Sitts et al v. Dairy Farmers of America, Inc. et al
OPINION AND ORDER denying 96 Motion to Strike Untimely New Expert Opinion; denying 121 Motion to Strike Undisclosed Expert Opinion. Signed by Judge Christina Reiss on 7/23/2019. (law)
UNITED STATES DISTRICT COURT
DISTRICT OF VERMONT
GARRETT AND RALPH SITTS, LEON
ATWELL, VICTOR BARRICK, DANIEL
BAUMGARDER, WILLIAM BOARD,
GEORGE BOLLES, ROGER BOLLES, ANDY
BOLLINGER, THOMAS BOLLINGER,
LOGAN BOWER, DWIGHT
BROUILLETTE, THOMAS BROUILLETTE,
AARON BUTTON, HESTER CHASE,
THOMAS CLARK, THOMAS
CLATTERBUCK, PAUL CURRIER, GERRY
DELONG, PETE AND ALICE DIEHL, MARK
DORING, MARK AND BARBARA DULKIS,
GLEN EA YES, MIKE EBY, WILLIAM
ECKLAND, DOUG ELLIOT, JAMES
ELLIOT, WENDALL ELLIOTT, MICHAEL
FAUCHER, DA YID AND ROBIN FITCH,
DUANE AND SUSAN FLINT, JOSEPH
FULTS, RICHARD GANTNER, STEFAN
AND CINDY GEIGER, WILLIAM GLOSS,
JOHN GWOZDZ, DAVID AND LAURIE
GRANT, JIM AND JOYCE GRAY, DENNIS
HALL, ROGER AND JOHN HAMILTON,
NEVIN AND MARLIN HILDEBRAND, JAKE
AND HARLEN HILL YERD, RICHARD AND
TERRI HOLDRIDGE, PAUL HORNING,
TERRY AND ROBERT HUYCK, DONALD
SCOTT HYMERS, TERRY INCH, RANDY
AND LYNETTE INMAN, THEODORE
JA YKO, JACK KAHLER, JAMES AND
TERESA KEA TOR, JIM AND SHARON
KEILHOLTZ, GEORGE KEITH, LEE AND
ELLEN KLOCK, MIKE AND LISA
KRAEGER, FRED LACLAIR, TIM LAL YER,
FRANK AND JOHN LAMPORT, CORRINE
LULL, CHARLES AND GRETCHEN MAINE,
THOMAS AND DEBORA MANOS, FRED
MATTHEWS, RUSSELL MAXWELL,
GERRY MCINTOSH, STEPHEN MELLOTT,
JOHN AND DAVID MITCHELL, THOMAS
MONTEITH, WALT MOORE, RICHARD
AND SHEILA MORROW, DEAN MOSER,
MELISSA MURRAY, SEAN QUINN,
THOMAS NAUMAN, CHARLES NEFF,
281' JUL 23 '9H 2: 34
DAVID NICHOLS, MICHAEL NISSLEY,
LOU ANN PARISH, DANIEL PETERS,
MARSHA PERRY, CAROLYN AND DAVE
POST, JUDY LEE POST, SCOTT
RASMUSEU, BRIAN REAPE, DAVID AND
LYNETTE ROBINSON, BRIAN AND LISA
ROBINSON, CALVIN ROES, BRADLEY
ROHRER, PAUL AND SARAH
ROHRBAUGH, ROBERTA RYAN, SCOTT
AND LIN SA WYER, S. ROBERT SENSENIG, )
THOMAS AND DALE SMITH, DALE AND
SUSAN SMITH, DENNIS SMITH, DONALD
T. AND DONALD M. SMITH, ROGER AND
TAMMY, SMITH, TODD SNYDER,
RICHARD SOURWINE, DANNY
SOURWINE, RANDY SOWERS, SHANE
STALTER, GEORGE AND SHIRLEY
STAMBAUGH, TRACY STANKO, STEPHEN )
SOURWINE, RICHARD SWANTAK,
GEORGE AND PATRICIA THOMPSON,
JEREMY THOMPSON, KEN AND JUDY
TOMPKINS, DANIEL VAUGHN, MARK
VISSAR, ERIC WALTS, EDWARD
WALLDROFF, GERALD WETTERHAHN,
JR., EUGENE WILCZEWSKI, STEVE
WILSON, DALE COVERT, FAMILY DAIRY )
FARMS, LLC, RICHARD PUGH,
DAIRY FARMERS OF AMERICA, INC.
and DAIRY MARKETING SERVICES,
Case No. 2:16-cv-287
OPINION AND ORDER DENYING DEFENDANTS' MOTION TO
STRIKE NEW EXPERT OPINION AND DENYING DEFENDANTS' MOTION
TO STRIKE AN UNDISCLOSED EXPERT OPINION
(Docs. 96 & 121)
Plaintiffs filed this action seeking relief pursuant to the Sherman Act, 15 U.S.C.
§§ 1-2, for alleged antitrust violations committed by Defendants Dairy Farmers of
America, Inc. ("DF A") and Dairy Marketing Services, LLC ("OMS"). Plaintiffs, who
refer to themselves as "Farmers United," are more than 115 dairy farmers who opted out
of a settlement approved by the court in a class action styled Allen v. Dairy Farmers of
America, Inc., No. 5:09-cv-230.
Pending before the court is Defendants' February 5, 2019 motion to strike
Professor Einer R. Elhauge's supplemental report. (Doc. 96.) Plaintiffs opposed the
motion on February 19, 2019 and Defendants replied on March 5, 2019. Oral argument
was held on April 9, 2019, at which time the court took the motion under advisement.
Also pending before the court is Defendants' May 3, 2019 motion to strike
Professor Elhauge's opinion that DFA and OMS possess unilateral monopsony power
because this opinion was first disclosed at his deposition. (Doc. 121.) Plaintiffs opposed
the motion on May 17, 2019 and Defendants replied on May 31, 2019, at which time the
court took the motion under advisement.
Plaintiffs are represented by Dana A. Zakarian, Esq., Elizabeth A. Reidy, Esq.,
Gary L. Franklin, Esq., Joel G. Beckman, Esq., and William C. Nystrom, Esq.
Defendants are represented by Margaret M. Zwisler, Esq., Alfred C. Pfeiffer, Jr., Esq.,
Elyse M. Greenwald, Esq., Ian P. Carleton, Esq., Jennifer L. Giordano, Esq., and W.
Todd Miller, Esq.
Factual and Procedural Background.
Plaintiffs allege that Defendants, in concert with known and unknown co-
conspirators, "have engaged in an illegal conspiracy to restrain competition, fix and
suppress prices paid to farmers and monopolize/monopsonize the raw Grade A milk
market in the Northeast." (Doc. 29 at 22, ,i 81.) Plaintiffs' Revised First Amended
Complaint asserts the following claims: Count I, conspiracy to monopsonize in violation
of 15 U.S.C. § 2; Count II, attempt to monopsonize in violation of 15 U.S.C. § 2; Count
III, unlawful monopsonization in violation of 15 U.S.C. § 2; and Count IV, conspiracy to
restrain trade in violation of 15 U.S.C. § 1.
On or about October 3, 2018, Plaintiffs served Professor Elhauge's initial expert
report (the "Initial Report") in which he used a regression analysis to measure the impact
of Defendants' alleged antitrust violations and concluded that DFA, DMS, and their coconspirators possessed monopsony power in the raw Grade A milk market in Federal
Milk Marketing Order 1. A deposition taken on November 6, 2018 included the
following colloquy between Professor Elhauge and Defendants' attorney:
So that's, again, back to my question: You did not do an analysis in
your report that says that either DFA or DMS or the two of them together
have monopsony power on their own, apart from the conspiracy; right?
Again, I'm not sure-I'm not positive. I don't think it's in the
report, but I do believe that they themselves have about 50 percent market
share and thus would likely have monopsony power on their own. But I
thought as an economic matter what matters is the collective power of the
And again, let's be blunt: Are you offering an opinion in this case
that DF A or DMS or the two of them together has monopsony power on
I think they likely do. But I'm not sure it's in the report.
So you're not offering that opinion whether or not you think they
may have it.
Well, you're asking me now, and I think they likely do have that
power since they have about a 50 percent share of the market.
Okay. Is that an opinion you're offering?
I think it is likely the case. I guess I'd like to investigate it further.
It wasn't one of the questions I was, you know, directed to answer. But I
think I do likely have that opinion.
So it's not a question you were directed to answer; right?
Well, not explicitly, no.
And it's not-
I suppose you could read that question to, you know, encompass the
possibility of also answering that separate question. But I wasn't directed
to explicitly separate them out.
And you didn't explicitly separate them out?
As far as-it's a long report. But I don't think in this section that I
ever separate out DMS and DF A shares alone. But you could easily do so
from the backup and the data that I provided. So I guess in that sense, since
the backup is disclosed already, it is there in my analysis.
But again, you'd actually have to go back and look at your data and
do that analysis and set it forth in a report if you were going to render that
I know that it has about a 50 percent market share for DMS and
DFA combined. I know it's higher in some years and lower in other years
than 50 percent. So that I can state confidently from the data?
Is that the only factor you'd need to know to know whether they had
monopsony power on their own?
Well, I'm trying to think why it would be relevant. It seems like it
would be relevant only ifwe thought-we accepted some premise that the
other co-conspirators didn't also participate. But if they didn't participate,
then that would mean that DFA and DMS were the only conspirators and
that they did-were able to suppress prices. So I think that would support
the inference. The evidence about inelasticity would be the same, and the
evidence about entry barriers would be the same. So I think it is the case
that at least if I accept the premise, which I think is incorrect, that the other
co-conspirators were not involved, that that would allow an inference of
(Doc. 122-2 at 7-11.)
When questioned in his deposition, Defendants' expert witness Professor Edward
Snyder indicated that he reviewed Professor Elhauge's market share calculations for DFA
and DMS in the process of producing his opinion:
Right. I'm asking about DFA and DMS, the defendants. Did you
calculate their market share?
I didn't. I didn't do any separate calculations. My-I read-my
recollection is that Professor Elhauge's calculation put it at-it could be 40
percent. I can check that.
I didn't do a separate calculation.
Okay, so you're offering an opinion that there is no evidence of
defendants' monopsony power, but you didn't calculate defendants' market
share in Order 1; is that correct?
Well, I reviewed Professor Elhauge's calculations. I didn't
separately calculate them, no.
Okay. You understand that one way that he calculated market share
is to look at the amount of milk that they produced versus the total amount
of milk produced in Order 1?
The combination ofDFA and DMS?
That sounds right.
(Doc. 125-5 at 3-5.)
On or about November 30, 2018, Defendants served two expert rebuttal reportsone authored by Professor Snyder (the "Snyder Report") and one authored by Professor
Daniel Sumner (the "Sumner Report"). Among other things, Professor Sumner found a
problem with Professor Elhauge's reliance on a producer-location-based proxy, stating in
his report: "[Professor] Elhauge calculates federal minimum prices that reflect handler
location when available, and when it is not available he approximates it by using only the
producer's location. This is a problem because many producers do not deliver to a
handler near their farm." (Doc. 107 at 3) (citing the Sumner Report) (emphasis omitted).
On January 18, 2019, Professor Elhauge submitted a Supplemental Expert Report
(the "Elhauge Supplemental Report"), in which he explains:
The Sumner Report revealed certain data processing errors in my initial
report, but only partially corrected them in the regression analysis.
Pursuant to my obligation under Federal Rule of Civil Procedure 26( e) to
supplement my report when information arises that suggests it is
incomplete or incorrect, I file this supplemental report to fully correct my
initial regression. Because I understand that the scheduling order in this
case does not provide for a reply report, I limit this report to correcting my
initial report. I thus do not respond to various other claims in the Snyder
Report and the Sumner Report that claim my analysis is "incomplete" or
contains "flaws[,]" "limitations[,]" or "errors" because those claims are all
inaccurate and thus require no correction of my initial report.
(Doc. 97-1 at 3.)
Professor Elhauge acknowledges that he inadvertently omitted some delivery data 1
and acknowledges that for transactions lacking delivery data, he initially used a producerlocation-based proxy employed in the Allen case in which federal minimum prices were
approximated using the producer's location. He contends that the missing delivery data
identified in the Sumner Report revealed that the producer-location-based proxy was not
a reliable substitute for actual delivery data because use of the actual delivery data
differed substantially from the proxy. He explains: "If the producer-location-based
approximation truly allowed for an unbiased estimation of the location-based adjustment,
then replacing the proxy with the actual processor location should not have significantly
affected the estimation of the conduct variable coefficient in the regression model."
(Doc. 97-1 at 6.)
In his Supplemental Report, Professor Elhauge replaced the producer-locationbased proxy with a proxy based on the average location adjustments for farmers in the
same zip code with delivery data that specifies the processors to whom they sell. To
make this correction, he altered two commands in his regression analysis but did not add
any new data that had not been produced in discovery. However, because there were
some zip codes for which there was no actual delivery data, for these zip codes, the new
proxy proved unworkable because there were no values with which to generate an
average. Professor Elhauge therefore excluded these observations from the data set forth
in his Supplemental Report. Defendants describe the changes wrought by Professor
Elhauge's Supplemental Report as follows:
Professor Elhauge attributes this error to Defendants' production of delivery data over a ninemonth period as part of forty-one separate data productions, noting that the "keys" needed to
decipher the data were produced in fifteen separate sets over a six-month period. He states: "We
made every effort to ensure that our data set captured all delivery data from these multiple
productions. Unfortunately, it appears that some data was missed." (Doc. 97-1 at 4, n.2.)
First, Professor Elhauge changes his original farmer-location proxy to an
entirely "new proxy" that he introduced for the first time in this
supplement. As Professor Elhauge describes it, he did not use any new
facts or data to create this new proxy. Instead, he used data produced
during discovery to approximate a farmer's delivery location based on the
delivery location for other farmers in the same zip code. Second, he
replaced about 362,000 data observations that previously relied upon
farmer-location with his new proxy. He could not, however, calculate his
new proxy for about 43% of the observations that still lacked delivery
information after his data entry errors were corrected. Thus, third, he threw
out 274,399 observations that were not affected by his original deliverydata errors because they did not fit his new proxy. In sum, Professor
Elhauge did not simply correct data-entry errors; he created a materially
new analysis that changed or discarded approximately 54% of the data
observations in the already-corrected dataset.
Armed with a dataset containing a new proxy and hundreds of thousands of
altered observations, Professor Elhauge then recalculated his original
regression. The result was to re-inflate his average damages from the
corrected-estimate to even higher than Professor Elhauge estimated in his
initial regression analysis and report.
(Doc. 96 at 5-6) (footnotes omitted).
Plaintiffs, in contrast, describe Professor Elhauge's work as follows:
Professor Elhauge's investigation included: (1) reviewing Professor
Sumner's report and "corrected data set," the 41 separate productions of
delivery data, the regression data from the Class Action; (2) checking every
alleged error to determine whether there was any error (often there was
none); and (3) determining how, if at all, the error effected the regression
(generally correcting the errors alleged by Professor Sumner increased the
(Doc. 107 at 2, n.2.)
Conclusions of Law and Analysis.
Federal Rule of Civil Procedure 26(a) requires a party to disclose to the other
parties the identity of any expert witness it may use at trial and to accompany that
disclosure with a written report, which must contain "a complete statement of all opinions
the witness will express and the basis and reasons for them[.]" Fed. R. Civ. P.
26(a)(2)(B)(i). Rule 26(e) further provides that:
A party who has made a disclosure under Rule 26(a) ... must supplement
or correct its disclosure or response ... in a timely manner if the party
learns that in some material respect the disclosure or response is incomplete
or incorrect, and if the additional or corrective information has not
otherwise been made known to the other parties during the discovery
process or in writing[.]
Fed. R. Civ. P. 26(e)(l)(A).
For an expert report disclosed pursuant to Rule 26(a)(2)(B), "the party's duty to
supplement extends both to information included in the report and to information given
during the expert's deposition. Any additions or changes to this information must be
disclosed by the time the party's pretrial disclosures under Rule 26(a)(3) are due." Fed.
R. Civ. P. 26(e)(2). "Unless the court orders otherwise, [pretrial] disclosures must be
made at least 30 days before trial." Fed. R. Civ. P. 26(a)(3)(B).
A party's "duty to supplement its initial expert report does not arise when [a party]
seeks to bolster its earlier submission, but rather, arises only if the expert subsequently
learns of information that was previously unknown or unavailable, that renders
information previously provided in an initial report inaccurate or misleading because it
was incomplete[.]" Allen v. Dairy Farmers ofAm., Inc., 2014 WL 2040133, at *5 (D. Vt.
May 16, 2014) (citation omitted); see also Cedar Petrochems., Inc. v. Dongbu Hannong
Chem. Co., 769 F. Supp. 2d 269, 278 (S.D.N.Y. 2011) (noting that "experts are not free
to continually bolster, strengthen, or improve their reports by endlessly researching the
issues they already opined upon, or to continually supplement their opinions") (internal
quotation marks omitted); Lidie v. Cirrus Design Corp., 2009 WL 4907201, at *5
(S.D.N.Y. Dec. 18, 2009) ("Rule 26(e) is not ... a vehicle to permit a party to serve a
deficient opening report and then remedy the deficiency through the expedient of a
'supplemental' report."). Consequently, "[i]f an expert's report does not rely [on] any
information that was previously unknown or unavailable to him, it is not an appropriate
supplemental report under Rule 26." Allen, 2014 WL 2040133, at *5.
In assessing whether to exclude an expert witness report, the Second Circuit
directs trial courts to consider the following:
( 1) the party's explanation for the failure to comply with the [disclosure
requirement]; (2) the importance of the testimony of the precluded
witness[es]; (3) the prejudice suffered by the opposing party as a result of
having to prepare to meet the new testimony; and (4) the possibility of a
Design Strategy, Inc. v. Davis, 469 F .3d 284, 296 (2d Cir. 2006) (internal quotation
marks omitted) (citing Patterson v. Balsamico, 440 F.3d 104 (2d Cir. 2006)). "Before the
extreme sanction of preclusion may be used by the district court, [the court] should
inquire more fully into the actual difficulties which the violation causes, and must
consider less drastic responses." Outley v. City ofNew York, 837 F.2d 587, 591 (2d Cir.
Whether to Exclude Portions of Professor Elhauge's Supplemental
Defendants ask the court to strike portions of the Elhauge Supplemental Report
because Plaintiffs failed to comply with Federal Rule of Civil Procedure 26(e) and
because the Supplemental Report is untimely under the Scheduling Order. 2 Defendants
acknowledge that Professor Elhauge should be allowed to update his data set to include
the missing data identified by Professor Sumner, but assert that he should not be
permitted to make any other changes to his Initial Report. Plaintiffs respond that
Professor Elhauge was required to supplement his Initial Report in order to address
inaccuracies that he became aware of after receiving the Sumner Report and that it would
be contrary to the interests of justice to require him to testify to data he knows is
The data upon which Professor Elhauge relies in his Supplemental Report was
available to him when he produced his Initial Report. According to Plaintiffs, his failure
The June 21, 2018 Scheduling Order required submission of expert reports on or before
September 21, 2018. On December 12, 2018, the court granted the parties' joint motion to revise
the discovery schedule, ordering that "[i]f plaintiffs choose to supplement their expert's report
based on any new information learned during the December 19, 2018 second deposition of
DFA's CEO, Rick Smith, plaintiffs shall do so by January 4, 2019." (Doc. 88 at 1, ,-r 2.)
Plaintiffs do not contend that the Elhauge Supplemental Report is based on information obtained
as a result of Mr. Smith's second deposition.
to include this data was a mistake attributable at least in part to the piecemeal manner in
which the data was provided. Plaintiffs further contend that this mistake exposed a bias
in the location proxy that also required correction. Defendants counter that Professor
Elhauge could have tested for this bias using the data that he relied upon in his Initial
Report and that any fault lies in Professor Elhauge's acceptance of the Allen proxy
without testing it. The court agrees. The first Outley factor thus weighs in favor of
striking the Elhauge Supplemental Report as the mistakes in the Initial Report could and
should have been avoided.
With respect to the second Outley factor, the information encompassed in the
Elhauge Supplemental Report is central to Plaintiffs' case and damages calculation. As
Plaintiffs point out, requiring Professor Elhauge to rely on his initial regression analysis
would "require Professor Elhauge to give inaccurate testimony based on a proxy he now
knows is biased[.]" (Doc. 107 at 11.) The importance of the Elhauge Supplemental
Report therefore weighs in favor of allowing its use. See Zerega Ave. Realty Corp. v.
Hornbeck Offehore Transp., LLC, 571 F .3d 206, 213 (2d Cir. 2009) (holding that the trial
court abused its discretion in excluding an expert opinion for noncompliance with a
pretrial order where, among other things, "the testimony of [the excluded expert] was
critical to [defendant]'s defense on the issue of causation"); Scientific Components Corp.
v. Sirenza Microdevices, Inc., 2008 WL 4911440, at *4 (E.D.N.Y. Nov. 13, 2008)
(denying a motion to strike, the court explained that the rebuttal report was "important to
plaintifrs case"); Lab Crafters, Inc. v. Flow Safe, Inc., 2007 WL 7034303, at *7
(E.D.N.Y. Oct. 26, 2007) (noting that because the rebuttal expert testimony was of "grave
importance to defendant's case[,]" it "warrant[ed] admission under this factor of the
The third Outley factor and "[t]he touchstone for determining whether to exclude
an untimely expert report is whether the party opposing [its] admission is prejudiced."
Lore v. City ofSyracuse, 2005 WL 3095506, at *4 (N.D.N.Y. Nov. 17, 2005).
Defendants assert that the Elhauge Supplemental Report will severely prejudice them by
"forcing a costly and time-consuming 're-do' of discovery of Plaintiffs' expert and his
work." (Doc. 96 at 11.) However, in essence Professor Elhauge now agrees with
Defendants' expert which can hardly be deemed prejudicial. 3 Although Plaintiffs
understate the importance of Professor Elhauge' s corrections, Defendants overstate them.
Professor Elhauge used a proxy that was not the most accurate one available. Inevitably,
this affected his initial regression analysis as well as his corrected one. The reason for
the change, however, is relatively straightforward and not one that requires extensive
investigation or analysis. Indeed, to date, Defendants have not sought to re-depose
Professor Elhauge. 4
The fact that Defendants face a higher damages calculation if the Supplemental
Report is allowed is not the type of prejudice that weighs in favor of a motion to strike.
Instead, the focus is on whether any trial preparation prejudice may be cured by allowing
Defendants to re-depose Professor Elhauge at Plaintiffs' expense should Defendants
desire to do so. See RMED Int 'l, Inc. v. Sloan's Supermarkets, Inc., 2002 WL 31780188,
at *4 (S.D.N.Y. Dec. 11, 2002) ("[A]ny prejudice is easily cured by allowing plaintiff to
depose [the expert] if [it] so desire[s]."); Virgin Enters. Ltd. v. Am. Longevity, 2001 WL
34314729, at *2 (S.D.N.Y. Mar. 1, 2001) (noting that "any prejudice will be remedied by
the deposition of [the expert]"); Lab Crafters, Inc., 2007 WL 7034303, at *8 ("Courts to
address this issue have stated that any prejudice to the opposing party can be alleviated
by allowing them to depose the expert prior to trial.").
On balance, although the Supplemental Report may require additional discovery
on Defendants' part which is a form of prejudice, that prejudice may be cured. See Plew
v. Ltd. Brands, Inc., 2012 WL 379933, at *2 (S.D.N.Y. Feb. 6, 2012) ('"Exclusion of
expert testimony is a drastic remedy' and is inappropriate where the movant could easily
have cured the prejudice by seeking more discovery.") (citations omitted). The third
Defendants' identification of errors in Professor Elhauge's work is fodder for crossexamination and may alone be sufficient to undermine his credibility.
Plaintiffs represent that they previously made Professor Elhauge available for this purpose and
Defendants declined to depose him.
Outley factor thus either weighs in favor of denying the motion to strike or, is at best,
The final Outley factor is the possibility of a continuance, which in this case is
readily available. No trial date has been set and Defendants' motion for summary
judgment is under advisement and largely unimpacted by the Elhauge Supplemental
Report. A continuance to alleviate the prejudice associated with the Elhauge
Supplemental Report may therefore be granted without significantly delaying the
adjudication of the merits of this dispute. See Lab Crafters, Inc., 2007 WL 7034303, at
*8 (finding that because the trial date had not been set and the party submitting expert
testimony was not seeking an extension, "this factor also weighs heavily in favor of
admitting [expert] testimony"); RMED Int'/, Inc., 2002 WL 31780188, at *4 (allowing a
new expert report when it "will not disrupt the trial, which is set to begin almost a month
Based on the totality of the Outley factors, the court concludes that the drastic
sanction of exclusion is not warranted. As a condition precedent to the admissibility of
the Supplemental Report, 5 Plaintiffs must offer a supplemental deposition of Professor
Elhauge and pay for Defendants' reasonable preparation time, deposition time, and travel
expenses occasioned by the need to re-depose Professor Elhauge on the subject matter of
his Supplemental Report.
Whether to Exclude Professor Elhauge's Opinion on Whether DFA
and DMS Possess Monopsony Power.
Defendants argue that Professor Elhauge should not be permitted to opine on
whether DF A and DMS jointly have monopsony power because he did not offer this
opinion in his Initial Report, 6 but instead disclosed this opinion during his deposition. 7
The court does not foreclose a challenge to the admissibility of the Supplemental Report on
Neither party attached Professor Elhauge's Initial Report to their briefing on this motion.
In his written report, Professor Elhauge opines on whether DFA, DMS, and their coconspirators possessed monopsony power, but does not offer an opinion on whether DF A and
DMS possessed monopsony power independent of their co-conspirators.
They also assert that Professor Elhauge should not be permitted to opine that DF A and
DMS have a 50% market share because this number is not included in his Initial Report.
Plaintiffs respond that Professor Elhauge' s written report "properly discloses
Defendants' 50% market share" in the backup data, which includes the market share for
each co-conspirator, including Defendants. (Doc. 124 at 5.) Plaintiffs also note that
determining whether Defendants possessed monopsony power involves the same factors
and analysis that Professor Elhauge relied upon in concluding that Defendants and their
co-conspirators exercised monopsony power. In their reply, Defendants dispute that
Professor Elhauge's backup data "contains any calculation showing that DFA and DMS
have approximately a 50% market share." (Doc. 127 at 3.)
"If 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)(l). Parties may not "cure deficient expert reports by
supplementing them with later deposition testimony." Ciomber v. Coop. Plus, Inc., 527
FJd 635, 642 (7th Cir. 2008); see also Baker v. Anschutz Exp!. Corp., 68 F. Supp. 3d
368, 382 (W.D.N.Y. 2014) (holding that "[a]n opinion that comes for the first time at the
expert deposition is untimely") (citation omitted). Nonetheless, "Section 26(a)(2)(B)
does not limit an expert's testimony simply to reading his report. No language in the rule
would suggest such a limitation. The rule contemplates that the expert will supplement,
elaborate upon, explain and subject himself to cross-examination upon his report."
Thompson v. Doane Pet Care Co., 470 F.3d 1201, 1203 (6th Cir. 2006).
As Plaintiffs point out, Defendants' expert Professor Snyder testified that he relied
upon Professor Elhauge's calculation ofDFA and DMS's market share in forming his
opinions. There is thus no unfair surprise to Defendants with regard to Professor
Elhauge's calculation of Defendants' market share.
Nor does Professor Elhauge's opinion that DFA and DMS possess monopsony
power constitute impermissible "sandbagging" as his opinion is based on the same data
and analysis that he relied upon in concluding that DFA, DMS, and their co-conspirators
possessed monopsony power. See Sec. & Exch. Comm'n v. McGinnis, 2018 WL
1633592, at *5 (D. Vt. Apr. 3, 2018) ("The purpose of Rule 37(c)(l) is to prevent the
practice of 'sandbagging' an opposing party with new evidence.") ( citation omitted);
Cary Oil Co. v. MG Ref & Mktg., Inc., 2003 WL 1878246, at *4 (S.D.N.Y. Apr. 11,
2003) (holding that the Federal Rules regarding disclosure of expert opinions "are not
designed to prohibit a witness from testifying about anything not explicitly mentioned in
his Rule 26 disclosure, but rather to protect one party from being blindsided by another
party with new opinions never before discussed"). More importantly, Defendants
affirmatively solicited this opinion from Professor Elhauge in the course of questioning
him about the basis for his conclusions.
Although Professor Elhauge did not offer an opinion regarding whether DF A and
DMS independently possessed monopsony power in his Initial Report, because data in
his Initial Report supports this conclusion, because Defendants solicited the opinion they
seek to strike, and because Defendants "have ample time to prepare effective cross
examination and consider possible witnesses to counter such discussions," striking the
opinion is not warranted. Cary Oil Co., 2003 WL 1878246, at *5; see also In re Methyl
Tertiary Butyl Ether (MTBE) Prods. Liab. Litig., 643 F. Supp. 2d 471,482 (S.D.N.Y.
2009) ("[The expert's] omission of an obvious and readily calculated result which has
now been revealed more than thirty days before trial followed a complete disclosure of
his methodology and factual basis. This hardly rises to the level of unacceptable
sandbagging."). Professor Elhauge, however, is confined to his deposition testimony and
may not offer any supplemental testimony beyond that disclosed in response to
For the foregoing reasons, Defendants' motion to strike portions of Professor
Elhauge's Supplemental Report is DENIED. (Doc. 96.) Defendants' motion to strike
Professor Elhauge's deposition testimony is DENIED. (Doc. 121.)
Dated at Burlington, in the District of Vermont, this ,;
f day of July, 2019.
Christina Reiss, District Judge
United States District Court
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