Traditional steady state experiments to measure constitutive relations governing two-phase (organic-aqueous) flow in the subsurface often extend over periods of weeks or months. Alternatively, one-step or multistep outflow (MSO) experiments can be combined with application of a multiphase flow simulator and an optimization algorithm to achieve a more rapid technique for parameter estimation. In this work, MSO experiments were conducted to produce a data set for the estimation of two-phase constitutive parameters using this inverse modeling approach. Examination of experimental results reveals significant discrepancies between observed and simulated outflow data, with simulated curves tending to approach equilibrium at a faster rate than the experimental observations. Similar behavior has been documented by other investigators. Application of alternative equilibrium constitutive models in the multiphase flow optimization simulator failed to improve model fits to observed data. However, when model governing equations were modified to incorporate a dynamic capillary pressure term, there was significant improvement in the agreement between measured and simulated cumulative water outflow and outflow rates. Comparisons of simulated and measured data further suggest that the dynamic capillary pressure constitutive coefficient depends on saturation. Attribution of the observed experimental deviations to dynamic effects in capillarity is also supported by the consistency of the fit equilibrium retention function with an independently measured static retention relation.