On November 12, 2024, Judge McMahon (S.D.N.Y.) granted defendant Lutron Electronics Co.’s motion for sanctions against plaintiff Geigtech East Bay LLC, and precluded Geigtech from presenting any theory of damages on retrial other than the expert opinion it had presented at the initial trial on its claims. See Geigtech E. Bay LLC v. Lutron Elecs. Co, Case No. 18-Civ-05290 (CM) (Nov. 12, 2024).
Lutron manufactures window shades. Geigtech holds a patent asserted against whose claims it alleges cover a bracket used in Lutron’s shades. At trial, Geiger presented testimony from its expert assessing damages of $3.84 based on the “entire market value” theory. The jury awarded damages of approximately ten times that amount and found the infringement to be willful. However, Judge McMahon vacated the jury’s award and ordered a remittitur to the $3.84 million sought by Geigtech. Rather than accept the remittitur, Geigtech opted to retry the case. But on the eve of the retrial, Geigtech disclosed that it would not call its damages expert or use his computation of damages. Instead, Geigtech planned to “let the jury decide” how to calculate damages based on the factual evidence provided. Lutron filed a motion requesting that Geigtech be precluded from presenting any theory of damages other than the calculation it provided at the first trial.
Judge McMahon granted the motion, which he characterized as a motion for sanctions. He found that Geigtech violated Federal Rule of Civil Procedure 26 (which requires timely disclosure of a plaintiff’s damages computations) and 33 (which required a full and complete response to Lutron’s interrogatory seeking information about Geigtech’s damages calculations). Op. 5. The Court explained that Rules 26 and 33 “do not go out the window just because we are on the second trial. When it declined the Court’s remittitur and committed itself to a retrial, GeigTech immediately became obligated to supplement its previous Rule 26 and interrogatory responses with any additional or revised ‘computation of any category of damages’ it might try to seek[.]” Op. 9.
The Court also found that Geigtech’s “sandbagging in the extreme” warranted sanctions under FRCP 37 and Patterson v. Balsamico, 440 F.3d 104, 114 (2d Cir. 2006) (laying out factors justifying sanctions). The Court found that Geigtech’s proposed method of “letting the jury decide” damages was not an appropriate computation of damages and was not justifiable where the jury had no clear basis for determining a reasonable royalty on their own. Op. 9-10. The Court further found that Lutron would be severely prejudiced by being forced to defend against Geigtech’s previously undisclosed theory, years after discovery had closed and where Lutron had no previous notice that it may need to present expert evidence to rebut anything that wasn’t part of the first trial. Op. 11-12. Finally, the Court found there was no reason for any continuance, where the case had been pending for years and where Geigtech was continuing to request enhanced damages as a result of the willfulness finding at the first trial. Op. 12. The Court concluded its critique of Geigtech by noting that it may be doing the plaintiff a favor by limiting Geigtech’s damages computation to the calculation initially presented, as Geigtech “took a tremendous risk” by presenting a “secret plan to ‘prove damages in a manner not disclosed in discovery,’” given “the very real possibility that the court would have to direct a verdict of $1 in damages if Geigtech had tried its alternative method of ‘proving’ them.” Op. 13.
