ORDER Re: Defendants' Motion in Limine to Prohibit New Damages Claim [119]

RONALD S.W. LEW, Senior District Judge.

Before the Court is Defendants Time Warner Cable, LLC and Time Warner NY Cable, LLC's (collectively "Defendants") Motion in Limine to Prohibit New Damages Claim [119]. The Motion was set for hearing for June 6, 2012, and taken under submission on June 5, 2012. After considering all of the papers and arguments submitted on this matter, THE COURT NOW FINDS AND RULES AS FOLLOWS:

The Court hereby DENIES Defendants' Motion in Limine to Prohibit New Damages Claim. In their Motion, Defendants argue that the Court should preclude Plaintiff from asserting its "cost of funds" damages claim at trial. The Court, however, denies Defendants' request.

Federal Rule of Civil Procedure 37(c)(1) "forbid[s] the use at trial of any information required to be disclosed by Rule 26(a) that is not properly disclosed." Hoffman v. Constr. Protective Servs., Inc., 541 F.3d 1175, 1179 (9th Cir. 2008) (citing Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir.2001)). Furthermore,"if a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." Fed. R. Civ. Pro. 37(c)(1). The party facing sanctions, however, bears the burden of proving that its failure to disclose the required information was substantially justified or harmless. Torres v. City of L.A., 548 F.3d 1197, 1213 (9th Cir. 2008).

In their Motion, Defendants state that during discovery, Plaintiff provided no indication to Defendants that Plaintiff was seeking any "cost of funds" damages, which are damages related to interest Plaintiff paid on its sources of funds to operate its business. Defendants contend that Plaintiff waited to disclose its plan on pursuing these damages in its "Supplemental Initial Disclosures," which were filed one month after the close of discovery. Defendants argue that not only was this "cost of funds" category of damages not identified in initial disclosures, but it was not identified in any responses to Defendants' interrogatories. As such, Defendants argue that Plaintiff's failure to identify this alleged category of damages precludes Plaintiff from now relying on that information during trial.

The Court, however, finds Defendants' arguments unconvincing. Defendants have requested that the Court preclude Plaintiff from asserting an entire category of damages. As such, because the requested sanction involves the dismissal of an entire category of damages, the Court is "required to consider whether the claimed noncompliance involved willfulness, fault, or bad faith." R&R Sails, Inc. v. Insurance, co. of Pennsylvania, 673 F.3d 1240, 1247 (9th Cir. 2012) (holding that the district court was required to make an inquiry into willfulness, fault, or bad faith if the sanction amounted to the dismissal of a claim). If the Court cannot find "willfulness, fault, or bad faith," then the Court must deny the requested sanction. Id.

Here, the Court finds that the circumstances surrounding discovery do not affirmatively indicate that Plaintiff acted in bad faith. A month and a half before the close of discovery, Plaintiff disclosed its Consolidated Financial Statements that included detailed information regarding Plaintiff's "cost of funds." Although Defendants did not send a demand letter to Plaintiff to update its initial disclosures until a day after fact-discovery was completed, Plaintiff, nevertheless, updated its initial disclosures, as Defendants requested, to include the "cost of funds" damages claim. As these facts indicate, it appears that Plaintiff attempted to work with Defendants in providing sufficient information regarding the "cost of funds" claim. The Court finds that Plaintiff's conduct is not consistent with an attitude of "willfulness, fault, or bad faith."

Moreover, the Court finds that Plaintiff has met its burden to show that any perceived discovery violation was harmless. Torres, 548 F.3d at 1213 (party facing sanctions bears the burden of showing that their discovery violation was harmless). Here, although Plaintiff did not fully disclose the "cost of funds" until after the deadline for fact-discovery, Defendants, nevertheless, were able to elicit deposition testimony regarding the Cost of Funds from Plaintiff's 30(b)(6) witness, Diana Dodge. Moreover, Defendants' expert fully accounted for the "cost of funds" damages in his expert report and admitted that he had available to him all necessary financial information related to the "cost of funds" damages claim.

Defendants argue that they are prejudiced because they were not able to subpoena bank records from the various banks that provided Plaintiff its "cost of funds." However, given that Defendants' expert did indicate that he had all necessary financial information pertaining to the "cost of funds," it is unlikely that Defendants need substantially more discovery pertaining to this issue.

In sum, based on the foregoing, the Court DENIES Defendants' Motion in Limine to Prohibit New Damages Claim given that Defendants cannot meet their burden to show that Plaintiff's discovery violation constituted "willfulness, fault, or bad faith."

IT IS SO ORDERED.