Expert Testimony in a Federal Condemnation Case
When is an Expert’s Testimony Admissible in a Federal Condemnation Case?
In UGI Sunberry LLC v. A Permanent Easement for 1.7575 Acres, 949 F.3d 825 (3rd Cir. 2020), the United States Third Circuit Court of Appeals addressed the question of what the standard is for the admissibility of expert testimony in a condemnation proceeding under the Natural Gas Act. 15 U.S.C. § 717, et seq. The Court held that Federal Evidence Rule 702 supplies the answer and requires reliable expert testimony that fits the proceedings. This standard recognizes that “[t]he more tightly law is bound to good science, the more orderly and predictable the legal process will become.” UGI Sunberry LLC, 949 F.3d at 829 (citing Peter W. Huber, Galileo’s Revenge: Junk Science in the Courtroom, 215 (1991)). The Court found that the expert testimony presented by the landowners in the case was bound only to speculation and conjecture, not good science or other “good grounds.” Accordingly, the Third Circuit vacated the award that the District Court made in favor of the landowners and remanded the cases for new valuation proceedings.
UGI Sunberry LLC is a pipeline company who builds natural gas pipelines. In accordance with the Natural Gas Act, it obtained authorization to construct and operate an underground pipeline under a 34.4 mile stretch of land in Pennsylvania. The pipeline crosses underneath properties owned by David W. Beachel, Jr. and Donald D. and Georgia A. Pontuis (“Landowners”). The Landowners rejected UGI’s offers of compensation for rights of way, so UGI filed complaints seeking orders of condemnation. UGI prevailed, winning temporary and permanent easements over the Landowners’ properties to construct the pipeline.
With the easements awarded, only the amount of compensation remained. To aid the District Court’s calculation, UGI and the Landowners obtained valuation experts. UGI moved in limine to exclude the Landowners’ expert testimony for failure to meet the standards required by evidence Rule 702, but the District Court admitted the testimony and awarded $254,228.39 for the value of the permanent easement, the temporary easement and prejudgment interest. On appeal, UGI contended that the Landowners’ expert testimony did not satisfy Rule 702 because it was not reliable and did not fit the facts of the cases. As such, the District Court abused its discretion in denying UGI’s motion to exclude the testimony of the Landowners’ expert. The Landowners argued that the District Court was within its discretion to rely on their expert’s testimony.
In determining UGI’s issue, the Third Circuit turned to Federal Rule of Evidence 702 and noted that in a pipeline condemnation proceeding, valuing the condemned property is the first step to calculating the compensation to the landowner, Tenn. Gas Pipeline Co. v. Permanent Easement for 7.053 Acres, 931 F.3d 237, 243-44 (3rd Cir.. 2019), and given the technical nature of that question, expert testimony “acquires special significance in an eminent domain proceeding where the sole issue is the value of condemned property.” United States 68.94 Acres, 918 F.2d 393 (3rd Cir. 1990).
In analyzing the issue, the Third Circuit started with a clarification about the role Rule 702 plays in bench trials. In a bench trial, “a trial judge acts as a gatekeeper to ensure that any and all expert testimony or evidence is not only relevant, but also reliable.” Pineda v. Ford Motor Co., 520 F.3d 237, 243 (3rd Cir. 2008). As gatekeeper, a trial judge has three duties: (1) confirm the witness is a qualified expert; (2) check that the proposed testimony is reliable and relates to matters requiring scientific, technical, or specialized knowledge; and (3) ensure the expert’s testimony is “sufficiently tied to the facts of the case,” so that it “fits” the dispute and will assist the trier of fact. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 591 (1993) (quoting United States v. Downing, 753 A.2d 1224, 1242 (3rd Cir. 1985)). Rule 702 contains no exception to these requirements, so if they are not satisfied, an expert cannot testify before the “trier of fact.” Fed. R. Evid. 702.
The Court noted that Rule 702 applies whether the trier of fact is a judge or a jury and the district courts must apply Rule 702 to assess an expert’s qualifications, reliability, and fit before weighing the expert’s opinions to decide a triable issue. A trial judge in all cases of proffered expert testimony must find that it is properly grounded, well-reasoned, and not speculative before it can be admitted. Of course, district courts do retain “latitude” to decide “how” to apply those requirements in a bench trial. Kumho Tire Co. v. Carmichael, 527 U.S. 137, 152 (1999). So a district court has leeway about “whether or when special briefing or other proceedings are needed to investigate” the facts relevant to qualification and admissibility of expert testimony. Id. Or it may conditionally admit the expert testimony subject to a later Rule 702 determination. The failure to conduct any form of assessment of the expert and proposed testimony before admitting the testimony is an abuse of discretion.
In considering Rule 702’s reliability threshold, the Court noted that this requires expert testimony to be “based on the methods and procedures of science, not on subjective belief and unsupported speculation.” Karlo v. Pittsburgh Glass Works, LLC, 849 F.2d 61, 80-81 (3rd Cir. 2017). Courts look for rigor, not mere “haphazard, intuitive inquiry.” Oddi v. Ford Motor Co., 234 F.3d 136, 156 (3rd Cir. 2000). Yet admissibility is not based on whether an expert’s “opinion has the best foundation, or even whether the opinion is supported by the best methodology or unassailable research.” Karlo, 849 F.3d at 81. Rather, “the court looks to whether the expert’s testimony is supported by ‘good grounds.’” Id.
The Court went on to note that the Supreme Court in Daubert and the Third Circuit itself in many decisions have explained that whether “good grounds” support an expert’s potential testimony depends on many factors, including:
- whether a method consists of a testable hypothesis;
- whether the method has been subject to peer review;
- the known or potential rate of error;
- the existence and maintenance of standards controlling the technique’s operation;
- whether the method is generally accepted;
- the relationship of the technique to methods which have been established to be reliable;
- the qualifications of the expert witness testifying based on the methodology; and
- the non-judicial uses to which the method has been put.
Pineda, 520 F.3d at 247-48 (citing In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 742 n.8 (3rd Cir. 1994)). While no one factor is dispositive, some analysis of these factors is necessary. Id. The court concluded that no analysis occurred in the case before it.
In considering the fitness requirement of Rule 702 to determine whether an expert’s testimony “fits” the proceedings, the Court noted that it asks whether it “will help the trier of fact to understand the evidence or to determine a fact in issue.” Fed. R. Evid. 702(a); Karlo, 849 F.3d at 81. “‘Fit’ is not always obvious, and scientific validity for one purpose is not necessarily scientific validity for other, unrelated purposes.” Daubert, 509 U.S. at 591. “Thus, even if an expert’s proposed testimony constitutes scientific knowledge, his or her testimony will be excluded if it is not scientific knowledge for purposes of the case.” Paoli, 35 F.3d at 743 (emphasis in original).
The Court in reviewing the requirements of reliability and fitness of the Landowners’ expert’s testimony concluded that it lacked reliability and did not fit the case, contravening the mandatory requirements of Federal Rule of Evidence 702 applicable in both bench and jury trials. The Third Circuit concluded that the District Court abused its discretion in admitting and relying on the Landowners’ expert’s testimony, and its experts’ conclusory valuation of just compensation, which lacked a clearly stated basis. Accordingly, the Court vacated the award entered by the District Court and remanded for further proceedings consistent with its opinion.
In reviewing the Third Circuit Court’s evaluation of expert testimony in a federal condemnation case, it can easily be concluded that the Court’s analysis would apply to any expert testimony in a Federal Court case.
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