Opinion ID: 78179
Heading Depth: 1
Heading Rank: 3

Heading: sanctions rulings

Text: Fitel's appeal challenges these rulings on EBG's discovery motions: (1) the district court's exclusion of Fitel's expert as a sanction for its untimely production of Rafuse's written expert report; and (2) the court's striking of Fitel's claim for attorney's fees as a sanction for its refusal to produce copies of its attorney's fee agreement and attorneys' bills. Our review of a district court's decision to impose sanctions under Rule 37 is sharply limited to a search for an abuse of discretion and a determination that the findings of the trial court are fully supported by the record. Serra Chevrolet, Inc. v. Gen. Motors Corp., 446 F.3d 1137, 1146-47 (11th Cir.2006) (quotation marks and citations omitted); BankAtlantic v. Blythe Eastman Paine Webber, Inc., 12 F.3d 1045, 1048 (11th Cir.1994); Pesaplastic, C.A. v. Cincinnati Milacron Co., 799 F.2d 1510, 1519 (11th Cir.1986). We discuss each in turn.
The district court excluded Fitel's legal expert because it found (1) Fitel violated Federal Rule of Civil Procedure 26(a)(2) and Local Rule 26.2(C) by failing to provide its expert witness report until three days after the expiration of the discovery period, and (2) Fitel had engaged in willful delay in producing the report, which the court described as stonewalling. Fitel argues the district court abused its discretion in excluding its expert because Fitel timely produced its expert's affidavit, the affidavit complied fundamentally with the discovery rules, the rules do not require its expert's report to be produced before the close of discovery, and, in any event, the record establishes that any delay as to the report was substantially justified. We start with Rule 26(a)(2), which requires a party to disclose to the other parties the identity of any expert witness it may use at trial to present evidence and [e]xcept as otherwise stipulated or directed by the court, this disclosure shall ... be accompanied by a written report prepared and signed by the witness. Fed.R.Civ.P. 26(a)(2). Thus, `[d]isclosure of expert testimony' within the meaning of [Rule 26] contemplates not only the identification of the expert, but also the provision of [the expert's] written report. Reese v. Herbert, 527 F.3d 1253, 1265 (11th Cir.2008); see Prieto v. Malgor, 361 F.3d 1313, 1317-18 (11th Cir.2004). The expert's written report must contain: a complete statement of all opinions to be expressed and the basis and reasons therefor; the data or other information considered by the witness in forming the opinions; any exhibits to be used as a summary of or support for the opinions; the qualifications of the witness, including a list of all publications authored by the witness within the preceding ten years; the compensation to be paid for the study and testimony; and a listing of any other cases in which the witness has testified as an expert at trial or by deposition within the preceding four years. Fed.R.Civ.P. 26(a)(2)(B). Here, it is undisputed that Fitel's complaint identified its expert and on November 3, 2006 Fitel produced a written report that contained all of the information required by Rule 26(a)(2)(B). Rather, the dispute here concerns only the timing of the disclosure of the expert's report. Rule 26(a)(2)(C) provides that, absent a stipulation or court order, the expert report must be disclosed at least 90 days before the trial date or the date the case is to be ready for trial. In this case, however, no date had been set for the trial or for the case to be ready for trial. [14] Nonetheless, the heart of EBG's argument is that Local Rule 26.2(C), when read with Federal Rule 26(b)(4)(A), requires disclosure of Fitel's expert report before the close of discovery so that the expert can be deposed within the discovery period. In Reese, this Court recently examined the same Local Rule and the timing of the disclosure of an expert's report when a trial date had not yet been set. [15] The Reese Court first stated that Rule 26 does not prescribe a specific deadline applicable for disclosure of the expert's written report because a trial date had not been set. Id. at 1265. The Court in Reese then read Local Rule 26.2(C)'s requirements, along with Rule 26(b)(4)(A)'s deposition prerequisite, and determined that both the expert's name and report should be disclosed before the close of discovery. Id. Here is how Reese reached that conclusion. The Reese Court first stressed that Rule 26's expert disclosure rule is intended to provide opposing parties reasonable opportunity to prepare for effective cross examination and perhaps arrange for expert testimony from other witnesses. Reese, 527 F.3d at 1265 (quotation marks omitted). The Reese Court then noted that in accordance with this purpose, Local Rule 26.2(C) requires that a party shall designate its expert sufficiently early in the discovery period: (1) to permit the opposing party the opportunity to depose the expert; and (2) if desired, to name its own expert so that the second expert could also be deposed prior to the close of discovery. Id. (quoting Local Rule 26.2(C)). [16] While Local Rule 26.2(C) does not reference the expert's written report, it does require the expert be deposed prior to the close of discovery. The Reese Court pointed out that Rule 26(b)(4)(A) does not permit an expert to be deposed until after her report is provided to the opposing party. Id. The syllogism in Reese appears to be: (1) the expert must be deposed before the close of discovery (Local Rule 26.2(C)), (2) the report must come before the expert's deposition (Rule 26(b)(4)(A)), and (3) therefore the expert's report necessarily must come before the close of discovery. In Reese, this Court concluded that plaintiff's filing of his expert affidavit seven weeks after the close of discovery and in response to defendants' summary judgment motion violated Rule 26 and Local Rule 26.2(C) because disclosure of the expert's report was not before the close of discovery, much less sufficiently in advance of the close of discovery to furnish defendants an opportunity to depose that expert and obtain a rebuttal expert during the discovery period. Id. Here, Fitel did not produce Rafuse's written report until after the close of discovery. Thus, Fitel's disclosure of Rafuse's written report after the close of discovery ran afoul of Rule 26 and Local Rule 26.2(C), as interpreted in Reese. [17] Fitel argues its inclusion of Rafuse's expert affidavit in its complaint was enough to comply with Rule 26 and Local Rule 26.2(C). We disagree. Rule 26 mandates that an expert's written report contain specific informationsuch as the expert's compensation for study and testimony, a list of all publications the expert authored in the preceding ten years, and a list of all cases in which the expert testified at trial or by deposition in the preceding four years. Fed.R.Civ.P. 26(a)(2)(B). All of this information is wholly absent from Rafuse's affidavit. This type of information is required in the expert's written report precisely because it is important information necessary to attorneys in preparation for deposing the expert. Moreover, the affidavit does little more than assume the complaint's facts are true and, on that basis, opines generally that EBG departed from the professional standard of care by not advising Fitel that its suggested approach to the double dip issue might violate the ADEA. The affidavit provides no meaningful analysis of how and why EBG's actions breached the standard of care. The written report Fitel ultimately produced, on the other hand, provides the level of detailed analysis that the expert disclosure rule requires. It simply came too late. Alternatively, Fitel argues it could not produce a meaningful legal expert report without first taking the depositions of the EBG attorneys who had represented Fitel regarding its no double dipping policy and then reviewing those transcripts. Fitel contends it was justified in not producing the report until after those EBG depositions and it repeatedly advised EBG that EBG's rescheduling the depositions would delay Fitel's report. As discussed later, this argument, along with other undisputed facts in this record, provide substantial justification for Fitel's conduct but they do not negate the fact that the timing requirement in the rules was violated. [18] As this Court noted in Reese, compliance with the requirements of Rule 26 is not merely aspirational. Reese, 527 F.3d at 1266. Nevertheless, determining that Fitel violated Rule 26 and Local Rule 26.2(C), as interpreted in Reese, comprises only half the inquiry. We still must consider whether the sanction imposed by the district court was within its discretion. Here, the district court excluded Rafuse's expert testimony. Under Rule 37(c)(1), a district court clearly has authority to exclude an expert's testimony where a party has failed to comply with Rule 26(a) unless the failure is substantially justified or is harmless. See Rule 37(c)(1); Local Rule 26.2(C). [19] The district court's sanction was based on its finding that Fitel had engaged in willful delay in producing Rafuse's written expert report, which the court characterized as stonewalling. While the district court did not use the term substantially justified, the court's finding that Fitel's delay was willful and stonewalling is effectively a finding of no such substantial justification. Fitel argues the undisputed facts in the record do not support the willfulness/stonewalling finding, but establish only substantial justification. We agree and explain why. First, this is not a case of complete failure to provide information about an expert witness. Fitel identified Rafuse as its expert when it filed its complaint, confirmed that designation in its post-removal initial disclosures, and filed an affidavit of Rafuse with at least some information about her opinions. Second, Fitel repeatedly told EBG it needed the EBG attorney depositions before Rafuse could do her report. As early as June 2006, well before the end of the discovery period, Fitel's counsel informed EBG that Rafuse's report needed to take into account the deposition testimony of the EBG attorneys whose depositions the parties were scheduling and that Fitel believe[d] her report can be completed within thirty ... days of the completion of these four depositions. See June 12, 2006 letter from Fitel's counsel to EBG's counsel. Moreover, Fitel, also in May 2006, noticed the depositions of the EBG attorneys for late June, affording EBG over four weeks of advance notice. If these EBG depositions had occurred as scheduled in late June, Fitel's Rafuse report would have been timely produced in mid- to late-July. We know that because once Fitel had those four EBG depositions, it produced Rafuse's report in eighteen days. Rather than those EBG depositions taking place in June, Fitel's counsel cooperated with EBG's counsel to schedule those depositions at the attorneys' convenience, and those depositions were not completed until September 27, 2006. Indeed, Fitel reiterated its position after scheduling difficulties arose with regard to the EBG attorney depositions, expressly reminding EBG's counsel in a July 11, 2006 letter that we will need approximately thirty... days after the completion of the EBG lawyer depositions to finalize our expert report and that if those depositions could not be scheduled until mid-September, you should not expect our expert report until mid-October. [20] Once Fitel obtained the transcript of the final EBG attorney deposition, it promptly produced the expert report, which the parties agree complies with Rule 26(a)(2)(B). Third, it is noteworthy that in June 2006, EBG itself moved for an extension of discovery from August 13, 2006 until December 13, 2006 and even noted that it was needed in part because Fitel informed [EBG] that no expert report will be prepared... until approximately thirty days after [Fitel] deposes certain attorneys employed by EBG, and that [o]nce such an expert report is furnished to it, [EBG] will want [time] to depose said expert and evaluate the necessity of identifying an expert to testify in response thereto. EBG well knew Fitel's report would come only after the EBG depositions. There was no element of surprise to EBG about when the expert report was going to be provided. Fourth and most importantly, no trial date for the case had been set or was imminent. Fitel produced Rafuse's expert report on November 3, 2006, and EBG had ample time to take Rafuse's deposition in November 2006 and designate its rebuttal expert. [21] There is no claim here that the passage of time affected EBG's ability to employ a rebuttal legal expert or the ability of its expert to conduct needed analysis. Fifth, this is not a case where the plaintiff knew all the facts anyway; rather, Fitel reasonably needed the depositions of the defendant EBG's attorneys before it produced its legal expert's report. Here, the issue involves not so much Fitel's interaction with EBG, which Fitel would have known at the outset of the case, but what actions, investigation, and research occurred within the confines of the law firm before EBG gave its advice, or allegedly failed to give any ADEA advice that forms the crux of the case. Certainly, Fitel knew what advice the EBG attorneys gave to it and what the no double dipping policy said, but the attorneys' depositions were required to show what the EBG attorneys did, and knew, before rendering that advice or failing to render it, as Fitel alleges. [22] In sum, the undisputed facts in the record reveal that Fitel failed to produce its legal expert's report not through willful delay or stonewalling, but from: (1) a good-faith attempt to accommodate the EBG attorneys in scheduling their depositions over several months (with the last one occurring on September 27, 2006, shortly before the end of discovery), rather than Fitel's insisting on taking all the EBG attorneys' depositions on the noticed, fixed dates in June 2006; and (2) a good-faith belief that the more practical[ ] and productive way to structure discovery in this legal negligence case was to identify its legal expert, engage in all relevant fact discovery of the EBG attorneys, and then to produce the expert's written report and to engage in expert discovery. Further, this approach was reasonable given the nature of the case and the actual need for those attorney depositions in order to have a meaningful legal expert report. Simply put, given all these particular factual circumstances in this case, we cannot say the record supports the district court's finding that Fitel engaged in willful or stonewalling delay as to the written report of its expert. Instead, we conclude that the undisputed facts show Fitel had substantial justification for its conduct as to its expert report, that the record does not support the district court's willful-delay determination as to that report, and thus the district court abused its discretion in excluding Rafuse's expert testimony. Therefore, we reverse the district court's exclusion of Fitel's expert and subsequent dismissal of Fitel's entire complaint with prejudice and remand for further proceedings.
Fitel also challenges the district court's decision to dismiss Fitel's attorney's fees claim as a sanction for Fitel's failing to produce its attorney's fee agreement and attorneys' bills incurred in the instant case. The district court found that there was a complete and willful failure by Fitel to provide EBG with the required documents given that Fitel expressly sought to recover its attorney's fees incurred in this case. The district court imposed the sanction pursuant to Rule 37(d) and 37(b)(2)(C). Rule 37(d) states that if a party fails ... to serve a written response to a request for inspection submitted under Rule 34, after proper service of the request, the court in which the action is pending on motion may make such orders in regard to the failure as are just, and among others it may take any action authorized under subparagraphs (A), (B), and (C) of subdivision (b)(2) of this rule. Fed.R.Civ.P. 37(d). In turn, Rule 37(b)(2)(C) lists dismissal as a permitted sanction, stating that the court may issue [a]n order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default .... Fed.R.Civ.P. 37(b)(2)(C) (emphasis added). Thus, these rules permit dismissal as a sanction for failure to produce documents. Construing these same rules, this Court concluded, where appropriate, a court is authorized to strike pleadings, stay proceedings, dismiss the action or any part thereof, or render a judgment by default against a disobedient party. United States v. Certain Real Prop. Located at Route 1, Bryant, Ala., 126 F.3d 1314, 1317 (11th Cir.1997). [23] However, we also indicated that a district court may impose the severe sanction of dismissal of a claim with prejudice only where the party's non-compliance is willful or in bad faith. Id. at 1317-18. [24] As to Fitel's attorney agreement and attorney's bills, there is record evidence to support the district court's finding of a complete and willful failure to comply with EBG's discovery requests. The documents responsive to EBG's Document Request were directly relevant to Fitel's claim for attorney fees. In its answer to the Document Request, Fitel first agreed to produce the responsive documents (redacted to protect privilege), as follows: [Fitel] objects to Request Number 32 to the extent that it improperly seeks privileged communications between [Fitel] and its counsel. [Fitel] further objects to Request Number 32 to the extent that it seeks information that is not relevant to any claim or defense asserted in the action. Subject to and without waiving the foregoing objection and the General Objections above, [Fitel] will produce documents responsive to Request Number 32 that reflect the amounts of attorneys fees billed to and paid by [Fitel] in this action (redacted, if necessary, to protect privileged information). Nevertheless, despite repeated entreaties, Fitel produced nothing at all. Instead, Fitel (1) decided unilaterally that a summary of its counsel's billsrather than the documents EBG requested and Fitel stated it would provide with redactionswould be sufficient, and then (2) told EBG that even the summary would not be produced until EBG agreed not to challenge the sufficiency of Fitel's production. At the time of the motions hearing and court's sanctions ruling, Fitel still had produced nothing at all, not even the summary or the underlying agreement. The district court also found that Fitel's conduct evinced a strategy by Fitel and/or its counsel of we're going to make the judge order us to produce the attorney's fees documents. [25] In sum, Fitel's conduct as to its attorney's fee agreement and the attorney bills is starkly different from its cooperative conduct as to Rafuse's written expert report. Further, while we may have chosen a different sanction (such as awarding EBG its costs in filing its motion to compel), the district court's choice of sanctiondismissal of the attorney's fee claimwas within its range of options under Rule 37(d) and 37(b)(2)(C) given its finding of a complete and willful failure to comply with EBG's Discovery Request. Thus, we cannot say the district court abused its discretion in its dismissal of Fitel's attorney's fees claim pursuant to Rule 37(d) and 37(b)(2)(C).