Pacific Steel Group v. CMC Steel Fabricators, INC.

CourtDistrict Court, S.D. California
DecidedApril 11, 2025
Docket3:22-cv-00892
StatusUnknown

This text of Pacific Steel Group v. CMC Steel Fabricators, INC. (Pacific Steel Group v. CMC Steel Fabricators, INC.) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pacific Steel Group v. CMC Steel Fabricators, INC., (S.D. Cal. 2025).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA

10 PACIFIC STEEL GROUP, Case No.: 22-cv-0892-L-DEB 11

Plaintiff, 12 ORDER GRANTING PLAINTIFF’S v. MOTION TO SHIFT EXPERT 13 COSTS CMC STEEL FABRICATORS, INC, 14 et al.,

15 Defendants. [DKT. NO. 101] 16 17 Before the Court is Plaintiff Pacific Steel Group’s (“Pacific Steel”) Motion to Shift 18 Expert Costs. Dkt. No. 100; Dkt. No. 101. Defendants CMC Steel Fabricators, Inc., CMC 19 Steel US, LLC, and CMC Rebar West (“CMC Rebar”) oppose the Motion, and Pacific 20 Steel replied. Dkt. Nos. 115, 117.1 For the reasons discussed below, the Court GRANTS 21 Pacific Steel’s Motion. 22 I. INTRODUCTION 23 Pacific Steel and CMC Rebar compete in the rebar furnish-and-install (“F&I”) 24 industry. Pacific Steel’s amended complaint alleges CMC Rebar submitted below-cost bids 25 in violation of the California Unfair Practices Act, Cal. Bus. & Prof. Code §§ 17043, 17044, 26

27 1 The Court GRANTS Pacific Steel’s motions to file documents under seal and for leave 28 1 and the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. 2 Dkt. No. 11. CMC Rebar denies the allegations. Dkt. No. 30. 3 During fact discovery, Pacific Steel requested that CMC Rebar produce F&I pricing 4 templates, which Pacific Steel states are industry-standard pricing forms supporting rebar 5 F&I bids. Dkt. No. 101 at 8; Dkt. No. 101-2 at 4. Pacific Steel represents its experts rely 6 on the pricing templates to opine whether CMC Rebar submitted below-cost bids. 7 Dkt. No. 101 at 8. 8 CMC Rebar has produced approximately 4,000 templates. Many, however, were 9 produced after Pacific Steel’s experts completed their reports. These late productions have 10 required Pacific Steel’s experts to revise their reports. Through this Motion, Pacific Steel 11 seeks to shift the costs of the latest round of revisions to CMC Rebar. Pacific Steel also 12 seeks an order requiring CMC Rebar to search its employees’ laptops for the 199 templates 13 that remained missing when Pacific Steel filed its Motion. 14 II. PROCEDURAL BACKGROUND 15 The Court issued the Scheduling Order on August 23, 2023, and granted four 16 deadline extensions at the parties’ joint requests. Dkt. Nos. 40, 53, 62, and 69. The final 17 extensions set a July 26, 2024 fact discovery cut-off, a September 20, 2024 deadline for 18 Pacific Steel to produce revised opening expert reports, and a November 7, 2024 expert 19 discovery cut-off. Dkt. Nos. 62, 75. 20 On August 22, 2023, Pacific Steel served its First Set of Requests for Production on 21 CMC Rebar. One request sought “[a]ny and all DOCUMENTS REFLECTING YOUR 22 Pricing Templates for projects bid by [CMC Rebar] from January 1, 2015 up to and 23 including the present.” Dkt. No. 101-2 at 4. On September 21, 2023, CMC Rebar agreed 24 to “produce non-privileged documents responsive to this Request that are in its possession, 25 custody, or control insofar as such documents are located during CMC Rebar’s reasonable 26 search and review.” Dkt. No. 101-3 at 12. 27 28 1 On April 5, 2024, CMC Rebar produced more than 2,000 pricing templates it 2 represented “comprise [D]efendants’ California non-Exhibit A F&I pricing templates for 3 the October 31, 2017 through December 31, 2022 period.” Dkt. No. 144-1.2 4 On May 6, 2024, Pacific Steel notified CMC Rebar that the number of produced 5 templates “is far too low” and questioned whether additional templates existed.3 In 6 response, CMC Rebar produced 1,000 additional templates in May and June of 2024. 7 Dkt. No. 115 at 7; see also Dkt. No. 101-1 at 2. 8 On July 26, 2024, CMC Rebar produced 2,800 bid proposals. Dkt. No. 144-4 at 3.4 9 Pacific Steel, however, could not locate pricing templates corresponding to approximately 10 1,000 bid proposals. Id. On August 6, 2024, Pacific Steel informed CMC Rebar that there 11 “appears to be a significant gap in Defendants’ production of pricing templates” and 12 provided a spreadsheet listing the missing templates. Dkt. No. 144-4 at 2. Later that month, 13 CMC Rebar produced another 662 templates. Dkt. No. 101-1 at 2. 14 Because this new production came after Pacific Steel served its expert reports, 15 Pacific Steel’s experts revised their reports and damage calculations to account for the 16 additional templates. Id. Although Pacific Steel represents it spent approximately $100,000 17 18

19 20 2 Exhibit A to the amended complaint identified twenty F&I jobs that Pacific Steel included as “examples” of CMC Rebar “aggressively bidding [F&I] rebar projects in a targeted way 21 to prevent Pacific Steel from gaining a foothold in the market.” Dkt. No. 11 at 9–11 & Ex. A. The pricing template production at issue concerned jobs not included in Exhibit A. 22 See Dkt. No. 144-4 at 2. 23 3 Dkt. No. 144-2 at 3 (“It appears that prior to Friday’s production Defendants had produced 24 only 27 templates for 2018. We believe this is far too low and would have expected to see 25 100s of templates per year. Similarly, in 2022 we received 55 pricing templates for NoCal when prior years had well over 100. Can you advise as to whether you anticipate producing 26 more templates; and, if not, explain why there is such a small number for such years.”). 27 4 Bid proposals are submitted to customers, and a pricing template should correspond to 28 1 revising its expert reports, Pacific Steel does not seek to shift the costs of those revisions. 2 Dkt. No. 101 at 11.5 3 On October 8, 2024, CMC Rebar produced a bid report with its expert disclosure. 4 Dkt. No. 115 at 7–8; see also Dkt. No. 101 at 11.6 From this bid report, Pacific Steel 5 determined and notified CMC Rebar that another approximately 2,700 templates were 6 missing from CMC Rebar’s production. Dkt. No. 101 at 12; Dkt. No. 144-5 at 2. In 7 response, CMC Rebar located and produced another 266 templates (59 on November 26, 8 2024, 42 on December 9, 2024, and 165 on December 16, 2024). Dkt. No. 101-1 at 2–3. 9 Pacific Steel asserts its experts must again revise their reports to account for CMC Rebar’s 10 most recent template productions and, through this Motion, seeks to shift those costs to 11 CMC Rebar. 12 III. LEGAL STANDARDS 13 Pacific Steel’s Motion seeks cost-shifting under Federal Rules of Civil Procedure 14 26(g) and 37(c). Dkt. No. 101 at 2, 7, 15–16. 15 A. Rule 26(g) 16 Federal Rule of Civil Procedure 26(g)(1)(B) requires an attorney or party responding 17 to a discovery request to certify that every response or objection “to the best of the person’s 18 knowledge, information, and belief, formed after a reasonable inquiry” is (i) consistent 19 with the Federal Rules of Civil Procedure and warranted by existing law, (ii) not interposed 20 21

22 23 5 CMC Rebar represented its production of 662 additional templates was the product of “an extensive, multistep process to collect, process, search, and sample across over 2.5 24 terabytes of information,” [and] “careful coordination between outside counsel, CMC 25 Rebar sales personnel, company IT personnel, and document vendors over the course of multiple weeks . . . and countless hours of work, including by attorneys and company 26 personnel.” Dkt. No. 72 at 6. 27 6 Pacific Steel explains that a bid report includes proprietary details from CMC Rebar’s 28 1 for an improper purpose, and (iii) neither unreasonable nor unduly burdensome or 2 expensive. Fed. R. Civ. P. 26(g)(1)(B). 3 Further, under Rule 26(g)(3), “[i]f a certification violates this rule without 4 substantial justification, the court . . .

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Pacific Steel Group v. CMC Steel Fabricators, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/pacific-steel-group-v-cmc-steel-fabricators-inc-casd-2025.