DR Distribs. v. 21 Century Smoking, Inc.
| Decision Date | 12 January 2023 |
| Docket Number | 12 CV 50324 |
| Parties | DR Distributors, LLC, Plaintiff-Counterdefendants, v. 21 Century Smoking, Inc., and Brent Duke, Defendants-Counterclaimants, v. CB Distributors, Inc., and Carlos Bengoa, Counterdefendants. |
| Court | U.S. District Court — Northern District of Illinois |
Plaintiff's motion to strike defendants' expert report, Dkt. 535, is granted. Defendants' motion to strike or, in the alternative, for leave to file a sur-reply, Dkt. 558, is granted in part and denied in part. The Court allows Defendants leave to file the sur-reply, which was attached to the motion. On the Court's own motion, under both its inherent authority and Federal Rule of Civil Procedure 37(b) Defendants and their counsel are sanctioned (jointly and severally) $6,000 total for violating this Court's January 19, 2021, sanctions order by “using any information not disclosed to Plaintiff by June 1 2015.” Dkt. 439, at 9. The sanction is payable to the Clerk of Court for the District Court for the Northern District of Illinois and must be paid by February 13, 2023.
Satellite litigation of satellite litigation-that's the current status of this case. As frustrating as that situation may be what's more maddening is Defendants' blatant violation of this Court's January 19, 2021, sanctions order. Dkt. 439. And even more maddening is that despite admitting to the facts establishing the violation, Defendants repeatedly argue that they didn't violate the order.
Defendants' colossal discovery errors resulted in this Court's 256-page discovery sanctions order. Dkt. 439; DR Distribs., LLC v. 21 Century Smoking, Inc., 513 F.Supp.3d 839 (N.D. Ill. 2021). Among the sanctions, this Court barred Defendants “from using any information not disclosed to Plaintiff by June 1, 2015” and “preclude[d] Defendants' expert witnesses from testifying that their opinions would not change had they considered the documents and information not disclosed before June 1, 2015.” Dkt. 439, at 9; DR Distribs. 513 F.Supp.3d at 863.
Incredibly, after the sanctions order, Defendants suddenly identified 20 bankers' boxes of documents. That trove of documents was not the subject of the January 19, 2021, sanctions order. This revelation begot Plaintiff's second sanctions motion that is now more than fully briefed. Dkt. 497.
After Plaintiff filed the second sanctions motion, Defendants and their former defense counsel responded. Dkts. 530-33. As part of their response, Defendants included a new expert report by Mr. Brian Brown. According to Defendants, the report's purpose was to contradict Plaintiff's “unsupported opinions and arguments” in the second sanctions motion. Dkt. 559, at 2. Plaintiff did not offer an expert opinion in support of the second sanctions motion.
The new expert report offers three opinions. All three opinions are based upon new analyses using documents not disclosed on or before June 1, 2015. The first opinion is essentially a reiteration of an opinion provided in 2016. But notably, the report states, “My prior opinion has not changed.” Dkt. 544-1, at 216. The second and third opinions are new. Like the first opinion, these opinions are also based on new analyses conducted by the expert using documents Defendants unabashedly admit were not disclosed before June 1, 2015. Dkt. 559, at 5-6 (); Dkt. 544-1, at 220-21, 223, 225-26.
Plaintiff's initial response to this report was a motion to strike. Dkt. 535, at 3-5. But, additionally, in its reply, Plaintiff understandably blew a gasket. Among other things, Plaintiff noted that the report violated the Court's sanctions order barring Defendants from using information not disclosed before June 1, 2015, and barring experts from stating that their opinions had not changed after considering information not produced by June 1, 2015. Dkt. 554, at 32-8; Dkt. 439, at 9.
So, there's now a motion to strike expert opinions used in response to a second sanctions motion. In an attempt to stop the never-ending filings in this case, the Court ordered Plaintiff's motion to strike to be taken up with the briefing on the second sanctions motion. Dkt. 536.
Not to be outdone, however, more than a month after Plaintiff filed the reply brief, Defendants filed their very own motion to strike. Dkt. 558. In the alternative, Defendants argued that they should be allowed to file a sur-reply to what they perceived were new arguments raised in the reply. Id. at 2. Among other things, this filing functioned as a response to the motion to strike. See Dkt. 559 (Defendant's Memorandum in Support of Motion to Strike or on the alternative, Defendants' Sur-Reply).
So, now there are two separate satellite motions to a satellite motion. The Court has already explicitly warned the parties about wasting its time with filings. Dkt. 453 ( ). Although Plaintiff and Defendants apparently have unlimited time and resources, the Court does not. And, in this latest round of filings, Defendants have not heeded this Court's multiple clear warnings.
Defendants' response brief, which attached and relied upon Mr. Brown's second report, plainly violates this Court's January 19, 2021, order. Any attempt to argue the contrary is simply gaslighting.
As to Mr. Brown's first opinion, after having reviewed information and conducting an analysis, he explicitly states, “My prior opinion has not changed.” And here's what the Court's sanction order barred, among other things: “This bar precludes Defendants' expert witnesses from testifying that their opinions would not change had they considered the documents and information not disclosed before June 1, 2015.” Dkt. 439, at 9; DR Distribs., 513 F.Supp.3d at 863. But, more importantly, this opinion-just like the second and third opinions-relies upon information not disclosed to Plaintiff by June 1, 2015. Id.
As to Mr. Brown's first, second, and third opinions, Defendants explicitly admit that he relied upon materials not disclosed by June 1, 2015. Here's the admission:
Mr. Brown's new opinion relied on the same Zen Cart files that he had previously reviewed in preparing his March 25, 2016 SEO Report. These Zen Cart files were identified and produced to plaintiff during written expert discovery and depositions at the end of 2015 and early 2016. The only new materials reviewed or relied upon were the Zen Cart Admin Log produced by current defense counsel in the March 19, 2021 Production and a copy of the backup log Mr. Brown found in a set of backup server files he downloaded as part of his review of documents for his March 25, 2016 SEO Report.
Dkt. 559, at 5 (emphasis added).
Again, at the risk of being repetitive, the Court's sanction order stated, “Defendants are barred from using any information not disclosed to Plaintiff by June 1, 2015.” Dkt. 439, at 9. And, at the risk of stating the self-evident, “the end of 2015 and early 2016” as well as “March 19, 2021” are after June 1, 2015. It doesn't take Captain Obvious to know that this is the direction of time's arrow. See Runkel v. City of Springfield, 51 F.4th 736, 745 (7th Cir. 2022).
At a hearing and in a filing, Defendants claimed that Mr. Brown's report and their response brief did not violate the Court's order. At the hearing, counsel did not address either (1) the fact that Mr. Brown's order explicitly stated, “My prior opinion has not changed,” or (2) that to reach the new opinions in his report, Mr. Brown admittedly relied upon information not disclosed to Plaintiff by June 1, 2015. Dkt. 549. After not addressing the clear issue head on, counsel asserted, “I don't believe we violated the Court's ruling in terms of him expressing an opinion that the new documents wouldn't change his opinion.” Dkt. 549, at 15. In Defendants' filing, they again failed to address either of these points, while still claiming that the report did not violate the Court's order. Dkt. 559, at 2 n.1. Indeed, after admitting that Mr. Brown relied upon documents and information first produced at the end of 2015 and early 2016 and on March 19, 2021-nearly four years after June 1, 2015-Defendants simply stated that the purpose of the report was Dkt. 559, at 5. Although that may have been the alleged purpose of the report, it is undisputed that the report itself was based on “information not disclosed to Plaintiff by June 1, 2015.”
The only argument the Court can tease from Defendants' statements at the hearing and in their filing is that they were somehow operating under the belief that the January 19 2021, sanctions order only applied when Defendants were disputing the merits of the case. To the extent that's Defendants' argument, it is patently meritless and sanctionable. The order is clear. This argument would read an exception into the order and would have the January 19, 2021, sanctions order include the following additional provision: “Defendants are barred from using on the merits of the case any information not disclosed to Plaintiff by June 1, 2015.” But, like statutes, court orders are not interpreted to incorporate exceptions. Glymph v....
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