Matthew Enterprise, Inc. v. Chrysler Group LLC

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S REVISED MOTION TO STRIKE NEW WORK PROFFERED BY EDWARD M. STOCKTON [RE: ECF 179]

          BETH LABSON FREEMAN United States District Judge

         The parties to this antitrust action have submitted expert reports on a schedule set forth in a case management order. See ECF 127. Defendant Chrysler now seeks to strike fourteen tabs and related opinions in Plaintiff’s expert’s Rebuttal Report for offering new evidence, analysis, and theories that exceed the proper scope of rebuttal. Plaintiff counters that each challenged tab directly responds to and properly rebuts an opinion offered by Defendant’s expert Glenn Woroch. For the reasons stated below, the Court GRANTS IN PART and DENIES IN PART Defendant’s Motion.^[1]

         I. BACKGROUND

         Pursuant to the case schedule, Plaintiff Stevens Creek’s expert Edward Stockton executed an expert report on October 30, 2015, see Stockton Initial Report (“Stockton”) at 30, ECF 135-3; Chrysler’s expert Dr. Woroch executed an expert report on December 22, 2015, see Woroch Report (“Woroch”) at 55, ECF 156-11; and Mr. Stockton filed a rebuttal expert report on January 13, 2016, see Stockton Rebuttal Report (“Stockton Rebuttal”) at 24, ECF 156-13. Defendant contends that fourteen of the tabs in Mr. Stockton’s Rebuttal Report exceed the scope allowed for rebuttal.

         On February 9, 2016, Defendant filed an administrative motion seeking leave to submit another report by Dr. Woroch to respond to the allegedly new opinions. ECF 154. Because Defendant failed to identify the opinions and analyses it hoped to supplement, much less provide a sense of the proposed supplementation, the Court denied this request for a carte blanche but stated that Defendant could file a motion to strike “specific opinions . . . Defendant believes . . . surpassed the scope allowed for rebuttal.” Id. at 3. Defendant has now filed such a motion.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 26, which governs parties’ disclosure obligations, demands that parties “make [their] disclosures at the times and in the sequence that the court orders.” Fed.R.Civ.P. 26(a)(1)(D). Parties must accompany their disclosures of “the identity of any [expert] witness . . . [with] a written report” that “contain[s] (i) a complete statement of all opinions the witness will express and the basis and reasons for them.” Fed.R.Civ.P. 26(a)(2).

         “[W]hen a court's scheduling order allows rebuttal reports, a party may only submit an expert rebuttal ‘if the evidence is intended solely to contradict or rebut evidence on the same subject matter identified by another party.’” In re Asbestos Products Liab. Litig. (No. VI), No. 09-CV-74351X, 2012 WL 661673 at *1 (E.D. Pa. Feb. 8, 2012) (citing Fed. R. Civ. Pro. 26(a)(2)(c)); see also Columbia Grain, Inc. v. Hinrichs Trading, LLC, No. 3:14-CV-115-BLW, 2015 WL 6675538 at *2 (D. Idaho Oct. 30, 2015); Century Indem. Co. v. Marine Grp., LLC, No. 3:08-CV-1375-AC, 2015 WL 5521986 at *3 (D. Or. Sept. 16, 2015). “The proper function of rebuttal evidence is to contradict, impeach or defuse the impact of the evidence offered by an adverse party.” Bowman v. Int'l Bus. Mach. Corp., No. 1:11-CV-0593-RLY-TAB, 2013 WL 1857192 at *7 (S.D. Ind. May 2, 2013) (quoting Peals v. Terre Haute Police Dept., 535 F.3d 621, 630 (7th Cir.2008)). As a result, “[r]ebuttal reports ‘necessitate a showing of facts supporting the opposite conclusion of those at which the opposing party's experts arrived in their responsive reports.’” R & O Const. Co. v. Rox Pro Int'l Grp., Ltd., No. 2:09-CV-01749-LRH-LR, 2011 WL 2923703, at *2 (D. Nev. July 18, 2011) (quoting Bone Care Int'l, LLC v. Pentech Pharmaceuticals, Inc., 2010 WL 389444 (N.D. Ill. Sep. 30, 2010)).

         However, “[r]ebuttal expert testimony is limited to ‘new unforeseen facts brought out in the other side's case.’” Columbia Grain, 2015 WL 6675538 at *2 (quoting Century Indem., 2015 WL 5521986 at *3). “Rebuttal testimony cannot be used to advance new arguments or new evidence, ” id. at *2, nor are they the place to “set forth an alternate theory.” R&O, 2011 WL 2923703 at *5. “[S]imply because one method [to support an expert opinion] fails, the other does not become ‘rebuttal.’” Id. (quoting Morgan v. Commercial Union Assur. Cos., 606 F.2d at 555). In other words, “[a] rebuttal report is not the time to change methodologies to account for noted deficiencies; instead, it is to respond to criticisms of such methodologies.” Bowman, 2013 WL 1857192 at *7.

         A party that, without substantial justification, fails to disclose information as required by Rule 26(a) by, for example, exceeding the proper scope of rebuttal, may not “unless such failure is harmless, [] use as evidence at trial . . . any witness or information not so disclosed.” Fed.R.Civ.P. 37(c)(1). “The sanction is automatic and mandatory unless the sanctioned party can show that its violation . . . was either justified or harmless.” R&O, 2011 WL 2923703 at *3 (citing Salgado v. Gen. Motors Corp., 150 F.3d 735, 742 (7th Cir. 1998)) (emphasis added).^[2]

         III. DISCUSSION

         Defendant seeks to strike fourteen of Mr. Stockton’s Rebuttal Tabs and the opinions that relate to them for improperly introducing new arguments, evidence, and/or theories. Plaintiff responds that each challenged opinion directly rebuts Dr. Woroch’s opinions. As a general matter, the Court notes that although Plaintiff accurately states that each of the contested tabs and related opinions is referenced in the main body of the Rebuttal Report as responsive to Dr. Woroch’s Report, the Court does not find such a general statement sufficient. Therefore, the Court considers each challenged opinion and its supporting analysis in turn to determine whether each is, in fact, proper rebuttal.

         A. Rebuttal Tab 3 and Related Opinions

         Defendant first asks the Court to strike Rebuttal Tab 3 and related opinions, asserting that Mr. Stockton defined “dealer area” using drive time for the first time there, having used a different definition in his Initial Report. Mot. at 7. Plaintiff responds that Mr. Stockton refers to this definition only to rebut an opinion offered by Dr. Woroch, not to replace Mr. Stockton’s prior “containment area” analysis. Opp. at 6. Plaintiff additionally argues that Mr. Stockton first conducted and used the drive-time analysis in his Initial Report.

         Having reviewed Mr. Stockton’s deposition testimony and his reports, the Court agrees with Plaintiff. While Defendant asserts that Mr. Stockton admitted in his deposition that this definition is new, this argument misconstrues Mr. Stockton’s testimony. See Stockton Depo. at 623:24-625:17 (testifying “I don’t think [defining dealer area based on drive time] is new, ” “[c]ertainly the underlying data would be [in the Initial Report”), ECF171-4. Furthermore, turning to the reports themselves, the Court finds that this driver-time based definition of “dealer area” is not new: Mr. Stockton’s Initial Report included a tab comparing “dealer area[s] based on drive time.” See Stockton Tab 9 at 2, ECF 171-5. Rather, Defendant’s argument appears to conflate two concepts Mr. Stockton defined differently in his Initial Report: “dealer area” and “containment area, ” see Stockton ¶ 23 & n.5.^[3] Because Rebuttal Tab 3 does not offer new evidence or analysis, it does not exceed the proper scope of rebuttal. Accordingly, Defendant’s Motion to Strike Rebuttal Tab 3 and related opinions is DENIED.

         B. Rebuttal Tab 6 and Related Opinions

         The Court next considers Defendant’s Motion to Strike Rebuttal Tab 6, which presents a regression that Mr. Stockton admitted during his deposition “was not in the original report, ” see Stockton Depo at 578:18-20, but is offered to rebut Dr. Woroch’s unequivocal conclusion that car companies do not engage in intra-brand competition. Opp. at 7.

         The Court agrees with Plaintiff that Mr. Stockton did not discuss inter-brand competition in his Initial Report and Dr. Woroch’s extreme position therefore reflected “new unforeseen facts brought out in the other side's case.” Columbia Grain, 2015 WL 6675538 at *2 (quoting Century Indem., 2015 WL 5521986 at *3). Therefore, Rebuttal Tab 6 and related opinions are properly offered “to contradict, impeach or defuse the impact of the evidence offered by an adverse party.” See Bowman, 2013 WL 1857192 at *7. Accordingly, the Court DENIES Defendant’s Motion to Strike Rebuttal Tab 6 and related opinions.

         C. Rebuttal Tab 7 and Related Opinions

         Defendant next seeks to strike Rebuttal Tab 7 and related opinions based on arguments that mirror those considered above for Rebuttal Tab 6: Defendant notes that Mr. Stockton admits that the analysis is “new . . . [and] didn’t go into the affirmative report at all, ” see Stockton Depo. at 611:24-612:1, while Plaintiff responds that Mr. Stockton did not offer such analysis in his Initial Report because he “did not anticipate . . . that Dr. Woroch would question the entire concept of intra-brand competition.” Opp. at 7. For the reasons stated above, the Court finds that Rebuttal Tab 7 and related opinions fall within the proper scope of rebuttal and Defendant’s Motion to Strike Rebuttal Tab 7 and related opinions is therefore DENIED.

         D. Rebuttal Tab 10 and Related Opinions

         Defendant next asks the Court to strike Mr. Stockton’s but-for objectives, which Defendant contends appear for the first time in Rebuttal Tab 10 and related opinions. Mot. at 9. Defendant notes that Dr. Woroch highlighted in his report that “[n]either Stevens Creek nor Stockton [had] perform[ed] th[e] exercise” of proposing but-for objectives, see Woroch ¶ 36, and that Mr. Stockton admitted that he “didn’t present alternative objectives” in his Initial Report, Stockton Depo. at 298:6-17. Plaintiff responds that Rebuttal Tab 10 does not offer “but for” objectives, but ...