Opinion ID: 2493631
Heading Depth: 1
Heading Rank: 7

Heading: Reliability of Expert Testimony [5]

Text: ¶ 15. Proposed testimony must be supported by appropriate validation i.e., `good grounds,' based on what is known. In short, the requirement that an expert's testimony pertain to `[specialized] knowledge' establishes a standard of evidentiary reliability. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 590, 113 S.Ct. 2786, 2795, 125 L.Ed.2d 469 (1993). Such testimony must be (1) ... based upon sufficient facts or data, (2) ... the product of reliable principles and methods, and (3) ... the principles and methods must be applied by the witness reliably to the facts of the case. Miss. R. Evid. 702. Such foundational facts must afford a `reasonably accurate basis' for the expert's conclusions. Fielder v. Magnolia Beverage Co., 757 So.2d 925, 929 (Miss.1999) (quoting Gulf Ins. Co. v. Provine, 321 So.2d 311, 314 (Miss.1975)). ¶ 16. Under Rule 702, the trial judge has discretionary authority, reviewable for abuse, to determine reliability in light of the particular facts and circumstances of the particular case. McLemore, 863 So.2d at 39 (quoting Kumho Tire Co. v. Carmichael, 526 U.S. 137, 158, 119 S.Ct. 1167, 1179, 143 L.Ed.2d 238 (1999)). But such discretionary authority does not extend to expert testimony based only upon subjective beliefs or unsupported speculation. McLemore, 863 So.2d at 36 (citing Daubert, 509 U.S. at 590, 113 S.Ct. 2786). See also Gulf South Pipeline Co. v. Pitre, 35 So.3d 494, 499 (Miss.2010) (merely speculative expert opinions should not be admitted); Watts, 990 So.2d at 149 (quoting Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146, 118 S.Ct. 512, 519, 139 L.Ed.2d 508 (1997)) (nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence which is connected to existing data only by the ipse dixit of the expert); Edmonds v. State, 955 So.2d 787, 792 (Miss.2007) (a court should not give... an expert carte blanche to proffer any opinion he chooses). ¶ 17. [A]n eminent domain suit is a peculiar type of action where the condemnor is under a heavy and non-delegable duty and responsibility to pay the defendant landowner the full fair market value of her property. Sarphie v. Miss. State Highway Comm'n, 275 So.2d 381, 383 (Miss.1973). See also U.S. Const. amend. V ([n]o person shall be ... deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation); Miss. Const. art. III, § 17 (1890) ([p]rivate property shall not be taken or damaged for public use, except on due compensation being first made to the owner or owners thereof, in a manner to be prescribed by law....). This Court has stated that: [t]he canonical definition [of fair market value] is[:] the most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress. American Institute of Real Estate Appraisers, The Appraisal of Real Estate, 43 (10th ed. 1992).... One formulation familiar in this state is, the sales price that would be negotiated between knowledgeable and self-interested persons, one who wants to purchase and one who wants to sell, the seller being under no obligation or compulsion to sell, and the buyer being under no necessity of having the property. [6] Potters II v. Miss. State Highway Comm'n, 608 So.2d 1227, 1231 (Miss.1992). ¶ 18. Fair market value is generally established as of the date of the filing of the complaint. [7] Miss.Code Ann. § 11-27-19 (Rev.2004). See also Pearl River Valley Water Supply Dist. v. Brown, 254 Miss. 685, 182 So.2d 384, 385-86 (1966) (the time of taking for the purpose of determining due compensation is the date of the institution of the eminent domain suit.). The primary inquiry is what is the worth of that being taken to the person having to sell his property. Times Square Realty, Inc. v. City of Grenada, 421 So.2d 1053, 1055 (Miss.1982). See also United States v. Miller, 317 U.S. 369, 375, 63 S.Ct. 276, 281, 87 L.Ed. 336 (1943) ([s]ince the owner is to receive no more than indemnity for his loss, his award cannot be enhanced by any gain to the taker.... [I]ts special value to the condemnor as distinguished from others who may or may not possess the power to condemn, must be excluded as an element of market value.). In making that determination, the condemnee is entitled to: the difference between the fair market value of the business as a going concern immediately before the damage and the fair market value of any assets remaining after the business closed and ceased to operate as a public utility. In determining the before value of the utility business so damaged, every element of the plan or system which was reasonably required for the operation thereof and which entered into and remained a part thereof should be taken into account. This means that the appraiser should consider the certificate of public convenience and necessity as an element of value, for without it the entire physical plant would be worthless.... The value of the utility as a going concern is obtained by taking a comprehensive view of each and all of the elements of property, tangible and intangible, and considering them as inseparable parts of the business entity. Bear Creek, 416 So.2d at 401-02 (quoting City of Jackson v. Creston Hills, Inc., 252 Miss. 564, 578, 172 So.2d 215, 221-22 (1965)) (internal citations omitted) (emphasis added). See also Sackman, Nichols on Eminent Domain § 15.07, at 15-48 to 15-49 ([w]hen the plant of a public service corporation is taken by eminent domain, the corporation is not limited to the value of its physical property, or to the cost of reproducing the same, but it is entitled to be paid for the value of its property and franchises taken together as a going concern and as parts of one working system.... The elements ordinarily considered in ascertaining the value of the utility are the current value of the tangible property of the company, the earnings, both present and future, of the company, the `going value' of the plant, and the amount of money required to put the plant in good condition.). In Bear Creek, this Court explained that [w]e think it impractical to assume that a businessman interested in buying a going business would blind himself to past revenues, present physical facilities, the likelihood of expansion and other business factors, including the likelihood of future revenues, because all are essential to its present market value. Bear Creek, 416 So.2d at 403. The valuation process is to be guided by the three, interrelated approaches to value: the cost approach, the income capitalization approach, and the market-data or comparative sales approach. Rebelwood, Ltd. v. Hinds County, 544 So.2d 1356, 1360 (Miss. 1989). See also Potters II, 608 So.2d at 1231. ¶ 19. At trial, Stokes valued the Dedeaux utility system at $3,691,328, which consisted of: Fair market value of depreciated operating assets$3,451,961 Land value$20,165 Other intangibles including the Certificate and going concern value$255,202 Elliott valued the Dedeaux utility system at $9,846,288, which consisted of: Depreciated replacement cost of water/sewer facilities$7,506,000 Land value$20,200 [8] Certificate valueProjected CIAC $1,494,700 Certificate valueProjected cash flow $800,388 Transitional assistance$25,000 [9]