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Untimely Disclosure of Expert Reliance Materials Leads to Exclusion

Ebony S Morris

Untimely Disclosure of Expert Reliance Materials Leads to Exclusion
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Federal Rule of Civil Procedure (FRCP) 34 requires production of documents within 30 days after service of a request for production and requires the parties to timely supplement incomplete responses. See Fed. R. Civ. P. 34(b)(2)(A) and 26(e). Failure to timely produce expert reports or reliance materials will lead to automatic exclusion pursuant to FRCP 37(c). The recent decision by the U.S. District Court Middle District of Florida provides a cautionary tale for practitioners engaging in untimely discovery.

In Zurich American Insurance Co. v. John Walker Hardin, et al., No. 8:14-cv-775, 2020 WL 1150981 (M.D. Fla. Mar. 10, 2020), Zurich American Insurance Company asked the district court to bar various documents not produced during fact discovery, as well as corresponding expert opinions based on those documents. Zurich alleged that it had collected only a small fraction on judgments because John Edward Walker Hardin, the sole owner of Leasing Resources, depleted Leasing Resources’ assets and transferred Leasing Resources’ business to Cohesive Networks, Inc., another Hardin-owned entity.  The defendants disclosed the identity of their accounting expert, and Zurich served a subpoena for deposition and requested the documents considered for the defense expert’s report. A few days before the deposition, and after the discovery period closed, the defendants produced the documents to Zurich. After comparing the documents, Zurich determined that the defense expert was given more than 300 documents that had not been produced in discovery. Consequently, Zurich filed a motion to bar documents not produced during fact discovery and requested an order excluding the withheld documents at trial, prohibiting the expert from offering any opinions related to the withheld documents, and requested monetary sanctions for reasonable expenses, including attorney fees, incurred due to the discovery violation.  

In excluding the documents and expert’s opinion, the court held that the defendants could not avoid FRCP 37(c) sanctions because their failure to timely provide the requested documents was neither justified nor harmless. The court further held that Zurich would be prejudiced if the defendants relied on the withheld documents. Zurich timely disclosed two experts, and both experts relied on the defendants’ previously produced documents. Given that Zurich’s experts did not have the opportunity to review the withheld documents before forming their opinions, Zurich could not question the defense experts about the withheld documents when Zurich deposed its fact witnesses. The court further held that the defendants’ late disclosure deprived Zurich of a meaningful opportunity to perform discovery and depositions related to the documents in question. The court granted the motion to exclude documents and awarded monetary sanctions to Zurich. 

The Zurich American decision provides an instructive discovery lesson for practitioners engaged in improper discovery practices. First, practitioners must pay close attention to the court’s scheduling order in terms of discovery deadlines, expert disclosure deadlines, and if applicable, deadlines to supplement discovery and disclosures. Failure to timely disclose and supplement will ultimately lead to exclusion of relevant documents, and possibly, a vital expert opinion.