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

Case 1:05-cv-00956-CCM

Document 83

Filed 04/13/2007

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

DAVID S. LITMAN And MALIA A. LITMAN, Plaintiffs-Counterdefendants,

) ) ) v. ) ) THE UNITED STATES, ) Defendant-Counterplaintiff ) ____________________________________ ) ) ROBERT B. DIENER And MICHELLE S. DIENER, ) Plaintiffs-Counterdefendants, ) ) v. ) ) THE UNITED STATES, ) Defendant-Counterplaintiff ) ____________________________________ ) ) HOTELS.COM, INC. and Subsidiaries (f/k/a ) HOTEL RESERVATIONS NETWORK, INC.) ) Plaintiffs, ) ) v. ) ) THE UNITED STATES, ) Defendant ) ____________________________________ )

No. 05-956T

No. 05-971T

No. 06-285T (Judge Christine O.C. Miller)

PLAINTIFF HOTELS.COM AND SUBSIDIARIES RESPONSE TO THE UNITED STATES' MOTION IN LIMINE TO PRECLUDE EXAMINATION BY PLAINTIFFS OF IRS AGENT SUSAN WEISS ON CERTAIN SUBJECTS AT TRIAL Plaintiff, Hotels.com and Subsidiaries ("Hotels.com"), does not object to the substance of the United States' motion in limine. However, as set forth in Hotels.com's Motion in limine to Exclude Evidence of Administrative Settlement Negotiations Prior To Issuance Of Notice of

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Case 1:05-cv-00956-CCM

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Deficiency ("Hotels.com's Motion"), all evidence related to the administrative process should be excluded.1 As set forth in Hotels.com's Motion, portions of Mr. DeGraw's deposition testimony designated by the Litmans and Dieners in their Motion for Leave to File Transcript of Deposition Testimony of Eric DeGraw, filed on February 26, 2007, and by the United States in its Motion For Leave To File Deposition Testimony, filed on April 2, 2007,2 also should be excluded,3 as well as documents related to the IRS settlement negotiations (See Exhibit B attached to Hotels.com's Motion). CONCLUSION Excluding the evidence discussed above is the only way to ensure that this Court's decision is "based on the merits of the case and not any previous record developed at the administrative level." Cook v. United States, 46 Fed. Cl. 110, 114 n.8 (2000), quoting

Hotels.com does object to certain characterizations, factual assertions, and implications made by the United States that are related to Hotels.com. For example, Hotels.com does not dispute that Mr. Litman directed that the stock at issue herein be issued as of February 24, 2000 and that the stock certificates bear that date. However, Hotels.com disagrees with any implication that the date on which the Litmans and Dieners were legally entitled to the stock at issue is not relevant to the matters before the Court under the Litmans', Dieners', and United States' legal positions, or under Hotels.com's alternative positions. Moreover, as set forth in Hotels.com's Motion, positions taken by Hotels.com on audit or in subsequent tax returns are not determinative of the issues before the Court. See footnote 1 of Hotels.com's Motion.
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Hotels.com and Subsidiaries' Objections to United States' Motion For Leave To File Deposition Testimony, filed on April 9, 2007, set forth the portions of Mr. DeGraw's testimony designated by the United States that should be excluded.

Hotels.com has designated certain portions of Mr. DeGraw's deposition testimony in the event that the Court allows his testimony. See Plaintiffs' Motion for Leave to File Deposition Testimony under RCFC 32(a)(3) and Appendix A ¶14(A)(3), filed Feb. 26, 2007, Ex. 3. To the extent that the Court grants Hotels.com's Motion, those sections should be excluded from Hotels.com's designations as well. However, to the extent that Hotels.com's Motion is denied, Hotels.com would request that its protective designations be admitted. 2

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Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324, 328 (1974). It is also the only means of protecting the parties' expectations about their negotiations during the audit period. For the reasons set forth above, Hotels.com respectfully requests that the Court exclude at trial not just Ms. Weiss's testimony but also any and all evidence relating to Hotels.com's administrative settlement negotiations.

April 13, 2007

Respectfully submitted, s/ Kim Marie K. Boylan____ Kim Marie K. Boylan Latham & Watkins, LLP 555 11th Street, NW Washington, DC 20004 (202) 637-2235 Attorney of Record Kari M. Larson Latham & Watkins, LLP 555 11th Street, NW Washington, DC 20004 Of Counsel Jennifer S. Crone Latham & Watkins, LLP 555 11th Street, NW Washington, DC 20004 Of Counsel

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