Grand River Enterprises Six Nations Ltd. v. VMR Products LLC
Filing
135
ORDER granting in part and denying in part 120 Motion to Strike. Signed by District Judge William M. Conley on 4/23/14. (krj)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
GRAND RIVER ENTERPRISES SIX
NATIONS LTD.,
Plaintiff,
OPINION & ORDER
v.
13-cv-104-wmc
VMR PRODUCTS LLC, d/b/a V2 CIGS,
Defendant.
In this action for trademark infringement, plaintiff Grand River Enterprises Six
Nations, Ltd. (“Grand River”) alleges that defendant VMR Products LLC (“VMR”) has
infringed its trademark rights under federal and common law. Currently before the court is
VMR’s Motion to Strike the Expert Report of Stephen M. Nowlis (“Nowlis Report”) (dkt.
#120), on the grounds that the report was not timely disclosed. In connection with that
motion, VMR also asks the court to exclude Nowlis’s testimony at trial and for an award of
fees and expenses in connection with the motion to strike.
The deadline for proponent expert disclosures was January 27, 2014, based on the
parties’ own stipulation. (See dkt. ##35, 36.) On January 27, VMR represents that it
disclosed its own expert, Jeffrey M. Samuels, and provided Grand River with his report (the
“Samuels Report”), which contains opinions as to whether Grand River’s COUTURE mark
is used in United States commerce. Grand River did not disclose any experts at that time.
On February 28, 2014, Grand River served VMR with the Nowlis Report.
The
Nowlis Report contains three paragraphs purportedly discussing the use of the COUTURE
mark in commerce. (See Nowlis Report (dkt. #122) ¶¶ 7-9.) The remainder of the report is
devoted to an analysis of the likelihood of consumer confusion and contains sections
analyzing the similarities between the two marks, the similarities of the target markets and
the goods, and concurrent use of the marks. (Id. at ¶¶ 10-49.)
Federal Rule of Civil Procedure 26(a)(2)(D) requires parties to make disclosures “at
the times and in the sequence that the court orders.” At the parties’ request, the court
established a deadline in this case of proponent expert disclosures to be due on January 27,
2014. Likelihood of confusion is an issue on which the plaintiff bears the burden of proof.
See Ty Inc. v. Softbelly’s Inc., 353 F.3d 528, 535 (7th Cir. 2003) (noting that plaintiff Ty had
burden of proof on likelihood of confusion). Thus, any expert evidence Grand River had to
offer on the issue of likelihood of confusion should have been disclosed by January 27,
making its February 28 disclosure thirty days late.
Grand River’s attempt to defend its untimely disclosure is unconvincing.
Grand
River argues that the Nowlis Report is timely because it is “intended solely to contradict or
rebut evidence” offered by VMR’s expert under Fed. R. Civ. P. 26(a)(2)(D)(ii). This is true
only to a very limited extent: in Paragraph 7, Nowlis purports to rebut Samuels’ opinions on
use in commerce by opining that “Couture cigarettes are used in commerce in the United
States.” (Nowlis Report, at ¶ 7.) But the vast majority of the Nowlis Report deals with the
likelihood of confusion, a topic addressed nowhere in the Samuels Report. As Grand River
itself points out, “[t]he proper function of rebuttal evidence is to contradict, impeach or
defuse the impact of the evidence offered by an adverse party.” Peales v. Terre Haute Police
Dep’t, 535 F.3d 621, 630 (7th Cir. 2008).
With the exception of Nowlis’s wholly
conclusory statement in paragraph 7 that Couture cigarettes are used in U.S. commerce, the
opinions on the likelihood of confusion between the COUTURE and VAPOR COUTURE
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marks have nothing to do with the opinions in the Samuels Report and are not proper
rebuttal evidence.
Grand River also argues that an inquiry into the use of the COUTURE mark in
commerce “cannot be extracted or isolated from the impact on U.S. consumers regarding
the use in commerce of the parties’ competing COUTURE marks.” (Pl.’s Br. Opp’n Mot.
Strike (dkt. #124) 3.) As best the court can determine, Grand River conflates the question
of the extent and nature of a mark’s use in commerce, which may bear on the likelihood of
confusion,1 with the question of whether the mark is used in U.S. commerce at all, such that
a party has established trademark rights.
Since those are two distinct inquiries both
factually and legally, there is no basis to argue the two overlap except on the most superficial
level. Even if the inquiries were not easily separated, Grand River still had the burden to
make a timely proponent expert disclosure on likelihood of confusion. The bulk of the
Nowlis Report is, therefore, indisputably untimely.
In the Seventh Circuit, when a party violates Rule 26, “the sanction of exclusion is
automatic and mandatory unless the sanctioned party can show that its violation of Rule
26(a) was either justified or harmless.” David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th
Cir. 2003) (quoting Salgado v. Gen. Motors Corp., 150 F.3d 735, 742 (7th Cir. 1998)).
Under David, courts consider four factors in determining whether to exclude testimony or
evidence not properly disclosed under Rule 26:
(1) the prejudice or surprise to the party against whom the
evidence is offered; (2) the ability of the party to cure the
prejudice; (3) the likelihood of disruption to the trial; and
The extent of a mark’s use might bear upon the strength of the mark, the area and manner of
concurrent use and even an intent to “palm off” a defendant’s goods as those belonging to a plaintiff.
See Ty, Inc. v. Jones Grp., Inc., 237 F.3d 891, 898 (7th Cir. 2001) (likelihood of confusion factors).
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(4) the bad faith or willfulness involved in not disclosing the
evidence at an earlier date.
Id. at 857. In this case, VMR was prejudiced by the month-late disclosure of Grand River’s
expert on the likelihood of confusion, and Grand River’s subsequent refusal to withdraw
that report or seek an extension of the disclosure deadline. VMR also credibly argues that it
has been prejudiced due to the timing of the disclosure in relation to the summary judgment
briefing and to the impact on its litigation strategy overall.2
Grand River nevertheless argues that VMR was not prejudiced because it could not
have responded to the Nowlis Report in its brief in opposition even if the report had been
timely served, since the deadlines were the same day. While this is true, so far as it goes,
Grand River did gain an advantage insofar as it could -- and did -- respond directly to VMR’s
brief in opposition. In fact, the Nowlis Report quotes directly from VMR’s brief at several
points and uses those quotations to direct its analysis. (See, e.g., Nowlis Report ¶¶ 11, 24,
28.) Furthermore, after the proponent expert deadline came and went with no word from
Grand River, VMR had the right to expect that Grand River would not be offering expert
testimony on issues on which it had the burden of proof and to prepare its defense
accordingly, including the decision not to require its own respondent expert on the issue of
likelihood of confusion. Combined with a complete lack of excuse for its delay, this is
enough to prejudice VMR.
Finally, Grand River argues that even if VMR was prejudiced, the prejudice is easily
cured because: (1) VMR has time to depose Nowlis; (2) the court has already granted VMR
With respect to the first point, VMR’s brief in opposition to Grand River’s motion for summary
judgment was due on January 27, 2014, the same day as proponent expert disclosures. By waiting
until February 28, 2014, VMR argues that Grand River was able to avail itself of the benefit of
VMR’s brief in opposition in crafting the Nowlis Report.
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an extension to designate a rebuttal expert; and (3) likelihood of confusion is not a novel
legal theory. The court finds these arguments unpersuasive. First, trial in this matter is less
than two months away, and VMR should not now have to rush to prepare for Grand River’s
untimely-disclosed expert on top of its other trial preparations. Second, the chance to offer
rebuttal expert disclosures is not intended to relieve a party with the burden of proof from
timely coming forward with evidence necessary for its case in chief; it is meant to allow
parties to reply directly to any unanticipated -- and properly responsive -- nuances in
respondent disclosures. Third, though Nowlis is not testifying as to a “novel legal theory,”
he is certainly advancing new evidence and arguments in support of Grand River’s theory.3
The court, therefore, will grant VMR’s motion to strike the opinions on likelihood of
confusion contained in the Nowlis Report and will preclude Nowlis from testifying at trial
as to those opinions. Grand River is ordered to pay VMR’s reasonable expenses caused by
its failure to timely disclose its expert, pursuant to Federal Rule of Civil Procedure
37(b)(2)(C).4
VMR also asks the court to exclude the remainder of the Nowlis Report under
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), because Nowlis, as a
purported marketing and consumer behavior expert, is not qualified to testify as to whether
As support for its position, Grand River cites Sandisk Corp. v. Kingston Tech. Co., No. 10-cv-243-bbc,
2011 WL 7121190, at *3 (W.D. Wis. Oct. 27, 2011), but that case is not applicable here. The
court in Sandisk Corp. denied a motion to exclude an untimely supplemental expert report, because
the supplemental report merely identified new deposition testimony that supported the expert’s
earlier, timely-disclosed opinions. Because the report supplied no new evidence, arguments or
theories, and because the movant had actually been present at the depositions in question and thus
could not have been surprised by the testimony, the court found any failure to disclose timely to be
harmless. In contrast, the Nowlis Report is not a supplement; it advances new evidence and
arguments (if not new legal theories); and VMR had no way of knowing what the evidence and
arguments were until it actually received the Nowlis Report.
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VMR also asks the court to extend its deadline for designating a rebuttal expert. Since Grand River
is precluded from using Nowlis’s report or testimony, that portion of its request is denied as moot.
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a mark has been “used in commerce.” The court need not delve deeply into this question,
however, because the dispute between the parties as to whether COUTURE has been “used
in commerce” is premised on their differing legal interpretations of the Lanham Act and on
the appropriateness of applying the doctrine of judicial estoppel. In the Seventh Circuit,
“Federal Rules of Evidence 702 and 704 prohibit experts from offering opinions about legal
issues that will determine the outcome of a case.” United States v. Sinclair, 74 F.3d 753, 757
n.1 (7th Cir. 1996); see also Roundy’s Inc. v. N.L.R.B., 674 F.3d 638, 648 (7th Cir. 2012)
(disallowing expert testimony amounting to legal argument); United States v. Caputo, 517
F.3d 935, 942 (7th Cir. 2008) (meaning of a statute is “a subject for the court, not for
testimonial experts”); Maloney v. Central Aviation, Inc., 450 F. Supp. 2d 905, 912 (W.D.
Wis. 2006) (noting that “expert witnesses are prohibited from rendering legal opinions”).
As a result, neither party’s expert may render an opinion on how the court should
interpret the Lanham Act, nor on whether Grand River should be judicially estopped from
claiming it uses the COUTURE mark in commerce.
Thus, VMR’s motion to strike is
granted with respect to the remainder of Nowlis’s testimony as well.
The court also
cautions VMR that it may not present any improper expert opinion testimony of its own at
trial, nor will the court consider any improper legal conclusions contained within the
Samuels Report for purposes of resolving the pending motions for summary judgment.
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ORDER
IT IS ORDERED that defendant VMR Products LLC’s Motion to Strike (dkt. #120)
is GRANTED IN PART and DENIED IN PART, consistent with the opinion above.
Entered this 23rd day of April, 2014.
BY THE COURT:
/s/
________________________________________
WILLIAM M. CONLEY
District Judge
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