Antitrust Law Daily Wrap Up, ANTITRUST—D. Kan.: Expert witness substitution allowed in urethane price fixing case against Dow, (Aug 15, 2013)

By Tobias J. Gillett, J.D., LL.M.

In three cases brought by direct action plaintiffs who opted out of a class action against Dow Chemical Co. that that resulted in a $1.2 billion judgment against the firm, the federal district court in Kansas City, Kansas, has allowed the plaintiffs to substitute their damages expert (In Re: Urethane Antitrust Litigation, August 13, 2013, Lungstrum, J.).

The court previously stated its intent to leave resolution of Dow’s Daubert motion to exclude testimony by the plaintiffs’ damages expert, Dr. Matthew Raiff. In their motion, the plaintiffs sought to substitute another expert, Dr. Leslie Marx, for Raiff, on the grounds that Raiff was “presently disabled; that he will remain so for at least a period of six to twelve months; that continued participation in this case would be detrimental to his health; that it is uncertain whether he will ever recover; and that he is withdrawing from the case.”

The court granted the plaintiffs’ motion. The court cited the Tenth Circuit’s 2011 decision in Rimbert v. Eli Lilly & Co., 637 F.3d 1247, in which the court set forth four factors for determining whether a district court had abused its discretion in refusing to allow a scheduling order amendment permitting the substitution of an expert witness: “(1) the prejudice or surprise in fact of the party against whom the excluded witnesses would have testified, (2) the ability of that party to cure the prejudice, (3) the extent to which waiver of the rule against calling unlisted witnesses would disrupt the orderly and efficient trial of the case or of other cases in court, and (4) bad faith or willfulness in failing to comply with the court’s order.”

Here, the factors weighed in favor of permitting the scheduling order amendment, the court concluded. No trial date had been scheduled, no pretrial order had been entered, and a magistrate judge had recently ruled that Dow could conduct additional discovery. Therefore, the plaintiffs would have plenty of time to submit a new expert disclosure and any additional reports or depositions, and Dow would not suffer prejudice.

The court rejected Dow’s argument that it would suffer prejudice because it saw Raiff as a “flawed witness” and because it would incur costs from additional expert discovery. The court noted that the Rimbert court had “made clear that the type of prejudice relevant to this analysis relates to the defendant’s ability to mount a defense to the new expert’s testimony,” and that incurring additional expenses did not qualify as prejudice. Moreover, Dow did not show that the plaintiffs were not diligent or had acted in bad faith.

Dow also unsuccessfully argued that the court should dismiss the motion without prejudice because the plaintiffs had not established that Raiff would not be available at trial. Although the plaintiffs would be able to raise the issue again once a trial date had been set, the court observed that Raiff had withdrawn from the case, depriving the plaintiffs of an expert at present, and the trial date might not allow sufficient time for discovery and motions resulting from the substitution.

The court denied Dow’s request for discovery into Raiff’s condition prior to the court’s ruling, noting that Dow had not provided any reason “for questioning either plaintiffs’ evidence or their good faith.” However, the court approved a restriction proposed by the plaintiffs that Marx would “not be permitted to develop her own models or methodologies, but must endorse and defend Dr. Raiff’s opinions.”

The cases are MDL No. 1616, No. 04-1616-JWL, No. 08-2617-JWL, No. 09-2026-JWL, and No. 10-2077-JWL.

Attorneys: Brian R. Markley (Stinson Morrison Hecker LLP) for Dow Chemical Co. Gloria B. Solomon (Trout Cacheris, PLLC) for Carpenter Co. Edward H. Wasmuth, Jr. (Smith, Gambrell & Russell, LLP) for Woodbridge Foam Corp. David C. Eddy (Nexsen Pruet, LLC) for Dash Multi-Corp, Inc. Andrew Stanley Marovitz (Mayer, Brown, Rowe & Maw LLP) for BASF AG. Bryan Turner White (White, Allinder, Graham, Buckley & Carr LLC) for Lyondell Chemical Co. Daniel Schaefer (Dickstein Shapiro, LLP) for Direct Action Plaintiffs.

Companies: Dow Chemical Co.; Carpenter Co.; Woodbridge Foam Corp.; Dash Multi-Corp, Inc.; BASF AG

Cases: Antitrust KansasNews