Northern Indiana Public Service Company, LLC v. Department Of State Revenue

Opinion

ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT: RANDAL J. KALTENMARK THEODORE E. ROKITA STEVEN A. BALDWIN ATTORNEY GENERAL OF INDIANA DARRICK J. HOOKER JEFFERSON S. GARN BARNES & THORNBURG LLP MICHELLE R. WYATT Indianapolis, IN SHELBY M. STOUDER DEPUTY ATTORNEYS GENERAL

Indianapolis, IN

IN THE

INDIANA TAX COURT

NORTHERN INDIANA PUBLIC SERVICE ) FILED COMPANY, LLC ) Aug 31 2026, 2:35 pm ) CLERK Petitioner, ) Indiana Supreme Court Court of Appeals

and Tax Court

)

v. ) Case No. 24T-TA-00017 )

INDIANA DEPARMENT OF ) STATE REVENUE, )

)

Respondent. )

ORDER ON NIPSCO’S MOTION TO EXCLUDE TESTIMONY OF PUTATIVE EXPERT JOHN A. WILLIAMS

FOR PUBLICATION

August 31, 2026

MCADAM, J.

This matter concerns Northern Indiana Public Service Company, LLC’s Motion to Exclude the two expert witness reports and related testimony of the Indiana Department of Revenue’s expert, John A. Williams—a professional engineer with academic and professional experience reaching topics in electrical engineering. Northern Indiana Public Service Company, LLC (“NIPSCO”) contends that Williams lacks qualifying

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experience to offer opinions on the topics covered in his reports, uses unscientific reasoning or methodology, and offers inadmissible legal conclusions. The Indiana Department of Revenue asserts that Williams has relevant expertise in engineering and electrical transmission systems, provides reliable and scientifically valid testimony, and testifies on ultimate issues. The Court finds that Williams is qualified to offer opinions concerning (1) the general nature of electricity and (2) the electric industry at large and NIPSCO’s company overview, business model, and role within the industry. As to the first, the Court further finds that his testimony rests on reliable scientific principles. The Court finds, however, that the Department has not shown Williams to be qualified to interpret or rely upon NIPSCO’s regulatory filings. And, in the testimony that remains, the Court identifies inadmissible legal conclusions.

FACTS AND PROCEDURAL HISTORY NIPSCO seeks a refund of the Indiana sales and use tax that it paid on purchases of tangible personal property that it used or consumed to transport electricity owned by third parties during 2015, 2016, and 2017. The Department denied NIPSCO’s refund request, but NIPSCO contends that it is entitled to the public transportation exemption provided in Indiana Code § 6-2.5-5-27. (Jt. Stip. at 2 ¶¶ 3–7.)

Following discovery, the Parties filed cross-motions for summary judgment, which are currently pending before the Court. NIPSCO seeks partial summary judgment on the question of whether electricity is eligible for the public transportation exemption as property or as a physical object. (See Pet’r’s Mot. Partial Summ. J. at 3.) The Department has filed its own motion for summary judgment and retained John A.

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Williams as an expert. (See Resp’t’s Mot. Summ. J. at 1–2.) Williams is the subject of the motion before the Court.

Williams produced two reports for the Department’s summary judgment motion.

In the first report, Williams covered topics on the nature of electricity, including the fundamental physics of electricity, electricity generation methods, transmission and propagation characteristics, and electrical grid and transmission line physics. (Pet’r’s Br. Supp. Mot. Exclude Test. Ex. A, at 3.)1 He also testified about NIPSCO’s business model and services, the energy regulatory framework, various regulatory reports filed by NIPSCO, distinctions between electricity and transportation, and industry terminology and standards. (Pet’r’s Br. Ex. A, at 3.) In his second report, Williams rebutted the claims and assertions made in the report of NIPSCO’s expert, John Loud. (Pet’r’s Br. Ex. B, at 2.) Williams clarified the distinctions between electrons as a medium and energy as a service, as well as energy propagation and electron drift. (Pet’r’s Br. Ex. B, at 3.) Williams also covered topics such as the real-time balance requirement, the flaws in Loud’s definitions and analogies, and industry terminology. (Pet’r’s Br. Ex. B, at 3.)2 Williams has an academic background in engineering, having obtained master’s and doctorate degrees in chemical and fuels engineering from the University of Utah. (Resp’t’s Br. Ex. 1, at 3.) His master’s thesis and Ph.D. dissertation included topics in electrical engineering. (See Pet’r’s Br. Ex. C, at 11:18–12:3, 15:13–25.) He has taught courses that include discussions of electricity and electron behavior and has served as

1 For ease of the reader, Petitioner’s Brief in Support of its Motion to Exclude Testimony of Putative Expert John A. Williams shall be hereinafter referred to as “Pet’r’s Br.” in citations. The same shall be true for Respondent’s Response to Petitioner’s Motion to Exclude Testimony of Putative Expert John A. Williams, which shall be hereinafter referred to as “Resp’t’s Br.” in citations. 2 For ease of the reader, Pet’r’s Br. Ex. A shall be hereinafter referred to as “Opening Report” in citations, and Pet’r’s Br. Ex. B shall be hereinafter referred to as “Rebuttal Report.”

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an Adjunct Professor at the University of Utah in the Department of Chemical Engineering. (Resp’t’s Br. Ex. 1, at 1; Resp’t’s Br. Ex. 2, ¶ 7.) In addition to his academic experience, Williams has obtained his Professional Engineering Licensure in twenty- seven states, including Indiana, served for thirty-one years as the general manager for a professional engineering firm that has “engineered, analyzed, and constructed industrial facilities containing electrical power transmission and distribution systems,” and worked as a consultant to analyze electrical transmission and distribution for large electric utility companies. (Resp’t’s Br. Ex. 2, ¶¶ 3, 5–6; see Resp’t’s Br. Ex. 1, at 2.)

NIPSCO has moved to exclude Williams’ two reports and testimony related to them.

DISCUSSION

NIPSCO moves to exclude Williams’s reports and any related testimony on three grounds under Rules 702 and 704 of the Indiana Rules of Evidence. Namely, NIPSCO argues that (1) Williams lacks the expertise to offer opinions on the electric industry, its regulation, and NIPSCO’s business; (2) his opinions do not rest on scientifically valid reasoning or methodology; and (3) his reports offer only inadmissible legal conclusions. (Pet’r’s Br. at 2.)

The Court resolves those grounds as follows. Applying Indiana Evidence Rule 702(a) to Williams’ proffered opinions, the Court finds that he is qualified to testify about the general nature of electricity. As to that category of testimony, the Court finds that the Department has shown it rests upon reliable scientific principles—the principles are of a foundational nature and generally accepted—and so satisfies Indiana Evidence Rule 702(b). The Court also finds that Williams is qualified to testify about several topics,

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such as how the grid and utilities are designed, operated, and coordinated, and generally what NIPSCO’s business is and how it fits in the industry, but that he is not qualified to speak to the interpretation of NIPSCO’s regulatory filings or apply that interpretation to questions in this case. Finally, addressing NIPSCO’s objection under Indiana Evidence Rule 704(b), the Court identifies impermissible legal conclusions among the opinions that survive the qualification analysis.

I. Williams’ Qualifications and Scientific Reliability under Rule 702 “Evidentiary rulings, including a decision to exclude expert testimony, lie solely within the trial court’s discretion.” Lytle v. Ford Motor Co., 814 N.E.2d 301, 308 (Ind. Ct. App. 2004). Affidavits presented on summary judgment must “set forth such facts as would be admissible in evidence.” Ind. Tr. R. 56(E) (eff. Jan 1, 2008). Therefore, such affidavits must comply with the requirements for expert testimony in Indiana Evidence Rule 702, which provides:

(a) A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue.

(b) Expert scientific testimony is admissible only if the court is satisfied that the expert testimony rests upon reliable scientific principles.

Ind. R. Evid. 702 (eff. Jan. 1, 2014).

The admission of expert testimony is committed to the Court’s discretion in its role as gatekeeper. See McDaniel v. Robertson, 83 N.E.3d 765, 773 (Ind. Ct. App. 2017). The proponent of the testimony—here, the Department—bears the burden of establishing that the witness is qualified. Witte v. Mundy ex rel. Mundy, 820 N.E.2d 128, 135 (Ind. 2005) (“The [proponents] had the burden of establishing the ability of

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their witness to give the proffered testimony.”).

To satisfy Rule 702(a) of the Indiana Rules of Evidence, the party seeking to introduce the testimony must meet two requirements. First, the subject matter must be “distinctly related to some scientific field, business, or profession beyond the knowledge of the average lay person”; and second, the witness must be “shown to have sufficient skill, knowledge or experience in that area so that the opinion will aid the trier of fact.” Bacher v. State, 686 N.E.2d 791, 800 (Ind. 1997). Qualification may rest on one or more of the distinctive bases named by the Rule—knowledge, skill, experience, training, or education. See Fueger v. Case Corp., 886 N.E.2d 102, 104 (Ind. Ct. App.) (citing Lytle, 814 N.E.2d at 308), aff’d on reh’g sub nom. Fueger v. CNH Am. LLC, 893 N.E.2d 330 (Ind. Ct. App. 2008).

Critically, qualification is subject-matter specific. “[A]n expert must have sufficient skill in the particular area of expert testimony before an opinion may be offered in that area.” Id. “An expert in one field of expertise cannot offer opinions in other fields absent a requisite showing of competency in that other area,” id., such that “before an expert may testify in an area, the proponent of the expert must show that the expert is competent in that area,” Armstrong v. Cerestar USA, Inc., 775 N.E.2d 360, 366 (Ind. Ct. App. 2002) (citing Hannan v. Pest Control Servs., Inc., 734 N.E.2d 674, 679 (Ind. Ct. App. 2000), trans. denied). Said differently, a witness’s competence in a general field does not automatically extend to every specialized subject that field may touch.

That said, once threshold competence in the relevant field is established, finer gaps in the witness’s command of a subfield ordinarily go to weight rather than admissibility. “A witness’ competency is determined by his knowledge of the subject

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matter generally, and his knowledge of the specific subject of inquiry goes to the weight to be accorded his opinion, not its admissibility.” McIntosh v. Cummins, 759 N.E.2d 1180, 1185 (Ind. Ct. App. 2001) (citing Snyder v. Cobb, 638 N.E.2d 442, 446 (Ind. Ct. App. 1994), trans. denied), trans. denied. These two concepts work in tandem. The proponent must first show competence in a particular field before the witness may opine in it. After that threshold has been crossed, the absence of subfield expertise is a matter of weight. See id. Where, however, the proponent has not carried the threshold showing of competence in the relevant field, the McIntosh weight principle does not apply, and exclusion is the appropriate course. See, e.g., Goodwin v. Toney, 203 N.E.3d 481, 486 (Ind. Ct. App. 2022), trans. denied.

Where an expert’s opinion rests on the application of scientific principles, Rule 702 imposes a second and independent requirement: the proponent must additionally establish—and the court must be satisfied—that those scientific principles are reliable. Ind. R. Evid. 702(b); Fueger, 886 N.E.2d at 105. “When faced with a proffer of expert scientific testimony, the court must make a preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and whether that reasoning or methodology properly can be applied to the facts in issue.” Hannan, 734 N.E.2d at 679. On summary judgment, however, the “reliability of the scientific principles need not be established, but the trial court must be provided with enough information to proceed with a reasonable amount of confidence that the principles used to form the opinion are reliable.” Doe v. Shults-Lewis Child & Fam. Servs., Inc., 718 N.E.2d 738, 750–51 (Ind. 1999). The burden of making that showing falls on the proponent. Spaulding v. Harris, 914 N.E.2d 820, 829 (Ind. Ct. App. 2009)

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(proponent bears the burden of establishing “the foundation and reliability of the scientific principles and tests upon which the expert’s testimony is based”).

The reliability inquiry is flexible rather than formulaic: “there is no specific ‘test’ or set of ‘prongs’ which must be considered in order to satisfy Indiana Evidence Rule 702(b).” McGrew v. State, 682 N.E.2d 1289, 1292 (Ind. 1997). Such factors may include: “whether the technique has been or can be empirically tested; [] whether the technique has been subjected to peer review and publication; . . . [or] general acceptance within the relevant scientific community.” Id. at 1292 n.5 (citing Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 593–595 (1993)).

A. The Reports and Subjects on which Williams Opines Williams’ two reports address several analytically distinct subjects. For purposes of the qualifications and reliability inquiries, the Court adopts the groupings used by the parties and organize them into two buckets as follows: (1) the general, foundational, nature of electricity; and, (2) the design, operation, coordination, and regulation of the electric-utility industry, including NIPSCO’s operations within the industry. These categories are interspersed throughout the report—accordingly, the Court will not go line-by-line to identify where category is discussed but rather speak about them generally.

1. Category 1 – The general nature of electricity For good portions of both reports, Williams describes what electricity is and how it behaves as a matter of physical science: that electrical energy propagates as an electromagnetic field; that electrons drift or oscillate in place rather than travel end-to- end from generator to customer; and that, as a matter of physics, generation and load

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must remain in instantaneous balance.

2. Category 2 – The electric-utility industry NIPSCO believes that Williams cannot speak about the industry that delivers electricity, nor NIPSCO’s participation in it, because he does not know how it is built, run, or regulated. NIPSCO assigns several different topics of Williams’ testimony to the second category, gathering various subjects on which NIPSCO contends Williams is unqualified to opine about: (1) “the electric industry”; (2) “NIPSCO’s operations”; (3) “the functioning of regional grid networks”; (4) “the design, operation, or coordination of electric transmission systems”; or, (5) “the complex regulatory frameworks governing electric utilities.” (Pet’r’s Br. at 9, 11.) The defining feature of all five for purposes of Rule 702(a) is that each demands specialized knowledge of how the electric-utility industry and its component parts are operated, coordinated, and regulated—the applied expertise of the electric-power industry—as opposed to the physical science of electricity that defines the first category. Whether the subject is a transmission system’s design, a regional grid’s coordination, NIPSCO’s operations or place within the industry—such as its company overview, being set up as a vertically integrated public utility offering bundled service, or whether a provider is subject to FERC jurisdiction3— the competence required is that of an electric-utility professional, not a scientist.

B. Analysis of the Reports and Williams’ Opinions The parties disagree about the extent of Williams’ qualifications to testify about each category. As to the first category—testimony about the general nature of electricity—the parties generally agree that Williams is qualified to testify on this subject

3 “FERC” stands for the Federal Energy Regulatory Commission.

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matter.4 The parties differ sharply regarding the second category—testimony about the electric-utility industry in general. NIPSCO contends that Williams is not qualified to testify to anything falling within the ambit of this topic because, according to NIPSCO, he has no expertise or experience in the regulation of electricity transmission or the electric industry. The Department, pointing to Williams’ education and experience, argues that he is competent in each category.

The Court finds Williams’ education and experience to be sufficient to permit his testimony concerning the first category. Furthermore, the Court finds the testimony in this first category to rest on reliable scientific principles. For the second category, however, the Court finds that Williams is qualified in part. Based on his experience, he can speak generally about the electric industry, NIPSCO’s company overview and business model as a bundled service provider, the functioning of regional grid networks, the design, operation, or coordination of electric transmission systems, and the electrical utility regulatory framework. But, the Court finds that the Department has not shown that Williams is qualified to opine on the meaning of specific regulatory instruments and reports, independently or as they pertain to NIPSCO.

4 NIPSCO appears in its initial brief to challenge that Williams has no expertise in electricity transmission. (Pet’r’s Br. at 9 (“Having no expertise or experience in electricity transmission, . . . Williams is not an expert capable of testifying on these topics and his opinions should be excluded.”).) However, NIPSCO clarified at oral argument that, given his background, Williams should be allowed to opine on whether “electricity is a physical object, [] it [can] be felt, tasted, . . . perceived by the senses,” as well as on “how electricity works.” (Aug. 13, 2026 Oral Tr. at 14.) It also indicated that it did not “take issue with [] Williams’ ability to opine on fundamental concepts of electricity.” (Aug. 13, 2026 Oral Tr. at 52.)

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1. Category 1 – Williams is qualified to describe the general nature of electricity

The relevant field is the general physical science of electricity—what electricity is and how, as a matter of physics, it is generated, propagates, and behaves. The first 702(a) element is plainly met: the fundamental physics of electromagnetic energy lies beyond the knowledge of the average layperson.

The second qualification element is also met. Williams holds advanced degrees in chemical and fuels engineering, with his master’s and Ph.D. degrees involving electric engineering coursework and at least his master’s thesis involving a high- pressure reaction system that had electrical components, controls, and monitoring. (Resp’t’s Br. Ex. 1, at 3; Pet’r’s Br. Ex. C, at 11–12.) Williams serves as an Adjunct Professor at the University of Utah’s Department of Electrical & Computer Engineering, where he has taught courses that discuss electricity and electron behavior. (Resp’t’s Br. Ex. 1, at 1; Resp’t’s Br. Ex. 2, ¶ 7.) He has also presented on the transmission of energy. (Pet’r’s Br. Ex. C, at 32:12–14.) As Williams explains, chemical engineering is “very focused on energy, energy conversion, and energy systems,” and chemical engineers are trained “to understand and be technically proficient in . . . electrical physics [and] electrical engineering.” (Pet’r’s Br. Ex. C, at 20:17–18, 20:24–21:1.)

In addition to his academic experience, Williams has obtained his Professional Engineering License in twenty-seven states, including Indiana. (See Resp’t’s Br. Ex. 1, at 2.) “[A]s a licensed professional engineer, [Williams has] demonstrated a competency in electrical engineering.” (Pet’r’s Br. Ex. C, at 16:21–24; see also Pet’r’s Br. Ex. C, at 26:24–27:16.) He has served for thirty-one years as the general manager for a professional engineering firm that has “engineered, analyzed, and constructed industrial

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facilities containing electrical power transmission and distribution systems.” (Resp’t’s Br. Ex. 2, ¶ 3.) In a consultant role, he has analyzed electrical transmission and distribution for large electric utility companies. (Resp’t’s Br. Ex. 2, ¶ 6.) He also testified to having completed several investigations concerning electrical failure analysis. (Pet’r’s Br. Ex. C, at 16:14–15.) A witness with this training and experience possesses “sufficient skill, knowledge or experience” to explain the general physical character of electricity so as to aid the trier of fact. Bacher, 686 N.E.2d at 800.

NIPSCO’s objection that Williams is a chemical and fuels engineer rather than an electrical engineer does not defeat qualification as to this category. NIPSCO has not offered any evidence that the general physics of electricity is the exclusive province of electrical engineering. There is adequate support for the conclusion that knowledge of electricity falls within the competence of a broadly trained engineer. Williams’ description of the licensing examination for engineers is similar to the bar examination for lawyers; in both professions, the licensed professional is expected to have and is tested on a range of subspecialties within the broader field. (See Pet’r’s Br. Ex. C, at 26:25 –27:7.) The distinction NIPSCO attempts to draw is one that our courts assign to weight rather than admissibility. See McIntosh, 759 N.E.2d at 1185. The Court therefore finds that the Department has carried its burden of qualifying Williams to offer testimony describing the general nature of electricity.

Because the Category 1 testimony rests on the application of scientific principles—the physics of electricity—it carries the additional reliability requirement of Rule 702(b). The Court has a reasonable amount of confidence that the Category 1 principles are reliable. The propositions Williams advances at this level of generality—

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that electricity is electromagnetic energy; that electrons drift or oscillate in place rather than travel end-to-end from generator to customer; and that generation and load must remain in instantaneous balance—appear foundational and generally accepted. See PSI Energy, Inc. v. Home Ins. Co., 801 N.E.2d 705, 739 (Ind. Ct. App. 2004) (“Widespread acceptance can be an important factor in ruling whether particular evidence is admissible under [Evidence Rule] 702.”), trans. denied. The reliability of these foundational principles—as distinct from their application to NIPSCO—is not in genuine dispute,5 and Williams grounds them in a scientific treatise, Kuphaldt’s Lessons in Electric Circuits, which this Court notes that NIPSCO’s own expert relies upon in part in his report attached to the motion for summary judgment, (see Pet’r’s Mot. Partial Summ. J. & Designation of Evid. Ex. C, at 9.) The Department has therefore carried its burden on reliability as to the Category 1 principles.

2. Category 2 – Williams is qualified to opine on the electric industry generally, but is not qualified to interpret specific regulatory filings

The subjects in this category lie beyond the knowledge of the average layperson, so the first Rule 702(a) element is met. The contested question is the second—whether Williams has sufficient skill, knowledge, or experience in this field to aid the trier of fact—and the burden of showing it is met is the Department’s. The threshold that showing must clear is not demanding. Qualification may rest on any of the disjunctive bases Rule 702(a) names—knowledge, skill, experience, training, or education. A witness’ competency is determined by his knowledge of the subject matter generally, and his knowledge of the specific subject of inquiry goes to the weight to be accorded

5 Importantly, when asked at oral argument about whether it was challenging “his testimony regarding the principles of electricity or the nature of electricity . . . under 702(b),” NIPSCO affirmed, indicating “not in [a] vacuum.” (Aug. 13, 2026 Oral Tr. at 6.)

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his opinion, not its admissibility. McIntosh, 759 N.E.2d at 1185.

Measured against that threshold, the Department’s showing of Williams’

experience suffices for the bulk of his Category 2 testimony. Williams’ engineering career spans more than thirty-five years. As described previously, he has served for thirty-one years as the general manager for a professional engineering firm that has “engineered, analyzed, and constructed industrial facilities containing electrical power transmission and distribution systems.” (Resp’t’s Br. Ex. 2, ¶ 3.) He has also served as a consultant for or analyzed the operations of several electric utility companies, including Florida Power and Light, Luminant, Pacific Gas and Electric, ComEd, and Exelon. (Resp’t’s Br. Ex. 2, ¶¶ 5, 6.) According to his testimony, many of the analyses he has done have been “work for or about utilities.” (Pet’r’s Br. Ex. C, at 23:9–10.) He has done work involving MISO.6 (Pet’r’s Br. Ex. C, at 24:24–25.) He is a licensed Professional Engineer and a Fellow of the American Institute of Chemical Engineers, and he has presented on how regulation bears on the energy industry. (Resp’t’s Br. Ex. 1, at 1, 3–4.) That experience reflects sufficient general knowledge of how electric transmission and distribution systems, the regional grids they form, and the utilities that operate them are designed, run, and coordinated to permit Williams to opine on those subjects and to aid the trier of fact. He is therefore qualified to testify concerning the design, operation, and coordination of electric transmission systems, the functioning of regional grid networks, the electrical utility regulatory framework, NIPSCO’s company overview, service territory, and general operations, and the electric industry generally. The deficiencies NIPSCO identifies do not defeat that qualification; they bear on the

6 “MISO” stands for the Midcontinent Independent System Operator.

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weight the Court may ultimately give the opinions. See McIntosh, 759 N.E.2d at 1185.

Nevertheless, one subject within this large category stands on a different footing.

Throughout his reports, Williams interprets the meaning of specific regulatory instruments, including NIPSCO’s FERC Form 1 Annual Report of Major Electric Utilities, Licensees and Others and Supplemental Form 3-Q Quarterly Financial Report, FERC Form 1 Electric Energy Account and Monthly Transmission System Peak Load data, FERC Electric Quarterly Report transaction summaries, FERC Form 566, the FERC Uniform System of Accounts, NERC reliability standards, the EIA-861 and EIA-923 forms, and IURC tariff schedules.7 To the extent that Williams offers not a description of how the utility industry writ large operates but an expert interpretation of NIPSCO’s regulatory filings and then relies upon that interpretation to offer conclusions about NIPSCO’s operations, etc., the Department has not shown that he is competent to do so.

Interpreting those instruments is not an exercise in engineering but in regulatory accounting: it requires specialized knowledge of the conventions by which utilities classify and report their activities under the regulatory scheme. The Department has identified no degree, training, or experience of Williams in the discipline of regulatory accounting, and the general industry and energy-engineering experience that qualifies him does not supply it. In the deposition portion provided to the Court, Williams was able to describe FERC, MISO, the IURC, and NERC in general terms. (See Pet’r’s Br. Ex. C, at 24:10–26:19.) Beyond that, however, the submissions are silent where it matters. The Department does not provide evidence describing what Williams did in the

7 “NERC” stands for the North American Electric Reliability Corporation. “IURC” stands for the Indiana Utility Regulatory Commission.

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“analyses” he testified had “involved” MISO, (Pet’r’s Br. Ex. C, at 24:24–25,) or in the utility consulting his affidavit recites, (see Resp’t’s Br. Ex. 2, ¶¶ 5, 6.) Though Williams has three professional presentations titled “How Do Regulations Affect the Energy Industry” (for years 2016, 2017, and 2019), the Court is not satisfied that these presentations involve the knowledge that is required. The Department has not described their content at all, nor indicated that these presentations involve the regulatory- accounting conventions that govern the specific filings at issue. By themselves, the titles suggest that these presentations were aimed at a generalized treatment of how regulation bears on the energy industry rather than any command of electric-utility regulatory practice or how to interpret particular compliance filings.

Here the shortfall is not a matter of weight but of threshold competence. In this respect, Williams’ situation resembles two cases in which Indiana courts held that general skill in a field did not qualify a witness to opine on a specialized subject within it.

In Cansler v. Mills, 765 N.E.2d 698 (Ind. Ct. App. 2002), trans. denied, the Court of Appeals addressed whether an auto mechanic was qualified to give expert testimony that a Corvette’s air bag should have deployed. The Court upheld the trial court’s finding that the mechanic was unqualified under Rule 702(a) to opine on air bag deployment: although he had “examined numerous wrecked automobiles with deployed air bags” and his automotive-repair experience gave him “some knowledge” of the subject, he had never consulted on a defective air bag, never trained on air bags, and never designed, tested, or certified air bag systems, and thus lacked “enough experience with the fundamentals of air bag deployment to qualify him as an expert in the area.” Id. at 702, 703.

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Hegerfeld v. Hegerfeld, 555 N.E.2d 853 (Ind. Ct. App. 1990), is to the same effect. There, the Court of Appeals reversed a marital-property division after the trial court permitted a certified public accountant to testify as an expert to the present value of pension benefits. Accounting skill alone was not enough; the proponent of the expert needed to demonstrate that he “possessed, in addition to his skill as an accountant, knowledge of the process of ascertaining the present value of pension benefits,” and had failed to do so.8 Id. at 856. Command of the broad field did not carry over since the witness must have demonstrated, but did not demonstrate, “that he knows . . . what the data represent[ed] and . . . why or how that data applie[d]” to the case. Id. The deficiency was fundamental.

So too here. The Department has shown that Williams is an experienced energy engineer and industry consultant, and that experience qualifies him to speak generally to how utilities and the grid operate. But interpreting NIPSCO’s regulatory documents is the analogue of opining on air-bag deployment or valuing a pension: a specialized subject that demands competence the general credential or experience does not supply. The Department has identified nothing in Williams’ background that supplies that competence, and the burden to do so was its own. See Armstrong, 775 N.E.2d at 366 (“[B]efore an expert may testify in an area, the proponent of the expert must show that the expert is competent in that area.”)

The Court thus finds that, although Williams is qualified to opine on the design, operation, and coordination of electric transmission systems, the functioning of regional grid networks, NIPSCO’s business model and utility operations, and the electric industry

8 While Hegerfeld was decided prior to Rule 702’s adoption, its analysis of expert qualifications is similar to that required under the rule. See generally 555 N.E.2d at 855.

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generally, the Department has not carried its burden of qualifying Williams to interpret or apply NIPSCO’s regulatory filings or the regulatory-accounting conventions that govern them.9 II. Inadmissibility of Legal Conclusions under Rule 704 NIPSCO also contends that Williams’ reports and related testimony should be excluded under Rule 704 of the Indiana Rules of Evidence, as his “reports offer only inadmissible legal conclusions dressed up as expert opinions.” (Pet’r’s Br. at 2). NIPSCO argues that Williams offers legal conclusions that are based on application of relevant law to the facts of the case and impermissibly address the public transportation exemption and NIPSCO’s compliance with its statutory and regulatory requirements. It specifically calls out “Williams’ conclusion that NIPSCO provides ‘energy’ as a retail service and does not transport electricity as contemplated by the exemption” as “foundational to both of his reports.” (Pet’r’s Br. at 6.) The Department argues that Williams “offers scientific background, context, and analysis of the ultimate issues in this matter” and contends that the Court is free to disregard any legal conclusions should they exist. (Resp’t’s Br. at 2).

Indiana Evidence Rule 704 “generally allows opinions to embrace ultimate issues to be decided by the trier of fact.” Tell City Boatworks, Inc. v. Ind. Dept. of State Revenue, 123 N.E.3d 728, 731 (Ind. Tax Ct. 2019). However, a witness may not testify to legal conclusions. Ind. Evid. R. 704(b). A legal conclusion occurs when an “expert states his

9 The Court reaches Rule 702(b) only as to Category 1. Rule 702(b) is triggered only by testimony resting on scientific principles. Williams’ Category 2 opinions are experience-based, or specialized-knowledge testimony, not scientific-principles testimony. See Malinski v. State, 794 N.E.2d 1071, 1085 (Ind. 2003) (quoting Jervis v. State, 679 N.E.2d 875, 881 (Ind. 1997)) (testimony resting on “specialized knowledge” rather than “scientific principles” is not subject to Rule 702(b)).

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opinion as to how the case should be decided.” City of Columbia City v. Ind. Util. Regul. Comm’n, 618 N.E.2d 21, 28 (Ind. Ct. App. 1993), reh’g denied. Testimony that draws “conclusions based on application of the relevant law to the facts of the case” are legal conclusions. Kelly v. Levandoski, 825 N.E.2d 850, 864 (Ind. Ct. App. 2005); see also, e.g., Schumm v. State, 868 N.E.2d 1202, 1204 (Ind. Ct. App. 2007) (indicating that evidence relating to whether the defendant complied with regulations requires the witness to draw a legal conclusion). Interpretations of the law also constitute inadmissible legal conclusions. See Indianapolis Podiatry, P.C. v. Efroymson, 720 N.E.2d 376, 383 (Ind. Ct. App. 1999), trans. denied; see also Cincinnati SMSA Ltd. P’ship v. Ind. Dept. of State Revenue, No. 49T10-0409-TA-45, 2009 WL 2783705, at *5 (Ind. Tax Ct. Aug. 21, 2009) (indicating testimony based upon the expert’s interpretation of the Mobile Telecommunications Sourcing Act was an inadmissible legal conclusion); Hacker v. Holland, 570 N.E.2d 951, 953 (Ind. Ct. App. 1991) (citing Walker v. Lawson, 526 N.E.2d 968, 970) (Ind. 1988)). “The purpose of the rule is that legal conclusions from a witness are not helpful to the trier of fact; the judge, not an expert witness, instructs on the law.” Kelly, 825 N.E.2d at 864 (quoting Vaughn v. Daniels Co. (West Virginia), 777 N.E.2d 1110, 1122–123 (Ind. Ct. App. 2002)).

In contrast, “Indiana Evidence Rule 704 permits opinions to embrace ultimate issues to be decided by the trier of fact.” Vaughn v. Daniels Co. (West Virginia), 841 N.E.2d 1133, 1137 (Ind. 2006). Statements of facts are admissible, as they are not legal conclusions. See, e.g., Cincinnati SMSA Ltd. P’ship, 2009 WL 2783705, at *5 (explaining several admissible statements of facts).

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A trend exists “to allow expert opinion testimony even on the ultimate issue of the case, so long as the testimony concerns matters which are not within the common knowledge and experience of ordinary persons and will aid the trier of fact.” Kelly, 825 N.E.2d at 864 (quoting Vaughn, 777 N.E.2d at 1122–123). To this effect, Indiana trial courts are generally granted broad discretion in admitting expert testimony. See ‘Norfolk S. Ry. Co. v. Est. of Wagers, 833 N.E.2d 93, 100–01 (Ind. Ct. App. 2005), trans. denied. This discretion is such that, in bench trials, the Court may admit expert testimony that includes legal conclusions, so long as the Court expressly ignores such conclusions in its decision-making. See, e.g., Major v. OEC-Diasonics, Inc., 743 N.E.2d 276, 285 (Ind. Ct. App. 2001); accord Kelly, 825 N.E.2d at 865 n.6 (indicating that “part of [the] justification for finding no error” in Major “was the case was tried to the bench, and the court expressly stated it would ignore the . . . legal conclusions if the court disagreed”).

The Court notes initially that its qualification rulings have narrowed this inquiry. The Court analyzes the remaining text and the several contested statements appearing therein. In doing so, the Court finds that Williams offers inadmissible legal conclusions at various points in what remains of his reports. Testimony on any interpretation of Indiana statutes, regulations, case law, or compliance thereof will be disregarded, as these amount to legal conclusions and are well within the bench’s expertise. For example, the conclusion in the rebuttal report that “[t]his interpretation aligns with the statute’s plain language requiring ‘public transportation’ services . . .” will be disregarded, as it provides the expert’s interpretation of Indiana Code § 6-2.5-5-27. (Rebuttal Report § 5.6.0.3.) The same could be said of other conclusions that by their own terms venture into interpretation of Indiana Code. (See, e.g., Rebuttal Report §§ 5.6.0.1 (discussing the statutory

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requirement that the “physical object be used ‘in providing public transportation for persons or property’”), 6.2.0.2 (“Indiana Code classifies NIPSCO using service-oriented terminology . . . rather than transportation language . . . .”).)

Any conclusions made by Williams that apply relevant law to the facts of the case, or that state how the case should be decided, will also be disregarded. For example, the conclusion by Williams that the relevant legal framework describes NIPSCO’s functions in terms of service provision rather than transportation activities will be disregarded, as such a conclusion requires both an interpretation of Indiana law and an application to the facts of the case. (See Opening Report § 4.4.0.3.) Additionally, testimony such as “[the Department]’s denial of the transportation exemption . . . should be upheld” or “the equipment for which the exemption is claimed is not eligible, and [the Department]’s denial should be upheld” will be disregarded, as this testimony seeks to opine on how the case should be decided. (Rebuttal Report §§ 2.7.0.1, 6.4.0.2.)

The Court finds, however, that Williams opines on ultimate issues as well. In contrast with the above testimony, testimony such as “electricity operates according to physical principles that are fundamentally distinct from transportation systems,” or the “physics of transmission line operation involve complex electromagnetic interactions that are fundamentally different from the mechanical systems used to transport goods or people,” will be retained. (Opening Report §§ 1.0.0.3, 3.3.3.2.) This testimony and others like it, which aims to describe the nature of electricity, does not seek to interpret the law, apply facts to law, or declare how a case should be decided. The same is true of statements like, “[i]n my professional opinion, when customers purchase electricity from NIPSCO, they are buying the service of having electrical energy available at their

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location when needed, rather than purchasing a transported commodity.” (Opening Report § 1.0.0.5.) This statement merely recounts Williams’ belief that customers buy a service rather than a commodity.

Additionally, there are several points where Williams discusses that NIPSCO does not engage in the physical transportation of goods and people or transportation services but rather provides electricity service through electromagnetic energy transmission and distribution.10 The Court finds that such statements are merely opinions about ultimate issues of fact, describing Williams’ opinions about NIPSCO’s services. Any seeming proximity to the statutory language is incidental and not determinative. Williams is allowed to opine on ultimate issues of fact—he’s just not allowed to testify about legal conclusions.

In sum, the Court decides that portions of Williams’ testimony amount to legal conclusions and will be disregarded when deciding the cross-motions for summary judgment. The Court need not decide now which specific items to exclude; rather, when the Court decides the summary judgment motions, it will simply ignore any and all legal conclusions. See Major, 743 N.E.2d at 285; Kelly, 825 N.E.2d at 865 n.6. While NIPSCO asserts that Williams’ reports are replete with inadmissible legal conclusions

10 See, e.g., Opening Report § 1.0.0.2 (“[I]t is my professional engineering opinion that NIPSCO does not engage in transportation services, but rather provides electricity service through electromagnetic energy transmission and distribution.”), § 1.0.0.7 (“It is my professional engineering opinion that NIPSCO provides electricity service through electromagnetic energy transmission and distribution which operates according to fundamentally different principles than the physical transportation of goods or people.”); § 5.0.0.1 (“Based on my professional engineering analysis, NIPSCO’s operations involve electromagnetic energy transmission and distribution services rather than the physical transportation of goods or people.”); § 5.6.0.2 (“It is my professional engineering opinion that NIPSCO provides electricity service through electromagnetic energy transmission and distribution which operates according to fundamentally different principles than the physical transportation of goods or people.”); § 5.6.0.3 (“[I]t is my professional engineering opinion that the equipment purchases for which NIPSCO seeks tax exemption are integral to providing electricity service through electromagnetic energy transmission and distribution operations. These technical characteristics distinguish NIPSCO’s operations from the physical transportation of goods or people.”).

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such that the entirety of his reports should be stricken, the Court finds that the remainder of Williams’ reports and testimony continues to offer assistance to the trier of fact as background and context, notwithstanding his legal conclusions. To the extent that Williams’ reports and related testimony are in the form of legal conclusions, though, the Court will disregard them.

CONCLUSION

The Court finds that expert witness Williams is qualified under Rule 702(a) to offer testimony describing the general nature of electricity (Category 1), which the Court finds is also based on reliable scientific principles. And, while he can testify generally about the electric industry, NIPSCO’s company overview, the functioning of regional grid networks, the design, operation, or coordination of electric transmission systems, and the electrical utility regulatory framework (Category 2), he has not been shown to be qualified to interpret the meaning of, or apply knowledge gained from, specific regulatory instruments. Of the remaining text, the Court finds that Williams offers several legal conclusions that Rule 704(b) disallows.

In light of this, NIPSCO’s Motion to Exclude Testimony of Putative Expert John A.

Williams is GRANTED IN PART and DENIED IN PART. The portions of Williams reports where he interprets the meaning of, or applies knowledge gained from, specific regulatory instruments—including but not limited to NIPSCO’s FERC Form 1 Annual Report of Major Electric Utilities, Licensees and Others and Supplemental Form 3-Q Quarterly Financial Report, FERC Form 1 Electric Energy Account and Monthly Transmission System Peak Load data, FERC Electric Quarterly Report transaction summaries, FERC Form 566, the FERC Uniform System of Accounts, NERC reliability

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standards, the EIA-861 and EIA-923 forms, and IURC tariff schedules—are STRICKEN. The legal conclusions in Williams’ reports are also STRICKEN.

SO ORDERED this 31st day of August 2026.

Justin L. McAdam

Judge, Indiana Tax Court

Distribution: Randal J. Kaltenmark, Steven A. Baldwin, Darrick J. Hooker, Jefferson S. Garn, Michelle R. Wyatt, Shelby M. Stouder