Southern Minnesota Beet Sugar Cooperative v. Agri Systems

Background

Southern Minnesota Beet Sugar Cooperative (SMBSC) entered into a design-build agreement with Agri Systems, doing business as ASI Industrial, Inc. (ASI), for the design and construction of six sugar-storage silos. Each silo used a reclaimer system to move stored sugar toward the center so it could be removed.

One reclaimer failed on December 30, 2015, after a cotter pin sheared and a trolley separated from its track. ASI redesigned the system, but it failed again in November 2017 when trolley bolts sheared. ASI later added additional bolts.

SMBSC offered David Hallman as an expert witness concerning ASI’s alleged negligent design. SMBSC’s remaining claims were breach of contract, breach of express warranty, breach of implied warranty, and professional negligence. The court had previously granted summary judgment to ASI on SMBSC’s void-contract and product-defect claims.

ASI’s Motion

ASI moved to exclude Hallman’s testimony in its entirety. Alternatively, ASI sought to exclude opinions concerning matters outside Hallman’s expertise, the professional standard of care and whether ASI violated it, the National Society of Professional Engineers code of ethics, RISA software files, ASI’s calculations, and the sufficiency or credibility of deposition evidence.

Legal Standard

The court applied Federal Rule of Evidence 702 and the reliability framework from Daubert v. Merrell Dow Pharmaceuticals, Inc. Rule 702 permits qualified expert testimony when the testimony will help the factfinder, rests on sufficient facts or data, results from reliable principles and methods, and reflects a reliable application of those principles and methods to the case. The party offering the expert must establish admissibility by a preponderance of the evidence.

The court explained that it must act as a gatekeeper by separating reliable expert opinions from speculation. Gaps in an expert’s qualifications generally affect the weight of testimony rather than its admissibility, but testimony that is fundamentally unsupported and cannot assist the jury is inadmissible.

Analysis

The court held that Hallman was qualified to offer opinions about mechanical engineering applicable to the reclaimer system. His lack of experience designing a reclaimer did not, by itself, disqualify him.

The court nevertheless found his opinions unreliable and unhelpful to the jury. Hallman said that engineering design required calculations of applied loads, but he did not explain how a proper calculation should be performed and admitted that he had performed no calculations himself for this case. His opinions about “engineering best practices” were based primarily on his own point of view and did not identify industry standards of care specific to the work at issue. The court also concluded that the National Society of Professional Engineers’ code of ethics did not adequately establish the applicable standard of care.

The court identified additional methodological problems. Hallman had never designed a reclaimer or similar machine, had not tested any component, had not personally observed the relevant components before their modifications, and had never observed an ASI-built reclaimer operating. He had never used the RISA software whose files he criticized and instead assumed it worked like software with which he was familiar. He also did not investigate whether other trolley options were more suitable and sometimes concluded that a trolley was improper simply because it failed.

Because Hallman did not use scientifically reliable methods or demonstrate the same level of rigor used in design engineering, the court concluded that his proposed testimony did not satisfy Rule 702’s threshold requirements.

Disposition

The court excluded Hallman’s proposed testimony on behalf of SMBSC in its entirety and granted ASI’s motion to exclude expert testimony. ASI also argued that excluding Hallman entitled it to judgment as a matter of law on three claims. The court stated that request was untimely under the scheduling order and premature under Federal Rule of Civil Procedure 50(a); the order granted the motion to exclude but did not grant that request for judgment.