Belated Production of the Accounting Expert’s Report Was Not Justified
Posted on May 12, 2025 by Expert Witness Profiler
Asserting various state and federal claims arising from alleged trademark infringement, Sacks Holdings, Inc. (the “Plaintiff” or “Sacks”) sued Grin Natural USA Limited, Grin Holdings Limited, Grin Natural US Limited, and Grin Natural Products Limited (collectively, the “Defendants” or “Grin”) for, inter alia, trademark infringement.
In July 2024, Defendants’ counsel contacted Julianne “Juli” Saitz at FTI Consulting, asking her “to take a look at” the instant “trademark infringement dispute,” as well as to “give [defense counsel Saitz’s] thoughts on potential damages.”
At 8:12 p.m. on Wednesday, October 30, 2024, Defendants produced a second expert report from Saitz (the “New Report”) as well as certain documents (the “New Evidence”) that contain “information relied on by Saitz in forming her opinions.”
Plaintiff sought to exclude the New Evidence and strike the New Report. Defendants opposed both Motions.
Accounting Expert Witness
Julianne Saitz has more than 25 years of experience providing forensic accounting and financial and economic analysis to attorneys in litigation and arbitration, as well as private general ledger accounting expertise.
Saitz holds a B.S. from New York University’s Stern School of Business. She is a Certified Public Accountant in New York, is Accredited in Business Valuation and is Certified in Financial Forensics by the American Institute of Certified Public Accountants.
Discussion by the Court
First of all, Defendants failed to establish either harmlessness or substantial justification for their belated production of the New Evidence.
Defendants contended that the New Report qualifies as a “timely and proper” supplementation.
To begin, as Defendants tacitly concede, the Initial Report opines solely on the parties’ sales, whereas the New Report additionally opines on the parties’ profits. Thus, the New Report offers “new opinions” and calculations; it does not merely “offer[] more details on [Saitz’s] prior calculations” or otherwise supplement her prior opinions.
However, Defendants just failed to provide the (basic) information necessary to begin the five-day objection window until August 26, 2024, a delay that extended the objection window beyond the expert report deadline.
“Second,” Defendants maintained, they “created new financial statements after receiving guidance from Saitz on the details of costs and expense information necessary from deduction of sales to determine profits. That effort took until October.” The Court held that this argument does not show good cause for the violation of Rule 26.
The exclusion of the New Evidence independently necessitates exclusion of those portions of the New Report that rely thereon, and the determination that Plaintiff possesses priority rights to the disputed mark lessens the importance of the New Report’s calculation of Plaintiff’s profits to resolution of this action.
This case, filed more than seventeen months ago, goes to trial in less than three months and even Defendants’ proposed alternative sanction would interject further delay into these proceedings.
In sum, the Court held that the Defendants failed to establish good cause for their belated production of the New Report.
Held
The Court granted the Plaintiff’s motion to exclude the New Evidence and strike the New Report.
Key Takeaway:
Rule 26(e) requires a party to “supplement or correct its disclosure or response . . . if the party learns that in some material respect the disclosure or response is incomplete or incorrect.”
Case Details:
| Case Caption: | Sacks Holdings, Inc. V. Grin Natural USA Limited Et Al |
| Docket Number: | 1:23cv1058 |
| Court Name: | United States District Court, North Carolina Middle |
| Order Date: | May 09, 2025 |
