Opinion ID: 2674882
Heading Depth: 2
Heading Rank: 1

Heading: Exclusion of Pyramid’s Expert Witnesses

Text: Rule 702 of the Federal Rules of Evidence provides that expert opinion evidence is admissible if: (1) the witness is sufficiently qualified as an expert by knowledge, skill, experience, training, or education; (2) the scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (3) the testimony is based on sufficient facts or data; (4) the testimony is the product of reliable principles and methods; and (5) the expert has reliably applied the relevant principles and methods to the facts of the case. Fed. R. Evid. 702. PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS 9 Under Daubert, 509 U.S. at 579, and its progeny, including Daubert v. Merrell Dow Pharm., Inc., 43 F.3d 1311 (9th Cir. 1995), a district court’s inquiry into admissibility “is a flexible one.” Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 969 (9th Cir. 2013) (citation omitted), cert. denied, 134 S. Ct. 644 (2013). In evaluating proffered expert testimony, the trial court is “a gatekeeper, not a fact finder.” Primiano v. Cook, 598 F.3d 558, 565 (9th Cir. 2010) (citation and quotation marks omitted). “[T]he trial court must assure that the expert testimony ‘both rests on a reliable foundation and is relevant to the task at hand.’” Id. at 564 (quoting Daubert, 509 U.S. at 597). “Expert opinion testimony is relevant if the knowledge underlying it has a valid connection to the pertinent inquiry. And it is reliable if the knowledge underlying it has a reliable basis in the knowledge and experience of the relevant discipline.” Id. at 565 (citation and quotation marks omitted). “Shaky but admissible evidence is to be attacked by cross examination, contrary evidence, and attention to the burden of proof, not exclusion.” Id. at 564 (citation omitted). The judge is “supposed to screen the jury from unreliable nonsense opinions, but not exclude opinions merely because they are impeachable.” Alaska Rent-A-Car, 738 F.3d at 969. Simply put, “[t]he district court is not tasked with deciding whether the expert is right or wrong, just whether his testimony has substance such that it would be helpful to a jury.” Id. at 969–70. Like the test for admissibility in general, the test of reliability is also flexible. Estate of Barabin v. AstenJohnson, Inc., 740 F.3d 457, 463 (9th Cir. 2014) (en banc). To determine reliability, the Supreme Court has suggested several factors: “1) whether a theory or technique can be 10 PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS tested; 2) whether it has been subjected to peer review and publication; 3) the known or potential error rate of the theory or technique; and 4) whether the theory or technique enjoys general acceptance within the relevant scientific community.” Id. (quoting United States v. Hankey, 203 F.3d 1160, 1167 (9th Cir. 2000)); see also Primiano, 598 F.3d at 564. These factors are “meant to be helpful, not definitive, and the trial court has discretion to decide how to test an expert’s reliability as well as whether the testimony is reliable, based on the particular circumstances of the particular case.” Primiano, 598 F.3d at 564 (citations and quotation marks omitted); see also Barabin, 740 F.3d at 463. The test “is not the correctness of the expert’s conclusions but the soundness of his methodology,” and when an expert meets the threshold established by Rule 702, the expert may testify and the fact finder decides how much weight to give that testimony. Primiano, 598 F.3d at 564–65. After an expert establishes admissibility to the judge’s satisfaction, challenges that go to the weight of the evidence are within the province of a fact finder, not a trial court judge. A district court should not make credibility determinations that are reserved for the jury.
Spiegel is a certified restorer with the National Institute of Disaster Restoration. He is also a certified: (1) master restorer and water, fire and odor control journeyman with the Institute of Inspection, Cleaning, and Restoration; (2) indoor environmentalist and mold remediator with the Indoor Air Quality Association; and (3) Level I thermographer with the Infrared Training Center. Spiegel is also a general and specialty licensed contractor with the state of California and PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS 11 has 38 years of experience in property damage repair and more than 15 years of experience in construction defect investigation. In two conclusory sentences and without analysis or explanation, the district court held that Spiegel was not a qualified expert “on the scientific, technical, or specialized data on which he purports to opine” and that his opinion regarding relative humidity was not based on sufficient facts or data and was not the product of reliable principles and methods. The district court abused its discretion in reaching these conclusions. Spiegel used weather data from the time of the incident, thermo-hygrometer and infrared data, and ambient condition data to opine on the level of humidity in the warehouse at the time of the flood. As noted, Spiegel is a certified thermographer, certified indoor environmentalist, certified master restorer, certified water control journeyman, and certified mold remediator, with decades of experience. This expertise and experience is relevant to the issues on which Spiegel opined. Because the district court provided no explanation or analysis for rejecting these qualifications, the district court abused its discretion in summarily determining that Spiegel was not qualified as an expert. See Barabin, 740 F.3d at 464 (holding the district court “failed to assume its role as gatekeeper” when it excluded expert testimony for “dubious credentials” without conducting a Daubert hearing or assessing expert’s findings). Spiegel’s many relevant certifications and decades of relevant experience render him qualified to issue his expert opinion. In addition, in preparing his report Spiegel conducted two site visits to Pyramid’s warehouse, interviewed several 12 PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS Pyramid employees who saw the water intrusion and its immediate aftermath, reviewed ServPro’s ambient condition measurements, and recorded his own ambient data during his visits, including data from a 5:30 a.m. visit designed to compare the difference in indoor and outdoor conditions when the warehouse was closed and locked (as it was during the flood). Spiegel also took digital photographs and electronic thermo-hygrometer readings, performed infrared imaging, reviewed www.weatherunderground.com to determine the weather conditions at a nearby airport at the time of the flood, and reviewed the Helms report. These facts and data constitute a sufficient basis for Spiegel’s expert report. Although not discussed by the district court, Spiegel relies on more facts and data in reaching his expert conclusions than did Hartford’s expert witness. Hartford’s expert Helms spent approximately two hours conducting a visual inspection of the warehouse but did not take any measurements, thermographic readings, infrared images, or other data. Although Helms contacted ServPro for its readings, Helms did not learn the locations from which ServPro obtained its readings, what ServPro did to get its readings, or what kind of detection machine ServPro used. The day after his twohour site visit, Helms completed his report and concluded that based on the humidity levels measured by ServPro, no damage occurred to the components in question. Spiegel also adequately explained his methodology in reaching his opinion. Spiegel described how the data he collected and reviewed helped him determine the conditions of the warehouse at the time of the event and at the time of ServPro’s measurements (which were relied on by Helms to determine that no damage from humidity could have PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS 13 occurred). Unlike Helms, however, Spiegel took into consideration the fact that the warehouse doors were closed and locked during the flood but open during ServPro’s measurements, and Spiegel calculated and considered the difference between the indoor and outdoor conditions during his 5:30 a.m. visit. Spiegel applied that difference to the weather data at the nearby airport on the night of the incident to extrapolate the indoor conditions on the night of the flood. Spiegel also used the infrared temperature readings of the packages on the shelves in comparison to the air temperature taken during his visit to determine the likely temperature of the packages on the night of the incident. The record shows that the knowledge underlying Spiegel’s report “has a reliable basis in the knowledge and experience of the relevant discipline,” rendering his report reliable. Primiano, 598 F.3d at 565 (citation and quotation marks omitted). The record also shows that Spiegel’s reliance on the nearby airport weather information from www.weatherunderground.com is acceptable in the industry, for Helms testified that he relied on the same data. Spiegel also explained how he applied the data to reach his conclusions and how Helms failed to rely on proper data to reach his conclusion. In short, Spiegel’s principles and methods were reliable and his report is not one of the “unreliable nonsense opinions” that should be screened from use. Alaska Rent-A-Car, 738 F.3d at 969. Thus, the district court abused its discretion in excluding this evidence. Excluding the Spiegel report was both erroneous and prejudicial. Spiegel’s expert report provides evidence that: (1) the Helms report relied on improper data to conclude that no damage was caused by humidity following the flood; (2) during the flood, the humidity exceeded 90% and was 14 PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS above the dew point; (3) the applicable standards for moisture-proof packaging require a one-year shelf life and humidity below 90% to prevent failure; (4) the vast majority of the parts stored in moisture-proof packaging was well beyond the one-year warranty protection; and (5) the conditions during the flood “without question” put the affected moisture-proof packages outside the packing standards. Thus, as Spiegel opines, the humidity and condensation caused by the flood may have compromised the packaging and possibly the components themselves. This is admissible evidence from which causation and damage reasonably may be inferred. Although Spiegel did not say with certainty that the humidity from the flood caused damage to Pyramid’s inventory, a jury could reasonably infer causation from Spiegel’s report and Pyramid’s other evidence. It is not necessary for Spiegel’s report to establish every element of Pyramid’s claim in order for it to be admissible in evidence. See Primiano, 598 F.3d at 564 (“Reliable expert testimony need only be relevant, and need not establish every element that the plaintiff must prove, in order to be admissible.”) (citation omitted). If Spiegel’s report had been admitted, the district court would have been required to view it in the light most favorable to Pyramid when considering Hartford’s motion for summary judgment. Because the report could assist a trier of fact in inferring that the flood caused sufficiently high humidity to damage Pyramid’s parts and that Helms’ contrary conclusion was not reliable, the exclusion of Spiegel’s report is prejudicial to Pyramid. See Messick v. Novartis Pharm. Corp., No. 13-15433, 2014 WL 1328182, at –5 (9th Cir. Apr. 4, 2014) (reversing grant of summary judgment where expert’s testimony, which would have created a genuine issue PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS 15 of material fact, was excluded because it was erroneously deemed unreliable and irrelevant).
The district court also excluded the Pytlewski report under Rule 702, stating that it was not the product of reliable principles and methods, and under Rule 701,2 stating that the report does not explain how the opinions are rationally based on the perceptions of the witness. Because Pytlewski was proffered as an expert witness, however, only Rule 702 applies. Pytlewski was retained to review and comment on the report prepared by Hartford’s expert Dr. Kumar of SEAL Laboratories. The district court appears to have accepted Pytlewski as a qualified expert, excluding his report solely based on reliability. The district court concluded that Pytlewski’s report was not the product of reliable principles and methods. An expert opinion is reliable “if the knowledge underlying it has a reliable basis in the knowledge and experience of the relevant discipline.” Alaska Rent-A-Car, 738 F.3d at 969 (quoting Primiano, 598 F.3d at 565). Pytlewski’s opinions are based on his knowledge and experience as a professional engineer and metallurgist. For 2 Fed. R. Evid. 701 provides: “If a witness is not testifying as an expert, testimony in the form of an opinion is limited to one that is: (a) rationally based on the witness’s perception; (b) helpful to clearly understanding the witness’s testimony or to determining a fact in issue; and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.” 16 PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS example, Pytlewski countered Dr. Kumar’s statement that the damage to Pyramid’s inventory could not have been caused by the flood because the corrosion was not uniform by explaining that metal exposed to moisture would not oxidize uniformly. This opinion is within the knowledge and experience of a metallurgist. See, e.g., Stilwell v. Smith & Nephew, Inc., 482 F.3d 1187, 1192–93 (9th Cir. 2007) (holding admissible metallurgist’s expert testimony that nails were poorly manufactured and could have been designed to last longer); White v. Ford Motor Co., 312 F.3d 998, 1008 (9th Cir. 2002) opinion amended on denial of reh’g, 335 F.3d 833 (9th Cir. 2003) (describing metallurgist’s testimony that was “well within his metallurgical expertise” when he “identified wear on the ratchet wheel of the brake that showed repeated tip-on-tip engagement rather than the proper engagement”); see also 6 Am. Jur. Trials 555 (describing common use of expert metallurgists to describe, among other things, causes and effects of corrosion). The “reliability” test is flexible and should be applied based on the circumstances of the case. Given the subject matter and type of opinions that Pytlewski rendered and his knowledge and experience, Pytlewski’s opinion is reliable. See Messick, 2014 WL 1328182, at . The exclusion of Pytlewski’s report is prejudicial because his report provides evidence from which a fact finder could disregard the opinion of Dr. Kumar and reasonably infer damages and causation relating to the flood. Further, Pytlewski’s deposition testimony links the flood as at least a partial cause of the damage to Pyramid’s inventory. Thus, the district court abused its discretion in excluding Pytlewski’s expert report and testimony. PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS 17
The district court also excluded the Mortenson report under Rule 702, stating it was not reliable, and under Rule 703,3 stating it was not based on facts or data known to Mortenson. Mortenson opined that it was improper for Hartford’s expert Dr. Kumar to use military standards of suitability instead of commercial standards in testing the selected parts from Pyramid’s inventory. Mortenson testified at deposition, however, that he did not know what standards should have been used and that he is not aware of the governing commercial standards because that is not his field of expertise. Thus, Mortenson’s testimony that Dr. Kumar should not have used military standards and should have used commercial standards was not based on facts or data known to Mortenson and is inadmissible under Rule 703. Additionally, Mortenson’s testimony is not reliable because he did not have the knowledge or experience required under Rule 702 to permit him to give expert testimony in this matter. The exclusion of Mortenson’s report by the district court was not an abuse of discretion. See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 153–54 (1999) (holding trial court did not abuse its discretion to exclude expert testimony on grounds that expert’s methodology in analyzing relevant data was unreliable, even though the expert was qualified, where 3 Fed. R. Evid. 703 provides: “An expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed. If experts in the particular field would reasonably rely on those kinds of facts or data in forming an opinion on the subject, they need not be admissible for the opinion to be admitted. But if the facts or data would otherwise be inadmissible, the proponent of the opinion may disclose them to the jury only if their probative value in helping the jury evaluate the opinion substantially outweighs their prejudicial effect.” 18 PYRAMID TECH. V. ALLIED PUBLIC ADJUSTERS there was no evidence that other experts in the industry used the expert’s particular approach).