Transportation Law Update: Eighth Circuit Reverses Significant Jury Verdict in Trucking Case

04.16.2020

The United States Court of Appeals for the Eighth Circuit has vacated a ruling from the District Court for the District of Nebraska, holding that the district court abused its discretion when it erroneously admitted a supplemental expert report from plaintiffs. The Eighth Circuit concluded the district court erroneously bypassed the good cause requirement in rule 16(b)(4) of the Federal Rules of Civil Procedure. Petrone v. Werner Enterprises, Inc., 940 F.3d 425, 434 (8th Cir. 2019).

In coming to this conclusion, the appellate court noted that the good cause requirement of rule 16 is one of two requirements that must be satisfied in order for there to be a deadline extension on disclosure of expert reports. This requirement was bypassed by the district court’s erroneous use of rules 1 and 37(c)(1). As plaintiffs could not demonstrate the error was harmless, a new trial was warranted.

Facts:

Philip Petrone and other student drivers (“Plaintiffs”) filed a class action against multiple trucking companies that operated student driver training and orientation programs for new drivers. By a progression order entered on July 13, 2013, the district court set the deadline for disclosure of expert witnesses by each party to be on January 15, 2014. After timely disclosure by both parties, a deposition of plaintiffs’ expert occurred. The expert admitted that there were flaws in the method used to compute the uncompensated break and sleeper-berth times. These inconsistencies resulted in improperly inflated estimates for plaintiffs, who subsequently moved to modify the previously implemented progression order so they could file a supplemental expert report to correct their mistakes.

Although the district court found no good cause to extend the disclosure deadline, and that the delay was neither “substantially justified” nor “harmless” under Rule 37(c), the district court decided that the corrected information was useful and necessary to the disposition of the case on the merits. Thus, the district court invoked its discretion under Rule 37(c).

Procedural History and Court Rulings:

The jury awarded plaintiffs $779,127 on their short-rest-break claims, a reduced amount of liquidated damages, attorney’s fees, nontaxable costs and expenses, while defendants were found not liable and awarded costs for the sleeper berth claims. Plaintiffs appeal the court’s post-trial ruling, while defendants cross-appealed the pre-trial rulings.

Analysis:

To determine the validity of the expert report disclosure extension by the district court, the appellate court started by discussing rule 26(e), which imposes an obligation on a party to supplement incorrect information in a situation involving expert witness disclosures. Additionally, rule 16 requires a district court to issue a scheduling order that gives discretion to a court in setting a deadline to complete discovery. If this scheduling order is to be modified, rule 16 requires that there must be good cause and the judge’s consent must be given.

To establish good cause, a party must show diligence in attempting to meet the progression order. The appellate court noted that although the district court did not find good cause, the lower court bypassed rule 16, and allowed modification by relying on rule 1 and 37(c). The appellate court said the district court’s reliance on rule 1 goes against the general rule that “adherence to progression order deadlines helps in achieving the primary goal of the judiciary.” Moreover, reliance on rule 37 was mistaken in that the rule only applies when a party fails to comply with rule 26 and then seeks to use the information “on a motion, at a hearing, or at a trial.” Plaintiffs did not seek to use the information for any of those three purposes. Instead, plaintiffs sought to bring their disclosure into compliance with rule 26 so that the information would not be excluded at a later hearing or trial.

Notwithstanding this, the appellate court found the error was not harmless. In vacating and remanding, the appellate court found that the error resulted in a $779,127 award for plaintiffs, which was clearly based on the jury’s reliance of plaintiffs’ expert opinion. Consequently, the verdict was vacated and the case remanded for a new trial.

Contact John F. Fatino for more information about trucking and transportation matters at (515) 288-6041. Clark J. Butler, J.D. Candidate, Drake University Law School, assisted in the preparation of these materials.

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