Karum Holdings LLC v. Lowe’s Companies, Inc.
Lowe’s expanded its retail home improvement stores into Mexico. Lowe’s Mexico contracted with Karum to provide private-label credit card services there. The program failed to meet expectations. Karum sued, claiming breach of contract. Early on, Karum disclosed its summary “damages model,” a 37-page estimate of damages with hundreds of figures contained in charts and graphs. Karum intended to have its Chairman and former CEO Johnson and/or its current CEO and CFO Ouchida present the damages model at trial as lay opinion testimony. Karum never retained a damages expert. Two months before trial, Lowe’s moved to preclude Johnson and Ouchida from testifying as to the damages model because any testimony regarding the model required the specialized knowledge of an expert. The district court granted the motion, finding that Karum had never properly disclosed an expert pursuant to Federal Rule of Civil Procedure 26(a)(2). Since this was a case-dispositive sanction, the court granted judgment in favor of Lowe’s. The Seventh Circuit affirmed. The plain meaning of Rule 26(a)(2) demands a formal designation for expert disclosures. Although Lowe’s deposed Johnson about the model and knew Karum intended to call him to testify about its content, Lowe’s should not have to assume a particular witness will testify as an expert. View "Karum Holdings LLC v. Lowe's Companies, Inc." on Justia Law