The magistrate judge denied the insured’s motion to exclude the insurer’s bad faith expert. Southwest Airlines Co. v. Liberty Ins. Underwriters Inc., 2025 U.S. Dist. LEXIS 235109 (N.D. Texas Dec. 2, 2025).

Southwest suffered a computer system failure that disrupted its flight schedule for three days in July 2016 and caused flight cancelations or delays for approximately 475,000 customers. To win back customers, Southwest issued travel vouchers, discount codes and loyalty point. It also increased its advertising to an ongoing fare sale that it extended due to the disruption.

Southwest tendered the losses to its excess carrier, Liberty. Coverage was denied because Liberty disputed that certain Southwest expenditures were losses covered by the policy’ or contended that the expenditures fell within one of the exceptions to coverage.

Liberty designated Steven Plitt as an expert witness on coverae issues. Plitt created a 115-page repot setting out his observations and opinions. Liberty contended that he would testify on insurance industry customs and standards under Texas law.

Southwest moved to exclude certain opinions expressed by :Pitt because there were improper legal conclusions and misstated the law.

In his report, Plitt disclaimed any intent to tender legal opinions, and noted that his opinions concerned compliance with industry standards. He opined, among other things, that Liberty reasonably processed Southwest’s claim and came to the reasonable conclusion that its policy did not provide coverage for costs at issue.

Southwest argued that Plitt’s opinions that Liberty’s processing of the claim was consistent with the policy’s implied covenant of good faith and fair dealing had a reasonable basis for its no-coverage determination was purely a legal opinion. The court disagreed.

Courts routinely allowed testimony from experts within the insurance industry to testify about the ordinary practices and usages of the industry, while specifically barring testimony that stated a legal conclusion. Plitt’s opinions were not pure legal conclusions that instructed the jury on the law, but instead were mixed questions of fact and law and incorporated his experience and understanding of insurance practices and standards.

Southwest’s motion was denied subject to its ability to contest true legal conclusions offered under the guise of expert testimony at trial.