Severn Peanut Co., Inc. et al v. Industrial Fumigant Co. et al

Filing 96

ORDER GRANTING 64 Defendant's Motion to Exclude Plaintiffs' Post-Disclosure Expert Testing and Supplemental Reports and Opinions. Any and all testing undertaken by the plaintiffs' expert witnesses subsequent to May 1, 2013, includin g but not limited to the testing undertaken in Memphis, Tennessee, on or about September 4, 2013, and any supplemental reports and/or opinions associated with such testing, is hereby EXCLUDED from evidence in this case. Signed by US District Judge Terrence W. Boyle on 1/13/2014. Counsel is directed to read Order in its entirety for critical information. (Fisher, M.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
NORTHERN DIVISION
NO. 2:11-CV-00014-BO

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SEVERN PEANUT CO., INC., et al,
Plaintiff,
v.

INDUSTRIAL FUMIGANT CO. and
ROLLINS INC.,
Defendants.

ORDER

This matter is before the Court on defendants' motion to exclude plaintiffs' postdisclosure expert testing and supplemental reports and opinions [DE 64]. The motion is now ripe
for adjudication. For the reasons stated herein, the defendants' motion is GRANTED.

BACKGROUND
On April 20, 2009, Industrial Fumigant Co. ("IFC") and Severn Peanut Co. ("Severn")
entered into a contract for IFC to fumigate Severn's peanut storage dome ("dome"). On August
4, 2009, IFC applied the fumigant and sealed the dome. Seven days later, Severn discovered
smoke coming from the dome and notified IFC. On August 29, 2009, there was an explosion in
the dome and the dome and peanuts inside sustained severe damage. Severn alleges that it
sustained $20 million in damages as a result of the fire, which it attributes to defendants'
improper application of the pesticide Fumitoxin.
As a result of this incident, plaintiffs filed this suit against defendants on April 8, 2011.
Plaintiffs assert claims for negligence, negligence per se, and breach of contract. Defendants
assert, among other defenses, contributory negligence on the part of Severn. On February 21,

2013, this Court entered an order extending the scheduling deadlines making plaintiffs' expert
disclosures and reports due on May 1, 2013 and defendants' expert disclosures and reports due
on June 26, 2013. Depositions could occur only after defendants' disclosures. [DE 53].
Discovery closed on October 28, 2013 and dispositive motions were due on November 27, 2013.
[DE 53].
In accordance with the scheduling order, and pursuant to FED. R. CIV. P. 26(a)(2), on May
1, 2013, plaintiffs disclosed four retained, testifying expert witnesses and attached the expert
reports of those experts to the disclosure. On June 26, 2013, defendants disclosed eight retained,
testifying expert witnesses and attached their expert reports to the disclosure. Defendants took
the deposition of plaintiffs' expert Rich on July 30, 2013, plaintiffs' expert Brown on August 2,
2013, and plaintiffs' expert Mueller on August 13, 2013. Each testified that they had not
conducted any testing to support their opinion and did not indicate that 'they planned to do any
before trial.
Defendants noticed plaintiffs' expert Schumacher's deposition for September 12, 2013.
On September 6, 2013, plaintiffs served on defendants a second supplemental expert report of
Schumacher. In that report, Schumacher states that on September 4, 2013, he took part in and
witnessed demonstrations in Memphis, Tennessee of Fumitoxin tablets being dispensed from
flasks onto the surface of a peanut pile. His second supplemental report states that the
demonstrations provided additional support for his previously expressed opinion. During
Schumacher's deposition he revealed that plaintiffs' experts Rich and Mueller also participated
in the testing. On September 23, 2013, plaintiffs disclosed a second supplemental expert report
of Rich in which he indicated the testing provided additional support of his original opinions.

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On October 8, 2013, defendants filed the instant motion seeking to exclude from
evidence in this case any and all testing undertaken by plaintiffs' expert witnesses subsequent to
May 1, 2013, including but not limited to the testing undertaken in Memphis, Tennessee on or
about September 4, 2013, and any supplemental reports and/or opinions associated with such
testing.
DISCUSSION
The disclosure of expert testimony is governed by Rule 26(a)(2) which provides that an
expert report must contain "(i) a complete statement of all opinions the witness will express and
the basis and reasons for them; (ii) the facts or data considered by the witness informing them;
(iii) any exhibits that will be used to summarize or support them." FED. R. Clv. P. 26(a)(2)(B).
An expert report may be supplemented pursuant to Rule 26( e) only when the original report was
"defective in some way so that the disclosure was incorrect or incomplete and, therefore,
misleading." Akeva L.L.C. v. Mizuno Corp., 212 F.R.D. 306,310 (M.D.N.C. 2002). "It does not
cover failures of omission because the expert did an inadequate or incomplete preparation." !d.
However, "[b]ecause there was a court approved discovery plan in this case, the Court looks to
Rule 16(f) to determine violations for not disclosing expert reports at the time required under the
scheduling order, and to determine sanctions. !d. at 309.
Here, as Schumacher testified, the testing in which he, Rich, and Mueller participated in
on September 4, 2013, over four months after plaintiffs' expert disclosure deadline, was for the
purpose of"bolster[ing my] opinion." Schumacher Deposition pp. 64-65. Plaintiffs do not allege
that the supplemental reports were to correct an incomplete or misleading disclosure.
However, plaintiffs argue that this is still proper supplementation. Plaintiffs point to the
scheduling order which stated that "supplementation under Rule 26( e) must be made promptly

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after the receipt of the information by the party or counsel but in no event later than the close of
discovery." [DE 36]. Plaintiffs argue that because they served the supplemental reports prior to
the close of discovery, the supplementation does not violate the scheduling order and should be
allowed.
Plaintiffs' argument is unavailing. Here, the supplemental testing and reports defendants
seek to have excluded clearly violate this Court's scheduling order and do not qualify as
supplementation under Rule 26(e). Plaintiffs' own experts describe the need for their
supplementation as a means to "bolster" their original opinions. However, Rule 26(e)(1) requires
supplementation when a "party learns that in some material respect the information disclosed is
incomplete or incorrect." FED. R. CIV. P. 26(e)(l). Like the court in Akeva, this Court "cannot
accept a definition of supplementation which would essentially allow for unlimited bolstering of
expert opinions." Akeva, 212 F.R.D. at 310. The only appropriate supplementation occurs when
the previous disclosures "happen to be defective in some way so that the disclosure was incorrect
or incomplete and, therefore, misleading." !d. (emphasis added). "To construe supplementation
to apply whenever a party wants to bolster or submit additional expert opinions would reek
havoc on docket control and amount to unlimited expert opinion preparation." !d. Accordingly,
plaintiffs' experts' supplemental reports and testing are not proper supplementation, but rather
untimely disclosures.
Having determined that its discovery plan was violated, the Court now looks to whether
or not exclusion, as defendants request, is the appropriate sanction. The sanctions authorized by
Rule 37(b)(2)(A)(ii)-(vii) are available to the court as a result of plaintiffs violation of the
scheduling order. FED. R. CIV. P. 16(f). The sanctions provided for in that rule are as follows:
(ii) prohibiting the disobedient party from supporting or opposing designated
claims or defenses, or from introducing designated matters in evidence; (iii)
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striking pleadings in whole or in part; (iv) staying further proceedings until the
order is obeyed; (v) dismissing the action or proceeding in whole or in part; (vi)
rendering a default judgment against the disobedient party; or (vii) treating as
contempt of court the failure to obey any order except an order to submit to a
physical or mental examination.
FED. R. CIV. P. 37(b)(2)(A). "The primary focus of the Rule 16(f) analysis is "whether [the
disobedient party] has shown good cause for its failure to timely disclose." SMD Software, Inc. v.
EMove, Inc., NO. 5:08-CV-403-FL 2013 U.S. Dist. LEXIS 146864, *12 (E.D.N.C. Oct. 10,

2013) (citingAkeva, 212 F.R.D at 309). "Ifthe court finds such a violation without good cause, it
has 'broad discretion in employing sanctions."' Id at 12-13 (citing Akeva, 212 F.R.D at 311).
Relevant considerations include "(1) the explanation for the failure to obey the order; (2) the
importance of the expert opinion; (3) the prejudice to the opposing party by allowing the
disclosures; and (4) the availability of alternative or lesser sanctions. . . . ([ 5]) the interest in
expeditious resolution of litigation; ([6]) a court's need to manage its docket; and ([7]) public
policy favoring disposition of cases on the merits." 1 Akeva, 212 F.R.D. at 311.
Here, plaintiffs offer no explanation for their failure to obey the scheduling order other
than to argue that the supplements are proper under Rule 26(e). The Court has already found this
argument to be unpersuasive and notes that plaintiffs' only motivation to offer the supplements
was to bolster their experts' opinions. There is no excuse for failure to properly prepare and
supplementation will not be allowed in such circumstances. Further, plaintiffs offer no
explanation as to why the testing could not have been performed at a time when the results could
have been disclosed in plaintiffs' original expert reports. Allowing plaintiffs' untimely
disclosures at this juncture would necessitate allowing defendants to submit supplemental reports
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The Court notes that several courts in the Fourth Circuit have found the appropriate factors to be the five laid out in
Southern States Rack & Fixture Inc. v. Sherwin-Williams Co., 318 F.3d 592, 597 (4th Cir. 2003) for determining
whether evidence should be should be excluded under Rule 37(c)(l) when making an analysis under Rule 16(f), see
SMD Software, 2013 U.S. Dist. LEXIS 146864 at *13 (collecting cases), but also notes that the factors are
substantially similar and the Court's analysis here would be the same whether conducted under either set of factors.

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and take additional depositions of plaintiffs' experts. Plaintiffs' admit this and argue that they
offered to allow defendants to do so before the close of discovery. [DE 77 at 8]. However, at this
time discovery has closed, and the reopening of depositions and expert reports would impose
significant costs on the court and both parties. Further, this would disrupt the Court's ability and
need to manage its docket. Of course, excluding the reports does lessen the likelihood that the
case will be decided on the merits, and therefore, this factor weighs against exclusion. However,
after considering all of the factors as applied to this case, there is no better solution than to
exclude the testing and supplemental reports, and that solution is well justified.
Accordingly, any and all testing undertaken by plaintiffs' expert witnesses subsequent to
May 1, 2013, including but not limited to the testing undertaken in Memphis, Tennessee on or
about September 4, 2013, and any supplemental reports and/or opinions associated with such
testing is hereby excluded from evidence in this case. Defendants' motion is granted.
CONCLUSION

For the foregoing reasons, defendants' motion to exclude is GRANTED. Any and all
testing undertaken by plaintiffs' expert witnesses subsequent to May 1, 2013, including but not
limited to the testing undertaken in Memphis Tennessee on or about September 4, 2013, and any
supplemental reports and/or opinions associated with such testing is hereby EXCLUDED from
evidence in this case.
SO ORDERED.
Thisthe

/~ dayofJanuary2014.

TE
NCE W. BOYLE
UNITED STATES DISTRIC

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