Federal Insurance v. Al Qaida

Background

This memorandum decision concerns several related September 11, 2001 attack cases in a multidistrict proceeding. The plaintiffs sought to hold defendants, including Dubai Islamic Bank (DIB), liable for losses from the attacks. The plaintiffs’ Executive Committees identified Jonathan Winer as an expert witness. Winer submitted two reports and was deposed in July 2021, during the period of expert discovery.

In March 2022, the Central Intelligence Agency declassified documents that referred to DIB and its board members. On June 17, 2022, the plaintiffs served DIB with a third report from Winer, identified in the opinion as “Winer III,” discussing those documents and alleged ties between DIB and al Qaeda. The plaintiffs served the report after expert discovery had closed and did not seek permission to file an additional report.

DIB moved to strike Winer III as procedurally improper and untimely. Magistrate Judge Sarah Netburn granted that motion on March 6, 2023. The plaintiffs filed objections under Rule 72 of the Federal Rules of Civil Procedure, asking the district court to set aside the magistrate judge’s order.

Legal Standards

For a magistrate judge’s order on a nondispositive pretrial matter, a district judge may modify or set aside the order only if it is clearly erroneous or contrary to law. “Clearly erroneous” means that, after reviewing the evidence, the court has a definite and firm conviction that a mistake was made. An order is “contrary to law” if it fails to apply, or misapplies, relevant law or procedural rules.

Rule 26(e) requires a party to supplement an expert report or deposition when the party learns that the earlier material is materially incomplete or incorrect. Courts generally permit a supplemental report only when it stays within the scope of the initial report and relies on information previously unknown or unavailable to the expert. Rule 37(c)(1) provides for exclusion when a party fails to provide required information unless the failure was substantially justified or harmless.

Court’s Analysis

The court held that Magistrate Judge Netburn correctly found that Winer III was not a proper Rule 26(e) supplement. The report focused on the alleged relationship between al Qaeda and DIB, a subject not discussed in Winer’s earlier reports or at Winer’s deposition. The court therefore agreed that the report was outside the scope of the earlier work.

The court also held that Winer III did not correct or complete information in the earlier reports. Although the report relied heavily on newly released documents, the earlier reports did not mention DIB. The court characterized Winer III as a new opinion rather than a report supplementing or correcting the earlier theories.

The court further agreed that exclusion was justified under Rule 37(c)(1). The plaintiffs filed Winer III after discovery ended and did not seek leave to submit it, so the violation was not substantially justified. It also was not harmless because DIB could have sought additional documents and asked additional deposition questions had the report been disclosed earlier.

Applying the relevant factors, the court found that the plaintiffs had not shown a sufficient justification for violating the discovery schedule or failing to seek permission. It also found that the report was not critical enough to warrant further delaying summary judgment proceedings concerning personal jurisdiction, and that DIB faced prejudice from having to respond to the new testimony.

Disposition

Judge George B. Daniels overruled the plaintiffs’ Rule 72 objections and confirmed Magistrate Judge Netburn’s order striking Winer III from the record. The opinion states that the court had previously granted DIB’s renewed summary judgment motion for lack of personal jurisdiction, but that prior ruling was not the disposition challenged in this decision.