Free Motion for Miscellaneous Relief - District Court of Federal Claims - federal

Case 1:93-cv-00531-LAS

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS __________________________________________ ) AMBASE CORPORATION AND ) CARTERET BANCORP, INC., ) ) Plaintiffs, ) ) and ) ) FEDERAL DEPOSIT INSURANCE ) CORPORATION, ) ) Plaintiff-Intervenor, ) ) v. ) ) UNITED STATES OF AMERICA, ) ) Defendant. ) __________________________________________)

Civil Action No. 93-531C (Judge Loren Smith)

PLAINTIFFS' MOTION TO SUBMIT PARTY ADMISSIONS AS SUBSTANTIVE EVIDENCE Pursuant to FED. R. EVID. 801(d) Plaintiffs AmBase Corporation and Carteret Bancorp, Inc. ("AmBase"), hereby move for leave to file excerpts of Professor Roy C. Smith's deposition testimony, taken on October 16-18, 2007, for use as substantive evidence in this case. Specifically, AmBase wishes to submit the following portions of Professor Smith's deposition (attached hereto as Ex. A): 4:12-4:24; 7:11-7:17; 8:1-8:9; 54:10-54:23; 55:11-55:22; 58:7-59:19; 71:2073:13; 83:25-84:24; 92:7-92:20; 93:3-94:8; 94:16-94:20; 97:3-99:20; 112:2-112:4; 117:2-118:3; 118:7-119:6; 119:7-119:16; 122:14-124:7; 125:17-126:16; 128:2-129:3; 129:12-129:18; 135:9135:15; 136:15-137:5; 138:12-138:19; 141:2-141:19; 142:14-142:25; 146:9-146:23; 153:23154:13; 156:19-157:12; 157:20-158:15; 161:11-161:24; 164:7-164:13; 165:3-165:14; 165:23166:10; 167:17-167:21; 169:5-169:9; 169:21-170:3; 172:19-173:11; 174:1-175:11; 176:13-

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177:2; 181:2-181:12; 204:17-205:5; 208:13-209:2; 210:18-210:23; 234:13-235:4; 282:14-283:4; 307:16-307:23; 315:18-315:25; 348:25-350:5; 378:9-380:18; 382:21-383:3; 383:6-383:18; 383:25-384:23; 398:12-398:24; 407:13-407:24; 409:3-409:11; 420:11-420:23; 421:20-422:7; 426:18-427:20; 428:11-428:20; 434:10-435:14; 438:7-439:25; 441:19-443:4; 443:24-445:7; 446:22-448:1; 452:20-453:5; 464:23-467:20; 507:16-509:14. This deposition testimony is admissible under FED. R. EVID. 801(d)(2)(C). 1 DISCUSSION I. Requirements for Admissibility Under Rule 801(d)(2)(C) FED. R. EVID. 801(d) provides, in relevant part: The Court ordered AmBase to file its Appendix A submissions by December 21, 2007. Order of April 13, 2007 (Doc. 217). Appendix A of this Court's Rules specifies that "[a]ny party intending to present substantive evidence by way of deposition testimony, other than as provided by Fed. R. Evid. 801(d), shall serve and file a separate motion for leave to file the transcript of such testimony." RCFC Appendix A, ¶15(b) (emphasis added). AmBase seeks to designate Professor Smith's testimony only under Fed. R. Evid. 801(d), and thus was not required to file this motion as part of its Appendix A submissions. See Globe Sav. Bank, F.S.B. v. United States, 61 Fed. Cl. 91, 96 (2004) (noting that "this Court's case management procedures . . . specify that a separate motion be filed for admission of a deposition pursuant to RCFC 32(a) but not under Fed. R. Evid. 801(d)(2)"); Order Granting-In-Part Plaintiff's Motion to Admit Deposition Testimony as Substantive Evidence at 2-4, Anchor Sav. Bank v. United States, No. 95-39C (Fed. Cl. May 17, 2005) ("Anchor Order") (attached hereto as Ex. B) ("Paragraph 15 by its own terms does not apply to deposition testimony that is presented at trial pursuant to Fed. R. Evid. 80 1 (d), i.e., deposition testimony that is characterized as non-hearsay . . . ."); Glendale Fed. Bank, FSB v. United States, 39 Fed. Cl. 422, 425 (1997) (admitting expert witness' deposition testimony "as admissions against the Defendant" pursuant to Fed. R. Evid. 801(d)(2)(C) without referring to RCFC 32(a)). See also Pls.' Mot. to Designate Dep. Test. for Trial (Doc. 244) at 7 n.1 ("AmBase nevertheless reserves the right to move for leave to designate additional deposition testimony that may be admissible under FED. R. EVID. 801(d)."). Indeed, as explained below, this Court's rule concerning the designation of an expert's deposition testimony as an admission of a party opponent instructs that a motion such as this one cannot be filed until trial has begun. See Glendale, 39 Fed. Cl. at 424-25. In Glendale, this Court held that "classic independent experts brought in for trial" do not qualify as agents under Fed. R. Evid. 801(d)(2)(D), but rather as parties authorized to speak under Fed. R. Evid. 801(d)(2)(C). 39 Fed. Cl. at 424. Accordingly, AmBase brings this motion under the latter Rule. If, however, the Court revisits and reverses this ruling, then AmBase respectfully requests that the Court also treat this as a motion to designate under Rule 801(d)(2)(D). 2
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(d) Statements which are not hearsay. A statement is not hearsay if-- .... (2) Admissions by party-opponent. The statement is offered against a party and is . . . (C) a statement by a person authorized by the party to make a statement concerning the subject. Deposition testimony satisfying the requirements of this rule need not "fall within a provision of RCFC 32 to be admissible," for "Fed. R. Evid. 801(d)(2) provides an independent ground for admission of deposition testimony." Globe, 61 Fed. Cl. at 95-96 (quotation marks omitted). See also RCFC 32(a)(1) ("Any deposition may be used by any party for the purpose of contradicting or impeaching the testimony of deponent as a witness, or for any other purpose permitted by the Federal Rules of Evidence.") (emphasis added); Anchor Order at 4-6. Thus, so long as AmBase can demonstrate that designated deposition testimony satisfies the requirements of Rule 801(d)(2), it may be admitted as evidence at trial. See Long Island Sav. Bank, F.S.B. v. United States, 63 Fed. Cl. 157, 163-65 (2004); Globe, 61 Fed. Cl. at 94-97; Anchor Order at 4-6. "It is a widely accepted rule that admissions of a party-opponent under Rule 801(d)(2) are accorded generous treatment in determinations of admissibility." Globe, 61 Fed. Cl. at 96 (quotation marks omitted). Thus, deposition testimony may be used at trial as the admission of the United States as party opponent under Rule 801(d)(2)(C) so long as it meets two straightforward requirements. First, it must be an "admission." "[A] `statement' is an `admission' for the purposes of the rule simply if it benefits the party offering it." PG&E v. United States, 73 Fed. Cl. 333, 440 (2006). In other words, the statement need not be "against interest" or "inculpatory," Globe, 61 Fed. Cl. at 97. Second, the statement must be "made by `a person authorized by the party to make a statement concerning the subject.'" PG&E, 73 Fed. Cl. at 440. Deposition testimony satisfying these requirements is admissible as substantive evidence without further showing. The movant "need not demonstrate that any of the declarants whose

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deposition testimony it seeks to admit at trial . . . will be unavailable as witnesses at trial." Long Island Savings Bank, 63 Fed. Cl. at 164; accord Globe, 61 Fed Cl. at 95. 2 Rule 801(d)(2) is not a rule of convenience or necessity justified by witness unavailability. Instead, Rule 801(d)(2) recognizes that party admissions have circumstantial guarantees of reliability that substitute for the guarantees of in camera observation, oath, and cross examination. Thus, admissions constitute, and the Federal Rules treat them as, reliable and independent substantive evidence. Accordingly, the concerns that motivated the common law's preference for live testimony are not implicated by designations under Rule 801(d)(2). As this Court has recognized, "admissions of a party opponent are not hearsay. The common law's preference for live testimony has no bearing on the use of party admissions as evidence." Long Island Savings Bank, 63 Fed. Cl. at 163. See also Globe, 61 Fed. Cl. at 94-95 ("As Professor Wigmore explains, admissions `pass the gauntlet of the hearsay rule, which requires that extra-judicial assertions be tested by cross-examination, because the declarant, in the circumstance of making an admission, is "the only one to invoke the hearsay rule and because he does not need to examine himself.'") (quoting 4 John Henry Wigmore, Evidence in Trials at Common Law § 1048, at 4 (James H. Chadbourn ed., 1972)). The Advisory Committee's Note to Rule 801(d) explicitly makes this point: "Admissions by a party-

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In response to AmBase's Motion to Designate Deposition Testimony for Trial (Doc. 244), which relied in part on Rule 801(d)(2) and the analyses of that Rule in Globe and Long Island, the government stated that it "respectfully disagree[d] with the[se] cases . . indicating th[at] Fed. R. Evid. 801(d)(2)(D) constitutes an independent basis for admitting deposition testimony as evidence." Doc. 248 at 6 n.1. The government may well disagree with these decisions, perhaps because they force the government to grapple with the implications of its own admissions, but it offered no reasons why the opinions are erroneous under the Rules they interpret. Faced with the cogent analysis of Long Island and Globe, the Government is left to invent nonexistent requirements under the Rules and to appeal to a common law preference for live testimony--a preference, which as explained above, does not even apply to admissions. Long Island, Globe, and the other sources cited in this filing effectively and fully rebut these arguments. In any event, this Court rejected the government's arguments and granted AmBase's motion to designate. See Doc. 250. AmBase respectfully submits that the same course is appropriate here. 4

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opponent are excluded from the category of hearsay on the theory that their admissibility in evidence is the result of the adversary system rather than satisfaction of the conditions of the hearsay rule. No guarantee of trustworthiness is required in the case of an admission." Indeed, even if a witness has testified or will testify at trial, his out-of-court admissions constitute admissible substantive evidence. See, e.g., Cmty. Counseling Serv. v. Reilly, 317 F.2d 239, 243 (4th Cir. 1963) ("[I]t is quite immaterial that the adversary is available to testify at the trial or has testified here. Thus applied, the Rule is a restatement of the long recognized rule of evidence that statements of a party which are inconsistent with his claim in litigation are substantively admissible against him.") II. Professor Smith's Testimony Satisfies the Requirements of Rule 801(d)(2)(C) As noted above, to constitute an admission under Rule 801(d)(2)(D), a statement must be "made by `a person authorized by the party to make a statement concerning the subject.'" PG&E, 73 Fed. Cl. at 440. AmBase seeks admit as an admission of the United States the testimony of Professor Roy Smith, an expert retained by the government to testify in this case. AmBase seeks to admit this testimony because it goes toward proving its case. For example, AmBase seeks to prove that Carteret labored under onerous regulatory restrictions in the aftermath of the breach. Professor Smith, in a portion of his deposition identified above, stated that Carteret was "in jail" after FIRREA. Smith Dep. at 282:14-283:4. The identified testimony thus "benefits the party offering it." PG&E, 73 Fed. at 440. The only remaining question then is this: is a testifying expert a person authorized by the party to make a statement concerning the subject? Id. This Court, in a veritable doppelganger of this case, has answered that question in the affirmative.

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In Glendale, the Court addressed whether the plaintiff in a Winstar case could "introduce deposition testimony of government experts . . . as substantive evidence." Glendale, 39 Fed. Cl. at 422. Specifically, the Court considered whether the expert statements qualified as statements authorized by a party under 801(d)(2)(C) and found that timing is the dispositive issue. The Court explained: By the time trial begins, we may assume that those experts who have not been withdrawn are those whose testimony reflects the position of the party who retains them. At the beginning of trial we may hold the parties to a final understanding of their case and hence an authorization of their expert witnesses who have not been withdrawn. At this point when an expert is put forward for trial it is reasonable and fair to presume they have been authorized. This of necessity includes prior deposition testimony of that expert. This is also a rational and fair point at which to draw the authorization line. . . . The beginning of trial is a critical juncture. By the beginning of trial it is fair to tie the party to the statements of its experts. . . . [T]hey were selected as witnesses and retained through the start of trial because the opinions they held all along, and still hold as the trial begins, are consistent with those of the sponsoring party. . . . [A]n expert witness who is listed as such when the trial begins has been authorized and his or her prior statements are fair game. Id. at 424-25. The Court thus enunciated the following rule: "When an expert witness is put forward as a testifying expert at the beginning of trial, the prior deposition testimony of that expert in the same case is an admission against the party that retained him." Id. at 425. See also Banks v. United States, 78 Fed. Cl. 603 (2007) ("The studies not issued directly by an agency of the United States and instead issued by a private entity hired by the government for the purpose of studying and submitting a report on the erosion at St. Joseph qualify as statements made `by a person authorized by the party to make a statement concerning the subject.'") (quoting FED. R. EVID. 801(d)(2)(C)); PG&E, 73 Fed. Cl. at 438, 440 (finding statements in "documents prepared by contractors under the authority of and for the benefit of" the Department of Energy "could be admitted as non-hearsay under Fed. R. Evid. 801(d)(2)(C)").

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The case at bar easily satisfies the test laid out in Glendale. Trial has begun and the government has retained Mr. Smith as a testifying expert. See Def.'s Final Witness List (Doc. 255) at 2, 8-9 (identifying "Professor Roy C. Smith" as a "witness[] the government expects to present at trial"). Indeed, in its opening statement, counsel for the government explicitly and repeatedly invoked the upcoming testimony of Professor Smith. See Tr. at 109:9-109:18, 116:21-116:25, 129:21-130:3. Accordingly, under the rule of Glendale, the deposition testimony identified above is admissible as substantive evidence. CONCLUSION For the foregoing reasons, AmBase respectfully requests that the Court enter an order admitting the deposition testimony identified herein as substantive evidence at trial. Respectfully submitted, /s/ Charles J. Cooper______________ Charles J. Cooper COOPER & KIRK, PLLC 1523 New Hampshire Ave., N.W. Washington, D.C. 20036 (202) 220-9600 (202) 220-9601 (fax) Counsel of Record Of Counsel: Vincent J. Colatriano David H. Thompson Jesse Panuccio COOPER & KIRK, PLLC 1523 New Hampshire Ave., N.W. Washington, D.C. 20036 (202) 220-9600 (202) 220-9601 (fax) Dated: February 21, 2008

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CERTIFICATE OF SERVICE I hereby certify that on this 21st day of February 2008, I caused to be served by the Court's electronic filing system copies of the foregoing on the following counsel: David Levitt, Esq. U.S. Department of Justice Commercial Litigation Branch Civil Division 1100 L Street, N.W.--Room 12006 Attn: Classification Unit--8th Floor Washington, DC 20530 Andrew Gilbert, Esq. FDIC Legal Division 550 17th Street, N.W. Room 2098 Washington, DC 20429

/s/ Jesse Panuccio Jesse Panuccio

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