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Fort Collins Nissan, Inc. v. Kia Motors America, Inc.

United States District Court, D. Colorado

December 14, 2018

FORT COLLINS NISSAN, INC. D/B/A TYNAN'S KIA, a Colorado Corporation, Plaintiff,
v.
KIA MOTORS AMERICA, INC., a California Corporation, Defendant.

          ORDER ON MOTION TO STRIKE

          Nina Y. Wang United States Magistrate Judge.

         This matter comes before the court on Defendant Kia Motors America, Inc.'s (“Defendant” or “KMA”) Motion to Strike Second Amended Expert Report of Kenneth R. Rosenfield (“Motion to Strike” or “Motion”), filed October 25, 2018. [#60].[1] The undersigned considers the Motion pursuant to 28 U.S.C. § 636(b), the Order Referring Case dated March 30, 2017 [#4], and the Memorandum dated October 26, 2018 [#61]. Upon careful review of the Motion and associated briefing, the comments offered at the October 4, 2018 Discovery Hearing, the applicable case law, and the entire docket, this court DENIES the Motion to Strike for the reasons stated herein.

         BACKGROUND

         This court has discussed the background of this matter in its prior Order, see [#43], and does so here only as it pertains to the instant Motion. Plaintiff Fort Collins Nissan, Inc. d/b/a Tynan's Kia (“Plaintiff” or “Tynan's”), a franchised motor vehicle dealer, operates a franchised motor vehicle dealership that sells and services KMA products. [#1 at ¶¶ 1-2, 7]. Based on United States Census Tract data each dealer is assigned a specific territory-known as the Area of Primary Responsibility (“APR”)-that is used “for measuring sales performance and assigning sales incentive objectives, ” among other things. See [id. at ¶¶ 11-12, 14]. Tynan's alleges that KMA granted another dealership permission to relocate seven miles closer to Plaintiff's dealership in 2012, but did not adjust Plaintiff's APR until 2015, which led to Tynan's not receiving “significant monies under the Incentive Programs as a result of its failure to meet unfairly inflated sales objectives.” See [id. at ¶¶ 20-28]. KMA also allegedly refused Plaintiff's proposal to establish a dealership in Aurora, Colorado and denied Plaintiff's request to relocate. See [id. at ¶¶ 29-34, 43-46]. Tynan's alleges that KMA's refusals, based on faulty APR metrics, resulted in significant lost profits. See [id. at ¶¶ 34, 45].

         Plaintiff initiated this suit on March 29, 2017. [#1]. This court held a Scheduling Conference with the Parties on June 20, 2017. See [#24]. Relevant here, the Scheduling Order originally set the affirmative experts deadline as January 19, 2018, the rebuttal experts deadline as February 16, 2018, and the discovery deadline as April 2, 2018. See [#25 at 7]. Following several requests for extensions of time, the undersigned extended the affirmative experts deadline to May 31, 2018, the rebuttal experts deadline to July 2, 2018, and the discovery deadline to August 30, 2018. See [#46].

         On May 31, 2018, Tynan's filed on the court's docket its designation of affirmative experts; these included Edward Stockton and Kenneth Rosenfield (“Mr. Rosenfield”).[2] See [#48 at 1]. Then, on September 27, 2018, Plaintiff filed its Motion for Leave to Supplement Expert Report of Kenneth Rosenfield and Supporting Memorandum (the “Motion to Supplement”). [#52]. Because discovery had closed, Plaintiff moved to reopen discovery for the sole purpose of providing Defendant with Mr. Rosenfield's Second Amended Expert Report (the “Second Amended Report”) see [#59 at 4-6; #64 at 2], explaining that Plaintiff learned at Mr. Rosenfield's deposition that Mr. Rosenfield had used the “wrong set of data” in compiling his affirmative expert report. See [#52 at 1-5]. This court struck the Motion to Supplement and set the Parties for an informal discovery dispute conference. See [#54]. At the October 4, 2018 informal discovery dispute conference, this court directed Plaintiff to serve KMA with the Second Amended Report and permitted KMA to file a Motion to Strike if, after a robust meet and confer, Defendant believed the Second Amended Report was not proper under Rule 26(e) of the Federal Rules of Civil Procedure. See [#56]. The instant Motion followed.

         Now, KMA argues that the Second Amended Report is not proper under Rule 26(e) because it is a “new, substitute report, based on different data.” [#59 at 11]. KMA further contends that even if the Second Amended Report is a supplement, it is untimely under Rule 26 and Tynan's untimeliness was not substantially justified or harmless under Rule 37(c). See [id. at 13-16]. Plaintiff counters that the Second Amended Report is a proper supplement that Plaintiff timely served and, if not, Tynan's untimeliness was substantially justified and harmless. See [#64 at 3-9]. The Motion is now ripe for disposition.

         LEGAL STANDARDS

         I. Rule 26

         Rule 26(a)(2) of the Federal Rules of Civil Procedure provides that “a party must disclose to the other parties the identity of any witness it may use at trial, ” generally accompanied by a written report “if the witness is one retained or specially employed to provide expert testimony in the case.” Fed.R.Civ.P. 26(a)(2)(A)-(B). Like initial disclosures, “[t]he parties must supplement these disclosures when required under Rule 26(e), ” Fed.R.Civ.P. 26(a)(2)(E), if the party discovers that the disclosure is “incomplete or incorrect” in some “material respect, ” see Caldwell-Baker Co. v. S. Illinois Railcar Co., No. CIV.A.00-2380-CM, 2001 WL 789389, at *1 (D. Kan. June 5, 2001). If incomplete or incorrect, the disclosing-party must supplement its disclosures in a timely manner. See Cohen v. Pub. Serv. Co. of Colorado, No. 13-cv-00578-WYD-NYW, 2015 WL 6446948, at *2 (D. Colo. Oct. 26, 2015) (discussing Fed.R.Civ.P. 26(e)(1)).

         The timeliness of supplementation centers on when the disclosing-party “reasonably should know” that its disclosures are incomplete or incorrect. See Jama v. City & Cty. of Denver, 304 F.R.D. 289, 299-300 (D. Colo. 2014). But such supplementation must be made no later than the time a party's pretrial disclosures are due under Rule 26(a)(3). Fed.R.Civ.P. 26(e)(1)(a), (e)(2). Under this District's Local Rules of Civil Practice, disclosures under Rule 26(a)(3) of the Federal Rules of Civil Procedure must be made by the deadline for the submission of the Final Pretrial Order. D.C.COLO.LCivR 26.1(b); Auraria Student Housing at the Regency, LLC v. Campus Vill. Apartments, LLC, No. 10-cv-02516-WJM-KLM, 2015 WL 72360, *3 (D. Colo. Jan. 5, 2015); Buben v. City of Lone Tree, No. 08-cv-00127, 2010 WL 4810632, *2 (D. Colo. Nov. 19, 2010). Nevertheless, even if made on or before the deadline, the court will also consider a party's diligence in obtaining the supplemental information, the length of time to supplement once the party obtained the supplemental information, and other relevant facts to determine whether a party's course of conduct in supplementing frustrates the purpose of Rule 26 to promote full and orderly pretrial disclosure. See e.g., Jama, 304 F.R.D. at 299-300 (discussing timeliness under Rule 26(e)); Harvey v. United States, Civil Action No. 04-cv-00188-WYD-CBS, 2005 WL 3164236, *13 (D. Colo. Nov. 28, 2005).

         II. Rule 37(c)(1)

         If the court finds a violation of Rule 26(e), it must consider the imposition of an appropriate sanction. Unless substantially justified or harmless, Rule 37(c)(1) precludes a party from using information to supply evidence on a motion or at trial if that party fails to disclose the information as required by Rule 26(e). Fed.R.Civ.P. 37(c)(1). The court has broad discretion in determining whether the Rule 26 violation was substantially justified or harmless, and the court need not make explicit findings in this regard. See Woodworker's Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 993 (10th Cir. 1999). Nonetheless, several factors guide the court's determination, including (1) the prejudice and surprise to the party against whom the testimony is offered; (2) the ability of the party to cure the prejudice; (3) the extent to which introducing such testimony would disrupt the trial; and (4) the moving party's bad ...


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