United States District Court, S.D. New York
January 6, 2004.
SEMI-TECH LITIGATION LLC, Plaintiff,-against-BANKERS TRUST COMPANY, et al., Defendants
The opinion of the court was delivered by: LEWIS KAPLAN, District Judge
By letter dated December 30, 2003 ("BT Letter"), defendant Bankers
Trust Company ("BT") moves, pursuant to Fed.R.Civ.P. 37(c)(1), to
preclude plaintiff from offering expert testimony in this case on the
ground that its disclosure of its experts on the eve of the expiration of
the discovery period was untimely.
The reference to the bankruptcy court was withdrawn with respect to
this adversary proceeding on February 25, 2002. The scheduling order, as
amended, required the completion of all discovery by December 31, 2003
and the filing of a joint pretrial order by January 15, 2004. It provided
also that the case was to be ready for trial by the latter date.
On December 16, 2003 approximately 21 months after the
withdrawal of the reference with respect to this case and just 15 days
prior to the expiration of the discovery period plaintiff
applied for a 90 day extension of the discovery period, arguing in part
that it needed time to prepare expert reports.*fn1 BT opposed the
application,*fn2 which the Court denied on December 23, 2003.
On December 19, 2003, while plaintiff's application for an extension
was pending, it designated two expert witnesses "to assist Plaintiff in
the conduct of the Litigation."*fn3 It did not, however, then make any
of the other disclosure required by Fed.R.Civ.P. 26(a)(2)(b). It
appears to have served expert reports on December 31, 2003.
In this case, the scheduling order, as amended, fixed December 31, 2003
as the deadline for the completion of all discovery. Under Rule
26(a)(2)(C), December 31, 2003 therefore
was the date by which all disclosure not only the production of
initial expert reports under Rule 26(a)(2)(B), but the production of
reports of rebuttal experts and the depositions of the experts pursuant
to Rule 26(b)(4)(A) was to have been completed.*fn4 In
consequence, it was plaintiff's duty to produce its expert reports
sufficiently early to permit compliance with the December 31, 2003
discovery completion date. This it failed to do.
Rule 37(c)(1) provides in relevant part that "[a] party that without
substantial justification fails to disclose information required by Rule
26(a) . . . is not, unless such failure is harmless, permitted to use as
evidence . . . any witness or information not so disclosed." While
plaintiff claims that it has conducted an extensive discovery program
and, in general, acted diligently, it offers no explanation for the
untimely disclosure of its expert witnesses.*fn5 At first blush, then,
this so-called self-executing provision appears to require exclusion of
plaintiff's experts unless there was substantial justification for its
failure. As this Court previously has noted, however, the imposition of
sanctions under this rule is discretionary, and preclusion will be
ordered only in rare cares.*fn6
Plaintiff at best has been inattentive. It appears from its December
application for an
extension of the discovery period for the purpose, among others, of
preparing expert reports, that it neglected to prepare the case in a
timely manner, consistent with the scheduling order. Nevertheless, there
is no evidence that this failure to prepare in a timely and diligent
manner was a product of bad faith. Taking into account the lack of any
substantial showing of prejudice to BT, the Court is unwilling to
preclude plaintiff's experts provided both are produced for depositions
by BT upon BT's request and that the depositions are completed by the
end of January 2004.
This is at least the second case in which the question whether
Rule 37(c)(1) is satisfied where expert reports first are produced on or
shortly before the date set for completion of all discovery.*fn7 In this
Court's view, it is not. In future cases, the Court will take into
account the publication of this decision in determining whether to
preclude testimony by experts in similar circumstances. It is unlikely to
be as charitable again.
BT's motion to preclude plaintiff from offering expert witnesses in
this case is granted unless plaintiff, upon request by BT, produces
Messrs. Landau and Korn for deposition and the depositions are completed
on or before January 31, 2004.