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R&R Sails, Inc. v. Insurance Company of the State of Pennsylvania

December 30, 2009


The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge


This matter is before the Court on Plaintiff's motion to reopen oral argument and revise its ruling on Defendant Motion In Limine No. 2 barring evidence of Plaintiff's attorneys fees claim. Defendant moved the Court in limine for an order precluding Plaintiff, its counsel, and its witnesses from making reference to Plaintiff's claim for attorneys fees and costs incurred in this case pursuant to the decision in Brandt v. Superior Court (1985) 37 Cal.3d 813. Defendant argued that Plaintiff failed to disclose the evidentiary basis for its claim and therefore Defendant was not able to conduct discovery regarding the claim or to retain an expert to review Plaintiff's evidence supporting the claim. Defendant asserted that Plaintiff should be precluded from presenting any evidence not previously disclosed at trial pursuant to Federal Rule of Civil Procedure 37(c)(1). Without any evidence, Defendant argued that Plaintiff will not be able to prove its claim for attorneys fees and costs, and therefore the claim should be barred. Plaintiff argued in opposition to the motion that Defendant had an affirmative duty to request the evidence during discovery, failed to do so, and therefore the motion should be denied. The Court ruled as follows:

Plaintiff identified an estimated claim for $350,000 in attorneys fees in its initial disclosures served on September 14, 2007. Defendant is correct that Plaintiff failed to produce any documentation of the claim at that time, and further failed to supplement its initial disclosures with documentation regarding fees, running afoul of Federal Rules of Civil Procedure 26(a) and 26(e). Plaintiff must substantiate the fees claimed with some sort of evidence at trial or the claim shall fail (in most cases documentation of hours worked by attorneys, etc). Concept Enterprises, Inc. v. Hartford Ins. Co, 2001 U.S. Dist. LEXIS 6901 at 30 (C.D. Cal. 2001). However, allowing production of the documentation of two years worth of accumulated fees and costs less than two months prior to trial, and without the benefit of discovery or expert analysis, is highly prejudicial to Defendant....

Furthermore, Plaintiff's failure to disclose is not harmless. Defendant cannot be expected or required to defend against a damages claim without having the prerequisite access to the evidence supporting the claim. Thus, if the Court denies Defendant's motion, the Court will have to reopen discovery, allow Defendant a reasonable amount of time once the evidence is produced to review it and hire an expert to analyze it and prepare a written report, who then will likely need to be deposed. In the context of Rule 37(c), "[d]isruption to the schedule of the court and other parties is not harmless. Courts set such schedules to permit the court and the parties to deal with cases in a thorough and orderly manner, and they must be allowed to enforce them, unless there are good reasons not to." Wong v. Regents of the University of California, 410 F.3d 1052, 1062 (9th Cir. 2005).

The Court finds that Plaintiff has not carried its burden to show that the failure to comply with Rule 26 was either substantially justified or harmless. Pursuant to the federal rules and the consistently applied law in the Ninth Circuit, the Court GRANTS Defendant's motion. Plaintiff is precluded from offering evidence to support, or from otherwise referencing, its Brandt claim at trial. (See November 20, 2009 Order, Doc. No. 175.)


Ordinarily, reconsideration is appropriate if the Court is "(1) presented with newly discovered evidence, (2) committed clear error, [(3)] or if the initial decision was manifestly unjust, or (4) if there is an intervening change in controlling law." School Dist. No. 1J, Multnomah County, Oregon v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). While Rule 59(e) permits a district court to reconsider and amend a previous order, the rule offers an "extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial resources." Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (citation omitted).

Plaintiff urges the Court to reconsider its November 20, 2009 ruling and to permit Plaintiff to pursue its attorneys fees claim at trial. Plaintiff argues that it satisfied the requirements of Federal Rule of Civil Procedure 26 when it served initial disclosures on September 14, 2007, stating a claim for attorneys fees in the amount of $350,000, and by offering on June 30, 2009 to deliver redacted copies of all related billing invoices to Defendant. Plaintiff asserts that Rule 26 does not require a party to produce copies of documents identified in its initial disclosures, absent a written request by the opposing party. In sum, Plaintiff argues that it was incumbent on Defendant to make an affirmative request for production of the billing invoices, which Plaintiff asserts Defendant did not do until June 2009.

Defendant opposes the motion on several grounds. First, Defendant argues that Plaintiff fails to present any new evidence in support of its position, does not allege that there has been any change in the applicable law, and fails to demonstrate either clear error or manifest injustice. Second, Defendant challenges Plaintiff's renewed assertion that Plaintiff had no affirmative obligation to produce the billing invoices. Defendant argues that Plaintiff's initial disclosure of its attorneys fees claim was inadequate under Federal Rule of Civil Procedure 26(a)(1)(A)(ii) because it did not describe the category or location of the documents intended to support the claim. Plaintiff's initial disclosure stated only the amount of the claim, and indicated via a footnote that the amount was an estimate and would be amended prior to trial. Defendant argues that Plaintiff ran afoul of Civil Local Rule 16(f)(4)(b) by failing to produce the billing invoices during the parties' exchange of exhibits anticipated to be introduced at trial. Defendant further argues that Plaintiff violated the requirements of Federal Rule of Civil Procedure 26(a)(1)(A)(iii), which requires a party to provide a computation of damages and the documents/materials upon which the computation is based. Defendant asserts that contrary to Plaintiff's position, this is clearly an affirmative obligation which Plaintiff failed to meet until the day before this motion was filed. Finally, Defendant urges the Court to consider the manner in which Defendant, as well as the Court, would be unduly prejudiced if Plaintiff is allowed to introduce the billing invoices and other documentation in support of its attorneys fees claim at trial.

The Court finds that Plaintiff fails to demonstrate a sound basis for modifying the November 20, 2009 ruling granting Defendant's motion in limine. Plaintiff does not make the required showing under Rule 59(e). Plaintiff incorrectly interprets the applicable Federal Rules of Civil Procedure to support its position. Rule 26(a)(1)(A)(iii) does not operate in tandem with Rule 34 in the manner Plaintiff suggests. The rule could not be clearer -- Plaintiff was required to have disclosed the billing invoices to substantiate the amount of attorneys fees claimed. Rule 26(a)(1)(A)(iii) provides that a party must disclose, "without awaiting a discovery request... a computation of each category of damages claimed by the disclosing party" and must make available for inspection "the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based..." The uncontradicted evidence before the Court confirms that Plaintiff did not comply with its obligations under the Federal Rules until, literally, the eve of trial. Exclusion of the evidence is proper.


Based on the foregoing reasons, the Court DENIES Plaintiff's motion. The Court declines to revise its November 20, 2009 ruling granting Defendant's Motion In Limine No. 2. As such, Plaintiff remains precluded from offering evidence to support, or from otherwise referencing, its attorneys fees claim at trial


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