United States District Court, D. Colorado
KRISTEN L. MIX, MAGISTRATE JUDGE
matter is before the Court on Defendant's Motion
in Limine to Exclude Testimony and Evidence Related to
Untimely Disclosed Damages [#94] (the
“Motion”). Plaintiff filed a Response [#102] in
opposition to the Motion [#94], and Defendant filed a Reply
[#105]. The Court has reviewed the filings and the applicable
law, and is sufficiently advised in the premises. For the
reasons stated below, the Motion [#94] is
asks the Court to preclude Plaintiff from presenting various
categories of damages at trial due to their late disclosure.
Motion [#94] at 1-2. In short, Defendant asserts
that Plaintiff's disclosure of new categories and amounts
of alleged damages on the day before the discovery cut-off
and two business days before dispositive motions were due is
prejudicial to Defendant. Id. at 6. Plaintiff argues
that the categories of damages were disclosed by May 8, 2017,
and that Defendant had the opportunity to conduct discovery
into the damages during the depositions of Plaintiff's
designated 30(b)(6) witness and Chief Financial Officer.
Response [#102] at 1. Plaintiff adds that, to the
extent that any prejudice to Defendant exists, any such
prejudice can be cured by allowing additional discovery and
continuing the trial. Id. at 2.
Civ. P. 26(a)(1)(A)(iii) provides:
[A] party must, without awaiting a discovery request, provide
to the other parties . . . a computation of each category of
damages claimed by the disclosing party - who must also make
available for inspection and copying as under Rule 34 the
documents or other evidentiary materials, unless privileged
or protected from disclosure, on which each computation is
based, including materials bearing on the nature and extent
of injuries suffered[.]
disclosures must be made “at or within 14 days after
the parties' Rule 26(f) conference unless a different
time is set by stipulation or court order.”
Fed.R.Civ.P. 26(a)(1)(C). Litigants' disclosure
obligations do not cease after initial compliance with the
Rule, however. “A party who has made a disclosure under
Rule 26(a) . . . must supplement or correct its disclosure or
response . . . in a timely manner if the party learns that in
some material respect the disclosure or response is
incomplete or incorrect . . . .” Fed.R.Civ.P. 26(e).
to Fed.R.Civ.P. 37(c)(1), if a party fails to comply with its
obligation to disclose or supplement initial disclosures
pursuant to Rule 26(a) or (e), “the party is not
allowed to use that information . . . to supply evidence on a
motion, at a hearing, or at trial, unless the failure was
substantially justified or is harmless.” “The
determination of whether a Rule 26(a) [or (e)] violation is
justified or harmless is entrusted to the broad discretion of
the district court.” Woodworker's Supply, Inc.
v. Principal Mut. Life Ins. Co., 170 F.3d 985, 993 (10th
Cir.1999); see also HCG Platinum, LLC v. Preferred Prod.
Placement Corp., 873 F.3d 1191, 1200 (10th Cir. 2017).
The Tenth Circuit Court of Appeals identified four factors
for consideration in determining whether the failure to
disclose is substantially justified or harmless: (1) the
prejudice or surprise to the impacted party, (2) the ability
to cure the prejudice, (3) the potential for trial
disruption, and (4) the erring party's bad faith or
willfulness. Woodworker's Supply, 170 F.3d at
993. The Court addresses each in turn.
Prejudice to Defendant
argues that Plaintiff waited until September 21, 2017, the
day before the discovery cut-off, to disclose for the first
time nearly $9 million worth of damages under the following
categories: “Damage to reputation” ($7, 943,
673); “Cost of redesign of Sole 4/5/7” ($815,
835); and “Cost of noise investigation” ($30,
553). Motion [#94] at 1; Summary of Estimated
Damages [#96-7]. Defendant explains that these types of
damages may require Defendant to retain additional experts
and would require substantial fact discovery,
“including third-party discovery of the customers Mr.
Streicher identified on the last day of discovery.”
Motion [#94] at 6.
Plaintiff asserts that all categories of damages
were disclosed by May 8, 2017, Plaintiff does not dispute
that the September 21, 2017 Summary added “lost
profits” related to lost contracts with three companies
that were not previously disclosed (totaling $7, 943, 673).
See Response [#102] at 5 (“The only change was
an increase in the amount of “lost profits”
sought by [Plaintiff]. This was due to the inclusion of three
lost contract[s] in the “lost profits” category
rather than the single contract estimated in the initial
disclosures.”). The names of the three companies
apparently were not disclosed by Plaintiff until September
22, 2017. Streicher Depo. [#96-8] at 3. “A key
policy goal of requiring parties to keep their disclosures
current is ‘to avoid trial by ambush.'”
Gallegos v. Swift & Co., No.
04-cv-01295-LTB-CBS, 2007 WL 214416, at *3 (D. Colo. Jan. 25,
2007) (citing Macaulay v. Anas, 321 F.3d 45, 50 (1st
Cir. 2003)). On these grounds alone, Plaintiff's timing
of providing the computation of damages is akin to trial by
ambush. Even if Plaintiff is correct that all categories of
damages were disclosed by May 8, 2017, Plaintiff did not
comply with the requirements of Fed.R.Civ.P. 26(a)(1)(A)(iii)
to provide a computation of each category of damages
until it provided the Summary on September 21, 2017.
Furthermore, the record does not reflect whether Plaintiff
has even “ma[de] available . . . the documents or other
evidentiary materials . . . on which each computation is
based” as required by the Rule. See Fed. R.
Civ. P. 26(a)(1)(A)(iii).
“delay and mounting attorneys fees can equate to
prejudice.” Sender v. Mann, 225 F.R.D. 645,
656 (D. Colo. 2004) (citing Jones v. Thompson, 996
F.2d 261, 264 (10th Cir. 1993)). Allowing Plaintiff to add
these disclosures would necessitate the reopening of
discovery in order to permit Defendant to prepare a defense
regarding damages. As such, the Court finds that the first
factor weighs in favor of excluding the damages, because
Defendant is indeed prejudiced, in terms of time, money, and
effort, by the delayed issuance of Plaintiff's
Plaintiff's Bad ...