Late disclosure in violation of Rule 26(a)(1) leads to evidentiary exclusion

Brown v. Wal-Mart Store, Inc., No. 09-cv-03339-EJD, 2018 U.S. Dist. LEXIS 71437 (N.D. Cal. Apr. 27, 2018).

In this class action, the court sanctioned Wal-Mart for late disclosures. Specifically, Wal-Mart gave its experts a “staggering” amount of evidence that it had not timely disclosed to the plaintiffs.

This case concerns a California state law claim about whether Wal-Mart is legally required to provide seats for its cashiers.

During discovery, the plaintiffs requested discovery of information supporting Wal-Mart’s claim that cashiers could not reasonably use seats. Wal-Mart produced 87 hours of video footage of cashiers using stools. At least some of this video showed employees or customers being injured by those stools.

The plaintiffs also specifically requested daily productivity reports for all the class members who had been cashiers. Wal-Mart, stating that these reports were “only available temporarily,” produced 600 cashier productivity reports.

Wal-Mart certified that its fact discovery was complete. The plaintiffs, relying on that representation, filed their motion for summary judgment after the close of fact discovery.

Months later, Wal-Mart produced three expert reports. The plaintiffs soon realized that Wal-Mart gave its experts “a large amount of information that had never been disclosed” in discovery. Over the next month, that information gradually “trickle[d] in” to the plaintiffs. The court characterized the undisclosed information as “staggering”: Wal-Mart’s experts reviewed 650 hours of video and 357,450 productivity reports.

The plaintiffs moved for sanctions against Wal-Mart for its failure to timely disclose this additional evidence.

Federal Rule of Civil Procedure 26(a)(1) requires parties to supplement their disclosures “in a timely manner” upon finding new information. Rule 37(c)(1) specifies the penalty for violation of Rule 26(a). A non-disclosing party cannot use withheld information unless it can establish that its “failure was substantially justified or is harmless.”

The court agreed with the plaintiffs that the late disclosures were neither substantially justified nor harmless. It concluded that Wal-Mart took no corrective action “on its own initiative.” Rather, it only provided the information “after [the] plaintiffs recognized and inquired” about it.

Wal-Mart argued that it did not have to provide the additional video evidence to the plaintiffs until it decided to call that witness to testify. The court rejected this assertion. Regardless of whether Wal-Mart intended to use the videos as evidence, the scope of discovery included the videos. Moreover, Wal-Mart “exacerbated the problem” by depriving the plaintiffs of the video evidence for another eight days. This delay prevented the plaintiffs’ expert from reviewing the evidence before his report was due.

In short, the court found that “Wal-Mart withheld a massive amount” of information. That delay precluded the plaintiffs from conducting any follow-up discovery. It also prejudiced their case because the plaintiffs filed for summary judgment based on the incomplete information they had. Further, the plaintiffs’ expert had to work “with a proverbial hand tied behind his back” because he was missing a substantial amount of information.

As to the productivity reports, Wal-Mart argued that it was unable to extract those reports until well after the close of fact discovery. The court noted that Wal-Mart made no effort to obtain additional reports until it “decided that the reports would be helpful” to its case. Then, “fully aware that its disclosure was materially incomplete,” Wal-Mart failed to advise the plaintiffs about the additional 356,850 reports.

The court excluded Wal-Mart from using either the late-produced evidence or the expert reports that relied on that information. It observed that this “massive” late disclosure was particularly egregious given the plaintiffs’ express requests for the withheld information. The court specifically held that this exclusion sanction is not too harsh because it “does not amount to dismissal” of Wal-Mart’s claim. Nor would lesser sanctions be adequate to repair the harm. Rather, “exclusion is commensurate with the harm” that Wal-Mart’s late disclosures caused.

As to a third expert witness who received a single undisclosed 45-minute video, the court found any delay in production harmless.

The court granted in part and denied in part the plaintiffs’ motion for sanctions. It agreed to exclude both the undisclosed evidence and the expert reports relying on that evidence. However, the court did not award the plaintiffs any attorneys’ fees or expenses for the motion.