Technical Experts, Unreliable Methodologies, and Litigating a Commercial Contract Breach in Georgia

Your business likely includes various elements of highly industry-specific knowledge. That can present a challenge if you encounter a need to bring a breach of contract lawsuit, as one or both sides may require experts to help the court make sense of the technical issues. When that happens, it is essential to ensure that the expert evidence the other side seeks to present meets all the standards the federal rules demand. If they don’t, you may be entitled to throw out that evidence. An experienced Atlanta commercial contract lawyer can help with this and every other vital step when it comes to making your case.

A contract dispute regarding a gas plant in Illinois offers a stark reminder of this truth. The buyer was a St. Louis-based energy company that sought to build a gasification plant (a facility that takes coal and water and produces synthetic natural gas.) The company contracted with another energy company for the purchase of needed equipment, including gasifiers.

Both sides, however, encountered problems. The buyer fell behind on the payments it owed. On the other side, the supplier’s equipment began experiencing problems. Similar gasifiers it sent to a plant in China were having difficulty converting coal into gas.

By 2016, with the supplier having left the gasification market, the buyer sued for breach of contract and fraud. The supplier countersued for the $13.2 million in unpaid payments it was owed.

The buyer’s case encountered numerous critical problems. One of those was that the expert evidence the buyer desired to use got thrown out because the expert used an “unreliable methodology.”

Without its expert evidence, the buyer’s case was greatly weakened, leading the supplier to seek (and obtain) a summary judgment tossing all of the buyer’s claims. That left only the supplier’s counterclaims, which resulted in a favorable judgment and an award of $13.2 million in damages.

The Vital Importance of ‘Reliability’

This unmitigated success for the supplier (and failure for the buyer) is instructive on multiple levels. One of the biggest takeaways is the profound importance of having the right expert with the right methodology when expert evidence is a key part of your case. The federal rules are very clear that any admissible expert’s testimony must be the result of “reliable principles and methods… reliably applied… to the facts of the case.” Federal courts have held that, as part of this requirement, judges are not required “to admit opinion evidence that is connected to existing data only by the ipse dixit [unproven assertion] of the expert.”

In this circumstance, the proposed expert’s methodology consisted of reviewing the paperwork the supplier produced during discovery, then hypothesizing that, if the gasifiers in China were having difficulties, then the (still unused) ones at the Illinois plant site would have had the same problems… if the buyer had ever opened and used them.

The supplier was wise to recognize the flaws in this evidence and make the necessary motion to exclude the buyer’s expert. Any time you can get a key piece of the other side’s evidence tossed, it stands to substantially strengthen your position.

As the trial judge noted, the expert didn’t do any testing of the gasifiers, didn’t conduct any computer modeling or simulations of the equipment’s performance, and did not opine about the degree of difference or similarity between the coal in Illinois versus the coal in China.

This, according to the 11th Circuit Court of Appeals (whose rulings directly control federal cases in Georgia, Florida, and Alabama,) meant that the plaintiff had failed to link its expert’s methodology to the conclusions reached, meaning the plaintiff had not proven that its expert’s methodology was a reliable one.

Whether you need to present expert evidence as part of your contract breach case, or you need to seek the exclusion of unreliable expert evidence (or an unqualified expert) from the other side, you need the right legal representation advocating for your business. The diligent Atlanta contract litigation attorneys at Poole Huffman, LLC are here to help. We have the knowledge and the hands-on experience to help you meet your litigation needs and protect your business interests. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation today.