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Providence Piers, LLC v. SMM New England, Inc.

United States District Court, D. Rhode Island

June 24, 2015

PROVIDENCE PIERS, LLC, Plaintiff,
v.
SMM NEW ENGLAND, INC., Defendant.

REPORT AND RECOMMENDATION

PATRICIA A. SULLIVAN, Magistrate Judge.

The motion before the Court seeks enforcement of a sanction award imposed in Providence Piers, LLC v. SMM New England, Inc., No. CA 12-532 S, 2014 WL 5775663, at *5 (D.R.I. Nov. 6, 2014) ("Providence Piers"). On November 6, 2014, this Court found that the failure of Plaintiff Providence Piers, LLC ("Providence Piers") to make a timely Rule 26(a)(2)(B)-compliant expert disclosure with respect to its designated engineering expert, George J. Geisser ("Geisser"), was neither substantially justified nor harmless; finding preclusion of Geisser to be overly harsh, the Court denied the motion of Defendant SMM New England, Inc., ("SMM") to strike, set a deadline for Providence Piers to supplement and ordered Providence Piers to pay, "as a sanction, SMM's reasonable attorneys' fees and costs that are occasioned by supplementation." Id. The Court specified that SMM should be allowed "a reasonable amount of time to determine whether supplemental rebuttal reports are needed." Id. The reimbursable fees and costs covered by the sanction include "review of the supplemental report, the preparation of supplemental rebuttal reports, and the deposition of Geisser." Id. at *6.

Since Providence Piers issued, Geisser's initial submission was timely supplemented on December 5, 2014 ("Geisser Report"), SMM's counsel and experts reviewed the Geisser Report, two supplemental rebuttal reports were prepared and submitted by SMM's experts on February 18 and 20, 2015, and, on March 11, 2015, SMM made demand on Providence Piers for payment of the fees and costs occasioned by that work; in all, SMM seeks sanctions in the total amount of $21, 681.50. This demand for payment does not include any fees associated with the Geisser deposition because it has not yet occurred.

Providence Piers's initial reaction to the demand for payment was flippant - one of its attorneys suggested that SMM should "Buy lottery tickets, " while the other tersely responded with "OMG, [1] thanks, I needed a laugh." However, they quickly righted the ship and confirmed that Providence Piers intends to comply with the Court's order by paying reasonable costs in accordance with it. ECF No. 118-5 at 3. Nevertheless, despite a follow-up-request made on May 5, 2015, neither payment nor a commitment to pay by a date certain has been forthcoming; accordingly, SMM filed its Motion to Enforce Order against Plaintiff (ECF No. 117).

The motion asks this Court to assess the reasonableness of the fees and costs occasioned by the supplementation so far and to enter an order mandating payment, notwithstanding the possibility that there might be a further request for additional fees and costs after the Geisser deposition. Further, while conceding that Providence Piers did not expressly make the use of Geisser as an expert contingent on payment of the sanction, SMM requests that the Court's order provide that Geisser will be stricken as an expert witness if payment is not remitted within fourteen days of the Court's decision.

In its opposition to the motion, Providence Piers does not dispute its obligation to comply with the order to pay reasonable fees and costs as a sanction. Instead, it launches a detailed assault on the reasonableness of the cost of work done by SMM's rebuttal experts, arguing that their reports are untimely, non-compliant with Fed R. Civ. P. 26, and little more than regurgitations of work done in 2014; it caps the litany of defects with its own motion to strike both of them. With respect to SMM's attorneys' fees, it accepts the reasonableness of the hourly rate, but little else. It nit-picks the time entries, pointing out some that reflect work duplicated by more than one attorney and others that do not seem to be anchored in other work done on this project. With respect to the timing of payment of whatever sanction may be imposed, Providence Piers asks the Court to order that the sanction will become due at the termination of the case, so that it will be incorporated into the parties' obligations to each other at that time.

The motion to enforce has been referred to me pursuant to 28 U.S.C ยง 636(b)(1)(A); I am addressing it in a report and recommendation because the outcome has potential case-ending consequences for Providence Piers. Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 6 (1st Cir. 1999) (whether sanctions motion is to be determined by magistrate judge or to be addressed by report and recommendation depends on whether it seeks a sanction that fully disposes of a claim or defense); Cleversafe, Inc. v. Amplidata, Inc., 287 F.R.D. 424, 425-31 (N.D. Ill. 2012) (circuit-by-circuit analysis of when magistrate judge may determine sanctions motion).

I. BACKGROUND

SMM's motion to enforce is focused on two of the three categories of fees and costs included within the sanction imposed by Providence Piers: review of the supplemental report and the preparation of supplemental rebuttal reports. It seeks recovery for the time invested by its legal team and by its two previously disclosed experts, structural engineer James McLoughlin P.E. of Halliwell Engineering Associates ("McLoughlin") and geotechnical engineer Paul B. Aldinger, Ph.D., P.E. of Douglas G. Peterson & Associates, Inc. ("Aldinger"). When asked at argument why it is seeking payment of the sanction now, when the full amount is not yet known because Geisser has not yet been deposed, SMM gave two reasons. First, it advised the Court that it is unlikely to seek a further sanction for the work associated with the Geisser deposition because its scope may well go beyond the Geisser Report, making identification of time spent on work "occasioned by supplementation" difficult if not impossible; SMM represented that it is disinclined to seek a further sanction, although it is not yet prepared to waive its right to do so. Second, SMM pointed out that, if its motion is granted and Providence Piers is unable to pay the sanction in two weeks, the Geisser Report will be stricken and a deposition to ask him about it will be unnecessary.

A. Cost of McLoughlin Rebuttal Report

McLoughlin is the structural engineer who was timely disclosed by SMM in the expert disclosures it made in June 2014. McLoughlin's initial report was dated June 16, 2014, and comprises forty pages of analysis, photographs, maps and data ("McLoughlin Report I"). By contrast, his seven page rebuttal report, signed on February 20, 2015 ("McLoughlin Report II"), is laser-focused on the Geisser Report. McLoughlin states that he reviewed the Geisser Report and prepared an opinion as to the engineering conclusions, methodologies and opinions in it, as well as the material referred to in it, such as the Exponent Report.[2] ECF No. 119-3 at 2-8. Focusing on two broad topics, the "Construction and Settlement of the Newly Constructed Stair Tower" and the "Damage to Certain One-Story Buildings Based on Crack Gauge Monitoring, " McLoughlin Report II walks through his summary of Geisser's comments on these topics and provides detailed enumerated responses to each; at various points, McLoughlin Report II refers back to portions of his analysis of specified issues in McLoughlin Report I.

McLoughlin's invoice covers only his own time at the hourly rate of $185, the reasonableness of which is not disputed. ECF No. 118-2 at 7-8. He billed two and a half hours to perform an initial examination of the Geisser Report and to confer with the attorneys; eight hours for review of both the Report and its extensive attachments (265 pages of material, including the Exponent Report); and an additional ten hours for procuring all of the documents referenced in it, performing a close analysis of the attachments, reports, boring logs, aerial photographs, construction documents and geotechnical claims, and preparing a summary for counsel. The balance of his time was spent developing comments, evaluating Geisser's assertions, reviewing vibratory data and preparing the rebuttal report, in all nineteen more hours. His total invoice is for $7, 307.50, covering a total of thirty-nine and a half hours of work. At argument, SMM represented that this invoice reflects the actual amount expended by SMM on the cost of this rebuttal report in that the invoice was paid as presented.

Providence Piers fires a blunderbuss at McLoughlin Report II. First, it presents a declaration from Geisser ("Geisser Declaration"), who avers that he has studied McLoughlin Report II, points out each instance where McLoughlin Report II restates an opinion from McLoughlin Report I and criticizes several of McLoughlin Report II's conclusions for the lack of the facts and data considered in forming them. ECF No. 119-1 at 2-7. Based on his conclusion that much of McLoughlin Report II is a mere restatement of McLoughlin Report I, and based on the lack of facts or data to support several of the conclusions, Geisser opines that the McLoughlin Report II should have taken no more than ten to fifteen hours to complete. At McLoughlin's unchallenged rate of $185, Geisser's opinion permits the inference that a reasonable charge for McLoughlin Report II is at least somewhere between $1, 850 and $2, 775.

Providence Piers also contends that the timing and content of McLoughlin Report II fails to comply with the Rules of Civil Procedure. By the time the Geisser Report was prepared on December 5, 2014, all applicable pretrial deadlines set by the Court had expired and there was no deadline applicable to the rebuttal reports beyond the statement in Providence Piers, 2014 WL 5775663, at *5, that "if Plaintiff is permitted to supplement the Geisser Report, expert discovery will need to be reopened to allow SMM a reasonable amount of time to determine whether supplemental rebuttal reports are needed." Providence Piers argues that, with no scheduling order in place, the default deadline of thirty days for rebuttal reports in Fed.R.Civ.P. 26(a)(2)(D)(ii) must apply, making these rebuttal reports due on January 7, 2015. Since McLoughlin Report II was not completed until February 20, 2015, Providence Piers contends that it is untimely and should be stricken.[3] Similarly, focused on the opinion in the Geisser Declaration that portions of McLoughlin Report ...


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