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

Case 1:01-cv-00249-CFL

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS TENNESSEE VALLEY AUTHORITY Plaintiff v. UNITED STATES Defendant TVA'S RESPONSE TO DEFENDANT'S MOTION IN LIMINE TO EXCLUDE TESTIMONY FROM UNDISCLOSED WITNESSES AND MOTION FOR EXPEDITED CONSIDERATION Although Defendant complains that TVA did not previously disclose to Defendant the identity of eight persons listed as planned or potential TVA witnesses, Defendant ignores totally the nature of the testimony expected to be given by these witnesses, that is, each is expected to respond solely to narrow issues raised in the expert reports and subsequent testimony of two of Defendant's experts, Stephen J, Kiraly and Raymond S. Hartman. These expert reports were received by TVA on March 30, 2005, and TVA took the deposition of Mr. Hartman on April 21 and Mr. Kiraly on April 27. Until the reports had been received and analyzed and the depositions taken, it was unclear to TVA the extent to which TVA would need to supplement the testimony of its primary witnesses. In fact, the very absence of any reference to most of these individuals either in TVA's initial disclosures or in the more than 150,000 pages of discovery provided by TVA to Defendant confirms both the specialized nature of their testimony and the fact that TVA did not anticipate until recently that their testimony would be required. No. 01-249-C (Judge Lettow)

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Nevertheless, because TVA now has had additional time to consider the testimony it wishes to present in response to Defendant's expert reports, TVA hereby withdraws the following persons from its witness list: Mark J. Burzynski, C. Gayle Creamer, T. A. Keys, David J. Humphrey, and Michael L. Turnbow. Accordingly, only the proposed testimony of Andrew W. Holmes, Roy Galyon, and George M. Holton Jr. remains at issue. As to the designation of Mr. Holton, TVA disagrees that Defendant was unaware of his existence or of the possibility he might be called as a witness. TVA counsel orally informed counsel for Defendant in late summer 2004 that one of the witnesses on TVA's initial disclosures, Perry Lawrence, had been replaced by George M. Laurie, and that another of the initially listed witnesses, Donald L. Hutson, had been replaced by George M. Holton Jr. Even were Defendant to dispute this notification by TVA counsel, Defendant cannot deny that, in the late fall of 2004, Mr. Hutson and Thomas L. Hayslett each testified in deposition that Mr. Hutson's responsibilities in TVA's Nuclear Fuels organization had been taken over by Mr. Holton. Accordingly, Defendant was fully on notice about Mr. Holton's existence and job responsibilities and had ample opportunity to take his deposition.1

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Defendant's decision not to take Mr. Holton's deposition may have been driven by Defendant's consistent position, repeated as late as February 7, 2005 in interrogatory answers, that discovery about acceptance rates after year 10 was not relevant: Although further fact discovery by the Government may demonstrate that the acceptance rate at which the Department of Energy was obligated to have accepted spent nuclear fuel after the first 10 years of SNF acceptance in the absence of any breach may be relevant to determining whether TVA's need for an ISFSI was caused by defendant's breach, such determinations are premature at this time. 2

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As to the designations of Andrew W. Holmes and Roy Galyon (who, as TVA previously informed Defendant are expected to testify for a total of less than 1.5 hours), their planned testimony is limited to a very narrow set of issues raised by the expert report of Mr. Kiraly.2 Mr. Holmes is expected to testify primarily about proof that TVA paid its incurred costs. This issue was not raised by Defendant prior to the expert report of Stephen J. Kiraly and was not wholly clarified for TVA until Mr. Kiraly's deposition on April 28 because TVA had continued to supply additional financial materials as requested by counsel for Defendant throughout March and April 2005. Moreover, although TVA requested that Defendant inform TVA as to whether Defendant intended to question payment at trial (most recently by Federal Express letter dated May 5, 2005 which requested an immediate response), so that TVA could make appropriate arrangements for testimony were that the case, the Government never responded to TVA's request (Exhibit 2, less enclosures). Similarly, as to the accounting issue regarding an allowance for funds used during construction (AFUDC), counsel for Defendant at one point suggested to TVA counsel that a stipulation regarding AFUDC might be possible and wrote to TVA on March 12, 2005, indicating both that TVA had presented very thorough and detailed information regarding AFUDC calculations and that TVA would be informed as soon as possible whether this item could be closed out from an audit perspective. Instead, Mr. Kiraly in his report and deposition (Exhibit 1, excerpted, at 8-9.) Defendant now contends that acceptance rates after year 10 are relevant to show that TVA's damages should be reduced.
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Although TVA does not dispute that Defendant may have been unaware of the identity of these two individual TVA witnesses, Defendant was aware of the organizations that these witnesses manage and the nature of the responsibilities of those organizations. Had Defendant wished to gather information about those organizations, Defendant was free to serve a Rule 30(b)(6) notice upon TVA. 3

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disclaimed that sufficient information had been made available and added that TVA had not shown that AFUDC costs were incremental. Accordingly, TVA named Mr. Holmes as a trial witness. As to the designation of Mr. Galyon, TVA learned at the deposition of Mr. Kiraly that its efforts to satisfy Mr. Kiraly's questions about TVA's Heavy Equipment Division practices had been deemed lacking. Accordingly, TVA designated Mr. Galyon to provide brief testimony on the issue. In sum, TVA did not "lay behind the log" (mot. at 5) but rather had to deal with issues recently raised by Defendant in its expert reports. In this regard, although TVA does not think that Defendant has been prejudiced by TVA's designations, TVA does not oppose (as TVA previously informed Defendant) a telephonic interview or brief telephonic deposition of Mr. Holmes and/or Mr. Galyon. CONCLUSION For the foregoing reasons, Defendant's motion to exclude testimony from undisclosed witnesses should be denied. Respectfully submitted, Electronically filed: May 17, 2005 Office of the General Counsel Tennessee Valley Authority 400 West Summit Hill Drive Knoxville, Tennessee 37902-1401 Facsimile 865-632-6718
003735739

Maureen H. Dunn General Counsel Edwin W. Small Assistant General Counsel s/Peter K. Shea Peter K. Shea Senior Attorney/Attorney of Record Telephone 865-632-7319 Attorneys for Tennessee Valley Authority

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