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Novak v. Capital Management & Development Corp.

April 24, 2007

DOMINIC NOVAK, ET AL. PLAINTIFFS,
v.
CAPITAL MANAGEMENT & DEVELOPMENT CORPORATION, ET AL., DEFENDANTS;
GEORGE D. VALDIVIA, PLAINTIFF,
v.
CAPITAL MANAGEMENT & DEVELOPMENT CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge

MEMORANDUM OPINION

I. Background

In its Memorandum Opinion dated February 26, 2004, this Court ordered Defendants to show cause why they should not be sanctioned for filing Defendants' Motion to Strike Untimely Witness Designations [#136]; Defendants' Second Motion to Strike Plaintiffs' Second Supplemental Answers to Defendant Capital Management and Development Corporation's First Set of Interrogatories 4, 5 and 6 [#140]; Defendants' Motion to Strike Plaintiffs' Second Request for Admissions to Defendants [#145]; and Defendants' Motion Objecting to Subpoenas Served on Royal & SunAlliance Insurance Company and Chubb Insurance [#146]. Memorandum Opinion of 2/26/2004 [#180] ("Mem. Op.") at 13. This Court also ordered Defendants to show cause why they should not be sanctioned for advancing arguments, other than claiming privilege for documents reviewed by Dr. Sherman, in Response to Plaintiffs' Motion to Strike Defendants' Specially Retained Expert Witnesses Due to Failure to Abide by the Court's Discovery Order and Rules 26(a)(2)(B) and 35 [#137]. Id.

II. Legal Standards

Under Rule 11(b) of the Federal Rules of Civil Procedure, an attorney, by filing any written motion or other paper, thereby certifies that "the claims, defenses, and other legal contentions" made in any motion, pleading, or filing "are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law." Fed. R. Civ. P. 11(b)(2). Under Rule 11(c)(1)(B), the court may, on its own initiative, enter an order directing counsel to show cause why it has not violated the provisions of subsection (b) of Rule 11. Fed. R. Civ. P. 11(c)(1)(B).

III. Responses to Show Cause Order for Defendants' Motion to Strike Untimely Witness Designations and Defendants' Second Motion to Strike Plaintiffs' Second Supplemental Answers to Defendant Capital Management and Development Corporation's First Set of Interrogatories 4, 5, and 6

A. Background

On June 13, 2003, Plaintiffs filed a supplemental response to Defendants' interrogatories that identified eleven previously unidentified witnesses, and on June 30, 2003, Plaintiffs filed a second supplement with eight additional names. Mem. Op. at 10. Discovery in this case was scheduled to close on July 30, 2003. Id. Defendants did not attempt to depose any of the witnesses or make a motion for an enlargement of the discovery period to do so. Instead, on June 30, 2003, the Defendants filed a motion to strike the witnesses identified on June 13, 2003, and the next day they filed a motion to strike the witnesses identified on June 30, 2003. Id.

This Court held that both supplemental filings by Plaintiffs were timely under Rule 26. Id. at 11. As stated in the Court's opinion, "'supplementing' previous information on the day discovery ends when it could have been supplemented sooner should not be tolerated," but in this case the new witnesses were identified forty-seven and thirty days prior to the discovery deadline. Id. Thus, both motions to strike were "completely unwarranted" as Defendants had plenty of time before the end of the discovery period to depose the witnesses or file for an extension of the discovery deadline if both parties' counsels' schedules did not permit enough time to complete the depositions that had to be taken. Id. at 12.

Defendants argue that they had proper grounds to object because the case had been in litigation for more than two years and these witnesses were certainly known to Plaintiffs earlier than the date on which the supplemented witness list was provided. Defendants' Memorandum in Response to Order to Show Cause [#181] ("Def. Resp.") at 4-5. Defendants argue this is especially true for witnesses personally known to Plaintiff, such as Plaintiff's grandmother, mother, and college friends. Id. at 5.

Defendants also contend that the time of disclosure in relation to the discovery deadline is only one factor for the court to consider. Id. at 6. Defendants refer to United States v. Phillip Morris U.S.A., Inc., 219 F.R.D. 198 (D.D.C. 2004), where the court prohibited the government from adding 650 additional racketeering acts eleven months before trial, in support of their argument that Plaintiffs were required to provide justification for the delay in supplementing their interrogatory responses so close to the end of discovery. Def. Resp. at 6-7. Defendants also rely on LaBadie Coal Co. v. Black, 672 F.2d 92, 95 (D.C. Cir. 1982), to argue that the length of time between their request for information and its disclosure by Plaintiffs is a proper ground upon which to object. Def. Resp. at 8. In LaBadie, the D.C. Circuit acknowledged that "it was grossly unfair to allow [defendant] to produce corporate documents in the last hours of trial which plaintiff had been demanding throughout pretrial discovery." Id. (citing LaBadie, 672 F.2d at 95). In addition, Defendants point to Lebron v. Powell, 217 F.R.D. 72 (D.D.C. 2003), in which the court held that "the most fundamental responsibility imposed upon a party engaged in discovery [is] to provide honest, truthful answers in the first place and to supplement or correct a previous disclosure when a party learns that its earlier disclosure was incomplete or incorrect." Id. at 10 (quoting Lebron, 217 F.R.D. at 76.) Defendants maintain that Plaintiffs "did not live up to that responsibility when they identified nineteen additional witnesses almost six weeks before discovery closed." Id.

As to their decision to file a motion to strike instead of a requesting an extension of time for discovery, Defendants contend that both parties "have adopted an aggressive litigation posture." Id. at 9. Defendants felt that moving to extend the discovery deadline would leave them open to charges of creating undue delay. Id. at 10 n.2.

B. Sanctions Are Warranted for the First Motion to Strike

Defendants should be made to pay for the fees and expenses Plaintiffs incurred in resisting Defendants' Motion to Strike Untimely Witness Designations and Defendants' Second Motion to Strike Plaintiffs' Second Supplemental Answers to Defendant Capital Management and Development Corporation's First Set of Interrogatories 4, 5 and 6.

Rule 11 of the Federal Rules of Civil Procedure specifies that by filing a motion, such as the Defendants' motion to strike, counsel is certifying that the legal contentions advanced in the motion are warranted by existing law or by a non-frivolous argument for the extension, modification or reversal of existing law. Fed. R. Civ. P. 11. There is no basis to move to strike a supplementation of an initial disclosure of potential witnesses under the Federal Rules of Civil Procedure that occurs during the discovery period, provided there is no evidence of "gamesmanship," such as having the information earlier but waiting until the day discovery ends to reveal it. Indeed, the Federal Rules of Civil Procedure require such supplementation if potential witnesses were identified in the initial disclosures made under Rule 26(a)(1) or in response to an interrogatory that demanded that information. Fed. R. Civ. P. 26(e). As I explained in my Opinion, there is no specific deadline by which initial disclosures must be supplemented, and responses to interrogatories must be filed "seasonably." Mem. Op. at 11. Thus, there is absolutely no support for the Defendants' contention that a court can strike such supplementations done during the discovery period when there is no evidence of the gamesmanship I have condemned.

Defendants' contention that the Court can look to factors other than timeliness and thus strike a timely supplemental designation is not supported by the authorities on which they rely. In Phillip Morris, the government added 650 additional racketeering allegations to the racketeering acts it had originally identified after the close of discovery when it moved for summary judgment. Phillip Morris, 219 F.R.D. at 198; see ...


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