The Need for the Supreme Court to Revisit Daubert, Again

It is no secret in products liability matters that motions to exclude expert testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), often play a critical role in determining whether a case proceeds to trial. What litigants may not appreciate, however, is the extent to which the interpretation and application of Daubert and Rule 702 of the Federal Rules of Evidence varies across federal courts. A recent petition for certiorari of a Ninth Circuit ruling in SQM North America Corp. v. City of Pomona, 750 F.3d 1036 (9th Cir. 2014), highlighted the disparate application of Daubert and the need for the Supreme Court to revisit Daubert. Unfortunately, the Court declined to hear the appeal, passing up an opportunity to restore uniformity across the federal courts.

Governing Law
Rule 702 of the Federal Rules of Evidence provides that expert opinion evidence is admissible if (1) the witness is sufficiently qualified as an expert by knowledge, skill, experience, training, or education; (2) the scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (3) the testimony is based on sufficient facts or data; (4) the testimony is the product of reliable principles and methods; and (5) the expert has reliably applied the relevant principles and methods to the facts of the case. Fed. R. Evid. 702. The goal of Rule 702 is to ensure “that the expert testimony both rests on a reliable foundation and is relevant to the task at hand.” Daubert, 509 U.S. at 597.

The Underlying Dispute
On October 15, 2010, the City of Pomona, California, filed suit against SQM North America Corporation (SQMNA) to recover the cost of investigating and remediating perchlorate contamination in the groundwater in and around Pomona. SQM N. Am. Corp., 750 F.3d at 1041. Pomona alleged that SQMNA’s importation of natural sodium nitrate from the Atacama Desert in Chile for use as a fertilizer was the primary source of Pomona’s groundwater perchlorate contamination. Id. Pomona’s suit hinged on a “stable isotope analysis” performed by its causation expert that purported to show that the perchlorate in its groundwater had the same distinctive isotopic “fingerprint” as the perchlorate imported into southern California by SQMNA between 1927 and the 1950s. Id. at 1042–43. SQMNA moved to exclude the expert’s opinions, arguing that stable isotope analysis failed to satisfy Daubert and was insufficiently reliable to be received in evidence under Rule 702. Id. at 1043. Of particular relevance here, SQMNA argued that the expert’s failure to rigorously adhere to testing protocols rendered his opinions unreliable. Id. at 1048. After an evidentiary hearing, the district court granted SQMNA’s motion, concluding that the expert’s opinions were unreliable because (1) they were subject to future methodological revisions and were not yet certified by the U.S. Environmental Protection Agency, (2) the procedures used by the expert had not been tested and were not subject to retesting, and (3) the reference database relied on by the expert was too small. Id. The Ninth Circuit, however, reversed the district court, holding the challenges to the expert’s opinions went, in essence, to weight, not admissibility. See generally id. at 1046–49 (enunciating grounds for reversal of the trial court).

The Crux of the Circuit Split
What makes the Ninth Circuit’s ruling in SQM North America remarkable is how openly the appellate court acknowledges the current split among federal courts of appeals regarding Daubert. Specifically, the Ninth Circuit stated:

Daubert, 509 U.S. at 594–95, 113 S.Ct. 2786 (emphasis added).

The Ninth Circuit contrasted its approach with that of In re Paoli Railroad Yard PCB Litigation, 35 F.3d 717 (3d Cir. 1994), in which the Third Circuit held that that “any step that renders the analysis unreliable under the Daubert factors renders the expert’s testimony inadmissible, *** whether the step completely changes a reliable methodology or merely misstates that methodology.” Id. at 745 (emphasis added). In rejecting the Third Circuit’s approach, the Ninth Circuit explained that “only a faulty methodology or theory, as opposed to imperfect execution of laboratory techniques, is a valid basis to exclude expert testimony.” SQM N. Am. Corp., 750 F.3d at 1043. Notwithstanding the Ninth Circuit’s claim that its approach to scrutinizing expert testimony is “more measured,” the Second, Sixth, and Tenth Circuits have all followed the “any step” approach set forth in Paoli Railroad Yard PCB Litigation. See Amorgianos v. Nat’l R.R. Passenger Corp., 303 F.3d 256, 265–70 (2d Cir. 2002) (relying on Rule 702 and Paoli to affirm trial court order excluding expert testimony offered to show a causal link between plaintiff’s exposure to workplace toxins and his injuries because one expert “fail[ed] to apply his stated methodology reliably to the facts of the case.”); Tamraz v. Lincoln Elec. Co., 620 F.3d 665, 670 (6th Cir. 2010) (gaps inexpert’s reasoning from previously published studiesmeant that his testimony was “at most a working hypothesis,not admissible scientific ‘knowledge’” based upon “‘sufficient facts or data’” or “‘the product of reliable principlesand methods *** applied reliably to the facts of the case’”); Attorney Gen. of Okla. v. Tyson Foods, Inc., 565 F.3d 769,779 (10th Cir. 2009) (citing Paoli “any step” rule with approval and rejecting argument “that Daubert should not have been used to assess the application of the experts’ methodologies, but rather should have beenused to assess only the methodologies upon which [they]relied”) (emphasis in original).

To be fair, though, the Ninth Circuit is not alone in construing Rule 702 and Daubert as calling for the “liberal admission” of expert testimony. In Johnson v. Mead Johnson & Co., 754 F.3d 557 (8th Cir. 2014), and Manpower, Inc. v. Insurance Co. of Pennsylvania, 732 F.3d 796 (7th Cir. 2013), the Eighth and Seventh Circuits reversed trial court decisions excluding expert testimony, reasoning that challenges to the experts’ assumptions and extrapolations were matters for cross-examination, not issues that reached questions of reliability under Rule 702 and Daubert.

The Practical Import of the Circuit Split
While the Ninth Circuit asserts that its “faulty methodology” rule takes a more measured approach to expert issues, in reality the rule creates a rigid distinction between the “methodology” an expert uses and the “conclusions” that the expert draws, urging courts to consider the two factors separately. This distinction conflicts with the plain language of Rule 702, which on its face requires a trial court to consider the soundness of the methodology and whether it has been reliably applied to reach the conclusions proffered by an expert. See Fed. R. Evid. 702(b), (d). The net effect of the Ninth Circuit’s “more measured” rule, and the “liberal admission” approach of the Seventh and Eighth Circuits, is that the critical gatekeeping role of the trial court—namely, ruling on challenges to an expert’s application of his or her methods and challenges to the factual underpinnings of the expert’s testimony—is delegated to the jury. In practical terms, this means that experts face a lower level of scrutiny in the Seventh, Eighth, and Ninth Circuits under Rule 702 and Daubert, compared with the more exacting “any step” rule followed by the Second, Third, Sixth, and Tenth Circuits. Unfortunately, the Supreme Court’s denial of certiorari in SQM North America ensures that, at least for the time being, litigants and experts will continue to face different levels of Daubert scrutiny depending on the circuit in which a matter is filed.

Conclusion
Simply put, despite the plain language of Rule 702 and Daubert, there is no uniform rule when it comes to scrutinizing expert testimony in the federal courts of the United States. By denying certiorari in SQM North America, the Supreme Court missed an opportunity to resolve a glaring circuit split and restore consistency in the federal courts.

Keywords: mass torts litigation, Daubert, expert witness, Rule 702, Federal Rules of Evidence, circuit split

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