Sparta Consulting, Inc. v. Copart, Inc.

Filing 182

ORDER signed by District Judge Kimberly J. Mueller on 1/9/2017 DENYING 171 , 178 Ex Parte Applications without prejudice to renewal in limine or in another appropriate motion. (Michel, G.)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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COPART, INC.,

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No. 2:14-cv-00046-KJM-CKD
Plaintiff,

v.

ORDER

SPARTA CONSULTING, INC., KPIT
INFOSYSTEMS, INC., and KPIT
TECHNOLOGIES, LTD.,
Defendants.

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Two ex parte applications have been filed with the court.

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The first is the ex parte application of defendants Sparta Consulting, Inc., KPIT

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Infosystems, Inc., and KPIT Technologies, Ltd. (collectively, “defendants”) to exclude three

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expert witnesses offered by plaintiff Copart, Inc., for violation of the court’s amended scheduling

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order and the Federal Rules of Civil Procedure. Ex Parte Application, ECF No. 171. Plaintiff

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opposes the ex parte application. Opp’n, ECF No. 173. Defendants have replied. Reply, ECF

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No. 174. For the reasons explained below, the court resolves the matter without hearing and

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DENIES the application.

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The second is plaintiff’s ex parte application to strike portions of defendants’

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rebuttal expert reports. Pl.’s Ex Parte Application, ECF No. 178. Defendants oppose the ex
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parte application. Defs.’ Opp’n, ECF No 179. For the reasons explained below, the court

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DENIES this application as well.

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I.

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DEFENDANTS’ EX PARTE APPLICATION
A.

Background
The court briefly addresses the relevant portions of its prior order before turning to

defendants’ arguments. See Am. Scheduling Order, ECF No. 140.
On August 17, 2016, in light of plaintiff’s third amended complaint that named

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two new defendants and included seven new claims, the court issued the operative amended

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scheduling order. See Am. Scheduling Order 1–2. The amended scheduling order included

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updated deadlines for each phase of the case: discovery was to be completed by October 28,

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2016; expert discovery completed by January 13, 2017; dispositive motions heard by February

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10, 2017; and trial set for August 14, 2017. Id. at 3–10. Most relevant here, in a section entitled

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“Disclosure of Expert Witnesses,” the order provided deadlines for initial expert disclosures on

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November 25, 2016, and supplemental expert disclosures on December 16, 2016. Id. at 3–4. The

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parties do not dispute these dates, but disagree as to whether each party must disclose expert

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reports for all experts. See Ex Parte Application 2–4; Opp’n 4–5.

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In the court’s amended scheduling order, the court provided, “[a]ll counsel are to

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designate in writing, file with the court, and serve upon all other parties the name, address, and

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area of expertise of each expert that they propose to tender at trial not later than November 25,

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2016. The designation shall be accompanied by a written report prepared and signed by the

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witness. The report shall comply with Fed. R. Civ. P. 26(a)(2)(B).” Am. Scheduling Order 3–4.

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The court’s order explains that a party’s failure to properly disclose “in all likelihood will

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preclude that party from calling the expert witness at the time of trial.” Id. at 4. The court’s order

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goes on to define “expert”:

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For purposes of this scheduling order, an “expert” is any person
who may be used at trial to present evidence under Rules 702, 703
and 705 of the Federal Rules of Evidence, which include both
“percipient experts” (persons who, because of their expertise, have
rendered expert opinions in the normal course of their work duties
or observations pertinent to the issues in the case) and “retained
experts” (persons specifically designated by a party to be a
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testifying expert for the purposes of litigation). A party shall
identify whether a disclosed expert is percipient, retained, or both.
It will be assumed that a party designating a retained expert has
acquired the express permission of the witness to be so listed.
Parties designating percipient experts must state in the designation
who is responsible for arranging the deposition of such persons.

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Id.
B.

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Plaintiff’s Expert Disclosures
Plaintiff timely filed expert disclosures on November 23, 2016, two days before

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the court’s deadline. Pl.’s Designation/Disclosure, ECF No. 169. The filing listed five expert

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witnesses: Mohan Rao, LaBaron Hartfield, Phatela Mosothoane, Justin Chapman, and Rama

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Prasad. Id. at 2. The first two—Rao and Hartfield—are consultants retained by plaintiff to testify

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in this case. Id. ¶¶ 14–18. Plaintiff served expert reports for both witnesses on defendants on

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May 31, 2016, and served a supplemental report for Hartfield on November 23, 2016. Id. ¶¶ 15,

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17–18.
The last three—Mosothoane, Chapman, and Prasad—are employees of plaintiff,

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and they serve as the Vice President of Enterprise Systems, Vice President of Finance, and Chief

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Technology Officer, respectively. Id. ¶¶ 1–13. Prior to the November 25 deadline, plaintiff did

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not serve expert reports for these three witnesses on defendants but instead provided a brief

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summary of each witness’s background with the company, the subjects about which each witness

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would testify, and the basis for each witness’s testimony. Id. Plaintiff said it disclosed

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Mosothoane, Chapman, and Prasad under Rule 26(a)(2)(C). Id. ¶¶ 1, 6, 10.

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C.

Discussion
Defendants argue plaintiff’s having not provided expert reports for the three

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employee-experts violates the court’s scheduling order as well as Rules 26(a)(2)(B) and

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26(a)(2)(C). Ex Parte Application 2–4. Defendants ask the court to exclude the three employee-

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experts from providing expert opinions on a motion, at a hearing, or at trial under Rule 37. Id. at

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5. For the reasons discussed below, the court finds plaintiff complied with Rules 26(a)(2)(B) and

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26(a)(2)(C) and that the court’s scheduling order did not require anything more. As a result,

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exclusion under Rule 37 is not warranted.
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Federal Rule of Civil Procedure 26(a)(2) (“Disclosure of Expert Testimony”)

Rule 26

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requires a party to identify any witness it may use at trial to present evidence under Federal Rules

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of Evidence 702, 703, or 705. Fed. R. Civ. P. 26(a)(2)(A).

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In addition to disclosing the identity of expert witnesses, a party must disclose

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additional information about each expert witness’s potential testimony. See Fed. R. Civ. P.

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26(a)(2)(B)–(C). The Rule was amended in 2010 to distinguish between “Witnesses Who Must

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Provide a Written Report,” Fed. R. Civ. P. 26(a)(2)(B), and “Witnesses Who Do Not Provide a

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Written Report,” Fed. R. Civ. P. 26(a)(2)(C). See Fed. R. Civ. P. 26, advisory notes (2010).

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Witnesses under Rule 26(a)(2)(B) must prepare and sign a written report that satisfies several

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requirements, such as the “facts or data considered by the witness.” See Fed. R. Civ. P.

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26(a)(2)(B)(i)–(vi). In contrast, witnesses under Rule 26(a)(2)(C) must disclose only “the subject

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matter on which the witness is expected to present evidence,” Fed. R. Civ. P. 26(a)(2)(C)(i), and

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“a summary of the facts and opinions to which the witness is expected to testify,” Fed. R. Civ. P.

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26(a)(2)(C)(ii). A written report is required “if the witness is one retained or specially employed

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to provide expert testimony in the case or one whose duties as the party's employee regularly

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involve giving expert testimony.” Fed. R. Civ. P. 26(a)(2)(B).

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The Advisory Committee notes for the 2010 amendment discuss the rationale for
the new category of expert witnesses:
Rule 26(a)(2)(C) is added to mandate summary disclosures of the
opinions to be offered by expert witnesses who are not required to
provide reports under Rule 26(a)(2)(B) and of the facts supporting
those opinions. This disclosure is considerably less extensive than
the report required by Rule 26(a)(2)(B). Courts must take care
against requiring undue detail, keeping in mind that these witnesses
have not been specially retained and may not be as responsive to
counsel as those who have. This amendment resolves a tension that
has sometimes prompted courts to require reports under Rule
26(a)(2)(B) even from witnesses exempted from the report
requirement. An (a)(2)(B) report is required only from an expert
described in (a)(2)(B).
Fed. R. Civ. P. 26, advisory notes (2010).

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Here, the court finds plaintiff’s three employee-experts fall under Rule

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26(a)(2)(C), as plaintiff indicated, and not Rule 26(a)(2)(B). The duties of the three employee-

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experts do not “regularly involve giving expert testimony.” See Opp’n 2. None of the employee-

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experts have ever given expert testimony or prepared an expert report before. Id. Thus, the

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employee-experts are not witnesses who must provide a written report under Rule 26(a)(2)(B).

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Instead, the employee-experts are properly characterized as witnesses subject to the less

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demanding requirements of Rule 26(a)(2)(C).

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The court further finds plaintiff has satisfied the requirements of Rule 26(a)(2)(C),
which requires disclosure of “the subject matter on which the witness is expected to present

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evidence” and “a summary of the facts and opinions to which the witness is expected to testify.”

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Fed. R. Civ. P. 26(a)(2)(C)(i)–(ii). Here, plaintiff has disclosed the identity of the three

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employee-experts, a brief summary of each witness’s background with the company, the subjects

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about which each witness would testify, and the basis for each witness’s testimony. Pl.’s

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Designation/Disclosure ¶¶ 1–13. This is sufficient under Rule 26(a)(2)(C).

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In sum, the court finds plaintiff adequately satisfied Rule 26 when it filed a timely

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disclosure for its three employee-experts under Rule 26(a)(2)(C). The court next considers

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whether the amended scheduling order required anything more.

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2.

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The court’s amended scheduling order does not modify the requirements of Rule

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26(a)(2). See Am. Scheduling Order 3–4. Defendants are correct that the court’s order defines

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“expert” broadly to include any expert subject to Rule 26. See Am. Scheduling Order 4 (“For

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purposes of this scheduling order, an “expert” is any person who may be used at trial to present

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evidence under Rules 702, 703 and 705 of the Federal Rules of Evidence.”). However, the

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court’s order specifically ties the written report requirement to Rule 26(a)(2)(B). See id. at 3–4

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(“The [expert witness] designation shall be accompanied by a written report prepared and signed

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by the witness. The report shall comply with Fed. R. Civ. P. 26(a)(2)(B).”). Because plaintiff’s

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three employee-experts are not subject to that rule, the scheduling order’s written report

Compliance with Amended Scheduling Order

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requirement does not apply to them. Thus, plaintiff’s compliance with Rule 26(a)(2)(C) is

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sufficient under the court’s order as well.

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In sum, the court finds plaintiff’s three employee-experts are subject to the

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requirements of Rule 26(a)(2)(C), that plaintiff has satisfied those requirements, and that the

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court’s amended scheduling order does not require anything more in this instance. Thus,

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exclusion of the employee-experts is not appropriate under Rule 37. The court DENIES

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defendants’ ex parte application.

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II.

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PLAINTIFF’S EX PARTE APPLICATION
Plaintiff also has filed an ex parte application to strike portions of defendants’

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rebuttal expert reports. See generally Pl.’s Ex Parte Application. Plaintiff argues defendants’

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expert reports by Michael Shamos (“Shamos Report”) and Jim Mottern (“Mottern Report”),

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offered as rebuttal to the reports of plaintiff’s expert, LaBaron Hartfield (“Hartfield Initial

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Report,” “Hartfield Supplemental Report”), include material beyond the scope of proper rebuttal.

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Id. at 2. The application, filed on December 30, 2016, sought the court’s ruling in time for

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plaintiff’s deposition of defendants’ experts on January 10 and 12, 2017. Id.

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Here, the court is satisfied, for the purposes of this application, that the scope of

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plaintiff’s expert reports are sufficiently broad to encompass the contents of both of defendants’

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rebuttal expert reports. See, e.g., Hartfield Supplemental Report, Section XII (“Sparta and

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KPIT’s Theft of Copart’s Intellectual Property”). Thus, the Shamos and Mottern Reports are “on

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the same subject matter” as plaintiff’s expert reports, and plaintiff has not shown a violation of

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the court’s scheduling order or the Federal Rules of Civil Procedure. Additionally, plaintiff has

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not shown what prejudice will result from denying plaintiff’s application, as plaintiff will have

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the opportunity to depose each of defendants’ two rebuttal experts. The court DENIES plaintiff’s

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ex parte application.

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III.

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CONCLUSION
The court DENIES defendants’ ex parte application and DENIES plaintiff’s ex

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parte application. These rulings are without prejudice and may be renewed, in limine or in

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another appropriate motion, subject to Federal Rule of Civil Procedure 11.
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IT IS SO ORDERED.

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This resolves ECF Nos. 171 and 178.

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DATED: January 9, 2017.

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UNITED STATES DISTRICT JUDGE
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