American & Foreign Ins. Co. v. General Elec. Co.

• Decision Date: 26 January 1995
• Docket Number: No. 93-2044,93-2044
• Citation: 45 F.3d 135
• Parties: , 97 Ed. Law Rep. 107, Prod.Liab.Rep. (CCH) P 14,135 AMERICAN & FOREIGN INSURANCE COMPANY, Plaintiff-Appellant, v. GENERAL ELECTRIC COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 135

45 F.3d 135

31 Fed.R.Serv.3d 1386, 97 Ed. Law Rep. 107,

Prod.Liab.Rep. (CCH) P 14,135

AMERICAN & FOREIGN INSURANCE COMPANY, Plaintiff-Appellant, v. GENERAL ELECTRIC COMPANY, Defendant-Appellee.

No. 93-2044.

United States Court of Appeals, Sixth Circuit.

Argued Dec. 9, 1994.

Decided Jan. 26, 1995.

Ralph H. Adams, Pasquale Ciccodicola (argued and briefed), Detroit, MI, for plaintiff-appellant.

Ernest R. Bazzana (argued and briefed), Boleslaus I. Stanczyk, Matthew Stanczyk, Plunkett & Cooney, Detroit, MI, for defendant-appellee.

Before: KEITH, JONES, and GUY, Circuit Judges.

NATHANIEL R. JONES, Circuit Judge.

Plaintiff-Appellant American & Foreign Insurance Company (hereinafter, "American") appeals judgment for the defendant, General Electric (hereinafter, "GE"), in this products liability action. On appeal, American argues that the trial court erred by excluding its expert witness testimony, and that the lower court erred by granting GE's motion for a directed verdict. After reviewing the record before the lower court, we find no error in the lower court's decision to exclude portions of the expert's testimony or to direct a verdict in favor of GE.

I.

On August 9, 1989, a fire broke out at Woodhaven High School in Brownstown Township, Michigan, damaging two rooms and causing severe smoke damage throughout the school. Total damages from the fire were $338,235.53. The school filed an insurance claim with American. American paid the claim and filed this action against GE in the Wayne County, Michigan Circuit Court. GE removed the action to the U.S. District Court for the Eastern District of Michigan pursuant to the court's diversity jurisdiction.

American's complaint alleged that the fire at Woodhaven High School was caused by numerous short circuit arcs within a wire mold plug strip, which set fire to various combustibles located in a custodians' room within the school. According to American, (1) GE was negligent in its design, manufacture, assembly, inspection, and testing of its model TQL amp circuit breaker--the safety device on the branch circuit powering the wire mold plug strip; (2) the circuit breaker was not reasonably safe for its intended use or foreseeable misuse because the devise could not provide protection against short circuit fires; and (3) GE was aware of the 20 amp circuit breaker's shortcomings but failed to take reasonable steps to warn its users and the public of the known dangers. American alleged that the failure of the circuit breaker was the proximate cause of the fire at the high school.

GE countered that the design of the circuit breaker was not defective and that it complied with all applicable standards regarding the design and manufacture of circuit breakers and their amplification. GE also raised the possibility that the fire was caused by the actions or activities of the school's employees and was already burning by the time the plug strip's wiring short circuited. ¹ Thus, according to GE, the circuit breaker could not have prevented the fire. ²

Prior to trial, the court apparently addressed and dismissed the design defect and failure to warn claims. See J.A. at 43. Those orders were not appealed. Accordingly, the only issue remaining at trial was American's manufacturing defect claim. After the matter was set for trial, GE filed three motions in limine, seeking, among other things, to exclude the testimony and opinions of Frederick Franklin, an electrical engineer, retained by American to assist in developing its case. A two and a half day evidentiary hearing was held to determine whether Franklin's opinions were reliable and relevant. During the hearing, Franklin was asked to produce all of his notes relating to the test itself and any protocol established for the test. Franklin responded that he had not established any protocol, that he had taken no notes during the testing, and that he had discarded the "raw data", i.e. the numbers he read on the oscilloscope screen. Franklin also testified that, although calibration of testing equipment was important to insure accurate readings, he was unsure whether his testing equipment had been calibrated. Finally, he testified that no one had witnessed the test and that the only evidence he had of the test was a single slip of paper consisting of a summary graph of the results. J.A. 324-28.

At the close of the hearing on GE's motion in limine, the court determined that, based on the testimony of the experts for both sides, Franklin's conclusions were not reliable. Accordingly, the court disallowed any references to Franklin's conclusions pursuant to Federal Rule of Evidence 702. ³

Thereafter, American was permitted to go forward with any remaining evidence it had in support of its manufacturing defect claim. Jeremiah Dyer, a maintenance supervisor at the high school, testified by way of deposition that when the fire was extinguished, he checked the circuit breaker panel and found a circuit breaker that had not been tripped to the off position. Fire Inspector Jeffrey Droillard testified that immediately after the fire was put out, he began an investigation, and concluded that the cause of the fire was a short due to bad installation. Franklin was also recalled to testify with respect to issues not disallowed after the hearing on the motion in limine.

During the course of Franklin's testimony, the court sua sponte indicated that it would entertain a motion for directed verdict. Following a hearing on GE's motion for directed verdict, the court found that American's only evidence with respect to proximate cause was Franklin's testimony that there was a 50% chance, with a plus or minus 25% margin of error, that even if the circuit breaker had been manufactured as designed, it would have detected the short circuit and prevented the fire. Accordingly, the court entered a directed verdict in favor of GE. The court subsequently denied Plaintiff's motion for reconsideration and a new trial. This appeal followed.

II.

American argues that the lower court erred by excluding the testimony of its expert witness, Frederick Franklin, regarding the alleged design defect in the GE TQL 20 amp circuit breaker. A trial court "has broad discretion in the matter of the admission or exclusion of expert evidence, and [the court's] action is to be sustained unless manifestly erroneous." Salem v. United States Lines Co., 370 U.S. 31, 35, 82 S.Ct. 1119, 1122, 8 L.Ed.2d 313 (1962); United States v. Pearce, 912 F.2d 159, 163 (6th Cir.1990), cert. denied, 498 U.S. 1093, 111 S.Ct. 978, 112 L.Ed.2d 1063 (1991).

A.

The admissibility of expert testimony is governed by Federal Rule of Evidence 702 which provides the following:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

"Rule 702 should be broadly interpreted on the basis of whether the use of expert testimony will assist the trier of fact." United States v. L.E. Cooke Co., 991 F.2d 336, 341 (6th Cir.1993). Until recently, this court used a four-part test to examine the admissibility of expert testimony: " '(1) a qualified expert (2) testifying on a proper subject (3) which is in conformity with a generally accepted explanatory theory (4) the probative value of which outweighs its prejudicial effect.' " Id. (quoting Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1208 (6th Cir.1988)).

The Supreme Court recently modified the third criterion, holding that general acceptance is not an absolute prerequisite to admissibility. Daubert v. Merrell Dow Pharmaceuticals Inc., --- U.S. ----, ----, 113 S.Ct. 2786, 2794, 125 L.Ed.2d 469 (1993). There, the Court found that "nothing in the text of [Rule 702] establishes 'general acceptance' as an absolute prerequisite to admissibility. Nor does respondent present any clear indication that Rule 702 or the rules as a whole were intended to incorporate a 'general acceptance' standard." Id. "[T]he requirement that an expert's testimony pertain to 'scientific knowledge' establishes a standard of evidentiary reliability." Id. at ----, 113 S.Ct. at 2795 (footnote omitted).

For purposes of Rule 702, "evidentiary reliability" means, essentially, "trustworthiness;" i.e., "[i]n a case involving scientific evidence, evidentiary reliability will be based on scientific validity." Id. at ---- n. 9, 113 S.Ct. at 2795 n. 9 (emphasis in original); United States v. Bonds, 12 F.3d 540, 555-56 (6th Cir.1993). As the Daubert court noted,

The adjective "scientific" implies a grounding in the methods and procedures of science. Similarly, the word "knowledge" connotes more than subjective belief or unsupported speculation. The term "applies to any body of known facts or to any body of ideas inferred from such facts or accepted as truths on good grounds." Webster's Third New International Dictionary 1252 (1986). Of course, it would be unreasonable to conclude that the subject of scientific testimony must be "known" to a certainty; arguably, there are no certainties in science. "Indeed scientists do not assert that they know what is immutably 'true'--they are committed to searching for new, temporary theories to explain as best they can, phenomena." "Science is not an encyclopedic body of knowledge about the universe. Instead, it represents a process for proposing and refining theoretical explanations about the world that are subject to further testing and refinement." But in order to qualify as "scientific knowledge" an inference or assertion must be derived by the scientific method. Proposed testimony must be supported by appropriate validation--i.e., "good grounds," based on what is known.

Id. (internal citations and parentheses omitted) (quotations and emphasis in original).

"[B]y defining evidentiary reliability in terms of...