Gadsden Indus. Park, LLC v. United States

• Decision Date: 22 May 2015
• Docket Number: No. 4:14–cv–00039–KOB.,4:14–cv–00039–KOB.
• Citation: 111 F.Supp.3d 1218
• Parties: GADSDEN INDUSTRIAL PARK, LLC, Plaintiff, v. The UNITED STATES of America; CMC, INC., and Harsco Corporation, Defendants.
• Court: U.S. District Court — Northern District of Alabama

111 F.Supp.3d 1218

GADSDEN INDUSTRIAL PARK, LLC, Plaintiff,

v.The UNITED STATES of America; CMC, INC., and Harsco Corporation, Defendants.

No. 4:14–cv–00039–KOB.

United States District Court, N.D. Alabama, Middle Division.

Signed May 22, 2015.

Avrum Levicoff, Levicoff Silko and Deemer PC, Edward I. Levicoff, The Levicoff Law Firm, P.C., Pittsburgh, PA, James C. Inzer, III, Inzer Haney McWhorter & Haney LLC, Gadsden, AL, Maxwell H. Pulliam, Birmingham, AL, for Plaintiff.

David Russell Marshall, Marshall Oakley & Oakley, Nicholasville, KY, Kimberly W. Geisler, Scott Dukes & Geisler PC, Birmingham, AL, Jeffrey D. Patton, Stephanie U. Roberts, Spilman Thomas & Battle PLLC, Winston–Salem, NC, for Defendants.

MEMORANDUM OPINION

KARON OWEN BOWDRE, Chief Judge.

This matter comes before the court on Defendants CMC, Inc and Harsco Corporation's "Joint Motion for Summary Judgment," (Doc. 74), and CMC and Harsco's "Joint Motion to Exclude Testimony of DR Davies Contractor LLC," (Doc. 76).

Plaintiff Gadsden Industrial Park, LLC sued CMC and Harsco for conversion and negligence stemming from CMC and Harsco's burial and sale of three railroad track spur lines—HN1, HS1, and HS2—owned by GIP at the former Gulf States Steel facility. That facility is now a Superfund site under 42 U.S.C. § 9607, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. GIP purchased part of the GSS facility in 2001, but excluded the facility's eastern portion from the sale because GIP feared environmental contamination on that portion of the site. GIP subsequently bought the spur lines, which were located on the eastern excluded property. CMC and Harsco are EPA contractors who buried and sold the spur lines during the remediation of the eastern excluded property. GIP alleges that CMC and Harsco intentionally and/or negligently sold or buried the spur lines solely for their own profit.

CMC and Harsco moved for summary judgment, arguing they are government contractors entitled to immunity. Additionally, CMC and Harsco argue that GIP did not own the spur lines and, thus, cannot sue for conversion. Finally, CMC and Harsco argue that GIP has not produced any legitimate proof of damages. The court will deny CMC and Harsco's motion for summary judgment because, when the facts are taken in the light most favorable to GIP, CMC and Harsco are not entitled to immunity as government contractors and GIP has sufficiently shown its ownership of the tracks and the damages it suffered.

Before addressing CMC and Harsco's summary judgment motion, however, the court must rule on CMC and Harsco's Daubert motion to determine the record for summary judgment.

I. Daubert Motion

CMC and Harsco ask the court to exclude the testimony of Daniel R. Davies, GIP's expert on the spur lines' market value. Davies has over 20 years of experience in the Alabama railroad industry. GIP plans to offer Davies' testimony as to the spur lines' market value based on information he received from GIP regarding the spur lines, track market pricing information, his familiarity with the GSS facility including his work repairing track at the facility, and his familiarity with the market for track in Alabama. The court will grant in part and deny in part the motion.

Federal Rule of Evidence 702, as explained in Daubert v. Merrell Dow Pharmaceuticals, Inc., controls determinations regarding the admissibility of expert testimony. See 509 U.S. 579, 589, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). "[U]nder the Rules the trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable." Daubert, 509 U.S. at 589, 113 S.Ct. 2786. The court may admit expert testimony when "(1) the expert is qualified to testify competently regarding the matters he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue." City of Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562 (11th Cir.1998).

First, Davies is qualified. CMC and Harsco argue that Davies is not qualified to testify regarding the spur lines' market value because anyone could gather the same information Davies gathered. Davies did much more than merely gather prices, however. Davies applied his 20 years of experience and independent research to the information provided by GIP to determine what GIP could reasonably expect to receive for the spur lines if sold as salvage or retail rail, or what GIP would pay to replace the spur lines. Davies does not provide a lay opinion, as such information is not general knowledge, and is qualified to testify regarding the spur lines' market value based on his 20 years of experience in the industry.

Second, Davies's methodology is reliable. CMC and Harsco argue that Davies's methodology is not reliable because Davies did not actually inspect the spur lines, the eastern excluded property, the track conditions, the soil stability, or GIP's right to access the property. CMC and Harsco also argue that Davies's methodology is not reliable because Davies did not base his calculations on a true market survey.

In United States v. 0.161 Acres of Land, an economist testified regarding property values. See 837 F.2d 1036, 1039 (11th Cir.1988). The economist "spent over 200 hours researching 145 land sales during the years 1976–84 in the downtown Birmingham area and reviewing economic data on the downtown area ... but he did not have personal familiarity with specific parcels." Id. at 1039. The Eleventh Circuit found that the economist's "failure to acquaint himself with the substance of each of the 145 transactions in his study conceivably lessens the probative value of his testimony;" nevertheless, because the economist's "testimony has a rational foundation as to market value," the Eleventh Circuit concluded that his testimony should be permitted. Id. at 1039–41.

Davies did not personally inspect the spur lines (because CMC and Harsco sold HS1 and HS2 and allegedly buried HN1) and only relied on two comparable transactions for market research. However, Davies did review information about the spur lines and is familiar with the GSS facility's tracks. Like in 0.161 Acres of Land, while his opinion might be more reliable had he inspected the spur lines and reviewed more transactions, it is admissible. The weight to assign his testimony is for the jury to decide.

Third, Davies's opinions are helpful to the jury. CMC and Harsco argue that Davies's opinions are not helpful because Davies merely provides a generic description of how track is sold and because Davies fails to show his calculations or ultimate conclusion. Again, CMC and Harsco are free to cross examine Davies about his market valuation methodology, but his opinions will assist the jury in determining the spur lines' market value.

Finally, CMC and Harsco object to Davies's opinion regarding the value of GIP's rail car storage business. Davies admits he is not an expert on this subject:

Q. All right. Do you consider yourself an expert in the field of valuing railroad car storage?

A. No, ma'am.

(Doc. 76–3, 27). Thus, he is not qualified to testify as a rail car storage expert.

Therefore, the court will not allow Davies's opinions regarding the value of GIP's rail car storage business and will allow the remainder of Davies's opinions.

II. Summary Judgment

A. Facts

The facts below, for purposes of summary judgment, are taken in the light most favorable to Gadsden Industrial Park. These facts may not be the true facts proved at trial.

1. The Gulf States Steel Facility

Gulf States Steel owned a 761 acre steel producing facility in Gadsden, Alabama until it declared bankruptcy around 2001. The GSS facility contained 25 miles of railroad tracks, including multiple spur lines and a main line. Three of the GSS facility's spur lines were named HN1, HS1, and HS2. HN1 is 1000 feet long. HS1 and HS2, now scrapped, were 800 and 600 feet long, respectively. At some point in 2001, EPA designated the GSS facility as a Superfund site on the national priority list and began site remediation.

In May 2001, the Williams Family Limited Partnership purchased "over (25) miles of in-ground railroad track" at GSS's bankruptcy foreclosure auction. (Doc. 82–12, 3, 18). WFLP "had a permissive use license through the bankruptcy trustee to use the Track until such time as the real estate was sold. WFLP did not have a lease, license, or legal right to access or conduct business on Track on property that it did not own or otherwise have a contractual right to use." (Doc. 74–12, 3). WFLP used the tracks to operate a rail car storage business from 2001 to 2002 and used the spur lines to store rail cars until 2002.

In December 2002, GIP purchased a 400 acre portion of the GSS facility. GIP knew that EPA had designated the GSS facility as a Superfund site when it purchased the real property, and GIP excluded the facility's eastern 200 acres from the sale because it feared environmental contamination on that portion of the facility.

The eastern excluded property contained the spur lines at issue. The eastern excluded property also contained two large "slag piles" of non-hazardous scrap metal totaling approximately three million cubic yards. One slag pile was located north of several lagoons on the eastern excluded property near HN1. The other slag pile was located south of the lagoons near HS1 and HS2.

Between 2002 and 2005, WFLP, GIP, and a third party operated a rail car storage business using WFLP's tracks. The tracks were in good repair and not buried in 2005. In December 2005, GIP bought out its partners, purchasing all 25 miles of track from WFLP for $270,000.00. Although GIP never verified the track length, GIP purchased all the track WFLP originally purchased at...