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Diamond X Ranch, LLC v. Atlantic Richfield Company

United States District Court, D. Nevada

May 3, 2018

DIAMOND X RANCH LLC, Plaintiff/Counter-Defendant,
v.
ATLANTIC RICHFIELD COMPANY, Defendant/Counterclaimant/Third-Party Plaintiff,
v.
PARK LIVESTOCK CO., Third-Party Defendant.

          ORDER

          MIRANDA M. DU, UNITED STATES DISTRICT JUDGE.

         I. SUMMARY

         Pending before the Court is Plaintiff and Counter-Defendant Diamond X Ranch, LLC's (“Diamond X”) Objection to the March 13, 2018 Order of Magistrate Judge William G. Cobb (“Objection”) (ECF No. 338). Defendant, Counter-claimant and Third-Party Plaintiff Atlantic Richfield Company (“ARCO”) filed a response (ECF No. 342).

         For the reasons discussed herein, the Objection is overruled.

         II. RELEVANT BACKGROUND

         This action concerns alleged contamination of a ranch (“the River Ranch”) owned and operated by Diamond X through the release of acid mine drainage (“AMD”) from the ARCO-owned Leviathan Mine. On January 25, 2018, Judge Cobb issued an oral ruling (“Expert Report Order”) in which Judge Cobb excluded the entire supplemental expert report of Robert Anderson, reasoning that “the aspect [in the supplemental report] of the flood plain remedial plan regarding the earthen channel is too far beyond Mr. Anderson's initial report” and thus is not “tied or tethered to the preexisting conclusions” in Anderson's initial report. (ECF No. 329 at 1-2.) Judge Cobb also excluded those portions of the supplemental expert report of Jeffrey Dagdigian, Ph.D., “for which he embraces Anderson's earthen channel” and ordered that ARCO be allowed to take the deposition of Dr. Dagdigian. (Id.; ECF No. 336 at 3.)

         Before Dr. Dagdigian's scheduled deposition on February 14, 2018, Diamond X's counsel provided ARCO's counsel with “well over one hundred pages of new tables, figures and other documents not previously disclosed.” (ECF No. 336 at 3 (quoting ECF No. 333 at 4).) During the intervening weeks between the Expert Report Order and the scheduled deposition, Dr. Dagdigian retained a new expert, Innovative Construction Solutions (“ICS”), and had an employee at his firm type up her notes on the costs of an embankment. All of this was to “prepare a new floodplain mitigation channel design and cost estimate” in lieu of that prepared by Anderson and to then “change[] his excluded opinion and cost estimates for the floodplain remedy” to embrace the replacement costs identified by ICS. (ECF No. 336 at 4 (quoting ECF No. 333 at 2-3); see also ECF No. 338 at 10.) Dr. Dagdigian also prepared a corrected and updated table, Table 3-6A, which provided an estimate of future costs for removing arsenic-contaminated soil from the relevant parcels (a solution identified as “Option 2”). (ECF No. 336 at 10; ECF No. 338 at 11.) ARCO then filed a Motion to Enforce the Expert Report Order's evidentiary exclusions. (ECF No. 333.)

         Judge Cobb found that the Motion to Enforce was not a disguised motion in limine as Diamond X had argued; instead, relying on Fed.R.Civ.P. 37, Judge Cobb found that it was within the Court's authority to address the Motion to Enforce and issue sanctions. (ECF No. 336 at 8.) In the written order (“Enforcement Order”), Judge Cobb generally held that Diamond X was prohibited “from offering testimony or evidence (i) on the costs for constructing a floodplain mitigation channel or (ii) that replaces, substitutes for, or serves as an alternative to the earthen channel developed by Mr. Anderson and embraced by Dr. Dagdigian in his November 15, 2017 supplemental report.” (Id. at 11.) More specifically, Judge Cobb excluded (1) any “utilization of the ICS opinions and conclusions either directly or indirectly via Dagdigian's reports” because those opinions were not contained in the original or supplemental reports of Dr. Dagdigian, and (2) the cost estimates and opinions as to the removal of arsenic hot spots found in Table 3-6A because this information was not timely provided as is required by Fed.R.Civ.P. 26. (Id. at 10-11.) Judge Cobb then issued sanctions-specifically, he granted ARCO's request for reasonable attorney fees incurred in bringing the Motion to Enforce. (Id. at 12.)

         Diamond X now objects to the Enforcement Order.

         III. LEGAL STANDARD

         Magistrate judges are authorized to resolve pretrial matters subject to district court review under a “clearly erroneous or contrary to law” standard. 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a) (a “district judge . . . must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law”); see also LR IB 3-1(a) (“A district judge may reconsider any pretrial matter referred to a magistrate judge in a civil or criminal case under LB IB 1-3, when it has been shown the magistrate judge's order is clearly erroneous or contrary to law.”). A magistrate judge's order is “clearly erroneous” if the court has a “definite and firm conviction that a mistake has been committed.” See United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). “An order is contrary to law when it fails to apply or misapplies relevant statutes, case law, or rules of procedure.” Jadwin v. Cty. of Kern, 767 F.Supp.2d 1069, 1110-11 (E.D. Cal. 2011) (quoting DeFazio v. Wallis, 459 F.Supp.2d 159, 163 (E.D.N.Y. 2006)). When reviewing the order, however, the magistrate judge “is afforded broad discretion, which will be overruled only if abused.” Columbia Pictures, Inc. v. Bunnell, 245 F.R.D. 443, 446 (C.D. Cal. 2007). The district judge “may not simply substitute its judgment” for that of the magistrate judge. Grimes v. City & Cty. of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991) (citing United States v. BNS, Inc., 858 F.2d 456, 464 (9th Cir. 1988)).

         IV. DISCUSSION

         Diamond X argues that the Enforcement Order is clearly erroneous for a variety of reasons, including that Dr. Dagdigian's supplementation after the Expert Report Order is consistent with that Order and that the Enforcement Order unfairly expands the Expert Report Order. (ECF No. 338 at 13-23.) However, these arguments miss the point. As ARCO points out, November 15, 2017-not February 2018-was the last date on which experts could supplement their opinions (ECF No. 342 at 8 (citing ECF No. 306)), and Judge Cobb clearly stated at the January 25, 2018 hearing that supplementation of expert opinions was permitted insofar as supplementation was tied or tethered to conclusions in the original expert reports. Dr. Dagdigian's incorporation of ICS's findings and addition of Table 3-6A effectively supplemented his expert report in ways untethered to his original report and well past the November 15, 2017 deadline. The Court therefore cannot find that Judge Cobb committed clear error when he excluded this supplemental information and awarded reasonable attorney fees to ARCO.

         A. The Scope of the ...


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