SACKS HOLDINGS, INC. v. GRIN NATURAL USA LIMITED

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

SACKS HOLDINGS, INC., )

)

Plaintiff, )

)

Vv. ) 1:23cv1058

)

GRIN NATURAL USA LIMITED, et al., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

This case comes before the Court on “Sacks Holdings, Inc.’s

Motion to Preclude Adam Levit from Testifying as an Expert Witness

for Defendants” (Docket Entry 116 (the “Motion”) at 1 (all-cap and

bold font omitted)).' For the reasons that follow, the Court will

grant the Motion as specified herein.’

1 Docket Entry page citations utilize the CM/ECF footer’s

pagination.

2 Through various pending motions to seal (see, e.g., Docket

Entries 118, 138), the parties seek to seal information regarding

a monthly retainer (see infra pp. 4, 19), conversations with

brokers and the informational sources of Levit’s opinions (see

infra po. 7, 14), and a reference in a memorandum in support of the

Motion to Levit’s testimony regarding his offer of compensation

(see infra p. 13). Resolution of the Motion necessitates

disclosure of this information and denial of sealing. See, e.g.,

Smartsky Networks, LLC v. Wireless Sys. Sols. LLC, No. 1:20cv834,

2021 WL 929729, at *6 (M.D.N.C. Mar. 11, 2021) (denying request to

seal “documents contain[ing] certain information that is key for

the public to understand these proceedings”); In re Zetia

(Ezetimibe) Antitrust Litig., Nos. 2:18md2836, 2:18cv23, 2:18cv39,

2:18cv71, 2018 WL 10471108, at *1 (E.D. Va. Aug. 10, 2018) (denying

proposed memoranda redactions that “significantly impact the

public’s ability to understand the matters before the court”).

BACKGROUND

Asserting various state and federal claims arising from

alleged trademark infringement, Sacks Holdings, Inc. (the

“Plaintiff”) sued Grin Natural USA Limited, Grin Holdings Limited,

Grin Natural US Limited, and Grin Natural Products Limited

(collectively, the “Defendants”) for, inter alia, trademark

infringement under the Lanham Act, 15 U.S.C. § 1114. (See

generally Docket Entry 1.) Asserting priority rights to the

disputed mark, Defendants filed state and federal counterclaims

against Plaintiff, including for trademark infringement under the

Lanham Act, 15 U.S.C. § 1114. (See generally Docket Entry 16.)

On September 2, 2024, the deadline for disclosures under Rule

26(a)(2) of the Federal Rules of Civil Procedure (the “Rules”) (see

Docket Entry 22 at 2; Text Order dated Mar. 2, 2024), Defendants

disclosed Adam Levit as a “person[] who may be used at trial to

present evidence under Fed[eral] R[ules of] Evid[ence] 702, 703, or

705, and [is] not retained or specially employed to provide expert

testimony in the case, and whose duties do not regularly involve

giving expert testimony” (Docket Entry 119-1 (the “Disclosure

Statement”) at 3). (See id. at 4.) According to the Disclosure

Statement:

Mr. Levit is the Chief Executive Officer for

Velocity Sales Management. His qualifications include

his role at Velocity where for the past nine years he has

lead [sic] a team that provides sales management and

marketing services across all major channels of

distribution, and over 20 years of prior experience in

2

sales, include [sic] holding several leadership roles at

the world’s largest Natural and Organic company, The Hain

Celestial Group. These positions include Chief Sales

Officer, SVP National Sales, General Manager – Snack

Foods and VP of Retail Sales. During his tenure at Hain,

he led Sales and Marketing efforts across all major

channels of distribution including Natural, Grocery,

Club, Mass, Food Service, Military and E-Commerce. Mr.

Levit is expected to testify as to the advantage

Plaintiff/Counter Defendant has in placing his [sic]

products quickly in the market given his over 30 years of

experience and relationships in the sales rep/broker and

[sic] how that advantage and Plaintiff/Counter

Defendant’s strategy to use that advantage to place its

GRIN products in wide circulation in retailers throughout

the United States once it believed Defendants/Counter

Plaintiffs were expanding its [sic] US market presence

blocks Defendants/Counter Plaintiffs from sales in that

same retailer market given that both products bear a GRIN

mark because brokers servicing the retailers and/or the

retailers will not want consumer confusion or the risk

associated with carrying two brands with the same mark.

(Id. at 3-4.)

On November 7, 2024, Plaintiff deposed Levit. (See Docket

Entry 119-2 at 3.) As relevant to the Motion, the deposition

reflects:

Levit considers himself an expert in “[t]he natural and

organic food and personal care space” (id. at 7) and, although he

has never before “served as an expert in legal proceedings” (id.),

“[he] ha[s]” (id.) “been retained to provide expert testimony in

this case” (id.). As for whether Levit will “[be] compensated for

[his] work regarding the testimony that [he] plan[s] on giving”

(id. at 10), “[t]here is an offer of compensation depending on how

long this goes” (id.; see also id. at 10-11 (“I may choose not to

3

bill [Defendants*®] but I have that opportunity.”)). As of the

deposition on November 7, 2024, Levit had not “billed [Defendants]

for any of [his] time related to this litigation,” but his

arrangement with Defendants provides for an “[h]Jourly rate” for

such time. (Id. at 11.)

Levit’s company, Velocity Sales Management (see id. at 12-13),

“currently represents [Defendants]” (id. at 13), a representation

that began “[i]n March of 2024” (id.), and for which Defendants pay

a monthly retainer (see id. at 16). Levit and his fifteen

employees “are essentially a sales team for hire” (id. at 13), so

they “function as [Defendants’] sales team and [Levit] as

[Defendants’] de facto VP of sales for the U.S.” (id.). “Many” of

the other fifteen employees at Velocity have also “worked on

matters for [Defendants].” (Id.) Notably, Levit “can’t speak to

what happened prior to [his] engagement with [Defendants].” (Id.

at 23; see also id. at 24 (confirming that “[Levit is] not aware of

what efforts [Defendants] made to place [their] products in the

U.S. before engaging [Levit] and Velocity”).) Nevertheless, “it’s

[his] understanding[ that Defendants] had first use in the market

and that — aware of that first use, [Plaintiff] continued to secure

3 The provided deposition excerpts generally refer to “Grin

Natural” without clarifying which Defendants that term encompasses.

(See, e.g., id. at 8-11.) The parties likewise fail to clarify the

distinction, if any, between “Grin Natural” and Defendants, largely

treating the testimony as referring collectively to Defendants (see

Docket Entries 119, 122, 149). This Opinion mirrors that approach.

distribution — attempt to and successfully secure distribution of

that mark.” (Id. at 22; see also id. at 22-23 (“[I]t’s [Levit’s]

understanding that [Defendants’] sale of product in the United

States predates [Plaintiff’s].”).)*

However, Levit “hal[s] no knowledge of when [Plaintiff] made

[its] first presentations [to retailers]” (id. at 23) and “can’t

speak to what [Plaintiff] knew” about Defendants expanding in the

United States (id. at 24). Levit has also not “received any

documents that are from [Plaintiff].” (Id. at 11.) Moreover,

(i) [Levit] ha[s] not” (id. at 8) “done any investigation into

[Plaintiff] for this case” (id.), (ii) “[Levit is] not” (id. at 18)

“familiar with [Plaintiff’s] CEO, Mr. Chodorow” (id. at 17), and

(iii) Levit “hal[s] no knowledge of Mr. Chodorow’s experience” (id.

at 20). Accordingly, Levit “[is] not going to testify” that

Chodorow “somehow leveraged any sort of experience or relationships

to get his product into retailers.” (Id. at 24.) Additionally,

when asked if he would “testify about [Plaintiff’s] or Mr.

Chodorow’s beliefs about [Defendants’] expansion in the U.S.,”

Levit responded that he would “not” (id.), “[b]lased on the

knowledge [he] hal[s] today” (id.).

When asked about his “familiar[ity] with [Plaintiff],” Levit

affirmed only “familiar[ity] with [Plaintiff’s] products.” (Id. at

4 Levit shared this “understanding” when asked about the

Disclosure Statement’s reference to Plaintiff’s alleged “strategy.”

(Id. at 21-22.)

8.) When directed to “tell [Plaintiff’s counsel] what [he] know[s]

about [Plaintiff’s] products” (id.), Levit responded that “[he]

know[s] that [Plaintiff] ha[s] distribution of a number of floss

picks at multiple retailers across the U.S.” (id.). Levit did not

recall “see[ing Plaintiff’s] Grin product in the marketplace”

before he began working with Defendants (id. at 18), but he

“purchased a couple of [Plaintiff’s] floss picks during [his] due

diligence before taking on [Defendants] as a client” (id. at 8).

(See id. at 9 (explaining that Levit “bought a bunch of competitive

natural care — natural oral care as — as part of [his] due

diligence to refamiliarize [him]self with what was available on the

market”) .) Those purchases occurred in “November or December of

[20]23.” (Id.) Aside from purchasing those products, Levit “did

not” (id. at 18) “do any other research on [Plaintiff]” (id.).

When asked what opinion(s) he “intend[s] to offer at trial in

this case,” Levit stated: “It is [his] opinion that the lack — that

— it is [his] opinion that [Plaintiff’s] presence in the market has

served as a block to [Defendants] securing retail presence in the

market.” (Id. at 12.) When asked “what facts [he is] relying upon

to form that opinion” (id.), Levit said that “[he’s] relying on

[his] 30 years of work in this space” (id.; see also id. (“Having

worked across dozens of different brands across dozens of different

retailers, and our lack of success to date, I can trace back to

only one key causal and that would be [Plaintiff’s] presence in the

market.”)). When asked “[w]Jhat about [Plaintiff’s] presence in the

market served as a block to [Defendants] securing retail presence

in the market,” Levit responded: “The potential confusion between

the names.” (Id.)

Although retailers have not provided “any feedback on their

declining to purchase [Defendants’] product” (id. at 14; see id. at

14-15), “[i]Jt is [Levit’s] opinion, from multiple presentations on

this line, that the decline has come as a direct relation to

[Plaintiff’s] product being in the market” (id. at 15).

Specifically, during “the first quarter of 2024” (Docket Entry 131-

8 at 17), Levit spoke with three brokers who “felt” (id. at 15)

that Plaintiff’s presence in the marketplace would make securing

distribution of Defendants’ goods “difficult” (id.) and “was going

to cause more trouble and confusion than it was potentially worth

to them” (id. at 16). (See id. at 14-17.) Levit’s “opinions are

formed on [his] conversations with these [three] brokers [and] the

conversations with [his] team on the — either the declines or

nonresponse from retailers.” (Id. at 17.)

To be clear, Levit has not “obtained any facts directly from

[Defendants] that [he] ha[s] relied upon in order to form [his]

opinions in this case.” (Id.) Further, when asked “[d]lid any of

the[ retailers] articulate why they were declining [Defendants’ ]

product,” Levit responded, “[t]hey did not — the retailers did

not.” (Id. at 18.) He continued:

It is the opinion of [Levit’s] team, and that list

[Levit] gave [Plaintiff’s counsel] probably encompasses

seven different members of [Levit’s] team calling on

those various retailers, that [Plaintiff’s] presence in

the market is what blocked [them] getting meetings,

getting acceptance.

And it is also [Levit’s] opinion, having had this

many different directors, [they] call [them]selves people

directors, have this little success on a product that has

clearly had success in other markets and is, in [Levit’s]

opinion, a great product. Well designed. Well marketed.

Well branded. Performs well.

That there is some other factor causing [their] lack

of success, and [Levit] believe[s] that to be

[Plaintiff].

(Id.; see also id. at 19 (“[I]n [Levit’s] opinion, [Defendants] had

a unique offering in the market that would make — in combination

with securing brokers that have tight relationships with buyers,

would make securing meetings [with retailers] manageable.

Nothing’s easy today.”).)

Levit further confirmed that the Disclosure Statement reflects

what he “intend[s] to testify to at trial” (Docket Entry 119-2 at

19), except that “[he] would potentially change ‘quickly[’] to

‘ahead of,’ meaning [Plaintiff] having distribution ahead of

[Defendants], not necessarily quickly, but ahead of has caused the

blockage that [Levit] ha[s] referred to.” (Id. at 19-20.) In

Levit’s view:

The advantage that [Plaintiff] has is retailers,

brokers, distributors are not in the business of settling

trademark issues. Therefore, they will default to

whatever is already on the shelf.

8

And there is no — there’s no upside, if you will, to

a broker or retailer to get involved in that dispute.

And clearly [Defendants] have a dispute. By bringing in

another brand with an identical — almost identical mark.

And creating that confusion on their shelves, confusion

with their consumers.

And [Levit] — [his] opinion, having done this for 30

years across multiple retailers and multiple categories,

is [Plaintiff’s] presence on the shelf ahead of

[Defendants] has created a roadblock within the

marketplace.

(Id. at 21.) “It’s [Levit’s] opinion that it would not — that

retailers would not want to engage in deciding which side of this

dispute they want to be on.” (Docket Entry 131-8 at 21.)

DISCUSSION

I. Relevant Standards

Under Rule 26, “a party must disclose to the other parties the

identity of any witness it may use at trial to present evidence

under Federal Rule of Evidence 702, 703, or 705.” Fed. R. Civ. P.

26(a)(2)(A).5 “[T]his disclosure must be accompanied by a written

report — prepared and signed by the witness — if the witness is one

retained or specially employed to provide expert testimony in the

case or one whose duties as the party’s employee regularly involve

giving expert testimony.” Fed. R. Civ. P. 26(a)(2)(B). As the

United States Court of Appeals for the Fourth Circuit has

5 Federal Rules of Evidence 702, 703, and 705 pertain to

expert witness testimony. See Fed. R. Evid. 702 (detailing

criteria for expert witness testimony); Fed. R. Evid. 703

(detailing permissible bases for expert’s opinion testimony); Fed.

R. Evid. 705 (detailing disclosure requirements for facts or data

underlying expert opinions).

9

explained, “[h]ybrid witnesses — fact witnesses with expertise that

will inform their testimony — do not fall under Rule 26(a) (2) (B)’s

purview.” Timpson by & through Timpson v. Anderson Cnty.

Disabilities & Special Needs Bd., 31 F.4th 238, 253 (4th Cir.

2022). “But most witnesses do not qualify as hybrid witnesses.”

Id. (first citing Indianapolis Airport Auth. v. Travelers Prop.

Cas. Co. of Am., 849 F.3d 355, 371 (7th Cir. 2017); and then citing

Downey v. Bob’s Disc. Furniture Holdings, Inc., 633 F.3d 1, 6 (lst

Cir. 2011)).

Moreover, “[i]f a party wants to present opinion evidence

through a hybrid witness, it still must disclose: ‘(i) the subject

matter on which the witness is expected to present evidence under

Federal Rule of Evidence 702, 703, or 705; and (ii) a summary of

the facts and opinions to which the witness is expected to

testify.’” (quoting Fed. R. Civ. P. 26(a) (2) (C)). “Failure to

comply with either requirement typically will result in mandatory

exclusion.” Id. (first citing Fed. R. Civ. P. 37(c) (1); and then

citing Southern States Rack & Fixture, Inc. v. Sherwin-Williams

Co., 318 F.3d 592, 595-96 (4th Cir. 2003)); see also Fed. R. Civ.

P. 37(c) (1) (“If a party fails to provide information or identify

a witness as required by Rule 26(a) .. ., the party is not allowed

to use that information or witness to supply evidence on a motion,

at a hearing, or at a trial, unless the failure was substantially

justified or is harmless.”).

10

Notably, “[t]he hybrid witness exception applies when

testimony is given arising out of personal observations made in the

normal course of duty.” National R.R. Passenger Corp. v. Railway

Express, LLC, 268 F.R.D. 211, 216 (D. Md. 2010) (explaining that “a

hybrid witness may relay factual observations and express opinions

flowing from those factual observations given their established

expertise”). As such, “hybrid fact/expert witnesses . . . must

testify from the personal knowledge they gained on the job,”

Indianapolis Airport Auth., 849 F.3d at 371, or, stated

differently, through their “ground-level involvement in the events

giving rise to the litigation,” Downey, 633 F.3d at 6. “In other

words, while hybrid witnesses provide expert opinions, their

testimony is based on facts learned or observations made in the

normal course of their duties, rather than based on a review of

materials supplied to them by someone else.” Mayo v. City of

Huntington, No. 3:21cv471, 2022 WL 1298742, at *1 (S.D. W. Va. Apr.

29, 2022).

Accordingly, “[t]he district court certainly may preclude

[hybrid] witnesses from testifying beyond the scope of facts they

learned and opinions they formed during the course of their project

duties.” Indianapolis Airport Auth., 849 F.3d at 371 (explaining

that “[t]h[e] personal knowledge requirement may limit [hybrid

witnesses’] testimony”); see also id. at 371 n.6 (“agree[ing] with

the district court that [hybrid witness] may not testify about the

11

so-called ‘KCE Model’ (a computer simulation model) or ‘KCE

Document’ (a diagram plotting out the locations of KCE’s

inspections)” because such witness “had nothing to do with the

creation of the KCE Model” and “he created the KCE Document . . .

years after he completed his services on the project, using KCE’s

inspection reports as his source material,” noting that, “[a]t

minimum, the district court did not abuse its discretion in

excluding [hybrid witness’s] testimony about these exhibits, which

is more in the nature of retained expert testimony rather than

hybrid testimony”).

Further, as the Fourth Circuit has emphasized,

Rule 26 disclosures are often the centerpiece of

discovery in litigation that uses expert witnesses. A

party that fails to provide these disclosures unfairly

inhibits its opponent’s ability to properly prepare,

unnecessarily prolongs litigation, and undermines the

district court’s management of the case. For this

reason, [the Fourth Circuit] give[s] particularly wide

latitude to the district court’s discretion to issue

sanctions under Rule 37(c)(1).

Wilkins v. Montgomery, 751 F.3d 214, 221 (4th Cir. 2014) (internal

quotation marks omitted). Nevertheless:

[I]n exercising its broad discretion to determine whether

a nondisclosure of evidence is substantially justified or

harmless for purposes of a Rule 37(c)(1) exclusion

analysis, a district court should be guided by the

following factors: (1) the surprise to the party against

whom the evidence would be offered; (2) the ability of

that party to cure the surprise; (3) the extent to which

allowing the evidence would disrupt the trial; (4) the

importance of the evidence; and (5) the nondisclosing

12

party’s explanation for its failure to disclose the

evidence.

Southern States, 318 F.3d at 597.

The first four of these “factors — surprise to the opposing

party, ability to cure that surprise, disruption of the trial, and

importance of the evidence — relate mainly to the harmlessness

exception, while the remaining factor — explanation for the

nondisclosure — relates primarily to the substantial justification

exception.” Id. “The burden of establishing these factors lies

with the nondisclosing party . . . .” Wilkins, 751 F.3d at 222.

In deciding whether to exclude evidence under Rule 37(c), district

courts “[are] not required to tick through each of the Southern

States factors.” Id. (emphasis in original).

II. Analysis

A. Appropriate Classification

Plaintiff asserts that “Levit is not a hybrid witness” because

“he ‘has the offer’ to be compensated for his testimony, which is

consistent with experts retained to provide testimony,”6 and “his

proposed testimony extends beyond personal observations made in the

normal course of duty.” (Docket Entry 119 at 2-3.) As such,

Plaintiff maintains, “[Levit] should have provided an expert report

pursuant to Rule 26(a)(2)(B), and his failure to do so during

6 Defendants do not address Levit’s compensation as an expert

witness or his admission that “[he] ha[s]” (Docket Entry 119-2 at

7) “been retained to provide expert testimony in this case” (id.).

(See Docket Entry 122 at 1-16.)

13

expert discovery was not substantially justified or harmless.”

(Id. at 9.) Plaintiff’s position possesses merit.

As Levit concedes, “[he] can’t speak to what happened prior to

[Velocity’s] engagement with [Defendants]” (Docket Entry 119-2 at

23; see id. at 23-24), which occurred in March 2024 (see id. at

13). Moreover, Levit admits that he does not know anything about

when Plaintiff began retailer presentations or what Plaintiff

believed or knew about Defendants’ efforts to expand into the U.S.

market. (See id. at 23-24.) Indeed, according to Levit, his

familiarity with Plaintiff extends no farther than knowing that

Plaintiff sells dental products — specifically, floss picks —

bearing the Grin mark. (See id. at 8.) Levit additionally reports

that he (1) conducted no investigation into Plaintiff beyond

purchasing some floss picks in late 2023 and (ii) relies on neither

documents from Plaintiff nor facts from Defendants for the opinions

that he proffers. (See id. at 8-9, 11, 18; Docket Entry 131-8 at

17.) Instead, Levit’s “opinions are formed on [his] conversations

with th[ree] brokers [in the first quarter of 2024 and] the

conversations with [his] team on the — either the declines or

nonresponse from retailers.” (Docket Entry 131-8 at 17.)

Accordingly, any testimony by Levit regarding, inter alia,

(i) Plaintiff’s actions and beliefs or (ii) events before

Velocity’s engagement in March 2024, exceeds the bounds of

permissible hybrid witness testimony. See, _e.g., Indianapolis

14

Airport Auth., 849 F.3d at 371 & n.6. At most, therefore, the

following reflects the outer limits of any hybrid witness testimony

from Levit:

[Since March 2024, Plaintiff’s] US market presence

[has] block[ed] Defendants[] from sales in that same

retailer market given that both products bear a GRIN mark

because brokers servicing the retailers and/or the

retailers will not want consumer confusion or the risk

associated with carrying two brands with the same mark

(Docket Entry 119-1 at 3-4) (the “Hybrid Parameters”).7

To the extent that Levit seeks to testify beyond that scope

(see id.), the Rules obliged him to produce an expert report,

see Fed. R. Civ. P. 26(a)(2)(B); see also, e.g., National R.R., 268

F.R.D. at 216-18 (recognizing that “a witness can be a hybrid

witness as to certain opinions, but a retained expert as to others”

and requiring expert reports for proposed witnesses who will

“provide expert testimony outside the scope of [the] hybrid

exception” (internal quotation marks omitted)). Levit did not

timely produce such report. (See Docket Entry 119-1 at 3-4.)

Nevertheless, Defendants maintain that Levit’s “failure to produce

a written report” qualifies as “harmless []or substantially

justified,” and thus that the Court should not “preclude [such]

testimony.” (Docket Entry 122 at 8; see id. at 8-14.) This

assertion lacks merit.

7 This Opinion does not address the admissibility of Levit’s

proposed testimony beyond the narrow question of Defendants’

compliance with their Rule 26 disclosure obligations.

15

Defendants’ harmlessness contention hinges on the notion that,

“[t]ogether, the [Disclosure Statement] and [Levit’s] deposition

provide a complete picture of what would have been opined in

Levit’s expert report” (id. at 9), forestalling any surprise and

preventing any disruptions to the trial schedule. (See id. at 9-

12.) Contrary to Defendants’ assertions, however, the Disclosure

Statement and Levit’s deposition do not “provide a complete

picture” of Levit’s “opinions and [the] factual basis for his

testimony” (id. at 9). (See Docket Entry 119-1 at 3-4.) To begin,

even beyond the missing word(s), the Disclosure Statement remains

confusing and ambiguous. (See id.)

Levit’s deposition does not clarify this ambiguity. For

instance, in his deposition, Levit confirmed that the Disclosure

Statement reflects what he “intend[s] to testify to at trial”

(Docket Entry 119-2 at 19), but then he equivocated, saying that

“[he] would potentially change ‘quickly[’] to ‘ahead of,’ meaning

[Plaintiff] having distribution ahead of [Defendants], not

necessarily quickly, but ahead of has caused the blockage that

[Levit] ha[s] referred to” (id. at 19-20 (emphasis added)).

Thereafter, directly contrary to the Disclosure Statement’s

position that Plaintiff acted in a certain manner “once it believed

Defendants[] were expanding its [sic] US market presence” (Docket

Entry 119-1 at 3), Levit stated that he “can’t speak to what

[Plaintiff] knew” about Defendants’ expansion efforts (Docket Entry

16

119-2 at 24) and “[is] not” (id.) “going to testify about

[Plaintiff’s] or [its CEO’s] beliefs about [Defendants’] expansion

in the U.S.” (id.). Levit also acknowledged that he “can’t speak

to what happened prior to [Velocity’s] engagement with

[Defendants]” (id. at 23), which occurred years after the parties

began selling their products in the United States (see, e.g.,

Docket Entry 25, ¶¶ 18-19, 27-41; Docket Entry 202 at 4).

In sum, the Disclosure Statement and deposition do not

“provide a complete picture” of Levit’s “opinions and [their]

factual basis” (Docket Entry 122 at 9), and thus cannot substitute

for the required written report. See Fed. R. Civ. P. 26(a)(2)(B)

(“The report must contain: (i) a complete statement of all opinions

the witness will express and the basis and reasons for them;

(ii) the facts or data considered by the witness in forming them;

(iii) any exhibits that will be used to summarize or support them;

. . . and (vi) a statement of the compensation to be paid for the

study and testimony in the case.”). Because Levit’s opinions and

the facts upon which he bases those opinions remain unclear,

Plaintiff faces surprise if Levit offers testimony beyond the

Hybrid Parameters. “Plaintiff[] cannot cure that surprise without

further delay and further discovery, including[, at a minimum, an

expert report from Levit].” Gallagher v. Southern Source

Packaging, LLC, 568 F. Supp. 2d 624, 632 (E.D.N.C. 2008). By the

time the parties finished briefing the Motion, though, the expert

17

disclosure deadlines had long passed and less than two weeks

remained before the dispositive motions’ deadline. (See Docket

Entry 22 at 2-3; Docket Entry 149 at 12.) Reopening discovery at

that juncture would have disrupted the progress of this litigation,

to say nothing of the disruption that would occur now, a mere two

months before the trial commences (see Docket Entry 230 at 1

(scheduling trial for August 25, 2025)). The first three Southern

States factors thus weigh against Defendants. See Southern States,

318 F.3d at 597.

As for the fourth factor, see id., Defendants maintain that

“Levit’s testimony is important for an aspect of [their] case

because his testimony goes to the heart of the injury [that

Plaintiff’s] infringement inflicted” (Docket Entry 122 at 12).

Setting aside the accuracy of that assertion (cf£. Docket Entry 149

at 10 (contending that “Levit’s proposed testimony has no bearing

on Defendants’ damages claim . . . [and] does not relate to any

recognized factor for assessing trademark infringement in this

circuit”’)), “importance cuts in both directions [in a Rule 37(c)

analysis], as admission of important undisclosed evidence

prejudices [the opposing party] as well,” Intercollegiate Women’s

Lacrosse Coaches Ass’n v. Corrigan Sports Enters., Inc., 698 F.

Supp. 3d 814, 820 (M.D.N.C. 2023). In any event, the Court (per

Chief United States District Judge Catherine C. Eagles) has already

“conclude[d] that the evidence, viewed in the light most favorable

18

to [ Djefendants, establishes a priority date in favor of

[ P]Jlaintiff” (Docket Entry 202 at 1), thereby defeating

Defendants’ trademark infringement claim. Thus, the fourth factor,

“importance of the evidence,” Southern States, 318 F.3d at 597, at

best qualifies as neutral. Under Southern States, therefore,

Defendants’ failure to provide an expert report from Levit does not

qualify as harmless.

As for substantial justification, Defendants assert:

As evidenced by [Defendants’] hybrid disclosure and

treatment of Levit as a hybrid witness, [Defendants]

ha[ve] reasonably believed Levit is a hybrid witness.

Levit’s on-the-ground experience working to place

[Defendants’ products] into retail stores and extensive

professional history in the retail industry firmly

support [Defendants’] belief. Because the line between

hybrid witnesses and retained experts can be difficult to

discern in practice, [Defendants’] position has been

reasonable.

(Docket Entry 122 at 14.) This contention misses the mark.

First, as Levit explicitly conceded — and Defendants fail to

address (see id. at 1-16) — Defendants (or Defendants’ counsel (see

Docket Entry 119-2 at 10-11)) “retained [Levit] to provide expert

testimony in this case” (id. at 7), offering him an “[h]ourly rate”

(id. at 11) for such work, distinct from the monthly retainer that

Defendants pay for Velocity’s services (see id. at 16). Consistent

with that retained expert approach, Defendants seek to have Levit

opine on matters far beyond “facts learned or observations made in

the normal course of [his] duties,” Mayo, 2022 WL 1298742, at *1,

notwithstanding the limitations on hybrid witness testimony, see,

19

e.g., Indianapolis Airport Auth., 849 F.3d at 371 & n.6; see also

Timpson, 31 F.4th at 253 (explaining that “[h]ybrid witnesses

[constitute] fact witnesses with expertise that will inform their

testimony” (emphasis added)). (See Docket Entry 119-1 at 3-4; see

also Docket Entry 122 at 9 (asserting, in opposition to Motion,

that “Levit’s opinion is that [Plaintiff] blocked [Defendants’ ]

sales in retail markets by placing their products in those same

markets where [Defendants] wlere] expanding”) Accordingly,

Defendants have not established that the failure to provide an

expert report from Levit qualifies as substantially justified. See

Wilkins, 751 F.3d at 222 (explaining that “[t]he burden of

establishing the[ Southern States] factors lies with the

nondisclosing party”). The Court (per the undersigned United

States Magistrate Judge) will therefore exclude any testimony by

Levit beyond the Hybrid Parameters. See Fed. R. Civ. P. 37 (c) (1)

(“Tf a party fails to provide information or identify a witness as

required by Rule 26(a) .. ., the party is not allowed to use that

information or witness to supply evidence on a motion, at a

hearing, or at a trial, unless the failure was substantially

justified or is harmless.”).

B. Hybrid Disclosure

To the extent that Levit qualifies as a hybrid witness,

Plaintiff asserts that the Disclosure Statement fails to comply

with Rule 26(a) (2) (C). (See, e.g., Docket Entry 119 at 4, 14-16.)

20

In particular, Plaintiff notes that, “[a]part from a brief overview

of Mr. Levit’s background, Defendants provided a single run-on

sentence describing what Mr. Levit is expected to testify.” (Id.

at 15.) Per Plaintiff, “[t]his disclosure lacks a summary of the

facts and opinions to which Mr. Levit is expected to testify, which

is required by Rule 26(a)(2)(C)(ii),” a situation that “typically

results in mandatory exclusion” under Rule 37(c). (Id.)8

In response, Defendants maintain:

Levit was properly disclosed as a hybrid witness in [the

Disclosure Statement], which summarized: (1) Levit’s

opinion that [Plaintiff] blocked [Defendants’] sales in

retail markets by placing their products ahead of

[Defendants’] on retail shelves and (2) the facts he used

to form those opinions — namely that brokers servicing

the retailers (and/or the retailers) did not want

consumer confusion or the risk associated with carrying

two brands with the same mark. As discussed, Levit

8 Plaintiff further asserts:

Levit lacks the relevant factual evidence regarding the

purported and assumed subject of his proposed testimony

— that is, that retailers are refusing to carry

Defendants’ GRIN-branded products because of

[Plaintiff’s] GRIN-branded products in the marketplace.

Mr. Levit testified that he has no feedback whatsoever

from retailers that show a retailer rejected Defendants’

products on that ground. See [Docket Entry 119-2] at

[14-15]. Without a factual basis to offer an opinion,

any such testimony is unreliable and pure conjecture and

should be excluded.

(Docket Entry 119 at 15-16.) Resolution of such evidentiary

challenges lies beyond the scope of this Opinion. (See also Docket

Entry 149 at 6 n.5 (asserting, in Plaintiff’s reply memorandum,

that “Levit’s proposed testimony is also deficient under Fed[eral]

R[ule of] Evid[ence] 702 and Daubert, but such challenges are

better suited to pre-trial motions if the Court denies this

Motion”).)

21

further specified those facts and opinions in his

deposition, which renders any potential surprise from

alleged non-disclosure harmless. See [Docket Entry 131-

8] at [11, 13-16, 18-21].

(Docket Entry 122 at 15.)

Under the circumstances, the combination of the Hybrid

Parameters and Levit’s deposition renders harmless any Rule

26(a)(C) violation. As Plaintiff correctly notes, the Disclosure

Statement provides a confusing and ambiguous description of Levit’s

proposed testimony, including the factual basis on which he rests

any opinions. (See Docket Entry 119 at 15; Docket Entry 119-1 at

3-4.) However, the Hybrid Parameters alleviate much of this

confusion, providing a clearer picture of Levit’s proposed

testimony. (See supra p. 15 (“[Since March 2024, Plaintiff’s] US

market presence [has] block[ed] Defendants[] from sales in that

same retailer market given that both products bear a GRIN mark

because brokers servicing the retailers and/or the retailers will

not want consumer confusion or the risk associated with carrying

two brands with the same mark.”).)

Moreover, unlike other disclosures that courts have held

deficient, the Hybrid Parameters identify both an opinion and

alleged facts upon which the proposed opinion rests. See Timpson,

31 F.4th at 253-54 (“The Timpsons’ hybrid witness disclosures

failed to satisfy Rule 26(a)(2)(C)(ii). The disclosures included

only ‘the subject matter on which’ the Timpsons expected McPherson,

Mullis, and Thomas to testify. Fed. R. Civ. P. 26(a)(2)(C)(i); see

22

J.A. 373-75, 378-79. At no point, however, did the disclosures set

out ‘a summary of the facts and opinions to which’ each was

expected to testify. Fed. R. Civ. P. 26(a)(2)(C)(ii).”); see,

e.g., Timpson by & through Timpson v. Anderson Cnty. Disabilities

& Special Needs Bd., No. 20-1163, Docket Entry 112-1, at 397-98

(4th Cir. Jan. 24, 2022) (specifying only that “[Thomas] is

expected to testify about matters related to abuse neglect and

exploitation as well as programs and services for persons who have

intellectual and other mental disabilities and other matters

related to this litigation”). Levit also offered additional facts

and opinions in his deposition that supplement the information in

the Hybrid Parameters, a situation that Defendants contend “renders

any potential surprise from alleged non-disclosure harmless.”

(Docket Entry 122 at 15 (citing, inter alia, Docket Entry 131-8 at

19); see also Docket Entry 131-8 at 19 (“[I]n [Levit’s] opinion,

[Defendants] had a unique offering in the market that would make —

in combination with securing brokers that have tight relationships

with buyers, would make securing meetings manageable.”).)

The Hybrid Parameters greatly curtail the scope of any

testimony that Levit can offer in this matter. Limiting Levit’s

testimony to the information disclosed in the Hybrid Parameters, as

supplemented by his deposition testimony, will reduce any surprise

to Plaintiff. Moreover, even setting aside questions regarding the

admissibility of such testimony under the Federal Rules of Evidence

23

(see, e.g., Docket Entry 119 at 15-16 (asserting that absence of

factual basis for proposed testimony renders it “unreliable and

pure conjecture,” necessitating its exclusion); Docket Entry 149 at

3-5 (asserting that proposed testimony lacks factual basis and

rests on hearsay and conjecture)), testimony under the Hybrid

Parameters appears to possess little, if any, relevance for the

upcoming trial given that Plaintiff possesses priority rights to

the Grin mark (see Docket Entry 202 at 1-5). That consideration,

in turn, mitigates the harm from Plaintiff’s inability to timely

secure a rebuttal expert witness to address Levit’s testimony.

(Cf. Docket Entry 149 at 5 n.4 (asserting that, “[e]ven if these

were proper expert opinions, Mr. Levit’s failure to serve a report

precluded [Plaintiff] from understanding the scope of his opinions

in time to secure a rebuttal expert to testify as to competing

explanations for Defendants’ market failures”).) As such, limiting

Levit’s testimony to the Hybrid Parameters, as supplemented by the

deposition testimony, renders harmless any Rule 26(a)(2)(C)

deficiency in the Disclosure Statement.

C. Attorney’s Fees

Plaintiff also requests an award of attorney’s fees for the

Motion. (See Docket Entry 116 at 1.) Defendants oppose the

request for attorney’s fees, maintaining that the “[M]otion is

without merit,” on the theory that “there has been no violation of

the discovery rules” and, “if the Court finds that there were, any

24

failure was substantially justified or harmless.” (Docket Entry

122 at 16.) As explained above, Levit’s proposed testimony exceeds

the bounds of permissible hybrid witness testimony, necessitating

provision of an expert report for any testimony beyond the Hybrid

Parameters. Defendants’ failure to provide such report qualifies

as neither harmless nor substantially justified. Moreover, the

refinement of the Disclosure Statement into the Hybrid Parameters

necessitated judicial intervention. The Court will therefore award

Plaintiff its reasonable attorney’s fees for the Motion. See Fed.

R. Civ. P. 37(c)(1)(A) (specifying that, “[i]n addition to or

instead of [excluding improperly disclosed witnesses], the [C]ourt,

on motion and after giving an opportunity to be heard . . . may

order payment of the reasonable expenses, including attorney’s

fees, caused by the failure [to comply with Rule 26(a)]”).

CONCLUSION

Levit’s proposed testimony exceeds the bounds of permissible

hybrid witness testimony.

IT IS THEREFORE ORDERED that the Motion (Docket Entry 116) is

GRANTED as follows: (i) Levit may only testify to the Hybrid

Parameters, as supplemented by testimony from his deposition on

November 7, 2024, that fits within the Hybrid Parameters; and

(ii) Plaintiff is awarded its reasonable attorney’s fees for the

Motion. On or before June 27, 2025, Plaintiff shall serve

Defendants with a notice of the reasonable expenses, including

25

attorney’s fees, that Plaintiff incurred in bringing the Motion.

On or before July 7, 2025, the parties shall meet and confer

in-person or by video-conference about that notice. On or before

July 14, 2025, Defendants shall file either a notice stating that

the parties have resolved all issues regarding the amount of the

reasonable expenses, including attorney’s fees, that Defendants

must pay Plaintiff or objections (spanning no more than 10 pages

exclusive of attachments) to the amount of the reasonable expenses,

including attorney’s fees, claimed by Plaintiff. On or before July

21, 2025, Plaintiff shall file any response (spanning no more than

10 pages exclusive of attachments) to any such objections.

This 6th day of June, 2025.

/s/ L. Patrick Auld

L. Patrick Auld

United States Magistrate Judge

26