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Axiall Corp. v. Descote S.A.S.

United States District Court, W.D. Pennsylvania

June 16, 2017

AXIALL CORPORATION, Plaintiff,
v.
DESCOTE S.A.S., Defendants.

          MEMORANDUM OPINION

          Joy Flowers Conti Chief United States District Court Judge

         I. Introduction

         Pending before the court are two motions to exclude expert testimony: the Motion to Preclude the Proffered Expert Testimony of Graeme Norval (ECF No. 86) filed by plaintiff Axiall Corporation (“Axiall”) and the Motion to Exclude Certain Testimony of Plaintiff's Expert Mark Gleason and Gleason & Associates (ECF No. 89) filed by defendant descote S.A.S. (“descote”). The court heard oral argument on these and other motions on May 1, 2017. During the hearing, the court issued rulings on various aspects of the motions, which were memorialized in an order entered on May 15, 2017. (ECF No. 135). In addition, the court ordered the parties to file supplemental briefs on two discrete issues, on which the court reserved ruling: (1) “whether Norval's testimony regarding the management of change process is relevant to the issue of reliance under 18 Pa. Cons. Stat. § 2315 (Implied warranty: fitness for a particular purpose), and, in particular, whether section 2315 imposes a subjective or objective reliance requirement;” and (2) “whether ‘the weighted average cost of capital' is the same as ‘return on assets[.]'” (Id. at 2). The parties timely filed their supplemental briefs (ECF Nos. 131, 133) and responses thereto (ECF Nos. 136, 137). The issues presented, having been fully briefed, are now ripe for resolution.

         II. Legal Standard

         Federal Rule of Evidence 702 provides that:

         A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.

         Under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), district courts must act as gatekeepers to “ensure that any and all scientific testimony or evidence admitted is ... reliable.” Id. at 589. While Daubert applied exclusively to scientific testimony, the Supreme Court subsequently extended the district court's gatekeeper function to all expert testimony. Kuhmo Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999). The United States Court of Appeals for the Third Circuit has explained that Rule 702 “embodies a trilogy of restrictions” that expert testimony must meet for admissibility: qualification, reliability and fit. Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404 (3d Cir. 2003).

         III. Discussion

         A. Motion to Exclude Testimony of Graeme Norval (“Norval”) regarding Management of Change

         Some background is necessary to place the parties' arguments about this issue in context. According to Norval's expert report, “[m]anagement of change (MOC) is one of the elements of a Process Safety Management system.” (ECF No. 86-1 at 4). It “is a process for evaluating and controlling modifications to facility design, operation, organization, or activities - prior to implementation - to make certain that no new hazards are introduced and that the risk of existing hazards to employees, the public, or the environment is not unknowingly increased” (Id.) (emphasis in original). As Norval explains in his report, “[c]ompanies and sites usually have written MOC procedures that apply to all work that is not judged to be an RIK (replacement in kind).” (Id.) “The principle behind MOC, ” he explains, “is that the operating chemical company has the most knowledge on the safe handling of its products. These companies need to follow due diligence principles when planning change.” (Id.)

         Later in his report, Norval opines:

In my opinion, an MOC process should have been followed by AXIALL in connection with implementation of the new rail cars and new valve technologies. The case involves the use of a valve technology that had not been in use in North America (save for pneumatic trials 20 years prior), and a new valve supplier, neither of which can be considered as Replacement in Kind. Maintenance activities are generally outside the scope of MOC because the part is replaced by an identical part (Replacement in Kind). The decision to change from a 4-valve to a 3-valve, and then back to a 4-valve arrangement should have been part of this MOC process. The documentation requirements and the diligence of these engineering reviews, would have provided AXIALL with the information to evaluate the candidate valves for the various AXIALL locations, and to make a valve selection decision. AXIALL was responsible for following the MOC process.

(Id. at 15). In his summary section, Norval concludes, in part:

AXIALL should have followed a Management of Change (MOC) protocol in the administration of this project. AXIALL had the responsibility to review and assess technological changes prior to their implementation; in this case, the technology change was the addition of a spring-loaded ball check valve on the underside of every valve. MOC protocols ensure that this is completed properly. It would have forced the documentation of the goals of the changed design, as well ...

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