CPI Card Group-Nevada, Inc. v. Traffic Jam Events, LLC

Filing 38

ORDER AND REASONS denying 28 Motion in Limine. Signed by Chief Judge Sarah S. Vance on 1/3/13. (jjs, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CPI CARD GROUP-NEVADA, INC.

CIVIL ACTION

VERSUS

NO: 11-2873

TRAFFIC JAM EVENTS, LLC

SECTION: R(4)

ORDER AND REASONS
Defendant in counterclaim, CPI Card Group-Nevada, Inc.
(“CPI”) moves to dismiss plaintiff’s counterclaim or
alternatively to limit plaintiff’s evidence based on plaintiff’s
failure to comply with pretrial orders and discovery rules. For
the following reasons, the Court denies the motion.
I.

BACKGROUND
This is a contract dispute. CPI manufactures and supplies

personalized plastic cards. Since 2009, CPI has done business
with Traffic Jam.1 Early in their business relationship, CPI
required Traffic Jam to pay for the cards in advance of
shipment.2 Later, when Traffic Jam began ordering larger amounts
of cards, CPI allowed it to do so on credit. CPI would invoice
Traffic Jam on or after the shipment was made and allow Traffic
Jam several weeks to pay.3

1

R. Doc. 12-3 at 1.

2

Id.

3

Id. at 2.

This contractual relationship worked until 2010 when Traffic
Jam ordered 3,440,000 cards from CPI. CPI shipped the cards in
three batches. The first batch was 40,000 cards. On December 9,
2010, CPI shipped 3,000 cards to Traffic Jam and sent it an
invoice for $2,872.78–the cost of 40,000 cards.4 Because ofa
clerical error, CPI did not ship the remaining 37,000 cards on
December 9, 2010, as planned, but shipped them on December 20,
2010.5 Also on December 20, 2010, CPI shipped the second batch of
2,400,000 cards and sent its corresponding invoice for $88,500.6
On January 7, 2011, CPI shipped the third batch of 1,000,000
cards and sent its corresponding invoice of $37,189.51.7
On January 24, 2011, Traffic Jam informed CPI that some of
the cards were sticking together and returned 449,500 of these
cards to CPI.8 CPI “powdered” the cards and shipped them back to
Traffic Jam on February 15, 2011.9 Traffic Jam kept all 3,440,000
cards it has received from CPI, including the powdered cards, but
has not paid for any of the invoices.10 On June 2, 2011, CPI sent

4

Id. at 1-2.

5

R. Doc. 12-3 at 2.

6

Id.

7

Id. at 3.

8

Id.

9

R. Doc. 12-3 at 16.

10

Id. at 3.
2

Traffic Jam a letter demanding payment on the invoices.11 CPI
filed this action because Traffic Jam refuses to pay.
Traffic Jam has filed a counterclaim against CPI alleging
that the cards were defective because they stuck together and
that Traffic Jam had to spend additional money to separate the
cards. CPI now moves for dismissal of the counterclaim.12
II.

DISCUSSION
On March 29, 2012 this Court Ordered that all Federal Rule

of Civil Procedure 26(a)(1) disclosures be made by April 30,
2012. Additionally, the Court Ordered the parties to provide a
list of witnesses and exhibits by October 15, 2012. Further, all
discovery was to be completed by November 13, 2012. On May 17,
2012 CPI served on Traffic Jam a discovery request for
information pertaining to the issue of damages. CPI did not move
to compel these disclosures. Despite repeated assurances, Traffic
Jam never responded to these requests nor complied with the
Court’s Orders. Rather, on November 27, 2012, after both of these
deadlines had passed, Traffic Jam disclosed documents pertaining
to its claim for damages. Now CPI seeks to dismiss the
counterclaim for failure to prosecute, or in the alternative, to
limit Traffic Jam’s evidence at trial.

11

Id. at 17.

12

R. Doc. 28.
3

Federal Rule of Civil Procedure 37(c)(1) provides that “if a
party fails to provide information or identify a witness as
required by Rule 26(a) or (e), the party is not allowed to use
that information or witness to supply evidence on a motion, at a
hearing, or at a trial, unless the failure was substantially
justified or is harmless.” Fed. R. Civ. P. 37(c)(1). District
courts determine whether a violation of Rule 26 is harmless by
considering four factors: (1) the importance of the evidence; (2)
the prejudice to the opposing party of including the evidence;
(3) the possibility of curing such prejudice by granting a
continuance; and (4) the explanation for the party’s failure to
disclose. Texas A&M Research Foundation v. Magna Transp., Inc.,
338 F.3d 394, 402 (5th Cir. 2003).
Traffic Jam’s late disclosures violated Rule 26 and the
scheduling Order of this Court. As justification, Traffic Jam
asserts only that it is “a large company, with various
departments, and numerous employees.” and that securing these
documents takes time.13 That Traffic Jam is a large company does
not justify the late disclosures. Traffic Jam’s conduct is
inexcusable.
On the other hand, CPI never filed a motion to compel
production of the documents. Further, the documents disclosed are
not voluminous, nor are they complex. Moreover, they are

13

R. Doc. 33 at 6.
4

essential to Traffic Jam’s case as they are necessary to
establish damages. Accordingly, while unjustified, Traffic Jam’s
late disclosures have not materially prejudiced CPI and will not
be excluded from trial.
However, because Traffic Jam has not provided the names of
any experts or produced any expert reports, Traffic Jam will be
precluded from introducing expert testimony at trial.
Rule 41(b) authorizes a district court to dismiss with
prejudice an action for want of prosecution upon “a showing of a
clear record of delay or contumacious conduct by the plaintiff .
. . and where lesser sanctions would not serve the best interest
of justice.” Dorsey v. Scott Wetzel Servs., Inc., 84 F.3d 170,
171 (5th Cir. 1996) (quotation omitted). The Court determines
that dismissal is inappropriate in this case because CPI has
failed to show that Traffic Jam’s late disclosures were willful
or in bad faith. Traffic Jam’s counsel is still required to
appear before this Court to show cause why he should not be
sanctioned for failing to attend the December 13, 2012 pretrial
conference.
IV.

CONCLUSION
For the foregoing reasons, CPI’s motion is DENIED.

3rd
New Orleans, Louisiana, this __ day of January, 2013.
_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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