The Fifth Circuit Court of Appeals’ opinion in Operaciones Tecnicas Marinas, SAS v. Diversified Marine Services, LLC illustrates the interplay between the requirements of Federal Rule of Civil Procedure 56—the summary judgment rule—and the requirements of Daubert case law that an expert adequately exclude alternative causes.

Diversified Marine Services, LLC (Diversified) was called upon to repair the engines of two vessels owned by Operaciones Tecnicas Marinas, SAS (OTM).  While the scope of the oral contract was disputed, the parties acknowledged that the initial repair estimate of $100,000-$120,000 ultimately cost OTM $345,000.  The boats were picked up and put to sea.  Four hours later the crews were forced to shut off the malfunctioning center engines.  The boats had to be towed to Columbia.

OTM filed its action alleging breach of contract, negligence and breach of warranty.  In the trial court, Diversified filed a motion for summary judgment under Rule 56, and in response OTM offered the testimony of its expert that the condition of the engines upon inspection in Cartegena was inconsistent with engines that had been recently rebuild or overhauled.  OTM concedes it had not attempted to prove the “precise cause” of the engines’ malfunction; instead it maintained that it presented sufficient evidence to create a dispute of a material fact.  The district court nevertheless granted Diversified’s motion for summary judgment.

On appeal, the Fifth Circuit reversed, holding that all OTM had to show at the summary judgment stage of the litigation is that there was a dispute of a material fact.   Because OTM’s expert saw no evidence of engine overhauls, a material fact was in dispute.  The Court thus vacated the judgment and remanded the case back to the district court for further proceedings.

Operaciones Technicas Marinas, SAS v.Diversified Marine Services, LLC, No. 15-30932 (5th Cir., Aug. 5, 2016, unpublished).