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CEC Entertainment, Inc. v. Kobra Properties

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


September 17, 2008

CEC ENTERTAINMENT, INC., PLAINTIFF,
v.
KOBRA PROPERTIES AND STONEGATE CONSTRUCTION, INC., DEFENDANTS.

AND RELATED CROSS-ACTIONS.

ORDER DENYING VINTAGE DRYWALL'S MOTION TO ENLARGE TIME TO DISCLOSE EXPERT REPORT

The matter before the Court is third-party defendant Vintage Drywall's motion to enlarge the time in which to disclose an expert report. Vintage Drywall seeks an order modifying the pretrial scheduling order ("Scheduling Order") to extend the expert disclosure deadline from December 3, 2007 to September 10, 2008 in order to disclose an expert report that was not included with its expert disclosure made on November 28, 2007. Defendant Stonegate Construction, Inc. ("Stonegate") and third-party defendant Custom Spray Systems, Inc. ("Custom Spray") oppose the motion. For the reasons set forth below, Vintage Drywall's motion is DENIED.*fn1

I.

A. Legal Standard

Because Vintage Drywall failed to submit an expert report in a timely manner, it must obtain a modification of the Scheduling Order in order to avoid exclusion of expert testimony. A district court's pretrial scheduling order shall not be modified absent a showing of "good cause." Fed.R.Civ.P. 16(b); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 608 (9th Cir. 1992). "Rule 16(b)'s 'good cause' standard primarily considers the diligence of the party seeking the amendment. The district court may modify the pretrial schedule 'if it cannot reasonably be met despite the diligence of the party seeking the extension.' " Johnson, 975 F.2d at 609 (quoting Fed.R.Civ.P. 16 advisory committee's note (1983 amendment)). The focus of the inquiry is on the moving party's reasons for seeking modification, not the prejudice caused to the party opposing the modification. Id. If the moving party is not diligent, the inquiry ends. Id.

To demonstrate diligence, the moving party may be required to show: (1) that it was diligent in assisting the Court in creating a workable Rule 16 scheduling order; (2) that its noncompliance with the scheduling order's deadline occurred or will occur notwithstanding diligent efforts to comply because of "the development of matters which could not have been reasonably foreseen or anticipated at the time of the Rule 16 scheduling conference;" and (3) that it was diligent in seeking amendment of the scheduling order. Jackson v. Laureate, Inc., 186 F.R.D. 605, 608 (E.D. Cal. 1999). Finally, the Ninth Circuit has stated that "carelessness is not compatible with a finding of diligence and offers no reason for a grant of relief." Johnson, 975 F.2d at 609.

B. Opinion

Vintage Drywall offers several justifications for its request to extend the expert disclosure deadline from December 3, 2007 to September 10, 2008 in order to disclose an expert report that was not included with its expert disclosure made on November 28, 2007.*fn2 First, Vintage Drywall asserts that it was unable to timely produce the expert report due to the expert's unanticipated work and family obligations and travel. Second, Vintage Drywall asserts that it did not attempt to disclose the expert report until July 23, 2008, nearly 8 months after the expert disclosure deadline, because it had been participating in mediation and hoped that it would settle out of the case. The Courts finds that Vintage Drywall has not demonstrated the requisite good cause to warrant modifying the Scheduling Order to extend the time to disclose an expert report. Specifically, Vintage Drywall failed to demonstrate diligence in complying with the Scheduling Order's expert disclosure deadline or in seeking to amend the Scheduling Order once it became apparent that they could not comply with the order. For instance, Vintage Drywall did not articulate a persuasive explanation as to why the expert report was not completed before the expert disclosure deadline. Vintage Drywall's claim that the expert report could not be timely completed due to the expert's unanticipated work and family obligations and travel is supported only by counsel's declaration rather than a declaration from the expert. In addition, Vintage Drywall did not articulate a persuasive explanation as to why an extension of time was not sought earlier. Indeed, requesting the Court to modify the Scheduling Order to extend the expert disclosure deadline approximately eight months after the deadline does not constitute diligence. Vintage Drywall's participation in mediation and expectation of settling out of the case does not amount to good cause justifying its failure to seek leave to modify the Scheduling Order at an earlier date. To the extent Vintage Drywall asserts that it overlooked its responsibility to disclose the expert report, the Court finds that this excuse amounts to nothing more than carelessness. As such, this excuse is not a sufficient reason to grant the relief requested by Vintage Drywall. See Johnson, 975 F.2d at 609 (carelessness is not compatible with a finding of diligence and offers no reason for a grant of relief). Accordingly, there exists no substantial justification for Vintage Drywall's failure to disclose the expert report as required by the Scheduling Order.

As a result, the expert testimony may be introduced only if Vintage Drywall's failure to disclose the required information is "harmless." See Fed.R.Civ.P. 37(c)(1) (explaining that information may be introduced if the failure to disclose was substantially justified or harmless); Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). The burden is on Vintage Drywall to prove harmlessness. Id. at 1107.*fn3 In this regard, Vintage Drywall argues that its failure to disclose the expert report is harmless for the following reasons: (1) the identity of its expert was disclosed in November 2007, including his qualifications and a brief description of the testimony he would provide and the information he would base it on; (2) the expert report was produced to all parties on July 23, 2008, eight days before the discovery cut-off date; (3) the parties have agreed to complete other expert depositions after the discovery cut-off date; (4) the other parties will not suffer prejudice because the trial is not scheduled until December 8, 2008; and (5) it is unlikely that rebuttal expert reports will be necessary in response to the expert report. In addition, Vintage Drywall argues that the Court should allow the expert report to be introduced because without the report its ability to defend against this action will be substantially impaired insofar as the expert's testimony is critical to establishing whether or not its work was the cause of the underlying damages alleged by plaintiff. Stonegate and Custom Spray counter by arguing that Vintage Drywall's failure to disclose the expert report cannot be considered harmless because (1) the deadline for completion of discovery passed on July 31, 2008; (2) Stonegate and Custom Spray will not have the opportunity to supplement their own expert disclosures or retain rebuttal experts as these deadlines have long past; and (3) Vintage Drywall's untimely disclosure has denied Stonegate and Custom Spray the opportunity to depose the expert prior to the pre-trial dispositive motion deadline.

Vintage Drywall has failed to satisfy its burden of proof. It has not adequately demonstrated that Stonegate and Custom Spray would not be prejudiced by not having the opportunity to rebut Vintage Drywall's expert's testimony or depose the expert before the pre-trial dispositive motion deadline. The time for discovery and supplemental expert reports has passed. Moreover, the hearing on this motion was set for September 3, 2008, the dispositive motion deadline. Thus, allowing Vintage Drywall to disclose the expert report at this stage of the litigation would require the Court to extend the other deadlines in the Scheduling Order, including the supplemental expert disclosure deadline, the discovery deadline and the dispositive motion deadline. As such, Vintage Drywall's failure to comply with this Court's Scheduling Order and the Federal Rules of Civil Procedure cannot be said to be harmless. Accordingly, Vintage Drywall's motion to enlarge the time in which to disclose an expert report is denied. Vintage Drywall's untimely disclosure was neither substantially justified nor harmless, and therefore Rule 37(c)(1)'s automatic exclusion applies.

II.

For the reasons set forth above, Vintage Drywall's motion is DENIED.

IT IS SO ORDERED.


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