United States District Court, W.D. Wisconsin
STEVEN M. LAUER d/b/a LAUER CUSTOM WEAPONRY, Plaintiff & Counter-Defendant
NIC INDUSTRIES, INC., Defendant & Counterclaimant.
OPINION AND ORDER
WILLIAM M. CONLEY DISTRICT JUDGE.
Lauer d/b/a Lauer Custom Weaponry and NIC Industries, Inc.
are competitors in the firearm finishing
market. Lauer is suing NIC in this lawsuit for
false advertising under the Lanham Act and Wisconsin law.
Following a stipulation by the parties, Lauer's remaining
Lanham Act claims arise out of alleged statements that NIC
made about the Cerakote Elite Series coating, and NIC's
remaining Lanham Act counterclaim concerns alleged statements
by Lauer concerning the post-UV exposure of the Cerakote
Black product. (See dkt. #42 at 1-2.) This opinion
will address and grant in part NIC's motion to strike the
expert report of Brian R. Smith. (Dkt. #26.)
and NIC are competitors in the firearm finishing market.
Before filing suit, Lauer sent a cease and desist letter to
NIC in May 2017, demanding NIC “immediately cease and
desist making false claims” that overstate the
performance characteristics of its products. (Cease &
Desist Letter (dkt. #28-2) 1.) In particular, the letter
identified two representations about the Cerakote Elite
Series coating that Lauer claimed “[i]ndependent
testing” had shown to be inaccurate: that it
“withstands (i) 8, 000 Taber abrasion wear cycles (ASTM
D4060); and (ii) 3, 000 hours of corrosion resistance (ASTM
B117).” (Id.) According to Lauer's letter,
independent testing showed that the coating instead
“withstands: (i) 4, 000 taber abrasion wear cycles . .
.; and (ii) 185 hours of corrosion resistance.”
(Id.) When NIC continued to claim its products
achieved greater performance, this suit resulted.
court's preliminary pretrial conference order in this
case required plaintiff to disclose its experts on or before
February 9, 2018, and for the disclosures to comply with Rule
26(a)(2). (Prelim. Pretrial Conference Order (dkt.
#9) 2.) The order also provided that supplementation under
Rule 26(e) must be: “limited to matters raised in an
expert's first report”; “in writing”;
and “served no later than five calendar days before the
expert's deposition, or before the general discovery
cutoff if no one deposes the expert.” (Id.)
later produced a timely expert report by Brian R. Smith, the
vice president of technology and business development for
Assured Testing Services. (Smith Rpt. (dkt. #28-1) 1.)
Assured Testing Services is an independent laboratory that
“specializ[es] in the testing of coatings and their
physical properties, corrosion resistance, weathering, and
chemical resistance performance.” (Id.) Smith
was retained to and did opine in writing about the accuracy
of four of NIC's claims concerning the Cerakote H and
Cerakote Elite Series coatings.
26(a)(2)(B) details what must be included in an expert's
written report: “a complete statement of all opinions .
. . and the basis and reasons for them”; “the
facts or data considered”; summary or supporting
exhibits; the expert's qualifications, including
publications from the past decade and prior expert experience
in the past four years; and a compensation disclosure.
Fed.R.Civ.P. 26(a)(2)(B). “Rule 26 is designed to avoid
surprise and give the opposing party a full opportunity to
evaluate the expert's methodology and conclusions and to
respond appropriately.” Gicla v. U.S., 572
F.3d 407, 411 (7th Cir. 2009). If violated, exclusion under
Rule 37 “is automatic and mandatory unless the
sanctioned party can show that its violation of Rule 26(a)
was either justified or harmless.” Salgado by
Salgado v. General Motors Corp., 150 F.3d 735, 742 (7th
Cir. 1998) (citing Finley v. Marathon Oil Co., 75
F.3d 1225, 1230 (7th Cir. 1996)). That said, Salgado
recognizes that “less severe” sanctions are
available, such as restricting an expert to testifying to the
incomplete opinions contained in his report. Id. at
argues that the Smith Report should be struck under Rule 37
on three grounds: (1) it did not attach the exhibits on which
Smith purports to rely; (2) the Smith Report does not
support, but rather undermines plaintiff's claims; and
(3) the Smith Report is a preliminary, not a final, report.
Defendant's first argument requires little discussion.
(See Pl.'s Opp'n (dkt. #37) at 3.) While
this failure is a literal violation of Rule 26(a)(2)(B),
defendant “readily” determined that the report
was based on previous testing, the reports of which plaintiff
had already produced in discovery. (See Mot. Strike
Br. (dkt. #27) 3.) Defendant having been prejudiced in no
discernable way by this technical violation, striking the
report would obviously be too harsh a sanction.
defendant argues that the Smith Report
“undermines” plaintiff's claims. More
specifically, defendant argues the Smith Report is
inadequately or improperly supported, “predicated upon
assumptions and unknowns, ” and relies on unreliable
prior testing. (Id. at 9.) Most of these concerns
were obviated by the parties' stipulation to dismiss
certain claims with prejudice. (See Stipulation (dkt.
#42) 1.) As to the remaining claims, Smith opines that:
• “To [his] knowledge based on the reports
reviewed no samples were tested to 8, 000 cycles therefore it
is not possible to address the claim given the data available
from previous testing.”
• The earlier testing results are “not directly
comparable to results obtained by Assured or those posted on
NIC Industries' website.”
• “Based on the Assured Testing Services' TR
14006A test results . . . where all samples exhibited some
rust at approximately 500 hrs, Product ‘1' or
‘2' samples are not compliant to the 3, 000 hr
claim of withstanding ASTM B117 Salt Spray without red
• “Regarding the results in the Touchstone Testing
Laboratory LLC (TTL) report 20284, . . . the (apparent)
Cerakote Elite samples are not compliant with the 3, 000 hr
claim of withstanding ...