Daubert Challenges in Energy and click on menu to view latest bankruptcy filings in Energy
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Recent Daubert Challenges in Energy Litigation: Key Takeaways
The Daubert standard continues to shape the admissibility of expert testimony in energy disputes, where valuation, forecasting, and damages models are central to high‑stakes litigation. Recent rulings illustrate how courts are scrutinizing methodologies in oil, gas, power, and renewables cases. Below is a digest of notable developments and lessons for practitioners.
1. Commodity Price Forecasting Under Fire
In several natural gas contract disputes, courts have excluded expert testimony where price forecasts relied on opaque, proprietary models. Judges emphasized that while forecasting inherently involves judgment, experts must demonstrate that their assumptions are testable, transparent, and consistent with industry benchmarks such as EIA or NYMEX forward curves.
Takeaway: Forecasts must be grounded in widely recognized data sources and accompanied by sensitivity analysis.
2. Reserve and Resource Estimation
Bankruptcy and M&A disputes involving upstream assets have seen challenges to reserve engineers’ testimony. Courts have admitted experts who followed Society of Petroleum Engineers (SPE) guidelines and disclosed decline‑curve methodologies, but excluded those who cherry‑picked wells or ignored contradictory production data.
Takeaway: Courts reward adherence to industry standards and penalize selective use of data.
3. Damages and Valuation Models
In pipeline tariff and royalty litigation, Daubert motions have targeted discount rates, growth assumptions, and comparable company selections. Some courts excluded experts who failed to justify their comparables or who presented a single DCF outcome without testing alternative scenarios. Others admitted testimony where experts provided robust scenario analysis and explained why certain inputs were chosen.
Takeaway: A defensible valuation requires transparency in assumptions and clear articulation of why certain metrics matter.
4. Regulatory and Policy Forecasting
Cases involving renewables and carbon markets have tested the limits of expert testimony on future regulatory impacts. Courts have been skeptical of experts who speculate on policy outcomes without citing published rulemakings or legislative pathways. Testimony tied to official regulatory dockets or enacted statutes has been admitted.
Takeaway: Policy forecasts must be anchored in documented regulatory processes, not conjecture.
5. Cross‑Disciplinary Boundaries
Courts are increasingly narrowing expert testimony to the witness’s core discipline. For example, economists offering engineering opinions on pipeline integrity, or engineers opining on financial market behavior, have seen portions of their testimony excluded.
Takeaway: Experts should stay within their domain and collaborate with co‑experts when multidisciplinary issues arise.
Broader Trends
- Transparency is paramount. Courts want to see data sources, assumptions, and reproducibility.
- Industry standards carry weight. SPE, SEC, and EIA frameworks provide credibility.
- Sensitivity analysis is expected. Single‑point estimates without stress testing are vulnerable.
- Scope discipline matters. Overreaching beyond one’s expertise risks partial exclusion.
Conclusion
The latest Daubert rulings in energy litigation underscore a consistent theme: methodology matters as much as conclusions. Experts who ground their work in recognized standards, disclose assumptions, and stress‑test their models are more likely to survive challenges. For litigators and valuation professionals, the message is clear—build testimony that is not only insightful but also defensible under rigorous judicial scrutiny.