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Design Basics LLC v. Petros Homes, Inc.

United States District Court, N.D. Ohio, Eastern Division

March 7, 2017

PETROS HOMES, INC., et al., Defendants.



         Plaintiff, Design Basics, LLC has moved to exclude defendants' expert witness Karl Keidel because defendants violated the court's case management scheduling order. (ECF Doc. No. 82) Although defendants did designate Karl Keidel as an expert witness by the court's deadline, they failed to produce a report, as required by the order and Fed.R.Civ.P. 26(a)(2)(B). Defendants oppose the motion to exclude. The parties have consented to my jurisdiction.[1]

         The motion to exclude defendants' expert as a sanction under Rule 37 is not well taken and will be DENIED.

         I. Factual Background

         Plaintiff Design Basics, Inc., is a building design firm that creates, markets, publishes, and sells licenses for the use of architectural designs. Plaintiff holds certificates of copyright registration issued by the United States Copyright Office for most of its designs. Plaintiff's designs at issue in the present case are: (1) Plan No. 2408 - Crawford; (2) Plan No. 2326 - Greensboro; (3) Plan No. 2355 - Waverly; (4) Plan No. 4998 - Holden; (5) Plan No. 7614 - Southwick; (6) Plan No. 8108 - Rose Hollow; and (7) Plain No. 2377 - Leighton.

         Plaintiff filed this lawsuit on September 4, 2014, claiming that defendant, Petros Homes, Inc., infringed on plaintiff's copyrighted plans by manufacturing and selling homes that used plaintiff's designs.[2] Plaintiff amended its complaint on February 24, 2016 to add Gary Naim and Sam Petros as defendants.[3] Plaintiff's amended complaint asserts a single cause of action: copyright infringement. Defendants have completely denied liability.

         The court issued a case management conference order on July 7, 2016 (ECF Doc. No. 59) which established December 1, 2016 as the date for identifying plaintiff's expert and any defense expert on a subject matter for which defendants have the burden of proof. On December 1, 2016, defendants filed a notice of identification of expert witness indicating that they may call Kurt Keidel as an expert witness. Defendants provided Mr. Keidel's contact information and curriculum vitae, but they did not provide a report as required by Fed.R.Civ.P. 26(a)(2)(B).

         Plaintiff's counsel wrote to defendants' counsel on December 13, 2016 demanding immediate production of Keidel's expert report. In response, defendants informed plaintiff that their expert had not completed his report and they requested until January 16, 2017 to produce the report. In a January 25, 2017 letter to the court, plaintiff's counsel advised that defendants served Keidel's expert report on plaintiff's counsel on January 23, 2017. Plaintiff's deadline to serve a responsive report was February 1, 2017. Defendants never sought an extension of the expert disclosure deadline from the court.

         II. Standard of Review

         “It is well established that the scope of discovery is within the sound discretion of the trial court.” Lavado v. Keohane, 992 F.2d 601, 604 (6th Cir. 1993). The Sixth Circuit reviews a decision to invoke or deny discovery sanctions under Federal Rule of Civil Procedure 37 for abuse of discretion. Beil v. Lakewood Eng'g & Mfg. Co., 15 F.3d 546, 551 (6th Cir. 1994).

         Rule 26(a)(3), Fed. R. Civ. P., requires a party to make pretrial disclosures of the documents or exhibits the party expects to offer at trial and those it may offer if the need arises. Fed.R.Civ.P. 26(A)(iii). "… Unless otherwise directed by the court, these disclosures must be made at least 30 days before trial." Id. Rule 26(a)(2)(B) provides that “[u]nless otherwise stipulated or ordered by the court, [an expert disclosure] must be accompanied by a written report…” Rule 37, Fed. R. Civ. P., authorizes the court to impose sanctions if a party fails to make a disclosure by a required date. “A party that without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at a trial … any witness or information not disclosed. In addition to or in lieu of this sanction, the court, on motion and after affording an opportunity to be heard, may impose other appropriate sanctions.” Fed.R.Civ.P. 37(c)(1).

         The court may exclude a party's evidence if the failure to timely disclose was without “substantial justification” or creates “harm”" to the other party. The Sixth Circuit uses four factors to review a Rule 37 sanction: first, whether the party's failure to cooperate in discovery is due to willfulness, bad faith, or fault; second, whether the adversary was prejudiced by the party's failure to cooperate in discovery; third, whether the party was warned that failure to cooperate could lead to the sanction; and fourth, in regard to a dismissal, whether less drastic sanctions were first imposed or considered. Freeland v. Amigo, 103 F.3d 1271, 1277 (6th Cir. 1997).

         III. Arguments Presented

         Plaintiff argues that defendant's expert should be excluded as a sanction for defendants' failure to provide an expert report by December 1, 2016. Plaintiff argues that defendant's expert report was tardy and is deficient. Plaintiff contends that it has been prejudiced ...

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