Products Liability Law Daily Trial court’s failure to explain expert witness exclusion warrants reversal, remand of oil-rig blowout case
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Monday, February 24, 2020

Trial court’s failure to explain expert witness exclusion warrants reversal, remand of oil-rig blowout case

By Jeffrey H. Brochin, J.D.

Because the district court did not give reasons for its decision to exclude expert testimony, the reviewing court had no way of knowing whether gatekeeping responsibility was adequately performed.

In an action stemming from the blowout of an oil rig, the U.S. Court of Appeals for the Fifth Circuit reversed and remanded a grant of summary judgment to an oil rig component manufacturer after determining that the district court erred in failing to offer any reason for the exclusion of the plaintiffs’ expert witness testimony regarding the blowout. The need for the lower court to explain its decision was particularly high in this case, given the likelihood that the exclusion devastated the plaintiffs’ case. The expert’s testimony formed much of the evidentiary basis on which the plaintiffs opposed summary judgment on the "unreasonably dangerous condition" issue under the Louisiana Products Liability Act (LPLA) (Certain Underwriters at Lloyd’s, London v. Axon Pressure Products Inc., February 21, 2020, Duncan, S.).

How oil rig blowouts are controlled. Oil, natural gas, and other subsurface deposits are contained within their formations at high pressure, and when those formations are drilled into and the pressures are not controlled, explosive blowouts can occur. To prevent materials from the deposit from entering the wellbore, fluids from the drilling rig are pumped into the wellbore to create downward pressure on the formation. But if that pressure is not carefully maintained, material from the formation can enter the wellbore, and a sudden high pressure "kick" can lead to a blowout. A device known as a blowout preventer stack (BOP) is installed to prevent oil well blowouts.

Major oil rig blowout. In July 2013, a crew working on the offshore oil rig "Hercules" was removing a drill pipe from the well when a kick occurred but went unnoticed. A short time later, an eruption came with enough force that it jammed the drill pipe into equipment overhead. This made it impossible for the crew to install a drill pipe safety valve, the usual first step in such a situation. The crew closed the BOP, but that did not stop the problem. The blowout intensified, and the crew activated certain components of the BOP, including trying to remotely close the "high closing ratio" (HCR) valve—which would have cut off the flow spewing out of the choke line—but the HCR valve never closed. The rig was evacuated and the blowout burned for several days until extinguishing itself. The loss was claimed to be $70 million. A subsequent federal investigation pointed to "human error" as the cause of the blowout.

Trial court summary judgment. Suit was filed against Axon Pressure Products, Inc. and Axon EP, Inc. (collectively, Axon), the companies that refurbished and installed the BOP, and summary judgment was entered in their favor after the trial court excluded the testimony of the plaintiffs’ key expert witness—without citing an explanation for the exclusion—and also struck the reports and affidavits of six other expert witnesses. In reviewing the matter de novo, the appeals court vacated the district court’s order excluding the expert’s evidence because the lower court failed to explain its decision, merely entering a "Plenary Order" that stated: "Axon’s motion to exclude testimony of Simon Bellemare—GRANTED." It offered no reasons for its decision.

Trial court’s "gatekeeping responsibility." The appeals court noted that courts serve as gatekeepers and are responsible for ensuring the reliability and relevance of all expert evidence, and that when a district court fails to give reasons for its decision to exclude expert testimony, a reviewing court has no way of knowing whether that gatekeeping responsibility has been adequately performed. In the instant case, the need for the district court to explain its decision was particularly high, given that the exclusion of the expert’s testimony could devastate the plaintiffs’ case. His testimony formed much of the evidentiary basis on which the plaintiffs opposed summary judgment on the "unreasonably dangerous condition" issue under the LPLA.

Merits of the LPLA claim. The appeals court next turned to the matter of the district court’s grant of summary judgment on the issue of causation, and found that it, too, suffered from the same lack-of-reasoned-explanation as the expert exclusion issue. The plaintiffs were required to show that: (1) a characteristic of Axon’s parts proximately caused the damage; (2) the damage arose from a reasonably anticipated use of the parts; and (3) the parts at issue were unreasonably dangerous. However, the district court granted Axon summary judgment because it concluded that the plaintiffs failed to meet their burden by showing that a question of material fact existed regarding causation and the "unreasonably dangerous" nature of the equipment.

The appeals court disagreed, finding that its review of the evidence disclosed disputes of material fact regarding causation. The plaintiffs produced evidence that the "blind shear ram" (BSR) valves on the BOP did not seal the drill pipe as they should have, and one expert testified that flow from the well through the BOP would have stopped had the BSRs sealed properly. Another witness concurred, and a third witness testified that after the BSRs had been activated, gas continued to flow up through the rig floor and drill pipe.

Based on the foregoing, the appeals court vacated the exclusion of: (1) the key expert’s testimony; (2) the expert reports of six other witnesses; and (3) the affidavits of two witnesses. The panel also reversed the grant of summary judgment as to the causation and "unreasonably dangerous condition" prongs of the LPLA.

The case is No. 18-20453.

Attorneys: Marc S. Tabolsky (Schiffer Hicks & Johnson, P.L.L.C.) and Neil Emerson Giles (Hall Maines Lugrin, PC) for Certain Underwriters at Lloyd's, London and Certain Insurance Companies, Subscribing to Policy Nos. JHB CJP-1861, JHB CJP-1959, and 13PKGN9161. Terrence Kent Knister (Gordon Arata Montgomery Barnett) for Walter Oil & Gas Corp., Tana Exploration Co., L.L.C. and Helis Oil & Gas Co., L.L.C. Timothy F. Lee (Ware, Jackson, Lee, O'Neill, Smith & Barrow, L.L.P.) for Axon Pressure Products Inc. f/k/a Church Energy Services Ltd., Axon EP, Inc. and Axon Energy Products AS.

Companies: Certain Underwriters at Lloyd's, London and Certain Insurance Companies, Subscribing to Policy Nos. JHB CJP-1861, JHB CJP-1959, and 13PKGN9161; Walter Oil & Gas Corp.; Tana Exploration Co., L.L.C.; Helis Oil & Gas Co., L.L.C.; Axon Pressure Products Inc. f/k/a Church Energy Services Ltd.; Axon EP, Inc.; Axon Energy Products AS

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