VIRGINIA STREET FIDELCO, L.L.C. et al v. ORBIS PRODUCTS CORPORATION et al

Filing 194

OPINION. Signed by Judge Kevin McNulty on 03/20/2018. (ek)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

VIRGINIA STREET FIDELCO, L.L.C.,
and THE CITY OF NEWARK,
Plaintiffs,
vs.

ORBIS PRODUCTS CORPORATION;
NORDA, INC.; PPF NORDA, INC.;
PPF INTERNATIONAL, INC.; ADRON,
INC.; QUEST INTERNATIONAL, INC.;
INDOPCO, INC.; NATIONAL STARCH
AND CHEMICAL CORPORATION;
JOHN DOE CORPORATIONS #1-50;
JOHN DOES #1-50; JOHN DOE
INSURANCE COMPANIES #1-100;
ESTATE OF ELENA DUKE
BENEDICT; ESTATE OF LOUIS
AMADUCCI; FLAROMA, INC.;
ROBERT L. AMADUCCI; and
WILLIAM R. AMADUCCI;

Civ. No. 2:1 1-cv-2057-KM-J3C
OPINION

Defendants.

KEVIN MCNULTY. U.S.D.J.:
Plaintiffs Virginia Street Fidelco (“Virginia Street”) and the City of Newark
(“Newark”) appeal Magistrate Judge Clark’s November 15, 2017 and November
21, 2017 orders barring the use of plaintiffs’ supplemental expert opinion of
Richard Greenberg and the new expert opinion of John H. Crow.
I.

BACKGROUND

Plaintiffs Virginia Street and Newark initiated this action on April 11,
2011 regarding alleged environmental contamination on property located at 55
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Virginia Street in Newark, New Jersey (the “Orbis site”). (ECF No. 1). Fact
discovery in this case concluded on July 14, 2014. (ECF No. 90). The exchange
of expert reports was due by March 21, 2016. (ECF No. 153). All reports were
exchanged by this deadline, including Dr. Greenberg’s initial report. (ECF Nos.
166, 168, 171).
In litigation in the Middle District of Florida that concerned the same
subject matter, plaintiffs also used Dr. Greenberg as an expert. (ECF Nos.
188-1, 189). They lost. Plaintiffs thereafter petitioned Magistrate Judge Clark
for relief from a scheduling order so that they could rehabilitate Dr.
Greenberg’s expert report. In May 2017, Magistrate Judge Clark granted
plaintiffs’ motion “to reopen discovery for the limited purpose of supplementing
the Greenberg report” with updated testing from the Orbis site. (ECF No. 171).
The order stated that “this period of discovery will be limited in an effort to
minimize any further delay in the final resolution of this matter.” (ECF No.
171). The order also stated that “[t]here will be no extensions of these
deadlines.” (ECF No. 171).
On July 17, 2017, plaintiffs filed a motion seeking to proceed on a
declaratory judgment claim or, in the alternative, to bifurcate the case and stay
the filing of the Greenberg supplemental report. (ECF No. 172). Magistrate
Judge Clark denied this motion but, despite the

warning

that there would be

no further extensions, granted an extension of time for plaintiffs to file the
supplemental report. (ECF No. 179).
Plaintiffs submitted Greenberg’s supplemental expert report in
September 2017. As it turned out, this supplemental report did not include
additional testing of the Orbis site, the basis for the motion to supplement.
Instead it relied on a 2002 environmental report that had never been produced
in discovery. (ECF No. 180). Plaintiffs also submitted a new expert report from
John H. Crow. (ECF No. 180).
Magistrate Judge Clark barred Mr. Crow’s expert report and Mr.
Greenberg’s supplemental report. (ECF Nos. 184, 186, 187). In a November 17,
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2017 telephone conference, Magistrate Judge Clark stated the basis for that
decision:
I was rather forgiving back in May, and as I said, rather
reluctant to yet again permit an amendment to the Greenberg
report. And I think it was very clear to everyone that it was very
limited. I didn’t say, Greenberg can amend his report and, you
know, we can amend it by using other experts to amend. That’s
in any honest
ridiculous. That’s not what I meant in any
appraisal of what went on back in May.
--

So I’m a little troubled by fact that we have got new experts
submitting reports at this late date when I, you know, at very least
communicated to everybody that I was allowing the Greenberg
report to be amended for very limited purposes. And I think it was
pretty clear [that ...] I did not expect all of this new stuff to crop up
and all of these new reports to pop up with new issues and new
documents and new facts....
I think enough is enough. I am not going to allow the
supplement to Mr. Greenberg’s report. I did that almost as an
actuality or mercy or charity, because the plaintiff, you know,
based on the results of the Florida litigation, insisted, oh,
we’ve
you know, we’ve got to go revisit the sampling.
--

If the sampling’s not possible now, well, then it’s not
possible. We’ll have to go with what we’ve got. And if you can’t
Mr. Greenberg can’t
supplement the Greenberg report
supplement it himself, because he doesn’t have samples, well,
then, that’s the end of it. He can’t supplement the report. We’re not
going to rely on new documents that were never produced before.
We’re not going to rely on new experts, you know, and new expert
--

reports.
(ECF No. 186).
The plaintiffs appealed Magistrate Judge Clark’s decision on November
28, 2017. (ECF No. 188). According to them, Magistrate Judge Clark erred in
barring the reports because “a) Defendants could show no prejudice from
admitting the reports; b) the experts’ reports plainly did not violate the Court’s
previous orders allowing for the same; and c) barring expert reports should be

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done only as a last resort.” (ECF No. 188). Plaintiffs argue that the ruling is
“patently erroneous” and should be reversed. (ECF No. 188).
II.

STANDARD OF REVIEW
A Magistrate Judge’s decision is to be overturned only when the ruling

was clearly erroneous or contrary to law. L. Civ. I?. 72.1(c)(1)(A).’ “The party
filing the notice of appeal bears the burden of demonstrating that the
magistrate judge’s decision was clearly erroneous or contrary to law.” Marks v.
Struble, 347 F. Supp. 2d 136, 149 (D.N.J. 2004) (citation omitted). A finding is
clearly erroneous “when although there is evidence to support it, the reviewing
court on the entire evidence is left with the definite and firm conviction that a
mistake has been committed.” Dome Petroleum Ltd. z’. Employ’rs Mut. Liab. Ins.
Co., 131 F.RD. 63, 65 (D.N.J. 1990) (quoting United States u. U.S. Gypsum Co.,
333 U.S. 364, 395 (1948)). A ruling is contrary to law if the Magistrate Judge
has misinterpreted or misapplied applicable law. See Gunter v. Ridgewood
Energy Corp., 32 F. Supp. 2d 162, 164 (D.N.J. 1998).
Where an appeal seeks review of a matter within the exclusive purview of
the Magistrate Judge, such as a discovery dispute, the “abuse of discretion
standard” must be applied. Kounelis v. Sherrer, 529 F. Supp. 2d 503, 518
(D.N.J. 2008) (citation omitted). “Where a magistrate judge is authorized to
exercise his or her discretion, the decision will be reversed only for an abuse of
discretion.” Id. (citation omitted).
III.

DISCUSSION

I find that Magistrate Judge Clark properly exercised his discretion.
Magistrate Judges have discretion to sanction litigants when they submit
untimely expert reports or do not comply with orders. For instance, in Hurley u.
L. Civ. 1?. 72.1(c)(1)(A) states, in relevant part:
Any party may appeal from a Magistrate Judge’s determination of a
non-dispositive matter within 14 days after the party has been served
with a copy of the Magistrate Judge’s order.... A Judge shall consider the
appeal and/or cross-appeal and set aside any portion of the Magistrate
Judge’s order found to be clearly erroneous or contrary to law.
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Atlantic City Police Department, a Magistrate Judge allowed plaintiff to serve

one untimely initial expert report. No. 93-cv-260, 1995 U.S. Dist. LEXIS 20508,
at *495o (D.N.J. Aug. 4, 1995). When the plaintiff submitted two additional
supplemental expert reports, the Magistrate Judge excluded all testimony
related to them as a sanction. Id. at *51. The District Court Judge upheld that
decision. Id. at *51522
Similarly, in this case, Magistrate Judge Clark permitted plaintiffs to
supplement the Greenberg report for a limited, particular purpose after the
period for discovery and expert reports had closed. That purpose was the
incorporation of new Orbis site testing data. The plaintiffs then sought to
supplement the Greenberg report beyond the limited purpose and also
submitted a report from a new expert.
There is a simple and straightforward justification for Judge Clark’s
ruling: he imposed a deadline and entered an order; the plaintiffs missed the
deadline and violated the order extending it.
Less straightforward, but equally persuasive, is to view the ruling as a
sanction for noncompliance with discovery orders. A sanction for
noncompliance is appropriate in this circumstance.
The Third Circuit’s Pennypack factors are used to evaluate whether a
District Court’s exclusion of evidence as a discovery sanction constitutes an
abuse of discretion. They include: (1) “the prejudice or surprise in fact of the
party against whom the excluded witnesses would have testified” or “the
excluded evidence would have been offered”; (2) “the ability of that party to
cure the prejudice”; (3) the extent to which allowing such witnesses or evidence
would “disrupt the orderly and efficient trial of the case or of other cases in the
court”; (4) any “bad faith or willfulness in failing to comply with the court’s
The District Judge in Hurley permitted the plaintiff to renew her challenge to
the Magistrate Judge’s order since the supplemental reports allegedly contained mere
summaries of potential rebuttal testimony and thus did not prejudice the defendants.
Hurley v. Atl. City Police Dep’t, 1995 U.S. Dist. LEXIS 20608, at *52. That situation is
not present in this case because plaintiffs’ reports are based on new, previously
undisclosed reports, and a new expert’s testimony.

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order”; and (5) the importance of the excluded evidence.” ZF Mentor, LLC v.
Eaton Corp., 696 F.3d 254, 298 (3d Cir. 2012) (citation omitted).
The first two factors are addressed together. (1) Defendants would
experience some prejudice if the plaintiffs’ new reports were included. Plaintiffs
have submitted a new expert opinion and relied on a report that was not
produced in discovery. These untimely submissions unfairly prejudice the
defendants. See McDaniel z.,. Kidde Residential & Commercial, No. 2:12-cv-1439,
2015 WL 6736811, at *3 (W.D. Pa. Nov. 3, 2015) (finding substantial prejudice
in the admission of untimely supplemental testimony where plaintiffs had
already expended substantial time and resources analyzing the old testimony);
cj ZFMeritor, 696 F.3d at 298 (finding no prejudice where new supplemental,
alternate damages estimates were based on data from the initial report, which
defendant had been aware of for three years). However, (2) the court could
mitigate any prejudicial effect by permitting the defendants additional time to
submit an expert report in rebuttal. See Ciocca v. B.J. ‘s Wholesale Club, Inc.,
No. 4-cv-5605, 2011 WL3563560, at*45 (E.D. Pa. Aug. 12, 2011) (finding
that court could cure prejudice by granting defendant additional time to
respond to an expert report or obtain its own rebuttal expert report).
Nonetheless, defendants would have to bear the burden and expense of taking
additional discovery and providing a new expert report. The litigation would
also be further delayed. The first two factors thus provide weak support, at
best, for the plaintiffs’ position.
(3) As to the third factor, allowing plaintiffs to submit additional expert
reports based on new information would disrupt the orderly and efficient flow
of the case. The defendants would have to rebut the new expert reports and the
case would be further delayed. This case began in 2011, fact discovery closed
in 2014, and the exchange of expert reports was due in 2016. (ECF Nos. 1, 90,
153). Magistrate Judge Clark correctly determined that reopening discovery,
submitting new expert reports, and having defendants respond to the new
expert reports would disrupt the orderly progress of this litigation.
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(4) Regarding the fourth factor, plaintiffs have shown willful disregard for
Magistrate Judge Clark’s order that granted plaintiffs’ motion “to reopen
discovery for the limited purpose of supplementing the Greenberg report” with
updated testing from the Orbis site. (ECF No. 171). Magistrate Judge Clark
permitted plaintiffs to reopen discovery for one limited purpose. Plaintiffs
responded with a wholly new expert report and a supplemental report from
Greenberg that did not relate to the single basis on which reopening was
permitted. The submission was a clear violation of the prior order and is thus a
“willful” violation. See McDaniel, 2015 WL 6736811, at *4 The disregard for the
previous order weighs in favor of upholding the Magistrate Judge’s decision.
(5) Regarding the fifth factor, plaintiffs have not shown that the evidence
excluded is critical to the case. This is unlike ZFMeritor, where the exclusion of
evidence effectively prevented the plaintiffs from pursuing damages at all. 696
F.3d at 299. Compare EEOC v. Gen. Dynamics Corp., 999 F.2d 113, 116-17 (5th
Cir, 1993) (finding an abuse of discretion in the District Court’s exclusion of
expert testimony, in part, because the total exclusion of such testimony “was
tantamount to a dismissal of the [plaintiffs’] claim”), with Sowell v. Butcher &
Singer, Inc., 926 F.2d 289, 302 (3d Cir. 1991) (finding no abuse of discretion in
the District Court’s exclusion of proffered expert testimony, in large part,
because “the record [was] totally devoid of any indication of

...

how th[e]

testimony might have bolstered [the plaintiff’s] case,” and thus there was “no
basis whatever for believing that the admission of expert testimony would have
influenced the outcome of th[e] case”). This is not a circumstance where the
exclusion of evidence would effectively eliminate plaintiffs’ case. Therefore, the
fifth factor also weighs in favor of upholding the Magistrate Judge’s decision.
Ultimately, I find that Magistrate Judge Clark did not abuse his
discretion in excluding the plaintiffs’ untimely and non-compliant submissions.
His decision is affirmed.

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IV.

CONCLUSION

For the foregoing reasons, I affirm Magistrate Judge Clark’s decision. An
appropriate order accompanies this opinion.

Dated: March 20, 2018

KEVIN MCNUIYrY
United States District Judge

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