Starlink Logistics, Inc. v. ACC, LCC et al

Filing 91

ORDER: Plaintiff's motion to strike and exclude the May 23 report of Mr. Jones ( 63 ) is granted except to the limited extent that (i) Mr. Jones may testify in full as to his initial report, including to the extent that Mr. Jones' initial r eport overlaps with the May 23 report and (ii) Defendant may cross examine Plaintiff's expert, Jim Evans, about deficiencies or other issues identified in the May 23 report. Signed by Magistrate Judge Barbara D. Holmes on 2/10/2020. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(gb)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
COLUMBIA DIVISION
STARLINK LOGISTICS, INC.
v.
ACC, LCC et al.

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Case No. 1:18-cv-0029
Richardson/Holmes

ORDER
Pending before the Court is Plaintiff’s motion to strike and exclude a second report
prepared by Defendants’ expert, Ben Jones. (Docket No. 63.) Defendants filed a response in
opposition to the motion (Docket No. 85) and Plaintiff filed a reply (Docket No. 86), which the
Court has considered. For the reasons discussed below, Plaintiff’s motion (Docket No. 63) is
GRANTED EXCEPT TO THE LIMITED EXTENT PROVIDED BELOW.
I. Background 1
Plaintiff retained Jim Evans as a real estate appraisal expert and provided Defendants with
Mr. Evans’ expert report on March 9, 2019. (Docket No. 63 at 2.) On May 1, 2019, Defendants
filed and served the report of their real estate appraisal expert, Ben Jones. See Docket No. 207-5
in related Case No. 1:12-cv-0011 (the “2011 Case Docket”). 2 Mr. Jones’ first report contained his
opinion as to the retrospective value of Plaintiff’s property as of December 21, 2001; however, it
is undisputed that the report does not directly mention or critique the Evans report. As provided
in Case Management Order #3, supplemental expert disclosures were to be made in accordance

Given the lengthy factual and procedural history of this consolidated case, only the
background necessary for context of the Court’s ruling is recited.
1

Plaintiff’s CERCLA and state law claims in the 2011 case that were not previously stayed
were severed and consolidated with this case. See 2011 Case Docket No. 225.
2

with Rule 26(a) and (e) and rebuttal experts were allowed only by leave of court. (2011 Case
Docket No. 160 at ¶ H.)
By agreement of the parties, Mr. Evans’ deposition was scheduled for May 21, 2019 and
Mr. Jones’ deposition was scheduled for May 24, 2019. (Docket No. 63-1.) 3 On the evening
before Mr. Jones’ deposition, Defendant provided Plaintiff with a second report of Mr. Jones dated
May 23, 2019, which assessed the Evans Report. When forwarded to Plaintiff, the May 23 report
was described as Mr. Jones’ “review of Mr. Evans’ report.” (Docket No. 63-2 at 2.) The May 23
report was also characterized as “a supplementation under Rule 26(e).” (Docket No. 63-6 at 2.)
From an email exchange between Mr. Jones’ and Defendants’ counsel on May 23, 2019, it
appears that Mr. Evans revised his report to correct a typographical error, which Mr. Evans’
apparently discovered while preparing for his deposition and which resulted in a reduction in
Mr. Evans’ valuation. (Docket No. 85-3 at 1.)

Defendants’ counsel provided Mr. Jones with

Mr. Evans’ revised report in anticipation of Mr. Jones’ deposition. Defendants’ counsel did not
request that Mr. Jones prepare a second report critiquing Mr. Evans’ revised report and was
unaware that he had done so until shortly before the May 23 report was provided to Plaintiff’s
counsel. (Docket No. 63-4.) 4 Mr. Jones’ deposition proceeded on May 24, 2019, but Mr. Jones
was not asked about his second report, nor did Plaintiff request an adjournment of Mr. Jones’
deposition to further review the May 23 report.

The deadline for completion of expert depositions was May 31, 2019. (2011 Case Docket
No. 205.)
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Mr. Jones’ May 23 report was not provided, presumably because Plaintiff does not want
the report before the Court.
2

Now, Plaintiff requests that the Court strike the May 23 report and all opinions expressed
in the report. Defendants argue that exclusion of the May 23 report is not an appropriate remedy
and that Plaintiff had a clear opportunity to cure any prejudice, which it elected not to do.
II. Legal Standards
A party must disclose its experts “at the times and in the sequence that the court orders.”
Fed. R. Civ. P. 26(a)(2)(D). This disclosure must “be accompanied by a written report—prepared
and signed by the witness.” Fed. R. Civ. P. 26(a)(2)(B). This written report must contain, among
other things, “a complete statement of all opinions the witness will express and the basis and
reasons for them” and “the data or other information considered by the witness in forming them.”
Fed. R. Civ. P. 26(a)(2)(B)(i)-(ii).
In addition to the initial expert disclosure and report, circumstances may arise in which a
party provides either a supplemental or rebuttal report. Indeed, a party has a duty to timely
supplement expert disclosures to correct incomplete or incorrect information. Fed. R. Civ. P.
26(e). The obligation to supplement does not, however, grant a party a right to generate new expert
reports. Saint-Gobain Corp v. Gemtron Corp., 2006 WL 1307890, at *2 (W.D. Mich. May 9,
2006)(citing DAG Ent., Inc. v. Exxon Mobile Corp., 226 F.R.D. 95, 110 (D. D.C. 2005)).
As to rebuttal reports, the Federal Rules of Civil Procedure allow for an expert to provide
a report that “rebuts” a report submitted by an expert on the other side. This rebuttal must be
intended “solely” to contradict or rebut “evidence on the same subject matter identified by another
party under Rule 26(a)(2)(B) or (C).” Fed. R. Civ. P. 26(a)(2)(D)(ii). Absent a stipulation or court
order, this rebuttal report must be disclosed “within 30 days after the party’s disclosure.” Id.
However, “the rule does not authorize any additional round of rebuttal following expert deposition
testimony.” Gardner v. Dye, 2016 WL 9244200, at *6 (M.D. Tenn. July 1, 2016). Further, the

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Local Rules of this Court provide that “[n]o rebuttal expert witnesses shall be permitted at trial,
absent timely disclosure in accordance with these Rules and leave of Court.” L.R. 39.01(c)(5)(D).
A violation of Rule 26 gives rise to the application of Rule 37(c)(1), which requires that
“[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the
party is not allowed to use that information or witness to supply evidence on a motion, at a hearing,
or at a trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1).
Rule 37 directs exclusion of the evidence as a sanction for a Rule 26 violation. See Roberts ex rel.
Johnson v. Galen of Va., Inc., 325 F.3d 776, 782 (6th Cir.2003). Though Rule 37 also allows the
district court to impose less severe sanctions than mandatory preclusion, the district court's choice
to observe the rule's primary directive of exclusion, rather than its secondary options is
discretionary. Smith v. Botsford Gen. Hosp., 419 F.3d 513, 516–17 (6th Cir. 2005). The test for
Rule 37(c) exclusion “is very simple: the sanction is mandatory unless there is a reasonable
explanation of why Rule 26 was not complied with or the mistake was harmless.” Bessemer &
Lake Erie R.R. Co. v. Seaway Marine Transp., 596 F.3d 357, 370 (6th Cir. 2010.) 5
To assess whether a party's omitted or late disclosure is “substantially justified” or
“harmless,” a court considers five 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 non-disclosing
party's explanation for its failure to disclose the evidence. Doe v. Belmont Univ., 367 F. Supp. 3d
732, 742 (M.D. Tenn. 2019) (citing Howe v. City of Akron, 801 F.3d 718, 748 (6th Cir. 2015). The
party requesting exclusion under Rule 37(c)(1) need not show prejudice, rather the non-moving

Exclusion of an expert’s testimony in an available opinion “that courts within this district
commonly exercise.” Adams v. Farbota, 306 F.R.D. 563, 572 (M.D. Tenn. 2015) (citing cases).
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party must show that failure to comply was either harmless or substantially justified. Saint-Gobain
Autover USA v. Xinyi Glass No. Am., Inc., 666 F.Supp.2d 820, 826 (N.D. Ohio 2009); see also
Roberts ex rel. Johnson, 325 F.3d at 782 (burden to prove whether noncompliance was
substantially justified or harmless falls on the party that failed to comply). Ultimately, the court
retains discretion to fashion a remedy that is “consonant with both the text and logic of
Rule 37(c)(1).” Id. at 784.
III. Discussion
There is no dispute that the May 23 report was additional to Mr. Jones’ initial May 1
report. 6 The Court cannot find that the May 23 report fairly constitutes either a proper rebuttal
report or a supplemental report. The May 23 report solely rebuts or contradicts the details of
Mr. Evans’ valuation methodology and results based on the revised valuation offered by Mr. Evans
in connection with his deposition. See Docket Nos. 85-3 and 63-5. 7 That is the definition of a
rebuttal report under Rule 26(a)(2)(D)(ii). Even though the May 23 report may have been produced
within the time that would otherwise be permitted by Rule 26(a)(2)(D)(ii), the Court finds it an
improper rebuttal report because it was prepared in response to Mr. Evans’ revised report and
deposition testimony and Rule 26(a)(2)(D)(ii) does not authorize an additional round of rebuttal
following expert deposition testimony. Gardner, supra. Nor was it contemplated in any case
management order that there would be rebuttal experts and reports. Although rebuttal experts or

Defendant addresses in detail in its response (Docket No. 85 at 2-3) various delays by
Plaintiff in providing complete expert reports. Without condoning any party’s disregard for case
management deadlines, the Court simply notes that, despite discussing the delays, Defendant does
not state that any of the delays were a cause for Mr. Jones not having included in his initial report
an analysis and critique of the Evans Report.
6

Although not entirely clear because not addressed by either party, the Court presumes that
Mr. Evans’ revised report simply corrected the typographical error and his ultimate valuation but
did not otherwise modify his initial March 9 report.
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reports are sometimes discussed at the initial case management conference and provided for in the
initial case management order, they were never raised by either party in this case. 8
Defendant suggests that the May 23 report is simply a supplementation to Mr. Jones’ initial
expert report as contemplated in Rule 26(e)(1). 9 The Court is not persuaded, however, that the
May 23 report falls within the boundaries of supplementation provided by Rule 26(e)(1). In his
initial report, Mr. Jones arrived at his conclusions apparently without consideration of Mr. Evans’
valuation methods or opinion. If Mr. Jones’ analysis was incomplete or incorrect, it was so only
because he did not earlier analyze the Evans Report. The Court cannot accept a definition of
supplementation that would essentially allow for unlimited bolstering of expert opinions.
Rule 26(e) envisions supplementation when a party's discovery disclosures happen
to be defective in some way so that the disclosure was incorrect or incomplete and,
therefore, misleading.... It does not cover failures of 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
[wreak] havoc in docket control and amount to unlimited expert opinion
preparation.”
Akeva LLC v. Mizuno Corp., 212 F.R.D. 306, 310 (M.D.N.C.2002); see also Sharpe v. United
States, 230 F.R.D. 452, 462-463 (E.D.Va.2005) (plaintiff not permitted to supplement expert
reports in order to remedy incomplete review performed by experts).
That leaves for consideration whether Defendant’s failure to timely disclose Mr. Jones’
critique of Mr. Evans’ expert report was “substantially justified” or “harmless.” As the Sixth
Circuit has emphasized, “exclusion of late or undisclosed evidence is the usual remedy for

As part of his initial report and valuation, Mr. Jones could have properly analyzed and
critiqued Mr. Evans’ methods and valuation, but he did not do so.
8

Rule 26(e)(1) in turn incorporates the timing requirement of Rule 26(a)(3) for disclosure
at least 30 days before trial unless otherwise directed by the Court. If a proper supplementation,
the May 23 report would be timely.
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noncompliance with Rule 26(a) or (e).” Howe, 801 F.3d at 747; see also Dickenson v. Cardiac &
Thoracic Surgery of E. Tenn., 388 F.3d 976, 983 (“The exclusion of non-disclosed evidence is
automatic and mandatory under Rule 37(c)(1) unless non-disclosure was justified or harmless.”)
Defendant argues that the circumstances of the May 23 report do not compel exclusion
largely because there is no perceived prejudice to Plaintiff. However, Rule 37(c)(1) does not
require that Plaintiff show prejudice; rather, the rule requires that Defendant show harmlessness
or justification. Sommer v. Davis, 317 F.3d 686, 692 (6th Cir. 2003).
The advisory committee's note to Rule 37(c) “strongly suggests that ‘harmless’ involves
an honest mistake on the part of a party coupled with sufficient knowledge on the part of the other
party.” Howe, 801 F.3d at 747. This also encompasses the first factor adopted by Howe of surprise
to the party against whom the evidence would be offered. 10 Here, there is no dispute that the
May 23 report was a surprise—to both parties. But the mistake is not found in a late disclosure of
an earlier analysis by Mr. Jones of the Evans Report. Rather, the mistake, if it indeed was one, is
in Defendant not having requested that Mr. Jones include in his own initial report a critique of
Mr. Evans’ valuation. The Court is not persuaded that this is the kind of mistake contemplated by
Rule 37(c)(1)’s allowance for harmlessness.
Nor does the Court find any justification for Mr. Jones not having earlier analyzed
Mr. Evans’ report. The Court does not doubt that Defendant’s counsel provided the May 23 report
to Plaintiff’s counsel immediately upon receipt from Mr. Jones. But that is not the critical question.
The necessary explanation under the fifth Howe factor is why Mr. Jones had not earlier analyzed

Again, the factors are: (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 non-disclosing
party's explanation for its failure to disclose the evidence. Howe, 801 F.3d at 748.
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the Evans Report and included a critique in his own initial May 1 report. Defendant offers no
explanation for that failing. For this reason, the Court finds that the first and last Howe factors
weigh against lesser sanctions.
The second and third factors of Howe—the ability of the receiving party to cure the surprise
and the extent to which allowing the evidence would disrupt the trial—arguably weigh in favor of
some lesser sanction, at least at first glance. But these factors cannot be considered in isolation
from the other factors. Although the Court could permit Plaintiff to now depose Mr. Jones at
Defendant’s expense, as there is time to do so before the bench trial in this case, that ignores that
Mr. Jones had plenty of opportunity before disclosure of his initial report to analyze and critique
the Evans Report. To be clear, the Court does not find that Defendant engaged in any underhanded
gamesmanship. In fact, Defendant’s counsel promptly disclosed the May 23 report when received
from Mr. Jones. Nevertheless, Defendant gave no explanation for why Mr. Jones did not
previously analyze or critique the Evans Report. Even if in the absence of gamesmanship, the
Court cannot find an appropriate basis to permit Mr. Jones to tardily cure that inadequacy, as doing
so directly contravenes the expectations of Rule 26 for expert discovery and to a large extent
extracts all the teeth from Rule 37(c)(1).
Regarding the fourth Howe factor, the importance of the evidence, the Court supposes that
retrospective valuation of the subject property is important to the issues in this case, which is even
more reason why the Court would have expected that Mr. Jones would have, as part of his own
initial report, analyzed and critiqued the Evans Report. The Court therefore finds that this factor,
considered with the other factors, favors exclusion of the May 23 report. Mr. Jones may not testify
as to his analysis, conclusions, or data underlying the May 23 report. He may, however, testify in

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full as to his initial report. To the extent that Mr. Jones’ initial May 1 report overlaps with the
May 23 report, such testimony may be allowed.
Further, notwithstanding exclusion of the May 23 report and of any testimony by Mr. Jones
about the information in the May 23 report (except as may overlap with his initial report),
Defendant is not precluded from cross examining Plaintiff’s expert, Jim Evans, about his report
based on deficiencies or other issues identified in the May 23 report. The Court concludes this
outcome, which is admittedly less than the exclusion for all purposes requested by Plaintiff, strikes
an appropriate balance under Rule 26(a) and (e) and Rule 37(c)(1).
IV. Conclusion
For reasons set forth above, Plaintiff’s motion to strike and exclude the May 23 report of
Mr. Jones (Docket No. 63) is granted except to the limited extent that (i) Mr. Jones may testify
in full as to his initial report, including to the extent that Mr. Jones’ initial report overlaps with the
May 23 report and (ii) Defendant may cross examine Plaintiff’s expert, Jim Evans, about
deficiencies or other issues identified in the May 23 report.
It is SO ORDERED.

_________________________________________
BARBARA D. HOLMES
United States Magistrate Judge

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