Omaha Public Power District v. Siemens Aktiengesellschaft, Case No. 8:99CV352 (D. Neb. 2/28/2002), Case No. 8:99CV352.

Decision Date28 February 2002
Docket NumberCase No. 8:99CV352.
PartiesOMAHA PUBLIC POWER DISTRICT, Plaintiff, v. SIEMENS AKTIENGESELLSCHAFT, a/k/a SIEMENS AG, a foreign corporation, Defendant. ARGUS GESELLSCHAFT MBH, Cross-Claim Plaintiff, v. SIEMENS AKTIENGESELLSCHAFT a/k/a SIEMENS AG, Cross-Claim Defendant. SIEMENS AKTIENGESELLSCHAFT a/k/a SIEMENS AG, Cross-Claim Plaintiff, v. ARGUS GESELLSCHAFT MBH Cross-Claim Defendant.
CourtU.S. District Court — District of Nebraska

LAURIE SMITH CAMP, District Judge.

This matter is before the court on the Motion for Summary Judgment of Cross-Claim Plaintiff and Cross-Claim Defendant Argus Gesellschaft MBH ("Argus") (Filing No. 188) and Argus's Motion to Strike the Affidavit of Isaac Avitan (Filing No. 200). Argus seeks summary judgment against Plaintiff Omaha Public Power District ("OPPD") on all claims, and Argus seeks summary judgment against Defendant and Cross-Claim Plaintiff Siemens Aktiengesellschaft ("Siemens AG") on its cross-claim against Argus. The Court has reviewed the evidence submitted by Argus in support of its motion for summary judgment (Filing No. 189), and the evidence submitted by Siemens AG in opposition to Argus's motion (Filing 197), which includes the Affidavit of Isaac Avitan that Argus seeks to strike.

To the extent Argus's motion for summary judgment is asserted against Plaintiff OPPD, it is denied as moot. On October 30, 2001, OPPD filed a Motion to Voluntarily Dismiss Argus, (Filing No. 183), and on November 28, 2001, the Court granted OPPD's motion for a voluntary dismissal of Argus and dismissed Argus without prejudice (Filing No. 194). That decision left OPPD's claims against Siemens AG, and Argus's and Siemens AG's cross-claims against each other.1 Accordingly, the Court will consider Argus's motion for summary judgment as it relates to Siemens AG's cross-claims against it.

Argus and Siemens AG have fully briefed their positions on the summary judgment motion and submitted evidence (Filing Nos. 189 and 197, respectively) in support of those positions. Whether the Court will consider the Affidavit of Isaac Avitan, offered by Siemens AG in opposition to the summary judgment motion, is material to the disposition of the motion, and, therefore, the Court initially considers Argus's Motion to Strike the Affidavit of Isaac Avitan.

A very brief outline of undisputed facts may be helpful. On September 14, 1995, there was a fire at an OPPD power plant located in Sarpy County, Nebraska, referred to as Unit # 3, that resulted in costly property damage to OPPD. The plant housed a V84.2 model 105 megawatt gas combustion turbine generator that was designed by Siemens AG. The combustion turbine was constructed, in part, using an Emergency Stop Valve ("ESV") that was designed and manufactured by Siemens AG and two Argus ball valves, which were designed by Siemens AG and manufactured by Argus. See Index of Evidence of Argus in Support of Motion for Summary Judgment, Volume 1, at Tab 1, OPPD Sarpy County Unit # 3 Anti-Ice Pipe Investigation ("Fire Investigation Report").

As a result of an investigation performed after the fire, it was determined that an accumulation of fuel oil leaked into an anti-icing line, ignited, and caused the fire. In order for the fuel oil to have reached the anti-icing line, the fuel oil had to flow through the ESV and the Argus ball valves. The ESV failed for reasons that are in dispute. When the ESV failed, the Argus ball valves were subjected to pressures that exceeded the design parameters, causing the Argus ball valves to open and allowing the fuel oil into the anti-icing line. Id.

An understanding of the procedural background of this case is also relevant. The Complaint was filed on August 26, 1999 (Filing No. 1). On May 15, 2001, Siemens AG's expert disclosures were timely made and included the initial report of Isaac Avitan (Filing No. 96). Isaac Avitan has a Ph.D. in electrical engineering. On June 4, 2001, Siemens AG filed an Amended Answer and Cross-Claim against Argus. Dr. Avitan's report was supplemented on August 17, 2001, and served on August 29, 2001 (Filing No. 161). Dr. Avitan's deposition was properly noticed and taken on September 25, 2001 (Filing Nos. 156 and 178). Argus filed its motion for summary judgment on November 2, 2001 (Filing No. 188). No additional amendments to Avitan's opinions were presented until the Affidavit of Isaac Avitan, dated December 1, 2001, was filed in opposition to Argus's motion for summary judgment on December 3, 2001 (Filing No. 197). Argus's Motion to Strike Dr. Avitan's Affidavit was filed on December 14, 2001 (Filing No. 200). This case has received a special setting scheduling trial to begin on February 25, 2002 (Filing No. 203).

Motion to Strike Affidavit of Isaac Avitan

The basis for Argus's Motion to Strike is that Dr. Avitan's Affidavit "embodies an expert opinion critical of the Argus ball valve that was not disclosed by Siemens AG . . . pursuant to Federal Rule of Civil Procedure 26(a)(2)," (Filing No. 200). If the Court finds a violation of Rule 26(a)(2), then Argus contends that Rule 37 requires that the Affidavit be stricken unless Siemens AG can show that its delay in disclosure was either justified or harmless.

Rule 26 requires the proponent of expert testimony to serve opposing parties with a detailed expert report, in writing, that is "prepared and signed by the witness." Fed.R.Civ.P. 26(a)(2). The report must contain the following specified sections: (1) a complete statement of all opinions to be expressed; (2) the basis and the reasons for the opinions expressed; (3) the data or other information considered by the expert in forming the opinions; (4) any exhibits to be used as a summary of or support for the opinions; (5) the qualifications of the witness, including a list of all publications authored by the witness within the preceding ten years; (6) the compensation to be paid for the study and testimony; and (7) 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. Fed.R.Civ.P. 26(a)(2)(B).

"Since failure to disclose in a timely manner is equivalent to failure to disclose," Siemens AG must produce its evidence in accordance with Rule 26(a)(2)(B) in a timely manner or risk sanctions under Rule 16 and 37. Trost v. Trek Bicycle Corp., 162 F.3d 1004, 1008 (8th Cir. 1998) citing Sylla-Sawdon v. Uniroyal Goodrich Tire Co., 47 F.3d 277, 284 (8th Cir. 1995). See also Bonin v. Chadron Comm. Hosp., 163 F.R.D. 565 (D.Neb. 1995).

Based on an examination of Dr. Avitan's initial report, amended report, and deposition testimony, the Court agrees that the opinions challenged in the Motion to Strike were disclosed for the first time in the Avitan Affidavit. One of the opinions provided in the Affidavit relates to the cause of the fire:

The failure of the Ball Valve Assemblies [manufactured by Argus] to perform, as required by the design requirements set by Siemens AG, most likely contributed to the cause of the fire, as such failure most likely increased the amount of fuel oil, which otherwise would not have accumulated in the anti-icing line, if the Ball Valve Assemblies had performed as required by Siemens AG, and most likely increased the speed at which such oil accumulated in the anti-icing line.

Index of Evidence in Opposition to Argus's Motion for Summary Judgment at Tab 2, paragraph 2 (Filing No. 197). This opinion, or one substantially similar to it, does not appear anywhere else in the record before the Court.

Dr. Avitan's initial report and his amended report mention the Argus ball valves, but do not criticize their functioning and do not find them to be a cause of the fire. Dr. Avitan's strongest opinion relating to Argus is in his Amended Report stating that Siemens Power Corporation contributed to the cause of the fire because it incorporated the Argus ball valve into the design of its combustion turbine. See Index of Evidence of Argus in Support of Motion for Summary Judgment, Volume 2, Tab 16(1), Avitan's Amended Report at 17 (Filing No.189). The initial and amended reports do not attack the Argus ball valve itself, but rather only its use in the combustion turbine. In the final section of Dr. Avitan's reports, he assigns fault to many parties, but he does not assign fault to Argus. Id. at 16-17.

The only other opinions of Dr. Avitan that were disclosed prior to his Affidavit were provided in his deposition. In response to a question posed by plaintiff's counsel, Dr. Avitan states:

Q: Do you have any opinions in this case as to the Argus ball valve?

A: Well, I was not afforded the opportunity to test it or value it in February when we came to inspect it so I really would rather reserve that to such a point in time when I could test it.

Id., Tab 20, Avitan Deposition, at 103:20-104:1. He added that he had visually inspected the Argus ball valve and had not found any defects, and that he did not consider it a redundant valve to Siemens AG's own ESV because the valves were designed to withstand different back pressures. Id. at 49; 104.

There is no question that the expert opinions contained in the Avitan Affidavit had not previously been disclosed, and that they were disclosed after all applicable court deadlines. Dr. Avitan's expert opinions were disclosed initially on May 15, 2001. If Siemens AG had wanted Avitan to supplement his opinions after it filed its cross-claim against Argus, those supplemental opinions could have, and should have, appeared in the Amended Report prepared in August, or by the time the deposition was provided at the end of September. At the latest, the opinions critical of Argus should have been provided before the deadline for the completion of discovery on October 15, 2001 (Filing No. 151).2

Having determined that the opinions contained in the December 1, 2001, Affidavit were not previously disclosed, the next issue is whether Siemens AG...

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