Great Lakes Dredge & Dock Co. v. Harnischfeger Corp.

• Decision Date: 10 April 1990
• Docket Number: No. 89 C 1971.,89 C 1971.
• Citation: 734 F. Supp. 334
• Court: U.S. District Court — Northern District of Illinois
• Parties: GREAT LAKES DREDGE & DOCK COMPANY, Plaintiff, v. HARNISCHFEGER CORPORATION, Defendant. HARNISCHFEGER CORPORATION, Third-Party Plaintiff, v. FAG BEARINGS CORPORATION, Fag Kugelfischer Georg Schafer, and General Electric Corporation, Third-Party Defendants.

734 F. Supp. 334

GREAT LAKES DREDGE & DOCK COMPANY, Plaintiff, v. HARNISCHFEGER CORPORATION, Defendant.

HARNISCHFEGER CORPORATION, Third-Party Plaintiff, v. FAG BEARINGS CORPORATION, Fag Kugelfischer Georg Schafer, and General Electric Corporation, Third-Party Defendants.

No. 89 C 1971.

United States District Court, N.D. Illinois, E.D.

April 10, 1990.

Michael A. Pope, Jan Feldman and Karen G. Seimetz, Phelan, Pope & John, Ltd., Chicago, Ill., for Great Lakes Dredge & Dock Co.

Robert W. Hallock, Edward R. Gower and Victoria P. Pappas, Keck, Mahin & Cate, Chicago, Ill., for Harnischfeger Corp.

George N. Vurdelja, Jr., William A. Gordon and Alan J. Martin, Mayer Brown & Platt, Chicago, Ill., for General Elec. Corp.

Thomas M. Sheehan, Robert D. Kolar and John R. Fanone, Robert D. Kolar & Assoc., Ltd., Chicago, Ill., for FAG Bearings Corp. and FAG Kugelfischer Georg Schafer.

MEMORANDUM OPINION AND ORDER

LINDBERG, District Judge.

This matter comes before the court on plaintiff's, Great Lakes Dredge & Dock Company (Great Lakes), motion to bar Mr. John Rumbarger and Franklin Research Center from acting as a consultant or testifying experts for the third-party defendant, FAG Bearings Corporation (FAG). Plaintiff contends that a conflict of interest exists if Mr. Rumbarger is allowed to be retained by FAG, because Mr. Rumbarger works for the same company as plaintiff's expert, Dr. Leonard, and Mr. Rumbarger often supervises Dr. Leonard's work. The facts are not as simple and the issue is not as clear as plaintiff contends. A discussion of the facts concerning the relationship between Mr. Rumbarger and Dr. Leonard as well as the retention of these two experts is a prerequisite to the understanding of the issue involved.

Background

Plaintiff, Great Lakes, agreed to purchase a large waterway dredge from defendant, Harnischfeger, in 1985. The dredge christened the "Chicago" was delivered in 1987. The Chicago consists of a 220-foot floating barge upon which is fixed a combination mining shovel and clamshell which digs bottom sediment from waterways. The mining structure rotates or swivels on an eighteen-foot "slewing" ring bearing. This slewing bearing was manufactured and sold to defendant, Harnischfeger, by the third-party defendant, FAG.

Shortly after the Chicago was delivered to Great Lakes, the bearing seized and the dredge became inoperable. Efforts by Great Lakes to obtain necessary repairs from Harnischfeger were unsuccessful. In 1987, Great Lakes retained John E. Sague and Associates (Sague and Associates) of Philadelphia to determine the cause of the slewing bearing failure and to recommend remedial steps necessary to return the Chicago to an operational condition.

Sague and Associates employed Dr. Leonard, an expert in the field of metallurgy, to be a consultant on the Great Lakes dredge problem. As a consultant to Sague and Associates, Dr. Leonard investigated the cause of the bearing failure, conducted tests and submitted a technical report containing his findings and conclusions on the cause of the bearing's failure. Based upon this report, Great Lakes expended substantial sums in modifying the bearing to enable the Chicago to operate on a temporary basis. Ultimately, over the course of time, Great Lakes arranged to have a new bearing designed and manufactured and installed in December 1989. Dr. Leonard consulted on the repairs of the original bearing as well as the design of the replacement bearing. Great Lakes filed the instant action against Harnischfeger in 1989. Since Great Lakes filed suit, Dr. Leonard has discussed his findings with counsel for Great Lakes. Great Lakes intends to call Dr. Leonard as an expert at trial.

Defendant, Harnischfeger, filed a third-party complaint for contribution against FAG, alleging defects in the FAG bearing incorporated into the Chicago caused Great Lakes' damages. In December 1989, FAG retained Franklin Research Center (Franklin) and its Executive Engineer, Mr. John Rumbarger, to act as its outside expert on the bearing failure issue. Mr. Rumbarger is a mechanical engineer. Mr. Rumbarger has worked at Franklin for approximately 25 years.

Dr. Leonard's professional pursuits are not limited to consulting for Sague and Associates. Dr. Leonard is also employed as a Principal Engineer in the Engineering Department of Franklin. The Engineering Department has worked on numerous matters involving bearing failures, including failures of bearings the size of the bearing involved in the Chicago. In many of these matters, Mr. Rumbarger and Dr. Leonard worked together. Currently, Mr. Rumbarger supervises Dr. Leonard on any project upon which Mr. Rumbarger is project leader. The members of the Engineering Department at Franklin occupy a discrete portion of the facility and use the same secretarial, filing, computer and support facilities. The members of the department often discuss ongoing projects on a formal and informal basis.

Discussion

Plaintiff, Great Lakes, filed a motion seeking to bar Mr. Rumbarger and Franklin Research Center from acting as consulting or testifying experts for FAG. Great Lakes attached the affidavit of Dr. Leonard in support of its motion. FAG filed its response which included the affidavit of Mr. Rumbarger. The affidavits are consistent in that there is no conflict in their statements over the nature of the hiring of the two experts or their relationship at Franklin Research Center.

Great Lakes contends that the fact Mr. Rumbarger and Dr. Leonard are both employed at Franklin and that Mr. Rumbarger often supervises Dr. Leonard when they work at Franklin on bearing failures, creates an intolerable conflict of interest which requires this court to disqualify Mr. Rumbarger and Franklin as experts for FAG. FAG counters that Great Lakes' use of Dr. Leonard was through his employment with Sague and Associates and unconnected to his work for Franklin with Mr. Rumbarger. FAG argues that Great Lakes has never consulted or retained Mr. Rumbarger or Franklin on the issues involved in the bearing failure at issue. The fact that Dr. Leonard worked at Franklin was not included in Dr. Leonard's resume submitted to FAG. FAG did not know of the common employer problem until informed by Great Lakes. FAG argues that Mr. Rumbarger's and Dr. Leonard's specialties are in different fields and there is no risk of prejudice to Great Lakes because no confidential or privilege information of Great Lakes is at risk and no conflict of interest exists. FAG argues it would be prejudiced if denied the use of its chosen expert, an acknowledged expert in the field of slewing bearing failures.

As both parties have stated in their briefs, there is a paucity of case law on the subject of disqualifying expert witnesses when conflicts of interest arise. Several courts have tackled the issue and the court finds one of these cases to be particularly helpful in analyzing the problem presented in the instant case. See Paul v. Rawlings Sporting Goods Co., 123 F.R.D. 271 (S.D. Ohio 1988).

The court in Paul v. Rawlings Sporting Goods Co. began its analysis by addressing the issue of what power, if any, a court has to disqualify a party's expert under any circumstances. 123 F.R.D. 271 (S.D.Ohio 1988). The court found that it was within a court's inherent power to grant necessary relief in order to protect various privileges which may be breached in some fashion if an expert with a relationship to one party were permitted to testify for that party's adversary. Paul, 123 F.R.D. at 278; see Miles v. Farrell, 549 F.Supp. 82 (N.D.Ill. 1982) (barred continued retention or testimony by treating physician of plaintiff who was retained by defendant as expert while still treating plaintiff). Additionally, the court found that it was within the inherent power of the court to disqualify an expert if necessary to preserve the public confidence in the fairness and integrity of the judicial proceedings. Paul, 123 F.R.D. at 278. In reaching its conclusion, the court in Paul discussed Conforti & Eisele, Inc. v. Division of Building and Construction, et al., 170 N.J.Super. 64, 405 A.2d 487 (1979).

In Conforti, the court relying on its inherent power to protect a client's attorney-client privilege and fundamental fairness, extended the attorney-client privilege which protects confidential communications made to an attorney by the client, to confidential client communications made to an agent of the attorney by the attorney. Conforti, 170 N.J.Super. 64, 405 A.2d 487 (1987). The Conforti court was protecting the defendants from the risk of prejudice from possible disclosure and use of confidential client communications which arose when the plaintiff hired the former expert of the defendants' attorney who had been exposed to and received confidential client materials involving the pending litigation while being employed in a related litigation matter by the defendants' attorney. Conforti, 170 N.J.Super. 64, 405 A.2d 487. The Paul court categorized Conforti as a particular application of a court's inherent power to protect various privileges, i.e., attorney-client. Paul, 123 F.R.D. at 278. The Paul court interpreted the language of Conforti involving fundamental fairness in not allowing an expert witness to switch sides in the same or related litigation as being an application of a court's inherent power to preserve the integrity of proceedings before the court. Paul, 123 F.R.D. at 278. The court in Paul read Conforti to stand for the idea that in certain circumstances it would be fundamentally unfair to allow an expert hired by a party, who at that party's expense obtains specific knowledge and expertise in the issues involved in the litigation, to then be hired by the opposing party and allow the opposing party to reap the benefits of that work, in much the same fashion as disclosure of trade secrets. Paul, 123 F.R.D. at 277.

The court in Paul, however, rejected a "bright line" test of whether a...