Solid 21, Inc. v. Richemont North America, Inc.

Background

Solid 21, Inc. sued Richemont North America, Inc., Richemont International S.A., and Montblanc-Simplo GmbH. Fact discovery ended in May 2021, and expert discovery ended later that month. Solid 21’s damages expert, Jennifer Vanderhart, had submitted her report and was deposed in July 2021.

The court later granted summary judgment concerning intracompany sales, excluding from Solid 21’s damages model sales from the Europe-based defendants to Richemont North America. The ruling reduced Solid 21’s damages calculation by approximately 90 percent. The court denied Solid 21’s motion for reconsideration and set a trial date that was later rescheduled.

After Solid 21’s prior counsel sought permission to withdraw, Solid 21 went without counsel for a period and eventually obtained current counsel in April 2023. Trial was rescheduled for October 2023. At an August 11, 2023 hearing, the court stated that Solid 21 could not present certain damages claims, including corrective-advertising damages, because those claims had not been disclosed during discovery. The court also stated that it did not intend to reopen discovery or allow a late supplement that added to previously submitted damages calculations.

On September 8, 2023, Solid 21 moved to supplement its required disclosures under Federal Rule of Civil Procedure 26(a) and Vanderhart’s expert report. The proposed report recalculated damages based on an assumption about whether sales involving certain brands were covered by tolling agreements. The proposed disclosures also identified corrective-advertising damages as a claim, without providing a damages calculation for it.

Legal standard

Rule 26 requires a party to disclose its computation of each category of claimed damages. It also requires an expert’s written report to provide a complete statement of the opinions the expert will express and the reasons for those opinions. Rule 26(e) requires a party to correct or supplement a disclosure if it learns that the disclosure is materially incomplete or incorrect.

Rule 37(c)(1) generally prevents a party that failed to make a required disclosure from using the information at a motion, hearing, or trial unless the failure was substantially justified or harmless. In deciding whether to exclude late evidence, courts consider the reason for the delay, the importance of the evidence, the prejudice to the opposing party, and the possibility of a continuance.

Court’s analysis

The court assumed that the additional damages information was important but concluded that the other factors weighed heavily against supplementation.

First, the court found that the prejudice to the defendants would be overwhelming. Solid 21’s motion came more than four years after the action began, two years after discovery closed, one year after the summary judgment motions were decided, and one month before the already delayed trial. Allowing supplementation would require reopening expert discovery, allowing the defendants to redepose Vanderhart, permitting a rebuttal damages report, and potentially allowing additional summary judgment motions.

Second, the court found that Solid 21’s explanation for the delay did not justify the requested supplementation. Solid 21’s president, Christopher Aire, asserted that prior counsel had made unauthorized decisions limiting Vanderhart’s damages calculation. Prior counsel disputed that account, and Solid 21’s current counsel stated that it could not advise the court about what had occurred. The court said it could not determine whether Aire’s accusations were true. But even accepting Aire’s account, the court found that it did not explain why the supplements were not made sooner, because Aire had been allowed to see the expert report nearly a year earlier and Solid 21 had replacement counsel for more than four months.

Third, the court found that a continuance was not appropriate. The trial date was approaching, had already been rescheduled twice at Solid 21’s request, and the proposed changes would require extensive expert work over a lengthy period.

Finally, the court was concerned that the proposed late disclosures were an attempt to undo earlier rulings. The proposed expert report reshaped the damages analysis around the court’s summary judgment ruling, while the proposed disclosures identified corrective-advertising damages for the first time. The court concluded that Solid 21 was improperly attempting to revive damages that had been excluded or had not been timely disclosed.

Disposition

Judge Arun Subramanian denied Solid 21’s motion for leave to supplement. The Clerk of Court was directed to terminate ECF No. 280.