The opinion of the court was delivered by: Magistrate Judge Morton Denlow
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Electrolux Home Products Inc.'s Motion to Strike Expert Report or Disqualify Expert From Offering Testimony. Pursuant to Rule 37 of the Federal Rules of Civil Procedure, DefendantElectrolux Home Products, Inc. ("Defendant" or "Electrolux") asks the Court to either strike the report of Plaintiff Allstate's ("Plaintiff" or "Allstate") expert witness William R. Keefe ("Keefe") or disqualify him from offering any testimony in this case.
Defendant alleges that Keefe, in forming his expert opinion, considered documents that are subject to a confidentiality agreement ("Confidential Documents") between Defendant and a third party ("Carrier One") in an unrelated arbitration proceeding involving a similar claim that Defendant's dryer caused a fire. For the reasons set forth below, the Court denies Defendant's motion to strike Keefe's report or disqualify Keefe from testifying. As stated during the hearing on December 14, 2011, the Court orders Keefe to amend his expert report to eliminate any reference to the Confidential Documents and to reflect his testimony that he did not rely on the Confidential Documents in forming his opinion in this case.
On September 1, 2006, John Clark experienced a fire at his residence in Lake Forest, Illinois. Pursuant to an insurance policy, Allstate paid Clark $202,924.96 for the damages resulting from the fire. Allstate investigated the fire and determined that the cause of the fire was an accumulation of lint in the heat vent at the rear of the dryer drum from a Frigidaire brand clothes dryer manufactured by Electrolux. In this lawsuit, Allstate, as subrogee of John Clark, seeks to recover damages from Electrolux resulting from that fire. Allstate brought the suit in the Circuit Court of Lake County under theories of strict liability, negligence, and breach of implied warranty. Dkt. 1. Electrolux removed this suit to this Court on October 12, 2009. Id.
1. The Keefe Expert Report.
In the course of discovery, Allstate designated Keefe as their expert. Keefe prepared and submitted a detailed sixteen page expert's report in accordance with Federal Rule of Civil Procedure 26(a)(2). Mr. Keefe has been a practicing engineer for over twenty-seven years in the areas of mechanical, safety and forensic engineering. He has participated in the investigation of approximately fifty fires involving Electrolux dryers. In his report he describes his methodology, the background of the incident, the site inspections he made on September 12, 2006, October 6, 2006, and April 19, 2011, and the laboratory inspection of the dryer and other artifacts conducted on November 25, 2008.
The report then proceeds through a detailed nine page discussion and analysis of the dryer at issue. The report reviews the May, 2003 Consumer Products Safety Commission Report on Electric Clothes Dryers and Lint Ignition. The report explains that Keefe has been involved in approximately fifty investigations of fires that originated with Electrolux dryers of this type and that the patterns of lint accumulation were similar.
Keefe issued eight detailed opinions over three pages based on his education, training and experience, inspection and testing performed in this investigation, and the facts contained in the materials. Keefe attached a complete curriculum vitae and a list of twenty-eight cases in which he has testified as an expert over the past four years. As Appendix I, he listed forty categories of information and documents reviewed and relied upon. Only half of these are specifically mentioned in the report.
2. Prior Arbitration Proceeding Involving Electrolux.
In 2007, Electrolux entered into a binding arbitration agreement ("Arbitration Agreement") with Carrier One, a third party insurance carrier which mandated arbitration of any subrogation claims for amounts under a certain threshold arising from Electrolux products.*fn1 Under the terms of the Arbitration Agreement, the "parties and the arbitrators" were to treat "the proceedings, any related discovery, and the decisions of the arbitrators as confidential." Electrolux and Carrier One agreed that "neither the content nor the results of the arbitration may be used in any other proceeding."
Subsequently, Electrolux and Carrier One submitted to arbitration in
at least one case in which Keefe was retained as a consulting expert
for Carrier One. Pursuant to the Arbitration Agreement, the
arbitration resulted in the designation of materials as confidential
("Confidential Documents"). Def. Mem.1.*fn2 These
documents included photographs, test results, expert reports,
pleadings, briefs, and depositions. Id. The root of the present
conflict is that Keefe, in his role as a consulting expert for Carrier
One, was privy to documents designated as confidential.*fn3
Id. at 2. Grotefeld Hoffmann Schleiter Gordon & Ochoa LLP
("GHSGO") represented Carrier One in the arbitration.*fn4
In that capacity, GHSGO worked with Keefe, who was retained
directly by Carrier One. Id. GHSGO now represents Allstate, who has
hired Keefe in the present matter as a testifying expert.
3. The Reference to Confidential Information in Keefe's Expert Report.
In the case at bar, Allstate submitted to Electrolux a report pursuant to Federal Rule of Civil Procedure 26(a)(2)(B) which, appropriately, included a list of the facts and data considered by Keefe in forming his expert opinion. One of the forty items on the list was "Information on Electrolux dryer fires subject to confidentiality agreements." Def. Mem. Ex. A, at 3.
Keefe's deposition testimony was ambiguous on what, if any, confidential information he relied upon. Keefe Dep. 21:2-15 (Def. Mem. Ex. B). When Electrolux inquired specifically about the contents of the Confidential Documents, Allstate's counsel objected and prevented Defendant from pursuing the line of questioning. Id. at 22:18 - 25:12. This left Defendant in a tough spot: it did not want to violate the confidentiality of those documents, but it wanted to be able to cross-examine Keefe on all materials that he considered and rejected or considered and relied upon in forming his opinion.
Electrolux urges the Court to find that Allstate has not complied with Rule 26 and asks the Court, pursuant to Federal Rule of Civil Procedure 37, to strike Keefe's expert report and prohibit him from testifying at trial. Specifically, Electrolux argues it cannot effectively cross-examine Keefe on his consideration of the Confidential Documents. Electrolux identifies only two ways in which it could cross-examine Keefe on these documents: 1) Electrolux could cross-examine Keefe based on its own possession of the Confidential Documents and consequently breach the confidentiality agreement with Carrier One, which prohibits it from using the documents in any other matter; or 2) Allstate could produce the documents in compliance with Rule 26, which Electrolux points out it cannot do because Allstate does not possess the Confidential Documents.*fn5
The Court has reviewed, in camera, the Arbitration Agreement, the Confidential Documents to which Keefe was privy, and Keefe's expert report in the current matter.
B. THE DECEMBER 14, 2011 HEARING.
The parties completed briefing on the motion and the Court held oral arguments on December 14, 2011. In the interest of resolving the issue, Allstate's counsel asked Keefe to be present in court. Both the Court and counsel for each side questioned Keefe on his use of the Confidential Documents in preparing his report.
Keefe explained to the Court that in preparing Appendix I of his report ("Information & Documents Reviewed and Relied Upon") he listed all the documents that he reviewed and studied in preparing the report, as well as information that was part of his background. Keefe testified that many of the Confidential Documents he reviewed in the Carrier One arbitration were duplicative of documents he had which were not confidential. Hr'g Tr. 43.*fn6 In Appendix I, Keefe separately listed all documents that were produced in a non-confidential manner, even if they overlap with the Confidential Documents. Id. at 67. When asked why he included the reference to the Confidential Documents, Keefe explained that it was part of his knowledge base when he wrote his expert report and he thought it was appropriate to inform Electrolux that he had that knowledge. Id. at 47-48.
Regarding the documents that are confidential, Keefe explained that he received those documents and reviewed them for his work on the arbitration matter: he did not read, study, or review those documents as part of the work process in preparing his report in this case. Id. at 61-65. Keefe testified several times that, absent knowledge of the Confidential Documents, his opinions in the present case would be the same. Id. at 43-44, 65-66. He stated that if the Court ordered him not to rely on the information he learned in the arbitration proceedings, he would not need to revise his expert report. Id. at 46.
A. FEDERAL RULE OF CIVIL ...