Presenting a live 60-minute webinar with interactive Q&A Fracking Litigation and Daubert Challenges Defending Against and Asserting Challenges to Expert Witness Evidence TUESDAY, MAY 21, 2013 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: R. Trent Taylor, Partner, McGuireWoods , Richmond, Va. Steve A. Luxton, Partner, Morgan Lewis & Bockius , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Fracking Litigation and Daubert Challenges Click to edit Master title style Presented by: Steve Luxton, Morgan, Lewis & Bockius LLP Trent Taylor, McGuireWoods LLP www.mcguirewoods.com www.mcguirewoods.com
Fracking Technical Process McGuireWoods LLP | 6 CONFIDENTIAL
Alleged Hazards of Fracking McGuireWoods LLP | 7 CONFIDENTIAL
Where? McGuireWoods LLP | 8 CONFIDENTIAL
Overview of Private Lawsuits Related to Hydraulic Fracking • Approximately 50 cases filed nationwide • Most pending in Federal Court • Litigation is still in infancy stage • Background – Parties – Allegations – Causes of action • Litigation update – Motions practice – Dismissals – Discovery 9
Examples of Parties Involved in Private Fracking Litigation to Date Plaintiffs • Landowners who leased oil and gas rights • Residents in close proximity to hydraulic fracking • Environmental groups • Employees of companies involved in fracking • Oil and gas companies (in commercial/patent actions) Defendants • Oil and gas companies, including well operators, drilling contractors, and service companies • Waste treatment operators • Compressor station operators 10
Factual Allegations Most Frequently Alleged Causes Continue to Relate to • Drilling, construction, and operation • Cement casing • Drilling techniques • Supervision of employees/agents • Handling of industrial and/or residual waste • Storage and/or disposal of drilling waste Most Common Result Alleged • Methane, ethane, barium, and/or other “fracking fluids” or “hazardous chemicals” migrate into groundwater 11
Causes of Action • Negligence • Violations of federal and state statutes related to • Negligence per se – safe drinking water • Strict liability – clean air • Nuisance – casing requirements • Trespass – deceptive trade practices • Fraud • Breach of contract • Patent infringement 12
Categories of Damages to Date • Compensatory damages • Punitive damages • Medical monitoring • Injunctive relief • Attorneys’ fees and costs • Plaintiffs will continue to develop novel theories of damages as this litigation matures 13
Recent Trends: Overview • Marcellus Shale region heavily targeted by plaintiffs firms • Filings nationwide have increased each of last two years • Majority of fracking lawsuits still involve groundwater contamination claims • Most cases currently pending have proceeded to the fact discovery phase (document productions, written discovery, and depositions) • Daubert and other expert issues will be next major phase of fracking litigation 14
Expert Testimony McGuireWoods LLP | 15 CONFIDENTIAL
Federal Rule of Evidence 702 • RULE 702. TESTIMONY BY EXPERT WITNESSES • 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. • (As amended Apr. 17, 2000, eff. Dec. 1, 2000; Apr. 26, 2011, eff. Dec. 1, 2011) McGuireWoods LLP | 16 CONFIDENTIAL
Daubert v. Merrell Dow Pharmaceuticals 509 U.S. 579 (1993) • Factors courts may consider when ruling on a Daubert motion: – Whether the technique was tested in actual field conditions – Whether the technique has been subjected to peer review and publication – The known or potential rate of error – Whether standards exist for the control of the technique’s operation – Whether the technique has been generally accepted within the relevant scientific community McGuireWoods LLP | 17 CONFIDENTIAL
Recent Daubert Trends McGuireWoods LLP | 18 CONFIDENTIAL
# 1 – Early Daubert challenges in class actions • Comcast Corp. v. Behrend , No. 11-864, 2013 BL 80435 (U.S. March 27, 2013) (courts must look at the merits issues when deciding class certification) • Wal-Mart Stores v. Dukes , 132 S. Ct. 320 (2011) (held that prior to certifying a class action, the trial court should engage in a rigorous review of all relevant issues) • American Honda Motor Co. v. Allen , 600 F.3d 813, 815-16 (7 th Cir. 2010) (held that where it is “critical to class certification” a court “must perform a full Daubert analysis before certifying the class”) McGuireWoods LLP | 19 CONFIDENTIAL
Class Actions • Evenson v. Antero , 2011 CV 5118 (Denver Dist. Ct.) – Seeking injunction to prevent oil and gas development in area • Tucker v. Southwestern (E.D. Ark. 2011) – Seeking monitoring fund, damages for personal injuries and property damages, punitives • Ginardi v. Frontier (E.D. Ark. 2011) – Seeking med. mon. program, property damages, emotional distress damages, punitives – Denied on 4/19/12 • Andre v. EXCO Resources & Beckman v. EXCO Resources (W.D. La. 2011) – Seeking med. mon. program, property damages, emotional distress damages, punitives McGuireWoods LLP | 20 CONFIDENTIAL
# 2 – Erosion of Daubert ? • Milward v. Acuity Specialty Prods. Grp., Inc., 639 F.3d 11 (1st Cir. 2011)(recently denied cert. by U.S. Supreme Court) • Plaintiffs Brian and Linda Milward sued U.S. Steel Corp. and other chemical companies for negligence, claiming Brian Milward's routine workplace exposure to benzene caused his acute promyelocytic leukemia. • A district judge dismissed the case, after rejecting toxicologist Martyn Smith's expert opinion that the research about APL supports "the inference" that benzene exposure can cause the extremely rare form of leukemia. • The First Circuit reversed in March, affirming Smith's method, in which he considered evidence from peer-reviewed scientific literature to eliminate unlikely conclusions and come to the most likely one. • “Dr. Smith estimated that ... to obtain statistically significant results, one would need hundreds of thousands of highly exposed workers, the same number of controls and millions of dollars of funding,” the opinion said. “The court erred in treating the lack of statistical significance as a crucial flaw.” • The First Circuit's decision could undermine the Supreme Court's 1993 Daubert v. Merrell Dow Pharmaceuticals ruling, which held that courts should bar “scientifically unreliable evidence,” and could also spur other courts to allow testimony based on "unsound science." McGuireWoods LLP | 21 CONFIDENTIAL
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