Too many attorneys treat initial disclosures as a procedural box to check at the beginning of litigation, but this risks having damages excluded entirely under Fed. R. Civ. P. 37.[1] Under Rule 26, parties must provide a computation of the categories of damages claimed but many attorneys simply provide a lump sum. Under Rule 37, a party that fails to provide an itemized computation as required by Rule 26, can result in damages being excluded from trial.[2] Thus, a careful attorney will not only serve initial disclosures with damages itemized by category but will return to them regularly throughout litigation, supplementing whenever new information emerges or a gap is identified.
Technically, Rule 37 provides that supplementation is not necessary if the information has already been made known to opposing counsel during discovery.[3] But courts have construed this “made known” language narrowly. If parties have not disclosed itemized damages in their initial disclosures, courts have ruled that opposing parties have not been given sufficient knowledge of damages sought even if the amount was disclosed in depositions, interrogatories, or document productions.[4] Courts have reasoned that opposing parties do not bear the burden of piecing together damages amounts nor the methodologies for computing the same.[5] Thus, a failure to itemize will not be excused by subsequent litigation developments.
There are two narrow exceptions to Rule 37’s sanctions for failure to itemize: substantial justification or harmless effect.[6] But these exceptions are subject to district court’s discretion and are subject to different tests in each circuit that make them dangerous to rely on.[7]
For example, the First Circuit applies these factors: “(1) the history of the litigation; (2) the sanctioned party’s need for the precluded evidence; (3) the sanctioned party’s justification (or lack of one) for its late disclosure; (4) the opponent-party’s ability to overcome the late disclosure’s adverse effects—e.g., the surprise and prejudice associated with the late disclosure; and (5) the late disclosure’s impact on the district court’s docket.”[8] The Tenth and Sixth Circuits do not rely on factors at all. The Tenth Circuit has often held that “… a district court need not make explicit findings concerning the existence of a substantial justification or the harmlessness of a failure to disclose.”[9] The Sixth Circuit holds that “the test is very simple: the sanction is mandatory unless there is a reasonable explanation of why Rule 26 was not complied with or the mistake was harmless.”[10]
When courts do find an exception applicable, it is usually because they see the opposing counsel as attempting to play a procedural game. For example, in Excel Fortress Ltd., the court held that exclusion would be improper where the defendant was “aware of the deficiency of [p]laintiffs’ damages-related disclosures since the moment he received [p]laintiffs’… disclosure in January 2018. A truly aggrieved defendant would have, at that point, immediately sought supplementation from his adversary and/or sought relief from the court.”[11] Thus, under Rule 37, courts are expected to consider the actual harm caused to the opposing party but too many courts can still let technicalities decide the outcome. Thus, a diligent attorney will always err on the side of caution and disclose with specificity.
As trial draws near, initial disclosures may be the last thing on the minds of the attorneys. However, opposing counsel’s silence on how the damages were disclosed may be a strategy. While not genuinely surprised, they may move to exclude entire categories of damages under Rule 37. This tactical advantage is not in line with the purpose of initial disclosures, but despite this, the court may exclude key damages. Litigators should treat initial disclosures as a continuous process, revisiting and supplementing it throughout discovery and reviewing it carefully as trial approaches. On this matter, an informed litigator is only substantially justified in doing three things: disclose, disclose, disclose.
If you are seeking assistance with discovery disputes, do not hesitate to contact the experienced litigators at Eckland & Blando LLP.
[1] Research and drafting assistance provided by Daniel J. Kientzle, law clerk at Eckland & Blando LLP.
[2] Deque Systems Inc. v. Browserstack, Inc., 2026 WL 1615177 at *6 (4th Cir. 2026); Fed. R. Civ. P. 37(c)(1).
[3] Id.
[4] City of Rome v. Hotels.com, L.P., 549 Fed. Appx. 896, 905 (11th Cir. 2013); Chicago Joe’s Tea Room, LLC v. Village of Broadview, 94 F.4th 588, 605 (7th Cir. 2024).
[5] Hudson-RPM Distribs., LLC v. Bowditch & Dewey, LLP, No. 19-cv-40095, 2022 WL 22902243, at *4 (D. Mass. Mar. 29, 2022); Burnett v. Ocean Props. LTD, 987 F.3d 57, 74 (1st Cir. 2021).
[6] Fed. R. Civ. P. 37(c)(1).
[7] Woodworker’s Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 993 (10th Cir. 1999) Quoting Mid–America Tablewares, Inc. v. Mogi Trading Co., 100 F.3d 1353, 1363 (7th Cir.1996).
[8] Esposito v. Home Depot U.S.A., Inc., 590 F.3d 72, 78 (1st Cir. 2009).
[9] Id.
[10] Bessemer & Lake Erie R.R. Co. v. Seaway Marine Transport, 596 F.3d 357, 370 (6th Cir. 2010) Quoting Vance ex rel Hammons v. United States, 182 F.3d 920 (6th Cir.1999).
[11] Excel Fortress Ltd. v. Wilhelm No. CV-17-04297-PHXDWL, 2019 WL 2503684, at *3 (D. Ariz. June 17, 2019).