GOLDENSON et al v. STEFFENS et al
Filing
187
ORDER denying 161 Plaintiffs' Appeal from Magistrate Judge Decision to District Court; denying 162 Defendants' Partial Appeal from Magistrate Judge Decision to District Court. By JUDGE JOHN A. WOODCOCK, JR. (MFS)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
DANIEL R. GOLDENSON, et al.,
Plaintiffs,
v.
JOHN L. STEFFENS, et al.,
Defendants.
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2:10-cv-00440-JAW
ORDER DENYING THE PLAINTIFFS’ AND THE DEFENDANTS’ APPEALS
OF THE MAGISTRATE JUDGE’S ORDER ON THE DEFENDANTS’
MOTION TO STRIKE
This securities-fraud lawsuit stems from the fall-out of Bernard Madoff’s
infamous Ponzi scheme. In an attempt to umpire an intractable discovery dispute,
the Magistrate Judge imposed sanctions on the Plaintiffs for their failure to file an
expert’s supplemental designation by the discovery deadline. He pleased no one.
Rankling at any sanction, the Plaintiffs appealed the Magistrate Judge’s Order;
frustrated at the Magistrate Judge’s leniency, the Defendants also appealed. The
Court concludes that the Magistrate Judge’s Order was neither clearly erroneous
nor contrary to law and it affirms the ruling.
I.
BACKGROUND
A.
Procedural History
On June 4, 2012, the Defendants moved to strike as untimely the Plaintiffs’
supplemental expert designation of Dr. Patrick E. Conroy. Defs.’ Mot. to Strike Pls.’
Supplemental Expert Designation of Dr. Patrick E. Conroy as Untimely (ECF No.
141) (Defs.’ Mot.). The Plaintiffs responded to the Defendants’ motion on June 18,
2012. Pls.’ Opp’n to Defs.’ Mot. to Strike Pls.’ Supplemental Expert Designation of
Dr. Patrick E. Conroy (ECF No. 150) (Pls.’ Opp’n).
On June 22, 2012, the
Defendants replied to the Plaintiffs’ opposition. Defs.’ Reply in Supp. of Mot. to
Strike Pls.’ Supplemental Expert Designation of Dr. Conroy as Untimely (ECF No.
153) (Defs.’ Reply).
The Magistrate Judge issued an Order on July 5, 2012, granting in part and
denying in part the Defendants’ Motion to Strike. Mem. Decision and Order on
Defs.’ Mot. to Strike Expert Designation (ECF No. 158) (Order). On July 19, 2012,
the Plaintiffs filed an appeal of the Magistrate Judge’s Order. Pls.’ Appeal of the
Magistrate Judge’s Order on Defs.’ Mot. to Strike Expert Designation (ECF No. 161)
(Pls.’ Appeal).
The Defendants filed a partial appeal of the Magistrate Judge’s
decision on July 19, 2012, Defs.’ Partial Appeal of the Magistrate Judge’s Decision
on Defs.’ Mot. to Strike the Expert Designation of Dr. Patrick E. Conroy (ECF No.
162) (Defs.’ Appeal), and responded to the Plaintiffs’ appeal on August 6, 2012, Defs.’
Resp. to Pls.’ Appeal of the Magistrate Judge’s Order on Defs.’ Mot. to Strike Expert
Designation (ECF No. 172) (Defs.’ Opp’n to Pls.’ Appeal). The Plaintiffs responded
to the Defendants’ partial appeal on August 6, 2012. Pls.’ Resp. to Defs.’ Partial
Appeal of the Magistrate Judge’s Decision on Defs.’ Mot. to Strike the Expert
Designation of Dr. Patrick E. Conroy (ECF No. 171) (Pls.’ Opp’n to Defs.’ Appeal).
B.
Factual Overview
The Court adopts the Magistrate Judge’s recitation of the facts and provides
a brief summary for context. See Order at 4-8. After granting two extensions, on
2
February 6, 2012, the Magistrate Judge extended the Plaintiffs’ deadline for expert
designations until February 29, 2012 “without prejudice to the filing of a further
motion to extend that deadline for good, articulable reasons, if a routine
modification of any expert designation(s) is inadequate.” See Am. Report of Hr’g
and Order Re: Scheduling of Sept. 28, 2011 at 2 (ECF No. 54); Report of Hr’g and
Order Re: Disc. and Scheduling of Feb. 6, 2012 at 7 (ECF No. 79) (Feb. 6, 2012
Order). On February 19, 2012, in a motion for protection, the Plaintiffs asked to
extend the Court’s February 29, 2012 expert designation deadline. Pls.’ Mot. for
Protection and for Order to Show Cause as to Why Sanctions Should Not be Entered
at 1 (ECF No. 85) (Pls.’ Mot. for Protection). At a hearing on the Plaintiffs’ motion,
when asked about the status of expert designations, the Plaintiffs informed the
Court that, “[w]e have designated our experts . . . I don’t think experts are going to
be the problem.” Defs.’ Opp’n to Pls.’ Appeal Attach 2, Tr. of Mar. 22, 2012 Hr’g.
On February 29, 2012, the Plaintiffs served their expert designations,
including Dr. Conroy’s designation, on the Defendants. Id. However, the Plaintiffs
informed the Defendants that they could not confirm the full extent of Dr. Conroy’s
expected testimony because they were still waiting for the Defendants to provide
documents relevant to his testimony. Id.; see also Decl. of Max Nicholas in Supp. of
Defs.’ Mot. to Strike Pls.’ Supplemental Expert Designation of Dr. Patrick E. Conroy
as Untimely (ECF No. 142) (Nicholas Decl.) Attach 1, Pls.’ Expert Witness
Designations (Pls.’ Expert Witness Desigs.).
On April 14, 2012, the Magistrate
Judge extended the discovery deadline from May 7, 2012 to May 21, 2012 “solely for
3
the purpose of taking expert depositions.”
Report of Hr’g and Order Re: Disc.,
Scheduling of April 14, 2012 (ECF No. 103).
In a series of emails between the parties, the Defendants pointed out that
they needed to receive Dr. Conroy’s supplemental designation information by May
16, 2012 to meet the “discovery cutoff.” See Order at 5-6; Nicholas Decl. Attach 9,
Email from James T. Kilbreth to Alfred Frawley (May 10, 2012). In response, the
Plaintiffs stated that they would try to comply with the discovery deadlines but that
the Defendants’ slow delivery of documents was the source of the Plaintiffs’ delay.
See Nicholas Decl. Attach 10, Email from Alfred Frawley to James T. Kilbreth (May
10, 2012).
On May 25, 2012, the Plaintiffs served Dr. Conroy’s supplemental
designation on the Defendants. Nicholas Decl. Attach 2, Pls.’ Supplementation to
the Expert Witness Designation of Patrick E. Conroy, Ph.D.
Pursuant to Rule 26(b), on May 31, 2012, the Defendants wrote the
Magistrate Judge requesting leave to file a motion to strike Dr. Conroy’s
supplemental expert designation. FED. R. CIV. P. 26(b); see Order at 6. In response,
the Plaintiffs wrote the Magistrate Judge and explained that Dr. Conway had been
away on work, that Dr. Conway and the Plaintiffs needed to review voluminous
documents before filing his supplemental designation, and that the Court’s
February 6, 2012 Order contemplated “routine modifications of any expert
designation” and authorized the Plaintiffs’ May 25th filing.
See Order at 7-8.
Despite the Plaintiffs’ letter, the Magistrate Judge granted the Defendants
permission to file a motion to strike. See Order at 2.
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II.
THE MAGISTRATE JUDGE’S ORDER
In his July 5, 2012, Memorandum Decision, the Magistrate Judge granted in
part and denied in part the Defendants’ motion to strike. See Order at 14. First,
the Magistrate Judge agreed that Dr. Conway’s expert designation was untimely
and did not comply with Rule 26(a)(2)(A)-(B). See FED. R. CIV. PRO 26(a)(2)(A)-(B);
Order at 1, 8-9. The Magistrate Judge also rejected the Plaintiffs’ assertion that
Rule 26(e)(2) allowed them to supplement Dr. Conroy’s designation until August 5,
2012, because that rule contemplates “additions or changes” to information in the
expert report and Dr. Conroy’s initial designation did not contain a complete report.
FED. R. CIV. PRO. 26(e)(2); Order at 8-9. The Magistrate Judge concluded: “Although
the plaintiffs designated Dr. Conroy by the February 29, 2012, deadline, the
designation effectively was nothing more than a placeholder without sufficient
substance” especially since “there was no statement of any opinion that Dr. Conroy
would express.” Order at 9. Even if Rule 26(e)(2) applied, the Magistrate Judge
decided that the Plaintiffs’ filing would still be late because “[t]he Plaintiffs failed to
supplement the Conroy designation by the [Court’s] deadline.” Id.; see FED. R. CIV.
P. 26(a)(3)(B), (e)(2). Further, the Magistrate Judge concluded that the Plaintiffs,
rather than the Defendants, bore the burden of requesting a deadline extension. Id.
at 10.
Next, although the Magistrate Judge found that the Plaintiffs’ failure to
timely file Dr. Conroy’s supplemental designation was not harmless, he concluded
that the Plaintiffs’ late filing was substantially justified.
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Id. at 10-11.
The
Magistrate Judge considered the parties’ contentious discovery disputes, the
delayed transmission of relevant documents to the Plaintiffs, Dr. Conroy’s busy
work schedule, the Plaintiffs’ timeline for filing the supplemental designation, and
the fact that the Defendants had notice of Dr. Conroy’s future testimony persuasive
in his analysis. Id. Nevertheless, the Magistrate Judge awarded the Defendants
sanctions in the amount of the Defendants’ reasonable costs of pursing their motion
to strike.
Id. at 12.
The Magistrate Judge stated that the Plaintiffs’ “lack of
concern” about their failure to comply with the Court’s scheduling orders and
discovery deadlines motivated his decision.
Id. at 12-13.
In addition, the
Magistrate Judge granted, “without objection”, the Defendants’ request to enlarge
the discovery period so that they could depose Dr. Conroy and re-depose the
Goldensons on issues relating to Dr. Conroy’s supplemental designation. Id. at 13.
III.
PARTIES’ POSITIONS
A.
Plaintiffs’ Appeal
The Plaintiffs insist that the Magistrate Judge’s decision to sanction them for
their “late” supplemental designation is clearly erroneous for five reasons: (1) that
the Plaintiffs duly designated Dr. Conroy on February 29th based on information
available to them; (2) that the Magistrate Judge did not rule on the Plaintiffs’
February 19th request to extend the designation deadline, apparently because the
Plaintiffs’ February 29th expert designations mooted the need for any extensions;
(3) that the Defendants never moved to strike Dr. Conroy’s designation; (4) that Dr.
Conroy’s supplementation was a supplemental disclosure pursuant to Rule
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26(a)(2)(B) because it contained “additions or changes” to the information contained
in his designation; and (5) that Dr. Conroy’s supplementation depended on his
review of documents that were drafted and produced by Defendants and had
“otherwise been made known to the other parties during the discovery process.”
Pls.’ Appeal at 6.
Second, the Plaintiffs contend that the Magistrate Judge “erroneously
interpreted [his] scheduling order” and failed to recognize that Rule 26(e)(2)
permitted their May 25th filing. FED. R. CIV. PRO. 26(e)(2); Pls.’ Appeal at 7.
Third, the Plaintiffs insist that they did not move for an extension with the
Court because on February 19, 2012, they had already moved for an extension of the
expert designation deadline.
Pls.’ Appeal at 8.
The Plaintiffs claim that the
Magistrate Judge never ruled on their motion. Id.
Next, the Plaintiffs point out that the Magistrate Judge did not determine
whether the Plaintiffs were substantially justified in disobeying the Court’s
discovery order and list five reasons to support their “substantially justified
misunderstanding” of the order and the Federal Rules. Id. at 8-9. The Plaintiffs
maintain that they “served Dr. Conroy’s [s]upplementation as promptly as possible
and made him available for an out-of-time deposition” as additional evidence of
their good faith. Id. at 9.
Finally, the Plaintiffs assert that the Magistrate Judge failed to determine
whether other circumstances made an award of sanctions unjust. Id.
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B.
Defendants’ Response to the Plaintiffs’ Appeal
The Defendants first respond that the Magistrate Judge was not required to
rule on the Plaintiffs’ February 19th deadline extension request because at a
hearing on their motion for protection the “Plaintiffs told [the Magistrate Judge] he
did not have to.” Defs.’ Opp’n to Pls.’ Appeal at 5-6 (emphasis in the Defendants’
opposition).
The Defendants say that even if the Plaintiffs’ February 19, 2012
extension request was not waived at their March 22, 2012 hearing, its pending
status cannot excuse the Plaintiffs’ failure to request an extension of the May 7th
and May 21st discovery deadlines. Id. at 5.
Second, the Defendants insist that the Magistrate Judge correctly interpreted
his scheduling orders and that “[e]ven setting aside the Magistrate Judge’s
interpretation of his own orders . . . [the] Plaintiffs’ competing interpretation makes
no sense.” Id. at 7.
Third, the Defendants contend that the Plaintiffs’ “after-the-fact” agreement
to extend the deposition deadline for Dr. Conroy does not excuse their failure to
comply with the May 21st deadline. Id. at 8. In addition, the Defendants argue
that the Plaintiffs did not establish substantial justification for their noncompliance
with the Magistrate Judge’s discovery orders given their emails to defense counsel
and their failure to request an extension for the May 7th and May 21st discovery
deadlines. Id. at 9-10. Finally, the Defendants make clear that the imposition of
costs is just because it is a less extreme sanction than originally sought by the
Defendants―Dr. Conroy’s exclusion. Id. at 10.
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C.
Defendants’ Partial Appeal of the Magistrate Judge’s
Decision
In the event that the Court grants the Plaintiffs’ appeal, the Defendants ask
the Court to “impose the alternative sanction of excluding Dr. Conroy as an expert
witness in this case.” Defs.’ Appeal at 3.
D.
Plaintiffs’ Response to the Defendants’ Partial Appeal
The Plaintiffs first argue that the Defendants’ partial appeal fails to
recognize that the Plaintiffs filed and still await a decision on a request for
protection from the February 29, 2012 expert designation deadline. Pls.’ Opp’n to
Defs.’ Appeal at 2. They assert that the “mere fact of this pending but unanswered
request should at the very least protect the Plaintiffs from sanctions.” Id. Further,
the Plaintiffs contend that “[t]he Defendants’ discovery tactics are the reason for the
overwhelming docket in this case” and that on several occasions they forced the
Plaintiffs to engage in seemingly unnecessary motion practice. Id. at 2-3.
IV.
DISCUSSION
A.
Standard of Review
The Magistrate Judge’s authority to rule on a non-dispositive pretrial matter
emanates from 28 U.S.C. § 636(a)(1)(A), which provides that a district judge may
designate a magistrate judge “to hear and determine any pretrial matter pending
before the court.” After a party files a timely objection to the Magistrate Judge’s
order on a non-dispositive matter, the District Court must “modify or set aside any
part of the order that is clearly erroneous or is contrary to law.” FED. R. CIV. PRO.
72(a); 28 U.S.C. § 636(b)(1)(A) (“A judge of the court may reconsider any pretrial
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matter . . . where it has been shown that the magistrate’s [magistrate judge’s] order
is clearly erroneous or contrary to law”). The discovery issues addressed in the
Magistrate Judge’s Order are “pretrial matter[s] not dispositive of a party’s claim or
defense” within the purview of Federal Rule of Civil Procedure 72(a). FED. R. CIV.
PRO. 72(a).
Under the “clearly erroneous standard”, the Court “must accept both the
trier’s findings of fact and conclusions drawn therefrom unless, after scrutinizing
the entire record, [it] ‘form[s] a strong, unyielding belief that a mistake has been
made.’” Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 4 (1st Cir. 1999) (citing
Cumpiano v. Banco Santander P.R., 902 F.2d 148, 152 (1st Cir. 1990)). “[S]anctions
pursuant to Rule 37 . . . are [also] generally reviewed under the ‘clearly erroneous or
contrary to law’ standard.” Russo v. Baxter Healthcare Corp., 51 F. Supp. 2d 70, 75
(D.R.I. 1999); see also In re. Subpoena to TD Bank, N.A., No-8-101-P-S, 2008 U.S.
Dist. LEXIS 99888, at * 2-3 (D. Me. Dec. 1, 2008).
B.
The Magistrate Judge’s Imposition of Sanctions
The parties’ primary dispute concerns the Magistrate Judge’s imposition of
sanctions. See Part I.C.1. Here, the Magistrate Judge sanctioned the Plaintiffs for
their “lack of concern about whether [Dr. Conroy’s] designation was made before or
after the May 21, 2012 [discovery] deadline.” See Order at 12-13. Pursuant to Rule
37(b)(2)(C), the Court ordered the Plaintiffs to pay the Defendants the “reasonable
costs of pursuing the Motion.” Order at 12; see FED. R. CIV. P. 37(b)(2)(C). The
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Court concludes that the Magistrate Judge’s ruling was neither clearly erroneous
nor contrary to law.
1.
Dr. Conroy’s Untimely Supplemental Designation
The Plaintiffs list five reasons why the Magistrate Judge’s sanctions decision
is clearly erroneous or contrary to law as it relates to Dr. Conroy’s “untimely”
supplemental designation. See Pls.’ Appeal at 6. In Rosario-Diaz, the First Circuit
stated that the “Civil Rules endow trial judges with formidable case-management
authority . . . [and] litigants have an unflagging duty to comply with clearly
communicated case-management orders . . . .” 140 F.3d at 315. “[A] litigant who
ignores a case-management deadline does so at his peril . . . .” Id. The Court also
noted that where a range of sanctions were available, the Court “acknowledge[s] the
trial judge’s special coign of vantage and give[s] him a wide berth to determine what
sanction responds most aptly to a particular infraction.” Id.
Similarly, in Serrano-Perez v. FMC Corp., the First Circuit noted that “[t]he
use of discovery closure dates and deadlines for disclosure of the identities of
experts are important tools for case management.” 985 F.2d 625, 629 (1st Cir.
1993). In Serrano-Perez, the First Circuit affirmed the district court’s decision to
deny the plaintiffs’ motion for reconsideration of summary judgment because the
plaintiffs did not introduce their proposed expert by the designated pretrial
discovery deadline. Id. at 628-29. The First Circuit observed that “to find that the
district court abused its discretion in denying the motion for reconsideration, we
11
would be flouting our own precedent, abdicating our supervisory responsibility, and
turning over control of discovery to the lawyers.” Id. at 629.
In light of First Circuit precedent and the Federal Rules of Civil Procedure,
the Court affirms the Magistrate Judge’s award of sanctions and rejects the
Plaintiffs’ five grounds for reversal. First, the Court concurs with the Magistrate
Judge that Dr. Conroy’s supplemental designation was untimely given the Court’s
clear scheduling orders and Rule 26(a)(2)(A)-(B). FED. R. CIV. P. 26(a)(2)(A)-(B); see
Part I.B.1. Instead of filing a “complete statement of all opinions” on February
29th, the Plaintiffs simply “described the methodology that [Dr. Conroy] would use
in expressing opinions when he had sufficient data to formulate them.” FED. R. CIV.
P. 26(a)(2)(A)-(B); Order at 9; see Pls.’ Expert Witness Desigs. at 11 (“no further
information concerning Dr. Conroy’s opinions can be provided at this time in the
context of this designation”). Thus, because the Plaintiffs openly acknowledge that
they were not submitting a “complete” designation for Dr. Conroy on February 29,
2012―the deadline for expert designations without approved extensions―the
Plaintiffs did not comply with Rule 26(a)(2)(B). See FED. R. CIV. P. 26(a)(2)(A)-(B)
(stating that an expert witness’s initial designation “must contain: (i) a complete
statement of all opinions the witness will express and the basis and reasons for
them . . .”).
The Court also rejects the Plaintiffs’ argument that their supplemental
designation was valid under Rule 26(e)(2). The Court agrees with the Magistrate
Judge that Rule 26(e)(2) only applies to designations made in compliance with Rule
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26(a)(2)(B). FED. R. CIV. P. 26(e)(2) (“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”).
Unfortunately for the Plaintiffs, their “mistaken beliefs” about Rule 26(e)(2)’s
applicability does not excuse their noncompliance with Rule 26(a)(2)(B).1
The
Plaintiffs had the obligation to raise with the Court any confusion or uncertainty
about these two Rules and their applicability before filing Dr. Conroy’s
supplemental designation. See Rosario-Diaz, 140 F.3d at 315 (“[w]e think that, at
the very least, the appellants should have . . . kept the court abreast of any
difficulties they were encountering with regard to legal representation”).
Moreover,
the
Plaintiffs’
argument
that
Dr.
Conroy’s
supplemental
designation was unnecessary given the Defendants’ delayed transfer of documents
is unconvincing. The Plaintiffs cite Rule 26(e)(1)(A) and compare Curet-Velazquez v.
ACEMLA de P.R., Inc., 656 F.3d 47 (1st Cir. 2007), to the facts at hand to justify
their late filing, arguing that Dr. Conroy’s supplementation depended on documents
that the Defendants “resisted” giving them.
FED. R. CIV. PRO. 26(e)(1)(A); Pls.’
Appeal at 6, 6 n.7. First, Rule 26(e)(1)(A) does not authorize the Plaintiff’s late
designation as it simply directs parties to supplement incomplete or incorrect
disclosures and responses made during pretrial discovery “in a timely manner.”
As the Court agrees with the Magistrate Judge that Rule 26(e)(2) does not apply to Dr.
Conroy’s supplemental designation, it finds the Plaintiffs’ argument that the Magistrate Judge
“erroneously interpreted the scheduling order” untenable. Pls.’ Appeal at 7; see Global Naps, Inc. v.
Verizon New Eng. Inc., 603 F.3d 71, 94 (1st Cir. 2010) (“the defendants . . . urge that the district
court’s discovery orders were directed at [the plaintiffs], not them. We will defer to the district
court’s contrary interpretation of its own orders”).
1
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FED. R. CIV. PRO. 26(e)(1)(A).
Furthermore, Curet-Velazquez is not controlling
because, unlike here, the defendants delayed submitting documents relevant to the
plaintiffs’ expert’s testimony until the day of the plaintiffs’ expert’s deposition―one
week before trial. 656 F.3d at 56. “In law as in life, two wrongs do not make a
right” and a delay in the delivery of documents does not justify the Plaintiffs’
noncompliance with Court orders. Muler-Abreu v. P.R. Police Dep’t, 675 F.3d 88, 92
(1st Cir. 2012).
Next, even if the Plaintiffs’ motion to extend the February 29th expert
designation deadline was pending, they must still comply with the Court’s
scheduling orders.2 See Pls.’ Mot. for Protection and for Order to Show Cause as to
Why Sanctions Should Not be Entered at 10 (ECF No. 85). Regardless of whether
the Plaintiffs waived their designation deadline request, they filed their
“supplemental” expert designation on May 25, 2012, four days after the Court’s
discovery deadline of May 21, 2012. See Order; Part I.A.2. By their late filing, the
Plaintiffs disregarded the Court’s case management authority and the Federal
Rules. See Rosario-Diaz, 140 F.3d at 315; Serrano-Perez, 985 F.2d at 629.3
Finally, the fact that the Defendants did not move to strike Dr. Conroy’s
insufficient designation before the Plaintiffs served their supplemental designation
on May 25th does not render the Magistrate Judge’s sanctions ruling clearly
Technically, the Plaintiffs’ February 19, 2012 motion remains pending. Consistent with the
Magistrate Judge’s order and this opinion, the Court dismisses the motion as moot.
3
As the Court concludes that the Plaintiffs’ pending motion to extend the February 29, 2012
expert designation deadline does not excuse their noncompliance with other discovery deadlines set
by the Magistrate Judge, the Court agrees with the Magistrate that it was the Plaintiffs’ burden to
request a designation extension. See Order at 10.
2
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erroneous. In support, the Plaintiffs cite White v. Meador, 215 F. Supp. 2d 215 (D.
Me. 2002) pointing out that the White Court stated that expert designations were
insufficient but would still be accepted because “[c]ounsel [should have] at least
give[n] opposing counsel a timely opportunity to remedy omissions in the required
designations before seeking assistance from the court in obtaining the necessary
information . . . .”
Id. at 221.
Here, the Defendants complied with White by
emailing the Plaintiffs and informing them that they needed to supplement Dr.
Conroy’s designation before May 21, 2012. Compare Order at 5-6 (summarizing the
parties’ email correspondence regarding Dr. Conroy’s designation), with White, 215
F. Supp. 2d at 221 (“from all that appears in the record, none of the moving
defendants took any action to seek further information or to notify plaintiff’s
counsel that they considered the designations to be incomplete in any way”). The
Defendants did not move to strike Dr. Conroy’s supplemental designation until the
Plaintiffs had plainly violated the Magistrate Judge’s scheduling orders.
2.
Rule 37(b)(2)(C): Substantial Justification and Other
Circumstances
The Plaintiffs also argue that the Magistrate Judge’s sanctions decision was
clearly erroneous and contrary to law because he did not determine whether the
Plaintiffs’ mistaken beliefs regarding Dr. Conroy’s designation were substantially
justified or whether other circumstances made an award of expenses unjust. Pls.’
Appeal at 8-9. According to Rule 37(b)(2)(C), the Court may “order the [party who
disobeyed the Court’s discovery order] . . . to pay the reasonable expenses, including
attorney’s fees, caused by the failure, unless the failure was substantially justified
15
or other circumstances make an award of expenses unjust.”
FED. R. CIV. P.
37(b)(2)(C). “A substantial justification is one that ‘could satisfy a reasonable
person.’” Pan Am Grain Mfg. Co. v. P.R. Ports Auth., 295 F.3d 108, 116-17 (1st Cir.
2002) (quoting Pierce v. Underwood, 487 U.S. 552, 565 (1988)).
Here, although the Magistrate Judge did not make an explicit substantial
justification finding pursuant to Rule 37(b)(2)(C), the Magistrate Judge’s stated
reasoning makes it plain that he considered other circumstances when making his
sanctions ruling.
See Order at 12-13 (“The plaintiffs, who knew that vital
documents had not been transmitted to Dr. Conroy until April 26, 2012, and that he
would be traveling on other business shortly thereafter, neither complied with the
court’s scheduling order deadlines nor moved for a deadline extension. Instead, this
motion practice ensued”). Three of the five reasons the Plaintiffs list in support of
their substantial justification argument have already been rejected by the Court.
See Pls.’ Appeal at 8; Part IV.B.1.
Accordingly, the Court concludes that a
reasonable person in the Plaintiffs’ position would not have found that Rule
26(e)(2), the Plaintiffs’ pending motion to extend the February 29th designation
deadline, or the fact that the Defendants had not yet filed a motion to strike
substantially justified the Plaintiffs’ late filing. See Pan Am Grain Mfg. Co., 295
F.3d at 116-17.
The
Plaintiffs’
fourth
justification
that—Dr.
Conroy’s
supplemental
designation was a “routine modification” as described in the Magistrate Judge’s
February 6, 2012 Order―is deficient because the Plaintiffs’ interpretation of the
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Magistrate Judge’s Order would contravene both the Federal Rules and the Judge’s
own interpretation of his Order.
Feb. 6, 2012 Order at 7; Order at 10 (“The
supplemental designation of Dr. Conroy was hardly a ‘routine modification’”).
Furthermore, the Plaintiffs’ agreement to extend the deadline for expert
designations on May 31, 2012 is inconsequential as it does not justify the Plaintiffs’
earlier decision to file their supplemental designation after the May 21, 2012
discovery deadline.
Finally, although the Magistrate Judge did not specifically find that other
circumstances did not render the imposition of sanctions unjust, in light of the
Plaintiffs’ “lack of concern about whether the designation was made before or after
the May 21, 2012[] deadline” and this case’s complex and contentious discovery
history, the Court concludes that the Magistrate Judge’s determination was neither
clearly erroneous nor contrary to law. Order at 12-13. The Plaintiffs argue that
“[a]t bottom, the Magistrate Judge’s Order subjects litigants to sua sponte sanctions
for making innocent mistakes or for ‘misconstru[ing] a statement’ in a court order.”
Pls.’ Appeal at 9. Yet, contrary to the Plaintiffs’ position, the Magistrate Judge did
not view their decision to file Dr. Conroy’s supplemental designation on May 25,
2012 as an “innocent mistake[].” Instead, the Magistrate Judge concluded that the
Plaintiffs’ late filing showed “a lack of concern” and respect for the Court’s case
management authority. Order at 12-13.
The Plaintiffs argument, that “[t]o require the Plaintiffs, who are already the
victims of financial fraud, to pay the Defendants’ legal fees . . . is patently unfair”, is
17
also unpersuasive because it does not excuse the Plaintiffs’ conscious disregard for
the Court’s scheduling orders. Pls.’ Appeal at 10 n.8. The Court defers to the
Magistrate Judge’s decision to impose sanctions. 140 F.3d at 315; see also Velez v.
Awning Windows, Inc., 375 F.3d 35, 43-44 (1st Cir. 2004) (“”On appeal from an
order imposing sanctions for noncompliance with a case-management order, we
must defer to the trial court’s informed assessment of the situation”).
In sum, because the Court affirms the Magistrate Judge’s decision to impose
sanctions on the Plaintiffs in the amount of the Defendants’ reasonable costs to
pursue their motion to strike, the Court denies the Defendants’ partial appeal and
request for alternative sanctions. See Defs.’ Appeal at 3.
V.
CONCLUSION
1. The Court DENIES the Plaintiffs’ appeal of the Magistrate
Judge’s decision on the Defendants’ Motion to Strike Expert
Designation (ECF No. 161);
2. The Court DENIES the Defendants’ partial appeal of the
Magistrate Judge’s decision on their Motion to Strike Expert
Designation (ECF No. 162); and,
3. The Court DISMISSES as moot the Plaintiffs’ Motion for
Protection and for Order to Show Cause as to Why Sanctions
Should Not Be Entered (ECF No. 85).
SO ORDERED.
/s/ John A. Woodcock, Jr.
JOHN A. WOODOCOCK, JR.
CHIEF UNITED STATES DISTRICT JUDGE
Dated this 1st day of February, 2013
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