MTBE Court Excludes Part, Permits Part Of Plaintiffs' Expert Opinion

In another in a series of rulings on expert issues, the MDL court in the MTBE litigation has excluded parts of the proffered testimony of a plaintiffs' expert, while permitting others. Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York issued an order permitting Dr. Myron Mehlman to testify that MTBE causes adducts to form on DNA and is a probable human carcinogen. Judge Scheindlin found that the plaintiffs proved that this part of his testimony is the product of reliable principles and methods. However, he may not testify that plaintiffs have a reasonable basis for their alleged fear of cancer.

The suits in the MDL generally allege that MTBE, which was added to gasoline at varying levels between 1979 and 2007, has leaked from underground storage tanks and contaminated groundwater. The defendants in this particular case within the MDL are the owners of two gas stations and their suppliers who allegedly contaminated 50 private water wells in the town of Fort Montgomery, N.Y. See In re: Methyl Tertiary Butyl Ether Products Liability Litigation, case number 1:00-cv-01898.

Defendants argued that Mehlman's opinion should be excluded because his methods are not generally accepted in the scientific community and because he hadn't applied those methods reliably to the facts. The absence of general acceptance in the community remains a relevant factor under Daubert.

The court noted that if a method hasn't gained general acceptance, it may be properly viewed with skepticism. But “viewing a method with skepticism is a far cry from the bright-line rule of exclusion.” The expert relied on the peer reviewed MTBE-DNA Adducts study, as well as numerous studies allegedly showing exposure to MTBE has led to cancer in animals. The court held that a vigorous cross examination by defendants at trial was the proper way to handle the issues concerning the expert’s methodology as well as its underlying assumptions. “After evaluating the evidence from both sides, the jury may well agree with defendants that MTBE does not cause cancer in humans,” the court noted.

However, the expert cannot testify that specific plaintiffs suffered subcellular damage or have a reasonable fear of cancer because he did not adequately quantify their alleged exposure. While the levels of exposure to toxic substances is sometimes difficult to precisely quantify, this does not excuse Dr. Mehlman from attempting to analyze plaintiffs' exposure levels if he intended to testify that they have a basis for their fear of cancer.

MDL Judge Excludes Plaintiffs' Real Estate Expert Opinion in MTBE Litigation

The MDL judge overseeing the federal MTBE litigation, In re Methyl Tertiary Butyl Ether (MTBE) Products Liability Litigation, MDL 1358, recently issued a ruling excluding a plaintiff expert’s opinion that the gasoline additive's alleged contamination of private wells caused home values to drop 15%. In Tonneson v. Sunoco Inc., 2008 WL 2324112 (S.D.N.Y. 6/6/08), Judge Shira A. Scheindlin held that the real estate expert, Gregory Langer, failed to offer any valid methodology for his devaluation conclusion.

In property damage cases, the injury/damages expert issues can be crucial. While plaintiffs prefer to focus attention as much as possible on defendant’s conduct, whether it be the alleged creation of a nuisance, strict liability for ultrahazardous activities, negligence, etc., in reality the plaintiffs’ ability to prove impact, injury, and damages from the conduct is a central issue in these cases.

Expert Opinions

The expert proposed to offer several opinions:

1. Contamination of the exclusive source of drinking water for residents with a chemical such as MTBE, which received widespread local publicity, has a significant impact on the market value of the property.

2. There is credible evidence that publicity concerning MTBE contamination in the relevant area has materially impacted the ability of residential property owners to sell their homes within a reasonable period of time.

3. A reasonable seller of real estate would disclose to any prospective buyer the presence of MTBE contamination in the domestic well servicing the property to be sold.

4. The value of plaintiffs' property in the affected area decreased by 15% due to the effective MTBE contamination.

The expert admitted that there were not enough sales to generate the data for a regression analysis. Thus, it was necessary to provide trend data on sales by sub-markets, sales/list price analysis, and days on the market comparisons. Langer's report compared the real estate market in the County as a whole and the relevant local community, on such variables as average list price, percentage sale price/list price, average days on the market, and median price.

Daubert Analysis

The court noted that under Rule 702, if scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

In this case, the court concluded it was unable to discern any method -- much less a reliable method -- that Langer used to reach his conclusion that the value of plaintiffs' property decreased by 15% because of MTBE contamination. Langer merely compiled market data and then offered his conclusions, without any sufficient explanation of the relationship between the two. The expert provided a litany of “important factors” that can affect the value, without any explanation how these factors did affect the value of plaintiffs' property, beyond the obvious conclusion that it would better to have properly that has not been contaminated with MTBE.

Other problems included the fact that the expert also selectively chose data to highlight. For instance, Langer stressed days on market, without addressing the fact that the median price went up at the same time. Obviously, the average days on the market may have shot up because sellers were unwilling to negotiate downward on their selling price in such a hot market. Without good explanations, courts cannot assess the reliability of any conclusion drawn by an expert, even if he possesses relevant experience. The expert cited, but did not follow, suggested standards of the relevant appraisal industry group, the USPAP.

The ultimate problem with Langer's opinion was not his conclusion but the fact that he failed to identify any methodology. A court cannot assess the reliability of reasoning or methodology that is unexplained. The ipse dixit of the expert is insufficient.

Fact Testimony

While Langer's expert testimony did not satisfy Rule 702, the statistics that he gathered on retail property were deemed relevant to plaintiffs' action. Plaintiffs might argue to the jury that they should find, based on all of the evidence, that the sales figure statistics demonstrate that MTBE contamination was a cause of the alleged diminished value of plaintiffs' homes. Thus, he would be permitted to offer certain statistics as a fact witness.