Lithuanian Commerce Corp. v. Sara Lee Hosiery

177 F.R.D. 205, 1997 U.S. Dist. LEXIS 18928, 1997 WL 742205
CourtDistrict Court, D. New Jersey
DecidedNovember 26, 1997
DocketNo. 96-1949
StatusPublished
Cited by41 cases

This text of 177 F.R.D. 205 (Lithuanian Commerce Corp. v. Sara Lee Hosiery) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lithuanian Commerce Corp. v. Sara Lee Hosiery, 177 F.R.D. 205, 1997 U.S. Dist. LEXIS 18928, 1997 WL 742205 (D.N.J. 1997).

Opinion

OPINION

ORLOFSKY, District Judge.

This is an appeal from a magistrate judge’s order imposing sanctions for Appellants’ eleventh hour substitution of expert witnesses in a commercial dispute over the distribution and sale of pantyhose manufactured by Appellees in Mexico and shipped to Appellants in Lithuania. This appeal presents a procedural issue which appears to have eluded resolution in the Circuit Courts of Appeals: whether a party’s failure to raise issues before a magistrate judge in the first instance constitutes a waiver of those issues on appeal to the district court from the magistrate judge’s determination of a non-dispositive issue? For the reasons which follow, I conclude that it does.

During discovery in this case, the Honorable Joel B. Rosen, United States Magistrate Judge, extended the deadline for Appellants to serve their expert witness reports several times. The final scheduling order established a firm date for serving expert witness reports and explicitly warned that violations would result in the exclusion of expert witness testimony and the imposition of sanctions pursuant to the Federal Rules of Civil Procedure.

Despite the extensions and the warning, however, and after the expiration of the final deadline, Appellants moved for leave to substitute a new expert witness in place of their previously identified primary expert who had already been deposed by Appellees. In an effort to move this case to a trial on its merits, the magistrate judge accommodated this request and granted the motion. The magistrate judge conditioned his ruling, however, on Appellants’ payment of the expenses and attorneys’ fees incurred by Appellees as a result of the substitution of the new expert.

Appellants never objected to this disposition by the magistrate judge and, in fact, appeared appropriately grateful for the court’s permission to use their last-minute expert witness. In letters to the court re[207]*207questing a reduction in the amount of the sanctions, Appellants even acknowledged the magistrate judge’s authority to impose the alternative monetary sanctions. Nevertheless, Appellants now attempt to reverse their litigation strategy and seek' relief from those sanctions by way of an appeal to this Court.

As explained below, such dilatory conduct cannot be allowed. Because Appellants failed to present their objections to the magistrate judge in the first instance, I will not consider them on this appeal and the order of the magistrate judge imposing sanctions will be affirmed. This matter will be remanded to the magistrate judge, however, for a determination of the reasonable expenses and attorneys’ fees incurred by Appellees.

I. BACKGROUND

On April 29, 1996, Lithuanian Commerce Corporation Ltd. filed this action against Sara Lee Hosiery, Sara Lee Hosiery International, Sara Lee International and Sara Lee Corporation (collectively “Sara Lee”). Sara Lee filed a counterclaim and third-party complaint against Lithuanian Commerce Corporation Ltd. and two of its principals, Algis Vasys and Laima Zajanckauskiene (collectively “LCC”). Pursuant to Rule 16 of the Federal Rules of Civil Procedure and Local Civil Rule 72.1, Magistrate Judge Rosen was assigned to supervise pre.-trial discovery in this case.

On June 26,1996, Magistrate Judge Rosen entered Scheduling Order No. 1 which established September 16, 1996, as the date by which all of LCC’s expert reports were to be served on Sara Lee’s counsel. Subsequent scheduling orders extended this date to December 31, 1996, and again to April 15, 1997. See Scheduling Order No. 2, dated October 30, 1996; Scheduling Order (the “Final Scheduling Order”), dated March 21, 1997.

Each of these scheduling orders set forth LCC’s deadline for serving expert reports in a paragraph which included the sentence: “No expert opinion testimony shall be admitted at trial with respect to any witness for whom this procedure has not been timely followed.” Moreover, each of these scheduling orders warned, in boldface capital letters: “THE FAILURE OF A PARTY OR ATTORNEY TO OBEY THIS ORDER MAY RESULT IN IMPOSITION OF SANCTIONS UNDER RULE 16(f), FED. R. CIV. P.”

During the course of discovery, LCC identified a total of seven expert witnesses. LCC first identified Dr. Byiung Jun Park as its product expert, but subsequently terminated his services and identified Julius Hyman (“Hyman”) as its primary product expert. LCC later named three Lithuanians and Dr. Joseph Zimmerman as additional expert witnesses. These maneuvers caused LCC to request several extensions of the deadline for the completion of expert discovery, all of which were granted by Magistrate Judge Rosen.

On February 28, 1997, at a hearing before Magistrate Judge Rosen, Gregory Saputelli, Esq., counsel for LCC, represented that LCC had provided its final expert report. See Sara Lee’s Ex. G at 33. In fact, when Sara Lee requested an extension, counsel for LCC “vigorously objected to any extension of time” for Sara Lee to serve its expert reports. Letter from James R. Thompson, Esq., dated March 25,1997, Sara Lee’s Ex. L at 2. That letter further stated that LCC “does not require an extension.” Id.

Nevertheless, on July 3, 1997, LCC filed a motion for leave to substitute a new expert witness, Dr. Bernard Miller, in place of Hyman. The motion was referred to Magistrate Judge Rosen pursuant to 28 U.S.C. § 636(b)(1)(A) and Local Civil Rule 72.1. According to LCC, LCC learned that Hyman was unfit and unqualified to serve as an expert witness in this case at his deposition on June 19, 1997. Hyman resigned the day after his deposition. Certification of Mr. Thompson in Support of Motion for Leave to Utilize Substitute Expert Witness, LCC’s Ex. 1, at 5. Sara Lee objected to this motion primarily on the ground that LCC could have, and should have, known of such serious problems with its own key witness much earlier.

This motion presented the first of three opportunities before Magistrate Judge Rosen for LCC to object to the imposition of sanctions. LCC filed its motion because the [208]*208scheduling orders entered by Magistrate Judge Rosen and the Federal Rules of Civil Procedure would have otherwise precluded the use of a new expert’s report and testimony almost three months after the end of expert discovery. See Memorandum of Law in Support of LCC’s Motion for Leave to Utilize Substitute Expert Witness, LCC’s Ex. 2, at 6 (reciting factors relevant to determining whether to permit testimony by a witness identified “in an untimely manner”).

Magistrate Judge Rosen then convened a hearing on July 22, 1997, at which LCC’s motion was discussed at length and at which LCC had ample opportunity to object on the record to the imposition of sanctions. The magistrate judge expressed his concern to Mr.

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Bluebook (online)
177 F.R.D. 205, 1997 U.S. Dist. LEXIS 18928, 1997 WL 742205, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lithuanian-commerce-corp-v-sara-lee-hosiery-njd-1997.