Opinion
Civil No. 3:02-CV-0378-H (consolidated with 3:02-CV-2239-H)
March 12, 2003
ORDER
Before the Court are Defendant's Motion for Continuance of Trial and Pre-Trial Deadlines, filed February 28, 2003, and Plaintiff's Response, filed March 7, 2003. Defendant's Motion also calls for re-opening the discovery period which ended February 3, 2003. Having considered the pleadings before the Court as well as the case history and previous Orders, the Court is of the opinion that neither a continuance of the trial and pre-trial deadlines nor reopening discovery is warranted. Defendant's Motion for Continuance is DENIED.
SO ORDERED.
MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiff's Motion to Exclude Defendant's Experts, filed February 3, 2003, Defendant's Response, filed February 18, 2003, and Plaintiff's Reply, filed February 26, 2003.I. Background
Trial in the above-captioned matter is set on the April, 2003 docket. The Agreed Amended Scheduling Order of November 4, 2002 calls for the completion of discovery by February 3, 2003. Plaintiff was required to "file a written designation of its expert witnesses and otherwise comply with Rule 26(a)(2) by noon, December 2, 2002." Scheduling Order at 2, ¶ 4. Defendant was required to "file a written designation of its expert witnesses and otherwise comply with Rule 26(a)(2) by noon, December 23, 2002." Id. On December 18, 2002, Defendant filed an Opposed Motion to Extend Rebuttal Expert Designation Deadline. On December 23, 2002, before the Court ruled on Defendant's Motion to Extend, Defendant filed its Expert Designation thereby making the motion to extend time moot. Plaintiff timely filed this motion to exclude Defendant's experts Owen Lyon ("Lyon"), and Roger Star ("Star"). Plaintiff argues both that Defendant's experts failed to comply with the technical requirements of Federal Rule 26(a)(2)(B) and that there is no factual basis for their stated opinions.
II. Defendant's Renewed Motion for Extension of Rebuttal Expert Designation Deadline
In its Response, Defendant includes a renewed motion to extend the rebuttal expert designation deadline. Def.'s Resp. at 2. Defendant requests that the Court extend the deadline (which occurred on December 23, 2002) to allow for a 21-day extension. The Court first notes, that the deadline of December 23, 2002 already represents a one-month extension of the deadline set in the Court's initial Scheduling Order. In fact, the December 23, 2002 deadline was agreed and submitted by the parties on October 31, 2002. Further, the Court notes that the reason given by the mooted Motion to Extend Time for its difficulty in timely compliance with the Agreed Amended Scheduling Order was the difficulty of the Christmas season, something that was clearly predictable in advance. Defendant also complains that it had only 3 weeks to find rebuttal witnesses while Plaintiff had almost one year to find their witnesses. However, these deadlines were agreed and submitted by the parties themselves. If Defendant required more time to comply with the Order, it should have provided for that time in the Agreed Amended Scheduling Order. Having both selected the date of the deadline and voluntarily filed these reports on December 23, 2002, Defendant may not now be heard to complain that it was forced to so file. As the deadline for rebuttal expert disclosure occurred 8 weeks before Defendant filed this renewed motion to extend time, and as discovery is now closed, the Court does not see any reasonable basis for re-opening the time to file expert reports. Furthermore, a 21-day extension from the date of this Order would have Defendant's expert reports filed after the scheduled trial date in this case. Defendant's Renewed Motion to Extend Time is DENIED.
III. Plaintiff's Motion to Exclude Defendant's Experts
A. Federal Rule 26(a)(2)(B)'s Requirements
Under the Agreed Amended Scheduling Order of November 4, 2002, Defendant was required to submit its expert designations in compliance with Rule 26(a)(2) by December 23, 2002. While Defendant submitted its Expert Designation on that date, Plaintiff argues that Defendant failed to comply with the Scheduling Order because Defendant's designations fail to meet the requirements of Federal Rule 26(a)(2)(B). Rule 26(a)(2)(B) requires that the disclosure "be accompanied by a written report prepared and signed by the witness." FED. R. CIV. P. 26(a)(2)(B). The expert's report
"shall contain a complete statement of all opinions to be expressed and the basis and reasons therefor; the data or other information considered by the witness in forming the opinions; any exhibits to be used as a summary of or support for the opinions; the qualifications of the witness . . .; the compensation to be paid for the study and testimony; and a listing of any other cases in which the witness has testified as an expert at trial or by deposition within the preceding four years." Id. (emphasis added).
Furthermore, Rule 26(e) requires a party to supplement or correct the disclosure or response to include information thereafter acquired. Fed.R.Civ.P. 26(e). Under Rule 37 of the Federal Rules, "a party that without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1) . . . is not, unless such failure is harmless, permitted to use as evidence at trial . . . any witness or information not so disclosed." Fed.R.Civ.P. 37(c)(1).
B. Daubert Requirements
The Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., defined the role of the district court as gatekeeper in determining both the reliability of those persons intending to offer expert testimony in scientific matters, and the relevancy of that proposed testimony. 509 U.S. 579 (1993). This gatekeeper's role encompasses the proposed testimony of all designated experts. Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999). The proponent of an expert witness must prove by a preponderance of the evidence that the testimony is reliable. The proponent must show "some objective, independent validation of the expert's methodology," but need not prove that the testimony is correct. Moore v. Ashland Chem., Inc., 151 F.3d 269, 276 (5th Cir. 1998) (en banc) cert. denied 526 U.S. 1064 (1999). In examining the qualifications and reliability of such designated experts, the court uses the factors set forth by the Supreme Court in Daubert as a starting point, and may supplement those factors with other considerations tending to establish the reliability and relevance of the proposed testimony. Tanner v. Westbrook, M.D., 174 F.3d 542, 547 (5th Cir. 1999).
Under the Federal Rules of Evidence, a qualified expert witness may testify "if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case." FED. R. EVID. 702.
IV. Analysis
Plaintiff argues that Defendant's expert reports from Lyon and Star do not comply with the requirements of Rule 26(a)(2)(B) and should be stricken because the testimony therein is conclusory and lacks an adequate factual basis. Plaintiff's also raise a generalized Daubert objection to the competency of the reports. The Court will examine each expert's report separately.
A. Lyon's Report
Lyon's report indicates that it is based upon a "preliminary review" of the Expert Report of Rodney W. Sowards ("Sowards"). Having reviewed Sowards's report, along with various general economic reports for the industry and region, Lyon states that recent adverse economic trends "have a significant effect on the Company's sales and profits, and must be accounted for in determining lost profits." Lyon's Report at 1. The remaining half of the two-page report is a list of questions that Lyon had about the specific facts of the case as well as a list of required documents. Id. at 2. The report concludes that "there are many economic influences and management decisions that were not taken into account that will significantly influence the calculations provided by the expert [Sowards] report." In sum, the report concludes that Soward should have taken the general state of the economy into consideration when determining lost profits, Lyon does not provide an alternative measure of lost profits, but merely attacks the methodology of Soward in failing to consider unspecified negative economic indicators. Lyon also states that "management decisions" were not taken into account by Soward. However, there is no indication of a factual predicate for that conclusion. Experts must give a factual predicate for their opinions in their reports. Sierra Club v. Cedar Point Oil Co. Inc., 73 F.3d 546, 571 (5th Cir. 1996) ( cert. denied 519 U.S. 811 (1996)); Elder v. Tanner, 205 F.R.D. 190, 193 (E.D. Tex. 2001). Expert reports should be "detailed and complete" so as "to avoid the disclosure of `sketchy and vague' expert information." Sierra Club at 571. Under (he terms of the Agreed Amended Scheduling Order, Defendants were required to file a complete statement of all opinions to be expressed and the basis and reasons therefor. Lyon's expert report falls short of that standard. Of his two-page report, a full page was dedicated to questions that he would need to have answered to "address the specific issues" raised by Soward's report. At best, Lyon's report may be considered complete if the ONLY issue that Lyon will testify to at trial is that of economic factors not taken into consideration by Soward. However, if that is the case Lyon's report suffers from a Daubert problem; Lyon is not qualified to testify as to the effect of economic indicators on expected profits. His resume indicates that he is a certified public accountant, licensed real estate broker, and possesses securities and insurance licenses. None of those licenses make him qualified to opine on economic trends and their likely effects on profits. Nor is there any other indicator in Lyon's resume that he is qualified to opine on economic issues. Along with its Response, Defendant also filed an affidavit by Lyon which apparently attempts to supplement his expert report. Def.'s App. at 002. The affidavit addresses many issues not raised in the initial report. Filing of this affidavit does not remedy the problem here. The Agreed Amended Scheduling Order and Rule 26(a) both clearly require that the initial disclosure be complete and detailed. Supplemental filings "are not intended to provide an extension of the deadline by which a party must deliver the lion's share of its expert information." Sierra Club at 571. Due both to the failure to comply with the requirements of the Agreed Amended Scheduling Order and to Lyon's lack of qualification to testify as to economic issues, Lyon's expert opinion is stricken.
Sowards is one of Plaintiff's experts.
For example, the affidavit concludes that "Sowards failed to consider Space Maker's wholesale sales prior to 2002," "Sowards places blame on the condition of the equipment without evaluating whether or not the equipment met the agreed upon specifications," "Sowards' . . . opinions were flawed because he did not consider industry standards for similar equipment," and "Sowards' opinions are not trustworthy because he did not review enough information to render a complete evaluation." Def.'s App. at 002. None of these conclusions were included in the initial report.
B. Star's Report
The relevant portion of Star's report for this analysis is entitled in part "General Preliminary Statements/Opinion." Star's Report at 3. One page of the "report" is a bullet-point list of the information that Star received from the Defendant. Star states that the reports of Plaintiff's experts Robert L. Mayes ("Mayes") and Sowards "are interesting but do not correlate with realistic expectation or warranties normally expected for USED machinery." Id. There is no description for the factual predicate of that conclusion. Star goes on to surmise that there must have been quite a bit of communication involved in developing the business relationship between the parties to this lawsuit and that "to thoroughly analyze would require the availability of machinery and all relative data for a professional analysis." Id. Star details three video-tapes sent by Defendant that he viewed which were (apparently) videos of the equipment that is the subject matter of this suit. It is not clear from the report when the videos were taken. Star then concludes, on the basis of the screening of the videos, that Defendant "successfully provided a full working roll forming `used machinery' production line" to Plaintiff. Id. at 4. Star then opines that "[u]nwritten instructions and possibly misunderstanding and lack of expert experience on what it typically takes to run, maintain, and operate a roll forming line could have been experienced" by Plaintiff. Id. Star completes his report with the statement that "incomplete familiarization of the actual machinery and time to interview, examine machine, and analysis will be required to provide a complete expert opinion." Id. (emphasis added). In short, Star indicates that the "report" submitted to the Court on December 23, 2002 was incomplete. As previously discussed, complete expert opinions were required to be filed by December 23, 2002 under the terms of the Agreed Amended Scheduling Order. Star's report does not meet the requirements of the Scheduling Order or Rule 26(a)(2)(B). Defendant has since filed an affidavit by Star that essentially proposes that his report was complete as filed in December. Def.'s App. at 005. As discussed above, such a supplemental filing is not sufficient to remedy an incomplete initial report. Furthermore, the affidavit of Star does not even provide any additional information, but only states that the "documents and information I reviewed were sufficient to support the conclusion I reached." Def.'s App. at 005.
The Court also finds that the testimony of Star, as presently put forth in his report, would not assist the trier of fact in determining the case, as is required by Daubert. Conclusory statements unsupported by facts will not assist the trier of fact and are therefore nor relevant or admissible at trial. Star's expert report is therefore stricken.
V. Conclusion
The "expert reports" of Lyon and Star are stricken. Neither Lyon nor Star will be permitted to testify as to the issues contained in their "expert reports."
SO ORDERED.