WPS Inc. v. American Honda Motor Co. Inc et al
OPINION and ORDER Granting in Part Motion to Strike Rebuttal Reports (ECF No. 74 ). Signed by Honorable Cameron McGowan Currie on 9/22/2017. (cbru, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
WPS Inc. d/b/a Honda of Columbia,
C/A No. 3:16-cv-2525-CMC
American Honda Motor Co. Inc., and
PMJ Automotive of South Carolina, LLC,
Opinion and Order Granting in Part
Motion to Strike Rebuttal Reports
(ECF No. 74)
Through this action, Plaintiff WPS, Inc., d/b/a Honda of Columbia (“Plaintiff”) brings state
claims against American Honda Motor Co., Inc., (“AHM”) and PMJ Automotive of South Carolina
(“PMJ”), requesting declaratory and injunctive relief and asking the court to “prohibit the
establishment of a new dealership . . .within ten miles of an existing dealership, like Honda of
Columbia.” ECF No. 1-1, Compl. at ¶ 40.
The matter is before the court on AHM’s motion to strike Plaintiff’s Rebuttal Expert
Reports. 1 ECF No. 74. For the reasons set forth below, the motion is granted in part.
Under a scheduling order in this case, agreed to by the parties, Defendant AHM’s initial
expert reports were due December 13, 2016, and were timely submitted. ECF No. 43. Plaintiff’s
deadline for initial expert reports was February 10, 2017, and two reports were submitted. ECF
Because the challenged opinions/reports have not yet been introduced, the court will treat this
motion as a motion to exclude under Rule 37(c)(1), Federal Rules of Civil Procedure.
No. 50. Rebuttal expert reports were due June 29, 2017. ECF No. 59. Plaintiff submitted two
“Rebuttal/Supplemental Reports” on that date. 2
On July 26, 2017, AHM filed a motion to strike the rebuttal/supplemental expert reports of
Plaintiff’s experts, Joseph F. Roesner and Kenneth Rosenfield. ECF No. 74. AHM argues Plaintiff
is “attempt[ing] to bolster the analyses contained in its initial reports under the guise of rebuttal . .
. and the two reports filed as rebuttal/supplemental expert reports should be stricken.” ECF No.
74-1. Specifically, AHM argues the June reports are untimely “affirmative expert reports,” and
should be stricken because they do not contain rebuttal evidence, are not proper supplementation
under Rule 26(e), and the failure to properly disclose the information is neither harmless nor
substantially justified. Id.
Plaintiff filed a response, noting its “rebuttal reports were timely, were served almost eight
months prior to the trial date, and directly rebut AHM’s experts’ opinions that the proposed
dealership will not negatively impact Honda of Columbia.” ECF No. 75. Plaintiff argues AHM’s
motion is procedurally improper, as a motion to strike is not the appropriate mechanism to
challenge an expert report. Plaintiff also contends the reports are “classic rebuttals . . .as to the
impact of the proposed new dealership.” In the alternative, if the court finds the reports are not
proper rebuttal, Plaintiff argues the reports are permitted supplements under Rule 26. Finally,
Plaintiff argues the reports are “still permissible” if not allowed under Rule 26 because they are
substantially justified and/or harmless, because they were served within the discovery period,
before expert depositions, and almost eight months before trial.
AHM also submitted rebuttal reports by the June deadline, but these reports are not the subject
of this motion.
In its reply, AHM argues Plaintiff’s new reports were not submitted in response to new
information provided by AHM’s experts, and were for the purpose of recreating proximity analysis
to allege more damage to Plaintiff. ECF No. 76. AHM argues the initial reports submitted by
Plaintiff were not inaccurate and the June reports do not include new information unavailable prior
to the initial reports. Finally, it argues the “last minute submission” is neither justified nor harmless
and should be stricken.
Pursuant to Fed. R. Civ. P 26(a)(2)(B), expert witness disclosures “must be accompanied
by a written report,” which contains, in relevant part, “a complete statement of all opinions the
witness will express and the basis and reasons for them.” The parties must disclose expert
testimony “at the times and in the sequence that the court orders.” Fed. R. Civ. P 26(a)(2)(D).
Rebuttal reports are “intended solely to contradict or rebut evidence on the same subject
matter identified by another party ...” Fed. R. Civ. P. 26(a)(2)(D)(ii). “Rebuttal evidence is defined
as evidence given to explain, repel, counteract, or disprove facts given in evidence by the opposing
party.” United States v. Stitt, 250 F.3d 878, 897 (4th Cir. 2001). “A party may not offer testimony
under the guise of ‘rebuttal’ only to provide additional support for his case in chief.” Wise v. C. R.
Bard, Inc., No. 2:12-CV-01378, 2015 WL 461484, at *2 (S.D.W.Va. Feb. 3, 2015). Thus,
“[r]ebuttal experts cannot put forth their own theories; they must restrict their testimony to
attacking the theories offered by the adversary's experts.” Boles v. United States, No. 1:13-CV489, 2015 WL 1508857, at *2 (M.D.N.C. Apr. 1, 2015). “Ordinarily, rebuttal evidence may be
introduced only to counter new facts presented in the defendant's case in chief. Such new facts
might include ‘surprise’ evidence presented by the defendants. Permissible rebuttal evidence also
includes evidence unavailable earlier through no fault of the plaintiff.” Allen v. Prince George’s
Cnty., Md., 737 F.2d 1299, 1305 (4th Cir. 1984).
However, rebuttal reports “may cite new evidence and data so long as the new evidence
and data is offered to directly contradict or rebut the opposing party's expert.” Withrow v. Spears,
967 F. Supp. 2d 982, 1002 (D. Del. 2013) (quoting Glass Dimensions, Inc. ex rel. Glass
Dimensions, Inc. Profit Sharing Plan & Trust v. State St. Bank & Trust Co., 290 F.R.D. 11, 16 (D.
Mass. 2013)). “Expert reports that simply address the same general subject matter as a previouslysubmitted report, but do not directly contradict or rebut the actual contents of that prior report, do
not qualify as proper rebuttal or reply reports.” Boles, 2015 WL 1508857, at *2 (quoting Withrow,
967 F. Supp. 2d at 1002); E. Bridge Lofts Prop. Owners Ass'n, Inc. v. Crum & Forster Specialty
Ins. Co., No. 2:14-CV-2567-RMG, 2015 WL 12831677, at *1 (D.S.C. July 9, 2015).
Under Rule 26(e), litigants have a duty to supplement or correct discovery responses that
are incomplete or incorrect in some material respect, and with respect to expert reports, a party's
duty to supplement extends both to information included in the report and to information provided
during the expert's deposition. Fed. R. Civ. P. 26(e).
Rule 26(e) envisions supplementation when a party's discovery disclosures happen
to be defective in some way so that the disclosure is incorrect or incomplete and,
therefore, misleading. It does not cover failures or omission because the expert did
an inadequate or incomplete preparation. To construe supplementation to apply
whenever a party wants to bolster or submit additional expert opinions would reek
[sic] havoc in docket control and amount to unlimited expert opinion preparation.
Palmetto Pharm. LLC v. AstraZeneca Pharm. LP, No. 2:11-CV-00807-SB-JDA, 2012 WL
4369259, at *2 (D.S.C. July 18, 2012) (citing Akeva LLC v. Mizuno Corp., 212 F.R.D. 306, 310
(M.D.N.C. 2002)). “Accordingly, Rule 26(e) permits supplemental reports only for the narrow
purpose of correcting inaccuracies or adding information that was not available at the time of the
initial report.” Id.
Federal Rule of Civil Procedure 37(c)(1) allows a court to exclude evidence that was not
properly disclosed under Rule 26(a). “[T]he basic purpose of Rule 37(c)(1) [is] preventing surprise
and prejudice to the opposing party.” S. States Rack And Fixture, Inc. v. Sherwin-Williams Co.,
318 F.3d 592, 596 (4th Cir. 2003). “The language of Rule 37(c)(1) provides two exceptions to the
general rule excluding evidence that a party seeks to offer but has failed to properly disclose: (1)
when the failure to disclose is substantially justified, and (2) when the nondisclosure is harmless.”
Id. The Fourth Circuit has articulated five factors to determine whether the nondisclosure is
substantially justified or harmless and whether exclusion of the evidence is warranted: (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. Id. at 597.
Plaintiff disclosed two expert reports in June 2017 as Rebuttal/Supplemental Reports. ECF
Nos. 74-4 (Roesner Report); 74-5 (Rosenfield Report). 3
Mr. Roesner’s Rebuttal/Supplemental Report purports to disagree with AHM’s expert
Farhat’s opinion existing dealers would not necessarily lose business if a new Honda dealership
opened. ECF No. 74-4 at ¶ 1. However, he notes “[m]any exhibits in this report re-create those
As the reports’ fitness as rebuttal or supplemental reports will be analyzed in this order, they will
be referred to as “June reports” to limit confusion.
in my February report which incorporated drive times. Other exhibits are versions of those in my
February report which relied upon drive distance.” Id. at ¶ 2. Mr. Roesner appears to have simply
recreated the analyses in his previous report with different data (Google versus “Routing J Server”
drive time data). Mr. Roesner’s Declaration, submitted in support of Plaintiff’s response in
opposition to the motion to strike, confirmed his June report “recreated exhibits already produced
in my February 10, 2017 report but made use of drive time data from Google Maps Distance Matrix
API (‘Google’).” ECF No. 75-4 at ¶ 3.
The only new piece of information appears to be a case study of a new Honda dealership
added in Georgia. Mr. Roesner includes a paragraph regarding a case study of an “analysis of the
effect of [a new Honda dealership] opening on an adjacent dealer.” ECF No. 74-4 at ¶ 19. This
analysis showed “sales of the adjacent dealer were indeed impacted following the addition of the
new dealership to the market,” even though the dealerships in Georgia were “more than twice as
far apart from each other than the 6.2 miles separating the proposed Add Point and Honda of
Mr. Rosenfield’s Rebuttal/Supplemental Report clearly states it is based upon Mr.
Roesner’s supplemental report, not any of AHM’s experts’ reports. ECF No. 74-5. The cover
letter specifically notes: “[T]he purpose of this report is solely to update our lost profit calculations
to reflect the change in loss ratios. There has been no change to our opinion in regards to the
Report of Herbert E. Walter, as expressed in our original report dated February 10, 2017.” Id. An
examination of the rebuttal/supplemental report reveals the same: the two page analysis and
appendices merely recalculate the total potential lost profits over five years, finding a much higher
“high end of loss range” of over ten million dollars (as opposed to under six million dollars in the
While Plaintiff argues the June reports are rebuttal material in a general sense, as they rebut
AHM experts’ overarching opinion that Plaintiff would not suffer harm with the addition of the
new dealership, it appears clear to the court the majority of Roesner’s and all of Rosenfield’s June
reports do not rebut the specifics of AHM’s expert reports. See Boles, 2015 WL 1508857, at * 3
(citing Calvert v. Ellis, No. 2:13-cv-00464, 2014 WL 3897949 (D. Nev. Aug. 8, 2014)) (reasoning
that, even though the reports “address the same general subject matter of the case, [the purported
rebuttal report] does not directly address the findings, i.e., the same subject matter, of [the initial]
experts’ reports.”). Similarly, while Roesner’s and Rosenfield’s June reports may address the
same general issue in the case (whether Plaintiff would suffer harm if the new dealership is
established), they do not purport to even address the specifics of AHM’s experts’ reports and do
not in fact do so. Boles, 2015 WL 1508857, at * 4 (“Although [Plaintiff’s expert’s] expert report
takes different general positions than Defendant’s experts’ reports, that does not suffice to qualify
as rebuttal.”). For these reasons, the court finds the majority of the June reports do not qualify as
rebuttal. Id. at *3 (finding expert reports are not rebuttal when “Plaintiff’s experts’ reports do not
address any of Defendant’s experts’ reports; Plaintiff’s experts’ reports do not rebut, contradict, or
respond to the specific opinions or conclusion of Defendant’s experts’ reports. Rather, each of
Plaintiff’s experts’ reports offers its own theories without limitation to attacking the theories
offered by Defendant’s experts.”).
The only part of the Roesner June report that qualifies as rebuttal is the opinion regarding
the Georgia dealership and how it was impacted by the opening of an adjacent dealer. See ECF
No. 74-4 at ¶ 19; ECF No. 75-1. Roesner’s report analyzes the opening of a new Honda dealership
in Roswell, Georgia, noting “sales of the adjacent dealer were indeed impacted following the
addition of the new dealership to the market.” ECF No. 74-4 at ¶ 19. This portion of the report
purports to be in direct response to AHM expert Farhat’s analysis involving “an examination of
real world situations of a similar nature where ‘after-the-fact’ results were available to confirm the
conclusions reached in the subject analysis.” ECF No. 75-2 at ¶ 45. Mr. Farhat analyzed nonHonda “brands that have added representation in the Columbia Metro,” and concluded the “brand
registration effectiveness improved with the addition of the new dealership.” Id. Based on Mr.
Farhat’s opinion “the ideal case study would be the same brand, taking the same action, in the
same market,” it is reasonable to consider Mr. Roesner’s analysis of the same brand, in a different
market, and with different results, to be a rebuttal of Mr. Farhat’s case study.
Therefore, paragraph 19 of Roesner’s June report is considered proper rebuttal evidence.
The remainder of the Roesner June report, and the entirety of the Rosenfield June report, are not
proper rebuttal evidence and will not be admitted as such.
The court also finds the balance of the June reports are not permissible supplements. Rule
26(e) permits supplemental reports only for the narrow purpose of correcting inaccuracies or
adding information that was not available at the time of the initial report. While Mr. Roesner
updated his drive time calculations with Google data, as opposed to the Routing J Server drive
time data used in his previous report, this is not information unavailable at the time of the initial
report. Although he notes his firm has recently begun using Google drive time data, he does not
state it was previously unavailable to him. Nor did he use it because the previous data was
inaccurate – he merely wished to utilize a different source of data.
This is not proper
supplementation to his initial report. Rosenfield’s report is the same: it does not appear to contain
any purported corrections of inaccuracies or new information previously unavailable, but simply
updates the previous opinions with Roesner’s new data, which is helpful to Plaintiff’s position, but
not appropriate supplementation under Rule 26(e). Therefore, neither report will be admitted
under Rule 26(e).
Substantially Justified or Harmless
Because they are not proper rebuttal or supplemental opinions, the June reports are
untimely expert submissions, and the court must determine whether they should be allowed,
despite this, under Fed. R. Civ. P. 37(c). In determining whether the reports are substantially
justified or harmless, the court examines the following factors: the surprise to the party against
whom the evidence would be offered; the ability of that party to cure the surprise; the extent to
which allowing the evidence would disrupt the trial; the importance of the evidence; and the
nondisclosing party's explanation for its failure to disclose the evidence. S. States Rack, 318 F.3d
The balance of the factors favors AHM. AHM submitted its reports first, so Plaintiff’s
experts had those when preparing their initial reports. Plaintiff thus had the opportunity to rebut
AHM’s experts’ opinions in its initial reports. Further, there were no new reports submitted by
AHM between February and June, therefore there was no new information from AHM for
Plaintiff’s experts to rebut in the June reports. The Google data utilized in the June reports was
available in February, and could have been used then. Plaintiff has offered no good explanation
for the failure to use the Google data in its initial reports.
Although the scheduling order allowed rebuttal reports, AHM was justifiably surprised by
the inclusion of new opinions not constituting rebuttal or supplemental evidence that doubled the
impact estimate. Because the challenged reports were not submitted until the rebuttal deadline,
AHM did not have the ability to cure the surprise via its own expert rebuttal reports. 4 Further,
several witnesses have already been deposed by AHM without analysis of and questioning
concerning the June reports.
As to the second factor, it does not appear likely allowing the evidence would disrupt the
trial, which has now been set for February of 2018. It would, however, require reopening of the
period for rebuttal reports by AHM’s experts, as well as extension of the discovery deadline.
The third factor, importance of the evidence, weighs in AHM’s favor. The opinion of
harm to Plaintiff by opening of the new dealership had already been made by the previous expert
reports. The change in use of data from Google versus Routing J Server simply increased the
Finally, the fourth factor, Plaintiff’s explanation for its failure to disclose the opinions in
the initial expert reports, does not reflect a need to add information not available at that time or
necessary to correct inaccuracies. The key question is whether the untimely submission of the
revised opinions is substantially justified. The court is not convinced by Plaintiff’s explanation
for the change in the June reports - it is clear from the language and content of the June reports
that they are not true rebuttals or supplements as defined by the Federal Rules and case law. In
fact, this type of opinion was not even the subject of AHM’s expert reports. 5 Although Plaintiff
Plaintiff appears to argue AHM would be allowed to file responses to the June reports because
discovery is still open; however, the deadline in the scheduling order for rebuttal reports has
AHM’s expert Mr. Farhat did not attempt to calculate amount of business potentially lost by
Plaintiff if the new dealership is established. Similarly, Mr. Walter did not attempt to evaluate the
potential impact of the new dealership on Plaintiff’s financial condition.
contends the recreation of the proximity analyses by its experts is due to the “more accurate”
Google data, that is not the standard required for a rebuttal or supplemental report, and does not
provide substantial justification for the untimely submission.
For the reasons set forth above, AHM’s motion to strike, treated as a motion to exclude, is
granted in part. Plaintiff’s experts’ June reports are excluded with the exception of paragraph 19
of Roesner’s June report. Plaintiff may not utilize the information in the June reports, other than
paragraph 19 of Roesner’s report, as evidence in this case.
IT IS SO ORDERED.
s/ Cameron McGowan Currie
CAMERON MCGOWAN CURRIE
Senior United States District Judge
Columbia, South Carolina
September 22, 2017
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