Commercial Litigation and Arbitration

Experts — “Self-Executing” Sanction of Exclusion for Failure to Supply Report Compliant with Rule 26(a)(2)(B) and Failure to Supplement Even When Undisclosed Methodology Was Attacked Pretrial

Rembrandt Vision Technologies, L.P. v. Johnson & Johnson Vision Care, Inc., 2013 U.S. App. LEXIS 16283 (Fed. Cir. Aug. 7, 2013):

We agree with JJVC that the court correctly granted judgment as a matter of law. The district court did not abuse its discretion when it excluded Dr. Beebe's testimony under the Federal Rules of Civil Procedure. Rule 26 requires an expert witness to disclose an expert report that contains "a complete statement of all opinions the witness will express and the basis and reasons for them." Fed. R. Civ. P. 26(a)(2)(B)(i). The purpose of the expert disclosure rule is to "provide opposing parties reasonable opportunity to prepare for effective cross examination and perhaps arrange for expert testimony from other witnesses." Reese v. Herbert, 527 F.3d 1253, 1265 (11th Cir. 2008) (quotations omitted).

Failure to comply with Rule 26(a) has significant consequences, including Rule 37's "self-executing sanction." Fed. R. Civ. P. 37(c), advisory committee notes. An expert witness may not testify to subject matter beyond the scope of the witness's expert report unless the failure to include that information in the report was "substantially justified or harmless." Fed. R. Civ. P. 37(c)(1). The burden is on the party facing sanctions to prove that its failure to comply with Rule 26(a) was "substantially justified or harmless." Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1107 (9th Cir. 2001).

Here, it is undisputed that Dr. Beebe failed to produce a report containing "a complete statement of all opinions the witness will express and the basis and reasons for them." Fed. R. Civ. P. 26(a)(2)(B)(i). The issue is thus whether, under Rule 37(c)(1), it was "substantially justified or harmless" that Dr. Beebe waited until trial to disclose the testing methodology that he claims he actually employed.

The district court did not err in concluding that the late disclosure was not substantially justified. The court rightly found that "[t]here is simply no excuse for Dr. Beebe waiting until cross-examination to disclose his testing procedures." JMOL Order, 282 F.R.D. at 664. Dr. Beebe submitted his expert report nearly six months prior to trial. Id. at 663-64; J.A. 96. Leading up to trial, the contents of his expert report were the subject of his deposition and were at issue in the pre-trial briefing, including dispositive motions. JMOL Order, 282 F.R.D. at 663-64. JJVC moved to exclude Dr. Beebe's testimony on the basis that his Shore D testing did not comply with industry standards. Id. at 658. JJVC also moved for summary judgment on the ground that the testing was not sufficient to raise a genuine issue of material fact as to the Shore D Hardness values of the accused lenses. Id. Nevertheless, even though the adequacy of his Shore D Hardness testing methodology was in dispute prior to trial, Dr. Beebe never attempted to supplement his expert report. As the district court observed, "Dr. Beebe thus apparently either did not review his expert report or forgot how he had actually performed the test." Id. at 664. Nothing in the record indicates that Dr. Beebe's failure to disclose his testing methodology was substantially justified.

We also reject Rembrandt's argument that Dr. Beebe's tardy disclosure was harmless. JJVC prepared its noninfringement defense based on the methodology disclosed in Dr. Beebe's expert report, and opted to challenge that methodology rather than introduce competing expert testimony. JMOL Order, 282 F.R.D. at 664. Nothing during the course of the proceedings alerted JJVC to the possibility that Dr. Beebe would change his testimony. To the contrary, Rembrandt stood behind Dr. Beebe's expert report at summary judgment and Dr. Beebe testified to the veracity of his report on direct examination. Id. at 657-58. Dr. Beebe even initially defended his testing methodology upon cross-examination. Id. at 658-59. Dr. Beebe only recanted his expert report when, after being "repeatedly challenged on cross-examination," he was "[u]nable to explain how his written procedures complied with the standards" that govern hardness testing. Id. at 659, 668. While Dr. Beebe characterized the errors in his report as "typo[s]," it is undisputed that the shift in his testimony was both substantive and substantial. Such a late change in course significantly hampered JJVC's ability to adequately cross-examine Dr. Beebe and denied it the opportunity to develop or introduce competing evidence. The court did not err in finding that Dr. Beebe's failure to disclose his testing methodology harmed JJVC.

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