Nachurs Alpine Solutions Corp v. Banks et al
ORDER: 129 SEALED Motion To Strike Defendants' Supplemental Disclosure of Expert Testimony denied, however, Plaintiff's request for alternative relief by authorizing plaintiff to re-depose Dr Mengel at defendants' expense granted. Pl aintiff's request for authorization to designate rebuttal expert witnesses denied. 135 SEALED Motion to Strike Plaintiff's Supplemental Disclosure of Expert Opinions denied. The court will provide alternative relief by authorizing defenda nt to re-depose Mr Grega at plaintiff's expense. The court will further permit defendants to designate a rebuttal damages expert. Defendants shall have until 9/29/2017, to provide full disclosures regarding any rebuttal damages expert. Plaintiff will have until 10/15/2017, to depose the rebuttal expert at its own expense. Signed by Chief Magistrate Judge CJ Williams on 9/8/2017. (pac)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
NACHURS ALPINE SOLUTIONS,
CORP., f/k/a Na-Churs Plant Food
Company, a Delaware Corporation,
NUTRA-FLO COMPANY, an Iowa
Corporation, and BRIAN K. BANKS,
TABLE OF CONTENTS
I. INTRODUCTION ......................................................................... 1
II. PROCEDURAL HISTORY .............................................................. 2
III. BACKGROUND FACTS .................................................................. 5
IV.DISCUSSION ................................................................................ 7
A. Plaintiff’s Motion to Strike ............................................................ 8
B. Defendants’ Motion to Strike.........................................................17
V. CONCLUSION .............................................................................19
This matter comes before the Court pursuant to cross motions to strike
supplemental expert disclosures.
Plaintiff moves to strike defendants’ supplemental disclosure of expert testimony
by Dr. David Mengel. (Doc. 129).
Alternatively, plaintiff requests the Court permit
it to re-depose Dr. Mengel at defendants’ expense and to permit plaintiff to designate
Defendants resist plaintiff’s motion, arguing that they could
not have supplemented their expert’s disclosure any sooner. (Doc. 138). Defendants
state they will make Dr. Mengel available for a second deposition, but resist paying
anything more than an attorney’s travel expenses related to a second deposition of Dr.
Mengel, and resist authorizing plaintiff to designate a rebuttal expert witness.
In turn, defendants move to strike plaintiff’s supplemental disclosure regarding its
damages expert, John Grega, arguing that it is untimely.
(Doc. 135). Plaintiff resists,
arguing that it altered its theory of recovery in light of discovering that defendants did
not sell a competing product.
Alternatively, plaintiff indicates it will offer
up Mr. Grega to be re-deposed and would not object to defendant being permitted to
conduct further discovery and designate a rebuttal expert.
For the reasons that follow, the Court denies plaintiff’s motion to strike the
supplemental disclosure of Dr. Mengel’s expert testimony, but grants plaintiff’s request
for alternative relief by authorizing the re-deposing of Dr. Mengel at defendants’ expense.
The Court denies plaintiff’s request to designate a rebuttal expert.
The Court similarly denies defendants’ motion to strike plaintiff’s supplemental
disclosure of Mr. Grega’s expert testimony, but will permit defendants to re-depose Mr.
Grega at plaintiff’s expense, and will permit defendants to designate a rebuttal expert
On March 10, 2015, plaintiff filed suit against defendants in this Court.
2). After litigation regarding a preliminary injunction, defendants filed an answer on
April 15, 2015.
(Doc. 27). On July 21, 2015, the Court held a telephonic scheduling
and planning conference with the parties.
(Doc. 29). On the same day, the Court
issued a Scheduling Order and Discovery Plan.
and submitted this plan to the Court.
It provided the following deadlines:
Motions to add parties and amend pleadings
Plaintiff’s expert witness disclosures
Defendants’ expert witness disclosures
Plaintiff’s rebuttal expert disclosures
Completion of Discovery
Trial Ready Date
The parties had prepared
November 8, 2015
January 8, 2016
March 8, 2016
April 22, 2016
October 8, 2016
December 11, 2016
March 8, 2017
These deadlines were set significantly beyond the normal deadlines provided for
in this District’s Instructions and Worksheet for Preparation of Scheduling Order and
Discovery Plan. For example, the deadline for completing discovery is normally set
eight months after submission of the proposed scheduling order; in this case, it was set
for fifteen months later.
The trial ready date is normally set thirteen months after
submission of the proposed scheduling order; in this case, the trial ready date was set for
twenty months later.
On July 21, 2015, the Court scheduled trial for April 24, 2017, more than two
years after defendants answered plaintiff’s complaint.
Plaintiff did not disclose experts by the January 8, 2016, deadline.
On March 7,
2016, defendants filed an unresisted motion to extend their expert disclosure deadline.
The following day, the Court granted defendants’ motion, but sua sponte
also extended plaintiff’s rebuttal expert disclosure deadline.
designated experts, however, by these extended deadlines.
On April 22, 2016, plaintiff filed a motion to extend all deadlines and the trial
(Doc. 38). Plaintiff alleged that a combination of attempting to settle the case,
the illness of an attorney, and difficulty in conducting ESI discovery necessitated a
continuance of all the deadlines and the trial.
Defendants resisted the motion.
(Doc. 39). On May 16, 2016, the Court denied plaintiff’s motion.
On July 21, 2016, defendants filed a motion to strike plaintiff’s experts, arguing
that they were untimely disclosed.
(Doc. 42). On August 25, 2016, the Court denied
the motion, but granted the alternative relief of extending defendants’ deadline for
disclosing experts and the deadline for completion of discovery.
also barred plaintiff from designating rebuttal expert witnesses. (Id.).
On October 7, 2016, the parties filed a joint motion to extend deadlines and
continue the trial. (Doc.71).
The Court entered a new scheduling order on October
20, 2016, which set the following deadlines:
Defendants’ Experts Disclosures
Completion of Discovery
January 13, 2017
June 2, 2017
September 1, 2017
By a separate order, the Court scheduled the trial for April 9, 2018. (Doc.
On March 31, 2017, the parties filed a joint motion to extend the deadline for
completion of discovery to August 1, 2017. (Doc. 89).
The Court granted the motion
on April 3, 2017, extending the deadline, but noting that no further extensions would be
granted. (Doc. 90).
On May 18, 2017, plaintiff filed a motion to compel discovery and for sanctions.
On June 22, 2017, the Court entered an order granting plaintiff’s motion,
finding that defendants failed to properly disclose documents and answer interrogatories
regarding documents, including a PowerPoint presentation at issue here, arguably
containing trade secrets, and other documents defendant Banks obtained from plaintiff.
On July 17, 2017, the parties filed yet another motion to extend discovery and
dispositive motions deadlines. (Doc. 125). The following day, the Court granted the
parties’ motion, setting new deadlines of September 29, 2017, to complete discovery,
and October 15, 2017, to file dispositive motions.
On July 1, 2016, plaintiff disclosed its experts, including non-retained expert, John
In an answer to Interrogatory No. 4, asking for information about
its experts, plaintiff stated:
John Grega will testify that, based upon market conditions, customer
contact, and new product evaluation, NAS projected gross profits of
approximately $81,521,593 through July 2020 which will be negatively
impacted due to Defendants’ violations as put forth in Plaintiff's Complaint.
Mr. Grega will also testify that, to this date, approximately $277,469.20 in
marketing expenses and $194,996.17 in new product costs have been
incurred by NAS related to the products in question.
(Id., at 6).
On January 13, 2017, defendants timely disclosed their experts’ testimony,
including that of Dr. Mengel.
Dr. Mengel’s report indicates that he
was offering opinions on three issues:
1. If enough information on the production of potassium acetate for uses
such as a deicing solution for airports or roadways or as a liquid fertilizer
was readily available in the public domain prior to January 2015 for NutraFlo to develop and produce potassium acetate based foliar fertilizer or
2. If potassium acetate based liquid fertilizers were available and being
marketed in the US prior to January 2015 for field crops, turf or
3. If the Nutra-Flo Chemical Company and affiliated organizations had
any record or history of producing potassium acetate based de-icing
products, or potassium acetate based fertilizers or plant growth promoting
products prior to January 2015.
(Id., at 5).
Dr. Mengel did not offer an opinion regarding whether information
regarding potassium acetate-based fertilizers was or could be a trade secret.
In March and April 2017, defendants produced ESI discovery documents to
plaintiff. (Doc. 115, at 2).
On April 25, 2017, plaintiff took defendant Brian Banks’ deposition. (Doc. 138,
During that deposition, plaintiff marked and used Exhibits 47 & 48.
Exhibits 47 & 48 are documents that were contained in defendant Brian Banks’ Dropbox,
and which were produced by defendants to plaintiff as part of the ESI production in
March and April 2017.
(Id., at 2-3).
On April 27, 2017, plaintiff took the deposition of Jason Glover, during which it
marked and used Exhibit 75B.
(Id., at 3).
Exhibit 75B is a PowerPoint presentation,
also produced to plaintiff as part of ESI disclosures in March and April 2017. (Id.).
On May 18, 2017, plaintiff took Dr. Mengel’s deposition.
(Doc. 129-2, at 1).
Dr. Mengel testified that he believed he had reviewed ESI discovery documents in
preparing his opinion. (Doc. 129-2, at 2-3). Dr. Mengel testified that he would not
render an opinion outside those disclosed in his report. (Id., at 4-5).
asked Dr. Mengel whether he intended to render any opinion regarding documents
produced during discovery that plaintiff contended contained its trade secrets.
4-6). In particular, plaintiff asked Dr. Mengel if he anticipated “rendering any kind of
opinions on or about a power point presentation that Brian Banks shared with Nutra-Flo
that’s labeled Bio K on it?”
(Id., at 5). Defense counsel instructed Dr. Mengel not to
answer the question on the ground that it was work product.
(Id., at 5-6).
On June 16, 2017, defendants filed a Supplemental Disclosure of Expert
(Doc. 129-3, at 2-3).
In this document, defendants indicated that Dr.
Mengel would offer opinions regarding whether Deposition Exhibits 12, 47, 48, and 75B
could constitute trade secrets or whether the information contained in those documents
was readily available to the public.
(Id., at 3).
Exhibit 12 is a PowerPoint titled
“Overview of Potassium Acetate,” which defendants had produced during discovery in
On June 20, 2017, plaintiff provided a supplemental answer to Interrogatory No.
9, asking for details about claimed damages.
(Doc. 135, at 2).
[Plaintiff] seeks between $12,896,773-15,342,838 in compensatory
damages. In June 2015, [plaintiff] was forced to reduce its prices to
remain competitive with Nutra-Flo’s price sheets. [Plaintiff’s] original
profit margin before this price decrease was higher because it had a firstto-market advantage regarding potassium acetate fertilizers for row crop
use. Nutra-Flo destroyed that advantage by advertising that it could make
the same product(s) at lower prices for the 2015 growing year. [Plaintiff]
lowered its price on its Bio-K line in response to Nutra-Flo’s advertising of
Nutra-KA24. [Plaintiff] seeks loss of gross profit for five years, which is
the length of time [plaintiff] anticipates it would have enjoyed the first-tomarket advantage for potassium acetate fertilizers for row crop use.
[Plaintiff’s] damages calculation of $12,896,773 is conservative because it
presumes no growth in sales and includes the difference in gross margin
per unit times the projected sales volumes for each product effected. The
$15,342,838 damages estimate presumes a growth in sales of the potassium
acetate products per [plaintiff’s] usual projections. These estimates have
been provided as bates stamp NACHURS06393 -94.
(Doc. 135, at 15-16).
As noted, this order addresses the parties cross motions to strike supplemental
The Court will address plaintiff’s motion first, as the first filed in
time, and then address defendants’ motion. The basic legal principles, applicable to
both motions, will be discussed in detail only once.
Plaintiff’s Motion to Strike
Plaintiff argues that defendants violated the Federal Rules of Civil Procedure when
they untimely disclosed Dr. Mengel’s supplemental expert testimony.
(Doc. 129-8, at
5). Plaintiff argues that the supplemental report did not correct his prior report or rebut
new evidence. (Id., at 5-7). Plaintiff further argues that it would be prejudiced by this
untimely disclosure because it “has lost its ability to submit rebuttal expert witnesses”
and “may not have time to re-depose Dr. Mengel to test his expert opinions.”
8). Plaintiff asks that, in the alternative, the Court order defendants to pay for the redeposition of Dr. Mengel and permit plaintiff to designate new rebuttal expert witnesses.
(Id., at 9).
Thus, the questions before the Court are: (1) whether defendants’
supplemental disclosure complied with Rule 26(e); and (2) if not, are sanctions
appropriate and, if so, what sanctions the Court should impose.
Compliance with Rule 26(e)
The Eighth Circuit Court of Appeals has explained: “The purpose of our modern
discovery procedure is to narrow the issues, to eliminate surprise, and to achieve
substantial justice.” Mawby v. United States, 999 F.2d 1252, 1254 (8th Cir. 1993)
(quoting Greyhound Lines, Inc. v. Miller, 402 F.2d 134, 143 (8th Cir. 1968)) (emphasis
“The rules are meant to insure that . . . parties can obtain ‘[m]utual
knowledge of all the relevant facts gathered by both parties.’”
v. Taylor, 329 U.S. 495, 507 (1947)).
(Id.) (quoting Hickman
The rules pertaining to the disclosure of expert
information is an important part of this discovery process.
Federal Rule of Civil Procedure 26(a)(2) requires the disclosure of the identity and
written reports of witnesses who are retained to provide expert testimony at trial. The
deposition of such witnesses may occur “only after the report is provided.” FED. R.
CIV. P. 26(b)(4)(A). Expert witness disclosures, as well as information provided in the
expert’s report and deposition, must be supplemented by “[a]ny additions or changes to
th[at] information.” FED. R. CIV. P. 26(a)(2)(E), (e)(2). A late disclosure of an expert
opinion can be “equivalent to a failure to disclose.” Trost v. Trek Bicycle Corp., 162
F.3d 1004, 1008 (8th Cir. 1998) (“failure to disclose in a timely manner is equivalent to
failure to disclose,” citing Sylla–Sawdon v. Uniroyal Goodrich Tire Co., 47 F.3d 277,
284 (8th Cir. 1995)).
Parties may supplement expert disclosures pursuant to Federal Rule of Civil
Procedure 26(e), which permits supplementation “if the party learns that in some material
respect the disclosure or response is incomplete or incorrect, and if the additional or
corrective information has not otherwise been made known to the other parties during the
discovery process or in writing.”
FED. R. CIV. P. 26(e)(1)(A).
disclosure under Rule 26(e)(1)(A) is timely if it is made as soon as possible.”
Hypertherm, Inc. v. Am. Torch Tip Co., Civil No. 05–cv–373–JD, 2009 WL 703271, at
*1 (D. N.H. Mar. 16, 2009). See also, e.g., Malozienc v. Pac. Rail Servs., 572 F.
Supp.2d 939, 943 (N.D. Ill. 2008) (holding supplementation was made in a timely
manner “by supplementing discovery production as soon as possible”); Walls v. Paulson,
250 F.R.D. 48, 53 (D.D.C.. 2008) (finding supplemental responses untimely when made
months after learning of information); Hummer v. BNSF Ry. Co., No. 06-CV-1218, 2006
WL 3523752, at *2 (C.D. Ill. Dec. 6, 2006) (finding supplemental disclosure made nine
days after party became aware of evidence was timely).
Courts have allowed an expert to supplement his or her report when the
supplementation is consistent with prior testimony and “merely expand[s] upon or
clarif[ies]” the initial opinions offered by the expert.
Wilson Rd. Dev. Corp. v.
Fronabarger Concreters, Inc., 971 F. Supp. 2d 896, 903 (E.D. Mo. 2013).
example, supplementation after the close of discovery has been permitted when the
supplementation contained the specifics of opinions previously proffered by the expert
“that the defendants had an opportunity to test during discovery.” (Id.). Likewise,
experts have been allowed to testify regarding supplemental declarations that provided
more detailed information which was “entirely consistent with and d[id] not significantly
expand on any of the opinions or reasons in the” expert’s initial report. Emerson Elec.
Co. v. Suzhou Cleva Elec. Appliance Co., No. 4–13:CV-01043 SPM, 2015 WL 2176964,
*3 (E.D. Mo. May 8, 2015). See also Taylor v. Cottrell, Inc., 795 F.3d 813, 818 (8th
Cir. 2015) (noting that “a post-deposition affidavit [will not be considered if it]
contradict[s] prior testimony in an attempt to create issues of fact ... [b]ut an affidavit
may be submitted to clarify ambiguities or confusion in deposition testimony;” and
concluding the district court abused its discretion in striking a witness’ post-deposition
supplemental affidavit because it “clarified and placed into context her prior testimony”).
In Omaha Public Power District v. Siemens Aktiengesellschaft, No. 8:99CV352,
2002 WL 826830, at *1 (D. Neb. Jan.15, 2002), the court considered whether to strike
a supplemental expert affidavit which was filed after the summary judgment deadline.
The supplemental affidavit included a new opinion which had not been previously
disclosed. Omaha Pub. Power Dist., 2002 WL 826830, at *3. The court found the
defendant offered no justification for its failure to comply with the disclosure
requirements and had not given any explanation for its late disclosure. (Id., at *5). The
court also found the cross-claim defendant was prejudiced because the expert’s new
opinions were disclosed just a few weeks before the final pretrial conference and less
than three months before trial. (Id.). The court determined that because the defendant
had no justification for his late disclosure and because the other party was prejudiced,
Federal Rule of Civil Procedure 37 required the court to exclude the new opinions of the
expert witness. (Id.).
This Court has also previously addressed a similar situation.
In Wells v.
Lamplight Farms, Inc., 303 F.R.D. 530, 534 (N.D. Ia. 2014), this Court held that
Federal Rule of Civil Procedure 26(a)(2)(A)-(B) and Northern District of Iowa Local
Rule 26(b), “when read together, establish that the expert witness disclosure deadlines
contained in a scheduling order are deadlines for disclosing all required information about
a retained expert, including all of the opinions he or she will offer at trial.” This Court
further concluded that supplementation of reports after the expert designation deadline is
only allowable for the limited purposes of correcting inaccuracies in the original report
or addressing information not previously available to the disclosing party:
Rule 26(e)(1) provides a limited exception to the deadlines provided in Rule
26(a)(2)(C), requiring that an expert witness supplement his report if he
“learns that in some material respect the information disclosed is incomplete
or incorrect and if the additional or corrective information has not been
made known to the other parties during the discovery process or in
writing.” . . . Rule 26(e) does not permit parties to file supplemental
reports whenever they believe such reports would be “desirable” or
“necessary” to their case. Rather, the Rule permits supplemental reports
only for the narrow purpose of correcting inaccuracies or adding
information that was not available at the time of the initial report.
Wells, 303 F.R.D. at 536-37 (quoting Mineabea Co. v. Papst, 231 F.R.D. 3, 6 (D.D.C.
2005)). This Court noted that the correct procedure, if the party believed it was entitled
to relief from a deadline for some reasons, is to file a motion to modify the scheduling
order and show good cause for the modification. (Id., at 537).
Defendants argue that they supplemented Dr. Mengel’s report in a timely manner,
explaining that Dr. Mengel could not offer an opinion regarding Exhibits 12, 47, 48, and
75B in January 2017, because he did not know about them then (i.e., the information was
not available at the time of the initial report). (Doc. 138, at 4). Defendants argue they
did not have “enough time between the Banks and Glover depositions” and Dr. Mengel’s
deposition “to make the decision to have Professor Mengel review the questioned exhibits
and express an opinion.”
Once defendants made that decision, defendants
explain, Dr. Mengel “needed an adequate amount of time to review the documents,
consult the information at his disposal, and arrive at his expert opinions.” (Id.).
the extent plaintiff complains about not having enough time to re-depose Dr. Mengel,
defendants fault plaintiff for waiting 35 days to file its motion to compel.
The Court finds that defendants’ supplemental disclosure constitutes a new opinion
by Dr. Mengel and therefore is not timely. Dr. Mengel’s new opinions are not mere
corrections to prior opinions. The supplemental pleading discloses new opinions not
previously rendered regarding specific documents and whether they constitute trade
secrets, a matter of central importance to this litigation.
Defendants argue they could not make this disclosure earlier because plaintiff did
not identify the exhibits as trade secrets until the April depositions of Banks and Glover.
(Doc. 138, at 4). This may be true, but defendants’ inability is a product of their own
failure to timely identify these documents in discovery, as this Court previously found,
so that plaintiff would have been aware of them in a more timely manner. This is not a
case where defendants did not have the information available to them. The documents
now marked as Exhibits 12, 47, 48 and 75B came from defendants. They did not timely
identify the documents as responsive to discovery requests, which would have allowed
plaintiff to more timely identify them as trade secrets. The fault for any timing issues,
therefore, falls squarely on defendants’ shoulders.
Defendants correctly state that Rule 26(a)(3) provides that “[u]nless the court
orders otherwise, these [pretrial] disclosures must be made at least 30 days before trial.”
(Doc. 138, at 5, (quoting FED. R. CIV. P. 26(a)(3)(B)). Defendants then go on to
incorrectly state that “[t]here does not appear to be an order in this case setting deadlines
for pretrial disclosures or for supplementing expert disclosures.” (Doc. 138, at 5). As
previously noted, the deadline for all opinions an expert intends to offer at trial is the
disclosure deadline contained in the Court’s scheduling order. Wells, 303 F.R.D. at
This Court set, and then moved at the parties’ request, the deadline for disclosure
of experts. Defendants’ final deadline for expert disclosures was January 13, 2017.
Defendants disclosed Dr. Mengel’s opinions about the documents now
marked as Exhibits 12, 47, 48, and 75B on June 16, 2017, over five months after the
expert disclosure deadline. The supplementation therefore did not comply with the
deadline set by the Court.
Sanctions for Failure to Timely Comply With Rule 26(a)
Having found defendants failed to comply with the deadline for providing expert
disclosures pursuant to Rule 26(a), the Court must now determine whether sanctions are
FED. R. CIV. P. 37(c)(1) provides for applicable sanctions to be imposed
in the event a party does not make the required disclosures under Rule 26(a).
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. In addition to or instead of this
sanction, the court, on motion and after giving an opportunity to be heard:
(A) may order payment of the reasonable expenses, including attorney’s
fees, caused by the failure; (B) may inform the jury of the party’s failure;
and (C) may impose other appropriate sanctions, including any of the orders
listed in Rule 37(b)(2)(A)(i)-(vi).
FED. R. CIV. P. 37(c).
When a party fails to provide the information or the identity of an expert witness
in compliance with Rules 26(a) and 26(e), a court has wide discretion to fashion a remedy
or sanction under Rule 37(c) that is appropriate under the circumstances. Wegener v.
Johnson, 527 F.3d 687, 692 (8th Cir. 2008). These sanctions can include the exclusion
at trial of testimony on undisclosed opinions. See FED. R. CIV. P. 37(c)(1). These
sanctions do not apply, however, if “the failure was substantially justified or is harmless.”
FED. R. CIV. P. 37(c)(1). See, e.g., Wegener, 527 F.3d at 692 (the district court did
not abuse its discretion in excluding expert witness testimony supplemented less than
three weeks prior to trial because, in relevant part, the late disclosure was neither
substantially justified nor harmless, and “a continuance would have postponed a muchdelayed trial”); accord Williams v. TESCO Servs., Inc., 719 F.3d 968, 976 (8th Cir.
2013) (finding no “clear and prejudicial abuse of discretion” in the district court’s
decision to strike an expert’s second report, which was disclosed after the close of both
discovery and the summary judgment record, because that report “materially alter[ed],
[rather than] merely clarif[ied]” the expert’s original report and deposition testimony).
Importantly, “the exclusion of evidence is a harsh penalty [for non-compliance
with discovery disclosure deadlines] and should be used sparingly.” Wegener, 527 F.3d
at 692 (quoting ELCA Enters. v. Sisco Equip. Rental & Sales, 53 F.3d 186, 190 (8th Cir.
1995). See also Sylla-Sawdon, 47 F.3d at 283-84 (holding that a trial court has great
discretion in determining whether to strike expert testimony that is disclosed in
contravention of the court’s scheduling orders). Cf. Jackson v. Allstate Ins. Co., 785
F.3d 1193, 1203–04 (8th Cir. 2015) (affirming, under the circumstances, the district
court’s denial of a motion to exclude expert trial testimony due to the late disclosure of a
supplemental expert report). “The burden of proof is on the potentially sanctioned party
to prove harmlessness or justification.”
Cooper v. Wullweber, No. C10-1032, 2012 WL
1904806, at *6 (N.D. Iowa May 25, 2012) (quoting R.C. Olmstead, Inc. v. CU Interface,
LLC, 657 F. Supp. 2d 905, 913 (N.D. Ohio 2008) aff’d, 606 F.3d 262 (6th Cir. 2010)).
The Court finds that defendants have failed to carry their burden of showing that
the failure to provide timely disclosure was justified.
Defendants had the documents
constituting Exhibits 12, 47, 48, and 75B in their possession long before the January 13,
2017, deadline for Dr. Mengel to render his opinions. Indeed, the Court previously
found defendants failed to timely disclose this information in their discovery responses,
instead producing the documents to plaintiff in a large mass of ESI discovery.
Defendants cannot now complain about plaintiff not marking the documents as exhibits
earlier when they failed to timely disclose the documents in the first instance.
Whether the untimely disclosure is harmless is a different question.
argues that it “may” not have time to re-depose Dr. Mengel.
(Doc. 129-8, at 8).
Plaintiff’s own language is speculative and the Court finds time still remains to re-depose
Dr. Mengel.1 The re-deposition will, however, cost additional funds that would not
have been necessary had defendants provided a timely disclosure.
In that sense,
defendants’ violation of the Rule 26 was not harmless.
Having found that defendants have shown neither substantial justification for
failing to comply with the disclosure requirements of Rule 26(a), or that the failure was
harmless, the Court must now determine the appropriate sanction.
The Court may
exclude an expert’s testimony when, as here, a party has failed to comply with the
disclosure requirements of Rule 26. See Wegener, 527 F.3d at 692 (holding that when
a party fails to provide information in compliance with Rule 26(a), the Court “may
exclude the information or testimony as a self-executing sanction unless the party’s failure
to comply is substantially justified or harmless.”) (citing FED. R. CIV. P. 37(c)(1)).
also Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358, 1365 (Fed. Cir. 2011) (“Rule
37(c)(1) ‘gives teeth’ to the written report requirement of Rule 26(a)(2)(B).”).
On the other hand, Rule 37(c)(1) also provides a district court with discretion in
fashioning an appropriate sanction, taking into account the circumstances of the case.
The Court, of course, possesses inherent power to impose sanctions in matters arising
from discovery abuses.
See Sylla–Sawdon, 47 F.3d at 280.
In fashioning an
Incidentally, the Court does not find that plaintiff unduly delayed in bringing this motion after
defendants provided their supplementation because plaintiff spent that time trying to resolve the
discovery dispute with defendants, as it was obligated to do.
appropriate remedy, a court should consider “the reason for noncompliance, the surprise
and prejudice to the opposing party, the extent to which allowing the information or
testimony would disrupt the order and efficiency of the trial, and the importance of the
information or testimony.”
Wegener, 527 F.3d at 692 (citing Marti v. City of
Maplewood, 57 F.3d 680, 683 (8th Cir. 1995) (setting forth a variety of possibly relevant
The Court finds striking Dr. Mengel’s supplemental opinion is too severe a
“[T]he exclusion of evidence is a harsh penalty [for non-compliance with
discovery disclosure deadlines] and should be used sparingly.”
Wegener, 527 F.3d at
692 (quoting ELCA Enters. v. Sisco Equip. Rental & Sales, 53 F.3d 186, 190 (8th Cir.
1995)); see Bonin v. Chadron Cmty. Hosp., 163 F.R.D. 565, 566 (D. Neb. 1995)
(reversing a magistrate judge’s order striking expert as too harsh a sanction for the party’s
failure to make a timely and complete disclosure of expert witnesses).
are designed to get at the truth, and striking an expert opinion that may assist the jury in
arriving at the truth could interfere with that goal.
See Kansas v. Cheever, 134 S. Ct.
596, 602 (2013) (affirming a district court’s denial of a motion to strike expert testimony,
noting the “core truth-seeking function of the trial”).
Therefore, the Court denies
plaintiff’s motion to strike Dr. Mengel’s supplemental opinions.
Rather, the Court will grant plaintiff’s alternative request for relief; that is, the
Court will permit plaintiff to re-depose Dr. Mengel at defendants’ expense.
finds it appropriate that defendants pay not only travel expenses, but also the costs of the
deposition, including attorneys’ fees. Defendants had the documents at issue in their
possession, failed to properly and timely identify them in discovery, and therefore should
bear the consequences of plaintiff having to re-depose Dr. Mengel when plaintiff was
finally able to discover the documents in the large amount of ESI produced by defendants.
The Court will not, however, grant plaintiff’s request to designate new rebuttal
The Court previously imposed that sanction as a result of plaintiff’s
own violation of discovery rules.
As the Court previously stated, plaintiff may, if it
chooses, call the experts it has thus far designated in rebuttal at trial, but plaintiff will
not be permitted to identify any new expert witnesses to rebut the testimony of defendants’
Defendants’ Motion to Strike
Defendants argue that plaintiff’s supplemental disclosure of damages information,
in response to Interrogatory No. 9, is untimely and “significantly altered the damages
information that had previously been provided.”
(Doc. 135-1, at 2). Defendants point
out that plaintiff did not supplement its answer to Interrogatory No. 4 regarding Mr.
Grega, but note that during his deposition, Mr. Grega confirmed that he was asked to
generate the information contained in the supplemental answer to Interrogatory No. 9 and
planned to testify about this information at trial. (Id.).
Defendants further argue that
the information upon which the supplemental answer was based was known to plaintiff
since June 2015 and therefore, plaintiff could have calculated these damaged long before
the deadline for expert disclosures.
(Id., at 3-4). Finally, defendants argue they are
harmed by the untimely supplemental answer because they did not designate a rebuttal
damages expert (arguing that plaintiff’s prior damages claim did not require one) and
because the late disclosure prevented them from conducting discovery regarding the new
(Id., at 4-5).
In response, plaintiff argues that it needed to adjust its theory of damages to
accommodate discovery developments. (Doc. 141, at 2).
Plaintiff claims that it based
its earlier damages calculations on the premise that defendants had sold a competing
potassium acetate-based product and was “skeptical” of defendants’ discovery responses
denying this proposition “in light of the information that was being found in ESI . . ..”
(Id., at 6).
Through discovery, however, plaintiff apparently became satisfied that no
competing product had been sold and therefore changed its damages calculations to be
based on how it had to lower its prices to compete with defendants’ published price sheet.
(Id., at 6-7).
Further, plaintiff argues that the supplemental disclosure constitutes an
update of financial information.
(Id., at 5-6).
For these reasons, plaintiff argues that
its supplemental disclosure was substantially justified.
(Id., at 5-7).
in the alternative, that any violation of the discovery rules is harmless because it will not
object to defendants re-deposing Mr. Grega and to naming a rebuttal expert. (Id., at 9).
In their reply brief, defendants point out that they did not produce ESI to plaintiff
until March 2017, and therefore plaintiff “simply chose to ignore” for nine months
defendants’ responses indicating that it did not sell a competing product. (Doc. 149, at
2). Defendants further argue that plaintiff’s supplemental disclosure does not simply
comprise of an update of financial projections, but reflects an entirely new theory of
damages. (Id., at 2-3).
The Court agrees that plaintiff’s supplemental answer to Interrogatory No. 9 in
large part constitutes a completely new theory of damages and is not simply an update of
financial data. The Court further finds that plaintiff’s failure to make a timely disclosure
of this damage theory was not substantially justified by its skepticism of defendants’
discovery responses. Nor is the untimely supplementation harmless because defendants
chose not to hire a rebuttal expert based on plaintiff’s prior damages theory.
Again, however, the Court finds striking the supplemental expert disclosure too
harsh of a sanction and one that would impair the jury’s ability to arrive at the truth.
The Court finds there is sufficient time remaining before trial for the discovery violation
to be remedied by permitting defendants to hire a rebuttal expert.
The Court will
therefore extend deadlines to permit defendants time to hire and disclose a rebuttal
The Court will also extend the discovery deadline for the limited
purpose of permitting plaintiff to depose the rebuttal expert.
The Court finds that both parties to this litigation have repeatedly failed to comply
with deadlines and discovery obligations, and have repeatedly cried foul upon each other.
The result has been significant delay and mounting costs, the very antithesis of the goals
set out in Rule 1 of the Federal Rules of Civil Procedure.
The parties have no one but
themselves to blame for this seemingly never-ending lawsuit and discovery sparring.
Once again, the Court finds the parties to have violated their obligations and imposes
The Court provides fair warning here that any further violations of discovery
obligations by the parties in this case will result in much more serious sanctions, including
possibly against the lawyers personally.
The Court finds defendants failed to provide a substantial justification for failing
to make timely expert witness disclosure and that such failure was not harmless.
Nevertheless, the Court finds that plaintiff’s motion to strike defendants’ supplemental
expert disclosure is too harsh of a remedy.
Therefore, the Court denies plaintiff’s
motion to strike defendants’ supplemental expert disclosure (Doc. 129).
grants, however, plaintiff’s request for alternative relief by authorizing plaintiff to redepose Dr. Mengel at defendants’ expense. The Court denies plaintiff’s request for
authorization to designate rebuttal expert witnesses.
The Court similarly finds plaintiff failed to provide a substantial justification for
failing to make timely expert witness disclosure and that such failure was not harmless.
Nevertheless, the Court finds that defendants’ motion to strike plaintiff’s supplemental
expert disclosure is too harsh of a remedy. Therefore, the Court denies defendants’
motion to strike plaintiff’s supplemental expert disclosure (Doc. 135).
The Court will
provide alternative relief by authorizing defendant to re-depose Mr. Grega at plaintiff’s
expense. The Court will further permit defendants to designate a rebuttal damages
expert. Defendants shall have until September 29, 2017, to provide full disclosures
regarding any rebuttal damages expert.
Plaintiff will have until October 15, 2017, to
depose the rebuttal expert at its own expense.
IT IS SO ORDERED this 8th day of September, 2017.
Chief United States Magistrate Judge
Northern District of Iowa
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