On December 12, 2016, in Olivarez v. GEO Group, Inc., the US Court of Appeals for the Fifth Circuit held that, if evidence serves both a substantive and impeachment purpose, it cannot be withheld from the automatic disclosure provisions of FRCP 26(a)(1) as evidence used solely for impeachment. The court therefore upheld district court sanctions of $1,000 each against two attorneys who failed to disclose such evidence in their initial disclosures. ( (5th Cir. Dec. 12, 2016)).

In 2012 and 2013, the plaintiff, Lisa Velasquez Olivarez, was incarcerated at a detention center owned by defendant GEO Group, Inc. (GEO). While incarcerated, the plaintiff was allegedly sexually assaulted multiple times by a GEO employee. Around the time of the alleged assaults, the plaintiff made several phone calls on a detention center phone in which she described the sexual encounters in a manner that could be construed to suggest the encounters were consensual.

In 2014, in the US District Court for the Western District of Texas, the plaintiff filed several claims against GEO and its detention center officials, all relating to the sexual assault. In response, the defendants argued, among other things, that the plaintiff had consensual sex with the GEO employee. In 2015, the defense attorneys submitted initial disclosures as required by FRCP 26(a)(1). The defense attorneys did not disclose the detention center tape recordings in which the plaintiff described the alleged assaults. However, when the defense attorneys deposed the plaintiff, they questioned her about the phone conversations and played the recordings. The defense attorneys provided the plaintiff's attorney with the recording only after the deposition.

The plaintiff's attorney moved to sanction the defense attorneys under FRCP 26 and 37 for failure to include the detention center tape recordings in their initial disclosures. The district court imposed sanctions under both Rule 37 and its inherent authority, ordering two defense attorneys who did not disclose the recordings to each pay a $1,000 fine. The court reasoned that the recordings were not solely impeachment evidence, and therefore they were required to be disclosed under FRCP 26(a)(1).

The defense attorneys appealed. They argued that they used the tapes only for impeachment and therefore they could withhold them under FRCP 26(a)(1), which provides that evidence used solely for impeachment need not be disclosed. The defense attorneys also argued that even if disclosure were required, they should not be sanctioned because they were substantially justified in their belief that they did not need to disclose the tapes.

On appeal, the Fifth Circuit held that:

Based on this reasoning, the Fifth Circuit affirmed the district court's order sanctioning the defense attorneys.