Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_99-cv-01794/USCOURTS-azd-2_99-cv-01794-6/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Aloe Vera of America Inc., et al.,

Plaintiffs, 

v. 

United States of America, 

Defendant.

No. CV-99-01794-PHX-JAT

ORDER 

 At the final pretrial conference held on June 25, 2014, the United States raised 

objections to certain of Plaintiffs’ lay witnesses listed in the proposed final pretrial order. 

Specifically, the United States objected to certain proposed topics of testimony for six of 

Plaintiffs’ witnesses on the grounds that the subjects of their testimony had not been 

timely disclosed: Arimoto, Ishida, Kobuna, Taniuchi, Mukaitani, and Fujikawa. Although 

Plaintiffs correctly classify the United States’ objection as an oral motion in limine 

disallowed by this Court’s prior order (Doc. 634 at 2), motions in limine can be 

particularly useful in determining the admissibility of a witness’ testimony, and the Court 

makes a one-time exception to its prior order for the limited purpose of ruling on the 

admissibility of these witnesses’ testimony.1

 The Court has considered the Plaintiffs’ memorandum filed in response to the 

United States’ objections (Doc. 659) as well as the United States’ responsive 

memorandum (Doc. 660), and rules as follows. 

 

1

 The parties should not construe this Order as an invitation to file motions in 

limine in violation of the Court’s prior order. Such filings may result in sanctions. 

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I. Background 

The United States originally objected to five topics of testimony by the lay 

witnesses, numbered 2, 4, 6, 7, and 8 and corresponding with the subjects of testimony 

numbered as such in the parties’ proposed final pretrial order. Plaintiffs have since 

withdrawn topic 8 as a subject of testimony by the lay witnesses. (Doc. 660 at 2). The 

remaining topics, 2, 4, 6, and 7, are: “(2) information communicated to [the witness] by 

Rick Toma or any other FLPJ employee regarding the TRTB audit of FLPJ prior to the 

October 1997 media reports; . . . (4) [the witness’s] knowledge of the information in the 

October 1997 media reports; . . . (6) was the witness the source of any of the media 

reports or was [the witness] aware of anyone in the company who was the source of the 

media reports; and . . . (7) [the witness’s] lay opinion regarding the source of the media 

articles and the meaning in Japanese society of the word “kankeisha” in a media story 

regarding tax issues based on [the witness’s] personal observation, prior experience, 

giving the basis for [the witness’s] belief and the societal context for [the witness’s] 

belief.” (Doc. 656 at 103-06). See also (Doc. 669 at 102-05) (final pretrial order as 

adopted by the Court). 

II. Legal Standard

A. Rule 26(a)

 Federal Rule of Civil Procedure (“Rule”) 26(a)(1)(A)(i) requires a party to 

disclose not only the identities of witnesses who are “likely to have discoverable 

information” but also the “subjects of that information.” A party must supplement its 

disclosures in a timely manner “if the party learns that in some material respect the 

disclosure or response is incomplete or correct, and if the additional or corrective 

information has not otherwise been made known to the other parties during the discovery 

process or in writing.” Fed. R. Civ. P. 26(e)(1)(A). 

B. Untimely Disclosure 

 When a party fails to make a timely disclosure required by Rule 26(a), “the party 

is not allowed to use that information or witness to supply evidence on a motion, at a 

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hearing, or at a trial” unless it proves that its failure was “substantially justified or is 

harmless.” Fed. R. Civ. P. 37(c)(1); Torres v. Los Angeles, 548 F.3d 1197, 1213 (9th Cir. 

2008). 

 The Ninth Circuit Court of Appeals (“Court of Appeals”) has enumerated four 

factors in determining “whether a violation of a discovery deadline is justified or 

harmless: . . . (1) prejudice or surprise to the party against whom the evidence is offered; 

(2) the ability of that party to cure the prejudice; (3) the likelihood of disruption of the 

trial; and (4) bad faith or willfulness involved in not timely disclosing the evidence.” 

Lanard Toys Ltd. v. Novelty, Inc., 375 F. App’x 705, 713 (9th Cir. 2010) (citing David v. 

Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir. 2003)). 

 If a court concludes that a discovery deadline violation is not substantially justified 

or harmless, it has “particularly wide latitude” in its discretion to “issue sanctions under 

Rule 37(c)(1).” Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th 

Cir. 2001). Rule 37(c) is intended to provide a “self-executing,” “automatic sanction 

provid[ing] a strong inducement for disclosure of material,” Fed. R. Civ. P. 37 advisory 

committee’s note (1993). Thus, the rule provides for the automatic exclusion of the 

testimony of an untimely disclosed expert witness. See Fed. R. Civ. P. 37(c)(1); Yeti by 

Molly, 259 F.3d at 1106 (citing Ortiz-Lopez v. Sociedad Espanola de Auxilio Mutuo Y 

Beneficiencia de Puerto Rico, 248 F.3d 29, 35 (1st Cir. 2001)). 

III. Witnesses

 A. Arimoto

 Plaintiffs have withdrawn Mr. Arimoto as a proposed witness and he is not listed 

in the parties’ amended proposed final pretrial order. Accordingly, the United States’ 

objections to his testimony are moot. 

 B. Ishida

 The United States initially objected to Mr. Ishida’s testimony in topics 2, 4, 6, and 

7. See (Doc. 660 at 1-2). Following Plaintiffs’ memorandum to which Plaintiffs attached 

a copy of a disclosure statement that disclosed subjects of Mr. Ishida’s testimony, the 

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United States has withdrawn its objection to topic 7. (Id. at 2). The Court finds that 

Plaintiffs properly disclosed topics 4 and 6 with respect to Mr. Ishida, but not topic 2. In 

Plaintiffs’ May 4, 2006 disclosure statement, Plaintiffs identified Mr. Ishida as a witness 

and listed his opinion testimony as being based upon “knowledge of the contents of the 

Publications and lack of pre-publication knowledge among FLP Japan employees 

regarding the contents of the Publications.” (Doc. 659-1 at 27). This adequately disclosed 

to the United States that Mr. Ishida would testify as to topic 4, “his knowledge of the 

information in the October 1997 media reports.” (Doc. 656 at 103). With respect to topic 

6, the disclosure statement stated that “[i]t is the further opinion of the witness that no 

employees or officers of FLP Japan were the source of the leaked information concerning 

the alleged tax fraud, alleged violation of Japanese law, assessments, audits, a joint 

U.S./Japan examination, penalties and other information.” (Doc. 659-1 at 27). This 

adequately disclosed to the United States that Mr. Ishida would testify as to topic 6, 

whether he was the source of the media reports or was aware of anyone in the company 

being the source of the media reports. 

 The Court has read all of the documents attached to Plaintiffs’ memorandum and 

has not identified any timely disclosures that contain information pertaining to topic 2. 

The only potential document implicating topic 2 is an affidavit of Mr. Ishida submitted in 

opposition to the United States’ motion for summary judgment. This affidavit, filed on 

October 24, 2006, includes a statement that Mr. Ishida had attended an FLPJ meeting 

prior to the media reports in which cursory information concerning an audit by the Tokyo 

Regional Tax Bureau (“TRTB”) was disseminated. (Doc. 501-2 at 20). 

 Plaintiffs contend that this affidavit constituted adequate disclosure to the United 

States that Mr. Ishida would testify at trial to the topics contained within. (Doc. 659 at 4). 

In support, Plaintiffs rely upon Rule 26(e)(1)(A)’s provision that a formal supplemental 

disclosure need not be made if “the additional or corrective information has not otherwise 

been made known to the other parties during the discovery process or in writing.” (Id.) 

Plaintiffs contend that because the United States’ reply in support of its motion for 

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summary judgment specifically addressed Mr. Ishida’s affidavit (as well as others), the 

United States had notice in writing of the subject of Mr. Ishida’s testimony. (Doc. 659 at 

5). Although the United States indeed specifically referenced Mr. Ishida’s affidavit in its 

reply, see (Doc. 514 at 10), this does not rise to the level of supplanting the formal 

disclosure requirements. 

 Plaintiffs primarily rely upon Westefer v. Snyder, 422 F.3d 570 (7th Cir. 2005), in 

which the Seventh Circuit Court of Appeals held that affidavits produced in response to a 

motion for summary judgment constituted adequate disclosure such that formal 

amendment of the non-movant’s answers to interrogatories was not required. In that case, 

the defendant had been slow to produce documents which it eventually attached to its 

motion for summary judgment. 422 F.3d at 582. In responding to the motion for 

summary judgment, the plaintiffs, who were inmates alleging they had been transferred to 

a particular prison for unlawful reasons, submitted affidavits in which they avowed that 

the documents produced by the defendants had been falsified. Id. Because the documents 

were the plaintiffs’ prison transfer records, the allegation that the records were falsified 

constituted a new theory in the case. See id. at 582-83. The defendants moved for Rule 37 

sanctions on the grounds that this theory had not been properly disclosed. Id. at 582. The 

court concluded that Rule 26’s “or otherwise” clause rendered the plaintiff’s response to 

the defendant’s summary judgment motion a valid disclosure that placed defendants “on 

written notice that the prisoners challenged the placement forms’ veracity.” Id. at 584. 

 In Westefer, however, the court explicitly relied upon the defendant’s delay in 

producing the documents to conclude that “[t]here was no unfair surprise in the prisoners’ 

failure to amend their interrogatories.” Id. The Court is not persuaded that the Ninth 

Circuit Court of Appeals would reach the same conclusion in the present case. In 

Westefer, it was clear from the plaintiffs’ affidavits that the plaintiffs were asserting a 

new theory in the case. In the present case, although it was clear from Mr. Ishida’s 

affidavit that he had knowledge of information communicated to him concerning the 

TRTB audit prior to the media reports, it was not clear that he would offer such evidence 

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at trial. The Court has not found any Ninth Circuit Court of Appeals authority holding 

that the production of an affidavit in opposition to a motion for summary judgment makes 

it known to the movant that the non-movant intends to offer the affiant as a witness at 

trial on all topics contained in that affidavit. 

 The plain language of Rule 26(e) provides, as Plaintiffs correctly highlight, that 

supplementation is unnecessary when information has been “otherwise made known to 

the other parties during the discovery process or in writing.” Fed. R. Civ. P. 26(e)(1)(A). 

But nothing in this case indicates that the information made known in Mr. Ishida’s 

affidavit was the fact that he would be testifying at trial as to the subject of his affidavit. 

This is not the case where, like Westefer, the information disclosed in writing is apparent 

as a new theory of the case. Nor was the information disclosed an admission or a 

previously-undisclosed document relevant to the action, the significance of which is 

intrinsically apparent. 

 When in response to a summary judgment motion the non-movant makes an 

admission, attaches a newly disclosed document, or states a new theory of the case, this 

information is itself sufficient to notify the movant of this information. But unlike these 

types of disclosures, statements contained within an affidavit do not intrinsically convey 

to the reader notice that these particular statements will be the subject of the affiant’s 

testimony at trial. The purpose of the disclosure requirements for witnesses is so the 

parties may know which of the often-voluminous evidence will be relevant to the trial 

proceedings. For this, the party offering the witness must inform the other parties in the 

case that it intends to use this witness to elicit testimony on such a subject. Mr. Ishida’s 

affidavit disclosed his opinions, but it did not disclose that he would testify at trial 

regarding those opinions. 

 In arguing that the mere disclosure of Mr. Ishida’s affidavit sufficiently notified 

the United States of his trial testimony, Plaintiffs cite several cases. McKesson 

Information Solutions, Inc. v. Bridge Medical, Inc., 434 F. Supp. 2d 810, 813 (E.D. Cal. 

2007) is unpersuasive because the Court cannot ascertain with specificity the actual 

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extent of disclosure in that case. See 434 F. Supp. 2d at 813 (“. . . all of the challenged 

witnesses were identified in documents produced. . .”). BanxCorp v. Costco Wholesale 

Corp., 978 F. Supp. 2d 280, 323 (S.D.N.Y. 2013) is similarly noncontrolling and 

unpersuasive. There, the party moving to preclude the witnesses had admitted that it had 

adequate notice of the witnesses but “had no reason to engage in a fishing expedition and 

depose other employees of Defendants at random.” 978 F. Supp. 2d at 324. In the present 

case, the United States asserts that it did not receive adequate notice when the affidavit 

was buried in 156 exhibits offered in opposition to its motion for summary judgment. 

(Doc. 660 at 5). Finally, in Coleman v. Keebler Co., 997 F. Supp. 1102, 1107 (N.D. Ind. 

1998), it was “uncontroverted that Keebler became fully aware of the identities of [the 

witnesses] at the latest during [another witness’s] deposition.” 997 F. Supp. at 1107. The 

Court finds these cases unpersuasive. 

 Accordingly, the Court concludes that Plaintiffs timely disclosed the subjects of 

Mr. Ishida’s testimony only with respect to topics 4 and 6. 

C. Kobuna

 The United States objects to Ms. Kobuna’s testimony with respect to topics 2, 4, 6, 

and 7. As with Mr. Ishida, Plaintiffs attached an affidavit of Ms. Kobuna in opposition to 

the United States’ 2006 motion for summary judgment. See (Doc. 501-2 at 18). Unlike 

Mr. Ishida, however, Plaintiffs never listed Ms. Kobuna as testifying to topics 4 and 6 in 

their May 4, 2006 disclosure statement. For the same reasons discussed with respect to 

Mr. Ishida, the Court concludes that Plaintiffs have not timely disclosed the subjects of 

Ms. Kobuna’s testimony with respect to topics 2, 4, 6, and 7. 

D. Taniuchi

 As with Mr. Ishida, the United States objected to topics 2, 4, 6, and 7 of Mr. 

Taniuchi’s testimony before withdrawing its objection to topic 7. Plaintiffs’ May 4, 2006 

disclosure statement listed the same opinions and bases for opinion for Mr. Taniuchi as it 

did for Mr. Ishida. Plaintiffs also attached Mr. Taniuchi’s affidavit in opposition of the 

United States’ 2006 motion for summary judgment. See (Doc. 501-2 at 22). 

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Consequently, the Court finds for the same reasons discussed concerning Mr. Ishida that 

Plaintiffs timely disclosed Mr. Taniuchi’s testimony with respect to topics 4 and 6, but 

not 2. 

E. Mukaitani

 The United States objects to Mr. Mukaitani’s testimony with respect to topics 2, 4, 

6, and 7. See (Doc. 660 at 2). Plaintiffs argue Mr. Mukaitani’s testimony was properly 

disclosed, and rely upon a May 31, 2013 written disclosure of Mr. Mukaitani as a 

damages witness in which they stated that he will testify “similarly to the other FLPJ 

employees and distributors previously identified by Plaintiffs and deposed in Hawaii by 

Mr. Role. That is, he will testify, inter alia, as to the media reports about FLPJ in October 

1997, his opinion as to the source of the reports, his knowledge of the Simultaneous 

Examination prior to the media reports, the impact of the media reports on FLPJ in 1997 

through the present time, and the damages caused by the media reports.” (Doc. 659-1 at 

48). 

 This disclosure placed the United States on notice of Mr. Mukaitani’s proposed 

testimony with respect to topics 2, 4, 6, and 7 because each of these topics is fairly 

encompassed within Plaintiffs’ disclosure. 

F. Fujikawa

 The United States objects to Ms. Fujikawa’s testimony with respect to topics 2, 4, 

6, and 7. See (Doc. 660 at 2). As with Mr. Ishida, Plaintiffs attached her affidavit in 

opposition to the United States’ 2006 motion for summary judgment. See (Doc. 501-3 at 

5). Unlike Mr. Ishida, however, Plaintiffs never listed Ms. Fujikawa as testifying to topics 

4 and 6 in their May 4, 2006 disclosure statement. For the same reasons discussed with 

respect to Mr. Ishida, the Court concludes that Plaintiffs have not timely disclosed the 

subjects of Ms. Fujikawa’s testimony with respect to topics 2, 4, 6, and 7. 

IV. Remedy for Untimely Disclosure 

 The remaining issue is the appropriate remedy for Plaintiffs’ failure to timely 

disclose. Rule 37(c)(1) mandates exclusion of the witnesses unless the failure to disclose 

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was harmless. The Court concludes the failure was not harmless. Turning to the first 

factor enumerated in Lanard Toys, the Court finds Plaintiffs’ non-disclosure created 

substantial prejudice to the United States because Plaintiffs have surprised the United 

States on the eve of trial with these witnesses, whom the United States had no reason to 

previously depose because it did not reasonably anticipate Plaintiffs would call them at 

trial. 

 As to the second factor, the ability of the United States to cure the prejudice, the 

Court finds this factor weighs strongly against Plaintiffs because the United States cannot 

cure its prejudice absent the Court resetting the trial date and reopening discovery, which 

the Court will not do at this late juncture. Thus, the United States would have no choice 

but to proceed to trial without having deposed these witnesses on the specific topics of 

testimony Plaintiff now proposes to offer. For these same reasons, the third factor, the 

likelihood of disruption of the trial, also favors the United States because proceeding to 

trial without having previously deposed these witnesses is likely to interfere with the 

smooth functioning of the trial process. 

 The fourth factor, bad faith or willfulness involved in the untimely disclosure, 

favors Plaintiffs because there is no evidence that they acted in bad faith or willfully 

failed to disclose the proposed subjects of testimony. The Court is mindful that in a case 

of this magnitude it is difficult to manage all of the moving parts, but also it is precisely 

for this reason that formal disclosures are even more important. 

 The Court concludes that exclusion of the subjects of testimony is the appropriate 

sanction for Plaintiffs’ failure to disclose as required under Rule 26(a) and 26(e). See Fed. 

R. Civ. P. 37(c)(1); cf. Quevado v. Trans-Pacific Shipping, Inc., 143 F.3d 1255, 1258 (9th 

Cir. 1998). 

V. Conclusion

 For the foregoing reasons, 

IT IS ORDERED that Plaintiffs’ witness Ishida may not testify at trial regarding 

proposed topic of testimony 2 (as listed in Doc. 669 at 103). 

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IT IS FURTHER ORDERED that Plaintiffs’ witness Kobuna may not testify at 

trial regarding proposed topics of testimony 2, 4, 6, and 7 (as listed in Doc. 669 at 104). 

IT IS FURTHER ORDERED that Plaintiffs’ witness Taniuchi may not testify at 

trial regarding proposed topic of testimony 2 (as listed in Doc. 669 at 102). 

IT IS FURTHER ORDERED that Plaintiffs’ witness Fujikawa may not testify at 

trial regarding proposed topics of testimony 2, 4, 6, and 7 (as listed in Doc. 669 at 105). 

 Dated this 11th day of July, 2014. 

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