Opinion
No. 04 Civ. 8803 (RMB) (THK).
February 18, 2005
MEMORANDUM OPINION AND ORDER
This action was referred to this Court for general pretrial supervision, pursuant to 28 U.S.C. § 636(b)(1)(A). Presently before the Court is Defendants' motion to strike or exclude from evidence an October 22, 2002 affidavit, sworn to by Defendant Brian Gerber. For the following reasons, the motion is denied.
Defendants' have also filed a motion to disqualify Plaintiff's counsel, which will be addressed in a separate opinion.
BACKGROUND
Plaintiff AIG Global Asset Management Holdings Corp. ("AIG Global") brought this action seeking a declaration of the parties' rights under an Acquisition Agreement dated April 19, 1999 ("the Acquisition Agreement"). The Acquisition Agreement provided for AIG Global's acquisition of an approximately 80% interest in a Texas-based investment advisory business ("Old JMIC"), that is now a Delaware limited partnership known as Brazos Capital Management, L.P. ("Brazos"). Defendants are all former employees of Old JMIC and Brazos, and they are currently limited partners of Brazos, who collectively own approximately seven percent of the company. Defendants are also parties to the Acquisition Agreement and have claimed a right thereunder to require AIG Global to purchase their Brazos interests. AIG Global denies that it has any obligation to purchase Defendants' Brazos interests and filed this action to obtain a declaration of its obligation under the Acquisition Agreement.
This description is derived from Plaintiff's submission to the Court. (See Letter from Michael B. Carlinsky, Esq., dated Feb. 14, 2005 ("Carlinsky Ltr."), at 1.)
DISCUSSION
A motion to dismiss is pending before the Court (Berman, J.), which is based in part on Defendants' claim that they are not subject to the personal jurisdiction of this Court. The motion was filed on January 28, 2005. On February 4, 2005, Plaintiff filed its opposition to the motion, which included an affidavit by one of the Defendants, Brian Gerber, that was filed in an earlier proceeding ("the Gerber Affidavit"), and which, Plaintiff contends, directly contradicts the affidavit Gerber submitted in this action in support of his motion to dismiss. Defendants argue that the Gerber Affidavit should be stricken because it was not produced with Plaintiff's initial disclosures, pursuant to Federal Rule of Civil Procedure 26(a)(1). Plaintiff contends that it fully complied with the requirements of Rule 26(a)(1) and, in any event, any failure to comply was harmless.Rule 37(c)(1), Fed.R.Civ.P., provides in relevant part:
A party that without substantial justification fails to disclose information required by Rule 26(a) . . ., or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed.
"Despite the self-executing nature of Rule 37(c)(1)'s sanction, courts in this circuit have recognized that the imposition of sanctions under Rule 37(c)(1) is a matter within the trial court's discretion."Jockey Int'l, Inc. v. M/V "Leverkusen Express", 217 F. Supp. 2d 447, 452 (S.D.N.Y. 2002) (quoting Ward v. Nat'l Geographic Soc'y, No. 99 Civ. 12385 (LAK), 2002 WL 27777, at *2 (S.D.N.Y. Jan. 11, 2002) (internal quotation marks omitted).
"Substantial justification" for the failure to produce a document may be demonstrated if there is "justification to a degree that could satisfy a reasonable person that parties could differ as to whether the party was required to comply with the disclosure request," or "if there exists a genuine dispute concerning compliance." Jockey Int'l, Inc. v. M/V "Leverkusen Express", 217 F. Supp. 2d 447, 452 (S.D.N.Y. 2002) (internal quotation marks and citations omitted).
In the instant case, the failure to produce the Gerber Affidavit was both substantially justified and harmless. As Plaintiff correctly notes, Rule 26(a)(1) does not require a party to produce each document it intends to rely on during the course of the litigation. Rather, a party may either produce "a copy of, or a description by category and location of, all documents . . . [it] may use to support its claims or defenses." Fed.R.Civ.P. 26(a)(1)(B) (emphasis added). Plaintiff stated in its Rule 26 initial disclosure that it intended to rely on, inter alia, "documents relating to the negotiation, drafting, and interpretation of the Acquisition Agreement." (Carlinsky Ltr. at 4) (quoting Plaintiff's Rule 26(a)(1) Disclosures ¶ B.) The Gerber Affidavit fits within that description, as it relates to Defendant Gerber's involvement and representation in the negotiation of the Acquisition Agreement, as well as the discussions and negotiations that resulted in the Acquisition Agreement.
Similarly, Defendants stated in their Rule 26 Initial Disclosure that they intended to rely on documents "relating to the Acquisition Agreement." (Defendants' Initial Disclosures ¶ B).
In any event, the failure to produce the document was harmless. Rule 26(e) contemplates the amendment and supplementation of Rule 26(a) disclosures. The Gerber Affidavit was served on Defendants only four days after the date on which Plaintiff's Rule 26 Disclosures were provided to Defendants. Defendants filed their motion to dismiss on January 28th, which was three days before Plaintiff's Rule 26 Disclosures were due. Thus, contrary to Defendants' contention, even if the affidavit had been produced with Plaintiff's Rule 26 Disclosures, it would not have affected how Defendants approached the issue of personal jurisdiction in their motion to dismiss. Defendants have thus failed to demonstrate any perceptible prejudice resulting from the four-day delay in their receipt of the affidavit.
For the foregoing reasons, Defendants' motion to strike the Gerber Affidavit is denied.
SO ORDERED.