Electrolux Home Prod v. Whitesell Corp

Filing 1453

ORDER granting in part 1268 Motion for Sanctions; denying 1302 Daubert Motion, Motion in Limine and Motion to Strike P. Dopp. Defendant EHP shall pay reasonable attorney's fees and costs as described herein. Plaintiff Whitesell shall file a particularized application for the awarded fees and costs by 3/16/2021 and Defendant EHP may file any objections thereto within 14 days of service. Signed by Chief Judge J. Randal Hall on 3/2/2021. (pts)

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 1 of 14

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION

WHITESELL CORPORATION,

Plaintiff,
CV 103-050

V.

ELECTROLUX HOME PRODUCTS, INC.,
HUSQVARNA, A.B., and HUSQVARNA

*
*

OUTDOOR PRODUCTS, INC.,

*
*

Defendants.

ORDER

Before

the

Court

Electrolux Home

are

two

motions

Products, Inc.'s

related

C'EHP") expert

to

Defendant

witness,

Dopp, filed by Plaintiff Whitesell Corporation ("Whitesell").
first

motion

is

a

motion

for

sanctions,

which

is

based

Paul

The
upon

Whitesell's contention that EHP willfully failed to produce a

document upon which Mr. Dopp relied.

The motion for sanctions

also relies upon the errors and miscalculations in Mr. Dopp's

expert report.

The second motion, titled "Daubert Motion, Motion

in Limine, and Motion to Strike," seeks to exclude Mr. Dopp as an

expert based upon the aforementioned errors and miscalculations
and based upon Whitesell's theory of the case that EHP is not
entitled to the damages calculated by Mr. Dopp as a matter of law.
The Court will address both motions herein.

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 2 of 14

I.

BACKGROUND

Mr. Dopp is a Certified Public Accountant and Certified in
Financial Forensics with over 35 years of experience in the area
of forensic and general accounting, including the quantification

of complex financial damages, investigation of business disputes,

corporate internal investigations, financial fraud investigations,
funds

tracing,

consulting.

business

valuations,

and

financial

analysis

(Dopp Expert Report, Doc. 1268, Ex. A, at 4-5.)

Mr.

Dopp's qualification as an expert is not in dispute here.
On April 19, 2019, EHP served Mr. Dopp's expert report upon
Whitesell in accordance with the relevant deadline.

Dopp

calculated

the

amount

of

damages

Therein, Mr.

related

to

EHP's

counterclaims for phase-out inventory, expedite fees, and annual
rebates. Schedule 2 to his report related to his opinion regarding

EHP's

phase-out

damages;

specifically,

it

contained

the

calculation of damages based on the differences in prices between

what EHP was paying Whitesell for certain parts and what EHP paid
third-party suppliers for those same parts during the relevant
time period.1

Schedule 2 is 46 pages listing the itemized parts.

^ Generally speaking, the relevant time period is referred to as
the Phase-Out Period, contractually defined as the period of time
between

EHP's

termination.

termination

notice

and

the

effective

(See Sec. Am. Compl., Ex. 1, SPA H 23.1.)

date

of

Mr. Dopp

identified three elements of the phase-out damages: (a) increased
costs of replacement parts during Phase-out Period following the
August 20, 2008 erroneous inventory list provided by Whitesell;
(b) expedite fees incurred related to these purchases; and (c)
increased costs of replacement parts for parts purchased after the
2

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 3 of 14

the quantity purchased and the price difference for each part, and
the resulting alleged damage to EHP.

Footnote 1 to Schedule 2

refers to a document titled "GR Analysis Other Suppliers Parts
Data.xlsx Tab 'Other Suppliers Data'" (hereinafter referred to as

"Unproduced Document").

EHP describes the Unproduced Document as

a draft working paper prepared by Mr. Dopp in the process of
preparing

his

report

using

Appendix 2 to the report.

certain

case

materials

listed

in

To be sure, Appendix 2 purports to

contain a list of all documents that Mr. Dopp considered and relied

upon.

The Unproduced Document does not appear on Appendix 2.

It is undisputed that EHP did not produce the Unproduced

Document

initially

with

the

expert

report

or in response

to

Whitesell's request for production of documents served on April
25, 2019, which asked that EHP produce "[t]he expert report of

Dopp, and all exhibits and appendices to such expert report, in
native format"

(Request

No.

1)

and

"[a]ny and

all Documents

reviewed or relied upon by Mr. Dopp" (Request No. 7) .2

in response

to Request No. 1, EHP informed Whitesell that though it is under
no obligation to produce the requested native versions, it would

Phase-Out Period, which Whitesell allegedly refused to supply to
EHP. (Dopp Expert Report at 12.)

2 Whitesell served these requests to produce in conjunction with a
motion to take additional discovery related to expert reports.
(See Doc. No. 1189, Ex. A.) The Court denied the motion as moot
after

Whitesell

indicated

that

it

was

satisfied

responsiveness of Defendants to its requests.
2019, Doc, No. 1212.)
3

with

the

(Order of May 29,

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 4 of 14

nevertheless produce the native versions of the Schedules attached

to Mr. Dopp's report.

(See Doc. No. 1193, Ex. A.)

In response to

Request No. 7, EHP responded that all documents reviewed or relied

upon by Mr. Dopp are listed on Appendix 2 and had already been
produced.

(Id.)

Notably, even though the Unproduced Document was

identified in the footnote of Schedule 2, Whitesell did not file

a motion to compel with the Court.
On July 16,

2019,

Whitesell seirved

its

Notice

of

Taking

Videotaped Deposition Duces Tecum of Paul Dopp and attached 18
document requests including ''all work papers and documents Dopp

relied upon in making his analysis or opinion in this matter."
(Doc. No. 1270, Ex. A.)

On July 30, 2019, EHP objected to the

document requests as duplicative, unduly burdensome, and in excess

of what is required under the Federal Rules of Civil Procedure.
(Id., Ex. B.)

Whitesell did not file a motion to compel with the

Court.

Whitesell took the deposition of Mr. Dopp on September 12,
2019, which the Court has thoroughly reviewed.

Ex. B.)

(See Doc. No. 1282,

It became apparent from the start that Whitesell had

detected significant discrepancies between the cost per unit of

particular parts in the underlying source data (i.e., invoices
from third-party suppliers) and the cost per unit of those same

parts used by Mr. Dopp to compute EHP's damages.

For example, the

unit cost of Part No. 134227100 charged by the third-party supplier

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 5 of 14

as reflected on Schedule 2 was $2.30296.

The damage to EHP for

purchasing that part from the third-party supplier was calculated
by using the price differential between $2.30296 and the unit cost
charged by Whitesell times the 9,000 units at issue.
unit

cost

for

Part

No.

134227100

as

reflected

in

However, the
the

relevant

underlying invoice was $.0071 per unit, which would obviously yield
a reduced damages calculation for the 9,000 units because the price
differential would be significantly less.

Dep. at 149-61.)

(See generally Dopp

Similar errors were revealed and discussed for

several other parts.

When Mr. Dopp was asked about the discrepancy between the

invoice price and the price used for the damages calculation for
Part No. 134227100, Mr. Dopp referenced the Unproduced Document,

stating that he had to look at ''the file that did the calculation."
(Id. at 160-61.)

At this point, the parties determined that the

file had not been produced.

After a short recess, counsel for EHP

represented that the Unproduced Document was created by Mr. Dopp

in preparation of his report and in doing so, he relied on the
documents that were listed and produced on Appendix 2.

As such,

counsel described the Unproduced Document as a "work paper."
at 177-78.)

(Id.

When Mr. Dopp was asked about the file at that time,

he confirmed that the Unproduced Document was created by his team.
(Id.)

Later, Mr. Dopp reaffirmed that he created the document and

reviewed it as part of his quality control.

(Id. at 201.)

He

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 6 of 14

also stated that it formed the basis of his opinions in the report.

(Id.)

When asked specifically if he relied upon it, Mr. Dopp

stated: "I rely on my work, yes, so.

But there's a difference

between relying on documents produced that form the basis for my
opinions.

But my schedules and my calculations, yes, that's my

work product and I -- my work product supports my opinions."

(Id.

at 202.)

Four

days

Whitesell's

after

counsel

the

deposition,

regarding

Mr.

EHP's

Dopp's

counsel

working

wrote

papers

and

explained that disclosure is not required by the Federal Rules of
Civil Procedure.

(Doc. No. 1238, Ex. B.)

to produce the papers.

EHP nevertheless agreed

EHP further explained that because Mr.

Dopp planned to produce a revised expert report, about which
Whitesell had already indicated it planned to depose Mr. Dopp,

Whitesell would have an opportunity to ask Mr. Dopp about the

working papers.

(Id.)

Counsel would go back and forth by letter

on the issue of EHP's production obligations and whether Whitesell

had been prejudiced.

(Id., Exs. C & D.)

Ultimately, on September

20, 2019, EHP produced the Unproduced Document to Whitesell.

September

23,

2019,

Whitesell

filed

the

instant

motion

On

for

sanctions based on EHP's failure to produce the Unproduced Document
previously.

The Court also reviewed Mr. Dopp's deposition with an eye
toward the miscalculations.

All told, it appears that Whitesell

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 7 of 14

discovered errors in Mr. Dopp's calculations totaling $700,000, a
61% deviation from the total calculated damage amount on Schedule

2.

(Dopp Dep. at 217-18.)

It took some time for Mr. Dopp to

recognize there was a problem, and he initially resisted Whitesell
counsel's characterization of his work as sloppy.

197-98.)

(See id. at

Even so, Mr. Dopp opined that while there were errors in

the data used, his "methodology and [] approach [wa]s reliable."
(Id. at 177.)

He testified that he would not stand behind his

report in court until he fixed the errors.

(Id. at 200-01.)

Ultimately, however, Mr. Dopp recognized that the errors had a

"significant

impact

on

the

damages,"

"embarrassing" and "upsetting."

which

he

lamented

was

(Id. at 224.)

EHP served Whitesell with Mr. Dopp's amended expert report on

October 4, 2019.

The Court does not know whether Whitesell re-

deposed Mr. Dopp.

II.

MOTION FOR SANCTIONS

Federal Rule of Civil Procedure 26 governs the disclosure of

expert reports, which must contain: "(i) a complete statement of
all opinions the witness will express and the basis and reasons
for them; (ii) the facts or data considered by the witness in

forming them; (iii) any exhibits that will be used to summarize or

support them; (iv) the witness's qualifications, including a list
of all publications authored in the previous 10 years; (v) a list

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 8 of 14

of all other cases in which, during the previous 4 years, the

witness testified as an expert at trial or by deposition; and (vi)
a statement of the compensation to be paid for the study and

testimony in the case."

Fed. R. Civ. P. 26(a)(2)(B).

Rule 26

also requires "[a] party who has made a disclosure under Rule 26(a)
. . . [to] supplement or correct its disclosure or response . . .
in a timely manner."

Fed. R. Civ. P. 26(e).

Rule 37(c) is the

enforcement mechanism for Rule 26(a), providing that if a party

fails to provide the information required by Rule 26(a), "the party
is not allowed to use that information . . . 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).
Alternative sanctions include the payment of reasonable expenses,

including attorney's fees, caused by the failure to disclose and

any other sanction listed in Rule 37(b)(2)(A)(i)-(vi).
In this case, Whitesell's sanction motion is premised upon

its belief that EHP was required to disclose the Undisclosed

Document because Mr. Dopp testified that he reviewed and relied

upon it.

Whitesell points to Rule 26(a), which requires the

disclosure of all facts or data considered by an expert in forming

his opinion, as well as its two requests for the production of
documents upon which Mr. Dopp relied.

EHP holds fast to its

contention that the Unproduced Document is a working paper that is
not required to be produced under the Federal Rules.

EHP further

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 9 of 14

contends that even if it were required to be disclosed, Whitesell

has suffered no prejudice as a result of its late disclosure.
The Court agrees that Rule 26 does not ''require a party to

disclose all of its expert's notes, calculations, and preliminary
analysis." See Etherton v. Owners Ins. Co., 2011 WL 684592, at *2
(D. Colo. Feb. 18, 2011) (cited source omitted); see also Gillespie
V. Sears, Roebuck & Co., 386 F.3d 21, 35 (1®^ Cir. 2004) (stating

Rule 26(a) does not require that the expert report contain, or be

accompanied by, all of the expert's working notes or recordings);
CSX Transp., Inc. v. Kirkland, 2017 WL 2271120, at *4 (S.D. Ga.

May 24, 2017) (stating that the Rules do not require that work
notes be attached to an expert report).

Moreover, it should be

remembered that the purpose of the expert witness discovery rules

is to provide notice to opposing counsel of the expert witness's
testimony

to

prepare

for

cross-examination

and

to

prevent

surprise.

See W. Union Holdings, Inc. v. E. Union, Inc., 316 F.

App'x 850, 854 (ll'^^ Cir. 2008); see also Companhia Energetica
Potiguar v. Caterpillar Inc., 2016 WL 7507848, at *4 (S.D. Fla.

Aug. 1, 2016) ("The purpose of Rule 26(a)(2) is to provide notice
to opposing counsel - before the deposition - as to what the expert
witness will testify" so as to "minimize the expense of deposing

experts, and to shorten direct examination and prevent an ambush
at trial.")

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 10 of 14

Here,

Mr.

Dopp's

report

identifies

the

procedure

and

methodology he used to calculate the damages, and EHP provided the
underlying data from which the calculations were drawn, i.e. the
documents listed in Appendix 2.

In fact, Whitesell was able to

conduct an efficacious cross-examination of Mr. Dopp without the
Undisclosed Document.

Thus, the objectives of the expert discovery

rules were not subverted by EHP's failure to provide Mr. Dopp's
intermediary working paper, which he created from data that had

been produced.

Whitesell grounds its motion on the fact that Mr.

Dopp testified that he ''relied" on this working paper.

One would

assume, however, that most experts would similarly testify that

they relied on their working papers when producing their reports.

Requiring disclosure of a document solely based upon testimony
that the expert relied on it would swallow up the working paper

exception to the disclosure rules.

In short, the Court concludes

that EHP did not err in not producing the Undisclosed Document as
"facts or data" upon which the expert relied because it was a
working paper not required to be disclosed.
disclosure was substantially justified.^

Thus,

the

non

The Court therefore does

3 Notably, Mr. Dopp disclosed the existence of the Undisclosed
Document in his expert report, but Whitesell never asked for the
document specifically or filed a motion to compel production prior
to the deposition. Ultimately, EHP produced the document with the
concession that Whitesell could re-depose Mr. Dopp after his
revised expert report was provided.
10

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 11 of 14

not find that EHP should be sanctioned for the failure to produce
the Undisclosed Document.

The Court now turns to Whitesell's second basis for sanctions

against EHP

related

to

Mr.

Dopp's

expert

report,

namely

significant miscalculations related to phase-out damages.'^

the

There

is no dispute that Mr. Dopp's final calculation of phase-out

damages was grossly inaccurate because the third-party supplier
cost

per

unit

of

various

parts

did

not

match

underlying invoice from the third-party supplier.
the

Eleventh

Circuit

has

held

that

mistakes

the

relevant

EHP argues that
in

an

expert's

calculations, when the methodology is otherwise sound, go to the

weight of the evidence, not the admissibility, and are not grounds
for striking an expert's testimony.

See Quiet Tech. DC-8, Inc. v.

Hurel-Dubois UK Ltd., 326 F.3d 1333, 1345 {11^^ cir. 2003), and
cases cited therein.

Moreover, courts routinely allow experts to

submit supplemental and amended expert reports.^

And, EHP has

^ There is no indication that Mr. Dopp's calculations regarding
annual rebates or expedite fees were erroneous.
5 The Court must mention that two months after filing the instant
motion for sanctions, Whitesell filed a "Notice" on the record,
which addresses Whitesell's post-deposition submission of updated
schedules for its own expert's report, that of Mr. Peter J. Karutz.
(See Doc. No. 1278.) Therein, Whitesell states that the updated
schedules, which correct errors previously made by Mr. Karutz, "do
not
affect
the
substance
of
[his]
opinions
or
damages
calculations," "pre-empt[ing] a potential argument from the
Defendants that the service of Mr. Karutz' updated schedules
somehow make Mr. Karutz not competent to offer his expert opinions
or that Mr. Karutz should otherwise be excluded or limited as an

expert witness."

(Id.)

This demonstrates that amendments and
11

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 12 of 14

submitted an amended report for Mr. Dopp, presumably reflecting
the correct costs.

It is on this basis that EHP contends that it

should not be sanctioned, essentially a no harm, no foul argument.

While the Court agrees with EHP that the miscalculations do
not render Mr. Dopp unqualified or incompetent to testify on the
matters for which he was hired, it cannot agree that Whitesell
suffered no harm from Mr. Dopp's erroneous report.

The Court can

imagine that attorneys or paralegals spent a number of hours trying

to piece together where Mr. Dopp got the per unit cost he used in
calculating the damages.

Indeed, Mr. Dopp did not comprehend his

error at deposition for well over an hour of questioning on the
issue.s

In fact, Whitesell spent almost the entire deposition

going over the mistakes made by Mr. Dopp.

Whether Whitesell had

other ground to plow at deposition is immaterial.
whether Whitesell chooses to re-depose Mr. Dopp.

So too is

The fact remains

that a significant amount of time at deposition and undoubtedly in
preparation

for

the

deposition

was

wasted

because

of

the

miscalculations that EHP did not discover in advance of disclosing

the expert report.

The Court cannot simply overlook the matter

because EHP filed an amended report.

supplements to expert reports are commonplace and do
necessarily require exclusion of the expert or his report.

not

® The Court recognizes that the matter may have been confusing
because the cross-examination involved the native version of
Schedule 2 which differed from the Schedule 2 attached to the
expert report.
12

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 13 of 14

For this reason, the Court will impose sanctions against EHP
for the submission of the miscalculated damages report.

EHP

shall pay

Whitesell reasonable

attorney's fees

That is,

and

costs

associated with the review and analysis of Mr. Dopp's April 15,

2019 expert report and preparation for and taking the deposition

of Mr. Dopp on September 12, 2019. In this way, Whitesell's motion
for sanctions (doc. no. 1268) is GRANTED IN PART.

Whitesell shall

file a particularized application for the awarded fees and costs

within fourteen (14) days hereof.

EHP may file any objections

thereto within fourteen (14) days of service.

III.

Daubert Motion

On December 13, 2019, Whitesell filed a "Daubert Motion,
Motion in Limine, and Motion to Strike" (the "Daubert motion") the

expert report and testimony of Mr. Dopp.
Whitesell

filed

three

substantially

against three other defense experts.

On this same day,

similar

Daubert

motions

Whitesell asserts the same

grounds to exclude Mr. Dopp as it did to exclude the other experts,

namely that Mr. Dopp's testimony is unnecessary or irrelevant to
the issues in the case because EHP cannot sustain its counterclaims

for damages as a matter of law.

The Court rejected this argument

in its Order of September 30, 2020, denying Whitesell's Daubert

motions against the other three experts.

(See Doc. No. 1412.)

The Court similarly holds here, in relation to Mr. Dopp, that
13

Case 1:03-cv-00050-JRH Document 1453 Filed 03/02/21 Page 14 of 14

Whitesell's essential legal premise is erroneous because genuine

disputes of material fact exist with respect to the attribution of
fault on EHP's counterclaims for damages.

Thus, the expert report

of Mr. Dopp on the issue of counterclaim damages is not irrelevant.
The only distinction between the Daubert motion related to

Mr. Dopp and the three other motions is Whitesell's contention
that Mr. Dopp is not competent or qualified to offer his damages
report because of the aforementioned miscalculations.

The Court

rejected this argument supra. The miscalculations go to the weight
of

Mr.

Dopp's

opinion,

not

his

qualifications.

Matters

of

compensation and time spent in preparing the expert report also go

to the weight of an expert's opinion, not admissibility.

Whitesell

will be permitted to cross-examine Mr. Dopp about his erroneous
initial

report

at

trial

on

a

limited

basis

and

matters

of

motion

(doc.

no.

compensation and preparation.
Upon

the

foregoing,

Whitesell's Daubert

1302) is DENIED.

^

ORDER ENTERED at Augusta, Georgia, this C^_^day of March,
2021.

J. ^RANim-'HALL, CHIEF JUDGE

united/states DISTRICT COURT
SeUTHFra DISTRICT OF GEORGIA

14