Reetz v. Lowe's Companies, Inc. et al
Filing
205
ORDER granting in part and denying in part 121 Motion to Strike. Aon's [173, 174] Motions in Limine to Exclude Expert Testimony are deferred for final ruling at trial. Signed by District Judge Kenneth D. Bell on 2/22/2021. (nvc)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
STATESVILLE DIVISION
CIVIL ACTION NO. 5:18-CV-00075-KDB-DCK
BENJAMIN REETZ,
Plaintiff,
v.
ORDER
LOWE'S COMPANIES, INC.;
ADMINISTRATIVE
COMMITTEE OF LOWE'S
COMPANIES, INC.; AND AON
HEWITT INVESTMENT
CONSULTING, INC.,
Defendants.
THIS MATTER is before the Court on Plaintiff’s Motion to Strike (Doc. No. 121) and
Defendant Aon Hewitt Investment Consulting, Inc.’s (“Aon”) Motions in Limine to Exclude
Expert Testimony of David Donaldson and Marcia S. Wagner (Doc Nos. 173, 174). The Court has
carefully considered these motions and the parties’ related briefs and exhibits. For the reasons
discussed below, the Court will GRANT in part and DENY in part the motion to strike and defer
ruling on the motions to exclude the experts’ testimony until the Court has the opportunity to
consider their testimony at trial.
Motion to Strike
After 9 p.m. on November 19, 2020, the final day of the discovery period set by the Court,
Defendants Lowe’s Companies, Inc. and the Administrative Committee of Lowe’s Companies,
Inc. (“Lowe’s”) served amended disclosures under Rule 26(a) identifying 35 additional individuals
who may have information that Lowe’s “may use to support its claims or defenses.” See Fed. R.
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Civ. P. 26(a)(1)(A)(i). Plaintiff claims this disclosure was untimely and asks the Court to “strike” the
disclosure as unjustified and prejudicial, thereby preventing the potential witnesses from testifying at
trial. Lowe’s responds that Plaintiff already knew about the individuals from document production and
other discovery and the disclosure at the very end of the discovery period was accordingly harmless
(or could be made harmless by permitting additional discovery). Following the filing of the motion,
the Parties have narrowed their dispute1 to three third party witnesses - Billy Welsh and Christopher
Jarmusch from Gallagher Fiduciary Advisors and Jennifer Osborne from Wells Fargo.
The Court will not belabor its discussion of this dispute. Lowe’s cannot seriously or
credibly contend that disclosing almost three dozen potential witnesses shortly before the clock
struck midnight on the last day of the discovery period was timely, “substantially justified” or even
a good faith effort to respond to what the Advisory Committee Notes to Rule 26(a) describe as
“the functional equivalent of court-ordered interrogatories.” See Comments to 1993 Amendment
to Federal Rule of Civil Procedure 26 at Subdivision A, Paragraph 1. Lowe’s belated
identifications were plainly not a genuine effort to comply with any disclosure obligation –
disclosure when Plaintiff could do no further discovery would have a decidedly limited benefit.
Rather, Lowe’s amendment of the Rule 26 disclosures was simply an effort to paper over the record
to hopefully avoid being prohibited from calling the additional disclosed witnesses at trial.
Lowe’s suggests that it had no obligation to amend the disclosures because the individuals
had been identified in “thousands” of documents or were otherwise discussed in depositions or
expert reports. First, while it would be wrong to impose any sanction on the failure to “disclose”
Lowe’s has agreed to withdraw 22 individuals from its disclosure (Akinjide Falaki, Angela
Kirkby, Stacey Ryan, Brandon Sink, Jennifer Weber, Chris Ahearn, Mark Imhoff, Kristen
Thompson, Marshall Croom, Randy Moon, Dana Brown, Rod Bare, James O'Connor, Bo
Abesamis, James Veneruso, Beau Morrison, Brandi Wust, Kelly Waldner, Brian Donoghue, Isaac
Buchen, David Cantor, and Eric Guerci). Plaintiff has in turn agreed not to pursue the motion as
to the remaining ten individuals from Lowe’s Administrative Committee and Aon.
1
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potential witnesses at the very center of a case (such as individual parties), there is no exception
in the language of Rule 26(a) for “witnesses the other side should already know about” and the
Rule 26(a) identification of such clearly expected witnesses is in fact routine if not nearly universal.
Moreover, the more “well known” the likelihood that a witness may be called to “support [a
party’s] claims or defenses” then the easier it is for that party to identify the witness well in advance
of the discovery deadline. Finally, it is critical to the fair and efficient litigation of civil disputes
that the parties use their disclosures and discovery responses to actually narrow the scope of further
discovery and trial preparation, particularly in large commercial disputes involving what is often
an almost infinite number of potential supporting witnesses identified among hundreds of
thousands if not millions of pages of documents.
However, in light of the Parties’ narrowing of the dispute to only three witnesses (none of
whom were newly revealed in the amended disclosures), Plaintiff’s strident position that the Court
is required to prohibit the witnesses’ testimony, despite an obvious opportunity to rectify any
alleged prejudice by a prompt agreement to conduct additional targeted discovery, is far from
praiseworthy. Indeed, an unreasonable and uncompromising insistence on the strictest application
of the rules with the clear effect of thwarting the search for a true decision on the merits is no less
gamesmanship than the original sin. “Gotcha” is not and cannot be a guiding principle for the
application of the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 1 (“[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.”).
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Accordingly, applying the multi-factor balancing test of Southern States Rack & Fixture,
Inc. v. Sherwin–Williams Co., 318 F.3d 592, 595 (4th Cir. 2003),
2
the Court exercises its
discretion to find that while the belated disclosure was not “substantially justified,” it was
“harmless” in the specific context of this action. See Fed. R. Civ. P. 37(c)(1).3 Although Plaintiff
may not have known that Lowe’s would potentially use the Gallagher witnesses, he ought not to
have been “surprised” (factor 1) by that development in light of the fact their roles were noted in
expert reports as well as depositions. This is also true, but less so, with respect to the Wells Fargo
witness. While Wells Fargo’s role with respect to the Lowe’s ERISA Plan was known, the
disclosed witness was only apparently mentioned in documents, so her particular role and
relevance to the dispute may not be fully known to Plaintiff (and indeed it is not clear to the Court
from the limited record of the motion).
Further, in this case, the second factor – the ability of the disclosing party to cure the
surprise – is significant. As noted, there are only three witnesses in dispute, all of which can easily
be deposed long before the scheduled trial of the case in May 2021. Also, with respect to Ms.
2
In exercising its broad discretion to determine whether a nondisclosure of evidence is
substantially justified or harmless for purposes of a Rule 37(c)(1) exclusion analysis, a district
court should be guided by the following factors: (1) the surprise to the party against whom the
evidence would be offered; (2) the ability of that party to cure the surprise; (3) the extent to which
allowing the evidence would disrupt the trial; (4) the importance of the evidence; and (5) the nondisclosing party's explanation for its failure to disclose the evidence. Southern States, 318 F.3d at
596–97.
3 The Court recognizes that the Rule 37(c) advisory committee notes discuss that the “‘automatic
sanction’ of exclusion ‘provides a strong inducement for disclosure of material that the disclosing
party would expect to use as evidence,’” see Southern States, 318 F.3d at 592 n. 2 (quoting Fed.
R. Civ. P. 37(c) advisory committee note, 1993 Amendment). However, the text of the rule
specifically states that the sanction will not be applied if the failure to disclose was either
“substantially justified or harmless,” indicating that the Court should engage in a more nuanced
consideration of whether to apply the harsh sanction of disallowing potentially relevant evidence.
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Osborne, the Court will require Lowe’s to promptly provide Plaintiff with a detailed disclosure of
the specific topics on which Ms. Osborne is expected to testify and the substance of her testimony
on those subjects.4 Accordingly, the Court finds that any surprise and resulting prejudice to the
Plaintiff can be fully cured. Finally, as noted, allowing the evidence will not disrupt the trial (factor
3).5 Therefore, although the Court does find that Lowe’s disclosure of these witnesses was
untimely,6 the Court will deny the motion to strike because any prejudice to Plaintiff can be
remedied, making Lowe’s conduct “harmless.”
Motions to Exclude Expert Witness Testimony
Aon, but not Lowe’s, moves to exclude the expert testimony of Plaintiff’s experts David
Donaldson and Marcia Wagner pursuant to Federal Rule of Evidence 702. Mr. Donaldson is
currently an ERISA consultant and formerly worked, among other ERISA related jobs, as a Senior
Investigator at the Department of Labor. Mr. Donaldson has been “engaged by Plaintiff’s counsel
. . . to evaluate whether conflicts of interest were present . . . and whether AHIC and the Plan’s
Administrative Committee took adequate steps to avoid or address those conflicts.” (Doc. No. 1366 at ¶ 1). Ms. Wagner is an experienced ERISA attorney who Plaintiff says will offer “factuallybased” opinion testimony “regarding whether Defendants acted consistent with the standard of
care that Ms. Wagner has observed over her more than 30 years of experience in the pension
industry.” Doc. No. 194 at 1.
4
This disclosure appears to the Court to be unnecessary for the Gallagher witnesses based on the
parties’ respective arguments with respect to Gallagher during summary judgment which specify
the issues on which the witnesses will likely testify. Of course, Plaintiff will be free to fully explore
their relevant knowledge and potential testimony in their depositions.
5
The remaining factors of the importance of the evidence and the party's explanation for its failure
to earlier disclose the evidence are either disputed and/or do not outweigh the factors discussed
above.
6 The Court notes that Lowe’s is a frequent litigant in this Court and trusts that this conduct will
not be repeated in future litigation.
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Under Federal Rule of Evidence 702, “[a] district court considering the admissibility of
expert testimony exercises a gate-keeping function to assess whether the proffered evidence is
sufficiently reliable and relevant.” Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261 (4th Cir.
1999). “Relevant evidence, of course, is evidence that helps ‘the trier of fact to understand the
evidence or to determine a fact in issue.’” Nease v. Ford Motor Co., 848 F.3d 219, 229 (4th Cir.
2017) (quoting Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 591 (1993)). “Rule 702 was
intended to liberalize the introduction of relevant expert evidence.” Westberry, 178 F.3d at 261
(citing Cavallo v. Star Enter., 100 F.3d 1150, 1158-59 (4th Cir. 1996)). Therefore, the court “need
not determine that the expert testimony ... is irrefutable or certainly correct.... As with all other
admissible evidence, expert testimony is subject to being tested by ‘[v]igorous cross-examination,
presentation of contrary evidence, and careful instruction on the burden of proof.’ ” Id. (citation
omitted) (quoting Daubert, 509 U.S. at 596).
Although Rule 702 applies in bench trials, “the Court has increased discretion in how to
perform its gatekeeping role.” Acosta v. Vinoskey, 310 F. Supp. 3d 662, 667 (W.D. Va. 2018). The
thrust of Rule 702 is to protect the jury from “evidence that is unreliable for reasons they may have
difficulty understanding.” Quality Plus Servs., Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA.,
No. 3:18-cv-454, 2020 WL 239598, at *13 (E.D. Va. Jan. 15, 2020) (quoting 29 Charles A. Wright
& Victor J. Gold, Federal Practice and Procedure § 6270 (2d ed. 2019)); see also In re Zurn Pex
Plumbing Prods. Liab. Litig., 644 F.3d 604, 613 (8th Cir. 2011) (“The main purpose
of Daubert exclusion is to protect juries from being swayed by dubious testimony.”). However,
when the judge serves as the factfinder, this risk of confusion presents significantly less of a
concern, if any at all. See United States v. Brown, 415 F.3d 1257, 1269 (11th Cir. 2005) (“There
6
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is less need for the gatekeeper to keep the gate when the gatekeeper is keeping the gate only for
himself.”).
Thus, the Court has discretion to admit the expert evidence “subject to the ability later to
exclude it or disregard it” at trial. Hewett v. City of King, 2014 WL 7642093, at *1 (M.D.N.C.
Sept. 8, 2014) (quotation omitted); see also Pender v. Bank of Am. Corp., 2016 WL 6133850,
at *3 (W.D.N.C. Oct. 20, 2016) (“As this is a bench trial, the Court can freely accept or reject an
expert’s testimony at trial as the trier of fact.”); In re Salem, 465 F.3d 767, 777 (7th Cir. 2006)
(“[W]here the factfinder and the gatekeeper are the same, the court does not err in admitting the
evidence subject to the ability later to exclude it or disregard it if it turns out not to meet the
standard of reliability established by Rule 702.”).
Aon argues that the Court must exclude these witnesses because their testimony is
irrelevant and/or they will be offering “legal opinions” that invade the province of the Court to
decide the ultimate legal issues in dispute. Plaintiff disavows any intent to present expert legal
opinions on the ultimate issues, and the Court will hold Plaintiff to that representation.7 The Court
understands that these experts intend to testify, based on their ESISA experience, how the alleged
conflicts of interest and other fiduciary questions and situations involved in this dispute are
typically handled. In turn, the Court expects Aon (and perhaps also Lowe’s at trial) to vigorously
challenge the relevance and weight of this testimony. In light of the discretion afforded the Court
by a bench trial, the Court declines to decide these objections and arguments at this time. Instead,
the Court will allow the challenged witnesses to testify and defer a final ruling on the admissibility
and weight to give their testimony until it can evaluate their testimony at trial.
7
Further, with all due respect and great humility the Court does not need the witnesses from either
party to provide the Court with a primer on the applicable ERISA law or legal standards,
notwithstanding ERISA’s acknowledged “complexity.” See Doc. No. 194 at 8-9.
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ORDER
NOW THEREFORE IT IS ORDERED THAT:
1. Plaintiff’s Motion to Strike (Doc. No. 121) is GRANTED as to the individuals
identified in footnote one above who the Parties have agreed will not be called as
witnesses and DENIED as to the remaining potential witnesses disclosed for the
first time in Lowe’s November 19, 2020 Rule 26(a) disclosures;
2. Plaintiff is permitted to depose Billy Welsh and Christopher Jarmusch from
Gallagher Fiduciary Advisors and Jennifer Osborne from Wells Fargo outside the
discovery period, and the Parties are directed to cooperate in holding those
depositions, if requested, as soon as practicable;
3. Lowe’s shall provide to Plaintiff on or before February 26, 2021 a detailed
disclosure of the specific topics on which Ms. Osborne will testify and the expected
substance of her testimony on those subjects; and
4. Aon’s Motions in Limine to Exclude Expert Testimony of David Donaldson and
Marcia S. Wagner (Doc. Nos. 173, 174) are deferred for final ruling until trial.
SO ORDERED ADJUDGED AND DECREED.
Signed: February 22, 2021
2021
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