S. Minn. Beet Sugar Coop v. Agri Sys.

Southern Minnesota Beet Sugar Cooperative, Plaintiff, v. Agri Systems, doing business as ASI Industrial, Inc., Defendant.

Case No. 17-cv-5552 (WMW/BRT)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

August 31, 2020

ORDER GRANTING DEFENDANT'S MOTION TO EXCLUDE EXPERT TESTIMONY

Defendant Agri Systems, doing business as ASI Industrial, Inc. (ASI), moves to exclude the testimony of Plaintiff Southern Minnesota Beet Sugar Cooperative's (SMBSC) expert witness David Hallman. (Dkt. 44.) For the reasons addressed herein, ASI's motion is granted.

BACKGROUND

SMBSC is a Minnesota cooperative that processes sugar beets for sugar production. ASI is a Montana corporation that designs and constructs agricultural storage and processing facilities. In 2014, SMBSC and ASI entered into a contract, the Design-Build Agreement (Agreement), for ASI to design and construct six sugar-storage silos for SMBSC. The purpose of the silos was storage of the sugar, but another essential feature was the ability to empty the sugar from the silos. The device used to remove the stored sugar is a reclaimer. This device stirs the stored sugar so as to pull the sugar from the perimeter of the silo into the center so that the sugar flows out of the silo during the emptying process. The reclaimer system that ASI designed included a platform near the top of the silos, a drive system, a rail-and-trolley system from which the reclaimer hangs, and an auger system that rotates around the interior of the silo while stirring sugar toward the center of the silo.

The original reclaimer design that ASI contemplated used three trolleys per reclaimer. Through each trolley was a large bolt that was perpendicular to the direction the reclaimer traveled. However, the trolleys that ASI selected for the reclaimer system included a pin, rather than a bolt, through the middle of each trolley. The bolt was secured by a cotter pin on each end. The pin in the trolley was parallel, rather than perpendicular, to the reclaimer's direction of travel. ASI completed the silo project during the summer or autumn of 2015. On December 30, 2015, in one of the six new silos, ASI's reclaimer system fell to the bottom of the silo. A cotter pin sheared, causing a trolley to separate from its track, and Steve Bjordahl, an ASI engineer, opined in an email to his colleagues about the parallel-oriented pin system:

I think the pin that the gantry hangs from is oriented the wrong way. If the pin axis was perpendicular to the direction of travel, then we wouldn't be relying on scissor plates bending in the weak direction and the cotter pins pressing against the scissor plates. When the trolley hangs up, we're using the pin in a way it wasn't intended to apply the force needed to drag the trolley. It's bass ackwards.

Acknowledging that a cotter pin should never be load-bearing, ASI's expert, Dr. Gregory D. Williams, opined that "[s]omething shifted that shouldn't have shifted that caused the load on the cotter pin."

As a result of the reclaimer's failure, ASI reverted to a design similar to its original plan, redesigning the trolley configuration to include a large pin that is perpendicular to the direction of travel. At SMBSC's request, ASI's redesigned system included a mechanical "failsafe" to prevent another "catastrophic failure." ASI completed the first modification to the reclaimer system in or about April 2016. But the system failed again in November 2017 when bolts used to hold the sides of the trolley together sheared. ASI added additional bolts to the trolley to avoid another reclaimer failure.

SMBSC offers David Hallman as its expert to testify as to ASI's allegedly negligent design of the sugar-storage silos. Hallman's educational attainment includes a Bachelor of Science degree in mechanical engineering and a Master of Science degree in materials science and engineering. He is a licensed engineer in Minnesota and seven other states. Much of Hallman's professional experience is in automobile-crash investigation and reconstruction and fire investigation.¹ Hallman's work experience includes four years as a design engineer, in which he designed various mechanical structures and equipment. Hallman concedes that he has never performed any design work that did not involve a vehicle. But his experience includes evaluating and analyzing system loading, systemfatigue, system resonance, and system stresses and strains. And Hallman has developed safety factors based on predicted system loading.

Hallman completed four expert reports for this litigation. In his January 14, 2019 report, Hallman opines regarding both the standard of care and ASI's breach of that standard of care. Hallman explains that engineering design requires the applied loads to be calculated and accounted for using engineering calculations and that appropriate engineering calculations were not performed on the reclaimer system at issue here. ASI also did not undertake a Failure Mode and Effects Analysis (FMEA), which involves a review of failure modes, failure causes, and failure effects, Hallman concludes. Other failings identified by Hallman include that ASI ignored the warnings in the trolley manufacturer manual against using the trolleys for off-center loading, failed to consider accelerated wheel deformation and wear, and ignored plainly visible deformation to trolley parts that was evident in pictures and indicated overloading and misuse of the trolleys. According to Hallman, ASI inappropriately selected trolleys that were not intended for continuous movement. And ASI's claim that it accounted for improper engineering design by requesting SMBSC to limit control to the system is not a proper failsafe, Hallman opines, because a mechanical system should be designed to either withstand worst-case loading or have a mechanical failsafe.

In forming his opinions, Hallman reviewed photographs of the components, design and redesign drawings, trolley literature, multiple depositions, and other record evidence. He visited the site one time. But he concedes that he never examined the reclaimer system prior to the two modifications and has never observed an ASI-built reclaimer in operation.Hallman also concedes that he did not test any component of the reclaimer system at any time. Nor did he observe the cotter pins that were installed before the collapse or inspect the bolt that sheered in November 2017.

In response to ASI's production of RISA software files, Hallman concludes in his second report that these files were a static structural analysis of the reclaimer system that does not account for system dynamic loading of the trolleys, which makes the analysis inadequate for system design. But Hallman subsequently acknowledged at his deposition that he has never used the RISA software and does not know how multiple iterations of a design are saved in the RISA files. Hallman viewed the RISA files on a demonstration version of the program. And although he has never used RISA software, he is familiar with ANSYS software and "assum[ed]" RISA works in the same manner.

Hallman completed his third report in response to the report of ASI's expert, Dr. Williams. Hallman criticizes several of Dr. Williams's opinions for a lack of evidentiary support. Hallman explains that many of the calculations that Dr. Williams performed were either inappropriate or inaccurate. But Hallman concedes that he did not perform any calculations himself. Hallman also rejects Dr. Williams's opinion that ASI met the professional standard of care established by the code of ethics of the National Society of Professional Engineers (NSPE) because ASI failed to follow two fundamental canons of professional engineering ethics. First, ASI failed to consider safety as its primary concern and, second, ASI designed a reclaimer system that was outside its area of engineering expertise.

Hallman released a supplemental report after all fact depositions were completed. In that report he concludes that the reclaimer system failed as a direct result of ASI's failure to follow engineering best practices and failure to conduct an appropriate systems analysis. Hallman did not define "engineering best practices" in any of his expert reports. But at his deposition, Hallman explained that the appropriate standard of performance is determined by the "canons of ethics" and the parties' Agreement. The Agreement provides: "All design and engineering and construction services and other Work of the Design-Builder shall be performed in accordance with (a) the Contract Documents, (b) all Legal Requirements, and (c) the professional standards applicable to the Work, buildings or work of complexity, quality and scope comparable to the Work." Hallman acknowledges that the NPSE code of ethics does not regulate engineers in Minnesota. But he maintains that engineers are "expected to follow" the NPSE code of ethics.

SMBSC commenced this lawsuit against ASI, alleging six causes of action.² ASI now moves the Court to exclude the expert testimony of Hallman.

ANALYSIS

The admissibility of expert testimony is governed by Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Rule 702 provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. The proponent of expert testimony must prove its admissibility by a preponderance of the evidence. Lauzon v. Senco Prods., Inc., 270 F.3d 681, 686 (8th Cir. 2001). "Rule 702 reflects an attempt to liberalize the rules governing the...