3DT Holdings LLC v. Bard Access Systems Inc.

Background

The case was scheduled for a bench trial beginning May 23, 2022. The court planned to receive direct testimony by written declaration, followed by cross-examination and redirect examination in open court.

3DT Holdings LLC moved to exclude the testimony of Ed Burnside, a defense witness for Bard Access Systems Inc. Burnside had been Bard’s Vice President of Research and Development during the Penske project. Bard had not named him in its initial disclosures, its list of email custodians, or its response to 3DT’s interrogatory asking Bard to identify people with relevant knowledge. Bard first disclosed its intent to call Burnside on March 30, 2022.

Parties’ Arguments

3DT argued that Bard should be prevented from using Burnside because Bard had not identified him in the required disclosures. It said the late disclosure caused prejudice because 3DT did not know whether Bard had produced all relevant documents maintained by Burnside, had not been able to question other witnesses about his testimony and related documents, and could not have its expert consider his testimony.

Bard argued that using Burnside was not unfair because 3DT and its counsel had known about him throughout the litigation. Bard stated that it had produced at least 792 documents referring to or including Burnside and had mentioned him in its summary-judgment motion. Bard also agreed to make Burnside available for a deposition before trial.

Court’s Analysis

Federal Rule of Civil Procedure 26 requires a party to identify people likely to have discoverable information whom it may use to support its claims or defenses, unless the person will be used solely for impeachment. The rule also requires a party to update its disclosures when it later decides that it may use an additional witness. Under Rule 37, a witness not properly disclosed may be excluded unless the failure was substantially justified or harmless.

The court held that Bard should have disclosed Burnside. Bard’s general references to people identified during discovery, later witness lists, rebuttal, or impeachment did not satisfy the rule. The court also rejected the argument that a possible rebuttal use excused the failure to disclose Burnside.

To decide whether exclusion was appropriate, the court applied four factors: the explanation for the failure to disclose, the importance of the testimony, the prejudice to the opposing party, and the possibility of a continuance. The first factor favored 3DT slightly. The court found no indication that Bard deliberately tried to surprise 3DT, but also found that Bard had no good reason for failing to recognize earlier that it might use Burnside.

The other factors favored Bard. The court found Burnside’s testimony important to an accurate resolution of the case because he had been ultimately responsible for developing the Precisive Navigation Technology and selecting the development team. His testimony was relevant to whether Bard complied with the Development Agreement’s requirement that it provide commercially reasonable personnel, financial, and other support for developing a Bard product incorporating that technology. His testimony also addressed criticisms by 3DT’s expert concerning whether Bard’s decisions were commercially reasonable.

The court found that 3DT had not shown sufficient prejudice. Burnside’s name and involvement appeared in documents, testimony, deposition exhibits, and 3DT’s own summary-judgment papers. The court also noted that 3DT had received Burnside’s direct-testimony declaration and had not identified specific missing documents or specific questions it would have asked another witness. Any possible prejudice could be reduced by allowing 3DT to depose Burnside before trial.

The court further rejected 3DT’s argument based on Bard’s use of Anthony Misener as its representative under Rule 30(b)(6). That rule requires a corporation to designate a representative who can testify about information known or reasonably available to the organization; it does not require the corporation to designate the person with the most knowledge.

Ruling

Judge Lewis J. Liman denied 3DT’s motion to exclude Ed Burnside. The denial was conditioned on Burnside being made available for a deposition on May 18, May 19, or May 20, 2022, as reasonably selected by 3DT’s counsel. The clerk was directed to close docket entry 163.