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BP Amoco Chemical Co. v. Flint Hills Resources LLC

April 10, 2009

BP AMOCO CHEMICAL COMPANY, PLAINTIFF/COUNTER--DEFENDANT,
v.
FLINT HILLS RESOURCES LLC, DEFENDANT/COUNTER--PLAINTIFF.
FLINT HILLS RESOURCES LLC, THIRD-PARTY PLAINTIFF,
v.
BP CORPORATION NORTH AMERICA INC., DEFENDANT.



The opinion of the court was delivered by: Judge Amy J. St. Eve

Motion Ex. 19

DAUBERT MOTION NO. 1: FHR'S PRINCIPAL DAMAGES EXPERTS, RELEVANT AUTHORITY AND OVERVIEW OF OTHER DAUBERT MOTIONS BP AMOCO CHEMICAL COMPANY AND BP CORPORATION NORTH AMERICA INC.'S MOTION TO EXCLUDE THE OPINIONS OF SHARON MOORE BETTIUS AND JEFFREY BALIBAN

Flint Hills Resources, LLC ("FHR") relies on nine proposed expert witnesses whose opinions are not based on the facts of this case, who are not qualified to render the opinions they seek to offer, who have applied an improper methodology or no methodology at all, and/or who otherwise do not satisfy the requirements for expert testimony under the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993).

Rather than filing a separate motion relating to each of these nine experts, BP Amoco Chemical Company ("BP Amoco") and BP Corporation North America Inc. ("BPCNA") have grouped FHR's nine experts into four categories, according to the subject matter of their testimony, as follows: (i) two experts who testify on damages issues -- Daubert Motion No. 1; (ii) three experts who testify on engineering issues -- Daubert Motion No. 2; (iii) one expert who testifies on production capacity issues -- Daubert Motion No. 3; and (iv) three experts who testify on environmental issues -- Daubert Motion No. 4. In addition, consistent with Court's guidance that the parties err on the side of caution in deciding whether to raise a challenge relating to expert testimony now or later (in a pretrial motion in limine), BP Amoco also has filed a motion challenging the ability of FHR's environmental experts to rely on certain emissions stack tests conducted by FHR at the Joliet Plant after the sale -- Daubert Motion No. 5.

This motion, which is designated as Daubert Motion No. 1, addresses FHR's principal damages experts, Jeffrey Baliban and Sharon Moore Bettius, and provides background relating to their opinions and the grounds for this motion. In addition, this initial motion provides an overview of the four other motions BP Amoco and BPCNA are filing relating to FHR's experts. Each of BP Amoco and BPCNA's five motions is supported by a separate Memorandum of Law. To avoid repetition, this motion cites applicable case law that is common to all five motions and memoranda.

In further support of their motion, BP Amoco and BPCNA state as follows: 1. Each of BP Amoco and BPCNA's motions is based on Federal Rule of Evidence 702 as well as Daubert and its progeny. Under these authorities, FHR bears the burden of proving that their experts' opinions satisfy Rule 702's admissibility requirements. Euroholdings Capital & Inv. Corp. v. Harris Trust & Savs. Bank, 2009 WL 650373, at *4 (N.D. Ill. Mar. 11, 2009); Dukes v. Illinois Cent. R.R. Co., 934 F. Supp. 939, 946-47 (N.D. Ill. 1996); see also United States v. Williams, 95 F.3d 723, 729 (8th Cir. 1996). Before admitting an expert's opinion, this Court must exercise its "gatekeeping role" to determine whether an expert's reasoning and methodology are sufficiently reliable. Daubert, 509 U.S. at 597. Expert testimony is admissible only "if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case." Fed. R. Evid. 702. Daubert and Rule 702 demand that the district court ensure that an expert employs the same intellectual rigor in the courtroom as in the relevant field. Petersen v. Cordes, 2003 WL 2253364, at *1 (N.D. Ill. Nov. 6, 2003) (St. Eve, J.) (quoting Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999)). This applies to all expert testimony, regardless of whether it is based on "scientific," "technical," or other "specialized" knowledge. Kuhmo Tire Co., 526 U.S. at 141. Put another way, "a district judge asked to admit scientific evidence must determine whether the evidence is genuinely scientific, as distinct from being unscientific speculation offered by a genuine scientist." Rosen v. Ciba-Geigy Corp., 78 F.3d 316, 318 (7th Cir. 1996).

2. A putative expert must be "qualified as an expert by knowledge, skill, experience, training, or education" to testify about the subject on which he or she is proffered. Fed. R. Evid. 702. Generalized knowledge about a field does not necessarily qualify an expert to testify as to a specific subset of that general field. See, e.g., Martinez v. Sakurai Graphics Sys. Corp., 2007 WL 2570362, at *2 (N.D. Ill. Aug. 30, 2008). Rather, "[w]hether a witness is qualified as an expert can only be determined by comparing the area in which the witness has superior knowledge, skill, experience, or education with the subject matter of the witness's testimony." Jones v. Lincoln Elec. Co., 188 F. 3d 709, 723 (7th Cir. 1999) (quoting Carroll v. Otis Elevator Co., 896 F.2d 210, 212 (7th Cir. 1990)). If the expert is not properly qualified for the field about which he is testifying, then that expert's opinion should be excluded. Ancho v. Pentek Corp., 157 F. 3d 512, 518-19 (7th Cir. 1998); Vigortone AG Prods., Inc. v. PM AG Prods, Inc., 2004 WL 783075, at *1 (N.D. Ill. Jan. 15, 2004) ("if a witness lacks the requisite qualifications, his testimony cannot assist the trier of fact and such testimony should be barred"); Van Houten-Maynard v. ANR Pipeline Co., 1995 WL 311367, at *4 (N.D. Ill. May 19, 1995) (granting motion to bar portions of expert testimony where expert lacked the specialized knowledge in areas of proposed testimony).

3. Experts must outline a reliable methodology-they cannot simply rely on "expertise" or intuition. See Zenith Elecs. Corp. v. WH-TV Broad. Corp., 395 F. 3d 416, 418-20 (7th Cir. 2005) (affirming exclusion of expert testimony where it did not rest on reliable principles, methods or analysis and instead rested on "expertise"); R.J. Reynolds Tobacco Co. v. Premium Tobacco Stores, Inc., 2004 WL 1613563, at *8-9 (N.D. Ill. July 19, 2004) (striking report where ".only foundation he provides for his basic premises is his firm belief, based on his vast experience, that they are true and accurate. While we do not doubt the depth of his conviction, the chasm between his opinion and the ascertainable facts of the case remains. The jury would be in precisely the same position after hearing his opinion as they were before, and it will not put them any closer to resolution of the issues of the case.").

4. Daubert and Rule 702 require exclusion of opinion testimony that is based on unreliable assumptions or speculation. See, e.g., Ammons v. Aramark Unif. Servs., Inc., 368 F.3d 809, 816 (7th Cir. 2004) ("A court is expected to reject any subjective belief[s] or speculation"); Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1055-57 (8th Cir. 2000) (reversing trial court's admission of speculative damages model); Target Mkt. Publ'g, Inc. v. ADVO, Inc., 136 F.3d 1139, 1143-45 (7th Cir. 1998) (Daubert and the Federal Rules of Evidence require exclusion of speculative expert testimony). "[N]othing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert. A court may conclude that there is simply too great an analytical gap between the data and the opinion proffered." General Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997); see also Beachler v. Amoco Oil Co., 112 F.3d 902, 909 n.6 (7th Cir. 1997) (affirming exclusion of opinion that was speculative and not supported by any factual foundation). "An expert must 'substantiate his opinion; providing only an ultimate conclusion with no analysis is meaningless.'" Clark v. Takata Corp., 192 F. 3d 750, 757 (7th Cir. 1999); see also Elkins v. Ocwen Fed. Savs. Bank, 2007 WL 4125747, at *3-5 (N.D. Ill. Nov. 13, 2007) (striking a number of opinions, including damages opinions, where expert did not back up conclusions with specific evidence).

5. An expert must consider all relevant and available evidence, including evidence that is contradictory or inconsistent with the expert's view. SEC. v. Lipson, 46 F. Supp. 2d 758, 764 (N.D. Ill. 1998). The failure to consider such evidence renders the opinion unreliable, as it has been "carefully tailored to support [a] position." Id.; United States EEOC v. Rockwell Int'l Corp., 60 F. Supp. 2d 791, 797 (N.D. Ill. 1999) (expert's report and testimony held inadmissible under Rule 702 where, inter alia, expert "relied on materials, reports, and summaries given to him by counsel, and failed to verify the information from reliable, independent sources.")

6. Daubert also requires trial courts to evaluate the relevance of any expert opinions. Ammons, 368 F.3d at 816. To satisfy the relevance requirement, an expert's testimony must help "in determining a fact in issue. That is, the suggested . testimony must 'fit' the issue to which the expert is testifying." Deimer v. Cincinnati Sub-Zero Prods., 58 F.3d 341, 344 (7th Cir. 1995) (expert excluded where there was no "fit" because expert could not relate his causation theory to factual situation of the case). Opinion testimony is not admissible unless the court is convinced it "speaks clearly and directly to an issue in dispute in the case." Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1321 n.17 (9th Cir. 1995).

THIS MOTION: DAUBERT MOTION NO. 1

7. FHR's proposed damages experts, Jeffrey Baliban and Sharon Moore Bettius, both purport to calculate damages based upon an alleged difference in the value of the Performance Chemical Business Unit ("PCBU") purchased by FHR in its allegedly "as-represented" and "as-sold" conditions.

8. Sharon Moore Bettius: Ms. Bettius is an appraiser who purports to provide a diminution-in-value measure of damages for the PCBU, as an alternative to FHR's cost-of-repair damages. (Ex. 3, Bettius Rep. at 3) Bettius compares the purported fair market value ("FMV") of the PCBU in ...


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