United States District Court, D. Vermont
ALICE H. ALLEN, LAURENCE E. ALLEN, d/b/a/ Al-lens Farm, GARRET SITTS, RALPH SITTS, JONATHAN HAAR, CLAUDIA HAAR, and RICHARD SWANTAK, on behalf of themselves and all others similarly situated, Plaintiffs,
DAIRY FARMERS OF AMERICA, INC., and DAIRY MARKETING SERVICES, LLC, Defendants.
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO STRIKE UNTIMELY REVISION OF EXPERT OPINION (Doc. 486)
CHRISTINA REISS, Chief District Judge.
This matter comes before the court on the Motion to Strike Untimely Revision of Expert Opinion filed by Defendants, Dairy Farmers of America, Inc. and Dairy Marketing Services, LLC (Doc. 486). Defendants ask the court to strike certain January 2014 supplements to the expert report of Plaintiff's economist Gordon Rausser, Ph.D. Defendants contend the supplements are untimely, impermissible, and will prejudice them as they will be forced to confront an array of new expert opinions regarding Plaintiffs' alleged damages. Plaintiffs oppose the motion, arguing that the supplementation was required under the Federal Rules of Civil Procedure and that Defendants will suffer no prejudice because they understand Dr. Rausser's revised opinions and cannot claim to have been surprised by them in light of Plaintiffs' previous disclosures. Plaintiffs contend that, if the court finds any prejudice, it can be cured by allowing Defendants to re-depose Dr. Rausser.
The court held oral argument on the motion on May 8, 2014.
I. Factual and Procedural Background.
In their Second Amended Complaint ("SAC"), Plaintiffs allege that Defendants engaged and are presently engaging in five violations of the Sherman Act, 15 U.S.C. §§ 1-2: (1) conspiracy to monopolize/monopsonize in violation of § 2 of the Sherman Act; (2) attempt to monopolize/monopsonize in violation of § 2 of the Sherman Act; (3) unlawful monopoly/monopsony in violation of § 2 of the Sherman Act; (4) price fixing in violation of § 1 of the Sherman Act; and (5) conspiracy to restrain trade in violation of § 1 of the Sherman Act.
Plaintiffs allege that Defendants engaged in a wide-ranging conspiracy at both the processor and cooperative levels to fix, stabilize, and artificially depress prices for fluid Grade A milk and to allocate markets within Federal Milk Market Order 1 ("Order 1") among the co-conspirators. Plaintiffs allege that the prices in Order 1 were suppressed when processors in Order 1 agreed with Defendants to suppress certain premiums paid to dairy farmers (which Plaintiffs call "Farmer Premiums") in exchange for Defendants and other alleged co-conspirators' agreement to guarantee and control the supply of milk to conspiring processors.
On February 7, 2012, Defendants moved to exclude certain of Dr. Rausser's opinions under Fed.R.Evid. 702 and under Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), and its progeny. In response, Plaintiffs submitted a revised March 16, 2012 rebuttal declaration for Dr. Rausser (the "2012 Rausser Rebuttal"). The 2012 Rausser Rebuttal consists of certain supplementations and revisions to the "previously submitted three Declarations" (Doc. 486-4 at 2) Dr. Rausser authored in this case. The 2012 Rausser rebuttal includes Dr. Rausser's statement under oath: "In my Merits Report, I estimated that the prices paid for raw Grade A milk produced and pooled on Order 1 were suppressed by $0.69/cwt. I stand by that conclusion." (Doc. 486-4 at 6) (footnote omitted). It also includes a "model to estimate a different rate of suppression for each year in the Class Period" and states that "[t]he average of these suppression rates is $0.69/cwt, consistent with the results I reported in my Merits report." (Doc. 486-4 at 8.) In the 2012 Rausser Rebuttal, in a footnote, Dr. Rausser observes that when he "correct[s]" the damages model offered by Defendants' expert witness, economist Joseph Kalt, Ph.D., other suppression estimates are yielded:
[Dr. Kalt's] corrected model finds that Farmer Premiums were suppressed in Order 1 by $0.24/cwt (calculating Farmer Premium based on Gross price, with State fixed effects); by $0.41/cwt (calculating Farmer Premium based on Mailbox price-i.e. net of hauling costs-with State fixed effects); by $0.26/cwt (calculating Farmer Premium based on Gross price, without State fixed effects); by $0.66/cwt (calculating Farmer Premium based on Mailbox price-i.e. net of hauling costs-without State fixed effects).
(Doc. 486-4 at 4 n.288; 2012 Rausser Rebuttal at 101 n.288) ("footnote 288").
Defendants subsequently moved to strike the 2012 Rausser Rebuttal, arguing that it was untimely and improper rebuttal because it set forth new opinions after the close of expert discovery on February 14, 2012 and because it was a transparent effort to rebuff Defendants' Daubert challenges. The court agreed that the 2012 Rausser Rebuttal was improper and untimely, but nonetheless denied Defendants' motion to strike. In so ruling, the court reasoned that because a trial date had not been set, the court could alleviate any prejudice to Defendants by allowing them to re-depose Dr. Rausser and supplement their then pending Daubert motion. See Allen v. Dairy Farmers of Am., Inc., 2013 WL 211303, at *1, *4, *5-6 (D. Vt. Jan. 18, 2013) (denying Defendants' motion to strike and allowing 2012 Rausser Rebuttal notwithstanding the court's conclusions that the revised opinions were "untimely, " that Plaintiffs "should have obtained leave from the court to serve [them], " that "[c]ourts generally prohibit th[e] practice" of revising expert reports in response to Daubert motions, and that the revised opinion constituted improper rebuttal because "the Rausser Rebuttal exceeds what is necessary to simply rebut Defendants' expert opinions").
Thereafter, Defendants, who had deposed Dr. Rausser in 2011, re-deposed Dr. Rausser. At Dr. Rausser's deposition on June 26, 2013, Defendants specifically asked him if his expert damages opinion remained at the $0.69/cwt suppression estimate. Dr. Rausser answered in the affirmative:
Q. I'm asking you whether any of the damage calculations that you present in your rebuttal report are intended to change or amend the opinion that you offered in your July 2011 report.
Q. Okay. Now-and we can pull it out if you need it, but in your July 2011 report you estimated that total damages were something on the order of $835 million, is ...