Expert Witness Supplement Fails Esposito Test: US Appeals Court

Expert witness reports are automatically excluded under the FRCP when they are not disclosed "in a timely manner," although there are exceptions under the Esposito test.

In Paolino v. JF Realty, LLC (1st Cir. Jul 18, 2016), under the provisions of the U.S. Clean Water Act (CWA), Louis Paolino and his wife, Marie Issa, (Paolino-Issa) brought a citizen enforcement action against their neighbor, Joseph I. Ferreira and his company, JF Realty, alleging that contaminated stormwater runoff from Ferreira's auto salvage business was being discharged into U.S. waters, and contaminating their property.

Paolino-Issa had purchased their six-acre parcel in 1985, two years after Ferreira purchased his neighboring 39-acres. In the early 2000s, Paolino-Issa sold two half-acre lots of the land and were sued by the purchaser for failure to disclose that the land was contaminated. The land of both parties had previously been used as a pig farm and a waste dump. The state enviromental agency, RIDEM, had ordered Paolino-Issa to remove some 1,100 tons of contaminated soil from their property, and had ordered Ferreira to install a stormwater management system. In 2006, Paolino-Issa tried to sell their land to Ferreira for $250,000, but the offer was declined.

The case was originally dismissed in 2012 by the district court due to defective pre-suit notice, but the appellate court reversed and remanded the case. Before the next deadline, in February 2014, Paolino-Issa provided disclosures for two expert witnesses, Alvin Snyder, an engineer and water pollution and soil contamination expert witness and Dr. Robert Roseen, a civil engineer and hydrology expert witness.

Retained only two weeks before disclosures were due, Roseen relied on water samples taken by Snyder and submitted his report with some pages stamped "DRAFT", and without fully explaining the methodology and measures he used in his conceptual model that led him to conclude a berm that was built to manage storm water would overflow up to fifty times per year, discharging contaminated water at multiple locations and violating water quality regulations.

After Roseen's deposition in May 2014, Ferreira filed a motion for summary judgment, based in part on Roseen's expert report. Paolino-Issa subsequently submitted a request to supplement Roseen's report.

The district court rejected the supplement, noting that neither Roseen nor Paolino-Issa had ever indicated any intention to revise or supplement the expert report, the report came more than three months after expert disclosures were due, two weeks after expert discovery had closed and after Ferreira had filed a motion for summary judgment.

The trial proceeded and the district court issued a memorandum of decision concluding that Paolino-Issa failed to meet their burden of proof.

Ferreira then filed a motion for attorney's fees, claiming that Paolino-Issa went to trial without credible evidence, that the state enviromental agency, RIDEM, had investigated Paolino-Issa's complaints and found they lacked merit, and that neither RIDEM nor the EPA chose to intervene. In March 2015, the district court ordered Paolino-Issa to pay $112,000 in attorneys fees.

Paolino-Issa appealed, alleging that the trial judge erred in excluding the supplement to Roseen's expert report.

The appellate court noted that, under FRCP Rule 37(c)(1), expert witness reports are automatically excluded when they are not disclosed "in a timely manner" and may not be used "to supply evidence … unless the failure was substantially justified or is harmless." In reviewing the district court's decision to exclude the supplement, the appellate court used its Esposito test.

In Esposito v. Home Depot U.S.A., Inc., 590 F.3d 72, 78 (1st Cir. 2009), the appellate court set a test to determine if expert testimony was correctly excluded. The test considers five factors:

1. History of the litigation;
2. Sanctioned party's need for the precluded evidence;
3. Sanctioned party's justification for its late disclosure;
4. Objecting party's ability to cure adverse effects of late disclosure, including the extent of surprise or prejudice; and
5. Late disclosure's impact on the court's docket.

This was the third time Paolino-Issa sued Ferreira for essentially the same issue, and Paolino-Issa had repeatedly missed deadlines for discovery and motions previously. The appellate court noted that this case was "… only the latest in an inventive series of unjustifiable efforts to indict their neighbor's environmental practices."

While Paolino-Issa claimed the expert supplement was crucial to their case, they presented other forms of evidence and had nine other witnesses, as well as Roseen's testimony on his initial report.

Paolino-Issa justified their tardiness as the result of Ferreira's refusal to permit them entry onto his property, but the court noted that they did not file a motion to obtain an order to inspect the Ferreira's property until a little more than a week before experts' reports were due to be disclosed, and they did not retain Roseen until two weeks before the reports were due.

The appellate court noted that the exclusion of Roseen's expert supplement was not a "fatal sanction", as was the case in Esposito. When the exclusion of expert testimony is effectively a dismissal of a case, the justification for excluding the testimony "… must be comparatively more robust." However, Roseen was allowed to testify, along with other witnesses.

The appellate court found no abuse of discretion in the district court's decision to exclude Roseen's revised report, affirming the district court's judgment.