RCHFU, LLC v. Marriott Vacations Worldwide Corp.

          ORDER

          PHILIP A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiffs' Objections to the Magistrate Judge's Order Denying Their Request to Designate a New Expert to Analyze New Data [Docket No. 395, Public Entry Docket No. 396]. Plaintiffs filed a Request for Supplemental Expert Reports to Analyze Newly Produced Data [Docket No. 376] on March 28, 2019. The Marriott defendants opposed the motion [Docket No. 377] and defendant Aspen Highland Condominium Association took no position on the motion [Docket No. 375]. The magistrate judge denied the motion on April 7, 2019. Docket No. 386. Plaintiffs filed their objection to the magistrate judge's order on April 22, 2019. Docket No. 395.

         I. BACKGROUND

         Plaintiffs are owners of fractional interests in the Ritz-Carlton Club Aspen Highlands who brought this lawsuit against defendants arguing that the values of their timeshares were decimated by defendants allowing club access to Marriott timeshare members. Docket No. 250 at 10, ¶ 1; 13, ¶ 10; 88, ¶ 81. Plaintiffs refer to the “benefit to one brand through affiliation with a higher-end brand” as “the halo effect.” Docket No. 395 at 5. On October 26, 2018, plaintiffs disclosed three experts, two of whom who were to provide opinions on the halo effect. Docket No. 395 at 5-6.^[1] On December 28, 2018, the Marriott defendants submitted two rebuttal expert reports to rebut plaintiffs' experts' opinions on the halo effect. Docket No. 377 at 1-2.^[2] The Marriott defendants' rebuttal experts cited data from Sales and Marketing Surveys (“SMS”). Id. The SMS surveyed individuals who had and had not purchased Marriott memberships to identify which Marriott features were important to them in making their membership decisions. Marriott submitted the survey results for the purpose of demonstrating that Marriott timeshare members did not base their purchasing decisions on access to the Ritz-Carlton Club and, therefore, Marriott achieved no halo effect by the co-marketing of Marriott and Ritz-Carlton. Id.

         Plaintiffs challenged the Marriott defendants' late disclosure of the SMS and wrote to counsel on January 9, 2019 in an attempt to begin the meet and confer process regarding how to cure the prejudice it suffered from the late production and to obtain more documents and data related to the SMS. Docket No. 376-1 at 2-3, ¶ 6; Docket No. 395 at 7. On January 11, counsel for the Marriott defendants wrote back to plaintiffs, stating that, in order for the parties to “move forward without the need to burden the Court with another discovery dispute, ” he was proposing the following:

In terms of additional documents, we will produce on or before Tuesday, January 15, the backup data and documents that were used to prepare the SMS Reports.

We will agree to make Messrs. Peters and Sonberg available for deposition in our Orlando offices (we can arrange a video conference if you wish) on the following dates (we propose that they be done on the same day): January 28, February 1, 4, 5, 7 or 8. Their depositions will be limited to the template SMS Survey and the SMS Reports (Peters) and the MVC Points pricing spreadsheets (Sonberg).

We will agree that your experts Simon and Dev (but not Robinson) may submit amended affirmative reports on or before 14 days after the depositions of Messrs. Peters and Sonberg are completed; however, such amendments must be limited to the SMS Survey, SMS Reports and the MVC Points pricing spreadsheets. Our experts King and Israel (but not Dunec or Tantleff) will submit similarly limited rebuttal reports within 14 days of receiving your amended reports.

We will agree to defer the deadline for completion of expert depositions for 45 days after the service of all expert reports.

Docket No. 376-5 at 5. The Marriott defendants stated they believed this proposal had been accepted. Docket No. 377-1 at 4, ¶ 13. Specifically, the Marriott defendants' counsel stated the proposal set forth in the January 11 letter was agreed to during a telephone call on January 14, 2019. Id. The Marriott defendants then took actions contemplated by the agreement, such as producing backup data and documents used to prepare reports summarizing the SMS data. Id. at 5, ¶ 14. Moreover, plaintiffs took Peters' deposition, also referenced in the agreement, on February 13, 2019. Id. at 6, ¶ 18. Plaintiffs provided what was contemplated in the agreement, namely, supplemental expert reports from their two experts that incorporated evidence from the SMS surveys. Docket No. 395 at 10.

         On March 7, 2019, the Marriott defendants filed a status report and requested that the court enter a revised scheduling order based on the email agreement. Docket No. 361. On March 11, plaintiffs asked the Marriott defendants to agree to plaintiffs disclosing an additional expert to conduct an analysis on the SMS data. Docket No. 376-1 at 5, ¶ 17. The Marriott defendants opposed plaintiffs disclosing a new expert. Id., ¶ 18. Plaintiffs filed a reply to the Marriott defendants' status report and request, proposing their own amended scheduling order. Docket No. 362. Plaintiffs then filed this motion. Docket No. 376.

         The magistrate judge reviewed whether an agreement had been made between the parties concerning additional discovery. Docket No. 386 at 3. The magistrate judge determined the Marriott defendants had “persuasive evidence” that an agreement had been entered into, namely, the combination of the January 11 letter and both parties' actions taken pursuant to the agreement. Docket No. 386 at 5. Finding there to be a binding agreement between the parties limiting additional discovery, the magistrate judge denied plaintiffs' motion for supplemental expert reports beyond what was set out in the January 11 letter. Docket No. 386 at 7.

         II. STANDARD OF REVIEW

         When reviewing a party's objection to a magistrate judge's order on a non-dispositive matter, the Court “must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Fed.R.Civ.P. 72(a); Hutchinson v. Pfeil, 105 F.3d 562, 566 (10th Cir. 1997). The clearly erroneous standard “requires that the reviewing court affirm unless it ‘on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'” Ocelot Oil Corp. v. Sparrow Industries, 847 F.2d 1458, 1464 (10th Cir. 1988) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)). When applying the “clearly erroneous” standard, the Court is not entitled to reverse the magistrate judge's findings “simply because it is convinced that it would have decided the ...