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Federal Insurance Company, As Subrogee of Fulton Financial Corporation v. Handwerk Site Contractors

April 15, 2013

FEDERAL INSURANCE COMPANY, AS SUBROGEE OF FULTON FINANCIAL CORPORATION PLAINTIFF,
v.
HANDWERK SITE CONTRACTORS, AND UGI UTILITIES, INC. DEFENDANTS



The opinion of the court was delivered by: Christopher C. Conner United States District Judge

Judge Conner

MEMORANDUM

Presently before the court is the motion in limine of defendant Handwerk Site Contractors ("Handwerk") to preclude defendant UGI Utilities, Inc. ("UGI") from offering expert testimony (Doc. 73), to exclude or limit the testimony of Thomas Lloyd (Doc. 75), Robert Gordon (Doc. 76), John Little (Doc. 78) and Neil Brennan (Doc. 78), and to exclude the UGI Manual of Standard Procedures § 4.3.6. (Doc. 80). Also before the court is the motion in limine of defendant UGI to preclude the use of the UGI Manual of Standard Procedures § 4.1.3. (Doc. 83). The facts of this case have been thoroughly addressed in other memoranda and orders from this court, and will be reiterated only to the extent necessary to dispose of the matters at hand. The instant motions have been fully briefed and are ripe for disposition. The court will address them seriatim.

I. Handwerk's Motion in Limine to Preclude UGI from Offering Expert Testimony at Trial

A. Violation of Rule 26(a)(2)

Handwerk has moved to preclude defendant UGI from offering expert testimony at trial. (Doc. 73). Handwerk asserts that UGI failed to serve expert reports or identify expert witnesses pursuant to Federal Rules of Civil Procedure 26(a)(2)(A)-(D), and is therefore precluded from offering expert testimony at trial. (Doc. 74 at 3). UGI concedes that it did not provide opposing counsel with expert reports, and the company does not oppose this motion "to the extent that it merely seeks to preclude expert testimony from one retained or specially employed in connection with this matter." (Doc. 87 at 2). However, UGI "reserves" the right to call its own employees to testify at trial, "some of whom may qualify as an expert in areas relevant to the instant matter." (Id.)

Rule 26(a)(2) requires litigants to disclose the identity of any individual who may provide expert testimony pursuant to Federal Rules of Evidence 702, 703, or 705. See FED. R. CIV. P. 26(a)(2)(A). Parties must also submit written reports prepared by such witnesses who are "retained or specially employed to provide expert testimony" or "whose duties as the party's employee regularly involve giving expert testimony." FED. R. CIV. P. 26(a)(2)(B). All others must disclose the subject matter of their expert testimony and a summary of the facts and opinions to which the witness is expected to testify. FED. R. CIV. P. 26(a)(2)(C).

The Federal Rules of Evidence do not distinguish "between expert and lay witnesses, but rather between expert and lay testimony." FED. R. EVID. 701 (2000 Advisory Committee Notes)(emphasis in original); see also Collins v. Prudential Inv. & Ret. Servs., 119 Fed. Appx. 371 (3d Cir. 2005)(unpublished opinion). It is the content of a particular witness's testimony, not his or her qualifications or terms of retention, that triggers the disclosure requirements of Rule 26(a)(2). FED. R. EVID. 701 (2000 Advisory Committee Notes)("any part of a witness' testimony that is based on scientific, technical, or other specialized knowledge within the scope of Rule 702 is governed by the standards of Rule 702 and the corresponding disclosure requirements of the Civil and Criminal Rules"). Consequently, in the case at hand, UGI's argument that its potential employee witnesses are not experts "retained or specially employed in connection with this matter" is misplaced. If UGI had intended to provide expert testimony at trial under Rule 702, it was incumbent upon UGI to disclose at least their identities to the opposing parties prior to the deadlines established by the court under Rule 26(a)(2)(A). That certain employee witnesses were not specially retained or employed for purposes of this case is significant only to determine whether UGI had a responsibility to submit written reports under Rule 26(a)(2)(B) or merely the subject matter of their testimony and the facts and opinions on which it is based under Rule 26(a)(2)(C). In this light, UGI appears to have misapprehended its Rule 26 obligations.

B. Appropriate Sanction

Rule 37(c)(1) of the Federal Rules of Civil Procedure states that a party who fails to comply with Rule 26(a)'s requirements is "not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." FED. R. CIV. P. 37(c)(1).

The non-producing party has the "burden of proving substantial justification or that its failure to produce was harmless." Tolerico v. Home Depot, 205 F.R.D. 169, 175 (M.D. Pa. 2002). Substantial justification for the failure to make a required disclosure has been regarded as "justification to a degree that could satisfy a reasonable person that parties could differ as to whether the party was required to comply with the disclosure request. United States v. Dentsply Intern., Inc., 2000 U.S. Dist. LEXIS 6994 at *7 (D. Del. 2000). Failure to comply with Rule 26(a) is harmless "if it involves an honest mistake, coupled with sufficient knowledge by the other party of the material that has not been produced." Klatch-Maynard v. Sugarloaf Tp., 2011 U.S. Dist. LEXIS 54679 at *2 (M.D. Pa. 2011). UGI has not presented any evidence or argument on these issues.

The imposition of sanctions for abuse of discovery is a matter within the discretion of the trial court. Newman v. GHS Osteopathic, Inc., 60 F.3d 153, 156 (3d Cir. 1995). The Third Circuit has instructed district courts weighing this decision to consider the following factors in exercising its discretion to exclude expert testimony: "(1) the prejudice or surprise in fact of the party against whom the excluded witness would have testified; (2) the ability of that party to cure the prejudice; (3) the extent to which waiver of the rule against calling unlisted witnesses would disrupt the orderly and efficient trial of the case or of other cases in the court; (4) bad faith or willfulness in failing to comply with the district court's order"; and (5) the importance of the excluded testimony. Klatch-Maynard, 2011 U.S. Dist. LEXIS 54679 at *3 (citing Meyers v. Pennypack Woods Home Ownership Ass'n, 559 F.2d 894, 904-05 (3d Cir. 1977), overruled on other grounds, Goodman v. Lukens Steel Co., 777 F.2d 113 (3d Cir. 1985)). The Third Circuit has also cautioned that excluding evidence is an "extreme sanction" for a violation of a discovery order. In re TMI Litig., 193 F.3d 613, 721 (3d Cir. 1999).

In the matter at bar, such an evaluation is premature. Neither Handwerk nor UGI have identified the employee witnesses who may provide expert testimony on behalf of UGI at trial. Handwerk seeks merely to foreclose, in the abstract, this possibility. Absent precise information regarding the identities of UGI witnesses who may provide expert testimony, and the content of that testimony, the court is unable to thoroughly weigh the Meyers factors. For example, the court has no record upon which to assess either (1) the importance of any potential expert testimony from UGI's witnesses, or (2) its prejudice to Handwerk and Federal Insurance. Consequently, the court denies Handwerk's motion in limine to preclude defendant UGI from offering expert testimony without prejudice. To the extent that UGI employees do testify on the basis of scientific, technical, or other specialized knowledge within the scope of Rule 702, the court will revisit the issue in the context of an appropriate record. UGI will be directed to make a thorough proffer prior to the submission of any expert testimony.

II. Handwerk's Motion in Limine to Exclude or Limit the Testimony of Thomas Lloyd Handwerk seeks to exclude or limit the testimony of Thomas Lloyd, a field investigator with the Pennsylvania Department of Labor and Industry, Bureau of Labor Law Compliance. (Doc. 75). Plaintiff Federal Insurance has indicated that it may call Lloyd to provide expert testimony as to whether Handwerk violated the Pennsylvania One Call Act. Handwerk argues that Lloyd does not possess sufficient qualifications to provide expert opinion testimony pursuant to Federal Rule 702 of the Federal Rules of Evidence. (Doc. 82 at 4). Handwerk also asserts that Lloyd should not be allowed to present lay testimony pursuant to Federal Rule of Evidence 701, because Lloyd has no first-hand knowledge of Handwerk's activities with respect to the One Call Act. For the following reasons, the court will deny this motion.

A. Expert Testimony of Thomas Lloyd

Admissibility of expert testimony is a question of law governed by the Federal Rules of Evidence. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 588-89 (1993). The trial judge acts as a "gatekeeper" and determines the admissibility of expert testimony. See Calhoun v. Yamaha Motor Corp., U.S.A., 350 F.3d 316, 321 (3d Cir. 2003). Federal Rule of Evidence 702 provides:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

FED. R. EVID. 702. See also Calhoun, 350 F.3d at 321 (explaining that the Rule 702 requirements constitute "the 'trilogy of restrictions on expert testimony: qualification, reliability and fit'")(quoting Schneider v. Fried, 320 F.3d 396, 405 (3d Cir. 2003)). Nevertheless, Rule 702 embraces a "liberal policy of admissibility," Pineda v. Ford Moter Co., 520 F.3d 237, 243 (3d Cir. 2008), in which "the rejection of expert testimony is the exception rather than the rule," FED. R. EVID. 702 (Advisory Committee Notes).

With respect to expert qualifications, the Third Circuit has held that a "broad range of knowledge, skills, and training qualify an expert as such" and has "eschewed imposing overly rigorous requirements of expertise and have been satisfied with more generalized qualifications." In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 741 (3d Cir. 1994)); see also Lauria v. AMTRAK, 145 F.3d 593, 598 (3d Cir. 1998). The rule contemplates a broad definition of the term "expert" and includes within the scope of the rule "not only experts in the strictest sense of the word, e.g., physicians, physicists, and architects, but also ...


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