City of Pomona v. Sqm North America Corp.
2017 WL 3382281, 2017 U.S. App. LEXIS 14491, 866 F.3d 1060 (2017)
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Rule of Law:
A district court abuses its discretion when it illogically applies factors for reopening discovery, thereby prejudicially limiting expert testimony, or when it abdicates its gatekeeping role under Daubert by failing to make explicit findings on the scientific reliability and methodology of expert opinions.
Facts:
- The City of Pomona owns and operates a public water system that provides drinking water to its residents.
- In 2007, the State of California established a maximum contaminant level (MCL) of six parts per billion for perchlorate, a chemical that interferes with thyroid gland hormone production.
- Pomona discovered that fourteen of its wells had perchlorate levels exceeding the MCL, prompting it to shut down non-compliant wells and purchase water from other sources to remedy the contamination.
- SQM North America Corporation began importing fertilizer from the Atacama Desert in Chile in 1927 and imported a substantial portion of Chilean nitrate (a component of that fertilizer) into the United States from 1931 to 1968.
- Pomona alleged that SQM's importation of perchlorate-containing fertilizer products from the Atacama Desert, which were used in areas around Pomona's wells, caused the contamination in its water supply.
- Dr. Neil Sturchio developed a peer-reviewed methodology for analyzing perchlorate isotopes from groundwater and concluded that roughly ninety percent of the perchlorate present in Pomona's groundwater matched the distinct isotopic fingerprint of perchlorate unique to the Atacama Desert.
Procedural Posture:
- In 2010, the City of Pomona filed a products-liability action against SQM North America Corporation in the United States District Court for the Central District of California.
- Prior to a scheduled January 2012 trial, the district court conducted a Daubert hearing and subsequently granted SQM's motion to exclude the testimony of Pomona's expert, Dr. Neil Sturchio, finding his opinions not generally accepted, not tested, and his database too limited.
- The parties stipulated to dismiss the case to allow Pomona to appeal the exclusion of Dr. Sturchio's testimony.
- Pomona, as appellant, appealed the exclusion of Dr. Sturchio's testimony to the Ninth Circuit Court of Appeals.
- The Ninth Circuit reversed the district court's exclusion of Dr. Sturchio's expert testimony in City of Pomona v. SQM North America Corp., 750 F.3d 1036 (9th Cir. 2014) (Pomona I), and remanded the case for trial, with the mandate issuing in December 2014.
- Upon remand, Pomona requested to reopen fact and expert discovery to reflect scientific developments and filed a formal motion to supplement Dr. Sturchio's expert report on February 9, 2015.
- On March 26, 2015, the district court denied Pomona's motion to supplement Dr. Sturchio's report, concluding the information was not material and would delay trial.
- Before the original 2012 trial, Pomona filed a motion to exclude the testimony of SQM's alternative source expert, Dr. Richard Laton, under Daubert, which the district court tentatively denied without explanation.
- On May 29, 2015, four days before the new trial date, the district court issued new rulings on motions in limine, including a one-word denial of Pomona's renewed Daubert motion to exclude Dr. Laton's testimony, without analysis.
- After a seven-day trial, the jury returned a verdict finding that SQM's sodium nitrate fertilizer was not a substantial factor in causing harm to Pomona, resulting in a complete defense verdict for SQM.
- Pomona, as appellant, appealed the district court’s denial of its motion to update Dr. Sturchio’s expert report and the denial of its motion to exclude Dr. Laton’s testimony to the Ninth Circuit.
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Issue:
Did the district court abuse its discretion by limiting a plaintiff's expert testimony regarding new scientific developments and by failing to make sufficient findings before admitting a defendant's expert testimony regarding alternative contamination sources, thereby committing prejudicial error?
Opinions:
Majority - Judge Wallace
Yes, the district court abused its discretion by illogically applying the legal standard for reopening discovery, thereby prejudicially limiting Dr. Sturchio’s updated expert testimony, and by abdicating its gatekeeping role under Daubert through failing to make sufficient findings on the scientific reliability of Dr. Laton’s expert opinions, which errors were prejudicial in combination. First, regarding Dr. Sturchio's testimony, the district court correctly identified the legal standard for amending a Rule 16 scheduling order to reopen discovery, as set forth by the Schumer factors, but applied it illogically. The court's finding that reopening discovery might 'create back-and-forth discovery, which could delay trial' was illogical, as any potential for delay was attributable to the district court's own decision to set an expeditious trial date after remand. Furthermore, the court's determination that the updates to Dr. Sturchio's report were not material was also illogical; Dr. Sturchio was Pomona's key witness, and the updates directly addressed the main criticisms of his 2011 research (limited database, lack of interlaboratory testing) that were central to SQM's attack on his credibility at trial. The exclusion of this updated testimony was prejudicial because SQM heavily relied on these outdated criticisms, even though they had been scientifically rebutted by 2015. Second, concerning Dr. Laton's testimony, the district court abused its discretion by denying Pomona’s Daubert motion with a one-word 'DENY' and no accompanying analysis or findings regarding the scientific validity or methodology of his proposed opinions. This lack of explanation constituted an abdication of the district court’s gatekeeping role, as required by Estate of Barabin v. AstenJohnson, Inc. and Pyramid Technologies, Inc. v. Hartford Casualty Insurance Co. The Ninth Circuit found that Pomona preserved its objection despite not explicitly renewing it during trial, given the definitive pretrial ruling and other attempts by Pomona's counsel to challenge the testimony. Dr. Laton's testimony, which posited hundreds of alternative perchlorate sources without demonstrating scientific validity for the specific perchlorate found, was critical to SQM's defense and directly undermined Pomona's experts. The errors related to both experts, in combination, were prejudicial. The district court's actions allowed SQM to present outdated criticisms of Pomona's key expert while simultaneously admitting SQM's expert without proper scrutiny of his scientific basis. This skewed the 'battle of the experts' at the heart of the case and more probably than not affected the jury's verdict.
Analysis:
This ruling significantly reinforces the strict standards for district courts acting as 'gatekeepers' for expert testimony under Daubert, emphasizing that conclusory rulings without explicit findings on scientific reliability and methodology constitute an abuse of discretion. It also underscores the importance of a logical and fair application of discovery amendment rules, particularly in complex scientific cases where research evolves during litigation. The court's finding of combined prejudice from both evidentiary errors sets a high bar for appellate review, signaling that imbalances in the presentation of expert evidence can fundamentally undermine a trial's fairness and outcome.
