Free Response - District Court of Colorado - Colorado

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EXHIBIT A to Defendants' Response to Plaintiff's Objection to Magistrate's Order of April 13, 2007
[Transcript of Telephonic Hearing with Magistrate Judge Shaffer held on April 13, 2007]

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1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 vs. LAND O'LAKES, et al., Defendants. ____________________________________________________________ Proceedings before CRAIG B. SHAFFER, United States Magistrate Judge, United States District Court for the District of Colorado, commencing at 3:01 p.m., April 13, 2007, in the United States Courthouse, Denver, Colorado. ____________________________________________________________ WHEREUPON, THE ELECTRONICALLY RECORDED PROCEEDINGS ARE HEREIN TYPOGRAPHICALLY TRANSCRIBED... ____________________________________________________________ APPEARANCES CHERYL ANDERSON and LUKE SANTANGELO, Attorneys at Law, appearing for the plaintiff. ELIZABETH MORTON and RANDY DUNN, Attorneys at Law, appearing for the defendants. ____________________________________________________________ TELEPHONIC STATUS CONFERENCE IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 04-cv-00329-WYD-CBS ____________________________________________________________ CACHE LA POUDRE FEEDS, LLC, Plaintiff,

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2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P R O C E E D I N G S (Whereupon, the within electronically recorded proceedings are herein transcribed, pursuant to order of counsel.) THE CLERK: All rise. THE COURT: Good afternoon everyone. record in Cache La Poudre versus Land O'Lakes. 04-cv-329. telephone? MS. MORTON: Your Honor, this is Elizabeth Morton on behalf of defendants. MS. ANDERSON: Cheryl Anderson and Luke Santangelo for the plaintiff. MR. DUNN: And Randy Dunn on behalf of American Pride Co-op. THE COURT: All right. I wanted to ­- I know when We're here on a motion. We're on the This is

Who do I have on the

we were last together I had indicated I was going to write something. Unfortunately, folks, with the press of business I thought it was ­- I would be doing you a greater favor if I ruled on this pending motion to strike from the bench. That way you would know exactly where things stand so you can make whatever decisions and take whatever action you think is appropriate in light of my ruling. Again, the motion at issue is document 309, which is defendants' motion to strike. It was the subject of some

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3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 discussion at an earlier hearing, that is on April 9th. that hearing, I asked for some additional information. At I

received some supplemental materials from plaintiff on April 10, that's document 324. I've reviewed that supplemental

brief and the information contained in that supplemental brief. I simply wanted to give defendant an opportunity to

respond to any of the information in that supplemental brief, and then I am prepared to tell you what my ruling is. Ms. Morton, any additional comments you would like to make in light of the supplemental brief? MS. MORTON: I think the only comment that we would make is that it's clear to us now that these witnesses are more important than what we believed they were and what plaintiff indicated that they were, since they have said that they're going call 11 of the 20 witnesses, and that basically witnesses. ­that more than doubles their will call

Right now they only had 7 -­ or prior to this

they only had 7, and now there are 18 witnesses that they are planning on calling at trial. And so I -- it's just a matter of they -­ they appear more important now since they are calling over half of the witnesses that they disclosed in October. they -­ THE COURT: Well, I guess -­ MS. MORTON: -- doubled the witness list, so I And then

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4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 don't know if that makes the trial go longer, but I don't know how long each witness is planning on testifying, but it -­ THE COURT: Well, I guess. mean, okay. How does that -- I

Let's say, for purposes of our discussion that

you're absolutely correct, that this doubles their will call list. How does that relate to your argument that these should be struck? I mean, assuming you're

witnesses

correct, I guess my response is you're going to have to tie this up a little more effectively. To simply make that

statement doesn't help me or give me any sense of how you then either use that fact to bolster your argument, use that fact to undermine your argument. You haven't made an

argument, you just stated an observation. MS. MORTON: I'm just stating -­ I am just stating an observation. I'm just stating that it appeared that

these witnesses are much more important than what we were led to believe, that they are only initially intending to call at least one, maybe two or three is what we -­ we were impressed with that, and now their intention is to call at least 11 of these, which -- and it doubles their witness list, which is now that these are the witnesses that are going to support their claims as opposed to the other witnesses that had this information that they did disclose during the discovery period.

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5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor. THE COURT: Well, you clearly are. I mean, between our discussions on April 9th and your supplemental brief on April 10th, you added a new name. I have no sense of where THE plaintiff. COURT: Okay. Let me ask someone for

I will tell you, I was a little surprised when

I looked at your supplemental brief to see this additional name, Linda Panepinto. Your supplemental brief indicates You

that you first learned of this woman on April 10, 2007.

say that she's likely to have information dealing with market penetration. I guess my question is: At what point

does Cache La Poudre believe that this all comes to an end? I mean, this is death by a thousand cuts if you're just keep adding people. MS. ANDERSON: Your Honor, Ms. Panepinto came into the Cache La Poudre mill on the morning of April 10th and Mr. Charber (phonetic) was there and had a conversation with her. It was the first time that it had come to our going to

attention that she actually had some distribution activity. THE COURT: Well, I guess, but are you then leaving open the possibility that your client may be continuing to talk to people up to the first day of trial? I mean, if

that's the rationale for adding witnesses, Ms. Anderson, where does it ever come to an end? MS. ANDERSON: No, we're not proposing that, Your

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6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 was this process would end. MS. ANDERSON: Well, this is new information that acquired on April 10th. We were submitting the

supplemental brief, and we went ahead and put her on the list, making it clear that she -­ her information was new. She is important, Your Honor. THE COURT: Well, I appreciate she's important, but ­- but, I'm sorry, at some point the pretrial process has to come to an end. Now, I have ­- and I will say that this

motion to strike and the facts underlying the motion is certainly an interesting issue and there's a lot to digest, and I have done that. cited. I have read the cases that you folks

I did my own research to try to pull up additional

cases dealing with Rule 26(e) and the interplay between Rule 26(e) and Rule 37(c). I have gone back and reread defendants' motion, the plaintiff's response, plaintiff's supplemental brief. In light of the information in those submissions, as well as the case law that I have reviewed, I have determined that I will grant in part and deny in part defendants' motion to strike. And let me see if I can explain how I'm delineating

that treatment. Based upon my review of the case law, there does appear to be case law, and, in fact, the advisory committee notes to Rule 26(e) seem to support the notion that if

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7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 information is disclosed in a deposition, that may suffice for purposes of meeting the Rule 26(e) requirements. Ben, can you do me a favor? is some notes that I've got. On my computer there

It's one of my open documents Yeah, just

-- you'll be able to tell -- on my computer. print it off, will you?

While Ben is doing that, there is case law, as I say, that allows a person to avoid the strict requirements of Rule 26(e) if information was otherwise disclosed in a deposition. extent the There is no doubt in my mind that to some plaintiff of 26(e). has failed However, to with comply with to the the

requirements

respect

individual Mitch Anderson and the individual Rod Johnson, both of those individuals were mentioned and discussed, apparently, at depositions. In both of those instances,

there was the potential at those depositions for the parties or the lawyers to ask follow-up questions. There was the

possibility to establish some context for the references to Mr. Anderson and Mr. Johnson. I would also note that both Mr. Anderson and Mr. Johnson were affiliated, even indirectly, with defendant, Lake O'Lakes. So at least with respect to Mr. Anderson and

Mr. Johnson, Land O'Lakes clearly had the ability following those depositions to contact these individuals and elicit information from them. Based upon a strict application of

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8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Rule 26(e) and the advisory committee notes, as well as the prevailing case law, I will deny defendants' motion with respect to Mr. Anderson and Mr. Johnson. With respect to

Kimberly Fortune, Tammy Hodge and LeAnn Strain. I will also deny the motion to strike. Now, what strikes -­ what drove my decision with respect to Ms. Fortune, Ms. Hodge and Ms. Strain is the fact that these are individuals who were discovered apparently by the plaintiff very late in the process. I don't find any

indication of bad faith or willfulness with respect to Ms. Fortune, Ms. Hodge and Ms. Strain. Certainly no bad faith

or willfulness on the part of the plaintiff. What strikes me about Ms. Fortune, Ms. Hodge and Ms. Strain is the fact with respect to these three people defendants waited an inordinately long time to move to strike them. And certainly with respect to Ms. Fortune, Ms. Hodge and Ms. Strain, there was ample opportunity for defendants to have taken some action to discover information about them. behind the And the only reason that the defendant may be eight ball with respect to these three And

individuals is because the defendant sat on his hands.

I will not strike these three individuals, because for me to strike these three individuals would essentially reward defendants for their inactivity, and I will not do that. So I'm denying the motion with respect to Fortune, Hodge and

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9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is the Strain. With respect to everyone else, I'm going to grant the motion to strike, and let me explain why. The first

thing that I did is I went back and reread my decision in Sender versus Mann, which is found at 225 Federal Rule of Decision 645, a decision that I made -­ or an order that I entered in 2004. And in Sender versus Mann, I made some

observations which I believe still correctly state the prevailing law, and that is that initial disclosures are intended to provide the parties with information essential to the proper litigation of all relevant facts to eliminate surprise and to promote a settlement. I also noted that Rule 26(a)(1) disclosure

requirements should be applied with common sense in light of the principles of Rule 1. I admonish the parties not to

indulge in gamesmanship with respect to their disclosure obligations. Now, what I also discussed in Sender versus Mann Rule 26 obligation to supplement mandatory

disclosures at appropriate intervals, to the extent that a party learns that in some material respect the information disclosed is incomplete or incorrect and if the additional or corrected information has not otherwise been made known to the other parties during the discovery process. I went on to say that, quote, Although Rule

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10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26(e)(1) recognizes that supplementation of initial

disclosures can take various forms, alternative methods for supplementation must be consistent with and further the objectives underlying the mandatory disclosure requirement. Rule 26(e)(1) must be governed by the same common sense standard applicable to Rule 26(a) and supplemental disclosures should provide the opposing party with enough useful information to make informed decisions regarding discovery and trial preparation. So essentially what I said was is that in

determining whether or not a party is properly supplemented under 26(e), you have to, to a very great extent, be guided by the mandates and objectives underlying 26(a), and that I think is a fundamental problem that plaintiff has with respect to these particular individuals. 26(a) says that a party has to identify those individuals likely to have discoverable information that the disclosing party may use to support its claims, identifying the subjects of the information. Distilled to its essence, The disclosing party party must had

Rule 26(a)(1) requires the following: must identify that individuals. the The

disclosing being

indicate

individuals

disclosed

information that the disclosing party may use to support its claims. the And, finally, the disclosing party must identify of the information that these particular

subjects

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11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Plaintiff individuals may provide that may support claims. Now, if all of that information is provided by some alternative means through the discovery process, then the supplementation requirements of 26(e) are satisfied. Now, what I did hear is I went back and I looked at plaintiff's own representations and when I accept

plaintiff's representations at face value, I cannot find that 26(e) has been satisfied with respect to Joaquin Crago, Wes Hollister, Justin Lauridson, John Mossbarger, Robbie Newkirk, Glen Rask, Darla Shanaman, Justin Crago, Casey Lytle and Mark Overman. And let me just that give Glen a couple was of examples. in

represents

Rask

identified

plaintiffs -- during discovery in plaintiff's profile sales receipts. in the These sales receipts were provided to defendant of discovery. The sales receipts were

course

included in a file labeled First Use Profile Receipts. They tell me Mr. Rask was identified in five out of 21 of those receipts. They also tell me that Mr. Rask's contact

information was readily available from Treibers -­ Treiber's customer list. They go on to say, quote, Given the importance of Tribor's first use dates and the number of receipts for purchases by Mr. Rask early on and through the years

thereafter, defendants were aware that Mr. Rask had this

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12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 relevant information. I do not believe that that satisfies That information would

the supplementation requirements. never comply with 26(a)(1)(A).

The fact that Mr. Rask appears on 5 out of 21 receipts in no way indicates, quote, that Mr. Rask is an individual that plaintiffs may use to support their claims. And, more importantly, it doesn't necessarily put the

defendants on notice of the information Mr. Rask may have that plaintiff may use. All they know is Mr. Rask appears

as a name in a file, and if that's all it takes to comply with Rule 26(e)(1), then that effectively writes the

26(e)(1) supplementation requirement out of the rule. The whole purpose of the supplementation

requirement, like the initial disclosure requirement, is to provide the receiving party with enough information so they can make informed decisions about how to prepare for trial. I do not believe that the information available about Mr. Rask was sufficient to constitute supplementation. If Mr.

Rask was that important, I think the onus was on the plaintiffs to get a handle on their case and to disclose Mr. Rask properly. Since Mr. Rask was not disclosed in a timely manner, I do not find that plaintiff has properly complied with Rule 26(e)(1), either explicitly or indirectly through other discovery. And the same analysis would apply to these

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13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other individuals that I'm striking. So, for example,

plaintiffs argue that Justin Lauridson appears on Treiber's customer list, appears on numerous profile sales receipts, may have been captured in a photograph, whose -- and his name may have appeared on the back of the photograph. That doesn't in any way indicate that Mr.

Lauridson's a person who may have information about market penetration and maybe a person the plaintiff intends to use to prove that issue. Simply providing some names in a

discovery context is no guarantee that people are going to testify, particularly a case like this where the parties have effectively pursued discovery on a back up the truck basis. met And I cannot -- I cannot find that plaintiffs have burden. I cannot find that plaintiffs

their

supplemented in a timely manner. And the reason why I'm distinguishing these

individuals from individuals such as Ms. Hodge and Ms. Strain is because here the failure to take prompt action is directly attributable to plaintiff's own failures. And for

me to ignore that fact I think essentially fails to properly respect the rules themselves. I will not penalize plaintiff when the only delay is really attributable -or the

principal delay is attributable to the defendant.

But with

respect to these particular individuals, I'm striking. Here I find that the principal delay is the -- or should fall on

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14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Court has plaintiffs. On plaintiff, I should say.

I understand and I absolutely recognize that the to take into consideration the Woodworker's

(phonetic) factors.

With respect to the witnesses that I'm With respect to the witnesses it would be disruptive and

striking, I have done that. I'm striking, I find that

improperly burdensome to require the defendant to go around and depose or potentially conduct discovery with all of these people. If these people were sufficiently important

to be will call witnesses, it was incumbent upon plaintiff to act in a timely manner. In that respect I am guided by Judge Babcock's decision in Gallegos versus Swift & Company, found at 2007 Westlaw 214416, a decision by the District of Colorado in January of 2007. As Judge Babcock noted, providing the

defendant the opportunity to cure prejudice would mean reopening discovery and postponing the trial, options which are expensive and untenable at this stage of the proceeding, and I'm guided by the same analysis. So for that reason, and based upon the rationale I've just explained, I'm going to grant in part and deny in part the motion to strike. Again, so the record is clear,

I'm denying the motion with respect to Mitch Anderson, Kimberly Fortune, Tammy Hodge, LeAnn Strain and Rod Johnson. I'm denying the motion -- or I'm grant' -­ I'm denying it as

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15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 plaintiff to those five individuals, I'm granting the motion as to everyone else. With respect to Linda Panepinto, I understand that recently discovered her, very, very recently

discovered her existence, but at this point I believe just too much time has gone by and we are too close to the trial date. Plaintiff will have to go to trial with the witnesses

that it has listed and that I've allowed. Questions, comments? MS. MORTON: Your Honor, this is Elizabeth Morton. I think the only question we would have regards depositions that we would be able to take of the remaining people. THE COURT: I will allow you to take a deposition of Kimberly Fortune. of Tammy Hodge. LeAnn Strain. I will allow you to take a deposition

I will allow you to take a deposition of I'm assuming that Mr. Anderson and Mr.

Johnson are readily available to you as current or former employees. You're not suggesting you want to depose those

people, are you? MS. MORTON: No. THE COURT: I didn't think so. I will allow you to You will take

take Ms. Fortune, Ms. Hodge, Ms. Strain. their deposition on your nickel.

Those depositions must be

completed within the next three weeks. MS. MORTON: Okay. Thank you, Your Honor.

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16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. SANTANGELO: Your Honor, may I add something? THE COURT: Sure. MR. SANTANGELO: This is Luke here. THE COURT: Absolutely. MR. SANTANGELO: Your Honor, I believe that your eliminating witnesses from us is grossly unfair, and that your excluding them is an extreme remedy that basically eliminates the possibility of presenting the full market penetration that Cache La Poudre Feeds has in this matter, a very significant and important fact. THE COURT: And, Mr. Santangelo, don't

misunderstand me.

I realize it's an important fact, but

you've known this is an important issue for how many months or years? MR. SANTANGELO: Your Honor, we get invoices from them weeks ago. Weeks ago we have to analyze invoices that

come from the defendant, and we have no ability to counter those types of things. It's unfair, Your Honor.

THE COURT: Yeah, but, see, the problem you've got is this, Mr. Santangelo. First of all, the arguments you We have no ­- we

made in your brief, your arguments are:

had no duty to supplement because we disclosed these names of these people in some instances years ago. But, see, the

argument that I don't understand -- your logic breaks down. You're saying we didn't appreciate the significance of these

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17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 people till we got Land O'Lakes invoices. Well, if you

didn't appreciate their significance till you got Land O'Lakes invoices, why are you holding Land O'Lakes

accountable because these names happened to be mentioned in a massive paper? MS. ANDERSON: Because they're the ones that have filed the motion to strike late, Your Honor. THE COURT: You failed to designate in a timely manner, and that's why I've distinguished. Clearly when you questioned Mr. Sparks about Mr. Anderson, that satisfies the requirements as the advisory committee notes indicate. And

at that point Land O'Lakes had enough information, and they certainly had the ability to go -- to talk to Mr. Anderson. But, I'm sorry, Ms. Anderson. Just to simply say

that some people are mentioned in a mass of documents and therefore that eliminates your responsibilities, I'm just not satisfied with this, because you got those invoices how many months -- I mean, you took the deposition in June of 2006. When did you get the invoices? MR. SANTANGELO: Your Honor -­ MS. ANDERSON: Which deposition -THE COURT: No. Answer my question. Mr.

Santangelo, just be quiet.

I'm talking to Ms. Anderson. I'm not sure what deposition

MS. ANDERSON: Wait.

you're referring to, Your Honor.

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18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of 2005. THE COURT: Then, ma'am, you should have moved to reopen discovery. MS. ANDERSON: Well, Your Honor, we -­ the invoices were ordered by you to be produced by them and that was the time they were given. Of course it would be understood that invoices? MS. ANDERSON: Invoices were provided to us in March and April of 2006. THE COURT: Then why didn't you immediately -­ the discovery period didn't end until August. MS. ANDERSON: No, the discovery closed August 31st THE COURT: Now, you took the compliance deposition -MS. ANDERSON: In -- on June -­ THE COURT: -- on June 15. When did you get these

we had to evaluate those and that takes some time. THE COURT: No. MS. ANDERSON: There were thousands of invoices, Your Honor. THE COURT: Folks, listen. Don't misunderstand me. I respect your decision. with my ruling. I respect that you don't agree

But there's no point in us going around And if you don't

because I'm not going to change my ruling.

like my ruling, and I absolutely respect your right not to

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19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 can say. untimely. like my ruling, I'm not suggesting you should like my ruling, and you ­MS. ANDERSON: Your Honor, for purposes of the record we would like it to reflect that it is in fact our position that the interrogatory responses to questions

specifically asking about the people that were referenced in those files were responded to, the files were identified, and their significance was identified to the defendant. THE COURT: Folks, my ruling will stand. ruling from the bench. I am

To the extent that someone, either

Land O'Lakes or Cache La Poudre, takes exception to my ruling, that's absolutely fine. right. It's certainly within your

I have applied what I think is the law and the case

law in the appropriate manner. If Judge Daniel should chose to disagree with me, he's certainly well within his rights to disagree with me, and you certainly have the opportunity to take a Rule 72 objection. I'm simply telling you that

the time for that objection starts running as of my ruling because I'm ruling from the bench. And beyond that, I don't that there's much more we I think -- I think your supplementation was And to the extent that you are arguing that your

discovery responses constitute proper supplementation under Rule 26(e), I have to respectfully disagree with that assessment. And since your discovery supplementation was

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20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 position to add untimely, Rule 37(c) applies. Rule 37(c) says that the

sanction is to exclude the witness from trial unless the Court determines that some other sanction is appropriate. In this instance to suddenly suggest that you want 11 or so will call witnesses and 4 may call

witnesses, practically speaking, would require a substantial reopening of discovery. And given the timing of this

particular case and given the impending trial date, while in some instances to I the believe that the I delay will is allow solely those

accountable witnesses.

defendant,

and

As to the witnesses I'm striking, I believe

that plaintiff is accountable for a substantial portion of that delay. MS. ANDERSON: And, Your Honor, it would be your then that the timing was not substantially

justified, is that correct? THE COURT: Yes. I think frankly it was incumbent

upon plaintiff to move much faster or to seek other relief at a point in time when the Court could effectively manage this case. But to sit and wait and file -- to identify some

20 plus people the day before -- the day or a couple of days before the final pretrial conference, I think that is untimely. I would have expected faster action, particularly in a case such as this. Any other comments?

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21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ___________/s/___________________ Signature of Transcriber April 26, 2007 Date I certify that the foregoing is a correct (Whereupon, the within hearing was then in conclusion at 3:33 p.m. on April 13, 2007.) MS. ANDERSON: No. MS. MORTON: Not from defendants. THE COURT: All right. Thank you all.

MS. ANDERSON: Thank you.

transcript, to the best of my knowledge and belief, from the record of proceedings in the above-entitled matter.

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