Oracle Corporation et al v. SAP AG et al

Filing 1157

Declaration of Tharan Gregory Lanier in Support of 1156 Opposition/Response to Motion Declaration of Tharan Gregory Lanier in Support of Defendants' Oppositions to Oracle's 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, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23)(Related document(s) 1156 ) (Froyd, Jane) (Filed on 5/10/2012)

EXHIBIT 22

Page 1

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-W(NLS)
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
CALIFORNIA
2008 U.S. Dist. LEXIS 66667

August 29, 2008, Decided
August 29, 2008, Filed
SUBSEQUENT HISTORY: Motion denied by United
States v. 14.3 Acres of Land, 2008 U.S. Dist. LEXIS
96121 (S.D. Cal., Nov. 17, 2008)
COUNSEL: [*1] For The United States of America,
Plaintiff: Christopher B Latham, Katherine Lind Parker,
LEAD ATTORNEYS, U S Attorney's Office, San Diego,
CA; Thomas C Stahl, LEAD ATTORNEY, U S
Attorneys Office Southern District of California, San
Diego, CA.
For 14.30 Acres of Land, more or less situated in San
Diego County, State of California, Timothy Lichty,
Co-trustees of the Tim and Sherry Lichty Family Trust
dated October 24, 1991, Sheryl Lee Lichty, Co-trustee of
the Tim and Sherry Lichty Family Trust dates October
24, 1991, Defendants: Michael E Quinton, LEAD
ATTORNEY, Quinton and Petix, San Diego, CA.
JUDGES: Hon. Nita L. Stormes, U.S. Magistrate Judge.
OPINION BY: Nita L. Stormes
OPINION

ORDER DENYING DEFENDANTS' MOTION TO
STRIKE PLAINTIFF'S EXPERTS' REPORTS AND
EXCLUDE RELATED TESTIMONY
[Doc. No. 29]
Before the Court in the above-captioned matter is a
Motion to Strike Plaintiff's Experts' Reports filed by
Defendants Timothy and Cheryl Lichty [Doc. No. 29].
Defendants request that the Court find good cause to
impose evidentiary sanctions pursuant to Federal Rule of
Civil Procedure 37(c) against Plaintiff United States of
America for alleged violations of court-imposed
deadlines and the Federal Rules of Civil Procedure
governing [*2] the exchange of expert reports.
Specifically, Defendants seek an order of the Court
striking from the record certain reports submitted by two
of Plaintiff's experts in this case, or in the alternative,
excluding the reports from evidence. Plaintiff filed an
opposition to the motion [Doc. No. 34], and Defendants
filed a reply [Doc. No. 35]. On August 22, 2008, the
Court held a hearing on the motion. Michael Quinton
appeared on behalf of Defendants Timothy and Cheryl
Lichty. Assistant United States Attorneys Thomas Stahl,
Katherine Parker, and Christopher Latham appeared on
behalf of Plaintiff United States of America. After

Page 2
2008 U.S. Dist. LEXIS 66667, *2

hearing oral arguments, the matter was submitted on the
record. For the reasons stated below, the Court DENIES
Defendants' motion.
BACKGROUND
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
property in south San Diego County. (See Decl'n. of
Taking, [*3] Doc. No. 3, Schedules "A " and "C "
attached.) The acquisition occurred due to the proximity
of Defendants' land to the Mexican border and its
categorization as land for public use in connection with
the Multi-Tiered Fence Project in San Diego County,
California, commonly referred to as the Border Fence
project. (Id.) 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, Doc. No. 6.)
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. (See Court's November [*4] 7, 2007
Scheduling Order, Doc. No. 14.) The instant motion
concerns the deadlines set for the exchange of expert
disclosures. Paragraph 3 of the Scheduling Order
provides as follows:
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.
(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.)
Defendants assert that two of the government's
experts submitted a total of three reports after the
deadline for their disclosure, in violation of the Court's
Scheduling Order and Rule 26(a)(2). These reports
include:
. A report prepared by Ms. Nancy
Lucast, the government's expert on the
[*5] jurisdiction of the California Coastal
Commission over Defendants' property,
dated June 11, 2008, received by
Defendants via U.S. mail on June 18,
2008, intended by Ms. Lucast to
supplement and correct her April 28, 2008
expert report, presenting her final opinion
on the issue of the California Coastal
Commission's jurisdiction, if any, over
Defendants' property.
. A report prepared by Mr. Norm
Arndt, the government's expert civil
engineer, dated June 16, 2008, received by
Defendants June 20, 2008, intended by
Mr. Arndt to supplement and correct his
April 25, 2008 expert report, presenting a
revised estimated cost of extending dry
utilities to Defendants' property.
. A report prepared by Mr. Arndt,
dated June 27, 2008, received by
Defendants on the same date, intended by
Mr. Arndt to supplement and augment his
April 25, 2008 expert report, presenting
additional statutory authority supporting
the need for construction of a new access
road on Defendants' property prior to
development. 1

Page 3
2008 U.S. Dist. LEXIS 66667, *5

(See Defendants' Motion, Quinton Decl'n., Exs. "F," "M,"
and "N.")
1 In their motion, Defendants also argue that the
Declaration of Deputy Fire Marshall R.D. Medan
explaining the Fire Department standards [*6]
that would apply in the event that Defendants'
property is developed for residential use, was
submitted in an untimely manner by the
government. (See Defendants' Motion, Ex. "K.")
However, at the August 22, 2008 motion hearing,
defense counsel represented to the Court that the
timeliness/admissibility of the declaration was no
longer at issue subsequent to Mr. Medan's
deposition testimony asserting the opposite
conclusion to that asserted in his Declaration.
Accordingly, the Court considers this portion of
the motion MOOT.
Based on their alleged untimeliness, Defendants
move the Court to strike these reports from the record of
the case, or in the alternative, exclude the reports from
evidence. (See Defendants' Motion to Strike, Doc. No.
29.) The government argues in opposition that the
disputed reports were submitted in accordance with Rule
26(e) as part of the continuing duty of parties to
supplement their previous expert disclosures with
additions or changes prior to the deadline for filing
pretrial disclosures, December 1, 2008. As such, the
government argues that the reports are not untimely
pursuant to the Court's Scheduling Order or the
applicable Federal Rules. (See Plaintiff's [*7]
Opposition, Doc. No. 34; see also Court's Scheduling
Order P10.) Defendants dispute the government's
representation that the reports qualify as "supplemental"
reports and argue that the late submissions are new
reports, containing previously undisclosed information,
newly developed theories, and/or new bases for the
experts' opinions. Defendants argue that the government
deliberately chose to ignore the deadlines set by the
Scheduling Order, inherently prejudicing Defendants'
case and causing actual prejudice as well. (See
Defendants' Reply, Doc. No. 35.)
LEGAL STANDARD
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(a)(2)(B) further adds that:
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 to be expressed and the basis and
reasons therefor . . .
With respect to the timing of expert [*8] disclosures,
Rule 26(a)(2)(C) provides that: "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.
"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) citing Beller ex rel. Beller v.
United States, 221 F.R.D. 689, 695 (D.N.M. 2003)
(citation omitted).
Parties who run afoul of Rule 26 may face sanctions
as specified in Federal Rule of Civil Procedure 37. Rule
37(c)(1) provides:
If a party fails to provide information or
identify [*9] 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.
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

Page 4
2008 U.S. Dist. LEXIS 66667, *9

the Advisory Committee's Notes to Rule 37(c)(1) (1993
Amendments).) The Ninth Circuit "give[s] particularly
wide latitude to the district court's discretion to issue
sanctions under Rule 37(c)(1)." However, "[t]wo express
exceptions ameliorate the harshness of Rule 37(c)(1): The
information may be introduced if the parties' failure to
disclose the required information is substantially justified
or harmless." Id. In order to determine if the exclusion
sanction is appropriate, the Court must consider the
following factors: "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).
DISCUSSION
Defendants [*10] seek an order from the Court
imposing evidentiary sanctions against the government
for submitting reports prepared by experts Nancy Lucast
and Norm Arndt subsequent to the April 30, 2008
deadline for Plaintiff's expert disclosures set by the
Court's Scheduling Order. (Defendants' Motion, 6 et seq;
Ex. "A " P 3.) This discussion examines closely the
substantive content of the disputed reports, the timing of
their submission, and the relationship between Rule
26(a)(2)(C),
requiring
strict
compliance
with
court-ordered deadlines, and Rule 26(e), which relaxes
these deadlines to accommodate the duty of parties to
supplement their previous expert disclosures. Each report
shall be addressed in turn below.
A. The Lucast Reports
One of the factors addressed by experts in this case is
the jurisdiction of the California Coastal Commission
over Defendants' property and its effect on the land's fair
market value. The government retained Nancy Lucast as
its expert on this subject. (Plaintiff's Opposition, 2.) Ms.
Lucast submitted her expert report within the April 30,
2008 deadline for Plaintiff's experts' disclosures set by
the Court's Scheduling Order. In this report, dated April
28, 2008 and received [*11] by Defendants April 30,
2008 ("April 30, 2008 report" hereafter), Ms. Lucast
opines that the property lies entirely within the retained
coastal development permit jurisdiction of the California
Coastal Commission. (Defendants' Motion, Quinton
Declaration in Support ("Quinton Decl'n")., Ex. B.") She
goes on to detail the effect of this jurisdiction on future

development of Defendants' property, and reviews
Coastal Act policies applicable to the site. (Id. at 3-6.)
She notes at the beginning of the report that her opinion
is based on representations made by the San Diego
District Coastal Commission staff. Skeptical of the
Commission's assertion that it has original jurisdiction
over the entire parcel of land, lowlands and uplands alike,
Ms. Lucast indicates in the report her intention to obtain a
mapping opinion from the Coastal Commission's
mapping unit to confirm the nature and extent of its
jurisdiction. (Id. at 2, fn. 1.)
In a letter to Plaintiff's counsel dated May 6, 2008,
defense counsel references Ms. Lucast's request for a
mapping opinion and requests a "final answer" on the
jurisdiction issue. (Quinton Decl'n., Ex. "C.") In a
follow-up letter to Plaintiff's counsel dated May [*12]
21, 2008, defense counsel refers to Ms. Lucast's May 16,
2008 meeting with Coastal Commission representatives,
and requests that she submit her revised report in advance
of the May 30, 2008 rebuttal disclosures deadline. (Id.,
Ex. "E.") Ms. Lucast submitted her second report, dated
June 11, 2008, received by Defendants via U.S. mail on
June 18, 2008 ("June 18, 2008 report" hereafter), in
which she revises her prior opinion based on the
corrected
information
regarding
the
Coastal
Commission's jurisdiction over Defendants' property.
(Defendants' Motion, Ex. "F.")
Defendants now request that the Court find the June
18, 2008 report untimely pursuant to the terms of the
Court's Scheduling Order. Defendants also request that
the Court find the April 30, 2008 report noncompliant
with Rule 26(a)(2) because it does not state Ms. Lucast's
complete opinion and the reasons therefore, as required
by Rule 26(a)(2)(B)(i). Finally, Defendants seek an order
striking these two reports from the record and barring Ms.
Lucast from testifying in this case. (Id. at 6.)
The government asserts that Ms. Lucast's June 18,
2008 report was timely submitted as a supplemental
report, pursuant to both the Court's Scheduling [*13]
Order and Federal Rule of Civil Procedure 26(e). The
government argues that even if the report is not
considered a supplemental report and therefore found to
be untimely, Defendants suffered no actual prejudice
from the tardiness of Ms. Lucast's submission. (Plaintiff's
Opposition, 7.) The government points out that Ms.
Lucast submitted the June 18, 2008 report prior to her
June 25, 2008 deposition, giving defense counsel ample

Page 5
2008 U.S. Dist. LEXIS 66667, *13

time to review and question her regarding its comments.
An excerpt from Ms. Lucast's deposition testimony
follows:
[Defense Counsel]
Q: When you gave your report to Mr.
Stahl [Plaintiff's counsel], were you
satisfied that your report was an accurate
statement of the status of the subject
property with regard to the California
Coastal Commission as of May 16, 2007?
[Ms. Lucast]
A: Are you talking about my April 28
letter?
Q: Yes.
A: I was satisfied it was accurate at
the time.
Q: But in fact it was not?
A: In fact I learned later it was not.
And I believe that I included a cautionary
note in that letter of the 28th.
Q: And that's Exhibit 2 and you're
talking [about] your footnote Exhibit 2,
your report? Your footnote on page 2 that
ends on page 3 where you note that the
[*14] maps are famously, frequently
wrong?
A: Right.
(Defendants' Reply, Ex. "C," pg.31, ll.21 - pg.32, ll.13.)
Based in part on the above exchange, Defendants
seek an order barring Ms. Lucast's two reports and her
testimony from evidence arguing she knew her April 30,
2008 report was incomplete and her June 18, 2008 report
offered such a radically different opinion that it should be
considered a new report. Thus, as a threshold matter, the
Court must determine whether the April 30, 2008 report
satisfies the requirements of Rule 26(a)(2)(B)(i). This
classification in turn impacts whether the June 18, 2008
report should be considered a new report or a
supplemental report.

Ms. Lucast's April 30, 2008 report is approximately
ten pages in length, single-spaced, submitted in letter
form. (See Quinton Decl'n., Ex. "B.") The report begins
with several paragraphs in which Ms. Lucast explains the
purpose of the report, the assumptions underlying its
preparation, and the considerations made prior to
formulating her opinion. (Id. at 1-2.) After a brief
explanation of the underlying facts, she reviews a number
of Coastal Act policies applicable to the property and
summarizes the key issues influencing future [*15]
development of the property. (Id. at 4-6.) She concludes
by discussing at length the impact of Coastal
Commission jurisdiction over Defendants' parcel of land.
(Id. at 6-10.)
The Court finds that the April 30, 2008 report
constitutes a complete statement of Ms. Lucast's opinion
regarding the jurisdiction of the Coastal Commission,
based on the information available to her at the time and
the representations of qualified Commission staff
members. She noted, presumably out of due diligence,
that her opinion would have to be revised if the mapping
opinion rendered a different jurisdictional conclusion.
Defendants would have the Court conclude that this
cautionary note necessarily renders the April 30, 2008
report an incomplete statement. However, the report
offered a detailed review of the jurisdictional issue and a
conclusive opinion based on the state of the information
at the time. Rule 26(a)(2)(B)(i) does not require a
complete and final report - it only requires a complete
statement of the opinion the witness will express, and the
basis and reasons for that opinion. Ms. Lucast's April 30,
2008 report satisfies Rule 26(a)(2)(B)(i). As such, the
April 30, 2008 report is a timely submitted, [*16]
admissible expert report.
Pursuant to Rule 26(e), Ms. Lucast had an
affirmative duty to supplement the April 30, 2008 report
after obtaining additional, material information regarding
the Coastal Commission's lack of original jurisdiction
over Defendants' property. She notes in her June 18, 2008
report that she based her opinion contained in the April
30, 2008 report on published maps of the area, cognizant
of the fact that the Coastal Commission had not adopted
the maps. (Quinton Decl'n., Ex "F.") The results of the
mapping performed by the Commission changed the prior
information they had provided to Ms. Lucast; instead of
having original jurisdiction over the entire parcel of land,
the Commission only has appellate jurisdiction over
development plans in the event they are approved by the

Page 6
2008 U.S. Dist. LEXIS 66667, *16

City of San Diego and then appealed. (Id.) Ms. Lucast
prepared a second report incorporating the changes. Thus,
the June 18, 2008 report qualifies as a supplemental
report under Rule 26(e), submitted timely in light of the
December 1, 2008 pretrial disclosures deadline pursuant
to Rule 26(a)(2)(D).
Based on this determination, the Court need not
further analyze the admissibility of Ms. Lucast's reports.
[*17] However, the Court notes that even if the June 18,
2008 report did not qualify as a supplemental report, and
was deemed untimely, the report would not be stricken or
excluded from evidence in this case. The June 18, 2008
report does not constitute a "sandbagging" effort by the
government as Defendants suggest. (Defendants' Motion,
14.) Although Defendants claim that the June 18, 2008
report's lateness precluded their ability to put forth
rebuttal testimony regarding Ms. Lucast's conclusions, in
fact Defendants received Ms. Lucast's April 30, 2008
report one month prior to the May 30, 2008 deadline for
disclosing rebuttal information. Ms. Lucast's April 30,
2008 report set forth an opinion much less favorable to
Defendants' position than the revised opinion contained
in her June 18, 2008 supplemental report. If Defendants
truly thought a rebuttal was necessary with respect to the
Coastal Commission jurisdiction issue, they had the full
time afforded to them by the Scheduling Order in which
to arrange for a rebuttal disclosure. In addition, the June
18, 2008 report was served on Defendants a week in
advance of Ms. Lucast's deposition, giving defense
counsel the opportunity to question [*18] her at length
regarding the information contained in her supplemental
report. (See, e.g., Deposition Excerpt Cited Above.)
Accordingly, Defendants' motion to strike Nancy
Lucast's April 30, 2008 report, June 18, 2008 report, and
testimony is DENIED.
B. The Arndt Reports
Another factor addressed by experts in this case is
the provision of an access road and certain services to
Defendants' property, including whether or not
improvements are required prior to future development,
to what extent, and at what cost. The government retained
Norm Arndt, a registered professional civil engineer, as
its expert on this subject. (Plaintiff's Opposition, 3.) Mr.
Arndt submitted his expert report within the April 30,
2008 deadline for Plaintiff's experts' disclosures set by
the Court's Scheduling Order. In this report, dated April
25, 2008 and received by Defendants April 30, 2008

("April 30, 2008 report" hereafter), Mr. Arndt provides a
detailed estimate of construction costs associated with
building an access road on the property. (Defendants'
Motion, Ex. "I.") His estimate includes the cost of
earthwork, such as clearing and grading the land,
implementing erosion control measures, and building a
[*19] retaining wall; the cost of constructing a paved
driveway and the appropriate drainage system; the cost of
adding water meters and the necessary connections to the
property to ensure adequate fire protection; the cost of
extending an underground dry utility line onto the
property; as well as the cost of agency fees and
professional oversight. (Id. at 4.) The complete
construction estimate provided in the April 30, 2008
report suggested a range between approximately $ 4.5
and $ 5.1 million. (Id.) Defendants disclosed the rebuttal
testimony of their expert Gary Palenske by the May 30,
2008 deadline supporting the position that in order to
develop a single family home on the property, the
historical access would suffice and a newly constructed
fire access road would not be required. (Defendants'
Motion, Ex. "J.")
Mr. Arndt submitted a second report dated June 20,
2008 ("June 20, 2008 report" hereafter), in which he
provides a revised estimated cost of extending dry
utilities onto Defendants' property. (Defendants' Motion,
Ex. "M.") In his April 30, 2008 report, Mr. Arndt
estimated a cost ranging between $ 219,075 and $
285,750. (Quinton Decl'n., Ex. "I," 4.) In his June 20,
2008 report, [*20] he advises Plaintiff's counsel that in
the interest of providing a more accurate cost estimate, he
decided to consult utilities specialists, who were able to
obtain cost information from the utility companies likely
to provide services to the property. Using a "unit price
against length of extension formula," not available to him
when calculating his original estimate due to the
formula's dependence on company-specific pricing, the
revised estimated cost range fell between $ 116,335 and $
178,880 -- substantially lower and more favorable to
Defendants than the estimate provided by Mr. Arndt in
his April 30, 2008 report. (Quinton Decl'n., Ex. "M, " 3.)
Mr. Arndt submitted a third report dated June 27,
2008 ("June 27, 2008 report" hereafter), in which he
addresses the question of whether full access to
Defendants' property would still be necessary if the City
of San Diego's Fire Department determined that the site
was not required to be serviceable (required fire service
access was an underlying presumption of his first

Page 7
2008 U.S. Dist. LEXIS 66667, *20

estimate). (Defendants' Motion, Ex. "N.") He opined that
due to the flood levels of the Tijuana River, historic
access to the property could become impassable, and
thus, [*21] as a safety and welfare precaution, a new
access road has to be constructed prior to development.
(Id. at 1-2.)
Defendants request that the Court find the June 20,
2008 report (revising the estimated cost of extending dry
utilities to the property) to be a new report, untimely
pursuant to the terms of the Court's Scheduling Order,
and therefore inadmissible. (Id. at 16.) In support of this
characterization, Defendants refer to Mr. Arndt's
deposition, during which he testified that he did not have
time to include the information provided by the utility
specialists in his April 30, 2008 report because of the
deadline the government gave him for its submission.
Specifically, Mr. Arndt testified:
[Defense counsel]
Q: Is there any reason why as of April
25, 2008 you could not have given those
cost figures in your April 25 report?
[Mr. Arndt]
A: I simply could not get them [the
utility specialists] contracted and signed
up to do the study in time for the report.
So I don't know [who ]was pushing the
buttons whether it came from your side or
the Department of Justice side, but there-I
entered into draft contract with them, and
it came down that I had to have a report
done by a certain date. There [*22]
simply wasn't time to go through the
gymnastics of getting the attorneys happy
with the agreement.
Q: Well, did you understand that the
April 30, 2008 date was a court-imposed
deadline?
A: No.
(Quinton Decl'n. P 32.) Defendants also point out that
Mr. Arndt did not label the report a "supplemental
report," further supporting their argument that the June
20, 2008 report is a new report. The government argues
that the June 20, 2008 report is not a new report, and

qualifies as a timely supplemental report because it
provides a corrected estimation regarding dry utility costs
involved in developing the land, a subject included in his
total estimated construction costs contained in his April
30, 2008 report. (Plaintiff's Opposition, 11.)
Defendants also seek a finding that the June 27, 2008
report constitutes a new report, in spite of being labeled
by Mr. Arndt as Supplemental Report # 1. (Quinton
Decl'n., Ex. "N.") Defendants assert that if this report is
found to admissible, they will have to engage in costly
discovery and retain additional experts to rebut the
position. (Defendants' Motion, 12, 17.) Defendants claim
the June 27, 2008 report contains new information not
included in the April [*23] 30, 2008 report and
constitutes classic sandbagging because of its submission
to Defendants at the last minute prior to Mr. Arndt's
deposition. (Id. at 16-17.) The government argues that the
June 27, 2008 report also qualifies as a supplemental
report because it provides additional information on the
subject of an emergency service access road, the main
topic addressed in the April 30, 2008 report. (Plaintiff's
Motion, 10-12.) With respect to the sandbagging
accusation, the government denies that it engaged in any
such strategy, and argues that the reports themselves belie
Defendants' assertion. The government points out that the
disputed reports do not contain new theories or new
opinions on new topics. Rather, they argue that the
reports resulted from Mr. Arndt's duty to provide updated
information and report its effect on their prior
submissions. Defendants reply that the late submission of
the reports is "inherently prejudicial," and therefore not
harmless. (Defendants' Reply, 7.)
The Court finds that the June 20, 2008 report and the
June 27, 2008 report both qualify as supplemental
reports, submitted timely in light of the December 1,
2008 pretrial disclosures deadline pursuant [*24] to Rule
26(a)(2)(D) and Rule 26(e). As noted above, Rule
26(e)(2) describes the duty of parties to supplement their
expert disclosures. It provides, in pertinent part, that the
"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 . . . " (Emphasis added.) The June 20,
2008 report presented additional information, gathered
from specialists, on the specific issue of extending dry
utilities to the property. This information directly
supplements Mr. Arndt's April 30, 2008 report, which
contains an opinion regarding the cost of extending dry

Page 8
2008 U.S. Dist. LEXIS 66667, *24

utilities. The June 27, 2008 report provides additional
information to bolster Mr. Arndt's April 30, 2008 report
with respect to the overarching issue of whether access to
Defendants' property requires improvement prior to
development. Because this report was framed in a
different context, and explores a scenario in direct
contrast to the one considered in the April 30, 2008
report, its characterization as a supplemental report is not
quite as obvious. However, the report contains additional
information with respect [*25] to the flood potential of
the property and its impact on egress and ingress, and
consequently, the need to construct an access road.

strike Norm Arndt's June 20, 2008 and June 27, 2008
reports is DENIED.

The Court notes that even if the two reports were
considered untimely, under Rule 37(c)(1) the error was
harmless. Defendants had the opportunity to depose Mr.
Arndt regarding the content of all three of his submitted
reports, and have retained expert witnesses capable of
rebutting Mr. Arndt's testimony on the topic of an access
road at trial. Defendants' experts both had a period of
weeks to review the supplemental reports and answer
questions about them at their depositions. Defendants'
argument that the late submission of the reports is
"inherently prejudicial" to their case has no support in the
actual text of the Federal Rules or in the case law
interpreting them. Accordingly, Defendants' motion to

Based on the foregoing reasons, the Court DENIES
Defendants' Motion to Strike Plaintiff's Expert Reports
and Exclude Related Testimony [Doc. No. 29].

In conclusion, the Court is mindful of the "gaping
loophole" which can result when parties abuse the liberal
policy of Rule 26(e) with respect to the timing of
supplemental reports in order to avoid the stricter policy
of Rule 26(a)(2)(C). However, the Federal Rules have not
been abused [*26] in this case. Accordingly, Defendants'
request for evidentiary sanctions is DENIED.
CONCLUSION

IT IS SO ORDERED.
DATED: August 29, 2008
/s/ Nita L. Stormes
Hon. Nita L. Stormes
U. S. Magistrate Judge