A. H. Lundberg Assocs., Inc. v. Tsi, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 5, 2019
• Docket: 17-35304
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION FEB 05 2019 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

A.H. LUNDBERG ASSOCIATES, INC. a No. 17-35304 Washington corporation and LUNDBERG, LLC, D.C. No. 2:14-cv-01160-JLR

Plaintiffs-Appellees, MEMORANDUM* v.

TSI, INC, a Washington corporation,

Defendant, v.

RICHARD J. MARTIN and MARTIN THERMAL ENGINEERING, INC.,

Movants - Appellants.

Appeal from the United States District Court for the Western District of Washington James L. Robart, Judge, Presiding

Argued and Submitted June 11, 2018 Seattle, Washington

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: D.W. NELSON and WATFORD, Circuit Judges, and PREGERSON,** District Judge.

Expert witness Dr. Richard J. Martin (“Martin”) and Martin Thermal

Engineering, Inc. appeal the district court’s imposition of sanctions, including the

striking of Martin’s trial testimony, personal monetary sanctions, and a finding of

misconduct. We have jurisdiction under 28 U.S.C. § 1291 over an order imposing

sanctions upon a nonparty, and AFFIRM in part and REVERSE in part.

1. We review a district court’s exercise of its inherent power to impose

sanctions for abuse of discretion. Lahiri v. Universal Music & Video Distribution

Corp., 606 F.3d 1216, 1218 (9th Cir. 2010); Fink v. Gomez, 239 F.3d 989, 994 (9th

Cir. 2001). A district court abuses its discretion if it bases its decision “on an

erroneous view of the law or on a clearly erroneous assessment of the evidence.”

Holgate v. Baldwin, 425 F.3d 671, 675 (9th Cir. 2005). We review a district

court’s interpretation of the Federal Rules of Civil Procedure de novo. Republic of

Ecuador v. Mackay, 742 F.3d 860, 864 (9th Cir. 2014). Federal Rule of Civil

Procedure 26(a)(2)(B) unambiguously requires an expert witness to disclose the

“basis and reasons” for opinions he or she will express and the “facts or data”

supporting those opinions. Fed. R. Civ. P. 26(a)(2)(B)(I), (ii). Insofar as the

** The Honorable Dean D. Pregerson, United States District Judge for the Central District of California, sitting by designation.

2 district court interpreted Rule 26 to require the disclosure of all communications

with subcontractors, regardless whether those communications had any influence

on Martin’s opinions or testimony, that interpretation was erroneous.

2. Martin did not engage in bad faith conduct or conduct “tantamount to bad

faith.” Cf. B.K.B. v. Maui Police Dep't, 276 F.3d 1091, 1108 (9th Cir. 2002).

There was no evidence before the district court that Martin omitted any facts, data,

or reasons underpinning his expert opinions. The exclusion of certain

subcontractor information from Martin’s otherwise exhaustive list of disclosed

materials was not conduct tantamount to bad faith where the omitted information

was irrelevant. Nor was Martin’s testimony inconsistent. Martin explained that he

did not intentionally omit relevant information, but instead followed his usual

practice of omitting information that he did not consider to be important, including

the names of subcontractors. Martin’s admission of unintentional conduct referred

not to his conscious decision to omit subcontractor information, but rather to his

potentially erroneous identification of certain relevant information as immaterial.1

The district court erroneously assessed Martin’s testimony, and abused its

1 As discussed above, Martin’s identification of the subcontractor information at issue as irrelevant was consistent with Rule 26.

3 discretion in determining that Martin engaged in bad faith conduct or conduct

tantamount to bad faith.

Accordingly, the monetary sanctions and finding of misconduct against

Martin are VACATED.

3. Martin lacks standing to appeal the striking of his testimony. The district

court’s written order distinguished the personal sanctions against Martin from the

striking of his testimony. Although some courts have found that findings of

misconduct or explicit reprimands can constitute appealable sanctions, we are

aware of no authority for the proposition that the striking of Martin’s testimony,

which itself had little impact on Martin, constitutes a cognizable injury sufficient to

confer appellate standing. See, e.g., Lynn v. Gateway Unified Sch. Dist., 771 F.3d

1135, 1140 (9th Cir. 2014); cf. United States v. Talao, 222 F.3d 1133, 1138 (9th

Cir. 2000).

AFFIRMED in part, REVERSED in part, VACATED in part.