Oracle Corporation et al v. SAP AG et al

Filing 1143

Declaration of Tharan Gregory Lanier in Support of 1142 MOTION in Limine Defendants' Motions in Limine filed bySAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20)(Related document(s) 1142 ) (Froyd, Jane) (Filed on 4/26/2012)

EXHIBIT 20

Page 1
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

Only the Westlaw citation is currently available.
United States District Court,
S.D. California.
UNITED STATES of America, Plaintiff,
v.
14.3 ACRES OF LAND, more or less, situated in
San Diego County, State of California; Timothy
Lichty and Cheryl Lee Lichty, Co–Trustees of the
Tim and Sherry Lichty Family Trust Dated October
24, 1991; and Other Interested Parties, Defendants.
Civil No. 07cv886–AJB (NLS).
June 10, 2011.
Brett Norris, Christopher B. Latham, Katherine
Lind Parker, Thomas C. Stahl, United States Attorney Office, San Diego, CA, John Oliver Holm, US
Department of Justice, Washington, DC, for
Plaintiff.
Michael E. Quinton, Quinton and Petix, Andrew
Michael McKenzie, Jeffrey N. Garland, Andersen,
Mann, Hilbert & Parker LLP, San Diego, CA, for
Defendants.
ORDER GRANTING PLAINTIFF'S MOTION
TO STRIKE DEFENDANTS' EXPERT'S REPORTS AND EXCLUDE RELATED TESTIMONY
NITA L. STORMES, United States Magistrate
Judge.
*1 Before the Court in the above-captioned
matter is Plaintiff's Motion to Exclude the Second
Supplemental Expert Report of Jeffrey Kauttu.
[Docket No. 165.] Plaintiff requests that the Court
find good cause to impose evidentiary sanctions
pursuant to Federal Rule of Civil Procedure 37(c)
against Defendants for alleged violations of courtimposed deadlines and the Federal Rules of Civil
Procedure governing the exchange of expert reports. Defendants filed an opposition to the motion
[Docket No. 169], and Plaintiff filed a reply [Doc.

No. 170.] This is the third time that a motion to exclude a Kauttu report has been brought in this case.
The Original Kauttu Report was timely submitted
on January 25, 2008. On December 19, 2008, Defendants submitted a Supplemental Kauttu Report.
On January 30, 2009, the Court Granted the Government's Motion to Strike the Supplemental Report. [Docket No. 78.] On February 3, 2011, the
Court granted in part the Government's Motion in
Limine Number 2, and excluded a part of the Original Kauttu Report. [Docket Nos. 152, 154.] On
April 26, 2011, Defendants submitted a Second
Supplemental Kauttu Report. [Docket No. 165–2.]
It is this Second Supplemental Kauttu Report that is
the subject of the current motion to strike. The
Court finds that the Motion is suitable for disposition on the papers submitted. For the reasons stated
below, the Court GRANTS Plaintiff's motion.
I. BACKGROUND
A. The Litigation
This action arises from the condemnation of
14.3 acres of land adjacent to the United
States—Mexico border. On May 16, 2007, the
United States government (Plaintiff in this case,
hereafter “Government”), acting under the authority
of the Department of Homeland Security Act, 6
U.S.C. §§ 111, 202, 251, and 557, took possession
of Defendants Timothy and Cheryl Lichty's
(hereafter “Defendants”) property in south San
Diego County in connection with the Border Fence
project. (See Decl'n. of Taking, Docket No. 3,
Schedules “A” and “C” attached.) At the time of
filing the Declaration of Taking, the government
deposited into the Registry of this Court the amount
of Three Hundred Fifty–Eight Thousand Dollars
($358,000.00) as estimated just compensation for
Defendants' condemned property. (See Joint Motion
for Disbursement of Funds, Docket No. 6.) On October 17, 2008, the Government deposited supplemental estimated just compensation for taking the
estate condemned, in the amount of Seven Hundred
Eighty–Seven Thousand Dollars ($787,000.00.)

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 2
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

[Docket No. 50.] Defendants do not challenge the
statutory authority for the taking. The sole issue in
this case is whether the previously disbursed funds
constitute just compensation for the land.
The discovery period in this case began in
September 2007 and closed on August 1, 2008. The
parties focused their discovery efforts primarily on
obtaining documentation and expert opinions regarding the fair market value of Defendants' land
on the date of the taking. In November 2007, the
Court issued a Scheduling Order setting discovery
deadlines and other pretrial proceedings.
[Scheduling Order, Docket No. 14.] The instant
motion concerns the deadlines set for the exchange
of expert disclosures. Paragraph 3 of the Scheduling Order provides as follows:
*2 Defendants' expert disclosures required by
Fed.R.Civ.P. 26(a) (2) shall be served on all
parties on or before January 31, 2008 . Plaintiff's
expert disclosures required by Fed.R.Civ.P.
26(a)(2) shall be served on all parties on or before April 30, 2008. Any contradictory or rebuttal
information shall be disclosed on or before May
30, 2008.
[Docket No. 14 at p. 2.] (Emphasis in original).
This paragraph also references the duty to supplement expert disclosures pursuant to Federal Rules
of Civil Procedure 26(e) and 26(a)(3) prior to the
December 1, 2008 deadline set for pretrial disclosures, and emphasizes that failure to comply with
these deadlines may result in the sanctions provided
for by Rule 37, including the exclusion of evidence.
(Id.)
B. The Original Kauttu Report
The Original Kauttu Report estimated the value
of the property at $6.2 million, based on a valuation
of the residential component of the property at $5.2
million and a valuation of an additional $1 million
for the coastal wetland mitigation component, consisting of 3.96 acres of degraded wetlands. Because
this land is part of the Multiple Species Conservation Program, only 25% of the parcel can be de-

veloped and 75% of the parcel must be set aside
and used solely for environmental mitigation.
SDMC § 143.0152; see also Stedt Depo, Consol
FN1
Ex. 3.
Accordingly, the report's valuation of the
residential component is based upon 3.58 acres
(25% of the 14.3 acres) available for residential development.
FN1. “Consol Ex.” refers to the Consolidated Declaration and Exhibits in support of
the Government's Motions in Limine,
Docket No. 110–8–110–11. The San Diego
Municipal Code, Land Development Code
section can be found in Consol. Ex. 2.
C. The First Supplemental Kauttu Report
On December 19, 2008, Defendants issued the
First Supplemental Report of expert witness Jeffrey
Kauttu (“Kauttu”). The First Supplemental Report
was served three weeks after the December 1, 2008
deadline for producing Supplemental Expert Reports and only days before the Pretrial Conference.
The First Supplemental Kauttu Report was different
from the original in two ways: 1) the valuation of
the 3.96 acres of degraded wetlands was increased
from $1,000,000 to $1,600,000; and 2) a mitigation
valuation of $546,000 for the 6.83 acres of uplands
was provided for the first time. The First Supplemental Kauttu Report did not alter Kauttu's conclusion in the Original Kauttu Report that the best use
is as mixed residential and mitigation, but it did increase the estimated value from $6.2 million to $6.8
million. The Government moved to Strike the First
Supplemental Report, asserting that it was untimely
and should be excluded. [Docket No. 75.] On January 30, 2009, the Court issued an Order Granting
the Motion to Strike and Exclude Testimony.
FN2
[Docket No. 78.]
The Court rejected Defendants' argument that the First Supplemental Kauttu
Report was based on new information that, despite
their best efforts, Defendants could not obtain until
three days before the Final Pretrial Conference. The
Court found that the First Supplemental Kauttu Report was neither justified nor harmless and had to
be excluded.

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 3
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

FN2. The January 30, 2009 Order also
granted a Motion by the Government to
Strike the Expert Designation, Expert Report and Testimony of Deborah Rosenthal,
an expert on the California Coastal Commission.

the defense's expert. The motion is granted in
part and denied in part. The motion is granted
with respect to the expert witness' valuation pursuant to the unit rule valuation. This includes preclusion of the one million dollars for the four
acres of land, wetlands.

D. The Striking of Part of the Original Kauttu
Report
*3 The Government moved in limine to exclude the Original Kauttu Report based on a violation of the unit rule and other methodological errors. On February 3, 2011, the Court granted, in
part, the Government's Motion in Limine to Exclude Kauttu's valuation of the property because it
violated the unit rule. [Docket No. 152.] The Court
found that the Original Kauttu Report had improperly double counted the 3.96 acres of degraded wetlands as both for the sale of mitigation credits and
as part of the 75% of the parcel that had to be set
aside in order to develop the remaining 25% of the
land. Under the unit rule, “separately appraising individual components of value and adding them together to reach the whole value is a piecemeal approach which can easily result in double-counting
and is impermissible.” U.S. v. 6.24 Acres of Land,
99 F.3d 1140, 1144 (6th Cir.1996), quoting United
States v. 2,175.86 Acres of Land, 687 F.Supp. 1079,
1088 (E.D.Tex.1988); see also United States v. 8.41
Acres of Land, 680 F.2d 388, 395 (5th Cir.1982)
(valuation of separate interests cannot exceed the
worth of the whole.) Judge Houston found an impermissible double counting in the Original Kauttu
Report because it counted the 3.96 acres of degraded wetlands as part of the 75% set aside and as
a separate value by sale of mitigation credits.

[Docket No. 156, Transcript of Hearing at
FN3
89:15–25.]

The Court ordered the exclusion of all evidence
relating to the $1 million valuation of the mitigation
value of the 3.96 acres degraded wetlands, but did
not exclude the $5.2 million valuation of the mesa
top (intended for a residential use). Specifically, the
Court held:
In plaintiff's motion in limine no. 2, plaintiff
moves to exclude the testimony of Mr. Kauttu,

FN3. For the sake of convenience, the
parties addressed the 3.96 acres of degraded wetlands as “four acres.” See Docket No. 156, Transcript at p. 5.
E. The Second Supplemental Kauttu Report
On April 26, 2011, Defendants served the Government with a Second Supplemental Report by Mr.
Kauttu, stating: “This supplemental report was prepared to deal with Judge Houston's ruling relating
to Mr. Kauttu's appraisal at the conclusion of the
motion hearing on February 3, 2011.” (Norris Decl.
in support of Mtn to Strike, (hereinafter “Norris
Decl.”) at Ex. 1.) The Second Supplemental Kauttu
Report values the property at $5.9 million, a new
number. Mr. Kauttu reaches this appraisal by employing a new methodology for the first time: he
separates the 3.96 acres of degraded wetlands from
the residential component. Thus, the Second Supplemental Kauttu Report finds that 10.34 acres are
available for residential use, of which 2.58 acres are
FN4
available for development.
The Second Supplemental Kauttu Report then finds that the reduction
in area available for development from 3.58 acres
to 2.58 acres decreased the value of the residential
component by $300,000, resulting in a valuation of
$4.9 million. The Second Supplemental Kauttu Report also reinstates the stricken $1 million valuation
of the mitigation credits, resulting in a total valuation of $5.9 million, $700,000 more than the Original Kauttu Report.
FN4. The total land condemned is equal to
14.3 acres. Subtracting the 3.96 acres
leaves 10.34 acres. Twenty-five percent of
10.34 is equal to 2.58.

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 4
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

II. LEGAL STANDARD
*4 Federal Rule of Civil Procedure 26 governs
the disclosure of expert testimony. Rule 26(a)(2)
provides that a party must disclose to other parties
“the identity of all expert witnesses who may be
used at trial to present evidence under Rules 702,
703, or 705 of the Federal Rules of Evidence.” Rule
26 adds:

mentation “does not cover failures of omission because the expert did an inadequate or incomplete
preparation. To construe supplementation to apply
whenever a party wants to bolster or submit additional expert opinions would reek havoc in docket
control and amount to unlimited expert opinion preparation.” Akeva LLC v. Mizuno Corp., 212 F.R.D.
306, 310 (M.D.N.C.2002) (citations omitted.).

Unless as otherwise stipulated or ordered by the
court, this disclosure must be accompanied by a
written report—prepared and signed by the witness.... The report must contain a complete statement of all opinions the witness will express and
the basis and reasons for them.

Parties who run afoul of Rule 26 may face
sanctions as specified in Federal Rule of Civil Procedure 37, which provides in relevant part:

Fed.R.Civ.P. 26(a)(2)(B). With respect to the
timing of expert disclosures, Rule 26(a)(2)(c)
provides: “A party must make these disclosures at
the times and in the sequence that the court orders.”
Rule 26(e)(2) governs the supplementation of expert reports. It provides, in pertinent part:
For an expert whose report must be disclosed under Rule 26(a) (2)(B), the party's duty to supplement extends both to information included in the
report and to information given during the expert's deposition. Any additions or changes to this
information must be disclosed by the time the
party's pretrial disclosures under Rule 26(a)(3)
are due.
Fed.R.Civ.P. 26(e)(2). “Although Fed.R.Civ.P.
26(e) requires a party to ‘supplement or correct’ a
disclosure upon information later acquired, that
provision does not give license to sandbag one's opponent with claims and issues which should have
been included in the expert witness' report....” Lindner v. Meadow Gold Dairies, Inc., 249 F.R.D. 625,
635 (D.Haw.2008) quoting Beller ex rel. Beller v.
United States, 221 F.R.D. 689, 695 (D.N.M.2003)
(citation omitted). Similarly, a “party may not rely
on Rule 26(e)(1) as a way to remedy a deficient expert report or as a means of getting in, in effect, a
brand new report.” Medtronic Vascular, Inc. v. Abbott Cardiovascular Systems, Inc., 2008 WL
4601038 at *1 (N.D.Cal. Oct.15, 2008). Supple-

If a party fails to provide information or identify
a witness as required by Rule 26(a) or (e), the
party is not allowed to use that information or
witness to supply evidence on a motion, at a
hearing, or at a trial, unless the failure was substantially justified or is harmless.
Fed.R.Civ.P. 37(c)(1). The exclusion sanction
is “self-executing” and “automatic.” Yeti by Molly
Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101,
1106 (9th Cir.2001) (referencing the Advisory
Committee's Notes to Rule 37(c)(1) (1993 Amendments)). However, “[t]wo express exceptions
ameliorate the harshness of Rule 37(c)(1): The information may be introduced if the party can prove
that its failure to disclose the required information
is substantially justified or harmless.” Id. at 106–07
(“Implicit in Rule 37(c)(1) is that the burden is on
the party facing sanctions to prove harmlessness.”)
The Ninth Circuit “give[s] particularly wide latitude to the district court's discretion to issue sanctions under Rule 37(c)(1).” Id. The following
factors are used to guide the court's discretion: “1)
the public's interest in expeditious resolution of litigation; 2) the court's need to manage its docket; 3)
the risk of prejudice to the defendants; 4) the public
policy favoring disposition of cases on their merits;
5) the availability of less drastic sanctions.” Wendt
v. Host Int'l, Inc., 125 F.3d 806, 814 (9th Cir.1997).
III. DISCUSSION
*5 The Government seeks an order from the
Court imposing evidentiary sanctions against De-

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 5
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

fendants for the untimely submission of the Second
Supplemental Kauttu Report. As described above,
the Court has previously addressed this same issue
in relation to the First Supplemental Kauttu report.
As before, the late report will only be allowed if it
is substantially justified or harmless. As described
below, the Second Supplemental Kauttu Report is
neither substantially justified nor harmless.
A. The Second Supplemental Report Is Not Substantially Justified
1. Adverse Court Ruling is Not Justification for
Supplementation
It is undisputed that the Second Supplemental
Kauttu Report was issued in response to Judge
Houston's Order Granting in Part the Motion to
Strike the Original Kauttu Report. Norris Decl. Ex.
1. An adverse ruling is not justification for presenting a supplemental report. See La Gorce Palace
Condo. Assoc., Inc. v. QBE Ins. Corp. ., 2011 WL
1522564 at *2 (S.D. Fla. Apr 12, 2011) (rejecting
as improper attempt to supplement one expert report with stricken reports of other experts). Supplementation is designed to allow “a party to correct
inadvertent errors or omissions. Supplementation,
however, is not a license to amend an expert report
to avoid summary judgment.” Gallagher v. Southern Source Packaging, LLC, 568 F.Supp.2d 624,
631 (E.D.N.C.2008), citing Beller ex rel. Beller v.
United States, 221 F.R.D. 696, 701 (D.N.M.2003).
In this case, the Government moved to exclude
the $1 million valuation of the 3.96 acres of degraded wetlands, arguing that the proffered expert
testimony was not reliable under Daubert v. Merrel
Dow Pharm., Inc. 509 U.S. 579, 589, 113 S.Ct.
2786, 125 L.Ed.2d 469 (1993). Judge Houston
agreed and excluded the testimony relating to the
FN5
$1 million valuation.
Defendants want this
Second Supplemental Report in order to correct the
deficiency of double counting the 3.96 acres. This
is improper. See Snoznik v. Jeld–Wen, Inc., 2010
WL 1924483, 71 UCC Rep.Serv.2d 747 at *8–9,
(W.D.N.C. May 12, 2010) (Supplemental Report

improper where done to bolster report to withstand
Daubert challenge).
FN5. Defendants also argue that Judge
Houston did not strike the $1 million valuation, “but only found that the Lichtys'
[sic] would not be permitted to present
evidence of the fair market value of a 4
acres parcel of the Lichty property as part
of the residential property. The February
3, 2011, [sic] ruling left all of the other alternatives available.” (Opp. at 8.)
(emphasis in original.) As quoted more
fully earlier in this Order, Judge Houston
stated: “This includes preclusion of the one
million dollars for the four acres of land,
wetlands.” Judge Houston nowhere allows
the one million dollar valuation and
nowhere limits the exclusion of the testimony to “as part of the residential property.”
Defendants argue this case is similar to Childress v. Darby Lumber, Inc., 357 F.3d 1000, 1010
(9th Cir.2004). Defendants' reliance on Childress is
mistaken. By Defendants' own characterization of
Childress, the court allowed a late supplementation
where the party seeking to exclude the report had
caused the delay by failing to produce relevant documents in discovery. Defendants claim this case is
similar because they produced the Second Supplemental Kauttu Report shortly after receiving the adverse ruling from John Houston. In this case, the
Government did not withhold any documents or in
any way prevent Defendants from producing a report that included the valuation now put forth for
the first time. Accordingly, Childress is inapposite.
Simply put, Defendants made a decision not to include this alternate theory in the Original Kauttu
Report and cannot now be heard to argue that they
should be insulated from the consequences of their
FN6
choice.
FN6. Although Defendants do not specifically argue that the Second Supplemental
Report is justified under Rule 26(e), the

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 6
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

court will address this issue briefly in the
interests of completeness. Rule 26(e) sets
forth a duty to supplement, not a right to
supplement at will. “Duties are usually
owed to other people, and are not for the
benefit of the party who has the duty.”
Sandata Technologies, Inc. v. Infocrossing,
Inc., 2007 WL 4157163 at *7 (S.D.N.Y.
Nov 16, 2007) (rejecting untimely supplemental report that benefitted only the party
producing the report.); Reid v. Lockheed
Martin Aeronautics Co., 205 F.R.D. 655,
662 (N.D.Ga.2001) (“In short, Rule 26 imposes a duty on Plaintiffs; it grants them no
right to produce information in a belated
fashion.”) Because, as discussed fully below, the Second Supplemental Report benefits only the Defendants, it is not proper
supplementation under Rule 26(e).
2. Motion in Limine Number 8 Does Not Provide
Justification
*6 In motion in limine number 8, the Government argued that any testimony about the valuation
of two separate parcels should be excluded because
the Defendants had not submitted expert testimony
proving that the separation into two parcels was
legally permissible. Judge Houston denied the motion without prejudice. Defendants first argue that
the existence of this motion proves the Government
has known about this issue. Defendants appear to
equate the Government's attempt to exclude the
testimony as unsupported, with a right on their part
to produce new evidence on the topic. This equation does not compute. Defendants next argue that
Judge Houston's denial of the motion without prejudice leads to the inescapable conclusion that Defendants have a right to produce new expert testimony. Defendants fail to produce any support for
this proposition and the Court can conceive of no
logical support for this proposition. Judge Houston
found: “the appropriate manner to handle this is a
denial without prejudice.” [Docket No. 149, Transcript at 51:6–8, 17–20.] Judge Houston continued:
“I can determine best whether or not there is any-

thing in the reports as we go through the trial process, through the flow of the trial, as to whether or
not evidence should be precluded or not at that
juncture.” [Id. at 51–52.] Judge Houston merely
found that it would be best to see whether testimony was supported by expert opinion in the reports at a later date. Defendants' attempt to bootstrap this statement into a right to produce new expert opinion at a later date is simply not supported
by the record.
B. The Supplemental Kauttu Report is Not
Harmless
1. The Second Supplemental Report Increased the
Valuation by $700,000
Defendants claim that the Second Supplemental Kauttu Report is a benefit to the Government because it lowers the estimated value of the residential component by $300,000. The Second Supplemental Kauttu Report, however, also reinstates the
stricken $1 million for the mitigation component,
resulting in an estimate that is $700,000 higher than
the original Report. Because the new estimate is
$700,000 higher and based on a new methodology,
it is not harmless. As the record stood prior to the
Second Supplemental Report, the Defendants' estimate of the value of the property is $5.2 million
dollars. The estimate in the Second Supplemental
Report is $5.9 million. Because $5.9 million is
higher than $5.2 million, the report is not harmless.
Moreover, Defendants' argument that the report is
harmless must fail because it is internally inconsistent. Defendants argue that the Government would
not be prejudiced by an increase in the alleged
value of the property, but that they would be prejudiced if they are not allowed to offer a new (and
higher) valuation. Defendants cannot have it both
ways. A higher valuation cannot be both nonprejudicial to the Government if allowed and prejudicial to Defendants if excluded.
2. Prior Statement of Possibility of New Method
Does Not Negate Prejudice
*7 Defendants also argue that the Government

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 7
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

has suffered no prejudice because Defendants have
long expressed an interest in producing a valuation
that would split the 14.3 acres into two parcels. Defendants point to deposition testimony of Mr.
Kauttu in which he states that it is possible that the
wetland component could be sold separately.
(Kauttu Depo. Tr., Quinton Decl., Ex. A at 32–35.)
Defendants also argue that the Pretrial Order lists
whether this separation would be possible as an issue of law to be decided. (Pretrial Order, Docket
No. 74, pages 26, 28).

This argument lacks merit for at least two reasons:
1) as described above, the denial of Motion in
Limine Number 8 was without prejudice; and 2) at
most, Defendants were justified in believing that
they would be able to offer expert opinion based on
the expert reports already submitted, not based on a
report that had not yet been presented. In short, Defendants' argument that the Government will not be
prejudiced because it should have been prepared to
counter an opinion that Defendants had not produced is not persuasive.

Defendants' argument appears to be that their
long expressed intent to possibly produce a valuation of the property as two separate parcels entitles
them to produce a new opinion. An expressed desire is not, however, a legal entitlement. An Order
listing an issue to be decided does not bestow the
right to offer new and untimely expert testimony at
a later date. The fact that the Second Supplemental
Kauttu Report addresses an issue in the Pretrial Order does not address the issue of whether the
Second Supplemental Kauttu Report is timely, justified or harmless. In fact, Defendants' argument
works against them. Defendants admit that they
have long been aware that they might need expert
opinion on this topic, but do not explain any reason
why they have failed to produce the opinion during
the years they have known that they might need it.

3. New Opinion Would Require Additional Discovery and Trial Preparation
The Government argues that the Second Supplemental Kauttu Report cannot be harmless because, if forced to respond, it will have to: 1) reopen discovery; 2) have experts review the Second
Supplemental Report; 3) have experts draft responsive reports; and 4) prepare its experts for new
depositions. Defendants counter that the Government's case rests upon the argument that no residential use is possible and, therefore, the trial preparation would remain unchanged. This analysis misses
the point. Any litigant has an interest in not only asserting its own arguments, but also in negating the
arguments of the other side. Defendants do not
merely put forth a new number, they assert a new
methodology. Additionally, the Second Supplemental Kauttu Report includes three new properties
to support the new valuation of the residential component. Defendants argue that these properties are
not offered as comparable sales, but merely for the
“limited” purpose of validating that 2.58 acres
could support a residence with the amenities included in the valuation. Defendants do not explain
why the Government would not have to rebut the
evidence. In fact, the Government, if forced to respond, would have to show why the new opinion
should not be accepted. In order to do this, as the
Government points out in its Reply Brief, their experts would need to investigate the three new properties in order to determine if the Second Supplemental Kauttu Report accurately represented and
analyzed them. Additionally, the Government ex-

Similarly, Defendants argue that the Government knew that if Motion in Limine Number 2 were
granted, Defendants would seek to offer a different
valuation. Again, Defendants put forth no authority
for the conversion of their stated intent into a legal
entitlement. The question is not whether Defendants had expressed an intent to produce new evidence later, but whether the Government is harmed
by the late presentation of a new expert opinion.
Defendants next argue lack of prejudice because, as of the time Motion in Limine Number 8
was denied, “the Government was advised that the
Lichtys would be able to present evidence that the 4
acre mitigation parcel as an [sic] separate entity,
such as environmental mitigation.” (Opp. at 21.)

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.

Page 8
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
(Cite as: 2011 WL 2414348 (S.D.Cal.))

perts might need to issue their own supplemental
reports, which might require additional discovery.
Accordingly, Defendants are simply in error when
they assert that the Government's trial preparation
would not be affected by the new opinion in the
Second Supplemental Kauttu Report.
*8 Finally, the late supplementation occurred
after the close of discovery, two years after the pretrial conference and after motions in limine had
been heard. Accordingly, as the Government argues, if the late supplementation is allowed it
would disrupt the Government's trial preparation
and increase expert costs and litigation expenses.
Therefore, the Second Supplemental Kauttu Report
is not harmless.
C. Wendt Factors Favor Exclusion
In sum, the Supplemental Report is neither justified nor harmless, creating a great risk of prejudice to the Government. Additionally, because the
Final Pretrial Conference has already been held, the
Court's interest in managing the docket and the
public's interest in expeditious resolution lead inescapably to the conclusion that this aging case must
be adjudicated as soon as possible. Finally, no lesser sanction is appropriate at this late date. Only exclusion of the untimely, unjustified and harmful report can alleviate the prejudice to the Government.
Accordingly, the Motion to Exclude the Second
Supplemental Kauttu Report is GRANTED.
IV. CONCLUSION
Based on the foregoing reasons, It Is Hereby
Ordered that: the Motion to Exclude the Second
Supplemental Kauttu Report and related Expert
Testimony of Kauttu is GRANTED.
IT IS SO ORDERED.
S.D.Cal.,2011.
U.S. v. 14.3 Acres of Land
Slip Copy, 2011 WL 2414348 (S.D.Cal.)
END OF DOCUMENT

© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.