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Taubensee Steel & Wire Co. v. Macsteel Int'l Usa Corp.

May 2, 2011

TAUBENSEE STEEL & WIRE CO.
v.
MACSTEEL INT'L USA CORP.



Name of Assigned Judge D. Leinenweber Sitting Judge if Other or Magistrate Judge Harry than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT

Before the Court is Defendant Macsteel Int'l USA Corp.'s Motion to Exclude the Opinion Testimony of Kevin L. Jones. [71] For the reasons that follow, the motion is denied.

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Before the Court is Defendant's Motion to Exclude the Opinion Testimony of Kevin L. Jones. [71] For the reasons that follow, the motion is denied.

The instant lawsuit is a contract dispute over two loads of steel wire purchased by Plaintiff Taubensee Steel & Wire Co. ("Taubensee") from Defendant Macsteel Int'l USA Corp. ("Macsteel"). Taubensee rejected one load of low carbon steel on the basis that exceeded the company's limits on rust levels. An order for another load, of high carbon steel, was cancelled before it was delivered. Taubensee originally filed suit seeking a declaratory judgment that it was not required to arbitrate the dispute. Subsequently, Macsteel agreed to litigate the dispute in this Court. A bench trial is set for May 9, 2011.

At issue here is a report submitted by Taubensee's expert Kevin L. Jones, an engineer who inspected the low carbon steel coils on September 21 and 22, 2009, about a year after the steel was shipped. Jones opines that the steel did not meet Taubensee's requirements at the time of delivery, in particular because it exceeded Rust Level 3 of the company's specifications. (Taubensee employs a visual rating system from 1--8 for the rust level on steel coil, with 1 meaning there is no rust on the coil, and 8 meaning that the outer surface is entirely covered in rust.)

The low carbon steel wire rod was produced by a mill in China and delivered to the Normaco terminal in Lemont, Ill. on Oct. 13, 2008, for use by the Taubensee plant in Chicago. After workers at the terminal noted damage to the coils, a series of surveys of the coil were undertaken by Taubensee's employees. On Oct. 31, 2008, Jesus Rodriguez noted loose and damaged coils as well as a Rust Level from 4 to 6 on some of the coils. Taubensee's Ken Gorman inspected 466 of the 729 coils on Nov. 5, 2008, and reported Rust Levels between 5 to 7 or 6 to 8.

I. BACKGROUND

Following its normal course for when customers submit a damage claim, Macsteel notified the marine surveyors, who conducted a joint survey of the surveyors representing the various interests in the cargo. According to Macsteel, the surveyors concluded that any rust was atmospheric in nature and was not a concern. Taubensee, however, contended that the rust on every coil exceeded its specifications.

In reaching his conclusion supporting that contention, Jones reviewed reports and photographs documenting the condition of the steel throughout the shipment process. Included in his analysis were the reports discussed above and a report by surveyor Jason Fernandes, dated Feb. 6, 2009, indicating that a pre-loading inspection of the steel in China found that it had been stored in an open yard without cover and had rust stains on the outer surfaces and entangled coils.

At his deposition, Jones testified that the steel did not degrade from the time it was unloaded in October 2008 until the time he inspected it about a year later. Jones testified that he reached that conclusion by comparing his inspection photographs of the steel to prior reports and photographs of the steel.

Macsteel seeks to exclude Jones' testimony, arguing: (1) his methodology was so subjective that Jones' opinion should be excluded under Fed. R. Evid. 702; and (2) his visual inspection of the steel one year after its delivery will not aid the trier of fact because Jones does not know what happened to the coils in the intervening year. Macsteel also seeks to exclude any testimony by Jones as to the tensile strength of the high carbon ...


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