“Not the Stuff of Science”: “Differential Etiology” Causation Opinions Fail Daubert in 7th Circuit Toxic Tort Case

The Seventh Circuit Court of Appeals has affirmed a district court’s grant of summary judgment in an environmental toxic tort case, holding that the testimony of all three of plaintiffs’ causation experts – James Dahlgren, M.D., Vera Byers, M.D., Ph.D, and Jill Ryer-Powder, Ph.D – was properly excluded as unreliable under the Daubert standard governing the admissibility of expert testimony.

In C.W. et al. v. Textron, Inc. (August 26, 2015; Court of Appeals Case No. 14-3448 (N.D. Ind.)), the plaintiffs were two minors whose parents filed tort claims on their behalf against Textron. While living near a Textron fastener manufacturing plant in Rochester, Indiana, the infant children experienced gastrointestinal, immunological, and neurological issues. The parents eventually learned that the groundwater well at their home was contaminated by vinyl chloride released from the Textron facility, at levels of five to nine parts per billion. The family moved out of the home and sued Textron, alleging that the company had exposed the children to vinyl chloride, which caused their illnesses and substantially increased their risk of cancer and other adverse health effects.

After four years of litigation, the district court granted in its entirety a motion in limine to exclude plaintiffs’ three expert witnesses and then granted summary judgment, finding that plaintiffs could not prove general or specific causation without the experts. The Court of Appeals affirmed, holding that the district court “properly adhered to the Daubert framework” and conducted an “exhaustive” review.

Dr. James Dahlgren testified that exposure to vinyl chloride can cause and did cause the children’s illnesses, and that it was highly likely that both children will develop cancer at some point in the future. The district court found that Dahlgren’s reliance on “differential etiology” (often mistakenly called “differential diagnosis”) failed to meet the Daubert standard, in part because Dahlgren “failed to connect the dots between the scientific studies that he analyzed and the opinions that he offered”: the studies that he relied upon failed to establish that vinyl chloride, at the dose and duration relevant to the case, could cause the problems that plaintiffs experienced or claimed they were likely to experience. The Court of Appeals agreed that Dahlgren’s methodology was unreliable, stating: “This approach is not the stuff of science.”

Dr. Vera Byers also testified that exposure to vinyl chloride – via contaminated drinking water, inhalation of vapors from bathing, and dermal contact – can cause and did cause the children’s gastrointestinal and immune-system problems. The district court similarly excluded her differential etiology testimony, finding the studies she relied on were not relevant, and there was no basis for “ruling in” vinyl chloride exposure as a possible cause of the medical issues. The Court of Appeals concurred, commenting: “Without the benefit of analogous studies and an acceptable method of extrapolation, Dr. Byers . . . is forced to take a leap of faith in pointing to vinyl chloride as having the capacity to cause the injuries (and risk of injury) to [plaintiffs]. The district court ably performed its gatekeeper role in shielding the jury from this leap.”

Dr. Jill Ryer-Powder testified similarly, relying on studies at much higher exposure levels than were present in the case. In forming her opinion on causation, Ryer-Powder also relied on the fact that the plaintiffs’ drinking water exceeded regulatory standards. As with Dr. Dahlgren and Dr. Byers, the district court found that she did not offer a reliable basis to support her opinion. The Court of Appeals held that the district court did not abuse its discretion in rejecting Ryer-Powder’s methodology, noting in part that exceedances of regulatory standards do not prove causation.

The Court of Appeals also:

• ruled that the district court properly rejected the experts’ methodology, to the extent they based their opinions on the timing of the plaintiffs’ injuries coinciding with their exposure to vinyl chloride (citing a prior Seventh Circuit opinion holding that the “mere existence of a temporal relationship” does not “show a sufficient causal relationship”); and 
• rejected plaintiffs’ claim that, because there are no studies available regarding the impact of vinyl chloride on children at the dose and duration in question, the experts’ testimony should have been admitted. The Court noted that computer-based models can extrapolate from animal data to human subjects, and from high doses to low doses, but plaintiffs’ experts did not mention or refer to this method of bridging the data gap.

Finally, the Court of Appeals affirmed the district court’s grant of summary judgment in the absence of any admissible expert causation evidence, but disagreed with that court’s categorical exclusion of  differential etiology as a method to establish general causation. The Court adopted the approach taken by the Second Circuit Court of Appeals in Ruggiero v. Warner-Lambert Co., 424 F.3d 249 (2005), recognizing that there may be instances where a rigorous use of differential etiology is sufficient to support an expert’s opinion on both general and specific causation.

-- Don Sobelman

For more information, contact Don Sobelman at (415) 228-5456 or des@bcltlaw.com 

Federal Judge Puts Freeze on EPA’s Clean Water Act Rulemaking: Preliminary Injunction Halts Implementation of 'Waters of U.S.' Rule

In May of this year the U.S. Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers (“Corps”) issued the much-anticipated Waters of the United States rule (the “Rule”). The Rule redefines and expands federal jurisdiction over waters of the United States under the federal Clean Water Act.

The intent of the Rule, according to the United States, is to provide greater clarity over the jurisdictional reach of the Clean Water Act following a string of Supreme Court decisions limiting the reach of federal jurisdiction. See, e.g., Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) and Rapanos v. United States, 547 U.S. 715 (2006). According to agriculture and industry groups, the Rule is an unprecedented expansion of federal authority that vastly increases the jurisdictional reach of the Clean Water Act, will have a widespread negative economic impact, and profoundly infringes on private property rights.

The Rule has been opposed in Congress and, via a July 28 letter, by officials in 31 states that have asked EPA and the Corps to delay implementation of the Rule. A number of states and business groups have already filed challenges to the rulemaking in federal district courts. For example, on July 10, 2015, the U.S. Chamber of Commerce, along with the National Federation of Independent Business, Portland Cement Association, State Chamber of Oklahoma and Tulsa Regional Chamber, filed a lawsuit challenging the rule in Oklahoma federal court. See Chamber of Commerce et al. v. EPA, Case No. 4:15-cv-00386 (D.Okla. July 10, 2015).

On August 10, 2015, North Dakota and 12 other states -- Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, and Wyoming -- sought a preliminary injunction from the District of North Dakota to prevent implementation of the Rule. North Dakota, et al. v. United States Environmental Protection Agency, et al., Case No. 3:15-cv-00059 (D. N.D. June 29, 2015). The plaintiffs argued that a preliminary injunction was needed to maintain the status quo while the Rule’s legal failings were addressed by the federal courts.

On Thursday, August 27, Judge Ralph Erickson issued the requested preliminary injunction in an 18-page order that can be read here. In issuing the preliminary injunction, Judge Erickson found it more likely than not that the EPA and the Corps had overstepped their authority in promulgating the Rule and had failed to comply with aspects of the Administrative Procedure Act. In balancing the potential harm of issuing a preliminary injunction, the Court concluded:

On balance, the harms favor the [plaintiff] States. The risk of irreparable harm to the States is both imminent and likely. More importantly delaying the Rule will cause the Agencies no appreciable harm. Delaying implementation to allow a full and final resolution on the merits is in the best interests of the public.

Order at 15.

This preliminary injunction is sure to be appealed by the United States and signals the first of many legal salvos over the legitimacy of the Rule.

-- Tom Boer

For more information, contact Tom Boer at (415) 228-5413 or jtb@bcltlaw.com.

CEQA Alert: Extensive Proposed Revisions to CEQA Guidelines Released for Public Comment

On August 11, 2015, the Governor’s Office of Planning and Research (“OPR”) released a preliminary discussion draft of comprehensive revisions to the CEQA Guidelines (“Discussion Draft”).   

Revisions to the CEQA Guidelines are usually piecemeal, and made in response to either specific legislation amending the CEQA statute or court decisions interpreting CEQA. However, in 2013, OPR broadly solicited suggestions from stakeholders as to what changes to the CEQA Guidelines should be made. The Discussion Draft resulted from this process.

The Discussion Draft proposes revisions to 25 aspects of CEQA, broken down into three categories:  “Efficiency Improvements” (seven revisions), “Substance Improvements” (two revisions), and “Technical Improvements” (16 revisions). However, the fact that only two of the proposed revisions fall under the heading of “Substance Improvements” is somewhat misleading, as virtually all of the “Efficiency Improvements” would also substantively alter the Guidelines, with ramifications for both the environmental review process and post-review CEQA litigation. These substantive changes address a number of areas, including:

• adoption and application of thresholds of significance;
• determinations as to whether an activity is within the scope of a program EIR;
• the contents of Guidelines Appendix G (Initial Study Environmental Checklist);
• the consequences of a court decision finding a violation of CEQA;
• analysis of energy impacts;
• analysis of water supply impacts;
• selection of the baseline conditions for impacts analysis;
• deferral of mitigation; and
• response to comments on a draft EIR.

While some of the proposed revisions merely attempt to harmonize the Guidelines with recent case law and legislative acts, other revisions go well beyond such considerations and will likely be controversial. Moreover, OPR has posed a number of questions for stakeholders in the Discussion Draft, which could lead to additional proposed revisions.

The Preliminary Draft is available here. Comments on the Draft Guidelines must be submitted to OPR by October 12, 2015.

- Don Sobelman and Kathryn Oehlschlager

For more information, contact Don Sobelman at (415) 228-5456 or des@bcltlaw.com, or Kathryn Oehlschlager at (415) 228-5458 or klo@bcltlaw.com.

CEQA Alert: CA Supreme Court Clarifies Duties of State Agencies in Funding Off-Site Mitigation

On August 3, the California Supreme Court released its second CEQA decision of 2015, addressing a key issue for state agencies undertaking projects that require off-site environmental mitigation. In City of San Diego v. Board of Trustees of the California State University (SC Case No. S199557) (“City of San Diego”), the Court clarified that a state agency may not reject as infeasible off-site mitigation via fair-share payment solely due to the lack of appropriations earmarked for that purpose by the State Legislature. In doing so, it affirmed the Court of Appeal’s decision directing the Board of Trustees of the California State University (“CSU Board”) to vacate its certification of an EIR for a major expansion of the San Diego State University (“SDSU”).

In 2007, the CSU Board prepared an environmental impact report and campus master plan revision (“EIR”) proposing several major construction projects on the SDSU campus (“the project”). The EIR identified significant cumulative traffic impacts at several off-campus locations in San Diego, and it estimated the project’s average “fair share” contribution to mitigate the increased congestion at 12 percent. However, the CSU Board stated that it could not commit to paying that fair share, because it was not certain whether the California Legislature would appropriate funding specifically for that purpose. For this reason, the CSU Board found that mitigation of the traffic impacts via fair-share payment was infeasible, and that the traffic impacts were therefore significant and unavoidable. The CSU Board certified the EIR based on a statement of overriding considerations.

In a unanimous opinion penned by Justice Werdegar, the Supreme Court revisited the Court’s decision in another case involving the CSU Board’s approval of a campus expansion project, City of Marina v. Board of Trustees of California State University (2006) 39 Cal.4th 341 (“Marina”). In Marina, which was also authored by Justice Werdegar, the Court held that the CSU Board’s duty to mitigate impacts extended beyond the boundaries of the campus, and that if it could not adequately mitigate those impacts by performing acts on the campus, “then to pay a third party . . . to perform the necessary acts off campus may well represent a feasible alternative.” However, the Court also noted that “[ ] a state agency’s power to mitigate its project’s effects through voluntary mitigation payments is ultimately subject to legislative control; if the Legislature does not appropriate the money, the power does not exist.” 

In the instant case, the CSU Board relied on the italicized language above in determining that the uncertainty of earmarked appropriations by the Legislature rendered mitigation by fair-share payment infeasible. The Supreme Court held that, in doing so, the CSU Board had erroneously interpreted Marina, for a number of reasons:

1. The italicized language is “dictum” that appeared in a paragraph in the decision that “imagines possible limitations on our holding that the Board shared with other agencies the responsibility to mitigate the off-site environmental effects of its project.”
2. The Marina dictum “is simply an overstatement,” as a public agency “has access to all of its discretionary powers and not just the power to spend appropriations.” Moreover, in the case of CSU, the agency has some discretion over use of general support appropriations for capital projects and has access to non-state funds.
3. Neither CEQA nor any other decision interpreting the statute suggests that mitigation costs for a project funded by the Legislature cannot be included in the project’s budget and paid for with funds appropriated for the project.
4. No provision of CEQA “conditions the duty of a state agency to mitigate its projects’ environmental effects on the Legislature’s grant of an earmarked appropriation.” Moreover, the Legislature has expressly subjected the CSU Board’s decisions on campus master plans to CEQA, including the requirement for mitigation of environmental impacts.
5. CEQA draws no distinction between on-site and off-site environmental impacts. Public agencies are required to mitigate or avoid significant effects of a project on the “environment,” which is defined as “the physical conditions which exist within the area which will be affected by a proposed project.” If on-site mitigation measures can be funded through the project budget without an earmarked appropriation (as the CSU Board had determined in the EIR), “then so too can off-site mitigation measures.”

In addition, the Court noted that “unreasonable consequences” would follow from the CSU Board’s interpretation of Marina, and CEQA’s “fundamental statutory directive” would be impaired. Finally, the Court rejected three new arguments presented by the CSU Board, finding that Education Code sections 67504 and 66202.5 and Government Code section 13332.15 did not support the Board’s determination.

Overall, the City of San Diego decision provides welcome clarity on an important and recurring issue of CEQA interpretation that the Court itself had created with the Marina decision.

-- Don Sobelman

For more information, contact Don Sobelman at (415) 228-5456 or des@bcltlaw.com.