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Diamond X Ranch, LLC v. Atlantic Richfield Co.

United States District Court, D. Nevada

May 8, 2018

DIAMOND X RANCH LLC, Plaintiff/Counterclaim Defendant,
ATLANTIC RICHFIELD COMPANY, Defendant/Counterclaimant/Third-Party Plaintiff,
PARK LIVESTOCK CO., Third-Party Defendant.




         This action concerns alleged contamination of Plaintiff Diamond X Ranch, LLC's (“Diamond X”) property through releases of acid mine drainage (“AMD”) from Defendant Atlantic Richfield Company (“ARCO”) owned Leviathan Mine. Pursuant to LR 16-3 and Paragraph 2 of the Court's Order Regarding Trial in Civil Cases (ECF No. 319), both Diamond X and ARCO have filed consolidated motions in limine. (ECF Nos. 339, 340.) Both parties also filed respective oppositions. (ECF Nos. 344, 346.)

         For the reasons discussed herein, Diamond X's motion in limine is granted in part and denied in part and ARCO's motion in limine is granted in part and denied in part.


         The Court incorporates the relevant background facts set forth in the Court's previous order. (ECF No. 300 at 2-4.)


         A motion in limine is a procedural mechanism made in advance to limit testimony or evidence in a particular area. United States v. Heller, 551 F.3d 1108, 1111 (9th Cir.2009). It is a preliminary motion that is entirely within the discretion of the Court. See Luce v. United States, 469 U.S. 38, 41-42 (1984). To exclude evidence on a motion in limine, “the evidence must be inadmissible on all potential grounds.” See, e.g., Ind. Ins. Co. v. Gen. Elec. Co., 326 F.Supp.2d 844, 846 (N.D. Ohio 2004). “Unless evidence meets this high standard, evidentiary rulings should be deferred until trial so that questions of foundation, relevancy and potential prejudice may be resolved in proper context.” Hawthorne Partners v. AT & T Tech., Inc., 831 F.Supp. 1398, 1400 (N.D. Ill. 1993). This is because although rulings on motions in limine may save “time, cost, effort and preparation, a court is almost always better situated during the actual trial to assess the value and utility of evidence.” Wilkins v. Kmart Corp., 487 F.Supp.2d 1216, 1218 (D. Kan. 2007).

         In limine rulings are provisional. Such “rulings are not binding on the trial judge . . . [who] may always change h[er] mind during the course of a trial.” Ohler v. United States, 529 U.S. 753, 758 n.3 (2000). “Denial of a motion in limine does not necessarily mean that all evidence contemplated by the motion will be admitted to trial. Denial merely means that without the context of trial, the court is unable to determine whether the evidence in question should be excluded.” Ind. Ins. Co., 326 F.Supp.2d at 846.

         Evidence is relevant if “it has any tendency to make a fact more or less probable than it would be without the evidence” and “the fact is of consequence in determining the action.” Fed.R.Evid. 401. Only evidence that is relevant is admissible. Fed.R.Evid. 402. Relevant evidence may still be inadmissible “if its probative value is substantially outweighed by a danger of . . . unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed.R.Evid. 403. “Unfairly prejudicial” evidence is that which has “an undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one.” United States v. Gonzalez-Flores, 418 F.3d 1093, 1098 (9th Cir. 2005) (quoting Old Chief v. United States, 519 U.S. 172, 180 (1997)).


         A. Evidence of Any Potential Remedy Guided by the Environmental Protection Agency (“EPA”) at the River Ranch

         Diamond X moves “to exclude testimony or other evidence regarding any potential EPA-guided remedy at [the] River Ranch . . . that may theoretically occur in the future under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).” (ECF No. 340 at 7.) ARCO responds that “[t]he parties agree that the cost and scope of any future EPA-ordered CERCLA remedy on the [River Ranch] should not be presented to the jury, ” but adds two clarifications. (ECF No. 344 at 2.)

         First, ARCO argues that this evidence is “relevant to the parties' CERCLA claims for past and future response costs” during the bench phase of the trial and should be presented outside the scope of the jury. (Id.) ARCO raised this issue for the first time in its opposition; therefore, Diamond X did not address the issue in its motion in limine. (See ECF No. 340 at 7-8 (arguing exclusively that evidence of a future EPA-guided cleanup at the River Ranch is purely conjectural and is irrelevant to Diamond X's common law claims).) Regardless, the Court defers ruling on this issue until the bench phase of the trial.

         Second, ARCO argues that it “should be allowed to explain to the jury that [the Nevada Department of Environmental Protection (“NDEP”)] and EPA will hold [ARCO] responsible-as a liable party under CERCLA and as the company currently performing CERCLA early response actions, the remedial investigation, and the feasibility study-for any CERCLA remedy selected by EPA for the [River Ranch] (whatever that remedy may be or its cost).” (ECF No. 344 at 2.) ARCO posits that its responsibility for future cleanup costs is not conjectural at least as to NDEP, which “has made clear it will require [ARCO] to clean up the [River Ranch] to Nevada regulatory standards.” (Id. at 3.) ARCO contends that because it will be responsible for any future remedial action, this is relevant insofar as Diamond X will not need to incur any expenses for restoring its property and if Diamond X does incur expenses, they will be unnecessary. (Id.) The Court fails to see how future remedial costs incurred by ARCO pursuant to NDEP's or even EPA's direction is relevant to an evaluation of Diamond X's continuing torts, for which Diamond X can recover only lost use damages incurred during the relevant limitations period. (ECF No. 300 at 17-18.) The Court therefore will not permit ARCO to explain to the jury that NDEP or EPA will hold ARCO responsible for future cleanup costs.

         The Court therefore grants Diamond X's motion. The Court will exclude any evidence pertaining to the cost and scope of a future NDEP- or EPA-ordered remedy during the jury phase of the trial.

         B. Testimony of Joyce Tsuji, Ph.D., and David J. Folkes, P.E.

         ARCO designated Joyce Tsuji, Ph.D., to provide expert testimony on the risks to human health and the environment from contaminants such as arsenic on the River Ranch. (ECF No. 340 at 10.) Diamond X now moves to preclude Dr. Tsuji from offering at trial opinions that: (1) suggest a health-protective arsenic soil concentration for the River Ranch; (2) suggest a cleanup level for the River Ranch; (3) involve calculations that support a risk assessment and (4) relate to cleanup levels that EPA has selected for other contaminated sites. (Id. at 9.) Diamond X moves to exclude these opinions on the basis that “Dr. Tsuji did not apply any scientifically reliable method to determine a health-protective arsenic soil concentration (and hence, cleanup level) for [the] River Ranch; she failed to provide any calculations whatsoever in her expert reports or deposition testimony; and her opinions based on cleanup levels at other contaminated sites are unhelpful and prejudicial.” (Id.) As a result, Diamond X also moves to preclude David J. Folkes, P.E., from “offering opinions based on Dr. Tsuji''s purported cleanup level of 250 ppm and 1, 000 ppm for [the] River Ranch including: (1) the extent of soil contamination above those levels on [the] River Ranch; (2) any remedy based on that amount of contamination (e.g., deep tilling and limited excavation); and (3) costs associated with such remedy.” (Id.) The Court agrees with ARCO and denies Diamond X's motion as to this evidence.

         i. Legal Standard for Expert Testimony

         Under Rule 702, “[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.” Fed.R.Evid. 702. The Supreme Court provided additional guidance on Rule 702 in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999). In Daubert, the Court held that scientific testimony must be reliable and relevant to be admissible. Daubert, 509 U.S. at 589. Kumho Tire clarified that Daubert's principles also apply to technical and specialized knowledge. See Kumho, 526 U.S. at 141.

         Under Daubert, a court may use the following factors to assess reliability: whether a scientific theory or technique can be (and has been) tested; whether the theory or technique has been subjected to peer review and publication; the known or potential rate of error and the existence and maintenance of standards controlling the techniques operation; and whether the technique is generally accepted. Daubert, 509 U.S. at 593-94. However, the “test of reliability is ‘flexible, ' and Daubert's list of specific factors neither necessarily or exclusively applies to all experts or in every case.” Kumho, 526 U.S. at 141. The trial court has “considerable leeway” in deciding how to determine the reliability of an expert's testimony and whether the testimony is in fact reliable. Id. at 152. An expert's area of competence must match the subject matter of her testimony. See United States v. Chang, 207 F.3d 1169, 1172-73 (9th Cir. 2000) (affirming exclusion of experts' opinion that security was not counterfeit where he was only an expert in the history of securities and not an expert in detecting counterfeits).

         The Ninth Circuit has emphasized that “Rule 702 is applied consistent with the liberal thrust of the Federal Rules and their general approach of relaxing the traditional barriers to opinion testimony.” Jinro Am. Inc. v. Secure Investments, Inc., 266 F.3d 993, 1004 (9th Cir. 2001), opinion amended on denial of reh'g, 272 F.3d 1289 (9th Cir. 2001) (citations and internal quotation marks omitted). “An expert witness-unlike other witnesses-is permitted wide latitude to offer opinions, including those that are not based on firsthand knowledge or observation, so long as the expert's opinion has a reliable basis in the knowledge and experience of his disciplines.” Id. (citations and internal quotation marks omitted). Shaky but admissible evidence should not be excluded but instead attacked through cross-examination, contrary evidence, and attention to the burden of proof. Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010), as amended (Apr. 27, 2010).

         ii. Dr. Tsuji's Opinions

         Dr. Tsuji is a toxicologist. (ECF No. 344 at 4.) Diamond X argues that Dr. Tsuji's opinions should be excluded in part because she did not apply a reliable methodology to arrive at her projected values of what levels of arsenic soil concentration would protect human health and agricultural use on the River Ranch. (ECF No. 340 at 10.) The standard methodology to assess the risks from a contaminated site is a risk assessment, and Dr. Tsuji admitted she did not perform one and that one should be performed. (Id.) Diamond X further argues that Dr. Tsuji did not explain the method she used to compare the various contaminated sites, that she provided “limited details pertaining to each site, ” and that she neglected to account for site-specific factors such as varying background concentrations of arsenic, regulatory restrictions on expense and technical feasibility, and government imposed deed restrictions constraining the use of the River Ranch. (Id. at 12.) Finally, Diamond X points outs that Dr. Tsuji relied heavily on EPA-approved clean up data at the Anaconda Smelter site in Montana (“Montana Site”) but that she failed to explain “whether exposure at [the] River Ranch would be different or similar to the Montana Site and instead testified in her deposition that “she applied the cleanup level from the Montana [S]ite to [the] River Ranch because she ‘know[s] exactly how the calculations result in the 250 ppm for [the Montana Site]' and that, because the equations are ‘not complicated, ' she knew the assumptions used for the Montana [S]ite would be protective for [the] River Ranch.” (Id. at 13 (quoting ECF No. 340-2 at 8-12).)

         ARCO responds that Dr. Tsuji is qualified to offer her opinions (which Diamond X does not dispute), utilized a methodology reasonably relied upon by toxicologists in her field, and that Diamond X's argument ultimately goes to the weight, not the admissibility, of Dr. Tsuji's testimony. (ECF No. 344 at 5.) More specifically, ARCO points to the multiple analyses, techniques, and lines of evidence Dr. Tsuji relied on that are of the type reasonably relied upon by a toxicologist in her field, such as: (1) the “arsenic cleanup levels accepted by EPA or state regulatory agencies at sixteen western mining and smelting sites in the United States, where studies have been conducted to derive risk assessment assumptions and characterizes exposures”; (2) “the arsenic level accepted by EPA for the Anaconda Site” based on “extensive studies . . . on soils, house dust, arsenic bioavailability in laboratory animals, soil ingestion rates in children, and biomonitoring to support risk assessment assumptions, ” epidemiological studies, and EPA's health risk assessment for arsenic in residential soil; (3) site-specific conditions at the Montana Site compared to those at the River Ranch (accounting for arsenic bioavailability, relative sizes of affected areas, effects of climate conditions on potential exposure rates, and the source of the arsenic); (4) the extent to which EPA's assumptions at the Montana Site overestimate the health risk to children and adults; (5) toxicological and epidemiological studies on health-based metrics among persons exposed to varying degrees of arsenic in soil and water; and (6) the relative amounts of arsenic that a person would be exposed to if living on soil containing 250 ppm arsenic compared to background arsenic intake from diet and water that people are normally exposed to. (ECF No. 344 at 6-7.)

         Based on the variety of scientifically-accepted methodologies utilized by Dr. Tsuji, the Court agrees with ARCO that Diamond X's critique that Dr. Tsuji did not perform a risk assessment ultimately goes to the weight of her opinions. See Kennedy v. Collagen Corp., 161 F.3d 1226, 1231 (9th Cir. 1998) (finding that arguments about whether a qualified expert used a certain technique or considered specific data go to the weight and not the admissibility of her opinions). Dr. Tsuji's opinions may be “attacked through cross-examination, contrary evidence, and attention to the burden of proof, ” but the Court finds that her opinions are still admissible. See Primiano, 598 F.3d at 564.

         Diamond X also argues that Dr. Tsuji's opinions are not “grounded in the realities of [the] River Ranch” and speculates that facts specific to the River Ranch may differ, such as the allowable residential risk level, background arsenic levels, date of remediation, institutional controls, and technical feasibility/cost. (ECF No. 340 at 14.) However, Diamond X's critique again goes to the weight of Dr. Tsuji's opinions. Diamond X may cross-examine Dr. Tsuji as to how the River Ranch may be distinguishable from other contaminated sites to support her opinions.

         Diamond X's motion is therefore denied as to Dr. Tsuji's opinions.

         iii. Folkes' Opinions

         Diamond X seeks to exclude Folkes' opinions primarily because he relies on the 250 ppm clean up level that Dr. Tsuji selected. (ECF No. 340 at 14.) Diamond X's motion is denied because the Court has declined to exclude Dr. Tsuji's opinions.

         C. Testimony of Robert Annear, Ph.D., Regarding Chemistry Topics

         Diamond X moves to exclude Dr. Annear from offering expert opinion on chemistry-specifically those opinions reflected in Sections 2.2.2, 2.2.3, and 2.2.4 of his Rebuttal Report. (ECF No. 340 at 15.) ARCO responds that it does not intend to offer Dr. Annear's opinions as reflected in those sections of his Rebuttal Report, making this motion moot. (ECF No. 344 at 9.) Diamond X's motion is therefore denied as moot.

         D. Witness Britt Jones

         Diamond X moves to exclude the testimony of Britt Jones at trial “because ARCO failed to identify her in its initial and supplemental disclosures as required by the Federal Rules of Civil Procedure.” (ECF No. 340 at 17.) ARCO, however, points out that it disclosed Britt Jones as a witness in its Third Supplemental Rule 26(a)(1) Disclosures served on January 5, 2018. (ECF No. 344 at 9.) While ARCO did not attach any exhibits to support this contention, the Court assumes there is no dispute as to whether Britt Jones was disclosed in ARCO's Third Supplemental Disclosures. Accordingly, Diamond X's motion is denied without prejudice; Diamond X may re-raise this issue in the event ARCO's representation is not supported by its Third Supplemental Disclosures.

         E. Evidence Regarding Viability of Diamond X's Uncompleted Development Efforts

         Diamond X moves to exclude evidence or argument “concerning the viability of uncompleted efforts to develop [the] River Ranch” because it is irrelevant to calculation of lost use damages, which are based on the lost use rental value during the time Diamond X was unable to use the River Ranch because of contamination. (ECF No. 340 at 18-19.) Diamond X states that to determine fair market value, one must determine the highest and best use of the land. (Id. at 19.) ARCO counters that the “highest and best use” principle applies only to determining just compensation in eminent domain cases. (ECF No. 344 at 11 (citing City of Las Vegas v. Bustos, 75 P.3d 351, 352 (Nev. 2003)).) The Court agrees with ARCO and finds that the “highest and best use” principle is “but one factor to be considered in ascertaining [a] property's fair market value.” Tahoe Highlander v. Westside Fed. Sav. & Loan Ass'n, 588 P.2d 1022, 1024 (Nev. 1979). Thus, “[e]vidence of historical or current uses of the property [ ]including prior efforts to develop or market the property” and hypothetical future uses are relevant to determining the fair market and rental values of the River Ranch, since those values are affected in part by “whether the property has legal access rights and existing or readily available infrastructure or utilities.” (ECF No. 344 at 12.) Moreover, the Court agrees with ARCO that “[e]vidence of prior development and marketing efforts [ ] is relevant to undermine Diamond X's assertion that but-for contamination from the Leviathan Mine, it would be ranching the property to this day” and that this evidence actually demonstrates that Diamond X's “primary focus has been on developing or selling the property for a profit.” (Id.)

         The Court therefore denies this motion.

         F. Dr. Eugenia ...

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