Petrone v. Werner Enterprises, Inc. et al

Filing 618

MEMORANDUM AND ORDER - Defendants' Motion to Enter Judgment on the Mandate and For Order Approving Release of Supersedeas Bond, ECF No. 607 , is granted. This action is dismissed with prejudice. The supersedeas bond posted by Defendants is released. Plaintiffs' Motion for a New Trial, ECF No. 610 , is denied. A separate judgment will be entered. Member Cases: 8:11-cv-00401-LSC-MDN, 8:12-cv-00307-LSC-MDN Ordered by Senior Judge Laurie Smith Camp. (LKO)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
PHILIP PETRONE, et al.,
Plaintiffs,

MEMORANDUM AND ORDER

vs.
8:11CV401
WERNER ENTERPRISES, INC., AND
DRIVERS MANAGEMENT, LLC;
Defendants.
PHILIP PETRONE, et al.;
8:12CV307
Plaintiffs,
vs.
WERNER ENTERPRISES, INC., AND
DRIVERS MANAGEMENT, LLC,
Defendants.

This matter is on remand from the United States Court of Appeals for the Eighth
Circuit and is before the Court on Defendants’ Motion for Judgment on the Mandate and
for Order Approving Release of Supersedeas Bond,1 ECF No. 607,2 and Plaintiffs’ Motion
for New Trial, ECF No. 610. For the following reasons Defendants’ motion will be granted.
BACKGROUND

Plaintiffs do not object to the release of Defendants’ supersedeas bond. Pls.’ Br., ECF No. 613
at Page ID 57176.
1

2

References to the docket will be to filings made in Case No. 8:11CV401.

This case is a class action arising out of an eight-week training program operated
by Defendants. Plaintiffs alleged Defendants violated the Fair Labor Standards Act
(FLSA), 29 U.S.C. § 201 et seq., and Nebraska law, by failing to compensate trainees
adequately for short-term breaks or for time spent resting in their trucks’ sleeper-berths.
A jury ultimately found in favor of Plaintiffs in the amount of $779,127 on the short-term
break claim and found in favor of Defendants on the sleeper-berth claim.
On July 3, 2013, the Court entered its Amended Final Progression Order, ECF No.
149 (Strom, J.). Among other things, the Amended Final Progression Order set a deadline
of January 15, 2014 for the disclosure of expert witness reports. Plaintiffs timely disclosed
their expert reports. On March 20, 2014, Defendants took the deposition of Plaintiffs’
expert, Richard Kroon, and “reveal[ed] considerable flaws in the methodology for
computing the allegedly uncompensated break and sleeper-berth time.” Mem. & Order,
ECF No. 275 at Page ID 17474 (Strom, J.). To remedy these flaws, Plaintiffs attempted
to submit a supplemental report under Rule 26(e), which requires “[a] party who has made
a disclosure under Rule 26(a) . . . [to] supplement or correct its disclosure or
response . . . in a timely manner if the party learns that in some material respect the
disclosure or response is incomplete or incorrect . . . .” Fed. R. Civ. P. 26(e). The Court
found, and the Court of Appeals agreed, that Kroon’s second report was not a
supplement, but an attempt to “use the defendants’ efforts in uncovering the flaws in
Kroon’s report to hone the methodology and submit a more robust report after their
deadline has expired.” Mem. & Order, ECF No. 275 at Page ID 17458 (Strom, J.).
The Court found that Plaintiffs did not have good cause to extend the reporting
deadline. Even though Plaintiffs’ failure was not “substantially justified” nor “harmless,”

2

the Court determined that Rule 37(c)—as read in conjunction with Rule 1’s admonition
that the rules should be “construed, administered, and employed by the court and the
parties to secure the just, speedy, and inexpensive determination of every action and
proceeding”—gave the Court the discretion to impose a lesser sanction than complete
exclusion of the evidence. Mem. & Order, ECF No. 275 at Page ID 17458–60 (Strom,
J.). The Court permitted Plaintiffs to file the untimely report, imposed a lesser sanction of
permitting Defendants to depose Kroon at Plaintiffs’ expense, and denied all other
pending motions without prejudice. Id. at 17460.
The Court of Appeals found that the Court erred in “granting Plaintiffs’ request to
extend the Rule 16(b) disclosure deadline, despite finding that good cause for the
extension had not been shown, based on an erroneous application of Rule 37(c)(1).”
Petrone v. Werner Enters., Inc., 940 F.3d 425, 431 (8th Cir. 2019). Having found the
resolution of this issue dispositive, the Court of Appeals vacated the judgment and
remanded to this Court for proceedings consistent with its opinion.
DISCUSSION
I.

Admissibility of Kroon’s Report
Rule 16(b) requires a district or magistrate judge to issue a scheduling order in

every action providing for, among other things, the timing of disclosures required under
Rule 26(a). Scheduling orders “may be modified only for good cause.” Sherman v. Winco
Fireworks, Inc., 532 F.3d 709, 716 (8th Cir. 2008) (quoting Fed. R. Civ. P. 16(b)). “Rule
16(b)’s good-cause standard is not optional.” Id. The scheduling order in this case
provided that expert disclosures were to be submitted on or before January 15, 2014.
The Court of Appeals characterized Judge Strom’s later order, permitting the Plaintiffs to

3

file a new, untimely report, as amending the Rule 16(b) scheduling order without good
cause.
According to the decision of the Court of Appeals, it was error to rely on Rule 37(c)
because Rule 37(c) only applies when “a party fails to provide information or identify a
witness as required by Rule 26(a) or (e)” and attempts to “use that information or witness
to supply evidence on a motion, at a hearing, or at a trial . . . .” Fed. R. Civ. P. 37(c)(1).
Prior to trial or a motion, district courts are bound by the good cause standard of Rule 16
and can only impose a lesser sanction than exclusion once the undisclosed expert report
is offered for use at trial or on a motion. Because Plaintiffs disclosed their untimely report
before trial, the Court had no choice but to deny Plaintiffs the opportunity to disclose the
new report.3
II.

Dismissal with Prejudice
Finding resolution of the previous issue to be dispositive, the Court of Appeals

vacated the judgment and remanded to this Court to hold proceedings consistent with its
opinion.
The only evidence Plaintiffs presented to the jury on damages in this case was
expert testimony by Kroon and his new report. Indeed, the reason Judge Strom permitted
Plaintiffs to file their untimely report was because it was “useful and necessary to the
disposition of the case on the merits.” Mem. & Order, ECF No. 275 at Page ID 17459–
60 (Strom, J.) (emphasis added). Additionally, the Court of Appeals may “affirm the

3 See Petrone v. Werner Enters., Inc., 940 F.3d 425, 438 (Colloton, J., dissenting) (recognizing that
the Court of Appeals’ decision “construe[s] Rule 37(c)(1) as authorizing a district court to permit use of an
undisclosed expert’s information at trial but not to allow filing and disclosure of the same expert’s report
before trial.”).

4

judgment on any basis disclosed in the record, whether or not the district court agreed
with or even addressed that ground.” PFS Distribution Co. v. Raduechel, 574 F.3d 580,
591 (8th Cir. 2009) (quoting Palavra v. I.N.S., 287 F.3d 690, 693 (8th Cir. 2002)). If there
was other evidence presented to the jury that could have supported the verdict, reliance
on Rule 37(c) would have been harmless and the Court of Appeals would not have
vacated the judgment.
Plaintiffs argue they could still prove damages without Kroon’s expert report. In a
new trial, Plaintiffs state they could offer the Defendants’ pay and time records for
thousands of trainees, and a jury could determine damages from those. They argue that
even if data is voluminous, it does not require an expert to apply basic arithmetic. Instead,
such evidence may be summarized by a Rule 10064 exhibit. In support of this assertion,
Plaintiffs cite to Kalloo v. Unlimited Mechanical Company of New York, Inc., 977 F. Supp.
2d 187 (E.D.N.Y. 2013). In Kalloo, the district court allowed a spreadsheet prepared by
a paralegal to summarize the pay and time records of three employees of the defendant
corporation. Id. at 198.
There is clearly more analysis to be done of the evidence in this case than simple
arithmetic. The evidence was such that even Plaintiffs’ expert made significant errors
which rendered his first report likely inadmissible. A jury could not accurately determine
damages regarding the pay and time records for 55,000 class members without expert
testimony in this case.

Federal Rule of Evidence 1006 permits “a summary, chart, or calculation to prove the content of
voluminous writings, recordings, or photographs that cannot be conveniently examined in court.” Fed. R.
Evid. 1006.
4

5

Additionally, the discovery deadlines expired more than six years ago, and
Plaintiffs have not submitted a Rule 1006 exhibit, nor identified a witness who would
prepare it, nor have Defendants deposed this witness about the preparation of the Rule
1006 exhibit. In order to permit Plaintiffs to disclose this evidence, the Court would have
to amend the Rule 16(b) scheduling order, and there is no good cause to do so. See
Petrone, 940 F.3d at 434; Sherman, 532 F.3d at 716.
Plaintiffs could not have proved damages but for the admission of Kroon’s untimely
expert report. Therefore, the only proceeding consistent with the opinion of the Court of
Appeals is dismissal of this action with prejudice.
Accordingly,
IT IS ORDERED:
1. Defendants’ Motion to Enter Judgment on the Mandate and For Order
Approving Release of Supersedeas Bond, ECF No. 607, is granted;
a. This action is dismissed with prejudice;
b. The supersedeas bond posted by Defendants is released;
2. Plaintiffs’ Motion for a New Trial, ECF No. 610, is denied;
3. A separate judgment will be entered.
Dated this 22nd day of June, 2020.

BY THE COURT:
s/Laurie Smith Camp
Senior United States District Judge

6