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People's Law Guide


Federal Litigation Requirement to Disclose Damages

Peter Maverick



By Attorney Peter Mavrick

When defending an employer in a labor/employment lawsuit in federal courts, an important area of defense is ensuring, early in the case, that the plaintiff discloses his or her damages calculation and produces related documentation. Rule 26(a)(1)(A)(iii), Federal Rules of Civil Procedure, requires in pertinent part:

[A] party must, without waiving a discovery request, provide to the other parties:

a computation of each category of damages claimed by the disclosing party-who must also make available for inspection or copying under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered.

Where damages are calculable, the plaintiff is required to provide a reasonably specific computation of his damages. For example, Design Strategies, Inc. v. Davis, 367 F.Supp.2d 630, 633 (S.D.N.Y. 2005), interpreted the requirement to produce initial damages disclosures in the context of the plaintiff's claims for lost profits, where the plaintiff represented he suffered "particular monetary damage, in an amount … believed to be in excess of Twenty-five Million Dollars in lost revenues." The plaintiff did not provide "any specific computation of its alleged lost profits, nor any documents or other evidence on the basis of which such a computation could be made." The court held that to be inadequate.

Under Rule 37(a)(3)(A), Federal Rules of Civil Procedure, "[i]f a party fails to make a disclosure required by Rule 26(a), any other party may move to compel disclosure and for sanctions." Some courts have interpreted the sanctions provision of the rule to allow preclusion of proving damages in the case. See, e.g., Gould Paper Corporation v. Madisen Corp., 614 F.Supp.2d 485, 490 (S.D.N.Y. 2009) (failure to "provide a damages calculation" precluded party "from proving damages"); 24/7 Records, Inv. v. Sony Music Entm't, Inc., 566 F.Supp.2d 305, 318 (S.D.N.Y. 2008) (theory of damages precluded because plaintiff failed to make mandatory initial disclosure).

Rule 26(a)(1)(A) also requires that where the plaintiff has documents that support his claim for damages, those documents must be produced. The plaintiff must produce the non-privileged documents supporting the computation, including documents bearing on the nature and extent of injuries suffered. In Bessemer & Lake Erie R.R. Co. v. Seaway Marine Transport, 596 F.3d 357, 369 (6th Cir. 2010), the Sixth Circuit Court of Appeals excluded a claim for lost profits because all documents supporting the calculation were not disclosed. The plaintiff failed to provide critical documentation to determine lost profits, namely avoided costs. The court explained in pertinent part:

Bessemer claims that Seaway asks for too much. Rule 26, Bessemer argues, requires disclosure only of enough evidence to put Seaway on notice of the lost-profits claim. But that is not what Rule 26 says. It requires documents "on which each computation is based, including materials bearing on the nature and extent of injuries suffered." Fed.R.Civ.Proc. 26(a)(1)(A)(iii). Because Bessemer never provided a critical piece of the lost profits puzzle-evidence of avoided costs-the district court did not abuse its discretion in concluding that Bessemer came up short in meeting its Rule 26 obligations.

Similarly, the Second Circuit in Design Strategy, Inc. v. Davis, 469 F.3d 284, 295 (2d Cir. 2006), explained that "[b]y its very terms Rule 26(a) requires more than providing-without any explanation-undifferentiated financial statements; it requires a 'computation' supported by documents." Davis further explained that:

The Advisory Committee Notes to Rule 26(a)(1)(C) accompanying its promulgation make clear that the rule "imposes a burden of disclosure that includes the functional equivalent of a standing Request for Production under Rule 34. A party claiming damages or other monetary relief must, in additional to disclosing the calculation of such damages, make available the supporting documents for inspection and copying as if a request for such material had been made under Rule 34." … Design failed to disclose both the calculation of damages and the documents supporting that calculation.

Attorneys representing management in employment law cases should ensure that the plaintiff produces such damages information early in the case. Where the plaintiff is not forthcoming with the required information, defense counsel needs to demand the information and where necessary file a motion with the court to compel its production. Getting such information at the beginning of the case will assist in the defense strategy and might lead to an early settlement. Even if the case cannot be settled, having such damages information is critical to determine what the parties are fighting about and preparing to defeat the plaintiff.

Attorney Peter Mavrick represents management and business owners in employment law and business litigation cases. Mr. Mavrick has successfully represented many businesses in court as well as in responding to threatened legal action. This article is intended for information purposes only and is not legal advice. This article is not a substitute for legal advice tailored to a particular client's situation. Peter T. Mavrick can be reached at: Website:; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email:

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