United States District Court, S.D. Texas, Houston Division
DHI Group, Inc. f/k/a Dice Holdings, Inc. and Rigzone.com, Inc., Plaintiffs,
David W. Kent, Jr. Single Integrated Operations Portal, Inc. d/b/a Oilpro and Oilpro.com, et al., Defendants.
MEMORANDUM OPINION AND ORDER
H. MILLER SENIOR UNITED STATES DISTRICT JUDGE
before the court are objections filed by defendants and
counter-plaintiffs Single Integrated Operations Portal, Inc.
d/b/a Oilpro, OILPRO.com, and David W. Kent, Jr.
(collectively, “Oilpro”). Dkt. 264. After
considering the objections, response, reply, other relevant
documents in the record, and the applicable law, the court is
of the opinion that the objections should be OVERRULED.
and counter-defendants DHI Group, Inc. f/k/a Dice Holdings
Inc. and Rigzone.com, Inc. (collectively, “DHI”)
filed a motion to strike Oilpro's expert report of Trent
Livingston under Federal Rule of Civil Procedure 37(c)(1),
arguing that Livingston was an improper rebuttal expert whose
report is premised on documents that were improperly withheld
from production during discovery. Dkt. 215. DHI additionally
filed a motion to exclude Livingston's testimony under
Federal Rule of Evidence 702 and Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 596 (1993). This
case is referred to the Magistrate Judge for pretrial
management, and the Magistrate Judge held a hearing on both
motions on March 21, 2019. Dkt. 259. She granted in part and
denied in part both motions. Id. With respect to the
motion to exclude Livingston's testimony, she noted that
DHI moved to exclude based on unreliability but that
Livingston “substantially bolstered his opinions”
in his response to the motion. Id. The court
considered the record and arguments of counsel at the hearing
and held that, due to the supplementation Livingston had
provided regarding his methodology, DHI could redepose him.
Id. She also ordered Oilpro to pay reasonable
attorneys' fees for filing the motion to exclude because
of the missing explanations in Livingston's expert
objects to the Magistrate Judge's order requiring Oilpro
to pay the fees DHI incurred in filing its motion to exclude
the testimony of Trent Livingston. Dkt. 264. Oilpro argues
that the plaintiffs “knitt[ed] together a heightened
and incorrect Daubert standard” when seeking
exclusion of Livingston's testimony under both Federal
Rule of Civil Procedure 37(c) and Federal Rule of Evidence
702 and Daubert, and that the Magistrate Judge's
order “incorporates this conflated analysis.”
Id. Oilpro contends that Livingston's report
satisfies the inquiry under both Rule 702 and Rule
26(a)(2)(B). But, with regard to the motion to exclude under
Rule 702, which is the motion the Magistrate Judge referenced
when imposing attorneys' fees, Oilpro argues that
sanctions would only be available pursuant to the Magistrate
Judge's inherent power, which requires a finding of bad
faith. Id. Oilpro contends that there was no finding
of bad faith with regard to the alleged missing methodology.
Id. Oilpro also argues that the report was not
defective under either Daubert or Rule 26.
contends that Livingston failed to document the steps he took
to isolate data in his report, which made it impossible to
determine if his methodology supported his conclusions. Dkt.
265. According to DHI, Livingston also could not testify
about the steps during his deposition, but he then
“suddenly produced” the information in response
to the motion to exclude. Id. DHI notes that Oilpro
argues that the Magistrate Judge “failed to appreciate
the very straightforward difference between Federal Rule of
Evidence 702 and Federal Rule of Civil Procedure 26(a)(2)(b).
Id. DHI then hypothesizes that the Magistrate Judge
actually “used Rule 26 to save Defendants from the fate
they deserved under Rule 702.” Id. DHI argues
that the Magistrate Judge's decision “falls
squarely within [the Magistrate Judge's] inherent power
to manage her docket” and is certainly not clearly
reply, Oilpro argues that it was possible to test
Livingston's methodology without the information at issue
but, regardless, the Magistrate Judge's order to pay
attorneys' fees was clearly erroneous because she
considered the sufficiency of a Rule 26 disclosure on a Rule
702 motion to exclude. Dkt. 268. It reasserts that there is
no evidence or finding of bad faith and asserts that DHI is
merely seeking “to weaponize a simple discovery
issue.” Id. Oilpro urges the court to set
aside the finding that the report was deficient and the
objections are now ripe for this court's consideration.
may file objections to a Magistrate Judge's ruling within
fourteen days of being served with a copy of a written order.
Fed.R.Civ.P. 72; see also 28 U.S.C. §
636(b)(1)(c). The standard of review used by the district
court depends on whether the Magistrate Judge ruled on a
dispositive or non-dispositive motion. See Fed. R.
Civ. P. 72; see also 28 U.S.C. § 636(b)(1)(c).
District courts must “modify or set aside any part of
[an order on a nondispositive motion] that is clearly
erroneous or is contrary to law.” Fed.R.Civ.P. 72(a).
For dispositive motions, district courts “must
determine de novo any part of the magistrate judge's
disposition that has been properly objected to.”
Magistrate Judge has an in depth understanding of both the
Federal Rules of Civil Procedure and the Federal Rules of
Evidence, and she understands how both sets of rules work in
tandem to aid in the efficient and just disposition of civil
disputes. In considering whether to allow Livingston's
expert testimony and report, she had two motions before
her-one relying on the Rules of Civil Procedure and one
relying on the Rules of Evidence and Daubert. It
only makes sense in fashioning the appropriate remedy with
regard to this expert testimony and report, which
indisputably presents a unique question, that she relied on
the Rules that fit the appropriate outcome. Here,
notwithstanding Oilpro's adamant arguments that the
Magistrate Judge relied on her inherent authority in issuing
the sanctions, which would require a finding of bad faith,
there is no clear error in imposing sanctions even without
bad faith if she did so within the confines of Federal Rule
of Civil Procedure 37(c)(1). Compare Fed. R. Civ. P.
37(c)(1) (allowing a court to order payment of attorneys'
fees when a party fails to disclose or supplement), with
Chaves v. M/V Medina Star, 47 F.3d 153, 156 (5th Cir.
1995) (“In order to impose sanctions against an
attorney under its inherent power, a court must make a
specific finding that the attorney acted in ‘bad
Federal Rule of Civil Procedure 26(a)(2), an expert must
provide a written report that must contain, among other
things, “a complete statement of all opinions the
witness will express and the basis and reasons for
them.” Fed.R.Civ.P. 26(a)(2) (emphasis added).
During the hearing, the Magistrate Judge specifically found
that “the methodology should have been produced at the
time of the report and therefore it was deficient at that
time.” Dkt. 260 at 51. She therefore imposed
attorneys' fees “for the necessity of having to
file a motion to exclude based on lack of clarity of where
Mr. Livingston has gotten his information.”
Id. In the minute entry, she noted that the report
and deposition were both “missing critical explanations
of [Livingston's] methodology raising credible claims to
their unreliability.” Id. While there are
hints of both the Rules of Evidence and the Rules of
Procedure in these rulings, the Magistrate Judge was
considering motions filed under both sets of rules relating
to the same expert. What is important with regard to the
sanctions order is that the Magistrate Judge found
Livingston's report deficient under Federal Rule of Civil
Procedure 26, which she clearly did.
party fails to provide information as required by Rule 26(a),
courts turn to remedies found in Federal Rule of Civil
Procedure 37(c). Rule 37(c) allows a court, in such
circumstances, to exclude the evidence. Fed.R.Civ.P.
37(c)(1). The Magistrate Judge did not choose this remedy, at
least at this time, because Oilpro provided the missing
information in response to the motion to exclude. Instead,
she chose an alternative sanction allowed by Rule 37. The
Rule provides that “[i]n addition to or instead of
[exclusion], the court, on a motion and after giving an
opportunity to be heard . . . may order payment of the
reasonable expenses, including attorney's fees, caused by
the failure.” Id. Factors courts consider when
issuing sanctions under Rule 37 are (1) the party's
explanation, (2) any prejudice to the opposing ...