Toyrrific v. Karapetian, 2015 U.S. App. LEXIS 9170 (9th Cir. June 2, 2015):

2. However, the district court erred as a matter of law by excluding the damages evidence under Rule 37(c)(1). See R & R Sails, 673 F.3d at 1247. Here, excluding damages evidence was fatal to Toyrrific's claim. Appellees moved for summary judgment on the basis that Toyrrific could not introduce evidence of damages. The district court in the same order (1) ruled on the discovery violation, (2) ordered the evidence excluded, and (3) granted summary judgment on the sole basis that, as a result of the exclusion of the evidence, Toyrrific could not prove the damages element of its breach of contract claim. "Thus in practical terms, the sanction amounted to dismissal of a claim." Id. Accordingly, the district court erred as a matter of law by imposing Rule 37(c)(1) exclusionary sanctions without finding that Toyrrific's "noncompliance involved willfulness, fault, or bad faith," and without considering "the availability of lesser sanctions." Id. at 1245, 1247.¹

1.  We note that there is some tension in our law over the requirement that, before a sanction amounting to dismissal of a claim can be issued, the district court [*3]  must consider whether the claimed "noncompliance involved willfulness, fault, or bad faith" and must also consider "the availability of lesser sanctions." R & R Sails, 673 F.3d at 1247. The panel in R & R Sails distinguished Hoffman v. Constr. Protective Servs., Inc., 541 F.3d 1175 (9th Cir. 2008), which "reject[ed] the notion that the district court was required to make a finding of willfulness or bad faith to exclude the damages evidence . . . even when a litigant's entire cause of action will be precluded," 541 F.3d at 1180, by asserting that the sanction there was not tantamount to a dismissal of the entire claim. See 673 F.3d at 1247 n.1. We find this distinction questionable, but are bound to follow R & R Sails.