Thursday, June 10, 2010

Lyondell Chemical Co v. Albemarle Corp

Jun 8: In the U.S. Court of Appeals, Fifth Circuit, Case No. 08-40060. Both sides to this appeal concede liability for environmental cleanup at a hazardous waste site near the Houston Ship Channel but fault the district court's equitable allocation of the associated costs. More specifically, the appeal concerns the reliability of expert witness testimony under Daubert [Daubert v. Merrell Dow Pharms., 509 U.S. 579 (1993)], the admission of alleged settlement communications into evidence, the district court's choice of methodologies in allocating costs, and some of the court's factual findings. The Appeals Court said, "We find error in the admission of settlement communications only and remand to the district court for further proceedings."
    A key point in the litigation involves the "Smythe Reports." The Appeals Court indicates that Occidental objected to the district court's admission of the Smythe Reports, which the district court used to develop the "intermediate" estimate of Occidental's waste. Occidental asserted that the reports are "settlement communications" inadmissible under Federal Rule of Evidence 408. That rule excludes from admission certain evidence "offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount," including "conduct or statements made in compromise negotiations regarding the claim.
    In the conclusion, the Appeals Court said, "In sum, because admission of the Smythe Reports was harmful error, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion."
    Access the complete opinion (click here).