USA v. 8.11 Acres of Land, More or Less in the County of Grand, Colorado et al

Filing 109

ORDER by Judge Raymond P. Moore on 8/5/2019, re: 68 Motion to Limit Testimony of Gregory T. Gerken is DENIED. (sphil, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Raymond P. Moore
Civil Action No. 17-cv-01553-RM-SKC
UNITED STATES OF AMERICA,
Plaintiff,
v.
8.11 ACRES OF LAND, MORE OR LESS
IN THE COUNTY OF GRAND, COLORADO; and
LAMBRIGHT, LLC, et al.,
Defendants.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This action has been filed by the United States under its powers of eminent domain on
behalf of the Western Area Power Association in connection with the Granby Pumping Plant Windy Gap Transmission Line Rebuild project. The United States condemned approximately
8.11 acres that are a part of a larger parcel of land (the “Larger Parcel”) owned by Defendant
Lambright, LLC (“Lambright”) in Grand County, Colorado. Before the Court now is
Lambright’s Motion to Limit Testimony of Gregory T. Gerken (ECF No. 68) filed pursuant to
Fed. R. Evid. 702 and 403.
I.

BACKGROUND

The parties are well versed with the background of this case so it will not be repeated
here. In summary, at issue in this case is just compensation for the property taken by the United
States which expands a pre-existing powerline. In a partial taking, when the United States

acquires only part of a unitary holding, just compensation must reflect not only the property
interest acquired, but also any compensable change in the value of the remainder. United States
v. Miller, 317 U.S. 369, 376 (1943).
Mr. Gerken is the United States’ expert witness. Lambright seeks to exclude Mr.
Gerken’s opinion that the new powerline did not reduce the value of the remainder of the Larger
Parcel at all. Relying on several arguments, Lambright contends Mr. Gerken’s opinion is
excludable under Fed. R. Evid. 702 and 403.
II.

LEGAL STANDARD

Federal Rule of Evidence 702 (“Rule 702”) requires a district court to ensure that an
expert’s testimony is admitted only if it is reliable and relevant. Bill Barrett Corp. v. YMC
Royalty Co., LP, 918 F.3d 760, 770 (10th Cir. 2019) (citing Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993)). To do so, the court follows three steps.
First, the court must decide “whether the proffered expert is qualified ‘by knowledge,
skill, experience, training, or education’ to render an opinion.” Bill Barrett Corp, 918 F.3d at
770 (quoting Rule 702).
Next, if the expert is sufficiently qualified, the court “‘must determine whether the
expert’s opinion is reliable by assessing the underlying reasoning and methodology, as set forth
in Daubert.’” Id. (quoting United States v. Nacchio, 555 F.3d 1234, 1241 (10th Cir. 2009) (en
banc)). In doing so, the court considers 1) whether “the testimony is based on sufficient facts or
data”; 2) whether it “is the product of reliable principles and methods”; and 3) whether “the
expert has reliably applied the principles and methods to the facts of this case.” Fed. R. Evid.
702(b)-(d).

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There are many factors which may bear on whether expert testimony is based on sound
methods and principles, including the following: “whether the theory or technique has (1) been
or can be tested, (2) been peer-reviewed, (3) a known or potential error rate, (4) standards
controlling the technique’s operation, and (5) been generally accepted by the scientific
community.” Etherton v. Owners Ins. Co., 829 F.3d 1209, 1217 (10th Cir. 2016). “‘The focus,
of course, must be solely on principles and methodology, not on the conclusions they generate.’”
Id. (quoting Daubert, 509 U.S. at 595). And, where a court concludes there is too great an
analytical gap between the data and opinion offered, it is not required to admit such opinion
evidence. Schulenberg v. BNSF Railway Co., 911 F.3d 1276, 1283 (10th Cir. 2018).
Finally, after reliability, the court evaluates whether the testimony is relevant. “Relevant
evidence” is defined as that which has “any tendency to make the existence of any fact that is of
consequence to the determination of the action more probable or less probable than it would be
without the evidence.” Fed. R. Evid. 401. That is, whether the testimony properly “fits” in the
case. “‘Fit is not always obvious, and scientific validity for one purpose is not necessarily
scientific validity for other, unrelated purposes.’” Etherton, 829 F.3d at 1223 (quoting Daubert,
509 U.S. at 591).
Where the expert testimony meets the standards of Rule 702, “[v]igorous crossexamination, presentation of contrary evidence, and careful instruction on the burden of proof
are the traditional and appropriate means of attacking shaky but admissible evidence.” Daubert,
509 U.S. at 596. “[G]aps or inconsistencies in an expert’s reasoning may go to the weight of the
expert evidence, not to its admissibility.” Cook v. Rockwell Int’l Corp., 580 F. Supp. 2d 1071,
1085 (D. Colo. 2006). Moreover, the proponent of the testimony “need not prove that the expert

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is undisputably correct.” Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1233 (10th Cir. 2005)
(quoting Mitchell v. Gencorp Inc., 165 F.3d 778, 781 (10th Cir. 1999)). “[I]t is the specific
relation between an expert’s method, the proffered conclusions, and the particular factual
circumstances of the dispute, and not asymptotic perfection, that renders testimony both reliable
and relevant.” Bitler, 400 F.3d at 1234.
The trial court has discretion to determine “how to perform its gatekeeping function
under Daubert.” Bill Barrett Corp., 918 F.3d at 770 (emphasis in original). A Daubert hearing
is not mandated. Id.
III.

ANALYSIS

Mr. Gerken identified the subject property’s highest and best use before and after the
taking as a continuation of the existing agricultural and recreational ranch uses, with subdivision
potential. He opined that there was no diminution in the market value to the remainder of the
Larger Parcel after the government’s acquisition of the 100-foot expanded easement, aside from
diminution attributable to the physical footprint of the easement. Mr. Gerken based his opinion
on a journal article (the “Article”) concerning high voltage overhead transmission lines
(“HVOTLs”); sales data from Adams County; interviewing market participants; and his overall
experience and knowledge of powerlines. Pursuant to Rule 702, Lambright challenges Mr.
Gerken’s methodology and his application of that methodology. In addition, Lambright seeks
exclusion of Mr. Gerken’s testimony pursuant to Fed. R. Evid. 403. The Court addresses these
arguments in turn.

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1. The HVOTL Article
The Article is a review of various literature since 2010 regarding the impact of HVOTLs
on property values. The Article discusses various categories of the literature (statistical price
models, survey-based research, public perception research, and other research methods));
summarizes the various literature considered; and reaches its own conclusion based on such
literature. (ECF No. 68-1, pp. 150-163.) That conclusion provides “the most recent conclusions
remain…consistent with the literature before 2010. Survey-based research finds adverse
perceptions and general dislike for HVOTLs, but sales data reveals little to no diminution in
prices.” (ECF No. 68-1, p. 192.)
Lambright contends Mr. Gerken’s use of the Article is improper because it expressly
disclaimed its applicability in eminent domain cases and cautioned against generalizing from its
context-dependent conclusions, and he cherry-picked from the studies in the Article. Thus,
according to Lambright, the Article does not support Mr. Gerken’s conclusion and his opinion is
unreliable. The Court finds otherwise.
The Article’s disclaimer states “[i]t is important to note that this literature does not
generally apply to the taking of an easement for an HVOTL, but rather only to the damages, if
any, due to proximity to an existing HVOTL.” (ECF No. 681-1, p. 151.) The parties disagree
over the interpretation, and therefore the applicability, of this disclaimer. Lambright contends
this language is unambiguous and precludes the Article from being considered by Mr. Gerken in
his analysis. The United States counters this language could be read to apply to a “taking plus
damages” method of valuation used primarily under state law.

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The Court finds the Article was properly and reliably considered for several reasons.
First, as stated, just compensation must reflect not only the property interest acquired, but also
any compensable change in the value of the remainder. Miller, 317 U.S. at 376. As the United
States contends, the disclaimer relates to valuation of the part taken for the easement. Next,
while this case involves a taking for an easement, it is a taking to expand a pre-existing
easement. Third, Lambright focuses on the “damages…due to proximity to an existing HVOTL”
(ECF No. 83, p. 41 (emphasis in original)) arguing this contemplates that HVOTLs are already in
place. But, here, there were existing HVOTLs in place, albeit with a smaller footprint. Fourth,
based on the Court’s understanding of David Clayton’s (Lambright’s expert) opinion, his
compensation analysis also relies on studies of the impact on the value of properties due to
proximity of electric transmission lines, the very issue the Article discusses. Thus, Lambright’s
disagreement as to the applicability of the Article fails to provide a sufficient basis to find Mr.
Gerken’s opinions unreliable.
Lambright’s arguments concerning Mr. Gerken’s alleged “cherry picking” from the
studies within the Article or his generalizations from context-dependent conclusions fare no
better. First, the Court’s review of the record shows Lambright cherry-picks from Mr. Gerken’s
testimony and his report. For example, Mr. Gerken did not simply say “I don’t know” as to why
he relied on the Article. Similarly, Mr. Gerken said “several of the studies” in the Article
“are particularly meaningful,” and gave three examples. (ECF No. 68-1, pp. 114-116.) Mr.
Gerken did respond that “we have to take these studies in general … But I think … it does

1

Unless indicated otherwise, the page references are to the page number in the document and not to the page
number assigned to the document by the court’s CM/ECF system.
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support the overall body of literature out there.” (ECF No. 68-3, 269:4-15.) Lambright’s
argument here is a disagreement as to what Mr. Gerken’s report focused on from the Article.
But, as the United States argues, Mr. Gerken considered the Article’s data in light of its overall
conclusion – that “[s]urvey-based research finds adverse perceptions and general dislike of
HVOTLs, but sales data reveals little to no diminution in prices.” (ECF No. 68-1, p. 192.)
A conclusion which was based on all the studies the Article considered (including those Mr.
Gerken focused on), with their differences as to methodology, location, types of properties,
number of properties surveyed, and other factors, while recognizing that “[a]ll studies are
difficult to generalize.” (Id.) If, as Lambright contends, Mr. Gerken focused on some studies
but should have considered others or other matters in the Article, this argument goes to the
weight to be afforded his testimony, not its admissibility. Accordingly, the Court finds Mr.
Gerken’s reference to the Article is a reliable methodology and his use of the Article is consistent
with reliable appraisal practices.
2. The Adams County Sales
Mr. Gerken conducted a paired sales study of four properties in Adams County affected
by powerlines to determine whether and how proximity to powerlines impacts property values.
Lambright argues that Mr. Gerken’s Adams County research is an unreliable basis from which to
conclude anything about the new powerline’s effect on the value of the subject property based
essentially on two arguments: Mr. Gerken’s supposed “admissions” and his reliance on a
“solitary anecdote” from a single Grand County property owner. The United States counters that
Mr. Gerken acknowledged limitations with the Adams County case study but did not concede
that his study is unreliable; that any limitations did not render his study unreliable; and that Mr.

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Gerken looked for other recent sales in the Grand County area but could not find adequate data
to complete a study. Accordingly, the United States contends, Mr. Gerken’s opinions meet the
standard of Rule 702. The Court agrees.
First, the Court’s review of the records shows no admission of unreliability by Mr.
Gerken as to his case study. Next, Mr. Gerken did acknowledge some limitations in his study,
e.g., no “exact applicability” as to Sale 2 in Adams County. Similarly, Mr. Gerken
acknowledged that Adams County Sale1A is not “comparable in any way to mountain resort
property,” but he explained that his analysis was a comparison of property value due to
proximity to a powerline. As “asymptotic perfection” is not required, Bitler, 400 F.3d at 1234,
the Court finds such limitations do not render Mr. Gerken’s methodology or application thereof
unreliable.
To the extent Lambright contends Mr. Gerken chose Adams County (rather than Grand
County) for his case study arbitrarily, the record does not support such position. As the United
States has shown, Mr. Gerken found insufficient data to complete a study in Grand County.
Finally, contrary to Lambright’s contention, Mr. Gerken relied on more than a single
conversation for his opinion. Mr. Gerken’s report shows conversations with the buyer and seller
of Sale 1 in Grand County, and a conversation with the listing broker on Sale 2 in Adams
County. (ECF No. 68-1, pp. 77, 118.) And, Mr. Gerken clarified during this deposition that he
had conversations with the buyers of Sales 3 and 5 from Grand County. The persons with whom
Mr. Gerken had conversations advised that the powerlines had no effect on the value of the
property that was sold and purchased. The United States argues that market participant

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interviews are a reliable basis for an appraiser’s expert opinion and Lambright has not shown
otherwise.
In summary, Mr. Gerken’s methodology and underlying reasoning are reliable and
otherwise meet the standards under Rule 702. Any analytical “gap” is not too large; instead, any
gaps here go to the weight of the expert evidence, not to its admissibility. Cook, 580 F. Supp. 2d
at 1085.
3. Mr. Gerken’s Experience
Mr. Gerken’s opinions also rely on his professional experience. Lambright argues Mr.
Gerken (1) lacks the “necessary experience” to opine on value in this case because he has “never
signed an appraisal concerning a power line condemnation”; and (2) relied on that inadequate
experience to conclude the new powerline will not decrease the subject property’s value and that
such conclusion is nothing more than a hunch. The United States, of course, argues otherwise.
Starting with Lambright’s first argument that Mr. Gerken is not qualified, the Court’s
review finds this to be without merit. Mr. Gerken’s qualifications as a professional real estate
appraiser are fully set forth in his report (ECF No. 68-1, p. 128). The fact that Mr. Gerken has
never “signed” an appraisal concerning a powerline condemnation does not establish to the
contrary where he has shown experience in appraisals for the taking of other types of easements.
As the United States argues, in every appraisal where a property is encumbered by an easement,
the appraiser must determine whether that encumbrance affects the value of the property.
Lambright cites no legal authority or makes no showing to persuade the Court otherwise.
As to Lambright’s argument that Mr. Gerken’s opinion is based on just a “hunch” the
record shows it is not so. Instead, as discussed, Mr. Gerken’s opinion is based on data and

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information that are customarily used, such as the Article and paired sales which the Court has
found sufficient under Rule 702. That Lambright disagrees with Mr. Gerken’s conclusions based
on his analysis, on which he obviously relied upon his experience, does not render the opinion
inadmissible.
4. Rule 403
Pursuant to Fed. R. Evid. 403, “[t]he court may exclude relevant evidence if its probative
value is substantially outweighed by a danger of … unfair prejudice.” Lambright argues the
probative value of Mr. Gerken’s valuation opinion is substantially outweighed by unfair
prejudice because of the alleged “disconnect” between his intuition and the data. This argument
is based on the above arguments Lambright made and the Court has rejected, e.g., that the
opinion is not supported by the Article. As such, Lambright’s argument here is rejected for
substantially the same reasons why his other arguments were rejected.
This brings the Court to Lambright’s final argument of unfair prejudice due to an
“imbalance” of experts, i.e., if the Court allows the United States’ expert to testify but not
Lambright’s expert there would be an imbalance of expert testimony. The Court does not read
Rule 403 to require a balancing of experts. Instead, the Court balances the probative value of the
challenged evidence against the danger of unfair prejudice.
“To be unfairly prejudicial, the evidence must have ‘an undue tendency to suggest
decision on an improper basis, commonly, though not necessarily, an emotional one.’” United
States v. Caraway, 534 F.3d 1290, 1301 (10th Cir. 2008) (quoting Fed. R. Evid. 403 advisory
committee’s note). “Evidence is not unfairly prejudicial simply because it is damaging to an
opponent’s case.” Id. (quotation marks and citation omitted). Mr. Gerken’s testimony here has

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probative value and will not invoke passions or the like against Lambright. Lambright’s real
concern is that, depending on how the Court rules on the United States’ Daubert motions,2 the
jury may hear more expert evidence from the United States than from Lambright. But even
assuming this was true, more probative evidence is not unfair prejudice under Rule 403.
IV.

CONCLUSION

Based on the foregoing, it is ORDERED that the Motion to Limit Testimony of Gregory
T. Gerken (ECF No. 68) is DENIED.
DATED this 5th day of August, 2019.
BY THE COURT:

____________________________________
RAYMOND P. MOORE
United States District Judge

2

The Court has ruled on the United States’ Daubert motions and has place some limitations on Mr. Clayton’s expert
testimony.
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