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Leeds LP v. United States

June 1, 2010

LEEDS LP, PLAINTIFF,
v.
UNITED STATES OF AMERICA, DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO STRIKE WITNESSES AND EXHIBITS

Defendant United States of America moves to strike certain witnesses and exhibits belatedly disclosed by Plaintiff [Doc. 57]. For the following reasons, the Court GRANTS in part and DENIES in part the motion.

I. BACKGROUND

This is a quiet title suit challenging tax liens placed on Plaintiff's property by the United States. Defendant's motion before the Court seeks to exclude two witnesses from testifying at trial, declarations from a now-deceased witness,*fn1 and several exhibits. The United States claims that Plaintiff failed to timely disclose these witnesses and exhibits. Plaintiff argues that its failure was harmless or substantially justified.

II. LEGAL STANDARD

A party must disclose documents and the identity of witnesses likely to have discoverable information that the party may use to support its claims. Fed. R. Civ. P. 26(a)(1)(A)(i)--(ii). This is a continuing duty, and the disclosure must be supplemented if the party later learns of additional witnesses or responsive information. See Fed. R. Civ. P. 26(e); Hoffman v. Constr. Protective Servs., Inc., 541 F.3d 1175, 1179 (9th Cir. 2008). A party must also disclose the identity of each expert witness and their written reports at the time and in the sequence that the court orders. Fed. R. Civ. P. 26(a)(2)(A)--(C); Yeti by Molly Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001).

Failure to make the required disclosures has its consequences. "Rule 37(c)(1) gives teeth to these requirements by forbidding the use at trial of any information . . . that is not properly disclosed." Yeti by Molly Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). Courts have "particularly wide latitude" to issue sanctions under Rule 37(c)(1) because it is a "self-executing, automatic sanction to provide a strong inducement for disclosure of material." Id. (quoting Fed. R. Civ. P. 37 advisory committee's note (1993)) (emphasis added and internal quotation marks omitted). The automatic sanction will not be applied if the failure to disclose was either substantially justified or harmless. Yeti, 259 F.3d at 1106; Fed. R. Civ. P. 37(c)(1). "[T]he burden is on the party facing sanctions to prove harmlessness [or justification]." Yeti, 259 F.3d at 1107.

III. DISCUSSION

Plaintiff concedes that their required disclosures were late. So the only issue before the Court is whether Plaintiff has met its burden of proving substantial justification or harmlessness. The Court evaluates each belatedly disclosed witness and exhibit below.

1. Expert Witness Disclosures

The magistrate judge set a deadline of March 30, 2009 for all Rule 26(a)(2) expert disclosures. Although Plaintiff timely disclosed the identities of some experts, it was not until November 17, 2009 that Plaintiff disclosed that it intended to use Pete Cavanagh and Julie Sullivan*fn2 as expert witnesses. This was the first time Plaintiff disclosed them as experts in the case. They would testify about a property appraisal from March 1996.

Plaintiff must establish that its late disclosure of these experts was either harmless or substantially justified in order to avoid their exclusion. See Yeti, 259 F.3d at 1106. The Court finds that there is some harm to the United States caused by Plaintiffs' failure. It must now depose those experts and may have to designate a rebuttal expert of its own. Nevertheless, the United States had the appraisal report since April 29, 2009. Both Ms. Sullivan and Mr. Cavanagh signed the report, so the United States knew their identities and that they would have to testify to give a foundation for the appraisal report. And the Court can remedy the harm without pushing back the trial date. So although there has been some harm, the Court declines to exclude Ms. Sullivan and Mr. Cavanagh.

Plaintiff must produce the expert reports of Ms. Sullivan and Mr. Cavanagh within twenty-one days of the filing of this order. Plaintiff must make them available for depositions within forty-five days of the filing of this order. The United States, if it chooses to do so, may designate a rebuttal expert and file an expert report within thirty days of deposing Plaintiffs' experts. Due to time constraints, Plaintiff may not depose the United States's rebuttal expert.

This order is without prejudice to the United States seeking alternative sanctions. The United States only ...


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