United States District Court, N.D. Illinois, Eastern Division
PHYSICIANS HEALTHSOURCE, INC., an Ohio corporation, individually and as the representative of a class of similarly-situated persons, Plaintiffs,
ALLSCRIPTS HEALTH SOLUTIONS, INC. and ALLSCRIPTS HEALTHCARE LLC, Defendants.
MEMORANDUM OPINION AND ORDER
Jeffrey Cole Magistrate Judge.
plaintiff has filed two separate motions: the first is a
motion to strike evidence that the defendants have relied on
in their motion for summary judgment and in their response to
the plaintiff's motion for class certification. [Dkt.
#241, #243]. The second came a month and a half after the
defendants had filed their response. In it, the plaintiff
targeted fourteen of the Declarations the defendants attached
to and relied upon in their response brief. [Dkt. #243, at
1-2]. Five of those fourteen Declarations are
apparently also a part of another “junk fax” case
the plaintiff has filed, Physicians Healthsource, Inc. v.
A-S Medications, 12-CV-5105, which is pending before
Judge Gottschall. The Declarations are relevant to the issue
of predominance as it relates to individualized issues of
consent to receive faxes. [Dkt. #215, at 20]. Then there is a
fifteenth Declaration, that of Judi Desorcie, which the
plaintiff mentioned in a footnote in its first motion to
strike. There, plaintiff indicated it would be addressing
that Declaration with another motion to strike, but not until
it responded to the defendants' motion for summary
judgment. [Dkt. #243, at 2 n.1].
plaintiff filed its second motion to strike - the one
targeting the Desorcie Declaration - on July 21, 2016. [Dkt.
#250, #251]. The effect was to give the plaintiff an extra
week to complete its reply to the defendants' response to
plaintiff's class certification motion, which had been
due July 14th. In any event, it is unclear why the
plaintiff needed 52 or even 45 days to file a motion to
strike. It would seem that one would respond or move promptly
in regard to evidence - which allegedly surprised the
plaintiff - and seek redress in a more determined manner than
was done. But now, untimely or not, see Brandt v.
Vulcan, Inc., 30 F.3d 752, 756 (7th Cir. 1994),
the plaintiff claims surprise and argues that none of these
15 Declarants was properly disclosed by the defendants during
discovery, that they should be barred from testifying and
their Declarations stricken pursuant to Fed.R.Civ.P.
37(c)(1). If all of this seems moderately
complicated, it is, and it could have been avoided with
essentially no effort by either side.
the advent of the Federal Rules of Civil Procedure and the
hope that gamesmanship could be eliminated from federal
practice (or at least vastly curtailed), there continues to
be a good deal of adherence to stealth or omission as the
path to be followed. And so, judges and lawyers are often left
to perform tasks whose outcome will never please everyone,
and which, with slight effort from either or both sides,
would have been unnecessary. But Learned Hand was probably
right when, in his now famous address to the Bar Association
of the City of New York, he cautioned that: “the
atmosphere of contention over trifles, the unwillingness to
concede what ought to be conceded, and to proceed to the
things which matter... I must say that as a litigant I should
dread a lawsuit beyond almost anything else short of sickness
and death...” The anodyne was not to be found in
judges, for “without a bar which is willing to
co-operate, a bench more virtuous and wise than any we are
ever to get would do very little.” L. Hand, The
Deficiencies of Trials to Reach the Heart of the Matter,
with the overarching intent that litigants receive a fair and
unbiased trial and that what Wigmore called “trial by
ambush” should be a thing of the past, the Federal
Rules of Civil Procedure require a party to provide
“the name and, if known, the address and telephone
number of each individual likely to have discoverable
information that the disclosing party may use to support its
claims or defenses . . ., identifying the subjects of the
information.” Fed.R.Civ.P. 26(a)(1)(A). Rule 26 also
requires a party to supplement or amend its initial Rule
26(a)(1) disclosures (and discovery responses) if it learns
that the disclosure or response is “incomplete or
incorrect and if the additional corrective information has
not otherwise been made known to the other parties during the
discovery process or in writing....” Fed.R.Civ.P
26(e)(1)(A). To ensure compliance with these basic
requirements, Rule 37 provides that “[i]f a party fails
to provide information or identify a witness as required by
Rule 26(a) or 26(e), the party is not allowed to use that
information or witness to supply evidence . . . unless such
failure was substantially justified or harmless.”
Fed.R.Civ.P. 37(c)(1). See, generally, Saathoff v.
Davis, 826 F.3d 925, 931 (7th Cir. 2016).
a failure to comply with Rule 26(a) or (e) is substantially
justified or harmless is left to the broad discretion of the
district court. Dynegy Mktg. & Trade v. Multiut
Corp., 648 F.3d 506, 514 (7th Cir. 2011); David v.
Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir.
2003). But a district court has no discretion to
ignore the plain language of the Rules. Id. Thus, if the
court concludes that the failure was not substantially
justified or harmless, exclusion is mandatory and automatic.
Novak v. Bd. of Trustees of S. Illinois Univ., 777
F.3d 966, 972 (7th Cir. 2015).
parties' current submissions on the issue of the
Declarations cover 450 pages. A review reveals that there is
no dispute that the defendants did not name any of the 15
Declarants in their Rule 26 disclosures; nor did the
plaintiff ask the obvious and proper question, namely who, if
any, from the vast list provided by the defendants, had given
their assent to receive faxes. And so the issue comes down to
whether the Declarants were “otherwise made
known” to the plaintiff in the discovery process under
Rule 26(e)(1)(A) - a fact that plaintiff denies.
Alternatively, the defendants insist that their failure to
disclose the 14 names was substantially justified or was
harmless under Rule 37(c)(1).
defendants first argue that the identities of the 14
Declarants “were otherwise made known” to the
plaintiff in 2013 when the defendants produced “BFX
Reports.” [Dkt. #266, at 2].It is not clear what
“BFX Reports” are, but they apparently were taken
from the plaintiff's Salesforce database and comprise a
list of persons and entities who provided the defendants with
their contact information - in other words, fax targets.
[Dkt. #266, at 3]. In responses to interrogatories, the
defendants have indicated that they “culled the list of
persons and entities who received [faxes]” from this
list. [Dkt. # 266, at 3]. They further submit that this fact
has also been underscored in deposition testimony from
various witnesses from July 2014 on. [Dkt. # 266, at 3]. The
plaintiff points out that this list contained 17, 781 names
or fax targets [Dkt. #267, at 2; #204-1, at 9], and that
there has been no elaboration by the defendants either at the
time of production or by way of subsequent disclosure under
Rule 26(1)(a). The plaintiff submits that it is asking far
too much for the production of this extensive list to
constitute making the fourteen Declarants “otherwise
known” through the “discovery process or in
writing” as required by Rule 26(e)(1)(A).
over 17, 000 entries is a huge list to pour over, especially
given the fact we are talking about just fourteen individuals
from the list that the defendants selected to provide
Declarations. It's quite a leap to say, as defendants do,
that while the defendants failed to disclose the 14
Declarants as witnesses, they were made known to plaintiff by
the 17, 000-person list. That's simply too far to stretch
the “otherwise-made-known” provision of the
Federal Rules of Civil Procedure. (Rule 26(e)(1)(A)). As we
have said, the Rule is designed to ensure fairness by not
allowing a party to claim ignorance when it has or should
have become aware of disputed information through the
“discovery process.” Rules of practice and
procedure are not ends in themselves. They were devised to
promote the ends of justice, not to defeat them. Orderly
rules of procedure do not require sacrifice of the rules of
fundamental justice. Hormel v. Helvering, 312 U.S.
552, 556-557 (1941). The Rule was never intended to allow
material to be smuggled into a case inside a Trojan horse.
the plaintiff is the master of its law suit and thus is the
arbiter of the parameters of this litigation. Crosby v.
Cooper, 725 F.3d 395 (7th Cir. 1973).
Seventeen thousand is the size of the class action plaintiff
wants to maintain. While discovery in such a case is bound to
be rather daunting, that is one of the burdens of properly
maintaining a large class action. Plaintiff was free to
control the scope and manageability of discovery and its
counsel's workload and challenges. The position the
plaintiff finds itself in is really the inevitable result of
its own decisions. See Swanson v. Citibank, N.A.,
614 F.3d 400, 411 (7th Cir. 2010)(discussing concerns with
asymmetric discovery and genesis of Fed.R.Civ.P. 23(f));
Culver v. City of Milwaukee, 277 F.3d 908, 913 (7th
Cir. 2002)(class counsel responsible for directing and
managing class actions).
tells us that this suit is a spin-off from a previous junk
fax class action case it filed against the defendants that
was settled before Magistrate Judge Kim in February 2012.
According to the plaintiff, the defendants perpetrated a
fraud on Judge Kim by selecting 36 faxes to withhold from
discovery. [Dkt. #78, ¶ 1]. If that were the case, the
plaintiff could have filed a motion under Fed.R.Civ.P.
60(b)(2) or (b)(3), which allow relief from a judgment when
there is newly discovered evidence or fraud. Plaintiff chose,
instead, to file a new case. Strategic decisions have
consequences, which bind the elector. McKune v.
Lile, 536 U.S. 24, 41 (2002); Crowe ex rel. Crowe v.
Zeigler Coal Co., 646 F.3d 435, 444 (7th Cir.
2011); Abbott Laboratories v. Takeda Pharmaceutical Co.
Ltd, 476 F.3d 421 (7th Cir.2007); Silc v.
Crossetti, 2013 WL 3872196, 3 (N.D.Ill. 2013)(and cases
case - this case - is based, originally, on those 36 faxes
purportedly withheld by the defendants from discovery in the
previous case. Plaintiff could have pursued its claim for
redress under the Telephone Consumer Protection Act
(“TCPA”), 47 U.S.C. §227, for as much as
$54, 000 in damages if it could prove punitive damages were
appropriate. Indeed, the defendants advanced a settlement
offer to plaintiff for just that amount at the outset of this
case. [Dkt. ##34, 43]. The plaintiff decided to forego the
settlement offer and to pursue this matter as another class
action case. All these decisions were the plaintiff's
right, of course. But all decisions, as the courts have
repeatedly noted, have binding consequences. Obviously,
bringing a massive class action against a business
necessitates obtaining and sifting through far more discovery
than would have been imposed upon plaintiff and counsel had
they limited their pursuit to plaintiff's individual
claim. That ignores a foreseeable consequence in every class
action case, and it's a consequence plaintiff and counsel
chose here, although this case has become more complex and
unwieldy than just a case about 36 junk faxes would be.
result of plaintiff's discovery requests in this case,
the plaintiff has determined from the BFX reports produced by
the defendants that defendants sent faxes to 17, 781 fax
numbers. [Dkt. #204-1, at 9]. It's not clear what
plaintiff did once it had this information, but the issue of
consent, or whether faxes were unsolicited or uninvited, has
been an issue in this case from day one, as plaintiff made
clear in its Complaint. [Dkt. #1, ¶¶ 2, 12-13,
17(a), 27; see also Dkt. #58, at 2-3]. The
defendants either denied the allegation of no permission or
claimed to have insufficient knowledge to answer. See,
e.g. Dkt. #59, ¶12. The plaintiff does not call our
attention to any point in discovery where it requested
information from the defendants as to who from these BFX
lists might have solicited faxes or consented to receive them
from the defendants. Yet, the plaintiff knew either that it
was its burden under the Act or that, at the very least, this
was a defense that would be advanced by the defendants. Some
follow up from plaintiff would have seemed to have been as
simple as it was appropriate. But plaintiff does not inform us
of any. [Dkt. #267, at 2]. It seems that, once it had the
massive list, plaintiff chose not to initiate any further or
only case the plaintiff relies upon to support its position
that it could not have been expected to do anything further
once it received the large BFX list and that the Declarants
do not fall within the “otherwise made known”
safe harbor is Wallace v. U.S.A.A. Life Gen. Agency,
Inc., 862 F.Supp.2d 1062, 1065 (D. Nev. 2012).
Wallace is not binding here, and is not a class
action case. It is an insurance case in which the insurer
sought to call as witnesses the two underwriters who
investigated the insured's claim. The insurer conceded it
never disclosed the underwriters as potential witnesses, but
claimed that the underwriters were “otherwise made
known” to the insured during discovery. The court found
that while the underwriters' names appeared in the bodies
of documents the insurer produced in discovery, they were not
identified as underwriters or even as individuals who had
anything to do with the claim. Id. at 1065.
those circumstances, the court's discretionary decision
that the insured never was provided in a meaningful way - and
one required by both the letter and the spirit of the Federal
Rules of Civil Procedure - with the identities of those who
conducted an investigation and were to serve as witnesses in
support of the position taken by the carrier seems correct.
In that context, the duplicity of the carrier and the lack of
good faith of the insurance carrier seems as obvious as the
“innocence” of the insured. That is not
comparable to the situation here where plaintiff asked only
for a list of people to whom faxes were sent and under the
Complaint undertook the obligation to prove who had not given
prior permission and yet did nothing to learn the identity of
the 14 Declarants were not otherwise made known in discovery
to the plaintiff under Rule 26(e)(1)(A) - and I think they
were not - the question becomes whether the defendants'
failure to formally disclose their names was substantially
“justified or harmless” under Rule 37(c)(1). A
district court need not make explicit findings concerning the
existence of a substantial justification or the harmlessness
of a failure to disclose. David v. Caterpillar,
Inc., 324 F.3d 857, 857 (7th Cir. 2003);
Woodworker's Supply, Inc. v. Principal Mutual Life
Ins. Co., 170 F.3d 985, 993 (10th Cir. 1999).
Still, the Seventh Circuit has indicated that the following
factors should guide the district court's discretion: (1)
the prejudice or surprise to the party against whom the
evidence is offered; (2) the ability of the party to cure the
prejudice; (3) the likelihood of disruption to the trial; and
(4) the bad faith or willfulness involved in not disclosing
the evidence at an earlier date. David, 324 F.3d at
discussed earlier and as plaintiff, itself, submits [Dkt.
#243 at 1-2], the plaintiff knew that consent would be a
critical issue. Indeed, its own Complaint said so and seemed
to relegate proof on that score to the plaintiff. And yet,
the plaintiff, who was in the perfect position to make the
next logical move - and, it bears repeating, needed the
information to sustain the allegations in the Complaint - did
not ask for the names of those who had given their consent to
receive faxes. It was content with the massive list provided
by defendants and not to ask the decisive question. Our
courts have refused to follow and have been critical of the
“ostrich-like” approach to legal issues, cf.
Microsoft Corp. v. Rechanik, 249 Fed.Appx. 476, 478-479
(7th Cir. 2007); Hill v. Norfolk & Western
Ry. Co., 814 F.2d 1192, 1198 (7th Cir. 1987), and have
refused to allow litigants essentially to blame their
not be forgotten that the adversary system is alive and well.
Perdue v. Kenny A. Ex rel. Winn, 559 U.S. 542, 560
(2010)(Kennedy, J. concurring); Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579, 595-96 (1993);
Alioto v. Town Of Lisbon, 2011 WL 2642369, 5
(7th Cir. 2011); Kay v. Board of Educ. of City
of Chicago, 547 F.3d 736, 738 (7th Cir.2008);
Kirksey v. R.J. Reynolds Tobacco Co., 168 F.3d 1039,
1041 (7th Cir. 1999); Burdett v. Miller, 957 F.2d
1375, 1380 (7th Cir. 1992). Compare
Brandeis, The Living Law, 10 Ill.L.Rev. 461, 470
(1916)(a “judge rarely performs his functions
adequately unless the case before him is adequately
presented.”) Thus, common sense and ordinary prudence
cannot be abandoned with impunity. Metaphorical ostriches, no
less than chickens, come home to roost. And thus, generally,
a lawyer need not make a case for his
current situation, there was ample opportunity for the
plaintiff to cure any prejudice it might have felt stemmed
from the production from so large a list. There was a month
and a half during which plaintiff could have addressed this
issue with a motion to strike or, in the case of the motion
for summary judgment, with a motion under Fed.R.Civ.P. 56(d)
for some additional discovery. The plaintiff seems to scoff
at anything like a limited reopening of discovery for such a
purpose [Dkt. #10-12], but that's quite a sharp turn from
the route plaintiff has been on all along in this case.
Suddenly, for the plaintiff, the discovery and briefing
schedules are sacrosanct. But the plaintiff's
“overarching” concern for deadlines and rules
seems to be confined to its motion to strike. [See
Dkt. ##97, 112, 125, 153, 173, 185, 188, 189, 191, 193, 203,
221, 224, 231, 234, 235, 240, 244, 252, 260, 268].
so, there would seem to be little if any prejudice to be
cured, according to plaintiff. As noted earlier, and as
plaintiff, itself, submits [Dkt. #243, at 1-2], the 14
Declarations matter only with respect to the question of
individualized consent in the predominance analysis. The
defendants mention them on a single page of their
twenty-seven-page response to the plaintiff's motion for
class certification. [Dkt. #215, at 20; #227-1, at
20]. According to the plaintiff's reply
in support of its motion for class certification, the
Declarations are “of no evidentiary value
whatsoever” because, while the Declarants claim they
gave permission for faxes, they cannot even remember
receiving any or when they gave permission [Dkt. #238, at 18]
- (there will be a bit more discussion on that point later).
Moreover, in the motion for class certification, plaintiff
argues that individualized issues of prior express permission