Further, we cannot excuse plaintiffs’ failure to even attempt to seek from the
District Court an extension of the deadline to file its expert report. Plaintiff retained its
expert less than two weeks prior to the close of expert discovery. If we are to believe
the plaintiffs when they contend that their expert could have produced a final report in
thirteen days if it had had all of the documents on the date it was retained, then by our
calculation, plaintiff would have only needed to extend the expert discovery deadline by
three weeks; it had the documents copied by May 8, and thus, the expert could have
finished his report by May 21, 2003 and he could have been deposed within the original
schedule calling for his deposition by May 31, 2003. We cannot say for certain if the
District Court would have granted such an extension, but we cannot absolve plaintiff of
all liability for the additional expert fees since it did not even try to mitigate its costs.

More importantly, after comparing the interim report to the supplemental report,
and reviewing the billing statements for each, we find that much of the $65,000.00 the
expert charged for the supplementary report most likely would have been incurred even
if he had had the documents at an earlier time. The interim report is fifteen pages long
and contains a great deal of analysis and discussion. The supplemental report is
nineteen pages long. The first nine pages of the two reports are nearly identical; the
only additions to the second report are a list of additional materials reviewed (page 2)
and minor updates of the number of customers the parties have in common (page 8)
and the fact that defendant had recently produced a 2002 tax return but no 2002 P&L
statement (page 9). Further, several other sections of the two reports are nearly or
completely identical. There are approximately five pages of the second report that are
substantially new and which use the data received by the expert after April 30"; there

4



it relates to plaintiffs’ motion for sanctions.

We have broad discretion to impose sanctions against a party for abuse of
discovery orders. Fed.R.Civ.P. 37(b). In this case, on April 22, 2003, we ordered
defendant to produce the financial documents requested by the plaintiff (the twenty-six
boxes), by the end of the day on April 23, 2003. Defendant actually produced the
documents on April 23, 24, and 25, 2003. Although the plaintiff contends that it had
been seeking these documents from the defendant for months, it first filed a motion to
compel in federal court in March, 2003.' We do recognize that both parties have
engaged in various delay tactics regarding discovery throughout this case. The
question is whether any of the defendants’ actions with regard to the documents
needed by plaintiffs’ expert were so egregious as to warrant an imposition of sanctions.

After reviewing the parties’ arguments, we do not find it appropriate to order
defendants to pay the costs plaintiff incurred in obtaining an interim expert report.
Plaintiff filed its first motion to compel these documents in federal court only twelve
days before the original close of discovery, and our first order requiring defendant to
produce them was issued on April 22, 2003. Despite plaintiffs’ contention that it had
been pursuing these documents for months during the state court action, its pursuit of
them in federal court only began in March, 2003, even though this case had been

removed to federal court in June, 2002.

* Plaintiff contends that it has filed three motions to compel with regard to the documents at issue,
one in state court filed in May, 2002, one in federal court on March 13, 2003, and another on April 14, 2003.
We cannot determine when or to what extent the defendant responded to the state court motion. We entered
and continued the March motion to allow defendant time to respond; plaintiff thereafter filed its April motion,
contending that it was still unable to obtain any documents from the defendant. At the time, we had issued
no orders regarding defendants’ obligation to produce discovery.

3



Tes

are also updates to the schedules attached to the report.

We cannot accept plaintiff's contention that, after spending 136 hours to
complete the interim report, all of the additional 152 hours spent by the expert in
preparing the second report was only necessary because of the original delay in
production of the documents. To the contrary, it is obvious that only a fraction of the
interim report was not used in the supplemental report, and much of the time taken to
complete the new parts of the supplemental report was neither duplicative nor
unnecessary; it instead included work that needed to be done no matter when the
documents were produced. Neither party attempts to address the issue of how much
of the work was actually unnecessary, but it is clear that if the expert had produced only
a single report containing the analysis from both the first and second reports, plaintiff
would have been responsible for paying all of the expert's fees. Thus, we deny
plaintiffs’ motion for sanctions against defendant for payment of the interim expert fees.

Plaintiff also requests payment of $6,162.50, which its expert charged for
preparing for and appearing at a deposition requested by the defendant; with the notice
of deposition, defendants requested that the expert produce twenty-one categories of
documents. The expert claims that he and a manager and associate at his firm
expended a total of 14.5 hours preparing for the deposition (11.2 of the hours were
spent by the partner who was deposed). Fed.R.Civ.P. 16(b)(4)(C) states that “the party
seeking discovery shall pay the expert a reasonable fee for time spent in responding to
discovery.” Attached as an exhibit to plaintiffs reply brief is a letter from defendant
requesting an opportunity to respond to the Court regarding this issue. Since the
plaintiffs first raised this issue in its reply brief, defendant has not yet had such

5



Migute Ordgr For (0897)

United States District Court, Northern District of Minois

N rm ‘ ‘
a Machete suas David H. Coar sing eet Sean Michael T. Mason
CASE NUMBER 02 C 4471 DATE 7122/2003
CASE Wisconsin Cheese, Inc. et al. vs. Zavacki et al.
TITLE

[ln the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.}

MOTION:
DOCKET ENTRY:
(1) im} Filed motion of [ use listing in “Motion” box above.]
(2) Q Brief in support of motion due
@) ia} Answer brief to motion due » Reply to answer brief due.
(4) im Ruling/Hearing on set for at
(5) in| Status hearing{held/continued to] (set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] (set for/re-set for] on set for at ‘
(7) Qa Trial[set for/re-set for] on at
(8) Qa {Bench/Jury trial) [Hearing] held/continued to at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) O Local Rule 41.1 CIFRCP41(a)(1) 0 FRCP41(a)(2).
| {Other docket entry} For the reasons stated in the attached Memorandum Opinion and Order,
plaintiffs’ request for expert witness fees connected to the filing of the interim report [21-1] is denied.
Plaintiff's request for fees connected with the expert’s deposition and its motion to compel raised in its
reply to defendants’ response to plaintiff's request for sanctions of expert fees [105-1] are entered and
continued. Defendants are ordered to file a response to plaintiff's request for fees connected with the
expert’s deposition and its motion to compel raised in plaintiff's reply by 7/29/03. Plaintiff's reply by
8/5/03. Enter Memorandum Opinion and Order.
(ll) @f [For further detail see order attached to the original minute order.]
No notices required, advised in open court.
No notices required.
a | Notices faxed by judge's staff.
Notified counsel by telephone.
Docketing to mail notices. sn
Mail AO 450 form. Aunod Latussid s
oY | Copy to judge/magistrate judge. ce
gil Ha 22 yar cu
courtroom
= | Seat pros
Date/time received in
central Clerk's Office



opportunity to respond. We thus order it to file a response to plaintiffs request within
seven days of this order; plaintiff has seven days to file its reply.? Plaintiffs’ motion for
expert witness fees connected to the filing of the interim report is denied. Plaintiffs’

motions for fees connected with the expert's deposition and its motion to compel are

entered and continued. It is so ordered.

ENTER:

DM rks LPH ate. —
MICHAELT. MASON ~
United States Magistrate Judge

Dated: July 22, 2003

? In these briefs, the parties should also discuss plaintiff's contention that It is still owed outstanding
documents from defendant.

6



* DOCKETED

JUL 2 3 2003

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
WISCONSIN CHEESE, INC. and, )
WISCON, CORP., )
)
Plaintiffs, )
) No. 02 C 4471
v. )
) Judge David H. Coar
JAMES T. ZAVACKI, MIODRAG ) Mag. Judge Michael T. Mason
NOVACOVICI and GRATER )
WISCONSIN, INC. )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

Michael T. Mason, United States Magistrate Judge:

Plaintiffs Wiscon Cheese, Inc., (“Wiscon”) et.al., have filed a motion seeking
more than $71,000.00 from defendants Grater Wisconsin, et.al. (“Grater”) as sanctions
for defendants’ delay in producing documents needed for plaintiffs’ expert report, and
as fees for defendants’ deposition of that expert. Plaintiffs claim that defendants should
be sanctioned approximately $65,000.00 because defendants’ late production of certain
financial documents required plaintiffs’ expert to create both an interim and
supplemental report in order to meet a discovery deadline set by the District Court.
Plaintiffs contend that had defendants not delayed for nearly a year in producing certain
documents, its expert would have been able to timely produce a single report analyzing
plaintiffs’ financial losses connected to defendants’ alleged theft of trade secrets and
other actions against plaintiff. Further, plaintiffs request an additional $6,162.50

incurred by the expert in preparing and sitting for defendants’ deposition of him.

[0/



As support for its motion, plaintiff submitted the billing statements from its expert
witness for both reports, as well as a declaration from the expert that avers that he
could not produce a final report until after he reviewed twenty-six boxes of financial data
produced after the deadline for filing an expert report had passed. We granted
plaintiffs’ motion to compel production of these documents on April 22, 2003;
defendants produced them between April 23-25, 2003; the expert's report was due on
April 30, 2003. Plaintiff contends that it took an outside copy service ten days to
reproduce the documents, as they were original financial materials that were not of
uniform size or shape; the expert received copies of the documents on May 8, 2003
and thereafter completed a supplemental report that accounted for the new financial
information.

Defendant objects to paying for the interim report for several reasons. First, it
contends that plaintiffs waited until less than two weeks before the expert report was
due to even engage an expert witness, implying that plaintiffs’ allegations regarding the
late discovery is simply a delaying tactic of its own designed to mask the fact that its
expert could not have completed the full report on time. Further, defendants note that
plaintiffs never asked the District Court for an extension of time to submit the expert
report, although they did ask for and receive additional time to complete several
depositions allegedly needed for the expert report. In fact, plaintiffs’ expert completed
his supplemental report prior to receiving the deposition transcripts, belying the
argument that they were needed at all. Finally, defendants object to the time entries in
the expert's initial and supplemental bills, arguing generally that they contain material
inconsistencies and often omit meaningful descriptions of the work performed and how

2