U.S. v. Dico Inc.

• Decision Date: 10 April 2001
• Docket Number: No. 00-2430,00-2430
• Citation: 266 F.3d 864
• Parties: (8th Cir. 2001) UNITED STATES OF AMERICA, PLAINTIFF - APPELLEE, v. DICO, INC., DEFENDANT - APPELLANT. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 864

266 F.3d 864 (8th Cir. 2001)

UNITED STATES OF AMERICA, PLAINTIFF - APPELLEE, v. DICO, INC., DEFENDANT - APPELLANT.

No. 00-2430

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: April 10, 2001

Filed: September 19, 2001

Appeal from the United States District Court for the Southern District of Iowa. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Before Bowman and Fagg, Circuit

Judges, and Piersol,¹ District Judge.

Bowman, Circuit Judge.

The United States sued Dico, Inc., pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675 (1994 & Supp. IV 1998), to recover response costs incurred for the cleanup of groundwater contaminated by trichloroethylene (TCE)² and other chlorinated volatile organic compounds (VOCs). The District Court³ held a bench trial and found Dico liable for response costs incurred in connection with the groundwater contamination. The court also granted summary judgment to the United States on the amount of cleanup costs it was entitled to recover from Dico. Dico appeals both as to liability and damages. We affirm.

I.

This litigation returns to this Court for the third time. The case arises from the EPA's determination, made in the mid-1970s, that the Des Moines public water supply had been contaminated by TCE and other chlorinated VOCs. Dico's property sits within the boundaries of the Des Moines TCE Site (the Site), the land area identified by the EPA as the source of the contamination. Dico and other businesses located within the Site had for many years used TCE for degreasing and other industrial applications. The EPA designated Dico as a potentially responsible party under CERCLA and issued a cleanup order to Dico. Dico complied, thereby incurring response costs. Moreover, the EPA itself incurred costs in connection with the cleanup of the Site. For a detailed history and factual background of the prior litigation, see Dico I, 35 F.3d at 349-50 (reversing grant of summary judgment to the EPA in Dico's suit against the EPA seeking reimbursement for response costs it incurred in complying with the EPA's cleanup order), and United States v. Dico, Inc., 136 F.3d 572, 574-75 (8th Cir. 1998) (Dico II) (reversing grant of summary judgment to the EPA in the EPA's cleanup-cost recovery action against Dico).

Following our remand in Dico II, the District Court heard the EPA's suit against Dico at a bench trial. The EPA's theory of the case was that Dico had released TCE on its property via numerous sources and activities: leaks from vapor degreasers that used TCE to degrease metal parts manufactured by Dico; spreading TCE-laden sludge as a dust suppressant on the ground around Dico's buildings; dumping TCE sludge directly onto the ground; storing TCE sludge in drums left exposed to the weather; leaks from railcars, drums, and storage tanks used in Dico's chemical repackaging and supply business; and cleaning of TCE storage drums at Dico's facility. The EPA further contended that the TCE released by Dico migrated through the soil into the groundwater below Dico's property.

In defense, Dico attempted to identify potential alternative sources for the groundwater contamination. Dico argued that all of the groundwater contamination the EPA attributed to its activities actually originated with polluters located to the north of its property. Dico contended that contamination found a mile north of Dico, near the Martin Luther King Expressway (MLKE area), migrated with groundwater flowing south into the aquifer below Dico's property. Dico also attacked the government's case by arguing that even if Dico released TCE, none of the TCE could have migrated far enough down through the soil to reach the groundwater.

The District Court found Dico liable for the costs incurred by the EPA in cleaning up the groundwater at the Site, but delayed its decision on the amount of the cleanup costs to be awarded to the EPA pending a hearing on the EPA's motion for summary judgment on that question. After a hearing, the District Court granted summary judgment to the EPA, awarding it $4,129,426.67 in cleanup costs. Dico appeals both the liability and the award portions of the judgment entered by the District Court.

II.

Dico challenges the District Court's liability determination on numerous grounds. We first address Dico's objections to evidentiary rulings on the admission of expert testimony and of deposition testimony offered by the government after the close of both parties' cases-in-chief.

A.

Dico argues that the District Court erred in refusing to exclude the testimony of John Robertson, the government's expert hydrogeologist, because "his methodology was unreliable." Appellant's Br. at 29. We review a district court's decision to admit expert testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), for an abuse of discretion. Kumho, 526 U.S. at 152; General Elec. Co. v. Joiner, 522 U.S. 136, 138-39 (1997). Admissible expert testimony must be grounded upon scientifically valid reasoning or methodology.⁴ Daubert, 509 U.S. at 592-93. The court must examine both the relevance and the reliability of the proffered testimony, Blue Dane Simmental Corp. v. Am. Simmental Ass'n, 178 F.3d 1035, 1040 (8th Cir. 1999), keeping in mind that "[t]he focus, of course, must be solely on principles and methodology, not on the conclusions that they generate." Daubert, 509 U.S. at 595.

Dico does not dispute the relevance of Robertson's testimony. Rather, Dico challenges the reliability of Robertson's testimony, urging us to reject his methodology and exclude his testimony on several grounds. First, Dico argues that Robertson's analysis of the contamination found on its property is fundamentally flawed because he ignored evidence suggesting alternative sources for the contamination. Dico argues that Robertson improperly excluded from his computer model any consideration of groundwater flow onto Dico's property from the north,⁵ failed to consider the Ingersoll Run as a conduit for contamination originating off of Dico's property,⁶ disregarded data indicating that the amount of TCE in the Dico remediation wells increased after their activation,⁷ and ignored all data regarding TCE contamination in the MLKE area.

The record undermines Dico's characterization of Robertson's analysis. First, Dico's arguments regarding Robertson's computer model are inapposite because Robertson testified that the model did not form the basis for his conclusion regarding the origin of the contamination. Tr. at 156. Robertson used the model for a limited purpose--studying the capture zones of the remediation wells within the boundaries of Dico's property. Tr. at 157. Thus, Dico's complaints regarding the data Robertson put into the model are without consequence to the validity of his analysis of alternative sources for the contamination. Furthermore, the model itself passes scrutiny under Daubert. Known as MODFLOW, the model is sanctioned by the EPA and is considered a standard model that is acceptable and commonly used by hydrogeologists. Tr. at 306. Dico's expert hydrogeologist used the same computer model as Robertson in his evaluation of the Site. Id.

Robertson's testimony also shows that he considered each piece of data that Dico alleges he ignored. He looked at data regarding whether the Ingersoll Run was a conduit of contamination onto Dico's property. Citing the negative results of tests performed on soil borings taken close to the Run and on sediment samples from the pond at its terminus, Robertson rejected the Run as a possible source. Tr. at 73-74. Moreover, Robertson's testimony reflects that he considered the data indicating that the amount of TCE in the Dico remediation wells increased after their activation. He explained that he used the continued existence of contamination to support his conclusion that TCE in dense non-aqueous phase liquid form (DNAPL) existed in the soil beneath Dico's property. Tr. at 70-71. Similarly, Robertson did not ignore data regarding contamination in the MLKE area. Rather, he testified that he examined data in the reports on the area and considered the amounts and location of the contamination in relation to the topography between the MLKE area and Dico's facility. Tr. at 128. From his study, Robertson concluded that the clearly delineated borders of the contamination and the different chemical fingerprints of the chemicals of concern present at the MLKE area precluded that site from being the source of the TCE removed from the groundwater by the Dico remediation well system. Dico's arguments regarding the reliability of Robertson's analysis of alternative sources of contamination do not show an abuse of discretion by the District Court in admitting Robertson's testimony.

Dico argues, as a second ground for excluding Robertson's testimony, that his analysis of the migration of TCE from the soil into the groundwater at Dico's property is based on unreliable methodology. Dico claims that Robertson's "continuous line theory" and conclusion that the contaminants left a trail of DNAPL in the soil are unsupported by the record. Dico's challenge rests primarily on the argument that the number of soil samples taken was insufficient to support Roberton's conclusions. As part of its examination of the contamination on Dico's property, Dico's contractor, Eckenfelder, Inc., drilled sixty-nine deep soil borings on Dico's property, each approximately twenty-five feet deep. From each twenty-five foot boring, approximately two small samples were sent to a laboratory for analysis. Dico contends that even if every sample tested contained TCE, such a small section of each boring was examined that the results cannot reliably support the conclusion that contamination existed continuously from the surface to the groundwater.

Robertson specifically...