Rural Water District No. 5, Wagoner County, Oklahoma v. Coweta, City of
4:08-cv-00252
N.D. Okla.Oct 8, 2013Background
- Plaintiff Rural Water District No. 5 of Wagoner County, Oklahoma (Wagoner-5) designated CPA Ronald Creason as its damages expert to calculate net revenue lost from the City of Coweta providing water service to customers inside Wagoner-5's territory.
- Creason computed, for each disputed customer, the net revenues Wagoner-5 would have received, relying on usage data from the City, rate and cost figures from Wagoner-5 (some provided via Wagoner-5's counsel), and his accounting methodology.
- Defendants (City of Coweta and Coweta Public Works Authority) moved under Daubert to exclude Creason’s testimony, challenging his qualifications and the relevance and reliability of his opinions.
- The City emphasized Creason’s lack of experience operating a rural water district and argued he relied on data provided by Wagoner-5/counsel rather than independent historical measures.
- Wagoner-5 and Creason relied on standard accounting practices and Rule 703 principles permitting experts to base opinions on data supplied by others; Creason also used usage information provided by the City.
- The Court considered Rule 702 and Daubert/Kumho gatekeeping principles and evaluated qualifications, methodology, and whether any analytical gap warranted exclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Expert qualifications | Creason is a CPA qualified to perform damages accounting | Creason lacks experience operating a rural water district; thus not helpful to trier of fact | Court: CPA qualifications sufficient; lack of industry-specific operational experience does not bar testimony |
| Reliability of methodology and data | Creason used usage data from City and cost/rate inputs from Wagoner-5; accountants reasonably rely on such data | Reliance on data supplied by Wagoner-5/counsel and absence of historical rate of return makes his opinions unreliable and speculative | Court: Reliance on supplied data permitted under Rule 703; no unacceptable analytical gap shown; criticisms go to weight, not admissibility |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (gatekeeping role for admissibility of expert testimony)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (Daubert gatekeeping applies to technical and other specialized testimony)
- Bitler v. A.O. Smith Corp., 400 F.3d 1227 (10th Cir.) (focus on methodology and reliable basis in expert's discipline)
- Norris v. Baxter Healthcare Corp., 397 F.3d 878 (10th Cir.) (analytical gap can justify exclusion of expert testimony)