This past Friday, the Texas Supreme Court issued its opinion in Gharda USA, Inc. and Gharda Chemicals, Ltd. v. Control Solutions, Inc., United Phosphorus, Inc., and Mark Boyd; a case that will provide defendants with additional ammunition to attack subrogation claims involving fire losses.

The Gharda case involves a warehouse fire with a complex causation theory involving testimony from several experts, including two fire investigators, two chemists, and an electrical engineer.  The fire investigators based their opinions on the opinions of the two chemists.

The plaintiffs' causation theory was that the fire started in an industrial oven and a chemical contamination resulted in a decomposition that created flammable gases. One of the chemists opined that these gases either spontaneously combusted or were ignited by static electricity.

The plaintiffs successfully tried the case before a Houston jury, which assessed total damages over $8 million.  However, the trial court disregarded the jury verdict and rendered a take-nothing judgment, finding that the plaintiffs' expert testimony was unreliable.  The court of appeals reversed the trial court, and the defendants appealed.

The Texas Supreme Court found that the opinions of the two chemists lacked a reliable foundation and could not be considered by the jury.  Because the fire investigators relied on the chemists to support their theories, the court found that their opinions were also unreliable.  This destroyed any expert testimony supporting the causation element of the plaintiffs' claims.

The plaintiffs' chemists performed limited testing and did not testify about certain information that the court considered to be critical to their theories, including:

  • the amount of contamination required to cause decomposition;
  • the amount of contamination in the chemicals;
  • the concentration of vapors that must have been present;
  • the temperature at which spontaneous combustion would occur; and
  • how a static discharge could develop in the industrial oven.

The court’s opinion strongly suggests that for a forensic chemist's opinion to be reliable, the chemist's opinion should be based on actual testing of samples taken from the fire scene or exemplar samples.  Furthermore, testimony that something is "possible," as opposed to "probable," is insufficient to support a verdict.

The Gharda case will no doubt provide a legal basis for latent scrutiny of expert testimony in fire cases and may result in the exclusion of otherwise admissible expert testimony.  This is just another example of an increasingly hostile judicial environment in which to prove subrogation cases.