Silver Fern Chemical Inc v. Lyons, 2:23-cv-00775

Silver Fern Chemical, Inc. sued multiple individuals and Ambyth Chemical Company for misappropriation of trade secrets, breach of contract, and related claims, including a claim for unjust enrichment.
Plaintiff sought damages for unjust enrichment but did not supply a specific computation in initial disclosures, citing lack of access to necessary sales data held by Defendants.
Defendants eventually produced the needed sales data for 2023-2024 after Plaintiff requested it in discovery; this data was vital for Plaintiff to calculate unjust enrichment damages.
Plaintiff disclosed a specific damages figure ($7,617,195) and supporting spreadsheets in opposition to Defendants’ motion for summary judgment, after receiving the relevant data from Defendants.
Defendants moved to preclude Plaintiff from presenting evidence of unjust enrichment damages at trial, arguing untimely disclosure in violation of Rules 26 and 37.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Plaintiff timely disclosed a computation of unjust enrichment damages in compliance with Rule 26	Could not provide computation earlier due to lack of Defendants’ sales data; disclosure made as soon as possible after receiving data	Plaintiff failed to provide a computation in initial disclosures or timely supplement	Plaintiff timely disclosed damages after receiving necessary data
Whether Plaintiff’s failure to supplement was substantially justified or harmless under Rule 37(c)(1)	Any delay was justified by Defendants’ late production; no bad faith; disclosure harms no one	Late disclosure was unjustified and prejudicial, warranting exclusion	Delay was both justified and harmless; exclusion sanction not warranted
Sufficiency of supporting documentation for damages computation	Provided damages figure, method, and spreadsheets showing calculation	Documentation insufficient; Defendants could not verify calculation	Plaintiff provided sufficient support with calculation and documentation
Whether preclusion of unjust enrichment damages evidence is appropriate	Not appropriate, as Defendants had time, notice, and access to relevant information	Should be precluded due to late, insufficient disclosure	Preclusion not appropriate; Defendants can challenge calculations before trial

Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101 (9th Cir. 2001) (Rule 37's exclusion sanction is automatic unless the failure to disclose is harmless or substantially justified)
R&R Sails, Inc. v. Ins. Co. of Pa., 673 F.3d 1240 (9th Cir. 2012) (Rule 26 requires not just disclosure of documents, but an actual damages computation)
Goodman v. Staples The Office Superstore, LLC, 644 F.3d 817 (9th Cir. 2011) (Factors for determining if failure to disclose is harmless)
Merchant v. Corizon Health, Inc., 993 F.3d 733 (9th Cir. 2021) (Application and standards of Rule 37(c)(1) sanctions)