*1 Before the Court is Defendant's Motion to Exclude Specific Categories of Damages. (ECF No. 86). Plaintiff opposed and Defendant replied. (ECF Nos. 91, 92).

This case involves the alleged breach of an employment contract. The question before the Court is whether Plaintiff should be precluded from pursuing two areas of damages under Rule 37. These two areas are “wages, salary and compensation” and “value of equity owed to Plaintiff.”

The parties are familiar with the arguments. As a result, the Court does not repeat theme here. Instead, it will incorporate such arguments, as relevant, throughout the discussion below.

I. Analysis

Rule 26 requires parties to provide initial disclosures to the opposing parties without awaiting a discovery request. FED. R. CIV. P. 26(a)(1)(A). As part of its initial disclosures, a party must provide:

FED. R. CIV. P. 26(a)(1)(A)(iii). Rule 26’s disclosures requirement accelerates the exchange of information and assists the parties in focusing and prioritizing their organization of discovery. See R&R Sails, Inc. v. Ins. Co. of Penn., 673 F.3d 1240, 1246 (9th Cir. 2012).

Courts recognize that a “computation of damages may not need to be detailed early in the case before all relevant documents or evidence has been obtained by the plaintiff.” LT Game Int'l Ltd. v. Shuffle Master, Inc., No. 2:12-cv-01216-GMN, 2013 WL 321659, *6 (D. Nev. Jan. 28, 2013). But a party's initial disclosures should provide “the best information then available to it concerning that claim, however limited and potentially changing it may be.” MOORE'S FEDERAL PRACTICE, § 26.22 [4][c][i] (3d ed. 2016). The word “computation” contemplates some analysis beyond merely setting forth a lump sum amount for a claimed element of damages. City and County of San Francisco v. Tutor–Saliba Corporation, 218 F.R.D. 219, 221 (N.D. Cal. 2003).

Plaintiff's precise method of calculation need not be disclosed to the extent the method is disclosures properly the subject of expert testimony and the parties will be turning over expert evidence in the future. Frontline Medical Associates, Inc. v. Coventry Health Care, 263 F.R.D. 567, 569 (C.D. Cal. 2009). On the other hand, “[a] party is not excused from making its disclosures because it has not fully investigated the case.” FED. R. CIV. P. 26(a)(1)(E). Id. at 570. Future expert analysis does not relieve Plaintiff of his obligation to provide information reasonably available to him as to gross revenues, expenses and any other component of his lost profits computation. Id.

In addition, Rule 26(e)(1) requires a party making initial disclosures to supplement or correct those disclosures in a timely manner. FED. R. CIV. P. 26(e).

*2 When a defendant believes that a plaintiff has failed to timely comply with Rule 26’s disclosure requirements, that defendant may move for sanctions under Rule 37(c). FED. R. CIV. P. 37(c). Rule 37 “gives teeth” to Rule 26(e)’s disclosure requirements. Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001).

The party requesting discovery sanctions bears the initial burden of establishing that the opposing party failed to comply with the disclosure requirements. Silvgani v. Wal-Mart Stores, Inc., 320 F.R.D. 237, 241–42 (D. Nev. 2017). If the movant meets its burden, the court must then, using its discretion, determine whether the failure to comply with the initial disclosure requirements was either substantially justified or harmless. Id. Among the factors that may properly guide a district court in determining whether a violation of a discovery deadline is justified or harmless are: (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). The burden is on the party facing sanctions to show substantial justification or harmlessness. Id.

Even if the party facing sanctions fails to establish substantial justification or harmlessness, exclusion sanctions are not required. Jackson v. United Artists Theatre Circuit, Inc., 278 F.R.D. 586, 594 (D. Nev. 2011). Instead, Rule 37(c) permits the court to impose other sanctions in addition to or instead of exclusion sanctions, including payment of attorneys’ fees, informing the jury of the party's failure, and “other appropriate sanctions.” FED. R. CIV. P. 37(c)(1)(A)-(C).

There was no requirement to meet and confer

First, the Court addresses Plaintiff's argument that the motion is procedurally improper given the parties did not meet and confer.

The Ninth Circuit has made clear that Rule 37(c) does not contain a meet-and-confer requirement. Hoffman v. Construction Protective Services, Inc., 541 F.3d 1175, 1179 (9th Cir. 2008). In Hoffman, the Ninth Circuit noted that California's local rules required a meet and confer prior to filing motions relating to discovery. Id. It concluded, however, that motions for sanctions are not “motions relating to discovery.” Id. Nevada's Local Rules contain a meet-and-confer requirement analogous to California's. See LR 26-7(c). And like in Hoffman, Nevada's meet-and-confer requirement applies to “discovery motions”—not to motions for sanctions under Rule 37. Further, the Ninth Circuit has explained that if a local rule required a conference prior to filing a motion under Rule 37(c), it would be unenforceable. Hoffman, 541 F.3d at 1179. As a result, given that Defendant filed the underlying motion pursuant to Rule 37(c), no meet and confer was required.

Plaintiff failed to comply with Rule 26

Here, Defendant met its initial burden of establishing that Plaintiff failed to comply with Rule 26’s disclosure requirements.

The initial disclosures were provided on November 14, 2022, without a computation of damages or documents. ECF No. 86-1. The supplement provided on January 4, 2023 stated that the computation could not be completed at that time and further provided the damages included, in relevant part, “(a) wages, salary, or compensation in an amount in excess of $300,000, ... [and] (c) value of Mr. Turner's owed equity in Harvard MedTech.” Id.

*3 It is true, as Plaintiff argues, that the method of damages calculation need not be disclosed if it is the subject of expert testimony. Nevertheless, “[a] party is not excused from making its disclosures because it has not fully investigated the case.” FED. R. CIV. P. 26(a)(1)(E). Id. at 570. Coventry Health Care, 263 F.R.D. at 569. Moreover, the fact that a party may rely on future expert analysis “does not relieve Plaintiff of its obligation to provide information reasonably available to it as to gross revenues, expenses and any other component of its lost profits computation.” Id.

Here, the initial disclosures were completely devoid of any information regarding damages. And the supplemental disclosures hardly satisfy the rules.

First, Plaintiff should have a pretty good sense of what the promised salary was. At one point in his Second Amended Complaint, he states that his salary was adjusted “to $175,000 per year—less than market rate.” ECF No. 47 at 6. Thus, he should have a sense of what the original promised salary was. Stating that he should be compensated in an amount exceeding $300,000 is not sufficient. While the information regarding the methodology employed to arrive at a specific salary can wait until expert disclosures, Plaintiff should have provided more than it did (including any documents supporting his calculation). Moreover, the expert report appears to provide information about market rates, which is relevant to the damages calculation, but provides no concrete information as to Plaintiff's losses. Lastly, any W-2s received or W-9s prepared, together with any other documentation pertinent to lost compensation, should have accompanied the disclosure.

Next, the Court turns to the category of damages dealing with equity. According to Plaintiff, no documents accompanied the disclosure because Plaintiff does not have that documentation and has previously requested it from Defendant. But “[n]oncompliance with Rule 26 cannot be justified by the fact that the other side already had the information. That would eviscerate the rule[.]” Spin Master, Ltd. v. Zobmondo Entm't, LLC, No. 06-3459, 2011 WL 13127349, at *6-7 (C.D. Cal. Sept. 15, 2011) (citing cases), vacated on reconsideration in part, 2011 WL 13127211 (C.D. Cal. Oct. 13, 2011). While Plaintiff may not possess the actual documents, he needs to provide the actual amount claimed, it is his responsibility to provide some information regarding the damages he seeks.

Plaintiff's conduct is not substantially justified

Plaintiff has not met his burden of showing that his conduct was substantially justified. Indeed, he continues to argue he was not in violation of the rules given the expert's report and the fact that he lacks certain documentation with regard to the calculation of equity damages. But the caselaw, as stated above, is clear.

Plaintiff's conduct is harmless

Plaintiff produced the expert report in January of this year with figures regarding market rates for similar employment. Thus, it is not clear why Defendant would be surprised 10 months after the report was produced (or, if it was, why it did not move for sanctions sooner). While best practices would have included bringing this motion before the Court sooner, the reality is that—as things stand—Plaintiff's incomplete disclosures prejudice Defendant. Even if Defendant had retained an expert, it would not have been able to provide much information (other than Plaintiff's expert report), which is not enough. The prejudice suffered by Defendant can be cured by (1) a more fulsome damages disclosure and (2) an extension of deadlines, including expert disclosure deadlines.

*4 No trial date has been set and the Court finds no bad faith on the part of Plaintiff.

Balancing all of the factors above, and with remedial measures in place adopted by the Court, the Plaintiff's failure to comply with Rule 26 is harmless.[1]

Defendant's request for fees

Given the above, Defendant's request for fees is denied.

Plaintiff's request for sanctions under 28 U.S.C. § 1927

Given the above, sanctions under this statute are not appropriate.

II. Conclusion

IT IS ORDERED that Defendant's Motion to Exclude (ECF No. 86) is DENIED.

IT IS FURTHER ORDERED that Plaintiff shall have 30 days from the day of this Order to provide a more fulsome damages calculation as to both categories of damages.

IT IS FURTHER ORDERED that deadlines in this case are extended as follows: