CAPITAL HEALTH SYSTEM, INC., et al. v. Erol VEZNEDAROGLU, M.D., et al Civil Action No. 15-8288 (MAS) (LHG) United States District Court, D. New Jersey Filed September 09, 2020 Counsel Anthony Argiropoulos, Maximilian De Cuyper Cadmus, Scheherazade A. Wasty, Sheila A. Woolson, Thomas Kane, Epstein Becker & Green, P.C., Princeton, NJ, Theodora T. McCormick, Epstein Becker & Green, PC, Newark, NJ, for Capital Health System, Inc., et al. Christie M. Comerford, Claire Blewitt Ghormoz, Jennifer Platzkere Snyder, Patrick M. Northen, Margaret Ruth Mcguire Spitzer, Thomas S. Biemer, Patrick J. Hamlet, Dilworth, Paxson LLP, Philadelphia, PA, for Erol Veznedaroglu, M.D., et al. Goodman, Lois H., United States Magistrate Judge LETTER ORDER *1 Dear Counsel: The Court has before it the Motion to Strike and for Sanctions filed by Consolidated Defendant Alireza Maghazehe (“Maghazehe”) (the “Motion”) [Docket Entry No. 301], along with the Memorandum of Law in Support of His Motion to Strike and for Sanctions (“Brief in Support”) [Docket Entry No. 302], which requested that the Court: (i) strike portions of Global Neurosciences Institutes’ (“GNI”) brief in opposition to Maghazehe's motion for summary judgment that refer to witnesses that were not properly identified in GNI's Rule 26 initial disclosures; (ii) strike in its entirety the Karabulut Declaration supporting GNI's brief in opposition to Maghazehe's motion for summary judgment; and (iii) award Maghazehe his attorney's fees and costs associated with this motion as a sanction. Defendants/Consolidated Plaintiffs, GNI and Drs. Erol Veznedaroglu (“Dr. Veznedaroglu”), Kenneth Liebman, Mandy Binning, and Zakaria Hakma (collectively, the “GNI Defendants”), filed a Brief in Opposition to Consolidated Defendant Alireza Maghazehe's Motion to Strike/for Sanctions (“Opposition Brief”) [Docket Entry No. 327], claiming that the issues set forth in the Motion had already been decided by this Court, and further that there is no basis for seeking sanctions or to strike. Maghazehe filed a Memorandum of Law in Further Support of His Motion (“Reply Brief”). [Docket Entry No. 334]. The Court has considered the Motion on the papers filed, without oral argument, pursuant to Fed. R. Civ. P. 78 and L. Civ. R. 78.1(b). For the reasons set forth below, Maghazehe's Motion is denied.[1] After a series of employment, management, and leasing agreements fell apart between the parties, Capital Health filed suit against the GNI Defendants in 2015, alleging, inter alia, that the GNI Defendants had used improper means to access confidential information from Capital Health, violated a nonsolicitation provision, and had stolen Capital Health's Transfer Hotline. Second Amended Complaint (“Complaint”) ¶¶ 86-92 [Docket Entry No. 101]. In response, the GNI Defendants filed a Complaint and Demand for Jury Trial (the “RICO Complaint”), which was subsequently consolidated into the 2015 action on April 13, 2016. [Docket Entry No. 85]. On May 23, 2016, the GNI Defendants filed a consolidated RICO Case Statement, as ordered by this Court, in which they alleged that Maghazehe and Capital Health had engaged in a broad and systematic scheme to misappropriate the GNI neurosurgery practice. RICO Case Statement at 32 [Docket Entry No. 97]. The RICO Case Statement also includes a copy of a complaint filed against Capital Health by Dr. Nigahus Karabulut (“Dr. Karabulut”) on May 17, 2016 in the Superior Court of New Jersey, and additionally references Dr. Karabulut over seventeen times in order to demonstrate Maghazehe and Capital Health's pattern of fraudulent behavior. RICO Case Statement at 14, 24, 30. *2 Initial discovery focused on a preliminary injunction application. A schedule was finally set for substantive plenary discovery at the March 27, 2017 conference. Under that schedule, the parties had until July 28, 2017 to file any further requests for leave to amend the pleadings and were to complete all fact discovery by December 31, 2017. [Docket Entry No. 136]. That schedule was amended several times, as the parties engaged in discovery [Docket Entry Nos. 144, 148, 155, 180, 188, 197, 204, 232], and filed numerous discovery-related and other motions. See, e.g., Docket Entry Nos. 151, 66, 167, 168, 209 (motions to compel discovery from a third party); Docket Entry No. 162 (motion to disqualify counsel); Docket Entry Nos. 66, 82, 213 (motions to amend). The most recent scheduling order provided for fact discovery to be completed by no later than November 30, 2018, with the exception of discovery related to certain third-party subpoenas. [Docket Entry No. 197]. Because of those third-party subpoenas and later expert discovery, the filing of dispositive motions was delayed until August 23, 2019. [Docket Entry No. 204]. On November 26, 2019, this Court denied Capital Health's Motion to File Third Amended Complaint (“Motion to Amend”) [Docket Entry No. 213], which sought additional relief based on allegedly concealed evidence that Capital Health said it was only able to discover through third-party subpoenas. See Order Denying Motion To File Third Amended Complaint (“Order Denying Motion to Amend”) at 6 [Docket Entry No. 247]. In denying the motion, this Court rejected Capital Health's argument that it had good cause to amend at that late stage because the GNI Defendants had concealed evidence of their fraudulent behavior in discovery. Id. at 14. A look at the timeline of the case belied Capital Health's diligence argument by showing that it had obtained the critical information by April 25, 2019, over a year prior to filing its motion to amend. Id. at 12-15. Further, subsequent to Capital Health's obtaining the information that formed the basis for its amendments, this Court entered two amended pretrial scheduling orders [Docket Entry Nos. 180, 188], both prepared by Capital Health after it had received the subpoenaed documents. Id. at 13. At no point had Capital Health asked the Court to extend the deadline to file a motion to amend the pleadings. Consequently, the Court denied the Motion to Amend because Capital Health failed to act with appropriate diligence. Id. at 16-17. The deadline to file dispositive motions was extended to December 13, 2019, after the Motion to Amend was decided. [Docket Entry Nos. 244, 248]. All parties filed motions for summary judgment according to this deadline. [Docket Entry Nos. 251, 253, 265]. Additionally, the Consolidated Plaintiffs and Consolidated Defendants filed respective opposition briefs. [Docket Entry Nos. 280-83, 286]. Maghazehe then filed this Motion to Strike and for Sanctions. [Docket Entry No. 301]. On April 13, 2020, this Court administratively terminated the motions for summary judgment and motions in limine pending the resolution of this Motion. [Docket Entry No. 324]. In the present Motion, Maghazehe alleges that the GNI Defendants have engaged in a pattern of discovery abuses. Brief in Support at 1. Maghazehe first alleges that the GNI Defendants intentionally withheld discovery that Capital Health was only able to obtain by way of a third-party subpoena served on ECG Management Consultants (“ECG”). Id. at 4-5. The subpoena resulted in extensive document production, totaling 12,616 pages, and contained communications and emails about GNI's plans to create a dedicated neurosciences hospital. Id. at 4. Maghazehe alleges that this evidence was in the possession, custody, and control of GNI all along, and despite its relevance, GNI Defendants purposely chose to conceal it from production. Id. at 7. Second, Maghazehe alleges that the GNI Defendants intentionally withheld the names of physicians and patients referred to in paragraphs 90 and 129 of their initial RICO Complaint. Id. at 13. After the GNI Defendants failed to reveal these witnesses, Maghazehe alleges that he took three additional steps to learn the identities: 1) he served an interrogatory specifically asking GNI to identify the witnesses referenced in paragraph 90 of the RICO Complaint; 2) he took depositions of all eight individuals included in GNI Defendant's Initial Disclosures; and 3) he requested that the GNI Defendants supplement their Initial Disclosures. Id. at 12-14. According to Maghazehe, Don Damico, who was GNI's Chief Operating Officer and among those identified by the GNI Defendants in their Initial Disclosures, falsely stated in his December 19, 2017 deposition that the GNI Defendants had no information regarding the mystery witnesses alluded to in the RICO Complaint. Id. at 13. He also asserts that the GNI Defendants and Mr. Damico deliberately concealed this information until Mr. Damico's second deposition on October 18, 2018. Id. at 15-17. Despite never amending their Initial Disclosures, the GNI Defendants nonetheless name the mystery witnesses prominently throughout their opposition to Capital Health's motion for summary judgment. Id. at 17. *3 Finally, Maghazehe alleges that the GNI Defendants failed to identify Dr. Nigahus Karabulut as an individual likely to have discoverable information in their Initial Disclosures, yet relied on a declaration by Dr. Karabulut (the “Karabulut Declaration”) in their opposition to Capital Health's motion for summary judgment. Id. at 17. Further, Maghazehe alleges that the declaration directly contradicts testimony that was provided by the GNI Defendants in Dr. Karabulut's New Jersey Superior Court litigation against Capital Health. Id. at 17-18. Maghazehe therefore asks this Court to strike from GNI's brief in opposition to Maghazehe's motion for summary judgment the Karabulut Declaration and all information and witnesses not disclosed by the GNI Defendants pursuant to Rule 26, as well as to impose financial sanctions on the GNI Defendants for their discovery abuses. Id. at 24-25. In their Opposition Brief, the GNI Defendants first state that this Court already addressed Maghazehe's argument about discovery obtained from ECG when it denied Capital Health's Motion to Amend. Opposition Brief at 2. Second, the GNI Defendants argue that the mystery witnesses were identified during the fact discovery period, and that even if Maghazehe took issue with the timing of the disclosures, he could have but did not request a discovery extension once he had that information in order to explore it. Id. at 7-9. Finally, the GNI Defendants argue that Maghazehe was aware of evidence pertaining to Dr. Karabulut for almost four years. Id. at 4. Dr. Karabulut was named seventeen times in the RICO Case Statement, and the RICO Case Statement is referenced five times in the GNI Defendants’ Initial Disclosures. Id. at 4-5. They add that in response to Capital Health's interrogatories, the GNI Defendants referred to the RICO Case Statement as identifying patients and physicians who may have relevant information. Id. at 6. In his Reply Brief, Maghazehe highlights that the GNI Defendants said they would supplement their Initial Disclosures if they decided to rely on additional witnesses, but they never did so to include Dr. Karabulut. Reply Brief at 1-2. Maghazehe further emphasizes that the GNI Defendants’ failure to provide the names of the mystery witnesses is inexcusable and should subject them to sanctions. Id. at 2. Under Rule 26 of the Federal Rules of Civil Procedure, a party is required to supplement discovery only if “the additional or 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)(2). In order to qualify under the “otherwise been made known” language, the “alleged disclosure must be clear and unambiguous.” Pfizer v. Teva, No. 04-754, 2006 WL 2938723 at *3, 2006 U.S. Dist. LEXIS 74611 at *3 (D.N.J. Oct. 13, 2006) (finding that disclosures that are not facially apparent and require the drawing of further inferences are insufficient for Rule 26 purposes). The determination of whether an alleged disclosure satisfies the otherwise made known requirement is ultimately fact and case specific. Eli Lilly & Co. v. Actavis Elizabeth LLC, No. 07-3770, 2010 U.S. Dist. LEXIS 44913 at **12-14 (D.N.J. May 7, 2010) (citing Fast Food Gourmet, Inc. v. Little Lady Foods, Inc., No. 05-6022, 2007 WL 3052944 at **––––, 2007 U.S. Dist. LEXIS 77439 at **14-16 (N.D. Ill. Oct. 18, 2007)). A majority of courts and the Advisory Committee Note to Rule 26 agree, however, that the identity or knowledge of an individual can satisfy the otherwise made known standard if it is disclosed through deposition testimony. Id. at 12-13 (citing In re Jacoby Airplane Crash Litig., No. 99-6073, 2007 WL 559801 at **8, 2007 U.S. Dist. LEXIS 10090 at **8-10 (D.N.J. Feb. 14, 2007)); see also Advisory Committee Note to Rule 26(e) (1993) (“There is, however, no obligation to provide supplemental or corrective information that has been otherwise made known to the parties in writing or during the discovery process, as when a witness not previously disclosed is identified during the taking of a deposition.”). *4 Furthermore, under Rule 37, a court may impose sanctions if a party “without substantial justification fails ... to amend a prior response to discovery as required by Rule 26(e)(2) ... unless failure is harmless.” Fed. R. Civ. P. 37(c)(1). Though Rule 37 does not define harmless, the 1993 Advisory Committee Notes give examples of situations in which the failure to disclose may either be substantially justified or harmless. One such example is “the inadvertent omission from a Rule 26(a)(1)(A) disclosure of the name of a potential witness known to all parties ....” In re Mercedes-Benz Antitrust Litig., 225 F.R.D. 498, 506 (D.N.J. 2005). Further, while preclusion of evidence is used as a sanction when a party fails to disclose, the Third Circuit has held that absent a willful deception or flagrant disregard of a Court Order, exclusion of evidence would be extreme. Meyers v. Pennypack Woods Home Ownership Ass'n, 559 F.2d. 894, 905 (3d. Cir. 1977). The Court turns first to the evidence Maghazehe complains he had to obtain via third-party subpoena because the GNI Defendants failed to produce it. At the outset, the Court notes that it addressed a similar issue in a related context while denying the Motion to Amend on November 26, 2019. Order to Deny Motion to Amend [Docket Entry No. 247.] There, Capital Health had asked for leave to amend in light of information it had to obtain by way of a third-party subpoena, after GNI Defendants wrongfully failed to turn it over. Id. at 5. This Court denied Capital Health's request, finding that Capital Health sat on the new evidence for an inexplicable amount of time before filing to amend the pleadings. Id. at 14-15. This Court also noted that after Capital Health obtained the new subpoenaed information, the Court twice extended discovery at Capital Health's request, though at no point did Capital Health ask the Court to extend the deadline to file a motion to amend the pleadings. Id. at 13. Accordingly, this Court found that Capital Health did not meet the good cause standard or act with the appropriate diligence required by Rule 16 of the Federal Rules of Civil Procedure. Id. at 14. In the present Motion, Maghazehe points to the same misconduct by the GNI Defendants that caused him and Capital Health to seek documents by way of a third-party subpoena. Brief in Support at 4-7. He does not indicate, however, why he did not seek a remedy before the close of discovery. If Maghazehe believed he was not getting full and complete discovery from the GNI Defendants, he could have filed a motion to compel or sought other relief from the Court. Instead, he chose to issue several non-party subpoenas on GNI's consultants and potential business partners. Id. at 4. Further, Maghazehe does not indicate how, even if the GNI Defendants intentionally withheld documents, he was harmed by their actions, given that he obtained the documents and relevant information by way of the third-party subpoena and within the fact discovery period. Brief in Support at 4-7. Because Rule 37 sanctions do not apply where a discovery abuse is harmless, no relief can be granted. Fed. R. Civ. P. 37(c)(1). Next, the Court turns to Maghazehe's argument that the GNI Defendants failed to identify certain fact witnesses in their Initial Disclosures, and later failed to amend those disclosures when it became clear that the GNI Defendants intended to rely on those witnesses. Based upon the record presented, the Court finds that the witnesses allegedly concealed from Maghazehe were clearly and unambiguously disclosed before the close of discovery and in accordance with Rule 26. Opposition Brief, Declaration of Erik Coccia (the “Coccia Declaration”), Exhibits 4, 6 [Docket Entry Nos. 327, 329]. Even had the GNI Defendants engaged in the alleged behavior, Maghazehe's own papers admit that at Mr. Damico's second deposition, which occurred during the fact discovery period, the witnesses were identified. Brief in Support at 16. This information was thus made known to Maghazehe in accordance with Rule 26(e)(2) before the close of fact discovery. Although Maghazehe complains about the late timing of the disclosures, at no point did he or Capital Health request an extension of the discovery period so that they could adequately conduct discovery as to these new witnesses. Id. Maghazehe additionally fails to indicate how he was harmed by the GNI Defendants’ alleged actions. Based on the conclusion that Maghazehe was aware of the identity of these individuals before the close of discovery, and without a showing of harm from their not having been identified sooner, the Court finds there is no basis to strike any reference to them in the summary judgment motions. *5 Finally, the Court turns to Maghazehe's allegation that the GNI Defendants failed to identify Dr. Karabulut as an individual likely to have discoverable information in their Initial Disclosures. Prior to the initiation of discovery, GNI Defendants filed a RICO Case Statement, wherein Dr. Karabulut was referenced seventeen times. RICO Case Statement at 14, 24, 30. Significantly, this case statement was referenced five times in the GNI Defendants’ Initial Disclosures, and was again explicitly referenced as part of the GNI Defendants’ responses to Capital Health's First Set of Interrogatories. Coccia Declaration, Exhibits 2, 3. The numerous references to Dr. Karabulut were both clear and unambiguous, thereby meeting the Rule 26 standard of having otherwise been made known. Accordingly, the Motion is denied insofar as it seeks to strike the Karabulut Declaration. The Court finds that Maghazehe has failed to show that the GNI Defendants did not sufficiently meet their obligations under the Rules or that Maghazehe was harmed by any discovery actions taken by the GNI Defendants. As a result, this Court finds no reason to impose sanctions. Accordingly, for the reasons set forth above, and for good cause shown, Maghazehe's Motion to Strike and for Sanctions [Docket Entry No. 301] is DENIED in its entirety. IT IS SO ORDERED. Footnotes [1] This decision is intended only for the parties and assumes a degree of familiarity with the facts of the case.