Nutritional Biomimetics, LLC v. Empirical Labs, Inc.

          ORDER

          KATHLEEN M TAFOYA UNITED STATES MAGISTRATE JUDGE.

         This matter is before the court on “Defendant Empirical Labs' Motion In Limine to Exclude Evidence of Undisclosed Damages” [Doc. No. 381] (“MUD”) filed May 26, 2018 and on “Defendant Empirical Labs' Motion In Limine to Exclude Undisclosed Expert Opinion Testimony” [Doc. No. 411] filed October 26, 2018. Both motions are fully briefed and trial is scheduled to begin on January 7, 2019.

         Pursuant to the court's directive, Empirical Labs, the proponent of each motion, filed “Empirical Labs' Notification Concerning Pending Motions In Limine” [Doc. No. 453] on December 14, 2018. Neither party asked for supplementary briefing as to either motion, indicating that both motions were ripe for ruling by the court as briefed.

         Nutritional Biomimetics, LLC's (“NB”) only damages disclosure to date reads as follows:

III. C.R.C.P. 26(a)(1)(C) Computation of Damages. Plaintiff and Third-Party Defendants seek damages from Defendants and Third-Party Defendants, including but not limited to actual damages, presumed damages, special damages, and consequential damages. It is not yet possible to provide a precise calculation as to those damages and other harm caused by Defendant and Third-Party Defendants. A substantial amount of information needed to provide such a calculation is in the possession of Defendant. Once that documentation has been disclosed, Plaintiff will provide that estimate in due course through expert testimony. At this time, Plaintiff has determined that Defendant is liable to Plaintiff for the “full retail price of manufactured products” that it produces without a license. Upon information and belief, Defendant has manufactured products that would entitle Plaintiff to damages in the amount of $708, 847.50. Plaintiff also seeks equitable relief in the form of a preliminary and permanent injunction as described in its filings with the Court. Plaintiff and Third Party Defendants also seek their attorneys' fees, costs and pre- and post-judgment interest.

MUD, Ex. A, [Doc. No. 382-1] at 4.

         The MUD seeks to exclude evidence of NB's undisclosed “claimed damages, and limiting NB's evidence to that supporting its claims for equitable relief.” (MUD at 14.) Empirical Labs claims that in spite of NB's promises in its initial disclosures that NB would provide damage estimates “in due course through expert testimony, ” NB never disclosed a damages expert witness and did not supplement its disclosure with respect to calculations of damages sought. Id. Empirical Labs claims that:

NB and its two affiliates^[1] did not disclose which of the three claimants sought which damages, did not disclose any computations for their damages, did not disclose even “lump-sum” figures, did not disclose which categories were claimed for which of their combined seven substantive claims for relief, and did not disclose against which of the defending parties the damages were sought.

Id. at 5. Additionally, Empirical Labs claims that in response to its discovery requests about damages, NB responded only:

Plaintiffs damages calculation is as follows[.] Plaintiff reserves the right to amend its damages calculation as discovery continues. Pursuant to the Licensing Agreement executed on June 3, 2014[, ] Empirical is liable to Plaintiff for the “full retail price of manufactured products” that it produces without a license. Upon information and belief, Defendant has produced the following products, with the following retail prices as listed below.

(Image Omitted)

Id. at 6. citing (Ex. C: NB's Resp. to Second Request for Expedited Discovery, June 9, 2015, at 7-8, interrog. no. 5). This response was likewise never supplemented by NB.

         On April 20, 2017, this court entered an Order with respect to NB's claimed liquidated damages contained in a contract between Empirical Labs and NB. (April 20, 2017 Order granting in part Empirical Labs' Motion for Partial Summary Judgment [Doc. No. 172]) (“Damages Order”). This court specifically held that NB's claimed damages of $708, 847.50 representing the “full retail price” of Empirical Lab's sold products was “punitive, rather than compensatory” and that the “stipulated amount is not reasonably related to the actual damage suffered by NB for Empirical Lab's alleged breach of the Resolution.” Id. at 9 (citing Peerless Enters., Inc. v. T.N.T., Inc., 511 P.2d 538, 539 (Colo.App. 1973))(stipulated damages clause was unenforceable under the second factor because it allowed the injured party to recover as income the “gross profits” of the violating party “without incurring any of the expenses ordinarily required to produce income”). Empirical Labs argues that by no later than April 20, 2017, NB knew that the court found “the proper measure of damages is the actual damage suffered [by NB as] the non-breaching party” (Damages Order at 11) and that NB's only specific damages disclosed in its Rule 26 disclosures was removed by the court.

         Empirical Labs states and NB does not deny that NB never supplemented this discovery response following the court's ruling in the Damages Order with any theories of computation of “actual damages” nor did it offer even so much as a lump sum calculation about how much and under what theory it would be attempting to prove its “actual damages” nor did NB offer any damages expert whose report might have been expected to offer a calculation theory for NB's actual damages, if any.

         Discovery in this case closed on or about July 31, 2017, after multiple extensions, approximately three months subsequent to the Damages Order. See, e.g. [Doc. No. 224] and [Doc. No. 221] at 2 (recounting history of discovery cutoff extensions). Empirical Labs' motion was filed, as noted, in May, 2018. Subsequent to the filing of the MUD, rather than attempting to immediately ameliorate any of the alleged disclosure deficiencies, NB instead responded that it could “not provide a precise calculation of damages, ” adding that: “[a] substantial amount of information needed to provide such a [damages] calculation is in the possession of Defendant.” (Resp. to MUD [Doc. No. 389] at 4.) However, at the time of the filing of the Response on July 2, 2018, discovery had been closed for almost one year. Therefore, the time had long passed to request and receive information and evidence needed for Plaintiff to prove its actual damages as it was legally ...