Two industrial sites in Illinois were found to have significant amounts of groundwater contamination related to their operations. When the owner’s insurer refused to indemnify, the owner sued. The case turned on testimony from an expert witness, who was excluded by the district court because he didn’t use reliable methods.
The site owner operated two industrial facilities related to railroad. At Site I, the owner performed operations such as plating parts for locomotive engines in chrome. At Site II, the owner‘s operations included refueling diesel engines. The site owner discovered contamination at both sites.
Site I had a sump that held wastewater from the chrome plater. When the water in the sump reached a certain level, a pump would pump the water to a holding tank. The owner found a chemical called hexavalent chromium contaminating the area around the sump. At Site II, the owner discovered two types of ground-water contamination. It found a chlorinated solvent by a tank into which metal parts were dipped to degrease them. It also found diesel fuel near a large tank where locomotives would refuel.
The contamination at these two sites cost the owner millions of dollars in damages and remediation expenses. It sought indemnification from its insurer, but the owner‘s policy had an exclusion for any property damage arising out of chemical leaks or discharges. The insurance company denied coverage on this basis.
The site owner sued the insurance company. To overcome the pollution exclusion, it pointed to a policy provision stating that, despite the exclusion, the insurance company would cover chemical leaks or discharges that were “sudden and accidental.” Without direct evidence of how the damage occurred, it proffered the expert testimony of a geologist to prove that the contamination of the site occurred suddenly and accidentally.
Circuit Judge Amy Coney Barrett of the U.S. Court of Appeals for the Seventh Circuit wrote in her opinion that the geologist testified that the contaminants at the Site I were released because the concrete sump leaked. He opined that the releases were “sudden and accidental” because they weren’t intended and occurred in sudden spurts each time that the sump failed. When asked about his basis for these opinions, the expert explained that he had experience working with sumps and had personal knowledge of these sumps in particular.
The geologist also testified that the releases at the Site II were also likely to be “sudden and accidental.” He asserted that the contamination around the diesel refueling area was too large to have occurred by minor leakage. Instead, he testified that the contamination was “consistent with overfills of diesel locomotives” and suggested that “tens of gallons to hundreds of gallons  would have been released before it was noticed.” He also opined that the value of the fuel made it unlikely that such a fuel spill would have occurred intentionally. As to the contamination at the chlorinated solvent storing area, he reasoned that it was “indicative of a drum overturning and suddenly leaking out rather than from operations.” He based this opinion in part on the fact that the contamination was found around where the solvent was stored, not where it was used.
Both parties moved for summary judgment. The insurance company also moved to strike the geologist ‘s testimony. The district court granted the motion to strike, holding that the geologist ‘s opinions were unreliable and speculative under Federal Rule of Evidence 702. The district court then granted the insurance company‘s motion for summary judgment. The site owner appealed.
Judge Barrett wrote that the geologist’s expert testimony was the only evidence that the site owner offered as to whether the contamination occurred in a sudden and accidental fashion. Before the expert testimony can be admitted, it must be deemed reliable under Rule 702 of the Federal Rules of Evidence, which tracks the Supreme Court’s opinion in Daubert, she said. The court must decide that the witness is “qualified as an expert by knowledge, skill, experience, training, or education”; the testimony will “help the trier of fact to understand the evidence or to determine a fact in issue”; “the testimony is based on sufficient facts or data” and “reliable principles and methods”; and the expert has “reliably applied the principles and methods to the facts of the case.” An expert’s proponent has the burden of establishing the admissibility of the opinions by a preponderance of the evidence.
The district court determined that the geologist‘s testimony failed to meet these requirements because it wasn’t based on reliable methods or principles.
In the geologist ‘s report and testimony, he asserted that the discharges at Site I must have been “sudden and accidental.” He suspected that the contamination occurred in connection with a failure in the sump pump in the 1970s. He claimed to base this on his experience with sumps, his site visits, and his knowledge of the sites’ operations. Judge Barrett noted that this type of evidence wasn’t necessarily unreliable, but the geologist still needed to show how his experience or expertise led to his conclusions.
The expert tried to base his conclusions on inferences from qualities of the “plume” of contamination. He examined the size and scope of the contamination and worked backward to determine how it must have occurred. But he failed to explain why this data mattered, or why his inferences were justified. When pressed specifically on the connection between the contaminant mass and the circumstances of the release, he simply stated that the data was “an indication” but acknowledged that it was “not conclusive.” The geologist opined that the sump itself had a “sudden and accidental nature.” But Judge Barrett said it wasn’t clear what he meant, considering that the sump is just a basin in the ground. The geologist did say in passing that the contamination concentrations were “not uniform,” but he didn’t explain why that was significant.
The geologist‘s testimony about the Site II was equally lacking, Judge Barrett found. The expert explained that the volume of the contamination at the fueling location was inconsistent with “minor leakage” and opined instead that it may have resulted from overfills of diesel locomotives. As to the chlorinated solvent storing area, the geologist suggested that perhaps a drum got punctured and caused the contamination. However, he offered no methodology to explain how he drew those conclusions.
In short, Judge Barrett held that the geologist failed to demonstrate that his conclusions were “anything more than guesses.” To satisfy Daubert, the judge explained, the geologist needed to provide an explanation of how the evidence led to his conclusions. He had to articulate a justification for his inference that the chemical spills were sudden and accidental beyond a simple say-so.
If the geologist made an argument based on a reliable methodology, then the site owner failed to point it out, either to the Court of Appeals or to the district court. And Judge Barrett wrote that “courts do not have to scour the record or make a party’s argument for it.”
As a result, the district court didn’t abuse its discretion in excluding the geologist‘s testimony. Without his testimony and report, there was no issue of material fact as to whether the contamination occurred suddenly and accidentally.
The Seventh Circuit affirmed the district court’s grant of summary judgment to the insurance company.