Halliburton Can’t Get Property Diminution Experts Tossed by Jacob Batchelor, June 9, 2015, Law360
An Oklahoma federal judge on Monday ruled that Halliburton Energy Services Inc. can’t nix the testimony of two appraisers who said the company’s alleged groundwater contamination devalued affected properties by 80 percent, denying the related motion for summary judgment on property diminution claims.
U.S. District Judge Vicki Miles-LaGrange shot down the energy giant’s bid to block the testimonies of Jim Arman and Philip Isaacs, two appraisers who were hired by plaintiffs to assess the loss of property value from alleged perchlorate contamination.
In doing so, Judge Miles-LaGrange also rejected Halliburton’s bid for summary judgment on property diminution claims, which had been premised on a lack of evidence should the experts have been barred from testifying.
“The court has found that Mr. Artman’s and Mr. Isaacs’ expert opinions should not be excluded,” the judge said. “Plaintiffs do have evidence to meet their burden to show that their properties have been damaged and suffered a diminution in fair market value and … HESI is not entitled to summary judgment as to plaintiffs’ property damage claims.”
Halliburton had conceded the two men were qualified as appraisers, but said that their opinions on diminution were “unreliable, speculative and inadmissible,” according to the order.
However, the judge ruled that each appraiser had interviewed real estate appraisers, realtors, lenders and buyers in the market and conducted an analysis to determine the direct effect of groundwater contamination in the area on property values.
Halliburton will have the opportunity to thoroughly question the appraisers’ methods on cross-examination, the judge said.
Halliburton filed the motion to exclude and for summary judgment in April, alongside a broader motion to dismiss some property owners’ claims that argued the plaintiffs had failed to demonstrate a legally cognizable injury.
Halliburton said in that motion for summary judgment that the owners of “threatened” and many “currently impacted” properties near its plant in Duncan, Oklahoma, have not shown an actionable injury over perchlorate contamination. That motion has yet to be ruled on.
Property owners in the suit contend that contaminated groundwater from Halliburton’s plant migrated to their neighborhood and created a reasonable threat of contamination; they lodged a putative class action in October 2011 seeking an order forcing Halliburton to clean up the pollution and pay damages to class members for health injuries and property damage, in addition to medical monitoring claims. Judge Miles-LaGrange in March denied class certification to the group and upheld the decision this month.
For 30 years, the Duncan plant cleaned U.S. Department of Defense motor casings and recycled fuel rod racks from a Nebraska nuclear plant, and ammonium perchlorate disposed of at the site has contaminated the groundwater around the facility, according to court documents.
Halliburton filed several other motions to exclude experts or otherwise block testimony, as well as a related motion for summary judgment on bodily injury claims Monday.
Counsel for the Halliburton was not immediately available for comment on Monday.
Halliburton is represented by Carmen R. Toledo, J. Kevin Buster, R. Bruce Hurley and Elizabeth R. Taber of King & Spalding LLP and Gerald P. Green, Peter L. Wheeler and Robert L. Betts of Pierce Couch Hendrickson Baysinger & Green LLP.
The case is Mitchell McCormick et al. v. Halliburton Co. et al., case number 5:11-cv-01272, in the U.S. District Court for the Western District of Oklahoma. [Emphasis added]
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