Kaiser Aluminum Warrick, LLC v. US Magnesium LLC

District Court, S.D. New York·Decided October 4, 2023·No. 1:22-cv-03105·Unknown

Opinion

BURBIDGE | ]}] USDC SDNY TRIAL LA\f{ DOCUMENT PARKSIDE 1] ELECTRONICALLY FILED [jer □□□□ 215 SOUTH STATE ST ) 355-6677 CAROLYN LEDUC SALT Lake City, uf] DOC #: TILE NUMBER DATE FILED: 10/04/2023 ) 355-2341 September 29, 2023 Plaintiff shall file a letter in response of no more than five VIA ECF pages by Monday, October 9, 2023. A conference is . scheduled for October 11, 2023 at 11:30 am in Courtroom Dooce eean 17-D, US Courthouse, 500 Pearl Street, New York, NY. Southern District of New York APPLICATION GRANTED 500 Pearl Street, Room 750 KPhawed{ Yulen New York, NY 10007 Hon. Katharine H. Parker, U.S.M.J. 10/04/2023 Re: = Kaiser Aluminum Warrick, LLC vy. US Magnesium, LLC, Case No. 1:22-cv-03105-JGK-KHP Dear Judge Parker: On behalf of Defendant US Magnesium, LLC (“US Mag”), we write pursuant to Rule II.B of the Court’s Individual Practices and Local Rule 37.2 to request a pre-motion conference concerning US Mag’s proposed motion to strike Kaiser Aluminum Warrick, LLC’s (“Kaiser”) untimely disclosure of many new third-party witnesses. As the Court is aware, this matter involves a commercial dispute between Kaiser and US Mag, two industrial manufacturing companies. Pursuant to the terms of a Magnesium Supply Agreement, US Mag agreed to supply magnesium to Kaiser from the start of December 2020 through the end of December, 2022. Due to catastrophic and unforeseen equipment failures, however, US Mag declared force majeure in the fall of 2021 and thereafter reduced its supply of magnesium to Kaiser. In this suit Kaiser has challenged the legitimacy of US Mag’s force majeure. Kaiser seeks to recover not only cover damages, but also “lost profits” that allegedly arose when Kaiser, purportedly short on magnesium, declared force majeure to its own customers in the summer of 2022. Kaiser’s “lost profits” theory was asserted in an Amended Complaint filed over a year ago. Yet throughout the fact discovery period, Kaiser never identified a single third-party witness whom it planned to call to testify in support of its asserted “lost profits” damages. Months ago, US Mag served subpoenas on a few of Kaiser’s customers—not because Kaiser had signaled it planned to call any representatives from these customers to testify, but rather because there were certain issues that US Mag considered exploring from these third-party entities. Upon review of documents produced by these third-party entities, US Mag later determined not to go forward with these third-party depositions. That decision was made just a few weeks ago—with the end of fact discovery quickly approaching. That decision, importantly, was made in part because Kaiser itself had never signaled that it planned to call any third-party witness to testify. The few depositions scheduled, accordingly, were canceled. However, one

Hon. Katharine H. Parker September 29, 2023 Page 2 business day after US Mag disclosed that it no longer intended to depose those few third-party witnesses, Kaiser suddenly served a new “supplemental” disclosure in which Kaiser disclosed, for the first time, that Kaiser may call dozens of new third-party witnesses. Specifically, Kaiser disclosed the following new witnesses: Justin Driscoll Jennifer Tsai Charles Rogers Elena Carroll Michael Arena Abby Crowley Logan Schnur Ian Wilson Amado Nieto Bryce Roach Mark Sidorski Laura Storbrauck Philip Burgess Teri Turschman Jason Began Francesco Basolli Robert McHale Christie Breves Kaiser’s complete supplemental disclosure is attached hereto as Exhibit A. The new witnesses are identified starting on pages 6-7 of the disclosure. On September 20, 2023, the parties conferred over this discovery dispute. Kaiser did not purport to have any excuse or justification for its untimely disclosures. There is no dispute, in other words, that Kaiser has known about these witnesses since the start of this case. In the discussion concerning this dispute, Kaiser proposed allowing a two-week extension to the fact discovery deadline—as though two weeks of additional time could somehow cure the prejudice of the untimely disclosure of 18 new witnesses. Kaiser also argued that there should ostensibly be no prejudice to US Mag, since the names of some of these witnesses may have appeared on some documents appearing somewhere in Kaiser’s production. Kaiser’s production, however, contained well over 250,000 documents. The fact that a name happened to appear on a document produced somewhere in the discovery process does not constitute sufficient “disclosure” of the witness under Rule 26. See, e.g., Downey v. Adloox, No. 16-CV-1689 (JMF), 2018 WL 794592, at *1 (S.D.N.Y. Feb. 8, 2018) (observing that mere “knowledge of the existence of a witness does not satisfy the Rule Hon. Katharine H. Parker September 29, 2023 Page 3

26(a)(1)(A) disclosure obligation; that obligation is fulfilled only if [Plaintiffs] informed [Defendants] that [they] might call the witness in support of its claims or defenses”) (internal quotation marks omitted). Within the Second Circuit, courts have considerable discretion in deciding whether to impose sanctions, and if so, what sanctions to impose. See Design Strategy, Inc. v. Davis, 469 F.3d 284, 294 (2d Cir. 2006). Evaluating this issue, courts typically consider four factors: “(1) the party's explanation for the failure to comply with the [disclosure requirement]; (2) the importance of the testimony of the precluded witness[ |; (3) the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony; and (4) the possibility of a continuance.” Patterson v. Balsamico, 440 F.3d 104, 117 (2d Cir. 2006) (internal quotation marks omitted) (first alteration in original). In this case, as mentioned above, Kaiser has no excuse for its untimely disclosures. Also, the witnesses are not critical to the case—as demonstrated by Kaiser’s own neglect to even consider these witnesses until the eve of the close of discovery. US Mag has been prejudiced by the untimely disclosures, since fact discovery has now concluded. Finally, an extension of time would not cure the prejudice. US Mag’s discovery was, appropriately, planned and carried out in light of the disclosures that Kaiser had made about whom it intended to call at trial. Even the depositions that already took place would have been planned and executed differently, had US Mag known and anticipated that Kaiser planned to call these 18 additional witnesses. US Mag should not be put to the burden of extending fact discovery for many more months to accommodate these late disclosures, nor should US Mag suffer the prejudice of having to revisit the discovery that has already occurred. The untimely disclosures, therefore, should be stricken. The parties engaged in a follow-up meet and confer on September 26, 2023, and were not able to come to resolution on this issue. In sum, US Mag seeks an order striking Kaiser’s untimely disclosure of witnesses.

Respectfully submitted, BURBIDGE | MITCHELL Carolyn LeDuc Carolyn LeDuc

cc: All Counsel of Record via ECF

EXHIBIT A UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK KAISER ALUMINUM WARRICK, LLC, Plaintiff, -against- Case No. 22-cv-03105-JGK US MAGNESIUM, LLC, Defendant.

PLAINTIFF KAISER ALUMINUM WARRICK, LLC’S SECOND SUPPLEMENTAL INITIAL DISCLOSURES PURSUANT TO FED. R. CIV. P. 26(a)(1) Plaintiff Kaiser Aluminum Warrick, LLC (“Kaiser”), by its attorneys McDermott Will & Emery LLP, hereby makes the following supplemental initial disclosures pursuant to Rule 26(a)(1) of the Federal Rules of Civil Procedure.

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Related

Patterson v. Balsamico
440 F.3d 104 (Second Circuit, 2006)
Design Strategy, Inc. v. Davis
469 F.3d 284 (Second Circuit, 2006)