United States District Court, D. Arizona
ORDER
DOMINIC W. LANZA UNITED SLATES DISTRICT JUDGE
Pending
before the Court is Defendant Wilhelm's motion for
sanctions (Doc 134), which Plaintiffs oppose (Doc. 136). The
Court heard oral argument on the motion on June 17, 2019. As
explained below, the motion will be granted in part and
denied in part and the parties will be ordered to file a
joint supplemental brief after meeting and conferring.
RELEVANT
BACKGROUND FACTS
In
January 2018, Plaintiffs provided their initial MIDP
disclosure. Although this document identified various
categories of damages Plaintiffs seek to recover in this
case, it failed to provide a computation of those damages:
Plaintiffs . . . seek monetary damages to be determined at
trial with regard to their allegations against Defendants
relating to severed and interrupted business relationships,
business disruption, lost benefit of their investments, lost
potential financing and investment, lost profits, lost
competitive advantage, loss of valuable product, costs of
delay and harm to reputation in the market, litigation costs,
attorneys' fees, and interest. As discovery continues,
Plaintiffs will supplement this disclosure with regard to
amount of such damages and losses. Plaintiffs refer to
documents produced at EFG000001-EFG000272 for evidence of the
damages and losses described herein.
(Doc. 136-2 at 12.)
In
February 2018, the scheduling order was issued. (Doc. 55.) It
imposed a deadline of December 28, 2018 for the completion of
“Fact discovery” and a deadline of March 1, 2019
for the completion of “All discovery.”
(Id. at 2-3.)
In
November 2018, as part of the meet-and-confer process arising
from a discovery dispute, Plaintiffs' counsel sent an
email to Wilhelm's counsel that provided additional
information concerning Plaintiffs' damage theories. That
email stated in relevant part as follows:
[A]s to damages and your request for profit documentation.
There are no documents as to Plaintiffs' lost profits
because they are not yet profitable entities. We do not have
lost customer sales yet because, as far as we now know, your
clients are not yet in production and have not yet taken
customers from us. Our damages claims are and will at trial
be primarily based on lost future profits, revenues and
customers based on the alleged misappropriation of trade
secrets, business disparagement and tortious interference
with Dr. Li's contract. We will seek compensation for the
lost benefit of the $1 million we paid to Dr. Li to obtain
the devulcanization technology that we allege has been
misappropriated. We will also seek compensation for the lost
time and delay caused to us by Defendant Wilhelm's
negligent mixing and creation of unusable [chemicals].
(Doc. 136-4 at 2.)
On
February 14, 2019, at the parties' request, the Court
issued an order extending the deadline for completing
“All discovery” to May 24, 2019. (Doc. 132.)
On
February 21, 2019, Wilhelm's counsel sent an email to
Plaintiffs' counsel explaining that, although
“Plaintiffs' claims against Mr. Wilhelm have been
outstanding for almost two years now . . . Plaintiffs have
never provided the required calculation of damages.”
(Doc. 136-8 at 2.) Thus, Wilhelm's counsel asked
Plaintiffs' counsel to provide supplemental disclosures
on this topic. (Id. at 2-3.)
On
March 1, 2019, Plaintiffs' counsel provided an
“amended and supplemental” version of
Plaintiffs' MIDP disclosure. (Doc. 136-10.) This document
stated that Plaintiffs were seeking the following seven
categories of damages:
(1) $214, 000 in consulting payments to Wilhelm;
(2) “Loss of the full benefit of the rubber
devulcanization technology sold to Excel by Dr. Li and
licensed to EFG: some portion of $1 million to be determined
by a jury”;
(3) $261, 163 for chemicals that Wilhlem had improperly
ordered or misused;
(4) “Loss of profit from approximately one-year delay
created by inability to use modifier compound negligently or
intentionally created: $20, 800, 000 in net profit from 2015
pro formas”;
(5) “Lost potential funding from Green Injectors: $15
million or to be ...