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Steffy v. Home Depot

December 10, 2008

DARREL STEFFY AND SUSANNE STEFFY
v.
THE HOME DEPOT, INC. AND PATRIOT TIMBER PRODUCTS INTERNATIONAL, INC.



The opinion of the court was delivered by: Chief Judge Kane

MEMORANDUM

Before the Court are cross motions to exclude proposed expert testimony. Plaintiffs Darrel and Susanne Steffy seek to exclude the reports and testimony of defense experts William Wheatley and E. Mitchell Swan. (Doc. No. 49.) Defendants Patriot Timber Products International, Inc. ("Patriot Timber") (Doc. Nos. 46, 48) and The Home Depot, Inc. ("Home Depot") (Doc. Nos. 58, 61)*fn1 seek to exclude the testimony of Edward Montz Jr. and Weinstein Realty Advisors. The motions are fully briefed, the Court has heard testimony from the experts at the scheduled Daubert hearing, and the issues are ripe for disposition. For the following reasons, the Defendants' motions will be granted in part and denied in part; the Plaintiffs' motion will also be granted in part and denied in part.

I. BACKGROUND

The dispute in this case arises from the sale of plywood to the Plaintiffs for construction of a multi-purpose building ("Building") on their property in 2004. (Doc. No. 1.) The structure was intended for use by family and employees of Steffy Concrete and would include a garage for storage of construction vehicles, a gymnasium, ceremonial hall, and offices. (Id.) During construction of the Building, the Plaintiffs allege that they have purchased 400 sheets of plywood from one of Defendant Home Depot's stores, used it to panel most of the interior walls in the Building. (Id. 15-16; 20; 22.) Thereafter, Plaintiffs claim that they experienced adverse health effects after using the Building, and eventually a "pungent, unpleasant" odor was noticed in the Building. (Id. ¶ 30.) After tests were performed, the Plaintiffs determined that the odor was formaldehyde, which allegedly rendered the Building uninhabitable. (Id. ¶ 53.)

II. STANDARD OF REVIEW

The Supreme Court has held that the trial court has "a special obligation" to ensure that any and all expert testimony is not only relevant but reliable. Kumho Tire Co., Ltd., v. Carmichael, 526 U.S. 137, 147 (1999) (quoting Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993)). This special obligation has been likened to a "gatekeeping role" for the trial judge. Daubert, 509 U.S. at 597. Accordingly, the admission of scientific, technical, or other specialized knowledge is within the discretion of district court. General Elec. Co. v. Joiner, 522 U.S. 136, 146-47 (1997).

This inquiry is controlled by Rule 702 of the Federal Rules of Evidence, which provides:

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.

Fed. R. Evid. 702. As the Third Circuit has explained, these requirements represent the "trilogy of restrictions on expert testimony: qualification, reliability and fit." Calhoun v. Yamaha Motor Corp. U.S.A., 350 F.3d 316, 321 (3d Cir. 2003) (citing Schneider v. Fried, 320 F.3d 396, 405 (3d Cir. 2003)).

When considering the qualification requirement, a Court must discern whether a proffered witness has specialized expertise in a given field. Pineda v. Ford Motor Co., 520 F.3d 237, 244 (3d Cir. 2008). In undertaking this inquiry, no particular background or credentials are necessary to establish specialized knowledge: "a broad range of knowledge, skills, and training qualify an expert." In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 741 (3d Cir. 1994). There is no challenge to the qualifications of any of the proffered experts in the present motions, and the Court finds that each challenged expert satisfies the qualification requirement.

As for the reliability requirement, the Supreme Court has held that the gatekeeping function requires the trial court to "make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Kumho Tire, 526 U.S at 152. To meet this requirement, "a litigant has to make more than a prima facie showing that his expert's methodology is reliable . . . [but] the evidentiary requirement of reliability is lower than the merits standard of correctness." Pineda, 520 F.3d at 244. When evaluating the reliability of a witness's methodology, a court is guided by several familiar factors drawn from Daubert:

(1) whether a method consists of a testable hypothesis; (2) whether the method has been subject to peer review; (3) the known or potential rate of error; (4) the existence and maintenance of standards controlling the technique's operation; (5) whether the method is generally accepted; (6) the relationship of the technique to methods which have been established to be reliable; (7) the qualifications of the expert witness testifying based on the methodology; and (8) the non-judicial uses to which the method has been put.

Calhoun, 350 F.3d at 321 (citing Paoli, 35 F.3d at 742 n.8). These factors "may or may not be pertinent in assessing reliability, depending on the nature of the issue, the expert's particular expertise, and the subject of his testimony." Kumho Tire, 526 U.S. at 150. Accordingly, the Rule 702 inquiry is a flexible one, and the court should also take into account any other relevant factors. Calhoun, 350 F.3d at 321.

The final requirement is fit, which means "the expert's testimony must be relevant for the purposes of the case and must assist the trier of fact." Id. (quoting Schneider, 320 F.3d at 405). "Rule 702's helpfulness standard requires a valid scientific connection to the pertinent inquiry as a precondition to admissibility." Daubert, 509 U.S. at 591-92. This inquiry goes primarily to relevance because expert opinion which does not relate to a disputed issue is not relevant and cannot assist the trier of fact as required by Rule 702. Id. As the Supreme Court has explained,

The study of the phases of the moon, for example, may provide valid scientific "knowledge" about whether a certain night was dark, and if darkness is a fact in issue, the knowledge will assist the trier of fact. However (absent creditable grounds supporting such a link), evidence that the moon was full on a certain night will not assist the trier of fact in determining whether an individual was unusually likely to have behaved irrationally on that night.

Id. Like the typical relevance inquiry, the standard for analyzing the fit of an expert's analysis to the case at hand is "not that high." United States v. Ford, 481 F.3d 215, 219-20 (3d Cir. 2007) (quoting Paoli, 35 F.3d at 745). But, expert testimony can be powerful and misleading because of the difficulty in evaluating it, and the Third Circuit has cautioned that "district courts should tread carefully when evaluating proffered expert testimony, paying special attention to the relevance prong of Daubert. Id. at 219 n.6.

III. DEFENDANTS' MOTIONS

A. Edward Montz Jr.

1. Report

Edward Montz Jr.'s ("Montz") expert report deals with the formaldehyde concentrations in the Plaintiffs' Building. (Doc. No. 46 Ex. C at 1 (hereinafter "Montz Report").) Montz's report describes two stages of testing at the Plaintiffs' Building. During the first stage, Montz tested the air in the Building and determined that the concentrations of formaldehyde "were far higher than any concentrations that we have observed in any newly constructed space, to date, as a result of construction materials alone." (Id. at 6.) The second study was "aimed at evaluating Mr. Steffy's concern about paneling containing formaldehyde." (Id.) IAS took two samples of plywood, which were comprised of five four-by-eight sheets taken randomly throughout the Building. (Id. at 4.) These samples were then sent to a lab where they were loaded into a chamber for emissions monitoring; a process called large chamber ASTM Method. (Id.) From these results, Montz estimated a concentration of formaldehyde in the plywood when it was initially purchased. (Id. at 7-8.)

The Defendants challenge two of Montz's conclusions in this motion. First, they challenge his conclusion that "[t]he chamber testing indicated that the 13-layer veneer plywood in the space was a potent source of formaldehyde." (Id. at 7.) In further elaboration of this opinion, Montz testified that he could conclude a substantial component of the formaldehyde in the Building's air was being offgassed by the plywood paneling. (Daubert Hr'g. Tr. at 78: 19-23, Oct. 23, 2008 (hereinafter "Hr'g. Tr.").) Defendants secondly challenge Montz's conclusion that the high concentrations of formaldehyde in the plywood "undoubtedly caused the elevated formaldehyde levels detected in the space." (Montz Report at 7.) This conclusion was clarified somewhat at the hearing, where counsel represented that Montz's ultimate opinion was that "the plywood was a substantial contributing factor of high formaldehyde levels in the building . . . ." (Hr'g. Tr. at 98: 16-20.)

2. Discussion

The Defendants challenge Montz's methodology in reaching his conclusions that the panels are the source and cause of the formaldehyde because he fails to account for potential alternative causes of formaldehyde in the air. (Doc. No. 54 at 19.) Focusing on the reliability prong of the Daubert inquiry and relying on Roche v. Lincoln Property Co., 278 F. Supp. 2d 744 (E.D. Va. 2003), the Defendants argue that Montz could not reliably come to his conclusion without accounting for other potential sources of formaldehyde used in construction of the Building or obvious alternative causes of the formaldehyde saturation.

As the Plaintiffs point out, Roche is not binding on this Court, but the Third Circuit has approved of the proposition that a causation expert's failure to account for obvious alternative explanations can be considered as a factor in assessing the reliability of his conclusions. See In re Unisys Savings Plan Litigation, 173 F.3d 145, 166 n.10 (3d Cir. 1999) (citing Claar v. Burlington N.R.R. Co., 29 F.3d 499, 502 (9th Cir. 1994)).

a. Source of the Formaldehyde Saturation

As to the first conclusion, the Court is satisfied that Montz's methodology is reliable. In his testimony at the Daubert hearing, Montz sufficiently explained his reasoning in focusing on the plywood and having it tested first. As discussed above, Montz's initial tests of the Building (which are not challenged by the Defendants) showed extremely high concentrations of formaldehyde in the air. (Hr'g. Tr. at 72: 2-5.) With these results in mind, Montz assessed the "multiplicity of items in the building that could be a source." (Hr'g. Tr. at 76: 5-6.) Recognizing that it would take a large source of formaldehyde to produce the concentrations found in the air, Montz looked for materials in the Building that had large enough volume, weight, and surface area to offgas the high levels formaldehyde, which led him to focus on the plywood. (Hr'g. Tr. at 76: 8-11.) Given the data he had already examined, plywood was a legitimate focus of his investigation, especially when taking into account reports that handling the plywood had caused some ill effects. (Hr'g. Tr. at 76: 14-18.)

Further, Montz did consider other sources of formaldehyde in his analysis. In a letter dated September 15, 2006, Montz stated:

Other Sources of formaldehyde in the building have not been identified or tested. From a scientific perspective, I need to be certain that the paneling is the major problem in the building. Given the ubiquitous nature of formaldehyde in building materials, I do not want to be professionally embarrassed by discovering later that another source of formaldehyde was the problem in the building. (Doc. No. 46-4 Ex. F at 2.) While the Defendants make much of this letter in attacking the reliability of Montz's methodology, it shows that Montz had not simply overlooked the other potential sources of formaldehyde in his investigation. In fact, Montz was evaluating the potential for other significant sources right up until the chamber testing showed such high concentrations of formaldehyde in the plywood. Further, he testified that in considering these alternative potential sources of formaldehyde, he gathered Material Safety Data Sheets ("MSDS") for all of the products used in construction of the Building and contacted manufacturers of those products to evaluate their potential impact. (Hr'g Tr. at 80: 12-18.)

Focusing on Montz's admission that he could not exactly correlate the tested plywood outgassing rates with the formaldehyde concentration in the Building's air, Defendants argue that "it is impossible to conclude that the formaldehyde in the plywood is the only source of formaldehyde in the air. Such a conclusion is even more difficult to reach in the presence of multiple potential sources of formaldehyde, the formaldehyde content of which is unknown." (Doc. No. 54 at 20.) But, as the Plaintiffs point out, this is not Montz's ultimate conclusion. He opines only that a substantial component of the formaldehyde in the air was being offgassed by the plywood paneling, which reflects his understanding that other sources of formaldehyde were present in the Building and contributed to the overall formaldehyde levels. Thus, while the fact that Montz did not perform actual tests on these other potential sources might affect the weight of his conclusion, it does not make his methodology unreliable. The Defendants' concern is more appropriately addressed on cross-examination and by presentation of contrary evidence at trial.

Montz also admitted in his testimony that the plywood samples sent out for testing only represented less than one percent of the 700 plywood panels installed in the Building. He also testified that "scientifically you would ...


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