Opinion ID: 743588
Heading Depth: 2
Heading Rank: 1

Heading: Preclusion of Softel's Expert

Text: 20 In December 1989, Magistrate Judge Gershon set a discovery cutoff date of January 30, 1990. At a pretrial conference on December 6, 1989, Softel advised Magistrate Judge Gershon that it was substituting a new expert, Dr. Thomas A. DeFanti, for its former expert, Aaron Grosky. Magistrate Judge Gershon agreed to allow Softel to serve a report by its new expert, but said that the new expert's report must be submitted by December 22, so that Dragon would have time to respond before the deadline. Softel I at  2. Softel also announced that its first expert, Grosky, refused to return the diskettes that contained the programs at issue in the litigation, because of a fee dispute. Apparently, Softel had not made duplicates of the diskettes before giving them to Grosky. Dragon agreed to duplicate the disks it had, and delivered 175 disks to Softel a few days later, on December 11, and a few remaining diskettes a week later, on December 18, three days before the discovery cutoff deadline. On December 21 (the day before the deadline), Softel asked that the date be extended, as DeFanti needed more time to review the materials. On January 8, 1990, Magistrate Judge Gershon refused to extend the deadline, holding that Softel had produced no justified explanation. On January 12, Magistrate Judge Gershon explained this preclusion order as disallowing Softel from presenting at trial the testimony of any expert witness from outside the company except that of the expert originally designated, i.e., Grosky. Softel objected to these rulings pursuant to Fed.R.Civ.P. 72(a) but Judge Cannella upheld both rulings. See id. At trial, Judge Cannella also rejected Softel's attempt to have DeFanti's report introduced as rebuttal evidence, stating that the tenor of his first order had been that Grosky would be the only outside expert witness for Softel, and that this order included Softel's rebuttal case. Softel challenges these rulings as abuses of discretion on the part of the district court. 21 We review the district court's order for abuse of discretion. See Update Art, Inc. v. Modiin Publ'g, Ltd., 843 F.2d 67, 71-72 (2d Cir.1988). In determining whether a district court has exceeded its discretion, we consider the following factors: (1) the party's explanation for the failure to comply with the discovery order; (2) the importance of the testimony of the precluded witness; (3) the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony; and (4) the possibility of a continuance. See Outley v. City of New York, 837 F.2d 587, 590-91 (2d Cir.1988). 22 With respect to the first Outley factor, we note that Softel was allowed to change its expert roughly sixty days before the discovery deadline on the condition that the new expert file his report roughly a month later, i.e. by December 22. Softel's explanation for its failure to comply with this deadline was that DeFanti did not have enough time to conduct his inquiry because he did not have access to the relevant diskettes until shortly before the deadline. This explanation is inadequate. Softel could have provided its new expert with additional time in a variety of ways: it could have retrieved its diskettes from Grosky by paying him the disputed fee and then suing for the alleged overcharge, it could have made copies of the diskettes before giving them to Grosky, or, most obviously, it could have notified the court and the defendant of the fee dispute several months earlier than it did. Dragon cannot be charged with the burden of producing the diskettes from which DeFanti was to work: it gave additional copies of these disks to Softel as an accommodation. 23 Softel directs our attention to Potlatch Corp. v. United States, 679 F.2d 153 (9th Cir.1982). In that case, which involved a complicated tax dispute, the government advised the court when it was first setting discovery deadlines that it had not yet hired an expert, and that all of the experts it had interviewed had estimated that work on the project would take six months. See id. at 154. The court set a deadline of six months later. When the government failed to meet this deadline, the district court excluded the experts' testimony. The Ninth Circuit reversed, taking into account the following facts: the district court's deadline could reasonably have been construed by the government to have been a precatory one; government attorneys must endure considerable red tape in order to hire an expert; the government did not control the experts; and, finally, the taxpayer delayed also. See id. at 155-56. We believe Potlatch is distinguishable on these facts. In this case, the deadline was clearly not precatory, Softel did not have to deal with governmental red tape to hire its witness, and, perhaps most importantly, the district court was not notified that the expert would not be able to comply with the deadline until the day before the deadline itself--a far cry from the situation in Potlatch where the government notified the court at the initial status conference. Discovery in this case began in early 1987 and ended in January 1990: Softel does not claim that an expert could not have completed the required analysis within that time. Instead, it claims that the time it was granted after it decided to change experts late in the period, and after it had (not irretrievably) lost its only copy of the relevant materials to its first expert, was inadequate for it to alter or bolster portions of discovery that had already taken place. On these facts, Potlatch avails them naught. 24 The second Outley factor--the importance of the testimony of the precluded witness--cuts in favor of Softel, but only slightly. While it is of course important to have an expert in a technical trial such as this, Softel did have another expert it could, and did, use: Softel's president, Fiondella. Softel was denied the opportunity to bolster Fiondella's testimony with DeFanti's, but this prejudice is slight when compared with, for example, that suffered by the plaintiff in Outley, whose only corroborating fact witnesses had been excluded in a trial in which credibility was the crucial issue. See Outley, 837 F.2d at 590-91. Moreover, Softel was given an opportunity to enter both of Grosky's reports into evidence, but apparently chose not to do so. Under these circumstances, the prejudice resulting from the preclusion of DeFanti was slight, and hardly tantamount to a dismissal, as Softel claims. 25 The third Outley factor is the prejudice suffered by the opposing party as a result of having to prepare to meet the new testimony. In Outley, this burden was slight. There, the plaintiff alleged police misconduct, and sought to put on two eyewitnesses. This Court noted that a brief interview would have allowed the [defendant] to probe the ability of the witnesses to observe, to find out why [the witnesses] were on the street, and to uncover weaknesses or conflicts in their testimony. Id. at 591. We also specifically noted that the testimony [of the witnesses] was not the technical or specialized evidence given by an expert witness. Id. Here, the excluded testimony was expert testimony. Moreover, the parameters of the dispute in a highly technical case such as this are largely defined by expert testimony. Therefore, any differences between DeFanti's testimony and Grosky's would have redrawn the boundaries of the case and almost certainly have prejudiced Dragon's ability to meet Softel's attack. Because Dragon would have been forced, at a very late date in the discovery process, to accommodate potentially significant shifts in the theories being offered against it, this factor cuts in favor of Dragon. 26 The final Outley factor is the availability of a continuance. Here, no trial date had been set, and a continuance was available. However, expeditious management of discovery schedules is especially important in cases of this nature because they require extensive expert involvement over lengthy periods of time. Therefore, the burden on the trial court of granting a continuance is greater than in some other cases. Softel points to the fact that this case did not go to trial for many months after the preclusion order as evidence of the propriety of a continuance. This of course is 20/20 hindsight. Had the court granted a continuance for Softel, it probably would have had to grant additional time for Dragon to respond. When trial courts permit deadline slippage of this sort, trials cannot be scheduled when they ought to be, resulting in the backup of other cases and eventual scheduling chaos as a series of bottlenecks builds. Additionally, the enormous length of every step of the proceedings in this case militated against any more continuances. Denial of a continuance in the circumstances was certainly within the sound discretion of the trial judge. 27 The first, third, and fourth Outley factors cut against Softel; the second cuts only slightly in its favor. On balance the Outley factors make clear that the lower court's ruling was not an abuse of discretion. We therefore affirm it.