Co-author Matthew Wheatley
Your well consultant just cemented 10,000 feet of tubing inside the casing of your eight million dollar well, … a neighboring operator frac’ed his Eagle Ford well into your Austin Chalk completion, thereby trespassing and contaminating your well. Righteousness and vengeance are yours. The jury will draw and quarter the offender.
Not So Fast
Texokan Operating, Inc. v. Hess Corp. is a reminder: To obtain the justice you so richly deserve you need a reliable expert to testify, and your expert must jump through procedural hoops before his testimony will deliver you to the judicial promised land. Texokan’s suit for well contamination required engineering expertise.
Under what circumstances are an expert’s opinions admissible?
What Doesn’t Work
Plaintiff’s expert determined the “loss of value” of wells based on his “forecast” of future production. He calculated this forecast using historical data from the wells, oil prices at the time, operating expenses, royalties, taxes, and a present value discount factor based on his “experience and education” evaluating “thousands” of oil wells. He admitted that his approach contained a huge amount of subjective judgment. He had probably used two or three different approaches but could not remember exactly how he reached his conclusions.
Among other deficiencies, there was no evidence that his approach had been subjected to testing or peer review, he could not identify any standards controlling his procedure, he applied SEC standards inconsistently when calculating damages, and he failed to show how his purely subjective method is generally accepted.
An expert’s testimony must be the product of reliable principles and methods. Factors are:
- Whether the theory or procedure has been subjected to testing;
- Whether it has been subjected to peer review and publication;
- The rate of error and the existence of standards controlling the theory or procedure; and
- Whether it has attained general acceptance.
The proponent must:
- Show that the expert has reliably applied the principles and methods to the facts of the case. The court is not required to accept an expert’s opinion if it is connected to data only by his or her “ipse dixit’, which means “I am an engineering god; trust me.” It is also Latin for “because I said it is so”.
- Provide evidence establishing that the expert’s opinions were the product of reliable principles and methods reliably applied to the case.
- Show that the expert sufficiently applied his method to the facts of the case. Here, he did not independently evaluate well expenses. He could not remember time frames or the meaning of certain dates in his calculations. Materials Texokan later cited textbooks to bolster his reasoning that were not in the record or referenced anywhere in the expert’s own reports or testimony.
How (Not) to Use An Expert – Nine Sure-Fire Ways to Scuttle Your Case:
- Don’t bother to understand the nature of the expertise you need. A reservoir engineer is just like a completions guy is just like a frac guy, right?
- Hire a hack. He’s the one who pretty much promises a result before he has seen the materials.
- Don’t waste time reading his writings on the subject. He would never contradict himself for the sake of a fee, would he?
- Hire your expert late in the proceeding. That saves time and money. You don’t need his help in determining what he might need from the other side to formulate his opinions. Last minute is preferred.
- Limit the budget. All you need is for him to throw something together just to scare the other side into settling.
- Give him the materials you think he needs, not what he asks for. The bad stuff can only hurt you, correct?
- Assume the other side is too stupid to figure out what you’re up to.
- For God’s sake don’t spend too much time in depo prep. You’ve both done this before, so what’s to gain?
- When all seems lost at trial, devise and present new and heretofore undisclosed theories, claiming you couldn’t have thought of them any sooner.
Some of you know that I recently had an incident with a crawfish pot. Today’s musical interlude is dedicated to myself.