                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-30-2004

Szusterman v. Amoco Oil Co
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-3360




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                                                                 NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT


                                     No. 03-3360


                               JERRY SZUSTERMAN;
                           10-12 SUSSEX AVENUE CORP.

                                                 Appellants

                                            v.

                              AMOCO OIL COMPANY




                     Appeal from the United States District Court
                            for the District of New Jersey
                        (D.C. Civil Action No. 00-cv-04744)
                      District Judge: Honorable Jose L. Linares


                      Submitted Under Third Circuit LAR 34.1(a)
                                 September 14, 2004

         Before: SCIRICA, Chief Judge, ALITO and AM BRO, Circuit Judges

                              (filed September 30, 2004)




                                      OPINION


AM BRO, Circuit Judge

      In 1995, Jerry Szusterman opened a gasoline station by entering into a franchise
agreement with Amoco Oil Company (“Amoco”). 1 On November 27, 2000, Szusterman

and 10-12 Sussex Avenue Corp. (“Sussex”)2 brought a suit against Amoco. Szusterman

alleged, inter alia, breach of the implied covenant of good faith and fair dealing, claiming

that his business had substantially declined because Amoco opened or allowed to be

opened five Amoco-branded gasoline stations in close proximity to Szusterman’s since its

opening. Amoco responded that its agreement with Szusterman did not grant him any

exclusive right to distribute Amoco gasoline in any particular geographic area.

         On November 30, 2000, during the discovery period, the Magistrate Judge

approved a pretrial scheduling order directing the parties to conclude all discovery by

August 30, 2001. Because Szusterman indicated that he planned to furnish information

about his damage claims based on experts’ valuations, the parties were also ordered to

provide information about any of their experts by June 30, 2001. The record shows that

Szusterman failed to provide Amoco with the basis for his damage claims or experts’

valuations of the alleged damages despite Amoco’s repeated requests for this information.

On August 22, 2001, the Magistrate Judge modified his pretrial schedule by extending the

discovery deadline by four months until December 17, 2001 and directing Szusterman to

serve any expert report by October 15, 2001. The M agistrate Judge warned that there



  1
      Amoco is now known as BP Products America Inc.
  2
   Co-plaintiff Sussex is the real property owner of Szusterman’s gas station site.
According to Amoco, it has no contractual relationship with Sussex. For convenience, we
refer to Szusterman and Sussex jointly and severally only by the former’s name.

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would be no further extensions of these deadlines. Szusterman again did not provide

information about an expert witness by the deadline. On February 5, 2002, in the final

pretrial order, the Magistrate Judge stated that no expert would be permitted to testify at

trial unless information about the expert and his report were provided. Szusterman failed

to provide the relevant information.

       On February 15, 2002, Szusterman requested additional time to locate an expert.

On March 5, 2002, the Magistrate Judge denied that request. He explained that the denial

was consistent with the earlier warning. The District Court upheld this decision on March

19, 2002. Upon Szusterman’s motion for reconsideration, the District Court again

affirmed its decision on April 26, 2002, stating that “there [was] no explanation for

[Szusterman’s] failure to timely request an extension to disclose an expert.” It added that

whether Szusterman “had already chosen a tentative expert and did not disclose him

because he may not have been available . . . does not help [Szusterman]” and that

“[Szusterman] should have disclosed [the expert] and later requested leave to change

experts if he became unavailable.” The District Court concluded that Szusterman “failed

to show that the Magistrate Judge[]’s Order was clearly erroneous or contrary to the law.”

See United States v. Raddatz, 447 U.S. 667, 673 (1980) (“Review by the district court of

the magistrate’s determination of the[] nondispositive motions is on a ‘clearly erroneous

or contrary to law’ standard.”); see generally 28 U.S.C. § 636.

       Thereafter, the record shows that Szusterman did not furnish any facts or



                                              3
methodology based on which he calculated his alleged damages, despite the repeated

requests to do so. Amoco thus moved to preclude Szusterman from offering evidence

concerning damages and requested summary judgment. On July 8, 2003, the District

Court granted Amoco’s motion and entered summary judgment against Szusterman.

         In ruling to preclude Szusterman from offering evidence of damages at trial, the

District Court, among other things, pointed out that Szusterman failed to provide a

computation of his alleged $10,000,000 damages required by Federal Rule of Civil

Procedure 26(a)(1)(C).3 The Court stated that Szusterman “ha[d] no substantial

justification for failing to disclose the information that has been requested both by

[Amoco] and required in the pretrial order and under the rules over the last almost three

years . . . .” Moreover, as the District Court noted, although Szusterman demanded

$10,000,000 in damages, when asked how he had calculated that figure in his deposition,



  3
      The Rule provides in pertinent part:

                (a) Required Disclosures; Methods to Discover Additional Matter.
                       (1) Initial Disclosures. . . . [A] party must, without awaiting a
                       discovery request, provide to other parties: . . .
                               (C) a computation of any category of damages claimed
                               by the disclosing party, making available for
                               inspection and copying as under Rule 34 the
                               documents or other evidentiary material, not
                               privileged or protected from disclosure, on which such
                               computation is based, including materials bearing on
                               the nature and extent of injuries suffered; . . . .

Fed. R. Civ. Proc. 26(a)(1)(c) (emphasis added).


                                                4
he answered, “I don’t know.”

       Further concluding that the dismissal of the case was the only appropriate sanction,

the District Court found that Szusterman’s failure to provide required information was not

only unjustified, but was prejudicial to Amoco. He explained: “There is no question

that[,] without this information, [Amoco] would not be able to respond adequately to

damages that are alleged by [Szusterman] and is left to wonder what . . . [Szusterman]’s

damages and methodologies are . . . .” Plus, the Court found Szusterman’s failure to

abide by the Federal Rule was willful “because it was clear from the many requests that

[he was] aware that this information was necessary, sought and ordered by the Court.”

Applying the Poulis factors,4 the District Court ultimately concluded (on the morning of

trial) that sanctions other than dismissal would be ineffective.

       Szusterman moved for reconsideration. On August 26, 2003, the District Court

denied that motion. Szusterman appeals. His claim is that the District Court abused its

discretion when it (a) affirmed the Magistrate Judge’s refusal to extend the deadline



  4
   See Poulis v. State Farm Fire and Cas. Co., 747 F.2d 863, 868 (3d Cir. 1984) (“In
exercising our appellate function to determine whether the trial court has abused its
discretion in dismissing, or refusing to lift a default, we will be guided by the manner in
which the trial court balanced the following factors, which have been enumerated in the
earlier cases, and whether the record supports its findings: (1) the extent of the party’s
personal responsibility; (2) the prejudice to the adversary caused by the failure to meet
scheduling orders and respond to discovery; (3) a history of dilatoriness; (4) whether the
conduct of the party or the attorney was willful or in bad faith; (5) the effectiveness of
sanctions other than dismissal, which entails an analysis of alternative sanctions; and (6)
the meritoriousness of the claim or defense.”).


                                              5
further for disclosing Szusterman’s experts, (b) excluded his evidence for damages at

trial, and (c) ultimately dismissed his case. For the reasons given by the District Court,

we agree with its decision to uphold the Magistrate Judge’s ruling and to exclude

Szusterman’s evidence concerning damages at trial. Upon reviewing the record before

us, we are convinced that the District Court thoroughly examined Szusterman’s

arguments, carefully weighed the Poulis factors, and reasonably concluded that the

dismissal was warranted. Therefore, we affirm.




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