Nutrasweet Company v. X-L Engineering Co ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 99-3863
NutraSweet Company,
and Monsanto Company,
Plaintiffs-Appellees,
v.
X-L Engineering Company,
and Paul T. Prikos, individually,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 95 C 6024--Charles R. Norgle, Sr., Judge.
Argued April 11, 2000--Decided September 8, 2000
Before Manion, Diane P. Wood, and Evans, Circuit
Judges.
Manion, Circuit Judge. The Comprehensive
Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. sec.
9601 et seq., allows private parties to recover
the costs they incur in cleaning up hazardous
wastes. NutraSweet and Monsanto (collectively
"NutraSweet") sued X-L Engineering and its
president and principal shareholder, Paul Prikos
(collectively "X-L"), for improperly disposing of
hazardous compounds which contaminated
NutraSweet’s property. The district court entered
partial summary judgment in favor of NutraSweet,
finding X-L to be at least partly responsible for
the hazardous wastes on NutraSweet’s property.
After a bench trial, the district court found
that X-L was in fact 100% liable for these wastes
and awarded NutraSweet the full amount of its
requested damages. X-L raises numerous issues
concerning the proceedings below. We affirm in
all respects.
I. Background
NutraSweet (a subsidiary of Monsanto) owned a
food manufacturing facility in Niles, Illinois.
Its neighbor to the east was X-L Engineering, a
machine shop. In October 1990, NutraSweet thought
about expanding its Niles facility on vacant land
on the east side of its property (which bordered
the west side of X-L’s shop), so it ordered soil
testing of that area. The tests revealed high
levels of hazardous volatile organic compounds
("VOCs") near X-L’s property. That month
NutraSweet hired another company to perform a
"phase one" assessment of the problem; the
assessment concluded that spills at X-L could
have caused the contamination.
In the spring of 1992, NutraSweet employees
began observing an X-L employee dumping out
wastewater from a mop-bucket on the west side of
X-L’s property near NutraSweet’s property.
NutraSweet sampled the wastewater and found that
it contained a VOC called "trichloroethene" (or
"TCE"). It also took a soil sample from X-L’s
property where the mop-bucket dumping was
observed. This sample also contained TCE.
NutraSweet began video surveillance of X-L’s
dumping, and after one month, it recorded 82
occasions where an X-L employee had dumped
wastewater onto X-L property next to NutraSweet’s
property, and four occasions in which the
standing wastewater had spilled onto NutraSweet’s
property.
At NutraSweet’s request, the Illinois EPA and
State Police also began surveillance of X-L. On
two occasions, state officials observed X-L
dumping wastewater on its own property but near
NutraSweet’s property. On the second occasion
they sampled the wastewater; it contained TCE,
another VOC called perchloroetylene (or "PCE"),
and several other hazardous compounds, including
trichloroethane (or "TCA"). The dumping ended in
July 1992, when the officials returned to X-L for
a third inspection, wherein they confronted
Prikos, X-L’s owner. At the beginning of this
inspection, the officials repeatedly observed the
same X-L employee again dumping wastewater onto
X-L property that was adjacent to NutraSweet’s
property. The inspectors sampled the wastewater
just before it was dumped; TCA was again present.
NutraSweet hired an environmental consulting
firm, Geraghty and Miller ("G & M"), to
investigate and plan for the "remediation" (or
clean-up) of its property. G & M tested the soil
and designed and implemented a plan with Illinois
EPA approval and under its supervision.
NutraSweet cleaned up the property until the
agency told it that the remediation had succeeded
to the maximum extent possible. NutraSweet then
sued X-L under CERCLA and the Declaratory
Judgment Act, 28 U.S.C. sec.sec. 2201-2202 (with
common law claims for nuisance, trespass and
negligence). See NutraSweet Co. v. X-L Eng’g
Corp., 933 F. Supp. 1409, 1412 (N.D. Ill. 1996).
II. The Proceedings Below
NutraSweet moved for summary judgment as to both
liability and damages. It produced considerable
evidence to establish that X-L was responsible
for at least some of the contaminates on its
property, such as:
1. the videotape of X-L’s mop-bucket dumping;
2. eyewitness accounts of this dumping (from
NutraSweet employees, Illinois EPA officials, and
Illinois State Troopers);
3. NutraSweet’s 1992 soil and water samples which
revealed the same VOCs in the mop-bucket
wastewater as were present in the area of
NutraSweet’s property onto which the wastewater
had spilled, and as were present in an
immediately adjacent area of X-L’s property where
the dumping was observed;
4. test results from Illinois officials of the
contents of the wastewater which showed the same
VOCs as were found on NutraSweet’s property;
5. an affidavit from G & M stating that the
highest level of VOCs on NutraSweet’s property
were near X-L’s property where the dumping was
observed and that the groundwater flowed away
from X-L’s property to NutraSweet’s property;
6. records from X-L showing its use of a TCA-based
solvent; and
7. an affidavit stating that NutraSweet did not
use chlorinated solvents in its manufacturing
process, and it never used such solvents at its
facility except for a self-contained parts
cleaner that was returned to the manufacturer for
recycling and which never had any releases during
the two years that NutraSweet used it.
In response, X-L admitted that it used chemical
solvents in its business, and it did not
establish that prior to 1992 it had properly
disposed of spent solvents (X-L stated that "in
the 1992 time frame" it disposed of spent
solvents through licensed waste haulers). Also,
Prikos stated that to "the best of his knowledge"
no X-L employee "has ever dumped or otherwise
discarded any item on the NutraSweet property."
But as to the X-L employee caught on video "mop-
bucket dumping," Prikos stated that he was
unaware "of the specifics as to how [that
employee] went about his duties and how he
disposed of the mop water." Prikos added that
after Illinois officials told him about the mop-
bucket dumping, he "issued orders directed to
ensure that [the employee] would no longer dump
mop water on or about [the area in question],"
and that although Prikos had "no personal
knowledge that [the employee] ever did dump mop
water in or near [the area in question], it is my
understanding that, after I indicated that this
[dumping] should not be done, that it was never
done again." X-L’s only other affidavit was from
its expert, Richard Shepherd, an environmental
engineer, who opined that NutraSweet had failed
"to prove, through a degree of scientific
certainty, that X-L Engineering Company was the
cause of contamination found on the NutraSweet
Property, much less the sole cause." Shepherd’s
conclusion was based on the lack of a "chemical
fingerprint" which, in turn, was based on his
assumption that TCA was the only VOC that X-L
ever used. Shepherd also concluded that the
groundwater flowed away from NutraSweet’s plant,
thus showing (he believed) that any solvents
dumped on X-L property could not have "migrated"
onto NutraSweet’s property.
In reply, NutraSweet’s experts used Illinois EPA
reports to show that all twelve of the VOCs on
NutraSweet’s property were found on X-L’s
property where the dumping had occurred, thus
showing, NutraSweet contended, a "chemical
fingerprint." A NutraSweet expert also disputed
Shepherd’s analysis of groundwater migration. He
opined that Shepherd’s conclusion was faulty
because it reflected rainwater recharging of the
soil--a condition where rainwater briefly alters
the "normal" direction of flow. NutraSweet’s
experts stated that they measured the groundwater
flow in the winter when the ground was frozen,
thus minimizing the effect of rainwater
recharging and indicating the usual direction of
groundwater migration, which was away from X-L’s
property to NutraSweet’s property. Finally, a
NutraSweet expert stated that based upon his
review of the surveillance tapes, X-L’s dumping
along a railroad ditch to the north of its
property sometimes created a 50-foot wide pond of
wastewater that would extend onto NutraSweet’s
property. Soil samples from this area of
NutraSweet’s property revealed the presence of
VOCs.
The district court found that there was no
genuine dispute that X-L was responsible under
CERCLA for at least some of the VOCs on
NutraSweet’s property and that it was liable to
NutraSweet under state law for nuisance, trespass
and negligence. NutraSweet, 933 F. Supp. at 1422-
25. Because X-L did not respond at all to
NutraSweet’s evidence of its clean-up costs
(about $560,000), the district court found that
its costs were those NutraSweet put forth. Id. at
1415. The court entered partial summary judgment
for NutraSweet on X-L being at least partially
liable for NutraSweet’s costs. It ordered a trial
on the remaining issue: the amount of VOCs for
which X-L was responsible (which would determine
its liability). Id. at 1423-25.
In preparing for trial, X-L repeatedly missed
deadlines. It first failed to make Shepherd
available for a deposition or to produce its
expert witness report on time. As a result,
NutraSweet moved under Fed. R. Civ. P. 37(c) to
bar Shepherd from testifying at trial. The
district court struck the trial date and ordered
the parties to brief whether Shepard should be
barred. X-L then filed Shepherd’s report, one
week after the deadline. This late filing
prejudiced NutraSweet’s ability to examine
Shepherd on his theory as to why X-L was not
liable for the VOCs. NutraSweet therefore
requested that the court bar Shepherd from
testifying or in the alternative, that it be
allowed to take soil samples from X-L’s property
to rebut the factual assumptions and theories in
Shepherd’s report. The district court again
declined to bar Shepherd from testifying, but
agreed to allow each side to take soil samples
from the NutraSweet and X-L sites, which the
parties completed in October 1997.
The district court set a new trial date for July
14, 1998 and directed the parties to disclose
their reports of the site work by March 4, 1998.
NutraSweet complied with the March 4 deadline,
but X-L did not. One week after the deadline, X-L
sought another extension for filing its report of
the site work, an extension for filing its
supplemental expert witness report on the site
work, and an extension for other pretrial
deadlines. To support its motion, X-L noted that
because of the extensive field work that was
done, NutraSweet would probably be supplementing
its theories of the case, and for that reason X-L
would need additional time to respond to
NutraSweet’s supplemental expert report. The
district court granted X-L’s motion and set pre-
trial deadlines as X-L had proposed.
NutraSweet filed the supplemental expert report
of its rebuttal expert, Dr. Roy Ball, a week
early on March 20, 1997. X-L’s supplemental
report was due on April 10, 1997, but it did not
meet this deadline. A week later, X-L moved for
an extension of time until May 5, 1998. The
district court did not act on this motion, but it
was just as well that it didn’t because that
proposed deadline also came and went, with X-L
still not filing a supplemental report.
NutraSweet again moved to bar expert testimony
that went beyond Shepherd’s initial expert
report. Finally, about six weeks after the April
10, deadline, X-L responded by complaining that
Ball’s report was not sufficiently specific and
that it expanded NutraSweet’s theory of the case.
X-L argued that it should not be required to file
a supplemental report until NutraSweet filed a
more complete report. The district court granted
NutraSweet’s motion, limiting Shepherd’s trial
testimony to his initial report and precluding
him from testifying on the results of the site
work.
At trial, NutraSweet called Prikos to establish
that X-L had used cleaning solvents containing
TCA and PCE from 1973 (when Prikos acquired the
company) until the fall of 1992. He also
testified that X-L used PCE in its "hot
degreaser," it used a TCA-based solvent in its
"cold degreaser" beginning in the mid- to late
1970s, and X-L cleaned parts a third way by
dropping them into a bucket (he did not know
whether PCE was used in cleaning parts this way).
G & M’s supervising hydrologist testified that
the soil and groundwater samples from X-L’s
property showed concentrated solvent dumping. Dr.
Ball, NutraSweet’s expert, testified that
laboratory chromatograms of the PCE found on both
NutraSweet and X-L’s property indicated that the
PCE was from essentially the same source but was
disposed of at different times. Various
methodologies that Ball used--such as the degree
of degradation or "speciation" of the VOCs at
each site, the rate of groundwater flow on the
NutraSweet site, and aerial photographs--
supported his theory that the dumping of solvents
began on X-L property when its shop was built in
the mid-1960’s but moved over to NutraSweet’s
property in the early 1980’s (probably once X-L
had paved over part of its property, thereby
making dumping impracticable). Finally,
NutraSweet rebutted X-L’s argument that it had
been properly disposing of its VOCs: it
introduced X-L’s shipping manifests and Illinois
EPA records that showed that it was not until
December 1990 at the earliest (ten years after
federal regulations required proper disposal of
VOCs) that X-L began to dispose properly of VOCs.
In its case, X-L did not introduce any evidence
or proffer a theory as to who besides X-L could
have been responsible for the VOCs on
NutraSweet’s property. The district court found
X-L 100% responsible and entered damages in favor
of NutraSweet equal to 100% of its costs (with
$113,000 in prejudgment interest, the total award
was thus $673,000).
X-L appeals the partial summary judgment in
favor of NutraSweet that X-L was at least partly
liable for the VOCs on NutraSweet’s property. It
also appeals the district court’s decision not to
allow it further time to file a supplemental
expert report and in limiting its expert’s
testimony at trial. Furthermore, X-L contends
that the district court abused its discretion in
admitting the testimony of NutraSweet’s expert,
and it contends that the court erred in denying
X-L’s motion for a directed verdict. Finally, X-L
appeals the district court’s finding at trial
that it was the source of all the VOCs on
NutraSweet’s property and the determination of
damages.
III. Discussion
Under sec. 107(a) of CERCLA, 42 U.S.C. sec.
9607(a), an owner of land is strictly liable for
hazardous wastes that are contaminating his
property. See Kerr-McGee Chem. Corp. v. Lefton
Iron & Metal Co., 14 F.3d 321, 325 (7th Cir.
1994) ("A responsible person includes the current
owner and any person who formerly owned and
operated the facility in question at a time of
actual or threatened release of a hazardous
substance."); id. at 326 (owners "are strictly
liable under CERCLA sec. 107"). But under sec.
113(f) of CERCLA, 42 U.S.C. sec. 9613(f), the
landowner "may seek contribution from another
person who is liable or potentially liable under
sec. 107." Kerr-McGee, 14 F.3d at 326. Thus,
under "the CERCLA statutory scheme, sec. 107 . .
. governs liability, while sec. 113(f) creates a
mechanism for apportioning that liability among
responsible parties." Town of Munster, Ind. v.
Sherwin-Williams Co., Inc., 27 F.3d 1268, 1270
(7th Cir. 1994).
In Azko Coatings, Inc. v. Aigner Corp., 30 F.3d
761, 764 (7th Cir. 1994), we noted that subpart
(B) of sec. 107(a) "permits any ’person’--not
just the federal or state governments--to seek
recovery of appropriate costs incurred in
cleaning up a hazardous waste site." As a result,
we indicated that a landowner who, although
technically strictly liable for hazardous wastes
on its property was innocent of the
contamination, would not have to bring a
contribution action under sec. 113(f) (because he
did not "contribute" to the contamination); he
could instead bring "a direct cost recovery
action" under sec. 107(a) against the responsible
party. Id. A few years later we held that an
innocent landowner could indeed use the "Azko
exception" to pursue a sec. 107 "direct cost
action." AM Int’l, Inc. v. DataCard Corp., DBS,
Inc., 106 F.3d 1342, 1347 (7th Cir. 1997); Rumpke
of Ind., Inc. v. Cummins Engine Co., Inc., 107
F.3d 1235, 1241 (7th Cir. 1997); see also PNC,
Inc. v. Sherwin-Williams Co., 151 F.3d 610, 617
(7th Cir. 1998) (noting availability of sec. 107
action for innocent landowners). Such an action
is available if "a landowner [is] forced to clean
up hazardous materials that a third party spilled
onto its property or that migrated there from
adjacent lands." Azko, 30 F.3d at 764; see also
Rumpke, 107 F.3d at 1240 ("the Azko exception"
certainly applies to "the landowner who discovers
someone surreptitiously dumping wastes on its
land"). To establish the Azko exception under
sec. 107(a), a plaintiff must establish that: (1)
the defendant is a covered person under sec.
107(a); (2) there is a release or threatened
release of a hazardous substance from a
"facility" as defined by sec. 101(9);/1 (3) the
release caused the plaintiff to incur response
costs that are consistent with the national
contingency plan, Kerr-McGee, 14 F.3d at 325;
Dedham Water Co. v. Cumberland Farms Dairy, Inc.,
889 F.2d 1146, 1150 (1st Cir. 1989); and (4) the
plaintiff "did not pollute the site in any way."
Rumpke, 107 F.3d at 1241. In this case, the major
issue is whether the hazardous wastes on
NutraSweet’s property were released from the X-L
facility.
A. Summary Judgment
We review a grant of summary judgment de novo.
Miller v. American Fam. Mut. Ins. Co., 203 F.3d
997, 1003 (7th Cir. 2000). Summary judgment is
appropriate if "there is no genuine issue as to
any material fact and . . . the moving party is
entitled to judgment as a matter of law." Fed. R.
Civ. P. 56(c). To ward off summary judgment by
showing that there is a genuine dispute on a
material fact, the non-moving party must do more
than raise a "metaphysical doubt" as to the
fact’s existence. Gleason v. Mesirow Fin., Inc.,
118 F.3d 1134, 1139 (7th Cir. 1997). The evidence
must be "such that a reasonable jury could return
a verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
"If the evidence is merely colorable, or is not
significantly probative, summary judgment may be
granted." Id. at 249-50 (internal citations
omitted).
X-L contends that a genuine issue existed as to
whether it caused the hazardous wastes on
NutraSweet’s property (whether there was a
release from X-L’s facility). It argues that the
district court’s determination that X-L was
partially responsible was based on the expert
testimony of G & M engineers Robert Smith and
James Hill because this testimony was the only
evidence that linked the "mop-bucket dumping at
X-L to the contamination at the NutraSweet site."
Basing summary judgment on this testimony was
erroneous, X-L contends, because its expert,
Shepherd, had a contrary opinion as to the source
of the VOCs.
We disagree. The summary judgment concludes that
X-L caused some of the VOCs on NutraSweet’s
property, not necessarily all of them. Regardless
of the "battle of the experts," there is not a
genuine dispute that this limited holding was
correct. X-L used solvents in its business that
broke down into the type of VOCs that were found
on NutraSweet’s property. In one month alone,
video surveillance captured an X-L employee
dumping waste water eighty-two times on X-L’s
property in an area adjacent to NutraSweet’s
property. On at least four of these occasions,
the standing wastewater clearly spilled over onto
NutraSweet’s property, sometimes forming a fifty-
foot wide pond. NutraSweet tested this
wastewater, soil samples from its property onto
which the wastewater had spilled, and soil
samples from X-L’s property where the dumping had
occurred. These tests all revealed the presence
of TCE. With this evidence alone, there is not
even a "metaphysical doubt" that X-L caused at
least some of the VOCs on NutraSweet’s property.
Further, contrary to X-L’s assertion, the expert
opinions are not genuinely in conflict.
Shepherd’s conclusions, as to both a lack of a
"chemical fingerprint" for the VOCs and
"groundwater migration," were based on faulty
assumptions. He mistakenly assumed that only one
VOC that X-L used in its business, TCA, was found
on NutraSweet’s property. But NutraSweet’s expert
showed that all twelve of the VOCs that were
found on NutraSweet’s property were also found on
X-L’s property. Shepherd also used a problematic
method in analyzing groundwater flow: his
calculations were based on the time of year when
rainwater recharge would give misleading results
on the direction of the flow. By contrast,
NutraSweet’s expert minimized the effect of
rainwater recharge. On appeal, X-L does not
dispute these problems with Shepherd’s
assumptions and analyses. These defects result in
an expert opinion that is substantially
incomplete if not inaccurate. In any event,
because it does not address (much less
contradict) several matters asserted by
NutraSweet’s expert, it cannot create a genuine
issue on whether X-L caused at least some of the
VOCs on NutraSweet’s property. See Liberty Lobby,
477 U.S. at 249-50 (summary judgment may be
granted if the evidence "is not significantly
probative").
B. Limiting Shepherd’s Trial Testimony
Under Fed. R. Civ. P. 37(c)
The Federal Rules of Civil Procedure require
parties to file reports of expert witnesses they
intend to use at trial. See Fed. R. Civ. P.
26(a)(2). If a party does not timely file his
reports, the district court may exclude the
party’s expert from testifying at trial on the
matters the party was required to disclose. See
Fed. R. Civ. P. 37(c)(1). The sanction of
exclusion is "automatic and mandatory unless the
party to be sanctioned can show that its
violation of Rule 26(a) was either justified or
harmless." Finley v. Marathon Oil Co., 75 F.3d
1225, 1230 (7th Cir. 1996). We review the
district court’s exclusion of testimony for abuse
of discretion. See Salgado v. General Motors
Corp., 150 F.3d 735, 739 (7th Cir. 1998).
Because X-L did not file a supplemental expert
witness report on the site work at X-L’s
property, the district court excluded Shepherd
from testifying about this work and limited his
testimony to his initial expert witness report.
X-L attempts to explain its failure to file a
supplemental expert report by complaining that
NutraSweet used a new expert (Dr. Ball) in its
supplemental report and changed (more accurately,
supplemented) its theory of the case. Assuming
NutraSweet did so (on that, more later), X-L
still fails to explain why this justified its
failure to file a supplemental expert report. The
site work occurred in early October 1997;
NutraSweet filed its test results by the March 4,
1998 deadline (X-L did not); and NutraSweet filed
its supplemental expert witness report of Dr.
Ball ahead of schedule on March 20, 1998. Even
though Ball’s report contained new theories, X-L
does not explain why it could not file its
supplemental expert report by the April 10, 1998
extended deadline it requested and received. Nor
does it explain why it could not meet its
proposed, revised May 5 super-extended deadline.
By the time of these deadlines, X-L had had
Ball’s report for three weeks and five and one-
half weeks, respectively. Even if Ball’s report
was not sufficiently specific (an argument X-L
made below but not here), it should have at least
filed a preliminary supplemental report or told
the court of its concerns with Ball’s report by
the April 10 deadline (or certainly by its
proposed May 5 deadline). There was no reason for
it to just sit by for six weeks after the April
10 deadline and do nothing while the trial date
was fast approaching. There appears to be no
justification for X-L’s failure to file some sort
of a supplemental report that would have enabled
Shepherd to expand his testimony. See Salgado,
150 F.3d at 741 ("Salgado never offered--indeed,
does not offer to this date--a satisfactory
explanation for its failure to comply with the
directive of the district court").
X-L’s failure to file a supplemental report also
was not harmless. The district court granted
NutraSweet’s Rule 37(c) motion on May 22. At that
time, the court had already postponed the trial
date once. The trial was in less than two months
(on July 14), and the pretrial order was due in
about three weeks (on June 15). Without even a
preliminary or draft supplemental expert witness
report from Shepherd, NutraSweet was greatly
hampered in its ability to examine him about his
analysis of the site work. See Salgado, 150 F.3d
at 742. In these circumstances, the use of the
"automatic" sanction of exclusion was not an
abuse of discretion. Id.
C. The Trial
X-L raises numerous issues regarding the trial.
It first argues that NutraSweet "sandbagged" it
and violated Fed. R. Civ. P. 56(d) by changing
its theory of liability from summary judgment to
trial, where NutraSweet relied on Ball’s
additional theories. X-L fails to support its
Rule 56(d) argument with a single case citation
and thus has not properly presented this issue
for appellate review. See Fed. R. App. P.
28(a)(9)(A); United States v. Mason, 974 F.2d
897, 901 (7th Cir. 1992) (failure to cite case
law in support of argument waives appellate
review). Furthermore, X-L did not object below to
Ball’s expert witness report, even though it was
on file for months before the trial, and X-L was
fully aware that the report contained new
theories (X-L complained about the new theories
in the report, but it did not move to bar
NutraSweet from using them). Moreover, X-L cannot
complain that it was duped when prior to the
filing of Ball’s report, it acknowledged that it
knew the report would likely contain additional
theories, but far from objecting, X-L simply
requested that NutraSweet file its supplemental
report first./2 Thus, X-L waived the issue of
Ball’s supplemental theories. Consolidated
Bearings Co. v. Ehret-Krohn Corp., 913 F.2d 1224,
1232 n.9 (7th Cir. 1990) (failure to raise
arguments below waived them on appeal).
Even if X-L had properly presented this issue,
we would disagree that NutraSweet had pulled a
"bait and switch."/3 Recall that at summary
judgment, NutraSweet argued that X-L was at least
partially responsible for the VOCs on its
property due to mop-bucket wastewater ponding
over to its property or leaching into the soil
and then traveling to its property. After summary
judgment, X-L’s expert opined in his report that:
1) the amount of VOCs in diluted mop-bucket
wastewater was too small to account for the
substantial deposits of VOCs on NutraSweet’s
property; and 2) the type of soil did not allow
the wastewater to migrate in groundwater to
NutraSweet’s property. To rebut these theories,
NutraSweet tested the soil on X-L’s property. In
doing so, it realized the environmental problem
was much bigger than it had thought: the testing
indicated that concentrated solvents had been
dumped directly onto X-L’s property near
NutraSweet’s property. NutraSweet also discovered
that concentrated solvents had been dumped onto
its own property. In response to these findings,
Ball conducted tests (discussed later) which led
him to opine that: 1) the type of soil allowed
solvents to migrate in groundwater from the X-L
site to the NutraSweet site and; 2) direct
dumping of concentrated VOCs had begun on the X-L
site but moved to the NutraSweet site after X-L
had paved its property with a parking lot in the
mid-1970’s. Based upon his analyses, Ball
concluded that X-L’s activities were the cause of
the VOCs on NutraSweet’s property. It was not
inappropriate for NutraSweet to supplement its
theory of the case due to newly-discovered
evidence, and X-L was not unfairly surprised by
NutraSweet doing so (indeed, because NutraSweet
filed Ball’s supplemental report months before
the trial, X-L was able to move to bar Ball from
testifying on grounds that his testimony would be
based on speculation, and it objected at trial on
the same ground). Because X-L not only failed to
object that Ball’s rebuttal theories would
prejudice it, but stated that all it wanted was
NutraSweet to file its new theories first (note
2, supra), X-L in effect agreed to NutraSweet
proceeding at trial with these theories. See Fed.
R. Civ. P. 15(b); Walton v. Jennings Community
Hosp., Inc., 875 F.2d 1317, 1320 n.3 (7th Cir.
1989) (Rule 15(b) "allows great latitude in
amending complaints to conform with subsequent
changes as the case develops").
X-L next complains that Ball’s testimony did not
satisfy the standards for admissibility for
expert witnesses. "In deciding whether to admit
the proffered expert testimony, a district court
must be guided by the instructions of Daubert."
Walker v. Soo Line R.R. Co., 208 F.3d 581, 586
(7th Cir. 2000) (citing Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993)).
Under the so-called Daubert framework, a district
court must determine whether: (1) the expert
would testify to valid scientific, technical, or
other specialized knowledge; and (2) his
testimony will assist the trier of fact. Fed. R.
Evid. 702; Kumho Tire Co., Ltd. v. Carmichael,
119 S. Ct. 1167, 1174 (1999); Walker, 208 F.3d at
586. "The admission of expert testimony from
technical fields is governed by the same concerns
and criteria as the admission of scientific
expert testimony", but with respect to technical
testimony, the "Supreme Court in Kumho Tire
explained that the Daubert ’gatekeeper’ factors
had to be adjusted to fit the facts of the
particular case at issue, with the goal of
testing the reliability of the expert opinion."
United States v. Brumley, 217 F.3d 905, 911 (7th
Cir. 2000) (citing Kumho Tire Co., 119 S. Ct. at
1175). "We review de novo whether the district
court properly followed the framework set forth
in Daubert." Id. If the district court properly
applied the Daubert framework, we review its
decision to admit or exclude expert testimony
only for an abuse of discretion. Kumho Tire Co.,
119 S. Ct. at 1176; Brumley, 217 F.3d at 911.
X-L does not argue that the district court
failed to follow the two-part Daubert framework;
rather, it disputes the court’s application of
it. Specifically, X-L argues that Dr. Ball’s
opinions were not based on reliable methods and
techniques, the first part of the framework. X-L
does not challenge the reliability of solvent
degradation (speciation), chemical
chromatography, or Darcy’s equation for
groundwater migration; these are all tested,
well-accepted, and frequently used methodologies
or technologies in the fields of hydrology and
environmental engineering. See Kumho Tire Co.,
119 S. Ct. at 1175 (testing and acceptance of
technique in the relevant field may indicate
reliability). But X-L argues that it is
speculation to look at a sequence of aerial
photos to determine the history of chemical
dumping.
Initially, it must be noted that Ball used these
photographs in conjunction with his other tests
as a means of confirming his hypothesis. Ball
first used chromatography to determine that the
same type of VOCs were on the NutraSweet and X-L
sites. The relative stages of decay of the VOCs
on the respective sites, which he determined by
soil degradation or speciation, showed that the
VOCs on the X-L site were much older than those
on the NutraSweet site. And the rate of
groundwater migration of VOCs on the NutraSweet
site, determined by using Darcy’s equation,
confirmed their approximate ages. Ball then
analyzed historical photographs of the sites to
further confirm the dumping sequence: the photos
showed that X-L paved over a large part of its
property in the area where concentrated solvents
had been dumped on its property about the time
the other tests (degradation and groundwater
migration) had indicated that concentrated
solvent dumping began on NutraSweet’s property.
To Ball, the photographic analysis confirmed his
hypothesis because in his experience people do
not dump solvents on asphalt or concrete (e.g.,
on parking lots) because they eat away at the
material.
Furthermore, the district court did not abuse
its discretion in concluding that photographic
analysis is a well-accepted technique in this
area so as to bear a sufficient indicia of
reliability. Nor did it abuse its discretion in
concluding that Ball could interpret the aerial
photos based on his own experiences and
expertise. As noted, "the test of reliability is
’flexible’" when examining an expert’s technical
knowledge and the techniques he employs. Id. at
1171. The district court enjoys "the same broad
latitude when it decides how to determine
reliability as it enjoys in respect to its
ultimate reliability determination." Id.
(emphasis in original). Ball testified that
historical analysis of aerial photographs is an
accepted tool in his field and that in fact the
EPA requires the historical analysis of such
photos and has its own team for doing this. The
district court did not abuse its discretion in
concluding that the common and official
acceptance of photographic analysis made it
sufficiently reliable. Id. ("’acceptability’ in
the relevant scientific community" is a factor
"which might prove helpful in determining the
reliability of a particular scientific ’theory or
technique’"). Dr. Ball also testified that he had
been interpreting aerial photos for about twenty
years and that he had developed an expertise in
that area. His work experience made his
interpretation of the photos in this case
sufficiently reliable. See Brumley, 217 F.3d at
911-12 (witness’s seven years of experience
working in the area gave his opinion sufficient
indicia of reliability even though it was not
based upon an underlying methodology).
X-L’s second criticism of Dr. Ball’s opinion is
that he did not have essentially "direct"
evidence that X-L was the source of the
concentrated dumping on its and on NutraSweet’s
property. Nor, X-L argues, did he have
"specialized knowledge" that X-L was the source
of this dumping. True, unlike with the mop-bucket
dumping, Dr. Ball could not point to videotape
directly connecting the contamination to X-L’s
activities. But as an expert witness, Dr. Ball
was not required to have direct evidence or a
personal observation that X-L was illegally
dumping VOCs. Contrast Fed. R. Evid. 701
(discussed in United States v. Santos, 201 F.3d
953, 963 (7th Cir. 2000) (rule governing
testimony by lay witnesses does not interdict all
inference drawing by such witnesses, but the
inferences must be tethered to perception, to
what the witness saw or heard)). As an expert
witness, Dr. Ball could use his "specialized
knowledge" of reliable techniques and methods (as
opposed to "specialized knowledge" of the
incident in question) to form an opinion.
Specifically, he could use the chromatography
results to determine that the solvents on
NutraSweet’s property were of the same type (were
from the same source) as those on X-L’s property.
Through groundwater migration test results, he
could trace some of the concentrated solvents on
NutraSweet’s property as migrating from X-L’s
property. Through soil degradation, he could
determine the relative ages of the solvents on
the two sites. He could then combine this
information, the aerial photographs, and the fact
that X-L used solvents that would produce the
VOCs found on both properties (and NutraSweet did
not) and come up with a theory (or opinion) as to
where the solvents came from and how they got
there: X-L’s activities. See Huddleston v. United
States, 485 U.S. 681, 691 (1988) ("Individual
pieces of evidence, insufficient in themselves to
prove a point, may in cumulation prove it. The
sum of an evidentiary presentation may well be
greater than its constituent parts."). By using
the test results and his experience, Ball could
infer that X-L was the source of the VOCs, even
though he did not have "specialized knowledge"
that it was. Fed. R. Evid. 704(a) (expert opinion
can be based on an inference and can embrace an
ultimate issue); Walker, 208 F.3d at 587 n.2
(noting that subject to an exception in criminal
matters, experts can testify to ultimate issue);
cf. Brumley, 217 F.3d at 912 (expert’s opinion
was proper because it was based on his
experience, not on representing to jury that he
possessed any "special knowledge"). This did not
render his opinion speculative. See Brumley, 217
F.3d at 911.
X-L’s other arguments concern the weight to be
given Ball’s testimony, rather than its
admissibility. For example, X-L complains that in
calculating soil degradation, Ball used the data
that G & M’s hydrologists obtained from their
testing of the X-L site, rather than using data
that he himself generated. X-L does not, however,
challenge the reliability of the underlying data,
and Ball’s use of G & M’s data is perfectly
permissible. Fed. R. Evid. 703 ("The facts or
data in a particular case upon which an expert
bases his opinion or inference may be those
perceived by or made known to the expert at or
before the hearing.") (emphasis added); see also
Walker, 208 F.3d at 588 (expert testimony may
rely on the opinions or data of others unless the
testifying expert’s opinion is too speculative or
the underlying basis is faulty). X-L also
complains that Ball only visited the site once.
In some circumstances a brief or solitary
examination might indicate a lack of reliability,
see Kuhmo Tire Co., 119 S. Ct. at 1177 (expert
inspected the tire for the first time on the
morning of this deposition), but an expert is not
always required to personally perceive the
subject of his analysis. See Fed. R. Evid. 703;
Walker, 208 F.3d at 591 (physician was allowed to
render expert opinion even though he did not
personally examine the subject). The reliability
of Ball’s opinion was largely dependent upon the
data gathered by others, rather than his personal
observation of the site. This data was
verifiable, and Dr. Ball used reliable
methodologies in reaching his opinion. While
"shoddy preparation by an expert might evidence a
lack of professional qualifications," in this
case we are not prepared to say "that the
district court’s decision to admit [Ball’s]
testimony was an abuse of discretion." Walker,
208 F.3d at 590-91.
X-L next disputes the district court’s finding
that it was 100% responsible for the wastes on
NutraSweet’s property. It first complains that
the district court should have granted its motion
for a directed verdict under Fed. R. Civ. P. 50.
X-L does not, however, develop this argument, and
therefore it is waived. See Fed. R. App. P.
28(a)(9)(A); John v. Barron, 897 F.2d 1387, 1393
(7th Cir. 1990) ("An appellant must not only
raise issues in his brief, he must present them
in a professional fashion. This court is not
obligated to research and construct legal
arguments open to parties, especially when they
are represented by counsel as in this case.").
We also disagree with X-L that the district
court’s findings were clearly erroneous and that
it should have entered judgment in its favor
after the trial. See Fed. R. Civ. P. 52(a). Under
the "clearly erroneous" standard, a district
court’s findings of fact should be affirmed
unless we are "left with the definite and firm
conviction that a mistake has been committed." R.
L. Coolsaet Const. Co. v. Local 150, Int’l Union
of Operating Eng’rs, 177 F.3d 648, 654 (7th Cir.
1999). We have no such conviction here. In
addition to Dr. Ball’s opinion and multiple
analyses, the evidence showed that NutraSweet did
not use chlorinated solvents (except for those in
a self-contained parts cleaner that never
leaked), while X-L admitted that it did use
solvents that contained the same VOCs (TCA, PCE,
and their degradation products) that had
contaminated NutraSweet’s property. A G & M
investigating engineer testified that there was
no evidence of any other source of the VOCs
besides X-L. Moreover, NutraSweet rebutted X-L’s
"alibi" that it had been properly disposing of
hazardous wastes: shipping manifests showed that
X-L did not off-site its spent solvents until
December 1990, and X-L did not even proffer a
theory as to who else could have been responsible
for the VOCs on its and NutraSweet’s property./4
X-L also argues that post-remediation (or clean-
up) test results indicated that NutraSweet did
not effectively clean up its property, and
therefore it violated the EPA’s "national
contingency plan" (NCP). See 42 U.S.C. sec. 9607
(a)(4)(B); 40 C.F.R. sec. 300.700(c); PMC, 151
F.3d at 616. NutraSweet’s compliance with the NCP
is required for X-L to be liable. See County Line
Inv. Co. v. Tinney, 933 F.2d 1508, 1512 (10th
Cir. 1991) ("Section 107 provides that a person
is only liable for private party response costs
to the extent that these costs were incurred
’consistent with the national contingency plan.’
Proof of response costs incurred ’consistent
with’ the NCP is, therefore, an element of the
prima facie private cost recovery action under
CERCLA.") (quoting 42 U.S.C. sec. 9607(a)(4)(B)).
At the summary judgment stage, the district court
determined that X-L was liable to NutraSweet.
NutraSweet, 933 F. Supp. at 1423 ("The court
rules as to the liability prong, but finds a
genuine issue of material fact as to the
attributable damages."). X-L therefore should
have contested the effectiveness of NutraSweet’s
clean-up at summary judgment, for if NutraSweet
did not comply with the NCP, then X-L would not
have been liable for any of NutraSweet’s clean-up
costs. 42 U.S.C. sec. 9607(a)(4)(B); County Line,
933 F.2d at 1512 ("Evaluation for conformity with
the NCP at [summary judgment] is proper, in order
to determine whether Plaintiffs are entitled to
recover any of their response costs and to avoid
useless trial of the case at a later juncture,
should Plaintiffs fail to show the requisite
consistency.") (emphasis added). Because X-L did
not raise the NCP issue at summary judgment, it
has waived it. See Bruner Corp. v. R. A. Bruner
Co., 133 F.3d 491, 497 (7th Cir. 1998) (defendant
waived right to dispute damage amount because it
failed to raise argument during summary judgment
when issues of liability and damages were being
considered).
But even if X-L had preserved that issue, the
district court did not clearly err in concluding
that NutraSweet had satisfied the NCP. The
Illinois EPA approved NutraSweet’s clean-up plan,
and the agency monitored the progress of the
remediation. NutraSweet remediated its property
until the Illinois EPA advised it that it could
stop because NutraSweet’s efforts had succeeded
to the maximum extent possible. In light of this
evidence, we are satisfied that NutraSweet met
this requirement for a CERCLA recovery.
Lastly, X-L contests the amount of damages that
the district court awarded NutraSweet, claiming
that there is insufficient documentation to
support the costs NutraSweet incurred in
investigating and remediating its property. The
amount of NutraSweet’s clean-up costs was also
litigated at summary judgment. See NutraSweet,
933 F. Supp. at 1415. There, X-L did not contest
these costs (indeed, X-L did not do so until
after trial when the parties were litigating the
question of pre-judgment interest). As a result,
NutraSweet was entitled to partial summary
judgment on the issue of its costs. X-L cannot
now dispute the accuracy of the amount of
remediation costs; it can only dispute the
percentage of them for which it is responsible.
See id. at 1423 ("X-L is liable for the amount of
response costs attributable to the VOCs
originating from the X-L facility. The extent of
liability, and the resulting amount of
recoverable costs, must be left for trial."). And
as stated, the district court did not clearly err
in finding X-L to be 100% responsible for them.
Therefore, X-L loses on this issue as well./5
IV. Conclusion
Because there is no genuine issue that X-L was
responsible (and hence liable) for some of the
hazardous wastes on NutraSweet’s property, the
district court did not err in granting partial
summary judgment to NutraSweet on the issue of
liability. The district court did not abuse its
discretion in excluding X-L’s expert from
testifying on the results of the October 1997
site work due to X-L’s failure to timely file its
supplemental expert report. The district court
also did not abuse its discretion in determining
that the techniques and methods upon which
NutraSweet’s expert based his opinion were
sufficiently reliable. Furthermore, the district
court did not clearly err in finding after trial
that X-L was in fact 100% responsible for the
VOCs on NutraSweet’s property and in finding that
NutraSweet complied with the NCP in remediating
(or cleaning up) its property. Lastly, because X-
L did not oppose at summary judgment NutraSweet’s
evidence of its clean-up costs, it waived this
issue, and the consequent issue of the amount of
damages.
For the foregoing reasons, the judgment of the
district court in favor of the plaintiff is AFFIRMED
in all respects.
/1 CERCLA defines a "facility" as, among other
things, "any site or area where a hazardous
substance has been deposited, stored, disposed
of, or placed, or otherwise came to be located."
See sec. 101(9)(B), 42 U.S.C. sec. 9601(9)(B). At
the summary judgment stage, the district court
noted that this case was unusual in that the
contamination of the NutraSweet site was
allegedly due to hazardous wastes being
improperly disposed of on the X-L site and then
migrating over to NutraSweet’s property (at
trial, NutraSweet theorized that the wastes were
also due to X-L directly dumping them onto
NutraSweet’s property, infra). Because hazardous
wastes had been "deposited," or "otherwise came
to be located" on both NutraSweet and X-L’s
property, the district court held that both sites
were "facilities." NutraSweet, 933 F. Supp. at
1417-18 & n.3. Whether or not the district court
was correct to consider both sites as
"facilities," it is indisputable that X-L owned a
facility, because it was its land or business
"from which there [was] a release, or a
threatened release which cause[d] the incurrence
of response costs." See CERCLA Section 107(a). We
therefore consider it irrelevant whether
Nutrasweet also had a "facility," because the
hazardous substances eventually came to rest on
its land.
/2 See Defendants’ Motion to Revise Scheduling Order
at 2, para. 4 ("Plaintiffs’ initiation of
substantial field investigating work after their
first expert opinion reports were filed strongly
suggests an effort to change and/or add to the
prior-stated opinions. . . . [Plaintiffs] should
first produce any amended or supplementary expert
opinion reports. Defendants will then be in a
position to understand plaintiffs’ opinion
evidence (if it has changed in any way as a
result of the later field investigation) and be
able to respond to it with any needed
supplementary expert reports of their own.")
(emphasis in original).
/3 According to X-L, the "bait" was the expert
opinions of the G & E engineers used at summary
judgment and the "switch" was the expert opinion
of Dr. Ball used at trial.
/4 X-L cites various district court decisions that
say that, by itself, evidence that a defendant
generated or used hazardous substances that
contained the same chemical constituents that
were found at a contaminated site does not meet a
plaintiff’s burden of proving that the defendant
caused the contamination, nor does the proximity
of the defendant’s site to the contaminated site,
nor does the defendant’s failure to account for
all of its hazardous waste disposal during the
relevant time frame. But here of course the
district court did not have just a category of
such evidence; it had all these types of
evidence, plus considerably more, to support its
findings. And while, as X-L points out, there was
no "smoking gun" connecting all the VOCs directly
to X-L’s activities, there was sufficient
evidence to support the district court inferring
that X-L’s activities were the cause of the
contamination.
/5 Because the district court found that X-L was
100% liable for the VOCs on NutraSweet’s
property, it awarded NutraSweet its costs under
sec. 107. X-L argues that because Dr. Ball
indicated that some of the VOCs migrated off
NutraSweet’s site, NutraSweet is not an innocent
landowner and therefore must recover under sec.
113(f), and that under the evidence, X-L’s share
of responsibility would be zero. We reject as
disingenuous this attempt by X-L to exonerate
itself of any responsibility. This one brief
comment in Ball’s testimony does not show that
the district court clearly erred in finding X-L
to be 100% responsible for the VOCs on
NutraSweet’s property and that NutraSweet was
innocent of the release of any hazardous wastes.
Even if there were a release of VOCs off
NutraSweet’s property, we cannot tell on this
record if it was de minimis, in which case
NutraSweet would still be able to recover under
sec. 107 as an innocent landowner. See PMC, 151
F.3d at 616 (sec. 113(f) action) ("PMC’s spills
may have been too inconsequential to affect the
cost of cleaning up significantly, and in that
event a zero allocation to PMC would be
appropriate."), and Rumpke, 107 F.3d at 1241
(possible to view a sec. 107 action as an
innocent landowner proceeding under sec. 113(f)
with an "implied claim for contribution, where
the landowner is alleging that its share should
be zero."). Furthermore, if a release of
hazardous materials occurred off of NutraSweet’s
property, NutraSweet still might be "innocent" as
to the hazardous wastes that X-L released onto
its property (which is the subject of
NutraSweet’s sec. 107 action), and such a release
would not relieve X-L of its liability to
NutraSweet, although it might give another party
a right to recover from either NutraSweet or X-L
or both.