DOMINIC W. LANZA, District Judge.
Pending before the Court are (1) Plaintiff EFG America, LLC's ("EFG") Rule 56(d) motion to defer consideration of Defendant Vaughn La Verl Wilhlem's ("Wilhelm") motion for summary judgment (Doc. 160) and (2) the parties' stipulation to stay depositions (Doc. 169). For the following reasons, EFG's motion will be denied and the parties' stipulation will be granted.
Although this case once involved an array of different parties and claims, it now involves a single negligence claim by one plaintiff (EFG) against one defendant (Wilhelm).
On July 2, 2019, Wilhelm filed a motion for summary judgment on EFG's negligence claim. (Doc. 157.) In that motion, Wilhelm argues the negligence claim fails as a matter of law because (1) EFG failed to retain an expert and thus cannot establish the standard of care, (2) the claim arises from his work as an independent contractor and is thus barred by the economic-loss rule, (3) there is no causal connection between his purported negligence and the consulting payments, which would have been paid regardless of whether he performed in a negligent manner, and (4) the consulting payments were made to a pair of LLCs, not to him personally, so he can't be held liable for them. (Id.)
On July 12, 2019, EFG filed a Rule 56(d) motion. (Doc. 160.) In a nutshell, EFG contends it should be allowed to depose Wilhelm before responding to his summary judgment motion. (Id.) EFG also identifies an array of questions it wishes to ask Wilhelm during his deposition (id. at 8-10) and contends its negligence claim doesn't require expert testimony and won't be barred by the economic-loss rule (id. at 7-8).
On July 17, 2019, Wilhelm filed an opposition to the Rule 56(d) motion. (Doc. 162.)
On July 24, 2019, EFG filed a reply in support of its Rule 56(d) motion. (Doc. 163.)
On August 8, 2019, the parties filed a "Joint Motion to Stay Depositions." (Doc. 169.) In this motion, the parties ask for a stay of all deposition deadlines in this case "pending resolution of [EFG's] Motion to Defer (ECF No. 160) and, in the event the Motion to Defer is denied, pending resolution of [Wilhelm's] Motion for Summary Judgment (ECF No. 157)." (Id. at 2.) In support of this request, the parties state that "[a]lthough [EFG] seeks to take [Wilhelm's] deposition for purposes of [Wilhelm's] Motion for Summary Judgment, the Parties wish to avoid the unnecessary expenditure of time and resources of taking all depositions by both sides while di[s]positive motions are still pending and in the event the Court decides that [Wilhelm's] deposition is unnecessary to consideration of his Motion for Summary Judgment." (Id.)
Rule 56(d) of the Federal Rules of Civil Procedure provides that "[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order." A party seeking relief under Rule 56(d) "must make clear what information is sought and how it would preclude summary judgment." Margolis v. Ryan, 140 F.3d 850, 853 (9th Cir. 1998) (quotation omitted) (emphasis added). Thus, if the party seeking relief would lose at summary judgment even after obtaining the information at issue, the Rule 56(d) request should be denied. Midbrook Flowerbulbs Holland B.V. v. Holland Am. Bulb Farms, Inc., 874 F.3d 604, 619-20 (9th Cir. 2017) (affirming denial of Rule 56(d) motion because "the additional discovery that Holland America sought in its opposition to Midbrook's summary judgment motion" had "no bearing" on the legal issue that provided the foundation for the summary judgment motion).
Here, EFG seeks a continuance under Rule 56(d) so it can depose Wilhelm before responding to his pending summary judgment motion. As explained below, this request will be denied because nothing Wilhelm might say in his deposition would preclude summary judgment—EFG's failure to obtain an expert means its negligence claim is doomed.
The parties agree that EFG's negligence claim against Wilhelm is governed by Texas law. (Compare Doc. 157 at 3-4 [Wilhelm's MSJ, citing Texas law] with Docs. 160 at 7-8 and 163 at 4-5 [EFG's Rule 56(d) motion and reply, discussing Texas law on the need for expert testimony].) In Texas, "[e]xpert testimony is necessary when the alleged negligence is of such a nature as not to be within the experience of the layman." FFE Transp. Servs., Inc. v. Fulgham, 154 S.W.3d 84, 90 (Tex. 2004) (citation omitted). When conducting this inquiry, "Texas courts have considered whether the conduct at issue involves the use of specialized equipment and techniques unfamiliar to the ordinary person." Id. at 91.
It seems clear that EFG will need expert testimony to prevail on its negligence claim against Wilhelm.
Unsurprisingly, given the specialized industry (rubber devulcanization) from which its claim arises, EFG's actual theory of negligence concerning Wilhelm is also highly specialized and technical. Although EFG now seeks to portray its negligence claim as a simple one that turns on Wilhelm's failure to follow basic checklists and instructions (Doc. 163 at 4-5), EFG's discovery disclosures paint a much different picture. In a discovery response prepared on July 1, 2019, EFG summarized the "facts" and "legal theories" underlying its negligence claim against Wilhelm as follows:
(Doc. 157-3 at 7.) It is inconceivable that a layman could make heads or tails of these accusations without an expert. The bottom line is that EFG's negligence claim turns on the interplay between chemicals and compounds that most jurors won't even be able to pronounce, let alone be familiar with. Texas law requires expert testimony in this circumstance. Fulgham, 154 S.W.3d at 90 ("Expert testimony is necessary when the alleged negligence is of such a nature as not to be within the experience of the layman.").
Finally, the cases cited in EFG's Rule 56(d) motion and reply are easily distinguishable and do not establish that expert testimony is unnecessary here. In Reed v. Granbury Hospital Corp., 117 S.W.3d 404 (Tex. Ct. App. 2003), although the court suggested that "the standard of administrative care at a hospital may be established by lay testimony," it went on to affirm the trial court's grant of summary judgment to the defense because "expert testimony is required where, as here, the underlying issue involves the performance of medical procedures" and the plaintiffs hadn't produced any admissible expert testimony on that topic. Id. at 409-14. It's unclear why EFG believes Reed is helpful to its position—its theory of negligence against Wilhelm is not akin to "the standard of administrative care at a hospital" and instead involves highly technical questions of chemical mixing, interaction, and substitution. Meanwhile, in Scurlock Oil Co. v. Harrell, 443 S.W.2d 334 (Tex. Ct. App. 1969), the plaintiff asserted a negligence claim against an oil company for allowing an underground pipeline to degrade and cause oil to seep onto the plaintiff's property, resulting in property damage and the killing of "sixteen sheep [that] died from drinking oil." Id. at 335. The court held that expert testimony was not necessary to support that claim because "[a] pipe that has deteriorated to a point where it will no longer contain the liquid that it was meant to contain is not a fact so peculiar to a specialized industry that the defect can only be established through expert testimony." Id. at 337. But here, EFG is not simply complaining about a pipe that broke—it seeks to hold Wilhelm liable for, among other things, believing that a chemical called "zinc naphthenate" was an appropriate substitute for a chemical called "butyl stearate" for purposes of the rubber devulcanization process. (Doc. 157-3 at 7.) Although a layman might be able to grasp the former, the latter would be inscrutable without expert guidance.
The parties have jointly asked the Court, in the event it denies EFG's Rule 56(d) motion, to stay all of the deposition deadlines in this case pending the resolution of Wilhelm's summary judgment motion. (Doc. 169.) Although the Court is usually loathe to stay discovery pending the resolution of a motion, it will grant the parties' request here because it seems likely, in light of the analysis in Section I, that Wilhelm will ultimately prevail on his summary judgment motion.
Accordingly,
(1) EFG's Rule 56(d) motion (Doc. 160) is
(2) The parties' stipulation (Doc. 169) is
(3) Depositions shall be
(4) EFG's response to Wilhelm's motion for summary judgment must be filed by
(5) Wilhelm's reply in support of his motion for summary judgment must be filed within 15 days after service of EFG's response.