Experts — Failure to Consider Compliance with Standards, Test, or ID Scientific Principles = Analytical Gap — Court Avoids Credibility in Daubert Inquiry — Must Make Specific Factual Findings as Gatekeeper

Heer v. Costco Wholesale Corp., 2014 U.S. App. LEXIS 20863 (10th Cir. Oct. 29, 2014):

A. Exclusion of Expert Testimony

Ms. Heer argues that, in granting Defendants' motion [*11]  to exclude Mr. Stolz's testimony, the district court applied the wrong legal standard by failing to consider the evidence of the Ensley case and abused its discretion in determining Mr. Stolz's testimony was not reliable. On appeal of a district court's decision to exclude expert testimony, we review de novo "whether the district court employed the proper legal standard and performed its gatekeeper role." United States v. Nacchio, 555 F.3d 1234, 1241 (10th Cir. 2009) (internal quotation marks omitted). But we review for abuse of discretion "the manner in which the district court performs this gatekeeping role" and will not disturb the district court's ruling unless "it is arbitrary, capricious, whimsical or manifestly unreasonable, or we are convinced that the district court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances." Id. (internal quotation marks omitted).

1. Sufficiency of the District Court Record

Ms. Heer first argues the district court did not fulfill its gatekeeper function under Rule of Evidence 702 because it failed to make specific findings on the record regarding Mr. Stolz's investigation of the Ensley case. Ms. Heer characterizes this alleged error as the application of an incorrect [*12]  legal standard and thus argues we should review the district court's decision de novo. In fact, Ms. Heer's challenge goes to the manner in which the district court fulfilled its gatekeeper role, not the legal standard it applied. See Nacchio, 555 F.3d at 1241 ("Although [defendant] argues that the district court abdicated its gatekeeping function, his argument really concerns the manner in which the district court fulfilled this role, e.g., allegedly failing to ensure the creation of a sufficiently developed record . . . ."). Because the record reflects the district court's application of the Daubert framework, which is the proper legal standard, we review for an abuse of discretion the manner in which the district court fulfilled its role as gatekeeper.

As part of their gatekeeper function under Rule 702, district courts must create "a sufficiently developed record," including "specific fact findings concerning their application of rule 702 and Daubert." Goebel v. Denver & Rio Grande W.R.R., 215 F.3d 1083, 1088 (10th Cir. 2000) (internal quotation marks omitted). Without such specific fact finding and thorough discussion on the record, "it is impossible on appeal to determine whether the district court carefully and meticulously review[ed] the proffered scientific evidence or simply made an off-the-cuff [*13]  decision to admit the expert testimony." Id. (alterations in original) (internal quotation marks omitted). In Goebel, the district court admitted the testimony of plaintiff's expert witness over defendant's objection but made no findings on the record as to the expert's qualifications or the relevance or reliability of the expert's testimony. Id. at 1086-87. On appeal, we held that where the record contained no indication "the district court ever conducted any form of Daubert analysis whatsoever," the district court had failed to perform its gatekeeper function under Rule 702. Id at 1088. Despite the district court's indication that it had "fully considered the matter," we held "this single statement [was] insufficient as a basis for judicial review." Id. We therefore reversed the district court's admission of the expert testimony and remanded for a new trial. Id at 1089.

Unlike the record in Goebel, the record in this case is replete with the district court's analysis and careful application of the Rule 702 and Daubert factors. In a ten-page memorandum decision, the district court thoroughly evaluated Mr. Stolz's report, applied the Daubert factors to his methodology, and provided abundant support for its decision to exclude [*14]  his testimony. The mere fact the district court did not mention Mr. Stolz's minimal evaluation of the Ensley case--which consisted of conclusory statements based solely on Mr. Stolz's review of the photographs from the Ensley case--is not enough to show it failed to sufficiently develop the record. This is particularly true where Defendants submitted their motion to exclude Mr. Stolz's testimony simultaneously with their motion for summary judgment, the district court issued companion orders for the two motions, and the court explicitly ruled in its summary judgment order that evidence of the Ensley accident was inadmissible because Ms. Heer failed to show it was substantially similar to her accident. Under these circumstances, we may properly construe the district court's failure to address the Ensley case in the order excluding Mr. Stolz's testimony as an implicit denial of Ms. Heer's argument that the Ensley case provided support for Mr. Stolz's opinion, and that it was denied for the same reason articulated in the order granting summary judgment. We therefore conclude the district court sufficiently developed the record and did not abuse its discretion in failing to discuss the  [*15] Ensley case in the order excluding Mr. Stolz's testimony.

2. Reliability of Mr. Stolz's Testimony

Having determined the record is sufficiently developed, we next review Ms. Heer's contention the district court abused its discretion in ruling Mr. Stolz's testimony was not reliable. Rule 702 of the Federal Rules of Evidence permits district courts to admit the testimony of an expert so long as the expert is qualified and the expert's opinion is both relevant and reliable. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993) ("The trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable."). Specifically, Rule 702 permits expert testimony by a "witness who is qualified" if the expert's testimony is helpful to the jury and is reliable in that it is "based on sufficient facts or data; . . . is the product of reliable principles and methods; and . . . the expert has reliably applied the principles and methods to the facts of the case." Under Rule 702, "[t]he proponent of expert testimony bears the burden of showing" that its proposed expert satisfies these requirements, and district courts have considerable latitude in determining whether the proponent has satisfied this burden. Nacchio, 555 F.3d at 1241; see also Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999) ("[T]he trial judge must have considerable leeway in deciding [*16]  in a particular case how to go about determining whether particular expert testimony is reliable.").

Here, the district court excluded Mr. Stolz's testimony, concluding that although he was qualified to testify as an expert, his testimony was not reliable. Ms. Heer argues the district court abused its discretion in reaching this conclusion. In particular, she contends Mr. Stolz employed a valid scientific methodology by applying basic mechanical engineering principles to his review of Ms. Heer's deposition testimony, his observations of the step stool's design, his analysis of other possible causes of the fall, and his review of photographs from the Ensley case. She therefore requests we reverse the district court's exclusion of Mr. Stolz's testimony. We decline to do so.

As Ms. Heer correctly notes, exclusion of expert testimony under Rule 702 "is the exception rather than the rule." Fed. R. Evid. 702 advisory committee notes (2000). But a district court may properly exclude such testimony when the opinion evidence "is connected to existing data only by the ipse dixit of the expert" such that "there is simply too great an analytical gap between the data and the opinion offered." Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997).4 Mr. Stolz's report was plagued [*17]  by just such an analytical gap. The report provided no scientific basis for its conclusion that a defect in the step stool's design caused Ms. Heer's fall. Mr. Stolz made no attempt to test his theory, nor did he make any calculations, apply any engineering principles to his causation theory, discuss any industry standards, or mention any scientific authority that supported his theory. Without scientific or technical support for Mr. Stolz's theory, the district court was left with only Mr. Stolz's conclusory opinion that the step stool was defective. Such an unsubstantiated basis is insufficient under Rule 702, and the district court was therefore within its discretion in determining Mr. Stolz's opinion was not reliable. Cf. Bielskis v. Louisville Ladder, Inc., 663 F.3d 887, 894-96 (7th Cir. 2011) (affirming a district court's exclusion of expert testimony in a ladder accident case where the expert "made no attempt to test his hypothesis," provided no evidence of "consensus in the engineering community" that his theory was accurate, and failed to show that his alternative designs were the product of reliable principles and methods); Beaudette v. Louisville Ladder, Inc. 462 F.3d 22, 25-26 (1st Cir. 2006) (affirming a district court's exclusion of expert testimony in a ladder accident case because the expert failed to provide "a sufficient [*18]  basis for his expert opinion").

4   "Ipse dixit" is Latin for "He, himself, said it," and is used to identify an unsupported statement that rests solely on the authority of the person who makes it. Black's Law Dictionary 905 (9th ed. 2009).

Despite these apparent shortcomings in Mr. Stolz's methodology, Ms. Heer argues the district court abused its discretion in excluding his testimony because it put undue weight on Mr. Stolz's failure to test his theory and failure to discuss whether his theory comported with ANSI standards. We disagree. In Daubert, the United States Supreme Court explained the importance of testing a scientific theory to assess its reliability: "[A] key question to be answered in determining whether a theory or technique is scientific knowledge that will assist the trier of fact will be whether it can be (and has been) tested." 509 U.S. at 593. Although we have held testing is not always required to satisfy the reliability threshold of Rule 702, it is particularly important when a proposed expert relies on novel theories or where the basis for the expert's opinion is subject to debate. Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1235-36 (10th Cir. 2004).

In this case, Mr. Stolz claims he applied generally accepted scientific principles to reach the conclusion [*19]  that a section of tubular steel through which a hole has been drilled is not as strong as a section of tubular steel that is intact. But he then leaped to the conclusion that the stool was rendered defective as a result of the hole, and this defect caused it to collapse during Ms. Heer's normal use of it. Mr. Stolz's opinion as to causation is unsupported by anything other than speculation, and it ignores completely the fact the step stool design complied with applicable industry standards. And unlike cases in which the expert's opinion relies on established scientific principles, see id., Mr. Stolz failed to explain the scientific principles upon which his theory of causation was based. Instead, Mr. Stolz advanced a theory which appeared novel in that it contradicted the outcome of standard industry tests. In cases such as this one where the expert's theories are not grounded in well-established scientific principles, "the importance of testing as a factor in determining reliability [is] at its highest." Id. at 1236. The district court considered Mr. Stolz's failure to test his theory as one of several factors tending to show his testimony was unreliable. Such consideration was not improper. [*20]

The same is true of Mr. Stolz's failure to consider industry standards. Federal courts have consistently held that compliance with industry standards is relevant to a reliability determination under Rule 702. See, e.g., Sappington v. Skyjack, Inc., 512 F.3d 440, 454 (8th Cir. 2008) (considering important to a reliability determination the fact the expert opinion "[took] the relevant ANSI standards into account"). The district court therefore did not abuse its discretion by considering Mr. Stolz's failure to address the ANSI standards as one factor in determining his testimony was unreliable.

Ms. Heer next contends the district court abused its discretion in improperly weighing Mr. Stolz's testimony against that of the defense expert, Dr. Quan. Although we agree this issue is a closer question, we are convinced the district court acted within its discretion under the facts of this case. At the Rule 702 gatekeeping stage, district courts must avoid weighing the credibility or persuasiveness of the competing experts' ultimate conclusions. See United States v. Oliver, 278 F.3d 1035, 1043 (10th Cir. 2001) ("[I]t is solely within the province of the jury to weigh . . . expert testimony." (Internal quotation marks omitted)). But that is not what happened here. As part of its reliability discussion, the district court contrasted Mr. [*21]  Stolz's methodology with that of Dr. Quan. Specifically, the district court used the fact Dr. Quan tested not only his own theory, but also Mr. Stolz's theory, to illustrate testing was feasible in this case.

The court also compared Mr. Stolz's and Dr. Quan's methodologies to illustrate Mr. Stolz's failure to consider other plausible explanations for the damage to the stool--specifically, that Ms. Heer tipped the stool over and collided with it as she fell. To the extent some of the district court's comparisons of Mr. Stolz's and Dr. Quan's reports may have improperly implicated an assessment of plausibility,5 the district court provided more than enough proper support for its determination that Mr. Stolz's testimony was not reliable.6

5   Although the district court was required to consider plausibility in its ultimate determination of this case, see infra Part B.1, the court should have reserved its consideration of Dr. Quan's conclusion that Ms. Heer's theory was implausible for its assessment of whether the circumstantial evidence was sufficient to survive summary judgment, instead of in its order excluding Mr. Stolz's testimony. Under the circumstances in this case, however, this misplaced [*22]  analysis is understandable: Defendants submitted their motion to exclude Mr. Stolz's testimony and motion for summary judgment together, and the district court issued its rulings on the two motions at essentially the same time. And because the district court provided more than enough proper support for its conclusion Mr. Stolz's testimony was not reliable, its premature discussion of the plausibility of Ms. Heer's causation theory does not undermine our confidence in the district court's decision to exclude Mr. Stolz's testimony as unreliable.

6   We also reject Ms. Heer's argument that the district court engaged in impermissible fact finding by including in its decision that Ms. Heer "fell from a step stool." Contrary to Ms. Heer's suggestion, the district court did not comment on the cause of the fall. Regardless of whether the step stool collapsed due to a design defect or it tipped over when Ms. Heer leaned toward the vent, the result was that Ms. Heer fell from the stool and hit the ground, breaking her arm.

In sum, we conclude the district court acted within its discretion in excluding Mr. Stolz's testimony as unreliable. The district court properly fulfilled its gatekeeper role and [*23]  sufficiently developed the record. The district court also undertook a thorough Daubert evaluation and found Mr. Stolz's testimony lacking due to its failure to provide a reliable scientific or technical basis for its conclusions. As part of this evaluation, the district court could properly consider Mr. Stolz's failure to test his theory and his failure to consider industry standards. And although the district court could have been more cautious in its comparison of Mr. Stolz's and Dr. Quan's reports, the thrust of that comparison was to contrast the methodologies of the two experts and to show that testing was feasible. We therefore affirm the district court's decision to exclude Mr. Stolz's testimony.

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