Rule 26(a)(2)(B)_In-House Expert WitnessA clean tech startup entered into a license agreement with Plaintiff and Corporation. The agreement gave the startup license to manufacture products and use the intellectual property related to Plaintiff’s energy catalyzer technology without the harmful byproduct associated with nuclear reaction processes. Plaintiff accused Defendant of breaching a licensing contract for his technology. As part of this on-going litigation, Plaintiff seeks to exclude the expert disclosure of Defendants’ expert witness due to their failure to comply with Rule 26(a)(2)(B).

Defendants served their expert disclosure according to the deadline. At his deposition, the expert referred to a written report he prepared for Defendants’ counsel, but which hadn’t been served on Plaintiff, stating he needed to rely on the report to answer some of Plaintiff’s questions. Plaintiff asserted—and Defendants didn’t dispute—that the expert disclosure didn’t satisfy the requirements of written expert reports under Rule 26(a)(2)(B). Defendants didn’t provide the written report prepared by their expert. But Plaintiffs also didn’t say what action, if any, was taken to obtain the report. The expert, the former Vice President of Engineering of the startup, sought to offer opinions regarding power sold and the results of testing performed.

Plaintiff argued Defendant’s expert should have submitted a written expert report under Rule 26(a)(2)(B) but failed to do so. According to Defendants, their expert disclosure was sufficient under Rule 26 because he was a “hybrid” witness who was to provide both fact and opinion testimony based on his specialized knowledge. They argued that hybrid witnesses need only submit disclosures to comply with Rule 26(a)(2)(C), and their expert disclosure was sufficient under the rule.

U.S. District Judge Cecilia M. Altonaga wrote in her opinion that an expert report might not always be required of a hybrid witness providing both factual testimony and opinions based on scientific, technical, or specialized knowledge: the determinative factor is the witness’s function in the suit. Although employees frequently serve as fact witnesses, Altonaga reasoned that if their normal duties as employees involve giving expert testimony, they’re required to provide an expert report under Rule 26(a)(2)(B). Similarly, experts “called solely or principally to offer expert testimony, whether or not they were employees,” should submit a written expert report under Rule 26(a)(2)(B).

The judge explained that the Advisory Committee Notes on Rule 26 provide guidance for determining who qualifies as a hybrid witness. It cites treating physicians and healthcare professionals as common examples of hybrid witnesses exempt from proving a report. But even treating physicians might be subject to section (2)(B), she said, if they offer opinions that extend beyond their treatment of a patient or if they form opinions upon review of information provided by an attorney or in anticipation of litigation.

Defendant’s expert was listed as a potential fact witness in the initial disclosures exchanged by the parties. He appeared as either sender or recipient of hundreds of emails produced in discovery—some of which were used in his deposition. Defendants argued these details show their expert was a hybrid witness with “some connection to the specific events underlying the case” and made him “exempt from the robust reporting requirements . . . [of Rule] 26(a)(2)(B).”

Judge Altonaga noted that while Defendant’s expert appeared to have direct and personal knowledge of some of the facts in the case, the opinions offered in his disclosure fell into the realm of expert opinions subject to Rule 26(a)(2)(B). Unlike a treating physician’s observations in the course of treatment, this expert’s opinions weren’t based on observations or perceptions he made while working “in the ordinary course” of his job at the startup. Instead, they were based on data analyses and testing he performed at the direction of counsel after the case was filed. The expert acknowledged he prepared a report on the testing he conducted and charged the startup $175 per hour for his services as a witness.

The judge found that Defendant’s expert “functioned exactly as an expert witness normally does, providing a technical evaluation of evidence he had reviewed in preparation for trial.” Consequently, Defendants should have provided Plaintiffs with a written report by their expert under Rule 26(a)(2)(B). Judge Altonaga then considered the appropriate sanction for Defendants’ violation.

Plaintiffs argued that the exclusion of the expert’s testimony was the only appropriate remedy for this Rule 26 violation, as the violation was not justified or harmless. But despite being aware of possible Rule 26 violations by the time of the deposition, Plaintiffs made no effort to obtain a written report through a conference or by informing the magistrate. Instead, they waited five weeks to file their motion and raise these issues for the first time. If they timely raised the issue when they learned of it at deposition—and before the close of discovery— Judge Altonaga said they might’ve been able to obtain an expert report and conduct additional investigation or depositions.

Thus, the Court held that Plaintiffs couldn’t delay in challenging a Rule 26 violation and proceed to seek the most extreme of sanctions in a Daubert motion, which was filed after the proper time for challenging discovery violations expired. Judge Altonaga denied Plaintiff’s motion to strike Defendants’ expert disclosure, but ordered them to serve Plaintiffs with a written expert report prepared by the expert.