HDI Global Insurance Co. v. Kuehne + Nagel, Inc.

Background

HDI Global Insurance Co. moved to prevent Kuehne + Nagel, Inc. from calling Jeanette Prince as a witness. Kuehne + Nagel had not identified Prince before discovery closed. The dispute concerns the number of packages under the Carriage of Goods by Sea Act and the resulting amount of damages. The front of the Sea Waybills listed 480 cartons as the number of packages, while applying a definition in the Sea Waybills' terms and conditions would result in 24 packages. Kuehne + Nagel had argued that the larger numbers were included for customs-compliance purposes.

Legal Standard

Federal Rule of Civil Procedure 37(c)(1) generally prevents a party that failed to identify a witness as required by the disclosure rules from using that witness at trial, unless the failure was substantially justified or harmless. The court considered the factors used to decide whether to exclude a witness: the explanation for the late disclosure, the importance of the testimony, the prejudice to the opposing party, and the possibility of a continuance. The court also considered whether a remedy less severe than excluding the witness could address the problem.

Court's Analysis

The court found that Kuehne + Nagel's failure to identify Prince before discovery closed was not substantially justified. Because the definition of “package” was a central issue, Kuehne + Nagel should have anticipated the need for evidence supporting its customs-compliance argument. The court found, however, that the omission appeared to be an oversight rather than a deliberate attempt to ambush HDI. The court also found that Prince's testimony could be important and that HDI had identified only the additional cost and expense of deposing her as prejudice.

The court concluded that HDI's prejudice could be addressed without excluding Prince. Because the case was scheduled for a bench trial, HDI would receive Prince's direct testimony through a declaration before trial and could then depose her.

Disposition

Judge Liman denied HDI's motion to preclude Kuehne + Nagel from calling Prince as a witness. The denial was conditioned on Kuehne + Nagel producing Prince's declaration by December 16, 2024, and making Prince available for a deposition lasting no more than four hours at least 24 hours after producing the declaration. Kuehne + Nagel must pay all expenses and reasonable attorney's fees incurred in taking the deposition, including travel expenses, but not fees for preparing for the deposition. The court directed the Clerk of Court to close the motion at docket entry 49.