ARIGNA TECHNOLOGY LIMITED, Plaintiff, v. NISSAN MOTOR COMPANY, LTD., et al., Defendants Case No. 2:22-cv-00126-JRG-RSP United States District Court, E.D. Texas, Marshall Division Signed October 06, 2022 Counsel Matthew R. Berry, Steven M. Seigel, Andres C. Healy, Danielle M. Nicholson, Emily Anne Parsons, John Edward Schiltz, Rachel S. Black, Susman Godfrey LLP, Seattle, WA, Andrea Leigh Fair, Charles Everingham, IV, Claire Abernathy Henry, Garrett C. Parish, Johnny Ward, Jr., Ward, Smith & Hill, PLLC, Longview, TX, Bryce Thomas Barcelo, Meng XI, Thomas V. DelRosario, Susman Godfrey, LLP, Houston, TX, Oleg Elkhunovich, Susman Godfrey LLP, Los Angeles, CA, for Plaintiff. Patrick A. Lujin, Basil Trent Webb, Mary Jane Peal, Omowunmi Soyinka, Shook Hardy & Bacon LLP, Kansas City, MO, Andrew Koopman, RatnerPrestia, King of Prussia, PA, David Wynne Morehan, Shook Hardy & Bacon LLP, Houston, TX, John R. Keville, Sheppard Mullin Richter & Hampton LLP, Houston, TX, Melissa Richards Smith, Gillam & Smith, LLP, Marshall, TX, for Defendants Nissan Motor Company, Ltd., Nissan North America, Inc. Aamir A. Kazi, Fish & Richardson PC, Atlanta, GA, Andrew Koopman, RatnerPrestia, King of Prussia, PA, Daniel Robert Gopenko, Ruffin B. Cordell, Fish & Richardson PC, Washington, DC, John R. Keville, Sheppard Mullin Richter & Hampton LLP, Houston, TX, Melissa Richards Smith, Gillam & Smith, LLP, Marshall, TX, Michael Alden Vincent, Fish & Richardson P.C., Dallas, TX, for Defendants Tesla, Inc., Tesla Motors TX, Inc. Andrew David Kasnevich, Kenyon & Kenyon LLP, Washington, DC, Michael A. Oakes, Hunton Andrews Kurth LLP, Washington, DC, Andrew Koopman, RatnerPrestia, King of Prussia, PA, John R. Keville, Sheppard Mullin Richter & Hampton LLP, Houston, TX, Tonya M. Gray, Hunton Andrews Kurth LLP, Dallas, TX, for Defendants Toyota Motor Corporation, Toyota Motor North America, Inc. Victoria Fishman Maroulis, Quinn Emanuel Urquhart & Sullivan LLP, Redwood Shores, CA, Andrew Koopman, RatnerPrestia, King of Prussia, PA, Gregory Blake Thompson, James Mark Mann, Mann Tindel & Thompson, Henderson, TX, John R. Keville, Sheppard Mullin Richter & Hampton LLP, Houston, TX, Jonathan S. Tse, Quinn Emanuel Urquhart & Sullivan LLP, San Francisco, CA, Marissa Rachel Ducca, Quinn, Emanuel, Urquhart & Sullivan LLP, Washington, DC, for Defendant General Motors LLC. Andrew Koopman, Pro Hac Vice, Christopher H. Blaszkowski, Benjamin E. Leace, Karen Riesenburger Poppel, RatnerPrestia, King of Prussia, PA, J. Thad Heartfield, M. Dru Montgomery, The Heartfield Law Firm, Beaumont, TX, John R. Keville, Michelle Cherry Replogle, Robert Lawrence Green, III, Michael C. Krill, Sheppard Mullin Richter & Hampton LLP, Houston, TX, for Defendants ADC Automotive Distance Control Systems GmbH, Conti Temic microelectronic GmbH, Continental AG. Payne, Roy S., United States Magistrate Judge MEMORANDUM ORDER *1 Before the Court is the Motion to Exclude Expert Opinions Relating to Documents Produced After Close of Fact Discovery filed by Plaintiff Arigna Technology Limited. Dkt. No. 149. For the following reasons, the motion is GRANTED. I. Background On February 18, 2021, Arigna filed suit against vehicle part supplier Continental[1] and several of its vehicle manufacturer customers[2] alleging infringement of U.S. Patent No. 7,397,318 (“’318 Patent”). Case No. 2:22-cv-00054 Dkt. No. 182.[3] Arigna alleges that Continental and the customer defendants manufacture, offer for sale, and/or sell automotive vehicles and components thereof that incorporate the NXP Semiconductors MR2001 chip package (“NXP MR2001 chip”) and that the NXP MR2001 chip infringes the ’318 Patent. Case ’54 Dkt. No. 182 ¶¶ 124, 172, 182, 193, 205, 216. On September 3, 2021, Arigna served interrogatories on Continental requesting information generally related to damages, including unit counts, revenues and costs associated with the accused products, parts, and associated systems. Case ’126 Dkt. No. 149 at 3–4. On October 4, 2021, Continental provided the number of ARS4-Series Radar sensors sold from 2015 to October 2021, and reserved the right to supplement the information. Case ’126 Dkt. No. 193 at 3 (citing Case ’126 Dkt. No. 193-6). The ’054 case originally had a January 5, 2022 deadline for fact discovery, which was later extended to February 4, 2022. Id. at 2. On February 2, 2022, the Court stayed the case pending additional guidance on venue from the Federal Circuit in a similar case. Case ’54 Dkt. No. 464. On April 27, 2022, the Court lifted the stay and severed Continental and the customer defendants into Case ’126 with an order to jointly propose an updated schedule of deadlines. Case ’54 Dkt. No. 467; Case ’126 Dkt. No. 1. On May 9, 2022, the Court extended the deadline to complete all previously-served fact discovery to June 17, 2022. Case ’126 Dkt. No. 193 at 2. On June 2, 2022, Continental produced additional volumes and sales figures for the NXP MR2001 chip. Id. at 3–4. One June 21, 2022, the Court entered another Amended Docket Control Order that set a June 30, 2022 deadline for Continental to complete all previously-served fact discovery and previously noticed depositions, and a July 6, 2022 deadline for serving opening expert reports. Id. at 2–3. On June 28, 2022, Continental produced CONTI-61955 and CONTI-61956, which included unit counts, revenues, and costs associated with the allegedly infringing products. Case ’126 Dkt. No. 193 at 4–5. In addition to the financial information contained within CONTI-61955 and CONTI-61956 is a note, stating “Tesla volumes lower than above FC,” to accompany highlighted Tesla unit counts from 2021 through “FC 2024.” Id. at 4–5. *2 On July 6, 2022, Arigna served the opening report of its damages expert, David Yurkerwich, based on the financial documents Continental produced on June 28, 2022. Case ’126 Dkt. No. 149 at 5. On July 11, 2022, Arigna notified Continental of unanswered requests for information underlying Continental's unit counts, complete revenue and cost data for its sales of ARS4 Radar Modules, market analysis, supplementation, and re-production of Continental's ESI. Case ’126 Dkt. No. 193 at 5–6 (citing Case ’126 Dkt. No. 193-15). On July 19, 2022, Continental disclosed CONTI-0227383 and CONTI-0227384 (collectively, the “Disputed Documents”), which included purportedly updated unit counts, revenues, and costs associated with the allegedly infringing products. Id. at 6. In the Disputed Documents, the 2021 unit counts decreased by 508,359 (from 1,196,918 to 688,559), of which 374,851 was attributable to Tesla, and 133,508 was attributable to the remaining OEMs. Id. at 4–7. Arigna moves to exclude certain opinions offered by Continental's damages expert, Mr. Gutzler, that rely on information contained in the Disputed Documents because Arigna asserts that: (1) the Disputed Documents were not produced during discovery, and (2) the untimely disclosure was not substantially justified. II. Legal Standard Federal Rule of Civil Procedure 26(e) requires parties to supplement or correct disclosures and responses to interrogatories in a timely manner. To clarify the timeliness requirement, the discovery order requires immediate supplementation if a party knows a disclosure is incomplete or incorrect. Case ’54 Dkt. No. 270 at 9. “If a party fails to provide information ... as required by Rule 26(a) or (e), the party is not allowed to use that information ... to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). Whether to admit or exclude expert testimony pursuant to Rule 37 is a matter left to the discretion of the trial court. E.g., Primrose Operating Co. v. National American Ins. Co., 382 F.3d 546, 563 (5th Cir. 2004). The Fifth Circuit applies a four-factor test to determine whether to find a violation substantially justified or harmless: (1) the importance of the evidence, (2) the prejudice to the party opposing the introduction of the evidence, (3) the possibility of curing such prejudice by granting a continuance, and (4) any justification for why the disclosure should be considered timely. Id. at 564. III. Analysis Arigna argues that Mr. Gutzler's opinions are based on the Disputed Documents, which were not timely disclosed, and Continental's untimely disclosure was not substantially justified. Case ’126 Dkt. No. 149 at 8–11. In response, Continental alleges that the Disputed Documents were timely supplements under Rule 26(e), or in the alternative, that the untimely disclosure of the Disputed Documents was substantially justified under Rule 37(c)(1). Id. at 11–13. Here, the Court finds the Disputed Documents were untimely disclosed. At the time of its disclosure on June 28, 2022, Continental was apparently aware that the unit counts were inaccurate. Case ’126 Dkt. No. 193 at 4–5. Nevertheless, several weeks after the close of fact discovery, Continental produced the Disputed Documents that included significantly different 2021 unit numbers than those presented in late June. Id. at 4–7. The 2021 financials should have been ascertainable before the stay, and at the very least before the end of fact discovery. Furthermore, the fact discovery deadline was extended to February 4, then to June 17, and finally to June 30. Clearly the Disputed Documents were untimely disclosed. *3 Turning to whether there is good cause, the court finds that the untimely disclosure of the Disputed Documents was not substantially justified. The untimely disclosure of the Disputed Documents is undoubtedly prejudicial. Arigna already served Mr. Yurkerwich's expert report on July 6, 2022, and Continental's significant reduction in unit counts undercuts Mr. Yurkerwich's opinions. Furthermore, Continental fails to justify why the disclosure of the Disputed Documents should be considered timely when the Disputed Documents were produced more than six months after the end of 2021. Continental was clearly not diligent in producing this information and made no sufficient effort to avoid prejudice to Arigna by advising it of any problems being encountered with the data. Thus, the untimely disclosure was not substantially justified. Since the Court finds the Disputed Documents were untimely disclosed, and the untimely disclosure was not substantially justified, the Court need not analyze the reliability of Mr. Gutzler's opinion with respect to the Disputed Documents. Continental is simply not permitted to rely upon the Disputed Documents and the information contained therein for any purpose in this litigation. IV. Conclusion For the reasons stated above, the Court GRANTS the motion. It is therefore ORDERED that any opinions relying on untimely information contained in CONTI-0227383 and CONTI-0227384 must be excluded. However, it is further ORDERED that Continental has leave to supplement Mr. Gutzler's report solely to substitute the information contained in CONTI-61955 and CONTI-61956 that was timely produced during fact discovery. Footnotes [1] Continental AG, Conti Temic Microelectronic GmbH, and ADC Automotive Distance Control Systems GmbH (collectively, “Continental”). [2] Including Nissan Motor Co., Ltd. and Nissan North America, Inc. (collectively “Nissan”); Tesla, Inc. and Tesla Motors TX, Inc. (collectively “Tesla”); Toyota Motor Corporation and Toyota Motor North America, Inc. (collectively “Toyota”); and General Motors LLC (“GM”). [3] For procedural reasons not relevant here, Case No. 2:22-cv-00126 (“Case ’126”) was born by severance of the instant defendants from Case No. 2:21-cv-00054 (“Case ’54”). Compare Case ’54 Dkt. No. 467 with Case ’126 Dkt. 1.