FILED
United States Court of Appeals
Tenth Circuit
November 13, 2014
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
KECHI TOWNSHIP; EMPLOYERS
MUTUAL CASUALTY COMPANY,
Plaintiffs-
Appellants/Cross-Appellees,
v. Nos. 12-3118, 12-3134
(D.C. No. 6:10-CV-01051-MLB)
FREIGHTLINER, LLC, n/k/a Daimler (D. Kan.)
Trucks North America, LLC,
Defendant-Appellee/Cross-
Appellant.
ORDER AND JUDGMENT *
Before GORSUCH, HOLLOWAY, ** and HOLMES, Circuit Judges.
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Federal Rule of Appellate
Procedure 32.1 and Tenth Circuit Rule 32.1.
**
The late Honorable William J. Holloway, Jr., United States Senior
Circuit Judge, participated as a panel member when oral argument was heard in
this case but passed away before having an opportunity to vote on or otherwise
participate in the consideration of this order and judgment. “The practice of this
court permits the remaining two panel judges if in agreement to act as a quorum
in resolving the appeal.” United States v. Wiles, 106 F.3d 1516, 1516 n.* (10th
Cir. 1997); see also 28 U.S.C. § 46(d) (permitting a circuit court to adopt
procedure allowing for the disposition of an appeal where a remaining quorum of
(continued...)
After a fire destroyed its machine shop, Kechi Township (“Kechi”) sued
Freightliner, LLC (“Freightliner”) in a products liability action, alleging that
Freightliner’s defective design of a truck (“the truck” or “the subject truck”) 1
caused the conflagration. A jury found Freightliner liable and awarded damages.
Both parties appeal. Kechi appeals on the ground that the district court
improperly excluded evidence from the jury’s damages calculation. For its part,
Freightliner raises two issues: (1) its motion for judgment as a matter of law
(“JMOL”) was improperly denied, and (2) expert testimony was improperly
admitted. Having jurisdiction under 28 U.S.C. § 1291, we affirm the district
court’s orders denying Freightliner’s motion for JMOL, allowing Kechi’s expert
witnesses to testify, and barring Kechi’s lay witnesses from testifying as to
damages.
I
At around 12:15 a.m. on December 19, 2007, a fire started at Kechi’s
machine shop. The fire destroyed the shop and all of its contents, including the
following pieces of heavy equipment: the subject truck, a John Deere motor
**
(...continued)
panel agrees on the disposition). The remaining panel members have acted as a
quorum with respect to this order and judgment.
1
The parties both refer to the vehicle as a “dump truck.” At trial,
there was testimony that it was used for “dirt hauling, gravel hauling, and general
hauling purposes.” Aplt. App. at 246 (Trial Tr., dated Jan. 11, 2012).
2
grader, a John Deere tractor, a John Deere mower, a John Deere Gator utility
vehicle (“the Gator”), two Dixie Chopper mowers, an Allis Chalmers 345 wheel
loader (“the wheel loader”), and a Chevy dump truck. After an investigation
traced the fire to the subject truck, Kechi sued Freightliner based on the truck’s
allegedly defective design in Kansas state court. The case was later removed to
federal district court on diversity grounds.
Prior to trial, Freightliner filed motions to exclude the testimony of Kechi’s
two expert witnesses: Don Birmingham, a fire-origin expert, and Jim Martin, a
fire-causation expert. Freightliner argued that the experts never inspected any of
the company’s design drawings or specifications, that they performed inadequate
research into the origin of the fire, and that they used an untrustworthy exemplar
truck and battery in their investigations. After conducting a Daubert 2 hearing, the
district court denied the motion to exclude Mr. Martin’s testimony, finding that
the absence of the specifications and the reliability of the exemplars were matters
for the jury and that Mr. Martin was not obliged to rule out every possible
explanation for the fire. The district court also largely denied the motion to
exclude Mr. Birmingham’s testimony, though it barred him from testifying as to
the combustibility of the truck’s insulation.
During trial, Kechi attempted to elicit from James Day, the man in charge
2
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993).
3
of the machine shop, testimony regarding the value of the real estate and personal
property destroyed in the fire. Freightliner filed a motion to exclude Mr. Day’s
testimony on damages, urging the court to “disallow Mr. Day [from] testify[ing]
as a lay witness [to] values of the various pieces of [personal] property and real
property when such testimony is plainly expert testimony under federal law.”
Aplt. App. at 77 (Mot. & Supp. Mem. to Exclude Pls.’ Damages Evidence, filed
Jan. 16, 2012). The district court granted the motion with respect to the real
property on the grounds that the testimony at issue was based entirely on an
appraisal performed by a third party, and thus constituted hearsay.
After oscillating somewhat on the question of the personal property, the
district court ultimately concluded that it would exclude from the jury’s
consideration damages testimony relating to any heavy equipment other than the
Gator, the property in the Gator, and certain shop supplies and equipment,
reasoning that Mr. Day had not demonstrated sufficient familiarity with the value
of any of the other items. The court likewise declined to allow Lee Caster, who
was apparently a trustee on the township board, 3 to testify to the value of the real
estate, ruling that there were “certainly very valid ways to put on testimony as to
the value of the building [but] that has not been done.” Id. at 800 (Trial Tr.,
3
From the briefing and transcript, it is not clear precisely what Mr.
Caster’s title was at the time he testified. It makes no difference to our analysis.
4
dated Jan. 17, 2012). 4
During its deliberations, the jury had before it a verdict form that asked it
to itemize damages with respect to only three different things: the Gator, the
property in the Gator, and certain “shop supplies and equipment.” Id. at 129
(Verdict, dated Jan. 19, 2012) (capitalization altered). The jury found
Freightliner liable for the fire and awarded $21,000 in damages.
The jury’s verdict rendered, Freightliner renewed an earlier-filed motion
for JMOL pursuant to Federal Rule of Civil Procedure 50. The district court
denied the motion, declining to “find as a matter of law that the evidence offered
was overwhelmingly preponderant in favor of [Freightliner].” Id. at 201 (Order,
filed March 29, 2012). Both parties appealed.
II
We first consider Freightliner’s challenge to the district court’s denial of its
motion for JMOL. Such decisions are reviewed de novo, applying the same
standard the district court did—namely, that “[a] party is entitled to judgment as a
4
As the preceding summary indicates, the district court’s basis (or
bases) for excluding the testimony is unclear, as the court had earlier cited
foundation and hearsay concerns, but much of the debate between the parties
concerned the interplay between expert and lay opinion rules. Because the parties
now focus on the latter, and because the district court’s ruling can properly be
affirmed on that ground, we limit our discussion to that issue. See United States
v. McGlothin, 705 F.3d 1254, 1266 n.17 (10th Cir.) (reiterating that we are
authorized to “affirm the district court’s evidentiary rulings on any basis that
finds support in the record”), cert. denied, --- U.S. ----, 133 S. Ct. 2406 (2013).
5
matter of law ‘only if the evidence points but one way and is susceptible to no
reasonable inferences which may support the opposing party’s position.’” Hysten
v. Burlington N. Santa Fe Ry. Co., 530 F.3d 1260, 1269 (10th Cir. 2008) (quoting
Tyler v. RE/MAX Mountain States, Inc., 232 F.3d 808, 812 (10th Cir. 2000)).
With respect to the arguments concerning the admission of the expert
testimony, “we review de novo the question of whether the district court applied
the proper standard and actually performed its gatekeeper role in the first
instance” and then “review the trial court’s actual application of the standard in
deciding whether to admit or exclude an expert’s testimony for abuse of
discretion.” Dodge v. Cotter Corp., 328 F.3d 1212, 1223 (10th Cir. 2003).
Freightliner questions the district court’s actual application of the standard; it
does not contend that the court used the wrong standard or failed to perform its
gatekeeper role. Accordingly, we will reverse only if we find an abuse of
discretion.
Lastly, we review the district court’s exclusion of the damages testimony
under an abuse-of-discretion standard. See James River Ins. Co. v. Rapid
Funding, LLC, 658 F.3d 1207, 1212 (10th Cir. 2011).
III
In overview, we hold that: (1) Freightliner’s motion for JMOL was properly
denied; (2) the district court did not abuse its discretion in admitting Kechi’s
expert testimony; and (3) the district court did not abuse its discretion in
6
excluding Kechi’s damages testimony. Our holdings compel us to affirm each of
the district court’s challenged rulings.
A
The first issue presented is whether the district court correctly denied
Freightliner’s motion for JMOL. Under Kansas law, 5 strict liability for the sale or
manufacture of a product is only imposed where the plaintiff shows that: “(1) the
injury resulted from a condition of the product; (2) the condition was an
unreasonably dangerous one; and (3) the condition existed at the time [the
product] left the defendant’s control.” Jenkins v. Amchem Prods., Inc., 886 P.2d
869, 886 (Kan. 1994) (quoting Mays v. Ciba-Geigy Corp., 661 P.2d 348, 359
(Kan. 1983)) (internal quotation marks omitted). At trial, Kechi submitted
evidence on two alleged design defects in the starter motor of the subject truck:
(1) the use of a bus bar 6 or depopulation stud, 7 and (2) the use of a cap nut. 8 It
5
Throughout these proceedings, the parties have rightly agreed that
Kansas law governs the substantive question of liability, and the district court
applied that law. See Elm Ridge Exploration Co. v. Engle, 721 F.3d 1199, 1210
(10th Cir. 2013) (“A federal court sitting in diversity applies the substantive law
of the state where it is located . . . .”).
6
According to trial testimony, a bus bar is a “wide electrical
conductor.” Aplt. App. at 512 (Trial Tr., dated Jan. 12, 2012).
7
As with many of the technical details in this case, the relationship
between the bus bar and the depopulation stud is unclear and is not illuminated by
the briefing. At times, the two objects are discussed in the alternative. See, e.g.,
Aplt. Opening Br. at 3 (discussing testimony “that the use of a busbar or
depopulation stud . . . caused a loose connection . . . .” (emphasis added)). At
(continued...)
7
argued that both defects caused loose connections in the motor, which in turn
caused the fire. As explained below, Kechi made each of the showings required
by Kansas law, and the district court therefore properly denied Freightliner’s
motion for JMOL.
1
In regards to the first element—the causal connection between the defect
and the injury—Freightliner submits that it was entitled to JMOL because Mr.
Martin, Kechi’s expert, attributed the ultimate cause of the fire to “a fault or
short, and not the loose connection” in the subject truck’s motor. Aplee. Opening
Br. at 18. Freightliner also maintains that Kechi “failed to sufficiently eliminate
other reasonable causes of the fire.” Id. at 22.
a
Freightliner’s suggestion that Mr. Martin’s testimony does not sufficiently
establish causation parses the legal standard more finely that the cases permit. In
products liability actions in Kansas, “[p]roximate causation in a proper case may
7
(...continued)
others, the depopulation stud is characterized as an element of the bus bar. See,
e.g., Aplt. App. at 545 (“I noticed the cap nut on the bus bar depopulation
stud . . . .” (emphasis added)). For present purposes, the distinction is not
germane. The important thing to remember is that the depopulation stud is
associated with the bus bar, not the B+ terminal, a different component discussed
shortly.
8
There was evidence at trial that a cap nut (also referred to in places
as a “capped nut”) is a “closed-off nut,” in contrast with an “open” or “uncapped
nut.” Aplt. App. at 1329 (Dep. of Michael Stohler, taken May 2, 2011).
8
be shown by circumstantial evidence.” Dieker v. Case Corp., 73 P.3d 133,
145–46 (Kan. 2003) (quoting Farmers Ins. Co. v. Smith, 549 P.2d 1026, 1033
(Kan. 1976)) (internal quotation marks omitted). A proximate cause is one
“which in natural and continuous sequence, unbroken by an efficient intervening
cause, produces the injury, and without which the injury would not have
occurred.” Rhoten v. Dickson, 223 P.3d 786, 801 (Kan. 2010) (quoting Yount v.
Deibert, 147 P.3d 1065, 1070 (Kan. 2006)) (internal quotation marks omitted).
Mr. Martin testified that “[w]hen these connections get loose, we produce
the resistance, we produce the heat, it begins to melt the insulation.” Aplt. App.
at 585. Asked on cross-examination whether the heat he held responsible for
starting the fire “was created by a loose nut,” he responded, “Two loose nuts.”
Id. at 613 (emphasis added). His other statements from the witness stand were
entirely consistent with this theory. See, e.g., id. at 589 (summarizing the chain
of events leading to the fire). Freightliner homes in on a passage in Mr. Martin’s
testimony where he opined that the looseness “contributed to the heat that
produced degradation of the insulation that ultimately resulted in the short” that
consequently caused the fire. Id. at 620. Seen in the light of his other statements
quoted above, as well as in the light of the overall thrust of his testimony, it is
obvious that Mr. Martin was not saying that the looseness was but one of several
causes, each of which could have independently produced the fire; rather, he was
characterizing the looseness as the first event that kicked off a “natural and
9
continuous sequence, unbroken by an efficient intervening cause,” which
ultimately led to the fire. Rhoten, 223 P.3d at 801 (quoting Yount, 147 P.3d at
1070) (internal quotation marks omitted).
Fatally, Freightliner does not point to any other original cause highlighted
by Mr. Martin, and a review of the record does not reveal one. It is certainly the
case that, as Freightliner notes, Mr. Martin indicated that it was ultimately a short
that sparked the flame. But Mr. Martin very clearly theorized that the short itself
was caused by the loose connection. To claim that the short severed the causal
connection between the looseness and the fire would turn causation analysis into
an absurd, impracticable framework. If there is no causation here, it would be
difficult to see how there would be causation when, say, an individual shoots
someone, as a series of mechanical events occurs between the pulling of the
trigger and the entry of the bullet. Cf. Yount, 147 P.3d at 1074 (“[A]lthough it
cannot be said with absolute mathematical certainty that the defendants’ activities
caused the house fire, there certainly appears to be sufficient circumstantial
evidence to create a question of fact concerning causation.”). “It is quite proper
to use expert testimony to prove the cause of a fire,” Smith, 549 P.2d at 1033, and
when a loose connection leads to a series of events that culminates in a fire, the
loose connection is plainly the proximate cause of the fire, see id. at 1034.
b
Turning finally to Freightliner’s contention that Kechi “failed to
10
sufficiently eliminate other reasonable causes of the fire,” Aplee. Opening Br. at
22, the contention cannot be sustained. Mr. Birmingham, the fire-origin expert
called by Kechi, testified that he follows a scientific approach in his work, which
involves collecting data, developing a hypothesis, testing the hypothesis, and, if
the hypothesis does not hold up, rejecting it and starting anew. His investigations
typically begin with an inspection of the scene and an examination of the fire
patterns.
Mr. Birmingham followed the same practice in investigating the Kechi
machine-shop fire. While conducting his inspection, Mr. Birmingham’s attention
was drawn to the subject truck because of the unusual way in which it had been
damaged by the fire. In total, he was at the scene for about two hours “looking
for an area of origin” before he “finally focused in on this truck.” Aplt. App. at
351. Because he suspected that the fire began around the starter area of the
subject truck, he called Mr. Martin, the electrical engineer, to look into that
possibility. During his testimony, Mr. Birmingham was asked what sort of burn
patterns he would expect to see had the fire started in a trash can, as Freightliner
speculated (and continues to speculate) may have happened. In that event, he
responded, the fire damage would have been distributed throughout the structure
in a different fashion, and the damage to the truck itself would have differed in
terms of where it was most badly burned.
Mr. Birmingham’s testimony more than sufficiently excluded potential
11
sources of the fire to get the question of causation to the jury. As noted, he
followed a scientific process and offered a reasonable explanation as to why he
traced the fire to the subject truck and not another source. If the jury was
unpersuaded, it could have voted for no liability, but there was no reason for the
district court to usurp its function and decide the matter itself on a motion for
JMOL. Cf. Smith, 549 P.2d at 1034 (reversing the exclusion of expert testimony
because “[b]y [the expert’s] elimination of other possible causes for the fire it
would appear that his conclusion was reasonable that the fire was the result of
some defect in the mobile home’s electrical system”). In summary, Freightliner’s
arguments on causation are meritless.
2
Turning to the second element—that “the condition was an unreasonably
dangerous one,” Jenkins, 886 P.2d at 886 (quoting Mays, 661 P.2d at 359)
(internal quotation marks omitted)—Freightliner avers that Mr. Martin never
testified that the use of a bus bar or cap nut is defective in all circumstances. It
further avers that no evidence showed how the cap nut might have become
loosened from the terminal and that, at any rate, Mr. Martin thought heat would
not have resulted from such a loosening. Finally, Freightliner insists that the
evidence in fact suggested that the connection was tight—as it was in the
exemplar truck and exemplar cable that the experts used for comparison purposes.
We are constrained by Kansas law to reject each of these contentions.
12
A product is unreasonably dangerous when it “is ‘dangerous to an extent
beyond that which would be contemplated by the ordinary consumer who
purchases it, with the ordinary knowledge common to the community as to its
characteristics.’” Delaney v. Deere & Co., 999 P.2d 930, 944 (Kan. 2000)
(quoting Restatement (Second) of Torts § 402A cmt. i) (1965)).
At trial, the jury was read excerpts of the deposition testimony of Michael
Stohler, a special investigator for Delco Remy (“Delco”), the company that
manufactured the truck’s starter. In one of those excerpted passages, Mr. Stohler
testified that “every electrical connection” must be “secure[d] . . . correctly,” or
“bad things happen.” Aplt. App. at 1292–93. He further testified that a loose
connection in a motor like the subject truck’s could create a situation in which it
is “[p]retty intense, pretty hot for a relatively short period of time.” Id. at 1293.
Later in the deposition, Mr. Stohler was asked what danger arose from the use of
a bus bar bracket or depopulation stud on B+ starter terminals, and he responded
that “[s]parks fly.” Id. at 1305. Mr. Martin confirmed all of these opinions in his
own testimony. Specifically, he agreed that “[w]hen these connections get loose,
we produce the resistance, we produce the heat, it begins to melt the insulation.”
Id. at 585. And he characterized as loose the connections at both the bus bar and
the B+ terminal.
Putting this testimony together, the jury could reasonably have inferred that
the loose connections in the starter posed the risk of causing a fire. It is beyond
13
peradventure that an ordinary consumer buying a dump truck does not expect it to
burst into flames. Cf. Betts v. Gen. Motors Corps., 689 P.2d 795, 799 (Kan.
1984) (holding that a jury could have properly found that a design defect was
unreasonably dangerous where it led to the placement of a fuel tank in a part of
the car where it later caused a fire when punctured in an accident). The
“unreasonably dangerous” element was satisfied for JMOL purposes. 9
3
The third element of strict products liability claims is that “the condition
existed at the time [the product] left the defendant’s control.” Jenkins, 886 P.2d
at 886 (quoting Mays, 661 P.2d at 359) (internal quotation marks omitted). On
this element, Freightliner reads Mr. Martin’s testimony as expressing the view
that loose connections were likely not an issue when Freightliner first shipped the
truck from its plant. Freightliner also attacks Mr. Martin’s supposed view “that
the nut magically backed off the stud” as “illogical.” Aplee. Opening Br. at 13.
It stresses that Freightliner shipped the truck as a chassis only and that the truck
9
Freightliner makes much of the fact that Kechi “did not seek even the
most basic of fact discovery” to ascertain whether the alleged defects were part of
Freightliner’s design. Aplee. Opening Br. at 23. However, it points to no legal
obligation on the part of Kechi to do so. Kechi’s discovery strategy is irrelevant
to its satisfaction vel non of its burden of proof. It either presented sufficient
evidence or it did not; it is of no significance where it did or did not get that
evidence. Kechi got enough of it, and there was therefore sufficient evidence on
the unreasonable dangerousness of the truck for Kechi to advance this element of
its claim to the jury.
14
was repaired and modified a number of times, thus increasing the likelihood that
no defect was present at the time the truck left Freightliner’s control. Again,
Freightliner’s arguments do not justify reversing the district court’s denial of the
motion for JMOL.
At the deposition of Mr. Stohler (Delco’s special investigator), an attorney
read from a Delco bulletin instructing purchasers of its starters, “[D]o not install a
bus bar bracket or de-population stud on the B plus starter terminals as these
apply excess mechanical loads and create a safety hazard.” Aplt. App. at
1300–01. Mr. Stohler was later asked if capped nuts could be used for B+
terminals on the subject truck model, and he responded that they should not
because “they can bottom out on some type[s] of terminals so you couldn’t get
that tight connection.” Id. at 1329. The problem with capped nuts, he explained,
was that they can “be very deceiving as far as whether or not you have something
tight.” Id. at 1331. Mr. Stohler had this to say about who provided which parts:
“[Delco] suppl[ies] . . . an interior nut on the solenoid, and we have an exterior,
which they take off, put their cables on and then torque it back down. So we
supply those nuts. Anything additional to that, they supply.” Id. at 1327. 10
10
Freightliner interprets this testimony to mean “that Delco Remy is
responsible for the nut on the B+ terminal, and not” Freightliner. Aplee. Reply
Br. at 3. A juror might agree. Then again, he might not. Not that long after Mr.
Stohler made this comment, he was asked, “If that had been a tight connection
and a proper connection according to Delco standards . . . would there have been
(continued...)
15
Seeking clarification, the attorney later asked him,
So you’re not necessarily going to worry about what the wires
look like that are connected to it because you’re just selling the
starter with the nut on it, and then it’s up to the [purchaser] to
make the connections and replace it and put the proper torque on
it; is that correct?
Id. at 1345. Mr. Stohler agreed that it was.
None of this testimony is a paradigm of clarity. Reading the transcripts, it
is often unclear which part of the starter is under discussion, and the witnesses
were not always as responsive to the questions as one might have hoped.
Nevertheless, the testimony, such as it is, survives a JMOL challenge. This is so
because the evidence surveyed above provided a basis for the jury to find that (1)
Freightliner improperly used a bus bar, and (2) Freightliner improperly used a
capped nut in its starter. Kechi needed nothing more to surmount the motion for
JMOL.
Though Freightliner makes much hay of Mr. Martin’s view that the
connection likely was not loose when Kechi purchased the subject truck, that
view is irrelevant to Kechi’s theory of liability. Kechi never argued that the
connection was loose from the moment it acquired the truck. Its argument has
10
(...continued)
any heat escaping that connection?” Aplt. App. at 1351. He responded,
“[T]here’d be no problem with that connection.” Id. Given that statement, and
given the fact that his earlier remarks left open the possibility that Freightliner
could have replaced the nut on the B+ terminal, a juror could have inferred that
Freightliner, and not Delco, was responsible for the nut on the B+ terminal.
16
always rested on the supposition that the design defect led to the loose
connection, and the loose connection in turn led to the fire. And that theory is
entirely consistent with what the jury heard about capped nuts and bus bars. See
id. at 1300–01 (“[D]o not install a bus bar bracket or de-population stud on the B
plus starter terminals as these apply excess mechanical loads and create a safety
hazard.” ); id. at 1329 (capped nuts “can bottom out on some type[s] of terminals
so you couldn’t get that tight connection”); id. at 1331 (capped nuts can “be very
deceiving as far as whether or not you have something tight”).
Freightliner’s suggestion that Kechi’s case rested on an “illogical” narrative
whereby “the nut magically backed off the stud,” Aplee. Opening Br. at 13, fares
no better. If Freightliner means to say that the loosening of a connection over
time is “illogical” and “magical,” that is simply not so. Cf. In re Rhoten, 397
F. Supp. 2d 151, 165 (D. Mass. 2005) (finding negligence where a “failure to
affix the proper locking device to . . . power cords . . . caused the development of
the loose connections,” which in turn caused an electrical fire (emphasis added)).
In Smith, to be sure, the Kansas Supreme Court did hold that a directed verdict
was properly granted against the plaintiffs when they had no evidence that loose
electrical connections in a mobile home existed at the time the mobile home left
the manufacturer’s control. See 549 P.2d at 1035. But the court did so because
the plaintiffs’ expert “specifically testified that he looked for an[d] found no
direct evidence of loose connections,” but “simply inferred that somewhere in that
17
area there was a loose electrical connection,” and provided no reason to think it
was the fault of the manufacturer. Id. This is quite a different case. Kechi
presented the testimony of two individuals, both thoroughly acquainted with the
engineering of the starter at issue, both of whom found the connections loose, and
both of whom provided reasons to trace the looseness back to the original
design. 11
Freightliner’s speculations about what may have transpired after Kechi
bought the subject truck likewise do nothing to shake the district court’s JMOL
ruling. Mr. Martin testified that the exemplar cable he inspected was
“essentially . . . identical” to that in the subject truck, an opinion he formed after
visually examining the two cables and noticing that the exemplar cable said
“Freightliner” on it and had what Mr. Martin “believe[d] to be a Freightliner
number” written on it as well. Aplt. App. at 569–70. The exemplar cable had the
same configuration as the subject truck’s cable, including the alleged design
defects that led to the fire. Given this explanation, it was reasonable of Mr.
Martin to rely upon the exemplar, and also reasonable of the jury to base its own
inferences on his comparison. Cf. Kerrigan v. Maxon Indus., Inc., 223
11
Freightliner also relies upon Jacobson v. Ford Motor Co., 427 P.2d
621 (Kan. 1967), for this point, but Jacobson dealt with an incomplete record, a
car that had been involved in an accident, and no apparent evidence that the
defect existed at the time it left the manufacturer’s control, see id. at 623–24,
none of which can be said here.
18
F. Supp. 2d 626, 642–43 (E.D. Pa. 2002) (permitting an expert witness to testify
regarding an exemplar where it and the subject machine “were manufactured with
the same specifications,” even though one “was in a different condition, whether
due to poor maintenance or to the accident or otherwise”). Mr. Martin’s analysis
of the exemplar tends to suggest that the defect accompanied the starter off
Freightliner’s lot.
Furthermore, on direct examination, Mr. Day, the man in charge of the
machine shop, was asked “whether or not any large repairs were done to the
truck” in the sense of anything “other than routine oil changes, things of that
nature.” Aplt. App. at 248. His response was definitive: “No. Other than the
clutch being changed. Nothing else happened to it.” Id. This testimony further
supported Kechi’s position that it acquired the subject truck with the defect. Cf.
Donegal Mut. Ins. v. White Consol. Indus., Inc., 852 N.E.2d 215, 227 (Ohio Ct.
App. 2006) (finding sufficient evidence that a design defect was present when it
left the manufacturer’s control where the owner of the product testified that no
repairs had been made to it).
Freightliner notes, however, that a third party modified the truck before it
came into Kechi’s possession and that the modifications “no doubt required re-
routing of the wiring to accommodate the new features.” Aplee. Opening Br. at
13. It would have been inappropriate for the district court to grant Freightliner’s
motion for JMOL on the basis of such a speculative assertion, when a jury could
19
just as reasonably infer from Kechi’s evidence that the defect existed at the time
Freightliner relinquished control of the subject truck. All of which is to say that
there was sufficient evidence from which the jury could reasonably have inferred
the correctness of Kechi’s theory, and that was all it needed to survive the motion
for JMOL. See, e.g., Bannister v. State Farm Mut. Auto. Ins. Co., 692 F.3d 1117,
1126 (10th Cir. 2012).
Freightliner maintains, ostensibly as a separate argument from its claims
regarding the elements of strict products liability, that Kechi’s case was
impermissibly built upon the “stacking of inferences.” Aplee. Opening Br. at 19.
The inferences it discerns are (1) “that the design of the exemplar truck included
a bus bar and cap nut”; (2) that the exemplar truck’s design reflected that of the
subject truck; and (3) “that a bus bar and cap nut [were] present at the time the
truck left [Freightliner’s] control.” Id. at 20–21.
“[P]iling presumption and inference upon presumption and inference” is not
allowed in Kansas, as “a burden of proof may not be met by mere conjecture.”
McKenzie v. N.Y. Life Ins. Co., 112 P.2d 86, 90 (Kan. 1941). In an instructive
passage, the McKenzie court recited the presumptions and inferences necessary to
substantiate liability:
To find otherwise the jury would be compelled to presume or
infer, in the absence of any evidence on the matter, that the
drinking glass had contained bromides; that Dr. McKenzie had
taken bromides from it; that the dose was an overdose; that such
overdose was taken accidentally and that such accidental
20
overdose was the cause of death without regard to the acute and
chronic disease of vital organs disclosed by the post-mortem
examination . . . .
Id. It does not take much to see how inapplicable this language is to the case at
bar. McKenzie mentions five inferences; each is necessary in combination to
reach the result. See id. Here, the only inferences the jury would have to draw
from the evidence to find the element satisfied would be either (1) that the
identity of the exemplars with the subject truck parts suggests that the defects
existed at the time the truck left Freightliner’s control, or (2) that the testimony
that Kechi never had significant repairs done suggests the same. Both are
reasonable, and each is sufficient standing alone.
In recognition of the fact that it will often be difficult to prove with direct
evidence the control element, the Kansas Supreme Court has declined to unsettle
a jury verdict where the element was met purely on the basis of testimony that a
defective part had not been tampered with after purchase. See Dieker, 73 P.3d at
147. 12 There is even less reason to do so in the present case, where the exemplar
testimony militates in favor of the same result. Accordingly, all of the elements
of strict products liability were sufficiently met for the jurors to cast their votes.
We therefore affirm the district court’s order denying Freightliner’s motion for
12
Dieker mentions other facts in its analysis, but none go to the
question of whether the defect may have arisen later, which is the precise point at
issue here. See 73 P.3d at 147.
21
JMOL.
B
The JMOL issue resolved, we next consider Freightliner’s argument that
Kechi’s experts should not have been allowed to testify. Expert testimony in
federal court is governed by Federal Rule of Evidence 702, 13 which 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.
Reliability is looked at in light of a number of non-exhaustive, “nondispositive
factors: (1) whether the proffered theory can and has been tested; (2) whether the
theory has been subject to peer review; (3) the known or potential rate of error;
and (4) the general acceptance of a methodology in the relevant scientific
community.” 103 Investors I, L.P. v. Square D Co., 470 F.3d 985, 990 (10th Cir.
13
The parties correctly agree that federal law governs this question.
See Sims v. Great Am. Life Ins. Co., 469 F.3d 870, 879 (10th Cir. 2006) (noting
that the doctrine of Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), does not
govern Federal Rules of Evidence that were passed by Congress as part of the
original Rules); see also An Act to Establish Rules of Evidence for Certain Courts
and Proceedings, Pub. L. No. 93-595, 88 Stat. 1926 (1975) (Congress enacting
Rule 702); Huss v. Gayden, 571 F.3d 442, 452 (5th Cir. 2009) (noting that the
Federal Rules of Evidence govern the admissibility of expert testimony in a
diversity case); US Salt, Inc. v. Broken Arrow, Inc., 563 F.3d 687, 691 (8th Cir.
2009) (same).
22
2006). We have emphasized that this framework is a “flexible” one, United
States v. Turner, 285 F.3d 909, 912 n.4 (10th Cir. 2002), and have acknowledged
a district’s court’s “broad discretion to consider a variety of other factors,”
Dodge, 328 F.3d at 1222. 14
Freightliner challenges the reliability of both of Kechi’s experts. As
explained shortly, Mr. Birmingham’s opinions were reliable because he followed
a methodical, scientific process, and because his failure to interview two
employees of the machine shop was not fatal in light of his thorough investigation
of the scene and compelling reasons for tracing the fire to the subject truck.
Similarly, Mr. Martin’s opinions were reliable because he presented a detailed
14
In Kechi’s view, Freightliner fails to argue the proper standard of
review on this issue—abuse of discretion—and thereby waives any claim against
the testimony of either witness. But in its first brief, Freightliner did indeed
clearly and accurately state the proper standard of review. See Aplee. Opening
Br. at 24 (“This Court reviews de novo whether the trial court properly performed
its role as ‘gatekeeper,’ and reviews for an abuse of discretion the manner in
which the role is performed.”); United States v. Allen, 603 F.3d 1202, 1212 (10th
Cir. 2010) (stating the same). Although Kechi takes Freightliner to task for not
reiterating this same standard every time it articulates the district court’s
purported error, our law does not require such a strained, technical, impractical
application of briefing standards. See Fed. R. App. P. 28(a)(8)(A) (providing that
an appellant’s argument section in its brief “must contain . . . appellant’s
contentions and the reasons for them, with citations to the authorities and parts of
the record on which the appellant relies”). Freightliner properly alerted us to the
appropriate standard of review and then explained the errors it believes constitute
abuses of discretion. In so doing, it saved us the burden of “mak[ing] arguments
for [it],” United States v. Yelloweagle, 643 F.3d 1275, 1284 (10th Cir. 2011), and
thus did not waive anything on appeal as respects the standard of review
governing this issue.
23
theory as to how the fire began, based on his extensive training, his diligent
inspection of the scene and the subject truck, and his use of trustworthy
exemplars. As a result, we affirm the district court’s decision to allow both
experts to testify.
1
It is Freightliner’s position that Mr. Birmingham, the fire-origin expert,
should not have been allowed to testify because he failed to investigate
“numerous burn patterns throughout the building,” and because he neglected to
account for the possibility that the fire may have been started by a wood-burning
stove in the shop or by the disposal of its ashes in a plastic container. Aplee.
Opening Br. at 33. Along the same lines, Freightliner finds that Mr.
Birmingham’s decision not to interview two employees at the shop rendered his
investigation into the fire fatally defective and violated the National Fire
Protection Association’s “NFPA 921” recommendations for fire investigations.
Freightliner’s assertions regarding Mr. Birmingham’s investigation are not
borne out by the record. First, as Kechi rightly notes, Mr. Birmingham flatly and
repeatedly stated that he was familiar with NFPA 921 and did follow it in his
investigation. See Aplt. App. at 1147–48, 1180 (Daubert Hr’g Tr., dated Jan. 4,
2012). And there is no evidence to the contrary. Furthermore, even if the district
court had questioned the credibility of this testimony (which it did not), that
would not have been an appropriate reason to exclude it. See Compton v. Subaru
24
of Am., Inc., 82 F.3d 1513, 1520 (10th Cir. 1996) (holding that a district court
properly allowed an expert to testify despite an “extremely low” opinion of his
credibility because “the weight and credibility of [his] testimony were issues for
the jury”), overruled on other grounds by Kumho Tire Co. v. Carmichael, 526
U.S. 137 (1999); see also Lapsley v. XTEK, Inc., 689 F.3d 802, 805 (7th Cir.
2012) (“A Daubert inquiry is not designed to have the district judge take the
place of the jury to decide ultimate issues of credibility and accuracy.”).
Moreover, assuming arguendo that it could be demonstrated that Mr. Birmingham
did not follow NFPA 921, it is far from evident that, in itself, this would compel
exclusion. See Russell v. Whirlpool Corp., 702 F.3d 450, 455 (8th Cir. 2012)
(holding that while “NFPA 921 qualifies as ‘a reliable method endorsed by a
professional organization,’” it is not “the only reliable way to investigate a fire”
(quoting Fireman’s Fund Ins. Co. v. Canon U.S.A., Inc., 394 F.3d 1054, 1058–59
(8th Cir. 2005)) (internal quotation marks omitted)).
Moreover, Mr. Birmingham’s failure to speak with the two employees did
not render his opinion unreliable under Rule 702. Mr. Birmingham had conducted
over 1000 fire investigations prior to the hearing, more than two dozen of which
concerned vehicles; he had worked in the field since 1979; and he had attended
“numerous” training and certification seminars, Aplt. App. at 1146. At the
Daubert hearing, Mr. Birmingham testified that after inspecting the area and the
fire patterns, he “narrowed the area of origin down to” the subject truck. Id. at
25
1142. It was no abuse of discretion for the district court to find this investigation
sufficiently reliable for Mr. Birmingham to appear before the jury.
Freightliner presents no authority holding that an expert is required to
interview every potential source of information in order to pass the Daubert test.
It is especially noteworthy that Mr. Birmingham indicated that he surveyed the
fire patterns on the premises and “narrowed” the potential sources of the fire
down to the subject truck, id., as his wording suggests that he conducted a broad
inspection of the shop and excluded other potential origins before arriving at his
theory. That is exactly how an expert is supposed to operate. See Fed. R. Evid.
702 advisory committee’s note (2000) (noting that a district court should ask
“[w]hether the expert has adequately accounted for obvious alternative
explanations” in evaluating reliability under Rule 702); cf. In re Cooper Tire &
Rubber Co., 568 F.3d 1180, 1188 (10th Cir. 2009) (giving persuasive weight to
advisory committee notes while interpreting the Federal Rules of Civil
Procedure); Martinez v. Sullivan, 881 F.2d 921, 928 (10th Cir. 1989) (giving
persuasive weight to advisory committee notes while interpreting the Federal
Rules of Evidence); cf. also Square D Co., 470 F.3d at 990–91 (determining that
the district court did not abuse its discretion in excluding expert testimony where
the expert fire investigator failed to discount another possible cause of the fire).
As Kechi fairly remarks, if Freightliner had concerns about the
thoroughness of Mr. Birmingham’s investigation, it could easily have expressed
26
those through cross-examination and closing argument. Cf. Gomez v. Martin
Marietta Corp., 50 F.3d 1511, 1519 (10th Cir. 1995) (concluding that expert
testimony was not impermissibly speculative in part because the other side “cross-
examined [the] expert on the asserted weaknesses of [the expert’s] assumptions
and presented expert testimony in its favor. While the weaknesses in the data
upon which [the] expert relied go to the weight the jury should have given her
opinions, they did not render her testimony too speculative as a matter of law.”).
There was no abuse of discretion in admitting Mr. Birmingham’s testimony.
2
Freightliner believes that testimony by Kechi’s other expert, Mr.
Martin—the electrical engineer who studied the fire’s cause—was also admitted
in error. In particular, Freightliner argues that because “Mr. Martin did not
consult, review, or analyze a single design drawing relating to” the subject truck,
he “possessed no knowledge of [Freightliner’s] design process” and thus “should
not have been allowed to offer any opinions” regarding the truck. Aplee. Opening
Br. at 26. Freightliner targets Mr. Martin’s testimony regarding the exemplar
parts in particular, as he failed to personally examine the exemplar truck, which
allegedly “was of unknown origin, unknown use, and unknown repair history.”
Id. at 27. Similarly, according to Freightliner, Mr. Martin had no assurance that
the exemplar cable was identical to the one from the subject truck or that it was
manufactured by the same company.
27
Freightliner finds further fault with Mr. Martin for flouting the
recommendations advanced by NFPA 921—specifically, its instruction to exclude
all potential causes of a given fire by process of elimination—which he did not
heed when he “rest[ed] fully on the assumptions of Mr. Birmingham as to fire
origin, and subsequently concerned himself and his opinions only with the
incident truck.” Id. at 29–30. Lastly, Freightliner takes issue with Mr. Martin’s
testimony at the hearing regarding how insulation in the truck spread the fire, as
he “admitted that he was only assuming that the cables were insulated” with a
flammable substance and had no actual knowledge on the issue. Id. at 30.
As with its grievances concerning Mr. Birmingham’s reliability under Rule
702, Freightliner’s problems with Mr. Martin’s testimony all boil down to a
complaint that he did not perform the investigation a different expert might have
performed; the grievances do not shake the district court’s reliability
determination regarding the investigation Mr. Martin actually did perform. That
investigation was unquestionably thorough. At the Daubert hearing, Mr. Martin
recounted his forty-one years of experience in the field and his investigation of
approximately 1200 fires, roughly 150 of them involving vehicles. He then
presented a detailed theory as to how the fire began, with reference to highly
specific components of both the exemplar engine and the destroyed truck’s
28
engine, both of which he had spent considerable time studying. 15 The district
court acted well within its discretion in finding his explanation sufficient to
permit him to testify as an expert.
Freightliner’s protestations notwithstanding, the law did not require Mr.
Martin to consult design drawings in order to offer his opinion on the fire, given
that he based his opinions on a perfectly plausible alternative method: extensive
study of the subject truck’s engine and comparison of that engine with an
exemplar. Cf. Bourelle v. Crown Equip. Corp., 220 F.3d 532, 536–37 (7th Cir.
2000) (affirming a district court that properly excluded expert testimony where
the expert failed to prepare design drawings and failed to do anything else that
would have rendered his opinion reliable under Daubert). Moreover, Mr. Martin
offered a perfectly plausible explanation for why he felt no need to examine any
design drawings—that is, because the physical evidence at the scene of the fire
was sufficient in view of the fact that he understood “how the system is
configured.” Aplt. App. at 1205. To impose the narrow and confining
15
Mr. Martin’s theory of the fire, as expressed at the Daubert hearing,
was as follows: Mr. Birmingham directed him to the subject truck as the likely
point of origin. While inspecting the area around the truck, Mr. Martin
discovered that two of the terminals on one of the cables were welded together,
suggesting the work of excessive heat. He also noticed that one of the nuts was
loose, and he was aware that such looseness could produce heat. His inspection
of the insulation at the scene and his comparison with the insulation of the
exemplar cable indicated to him that the fire had spread through the insulation
material.
29
requirement on an expert that Freightliner proposes would convert the “flexible”
Daubert inquiry, United States v. Baines, 573 F.3d 979, 988 (10th Cir. 2009), into
an overbearingly rigid one.
Freightliner’s contentions regarding the exemplars are similarly unavailing.
Mr. Martin explained that he relied upon the exemplar cable to form an opinion
about the fire because it had a part number consistent with the part number of the
subject truck’s cable, because it said “Freightliner” on it, and because the cables
had the same configuration. These are all good enough reasons for purposes of
Daubert’s reliability inquiry. Of course Mr. Martin could not be 100% sure the
cables were identical, but Rule 702 does not require “absolute certainty.” Gomez,
50 F.3d at 1519 (quoting Jones v. Otis Elevator Co., 861 F.2d 655, 662 (11th Cir.
1988)) (internal quotation marks omitted). All that is required is “that the method
employed by the expert in reaching the conclusion is scientifically sound and that
the opinion is based on facts that satisfy Rule 702’s reliability requirements,”
Goebel v. Denver & Rio Grande W. R.R. Co., 346 F.3d 987, 991 (10th Cir. 2003),
and Mr. Martin’s process with the exemplar cable met that standard. 16
Freightliner’s argument regarding Mr. Martin’s supposed noncompliance
16
Mr. Martin’s comments at the Daubert hearing regarding the
exemplar truck were not as extensive as those he offered about the exemplar
cable. However, for his belief that the exemplar truck was the same model as the
subject truck, he relied on his own visual inspection of the burned truck and the
photographs, as well as the assurances of his colleague Mr. Birmingham—all
reasonable sources for an expert.
30
with NFPA 921 is as fruitless as its similar argument with respect to Mr.
Birmingham. Like Mr. Birmingham, Mr. Martin did swear that he followed the
recommendations made in NFPA 921, see Aplt. App. at 1206–07; as with Mr.
Birmingham, the district court had no evidence to the contrary; and, as discussed,
NFPA 921 is not the be-all and end-all in the reliability of fire investigations, see
Russell, 702 F.3d at 455 (noting that while “NFPA 921 qualifies as a reliable
method endorsed by a professional organization,” it is not “the only reliable way
to investigate a fire” (citation omitted) (internal quotation marks omitted)).
Regarding Freightliner’s argument that Mr. Martin failed to exclude other
potential sources of the fire outside of the truck, and instead improperly deferred
to his colleague Mr. Birmingham on that point, Freightliner makes no showing
that such deference was improper. It is not unusual for courts to distinguish
between expert testimony on a fire’s cause and expert testimony on a fire’s origin.
See, e.g., Weisgram v. Marley Co., 169 F.3d 514, 519 (8th Cir. 1999) (permitting
a fire investigator to testify about the origins of a fire, but not its cause). Kechi
reasonably points out that Mr. Martin was only there for the former. See Aplt.
App. at 1207 (Mr. Martin testifying at the Daubert hearing that Mr. Birmingham
was the origin expert). As such, his charge was to ascertain how a fire might
have started in the subject truck, not how it might have begun elsewhere in the
shop. See id. at 1207–08 (Mr. Martin observing that Mr. Birmingham completed
the origin investigation). Freightliner offers no authority suggesting that such a
31
division of labor is inappropriate, and we have no reason to suppose the district
court abused its discretion in allowing it. See, e.g., Hartford Ins. Co. v. Gen.
Elec. Co., 526 F. Supp. 2d 250, 255 (D.R.I. 2007) (discussing a case involving
separate experts on fire cause and fire origin).
Freightliner next characterizes Mr. Martin’s theory that the insulation
spread the fire as overly speculative. Though expert testimony can properly be
excluded as unreliable where it is based on “assumptions . . . that [are] not
supported by the evidence,” Truck Ins. Exch. v. MagneTek, Inc., 360 F.3d 1206,
1213 (10th Cir. 2004), Mr. Martin’s comments on the insulation were supported
by his inspection of the incinerated insulation at the scene, his comparison of that
insulation with the insulation in the exemplar cable, and his many years of
experience studying fires that spread through insulation. The comments of Mr.
Martin did not render his proffered testimony unreliable. 17 To conclude, we see
no abuse of discretion in the district court’s decision to permit Messrs.
17
In its reply brief, Freightliner focuses on the district court’s
inconsistency in excluding Mr. Birmingham from discussing the insulation issue
but then allowing Mr. Martin to explore the matter from the stand, “even though
he admitted numerous times that he was not retained to offer origin opinions.”
Aplee. Reply Br. at 7. This is not an argument about Mr. Martin’s qualifications
to testify as an expert, but about what he said while so testifying. Furthermore, as
an argument omitted from the opening brief and inadequately discussed in the
reply brief, it is not properly presented to us. See, e.g., Bronson v. Swensen, 500
F.3d 1099, 1104 (10th Cir. 2007) (“[W]e routinely have declined to consider
arguments that are not raised, or are inadequately presented, in an appellant’s
opening brief.”).
32
Birmingham and Martin to testify, and consequently affirm its orders allowing
them to do so.
C
Our final issue concerns the district court’s decision to exclude most of
Kechi’s damages evidence. Although this ruling presents a closer question, we
nonetheless find that—as with the preceding issues—the district court acted
properly in this regard. We therefore affirm its order.
1
Kechi offered its damages evidence in the form of lay opinion testimony by
Messrs. Day and Caster. As a matter of federal law, lay opinion testimony is
governed by Federal Rule of Evidence 701. That rule provides that
[i]f a witness is not testifying as an expert, testimony in the form
of an opinion is limited to one that is: (a) rationally based on the
witness’s perception; (b) helpful to clearly understanding the
witness’s testimony or to determining a fact in issue; and (c) not
based on scientific, technical, or other specialized knowledge
within the scope of Rule 702.
Fed. R. Evid. 701. Here, the dispute is over subsection (c), i.e., whether Kechi’s
damages evidence was actually expert testimony and thus inadmissible as lay
testimony. We have explained that Rule 701(c) is covered by the Erie doctrine, 21
as it was added to the Rules by amendment under the Rules Enabling Act, 28
21
Erie R.R. Co., 304 U.S. at 78 (“Except in matters governed by the
Federal Constitution or by acts of Congress, the law to be applied in any
[diversity] case is the law of the state.”).
33
U.S.C. § 2072, and was therefore not an act of Congress outside Erie’s scope.
See James River, 658 F.3d at 1218. As such, in the event of a conflict between
Rule 701(c) and a state evidentiary rule, the federal rule must yield to its state
counterpart unless “application of the federal rule represents a valid exercise of
the rulemaking authority.” Id. (quoting Shady Grove Orthopedic Assocs., P.A. v.
Allstate Ins. Co., 559 U.S. 393, 422 (2010) (Stevens, J., concurring)) (internal
quotation marks omitted). Application of a federal rule is not such a valid
exercise where it “abridge[s], enlarge[s] or modif[ies] any substantive right.” Id.
(quoting Shady Grove, 559 U.S. at 422 (Stevens, J., concurring)) (internal
quotation marks omitted).
Our approach in the case at bar is as follows. We first inquire whether
federal law supports excluding the damages testimony and conclude that, if
applied, federal law would counsel in favor of upholding the district court’s
decision as a proper exercise of its discretion. We then turn to Kansas law. If
state and federal law are consistent, the evidence could be subject to exclusion
under either code. However, if Kansas law is demonstrably inconsistent with
federal law such that it would point toward admission of the evidence, we would
ask whether application of the federal rule affects a substantive right—and, if it
would not, the federal rule would control, permitting exclusion of the damages
testimony.
In this case, however, we are able to resolve the issue at the second step of
34
our analytical process because Kechi has failed to evince any conflict between
state and federal law. Consequently, we refrain from opining on whether
application of federal law affects a substantive right. We likewise abstain from
predicting how the Kansas courts would construe the import of their state’s law
regarding the damages testimony at issue here. Cf. Proctor & Gamble Co. v.
Haugen, 222 F.3d 1262, 1280 (10th Cir. 2000) (declining to weigh in on a
question of state law in the absence of guidance from the state’s highest court);
cf. also Royal Capital Dev., LLC v. Md. Cas. Co., 659 F.3d 1050, 1055 (11th Cir.
2011) (noting that “an authoritative statement from [a state] supreme court”
concerning state law “is much better than a conjectural statement” from a federal
court on state law). In other words, absent a showing by Kechi of a federal-state
legal incongruity, we are content to operate on the premise that the two codes are
consistent and would allow for the same outcome. Thus, crediting the district
court’s discretionary determination that the testimony of Messrs. Day and Caster
was too complex to come in under Rule 701, we affirm its decision that Kechi
was not permitted to introduce it.
2
Consistent with the framework discussed above, the first predicate question
is whether the damages evidence—either as to the real estate or as to the heavy
35
equipment 18—was properly excluded under federal law. In answering this
question, we are guided by the settled principle that “[a] district court has broad
discretion to [make decisions] under Rule 701.” United States v. Banks, 761 F.3d
18
As indicated in the fact section supra, the jury was instructed to
assess damages on only three items: (1) the Gator, (2) the property in the Gator,
and (3) certain “shop supplies and equipment.” Aplt. App. at 129 (capitalization
altered). Presumably, since the district court allowed the jury to award damages
on these three items, while excluding damages testimony as to the other heavy
equipment and real estate and likewise omitting any instruction on either, it
believed the evidence was proper on the three items. However, Freightliner
makes a number of confusing statements that could be read to suggest that it
understands the district court to have admitted all of Kechi’s damages evidence
(that is, not just the three items), and that it understands itself to be arguing
chiefly for reversal. See, e.g., Aplee. Opening Br. at 1 (framing the issue as
“[w]hether the trial court improperly allowed Mr. Day to testify pursuant to
[Federal Rule of Evidence] 701 as the alleged ‘owner’ of the damaged property”);
id. at 38–39 (“Mr. Day was . . . permitted . . . to offer testimony relating to the
heavy equipment and personal property that was damaged in the fire.” (emphasis
added)); id. at 39 (“[T]he Trial Court improperly allowed Mr. Day to testify as
owner.”); id. at 40 (“Mr. Day is not an owner of the property . . . , and his
testimony should have been excluded.” (emphasis added)). Elsewhere,
Freightliner appears to acknowledge in passing that the district court excluded at
least some of the testimony, but it is entirely unclear what testimony it believes
was admitted. In sum, it is impossible to decipher Freightliner’s account of the
events at trial, though its brief is replete with mistaken suggestions that it largely
lost on the damages question when, in fact, it largely won.
Given our institutional “preference for affirmance,” Richison v. Ernest
Grp., Inc., 634 F.3d 1123, 1130 (10th Cir. 2011), Freightliner’s apparent
confusion over the district court’s exclusion of most of the damages evidence
does not affect our analysis of that decision. It is another matter, however, with
respect to the evidence supporting the damages that were awarded. Because
Freightliner would have to seek reversal if it wanted to question the admission of
that evidence, and because it fails to make any specific argument to that effect,
we will not make an argument on its behalf, see Yelloweagle, 643 F.3d at 1284,
and will instead affirm the district court’s award of damages. The discussion that
follows above does not encompass the items on which damages were awarded.
36
1163, 1200 (10th Cir.) (quoting United States v. Garcia, 994 F.2d 1499, 1506
(10th Cir. 1993)) (internal quotation marks omitted), cert. denied, --- U.S. ----,
135 S. Ct. 308 (2014); see United States v. Goodman, 633 F.3d 963, 969 (10th
Cir. 2011) (observing the district court’s sound “discretion to exclude lay witness
testimony for other reasons contemplated by the Federal Rules of Evidence,
among them . . . Rule 701”); Gust v. Jones, 162 F.3d 587, 595 (10th Cir. 1998)
(“[T]he admission of lay opinion testimony is within the sound discretion of the
trial court.”); Getter v. Wal-Mart Stores, Inc., 66 F.3d 1119, 1124 (10th Cir.
1995) (underscoring the discretionary nature of the district court’s “determination
of a lay witness’s qualification to testify” under Rule 701).
Our strong deference to such rulings is grounded in “the trial court’s
familiarity with the case and experience in evidentiary matters.” Elm Ridge
Exploration Co., 721 F.3d at 1213 (quoting Abraham v. BP Am. Prod. Co., 685
F.3d 1196, 1202 (10th Cir. 2012)) (internal quotation marks omitted). Thus,
when assaying for abuse of discretion, we will not unsettle the district court’s
decision absent “a definite and firm conviction that the lower court made a clear
error of judgment or exceeded the bounds of permissible choice in the
circumstances.” Headwaters Res., Inc. v. Ill. Union Ins. Co., --- F.3d ----, 2014
WL 5315090, at *11 (10th Cir. 2014) (quoting Phelps v. Hamilton, 122 F.3d
1309, 1324 (10th Cir. 1997)) (internal quotation marks omitted).
In finding no abuse of discretion here, we are guided in part by our
37
reasoning in James River. By way of background, in James River we held that
the district court committed reversible error when it allowed a landowner to
testify to his property’s value as a lay witness under Rule 701. We did so on the
basis that this exercise would have required the landowner “to calculate a post-
fire estimate of the pre-fire value of a dilapidated, condemned, 39-year old
building.” James River, 658 F.3d at 1214. Such calculations, we said,
necessitated “[t]echnical judgment” and were based partly on the landowner’s
experience in real estate and his reliance “on a technical report by an outside
expert.” Id. at 1214–15. In other words, we reasoned, this was not a situation
where the landowner’s “opinions or inferences [did] not require any specialized
knowledge and could be reached by any ordinary person.” Id. at 1214 (quoting
LifeWise Master Funding v. Telebank, 374 F.3d 917, 929 (10th Cir. 2004))
(internal quotation marks omitted). Importantly, we also noted that “the Federal
Rules of Evidence generally consider landowner testimony about land value to be
expert opinion.” Id. at 1215.
To be sure, James River did not entirely foreclose the possibility of
deeming property-value testimony admissible under Rule 701. We acknowledged
the same in a footnote—viz., that “[a]lthough . . . the Rule 702 advisory
committee note point[s] to landowner testimony on value as being expert in
nature, with proper foundation, it may in the appropriate case be admitted as lay
opinion under Rule 701.” Id. at 1215 n.1 (emphasis added) (citation omitted).
38
Yet, in no uncertain terms, we instructed that the district court’s inquiry turns on
the complexity of the property right at stake and, more specifically, on whether
the “valuations [are] based on straightforward, common sense calculations.” Id.
at 1216 (internal quotation marks omitted).
Looking to James River, first of all, we are satisfied that the district court
operated within a permissible range of discretion in finding that Mr. Day’s
proffered testimony regarding the heavy equipment at issue was too complex to
qualify for admission under Rule 701. The machines involved in this case were
large, specialized, expensive pieces of equipment, and Mr. Day’s descriptions of
them sufficiently show that his opinion of their worth was based upon his
specialized, technical, professional experience working with them. See, e.g.,
Aplt. App. at 315 (Mr. Day explaining his valuation of the lawn mowers with
reference to the fact that they “were 25 horse, 60-inch cut. They’re all hydrostat.
They’ve got dual cooling on ’em. Dual oil filters.”); id. at 316 (explaining his
valuation of the tractor with reference to the fact that “it was a four-wheel drive,
you know, farmers, four-wheel drive, they can put duals, it was equipped ready to
put duals on the front and back if you needed to”); see also Aplt. Opening Br. at
10–11 (tallying up Mr. Day’s estimates of the eight machines’ values as in the
several hundred thousand dollars range). In short, the district court did not abuse
its discretion when it classified Mr. Day’s testimony as grounded on technical
knowledge of the sort possessed by an expert. By extension, the district court did
39
not abuse its discretion when it ruled that the damages testimony could not come
in under the auspices of Federal Rule of Evidence 701. 19
The testimony as to the valuation of the real estate—which would have
been offered by Mr. Day and Mr. Caster—poses a slightly closer question. 20
Unlike the equipment, the real property does not seem to have been particularly
complex. See, e.g., Aplt. App. at 249 (Mr. Day describing the building as a
“metal pole barn building with double truss wooden rafters. It was approximately
60 by 60 on the main part. And then we had an office on the east side that had a
wall partition between it but it was attached and it was also a tin/wood
structure.”). Nonetheless, we do not believe the district court “exceeded the
bounds of permissible choice in the circumstances,” Headwaters Res., Inc., 2014
19
In arguing that Mr. Day was qualified to testify to the value of the
equipment under federal law as a lay opinion witness, Kechi emphasizes that Mr.
Day was familiar with offers for the purchase of the wheel loader. It offers no
caselaw to support its contention that this was sufficient to render him a
competent lay witness. Furthermore, the argument deals with only one piece of
equipment and does not surmount the bar set by James River, which counsels that
the technical, specialized nature of an object strongly suggests that its valuation is
the proper subject for expert testimony.
20
In its initial order on this issue, the district court noted that James
River dealt with real property and not personal property, which it characterized as
“a big distinction.” Aplt. App. at 94 (Order, filed Jan. 16, 2012). It did not cite
any cases drawing such a categorical distinction, and James River is based in
large measure on the complexity of the object being valued, and not at all on the
legal status of the property. See 658 F.3d at 1214. As this very case proves,
personal property can be just as complex—if not more so—than real estate. We
therefore apply the same analysis to both the real and the personal property.
40
WL 5315090, at *11 (internal quotation marks omitted), by finding the building
complex enough that its valuation qualified as a fitting subject of expert
testimony. Notably, the James River opinion quoted approvingly from a Third
Circuit case that held that
[t]he prototypical example of the type of evidence contemplated
by the adoption of Rule 701 relates to the appearance of persons
or things, identity, the manner of conduct, competency of a
person, degrees of light or darkness, sound, size, weight,
distance, and an endless number of items that cannot be described
factually in words apart from inferences.
James River, 658 F.3d at 1214 (quoting Asplundh Mfg. Div. v. Benton Harbor
Eng’g, 57 F.3d 1190, 1196 (3d Cir. 1995)) (internal quotation marks
omitted). The valuation of the real estate (i.e., the machine shop), as simple as it
may have been, was certainly more complicated than the valuation of the items in
this list by an order of magnitude. Furthermore, as noted, James River
emphasized that “the Federal Rules of Evidence generally consider landowner
testimony about land value to be expert opinion.” Id. at 1215. In addition, James
River specifically highlighted the specialized knowledge required to estimate
depreciation after a building is destroyed by fire, see id. at 1214 (“Technical
judgment is required in choosing among different types of depreciation.”), which
is exactly the calculation Kechi’s witnesses would have been required to make.
Finally, Mr. Day indicated that he would be relying in part on an appraisal for his
evaluation, much like the “technical report” relied upon by the witness in James
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River, id. at 1215—yet another sign that his testimony was unfit for admission
pursuant to Rule 701.
To summarize, we are satisfied that the district court properly exercised its
discretion in concluding that the valuation testimony—both as to the heavy
equipment and as to the real estate (i.e., the machine shop)—was too specialized
to qualify as lay witness testimony. See Goodman, 633 F.3d at 969 (noting that
even if other rationales might support the admission of testimony, “the district
court still has the discretion to exclude [the] witness testimony” under Rule 701
(emphasis added)). We therefore will not disturb the district court’s ultimate
determination that this testimony could not be admitted under Rule 701.
3
Having concluded that federal law permits the exclusion of the damages
testimony, we ask whether Kansas law interposes a conflict. As noted supra,
however, Kechi has not attempted to argue that Kansas law dictates a different
outcome. Reading its briefing very liberally, Kechi hints at a possible federal-
state legal conflict, and the ensuing inquiry into the impact of the federal rule on
substantive rights, when offering the conclusory remark that invoking federal law
“would abridge [its] right to present the testimony of Jim Day, as evidence on the
damages claim.” Aplt. Opening Br. at 26. Even if our liberal construction is on
target, Kechi’s skeletal allusion is not enough. It is not a legally cognizable
argument; rather, it is an unsubstantiated, unexplained, uncited assertion. As
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such, we enjoy the discretion to disregard the assertion entirely and proceed on
the premise that, for purposes of this case, Kansas law can be harmonized with
federal law. We therefore affirm on that ground alone. See, e.g., Bronson, 500
F.3d at 1104; Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 841 (10th
Cir. 2005) (deeming several issues waived when the support for each consisted of
“mere conclusory allegations with no citations to the record or any legal authority
for support”); United States v. Rodriguez-Aguirre, 108 F.3d 1228, 1237 n.8 (10th
Cir. 1997) (noting that the appellant bears the burden of tying all salient facts to
his legal arguments).
In sum, to return to our starting matrix, it was not an abuse of the district
court’s discretion to find that the damages testimony could not come in under
Federal Rule of Evidence 701, as it was specialized expert testimony that should
have been offered pursuant to Rule 702, if offered at all. Because Kechi has not
meaningfully argued that state law would permit the testimony, we conclude that
the evidence, under these circumstances, was correctly deemed inadmissible.
Accordingly, we hold that the district court did not err in precluding Messrs. Day
and Caster from testifying as to damages.
IV
For the reasons presented above, we AFFIRM the district court’s orders
denying Freightliner’s motion for JMOL, allowing Kechi’s expert witnesses to
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testify, and barring Kechi’s lay witnesses from testifying as to damages.
Entered for the Court
JEROME A. HOLMES
Circuit Judge
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