Case: 1:11-cv-00103-GHD-DAS Doc #: 228 Filed: 09/04/13 1 of 14 PageID #: 1392
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF MISSISSIPPI ABERDEEN DIVISION KMART CORPORATION, Plaintiff CIV. ACT. NO. 1:11-CV-103-GHD-DAS versus THE KROGER CO., et al. Defendants PLAINTIFF’S MEMORANDUM IN SUPPORT OF OBJECTIONS TO THE MAGISTRATE JUDGE’S ORDER DENYING PLAINTIFF’S MOTION FOR LEAVE TO FILE THE AMENDED REPORT OF JOHN R. KREWSON May It Please the Court: Plaintiff, Kmart Corporation, respectfully submits this memorandum in support of its objections to the magistrate judge’s ruling denying Kmart leave to file the Amended Report of its expert, John R. Krewson, and requests that this Court vacate the magistrate judge’s ruling, pursuant to Local Uniform Civil Rule 72. I.
Background This case involves damages sustained by Kmart due to flooding to its store in Corinth,
Mississippi on May 2, 2010. At the deposition of Kmart’s hydrological engineering expert, Mr. Krewson, taken on May 22, 2013, it was discovered for the first time that the models relied on by Mr. Krewson in his Flooding Evaluation dated September 20, 2012 (“Initial Report”) contained a mistake that affected the conclusions in his report.1 In preparation of his Initial Report, Mr. Krewson had prepared HEC-RAS models for the Kmart and Kroger sites using as-built survey data and the 1
See Declaration of John R. Krewson at ¶ 9, attached as Exhibit A to Doc. 176, Kmart’s Motion for Leave to File Amended Report of John R. Krewson, Motion to Continue Discovery Deadline or, in the Alternative, Motion to Continue Trial Date.
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water flows for the area listed in the Federal Emergency Management Agency’s (“FEMA”) 2009 Flood Insurance Study.2 Mr. Krewson prepared three runs to determine the impact of the Kroger store on the flooding at Kmart during the May 2, 2010 flood event. The first run was an idealized model that assumed a fully maintained channel with no obstructions or encroachments in the floodway.3 In the second run, the Kroger store was added to the floodway and a rise in the flood of approximately one foot was found to occur.4 In the third run, to determine the impact of encroachments, obstructions, and overgrown banks, Mr. Krewson ran an idealized model that assumed a fully maintained channel with no obstructions or encroachments in the floodway, which resulted in a two-foot drop in the flood elevation at the Kmart site below the elevations found with the Kroger encroachment in the floodway.5 One factor that Mr. Krewson put into the HEC-RAS models was the peak discharge of Elam Creek, which figure was obtained from FEMA’s 2009 Flood Insurance Study.6 The peak discharge at Elam Creek for the 100-year flood is 3,702 cubic feet per second (cfs).7 The 3,702 cfs peak discharge is used in Mr. Krewson’s first and third HEC-RAS run data.8 The second HEC-RAS run data, which showed the impact of the Kroger store on the flooding
2
See John R. Krewson’s Flooding Evaluation dated September 20, 2012, attached as Exhibit B to Doc. 176. 3
Id.
4
Id.
5
Id. at pp. 5-6.
6
See Depo. of John R. Krewson, at p. 116, ll. 12-15, attached as Exhibit C to Doc. 176.
7
See Federal Emergency Management Agency’s 2009 Flood Insurance Study, at p. 5, attached as Exhibit D to Doc. 176. 8
See Doc. 176, Ex. C, Depo. of John R. Krewson at p. 117, ll. 3-5; see also to Doc. 176, Ex. A, Declaration of John R. Krewson ¶ 10.
2
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at Kmart, Mr. Krewson used the peak discharge figure of 5,202 cfs.9 The inconsistency in the peak discharge used in the first and third runs and the peak discharge used in the second run led Mr. Krewson to mistakenly conclude that the presence of the Kroger store caused a one-foot rise in the flooding at Kmart’s store during the May 2, 2010 flood.10 The peak discharge of 5,202 cfs should have been used in all three HEC-RAS runs. After being made aware of the mistake in the runs at his deposition, Mr. Krewson re-ran his models to address the error and prepared an Amended Flooding Evaluation (“Amended Report”).11 Mr. Krewson revised the flow data and prepared a new HEC-RAS model with three profiles.12 Mr. Krewson found that with the presence of the Kroger building only, there was a 1.1-foot rise in the flood compared to the benchmark model, which assumed the Kmart and Kroger stores never were built.13 With the presence of the Kmart building only, there was a rise of one foot relative to the benchmark model.14 With the Kmart and Kroger buildings combined, there was a rise of 0.9 feet relative to the benchmark model.15 Thus when Mr. Krewson used the corrected figures, he found that the presence of the Kroger store caused no significant difference in the rise of the flood at
9
Id.
10
Id. at p. 116, l. 18 - p. 117, l. 18.
11
See John R. Krewson’s Amended Flooding Evaluation, dated July 23, 2013, attached as Exhibit E to Doc. 176. 12
See id. at p. 9; see also Doc. 176, Ex. A, Declaration of John R. Krewson ¶ 11.
13
Id.
14
Id.
15
Id.
3
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Kmart’s store.16 But Mr. Krewson notes in his Amended Report that a review of the flow and velocity data from the model show that the addition of the Kroger building reduced the overbank width of flow at the building by 209 feet and increased the average velocity of the flow of the water at the Kmart building by 20 percent.17 These conditions increased the exposure of the Kmart building to flow water.18 In other words, without the presence of the Kroger building, the Kmart store would only have been exposed to one foot of standing water; flowing water from the overbank would only have barely approached the Kmart store. (Water at the edge of a waterway often is more stationary, while the water closer to the center of the channel is flowing.) The addition of the Kroger building caused the Kmart store to become exposed to the rapidly flowing water, even though the water level did not rise relative to other models. 19 Mr. Krewson states that it was reported by witnesses that rapidly flowing water carrying debris along the back of the Kmart building resulted in damage to the rear door and that this was the cause of the water intruding into the Kmart building.20 Thus this model corroborates eyewitness testimony that debris was pushed through the Kmart doors during the flood by flowing water.
16
Id.
17
Id.; see also Doc. 176, Ex. A, Declaration of John R. Krewson at ¶¶ 12-13.
18
See Doc. 176, Ex. E, John R. Krewson’s Amended Flooding Evaluation at p. 9.
19
Id.
20
Id.
4
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Another profile in his Amended Report considered the effect of a poorly maintained channel at Elam Creek on the flooding at the Kmart store.21 According to Mr. Krewson’s model, a poorly maintained channel causes a 1.4-foot additional rise in the flood levels discussed above when compared to the second model, above, which model considers the presence of the Kmart store, the Kroger store, and a well-maintained channel.22 Thus a poorly maintained channel causes a 2.3-foot rise in the flood level compared to the benchmark model (a rise of .9 feet due to the presence of both stores, discussed above, plus an additional rise of 1.4 feet due to the overgrown creek).23 In light of the mistake in Mr. Krewson’s Initial Report, Kmart sought leave to file Mr. Krewson’s Amended Report. The Case Management Order required that Kmart provide its expert designations by April 8, 2013. The deadline was extended by this court to April 22, 2013. As a courtesy to the defendants, Kmart provided Mr. Krewson’s initial report to all parties on October 4, 2012. On April 12, 2013, Kmart produced to defendants in response to discovery requests the HECRAS data used by Mr. Krewson to prepare his Initial Report. Defendants deposed Mr. Krewson on May 22, 2013. Moreover, Kmart agreed to two extensions of the defendants’ expert reports, which were utlimately sent to Kmart on June 28, 2013. On July 25, 2013, Kmart filed the Motion for Leave to file the amended report of Mr. Krewson. A hearing was held in front of the magistrate judge on August 15, 2013. On August 21, 2013, the magistrate judge issued a ruling denying Kmart’s motion.
21
Id. at p. 10.
22
Id.
23
Id.
5
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II.
Law and Argument Rule 72(B) of the Local Uniform Civil Rules provides that the ruling of a magistrate judge
will be reversed if the district judge determines that the magistrate judge’s findings of fact are clearly erroneous, or that the magistrate judge’s ruling is clearly erroneous or contrary to law. Here, Kmart has shown good cause to grant leave for Kmart to file the Amended Report of Mr. Krewson. Thus the magistrate judge’s ruling denying Kmart’s motion for leave is clearly erroneous and should be reversed. The magistrate judge’s ruling is erroneous because Kmart demonstrated the necessary good cause to allow Kmart leave to file the Amended Report of its expert, John R. Krewson. Federal Rule of Civil Procedure 16(b) allows a scheduling order to be modified for good cause. To determine whether good cause has been shown, courts look at: (1) the explanation for the failure to meet the deadline; (2) the importance of the testimony; (3) potential prejudice in allowing the testimony; and (4) the availability of a continuance to cure such prejudice.24 Kmart has explained that neither it nor Mr. Krewson discovered the mistake in Mr. Krewson’s Initial Report until Mr. Krewson’s deposition on May 22, 2013. By that time, the deadline to submit Kmart’s expert designations had passed. Moreover, Mr. Krewson’s Amended Report is important to Kmart’s case because it confirms that the presence of the Kroger store contributed to the damages incurred by Kmart after the May 2, 2010 flood event. Kmart will be seriously prejudiced if it is precluded from amending Mr. Krewson’s report because Mr. Krewson’s revised models and report still indicate that the presence of the Kroger store adversely impacted Kmart and contributed to the flooding at its store on May 2, 2010. The defendants will not be 24
Reliance Ins. Co. v. La. Land & Exploration Co., 110 F. 3d 253, 257 (5th Cir. 1997).
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seriously prejudiced if Kmart is permitted to file the Amended Report, and any potential prejudice can be cured by a continuance of the discovery and motions deadlines or, alternatively, by a continuance of the trial date. Kmart has demonstrated the necessary good cause to grant leave to file Mr. Krewson’s Amended Report, thus the magistrate judge’s ruling is in error and should be reversed. A.
Kmart has adequately explained its failure to meet the expert report deadline.
The magistrate judge denied Kmart’s Motion for Leave in part because he believes Kmart did not adequately explain the failure to meet the expert designation deadline. Kmart submits that the magistrate judge’s finding is erroneous because neither Kmart nor Mr. Krewson even learned of the error until Mr. Krewson’s deposition, by which time Kmart’s expert deadline had already expired. Upon learning of the error at his deposition, Mr. Krewson immediately set to addressing the error and correcting his models to prepare his Amended Report. Kmart submitted Mr. Krewson’s Amended Report to all defendants on July 23, 2013. The magistrate judge suggests that this explanation is unsatisfactory because Kmart and Mr. Krewson should have discovered the error prior to Mr. Krewson’s deposition. The magistrate judge stated that the nature of the error in Mr. Krewson’s Initial Report “lends credence to the defendants’ characterization of the error as glaring, and raises unanswered questions about why the error was not timely discovered.” But the error was not a glaring one. The peak discharge figure used in each of the three runs was merely one of numerous variables contained in HEC-RAS run spreadsheets. Moreover, the results of the initial HEC-RAS runs did not raise any suspicion regarding the accuracy of the runs because the finding that the Kroger store caused a one-foot rise in the flood level was consistent with FEMA’s determination that the Kroger store was in a floodway, as explained below. 7
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This fact lent credibility to Mr. Krewson’s initial findings, and thus there was no need for Mr. Krewson to re-examine or re-calculate his data between the time his report was disclosed voluntarily in October 2012 and the time he was deposed by Defendants in May 2013. A floodway is a regulatory limit defining the point at which it is anticipated that a building constructed in the area will cause a one-foot rise in the water.25 Mr. Krewson’s initial runs concluded that the Kroger store caused a one-foot rise in the flood level. Mr. Krewson felt that his initial results were relatively close to FEMA’s figures that supported the determination that the Kroger store was located within a floodway.26 Because the conclusions in the Initial Report were consistent with FEMA’s own determination that the Kroger store was located within a floodway, the error was not a “glaring” one, and thus was not discovered prior to Mr. Krewson’s deposition. Kmart’s expert report deadline expired before Kmart and Mr. Krewson discovered the error. However, as soon as the error was discovered, Kmart and Mr. Krewson set forth to correct the error and provide a new, accurate report. Kmart believes that it has adequately explained the failure to submit Mr. Krewon’s Amended Report, and thus Kmart should be granted leave to file the report. B.
Mr. Krewson’s amended report is important to Kmart’s case because it shows that the presence of the Kroger store in the floodway contributed to the flood damages at Kmart’s store.
The magistrate judge hinged its ruling on the first and third factors for determining whether there was good cause to allow Kmart to amend Mr. Krewson’s report. But the second factor, the importance of Mr. Krewson’s Amended Report, requires that Kmart be granted leave to file the report. Kmart will be highly prejudiced if it is not permitted to amend Mr. Krewson’s report because
25
See Doc. 176, Ex. C at 254, ll. 4-25.
26
See id. at 166, ll. 14-25.
8
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the revised models and report indicate that the presence of the Kroger store combined with the overgrown channels of Elam Creek did in fact contribute to the flooding at Kmart’s store on May 2, 2010. If Kmart is not permitted leave to file the report, Kmart will be forced to prosecute its case with Mr. Krewson’s flawed Initial Report, even though Mr. Krewson’s Amended Report confirms Kmart’s claim that, on May 2, 2010, the presence of the Kroger store caused flood damage at the Kmart store. Although the magistrate judge based its ruling on the first and third factors, and largely ignored the second factor, the magistrate judge acknowledged the importance of the Amended Report. For example, the magistrate judge stated that the error in the Initial Report was “serious and substantial”27 and “substantially undermines” Mr. Krewson’s report.28 Further, the magistrate judge found that the “error meant the difference between a reasoned theory of liability and no viable theory of liability relating to the alleged intrusion of the Kroger building into the floodway.”29 But the magistrate judge’s ruling now requires Kmart to rely on the flawed report even though the Amended Report supports Kmart’s claim that the Kroger store’s presence in the floodway contributed to Kmart’s damages. Kmart should not be bound to provide incorrect data to the jury. Kmart should not be precluded from providing correct data to the jury when the error has been discovered and corrected months in advance of trial. The United States Fifth Circuit Court of Appeals has recognized that “[t]he goal of grand jury proceedings, of criminal trials, and of civil trials is to resolve a dispute by gathering the facts and
27
See Doc. 213, Order Denying Motion at 4.
28
Id. at 1.
29
Id. at 5.
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arriving at the truth.”30 Further, “virtually every judicial inquiry begins with the goal of developing the facts. The basis of justice is the truth and our system frowns upon impediments to ascertaining the truth.”31 Therefore, the importance of the Amended Report to Kmart’s prosecution of the case requires that Kmart be granted leave to file the report. C.
Defendants will not be seriously prejudiced if Kmart’s Motion for Leave to File Mr. Krewson’s Amended Report is granted.
For the third factor, Defendants will not be seriously prejudiced if Kmart is allowed to amend Mr. Krewson’s report. Contrary to the magistrate judge’s finding, Kmart has not alleged a new claim or new theory of causation. This case does not present a situation where a plaintiff presents a “failure to warn” products liability case and suddenly and belatedly shifts to a defective design products liability case. Rather, Mr. Krewson’s amendment is the correction of a mathematical error. Once corrected, the output changed, such as water depth and velocity of water. But the theory that these Defendants’ presence in the floodway and failure to mitigate that presence has not changed. Indeed, Kmart’s Complaint includes the allegation that the presence of Kroger caused the water to change from standing water to a forceful flow.32 Moreover, Mr. Krewson noted in his Initial Report that eyewitnesses observed the water flowing along the rear of the Kmart building and that landscape timbers struck the doors with enough force to break open the doors and allow water to enter the store.33 The Defendants’ own experts acknowledge in their reports that Kmart alleged that
30
Johnston v. Harris County Flood Control Dist., 869 F.2d 1565, 1578 (5th Cir. 1989).
31
In re Dinnan, 661 F.2d 426, 427 (5th Cir. 1981).
32
See Doc. 1, Kmart’s Complaint at ¶¶ 16, 26, 33, 47, 56 and 65.
33
See Doc. 176, Ex. B, John R. Krewson’s Flooding Evaluation dated September 20, 2012 at 2-3.
10
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the Kroger store caused the water to change from standing water to a forceful flow of water. Mr. Krewson began amending his report to determine, using corrected figures, whether the Kroger store contributed to the flooding at the Kmart store. In the process, Mr. Krewson confirmed by reviewing the flow and velocity data from his models that the Kroger store reduced the overbank width of flow and increased the average velocity of the flow of the water at Kmart’s building, which increased the exposure of the Kmart building to flow water.34 The addition of the Kroger building caused the Kmart store to become exposed to the rapidly flowing water.35 The conclusions in Mr. Krewson’s Amended Report, therefore, do not constitute a new theory of causation or a new claim by Kmart, but merely correct data input and output, which also corroborates eyewitness testimony and the allegations already contained in Kmart’s Complaint.36 Additionally, there is no reason that the Defendants would have to seek out, hire, and pay new experts as a result of Mr. Krewson’s Amended Report, as suggested by the magistrate judge. Defendants’ experts could have discovered Mr. Krewson’s error themselves upon their review of Mr. Krewson’s Initial Report. Yet their reports rely on the very same flawed data, as they too utilize the incorrect figures for the peak discharge in their models! The conclusions in the Defendants’ expert reports are unreliable and need to be re-run anyway. If the Defendants wish to present accurate reports, they would have to re-run their models regardless of whether Kmart is permitted to amend
34
See Doc. 176 at Ex. A, Declaration of John R. Krewson at ¶ 12-13; see also Doc. 176, Ex. E, John R. Krewson’s Amended Flooding Evaluation, dated July 23, 2013 at p. 9. 35
Id.
36
Moreover, the Amended Report does not present any new concepts regarding the placement of the Kroger building in a floodway, as even the City of Corinth’s ordinances recognize that an obstruction in a floodway can increase the velocity of flood waters and cause damage. See City of Corinth Code of Ordinances §§ 12.2(b), 12.3, 12.5, 12.10, 12.42.
11
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Mr. Krewson’s report. Kmart also does not believe that the Defendants should incur significant costs to respond to Mr. Krewson’s report. Several of the Defendants have retained experts jointly and are presumably splitting the costs of those experts. Further, in an effort to reduce costs, Kmart has offered to permit the defendants to depose Mr. Krewson at a location convenient to the Defendants and at Kmart’s expense. Kmart is willing to schedule Mr. Krewson’s deposition at the same time the depositions for the Defendants’ engineering experts are scheduled to minimize the costs associated with those depositions. Defendants, therefore, would not be seriously prejudiced if Kmart were allowed to amend Mr. Krewson’s report. Finally, as Defendants have already designated hydrological experts in this matter, the case of Reliance v. Louisiana Land & Exploration Co.37 cited by Defendants and the magistrate judge is distinguishable. Unlike the defendants in Reliance, the defendants here have retained experts.38 There is no need for the Defendants to incur costs to retain new experts. The Defendants’ designated experts are already fully aware of the issues in this matter and of the errors in Mr. Krewson’s Initial Report. It will not take the designated experts near the amount of time it might take new experts to review and respond to Mr. Krewson’s Amended Report. D.
A continuance of the discovery and motions deadlines or, alternatively, of the trial date, will cure any potential prejudice to the defendants.
Kmart submits that the continuance of the current discovery and motions deadlines would cure any potential prejudice to the Defendants. Trial is scheduled to commence on February 24,
37
Id.
38
Id.
12
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2014 — nearly six months from now. There is sufficient time between now and the trial date for the defendants to re-depose Mr. Krewson and submit corrected reports of their own in response to Mr. Krewson’s Amended Report. In the Reliance case, the pre-trial conference was scheduled two months away from the time the plaintiff attempted to file its expert’s amended report and the court determined that allowing the amendment would disrupt the trial date.39 Here, the pre-trial conference is five months away. While Kmart is agreeable to a continuance of the trial date in order to ensure that it is allowed to present correct figures to the jury, Kmart believes it is likely that the pre-trial conference and trial date may be preserved given that both deadlines are months away. However, if this Court determines that these tasks cannot be accomplished prior to trial, then Kmart requests that the trial be continued, as trial has not yet been continued in this matter. A continuance of the current deadlines would allow Kmart to present an accurate report that supports the claim that the presence of the Kroger store contributed to the flood damages at Kmart’s store. Moreover, a continuance would cure any potential prejudice to the defendants. Therefore, Kmart should be granted leave to file the Amended Report of Mr. Krewson. III.
Conclusion Kmart has shown good cause to permit the filing of Mr. Krewson’s Amended Report.
Specifically, Kmart has provided an explanation for the failure to meet the expert designation deadline, has demonstrated the importance of Mr. Krewson’s Amended Report, has offered to make every reasonable effort to avoid any prejudice to the Defendants, and has shown that while Kmart is agreeable to a continuance of the trial date, such continuance may not be necessary given that the trial date is nearly six months away. Therefore, Kmart should be permitted to file Mr. Krewson’s 39
Id.
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Amended Report. Accordingly, Kmart requests that this court vacate the magistrate judge’s ruling and grant Kmart leave to file the Amended Report of Mr. Krewson.
Respectfully submitted,
/s/ Ryan O. Luminais __________________________________________ JAMES M. GARNER (La. Bar. No. 19589) JOHN T. BALHOFF, II (La. Bar. No. 24288) RYAN O. LUMINAIS (Miss. Bar. No. 101871) SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C. 909 Poydras Street, Twenty-eighth Floor New Orleans, Louisiana 70112 Telephone: (504) 299-2100 Facsimile: (504) 299-2300 ATTORNEYS FOR KMART CORPORATION
CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing has been served on all counsel of record and all unrepresented parties by e-mail, by facsimile, and/or by placing a copy of the same in the U.S. Mail, properly addressed and postage paid, this 4th day of September, 2013.
/s/ Ryan O. Luminais _________________________________________ RYAN O. LUMINAIS
14