## Facts

- Wheeling Pittsburgh Steel Corp. stored steel coils and sheet steel at Beelman River Terminals’ riverfront warehouse in St. Louis under a warehouse/bailment arrangement.
- The warehouse sat between the city floodwall and the Mississippi River, with truck access through three city-controlled floodgates at approximately 37, 38, and 41 feet; the warehouse floor was about 42 feet and was bordered by a 4-foot concrete wall.
- The Mississippi River rose to flood stage in June 1993 and continued rising during the 1993 flood; the highest prior recorded level near the facility had been about 43 feet (1973), while the city floodwall protected to about 50 feet.
- Evidence indicated that, while the floodgates remained open, Beelman could access the warehouse and could have moved all of Wheeling’s steel to a safer location using its own trucking resources within about 24–36 hours.
- The stored steel was damaged during the 1993 flood.
- Wheeling sued for breach of the bailment contract, seeking damages for roughly 3,000 tons of damaged steel, including consequential damages such as lost profits.
- A jury returned a verdict for Beelman; Wheeling appealed, challenging jury instructions, evidentiary rulings (including expert testimony and excluded admissions), and the damages limitation.

## Issues

1. Whether the jury instructions incorrectly stated Missouri bailment law governing the burden of proof and the bailee’s ordinary-care standard.
2. Whether admitting portions of Beelman’s hydrologist expert testimony improperly exceeded the expert’s competence and conveyed legal conclusions on foreseeability and reasonable care.
3. Whether excluding evidence that Beelman personnel expressed concern about the steel improperly withheld relevant proof of Beelman’s knowledge of risk and timing.
4. Whether limiting damages to replacement cost and excluding lost-profits evidence conflicted with Missouri law permitting lost profits when proved with reasonable certainty.

## Decision

- The Eighth Circuit reversed the judgment for Beelman and remanded for a new trial.
- The court held the bailment jury instructions misstated Missouri law on the negligence presumption and the allocation of burdens once delivery in good condition and return in damaged condition (or loss) is shown.
- The court held the district court abused its discretion by admitting expert testimony that strayed from hydrology into assessments of legal foreseeability and the reasonableness of Beelman’s conduct.
- The court held it was error to exclude evidence reflecting Beelman’s concern about the steel because it bore on Beelman’s awareness of danger and whether it acted with ordinary care.
- The court held the district court improperly foreclosed lost-profits damages; Missouri law allows such consequential damages if proved with reasonable certainty and not speculative.

## Legal Principles

- Under Missouri bailment law, once the bailor shows delivery in good condition and loss or damage while in the bailee’s custody, a presumption of negligence arises and the bailee must come forward with an explanation showing the loss occurred without its negligence and despite ordinary care.
- A bailee’s duty is ordinary care under the circumstances; an “Act of God” defense does not excuse liability if reasonable precautions were not taken in light of available information.
- Expert testimony must stay within the expert’s specialized knowledge and may not effectively instruct the jury on legal standards or determine ultimate legal conclusions such as whether conduct satisfied the required standard of care.
- Evidence of a party’s awareness of developing risk and internal concern about the safety of bailed goods is generally relevant to negligence and should not be excluded absent a valid evidentiary basis.
- Missouri permits recovery of lost profits and other consequential damages for breach of a bailment contract when proved with reasonable certainty; damages are not categorically limited to replacement cost.

## Conclusion

The Eighth Circuit ordered a new trial because instructional errors on Missouri bailment burdens, improper admission and exclusion of key evidence affecting negligence and foreseeability, and an incorrect categorical limitation on damages likely affected the verdict.


Wheeling Pittsburgh Steel Corp. v. Beelman River Terminals, Inc., 254 F.3d 706 (8th Cir. 2001)