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Rule 26(e) Right to Supplement Does Not Permit a Filing Designed to Cure a Deficient Expert Report

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SSS Enters. v. Nova Petroleum Realty LLC, 2013 U.S. App. LEXIS 14641 (4th Cir. July 19, 2013):

At a pretrial conference, the district court ordered that the plaintiffs file their expert disclosures, as required by Federal Rule of Civil Procedure 26(a)(2)(B), by January 27, 2012. That rule requires that unless otherwise exempted, the disclosures "must be accompanied by a written report -- prepared and signed by the [expert] witness." Fed. R. Civ. P. 26(a)(2)(B). The rule also requires that the report contain all opinions of the expert witness and the reasons for them; the facts and data supporting them; the exhibits supporting them; the expert witnesses' qualifications; a list of prior cases in which the expert witness has testified; and the compensation being provided the witness. See Fed. R. Civ. P. 26(a)(2)(B)(i)-(vi).

The plaintiffs failed to comply with the deadline established by the court, filing their disclosures on January 31, 2012. On February 2, 2012, they filed a motion for leave to have filed their disclosures late, which the district court granted. The defendants nonetheless moved to strike the late disclosures, not because they were late but because they did not include the experts' reports. The district court granted that motion. The plaintiffs filed a supplemental expert statement with the reports from two of their three experts and, on March 1, 2012, filed a motion to file those reports late. The district court, applying the five-factor test from Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592 (4th Cir. 2003), denied the motion.

After the close of discovery, the defendants filed two motions for summary judgment, arguing, among other things, that the plaintiffs failed to produce "admissible evidence to support any of their Sherman Act or Robinson-Patman Act claims," and that the plaintiffs failed to produce any admissible evidence to establish damages on their breach of contract claim. The district court granted the motions, entering judgment for the defendants, and this appeal followed.

The plaintiffs contend that the district court (1) abused its discretion in excluding the reports of its expert witnesses ....

As to the district court's ruling on the expert witness reports, we conclude that the court did not abuse its discretion. The federal rules impose an "automatic sanction" of exclusion of a party's expert witness for failure to adhere to the requirements set forth in Rule 26(a). See Southern States, 318 F.3d at 595 n.2. ("The Rule 37(c) advisory committee notes emphasize that the automatic sanction of exclusion provides a strong inducement for disclosure of material that the disclosing party would expect to use as evidence") (internal quotation marks and citation omitted). Even though the court gave the plaintiffs additional time within which to file their disclosures, the disclosures were simply noncompliant.

The plaintiffs argue that Rule 26(e), providing that the party has a duty to supplement or correct its disclosures, authorized them to file their reports late. But Rule 26(e) supplementation is meant only "to add additional or corrective information," not to correct the deficient filing. Campbell v. United States, 470 F. App'x 153, 157 (4th Cir. 2012) (per curiam) (internal quotation marks and citation omitted). Here, the supplemental expert disclosure was not supplementing anything -- it was, for the first time, including reports that had been required earlier.

Under Rule 37(c)(1), the plaintiffs had the burden of justifying their noncompliance by showing that it "was either substantially justified or harmless." See Carr v. Deeds, 453 F.3d 593, 602 (4th Cir. 2006). But we agree with the district court that in this case the plaintiffs failed to make that showing. See Saudi v. Northrop Grumman Corp., 427 F.3d 271, 278 (4th Cir. 2005).

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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