Bombardier Transportation (Holdings) USA Incorporated v. HDR Engineering Incorporated

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] Bombardier Transportation (Holdings) ) No. CV-21-01460-PHX-SPL ) 9 USA Incorporated, ) [10] ) O R D ER Plaintiff, ) ) 11 vs. ) ) [12] HDR Engineering Incorporated, et al., ) ) [13] ) Defendants. ) [14] 15 Before the Court is Defendant HDR Engineering Inc.’s Motion to Exclude 16 Opinions of Robert S. Vecchio (Doc. 143). The Motion has been fully briefed (Docs. 17 162, 164), and the Court rules as follows.1 18 I. BACKGROUND 19 Plaintiff Bombardier Transportation (Holdings) USA Inc. alleges one count of 20 breach of contract against Defendant HDR Engineering Inc., the only Defendant 21 remaining in this action. (Doc. 105). In 2009, Plaintiff contracted with the City of 22 Phoenix “to design, build, operate, and maintain” the Phoenix Sky Harbor International 23 Airport PHX Sky Train System (the “PHX Sky Train System”). (Doc. 105 at 2). In 24 January 2013, Plaintiff “discovered the failure of expansion joint concrete plinths” in 25 several Type 2 and Type 3 expansion joints (the “Original Failures”). (Doc. 105 at 4). [26] 27 1 Because it would not assist in resolution of the instant issues, the Court finds the pending motion is suitable for decision without oral argument. See LRCiv 7.2(f); Fed. R. [28] Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). 1 The expansion joints in the PHX Sky Train System consist of steel ride plates anchored 2 to concrete plinths. (Doc. 105 at 3). In February 2013, Plaintiff engaged Defendant under 3 their Master Services Agreement (“MSA”) and Purchase Order No. 4500546120 (the 4 “Purchase Order”). (Doc. 105 at 5). The Purchase Order reflects that it was “for the Type 5 2 and Type 3 running plinth expansion joints installed for the PHX Sky Train System” 6 and called for Defendant to perform various tasks, including “an independent review of 7 the original design,” “to develop Type 2 and Type 3 running plinth expansion joint 8 retrofit/replacement options,” and to “prepare a report that defines the root cause of the 9 Type 2 and Type 3 running plinth expansion joint failures.” (Doc. 143-1 at 31–33). 10 Defendant performed the independent review, identified design deficiencies, determined 11 that the Original Failures resulted from the defective design of the concrete plinths, and 12 concluded that the existing Type 2 and Type 3 concrete plinths needed to be redesigned 13 and reconstructed. (Doc. 105 at 6). Defendant also determined that 12 of 24 ride plates 14 needed to be replaced but did not redesign the ride plates or anchoring studs. (Doc. 105 at 15 6). Plaintiff implemented Defendant’s plan for fixing the Original Failures. (Doc. 105 at 16 6). 17 In September 2020 through January 2021, several Type 3 expansion joint ride 18 plate failures occurred, this time due to failures in the ride plate anchoring studs (the 19 “Recent Failures”). (Doc. 105 at 7). Plaintiff alleges that Defendant should have 20 discovered the deficiencies in the anchoring studs during its 2013 review and breached 21 the MSA and Purchase Order by providing negligent, defective, or incomplete work. 22 (Doc. 105 at 11). Defendant argues in part that the design of the anchoring studs was 23 beyond the scope of the work required by the Purchase Order. (Doc. 143 at 8–9). In the 24 instant Motion, Defendant argues for the exclusion of Plaintiff’s engineering expert, Dr. 25 Robert S. Vecchio. (Doc. 143). 26 II. LEGAL STANDARD 27 Federal Rule of Evidence (“FRE”) 702 permits parties to file motions to exclude 28 to ensure relevance and reliability of expert testimony. See Kumho Tire Co. v. 1 Carmichael, 526 U.S. 137 , 152–53 (1999). FRE 702 provides that: 2 A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of 3 an opinion or otherwise if: 4 (a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the 5 evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; 6 (c) the testimony is the product of reliable principles and methods; and 7 (d) the expert has reliably applied the principles and methods to the facts of the case. [8] 9 Fed. R. Evid. 702. The Rule imposes on the trial courts a gatekeeping obligation to 10 “ensure that any and all scientific testimony or evidence admitted is not only relevant, but 11 reliable.” Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993). “Whether the 12 expert is appropriately qualified, whether her testimony is relevant, and whether her 13 testimony is reliable are all distinct inquiries under Rule 702.” Contreras v. Brown, No. 14 CV-17-08217-PHX-JAT, 2019 WL 2080143 , at *1 (D. Ariz. May 10, 2019). 15 The proponent of the expert evidence has the burden of proving the expert’s 16 testimony is admissible under FRE 702 and the Daubert standard. Grant v. Bristol-Myers 17 Squibb, 97 F. Supp. 2d 986, 989 (D. Ariz. 2000). “When an expert meets the threshold 18 established by Rule 702 as explained in Daubert, the expert may testify and the jury 19 decides how much weight to give that testimony.” Id. When the expert does not meet the 20 threshold, the Court may prevent him from providing testimony. See Alaska Rent-A-Car, 21 Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 969 (9th Cir. 2013) (“Basically, the judge is 22 supposed to screen the jury from unreliable nonsense opinions, but not exclude opinions 23 merely because they are impeachable.”). 24 III. DISCUSSION 25 Defendant makes a variety of arguments for the exclusion of Dr. Vecchio’s 26 testimony, including that it is unreliable and unhelpful. First, Defendant argues that the 27 Court should exclude Dr. Vecchio’s testimony because he opines on the scope of 28 Defendant’s duties under the Purchase Order, which is a question of contract 1 interpretation that is an improper subject for expert testimony. “Unless a contract is 2 deemed ambiguous or there is a term of the contract that requires an expert’s explanation, 3 it is improper for an expert to interpret or construe a contract in his opinion.” Aya 4 Healthcare Servs., Inc. v. AMN Healthcare, Inc., 613 F. Supp. 3d 1308 , 1320 (S.D. Cal. 5 2020) (citing McHugh v. United Serv. Auto. Ass’n, 164 F.3d 451, 454 (9th Cir. 1999)). 6 But as Plaintiff highlights, under Pennsylvania law, which the parties agree governs the 7 Purchase Order, “even absent an ambiguity, a court may consider evidence of custom in 8 the industry or usage in the trade.” Nationwide Life Ins. Co. v. Commonwealth Land Title 9 Ins. Co., No. 05-281, 2011 WL 204519 , at *7 (E.D. Pa. Jan. 20, 2011); see also Sunbeam 10 Corp. v. Liberty Mut. Ins. Co., 781 A.2d 1189, 1193 (Pa. 2001) (“In the law of contracts, 11 custom in the industry or usage in the trade is always relevant and admissible in 12 construing commercial contracts and does not depend on any obvious ambiguity in the 13 words of the contract.”). Thus, courts applying Pennsylvania law permit expert testimony 14 regarding industry custom and trade usage of terms in a contract. See Nationwide, 2011 15 WL 204519 , at *7; T.N. Inc., Ltd. v. Fidelity Nat’l Info. Servs., Inc., No. 18-5552, 2021 16 WL 5980048 , at *13 (E.D. Pa. Dec. 17, 2021). Such testimony may not, however, go to 17 “the legal effect of a document, the drafters’ intent or other aspects of contract 18 interpretation that belong squarely in the realm of law.” T.N. Inc., 2021 WL 5980048 , at 19 *14; see also Aya Healthcare Servs., 613 F. Supp. 3d at 1320–21. 20 Expert testimony as to industry custom or trade usage must, like any other expert 21 testimony, be based on the expert’s skill, knowledge, experience, appropriate industry 22 sources, or other permissible bases. See Fed. R. Evid. 702 advisory committee’s note to 23 2000 amendment (“The expert’s testimony must be grounded in an accepted body of 24 learning or experience in the expert’s field, and the expert must explain how the 25 conclusion is so grounded.”). For example, in Nationwide, an expert was permitted to 26 testify to conclusions he reached about terms in a contract based on “his own experience, 27 title insurers’ underwriting manuals, bulletins, articles by leading title insurers, leading 28 treatises, and the general practice of underwriting employees,” but was precluded from 1 testifying to his definition of a term that was based “almost exclusively [on] legal sources 2 such as the Restatement, Pennsylvania state legal journals, and case law.” Nationwide, [3] 2011 WL 204519 , at *14. Similarly, in T.N. Inc., an expert was permitted to testify to his 4 opinions on a contract where his opinions “rel[ied] on a combination of his technical skill 5 and his knowledge of the customary practices . . . concerning open-source software 6 licenses.” T.N. Inc., 2021 WL 5980048 , at *13. 7 Thus, while it may have been permissible for Dr. Vecchio to opine on the meaning 8 of “Type 2 and Type 3 running plinth expansion joint” in the Purchase Order based on his 9 knowledge of and experience in the engineering consulting industry as Plaintiff suggests, 10 (Doc. 162 at 8), that is simply not the type of opinion that is before the Court. Unlike in 11 Nationwide and T.N. Inc. where the courts could discern the knowledge, experience, and 12 sources on which the experts relied, in this case, the Court can discern no proper basis for 13 Dr. Vecchio’s opinions on the scope of the Purchase Order. Instead, Dr. Vecchio’s report 14 merely states, “As shown in an excerpt of the purchase order for these services (see 15 Figure 3-9), Task 2 was concerned with the development of a retrofit or replacement 16 option for both the Type 2 and 3 ride plate assemblies, as well [as] checking the 17 anchorages of various abutments and abutment expansion joints.”2 (Doc. 143-6 at 20). 18 Except for excerpting the Purchase Order in Figure 3-9, nowhere does the report discuss 19 the language of the Purchase Order, define any terms contained therein, explain industry 20 customs with respect to similar purchase orders, or otherwise explain Dr. Vecchio’s 21 interpretation of the scope of Task 2. Absent any such discussion, Plaintiff has failed to 22 show that Dr. Vecchio’s opinions are grounded in his knowledge or experience in 23 engineering, or that they are the product of reliable principles and methods concerning 24 industry custom or trade usage. 25 In fact, it appears that Dr. Vecchio’s opinion concerning the scope of Defendant’s 26 obligations under the Purchase Order was not his opinion at all but rather that of [27] 2 Figure 3-9 of Dr. Vecchio’s report shows relevant excerpts of the Purchase 28 Order. 1 Plaintiff’s counsel. The Executive Summary to Dr. Vecchio’s report states that Defendant 2 “was retained to review the design of the ride plates, determine the root cause of failure 3 and provide design support for the development of retrofits, as necessary.” (Doc. 143-6 at 4 3). When asked about the basis for that statement during his deposition, Dr. Vecchio 5 testified that it “is our understanding based on our discussions with counsel.” (Doc. 143-8 6 at 6). Dr. Vecchio’s deposition testimony negates Plaintiff’s post hoc argument that Dr. 7 Vecchio’s purported opinions regarding Defendant’s duties under the Purchase Order are 8 a product of his knowledge and experience in the engineering industry. Instead, his 9 deposition testimony shows that the report merely parrots the opinions of Plaintiff’s 10 counsel regarding the scope of the contract. Plaintiff cannot prove its preferred reading of 11 the Purchase Order merely by having an expert witness state it. 12 Plaintiff cites to Elosu v. Middlefork Ranch, Inc. in arguing that reliance on 13 statements from counsel does not make Dr. Vecchio’s opinions unreliable, but that is a 14 gross misapplication of Elosu. 26 F.4th 1017 (9th Cir. 2022). The issue in Elosu was “the 15 scope of a district court’s discretion to exclude expert testimony that it deems 16 unsupported by the record.” Id. at 1023 . The district court in that case excluded an 17 expert’s testimony based on its finding that the expert’s “report [was] too speculative, 18 that his conclusion conflicted with the contractors’ testimony, and that he relied too 19 heavily on the testimony of the plaintiffs.” Id. The Ninth Circuit reversed, holding that 20 the district court’s “concerns speak to corroboration, not foundation, and are properly 21 addressed through impeachment before a jury at trial—not exclusion by a district judge at 22 the admissibility stage.” Id. at 1023–24. The Ninth Circuit found that the district court 23 had improperly assumed a factfinding role, overlooking the expert’s scientific analysis 24 and weighing evidence to discredit the expert’s conclusions. Id. at 1027 . 25 In contrast, here, the Court finds not that Dr. Vecchio’s opinions on the scope of 26 the Purchase Order are unsupported by the record but rather that they are not the product 27 of reliable principles or methods—which was explicitly not at issue in Elosu. Id. at 1023 . 28 Still, this Court is concerned too with the foundation for Dr. Vecchio’s opinions, which 1 appears to be not his own expertise, but the statements of counsel. Dr. Vecchio provides 2 no analysis or explanation of how he reached his conclusion on the scope of the Purchase 3 Order, seemingly because he did not reach such a conclusion; it was his “understanding 4 based on discussions with counsel.” (Doc. 143-8 at 6). Unlike in Elosu, this Court does 5 not necessarily find that Dr. Vecchio’s opinions are incorrect or inconsistent with the 6 record. The Court finds instead that Plaintiff has not shown a proper basis or 7 methodology for Dr. Vecchio’s opinions. Accordingly, Dr. Vecchio’s opinions on the 8 scope of Defendant’s duties under the Purchase Order must be excluded. 9 Still, the Court is largely not persuaded by Defendant’s arguments for the 10 exclusion of Dr. Vecchio’s other opinions. First, Defendant argues that Dr. Vecchio’s 11 opinions should be excluded because he failed to consider possible alternative causes— 12 specifically construction or fabrication defects— for the Recent Failures. (Doc. 143 at 13 12); see Clausen v. M/V New Carissa, 339 F.3d 1049, 1058 (9th Cir. 2003) (“A district 14 court is justified in excluding evidence if an expert ‘utterly fails . . . to offer an 15 explanation for why the proffered alternative cause’ was ruled out.” (citation omitted)). 16 Plaintiff responds by highlighting excerpts from Dr. Vecchio’s report and deposition in 17 which he explains that it is the designer’s responsibility to preclude the possibility of such 18 failures “using a combination of structural analysis, connection detailing, and 19 construction quality assurance.” (Doc. 162 at 12–13 (quoting Doc. 143-6 at 6)). 20 Defendant does not dispute that this assertion addresses possible alternative causes, but 21 instead argues that “construction quality assurance” was unavailable to Defendant 22 because the ride plates and studs were already fabricated when it became involved. (Doc. 23 164 at 7). Thus, Defendant essentially concedes that Dr. Vecchio considered possible 24 alternative causes but disagrees with his conclusions. Such disagreement may be explored 25 through cross-examination and other testimony, but it is not grounds for exclusion. See 26 Kennedy v. Collagen Corp., 161 F.3d 1226 , 1230–31 (9th Cir. 1998). 27 Next, Defendant argues that Dr. Vecchio’s opinions based on “common sense” 28 should be excluded as unhelpful to the jury. (Doc. 143 at 16); see McClellan v. I-Flow 1 Corp., 710 F. Supp. 2d 1092, 1136 (D. Or. 2010) (“It is well established that expert 2 testimony is not helpful if it simply addresses lay matters which the jury is capable of 3 understanding and deciding without the expert’s help.” (citation and quotation marks 4 omitted)). But the Court agrees with Plaintiff that, when read in context, Dr. Vecchio’s 5 use of the term “common sense” during his deposition refers to the common sense of a 6 professional engineer, not common sense possessed by a lay person. Thus, such 7 testimony may be helpful to lay jurors. 8 Finally, Defendant argues for the exclusion of Dr. Vecchio’s opinions that 9 Defendant was negligent both because he fails to identify the applicable standard of care 10 and because it is an improper opinion on an ultimate legal issue. With respect to the 11 applicable standard of care, Defendant first argues that Dr. Vecchio “never meaningfully 12 defines the standard of care applicable to a reasonable engineering firm acting in the 13 same capacity as [Defendant].” (Doc. 143 at 15). Plaintiff’s Response, however, 14 identifies several professional engineering standards cited by Dr. Vecchio as the basis for 15 his opinions. (Doc. 162 at 15–16). Defendant’s Reply then makes a somewhat different 16 argument: that Dr. Vecchio “ignore[s] the applicable standard of care established by the 17 terms of the contract” between the parties.” (Doc. 164 at 8 (emphasis omitted)). The 18 applicable provision states that the standard of care under the contract is “the care and 19 skill ordinarily used by members of [Defendant]’s profession practicing under the same 20 or similar circumstances at the same time and in the same locality.” (Doc. 143-7 at 37). 21 Defendant’s ultimate argument, then, is not that Dr. Vecchio did not cite any standard of 22 care but rather that he applies the wrong one. But even if that argument can be considered 23 to have been proper for the Reply brief, to the extent Defendant believes the professional 24 standards cited by Dr. Vecchio—including standards promulgated by the American 25 Association of State Highway and Transportation Officials, the American Society of 26 Civil Engineers, the American Institute of Steel Construction, and the American Welding 27 Society—are inconsistent with the standard of care under the contract, it may explore the 28 issue at trial. But this Court does not find that Dr. Vecchio’s citation to and application of 1 | professional standards from several industry organizations render his opinions unhelpful or improper in light of the contract’s fairly generic standard-of-care provision. 3 The Court will, however, preclude Dr. Vecchio from testifying that Defendant was 4| “negligent.” Defendant argues that such testimony embraces an ultimate legal issue. 5 | Under FRE 704, “[a]n opinion is not objectionable just because it embraces an ultimate issue.” But the Ninth Circuit “has repeatedly affirmed that ‘an expert witness cannot give 7 | an opinion as to her Jegal conclusion, 1.e., an opinion on an ultimate issue of law.’” 8 | United States vy. Diaz, 876 F.3d 1194, 1197 (9th Cir. 2017) (citation omitted). Thus, 9 | courts routinely hold that expert testimony as to whether a party was negligent is inadmissible. See, e.g., Garcia v. Vitus Energy, LLC, 605 F. Supp. 3d 1179 , 1185-85 (D. 11 | Alaska 2022); Forney v. Hopkins, No. CV 07-152-M-JCL, 2009 WL 106774678 , at *6 12 | (D. Mont. Mar. 26, 2009). To be sure, here, Plaintiffs claim is for breach of contract, not 13 | negligence. Still, “negligence” is a term that holds a specialized meaning in the law, cf. 14| Diaz, 876 F.3d at 1198-99 , and even if it weren’t inadmissible as an opinion on an 15 | ultimate issue of law, Dr. Vecchio’s use of the term “negligence” risks confusing the 16 | issues before the jury and is not helpful in a breach of contract case. See Fed. R. Evid. 17| 403. Dr. Vecchio may testify to his opinions of whether Defendant’s conduct met 18 | applicable standards, but he may not testify as to whether Defendant was “negligent.” See Forney, 2009 WL 106774678 , at *6. Accordingly, 20 IT IS ORDERED that Defendant HDR Engineering Inc.’s Motion to Exclude | Opinions of Robert S. Vecchio (Doc. 143) is granted in part and denied in part. The 22 | Motion is granted as to Dr. Vecchio’s opinions regarding the scope of Defendant’s 23 | contractual duties and whether Defendant was “negligent,” and the Motion is otherwise denied. 25 Dated this 13th day of July, 2023. [26] 28 United States District Judge