Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 1 of 19 PageID# 12617
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`
`
`Civil Action No. 1:20-cv-393
`
`
`
`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
`
`
`Plaintiffs,
`
`v.
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`
`
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.
`
`Defendants.
`
`
`
`
`MEMORANDUM IN SUPPORT OF COUNTERCLAIM PLAINTIFFS’ MOTION FOR
`LEAVE TO SERVE SUPPLEMENTAL EXPERT REPORTS
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`REDACTED
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 2 of 19 PageID# 12618
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`
`TABLE OF CONTENTS
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`
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`Page
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`I.
`
`II.
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`INTRODUCTION ...............................................................................................................1
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`FACTUAL BACKGROUND ..............................................................................................2
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`A.
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`B.
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`Reynolds Initially Misrepresented
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` ..........2
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`PMP/Altria Serves Expert Reports On Available Opinions And Evidence ............4
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`III.
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`LEGAL STANDARD ..........................................................................................................5
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`A.
`
`B.
`
`C.
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`Federal Rule Of Civil Procedure 16(b) ....................................................................5
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`Federal Rule Of Civil Procedure 26(e) ....................................................................5
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`Federal Rule Of Civil Procedure 37(c)(1) ...............................................................5
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`IV.
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`ARGUMENT .......................................................................................................................6
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`A.
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`B.
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`Good Cause Supports Granting PMP/Altria Leave .................................................6
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`PMP/Altria’s Supplementation Is Substantially Justified And Harmless ..............11
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`V.
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`CONCLUSION ..................................................................................................................14
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`TABLE OF AUTHORITIES
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`
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`Page(s)
`
`Cases
`
`Ace Am. Ins. Co. v. McDonald’s Corp.,
`No. 11-cv-3150, 2012 WL 2523883 (D. Md. June 28, 2012) ..................................................13
`
`Columbia Gas Transmission, LLC v. Grove Ave. Developers, Inc.,
`No. 17-cv-483, 2018 WL 10483888 (E.D. Va. May 22, 2018) ...............................................10
`
`Diehl v. Blaw-Knox, No. 01-cv-770,
`2004 WL 5509085 (M.D. Penn. Sept. 14, 2004) .................................................................9, 11
`
`Jaguar Land Rover Ltd. v. Bentley Motors Ltd.,
`No. 18-cv-320, 2020 WL 6817060 (E.D. Va. Nov. 3, 2020) ..............................................7, 11
`
`Lineras v. Inspiration Plumbing LLC,
`No. 10-cv-324, 2010 WL 4623940 (E.D. Va. Nov. 3, 2010) ................................................5, 7
`
`N.O. v. Alembik,
`No. 15-cv-868, 2016 WL 1388777 (E.D. Va. Jan. 15, 2016) ....................................................5
`
`OmniSource Corp. v. Heat Wave Metal Processing, Inc.,
`No. 13-cv-772, 2015 WL 3452918 (E.D.N.C. May 29, 2015) ........................................6, 9, 13
`
`Pascoe v. Furniture Brands Int’l, Inc.,
`No. 10-cv-193, 2011 WL 475003 (W.D.N.C. Feb. 4, 2011) ...................................................12
`
`Prusin v. Canton’s Pearls, LLC,
`No. 16-cv-605, 2018 WL 620473 (D. Md. Jan. 29, 2018)...........................................11, 12, 13
`
`United States ex rel. Skibo v. Greer Lab’ys, Inc.,
`No. 13-cv-110, 2019 WL 1992139 (W.D.N.C. May 6, 2019) .....................................5, 7, 9, 12
`
`United States v. 1.604 Acres,
`2011 U.S. Dist. LEXIS 51021 (E.D. Va. May 11, 2011) ........................................................14
`
`United States v. 1.604 Acres of Land,
`No. 10-cv-320, 2011 WL 1810594 (E.D. Va. May 11, 2011) ...................................................5
`
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 4 of 19 PageID# 12620
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`I.
`
`INTRODUCTION
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`Counterclaim Plaintiffs Altria Client Services LLC, Philip Morris USA Inc., and Philip
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`Morris Products S.A. (“PMP/Altria”) respectfully seek leave to supplement the opening expert
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`reports of Paul Meyer and Dr. John Abraham. Leave is warranted for these minimal yet probative
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`additions because their inclusion is supported by good cause and PMP/Altria acted diligently to
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`disclose the additions and seek leave.
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`First, good cause exists to allow Paul Meyer, damages expert for PMP/Altria, to
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`supplement his report with information from the April 16, 2021 deposition of Reynolds’ financial
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`employee Scott Peddycord. Mr. Peddycord,
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`Mr. Meyer used this previously unavailable testimony to further inform his opinions
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`.
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`. This new information goes to the heart of a
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`damages dispute identified by both PMP/Altria and Reynolds.
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`Second, good cause exists to allow Dr. John Abraham, technical expert for PMP/Altria, to
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`address new non-infringement opinions that Reynolds’ expert, Kelly Kodama, disclosed for the
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`time in his March 31, 2021 report. Mr. Kodama’s new opinions were not disclosed in Reynolds’
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`interrogatory responses or his earlier reports, and thus Dr. Abraham could not have addressed them
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`sooner.
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` Dr. Abraham’s opinions are also necessitated by
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 5 of 19 PageID# 12621
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`In total, the discrete supplementation PMP/Altria requests amount to the following:
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`(1) ¶¶ 18-21, 30-36, 44-47, 55-57, 59-61, and 71 of Dr. Abraham’s supplemental report; and
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`(2) ¶ 268 fn. 409 and Attachments 22-26 of Mr. Meyer’s supplemental report.
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`II.
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`FACTUAL BACKGROUND
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`After Reynolds sued, PMP/Altria filed Counterclaims on June 29, 2020. Dkts. 39, 40. The
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`parties conducted fact discovery through December 4, 2020, when the Court temporarily stayed
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`the case pending PMP/Altria’s PTAB challenges to Reynold’s asserted patents, based on the PTAB
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`finding that the merits of one challenges was “particularly strong.” Ex. 1 (’268 Institution
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`Decision) at 26. On February 16, 2021, the Court lifted the stay on PMP/Altria’s counterclaim
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`patents (Dkt. 456) and promptly set a schedule, with fact and expert discovery closing on April 12,
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`2021. Dkts. 460, 461. The schedule was modified to allow expert depositions to conclude by May
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`12, 2021. Dkts. 534, 535.
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`A.
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`Reynolds Initially Misrepresented The Design Of The VUSE Alto Product
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`On November 5, 2020, PMP/Altria asked Reynolds to confirm that:
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`. Ex. 2 (11/5/20 Koh Email). Reynolds confirmed
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`. Ex. 2 (11/9/20 Michalik Email). Reynolds’ representations were corroborated
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`by
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`. Ex. 3
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`(RJREDVA_001449123) at -132; Ex. 4 (RJREDVA_001450878) at -914-15. Reynolds’ 30(b)(6)
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`witness
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`. See, e.g., Ex. 5 (Hunt Dep.) at 81:12-82:1, 98:11-15.
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`Reynolds’ representations were false. On February 19, 2021, five days before the February
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`24th due date for opening reports, Reynolds
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`.” Ex. 6 (2/19/21 Michalik Email). That same day, Reynolds
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`.” Ex. 7 (RJR’s 3rd Supp.
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`Resp. to Interr. No. 16). Reynolds produced
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` two days before opening reports
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`were due. On March 5, a week after PMP/Altria’s served its infringement reports in accordance
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`with the Court’s schedule, Reynolds
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`. Ex. 8 (Reynolds’s 4th Supp. Resp. to Interr. No. 1). Those
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`deficient, conclusory, contentions include only a threadbare recitation of the claim language and a
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`general unsupported assertion that the
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` lacks the claimed features. Id.
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`Based on Reynolds’ admitted, and belatedly corrected, factual misrepresentations about
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`, the parties agreed to exchange additional reports on the
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`. Dkt. 513, 515. On March 12th, pursuant to the Court’s schedule, PMP/Altria served Dr.
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`Abraham’s supplemental expert report addressing the
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`. On March 31st, Reynolds expert Mr.
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`Kodama served a responsive expert report, responding to Dr. Abraham’s March 12th report. Mr.
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`Kodama’s March 31st report contained
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`, that were absent from Reynolds’ conclusory March 5th non-infringement contentions.
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`See, e.g., Ex. 9 (3/31 Kodama Rpt.) ¶¶ 38-40, 43-44, 85-87.
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`Reynolds notably delayed making its corporate designee
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`, Eric Hunt, available
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`for deposition until April 14, 2021. Ex. 10 (4/14/21 Hunt Dep.) at 344:20-347:18. During that
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`deposition, Mr. Hunt testified
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`. See id.
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 7 of 19 PageID# 12623
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`B.
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`PMP/Altria Serves Expert Reports On Available Opinions And Evidence
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`On February 24, 2021, PMP/Altria served their opening expert reports, including those of
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`Paul Meyer and Dr. John Abraham. In their reports, Dr. Abraham and Mr. Meyer
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`. See, e.g., Ex. 11 (Meyer Op. Rpt.) ¶ 19; Ex. 12 (Abraham Op. Rpt.) ¶ 3.
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`Because fact discovery continued until April 12th, the parties produced documents and
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`took depositions concurrently with exchanging expert reports. For example, Reynolds produced
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`more than 2,000 documents spanning 34,000 pages since February 24, including new documents
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`on which its experts relied in their rebuttal reports. The parties also took eleven fact depositions,
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`including several corporate witnesses who testified on Reynolds behalf.1
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`On April 26, 2021, PMP/Altria served supplemental expert reports from Mr. Meyer and
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`Dr. Abraham, among others, in a good faith effort to address the extensive information produced
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`by Reynolds after the submission of earlier reports. PMP/Altria redlined these discrete changes,
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`informed Reynolds it would seek leave for any supplementation challenged by Reynolds, and
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`requested a meet and confer to determine the extent of any objections. Ex. 13 (4/26/21 McNeely
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`Ltr.). Notwithstanding the narrow focus of the supplementation and the extensive details
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`PMP/Altria provided about its proposed supplementation, Reynolds refused to meet and confer for
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`several days. Finally, on April 30, the parties conferred. Reynolds refused to withdraw its
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`objections, requiring PMP/Altria to seek leave of Court to supplement.2
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`1 Several Reynolds fact witnesses—including two that Reynolds refused to produce until the Court
`compelled it to do so (Dkt. 566)—have yet to be deposed.
`2 Although it refuses to withdraw its objections to PMP/Altria’s discrete supplementation,
`Reynolds insists that its own experts, without seeking leave of court, should be allowed to include
`new opinions that go beyond mere citations to new evidence. See Ex. 14 (4/30/21 Michalik Email).
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 8 of 19 PageID# 12624
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`III. LEGAL STANDARD
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`A.
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`Federal Rule Of Civil Procedure 16(b)
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`Federal Rule of Civil Procedure 16(b)(4) provides that a scheduling order may be modified
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`“for good cause and with the judge’s consent.” FED. R. CIV. P. 16(b). “The ‘good cause’ standard
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`focuses on the timeliness of the amendment to the scheduling order and the reasons for its tardy
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`submission; ‘the primary consideration is the diligence of the moving party.’” United States v.
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`1.604 Acres of Land, No. 10-cv-320, 2011 WL 1810594, at *2 (E.D. Va. May 11, 2011). “The
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`good cause provision of Rule 16(b)(4) does not focus on the prejudice to the non-movant or bad
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`faith of the moving party, but rather on the moving party’s diligence.” Lineras v. Inspiration
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`Plumbing LLC, No. 10-cv-324, 2010 WL 4623940, at *2 (E.D. Va. Nov. 3, 2010).
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`B.
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`Federal Rule Of Civil Procedure 26(e)
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`A party must timely supplement disclosures “if [it] learns that in some material respect the
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`disclosure or response is incomplete or incorrect[.]” FED. R. CIV. P. 26(e)(1)(A). The duty to
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`supplement, which must occur before the pretrial disclosure deadline, “extends both to information
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`included in the [expert’s] report and to information given during the expert’s deposition.” FED. R.
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`CIV. P. 26(e)(2); see, e.g., N.O. v. Alembik, No. 15-cv-868, 2016 WL 1388777, at *2 (E.D. Va.
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`Jan. 15, 2016); United States ex rel. Skibo v. Greer Lab’ys, Inc., No. 13-cv-110, 2019 WL 1992139,
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`at *4 (W.D.N.C. May 6, 2019) (“Relators had a duty under Rule 26 to supplement based on their
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`receipt of new information and documents, including new data and admissions”).
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`C.
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`Federal Rule Of Civil Procedure 37(c)(1)
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`Rule 37(c)(1) provides that “[i]f a party fails to provide information or identify a witness
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`as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to
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`supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified
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`or is harmless.” FED. R. CIV. P. 37(c)(1). In Southern States v. Sherwin-Williams Co., the Fourth
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`Circuit articulated five factors to determine whether a supplementary disclosure is substantially
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`justified or harmless: “(1) the surprise to the party against whom the evidence would be offered;
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`(2) the ability of that party to cure the surprise; (3) the extent to which allowing the evidence would
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`disrupt the trial; (4) the importance of the evidence; and (5) the nondisclosing party’s explanation
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`for its failure to disclose the evidence.” 318 F.3d 592, 597 (4th Cir. 2003). Because the “basic
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`purpose” of Rule 37 is “preventing surprise and prejudice to the opposing party,” the first two
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`factors—surprise and the ability to cure the surprise—are “the foremost factors the Fourth Circuit
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`guides courts to consider in evaluating a motion under Rule 37.” Id. at 597.
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`IV. ARGUMENT
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`A.
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`Good Cause Supports Granting PMP/Altria Leave
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`Good cause exists to allow each supplemental disclosure to which Reynolds objects. FED.
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`R. CIV. P. 16(b); see also FED. R. CIV. P. 26(e).
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`“[S]upplemental reports may be necessary and proper when new information is obtained,”
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`and thus courts routinely allow supplemental reports where, as here, the disclosures are based on
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`new information produced late by the opposing party. OmniSource Corp. v. Heat Wave Metal
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`Processing, Inc., No. 13-cv-772, 2015 WL 3452918, at *9 (E.D.N.C. May 29, 2015). For example,
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`the OmniSource court found an expert’s supplement to be “proper” because it was “based on new
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`information,” including “additional discovery” and “deposition transcripts of key witnesses”
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`produced after his initial report was completed. Id. at *9-10. Similarly, in Greer Labs, the court
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`allowed a supplemental expert report where the “changes” were based on “new data and
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`admissions from [defendant], new data from [defendant’s] customers, and new testimony from
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`[defendant’s] customers[.]” No. 13-cv-110, 2019 WL 1992139, at *4. Indeed, it is common for
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`courts to permit supplemental expert reports to address to previously undisclosed contentions
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`revealed for the first time in their opponent’s expert reports. See Jaguar Land Rover Ltd. v. Bentley
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`6
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 10 of 19 PageID# 12626
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`Motors Ltd., No. 18-cv-320, 2020 WL 6817060, at **4-5 (E.D. Va. Nov. 3, 2020) (granting leave
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`to serve a responsive, supplemental report to previously-undisclosed damages calculations).
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`These cases are on point. The Court should allow PMP/Altria leave to supplement its
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`expert reports. As explained below, each supplemental disclosure to which Reynolds objects is
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`based on and accounts for new evidence and opinions unavailable before the experts’ prior reports.
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`PMP/Altria’s experts expressly reserved the right to supplement their previously-disclosed
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`opinions based on later produced evidence and have acted diligently to promptly provide these
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`limited disclosures as soon as reasonably possible.3
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`1.
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`Good Cause Supports Mr. Meyer’s Supplementation
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`Good cause supports granting leave to allow footnote 409 and attachments 22-26 of Mr.
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`Meyer’s supplemental report because they are based on testimony and exhibits from the deposition
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`of a Reynolds’ employee that was unavailable at the time of Mr. Meyer’s opening report.
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`In his supplemental report, Mr. Meyer
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`. Ex. 15 (Meyer Supp. Rpt.) ¶ 268 fn. 409. Mr. Meyer’s overall damages opinions,
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`theories, and royalty rates for each patent are unchanged. Id. ¶ 28. Maintaining his opinions, Mr.
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`Meyer supplements his report to include a footnote (annotated and reproduced below) discussing
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`testimony and exhibits from the April 16, 2021 deposition of a Reynolds’ witness, Scott
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`Peddycord, which occurred almost two months after he submitted his opening expert report:
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`3 While “[t]he good cause provision of Rule 16(b)(4) does not focus on the prejudice to the non-
`movant or bad faith of the moving party,” Lineras, 2010 WL 4623940, at *2, Reynolds has not
`been prejudiced and cannot show bad faith for the reasons discussed in Section IV.B.
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`Id. ¶ 268 n. 409 (annotated); see also id. at Attachments 22-26 (associated calculations).
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`. See, e.g., Ex. 16 (Peddycord Dep.) at 14:25-20:20, 22:3-23:17, 24:11-
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`31:10. Mr. Peddycord testified extensively about
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`. See, e.g., id. at 99:15-102:12. Importantly, Mr.
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`Peddycord testified about
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`240 (discussing
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`). After Mr. Meyer reviewed Mr. Peddycord’s testimony,
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`. Id. at 101:6-10; see Ex. 11 (Meyer Rpt.) ¶¶ 189-
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`he
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`Good cause exists to allow Mr. Meyer’s footnote 204, and the calculations in Attachments
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`22-26 that support his
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`. Mr. Meyer’s supplemental opinion is both
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`“necessary and proper” because it is “based on new information,” including “additional discovery”
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`and “deposition transcripts of [a] key witness[]” produced after his initial report. OmniSource,
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`2015 WL 3452918, at *9-10; see also Greer Lab’ys, 2019 WL 1992139, at *4 (allowing
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`supplementation based on “new data and admissions from [defendant]”). And the reason that Mr.
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`Peddycord was not deposed earlier is a consequence of Reynolds’ disclosure deficiencies:
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`.
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`Consequently, good cause supports allowing footnote 409 and attachments 22-26 of Mr.
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`Meyer’s supplemental report. Reynolds is scheduled to depose Mr. Meyer on May 7, so there can
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`be no prejudice arising from this proposed, timely, supplementation. See Diehl v. Blaw-Knox,
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`No. 01-cv-770, 2004 WL 5509085, at *1 (M.D. Penn. Sept. 14, 2004) (“Prejudice, if any, can
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`easily be cured by cross-examining [the expert].”).
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`2.
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`Good Cause Supports Dr. Abraham’s Supplemental Disclosures
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`It is undisputed that Reynolds misrepresented
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`. It is undisputed that
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`4 Reynolds
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`. See Ex. 18 (Reynolds’ Resp. to Interr. No. 4) at 3.
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` on the eve of exchanging opening expert reports. Reynolds apparently
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`believes
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`. Reynolds position is baseless.
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`Dr. Abraham submitted several reports, all in accordance with the Scheduling Orders
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`(Dkts. 513, 515), but never had an opportunity to respond to Reynolds’ new arguments disclosed
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`for the first time on March 31st. There can be no dispute that Reynolds misrepresentations were
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`material to Dr. Abraham’s infringement opinions, and allowed Reynolds to (improperly) disclose
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`new non-infringement opinions on March 31st that were previously undisclosed. Supra at 2-3
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`(describing new non-infringement opinions disclosed for the first time on March 31st).5 And there
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`can be no dispute that Reynolds’ delay in producing a corporate witness
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`—a month after Dr. Abraham served his opening report and March
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`12 supplemental report—stripped Dr. Abraham of any ability to consider this testimony and
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`respond. Cf. Columbia Gas Transmission, LLC v. Grove Ave. Developers, Inc., No. 17-cv-483,
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`2018 WL 10483888, at *1 (E.D. Va. May 22, 2018) (finding supplementation “proper and
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`necessary to cure the [] harm caused by [a] late disclosure[.]”). Dr. Abraham properly considered
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`this testimony, and diligently disclosed it to Reynolds on April 26th per the Scheduling Order.
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`Because Dr. Abraham could not have addressed them earlier, good cause exists to allow
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`his limited supplementation (Ex. 20 (Abraham Supp. Rpt. ¶¶ 18-21, 30-36, 44-47, 55-57, 59-61,
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`5 Dr. Abraham served a supplemental report on April 7, but could not respond to these new
`opinions because the scope of that report was limited to validity. Dkt. 513, 515.
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`71) to respond to these new arguments and opinions. See, e.g., Jaguar Land Rover, 2020 WL
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`6817060, at *4-5. And Reynolds will have a full and fair opportunity to depose Dr. Abraham on
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`these opinions. See Diehl, 2004 WL 5509085, at *1.
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`B.
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`PMP/Altria’s Supplementation Is Substantially Justified And Harmless
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`Although inapplicable in view of PMP/Altria’s timely motion for leave to supplement, the
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`Southern States factors, even if applied, support permitting the requested supplementation. The
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`subject supplemental disclosures are both “substantially justified” and “harmless,” and all five
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`Southern States factors (if applied) support allowing these disclosures.6
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`1.
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`Reynolds Has Not Been Surprised
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`Reynolds has not been—and cannot be—surprised by the limited supplemental disclosures
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`in PMP/Altria’s supplemental expert reports.
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`First, there can be no credible claim of surprise where, as here, the supplemental disclosures
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`merely amend or expound on previously-disclosed opinions to account for new evidence or
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`opinions. For example, in Spencer Spirit Holdings, Inc. v. Sunrise Roofing, Inc., the court found
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`no surprise because the expert’s supplement did “not go beyond the issues previously identified,”
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`and did not “interject an additional, and considerably complex, legal theory’ or factual theory
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`which would ‘substantially change the character of the case.’” No. 19-cv-186, 2020 WL 4757075,
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`at *3 (W.D.N.C. Aug. 17, 2020). Likewise, in Lightfoot v. Georgia-Pacific Wood Prods. LLC, the
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`court found no surprise because the supplemental opinions did “not change [the] overall expert
`
`opinion.” No. 16-cv-244, 2017 U.S. Dist. LEXIS 181681 (E.D.N.C. Nov. 2, 2017); see also, e.g.,
`
`
`6 Prusin v. Canton’s Pearls, LLC, No. 16-cv-605, 2018 WL 620473 (D. Md. Jan. 29, 2018) (“Rule
`37(c) is disjunctive – a party need only show its failure was substantially justified or harmless[.]”).
`
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 15 of 19 PageID# 12631
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`Prusin, 2017 WL 3492163, at *5 (finding “allegation of surprise is largely unfounded” when party
`
`had prior notice of defense to which supplemental opinions related).
`
`Reynolds cannot credibly claim surprise for the same reasons. No new theories of liability
`
`or damages have been added. No new patents or claims have been asserted, and no new products
`
`have been accused. And, with respect to damages, Mr. Meyer’s overall damages opinions are
`
`completely unchanged—he relies on the same agreements to determine the same royalty rates for
`
`each patent. Ex. 15 (Meyer Supp. Rpt.) ¶ 28. Because the subject disclosures relate to previously-
`
`disclosed opinions, and do not “go beyond the issues previously identified” or “change [the]
`
`overall expert opinion,” Reynolds cannot be surprised. Spencer Spirit, 2020 WL 4757075, at *3.
`
`In addition, “there should be little surprise” to Reynolds because, as discussed above,
`
`PMP/Altria’s prior “expert reports clearly contemplated supplementation.” Pascoe v. Furniture
`
`Brands Int’l, Inc., No. 10-cv-193, 2011 WL 475003, at *3 (W.D.N.C. Feb. 4, 2011). Instead of
`
`adding new opinions or theories, each expert merely supplemented previously-disclosed opinions
`
`to account for new evidence or contentions, which should be unsurprising because each expert
`
`reserved the right to do so in their prior reports. Cf., e.g., Ex. 11 (Meyer Rpt.) ¶ 19 with Ex. 15
`
`(Meyer Supp. Rpt.) ¶ 4; see also, e.g., Greer Lab’ys, 2019 WL 1992139, at *5 (allowing
`
`supplementation where experts made clear “at every step in this case that they intended to
`
`supplement [their] report to incorporate … new information [that] became available”).7
`
`
`7 Any claim of surprise from Reynolds rings hollow given that its experts went beyond the Court’s
`Scheduling Order. Indeed, Reynolds undertook such supplementation without seeking leave, or
`even meeting and conferring regarding its supplementation. Reynolds cannot have it both ways.
`In contrast, denying leave would severely harm and unfairly punish PMP/Altria for properly
`seeking leave, while also creating a windfall for Reynolds who unilaterally decided to serve
`supplemental reports without seeking leave. Cf. Prusin, 2017 WL 3492163, at *5 (finding that
`exclusion “would severely harm the Defendants’ position and is excessive, given that the
`[prejudice] can largely be cured without such drastic measures”).
`
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 16 of 19 PageID# 12632
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`2.
`
`Any Surprise Can (And Will) Be Cured
`
`Even if Reynolds could show surprise (it cannot), any surprise can be cured. Courts
`
`consistently find surprise can be cured where, as here, the party has an opportunity to depose an
`
`expert on their supplemental disclosures. See, e.g., Spencer, 2020 WL 4757075, at *3 (finding no
`
`prejudice because “Defendant [] had the opportunity to carefully review the supplement and
`
`depose Mr. Campbell regarding its shortcomings”); OmniSource, 2015 WL 3452918, at *10
`
`(allowing supplementation where adverse party “will be given a second opportunity to depose [the
`
`expert]”). Here, Reynolds has had PMP/Altria’s initial reports for over two months and the
`
`minimal supplemental additions to those reports since April 26th. Ex. 21 (4/26/21 Email from L.
`
`Smith). Expert discovery just opened, and Reynolds will have a full and fair opportunity to depose
`
`each expert on the subject disclosures.8
`
`3.
`
`Trial Will Not Be Disrupted
`
`“This situation is not one in which a party is seeking to admit new expert opinions on the
`
`eve of trial.” Ace Am. Ins. Co. v. McDonald’s Corp., No. 11-cv-3150, 2012 WL 2523883, at *5
`
`(D. Md. June 28, 2012) (allowing supplement where no trial was set). Allowing supplementation
`
`will not disrupt trial. See Spencer, 2020 WL 4757075, at *3; United States v. 1.604 Acres, 2011
`
`U.S. Dist. LEXIS 51021, at *4 (E.D. Va. May 11, 2011).
`
`4.
`
`The Evidence Is Important
`
`The subject supplemental disclosures are important. Although they merely expound on
`
`previously-disclosed opinions, the supplemental disclosures relate to key issues on infringement
`
`and damages. For example, Mr. Meyer’s supplemental report calculates
`
`
`
`
`8 The first such deposition – of Mr. Meyer – is scheduled for May 7th (i.e., the date noticed for the
`hearing of this motion). Reynolds has the opportunity to mitigate any purported prejudice by
`questioning Mr. Meyer on his supplementation at that time.
`
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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 17 of 19 PageID# 12633
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`. See supra at 7-9. While this does not
`
`
`
`change the ultimate royalty rates, it is important evidence
`
`
`
`, and Reynolds’ experts failure to use the best evidence based on the
`
`testimony of the very Reynolds employee he spoke with privately in preparing his report.
`
`Likewise, Dr. Abraham’s opinions are important to infringement of the ’911 Patent by the accused
`
`VUSE Alto product. At bottom, allowing these limited supplemental disclosures will facilitate
`
`trial on the merits because they will aid the jury in deciding infringement and damages. See, e.g.,
`
`Spencer, 2020 WL 4757075, at *3 (“[T]he additional information is important, as it will help a
`
`trier of fact to better understand Mr. Campbell’s ultimate conclusion.”).
`
`5.
`
`PMP/Altria’s Supplementation Is Substantially Justified
`
`As discussed in detail in Section IV.A, the modest supplementations in PMP/Altria’s
`
`supplemental expert reports are substantially justified. See supra at Section IV.A.
`
`V.
`
`CONCLUSION
`
`For the reasons above, PMP/Altria respectfully request that the Court grant this Motion
`
`and allow paragraphs 18-21, 30-36, 44-47, 55-57, 59-61, and 71 of Dr. Abraham’s supplemental
`
`report and paragraph ¶ 268 fn. 409 and attachments 22-26 of Mr. Meyer’s supplemental report.
`
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`

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`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 18 of 19 PageID# 12634
`
`Dated: April 30, 2021
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`/s/ Maximilian A. Grant
`Maximilian A. Grant (VSB No. 91792)
`max.grant@lw.com
`Lawrence J. Gotts (VSB No. 25337)
`lawrence.gotts@lw.com
`Matthew J. Moore (pro hac vice)
`matthew.moore@lw.com
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W., Ste. 1000
`Washington, DC 20004
`Tel: (202) 637-2200; Fax: (202) 637-2201
`
`Clement J. Naples (pro hac vice)
`clement.naples@lw.com
`LATHAM & WATKINS LLP
`885 Third Avenue
`New York, NY 10022-4834
`Tel: (212) 906-1200; Fax: (212) 751-4864
`
`Gregory K. Sobolski (pro hac vice)
`Greg.sobolski@lw.com
`LATHAM & WATKINS LLP
`505 Montgomery Street, Suite 2000
`San Francisco, CA 94111
`Tel: (415) 391-0600; Fax: (415) 395-8095
`
`Brenda L. Danek (pro hac vice)
`brenda.danek@lw.com
`LATHAM & WATKINS LLP
`330 North Wabash Avenue, Suite 2800
`Chicago, IL 60611
`Tel: (312) 876-7700; Fax: (312) 993-9767
`
`Counsel for Defendants-Counterclaim
`Plaintiffs Altria Client Services LLC, Philip
`Morris USA Inc., and Philip Morris
`Products S.A.
`
`15
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`

`Case 1:20-cv-00393-LO-TCB Document 580 Filed 04/30/21 Page 19 of 19 PageID# 12635
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on this 30th day of April, 2021, a true and correct copy of the foregoing
`
`was served using the Court’s CM/ECF system, with electronic notification of such filing to all
`counsel of record:
`
`
`
`
`
`
`
`
`
`
`
`/s/ Maximilian A. Grant
`
`
`
`
`
`
`
`Maximilian A. Grant (VSB No. 91792)
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W., Suite 1000
`Washington, DC 20004
`Telephone: (202) 637-2200
`Facsimile: (202) 637-2201
`Email: max.grant@lw.com
`
`
`Counsel for Defendants-Counterclaim
`Plaintiffs Altria Client Services LLC, Philip
`Morris USA Inc., and Philip Morris
`Products S.A.
`
`16
`
`