LD v. United Behavioral Health

Background

The plaintiffs sought sanctions under Rule 37 of the Federal Rules of Civil Procedure against the United Defendants. They asked the court to prohibit United from using 21,812 documents, 104 audio records, and an Excel spreadsheet listing 2,021 newly disclosed claims. United produced these materials after the July 15, 2022 fact-discovery deadline and shortly before the plaintiffs’ deadline to file a motion for class certification.

The disputed materials involved claims data, administrative and plan records, audio recordings of verification-of-benefits calls, and materials concerning both the plaintiffs’ sample of class members and a sample created by United. United argued that the productions were supplements to earlier discovery responses, that delays were caused by difficulties locating the materials, and that the plaintiffs were not prejudiced.

Court’s analysis

Rule 37(c)(1) generally prevents a party from using information that it was required to disclose under Rule 26 but did not disclose on time, unless the failure was substantially justified or harmless. The court explained that United had the burden to show substantial justification or harmlessness after the plaintiffs established that the materials were produced after the discovery deadline.

The court found that United did not show that the late productions were substantially justified. As to the spreadsheet containing 2,021 claims, United did not identify the specific discovery request being supplemented, explain when it learned the information was responsive, or provide evidence that circumstances outside its control caused the delay. As to the audio recordings for the plaintiffs’ sample, the court found that the plaintiffs had attempted in good faith to provide information needed to locate the recordings and that United had not shown that the delay resulted from circumstances beyond its control. The court attributed the delay to United’s lack of diligence. The court likewise found no adequate explanation for the late production of plan documents and administrative records or for the late production of materials related to United’s sample.

The court also found the late production was not harmless. The plaintiffs had insufficient time to review the voluminous materials, question United’s witnesses about them, or challenge them before the class-certification deadline. The court found the prejudice especially significant because United intended to rely on the late-produced materials in opposing class certification.

Sanction and disposition

The court considered whether a sanction less severe than exclusion would address the prejudice. It concluded that allowing additional review, depositions, or changes to the class-certification schedule would derail the schedule and would not provide a meaningful remedy. The court also found that United’s conduct was intentional and, in some respects, not in good faith, including its late disclosure of the members of United’s sample.

The court granted the plaintiffs’ request and precluded United under Rule 37 from relying on materials produced after the July 15, 2022 discovery cut-off. Those materials were precluded from use in the case for all purposes. The order stated that if a district judge later reopened non-expert discovery, the parties should meet and confer about whether the preclusion sanction should be changed; the order separately stated that the issues concerning MultiPlan would be addressed later.