United States of America v. 400 Acres of Land, more or less, situate in Lincoln County, State of Nevada

Filing 371

ORDER that DENIES ECF Nos. 358 Plaintiff's motion to strike and 364 Sheahan Landowners' counter-motion to strike; and EXTENDS the discovery cut-off to 9/14/2018, for the limited purpose of allowing Plaintiff to either depose Mr. DiFederico or disclose a rebuttal expert report. NO FURTHER EXTENSIONS WILL BE GRANTED. Signed by Magistrate Judge Nancy J. Koppe on 8/27/2018. (Copies have been distributed pursuant to the NEF - LH)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 DISTRICT OF NEVADA 9 10 UNITED STATES OF AMERICA, Case No.: 2:15-cv-01743-MMD-NJK Plaintiff(s), 11 12 v. 13 Order 400 ACRES OF LAND, more or less, situated in Lincoln County, State of Nevada. 14 15 16 (Docket Nos. 358, 364) Defendant(s). Pending before the Court is Plaintiff United States’ motion to strike Sheahan Landowners’ 17 expert report prepared by Tio DiFederico. Docket No. 358. The Court has considered Plaintiff’s 18 motion, Sheahan Landowners’ response to Plaintiff’s motion, Sheahan Landowners’ counter19 motion to strike Plaintiff’s rebuttal expert reports prepared by Nathan Moeder and Maurice 20 Robinson, Plaintiff’s reply, and Sheahan Landowners’ erratas. Docket Nos. 358, 362, 364, 365, 21 366, 368. The Court finds the motions properly resolved without a hearing. See Local Rule 78-1. 22 For the following reasons, the Court DENIES Plaintiff’s motion to strike. Docket No. 358. The 23 Court further DENIES Sheahan Landowners’ counter-motion to strike. Docket No. 364. 24 I. Background 25 The instant case involves a complaint for condemnation filed by Plaintiff, on behalf of the 26 Secretary of the Air Force, to determine an award for just compensation to Sheahan Landowners 27 for the subject property (“Property”). See generally Docket No. 1. Discovery in the instant case 28 has been ongoing since 2015; therefore, the Court notes only the following relevant deadlines and 1 1 procedural history: (1) on October 20, 2016, the parties exchanged their initial case-in-chief expert 2 reports (Docket Nos. 102 at 3, 358 at 2); (2) on February 21, 2018, the parties exchanged rebuttal 3 expert reports (Docket Nos. 322 at 3, 358 at 3); (3) on August 9, 2018, Sheahan Landowners 4 disclosed Mr. DiFederico’s expert report at issue (Docket No. 358 at 4); and (4) the discovery cut5 off is August 28, 2018, and the joint pretrial order deadline is December 14, 2018. Docket Nos. 6 348, 361 at 5. 7 II. Standards 8 A party must disclose the identity of any expert witness it intends to use at trial. 9 Fed.R.Civ.P. 26(a)(2)(A). The party must also provide a written report of the expert. Fed.R.Civ.P. 10 26(a)(2)(B). Parties must disclose their experts at the times and in the sequence that the Court 11 orders. Fed.R.Civ.P. 26(a)(2)(D). Parties also have a duty to supplement their disclosures. 12 Fed.R.Civ.P. 26(e). 13 Prior to determining the timeliness of an expert report, it may be necessary for the Court to 14 properly characterize the report at issue. See AMTRAK v. Young’s Commer. Transfer, Inc., 2016 15 U.S. Dist. LEXIS 52399, at *9-16 (E.D. Cal. Apr. 18, 2016); see also Stamas v. Cty. of Madera, 16 2011 U.S. Dist. LEXIS 27405, at *14-18 (E.D. Cal. Mar. 3, 2011). Rebuttal expert reports are 17 proper if they are “intended solely to contradict or rebut evidence on the same subject matter 18 identified by” another party’s initial expert disclosure. Fed.R.Civ.P. 26(a)(2(D). Rebuttal expert 19 reports cannot present new arguments or “contradict an expected and anticipated portion of the 20 other party’s case-in-chief.” See R&O Constr. Co. v. Rox Pro Int’l Group, Ltd., 2011 U.S. Dist. 21 LEXIS 78032, at *5-6 (D. Nev. July 18, 2011) (internal citation omitted). 22 With regard to expert reports, “the party’s duty to supplement extends to both information 23 included in the report and to information given during the expert’s deposition.” Fed.R.Civ.P. 24 26(e)(2). “However, an expert’s duty to supplement under Rule 26(e) is not a right to supplement 25 at will.” Colony Ins. Co. v. Colorado Casualty Ins. Co., 2014 U.S. Dist. LEXIS 72616, at *3 (D. 26 Nev. May 28, 2014) (internal citation omitted). 27 // 28 2 1 2 3 A party may not use a supplemental report to disclose information that should have been disclosed in the initial expert report, thereby circumventing the requirement for a timely and complete expert witness report. Rather, supplementation under the Rule means correcting inaccuracies, or filling the interstices of an incomplete report based on information that was not available at the time of the initial disclosure. 4 Id. 5 “Generally speaking, supplementation of an expert report is proper where it is based on new 6 information obtained after the expert disclosure deadline and the supplemental report was served 7 before the time for pretrial disclosures.” Id. at 5. 8 If the substance of a report is sufficient to characterize it as a supplement, the Court then 9 determines whether it was timely disclosed. Fed.R.Civ.P. 26(e) requires supplemental reports to 10 be produced in a “timely manner,” measured from the date the disclosing party obtained the new 11 information. See Silvagni v. Wal-Mart Stores, 2017 U.S. Dist. LEXIS 179230, at *4-5 (D. Nev. 12 Oct. 30, 2017) (“[S]upplementation must be [‘reasonably prompt’ and] provided ‘at the 13 appropriate intervals’ upon learning new information”) (internal citation omitted). While this 14 measurement is construed according to the circumstances of each case, the Court is mindful of the 15 “gaping loophole” of a liberal construction of Fed.R.Civ.P. 26(e), which could expose parties to 16 an endless stream of reports. Id. Nonetheless, supplemental reports must be disclosed “by the 17 time the party’s pretrial disclosures under Rule 26(a)(3) are due,” or 30 days prior to trial, unless 18 otherwise ordered by the Court. Fed.R.Civ.P. 26(a)(3)(B), (e)(2). 19 If disclosure is deemed untimely, or otherwise fails to meet the requirements under 20 Fed.R.Civ.P. 26(a) and (e), Fed.R.Civ.P. 37(c)(1) provides that the disclosing party may not use 21 the information at trial, “unless the failure was substantially justified or harmless.” See Yeti by 22 Molly, Ltd. v. Deckers Outdoor Corp. (“Yeti”), 250 F.3d 1101, 1106 (9th Cir. 2001) (“Rule 37 23 ‘gives teeth’ to the disclosure requirements of Rule 26…”). It is within the Court’s discretion, 24 however, to determine the appropriate sanctions. Fed.R.Civ.P. 37(c)(1); see also Wendt v. Host 25 Int’l, Inc., 125 F.3d 806, 814 (9th Cir. 1997) (listing the five factors Courts look to in determining 26 the appropriate sanction). Even if the disclosing party is unable to show substantial justification 27 or harmlessness, the Court is not required to exclude evidence. See Jackson v. United Artists 28 Theatre Circuit, Inc., 278 F.R.D. 586, 594 (D. Nev. 2011). 3 1 III. Analysis 2 Plaintiff submits that Mr. DiFederico’s expert report at issue is improper because it is 3 untimely and includes new information to “bolster” Sheahan Landowners’ initial expert reports. 4 Docket No. 358 at 6. Plaintiff further submits that Mr. DiFederico’s analysis of estimated expenses 5 to operate the Property as a tourist commercial business was not included in his initial expert 6 report, in which Mr. DiFederico stated that the analysis “was not necessary for [his] methodology.” 7 Id. Additionally, Plaintiff submits that the report is not a proper supplement because the 8 information on which it is based was available at the time of Sheahan Landowners’ initial 9 disclosures, as is evidenced by the initial expert reports prepared by Terrance Clauretie and 10 Cameron Steinagle, which discuss similar estimated expenses. Id. at 7. Plaintiff also submits that 11 the untimeliness is not substantially justified because Sheahan Landowners could have sought 12 leave from the Court to supplement Mr. DiFederico’s initial expert report and “inexplicitly kept 13 [the report] under wraps” from July 26, 2018, when the report was prepared, to August, 9, 2018, 14 when it was disclosed to Plaintiff. Id. at 7-8. Finally, Plaintiff submits that the untimeliness is not 15 harmless because it is not practical or reasonable for it to prepare for and depose Mr. DiFederico 16 a second time, formulate a rebuttal expert report, or otherwise dedicate resources to resolve the 17 issue prior to the discovery cut-off. Id. at 8. 18 In response, Sheahan Landowners submit that Plaintiff knew that the financial feasibility 19 of operating the Property as a tourist commercial business would be a principal issue in the instant 20 case and, therefore, should have included all related arguments in its initial expert reports, as 21 opposed to in its rebuttal expert reports. Docket No. 365 at 2-3. Sheahan Landowners further 22 submit that Plaintiff purposefully “soft-peddled” its initial expert report by Warren Neville so 23 Sheahan Landowners would be unable to respond to new arguments disclosed in its rebuttal expert 24 reports. Id. at 3-6. Additionally, Sheahan Landowners submit that Mr. DiFederico’s expert report 25 was proper because it was a narrow and limited response to new information improperly included 26 in Plaintiff’s rebuttal expert reports prepared by Mr. Moeder and Mr. Robinson.1 Id. at 6-9. 27 Sheahan Landowners submit that Mr. Moeder’s and Mr. Robinson’s rebuttal expert reports were improper because they included new information as to the riskiness of the investment 28 in the Property as a tourist commercial business and the required rate of return for investors. 1 4 1 Sheahan Landowners further submit that the report’s untimeliness is substantially justified and 2 harmless because if Plaintiff had “timely disclosed its case-in-chief opinions, then the information 3 and opinions in the DiFederico Supplement would have been disclosed as a timely rebuttal 4 opinion….” Id. at 11. Sheahan Landowners also submit that, although the report was prepared on 5 July 26, 2018, it took until August 9, 2018, to collect the work-file documents and bates-stamp the 6 report. Id. at 11-12. Finally, Sheahan Landowners submit that Plaintiff’s motion is premature in 7 regards to the argument that they can rely on other expert reports for the financial feasibility of 8 operating the Property as a tourist commercial business because “no party currently knows what 9 [evidence] will and will not be available to any party at trial.” Id. at 12. 10 In reply, Plaintiff submits that, construed as a sur-rebuttal, Mr. DiFederico’s expert report 11 is improper because it does not explicitly or implicitly rebut Mr. Moeder or Mr. Robinson’s 12 analysis. Docket No. 368 at 2-4. Plaintiff further submits that sur-rebuttals are inappropriate when 13 disclosed three weeks prior to the discovery cut-off, especially because Sheahan Landowners 14 received Mr. Moeder’s and Mr. Robinson’s rebuttal expert reports in February 2018 and deposed 15 them by May 2018 and, therefore, have had sufficient time to address any perceived improprieties 16 with their reports. Id. at 4-5. Finally, Plaintiff submits that Mr. Moeder’s and Mr. Robinson’s 17 reports were properly disclosed as rebuttals because they were timely and provided “detailed, 18 specific critiques linked to deficiencies in [Sheahan Landowners’] case-in-chief disclosures.” Id. 19 at 5-6. 20 The burden is on the disclosing party to show that its untimely disclosure was substantially 21 justified or harmless. See Yeti, 259 F.3d at 1107. Sheahan Landowners argue that they were 22 substantially justified in disclosing Mr. DiFederico’s expert report on August 9, 2018, because Mr. 23 Moeder’s and Mr. Robinson’s expert reports were untimely disclosed as well. Docket No. 365 at 24 11. Sheahan Landowners argue that “any alleged harm … could have been avoided if [Plaintiff] 25 Docket No. 365 at 6-7. Therefore, Sheahan Landowners submit, these reports were improperly expert reports and should have been included in Plaintiff’s initial disclosures. 26 disclosed as rebuttal Landowners advance these same arguments in their counter-motion to strike Id. at 6-8. Sheahan submitting that Plaintiff cannot prove that the 27 Mr. Moeder’s and Mr. Robinson’s reports, furtherbecause it willfully disclosed these reports late untimeliness is substantially justified or harmless 28 to prevent Sheahan Landowners from responding. Docket No. 366 at 9-10. 5 1 had not soft-peddled its case-in-chief.” Id. This argument is unsupported, and not meaningfully 2 developed. See Kor Media Group, LLC v. Green, 294 F.R.D. 579, 582 n.3 (D. Nev. 2013) (courts 3 only address arguments that are meaningfully developed). 4 “Harmlessness may be established if a disclosure is made sufficiently before the discovery 5 cut[-]off to enable the movant to depose the expert and challenge his expert report.” Pacific 6 Indemnity Co. v. Nidec Motor Corp., 203 F. Supp. 3d 1092, 1097 (D. Nev. 2016) (citing Boliba v. 7 Camping World, Inc., 2015 U.S. Dist. LEXIS 82709, at *3-4 (D. Nev. June 24, 2015)). In the 8 instant case, the discovery cut-off is August 28, 2018. Docket No. 348 at 4. Plaintiff received Mr. 9 DiFederico’s expert report on August 9, 2018, nineteen days before the discovery cut-off. Docket 10 No. 358 at 4. Plaintiff alleges that it is not practical or reasonable for it to dedicate resources to 11 respond to Mr. DiFederico’s expert report by the discovery cut-off. Id. at 8. The Court finds that 12 the parties’ resources and time would have been more appropriately spent cooperating to address 13 the instant issue, as opposed to involving the Court.2 See Cardoza v. Bloomin’ Brands, 141 F. 14 Supp. 3d 1137, 1145 (D. Nev. 2015) (“Discovery is supposed to proceed with minimal 15 involvement of the Court”) (internal citation omitted); see also Fed.R.Civ.P. 1 (requiring the 16 cooperation of parties by securing “the just, speedy, and inexpensive determination of every action 17 and proceeding”). The Court finds that Plaintiff had sufficient time before the discovery cut-off 18 to depose Mr. DiFederico or otherwise disclose a rebuttal expert report and, therefore, any 19 untimeliness in disclosing Mr. Federico’s expert report was harmless. 20 To eliminate any potential prejudice, the Court extends the discovery cut-off to September 21 14, 2018, for the limited purpose of allowing Plaintiff time to depose Mr. DiFederico or otherwise 22 disclose a rebuttal expert report. See Western Alliance Bank v. Jefferson, 119 F. Supp. 3d 961, 23 969 (D. Ariz. 2015) (“[A]lthough the Court is not sanguine about re-opening the pre-trial schedule 24 … [i]n order to assure that the parties’ claims and defenses are decided on the merits, the court 25 will extend the pre-trial schedule…”); see also Niemeyer v. Ford Motor Co., 2012 U.S. Dist. 26 The proper characterization of Mr. DiFederico’s report would not affect Plaintiff’s burden to show substantial justification or harmlessness, and does not change the Court’s decision on the 27 sufficiency of the time before the discovery cut-off available to Plaintiff. The Court therefore does 28 not opine on the character of Mr. DiFederico’s report. 2 6 1 LEXIS 4849, at *22 (D. Nev. Jan. 17, 2012) (“Any prejudice caused by [the untimely disclosure] 2 can be easily eliminated by allowing [the plaintiffs] an opportunity to reopen the depositions of 3 these experts…”). 4 IV. Conclusion 5 For the reasons discussed above, the Court DENIES Plaintiff’s motion to strike. Docket 6 No. 358. The Court further DENIES Sheahan Landowners’ counter-motion to strike. Docket No. 7 364. The Court EXTENDS the discovery cut-off to September 14, 2018, for the limited purpose 8 of allowing Plaintiff to either depose Mr. DiFederico or disclose a rebuttal expert report. NO 9 FURTHER EXTENSIONS WILL BE GRANTED. 10 IT IS SO ORDERED. 11 Dated: August 27, 2018 _______________________________ NANCY J. KOPPE United States Magistrate Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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