United States District Court, D. Arizona
THE
HONORABLE STEVEN P. LOGAN U.S. DISTRICT JUDGE.
ORDER
Honorable Deborah M. Fine United States Magistrate Judge.
This
matter is before the Court on Defendants' motion to
preclude Plaintiffs' damages expert from testifying at
trial due to late disclosure (Docs. 236, 237). Plaintiffs
responded, and a reply has been filed (Docs. 248, 250). This
matter is ripe for decision. Because the motion before the
Court involves sanctions under Rule 37, Federal Rules of
Civil Procedure, undersigned may only issue a report and
recommendation. See LRCiv 72.2(a)(1). This case was
referred to undersigned for pretrial proceedings and was
referred to undersigned specifically for a report and
recommendation regarding the motion before the Court (Docs.
7, 256). After a review of the parties' briefing and the
record in this matter, undersigned recommends that
Defendants' motion to preclude (Docs. 236, 237) be
granted.
This
case was removed to federal court on January 7, 2016 (Doc.
1). The expert disclosure deadlines began as of August 1,
2016 (Plaintiffs' expert reports), September 30, 2016
(Defendants' expert reports), and November 15, 2016
(rebuttal disclosures) (Doc. 16). The deadlines for
disclosure of Plaintiffs' expert reports were extended
six times on requests of the parties, most recently to May
15, 2018 (Docs. 55, 98, 128, 141, 170, 183). In addition to
such and corresponding extensions of time for defense expert
report disclosures as well as one two-week extension of
defense expert disclosures, the parties jointly requested and
obtain two additional deadline extensions for rebuttal
experts disclosure and completion of depositions (Docs. 196,
198, 204, 206). Yet, Plaintiffs never sought any further
extension to disclose expert witnesses. May 15, 2018, was
Plaintiffs' deadline to disclose expert Dr. Luna, her
report, qualifications and opinions in this case as required
under the Federal Rules of Civil Procedure.
Dr.
Luna is a damages expert. The record reveals that no
disclosure of Dr. Luna's report or opinions were made on
May 15, 2018. On May 16, 2018, Plaintiffs' counsel filed
a notice of service that “on May 15, 2018, Plaintiffs
served their Eighth Supplemental Disclosure Statement”
(Doc. 187). On May 30, 2018, defense counsel received in the
mail from the office of Plaintiffs' counsel an envelope
with Dr. Luna's biographical information, testimony
history, and 44 pages of financial schedules (Doc. 236-1 at
4, affidavit of attorney Michael Smith).[1] Codefendants'
counsel received such as well. See Doc. 236-1. In
the documents received, there was no report from Dr. Luna,
and there was no Eighth Supplemental Disclosure. Id.
Indeed, the time records by Plaintiffs' counsel, as
described in the defense motion, seem to support a conclusion
that no Eighth Disclosure Statement was even prepared.
See Doc. 209-2.[2]
Despite
that defense counsel repeatedly followed up with
Plaintiffs' counsel, who represented through staff and
directly that the Eighth Supplemental Disclosure statement
was sent out, Plaintiffs' counsel have never produced
such. Rather, an Amended Eighth Supplemental Disclosure was
sent by Plaintiffs' counsel in August, 2018, which
referenced and contained a report of Dr. Luna dated May 15,
2018, that Plaintiffs' counsel admits had never
previously been disclosed to defense counsel.
“Unfortunately, due to a miscommunication between a
former employee of Plaintiffs' counsel's law firm and
the expert witness, Dr. Luna provided only her final table;
her C.V. and supporting documents, but the final version of
the report (the “Luna Report”) with required
disclosures was not provided to Defendants' counsel until
August 12, 2018” (Doc. 248 at 3). The additional
documents provided to defense counsel in August, 2018, were
Dr. Luna's expert report dated May 15, 2018, a list of
the case materials reviewed, before and after tax schedules,
and four pages of additional schedules; these documents
totaled 33 new pages (Doc. 236-1).
While
Plaintiffs' counsel did not provide an affidavit, it
appears that Plaintiffs' counsel may not have received
the Luna Report, either, until on or about August 12, 2018.
Plaintiffs' counsel could have, but did not, raise any
issue related to Plaintiffs' late disclosure of the Luna
Report with the Court. Plaintiffs' counsel should have
done so promptly upon discovering the problem on or before
August 12, 2018. Indeed, Plaintiffs' counsel should have
discovered the problem in June, 2018, when contacted by
defense counsel. The parties stipulated for extensions of
time on August 13, 2018 (Doc. 205). Plaintiffs have not given
any good reason for Plaintiffs' failure to raise the late
disclosure of Dr. Luna's report at that time and before
the Court issued its final extension of Scheduling Order
disclosure/discovery deadlines (Doc. 206). Instead, of being
forthright with the Court about what occurred and asking for
reasonable associated relief, Plaintiffs' counsel appears
to have tried to gloss over the problem by submitting an
“amended” disclosure statement in August, 2018,
and hoping that defense counsel would follow up to depose Dr.
Luna.
Problems
with this strategy should have been quite apparent at the
time, including that the time for defense disclosure of
experts had already passed, and the defense had not disclosed
any damages expert. Plaintiffs' expert disclosure
deadline precedes defense and rebuttal expert disclosure
deadlines in order to allow the defense to consider the
experts Plaintiffs disclosed before making final decisions on
which type of experts to hire. Court relief for
Plaintiffs' late disclosure of Dr. Luna's report
would necessarily include opportunity for Defendants to
consult and possibly retain and disclose a damages expert and
report. Presently, the Court could not fashion such relief
without throwing this case into disarray procedurally given
that all the disclosure and discovery deadlines closed months
ago, with expert depositions closing in December, 2018. The
dispositive motions deadline passed last month. Summary
judgment motions have been filed and are pending with the
Court. The Scheduling Order requires Plaintiffs to file and
serve a notice that the case is ready for trial within ten
days of decision on the summary judgment motions (Doc. 16 at
10).
Each
party must disclose expert witnesses by a certain deadline
set by the court. Fed.R.Civ.P. 26(a)(2). “Rule 37(c)(1)
gives teeth to these requirements by forbidding the use at
trial of any information required to be disclosed by Rule
26(a) that is not properly disclosed.” Yeti by
Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101,
1106 (9th Cir. 2001); Fed.R.Civ.P. 37(c)(1) (“[i]f a
party fails to provide information or identify a witness as
required under Rule 26(a) . . ., the party is not allowed to
use that information”). The information may be used at
trial, however, if the party's failure to disclose the
required information is substantially justified or harmless.
Fed.R.Civ.P. 37(c)(1).
The
party making the late disclosure bears the burden of
establishing that the failure to disclose is substantially
justified or harmless. See Yeti by Molly, 259 F.3d
at 1107. In determining whether substantial justification or
harmlessness exist, a court considers (1) prejudice or
surprise to the other party, (2) the ability of that party to
cure the prejudice, (3) the likelihood of disruption of
trial, and (4) willfulness or bad faith. Silvagni v.
Wal-Mart Stores, Inc., 320 F.R.D. 237, 242 (D. Nev.
2017). Still, a court is not required to make a finding of
willfulness or bad faith before excluding expert testimony at
trial. See Hoffman v. Constr. Protective Servs.,
Inc., 541 F.3d 1175, 1180 (9th Cir. 2008) (rejecting the
notion that the court must find willfulness or bad faith to
exclude evidence because Rule 37 is “a self-executing,
automatic sanction” meant to induce disclosure)
(quotation omitted).
Plaintiffs
have not shown that the late disclosure was substantially
justified or harmless. It appears the late disclosure was
from a clerical or similar error that Plaintiffs' counsel
did not try to forthrightly or timely remedy with appropriate
Court relief. Defendants were entitled to assume that Rule
37(c)(1) means what it says, and that untimely disclosed
evidence would be excluded from evidence at trial. Reopening
discovery and setting new deadlines for depositions and
additional expert reports at this juncture would lead to
increased costs to the parties and a substantial delay and
inconvenience for the Court. The Ninth Circuit has held that
“[d]isruption to the schedule of the court and other
parties . . . is not harmless.” Wong v. Regents of
Univ. of Cal., 410 F.3d 1052, 1061-62 (9th Cir. 2005)
(finding that trial court did not abuse its discretion in
excluding expert witness not identified by the case
management deadline). This is true even where the trial date
is not imminent. See Id. at 1062 (exclusion of
witness testimony appropriate even though “the ultimate
trial date was still some months away”). Thus, the
untimely disclosures prejudice Defendants and are not
harmless.
Accordingly,
IT IS RECOMMENDED that Defendants'
motion to preclude Plaintiffs' damages expert, Dr. Luna,
from testifying at trial due to untimely disclosure (Doc.
236, 237) be granted.
This
recommendation is not an order that is immediately appealable
to the Ninth Circuit Court of Appeals. Any notice of appeal
pursuant to Rule 4(a)(1) of the Federal Rules of Appellate
Procedure should not be filed until entry of the District
Court's judgment. The parties shall have fourteen days
from the date of service of a copy of this recommendation
within which to file specific written objections with the
Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P.
6, 72; see also LRCiv 72.2(a)(1). The parties shall
have fourteen days within which to file responses to any
objections. Failure to file timely objections to the
Magistrate Judge's Report and Recommendation may result
in the acceptance of the Report and Recommendation by the
District Court without further review. See United States
v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003).
Failure to file timely objections to any factual
...