In re Shell Oil Refinery
132 F.R.D. 437 (1990)
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Rule of Law:
Under Federal Rule of Civil Procedure 26(b)(4)(B), discovery of facts and opinions held by a non-testifying expert is permitted only upon a showing of exceptional circumstances, which requires more than the mere expense of duplicating the expert's investigation when the underlying evidence is available to the requesting party.
Facts:
- On May 5, 1988, an explosion occurred at the catalytic cracking unit (CCU) of the Shell Oil Refinery in Norco, Louisiana.
- The day after the explosion, Shell Oil Company (Shell) and the Plaintiff’s Legal Committee (PLC) entered an agreement giving PLC's experts access to the CCU to inspect and photograph the site.
- Shell preserved all materials from the site that were tagged by the PLC, as well as additional materials Shell wished to preserve.
- Shell subsequently conducted metallurgical and chemical tests on material removed from the explosion site at its own research facility.
- Two Shell employees, R.E. Nordstrom and Paul A. Nelson, were asked by Shell's legal department to assist in the investigation for the purposes of litigation.
- PLC’s experts were permitted to observe some of the tests conducted by Shell.
- Shell initially identified Nordstrom and Nelson as potential testifying experts and submitted preliminary reports they authored.
- Later, Shell made a strategic decision that it would not call Nordstrom and Nelson to testify at trial.
Procedural Posture:
- Following an explosion at a Shell refinery, a class action lawsuit was filed against Shell Oil Company (Shell) by the Plaintiff's Legal Committee (PLC) in federal district court.
- The court ordered both parties to submit preliminary reports from any experts expected to testify at trial.
- The PLC filed several motions to compel expert discovery from Shell, which the court denied unless Shell intended to use the expert or test result at trial.
- The PLC filed a Motion for Reconsideration of a prior ruling, seeking the results of tests conducted by Shell and leave to depose Shell's experts, including two in-house employees, Nordstrom and Nelson, who Shell decided would not be called to testify.
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Issue:
Under Federal Rule of Civil Procedure 26(b)(4)(B), do exceptional circumstances exist to compel discovery of an opposing party's non-testifying, in-house experts' reports and test results when the requesting party has access to the same evidence but would incur significant expense to conduct its own tests?
Opinions:
Majority - Mentz, District Judge
No. Exceptional circumstances do not exist to compel discovery of Shell's non-testifying experts because the PLC can obtain the substantial equivalent of the information through its own investigation. The court held that in-house experts, like Nordstrom and Nelson, can be considered 'retained or specially employed' under Rule 26(b)(4)(B) when they are assigned to apply their expertise to a matter in anticipation of litigation, even if it is not their exclusive duty and they receive no extra pay. This designation protects their work from discovery absent exceptional circumstances. The 'exceptional circumstances' exception requires a showing that a party is unable to obtain equivalent information from other sources. Here, the PLC has access to the same physical materials Shell tested and had access to the site. The fact that duplicating the tests would be expensive (estimated at $230,000 to $315,000) does not constitute an exceptional circumstance, as the purpose of the rule is to prevent one party from building its case on the adversary's diligent preparation and expense.
Analysis:
This decision clarifies two key aspects of expert discovery under Rule 26(b)(4)(B). First, it establishes that in-house employees can be protected from discovery as non-testifying experts if they are specifically tasked with litigation-related analysis, thereby preventing parties from using an employee's status to circumvent work-product protections. Second, it sets a high bar for the 'exceptional circumstances' exception, explicitly stating that the significant cost of duplicating an opponent's research is not, by itself, sufficient to compel discovery. This reinforces the principle that each party must bear the cost of preparing its own case and cannot rely on its opponent's expertise as a cost-saving measure, thereby protecting trial strategy and diligent preparation.
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