Date: Jun 8, 2026

Rule 37(c)(1) Mandatory Exclusion for Undisclosed Damages: A Rebuttal Expert Report Cannot Backfill Rule 26(a) Computations

1. Introduction

In Deque Systems Inc. v. Browserstack, Inc. (4th Cir. June 5, 2026), Deque (a web accessibility testing vendor) sued its competitor BrowserStack alleging (i) copyright infringement under the Copyright Act, 17 U.S.C. § 501(a), (ii) false advertising under the Lanham Act, 15 U.S.C. § 1125, and Virginia law, Va. Code Ann. § 18.2-216, plus (iii) breach of contract and (iv) unjust enrichment.

Deque’s theory was that BrowserStack employees accessed Deque’s DevTools and Rules Help Pages under contractual “no copying/reverse engineering” terms, then used those materials to build BrowserStack’s competing Accessibility Toolkit and to publish allegedly false comparative advertising.

The appeal turned on case-management and remedies rather than the underlying infringement merits: whether Deque’s repeated failure to disclose damages computations and supporting material (as required by Federal Rule of Civil Procedure 26(a)) justified excluding damages evidence under Rule 37(c)(1), and whether summary judgment properly followed once damages evidence was excluded and injunctive relief was unsupported.

2. Summary of the Opinion

The Fourth Circuit affirmed two rulings:

The district court did not abuse its discretion by excluding Deque’s evidence of monetary damages (lost profits, disgorgement of revenue, and avoided development costs) as a sanction under Rule 37(c)(1), applying the Southern States Rack & Fixture, Inc. v. Sherwinn-Williams Co. factors.
The district court correctly granted summary judgment for BrowserStack on all claims because, after exclusion, Deque lacked admissible damages proof and also failed to show a triable basis for injunctive (or declaratory) relief—particularly given the unrebutted evidence that the alleged infringing content and challenged advertisement had been removed.

The court also held that Deque waived its attempt to reframe the exclusion order as a “terminating” sanction requiring Wilson v. Volkswagen of America, Inc. analysis because Deque first raised that theory in a Rule 59(e) motion.

3. Analysis

3.1 Precedents Cited

Southern States Rack & Fixture, Inc. v. Sherwinn-Williams Co.

This is the Fourth Circuit’s standard framework for deciding whether a Rule 26(a) failure is “substantially justified or harmless” under Rule 37(c)(1). The opinion reaffirms that district courts should weigh: (1) surprise, (2) ability to cure, (3) disruption, (4) importance of the evidence, and (5) explanation for nondisclosure. Applying Southern States, the court approved exclusion where Deque disclosed meaningful damages theories and magnitudes (up to $30M) only at the end of discovery via a mislabeled “rebuttal” report and a post-discovery “supplement.”

Wilkins v. Montgomery

The court used Wilkins v. Montgomery to emphasize two key points: (i) Rule 37(c)(1) exclusion applies to evidence used “on a motion, at a hearing, or at a trial,” and (ii) the burden is on the nondisclosing party to show substantial justification or harmlessness.

Clear Touch Interactive, Inc. v. Ockers Co.

Cited as a recent reiteration of the Southern States factors, reinforcing that the analysis is not novel and remains controlling in Rule 37(c)(1) disputes.

Saudi v. Northrop Grumman Corp.

The court relied on Saudi v. Northrop Grumman Corp. to justify “particularly wide latitude” for district courts sanctioning Rule 26(a) failures that impair preparation, prolong litigation, and undermine docket management. This deference substantially shaped the appellate posture: the question was not what the Fourth Circuit would have done, but whether exclusion was outside the district court’s discretion.

Dietz v. Bouldin

Dietz v. Bouldin was invoked for the general proposition that district courts have inherent authority to manage their dockets. This supported the district court’s finding that reopening discovery to cure Deque’s late damages disclosure would meaningfully disrupt the schedule.

Hoffman v. Constr. Protective Servs., Inc.

Though a Ninth Circuit case, Hoffman v. Constr. Protective Servs., Inc. was used persuasively: when late disclosure requires a new schedule and possibly reopened discovery, the failure is less likely “harmless.”

Foodbuy, LLC v. Gregory Packaging, Inc.

Deque argued Foodbuy, LLC v. Gregory Packaging, Inc. favored a continuance instead of exclusion. The court distinguished it: Foodbuy merely demonstrates a district court may cure surprise with a short adjournment—especially where the surprised party agrees—not that it must do so. The case thus reinforced discretion rather than constrained it.

Benjamin v. Sparks

Benjamin v. Sparks supported the principle that the more important the evidence, the more critical timely disclosure becomes—because prejudice increases with importance. Here, damages were central; that did not excuse late disclosure, it aggravated its effects.

Wilson v. Volkswagen of America, Inc. and Holland v. Big River Minerals Corp.

Deque attempted to invoke Wilson v. Volkswagen of America, Inc. (bad faith, lesser sanctions, etc.) typically associated with Rule 37(b)(2)(A) “failure to obey an order.” The court held the argument was waived under Holland v. Big River Minerals Corp. because Deque raised it only in a Rule 59(e) motion and the district court did not excuse the untimeliness. The court also noted that even aside from waiver, the premise was flawed because the district court treated exclusion and summary judgment as analytically separate steps.

United States v. Stover, Anderson v. Liberty Lobby, Inc., and Celotex Corp. v. Catrett

These cases supplied the summary-judgment framework: de novo review (United States v. Stover), the need for “specific facts” beyond pleadings (Anderson v. Liberty Lobby, Inc.), and the requirement to produce competent evidence once the movant points to an absence of proof (Celotex Corp. v. Catrett).

eBay Inc. v. MercExchange, LLC

The court invoked eBay Inc. v. MercExchange, LLC in rejecting injunctive relief without evidence of ongoing or threatened future harm. The opinion ties that principle to Deque’s failure to rebut sworn evidence that the challenged content and advertising had been removed.

Santos v. Frederick Cnty. Bd. of Comm'rs

In a footnote, the panel observed Deque likely abandoned injunctive relief, citing Santos v. Frederick Cnty. Bd. of Comm'rs for abandonment/waiver principles—though the court said that point was not necessary to the disposition.

Henry v. R.K. Chevrolet, Inc.

Henry v. R.K. Chevrolet, Inc. was cited to support the conclusion that Deque could not recover attorneys’ fees under Virginia’s false advertising statute without proving a “loss,” which Deque could not do once its damages evidence was excluded.

3.2 Legal Reasoning

(a) Rule 26(a) damages computations are not optional—and cannot be deferred indefinitely

The court treated Rule 26(a)(1)(A)(iii) as a front-loaded obligation: provide a computation for each damages category and produce or identify the supporting materials. Deque repeatedly offered only placeholders (“intend to seek all available damages”), missed the court’s expert schedule, and did not provide a usable damages computation until after discovery closed.

(b) A “rebuttal” expert report cannot be used to smuggle in an affirmative damages case

The opinion underscores that rebuttal reports exist to “rebut” the other side’s opinions, not to supply the proponent’s first real disclosure on an issue on which it bears the burden. Deque’s late damages expert report (served as “rebuttal,” but functioning as the first affirmative damages disclosure) therefore did not cure the Rule 26(a) failure.

(c) Rule 37(c)(1) exclusion was within discretion under the Southern States factors

Surprise: BrowserStack did not receive a meaningful damages theory and magnitude until days before discovery closed (and later supplements after close).
Cure and disruption: curing would require reopening discovery, re-deposing, and re-doing expert work—disrupting the court’s docket.
Importance: damages were central; that heightened prejudice from late disclosure.
Explanation: Deque provided no adequate justification.

(d) Wilson “terminating sanction” analysis did not apply (and was waived)

Deque tried to recharacterize the outcome as dismissal-like. The court’s response was twofold: (i) procedurally, Deque waived the argument by raising it first in Rule 59(e); (ii) substantively, the district court did not impose summary judgment as a sanction but granted it after excluding evidence and then examining the remaining record.

(e) Injunctive relief requires evidence of actual or threatened future harm

Even assuming monetary damages are not a strict element of copyright infringement or false advertising, Deque still needed evidence supporting prospective relief. BrowserStack submitted sworn evidence that the alleged infringing content and advertisement were removed; Deque offered no countervailing inspection evidence, affidavit, deposition testimony, or other competent material. The court treated Deque’s attack as essentially an invitation for a credibility determination without any competing facts—insufficient under Rule 56.

(f) Declaratory relief must be pleaded and pursued

The Fourth Circuit agreed with the district court that Deque did not request declaratory judgment in its complaint or meaningfully litigate it during pretrial. Attempting to revive it at reconsideration and on appeal did not salvage the claims.

3.3 Impact

Practical litigation impact in the Fourth Circuit

Damages disclosure must be concrete and timely: “we seek all available damages” is not a computation. Parties must commit early to categories, methodologies, and supporting materials.
“Rebuttal” is not a do-over: litigants cannot bypass missed affirmative expert deadlines by labeling the first damages opinion as “rebuttal.”
Post-discovery “supplements” are high-risk: late “abundance of caution” disclosures after discovery close will not necessarily prevent exclusion and may highlight noncompliance.
Rule 59(e) is not a preservation tool: new theories (e.g., reframing a sanction under Wilson v. Volkswagen of America, Inc.) raised first in reconsideration are generally waived on appeal absent district-court excusal.
Injunctions demand evidence of forward-looking harm: removing the challenged product features/ads can defeat injunctive claims if the plaintiff cannot show likely recurrence, ongoing infringement, or other cognizable prospective injury.

4. Complex Concepts Simplified

Rule 26(a)(1)(A)(iii) “computation of damages”: Not just listing types of damages. It means stating how you calculated each damages category (the math/method) and pointing to the documents/data supporting the numbers.
Rule 37(c)(1) exclusion: If you fail to disclose required information, you normally cannot use it later in motions or at trial—unless you show the failure was substantially justified (good reason) or harmless (no prejudice).
“Substantially justified or harmless” (Southern States test): Courts weigh surprise, ability to cure, disruption, importance, and explanation. The nondisclosing party bears the burden.
Rebuttal expert report: An expert report limited to responding to the other side’s expert on the same subject. It is not meant to be your first affirmative expert report on an issue you must prove.
Summary judgment burden shifting (Celotex / Anderson): Once the moving party shows a lack of evidence for an essential claim or remedy, the opponent must produce concrete, admissible evidence—not argument, suspicion, or attacks on credibility without competing facts.
Injunctive relief (eBay concept applied): A court order to stop future misconduct requires evidence of ongoing or likely future harm; past harm alone is usually insufficient if the conduct has ceased and is unlikely to recur.

5. Conclusion

Deque Systems Inc. v. Browserstack, Inc. reinforces a strict and practical rule: in federal court, a party that repeatedly fails to provide timely, substantive damages computations and supporting materials under Rule 26(a) risks mandatory exclusion of damages evidence under Rule 37(c)(1), and cannot cure the failure by repackaging an initial affirmative damages case as “rebuttal.”

The decision also underscores that remedy theories matter at summary judgment. If damages evidence is excluded, the plaintiff must be able to prove entitlement to alternative relief with competent evidence—especially where injunctive relief requires proof of ongoing or threatened future wrongdoing. Without such proof, summary judgment is not a “sanction,” but the ordinary consequence of an evidentiary record that cannot support relief.