Plymouth Grain Terminals LLC et al v. Lansing Grain Company LLC et al, No. 2:2010cv05019 - Document 460 (E.D. Wash. 2014)
Court Description: ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT'S MOTIONS IN LIMINE. Defendants Motion in Limine No. 1 Re: Plaintiffs Damages Allegations ECF No. 385 is DENIED in part and GRANTED in part as follows: Defendants request to exclude evidence of damages for trade secret and tortious interference claims is DENIED as moot; Defendants request to exclude evidence of PCs brokerage fees is DENIED as moot; and Defendants request to exclude evidence of disgorgement damages for accounting is GRANTED. Defendants Motion in Limine No. 2 Re: Location 251 and Beyond ECF No. 387 is GRANTED in part, DENIED in part and RESERVED. Signed by Judge Thomas O. Rice. (LLH, Courtroom Deputy)
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Plymouth Grain Terminals LLC et al v. Lansing Grain Company LLC et al Doc. 460 1 2 3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6 7 8 9 10 PLYMOUTH GRAIN TERMINALS, LLC, a Delaware limited liability company, CENTRAL WASHINGTON CORN PROCESSORS, INC. a Washington corporation, and PAULSON COMMODITIES, LTD., an Oregon corporation,, 13 14 15 16 ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE Plaintiffs, 11 12 NO: 10-CV-5019-TOR v. LANSING GRAIN COMPANY, LLC, a Michigan limited liability company, LANSING GRAIN COMPANY, an assumed name, LGC GRAIN COMPANY, LLC, a Michigan limited liability company, and LANSING TRADE GROUP, LLC, a Delaware limited liability company, 17 Defendant. 18 19 20 BEFORE THE COURT are Defendant’s Motion in Limine No. 1 Re: Plaintiff’s Damages Allegations (ECF No. 385) and Motion in Limine No. 2 Re: ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 1 Dockets.Justia.com 1 Location 251 and Beyond (ECF No. 387). This matter was heard with oral 2 argument at the Pretrial Conference on April 4, 2014. Joan M. Schulkers and John 3 S. Ziobro appeared on behalf of the Plaintiff. J. Chad Mitchell and Kirk T. May 4 appeared on behalf of Defendant. The Court has reviewed the briefing and the 5 record and files herein, and is fully informed. 6 MOTIONS IN LIMINE 7 Defendant moves in limine on various issues; the Court addresses each in 8 turn.1 The Court’s rulings are preliminary, dependent on how evidence is offered at 9 trial. As the Supreme Court has noted, in limine rulings are 10 subject to change when the case unfolds.... Indeed even if nothing unexpected happens at trial, the district judge is free, in the exercise of sound judicial discretion, to alter a previous in limine ruling. 11 12 13 1 The Court notes that the parties’ motions in limine were due under the scheduling 14 order before the Court issued its order on the parties’ motions for summary 15 judgment. Pursuant to the Court’s order, the trial was bifurcated into a bench trial 16 for an accounting at the originally scheduled trial date on January 13, 2014, and a 17 jury trial at a later date. When the parties appeared for the bench trial, they 18 informed the Court that they preferred the accounting to take place at the same 19 time as the jury trial. Accordingly, the Court now addresses the parties’ original 20 motions in limine, noting where subsequent rulings have mooted the request. ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 2 1 Luce v. United States, 469 U.S. 38, 41–42 (1984); McSherry v. City of Long Beach, 2 423 F.3d 1015, 1022 (9th Cir. 2005). 3 A. Defendant’s Motion In Limine No. 1 Re: Plaintiffs’ Damages Allegations 4 Defendants move in limine to exclude evidence of three categories of 5 damages: (1) PC’s damages for misappropriation of a trade secret and interference 6 of prospective advantage; (2) PC’s damages of $8,000 in brokerage fees; (3) and 7 PGT’s disgorgement damages of $75,000 per year retained by Lansing for its 8 accounting under the CMA. ECF No. 385 at 2. 9 10 11 12 The Federal Rules of Civil Procedure provide that [a] party who has made a disclosure under Rule 26(a)—or who has responded to an interrogatory, request for production, or request for admission—must supplement or correct its disclosure or response…in a timely manner if the party learns that response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing… 13 14 Fed. R. Civ. P. 26(e). “If a party fails to provide information or identify a witness 15 as required by Rule 26(a) or (e), the party is not allowed to use that information or 16 witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure 17 was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). However, “[i]n 18 addition to or instead of this sanction, the court, on motion and after giving an 19 opportunity to be heard,” may provide for other sanctions, including payment of 20 reasonable expenses. Fed. R. Civ. P. 37(c)(1). The party facing sanctions bears the ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 3 1 burden of proving that its failure to disclose the required information was 2 substantially justified or is harmless. Torres v. City of L.A., 548 F.3d 1197, 1213 3 (9th Cir. 2008). 4 Defendant contends that the exclusionary sanction is “self-executing” and 5 “automatic,” citing the comments to the rule. ECF No. 385 at 5. Despite this, the 6 Ninth Circuit has held that preclusion of evidence can be a harsh sanction, 7 particularly when it deals a “fatal blow” to an entire claim or request for punitive 8 damages, amounting, in practical terms, to the dismissal of a claim. R & R Sails, 9 Inc. v. Ins. Co. of Pennsylvania, 673 F.3d 1240, 1247 (9th Cir. 2012).2 10 Consequently, when district courts in this circuit conduct the harmlessness inquiry 11 under Rule 37(c)(1), they are required to consider “whether the claimed 12 noncompliance involved willfulness, fault, or bad faith…and also to consider the 13 availability of lesser sanctions.” Id. (internal citations omitted). The court has wide 14 discretion in determining the appropriate sanction. See Yeti by Molly, Ltd. v. 15 Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). In determining the 16 appropriate sanction, the Court looks to five factors: (1) the public's interest in 17 expeditious resolution of litigation; (2) the court's need to manage its docket; (3) 18 2 19 20 Plaintiffs, however, do not make this argument in their response to Defendant’s motion in limine. See ECF No. 425. ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 4 1 the risk of prejudice to the party seeking sanctions; (4) the public policy favoring 2 disposition of cases on their merits; and (5) the availability of less drastic 3 sanctions. See Wendt v. Host Int'l, Inc., 125 F.3d 806, 814 (9th Cir. 1997). 4 5 6 The Court examines each type of damages in turn. 1. PC’s Trade Secret and Tortious Interference Damages The Court’s Order Denying in Part the Parties’ Motions for Summary 7 Judgment (ECF No. 428) granted summary judgment on the issues of tortious 8 interference and misappropriation of trade secret. Thus, the Court denies as moot 9 Defendant’s request to exclude damages evidence for these claims. 10 11 1. PC’s Brokerage Fee Damages With respect to PC’s brokerage fee damages of $8,000, the parties 12 acknowledged during the pretrial conference that these damages were only 13 presented as resulting from PC’s unjust enrichment claim. The Court granted 14 Defendant’s motion for summary judgment on this claim. ECF No. 428 at 33. 15 Accordingly, this request to exclude evidence of unjust enrichment damages is also 16 denied as moot. 17 18 2. PGT’s Disgorgement Damages of $75,000 per year With respect the $75,000 per year in disgorgement damages, Plaintiffs claim 19 that the late disclosure was harmless to Defendant and as such should not be 20 excluded. ECF No. 425 at 2-3. Plaintiffs contend that the calculation of the ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 5 1 $75,000 per year fee is based on the language of the CMA and requires no 2 calculation; as such, no discovery is required. Id. at 3. 3 The Court disagrees. The CMA provides for the amount of $75,000 (“It is 4 intended that the activity resulting from this agreement will result in a relationship 5 that will generate net operating profits to be split with 60% going to Lansing and 6 40% going to SG after the first $75,000 is designated to Lansing.”). But Plaintiffs’ 7 second amended answer to the interrogatory, which Defendant cites, indicates that 8 the $75,000 represented the yearly amount “retained by Lansing for its accounting 9 of the CMA (which it did not do).” ECF No. 385 at 4. Thus, the plain language of 10 the CMA does not designate that the $75,000 is a yearly amount or one to be paid 11 in exchange for an accounting. As such, Plaintiffs failure to disclose this 12 information timely was not harmless, as it occurred after the discovery cutoff and 13 thus Defendants did not have time to further pursue the nature of these damages. 14 Nor does exclusion of the $75,000 appear to be dispositive of any of 15 Plaintiffs’ claims, though this is unclear from the parties’ briefing. Thus, exclusion 16 under the rule does not appear to run afoul of R & R Sails. Accordingly, 17 Defendant’s motion to exclude the $75,000 per year damage claim is granted. As 18 the Court explained at the pretrial hearing, this does not mean that the $75,000 19 cannot be referenced or testified to during trial. It has evidentiary relevance. 20 /// ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 6 1 2 B. Defendant’s Motion in Limine No. 2 Re: Location 251 and Beyond Defendant moves in limine to exclude evidence not specific to the Plymouth 3 Market Zone. ECF No. 387 at 2. Defendant contends that because the Court has 4 previously ruled that activity beyond the Plymouth Market Zone (e.g., Location 5 251 or activity beyond Location 251) is not discoverable, the Court should exclude 6 evidence not specific to the Plymouth Market Zone, the only market zone 7 encompassed by the CMA. Id. Defendant states that “evidence of Lansing’s profit, 8 loss, trades, margins, or positions throughout all market zone in Location 251 (or 9 in other locations) does not logically advance the issue of the appropriate profit and 10 loss calculations under the CMA, which is limited to the Plymouth market zone.” 11 ECF No. 387 at 6. 12 Plaintiffs respond that they do not contest a reasonable limitation to exclude 13 Location 251, but request that the following testimony or evidence not be 14 excluded: 15 16 17 18 19 20 1. Documents referencing Location 251 produced to Plaintiffs by Defendants; 2. Rebuttal or impeachment testimony or evidence in response to testimony related to Location 251 introduced through Defendants; 3. Testimony related to Location 251 or other locations that relate to the bonus of Charles Lapke; 4. Documents or testimony that rebuts or impeaches Lansing testimony or evidence stating that certain activity in Location 251 was not related to activity covered by the Corn Marketing Agreement; 5. Documents or testimony that show that prior to 2007 Charles Lapke was not trading outside of Location 251; and ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 7 1 6. Documents or testimony to rebut or impeach testimony introduced by Defendants related to locations under the supervision of Paul Frick. 2 3 ECF No. 427 at 4. Plaintiffs also contend that Defendant’s motions should be 4 denied to the extent it relates to testimony of Plaintiffs’ expert Phillip Williams, 5 whose October and November Supplemental Reports were the subject of 6 Defendant’s separate motion to exclude. ECF No. 427 at 3. 7 “Evidence is relevant if: (a) it has any tendency to make a fact more or less 8 probable than it would be without the evidence; and (b) the fact is of consequence 9 in determining the action.” Fed. R. Evid. 401. “Irrelevant evidence is not 10 admissible.” Fed. R. Evid. 402. “Irrelevant evidence may merely be a waste of 11 time, may confuse the jury, or may cause serious prejudice to the defense.” 12 McKinney v. Rees, 993 F.2d 1378, 1380 (9th Cir. 1993). 13 Here, the Court’s prior rulings with respect to Location 251 stand in that 14 documents and testimony will not be relevant simply because they reference 15 Location 251, which encompasses the Plymouth Market Zone. The Court and the 16 parties all understand that the Plymouth Market Zone is not coextensive with 17 Location 251 and as such, relevance cannot be established by reference to Location 18 251 alone. However, this does not preclude introduction of all evidence and 19 testimony related to Location 251 if its relevance is established through other 20 means. In other words, Defendants may not exclude every paper, email, or word of ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 8 1 testimony simply because of it refers to Location 251 or does not refer to the 2 Plymouth Market Zone, so long as the evidence has independent relevance. The 3 Court looks to the parties’ specific contentions in turn. 4 First, with respect to Williams’ testimony and reports, the Court agrees with 5 Plaintiffs, and here rules consistent with its ruling in its December 20, 2013, Order 6 Re: Motions to Exclude Experts (ECF No. 429). The Court stated in its order: 7 8 9 10 11 12 13 14 15 16 Williams’ October and November 2013 Report estimates are based on the Location 251 flowsheets, which purportedly include a larger area than the Plymouth area covered by the CMA. See ECF No. 381 at 6. However, the fact that Location 251 includes more information than needed to calculate profit and loss for the Plymouth area does not mean that testimony relating to Location 251 does not “logically advance[] a material aspect of the case.” Contrary to Defendant’s contention that Plymouth lacks the information about corn activity profit and loss from “Canada, North Dakota, Montana or PNW” and thus cannot know what to subtract from Location 251 flowsheets to get Plymouth-specific numbers, ECF No. 381 at 6, Plaintiffs contend that Steve Paulson believes (and has testified) that only a few trades in Arizona for corn were included in the Location 251 profits and thus the majority of transactions unrelated to the CMA can be sorted out by focusing on corn transactions. ECF No. 407 at 9. Whether or not this is true remains a question for trial. The fact that Location 251 includes more information than just Plymouth does not, without more, mean that Williams’ estimates for the Plymouth area fail Daubert’s relevance prong. If Plaintiffs fail to support Williams’ use of the Location 251 flowsheets, Defendant may crossexamine Williams to that effect and/or renew its objection at trial. Accordingly, Defendant’s motion to exclude on these grounds is denied. 17 18 ECF No. 429 at 17-18. Accordingly, Defendant’s request to exclude such evidence 19 already addressed in the Court’s order at ECF No. 429 is denied. 20 ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 9 1 Because Plaintiffs do not contest Defendant’s motion as it concerns 2 reasonable limitations to exclude Location 251, ECF No. 427 at 3, the Court 3 addresses Plaintiffs’ specific exceptions as follows. 4 1. Documents referencing Location 251 produced to Plaintiffs by 5 Defendants. As noted above, insofar as testimony is independently 6 relevant, Defendant’s motion to exclude on grounds that it refers to 7 Location 251 is denied. 8 9 2. Rebuttal or impeachment testimony or evidence in response to testimony related to Location 251 introduced through Defendants. 10 Insofar as Defendant’s testimony or evidence makes relevant such 11 evidence and opens the door to it, Defendant’s motion to exclude is 12 denied. 13 3. Testimony related to Location 251 or other locations that relate to 14 the bonus of Charles Lapke. As noted above, insofar as testimony is 15 independently relevant, Defendant’s motion to exclude on grounds 16 that it refers to Location 251 is denied. 17 4. Documents or testimony that rebuts or impeaches Lansing 18 testimony or evidence stating that certain activity in Location 251 19 was not related to activity covered by the Corn Marketing 20 Agreement. Insofar as Defendant’s testimony or evidence makes ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 10 1 relevant such evidence and opens the door to it, Defendant’s motion to 2 exclude is denied. 3 5. Documents or testimony that show that prior to 2007 Charles 4 Lapke was not trading outside of Location 251. The Court reserves 5 ruling pending trial. 6 6. Documents or testimony to rebut or impeach testimony 7 introduced by Defendants related to locations under the 8 supervision of Paul Frick. The Court reserves ruling pending trial. 9 ACCORDINGLY, IT IS HEREBY ORDERED: 10 1. Defendant’ Motion in Limine No. 1 Re: Plaintiff’s Damages Allegations 11 (ECF No. 385) is DENIED in part and GRANTED in part as follows: 12 a. Defendant’s request to exclude evidence of damages for trade 13 secret and tortious interference claims is DENIED as moot. 14 b. Defendant’s request to exclude evidence of PC’s brokerage fees is 15 DENIED as moot. 16 c. Defendant’s request to exclude evidence of disgorgement damages 17 for accounting is GRANTED. 18 /// 19 /// 20 /// ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 11 1 2. Defendant’s Motion in Limine No. 2 Re: Location 251 and Beyond (ECF 2 No. 387) is GRANTED in part, DENIED in part and RESERVED as 3 indicated above. 4 5 6 The District Court Executive is hereby directed to enter this Order and provide copies to counsel. DATED April 10, 2014. 7 8 THOMAS O. RICE United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTIONS IN LIMINE ~ 12
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