Advanced Analytics, Inc. v. Citigroup Global Markets, Inc.
301 F.R.D. 31
S.D.N.Y.2014Background
- Advanced Analytics, Inc. (AAI) sued Citigroup Global Markets, Inc. and The Yield Book, Inc. alleging misappropriation of numerical sequences and extensive expert discovery followed over many years.
- Court set expert-disclosure deadline of May 17, 2012 and closed discovery July 17, 2012; AAI previously filed a late “Fan Reply” that the Magistrate Judge struck and the District Judge affirmed.
- AAI submitted a 91‑page “Fourth Declaration of Dr. Jianqing Fan” (Fourth Fan Decl.) with 117 exhibits as part of its June 6, 2013 opposition to defendants’ summary-judgment and Daubert motions; the Fourth Fan Decl. reincorporated the previously‑stricken Fan Reply and contained new theories and exhibits.
- Defendants moved to strike the Fourth Fan Decl. as untimely and violative of Rule 26(a)(2); they also sought fees and costs.
- The magistrate judge struck the Fourth Fan Decl. for use on the merits (summary‑judgment opposition), allowed only paragraphs 257–273 for response to Defendants’ Rule 702/Daubert motion, denied AAI leave to use it for a sanctions motion, awarded defendants half their fees/costs for the motion, and gave AAI 30 days to file an amended summary‑judgment opposition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Fourth Fan Decl. may be used to oppose summary judgment (timeliness/Rule 26) | AAI: Declaration merely expands prior opinions and relied on newly disclosed/fraud‑related evidence; delay was justified or harmless | Defs: Declaration is untimely, contains new theories/exhibits, and reincorporates a previously‑stricken report | Struck for merits use: preclusion appropriate under Rule 16/26/37 and inherent authority because untimely, not justified, and prejudice/need to reopen discovery. |
| Effect of prior order striking Fan Reply (incorporation) | AAI: Silent or sought to revive its claims via Fourth Fan Decl. | Defs: Incorporation flouts court orders; re‑submission impermissible | Incorporation of previously‑stricken Fan Reply rendered Fourth Fan Decl. particularly improper; the Court enforced prior exclusion. |
| Use of Fourth Fan Decl. for non‑merits purposes (Daubert response/impeachment/sanctions) | AAI: Wants to use for Daubert response, for impeachment, and to support sanctions motion | Defs: Oppose any use beyond merits; fees for motion to strike | Fourth Fan Decl. may be considered only insofar as ¶¶257–273 to oppose Rule 702/Daubert; not allowed for sanctions (untimely) and impeachment use that would effectuate merits testimony is disallowed. |
| Entitlement to attorneys’ fees and sanctions | AAI: No bad faith; submission justified for non‑merits uses | Defs: Seek full fees/costs under Rules 16/37 and inherent power | Court awarded defendants one‑half of fees/costs for the motion (must submit documentation); full fees denied. |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993) (establishes admissibility framework for expert testimony)
- Design Strategy, Inc. v. Davis, 469 F.3d 284 (2d Cir. 2006) (four‑factor test and flexible approach for exclusion under Rule 37)
- Patterson v. Balsamico, 440 F.3d 104 (2d Cir. 2006) (identifies four factors for preclusion analysis)
- Softel, Inc. v. Dragon Med. & Scientific Commc’ns, Inc., 118 F.3d 955 (2d Cir. 1997) (affirming preclusion for late expert disclosures)
- Chambers v. NASCO, 501 U.S. 32 (1991) (recognizes inherent powers of court to sanction misconduct)
- Roadway Express v. Piper, 447 U.S. 752 (1980) (court control over proceedings and sanctions)
- Cedar Petrochemicals, Inc. v. Dongbu Hannong Chem. Co., 769 F. Supp. 2d 269 (S.D.N.Y. 2011) (permitting untimely affidavit if within scope of initial report; disallowing wholly new expert approaches)