City of Las Cruces et al v. United States of America et al

Filing 596

PROPOSED FINDINGS AND RECOMMENDED DISPOSITION regarding 261 Motion to Strike and 522 Motion to Substitute Expert Witness by Chief Magistrate Judge Gregory B. Wormuth. Objections to R&R due by 3/20/2023. Add 3 d ays to the deadline if service is by mailing it to the person's last known address (or means described in Fed. R. Civ. P. 5(b)(2)(D) and (F)); if service is by electronic means, no additional days are added. (Fed. R. Civ. P. 6(d); Fed. R. Crim. P. 45(c).) (es)

Case 2:17-cv-00809-JCH-GBW Document 596 Filed 03/06/23 Page 1 of 29

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO

CITY OF LAS CRUCES, et al.,
Plaintiffs/Counterclaim Defendants,
v.

Civ. No. 17-809 JCH/GBW

THE LOFTS AT ALAMEDA, LLC; AMERICAN LINEN
SUPPLY OF NEW MEXICO, INC.; RAWSON LEASING
LIMITED LIABILITY CO.; and CHISHOLM’S-VILLAGE
PLAZA, LLC,
Defendants/Counterclaimant,
and
AMERICAN LINEN SUPPLY OF NEW MEXICO, INC.
Crossclaimant,
v.
THE LOFTS AT ALAMEDA, LLC; RAWSON LEASING
LIMITED LIABILITY CO.; and CHISHOLM’S-VILLAGE
PLAZA, LLC,
Crossclaim-Defendants,
and
AMERICAN LINEN SUPPLY OF NEW MEXICO, INC.
Third-Party Plaintiff,
v.
ESTATE OF JESUS TERESO VILLANUEVA, SR., deceased,
BERTHA VILLANUEVA, individually and o/b/o ESTATE
OF JESUS TERESO VILLANUEVA, SR., and VICTOR A.
JASSO,
Third-Party Defendants.

PROPOSED FINDINGS AND RECOMMENDED DISPOSITION

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THIS MATTER comes before the undersigned pursuant to the Honorable Judge
Herrera’s order of reference regarding the appropriate remedy for the hearsay in James
Bearzi’s June 3, 2019, report and untimeliness of the August 4, 2020, rebuttal report, doc.
514, and pursuant to Defendant American Linen’s Motion of American Linen to
Designate Substitute Expert Witness and Amend Expert Disclosures Pursuant to Fed. R.
Civ. P. 16(b) and 26(a)(2)) (“Motion to Substitute”), doc. 522. Having reviewed the
supplemental briefing submitted by the parties on the appropriate remedy for the
expert report hearsay, docs. 519, 520, as well as the Motion to Substitute and its
attendant briefings and exhibits, docs. 522, 534, 536, 543, 544, having conducted a
hearing on these issues, see doc. 557, and being otherwise fully advised in the premises, I
RECOMMEND that the Court: (1) DENY American Linen’s Motion to Substitute (doc.
522); and (2) ADOPT Plaintiffs’ requested remedy of striking Mr. Bearzi’s June 3, 2019,
and August 4, 2020, reports and preventing Mr. Bearzi from testifying at trial as to those
reports.
I.

FACTUAL AND PROCEDURAL BACKGROUND
A. Litigation Overview
Plaintiffs City of Las Cruces and Doña Ana County bring suit under the

Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §
9601 et seq. (“CERCLA”), seeking recovery for and contribution to response costs
associated with the remediation of a hazardous waste site in Las Cruces, New Mexico.
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See generally docs. 79, 306. In 2018, Plaintiffs filed their first amended complaint which
brought owner/operator and contribution claims against several Defendants, including
Defendant American Linen (“American Linen”). See doc. 79 at ¶¶ 20-25, 57, 65. In
February 2021, Plaintiffs filed a second amended complaint in which Plaintiffs asserted
a new theory of liability against American Linen as an “arranger” for disposal of
hazardous substances. See doc. 306 at ¶¶ 60, 65.
On April 14, 2022, Plaintiffs filed a motion to dismiss the counterclaims, thirdparty claims, and affirmative defenses which American Linen included in its answer to
Plaintiffs’ second amended complaint. Doc. 487. On December 15, 2022, the Honorable
Judith C. Herrera dismissed American Linen’s counterclaims against the City of Las
Cruces and Doña Ana County without prejudice and dismissed American Linen’s thirdparty claims against Bertha Villanueva, the Estate of Jesus Villanueva, and Victor Jasso
with prejudice. Doc. 576 at 25-26. American Linen filed an amended answer on
December 29, 2022, in which it reasserted its counterclaims against Plaintiffs. As of the
date of this Proposed Findings and Recommended Disposition (PFRD), the remaining
claims in the case are Plaintiffs’ owner/operator, contribution, and arranger claims
against American Linen, see generally doc. 306; American Linen’s counterclaims against
Plaintiffs, see doc. 580 at 24-38; and American Linen’s crossclaims against Rawson
Leasing Limited Liability Co., The Lofts at Alameda, LLC, and Chisholm’s-Village
Plaza, LLC, see id. at 39-46.
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B. Discovery Overview
The first discovery period commenced in September, 2018, after Plaintiffs filed
their first amended complaint. See doc. 87. After several extensions and stays in the
case, the undersigned set the deadline for fact discovery as October 9, 2020. See doc. 214.
During the first discovery period, Plaintiffs’ expert witnesses, Peter Krasnoff and
Steve Helgen, produced multiple expert reports, including initial reports on April 8,
2019, see doc. 151, rebuttal reports on June 3, 2019, and July 16, 2019, see docs. 166, 175,
and supplemental reports on August 4, 2020, see doc. 227. American Linen’s expert
witness, James Bearzi, produced an initial report on June 3, 2019, see doc. 162, and a
second report (originally called a supplemental report by American Linen) on August 4,
2020, see doc. 226.
In March 2021, after Plaintiffs filed their second amended complaint, the
undersigned reopened discovery to give American Linen an opportunity to conduct
discovery on the new claim. Doc. 332. During the second discovery period, Plaintiffs
produced an expert report on the arranger claim on April 26, 2021, doc. 344, and rebuttal
reports on June 25, 2021, doc. 361, and American Linen’s expert, Mr. Bearzi, produced a
third expert report on the arranger claim on May 26, 2021, see doc. 351. Plaintiffs also
conducted a deposition of Mr. Bearzi on July 22, 2021. See doc. 520-5 at 1.
Throughout discovery, there have been several disputes between Plaintiffs and
American Linen which, in addition to the reopening of discovery, have served to
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prolong this litigation for over four years. In February 2021, the undersigned assessed
attorneys’ fees against American Linen after finding that it had acted in “willful
ignorance” when it failed to supplement its initial disclosures and discovery responses
with information about its use of PCE. Doc. 304 at 61. After the second discovery
period, the parties filed seven motions on a variety of discovery matters. Docs. 384-390.
The undersigned again assessed attorneys’ fees against American Linen based on two of
these motions. Doc. 435 at 119-20.
C. Factual and Procedural History of the Instant Discovery Dispute
The instant discovery dispute began on October 23, 2020, when Plaintiffs moved
to strike Mr. Bearzi’s initial expert report and supplemental report. See generally doc.
261. On August 2, 2022, Judge Herrera issued her Memorandum Opinion and Order of
Reference, which granted Plaintiffs’ Motion to Strike (doc. 261) in part based on its
finding that Mr. Bearzi’s initial report is improper under Federal Rule of Civil
Procedure 26(a)(2)(B) because it “demonstrate[s] a lack of independent analysis to
support his stated opinions” and because the opinions it contains “rel[y] extensively”
on “the reports of two other experts in this case, Thomas Johnson and Jan Kool” as well
as the expert for the EPA. Doc. 514 at 7. Judge Herrera also held that Mr. Bearzi’s
second “supplemental report” was in fact an untimely rebuttal report. Id. at 12. Judge
Herrera then referred the procedural remedy for the improper reports (“Remedy
Issue”) to the undersigned. Id.
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Following the Court’s reference of the Remedy Issue to the undersigned, this
Court ordered the parties to submit supplemental briefing “on the appropriate
procedural remedy (or remedies) for the hearsay in the June 3, 2019, report and the
untimeliness of the August 4, 2020, rebuttal report.” See doc. 516 at 2. Plaintiffs filed
their Brief on Appropriate Remedy for American Linen’s Expert Report Violations on
August 19, 2022, see doc. 519, and Defendant American Linen filed its Memorandum of
Points and Authorities in Response to Order for Supplemental Briefing on Motion to
Strike and Exclude Defendant’s Expert on September 2, 2022, see doc. 520.
Then, on September 12, 2022, American Linen filed its Motion of American Linen
to Designate Substitute Expert Witness and Amend Expert Disclosures Pursuant to Fed.
R. Civ. P. 16(B) and 26(A)(2) (“Motion to Substitute”) in which it explained that Mr.
Bearzi no longer wished to serve as an expert witness for American Linen, and it
requested that the Court permit it to substitute a new expert witness for Mr. Bearzi and
to submit corrected expert reports. See doc. 522. According to American Linen, see id. at
11, as well as testimony from Mr. Bearzi, see doc. 557 at 2, Mr. Bearzi resigned as an
expert witness for American Linen due to retirement and family considerations at some
point after this Court issued its August 2, 2022, order finding Mr. Bearzi’s initial and
second report to be improper. Plaintiffs filed their response to the Motion to Substitute
on September 29, 2022, see doc. 534, and Defendant Chisholm’s-Village Plaza, LLC filed
its response to the Motion to Substitute on October 3, 2022, see doc. 536. American Linen
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replied on October 13, 2022. See docs. 543, 544.
On October 21, 2022, the Court held a hearing on the Remedy Issue, Defendant
American Linen’s Motion to Substitute (doc. 522), and Defendant American Linen’s
Motion to Strike (doc. 531).1 Briefing on both the Remedy Issue and Defendant
American Linen’s Motion to Substitute, has concluded, see doc. 516, doc. 528 (denying
Plaintiffs’ leave to file a reply to American Linen’s supplemental briefing response), doc.
545, and both issues are ready for decision. Because the adjudication of the Motion to
Substitute resolves the Remedy Issue, see infra Section III, the undersigned will address
the Motion to Substitute first.
II.

MOTION TO SUBSTITUTE
A. Legal Standard
American Linen’s Motion to Substitute its expert witness is a request for the

Court to modify its scheduling order deadlines for expert witness disclosures after the
deadlines have already passed.2 As such, American Linen must show not only “good
cause” for the Court to modify the scheduling order, Fed. R. Civ. P. 16(b)(4), but also
that its failure to substitute its expert before the deadline is attributable to “excusable
neglect,” Fed. R. Civ. P. 6(b)(1)(B); see also CGB Diversified Servs., Inc. v. Forsythe, Case

Defendant American Linen’s Motion to Strike (doc. 531) has since been adjudicated. See doc. 563.
During the first discovery period, the deadline for American Linen’s expert disclosure was ultimately
set as June 3, 2019. See doc. 156 at 1. During the second discovery period, the Court permitted American
Linen to disclose a new expert by May 26, 2021, see doc. 332 at 9, although it chose not to do so.
1
2

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No. 20-cv-2120-TC-TJJ, 2021 WL 672168, at *1 (D. Kan. Feb. 22, 2021) (stating that where
a plaintiff’s expert disclosures deadline passed before it filed its motion for an amended
scheduling order, both the “good cause” and “excusable neglect” standards applied).
Courts consider the following factors when determining whether a movant has
shown good cause for a modification of the scheduling order in the context of
substituting an expert:
(1) the prejudice or surprise in fact of the party against whom the excluded
witnesses would have testified, (2) the ability of that party to cure the
prejudice, (3) the extent to which waiver of the rule against calling unlisted
witnesses would disrupt the orderly and efficient trial of the case or of other
cases in court, and (4) bad faith or willfulness in failing to comply with the
court’s order.
Summers v. Mo. Pac. R.R. Sys., 132 F.3d 599, 604 (10th Cir. 1997).
Courts also frequently associate good cause with a party’s diligence in
conducting discovery, and “[g]ood cause is likely to be found when the moving party
has been generally diligent, the need for more time was neither foreseeable nor its fault,
and refusing to grant the continuance would create a substantial risk of unfairness to
that party.” Tesone v. Empire Mktg. Strategies, 942 F.3d 979, 988 (10th Cir. 2019) (internal
brackets and quotations omitted) (quoting 3 James Wm. Moore, Moore’s Federal
Practice – Civil § 16.14[1][b] (3d ed. 2019)). By contrast, “[c]arelessness is not
compatible with a finding of diligence and offers no reason for a grant of relief.” Id. at

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989 (internal brackets omitted) (quoting Johnson v. Mammoth Recreations, Inc., 975 F.2d
604, 609 (9th Cir. 1992)).
The excusable neglect standard “requires both a demonstration of good faith by
the [movant] and also it must appear that there was a reasonable basis for not
complying within the specified period.” Stark-Romero v. Nat'l R.R. Passenger Co.
(AMTRAK), 275 F.R.D. 544, 547 (D.N.M. 2011) (quoting Anderson v. Bank of Am. (In re
Four Seasons Sec. Laws Litig.), 493 F.2d 1288, 1290 (10th Cir. 1974)). Under Rule 6(b),
“inadvertence, ignorance of the rules, and mistakes construing the rules do not
constitute excusable neglect.” Quigley v. Rosenthal, 427 F.3d 1232, 1238 (10th Cir. 2005).
B. Analysis
In its Motion to Substitute, American Linen asks that the Court modify its
scheduling order to allow American Linen to disclose one, or multiple, new experts and
to submit new expert reports, see generally doc. 522. American Linen suggests that
Plaintiffs be permitted to depose the new expert, and it offers to “pay for the reasonable
costs Plaintiffs will incur to prepare and appear for a deposition of the new expert (as
well as any co-authors, if necessary).” Id. at 17. Plaintiffs ask the Court to deny
American Linen’s Motion to Substitute and argue that Plaintiffs would be “severely
prejudiced” by the delay that would be caused by substitution as well as the litigation
advantage that substitution would create for American Linen. Doc. 534 at 14-16.
Plaintiffs also argue that American Linen did not show diligence because it “did
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nothing to prepare for the contingency that Mr. Bearzi might withdraw or be excluded.”
Id. at 12. The Court agrees with Plaintiffs and finds that American Linen has not shown
good cause under the Summers factors to substitute its expert witness. It has also not
shown excusable neglect regarding its failure to move to substitute its expert before the
deadlines set by the Court expired.
i.

The Summers Factors
a. Prejudice

Because Plaintiffs would be prejudiced by American Linen’s late expert
disclosure, the first Summers factor weighs against permitting substitution.
The late substitution of an expert witness creates prejudice when the substitution
prevents the opposing party from “fully litigat[ing] the case and defend[ing] against the
new testimony.” Rimbert v. Eli Lilly and Co., 647 F.3d 1247, 1255 (10th Cir. 2011).
American Linen claims that Plaintiffs already know what information the new expert
reports will contain because American Linen’s new experts’ “analysis will [not] result in
opinions significantly different from those expressed in the Bearzi reports” and the new
reports will “reach the same results as all the other defense experts’ opinions, which
Plaintiff have been aware of and preparing for since April of 2019.” Doc. 522 at 17. As a
result, American Linen argues that there is no prejudice to Plaintiffs because the new
reports will not create a “meaningful change in testimony” id. at 16-17 (citing Baumann

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v. Am. Family Mut. Ins. Co., 278 F.R.D. 614, 616 (D. Colo. 2012)), that would require
Plaintiffs to alter their litigation or defense strategy, see id. at 15-17.
American Linen’s argument fails to account for the severe deficiencies in Mr.
Bearzi’s reports. The purpose of an expert opinion is to “set forth the substance of the
direct examination,” Jacobsen v. Deseret Book Co., 287 F.3d 936, 953 (10th Cir. 2002)
(quoting Fed. R. Civ. P. 26(a)(2) advisory committee’s note to 1993 amendment), and
this substance includes the “basis and reasons” for an expert’s opinions as well as the
“facts or data considered by the witness” in forming his opinions, Fed. R. Civ. P.
26(a)(2)(B). The basis and reasons for an expert’s opinions are arguably the most
important part of the opinion, as they provide the substance that the opposing party can
use to refute the expert’s claims. As determined by this Court, Mr. Bearzi’s initial report
was missing any indication that Mr. Bearzi conducted the “independent analysis” that
would provide the basis and reasons for his opinions. Doc. 514 at 7. In other words, the
reports previously provided by American Linen do not meaningfully advise Plaintiffs
the basis and reasons for Mr. Bearzi’s conclusions. Thus, even if American Linen’s new
reports reach the same conclusions as those in Mr. Bearzi’s report and the other
defendants’ expert reports, the underlying analysis will be completely new to Plaintiffs.
The novel analysis that would be contained in American Linen’s new expert
reports will create a “meaningful change in testimony,” see Baumann, 278 F.R.D. at 616,
and this change will prejudice Plaintiffs. Courts have found that there is no prejudice if
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the new report of the substitute expert stays within the “four-corners” of the original
expert’s report. Martin v. Interstate Battery Sys. of Am., Inc., Case No. 12-CV-184-JEDFHM, 2016 WL 4400972, at *2 (N.D. Okla. Aug. 18, 2016); see also Sinclair Wyo. Refining
Co. v. Pro-Inspect, Inc., Civil No. 12-CV-196-J, 2014 WL 12768315, at *3 (D. Wyo. Jan. 29,
2014) (finding no prejudice where the new expert opinion was “expected to be
substantially similar to that of [the original opinion]”). In its Motion to Substitute,
American Linen cites to a variety of cases in which the court found that the substituted
expert’s report did not, or would not, substantially differ from the original expert’s
report. Doc. 522 at 15-17. None of these cases, however, involved a situation in which
the original expert’s report was found to be utterly inadequate by the court. Here, the
amount of new information and analysis that American Linen’s new expert must add to
the reports in order for the reports to be in compliance with the Federal Rules means
that it would be impossible for the new expert reports to stay “within the ‘four-corners’
of the original reports.” At a minimum, American Linen’s new expert or experts would
be augmenting Mr. Bearzi’s conclusions with the crucial bases and reasons for those
conclusions. In fact, American Linen has not established that its putative expert or
experts even agree with all of Mr. Bearzi’s conclusions. Presumably, these experts will
form their own conclusions based on their own analysis. But, even assuming their
conclusions end up identical to those of Mr. Bearzi, Plaintiffs’ litigation preparation up
to now, including their own expert reports, cannot be responsive to American Linen’s
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experts’ brand-new analysis. Plaintiffs will thus be prejudiced by having to pay their
experts to review the reasoning employed by the new expert or experts as they prepare
for trial.
In addition to the new work for Plaintiffs’ experts, Plaintiffs’ counsel (not to
mention the Court) will be burdened by having to closely police the new reports to
ensure that American Linen’s new expert did not produce opinions that are
substantially different from those in Mr. Bearzi’s original report. See Sinclair, 2014 WL
12768315, at *3 (holding that “to the extent [the new expert] introduces new material;
that is, opinions beyond the scope of the [original report], [the opposing party] is not
precluded from filing motions in limine” to strike the new material). The new and
original reports will likely be difficult to compare given the new analysis required in the
new reports. In any event, the high likelihood of disputes – and the attendant motion
practice – surrounding this issue will further increase the litigation costs to Plaintiffs.
The final notable prejudice to Plaintiffs is a tactical one. American Linen seeks to
identify new experts which would necessarily be disclosing new bases and analysis.
These experts would benefit from access to every single expert report, deposition, and
discovery response from all parties that have been produced up to this point, including
documents that would not have been available to American Linen or Plaintiffs when
they originally produced their reports. For example, American Linen would be able to
produce a new initial report with the benefit of Plaintiffs’ and other Defendants’
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supplemental and rebuttal reports3 and the depositions of Plaintiffs’ experts and Mr.
Bearzi. Because Plaintiffs would not be afforded a similar opportunity to prepare
reports with the benefit of three-plus years of discovery, American Linen would gain a
fundamental litigation advantage as a result of their failure to produce proper expert
reports in the first place.
b. Ability to Cure
Because the prejudice that Plaintiffs would experience should American Linen be
granted leave to substitute its expert witness is unlikely to be cured unless the Court
permits a complete reopening of expert discovery for both parties, the second Summers
factor also weighs against permitting substitution.
American Linen argues that any prejudice would be cured by giving Plaintiffs
“ample opportunity to conduct discovery on any new reports,” including giving
Plaintiffs a chance to depose the new witnesses. Doc. 522 at 17. American Linen further
states that it “is prepared to pay for the reasonable costs” of Plaintiffs to depose the new
expert. Doc. 522 at 17. Even with these concessions, the prejudice cannot be cured.
First, American Linen’s offer unrealistically assumes a common understanding of
what those “reasonable costs” are. The complexities of expert discovery in this case
take it outside the universe of typical cases where the costs of a deposition can be easily

Defendant United States produced a rebuttal report on June 3, 2019, doc. 161, and a supplemental report
on July 18, 2019, doc. 178. Neither of these reports would have been available to American Linen before
they submitted their initial expert report on June 3, 2019. See doc. 162.
3

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cabined and accounted for. Plaintiffs’ counsel’s preparation for the deposition(s) in
coordination with its experts would be extensive and expensive. Undoubtedly, the
parties will find themselves engaged in another round of protracted litigation over
recoverable fees and costs.
Second, Plaintiffs’ experts would need to be permitted to produce new rebuttal
reports since Plaintiffs’ original rebuttal reports were in response to reports that
contained no basis for their conclusions and that were provided two and a half years
ago. In fact, curing the litigation advantage described above would necessitate a near
restart on expert discovery for both parties. See Scholl v. Pateder, Civil Action No. 1:09cv-02959-PAB-KLM, 2011 WL 3684779, at *5 (D. Colo. Aug. 22, 2011) (“Given that [the
moving party’s] expert disclosure violations essentially require expert discovery to start
anew as it relates to [the expert’s] opinions and any rebuttal opinions, including the
provision of new reports and the reopening of depositions, . . . the prejudice to [the nonmoving party] cannot be readily cured.”); see also Sonrisa Holding, LLC v. Circle K Stores,
Inc., 835 F. App’x 334, 344 (10th Cir. 2020) (prohibiting a party from redoing its
inadequate expert reports because “while [the prejudiced party] may have had some
ability to cure the prejudice, this ability was constrained by costs and court-imposed
deadlines”).
In short, any attempt to cure the prejudice to Plaintiffs would be massively
expensive and lead to an exceptionally long delay in litigation that is already in its sixth
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year.
c. Disruption to the Trial Date
American Linen’s request to substitute its expert is not reasonable under the
third Summers factor which asks the court to consider if substitution would cause a
disruption to the trial date. Although American Linen is correct that “[t]here is no trial
setting” in this case, doc. 522 at 14, it fails to acknowledge that American Linen’s
involvement in this case has been ongoing for over four years, see Cohlmia v. Ardent
Health Servs., LLC, 254 F.R.D. 426, 433 (N.D. Okla. 2008) (refusing to permit a party to
correct their inadequate expert reports under an analogous legal standard to the
Summers factors in part because permitting new reports would “prolong[] the [expert]
process even longer and increase[e] the expense to all parties” in a case that had “been
on file for more than three years”). American Linen also fails to acknowledge that the
principal reason thus far for the lack of a trial setting is protracted discovery disputes
between the parties, rather than external factors related to the Court’s schedule, such as
existed in two of the cases to which American Linen cites. See Rimbert, 647 F.3d at 1254
(permitting the plaintiff to substitute his expert in part because the trial schedule had
been vacated by the court after the case was reassigned and the new judge
“understandably required additional time to familiarize herself with the case”);
Williamson v. Metro. Prop. & Cas. Ins. Co., No. 1:15-CV-958 JCH/LF, 2018 WL 1135536, at
*1 (D.N.M. Feb. 28, 2018) (reopening discovery to allow a substitute expert in part
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because trial had not been set “due to the congestion of the Court’s docket”). Under
American Linen’s logic, the parties could continue to engage in discovery disputes and
then rely on a lack of a trial date to justify prolonging discovery indefinitely. I am
unwilling to conclude that a lack of a trial date is a viable reason for extending
discovery, and the trial setting, once again.
Further, Plaintiffs’ Motion to Dismiss Counterclaims, Third-Party Claims and to
Strike Affirmative Defenses Contained in American Linen’s Second Answer (Doc. 487),
which American Linen identifies as a source of delay and an additional reason that trial
has not been set, see doc. 522 at 15, has been resolved by the Court, see doc. 576. The
Court’s Memorandum Opinion and Order on Plaintiffs’ Motion to Dismiss dismissed
American Linen’s third-party claims against Victor Jasso and claims against Bertha
Villanueva in her individual capacity and on behalf of the estate of Jesus Villanueva. Id.
at 25. Had these third-party claims remained, the parties would have needed to
conduct discovery on the new claims, and there would have been an additional
justification to reopen discovery. Without these claims, however, the only reason for an
extension of discovery is American Linen’s failure to follow the Federal Rules of Civil
Procedure and submit adequate expert reports. I do not recommend extending
discovery and further delaying trial based on this reason alone.

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d. Bad Faith
Finally, I am not willing to find that American Linen acted in bad faith under the
fourth Summers factor, but the lack of bad faith does not outweigh my findings as to the
other factors. See Jacobsen, 287 F.3d at 954 (acting in “good faith alone [is] not [] enough
to overcome the other factors” such as prejudice to the opposing party). Although there
is no direct evidence that American Linen’s failure to adhere to the Federal Rules with
regard to its expert disclosures was a willful attempt to delay litigation or prejudice
Plaintiffs, American Linen’s lack of diligence in making any attempt to remedy its
expert disclosures up to now (described in greater detail in the next section), leads me
to conclude that the bad faith factor is at most neutral and thus does not weigh either in
favor of or against permitting substitution.
ii.

Diligence and Excusable Neglect

In addition to failing to show good cause for substituting its experts under the
Summers factors, American Linen has failed to show diligence in correcting the
problems that led to its need to substitute its expert. It has also failed to show excusable
neglect for its failure to move to substitute its expert before the appropriate deadlines.
American Linen argues that it “exercised diligence” in relation to substituting its
expert because it located a new expert and moved the Court to substitute its expert
within a short time frame after learning that Mr. Bearzi would not be available to
continue as American Linen’s expert. Doc. 522 at 10-14. While it may be true that
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American Linen was diligent in locating a new expert after Judge Herrera issued her
order finding American Linen’s initial and second report improper in August of 2022,
American Linen displayed a serious lack of diligence throughout the expert discovery
process up to that point. Plaintiffs filed their motion to strike Mr. Bearzi’s initial and
second reports in October of 2020. See doc. 261. In the almost two years between the
filing of that motion and this Court’s order finding the reports to be improper,
American Linen took no steps to correct their expert disclosures. I do not find
persuasive American Linen’s argument that a party displays diligence when it does
nothing to prepare for crisis but then acts quickly once the crisis is in full effect. Cf.
Lujan v. Nat’l Wildlife Fed., 497 U.S. 871, 897 (1990) (“a litigant’s failure to buttress its
position because of confidence in the strength of that position is always indulged in at
the litigant’s own risk”).
In fact, it does not appear that American Linen even spoke with Mr. Bearzi to
ensure that he would be available to fix the reports should the Court find them
improper. American Linen’s Motion to Substitute strongly implies that American Linen
had not spoken with Mr. Bearzi about Plaintiffs’ motion to strike and the possibility that
Mr. Bearzi may need to redo his reports and undergo additional depositions until after
Judge Herrera’s order was issued in August of 2022. See doc. 522 at 10 (stating that after
Judge Herrera’s order was issued, counsel “notified Mr. Bearzi and began discussing
with him his role and tasks” but “[a]s the scope of potentially ‘curing’ his report became
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more apparent, including the potential for further deposition and trial testimony, Mr.
Bearzi expressed concern”). Had American Linen worked more closely with Mr. Bearzi
in the interim period, it may have learned sooner that Mr. Bearzi was unavailable to
continue serving as its expert, and the substitution issue could have been addressed
earlier. See LNC Invs., Inc. v. First Fid. Bank, No. 92 Civ. 7584(CSH), 2000 WL 1290615, at
*3 (S.D.N.Y. Sep. 12, 2000) (denying a motion to substitute and stating that “had counsel
for [the defendant] inquired at [an earlier time] into [its expert’s] availability in case of
need at the second trial, they would have learned that [the expert] had retired for
medical reasons”). Regardless of what conversations occurred when between American
Linen’s counsel and Mr. Bearzi, American Linen’s lack of diligence in addressing the
problems with its expert and his reports mean that American Linen will need to start
from scratch on its expert discovery, nearly two years after being notified of the
problems with its reports and over four years after American Linen’s entry into this
case.
In response to the premise that American Linen should have been more
proactive in correcting its reports and substituting its expert, American Linen argues
that it was “not unreasonable to continue to rely upon the Bearzi reports,” doc. 522 at 10,
even in the face of Plaintiffs’ motion to strike, and that it “would be an anathema to the
courts” if a party “move[d] to substitute every expert to [sic] whom a colorable
challenge is made,” doc. 543 at 7.
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American Linen’s argument ignores the fact that, notwithstanding the pending
motion to strike the Bearzi reports, Mr. Bearzi would be a necessary witness at trial.
While the substitution of Mr. Bearzi is far more problematic given the fundamental
deficiencies in his reports as reflected in the order granting Plaintiffs’ Motion to Strike,
American Linen was responsible for monitoring his availability for trial regardless of
how Judge Herrera might rule. Based on the briefing and hearing on the instant
motion, it appears that counsel for American Linen had no meaningful contact with Mr.
Bearzi from early August 2021 until early August 2022. They certainly were not
checking in with him to ensure his availability for a trial in the coming years.
While this gap in contact might be forgiven in the ordinary case, this
circumstance was not typical. Mr. Bearzi’s reports were the subject of a pending motion
to strike which would require significant work to remedy if granted. Of course, a party
need not move to substitute every expert against whom a colorable challenge is made.
However, the party should take appropriate steps to prepare for the potential outcome
that it may need to remedy its report, including, at the very least, ensuring that its
expert is willing to participate in that remedy process.
This conclusion is particularly true here where the Bearzi reports were in clear
violation of the Federal Rules. This Court’s ruling on the propriety of Mr. Bearzi’s
reports was not a close call, see, e.g., doc. 514 at 7 (“nothing in Bearzi’s first report seems
to suggest that he undertook [the required] analysis”) (emphasis added), and the Court
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cited to a wealth of existing case law which indicates that an expert witness may not
simply adopt the work of another expert without conducting independent analysis, id.
at 5-7. Indeed, the requirement that an expert must “demonstrate [the] basis for
concluding that another individual’s opinion . . . [is] reliable,” TK-7 Corp v. Estate of
Barbouti, 993 F.2d 722, 732 (10th Cir. 1993), is not a “novel or unfounded interpretation”
of the Federal Rules, Pickard v. United States, Case No. 18-2372-JWL, 2021 WL 463371, at
*3 (D. Kan. Feb. 9, 2021). American Linen’s failure to follow the Federal Rules in the
first instance coupled with its failure to take any proactive steps to correct its improper
reports after it was put on notice by Plaintiffs of this well-established law is not diligent
or excusable. See Corral v. Home Depot U.S.A., Inc., Civ. No. 13-555 JCH/CG, 2014 WL
12787984, at *3 (D.N.M. Sept. 30, 2014) (finding a “lack of good faith” in a party who
failed to take steps to “correct the defects in her experts’ reports” for two months
following the filing of the opposing party’s motion to strike); Pickard, 2021 WL 463371,
at *3 (finding that a party was not diligent when it failed to move to substitute its expert
after learning from opposing counsel that its expert disclosure was likely not in
compliance with the Federal Rules); see also Harlas v. Barn, LLC, Civil Action No. 18-cv02320-RM-NYW, 2019 WL 7290928, at *7 (D. Colo. Oct. 1, 2019) (striking a party’s expert
reports under an analogous legal standard because there were “some suggestions that
Plaintiff willfully disregarded any indication of deficiencies in [her expert’s]
disclosure”).
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Lastly, American Linen argues that even if it did have concerns that the Court
might find its reports to be inadequate, it reasonably believed that it would not need to
redo its expert reports because Mr. Bearzi’s deposition cured any problems with the
reports.4 See doc. 543 at 8. I disagree. It is true that, under certain circumstances, courts
have allowed a party to continue to trial with an inadequate expert report if the
deposition cures the report. See Jager v. Andrade-Barraza, Civ. No. 18-743 GBW/CG, 2019
WL 6896643, at *6-7 (D.N.M. Dec. 18, 2019) (finding that the expert’s “deposition
mitigated the prejudice caused by [the] violation” in his report in part because he
“provided greater detail about his opinions, and the bases for those opinions”).
However, the question of whether a deposition cures an expert report requires a highly
fact-specific inquiry. See, e.g., Gillum v. U.S., 309 F. App’x 267, 270 (10th Cir. 2009)
(denying a motion to strike plaintiff’s inadequate expert report because the defendant
“knew the substance of [the expert’s] expected testimony” due to the expert’s
deposition as well as the plaintiff’s “response to the motion in limine, which also
discussed the reasons and bases for [the expert’s] conclusion”). As a result, American
Linen’s reliance on Mr. Bearzi’s deposition as a cure for its inadequate reports was a
tenuous position, particularly in a case where, as American Linen frequently states,
expert testimony is critical. See, e.g., doc. 522 at 12-13. American Linen’s position with

The Court does not need to reach the issue of whether Mr. Bearzi’s deposition cured his inadequate
reports in order to decide American Linen’s Motion to Substitute. Thus, the Court will not take a position
on this issue.
4

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regard to Mr. Bearzi’s deposition is yet another example where American Linen’s
counsel failed to act diligently to ensure that it was adhering to the Federal Rules
during the discovery process.
iii.

Dispositive Effect of Denying the Motion to Substitute

Because expert testimony is critical to a party’s ability to defend itself against
CERCLA liability, see Morrison Enters. v. McShares, Inc., 302 F.3d 1127, 1131 (10th Cir.
2002), denying American Linen’s Motion to Substitute may have a dispositive effect on
the liability claims that Plaintiffs have brought against American Linen. While the full
impact of American Linen’s expert will be determined by the presiding judge, the
undersigned will assume it will be dispositive on the CERCLA liability claim.
In cases where the court is deciding whether to exclude evidence, including
expert testimony, under Federal Rule of Civil Procedure 37(c)(1), and the “exclusion of
evidence . . . has the necessary effect of a dismissal,” the Tenth Circuit has advised
courts to “carefully explore and consider the efficacy of less drastic alternatives,
ordinarily reserving the extreme sanction of dismissal for cases involving bad faith or
willfulness or instances where less severe sanctions would obviously prove futile.”
HCG Platinum, LLC v. Preferred Prod. Placement Corp., 873 F.3d 1191, 1206 (10th Cir.
2017). Although American Linen’s Motion to Substitute is a motion to reopen the
scheduling order under Federal Rules of Civil Procedure 6(b) and 16(b) and is thus not a
motion which directly involves Rule 37, denying the motion to substitute in this case
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will have a similar effect as excluding expert testimony under Rule 37. As a result, I
will apply the “lesser-sanctions inquiry” to the facts of this case. Id.
Given the current posture of the case, the only alternative to denying American
Linen’s Motion to Substitute is to grant its Motion and permit American Linen to
disclose a new expert and new reports.5 The Court would, at the very least, then need
to permit Plaintiffs to depose the new expert. In this scenario, the only available
sanction that the Court could assess against American Linen would be attorneys’ fees,
such as fees to cover Plaintiffs’ costs of deposing the new expert as well as the costs
Plaintiffs incurred in reviewing Mr. Bearzi’s reports and deposing Mr. Bearzi. The
Court would also require that the new expert’s reports stay within the “four-corners” of
Mr. Bearzi’s reports, although the Court does not consider this restriction to be feasible
given the deficiencies of the Bearzi reports nor to be a meaningful sanction as parties
which substitute their experts are generally required under the case law to adhere to
this requirement. See, e.g., Martin, 2016 WL 4400972, at *2. As discussed in detail above,
see supra pp. 13-15, this alternate scenario would create a myriad of problems that
would impose substantial burdens on Plaintiffs as well as the Court, including
protracted disputes over attorney fees and over whether American Linen’s new reports
adhered to the “four-corners” rule. American Linen is fundamentally asking the Court

For example, American Linen has not proposed any alternative involving Mr. Bearzi augmenting his
reports and proceeding as American Linen’s expert.
5

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to restart the clock on over four years of expert discovery due to its failure to follow the
Federal Rules during the first round of expert discovery and its failure to act diligently
to remedy its errors after it was given notice of the problems. The lesser sanctions
available to the Court in this instance would not only lead to additional disputes and
wasted judicial resources, but also are unjust given the enormity of American Linen’s
request and the resulting prejudice to Plaintiffs.
Lastly, although I find that less severe sanctions are not appropriate in this case,
I note that the “lesser-sanctions inquiry” described in HCG Platinum is typically applied
in instances where the exclusion of evidence leads to dismissal of the entire case. See,
e.g., HCG Platinum, 873 F.3d at 1199; see also Gillum, 309 F. App’x at 270 (considering the
propriety of excluding expert testimony as a discovery sanction in a medical
malpractice case, where the exclusion “necessarily resulted in the grant of summary
judgment for [the defendant]”). Although the denial of American Linen’s motion to
substitute may be dispositive as to Plaintiff’s liability claims, it is not dispositive as to
the issue of contribution. American Linen may still argue that it is not required to
contribute costs under the various equitable factors that courts use to determine
contribution in CERCLA cases. See United States v. Colo. & E. R.R. Co., 50 F.3d 1530, 1536
& n.5 (10th Cir. 1995).
III.

REMEDY ISSUE
I now turn to address the remedy for American Linen’s expert reports that Judge
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Herrera found to be improper in her Memorandum Opinion and Order of Reference.
Doc. 514. In their supplemental briefing which provides proposed remedies for the
improper reports, Plaintiffs request that the Court exclude Mr. Bearzi’s initial and
second expert report and prohibit Mr. Bearzi from testifying at trial.6 Doc. 519 at 23.
Plaintiffs further request that the Court exclude Opinion 6 of Mr. Bearzi’s third expert
report on the arranger claim because they argue that it suffers from the same hearsay
problem that led Judge Herrera to strike Mr. Bearzi’s initial report.7 Id. at 5-6. Finally,
because Plaintiffs’ proposed remedy would leave American Linen without an expert for
its owner/operator claims, Plaintiffs ask the Court to find American Linen liable as an
owner/operator under CERCLA law by finding two facts as established: (1) “American
Linen meets the definition of ‘owner’ and ‘operator’ under CERCLA,” and (2) American
Linen’s actions caused some of the toxic spill that Plaintiffs were responsible for
remediating. Id. at 17-19.
In its supplemental brief, American Linen does not oppose Plaintiffs’ request for
the Court to strike Mr. Bearzi’s inadequate initial and second reports. Rather, it asks
that the Court permit it to submit amended reports authored by a new expert. Doc. 520

Plaintiffs also request that the Court bar any future discovery in this case. Doc. 519 at 23. Discovery in
this case is closed, see doc. 332, and this PFRD does not reopen it.
7 Any issues in Mr. Bearzi’s third expert report on the arranger claim are not before the Court, and the
Court did not find this report to be improper in its Memorandum Order and Order of Reference on
Plaintiff’s Motion to Strike. See doc. 514. Plaintiffs include the request to strike Opinion 6 in Mr. Bearzi’s
third arranger report in their supplemental brief on the Remedy Issue. See doc. 519 at 3. They did not file
a separate motion to strike Opinion 6 in the arranger report.
6

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at 5, 24. American Linen formalized its request to substitute its expert in its Motion to
Substitute. See doc. 522.
For reasons described in detail in Section II, supra, I recommend that the Court
deny American Linen’s Motion to Substitute (doc. 522), which would mean that
American Linen would not be permitted to substitute its expert and produce amended
reports by a new expert. Given that American Linen’s only suggested remedy for the
deficiencies in Mr. Bearzi’s initial and second reports is that it be permitted to retain a
substitute expert and file amended reports, I recommend granting Plaintiffs’ request to
strike Mr. Bearzi’s initial and second reports and prohibit Mr. Bearzi from testifying on
those reports at trial.
I also recommend that the Court decline to adopt without prejudice the other
remedies requested by Plaintiffs in their supplemental brief, including their request to
exclude Opinion 6 in Mr. Bearzi’s third expert report and their request that the Court
establish certain facts and find American Linen as liable as an owner/operator, because
these issues are not properly before the Court. The Court’s Order for Supplemental
Briefing ordered the parties to file “briefing on the appropriate procedural remedy (or
remedies) for the hearsay in the June 3, 2019, report and the untimeliness of the August
4, 2020, rebuttal report.” Doc. 516 at 2. Plaintiffs’ request for the Court to exclude a
portion of a third, unrelated, expert report and their request that the Court establish
liability as to certain claims are disguised motions to strike and for summary judgment,
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rather than proposed remedies for the improper expert reports. Plaintiffs may file the
appropriate motions on these issues following the Court’s final resolution of the
Remedy Issue.
IV.

CONCLUSION
For the foregoing reasons, I RECOMMEND that the Court: (1) DENY American

Linen’s Motion to Substitute (doc. 522); and (2) ADOPT Plaintiffs’ requested remedy of
striking Mr. Bearzi’s June 3, 2019, and August 4, 2020, reports and preventing Mr.
Bearzi from testifying at trial as to those reports.

____________________________________
GREGORY B. WORMUTH
CHIEF UNITED STATES MAGISTRATE JUDGE

THE PARTIES ARE FURTHER NOTIFIED THAT WITHIN 14 DAYS OF SERVICE of
a copy of these Proposed Findings and Recommended Disposition they may file written
objections with the Clerk of the District Court pursuant to 28 U.S.C. § 636(b)(1). A party
must file any objections with the Clerk of the District Court within the fourteen-day
period if that party wants to have appellate review of the proposed findings and
recommended disposition. If no objections are filed, no appellate review will be
allowed.

29