Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_08-cv-02921/USCOURTS-cand-5_08-cv-02921-15/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California 

** E-filed April 9, 2010 ** 

NOT FOR CITATION 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

CRYOTECH INTERNATIONAL, INC., a 

Delaware Corporation, fka VBS 

INDUSTRIES INCORPORATED, 

 Plaintiff, 

 v. 

TECHNIFAB PRODUCTS, INC., an Indiana 

Corporation; and DOES 1–50 inclusive, 

 

 Defendant. 

____________________________________/

No. C08-02921 HRL 

ORDER DENYING PLAINTIFF’S 

MOTION TO EXCLUDE THE 

EXPERT REPORT OF O. EARL 

ELLIOTT 

[Re: Docket No. 156] 

Plaintiff Cryotech International, Inc. (“Cryotech”) and defendant Technifab Products, Inc. 

(“Technifab”) are competing companies in the cryogenic industry. They signed a contract where 

Technifab agreed to exclusively produce certain products that Cryotech agreed to exclusively 

purchase and sell. Cryotech later sued defendant for allegedly using Cryotech’s confidential 

information to sell products directly to Cryotech’s customers in violation of the agreement. 

Technifab then countersued plaintiff for allegedly outsourcing production of products for which 

Technifab was to be the sole source and for failing to use best efforts to sell Technifab’s products. 

Plaintiff now moves to exclude the report of defendant’s accounting expert, O. Earl Elliott, 

on grounds that he relied on unverified financial statements that defendant did not produce during 

fact discovery. Technifab opposes the motion. Upon consideration of the motion papers and the 

arguments presented at the hearing, the court DENIES plaintiff’s motion. 

Case 5:08-cv-02921-HRL Document 218 Filed 04/09/10 Page 1 of 4
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United States District Court

For the Northern District of California 

DISCUSSION 

Cryotech alleges that it has been “severely prejudiced” by Technifab’s failure to produce the 

financial statements upon which Elliott relied prior to the fact discovery deadline. (Mot. 1.) It 

claims that had defendant produced these documents earlier, Cryotech could have assessed the 

validity of the statements’ numbers as well as “determine whether it should retain an accounting 

expert for a similar purpose.” (Id.) Technifab counters that its counsel was unaware that Elliott 

intended to use the statements until it received his report. It denies that plaintiff was in any way 

prejudiced by the delay because Cryotech deposed Elliott after receiving the documents and also 

provided the documents to its rebuttal expert. 

The court is unpersuaded that it must exclude Elliott’s report because he relied on documents 

that Technifab disclosed approximately three weeks after the December 11, 2009 fact discovery 

deadline. Technifab produced Elliott’s report and associated documents on January 4, 2010; 

Cryotech repeatedly emphasizes that it is this timing of disclosure that caused it the most prejudice. 

Yet notwithstanding this short delay, plaintiff received the financial statements with Elliott’s report 

and was able to ask him questions directly on point during his deposition. As a result, plaintiff 

elicited testimony that it may use in an attempt to discount Elliott’s opinion at trial. Even its own 

rebuttal expert had the opportunity to review the statements as part of his report. 

Furthermore, although plaintiff insists that it needs the underlying data summarized in this 

handful of financial statements to confirm the reliability of Elliott’s calculations, Elliott himself did 

not base his opinion on any such data. Moreover, Cryotech already has access to all of Technifab’s 

invoices, which presumably provide far more detail concerning defendant’s alleged damages. 

Plaintiff therefore may attack Elliott’s opinion on several grounds, including that his acceptance of 

the numbers in the financial documents somehow was inappropriate. 

The court notes that plaintiff’s suggested alternative to exclusion—that the court permit it to 

submit an expert report for its own damages—is unrelated to Elliott’s report, which evaluates 

defendant’s damages. The court is dubious that if only Cryotech had known of these particular 

documents three weeks earlier, that it would have altered its litigation strategy and hired an 

accounting expert to calculate its own damages in this case. Cryotech was on notice that Technifab 

Case 5:08-cv-02921-HRL Document 218 Filed 04/09/10 Page 2 of 4
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United States District Court

For the Northern District of California 

intended to use an accounting expert to calculate its damages well in advance, and nothing 

prevented Cryotech from doing the same. Accordingly, the court DENIES plaintiff’s motion.1

IT IS SO ORDERED. 

Dated: April 9, 2010

HOWARD R. LLOYD 

UNITED STATES MAGISTRATE JUDGE

 

1

 Pursuant to this court’s case management order, Cryotech also submitted to the court a Daubert 

letter challenging Elliott’s expert qualifications. (Docket No. 169.) Plaintiff’s primary arguments in 

its letter mirror its arguments in the instant motion. The court does not find any of plaintiff’s other 

arguments in its Daubert letter persuasive and, as a result, no separate hearing is necessary.

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United States District Court

For the Northern District of California 

C 08-02921 HRL Notice will be electronically mailed to: 

Arthur J. Casey ajc@robinsonwood.com, kkn@robinsonwood.com 

David Richard Johanson drj@esop-law.com, msshelli@esop-law.com 

Douglas Andrew Rubel dar@johansonberenson.com, msshelli@esop-law.com 

Mark Douglas Hassler hassler@huntlawfirm.net 

Counsel are responsible for distributing copies of this document to co-counsel who have not 

registered for e-filing under the court’s CM/ECF program. 

Case 5:08-cv-02921-HRL Document 218 Filed 04/09/10 Page 4 of 4