LD v. United Behavioral Health

Background

This order addressed only the plaintiffs’ request for sanctions against the United Defendants. The court said that the remaining issues concerning Defendant MultiPlan would be addressed separately.

The plaintiffs sought to prevent United from using 21,812 documents, 104 audio records, and an Excel spreadsheet listing 2,021 newly disclosed class-member claims. The plaintiffs argued that United produced these materials after the July 15, 2022 fact-discovery deadline, shortly before the deadline for the plaintiffs’ class-certification motion. They said the late production deprived them of a fair opportunity to review the materials and question witnesses about them in depositions. United argued that the productions merely supplemented earlier disclosures, were substantially justified, and did not prejudice the plaintiffs.

Rule 37 standard

Federal Rule of Civil Procedure 37(c)(1) generally prevents a party from using information or a witness that it failed to disclose as required by Rule 26, unless the failure was substantially justified or harmless. The party seeking sanctions first must show a disclosure failure; the opposing party then bears the burden of showing substantial justification or harmlessness.

The court also explained that Rule 26(e) requires a party to supplement an incomplete or incorrect disclosure in a timely manner. The duty to supplement can continue after the discovery cutoff, but only when the material is responsive to a discovery request and the supplementation is timely.

Court’s analysis

The court found that United had not shown that its late productions were substantially justified. For the Excel spreadsheet containing 2,021 claims, United did not identify the specific discovery request being supplemented, explain when it learned the information was responsive, or show that circumstances beyond its control caused the delay. The court therefore found the August 9, 2022 production untimely and unjustified.

As to audio recordings for the plaintiffs’ sample, the court found that the plaintiffs had attempted in good faith to provide information that United requested to locate the recordings. The court concluded that United’s failure to locate the recordings before the deadline resulted from its lack of diligence, rather than circumstances outside its control.

The court also found that plan documents and administrative records for the plaintiffs’ sample were produced several days to a week after the deadline even though United had about ten weeks to collect them. United provided no explanation for failing to produce them on time. The court reached a similar conclusion concerning materials related to United’s own sample, finding that United did not explain why it could not disclose the sample members or complete the related production before the discovery cutoff.

The court further found that the late production was not harmless. The plaintiffs had insufficient time to review the large volume of new material, use it in depositions, or address it in their class-certification motion. The court found the prejudice especially significant because United said it intended to rely on the late-produced materials in opposing class certification.

In deciding whether to impose evidence-preclusion sanctions, the court considered the need for an efficient resolution, management of its schedule, prejudice to the plaintiffs, the policy favoring decisions on the merits, and whether a less severe sanction would work. The court found that the first three factors supported preclusion and that the policy favoring decisions on the merits was outweighed by the other considerations. It also found that United’s conduct was intentional and, in some respects, not in good faith, including its late disclosure of its own sample and its descriptions of some productions as smaller or less significant than they were.

Ruling

The court granted the plaintiffs’ request to preclude United under Rule 37 from relying on materials produced after the July 15, 2022 discovery cutoff. Those materials were precluded from use in the case for all purposes. The court found that less severe sanctions would not adequately address the prejudice without disrupting the case schedule and rewarding what it described as United’s gamesmanship.

The order stated that if the district judge later ordered non-expert discovery reopened, the parties should meet and confer about whether the preclusion sanctions should be modified. If they could not agree, either party could seek reconsideration from Chief Magistrate Judge Joseph C. Spero.