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Sabal Trail Transmission, LLC v. 0.589 Acres of Land In Hamilton County Florida

United States District Court, M.D. Florida, Jacksonville Division

August 2, 2018

SABAL TRAIL TRANSMISSION, LLC, Plaintiff,
v.
0.589 ACRES OF LAND IN HAMILTON COUNTY, FLORIDA, SAMUEL R. PANILAG, TRUSTEE, et al., Defendants. SABAL TRAIL TRANSMISSION, LLC, Plaintiff,
v.
0.7 ACRES OF LAND IN SUWANNEE COUNTY, FLORIDA, MANUEL DEGUZMAN, et al., Defendants. SABAL TRAIL TRANSMISSION, LLC, Plaintiff,
v.
3.504 ACRES OF LAND IN SUWANNEE COUNTY, FLORIDA, ELIZABETH BOLTON, et al., Defendants. SABAL TRAIL TRANSMISSION, LLC, Plaintiff,
v.
0.507 ACRES OF LAND IN SUWANNEE COUNTY, FLORIDA, MARY R. FRIDMAN, et al., Defendants.

          ORDER

          MARCIA MORALES HOWARD UNITED STATES DISTRICT JUDGE

         In these eminent domain cases, both parties have moved to exclude or limit the testimony of the other side's expert witnesses under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Federal Rule of Evidence 702. Plaintiff Sabal Trail has moved to exclude the testimony of the defendant-landowners' appraiser, Matthew Ray. (No. 3:16-cv-277-J-34JBT, Doc. 76; No. 3:16-cv-300-J-34PDB, Doc. 81; No. 3:16-cv-302-J-34PDB, Doc. 75; No. 3:16-cv-317-J-34MCR, Doc. 72) (“Ray Daubert Mo t ions”). Sabal Trail has also moved to exclude the testimony of Joshua Harris, Ph.D., a real estate economist whom the landowners hired to assist with valuation. (No. 3:16-cv-277-J-34JBT, Doc. 75; No. 3:16-cv-300-J-34PDB, Doc. 79; No. 3:16-cv-302-J-34PDB, Doc. 68; No. 3:16-cv-317-J-34MCR, Doc. 71) (“Harris Daubert Mot ions”). The landowners have responded to both the Ray Daubert Motions and the Harris Daubert Motions. (No. 3:16-cv-277-J-34JBT, Doc. 96; No. 3:16-cv-300-J-34PDB, Doc. 99; No. 3:16-cv-302-J-34PDB, Doc. 91; No. 3:16-cv-317-J-34MCR, Doc. 92) (“Ray Daubert Responses”); (No. 3:16-cv-277-J-34JBT, Doc. 93; No. 3:16-cv-300-J-34PDB, Doc. 96; No. 3:16-cv-302-J-34PDB, Doc. 86; No. 3:16-cv-317-J-34MCR, Doc. 89) (“Harris Daubert Responses”).

         Additionally, the landowners have filed cross Daubert motions to exclude or limit the testimony of Sabal Trail's appraiser, Chad Durrance. (No. 3:16-cv-277-J-34JBT, Doc. 85; No. 3:16-cv-300-J-34PDB, Doc. 89; No. 3:16-cv-302-J-34PDB, Doc. 78; No. 3:16-cv-317-J-34MCR, Doc. 81) (“Durrance Daubert Mo t ions”). Sabal Trail has responded to the Durrance Daubert Motions. (No. 3:16-cv-277-J-34JBT, Doc. 94; No. 3:16-cv-300-J-34PDB, Doc. 97; No. 3:16-cv-302-J-34PDB, Doc. 87; No. 3:16-cv-317-J-34MCR, Doc. 90) (“Durrance Daubert Responses”).[1] Thus, the motions are ripe for a decision.

         For the reasons set forth below, the Court will grant in part, and deny in part, Sabal Trail's motions to exclude Matthew Ray's testimony, defer ruling on the motions to exclude Dr. Harris's testimony, and deny the landowners' motions to exclude Chad Durrance's testimony.

         I. Background

         Pursuant to the Natural Gas Act and a Certificate of Public Convenience and Necessity, Sabal Trail sought to condemn easements on the landowners' property to install a natural gas pipeline. The properties are rural tracts of land in Hamilton County and Suwannee County, Florida, which are generally suitable for residential or agricultural use. In June 2016, the Court granted partial summary judgment in favor of Sabal Trail on its right to condemn the easements and granted its request for a preliminary injunction, which together allowed Sabal Trail to take immediate possession. About a year later, the Court held that state substantive law provides the federal rule for measuring just compensation in these proceedings. E.g., Sabal Trail Transmission, LLC v. 1.127 Acres of Land in Hamilton Cnty., Fla., No. 3:16-cv-263-J-20PDB, 2017 WL 2799352 (M.D. Fla. Jun. 15, 2017). See also Sabal Trail Transmission, LLC v. Real Estate, 255 F.Supp.3d 1213 (N.D. Fla. 2017) (superseded to correct scrivener's error). Here, that means the landowners are entitled to what the Florida Constitution calls “full compensation.” Fla. Const. art. X, § 6(a). The cases are now at the stage where a jury must determine the amount of compensation owed to the landowners for the takings.

         The landowners hired two experts in preparation for the trials on full compensation. The first, Matthew Ray, is an appraiser who has provided opinions regarding the value of the condemned easements and severance damages. The second, Dr. Joshua Harris, is a real estate economist who surveyed 23 real estate agents or brokers regarding their opinions on the effect a natural gas pipeline would have on property values (something commonly referred to as a “contingent valuation” survey in academic literature). Dr. Harris also reviewed literature on the impact that overhead power transmission lines, natural gas pipelines, and pipeline accidents purportedly have on property values. The essence of Dr. Harris's testimony is that public awareness of pipeline accidents would cause the average buyer to be less willing to buy land situated over a pipeline. Dr. Harris does not, however, offer any opinion about the compensation owed for any specific property.

         Additionally, Sabal Trail hired its own expert appraiser, Chad Durrance. Mr. Durrance has arrived at his own opinions regarding the value of the condemned easements and certain other damages.

         Sabal Trail moves to exclude Mr. Ray's and Dr. Harris's opinions under Daubert and Rule 702 of the Federal Rule of Evidence (Rule(s)). In doing so, Sabal Trail argues that their opinions are not the result of reliable methods or based on reliable facts and data. Sabal Trail also argues that their opinions are unduly prejudicial under Rule 403 because they threaten to make the health and safety risks of a pipeline rupture an improper feature of the trials.

         Sabal Trail filed similar motions to exclude the opinions of Mr. Ray and Dr. Harris in Sabal Trail Transmission, LLC v. 3.921 Acres of Land in Lake County, Florida, No. 5:16-cv-178-JSM-PRL (M.D. Fla.), Doc. 50, Doc. 51 (the “Sunderman Groves case”). The Honorable James S. Moody, Jr., granted both motions based on many of the arguments raised by Sabal Trail in the instant motions. Id., Doc. 71 (“Moody Daubert Order”). Likewise, Sabal Trail filed similar Daubert motions in Sabal Trail Transmission, LLC v. 0.981 Acres of Land in Levy County, Florida, No. 1:16cv97-MW/GRJ (N.D. Fla.), Doc. 48, Doc. 49. There, the Honorable Mark Walker resolved the Daubert motions differently. With the exception of three portions of Mr. Ray's opinions, Judge Walker denied both motions. Id., Doc. 69 (“Walker Daubert Order”). Thus, he admitted Dr. Harris's opinions as well as parts of Mr. Ray's opinions, but ruled that (1) Mr. Ray could not us e the term s “probable dam age radius” or “probable impact radius” in his testimony, (2) Mr. Ray could not testify about potential future land use regulations, and (3) Mr. Ray's severance damage study was improper because it double-counted the value of the easements. Id. Finally, Sabal Trail filed similar Daubert motions in Sabal Trail Transmission, LLC v. 7.593 Acres of Land in Hamilton County, Florida, No. 3:16-cv-276-J-32JRK, Doc. 69, Doc. 70. The Honorable Timothy J. Corrigan granted in part, and denied in part, Sabal Trail's motion to exclude Mr. Ray's testimony, and deferred ruling on whether and to what extent Dr. Harris's testimony should be excluded. Id., Doc. 109 (“Corrigan Daubert Order”). Judge Corrigan ruled that Mr. Ray's testimony w as inadmissible to the extent he (1) used a “potential impact radius” to measure severance damages, (2) used terms such as “probable damage radius” or “potential blast radius” in his appraisal, (3) double-counted the value of the easements in his appraisal, (4) failed to appraise parts of the property burdened by a preexisting easement in their encumbered condition, and (5) included certain “additional damages” that were not recoverable as a matter of Florida law. Id. at 4-10 & n.3.[2] Judge Corrigan denied the remainder of Sabal Trail's Daubert motion with respect to Mr. Ray. Id. at 6. As for Dr. Harris, Judge Corrigan deferred ruling on the Daubert motion until he heard a pretrial proffer, but indicated he may limit Dr. Harris's testimony about literature concerning pipeline accidents that have occurred elsewhere. Id. at 10.

         The landowners also have filed Daubert motions seeking to exclude the testimony of Sabal Trail's appraiser, Mr. Durrance. The thrust of the Durrance Daubert Motions is threefold: (1) Mr. Durrance uses the wrong legal standard to the extent he suggests that market value is the exclusive standard for measuring full compensation, (2) Mr. Durrance uses the wrong legal standard to the extent he employs a “before-and-after” method of valuation (which the landowners argue is the standard under federal common law) rather than a “taking-plus-damages” standard (which the landowners argue is the standard under Florida law), and (3) Mr. Durrance's market data consists of paired sales that are too dissimilar.

         The landowners have filed similar Daubert motions challenging Mr. Durrance's opinions in other cases. However, it appears that the only court to address these issues thus far is Judge Moody in the Sunderman Groves case. No. 5:16-cv-178-JSM-PRL, Doc. 94. There, Judge Moody summarily denied the motion without comment. Id., Doc. 98 at 3; Doc. 100 at 27.

         II. Standard

         Rule 702 of the Federal Rules of Evidence (Rule(s)) provides:

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. In Daubert, the Supreme Court explained that Rule 702 imposes an obligation on the trial court to act as gatekeeper to ensure that any and all scientific testimony or evidence is not only relevant, but reliable. 509 U.S. at 589. The Supreme Court extended Daubert's holding to non-scientific expert testimony in Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147 (1999). To determine the admissibility of expert testimony, a trial court must consider whether:

(1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue.

United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004) (quoting City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548 (11th Cir. 1998)). The “burden of establishing qualification, reliability and helpfulness” lies with the party offering the expert opinion. See McClain v. Metabolife Int'l, Inc., 401 F.3d 1233, 1238 (11th Cir. 2005) (quoting Frazier, 387 F.3d at 1260).

         In evaluating the reliability of a method as required by Daubert, the Supreme Court has suggested that a trial court consider certain factors, including: (1) whether the theory or technique can be, and has been, tested; (2) whether the theory or technique has been subjected to peer review and publication; (3) the known or potential rate of error; and (4) whether the theory has attained general acceptance in the relevant scientific community. See Daubert, 509 U.S. at 593-94. These factors are not exhaustive, and the Eleventh Circuit has also considered whether an expert relied on anecdotal evidence such as case reports; temporal proximity; and improper extrapolation. See Allison v. McGhan Med. Corp., 184 F.3d 1300, 1312 (11th Cir.1999). The Court's inquiry under Rule 702 must focus on the methodology, not conclusions, but the Court is not required to admit opinion testimony only connected to existing data by an expert's unsupported assertion. See Daubert, 509 U.S. at 595; Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997).

         In addition to determining the reliability of proposed expert testimony, Daubert instructs that under Rule 702 the Court must determine whether the evidence or testimony assists the trier of fact in understanding the evidence or determining a fact in issue. See Daubert, 509 U.S. at 591. This consideration focuses on the relevance of the proffered expert testimony or evidence. The Supreme Court explained that to satisfy this relevance requirement, the expert testimony must be “relevant to the task at hand.” Daubert, 509 U.S. at 591. Because expert testimony does not assist the trier of fact unless it has a justified relation to the facts, the Eleventh Circuit has opined that “there is no fit where a large analytical leap must be made between the facts and the opinion.” McDowell v. Brown, 392 F.3d 1283, 1299 (11th Cir. 2004) (citing Joiner, 522 U.S. at 146) (finding too great an analytical gap between data suggesting that one type of cancer was caused in mice and the conclusion or opinion that such data established causation of another type of cancer in humans).

         The proponent of expert testimony need not show that the opinion is correct, but only that more likely than not the opinion is reliable. See Allison, 184 F.3d at 1312. Thus, absolute certainty is not required. See Jones v. Otis Elevator Co., 861 F.2d 655, 662 (11th Cir. 1988) (citations omitted). However, the expert must know “facts which enable him to express a reasonably accurate conclusion instead of mere conjecture or speculation.” Id. An expert's assurances that he has used generally accepted scientific methodology are insufficient. See McClain, 401 F.3d at 1244.

         III. Sabal Trail's Motion to Exclude Matthew Ray's Testimony

         A. Issues in Common ...


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