Free Response to Motion - District Court of Federal Claims - federal

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Consolidated under lead cases Nos. 435-87C & 589-87C (No. 91-984C) (Judge Bruggink) ______________________________________________________________________________ ______________________________________________________________________________ GATEWAY LUMBER CO., et al. and MANKE LUMBER CO., et al. (Mt. Adams Veneer Co.), Plaintiffs, v. THE UNITED STATES, Defendant. ______________________________________________________________________________ PLAINTIFF'S MEMORANDUM IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ______________________________________________________________________________ Dennis J. Dunphy, Esq. Attorneys for Plaintiffs SCHWABE WILLIAMSON & W YATT, P.C. 1420 Fifth Avenue Suite 3010 Seattle, Washington 98101-2393 Telephone: (206) 622-1711

Of counsel: Steven A. Miller, Esq. SCHWABE WILLIAMSON & W YATT, P.C. 1420 Fifth Avenue Suite 3010 Seattle, Washington 98101-2393 Telephone: (206) 622-1711 January 22, 2004

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TABLE OF CONTENTS Page I. II. INTRODUCTION ...............................................................................................................1 STATEMENT OF CAS E ....................................................................................................6 A. B. C. D. E. The distinguishing characteristics of the Lynx Sale. ...............................................6 There were sizeable discrepancies between the government appraisal of the Lynx Sale and the prices actually bid at the original Lynx auction. ..................7 Mt. Adams was awarded the contract, but could not perform. ................................9 The government took a year before deciding whether to resell the contract. ..........9 Contract provision B9.4 required the government to conduct a new appraisal consistent with the then-existing standard Forest Service methods. ...................................................................................................................9 The government appraised the timber using out-of-date data when attempting to compute the value of the timber at the time of termination.............10 The standard method of appraising damages in cases where timber was not resold required the Forest Service to adjust its basic appraised rates by adding an estimated bid premium computed from comparable sales. ...................11 In computing bid premiums on the Lynx Sale, the government selected four "comparables" for reasons that the contracting officer cannot remember. ..............................................................................................................13 The "comparables" used to compute overbid do not share many of the Lynx Sale's characteristics.....................................................................................14 1. The government included two salvage sales as "comparables" and this alone artificially inflated damages by nearly two million dollars. .......................................................................................................14 The government also failed to adjust its overbid calculations to reflect the high quality of the timber contained in the Lynx Sale. .............15 The Lynx Sale included four times the volume of timber contained in any of the "comparables." ....................................................................16 The Lynx Sale also had a performance period that was twice as long as any of the "comparables," providing for greater scheduling flexibility. .................................................................................17

F. G.

H.

I.

2. 3. 4.

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TABLE OF CONTENTS Page 5. J. III. The government also failed to take into account the different contract terms contained in the "comparables." ......................................17

The government then computed damages using data about timber volumes that was apparently never verified for accuracy. ...................................................18

ARGUMENT.....................................................................................................................19 A. B. C. Summary Judgment Standard. ...............................................................................19 Contract provision B9.4 required the government to conduct an appraisal that complied in all material respects with its standard appraisal methods. ..........20 There are factual issues to show that the government did not comply in several material respects with its standard appraisal methods, and resolution of these factual issues requires a trial....................................................22 1. There are issues of fact as to whether the Forest Service complied in all material respects with its standard method of conducting a damage appraisal when no resale is conducted. .......................................22 The deviations from the government's standard method of conducting a damages appraisal are material to the government's assessment of damages and therefore preclude summary judgment.........24

2.

IV.

CONCLUSION..................................................................................................................25

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APPENDIX Exhibit No. 1 February 2, 1990, Memo from Jerry J. Brown, Fire/Timber Management Staff, to Regional Forester, Region 6 October 6, 1999, Trial Transcript, Capital Development Co. v. The United States, U. S. Court of Federal Claims, Cause No. 750-87C January 2, 1979 Memo from Robert D. Tokarczyk, Forest Supervisor, to District Manager, Randle R.D., with attachments Timber Sales Action Bid Record for Lynx Sale September 30, 1981, The Effectiveness of Competition and Appraisals in the Auction Markets for National Forest Timber in the Pacific Northwest, pp. iii, iv, viii, and 209 July 24, 1984 Letter from George M. Leonard, Director of Timber Management, to Regional Foresters Selection Portions of Forest Service Manual 2420 10/77 Amend. 109: §§ 2421.4, 2423.2, 2424.25, 2424.3 April 24, 1990 Appraisal Summary Selected Portions of Forest Service Manual 2430 (2/81) Amend. 123: §§ 2433.6, 2435.05 Selection Portions of Deposition of David E. Note, July 9, 1993, pp. 41, 42, and 43 FSM 2433.54 5/83 Amend. 129 April 13, 1990 Memo from Beulah Johnson to David Note, with attachments February 14, 1990 Memo from Wendall L. Jones, Director of Timber Management, to Regional Attorney Forest Service Manual § 2431.23 (12/82) R-6 Supp. No. 296 Page No. 1

2

2-4

3

5-6

4 5

7-14 15-20

6 7 8 9 10 11 12 13 14

21-22 23-37 38 39-43 44-49 50-56 57-63 64 65-66

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APPENDIX Exhibit No. 15 Form 2400-17s of Beech 5, Polk 4 Salvage, Beech 4 Salvage, Kraus 7, Schooley 11, Cozy 3, Tumble 4, Holdaway 2, Silver 7, and Polar 2 October 24, 1979 Lynx Timber Sale Contract, Section A7-Scheduled Rate Redetermination Report and Appraisal, Gifford Pinchot National Forest, Randle Ranger District, Lynx Timber Sale, Sale Cruise Scheduled Rate Redetermination, Lynx Timber Sale, Section A ­ Sale Cruise Deposition of Ronald Lewis, June 16, 1993, p. 46 Page No. 67-86

16 17 18 19

87-88 89-91 92-94 95-97

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TABLE OF AUTHORITIES Page CASES Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)...................................................20 Capital Development Co. v. United States 49 Fed. Cl. 178 (2001), aff'd 308 F.3d 1283 (Fed. Cir. 2003)....................................passim Cedar Lumber, Inc. v. United States 5 Cl. Ct. 539 (1984) ...........................................................................................................14 Dan Rice Constr. Co. v. United States 36 Fed. Cl. 1 (1996) ...........................................................................................................25 Hoskins Lumber Co. v United States 1996 U.S. App. LEXIS 9612 (Fed. Cir. 1996) ........................................................2, 20, 21 In re: Cleereman Forest Products AGBCA No. 2000-101-1...................................................................................................21 J.F. Allen Co. v. United States 25 Cl. Ct. 312 (1992) .....................................................................................................3, 20 Madigan v. Hobin Lumber Co. 986 F.2d 1401 (Fed. Cir. 1993)................................................................................2, 20, 21 Manke Lumber Co. v. United States 45 Fed. Cl. 157 (1999) .......................................................................................................25 Opryland USA, Inc. v. Great Am. Music Show, Inc. 970 F.2d 847 (Fed. Cir. 1992)............................................................................................23 Phillips Petroleum Co. v. Huntsman Polymers Corp. 157 F.3d 866 (Fed. Cir. 1998)............................................................................................20 Seaboard Lumber Co. v. United States 48 Fed. Cl. 814 (2001) .............................................................................................5, 18, 24 Teleflex, Inc. v. Ficosa N. Am. Corp. 299 F.3d 1313 (Fed. Cir. 2002)..........................................................................................20 Telemac Cellular Corp. v. Topp Telecom, Inc. 247 F.3d 1316 (Fed. Cir. 2001)..........................................................................................19 Tel-Instrument Electronics Corp. v. United States 56 Fed. Cl. 174 (2003) .......................................................................................................25

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TABLE OF AUTHORITIES Page RULES 36 C.F.R. § 223.60...........................................................................................................................8 RCFC 56(f) ....................................................................................................................................23

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS GATEWAY LUMBER CO., et al. and MANKE LUMBER CO., et al. (Mt. Adams Veneer Co.), Plaintiffs, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) ) )

Consolidated under lead cases Nos. 435-87C & 589-87C (No. 91-984C) (Judge Bruggink)

PLAINTIFF'S MEMORANDUM IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT I. INTRODUCTION

The defendant has applied for judgment on its counterclaim, without trial, in the amount of approximately $7 million ($3,789,615 in principal damages, plus interest). The government necessarily does not argue that it suffered injury in this amount. Indeed, the evidence developed thus far demonstrates it is unlikely that it has suffered any injury at all. 1 Rather, having chosen for reasons of public policy to retain rather than to sell the timber that was subject to the contract, the government proffers the Contracting Officer's calculation of entitlement under the terms of a contractual remedy for Mt. Adams Veneer's failure to cut it down. The validity of the calculation ­ its consistency or lack of consistency with government policy as mandated by the

1

An internal government memorandum dated February 2, 1990, states: If we were given approval to resell the [Lynx] sale in its original form, it is likely that the current contract rates (DF - $678.00; H&O - $500.00; C - $220.35) would be equaled or exceeded, thus mitigating the damages.

P. App. at 1; see also Declaration of Paul Ehinger, dated January 22, 2004, at ¶ 18 (hereinafter "Ehinger Decl.").

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terms of the contractual remedy itself ­ is nowhere demonstrated in the conclusory declaration submitted with the government's motion. In fact, the Contracting Officer's calculation is demonstrably at odds with many of these standards. As a result, it does not reflect the contractual remedy the government relies upon to obtain the money it seeks to accompany the trees it keeps. The parties agree that Article B9.4 provides the starting point for the analysis, as set forth in the government's motion. The government argues forcefully that, based upon Hoskins Lumber Co. v United States, 1996 U.S. App. LEXIS 9612 (Fed. Cir. 1996) (unpublished), and Madigan v. Hobin Lumber Co., 986 F.2d 1401, 1405 (Fed. Cir. 1993), questions of fairness, accuracy, or reasonableness of the appraisal utilized in connection with the calculation are not pertinent. That is not the import of those cases when applied to the present motion. While those cases indeed provide that the court will not look behind the appraisal policies to judge their fairness or accuracy, they just as decidedly require the government to demonstrate that the Contracting Officer's calculation adheres to those policies: ...compliance with the standard appraisal method is the sole measure of its accuracy and reliability. Hoskins, 1996 U.S. App. LEXIS 9612 at *4. The government ignores its burden. The government's moving papers neither identify the applicable standards nor demonstrate compliance. Instead, the government submits the final mathematical calculations, a fragment of one sub-calculation, and a conclusory declaration by a Forest Service official, uninvolved in the Contracting Officer's decision, which claims that the

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appraisal was "standard." 2 Ms. Anderson does not reveal what elements of the underlying appraisal, if any, that she reviewed to reach this conclusion. The Anderson declaration lacks foundation and should be stricken. 3 One may search the Anderson Declaration in vain for any description of the standards from which the conclusion of compliance arises or against which it could be tested. Not a single regulation is cited. Not a single provision from the Forest Service Manual or Handbook is referenced. No policies of any kind are identified. The Declaration is simply an exercise of checking the Contracting Officer's algorithm combined with an unsubstantiated declaration that the calculation looks "standard." Stated otherwise, replicating a set of summary mathematical calculations in a declaration begs the question of the source of the underlying data and whether it meets the standards that the Forest Service mandates. Without second-guessing those standards, Mt. Adams will demonstrate that the Contracting Officer failed to comply with them and that this has had a material impact on the results. In so doing, the Forest Service has failed to comply with the contract. The Forest Service Manual is, as one would expect, an important touchstone for the measurement of the Contracting Officer's consistency with Forest Service policy. The

"This appraisal of the value of the remaining timber in Mt. Adams' defaulted Lynx Sale, including the determination and addition of the weighted average bid premiums, was performed in accordance with the standard Forest Service method in use at the time." Declaration of Christine Anderson, dated September 11, 2003, (hereinafter "Anderson Decl."), ¶ 14. This Court has previously rejected the Forest Service's attempts to use Ms. Anderson's testimony to fill in evidentiary gaps on matters about which she has no personal knowledge. For instance, in the Capital Development trial, this Court specifically ruled that Anderson could not testify about the source of data contained in a government spreadsheet that had been prepared by another Forest Service employee because she lacked personal knowledge of the underlying data. P. App. at 3-4. That is precisely the kind of impermissible testimony the government offers in this case, and her declaration should therefore be stricken. See, e.g., J.F. Allen Co. v. United States, 25 Cl. Ct. 312, 325 (affidavits based upon reports and statements of others without personal knowledge cannot be considered in summary judgment motion).
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government's failure to apply it to the Contracting Officer's analysis is emblematic of the weakness of the government's argument. The manual describes, in hierarchical fashion, standard appraisal policies, the elements of a basic appraisal, and goes on to point out the need for adjustments in appraisals for more particularized circumstances. Mt. Adams will show in detail the many ways in which the Contracting officer failed to follow these standards, but the more salient examples, supported by USFS policy quotations, can be summarized as follows: 1. "When there is an overriding reason which precludes reoffering the

remaining timber, the resale value is the appraised value at expiration, adjusted as appropriate to reflect transaction evidence." The government's attempts to comply with this provision are superficial, at best. Though the contracting officer added an "estimated bid premium" to the basic appraised rates, the bid premium decidedly did not accurately "reflect" the transaction evidence because the contracting officer failed to account for significant differences between the Lynx Sale and the sales against which Lynx was compared. 2. "If similar sales can be found, use the average bid premium for those sales

and document what was done." The Contracting Officer recognized that sales had to first be comparable to the Lynx Sale before they could be used in computing an average bid premium, and yet two of the four sales he used for comparison were deteriorating "salvage sales," which typically contain dead, insect-infested, damaged, or down timber that is of substantially different quality than timber contained in "green sales." Salvage sales are so different from a "green sale" of live timber that the Forest Service specifically labels these sales (e.g, "Beech 4 Salvage") as an unmistakable warning to

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prospective bidders. Inclusion of these two dissimilar sales to compare against Lynx, which was a "green sale," drives nearly two million dollars of the "loss" calculated by the Contracting Officer. 3. "Since no two tracts of timber are identical, it follows that the stumpage

prices paid or to be paid for any two tracts cannot be directly compared without adjusting for the physical or quality differences between them." The Contracting Officer failed to make any adjustments for the physical and quality differences between Lynx and the four "comparables" he used when he computed an adjusted bid premium. His computation completely ignored the high quality of the Douglas fir timber contained in the Lynx Sale and also failed to adjust for other important differences in the sales, such as the volumes of timber offered in the Lynx Sale and the duration of the Lynx contract. The comparables were also different from the Lynx Sale in requiring a cash down payment and midpoint payments that had not been required in the Lynx Sale. This Court has previously ruled in the Seaboard and Capital Development cases that these increased financial burdens have a material impact on the prices bid on timber. Seaboard Lumber Co. v. United States, 48 Fed. Cl. 814, 835-36 (2001); Capital Development Co. v. United States, 49 Fed. Cl. 178, 184 (2001). Yet the contracting officer made no adjustments for these differences between Lynx and the "comparables." 4. "The appraiser must document his conclusions on all pertinent factors

significantly affecting stumpage value." If an appraiser or the Contracting Officer made any of the foregoing adjustments, or found some justification for not doing so, it is nowhere evident in the documents produced by the government in this case. It is self-

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evidently not contained within the documents selected to support the government's present motion. The government's Motion for Summary Judgment cites the contractual basis for its recovery and the cases which support its applicability, but little else. Proof that a Contracting Officer performed an appraisal and used the resulting values to generate a damages figure is not proof that the appraisal conformed with government policy on what is required to be done in the appraisal. The conclusory declaration that the approach was "standard" not only begs the question of what the standard is, but suggests that the government likely knows that a review of the standard will demonstrate just how far this Contracting Officer departed from it. II. A. STATEMENT OF CASE

The distinguishing characteristics of the Lynx Sale. In August 1979, the government advertised a timber sale located in the Randle Ranger

District of the Gifford-Pinchot National Forest known as the "Lynx Sale." The Lynx Sale contained large volumes of old-growth Douglas fir suitable for veneer production and also for producing lumber, and was particularly attractive and valuable to prospective purchasers. Ehinger Decl. ¶ 7. The Lynx Sale area spanned approximately 1,300 acres, and contained an estimated 536 acres of timber for clearcutting. D. App. 2-3. The sale contained an additional 38 acres of rightof-way for specified road construction. D. App. 2-3. The government estimated the volume of the sale at 37,500 MBF, 4 not including 574 acres of pulp and cull material. D. App. 3, 16. The government estimated that 19,600 MBF of this timber was Douglas fir. D. App. 3, 16. Another 16,400 MBF was western hemlock and other coniferous species, according to the government's

4

"MBF" means "thousand board feet."

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estimates. Id. The government also estimated that the sale included 1,600 MBF western red cedar. Id. These volumes would have kept a typical family-owned sawmill operational for six straight months. Ehinger Decl. ¶ 17. The Lynx Sale was so large, approaching one square mile of timber, that before it was offered, the government contemplated whether Lynx should have been offered as two sales. P. App. 6. The original duration of the contract was seven and a half years. D. App. 14; Anderson Decl. ¶ 2. This period for performance was lengthy even by Forest Service standards. Anderson Decl., ¶ 2. The performance period was later extended by agreement of the parties to June 30, 1989, bringing the total performance period to nearly ten years. D. App. 18. The singular quality of the old-growth timber, and especially the Douglas fir, contained in the Lynx sale is another distinguishing feature of the sale. Ehinger Decl. ¶ 7. An estimated twenty percent of the Douglas fir in the Lynx Sale consisted of #1 peeler and #2 peeler logs. D. App. 3, 16; Ehinger Decl. ¶ 11. These #1 and #2 peelers are more valuable than lower-grade timber because they have a clear surface that is free of knots, and a minimum diameter of 30 inches at the small end. Ehinger Decl. ¶ 11. This allows the logs to be peeled to produce veneer and also to be used to produce lumber. Ehinger Decl. ¶ 11. The quality of the cedar was also notable. Thirty-six percent of the cedar in the Lynx sale was graded as #2 Cedar sawlogs, which has at least a twenty-inch diameter. Ehinger Decl. ¶ 11.

B.

There were sizeable discrepancies between the government appraisal of the Lynx Sale and the prices actually bid at the original Lynx auction. The government established the minimum bids that it would accept on the Lynx Sale in

August 15, 1979, when the government finalized its pre-sale appraisal. D. App. 9. According to

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that appraisal, the estimated price of the Lynx Sale was $213.85/MBF for the Douglas fir and $125.18/MBF for the hemlock and other coniferous timber. 5 D. App. 9. The Lynx Sale was bid at an oral auction, and there were twelve bidders. P. App. 7-14. There were a total of 143 bids made at the auction. P. App. 7-14. The prices bid by the three highest bidders on the biddable species were well in excess of the government's pre-sale appraisal: Douglas fir $678.00/MBF $677.50/MBF $648.00/MBF $213.85/MBF Hemlock & Other $500.00/MBF $500.00/MBF $500.00/MBF $125.18/MBF

Mt. Adams Tom Co. Bald Knob Minimum Bid P. App. at 7-140.

These kinds of discrepancies between the government's pre-sale appraisal and the prices established by competitive bidding were typical of timber sales in the region where Lynx was located. P. App. 7-18. At the time Lynx was bid, bidders were typically bidding more than double the government's pre-sale appraisal rates, and at least one government-commissioned study questioned the effectiveness of the government's pre-sale appraisal process on this basis. P. App. 17-18.6 Even the government concedes that the rates established by its pre-sale appraisal process generally tended to be lower than actual sale prices in the market. Anderson Decl. ¶ 11.

The cedar and PAM were sold at fixed rates and could not be bid. PAM is always offered at fixed rates, as are minor species on the sale. Ehinger Decl., ¶ 7. The Forest Service has now largely abandoned the residual value appraisal methodology that was used at that time, and the current preferred method of appraising timber is by using transaction evidence. 36 C.F.R. § 223.60. However, under standard contract provision B9.4, the relevant appraisal methods and practices are those in place at the time the contract expired. See infra, Section II.E.
6

5

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C.

Mt. Adams was awarded the contract, but could not perform. Based upon its high bid, Mt. Adams was awarded the Lynx Sale. For reasons previously

addressed in a prior summary judgment motion, the sale expired uncompleted on June 30, 1989. Mt. Adams will not reargue these issues again in this brief, as they have been decided previously. D. The government took a year before deciding whether to resell the contract. Once the contract expired uncompleted, Forest Service policy required the government to decide whether to resell the Lynx Sale within a "reasonable time." P. App. 21. Forest Service policy also specified that this decision should ordinarily be made within six months. P. App. 21. However, the government did not make a decision about whether to resell the Lynx Sale within six months. It was not until June 22, 1990 ­ a year after expiration ­ that the government announced in its contracting officer's decision that it would not reoffer the Lynx Sale, for the stated reason that there were potential adverse effects on the watershed that would have resulted from the cutting. D. App. 27. Curiously though, the government did not formally memorialize the rationale for its decision not to resell the Lynx Sale until September 21, 1990 ­ several months after the government had already assessed damages against Mt. Adams. Decl. Anderson ¶ 8 & D. App. 19-24. E. Contract provision B9.4 required the government to conduct a new appraisal consistent with the then-existing standard Forest Service methods. Standard provision B9.4 of the Lynx Sale contract provides that when a purchaser fails to cut timber before the termination date, the Forest Service is required to conduct a new appraisal using current Forest Service methods at the time of termination, and damages are to be computed based upon that appraisal if the timber is not resold: B9.4 Failure to Cut. In event of (a) termination for breach or (b) Purchaser's failure to cut designated timber on portions of Sale Area by Termination date, Forest Service shall

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appraise remaining Included Timber, unless termination is under B8.22. Such appraisal shall be made with the standard Forest Service method in use at time of termination. Damages due to the United States for Purchaser's Failure to cut and remove such timber meeting Utilization Standards shall be the amount by which Current Contract Value plus the cost of resale, less any effective Purchaser Credit remaining at time of termination, exceeds the resale value at new Bid Rates. If there is no resale, damages due shall be determined by subtracting the value established by said appraisal from the difference between Current Contract Value and Effective Purchaser Credit. D. App. 25. According to this provision, the government was first required to conduct an appraisal of the timber using the standard methods of appraisal in place on June 30, 1989. Id. F. The government appraised the timber using out-of-date data when attempting to compute the value of the timber at the time of termination. The contracting officer's damage calculation in this case is based upon an appraisal that was conducted on June 1, 1990. D. App. 26. In that appraisal, the government appraised the Douglas fir at $426.35/MBF and the western hemlock at $121.16/MBF. D. App. 26. The appraisal states that it was prepared using data from the first quarter of 1989 and March 1989. D. App. 26, Ehinger Decl., ¶ 20. No explanation can be found in the Contracting Officer's decision or in the appraisal as to why this particular data period was chosen, given that the contract expired three months later. D. App. 26-28. The Contracting Officer certainly had more current data available to him, and without explanation he decided to ignore it. In an earlier appraisal of damages, conducted on April 24, 1990, data for the third quarter of 1989 and for September 1989 were used. P. App. 38. Because of a lag between the time the data are compiled and when they are published, the third quarter data would have better reflected the June 30, 1989, appraisal date. Ehinger Decl., ¶ 20. That

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more current data, had it been used in the final computation of damages, would have reduced the damage claim by over $400,000. See P. App. 38; D. App. 26; Ehinger Decl., ¶ 20. 7 G. The standard method of appraising damages in cases where timber was not resold required the Forest Service to adjust its basic appraised rates by adding an estimated bid premium computed from comparable sales. The government recognized that its pre-sale appraisals were not an adequate substitute for resale prices in determining the remaining value of the contract at the time of termination. Anderson Decl. ¶ 11; Deposition of Ronald Lewis at 46 (reproduced at P. App. 96). For that reason, it was standard Forest Service policy in damages appraisals that when timber was not resold, the contracting officer was required to make adjustments to the appraised value: "When there is an overriding reason which precludes reoffering the remaining timber, the resale value is the appraised value at expiration, adjusted as appropriate to reflect transaction evidence." FSM 2433.6 2/81 Amend. 123 (reproduced at P. App. 40) (emphasis added). The government concedes that it was the Forest Service's "practice" to treat damages appraisals differently than pre-sale appraisals. Anderson Decl. ¶ 11. Specifically, the contracting officer was required to calculate an "estimated bid premium" (also sometimes referred to as an "overbid") that was added to the appraised rates when the uncut volume in a defaulted sale was not being resold. Anderson Decl. ¶ 11; FSM 2433.6 2/83 Amend. 123 (reproduced at P. App. 40). Higher estimated bid premiums result in lower damages owed to the government, and conversely, understated bid premiums artificially increase damages owing to the government. David Note was the contracting officer who assessed damages on the Lynx Sale, and he participated in computing the bid premiums on the Lynx Sale. Deposition of David Note
7

Using the first quarter and March 1989 data, the government estimated the contract value, before adding a bid premium adjustment, at $10,413,380. D. App. 26. Using the later data, the estimate of contract value before adjustment was $10,848,702. P. App. 38. The difference exceeds $400,000.

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(hereinafter "Note Dep.") at 41 (reproduced at P. App. 34-39). He testified that he was not aware of any specific Forest Service policies or procedures for computing bid premium. Note Dep. at 41. He was, however, aware of a "general direction" that the government was to select sales that are "representative of the sale that you're concerned with and use those to determine what the bid premium was on those sales." Note Dep. at 41-42. Mr. Note acknowledged that in selecting comparable sales for computing the bid premium, he would have ordinarily considered the age of the timber, species composition, the systems needed to log the sale, quality of the timber, and overall volume. Note Dep. at 41-42. He did not recall haul distance or duration of the sale being considered as factors. Note Dep. at 42-43. In fact, Forest Service policy specifically required contracting officers to consider all significant factors affecting prices when making any appraisal, and admonishes contracting officers to make adjustments for the differences when comparing contracts as part of any appraisal: Appraised Market Value. Since no two tracts of timber are identical, it follows that the stumpage prices paid or to be paid for any two tracts cannot be directly compared without adjusting for the physical or quality differences between them. ... The fundamental rule in determining the items to be included and the general scope of timber appraisal is to include consideration of all significant factors affecting stumpage prices. FSM 2421.4 10/77 Amend. 109 (reproduced at P. App. 25) (emphasis added). This is particularly true when the government is computing damages, because in that context, the contracting officer is directed to appraise damages "with the utmost care and impartiality, and no item shall be included which cannot be supported." FSM 2433.54 5/83 Amend. 129 (reproduced at P. App. 51).

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H.

In computing bid premiums on the Lynx Sale, the government selected four "comparables" for reasons that the contracting officer cannot remember. In the case of the Lynx Sale, the government considered only ten timber sales sold on the

Randle District in the two years prior to the date of default. D. App. 27; P. App. 57-63. The government did not bother to consider sales after the date of default, even though such data was available by the time the government assessed damages. D. App. 27; Ehinger Decl. ¶ 19. Nor did the government look at any sales outside of the Randle District, even though the Director of Timber Management recommended consideration of sales in other forests if comparable sales could not be found in the Gifford-Pinchot National Forest. P. App. 64. It did not do any of these things even though in the months preceding the termination of the Lynx Sale, "there was considerably less representative timber sold on the Forest than would be sold under normal circumstances" because of an injunction on timber sales that had been issued to protect the spotted owl. P. App. 1. The contracting officer's artificial restrictions on the data he considered exacerbated the situation. From its initial list of ten sales, the government selected four that it contends were "similar" to the Lynx Sale. D. App. 27. The four sales chosen as comparables were the Polk 4 Salvage, Beech 4 Salvage, Polar 2, and Silver 7 sales. D. App. 30. However, Mr. Note acknowledges that he cannot recall anything about those four sales that made them comparable to Lynx. Note Depo. at 43 (P. App. 47). And the only justification given in his contracting officer's decision was that those four sales "contained similar species and both Douglas fir and western hemlock were biddable species." D. App. 27.

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I.

The "comparables" used to compute overbid do not share many of the Lynx Sale's characteristics. 1. The government included two salvage sales as "comparables" and this alone artificially inflated damages by nearly two million dollars.

Lynx was a "green sale" with only incidental salvage involved. P. App. 5; Ehinger Decl. ¶ 9. However, half of the sales (two out of four) chosen by the government to generate its bid premium were "salvage sales." D. App. 30; Ehinger Decl. ¶ 9. A salvage sale is, by definition, one in which the primary reason for entry is to salvage insect-infested, dead, dying, damaged, or down timber. See Cedar Lumber, Inc. v. United States, 5 Cl. Ct. 539, 546 n.9 (1984); FSM 2435.05 2/81 Amend. 123 (reproduced at P App. 42). The quality of the timber contained in a salvage sale is greatly dissimilar from the quality found in a green sale, and performance on the salvage sale must usually be accelerated to protect against further deterioration of the timber during the performance period. Ehinger Decl. ¶ 9. Salvage sales are sold under completely different circumstances from green sales, and bidder conduct is driven by very different assumptions. 8 Ehinger Decl. ¶ 9. Paul Ehinger, who has previously been recognized by this Court as an expert witness in both the Seaboard and Capital Development trials, recalculated the government's damages by eliminating the Polk 4 Salvage and Beech 4 Salvage from the government's bid premium calculation. Ehinger Decl. ¶ 10. By simply eliminating the use of incomparable salvage sales from the overbid calculation and making no additional adjustments, the government's damages would be reduced by nearly two million dollars. Ehinger Decl. ¶ 10.

Even the accuracy of the cruise is different for salvage sales. Regional policy required cruises to have sampling errors of no more than 5% for green sales. FSM 2431.23 12/82 R-6 Supp. 296 (reproduced in P. App. 66). For salvage sales, a larger sampling error of 10% was tolerated. Id.

8

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2.

The government also failed to adjust its overbid calculations to reflect the high quality of the timber contained in the Lynx Sale.

The timber included in the Lynx timber sale was of much superior quality to the timber contained in the comparables. Ehinger Decl. ¶ 11. Twenty percent of the Douglas fir timber included in the Lynx Sale was graded as a #1 or #2 peelers. Ehinger Decl. ¶ 11; D. App. 3. By comparison, the four comparables had only between 1% and 7% of its Douglas fir graded as a #1 or #2 peeler. Ehinger Decl. ¶ 11; P. App. 67-86. These quality differences are significant, as bidding is historically more aggressive on sales of higher quality because the purchaser has more options in the marketplace ­ purchasers can sell their timber for both lumber and veneer. Ehinger Decl. ¶ 11. As a result, the higher quality of the Lynx Sale timber would be expected to produce higher overbids. Id. This is borne out by the observed overbids on the four comparables chosen by the government. The Polk 4 Salvage sale had the lowest share of high quality #1 and #2 Douglas fir peelers at a mere 1%, and the adjusted bid premium on the Douglas fir was the lowest of all four of the sales. In contrast, the Polar 2 Sale had the highest share of #1 and #2 peelers, also had the highest adjusted bid premium for Douglas fir in the amount of $374.46. Ehinger Decl. ¶¶ 10-11; D. App. 30; P. App. 67-86. The government made no adjustments to its bid premium computation to account for the differences in quality between Lynx and the sales used for comparison. Ehinger Decl. ¶ 11. It failed to do so, even though Forest Service policy specifically provided that "the stumpage prices paid or to be paid for any two tracts cannot be directly compared without adjusting for the physical or quality differences between them." FSM 2421.4 10/77 Amend 109 (reproduced at P. App. 25).

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3.

The Lynx Sale included four times the volume of timber contained in any of the "comparables."

Not one of the four contracts used to compare Lynx comes anywhere near the volume of timber included in the Lynx Sale. Of those four contracts, the one with the largest volume was Polar 2, and even that sale only included 9,300 MBF in total volume. P. App. 85-86; Ehinger Decl., Exh. 2. The Lynx Sale had an estimated 38,300 MBF in total volume remaining at the time the contract expired ­ four times as much timber as in Polar 2. Anderson Decl. ¶ 7. The volumes of the four comparables are also dissimilar from Lynx when considered by species. Lynx contained 19,100 MBF of estimated remaining Douglas fir when the contract expired. D. App. 28. That was five times as much Douglas fir as was contained in any of the four comparables. D. App. 31. And Lynx's estimated 15,800 MBF of remaining hemlock and other conifers was almost four times as great as any of the four contracts used for comparison. D. App. 28, 31. The government did nothing to adjust its overbid calculations to compensate for Lynx's significantly higher volumes. D. App. 27-32. It ignored these substantial volume differences even though research conducted by Walter J. Mead, commissioned by the Forest Service, had already confirmed in 1981 that "firms are willing to pay substantial premiums to secure the largest size timber sales held for auction by the Forest Service." P. App. 20. Indeed, the government's own policies recognize the importance of volumes in the context of appraising values when the Forest Service Manual advises that in the context of an appraisal, a "volume estimate ... is the first consideration." FSM 2423.2 10/77 Amend. 109 (reproduced at P. App. 29). Yet the government still did nothing to adjust its overbid calculations to account for the unusually high volumes of timber included in the Lynx Sale. D. App. 27-32.

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4.

The Lynx Sale also had a performance period that was twice as long as any of the "comparables," providing for greater scheduling flexibility.

The Lynx Sale also had a lengthy performance period of 90 months. That was more than twice as long as the four sales that the government used as comparables. The next longest sale was the Beech 4 Salvage Sale, which had a length of only 43 months. Ehinger Decl. Exh. 2; P. App. 71. One of the comparable sales, Silver 7, only had a duration of 25 months. Ehinger Decl., Exh. 2; P. App. 83. As with volumes, the government also failed to make any adjustments to account for the differences in contract duration. Ehinger Decl. ¶ 14; see also D. App. 27-32. Contract duration has a significant impact on bidding because lengthy contracts like Lynx provide the purchaser with the scheduling flexibility to time the market and thereby realize higher prices on the timber once it is cut. Ehinger Decl. ¶ 14. In fact, the government-commissioned Mead Report revealed that for 31 out of 45 potential bidders interviewed, the "length of the timber sale contract was the dominant factor" in influencing their bid prices. P. App. 19. 5. The government also failed to take into account the different contract terms contained in the "comparables."

When the Forest Service performs an appraisal in connection with determination of damages, it is required to appraise the timber "under the original contract terms and conditions." FSM 2424.3 10/77 Amend. 109 (reproduced at P. App. 35). This is to ensure that the damage appraisal is comparable with the current contract value, since those are two critical components of the damage formula in a no-resale case. Id. Standard contract provisions had changed dramatically from 1979 when the Lynx Sale was sold to the time when the comparable sales were sold in 1988 and 1989. All four of the comparables included provisions that increased the financial burden of purchasing those sales by requiring cash down payments and midpoint payments, which were not required in the Lynx

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Sale. Ehinger Decl. ¶ 12(d) ­ (e). This Court has previously determined that these changed financial requirements have a material effect on the prices bid on timber. Seaboard Lumber Co. v. United States, 48 Fed. Cl. 814, 835-36 (2001); Capital Development Co. v. United States, 49 Fed. Cl. 178, 184 (2001). Yet there is no evidence that these differences are reflected anywhere in the government's overbid calculations, even though the Forest Service Manual requires damages to be appraised using original contract terms and conditions. Similarly, the Lynx Sale was a flat rate sale, whereas all of the contracts used to compute overbid contained Stumpage Rate Adjustment (SRA) clauses. Ehinger Decl., ¶ 12(c). These SRA clauses call for quarterly adjustments of the stumpage rates, and therefore do not give the contract purchaser the benefits of a rising market, the way that flat-rate sales like Lynx did. Ehinger Decl., ¶ 12(c). 9 There is no evidence that the government adjusted for the fact that the comparables were all SRA sales, while Lynx was not. J. The government then computed damages using data about timber volumes that was apparently never verified for accuracy. Timber volumes are a critical component of the government's appraisal for damages. Indeed, the Forest Service Manual states that in conducting a damages appraisal in connection with expired contracts, "The volume and quality of the remaining timber and its accessibility must be carefully determined, as well as all other factors influencing its value." FSM 2424.3 10/77 Amend. 109 (reproduced at P. App. 5). Yet the contracting officer who assessed damages admitted that he does not know of any steps that were taken by the government to ensure the accuracy of the volumes used in its determination of damages. Note Dep. at 51.

The Lynx Sale did have a scheduled rate redetermination provision. P. App. 88. However, unlike SRA sales, which updated rates quarterly, Lynx's rate redetermination was a one-time rate adjustment that had been scheduled to occur July 1, 1985. Id.

9

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Even more surprisingly, the data which formed the basis for the government's volume estimates does not appear to have ever been certified for accuracy or compliance with Forest Service policies. P. App. 90. The Forest Service Manual, Region 6 Supplement clearly requires certification: All timber cruises, used in connection with timber sale appraisals, must be approved for use by a Certified Cruiser. His approval shall be in the form of a signed statement indicating that he has examined the cruise, that it meets standards, and is technically proper, that unit volumes, species grade distributions and other estimated volumes are reasonable, and that in his opinion the cruise is acceptable. The intensity of his examination will vary depending on the complexity of the sale and the cruise plan, the experience of the cruisers, and the value of the resources involved. FSM 2431.23 12/82 R-6 Supp. 296 (reproduced at P. App. 66). This was not done. P. App. 91. The Lynx pre-sale appraisal even contains a form titled "Sale Cruise" where the Supervisory Forestry Technician was supposed to be make the required certification. P. App. 91. The certification is unsigned, and there is no evidence on the form that any field check was ever conducted by an appropriate supervisor. Id. A similar certification form is again left blank in a damages appraisal that was conducted on the Lynx Sale in September 1989, after the contract expired. P. App. 94. Without these mandatory certifications of accuracy, the accuracy of the government's volume estimate and its damage calculations are seriously in doubt because of noncompliance with government policies. III. A. Summary Judgment Standard. Summary judgment is appropriate only where "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." RCFC 56(c); see also Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1323 (Fed. Cir. 2001). Summary judgment is improper if "the dispute about a material fact is `genuine,' that is, if the ARGUMENT

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evidence is such that a reasonable [factfinder] could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). In determining whether there are any genuine issues of material fact, all reasonable inferences are drawn in favor of Mount Adams as the non-moving party. Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1323 (Fed. Cir. 2002) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)). Moreover, affidavits containing conclusory statements on issues of ultimate fact are of no help to the determination of a summary judgment if the affidavits fail to reveal the underlying factual basis for the conclusion. See, e.g., Phillips Petroleum Co. v. Huntsman Polymers Corp., 157 F.3d 866, 876 (Fed. Cir. 1998); J.F. Allen Co. v. United States, 25 Cl. Ct. 312, 325 (1992). The serious questions regarding the defendant's compliance with its own policies give rise to genuine issues of material fact which dictate that a trial is necessary to determine the extent, if any, of damages in this case. B. Contract provision B9.4 required the government to conduct an appraisal that complied in all material respects with its standard appraisal methods. Standard contract provision B9.4 requires that if a contract expires before the timber is cut, an "appraisal shall be made with the standard Forest Service method in use at time of termination." This appraisal is then used as a baseline against which the government computes its contractual remedy under B9.4. There are only a handful of cases that have interpreted this provision in the context of a defaulted timber contract that was not resold. See, e.g., Hoskins Lumber Co. v United States, 1996 U.S. App. LEXIS 9612 (Fed. Cir. 1996) (unpublished); Madigan v. Hobin Lumber Co., 986 F.2d 1401, 1405 (Fed. Cir. 1993); Capital Development Co. v. United States, 49 Fed. Cl. 178 (2001), aff'd 308 F.3d 1283 (Fed. Cir. 2003). Those cases have determined that B9.4 is an

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enforceable contractual remedy. See, e.g., Capital Development, 49 Fed. Cl. at 182-83. Mt. Adams is not asking for this Court to find otherwise. Instead, Mt. Adams requests only what it is explicitly entitled to under the contract ­ an appraisal that complies in all material respects with Forest Service appraisal methods. Hoskins clearly states that "the only appraisal to which [the purchaser in default] was entitled was one that complied in all material respects `with the standard Forest Service method in use at [the] time of the termination.'" Hoskins, 1996 U.S. App. LEXIS 9612 at *4 (emphasis added). This includes material compliance with all aspects of the Forest Service's regulations, manuals, handbooks, and other written policies and guidelines. As the Board of Contract Appeals poignantly noted in another case, "The [timber sale] contract does not place upon the purchaser the risk of having the Government conduct the sale without regard to the dictates of the handbook, with which, the contract specifies, the government's actions are to comply." In re Cleereman Forest Products, AGBCA No. 2000-101-1 at *2 (Nov. 1, 2001). Once the purchaser in default challenges whether the Forest Service complied in all material respects with standard Forest Service methods, the purchaser is entitled to a trial on that issue. Hoskins is particularly instructive because in that case the Federal Circuit specifically recognized that due to the complex nature and long history of the case, the purchaser was "entitled to a trial" to determine whether the Forest Service materially complied with the standard Forest Service appraisal methods in place at the time its contract terminated. See Hoskins, 1996 U.S. App. LEXIS 9612 at *3-4; cf. Madigan, 986 F.2d at 1403 (awarding summary judgment to government where purchaser argued unfairness of B.94 but did not dispute government's compliance with Forest Service standard appraisal methods). This Court's decision in Capital Development, 49 Fed. Cl. 178, is equally instructive, because in that case the

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Court allowed Capital Development to conduct a full trial to resolve factual issues on damages, including damages on two contracts that were not resold by the government. Id. Mt. Adams has that same right to have the factual disputes of its case resolved on the merits, after a full trial. C. There are factual issues to show that the government did not comply in several material respects with its standard appraisal methods, and resolution of these factual issues requires a trial. 1. There are issues of fact as to whether the Forest Service complied in all material respects with its standard method of conducting a damage appraisal when no resale is conducted.

Mt. Adams has clearly raised numerous factual issues about whether the contracting officer failed to comply with standard appraisal methods in this case. For instance, the quoted Forest Service policies required consideration of all factors that affect stumpage value and also require adjustments for qualitative differences when two sales are compared against one another. This is no different from the adjustments that would normally be expected in a real estate appraisal based upon transaction evidence. Yet the contracting officer's own computations reveal that he made no adjustments for differences in volume, quality, duration, or different financial requirements (cash down payment and mid-point payment) when he computed adjusted bid premiums based upon four sales that were qualitatively different from Lynx. By the testimony of the contracting officer himself, Forest Service policy also required consideration of "representative" and "comparable" sales in computing overbid. Yet two of the four contracts that the contracting officer used to appraise damages were salvage sales sold under circumstances that bear no relationship to Lynx, which was a sale of "green" timber. Still more factual questions exist about whether the contracting officer complied with Forest Service policies that emphasize the importance of volumes as the first consideration in an appraisal, and which require certification of the Forest Service cruise estimates as being both accurate and consistent with Forest Service policy in connection with any appraisal.

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Another significant factual issue of compliance with Forest Service policy is raised by the fact that the contracting officer was not even aware that any policies existed. See Note Dep. at 41-43. It is reasonable to infer, at least at this summary stage of the proceedings, that if the contracting officer was not aware of the relevant policies that governed his appraisal, then he likely did not satisfy those policies. In addition, there are issues of fact as to whether still other relevant standard Forest Service methods of appraisal were in place at the time the Lynx Sale expired. This issue of fact exists in large part because of the government's unwillingness to expose its standard policies to the light of day in its moving papers, and because of the contracting officer's inability to remember what the applicable standards were. Forest Service policy manuals and handbooks have been reconstituted to the best of Mt. Adams's abilities from the myriad of scattered pages and incomplete updates produced by the government through the discovery process. However, as government is wont to do, these policies appear to have changed from time to time, and it is not always clear where or if the government has produced the correct versions of policies relevant to this dispute, or if it has, it has not done so in any coherent form. In any event, at this summary stage of proceedings, Mt. Adams has not had the opportunity to compile a definitive set of all of the standard "methods" or "policies" that were in place on June 30, 1989. This process would require additional discovery, which will become necessary if this matter proceeds to trial, as it must. 10

10

At the very least, it would be inappropriate to grant the government's summary judgment motion at this juncture, without allowing Mt. Adams an additional opportunity to conduct discovery to investigate whether any additional Forest Service policies were in place on June 30, 1989 which might also not have been satisfied. See RCFC 56(f); see also Opryland USA, Inc. v. Great Am. Music Show, Inc., 970 F.2d 847, 852 (Fed. Cir. 1992) ("when the discovery [sought] is reasonably directed to `facts essential to justify the party's opposition,' in the words of Rule 56(f), such discovery must be permitted or summary judgment refused").

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Even without a definitive set of each and every rule and directive, the overarching policies and themes that Mt. Adams has uncovered in the documents cited above demonstrate that the careless practices of the contracting officer in administering its damage claim on the Lynx Sale are inconsistent with the Forest Service's standard damages appraisal methods. Moreover, even Christine Anderson and the contracting officer confirm that when the Forest Service was conducting a damages appraisal, it required consideration of comparable sales and computation of an adjustment to the appraised rates ordinarily used to establish minimum bids for timber. There is ample evidence in the record on this issue alone to create issues of fact about whether that policy was properly applied such that summary judgment at this stage would be inappropriate. 2. The deviations from the government's standard method of conducting a damages appraisal are material to the government's assessment of damages and therefore preclude summary judgment.

The contracting officer's deviations from policy are by no means trivial or de minimis. Each of these deviations from policy strikes at the heart of the government's calculation of the amounts supposedly owed by Mt. Adams. For instance, there is evidence that the inclusion of the two dissimilar salvage sales in the appraisal calculations inflated the government's calculations by nearly two million dollars. Its use of out-of-date data from the first quarter of 1999 inflated the calculations by another $400,000 or more. Other factors not taken into consideration, such as volumes, contract duration, quality of the timber, etc., also have an important effect on bid prices, and if those factors had been properly adjusted for, would have had a significant effect on the appraisal calculation as well. And this Court has already found in the resale context that the increased financial requirements on the four "comparable" contracts have a material effect on bidding. Seaboard Lumber Co. v. United States, 48 Fed. Cl. 814, 83536 (2001); Capital Development Co. v. United States, 49 Fed. Cl. 178, 184 (2001).

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Since these deviations were not "minor irregularities" and would make a difference in the damages analysis, they should be deemed material deviations that were not permitted by B9.4. See, e.g., Tel-Instrument Electronics Corp. v. United States, 56 Fed. Cl. 174, 176 (2003) (defining "material" defect in bid as one other than "minor informalities or irregularities"); Dan Rice Constr. Co. v. United States, 36 Fed. Cl. 1, 3 (1996) (defining "material" fact in summary judgment context as "one that could make a difference in the outcome"). And because Mt. Adams has raised factual issues on both noncompliance with Forest Service policy and on materiality of noncompliance, this case must proceed to a trial so that the factual issues can be resolved. 11 IV. CONCLUSION

There are numerous issues of material fact regarding whether the Forest Service complied in all material respects with their standard damages appraisal methods. In light of these material facts, summary judgment should be denied, and this matter should proceed to trial.

In addition to the arguments advanced in this response, the plaintiff believes that summary judgment in any case involving Mt. Adams is inappropriate until the Forest Service has issued a final decision regarding the buyout applications submitted by Mt. Adams, and Mt. Adams has been given the opportunity to seek review of that decision if appropriate. This Court previously ordered the government to accept these amended buy-out applications as timely filed. Manke Lumber Co. v. United States, 45 Fed. Cl. 157, 162 (1999). The government has not produced a final decision on those buy-out applications in the more than four years since this Court's prior ruling on this subject.

11

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Respectfully submitted this 22nd day of January, 2004.

s/ Steven A. Miller for Dennis J. Dunphy SCHWABE, WILLIAMSON & W YATT, PC 1420 Fifth Avenue, Suite 3010 Seattle, WA 98101 Phone: (206) 622-1711 Fax: (206) 292-0460 Of Counsel: Steven A. Miller SCHWABE, WILLIAMSON & W YATT 1420 Fifth Avenue Suite 3010 Seattle, WA 98101-2393 Phone: (206) 622-1711 Fax: (206) 292-0460

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CERTIFICATE OF SERVICE I hereby certify under penalty of perjury that on this 22nd day of January, 2004, I caused copies of the foregoing PLAINTIFF'S MEMORANDUM IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT and the accompanying APPENDIX TO PLAINTIFF'S MEMORANDUM IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT to be served upon the following individual electronically and a courtesy copy was sent by Federal Express. Richard P. Nockett Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 1100 L St., N.W. (8th Floor) Washington, D.C. 20530

s/ Steven A. Miller

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