American Dairy Queen Corporation v. W.B. Mason Co., Inc.

Background

American Dairy Queen Corporation accused W.B. Mason Co., Inc. of trademark infringement, trademark dilution, deceptive trade practices, and statutory and common-law unfair competition. The claims concerned W.B. Mason’s BLIZZARD-brand spring water and Dairy Queen’s rights in its BLIZZARD trademark.

The dispute concerned two expert reports Dairy Queen served on September 18, 2020: an expert rebuttal report by David W. Stewart, Ph.D., and a supplemental expert report by Erich Joachimsthaler, Ph.D. W.B. Mason moved to strike specified portions of both reports. It argued that the reports went beyond rebuttal by adding opinions, research, information, and authorities that Dairy Queen could have included in its earlier reports. Dairy Queen argued that the challenged material responded to criticisms by W.B. Mason’s experts.

Legal standard

Federal Rule of Civil Procedure 26 requires expert disclosures to follow the court’s schedule. Rebuttal reports may respond to evidence or theories presented by the opposing side, but may not be used simply to establish a party’s main case. Under Rule 37(c)(1), evidence that was not properly disclosed generally cannot be used at a motion, hearing, or trial unless the failure was substantially justified or harmless.

The court considered four factors in deciding whether any disclosure violation was harmless: the importance of the material, the party’s explanation for the disclosure, the possible prejudice to the opposing party, and whether a continuance could cure that prejudice.

Analysis

The court concluded that the challenged portions were, on balance, opinions attacking or responding to the theories offered by W.B. Mason’s experts. The court rejected W.B. Mason’s argument that material must be excluded merely because the expert could have included it in an initial report. In the court’s view, rebuttal may contain information not included in the initial report when that information explains, counteracts, or disproves the opposing side’s expert evidence.

The court also held that any departure from proper rebuttal was harmless. W.B. Mason had deposed Dr. Stewart and Dr. Joachimsthaler after receiving the challenged reports. W.B. Mason did not dispute that its own experts had been able to address the reports in their depositions, and it did not request additional discovery, a further rebuttal opportunity, or more time to prepare for later proceedings. The court found that W.B. Mason identified little, if any, actual prejudice.

The court further determined that the challenged material was important to the case, that Dairy Queen had a good-faith basis for treating much or all of it as proper rebuttal, and that W.B. Mason had not requested a continuance. These considerations did not support the severe remedy of excluding the evidence.

Disposition

The court denied W.B. Mason’s Motion to Strike Portions of Dairy Queen’s Expert Report of David W. Stewart, Ph.D., and denied W.B. Mason’s Motion to Strike Portions of Dairy Queen’s Supplemental Expert Report of Erich Joachimsthaler, Ph.D. Judge Elizabeth Cowan Wright did not decide the ultimate trademark claims in this order.