United States District Court, D. Delaware
INTEGRA LIFESCIENCES CORP., INTEGRA LIFESCIENCES SALES LLC, CONFLUENT SURGICAL, INC., and INCEPT LLC, Plaintiffs,
HYPERBRANCH MEDICAL TECHNOLOGY, INC., Defendant.
HONORABLE LEONARD P. STARK UNITED STATES DISTRICT JUDGE
Magistrate Judge Burke issued a 28-page Memorandum Order (the
"Order") (D.I. 384), dated November 14, 2017,
granting in part and denying in part Defendant HyperBranch
Medical Technology, Inc's ("Defendant" or
"HyperBranch") letter motion to strike portions of
Plaintiffs Integra LifeSciences Corp., Integra LifeSciences
Sales LLC, Confluent Surgical, Inc., and Incept LLC's
(collectively, "Plaintiffs" or "Integra")
expert report offered by its damages expert, John C. Jarosz
on November 28, 2017, Integra objected to the portion of the
Order granting Defendant's motion as related to the
market share apportionment theory (D.I. 427)
on December 12, 2017, HyperBranch responded to Integra's
Objections (D.I. 452) ("Response" or
the Court has considered the parties' objections and
responses for clear errors of law and clearly erroneous
findings of fact, see St. Clair Intellectual Prop.
Consultants, Inc. v. Matsushita Elec. Indus. Co., Ltd.,
691 F.Supp.2d 538, 541-42 (D. Del. 2010); 28 U.S.C. §
636(b)(1); Fed.R.Civ.P. 72(a);
THEREFORE, IT IS HEREBY ORDERED that:
Plaintiffs' Objections (D.I. 427) are OVERRULED, Judge
Burke's Order (D.I. 384) is ADOPTED, the portion of
Defendant's motion to strike (D.I. 345) related to price
erosion is DENIED, and the portion related to market share
apportionment is GRANTED.
Integra raises two general objections: (1) the Order
excessively strikes parts of Mr. Jarosz's expert report
that relate to lost profits generally rather than only to the
market share apportionment theory; and (2) the Order
incorrectly applies the Pennypack factors. (Objs at
1) The Court is not persuaded by either of Integra's
First, Integra contends the Order improperly strikes
paragraphs 91, 93-99, 100-02, 106-11 (with the exception of
the second sentence of paragraph 109), and 116-18 of Mr.
Jarosz's August 25, 2017 Report. (Objs at 4-6) These
paragraphs, according to Integra, relate to lost profits in
general and are not specific to Mr. Jarosz's market share
apportionment theory. (Id. at 5-6) This argument was
never presented to Magistrate Judge Burke during briefing or
the telephonic hearing. Accordingly, because "parties
objecting to a Magistrate Judge's report or order are
required to adhere to the arguments, evidence, and issues
they presented first to the Magistrate Judge, " and
because Integra has failed to show good cause for why it
failed to raise this argument earlier, the Court will not
consider it now. Masimo Corp. v. Philips Elec. N. Am.
Corp., 62 F.Supp.3d 368, 377 & n. 12 (D. Del. 2014).
Moreover, as HyperBranch points out, Integra served the
Supplemental Expert Report of Mr. Jarosz on November 28,
2017, addressing its two-party market damages theory and
incorporating portions of the original report stricken by the
Order. (Resp at 10) It is therefore unclear what prejudice
Integra is suffering from these paragraphs being stricken
from the initial report.
Second, Integra contends the Order incorrectly applies the
Pennypack factors because all of the information Mr.
Jarosz relied upon in forming his market share apportionment
opinion was made known to HyperBranch during fact discovery.
(Objs at 6) To the extent HyperBranch needed additional
third-party discovery, Integra alleges it is
HyperBranch's fault for not seeking it earlier.
(Id. at 6-7) The Court disagrees. Even if all the
information Mr. Jarosz relied upon in forming his opinion was
made known to HyperBranch, the market share apportionment
theory itself was never disclosed prior to Mr. Jarosz's
report. Instead, Integra maintained only its
two-player/product market theory, a theory that (at least in
part) contradicts the newly-asserted market apportionment
theory. (See Order at 14)
HyperBranch's own discovery may have shown that the
market was not a two-party/product market is not the issue.
As Judge Burke noted, "a party's duty to supplement
discovery responses set out in the Rules would be meaningless
if a party could later simply point to cherry-picked
information produced by its
opponent as fulfilling the
party's duty." (Id. at 17) Furthermore, the
Court agrees with the Order that "it is a substantively
different thing for Defendant (on the one hand) to go about
discovery by mainly trying to disprove Plaintiffs'
position that the relevant market is a two-party market, as
opposed to (on the other hand) being focused on using the
discovery period to delineate exactly what the scope of a
more-than-two-party/product market actually looks like. The
former is a more 'straightforward' issue to defend
against, while the latter would require significantly
different (and more expansive) discovery efforts."
(Id. at 23) (internal citations omitted)
Integra asserts that adopting the Order "will create a
bad precedent" as it will "convey to expert
witnesses that they had better think twice before offering
their true, independent opinions." (Objs at 8) To the
contrary, adopting the Order conveys to parties that they
must obey their discovery obligations and may wish to consult
their experts throughout the discovery process to ensure they
are adequately meeting such obligations and timely disclosing
all theories and opinions on which they wish to proceed.
Court has considered each of the other arguments raised by
Plaintiffs in their Objections and finds that each of them