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Deere & Co. v. Ohio Gear

January 19, 2007

DEERE & CO, ET AL., PLAINTIFFS,
v.
OHIO GEAR, ET AL DEFENDANTS.
OHIO GEAR, ET AL., THIRD PARTY PLAINTIFFS,
v.
CARSON'S NUT-BOLT AND TOOL CO., THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Joe Billy McDade United States District Judge

ORDER AND OPINION

Before the Court is Plaintiffs' Motion for a Rule 16 Conference and for Entry of a Scheduling Order. [Doc. 232.] Defendants have also filed a Response to the Motion. [Doc. 233.] These documents were filed in response to a Text Order from this Court for the parties to file an agreed Proposed Scheduling Order. In reviewing these submissions it is apparent that there is still an issue between the parties regarding the efficacy of the claim for "lost profits," the resolution of which would surely facilitate agreement upon a schedule for proceeding. This Court will, for the forth time, address the issue of lost profits. Given the protracted state of the record, the Court deems it necessary to first briefly cover the procedural history and basic facts of this case.

I. BACKGROUND

At its core, this case involves a contract dispute between John Deere & Co. ("John Deere"), a manufacturer of tractors and other equipment, and Ohio Gear, a provider of tractor parts. John Deere is seeking damages for allegedly faulty parts which Ohio Gear supplied. One of the issues which surfaced long after the case commenced and after all discovery was closed was the issue of lost profits sustained by John Deere as a consequence of the allegedly faulty parts.

The issue first surfaced on July 7, 2004 when Plaintiffs filed a "Motion for Leave to disclose supplemental and additional documentation of damages." [Doc. 115.] That motion was filed two months after the close of factual discovery and almost one month after the close of expert discovery on June 16, 2004. On July 16, 2004 this Court held a hearing and entered an Order on July 19, 2004 [Doc. 132] denying introduction of any evidence relating to lost profits as a sanction for Plaintiffs violating Fed. R. Civ. P. 26(a). As discussed in the July 19th Order, John Deere had failed to disclose this category of damages, their computation and supporting documentation, and related damages experts as part of the initial disclosures required by Rule 26(a) of the Federal Rules of Civil Procedure. Deere's belated motion to provide this information did not come until 51 days after the close of all discovery.*fn1 At the time, this Court noted that adding the issue of lost profits to the case after the close of discovery would change this case from one involving $3.2 million in damages to one involving $18 million in damages. [Doc. 132 at 4.] Even Plaintiffs' counsel conceded at the hearing that the amount and nature of the damages which they were seeking would alter the dynamics of the case. The Court noted that this would require reopening discovery. Undoubtedly, numerous depositions would need to be retaken and this case would be returned to what was already a protracted discovery process consuming over two years. As a result, Plaintiffs' Motion for Leave was denied and Plaintiffs were barred from proceeding on the issue of lost profits as a sanction under Rule 37(c). In addition, this Court also addressed the testimony of one of Plaintiffs' experts, Tamika Tremaglio ("Tremaglio"). Because Tremaglio's testimony focused on the issue of lost profits, this Court barred her testimony. However, upon review, on October 6, 2004, this Court modified its previous order and allowed Tremaglio to testify to additional matters in the case, but not to the issue of lost profits. [Doc. 174.]

Prior to this Court's modified Order, Defendants filed a Motion for Summary Judgment on August 9, 2004. Plaintiffs did not respond to this Motion and instead filed a series of other Motions. Among these additional motions was a "Motion for Relief from the Court Order[s]" [Doc. 178] in which Plaintiffs sought relief from the Court's previous order precluding the issue of lost profits. Plaintiffs primarily argued that the Defendants had not complied with their discovery obligations, and as a result, this Court needed to relieve Plaintiffs from the discovery sanction.

This Court waited for five months for Plaintiffs to respond to the Motion for Summary Judgment while additional discovery related motions continued to pile up. Since, on inquiry from the Court, Plaintiffs refused to file a response to the Motion for Summary Judgment including a Rule 56(f) affidavit, this Court went ahead and ruled on the Motion on February 3, 2005. In doing so, this Court deemed all facts submitted in support of Defendants' Motion admitted based upon Local Rule 7.1(D)(2). Based upon these admitted facts, Defendants' were granted summary judgment, and all the other pending motions which had piled up were moot.

Plaintiffs then appealed this Court Order to the Seventh Circuit. The Seventh Circuit noted that Plaintiffs should have filed a Response to the Motion for Summary Judgment under Fed.R.Civ.P. 56(f) requesting a continuance and explaining why additional discovery was necessary. Nevertheless, the Court held that the invocation of Local Rule 7.1(D)(2) without any Response by Deere was an abuse of discretion given the history of the motions practice in the case.*fn2 While not addressing the merits of the additional pending motions, the Circuit Court emphasized the need to address the motion history. Specifically, the Court stated as follows:

By granting Deere's [previous motion to depose certain experts], the district court had agreed that the disputed expert witness discovery was necessary to Deere's response to Ohio Gear's summary judgment motion. Ohio Gear's October 13 motion to enlarge the previously extended time for the experts' depositions added some ambiguity to the situation. The court did not decide that motion in a timely fashion. In the meantime, the parties made additional written submissions regarding the scope of the proofs and the need to set new event dates in the case based on the continuing disputes over expert witnesses. Oral argument was requested, but the court did not convene a motion hearing. These matters, too, were left unaddressed. Yet the court proceeded to invoke the local rule, treat the facts as admitted, and enter summary judgment-even though the stack of undecided procedural motions included ones targeting the disputed expert discovery that the court had previously determined was a predicate to Deere's response to the summary judgment motion. The history of the motions practice in this case was such that the court should not have bypassed all the accumulated discovery motions to grant summary judgment on the basis of procedural default. Deere & Co. v. Ohio Gear, 462 F.3d 701 at 707 (7th Cir. 2006).

Now this case has returned from the Appellate Court and this Court has requested that the parties agree to a scheduling order for proceeding. However, the parties have informed the Court that there is disagreement over whether the issue of lost profits is still in dispute, despite the previous rulings barring such a claim. Thus, it is necessary to resolve that issue for the last time before a schedule can be reached for proceeding to trial.

II. ANALYSIS

Plaintiffs would like this Court to revisit the issue of lost profits damages. Plaintiffs cite Christianson v. Colt Industries Operating Corp., 766 F.Supp. 670, 680 (C.D.Ill. 1991) and Door Systems, Inc. v. Pro-Line Door Systems, Inc., 83 F.3d 169, 174 (7th Cir. 1996), in support of their position that, upon remand, they should be free to re-raise the issue of lost profit damages. However, neither of these cases involves a Court allowing a party to re-dispute an issue which was decided before appeal.

Typically, the "law of the case" doctrine covers situations such as this. The law of the case doctrine posits that when a court decides upon a rule of law, "that decision should continue to govern the same issues in subsequent stages in the same case." Jarrard v. CDI Telecommunications, Inc., 408 F.3d 905 at 911-912 (7th Cir. 2005); citing Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 815-816 (1988). Furthermore, the doctrine applies to a court's own decisions. Christianson, 486 U.S. at 816. The rule provides consistency, protects parties from the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action. Analytical Engineering, Inc. v. Baldwin Filters, Inc., 425 F.3d 443 (7th Cir. 2005).

If the Seventh Circuit had reversed this Court's decisions barring the Plaintiffs from proceeding on the matter of lost profits damages, then that would be an entirely different matter. However, the Seventh Circuit noted this Court's ruling on the issue of lost profits as a discovery sanction in their Mandate and did not ...


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