Union Pacific Railroad Company v. Progress Rail Services Corporation

Filing 263

MEMORANDUM AND ORDER granting in part and denying in part 222 Motion in Limine; granting in part and denying in part 227 Motion in Limine; granting in part and denying in part 243 Motion in Limine; granting in part and denying in part 245 Motion in Limine; denying 248 Motion for Hearing. Ordered by Chief Judge Laurie Smith Camp. (ADB)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA

UNION PACIFIC RAILROAD
COMPANY,
Plaintiff,
v.
PROGRESS RAIL SERVICES
CORPORATION,
Defendant.

)
)
)
)
)
)
)
)
)
)
)

CASE NO. 8:10CV38

MEMORANDUM
AND ORDER

This matter is before the Court on five motions: (1) the Motion in Limine submitted
by Plaintiff Union Pacific Railroad Company (“Union Pacific”) to exclude expert testimony
of Edward Cox and Norman Hooper (the “Cox/Hooper Motion”) (Filing No. 222); (2) the
Motion in Limine submitted by Defendant Progress Rail Services, Inc. (“Progress Rail”) to
exclude expert testimony of Hans Iwand (the “Iwand Motion”) (Filing No. 227); (3) Union
Pacific’s Motion in Limine to exclude discussion, testimony, argument or colloquy on a wide
variety of subjects in eight general categories (“Union Pacific’s Omnibus Motion”) (Filing
No. 243); (4) Progress Rail’s Motion in Limine to exclude certain categories of evidence
(“Progress Rail’s Omnibus Motion”) (Filing No. 245); and (5) Union Pacific’s Request for
Oral Argument and Evidentiary Hearing on the Iwand Motion (Filing No. 248).
FACTUAL HISTORY
On July 14, 2007, Union Pacific train CBMRV-12 (the “First Train”) derailed near
DeWitt, Iowa. The First Train was composed of 135 loaded coal cars, including railcar
CWEX 1538 (the “First Railcar”), owned by a third party. Union Pacific’s investigators
concluded that the First Train derailed due to the failure of an axle on the First Railcar.
Union Pacific alleges that Progress Rail mounted a roller bearing on the axle in April 2006
without properly inspecting the axle for corrosion pits, removing the corrosion pits, checking

the axle for cracks, and treating the axle in compliance with industry standards, thereby
allowing the axle to fracture.
On January 14, 2010, Union Pacific train 3CEBJK-14 (the “Second Train”) derailed
near Martin Bay, Nebraska. The Second Train was composed of 123 loaded cars,
including railcar JECX 1409 (the “Second Railcar”), owned by a third party. Union Pacific’s
investigators concluded that the Second Train derailed due to the failure of an axle on the
Second Railcar. Union Pacific alleges that Progress Rail mounted a roller bearing on the
axle approximately 11 months before the derailment, and failed to inspect the axle for
corrosion pits, remove the corrosion pits, and refurbish an axle on the Second Railcar in
accordance with industry standards, thereby allowing the axle to fracture.
Union Pacific contends that Progress Rail’s negligence was the direct and proximate
cause of the two derailments, causing Union Pacific damages in the sum of $947,251.36
for the DeWitt, Iowa, derailment and $4,191,563.65 for the Martin Bay, Nebraska,
derailment.
STANDARD OF REVIEW
Fed. R. Evid. 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.
2

Fed. R. Evid. 403 provides:
The court may exclude relevant evidence if its probative value is substantially
outweighed by a danger of one or more of the following: unfair prejudice,
confusing the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence.
In light of Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), and Kumho
Tire Co. v. Carmichael, 526 U.S. 137 (1999),1 the Court must screen proffered expert
testimony for relevance and reliability. Bland v. Verizon Wireless, (VAW) L.L.C., 538 F.3d
893, 896 (8th Cir. 2008).
DISCUSSION
I. The Cox/Hooper Motion
Union Pacific seeks to preclude Progress Rail from offering expert testimony from
Edward Cox and Norman Hooper, asserting that such opinions lack foundation; are
unreliable, irrelevant, based on speculation and conjecture, and unfairly prejudicial; and
that they will mislead and confuse the jury.
Dr. Cox conducted certain experiments with “exemplar” axles and formed opinions
regarding the cause of the Martin Bay and DeWitt axle failures. He contends that corrosion
pits can form in railroad axles after only a few weeks of operation; fatigue cracks can occur
without pits being present; pits can occur without cracks forming; and the Martin Bay and
DeWitt axle failures probably occurred as a result of old age, extensive use, and corrosion
fatigue. From the evidence and arguments presently before the Court it does not appear
that Dr. Cox has sufficient foundation to offer an opinion about what caused the Martin Bay

1
The Supreme Court held that Daubert applies to all expert testimony, not only scientific expert
testimony. Kumho Tire Co., 526 U.S. at 141.

3

and DeWitt axle failures. It appears that his research is relevant to rebut Union Pacific’s
allegations of negligence on the part of Progress Rail, in that Dr. Cox conducted certain
experiments suggesting that even if the axles in question had been properly inspected,
refurbished, and mounted by Progress Rail, the defects in the axles (detected after the
accidents) might not have existed, or might not have been detectible, or might not have led
a reasonable person to conclude they posed any danger, at the time of Progress Rail’s
alleged negligent inspection, refurbishing and mounting. Accordingly, Union Pacific’s
Motion in Limine will be granted with respect to Dr. Cox’s opinions regarding the cause of
the Martin Bay and DeWitt axle failures, but Dr. Cox’s testimony may be admissible to
rebut Union Pacific’s evidence of Progress Rail’s alleged negligence.
Hooper intends to offer certain testimony about Union Pacific’s damages,
suggesting that they should be offset for salvage values and “betterment.” Union Pacific
argues that Hooper’s opinions lack adequate foundation and are speculative. Union
Pacific also asks that Hooper be precluded from offering any opinions about the cause of
the derailments. The Court finds no reason to conclude that Progress Rail intends to offer
Hooper’s expert testimony on the question of causation, but, to the extent that Union
Pacific seeks to preclude Hooper, in limine from “presenting any testimony or evidence
related to the cause of axle failures in this case” (Pl.’s Br., Filing No. 223 at 12), the motion
will be granted. With respect to Hooper’s testimony on damages, the motion in limine will
be denied and Union Pacific can raise its objections at trial.
II. The Iwand Motion, and Union Pacific’s Request for Hearing
Union Pacific’s expert Hans Iwand inspected the broken axles visually, and
conducted tests on the axles, leading him to conclude that certain corrosion pits and

4

fatigue cracks on the axle surfaces were present at the time Progress Rail reconditioned
the axles, months before the accidents occurred. Iwand concludes that Progress Rail was
negligent in its efforts to recondition the axles and, because corrosion pits and fatigue
cracks can cause axles to break and there is no other explanation for the axles breaking,
Progress Rail’s negligence was the cause of the accidents.
The Court has reviewed and considered Iwand’s qualifications and methodology,
using the standards of review set out above. Iwand’s opinion that certain corrosion pits
and fatigue cracks in the axles were present at the time Progress Rail refurbished them,
and that Progress Rail failed to remove such corrosion pits and fatigue cracks, satisfies the
standards of Fed. R. Evid. 702 and Daubert. He is also qualified to testify that corrosion
pitting and fatigue cracks in the fillet area of an axle can cause fractures in the journal,
causing the axle to fail. His ultimate opinion that corrosion pits and/or fatigue cracks
present in the axles before their refurbishing by Progress Rail actually caused the axle
failures, or more likely than not caused the axle failures, does not appear to be supported
by methodology that satisfies the standards of Fed. R. Evid. 702 and Daubert, and Iwand
will be precluded, in limine, from offering that conclusion as to causation.
Union Pacific’s Request for Oral Argument and an Evidentiary Hearing (Filing No.
248) is untimely and will be denied.
III. Union Pacific’s Omnibus Motion
Union Pacific seeks to preclude any evidence or argument about (1) the effect of
overloading or uneven loading of unit coals cars on the fatigue failure of axles; (2) the
control exercised by Union Pacific or other Class I Railroads over the American Association
of Railroads (“AAR”) and/or the Wheels, Axles, Bearing, and Lubrication (“WABL”)
5

Committee; (3) any alleged connection between the forge dates of the axles at issue in this
case and the derailments; (4) any alleged disparate performance between Class F and
Class K axles in 286,000 pound coal service; (5) “betterment” or depreciation of Union
Pacific property damaged as a result of the accidents; (6) undisclosed expert opinions; (7)
undisclosed documents or testimony; and (8) the financial disparity of the parties, Union
Pacific’s size and ability to pay a judgment, and any suggestion that Union Pacific should
be sent a “message.”
Progress Rail argues that (1) overloading or uneven loading of rail cars can have
an impact on the performance of axles and may be relevant to the issue of causation; (2)
Union Pacific participated in the AAR and the W ABL Committee which set standards for
the refurbishing of rail axles, thereby participating in the development of standards which
it now contends are deficient; (3) the forge dates of the axles is admissible, because metal
fatigue due to age is relevant to causation; (4) disparate performance of Class F and Class
K axles in coal service is relevant, because Union Pacific knew that Class K axles
performed better under such service and Progress Rail was not responsible for the design
of the Class F axles; and (5) Progress Rail should be permitted to offer evidence
demonstrating that repairs made to Union Pacific’s track after the derailment put Union
Pacific in a better position than it was prior to the derailments, and accounting for
depreciation of property that Union Pacific claims was destroyed. Progress Rail does not
object to Union Pacific’s motion as it seeks to bar undisclosed expert opinions, witness
testimony, or documentary evidence. Nor does Progress Rail object to Union Pacific’s
motion as it seeks to prohibit reference to the parties’ relative size and ability to pay for
alleged damages.
6

The Court agrees with Progress Rail’s position that Union Pacific’s objections to
certain evidence and argument as described in parts (1) through (5) of its omnibus motion
can best be addressed at trial, rather than in an order in limine. Accordingly, parts (1)
through (5) of Union Pacific’s Omnibus Motion in limine will be denied, without prejudice
to Union Pacific raising its objections at the time of trial. Parts (6) through (8) of the motion
will be granted.
IV. Progress Rail’s Omnibus Motion
Progress Rail seeks to preclude Union Pacific, in limine, from offering any evidence
or argument related to (A) corrosion pitting located on the journal stub and not on the fillet
of an axle; (B) reports issued by the Federal Railway Administration (“FRA”) and
Transportation Safety Board (“TSB”) of Canada; (C) Progress Rail’s implementation of a
secondary inspection station and use of magnifying glasses during its inspection of railcar
axles; (D) the Trinity Rail report on the Martin Bay Derailment; (E) testimony of Dana
Medlin; (F) Union Pacific’s video of the Progress Rail wheel shop in Sidney, Nebraska; (G)
Union Pacific’s alleged damages that has not been produced in the case; (H) the past
business relationship between Progress Rail and Westar Energy; (I) studies allegedly
performed by Richard Hodges and Howard Bush; (J) the video of the DeWitt derailment2;
(K) Caterpillar Inc.’s acquisition and ownership of Progress Rail, and Caterpillar’s technical
facilities; (L) additional procedures Progress Rail theoretically could have implemented in
its axle inspection and reconditioning processes; (M) Progress Rail’s failure to remove
older 6-1/2 x 12 axles from its interchange service and presentations to the WABL

2

Progress Rail also seeks an adverse jury instruction for Union Pacific’s failure to disclose the video
of the Dewitt derailment.

7

Committee regarding the same; (N) statements concerning defense counsel’s trial strategy,
reference to jury verdicts in other parts of the United States, reference to counsel’s law
practice or clients, reference to the probably testimony of absent witnesses, expert
testimony outside the scope of written opinions produced, and exhibits or evidence not
produced or identified in discovery.
Union Pacific states it has no intention of offering any FRA reports, and part (B) of
Progress Rail’s motion as it relates to FRA reports should be denied as moot. Union
Pacific states it has no intention of offering the video tape of the DeWitt derailment, and
part (J) of Progress Rail’s motion also should be denied as moot. Union Pacific states it
has no intention of offering evidence of Progress Rail’s recent acquisition by Caterpillar,
though Union Pacific may wish to voir dire the jury regarding Caterpillar to avoid potential
bias.3 Union Pacific states it has no present intention of introducing evidence or argument
about Progress Rail’s trial strategy, other jury verdicts, defense counsel’s law practice, or
expert testimony outside the scope of disclosed reports. With respect to Progress Rail’s
other requests for orders in limine, Union Pacific resists the motion, suggesting that
Progress Rail’s objections are unfounded or premature.
In general, the Court agrees with Union Pacific that Progress Rail’s objections can
best be addressed at trial, rather than in an order in limine. It appears that many of
Progress Rail’s objections are, or may be, moot. With respect to part (C) of Progress Rail’s
motion, however, the Court is persuaded that evidence of Progress Rail’s establishment
of a secondary inspection station and implementation of changes in its inspection and

3

The Court will plan to address the matter of such potential bias within its own voir dire.

8

refurbishing procedures likely are not admissible as evidence of negligence, pursuant to
Fed. R. Evid. 407. While Union Pacific may succeed in demonstrating the admissibility of
such evidence under certain exceptions to Rule 407, an order in limine is proper to
preclude Union Pacific from eliciting such evidence until such grounds for an exception to
Rule 407 are established.
Accordingly,
IT IS ORDERED:
1. The Motion in Limine submitted by Plaintiff Union Pacific Railroad Company
(“Union Pacific”) to exclude expert testimony of Edward Cox and Norman Hooper
(Filing No. 222) is granted in part, as follows:
Edward Cox and Norman Hooper are precluded, in limine, from offering their
opinions as to the cause of the two axle failures; and
The Motion is otherwise denied;
2. The Motion in Limine submitted by Defendant Progress Rail Services, Inc.
(“Progress Rail”) to exclude expert testimony of Hans Iwand (Filing No. 227) is
granted in part, as follows:
Hans Iwand is precluded, in limine, from offering his opinion that corrosion
pits and/or fatigue cracks present in the axles before their refurbishing by
Progress Rail caused the axle failures; and
The Motion is otherwise denied;
3. Union Pacific’s Motion in Limine to exclude discussion, testimony, argument or
colloquy on subjects in eight general categories (Filing No. 243) is granted in part
as follows:
Progress Rail is precluded, in limine, from offering any evidence or argument
related to undisclosed expert opinions, documents or testimony; the financial
disparity of the parties; Union Pacific’s size and ability to pay a judgment; or
any suggestion that Union Pacific should be sent a “message;” and
The Motion is otherwise denied;
4. Progress Rail’s Motion in Limine to exclude certain categories of evidence (Filing
No. 245) is granted in part as follows:

9

Union Pacific is precluded, in limine, from offering any evidence or argument
related to reports issued by the Federal Railway Administration; Progress
Rail’s establishment of a secondary inspection station or implementation of
changes in its axle inspection and refurbishing procedures after the
accidents that are the subjection of this action; the video tape of the DeWitt
derailment; Progress Rail’s recent acquisition by Caterpillar Inc.; Progress
Rail’s trial strategy; other jury verdicts; defense counsel’s law practice or
client base; or expert testimony outside the scope of disclosed reports; and
The Motion is otherwise denied; and
5. Union Pacific’s Request for Oral Argument and Evidentiary Hearing on the Iwand
Motion (Filing No. 248) is denied.
DATED this 3rd day of May, 2013.
BY THE COURT:

s/Laurie Smith Camp
Chief United States District Judge

10