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November 10, 2015 Articles

Striking Back—Federal Rule 37(c) and Untimely Expert Reports

By Puja Leekha and Molly E. Flynn

A nineteenth-century army general is credited with saying, “Always mystify, mislead and surprise the enemy, if possible.” These tactics may lead to success on a battlefield, but in a courtroom, they run afoul of civil procedure rules. And although trial teams set up “war rooms” during trial, courts will sanction conduct resulting in unjustifiable surprise or prejudice to the opposing party. In mass tort trials, surprise often takes the form of untimely expert reports. Courts have broad discretion to sanction parties, ranging from fines and costs to complete exclusion of untimely opinion testimony. In some extreme cases, the exclusion of key expert testimony will lead to case dismissal. And because the courts of appeals review sanctions for untimely reports under an abuse of discretion standard, they are frequently affirmed. Whether a party needs to serve a late-disclosed report and avoid sanctions or objects to a report and seeks sanctions, the party’s arguments will be guided by the framework set forth in the Federal Rules of Civil Procedure 26 and 37.

Rule 26 establishes the deadlines for disclosing experts and their reports. Expert disclosures must be made at the times and in the sequence ordered by the court. Fed. R. Civ. P. 26(a)(2)(D). Absent a stipulation or court order, the default disclosure deadline is at least 90 days before the date set for trial. Id. The duty to supplement extends to expert reports and depositions, so that the disclosing party is obligated to supplement expert disclosures with any additional or changed information and opinions no later than the deadline for pretrial disclosures, typically 30 days before trial. Id. Supplements made after the disclosure deadline are limited to corrections for inaccuracies or to add information not available at the time of the initial report; supplementation is not available to strengthen an opinion that was inadequately prepared. In re Asbestos Prods. Liab. Litig., 289 F.R.D. 424, 425 (E.D. Pa. 2013).

The sanction for failing to comply with these rules is severe. Rule 37(c) provides that the party failing to make timely disclosures “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.” The committee notes characterize this provision as an “automatic sanction,” and courts have interpreted it as requiring mandatory exclusion.

Courts have discretion to determine whether the violation was substantially justified or harmless. Federal courts have developed four- and five-factor tests to make this determination. Compare, e.g., Esposito v. Home Depot U.S.A., Inc., 590 F.3d 72, 78 (1st Cir. 2009) (five-factor test evaluates (1) history of the litigation; (2) sanctioned party’s need for the precluded evidence; (3) sanctioned party’s justification for late disclosure; (4) objecting party’s ability to cure adverse effects of late disclosure, including the extent of surprise or prejudice; and (5) late disclosure’s impact on the court’s docket), with Reliance Ins. Co. v. La. Land & Expl. Co., 110 F.3d 253, 257 (5th Cir. 1997) (four-factor test evaluates (1) importance of expert’s opinion testimony, (2) prejudice to the objecting party, (3) possibility of curing the prejudice by a continuance, and (4) the explanation for party’s failure to comply with discovery order). The differences between these tests are largely semantic; their general purpose is to balance the defaulting party’s explanation for failing to timely disclose the expert report with any resulting prejudice to the objecting party and the court caused by the late disclosure.

Parties attempting to submit untimely reports should expect most courts to view any proffered explanation with a critical eye. For example, mistake or inadvertence typically will be considered insufficient justification, and a pattern of delay or repeated requests for postponement are likely to result in sanctions. Santiago-Lampon v. Real Legacy Assurance Co., 293 F.R.D. 86 (D.P.R. 2013). Further, courts are critical of late disclosures that carry the appearance of bad faith or gamesmanship. See, e.g., Instant Tech., LLC v. DeFazio, 2013 WL 4733994, at *2 (N.D. Ill. Sept. 3, 2013); but see S. States Rack & Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 596 (4th Cir. 2003) (holding Rule 37(c) does not require finding of bad faith). If, however, the late disclosure is the result of newly discovered facts or other information, courts are likely to conclude that the late disclosure was substantially justified. See In re Asbestos Prods. Liab. Litig., 289 F.R.D. at 425. Similarly, if a timely disclosed expert becomes unavailable as a result of grave illness or death, courts may allow late disclosure of a substitute expert. See Morel v. Daimler-Chrysler Corp., 259 F.R.D. 17, 20 (D.P.R. 2009). The submitting party also may avoid sanction if it can show that the late disclosure is a rebuttal opinion or in response to an issue on which the objecting party “opened the door.” See Bearint v. Dorell Juvenile Grp., Inc., 389 F.3d 1339, 1349 (11th Cir. 2004). The argument point for either party will be whether the late-disclosed opinion could have been made before the disclosure deadline.

Even if the proponent of an untimely expert disclosure is able to demonstrate substantial justification, it must also show that the disclosure is harmless to the objecting party. The objecting party, however, will need to show that the untimely disclosure results in a prejudice that cannot be cured. Courts often look at the proximity of the disclosure to the start of trial to measure prejudice: The closer to the start of trial, the greater the prejudice. See, e.g., Beaudette v. Louisville Ladder, Inc., 462 F.3d 22, 27 (1st Cir. 2006) (affirming exclusion of expert disclosed five weeks before trial). Courts will also find prejudice if the late disclosure will require the objecting party to find and prepare its own expert to offer rebuttal opinions. See Peterson v. Scotia Prince Cruises, Ltd., 222 F.R.D. 216, 217 (D. Me. 2004). When the late disclosure consists of a new or supplemental opinion by a previously disclosed expert, courts will consider (1) the extent to which the opinion is different from the original opinion and (2) the objecting party’s familiarity with the expert’s opinions. See Ferrara & DiMercurio v. St. Paul Mercury Ins. Co., 240 F.3d 1, 10–11 (1st Cir. 2001); Morel, 259 F.R.D. at 21. In the context of mass tort proceedings, however, it is the authors’ experience that courts are less likely to find prejudice when the expert is familiar to the parties from earlier proceedings.

Another consideration is whether the prejudice can be cured. If the objecting party has adequate time to conduct supplemental expert discovery and prepare a cross-examination prior to trial, the courts may conclude that a sanction is unwarranted. And when the objecting party fails to request a deposition of the new expert, or fails to depose any of the previously disclosed experts, the objecting party’s claim of prejudice will be unpersuasive. See Morel, 259 F.R.D. at 21–22.

Courts also are sensitive to disruptions in trial dates and overall case management. In Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592 (4th Cir. 2003), the court affirmed the exclusion of a third opinion offered by an expert in the middle of trial. This third opinion surprised the opposing party because the expert had previously indicated he had completed his opinions. The prejudice caused by the late disclosure could be cured only by a continuance in the middle of trial—when other witnesses were prepared to testify, the parties were deeply entrenched in the trial, and the jury and judge had cleared their calendars to perform their civic duty and complete the trial. Further, the continuance would render much of the attorneys’ and court’s trial preparation obsolete. Accordingly, exclusion was warranted. Id. at 596.

Even when courts determine that a sanction is warranted, Rule 37(c)(1)(C) provides courts the discretion to craft sanctions less severe than total exclusion, such as the imposition of fines and costs. In particular, if the exclusion would lead to dismissal—because the expert’s testimony is required for the plaintiff to make a prima facie case—then the justification for exclusion must be more robust. In Esposito,the appellate court reversed the lower court’s exclusion of expert testimony for the plaintiff’s failure to formally disclose the expert before the court-imposed deadline. Where the plaintiff had missed only one deadline and did not seem to be engaged in gamesmanship, the missed deadline more likely warranted the imposition of fines or costs, not exclusion leading to dismissal of the case in its entirety. 590 F.3d at 80.

Whether you find yourself on the side seeking sanctions for late expert disclosures or the side submitting to the court’s discretion to allow admission of your untimely disclosures, keep in mind the argument points of justification, prejudice, and cure. And remember that, to avoid all this trouble, the best course of action is to follow the rules and disclose in a timely manner. Your client, the court, and all counsel involved will thank you.

Keywords: mass torts litigation, Federal Rule of Civil Procedure 26, Federal Rule of Civil Procedure 37, untimely expert report

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