Pacific Steel Group v. Commercial Metals Company

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 PACIFIC STEEL GROUP, Case No. 20-cv-07683-HSG

8 Plaintiff, ORDER DENYING REQUEST TO STRIKE EXPERT REPORTS 9 v. Re: Dkt. Nos. 355, 356 10 COMMERCIAL METALS COMPANY, et al., 11 Defendants. 12

13 Before the Court are Defendants Commercial Metals Company and its subsidiaries’ 14 (collectively, “CMC”) brief in support of striking expert reports, Dkt. No. 355, and Plaintiff 15 Pacific Steel Group’s (“Pacific Steel”) brief in opposition, Dkt. No. 356. The Court DENIES 16 CMC’s request to strike the expert reports. 17 I. BACKGROUND 18 In response to a reply report Pacific Steel filed on behalf of its expert, Dr. Patrick Kennedy 19 (“Dr. Kennedy”), CMC filed a supplemental “Declaration” of its expert, Dr. Ramsey Shehadeh 20 (“Dr. Shehadeh”), arguing that such a response was allowed because Dr. Kennedy’s reply 21 “presented updated and wholly new calculations and methods.” Dkt. 190-14, Ex. 12 at ¶ 1. 22 Pacific Steel moved to strike Dr. Shehadeh’s declaration as an expert sur-reply report filed in 23 violation of the Court’s Scheduling Order. Dkt. 205 at 3. The Court denied the motion to strike, 24 finding that the filing of Dr. Shehadeh’s declaration was substantially justified as a matter of basic 25 fairness so that CMC could respond to the “entirely new, previously undisclosed analyses and 26 calculations” included in Dr. Kennedy’s reply report. See Dkt. No. 349 at 9–10. In its order, the 27 Court also directed the parties to submit simultaneous briefs explaining why the Court should not 1 strike both the new analyses in Dr. Kennedy’s reply report and Dr. Shehadeh’s response. See id. 2 at 10, fn. 3. On October 11, 2024, the Court heard oral argument from the parties and took the 3 briefs under submission. See Dkt. No. 426. 4 II. DISCUSSION 5 CMC argues that the Court should strike the new analyses in Dr. Kennedy’s reply report as 6 an improperly disclosed expert opinion, and consequently should also strike Dr. Shehadeh’s 7 response “to narrow the issues and save valuable trial time.” See Dkt. No. 355 at 3–4. Pacific 8 Steel argues that striking Dr. Kennedy’s opinions is unwarranted because the disclosure was 9 harmless, even if untimely, and lesser (if any) sanctions are sufficient. See Dkt. No. 356 at 2, 4. 10 To be clear, the Court reiterates its conclusion as reflected in its prior order that Dr. 11 Kennedy’s reply report plainly included new analyses and calculations and thus violated Rule 26. 12 See Dkt. No. 349 at 9. CMC was therefore justified in submitting Dr. Shehadeh’s declaration to 13 address the previously undisclosed analyses. Id. at 10. However, under the circumstances, the 14 Court declines to strike Dr. Kennedy’s reply opinions and Dr. Shehadeh’s responsive opinions. 15 Rule 37 precludes a party from relying on expert testimony that was not timely disclosed 16 under Rule 26 “unless the failure was substantially justified or is harmless.” See Fed. R. Civ. P. 17 37(c)(1); Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). 18 Courts assessing the harm of a Rule 26(a) violation generally consider the following factors: 19 (1) prejudice or surprise to the party against whom the evidence is offered; (2) the ability of that 20 party to cure the prejudice; (3) the likelihood of disruption of the trial; and (4) bad faith or 21 willfulness involved in not timely disclosing the evidence. Marcus v. Air & Liquid Sys. Corp., 22 No. 22-CV-09058-HSG, 2024 WL 2882562, at *3 (N.D. Cal. June 7, 2024) (citing Lanard Toys 23 Ltd. v. Novelty, Inc., 375 F. App’x 705, 713 (9th Cir. 2010)). 24 Here, the Court finds that Plaintiff’s tardy disclosure of Dr. Kennedy’s reply opinions has 25 not harmed CMC. CMC’s brief fails to identify any specific prejudice CMC has suffered or 26 would suffer if Dr. Kennedy is allowed to testify to those opinions, arguing instead that the Court 27 should strike Dr. Kennedy’s reply opinion and Dr. Shehadeh’s response to conserve judicial 1 “{clourts routinely strike similar improperly disclosed expert opinions,” and that striking both 2 || analyses would be “preferable to allowing both” in order to “streamline the trial”). And at the 3 || hearing, CMC’s counsel similarly did not articulate any actual or potential prejudice, given that 4 || the Court has allowed it to present Dr. Shehadeh’s responsive opinions. See Dkt. No. 349 at 10. 5 || As aresult, notwithstanding Pacific Steel’s violation, the parties are now on equal footing. 6 || Further, while neither side has deposed the opposing expert on the filings at issue, and depositions 7 are not practicable at this point because trial begins in one week, these circumstances affect both 8 || parties equally. As such, permitting Dr. Kennedy to testify to the analyses in his reply report and 9 || Dr. Shehadeh to testify to his responsive opinion will not meaningfully disrupt trial or harm either 10 || party. The Court therefore finds that, on balance, Pacific Steel’s violation of Rule 26 does not 11 warrant striking Dr. Kennedy’s reply opinions. See JH Kelly, LLC v. AECOM Tech. Servs., Inc., 12 605 F. Supp. 3d 1295, 1307 (N.D. Cal. 2022) (denying motion to exclude expert testimony after 13 || finding that Rule 26 violation was “inconsequential,” and because moving party “failed to 14 || adequately articulate how it suffered prejudice”). The Court accordingly DENIES CMC’s request 15 || to strike Dr. Kennedy’s reply report and Dr. Shehadeh’s response, Dkt. No. 355. a 16 Finally, while the Court does not find exclusion of Dr. Kennedy’s reply report and Dr. 3 17 Shehadeh’s response justified under Rule 37, it is still considering whether other sanctions against 18 || Pacific Steel may be appropriate, including ordering Pacific Steel to reimburse CMC for the costs 19 of preparing its sur-reply. See Fed. R. Civ. P. 37(c)(1) (“[iJn addition to or instead of” excluding 20 || evidence a party failed to timely disclose, the court “may order payment of the reasonable 21 expenses, including attorney’s fees, caused by the failure”). The Court will make that 22 || determination before the conclusion of the case. 23 IT IS SO ORDERED. 24 || Dated: 10/16/2024 25 Abr □□□□ HAYWOOD S. GILLIAM, JR. 26 United States District Judge 27 28