Moua v. International Business Machines Corporation et al

Filing 260

ORDER denying 120 Defendants' motion to preclude Plaintiff's use of damages-related allegations, evidence and computations not disclosed before discovery cut-off. Signed by Judge Edward J. Davila on 2/25/2019. (ejdlc3S, COURT STAFF) (Filed on 2/25/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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MAY MOUA,

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ORDER DENYING DEFENDANTS’
MOTION TO PRECLUDE
PLAINTIFF’S USE OF DAMAGESRELATED ALLEGATIONS,
EVIDENCE AND COMPUTATIONS
NOT DISCLOSED BEFORE
DISCOVERY CUTOFF

Plaintiff,
v.

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INTERNATIONAL BUSINESS
MACHINES CORPORATION, et al.,

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United States District Court
Northern District of California

Case No. 5:10-cv-01070-EJD

Defendants.

Re: Dkt. No. 120

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Pursuant to Federal Rule of Civil Procedure 37(c) and Local Civil Rule 7-8, Defendants
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International Business Machines Corporation (“IBM”), Joseph Koenig, and Venkatasubramaniam
Iyer (collectively, “Defendants”) move to preclude Plaintiff May Moua (“Plaintiff”) from using at

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trial or in any court submission damages-related allegations, evidence, and computations not
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disclosed during the discovery period established by the court. Dkt. No. 120. Specifically,
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Defendants seek preclusion of Plaintiff’s alleged “Loss of IBM Stock Option Purchase” valued at
$100,553 and “Loss of Life Insurance premium contribution” of “approximately $2,207.85.” Id.
at 1. For the reasons set forth below, Defendants’ motion will be denied.

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I.

BACKGROUND

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Plaintiff initiated this suit in 2010 alleging that she was misclassified as exempt from
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overtime pay requirements under California law. Dkt. No. 45. Plaintiff also asserts claims for
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pregnancy discrimination, wrongful termination, interference with leave and retaliation. Id.
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Throughout the fact discovery period, Plaintiff provided computations for three categories of
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damages associated with her wrongful termination claims: back pay (calculated as approximately
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Case No.: 5:10-cv-01070-EJD
ORDER DENYING MOTION TO PRECLUDE
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$57,000), front pay (calculated as $20,906 per year), and lost employment benefits (calculated as

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$618).
During the discovery period, Plaintiff served Rule 26 initial disclosures and supplemental

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disclosures in which she consistently identified and calculated certain categories of damages,

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including “estimated value of lost employment benefits” in the amount of $618. Butler Decl., Exs.

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A-D. Plaintiff provided the same information in response to IBM’s interrogatories. Butler Decl.,

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Ex. F.
Approximately two months after the December 10, 2012 fact discovery cut-off, Plaintiff

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served her Fourth Supplemental Rule 26(a) disclosures and her second amended responses to

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IBM’s interrogatories which disclosed two new damages computations: loss of stock options

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United States District Court
Northern District of California

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valued at approximately $100,553.31 and loss of life insurance premium contributions of

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approximately $2,207.85. Butler Decl., Ex. E. On the same date, Plaintiff produced documents

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related to these new computations. These two categories of damages nearly double Plaintiff’s

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wrongful discharge damages claim.

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II.

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DISCUSSION
Rule 26(a) of the Federal Rules of Civil Procedure requires a party seeking damages to

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provide a copy or description of documents the party may use to support its claims; to provide a

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computation of damages; and to make documents supporting its claimed damages available for

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inspection and copying. Fed. R. Civ. P. 26(a)(1)(A)(ii)-(iii). Rule 26(e)(1)(A) requires a

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disclosing party to supplement a prior disclosure and a prior interrogatory response “in a timely

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manner” when they are “incomplete or incorrect.” Fed. R. Civ. P. 26(e)(1)(A). Rule 37 provides

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that “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e),

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the party is not allowed to use that information ... at a trial, unless the failure was substantially

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justified or is harmless.” Fed. R. Civ. P. 37(c)(1). The party facing sanctions bears the burden of

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proving that its failure to disclose the required information was substantially justified or is

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harmless.” R&R Sails, Inc. v. Ins. Co. of Penn., 673 F.3d 1240, 1246 (9th Cir. 2012). In

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determining whether the failure to provide timely disclosures was substantially justified, courts in

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Case No.: 5:10-cv-01070-EJD
ORDER DENYING MOTION TO PRECLUDE
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the Northern District of California weigh five factors: (1) the surprise to the party against whom

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the information would be offered; (2) the ability of that party to cure the surprise; (3) the extent to

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which allowing the information would disrupt the trial; (4) the importance of the information; and

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(5) the nondisclosing party’s explanation for it[s] failure to disclose the evidence.” Bookhamer v.

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Sunbeam Prods., Inc., 2012 WL 5269677, at *3 (N.D. Cal. Oct. 23, 2012). “[I]n the ordinary case,

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violations of Rule 26 may warrant evidence preclusion.” R&R Sails, 673 F.3d at 1247. If the

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sanction of evidence preclusion amounts to dismissal of a claim, however, the court must consider

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“whether the claimed noncompliance involved willfulness, fault, or bad faith” and the availability

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of lesser sanctions. Id.
Here, three of the five factors weigh in favor of Defendants. Plaintiff’s belatedly disclosed

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United States District Court
Northern District of California

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damages calculation and evidence were a surprise to IBM. Prior to the discovery cut-off, Plaintiff

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consistently and repeatedly represented in disclosures and responses to interrogatories that her lost

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employments benefits totaled $618.00. The belated disclosure of over $100,000 of additional

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employment benefit damages represents an astounding 16,000% increase. Second, there can be no

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doubt that Plaintiff’s damages calculation and evidence are important. Third, Plaintiff’s proffered

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justification for her failure to disclose the alleged loss of stock options and loss of life insurance

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premium contributions is unpersuasive. Plaintiff explains that she testified about stock options

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and life insurance contributions at her October 25, 2012 deposition, and again at her continued

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deposition on February 4, 2013. Plaintiff contends that Defendants were therefore placed on

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notice of these additional items of damages and chose not to pursue further deposition testimony

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or discovery. But, under the circumstances presented here, the Federal Rules clearly place the

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disclosure and discovery obligations on Plaintiff, not Defendants. Fed. R. Civ. P. 26(a).

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Moreover, Plaintiff’s deposition testimony is no substitute for a full computation of damages and

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supporting documentation, which Defendants were entitled to before the discovery cut-off.

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The remaining two factors, however, weigh in favor of Plaintiff. The court appreciates

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Defendants’ concern that allowing Plaintiff to use the belatedly disclosed and produced damages

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evidence may necessitate “the need to conduct additional investigation, produce additional

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Case No.: 5:10-cv-01070-EJD
ORDER DENYING MOTION TO PRECLUDE
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documents, identify new witnesses (including expert witnesses on stock options damages), as well

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as re-open Plaintiff’s deposition to examine her about these alleged damages, the new documents

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she produced, and her new computation, all before possibly filing a new dispositive motion as to

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these damages allegations.” Dkt. No. 144 at 3-4. However, a trial date has not been set. Therefore,

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there is time to rectify Plaintiff’s belated disclosures without any disruption of the trial. On

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balance, the court finds that preclusion is unwarranted despite Plaintiff’s clear violation of her

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discovery obligations.

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III.

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ORDER
For the reasons set forth above, Defendants’ motion is DENIED. The parties shall meet

and confer to establish a discovery plan that will enable Defendants to pursue follow-up discovery

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United States District Court
Northern District of California

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necessitated by Plaintiff’s belated disclosure of damages-related allegations, evidence and

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computations. Any disputes regarding Defendants’ proposed follow-up discovery are referred to

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the magistrate judge. All follow-up discovery shall be completed no later than 45 days after the

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court issues a ruling on the submitted summary judgment motions (Dkt. Nos. 136, 137). The court

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anticipates issuing a ruling on the summary judgment motions by March 29, 2019.

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IT IS SO ORDERED.
Dated: February 25, 2019
______________________________________
EDWARD J. DAVILA
United States District Judge

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Case No.: 5:10-cv-01070-EJD
ORDER DENYING MOTION TO PRECLUDE
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