Electrolux Home Prod v. Whitesell Corp
Filing
1541
ORDER granting Defendants Husqvarna AB and Husqvarna Outdoor Products, Inc 1508 Motion in Limine to exclude presentation of evidence at trial concerning Whitesell's damages claim in Count II for capital expenditures related to the supply of Brunner and Matrix parts. Signed by Chief Judge J. Randal Hall on 4/18/2022. (ca)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION
WHITESELL CORPORATION,
Plaintiff,
*
*
V.
*
ELECTROLUX HOME PRODUCTS, INC.,
HUSQVARNA, A.B., and HUSQVARNA
OUTDOOR PRODUCTS, INC.,
CV 103-050
*
*
*
*
Defendants.
ORDER
Defendants Husqvarna AB and Husqvarna Outdoor Products, Inc.
(collectively ''Husqvarna") have filed a motion in limine to exclude
presentation
of
evidence
on
Plaintiff
Whitesell
Corporation's
damages claim for capital expenditures made in preparation for the
supply of Brunner and Matrix parts to Husqvarna.
Husqvarna claims
that Whitesell did not comply with its discovery obligations to
provide a damages computation or the evidence in support thereof.
As concluded herein, Husqvarna's motion in limine is GRANTED.
The Court begins the discussion with the observation that the
liberal discovery mechanisms of Federal Rules of Civil Procedure
26 to 37 "make a trial less a game of blind man's bluff and more
a
fair
contest
with
the
basic issues
fullest practicable extent."
and facts
disclosed
to
the
United States v. Procter & Gamble
Co., 356 U.S. 104, 114-15 (1958).
This observation was made prior
to the introduction of the mandatory initial disclosures of Rule
26(a)(1), which state that
a party must, without awaiting a discovery request,
provide to the other parties . . . a computation of
each category of damages claimed by the disclosing
party-who must also make available for inspection and
copying as under Rule 34 the documents or other
evidentiary material . . . on which each computation is
based . . . .
Fed.
R.
Civ.
P.
26(a)(1)(A)(iii).
Rule
26(e) imposes
upon
a
disclosing party the continuing duty to supplement its initial
disclosures.
As
relevant
here,
Husqvarna
also
propounded
the
following Interrogatories on August 1, 2014:
Interrogatory 5.
If Whitesell has made any
expenditures
or
capital
investments,
such
as
investments in property, plant, equipment, personnel,
or technology, in preparation for manufacturing the
Brunner and Matrix Parts, or to develop or enhance the
capability to do so, please identify each such time,
the date that it was acquired, the name of the person
or entity from whom it was acquired, the cost and
purpose of the expenditure or capital investment, and
the person or persons most knowledgeable about each
such expenditure or capital investment.
Interrogatory 51.
To the extent you have not
already
done
so
in
response
to
previous
Interrogatories, for each category of damages claimed
by Whitesell, please describe with particularity and
specificity the components of each category and how
Whitesell intends to calculate and determine the dollar
value of each such component. Please also identify the
person or persons most knowledgeable concerning these
items.
(Defs.' Mot. to Compel Resp. to Disc. Requests, Doc. No. 606-1.)
Whitesell responded to each Interrogatory respectively as follows:
Subject to and without waiving its objections,
Plaintiff states that the person most knowledgeable
about Plaintiff's expenditures and capital investments
in connection with its preparation to manufacture the
Brunner and Matrix Parts is Neil Whitesell. Plaintiff
further states that documents reflecting expenditures
and capital investments made in preparation for
manufacturing the Brunner and Matrix Parts, the date on
which each such expenditure or capital investment was
made (to the extent that information is available to
Plaintiff), the cost of the expenditure or capital
investment, and the purpose of the expenditure or
capital investment are being produced in response to .
. . Defendants' Requests for Production to Plaintiff.
To the extent that Plaintiff made any purchases of
equipment or tools in connection with its preparation
to manufacture the Brunner and Matrix Parts, Plaintiff
is
producing
documents
sufficient
to
show
the
expenditures and capital investments made. Plaintiff
directs
Defendants
to
documents
Bates-stamped
WC002305962-82. Because the burden of deriving or
ascertaining the requested information from these
documents is substantially the same for Plaintiff and
Defendants, Plaintiff responds by directing Defendants
to those invoices, in accordance with Federal Rule of
Civil Procedure 33(d).
Whitesell objects to [Interrogatory 51] to the
extent that it calls for damages calculations that will
be perfoinned by an expert and produced as part of an
expert report. Subject to the foregoing and General
Objections set forth [in] Whitesell's November 10, 2014
Responses and Objections, the people with the most
knowledge concerning issues relating to damages are
Neil Whitesell and Robert Weisse.
(Defs.'
Mot.
added).)
in
Limine,
Doc.
No.
1508,
Exs.
A
&
C
(emphasis
The documents Bates-stamped WC002305962-82 ("'Produced
Capital Expenditure Documents") were identified to Husqvarna in
January 2015; they are attached to Husqvarna's motion in limine as
Exhibit B.
With those in hand, Husqvarna noticed the Rule 30(b)(6)
deposition of Neil Whitesell on
July 3, 2018 and included the
following topics:
2. All investments allegedly made by Whitesell (e.g.,
buildings, infrastructure, equipment) in order to
supply the Brunner and Matrix parts, including, but not
limited to, the investments identified in [the Produced
Capital Expenditure Documents], the reasons why such
investments were necessary for the supply of these
parts, when each investment was made, and when each
investment became operational for Whitesell.
53. All efforts Whitesell took to mitigate its alleged
damages claimed by Whitesell to be associated with
purported contractual breaches by [Husqvarna].
70. How Whitesell calculates the damages it seeks in
this matter against [Husqvarna] related to the Brunner
Parts.
71. How Whitesell calculates the damages it seeks in
this
matter
against
[Husqvarna]
related
to
the
Matrix/wireform Parts.
(Defs.' Mot. in Limine, Ex. D.)
Husqvarna essentially concedes
that it did not ask specific questions of Mr. Whitesell about the
Produced Capital Expenditure Documents.
However, the following
exchange occurred when Husqvarna asked Mr. Whitesell about an Iowa
facility that Whitesell purchased in January of 2005:
Q:
[H]ave you used
products to the defendants?
that
facility
to
supply
A:
We did.
Q:
Have you used that facility to supply products
to other customers other than the defendants?
A:
We
[Husqvarna].
did,
but
the
primary
customer
was
Q:
Have you done any analysis of how much
utilization of the facility has been used to supply
other customers other than the defendants?
A: I'm sure that will be done by our expert.
will be provided in our damage report.
Q:
It
But sitting here today you don't know that?
A:
I know that people have worked on it, I haven't
personally.
But I don't know what the status of that
is at this time, it's not something I've done myself.
(Defs.' Mot. in Limine, Ex. E, Dep. of Neil Whitesell on July 12,
2018, at 72-73 (emphasis added).)
On August 12, 2019, Whitesell served the final report of its
only expert, Peter J. Karutz, which did not contain a single
opinion
pertaining to Whitesell's capital expenditures claim.
When discovery closed
on October
22,
2019, Whitesell
had
not
supplemented its interrogatory responses to provide a computation
of its capital expenditures claim or any other documentation to
support such claim.
In response to the present motion in limine
to. exclude evidence pertaining to Whitesell's damages claim for
capital expenditures, Whitesell states:
There is not much more for Whitesell to say other than
to point the Court to the [Produced Capital Expenditure
Documents], which unequivocally prove that Whitesell has
long complied with its discovery obligations [and] has
fully met, if not exceeded, its obligations under Rule
26(a)(1)(A)(iii) to provide a ''computation", also known
as a "calculation", for its claimed damages . . . .
(Pl.'s Resp. to Mot. in Limine, Doc. No. 1516, at 8.)
Thus, the
question before the Court is whether the production of the Produced
Capital
Expenditure
Documents
satisfied
Whitesell's
discovery
obligations under the Federal Rules of Civil Procedure.^
1
The Court
notes
that
Whitesell
referenced
other "evidence" of
its capital expenditure claim in response to Husqvarna's prior
motion for summary judgment filed on December 13, 2019, including
a settlement agreement between Whitesell and MetoKote to paint
Matrix parts, Hodges distribution invoices related to storage of
Matrix parts, and two paragraphs in Mr. Whitesell's declaration
5
Though not dispositive of the issue, the Court recognizes
that Husqvarna was led to believe that Whitesell would provide an
expert report (i.e., an expert computation) as to its claim for
capital
expenditures.
This
representation
probably influenced
Husqvarna's approach to the deposition of Mr. Whitesell.
Whitesell
criticizes Husqvarna for not cross-examining Mr. Whitesell about
the
Produced Capital Expenditure
Documents,
but this criticism
falls flat when Husqvarna reasonably expected an expert to be the
key witness on the issue - even Mr. Whitesell seemingly expected
as
much.
Nevertheless,
Mr.
Whitesell
was
identified
as
the
principal witness with knowledge of the subject damages, so not
cross-examining
him
about
the
Documents was not without risk.
Produced
Capital
Expenditure
That is to say, Husqvarna could
have performed the type of inquiry or examination that it mentions
in
its
briefing,
including
questions
about
whether
the
expenditures listed in the Produced Capital Expenditure Documents
were reasonable, necessary, and properly allocated for the supply
of the Brunner and Matrix parts and whether Whitesell's alleged
losses
were
benefits.
mitigated
or
should
be
reduced
by
tax
or
other
The failure to do so is not detrimental here, however.
dated September 10, 2010. (See PI.'s Sur-Reply to Defs.' Mot. to
Strike Karutz's Expert Report, Doc. No. 1394, at 6-7.) Whitesell
did not supplement either its Rule 26(a)(1)(A)(iii) disclosure or
its responses to Husqvarna's related interrogatories with these
documents.
The issue before the Court is not whether
Whitesell
could survive a motion for summary judgment but whether Whitesell
complied with its discovery obligations.
Thus, these documents
are irrelevant.
6
because
Husqvarna
asked
enough
of
Mr.
Whitesell
to
show
that
production of the Produced Capital Expenditure Documents did not
satisfy
Whitesell's
discovery
obligations.
In
fact,
in
the
deposition exchange quoted above, even Mr. Whitesell acknowledges
that
an
analysis
Whitesell's
customers.
73.)
was
necessary
facilities
was
to
used
determine
for
how
Husqvarna
much
one
versus
of
other
(Defs.' Mot. in Limine, Ex. E, Whitesell Dep. at 72-
The questioning then turned to a warehouse that Whitesell
built in the early 2000s.
Mr. Whitesell testified that they would
not have built it had it not been for entering into the Supply
Partnership Agreement ("SPA") with Electrolux in 2000.
73-76.)
(Id. at
Yet, as pointed out by Husqvarna, it was not obligated to
supply Brunner and Matrix parts until the Settlement Memorandum of
2003.
Thus, the storage capacity (and necessary equipment) of
this warehouse may not be solely attributed to the Brunner and
Matrix
parts.
Husqvarna
points
out
other
inconsistencies
regarding attribution of Whitesell's expenditures to the supply of
Brunner and Matrix parts in its brief.
(See generally Defs.' Mot.
in Limine at 13-19.)
The
Court,
however,
has
independently
concluded,
upon
an
independent review of the Produced Capital Expenditure Documents,
that Whitesell did not satisfy its discovery obligations.
The
Produced Capital Expenditure Documents are lists of expenditures
without context.
A review leads to more questions than answers
about Whitesell's damages claim.
No party, attorney or even expert
7
could reasonably divine solely from these twenty-one pages what
Whitesell's computation
of capital expenditure damages may be.
See Design Strategy^ Inc. v. Davis, 469 F.3d 284, 293 (affirming
the district court's conclusion that ""simply providing documents
to the defendant assuming that somehow the defendant will divine
what [the] alleged lost profits^ are by having documents is not
sufficient" under Rule 26(a)(1)(A)(ill)).
It must be remembered
that Whitesell had a duty under Rule 26(a)(1)(A)(iii) to provide
its damages computation and supporting documents even
request from Husqvarna.
without
Moreover, Whitesell had an obligation to
respond to and supplement (here, with a promised expert opinion)
interrogatories reasonably propounded.
either.
Whitesell failed to do
That is, it can hardly be said that Whitesell disclosed
its capital expenditure claim ""to the fullest extent possible" to
make the issue a fair contest.
See Procter & Gamble Co., 356 U.S.
at 114-15.
Federal Rule of Civil Procedure 37(c)(1) mandates preclusion
of undisclosed information at a trial if there is no substantial
justification for the failed disclosure and the failure to disclose
is
not
harmless.
Here,
Whitesell
has
not
provided
any
justification for its failure to provide the required damages
2
The
Court
rejects
out-of-hand
Whitesell's
attempt
differentiate the Design Specialty case by claiming that
to
its
capital expenditure claim is more straightforward than a lost
profits claim. The record belies any assertion that the claims in
this case are straightforward.
Besides, Whitesell originally
claimed that an expert would perform the damages computation.
8
computation
or
to
related to the same.
supplement
its
response
to
interrogatories
Further, the failure to do so is not harmless.
Discovery in the case closed long ago and the trial of the case is
set, even while the parties are conducting proceedings before a
Special Master on unrelated claims.
To reopen discovery to allow
the exploration and disclosure of the capital expenditures claim
would result in a substantial and prejudicial delay in the case.
Further, the Court will not allow the claim to proceed without
Husqvarna having had the opportunity to conduct adequate discovery
on the issue.
Upon the foregoing, the Court GRANTS the motion in limine to
exclude presentation of evidence at trial concerning Whitesell's
damages claim in Count II for capital expenditures related to the
supply of Brunner and Matrix parts.
{Doc. No. 1508).
ORDER ENTERED at Augusta, Georgia, this /^dav of April,
2022.
J. RANDAL HALL, CHIEF JUDGE
mTED/states DISTRICT COURT
SOUTHEm DISTRICT OF GEORGIA
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?