The "Fitness" Of Expert Opinion Evidence - A Matter Of Discretion?

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Even though an expert witness's theory and methodology may be reliable under FRE 702, both need a sufficient fit to an issue to satisfy the admissibility requirements of Daubert. The Eleventh Circuit has addressed how a theory for measuring air pollution effects from the repair of existing coal-burning electric-generating plants could find a sufficient fit to determining if a utility violated Clear Air Act regulatons, reversing and remanding a trial judge's determination that there had been no sufficient fit, in United States v. Alabama Power Co., _ F.3d _ (11th Cir. Sept. 19, 2013) (No. 11–12168)

"Simply because a model cannot be presumed reliable in a specific context," noted a divided panel of the Eleventh Circuit, "does not mean that it is per se unreliable in that context." Alabama Power, _ F.3d at _ (emphasis added). In this observation, the circuit emphasized the necessity of a fit between a credible theory and its sound application of expert testimony in a case. How can one determine if the "fit" between theory and practice is sufficient under FRE 702? The Eleventh Circuit decision provided no easy answers and its divided decision illustrated the contingent nature of this determination. In contrast, the dissent in the case suggested it was a matter of trusting the trial judge's "discretion."

Exclusion Of Government's Experts

The government sued defendant Alabama Power for violating the Clean Air Act after the company made major modifications at its power plants without obtaining a permit or installing certain pollution control equipment. The government alleged that under the Clean Air Act, while the changes may have made the plants more efficient, the modifications resulted in a significant net emission increase. The government presented two experts to support the contention that there was an increase in sulfur dioxide and nitrogen oxide emissions from the modified facilities. After the trial judge conducted a Daubert inquiry regarding the proffered expert testimony, the judge excluded it, concluding that "their methodology relied on incorrect and unrealistic assumptions about the operation of Alabama Power's generating units." Alabama Power, _ F.3d at _.

The trial court acknowledged that the experts' calculations would be reliable had a "baseload" unit of the defendant's been modified -- that is, one intended to operate "continuously" (so the increased generation of electricity from decreased down-time for repairs, for example, could be estimated). The trial court believed that the model for a continuously operating unit would not reliably work if applied to the defendant's plants in question. These plants were admittedly ones that did not operate full-time (e.g., a "cycling" facility that operated regularly, but not continuously, or a "peaking" unit that operated only when electrical demand exceeded regular supply). It was inappropriate to apply the full-time "baseline" model to pollutant production if the facility of concern did not operate full-time basis, like the defendant's cycling or peaking plants.

After excluding the expert testimony, the district court also granted summary judgment for the defendant company. The government appealed, contesting the trial court's exclusion of the expert testimony. A central issue addressed by the two government experts concerned the change in the levels of certain pollutants that would accompany a modification of the existing units.

Divided Panel Agrees On The Record, But Not On The Applicable Standard

A divided panel of the Eleventh Circuit reversed and remanded, concluding the trial court abused its discretion in eliminating the government expert testimony. The majority recognized that evaluating the reliability of expert evidence, a court must also consider "'whether the reasoning or methodology properly can be applied to the facts in issue.” Alabama Power (citing United States v. Frazier, 387 F.3d 1244, 1261–62 (11th Cir. 2004) (en banc) (internal quotation marks and ellipsis omitted)). Here, the experts had acknowledged the general limits of the model they were using, but opined that under the conditions that existed in the case, the model was nonetheless appropriate, even though the defendant's units were not "baseline" units.

The trial court erred in concluding from the expert's testimony that their model was "reliable only when used with ‘baseload’ electric generating units” and “works only if the unit is operated as a baseload unit.”' Alabama Power, _ F.3d at _ (citing United States v. Alabama Power, 773 F. Supp. 2d 1250, 1256 (NDAL 2011) ('Alabama Power I")). The majority noted that the expert "model can certainly be used to estimate pollutant emissions from baseload plants, its validity is not limited solely to such facilities. The model can be used to estimate such emissions from so-called 'cycling' units, which are 'operated on a regular or fairly regular basis, but not continuously.'" Alabama Power, _ F.3d at _ (quoting United States v. Cinergy Corp., 623 F.3d 455, 460 (7th Cir. 2010)). Unlike the Seventh Circuit Cinergy case, the government's case in the current prosecution provided expert testimony to show that the baseload model would be appropriate to the facts before the court, including that the defendant's own records indicated the repaired units would be used more than before because the repairs would produce more power at less cost, and that there would be less down-time given the nature of the changes made to the units. Alabama Power, _ F.3d at _ (expert testified baseline model "would be valid for cycling units so long as three underlying conditions were satisfied: (1) that the unit, assuming the modification provides additional hours of unit availability, will actually use the additional available hours; (2) that the unit will not spend more time in reserve shutdown in the future that it did in the past; and (3) that the output factor for the unit will not decrease" and that each of these conditions for using the baseline model on a cycling unit had been "satisfied.") (citation to record)).

Role Of Summary Judgment

Particularly in considering a summary judgment motion, the possibility that the baseline model could be used, as suggested by the experts, did not warrant excluding the evidence according to the panel majority:

Alabama Power may have a number of reasons why the [baseline] methodology should not be accepted as persuasive at trial, but it offers no persuasive argument to support the notion that Daubert and its progeny require all-out exclusion of the expert testimony ... prior to trial. That the [baseline] model always predicts an increase in pollutant emissions as a result of increased unit availability is not a fatal Daubert flaw ... but rather a natural outcome of the model's deterministic nature. Although a court may certainly evaluate the mathematical rigor of a model, the possible existence of a more thorough, more complex model is not a basis for wholesale exclusion."

Alabama Power, _ F.3d at _ (citing Allison v. McGhan Med. Corp., 184 F.3d 1300, 1311–12 (11th Cir. 1999) (trial court's Daubert gatekeeping role “is not intended to supplant the adversary system or the role of the jury: ‘vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.”). In essence, the applicability of the expert's model should be determined by the jury and not by the court on summary judgment.

Dissent: Questioning Whether The Trial Court's Discretion Was Abused

One member of the panel, District Judge William Terrell Hodges of the Middle District of Florida, dissented. In doing so, he did not realy question the majority's assessment that there was credible evidence that the baseline model could be used even though the defendant's facilities in the case were not baseline units. Rather, the dissent noted it was an issue that reasonably could be viewed by different judges in different ways. In applying the abuse of discretion standard of review, he "would affirm the district court in all respects" and the circuit should support the district judge's exercise of discretion to exclude the evidence, even if the reviewing judges would have made a different decision had they been in the trial judge's place. According to the dissent:

As I understand the abuse of discretion standard, particularly as applied to Daubert issues of admissibility of expert opinion under Fed. R. Evid. 702, the district court has a “range of choice.” ... Further, “[w]hat is true about the review of evidentiary issues in general applies with equal or even greater force to Daubert issues in particular, an area where the abuse of discretion standard thrives.” It is an area that involves, to quote Chief Judge Carnes' metaphor, a “heavy thumb—really a thumb and a finger or two—that is put on the district court's side of the scale....” That deference to the district court regarding Daubert evidentiary rulings is not idle dicta is established by research disclosing that, in the last five years, there have been 54 reported decisions of this court (13 published opinions and 41 unpublished opinions) reviewing district court evidentiary rulings under Daubert, and the district court was reversed in only three of those cases. This does not mean, of course, that Daubert rulings in the district courts are altogether unreviewable, but the rarity of reversals does signify an awareness that when it comes to managing the gate at Fed.R.Evid. 702, both this court and the Supreme Court have consistently emphasized the need to defer to the district court's discretionary gatekeeping decisions under Fed.R.Evid. 702 including, in particular, decisions involving reliability determinations.

Alabama Power, _ F.3d at _ (Hodges, J., dissenting)United States v. Brown, 415 F.3d 1257, 1265-66, 168 (11th Cir. 2005) (citing Rasbury v. Internal Revenue Serv. (In re Rasbury), 24 F.3d 159, 168 (11th Cir. 1994) (“[U]nder the abuse of discretion standard of review there will be occasions in which we affirm the district court even though we would have gone the other way had it been our call.”); Kilpatrick v. Breg, Inc., 613 F.3d 1329, 1344 (11th Cir. 2010)); Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 142 (1999) (“[T]he law grants a district court the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination.” ) (citing General Electric Co. v. Joiner, 522 U.S. 136, 143 (1997)).

Conclusion

The Alabama Power case provides a vivid example of the challenge of appellate review of expert testimony. How far does the reviewing court go -- when the trial judge made an evidence decision which was reasonable, but with which the reviewing judge disagrees -- to find that the trial judge abused his or her discretion? The admissibility of the expert testimony was central to the disposition of the case. Ultimately, the majority concluded that the jury should be permitted to consider the expert model as applied to the facts of the case.

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