It’s not very often an appellate court takes away a jury verdict because of the trial court’s discretionary ruling to extend a deadline. The case is Petrone v. Werner Enterprises (8th Cir. 10/10/2019).    Student drivers for Werner Enterprises brought a FLSA collective action for alleged unpaid wages earned during an eight weeks student-driver training program.   The plaintiffs alleged they were entitled to wages for time spent on short rest breaks and while resting in their sleeper berths.   A jury awarded the student drivers $779,127 for their short term rest breaks, but nothing for the sleeper berth claims.  The court then awarded liquidated damages and attorney’s fees.

The appeal was about the plaintiffs’ late disclosure of a supplemental expert witness report. Plaintiffs disclosed their original expert report in compliance with the deadline in the scheduling order. But, defense counsel’s deposition of the plaintiff’s expert “revealed considerable flaws in the methodology for computing allegedly uncompensated break and sleeper-berth time.”   The expert admitted in his deposition he had double counted some times, and others were artificially split into two separate breaks because they spanned 12:00 a.m., and thus occurred in two separate days.   As a result, the expert’s original calculations of the lost wages were inconsistent and inflated.

After the deposition, which occurred well after the expert disclosure deadline, plaintiffs’ counsel requested the court to amend the scheduling order to permit a “supplemental” expert report. The “supplemental” report corrected the flaws the defense counsel had exposed in the expert’s deposition, and was served one month before the deadline to file motions to exclude the expert testimony.

Naturally, Werner opposed extending the expert witness deadline.   The expert’s deposition revealed enough flaws in his proposed testimony that the court might exclude it altogether, which would make it difficult for the plaintiffs to prove damages.    If the deadline was extended, however, it would allow the expert to present a modified opinion free from the flaws contained in the expert’s original report.

The outcome turned on Federal Rule 16(b), which permits a court to modify a scheduling order for “good cause.” In this case, the trial court ruled good cause did not exist, because the expert’s so-called “supplemental” report did not really “supplement” his original opinions, as much as correct them. The court found that nothing prevented the expert from recognizing the flaws in his report before he was deposed.  While an expert is permitted to supplement expert opinions based upon information not available at the time the original report was prepared, he cannot use opposing counsel’s efforts identifying the flaws in the original report to hone his methodology and present more robust expert opinions.

What was the consequence of the “no good cause” finding?  It turns out, not much.     The court granted the requested extension of expert disclosure deadline anyway, reasoning that the lack of good cause was outweighed by the general preference in the Rules of Civil Procedure “for determination of cases on the merits.”   The trial court also relied on Rule 37(c)(1), which allows the trial court to impose as a sanction for failing to properly supplement discovery something less than complete exclusion of the evidence.    The sanction the trial court chose was to give Werner the opportunity, at plaintiffs’ expense, to depose the expert about the supplemental report, as well as awarding Werner costs incurred because of the late submission.   In the end, the expert was permitted to testify about the value of the lost wages, which he opined was $779,127.  That was precisely the amount the jury ultimately awarded.

In a 2-1 decision, the Court of Appeals vacated the judgment against Werner, holding the trial court abused its discretion in granting the plaintiffs’ request to modify the scheduling order despite finding no good cause existed for doing so.   The majority ruled the trial court should not have considered lesser sanctions under Rule 37 because Rule 37 did not apply in these circumstances.    The trial court also erred in finding the general preference for resolving disputes on the merits trumped the mandatory good cause standard in Rule 16(b).

What happens next? Vacating the judgment means the case is remanded back to the trial court, except this time the plaintiffs will not be allowed to present their modified expert opinion that was submitted after the original disclosure deadline.    The next battle will be whether the expert’s original, but admittedly flawed opinion, is still admissible to prove the plaintiff’s damages.

This opinion demonstrates that something as simple as a deadline in a scheduling order can have potentially an outcome determining effect on the case.   While a missed deadline will not necessarily gut every case like it did potentially to Petrone, when it comes to evidence you can’t live without, pay close attention to the disclosure deadlines.   This case is also a good reminder that expert witnesses should not expect to get a mulligan for sloppy work.     If it’s not done right the first time you may not get another chance.