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Case 1:05-cv-00776-MMS

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS AG-INNOVATIONS, INC., LARRY FAILLACE, LINDA FAILLACE, and HOUGHTON FREEMAN, Plaintiffs, v. UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) )

No. 05-776C (Judge Sweeney)

DEFENDANT'S RESPONSE TO PLAINTIFFS' MOTION TO JOIN ADDITIONAL PARTY PLAINTIFFS AND FOR LEAVE TO FILE AN AMENDED COMPLAINT Defendant, the United States, respectfully responds to plaintiffs' motion to join additional party plaintiffs, Doreen Freeman, Skunk Hollow Farm, Inc. ("SHFI"), and Freeman Family LLC ("FFLLC"). We do not dispute the fact that Doreen Freeman, SHFI, and FFLLC should be joined as plaintiffs in this action since SHF owned the sheep and the genetic material at the time of their seizure and Mr. Freeman transferred title of Skunk Hollow Farm to FFLLC in 2003, while the quarantine placed upon a portion of the farm was pending. Nevertheless, we dispute plaintiffs' contention that the late addition of these plaintiffs has not prejudiced the Government. Given that we did not become aware of the existence of SHFI and FFLLC and their significant role in this matter until July 2007, we require additional time, beyond the 90 days of discovery we requested and received in September 2007, in order to (1) understand and flesh out the implications of their ownership of the "Freeman" sheep and Skunk Hollow Farm, and (2) complete the discovery that we undertook as a result of this late recognition of the ownership of the Freeman sheep by SHFI and of Skunk Hollow Farm by FFLLC. As we will recount in greater detail below, plaintiffs interfered with our completion of discovery in this case in two basic ways: (1) plaintiffs' counsel, Hogan & Hartson, LLC (H&H), delayed in identifying

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SHFI's Rule 30(b)(6) witnesses and making them available for depositions; and (2) H&H delayed in providing documents that were responsive to our request for production of documents. In short, because of the late identification of SHFI, Mrs. Doreen Freeman, and FFLLC, and foot-dragging on the part of counsel for SHFI and FFLLC, we will require additional time beyond the 90 days initially granted to the Government to ensure that it has obtained all of the discovery it requires of these new plaintiffs.1 DEFENDANT'S ARGUMENT Pursuant to RCFC 17(a), this Court considers three factors in determining whether to join additional parties: (1) whether the defendant will be prejudiced; (2) whether the factual allegations will change; and (3) whether the defendant was aware of the relevant parties. See Deponte Invs., Inc. v. United States, 60 Fed. Cl. 9, 10 (2004). We agree with plaintiffs' counsel that the underlying factual allegations will not change as a result of the late addition of the three new plaintiffs, SHFI, Mrs. Doreen Freeman, and FFLLC. However, contrary to plaintiffs' contention, the Government was not aware until mid-July 2007 of the existence of SHFI or of FFLLC, and that (1) SHFI, not Mr. Houghton Freeman, owned the sheep that the Department of Agriculture ("USDA") seized in March 2001, and (2) Mr. Freeman transferred ownership of Skunk Hollow Farms to FFLLC in 2003, shortly after USDA issued the quarantine upon a portion of the premises. The fact that SHFI and FFLLC own the property that was the subject of the taking in this case has required us to re-examine our defense of this lawsuit and to take discovery from SHFI and FFLLC that we did not initially anticipate. We will be prejudiced by

We offered to consent to the late addition of the three new plaintiffs if plaintiffs would agree to a three-month enlargement of time to complete discovery in this case. However, plaintiffs declined our offer. -2-

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the late addition of these three new plaintiffs if we are not permitted adequate time to complete our discovery of these new plaintiffs. Plaintiffs' counsel, H&H, has significantly interfered with our efforts to complete our discovery by the current deadline, December 13, 2007. In mid-July 2007, during the deposition of Ms. Andrea Robertson, an accountant for Houghton Freeman LLC, even though he did not expressly state that H&H represented SHFI, plaintiffs' counsel, Mr. Kevin Willen, asserted an attorney-client privilege with respect to questions counsel for the Government, Mr. Robert Chandler, asked of Ms. Robertson relating to communications between Mr. Willen and Ms. Robertson. Defendant's Appendix ("Def. App.") 9-17. On August 10, 2007, we served a document production request and a Rule 30(b)(6) notice of deposition of SHFI upon H&H. Def. App. 18-27. We requested SHFI to produce its designated witnesses for the September 12, 2007 deposition. Def. App. 19.2 On September 7, 2007, Mr. Willen objected that the SHFI had not been properly served with the August 10, 2007 notice of deposition because SHFI was not a party and had not been served with a subpoena. Def. App. 29. On September 13, 2007, we attempted to serve a subpoena upon H&H on behalf of SHFI, but Mr. Jonathan Abram, counsel of record for the plaintiffs in this case, refused service on behalf of SHFI claiming that his firm did not represent SHFI. Def. App. 31-36. Because Mr. Abram refused to accept service of a subpoena on behalf of SHFI, counsel for the Government, Mr. Chandler, had to make arrangements with Mr.

On or about August 15, 2007, H&H informed us that plaintiffs would soon file a motion to add Doreen Freeman, SHFI, and FFLLC as parties in this matter and requested us to consent to this motion. We requested plaintiffs to provide us with a copy of their draft motion to amend the complaint prior to providing our response to their request to consent. Plaintiffs did not provide us with a copy of their draft motion to amend their complaint until November 1, 2007. -3-

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Thomas Amidon, SHFI's Vermont counsel, to accept service of the subpoena on behalf of SHFI in connection with our Rule 30(b)(6) SHFI notice of deposition. On September 10, 2007, plaintiffs' counsel, H&H, responded to our SHFI document production requests served on August 10, 2007. Plaintiffs' counsel stated that they had already provided all of the documents that they had that were responsive to six of the 10 document production requests and that SHFI had no documents that were responsive to one of the requests. Plaintiffs' counsel requested the Government to narrow its document production requests and its Rule 30(b)(6) deposition notice. The parties conferred by telephone during the first and second week in October 2007. On October 12, 2007, counsel for the Government, Mr. Chandler, sent a letter to counsel for the plaintiffs confirming his understanding of plaintiffs' position regarding the six Rule 30(b)(6) deposition topics and plaintiffs' intentions with regard to their September 10, 2007 response to the 10 production requests served on August 10, 2007. Def. App. 37-39. In that letter, Mr. Chandler noted that the Government was agreeable to preparing interrogatory requests for three of the six Rule 30(b)(6) SHFI's deposition topics under the following conditions: (1) plaintiffs provided a response to the interrogatories within two weeks of the date upon which the interrogatories were served; (2) the interrogatories would not count toward the 25 interrogatory limit set forth in the Rules of the Court of Federal Claims; and (3) we could conduct depositions on the topics that were the subject of the interrogatories we believed were necessary should plaintiffs' responses require further elaboration. Def. App. 38. On October 15, 2007, plaintiffs responded to our August 10, 2007 notice of deposition. Plaintiffs agreed to produce certain tax return documents, which were the subject of two of the

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Government's August 10, 2007 document production requests and topics numbered 1 and 6 of the Rule 30(b)(6) SHFI subpoena. Plaintiffs agreed to the terms stated in our October 12, 2007 letter concerning topics numbered 2 through 4, subject to reasonableness objections that plaintiffs might have. Def. App. 41. Notwithstanding the fact that plaintiffs did not object to topic # 1 to the extent that we requested tax information about SHFI,3 plaintiffs did not identify their designees for Rule 30(b)(6) SHFI deposition topic # 1 until October 18, 2007, and they did so only after we threatened to file a motion to compel. Plaintiffs' counsel indicated that both of the designated witnesses were not available on four of the six dates that we proposed because one of the witnesses was out of the country. The parties were not able to agree upon dates for the depositions relating to topic # 1 until the last week in October 2007. At that time, the deposition of Maureen Wall was scheduled to occur on November 9, 2007, and the deposition of Mr. Julian Harrison was scheduled to occur on November 16, 2007. Subsequently, on November 5, 2007, counsel for the plaintiffs informed us that the November 16, 2007 Rule 30(b)(6) deposition needed to be re-scheduled because of a personal emergency. That deposition was re-scheduled to occur on November 28, 2007. Plaintiffs did not serve the documents that were responsive to our August 10, 2007 second request for production of documents until October 29, 2007. Again, plaintiffs served these documents only after we threatened to file a motion to compel. Def. App. 39.

Initially, in a letter dated September 7, 2007, plaintiffs took a "tit-for-tat" position stating that it would not proffer any witnesses in response to our Rule 30(b)(6) SHFI deposition notice until the Court ruled upon our earlier motion for protective order and plaintiffs' cross motion to compel. Def. App. 39. -5-

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On November 14, 2007, we served our interrogatories in lieu of the Government's Rule 30(b)(6) SHFI deposition topics numbered 2 through 4. As previously agreed by the parties, we expected to receive plaintiffs' response within two weeks of the service of the interrogatories. However, on November 16, 2007, H&H informed us that plaintiffs would not comply with the parties' agreement and, in a letter dated November 21, 2007, indicated that plaintiffs would not respond to the three Rule 30(b)(6) SHFI deposition topics with interrogatory responses in lieu of a deposition. Def. App. 44-45, 46-47. H&H also refused to proffer any witness to respond to one of the three topics, topic # 2.4 As to the addition of three new plaintiffs in this case, we will require additional discovery concerning SHFI's financial documents after its November 28, 2007 deposition of SHFI's tax preparer. The parties will also require to schedule the depositions of witnesses plaintiffs have designated to respond to Rule 30(b)(6) SHFI's deposition topics numbered 3 and 4.5 Moreover,

We will continue to attempt to work out this issue with plaintiffs' counsel but, if we are unable to do so, we will file a motion to compel. In addition, we have notified plaintiffs that we want to depose one or more third party witnesses in connection with an affidavit plaintiffs served upon the Government on November 12, 2007, and one or more Ag-Innovations witnesses in connection with the documents AgInnovations, Linda Faillace, and Larry Faillace, served after the depositions of these individuals in March 2007. As of this date, we have tentatively agreed to the scheduling of the following three depositions prior to December 13, 2007: (1) the third-party witness whose affidavit was produced on November 12th, (2) the Faillace representative(s) concerning the documents produced by Ag-Innovations and the Faillaces after March 2007, and (3) a witness who is knowledgeable about Rule 30(b)(6) topic # 4. We also expect to depose a witness concerning topic # 3 of the Rule 30(b)(6) deposition notice, but this cannot be scheduled until after the close of discovery on December 13, 2007, because the designated witness has recently undergone surgery. If we cannot reach agreement upon our proposed deposition of a witness concerning topic # 2 of our Rule 30(b)(6) deposition notice, should the Court grant our motion to compel, we will need to schedule the deposition of plaintiffs' designee(s) concerning that topic. In addition, once we have completed the -65

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once the new plaintiffs have been added to the complaint, the Government will need to obtain assurances from the plaintiffs that we have received all of the information and documents that are in the possession, custody, or control of the new plaintiffs which are responsive to the written discovery requests served upon plaintiffs on July 26, 2006, in connection with Defendant's First Set of Interrogatories and Request for Production of Documents. Clearly, the Government has been prejudiced by plaintiffs' late identification of Mrs. Doreen Freeman, Skunk Hollow Farms, Inc., and Freeman Family LLC, as the real parties in interest in this case. Not only have we been required to conduct discovery that we did not initially anticipate, but also we have had to re-evaluate the potentially significant implications as a result of the fact that SHFI owned the sheep at the time of the seizure and that Mr. Freeman transferred his interest in Skunk Hollow Farm to FFLLC shortly after the USDA imposed a quarantine on the property. Accordingly, we respectfully request that should the Court grant plaintiffs' motion for leave to amend the complaint to add these new plaintiffs, the Court will also grant our request for an enlargement of time to complete whatever follow-up and supplemental discovery is necessary with respect to these new plaintiffs. Respectfully submitted, JEFFREY S. BUCHOLTZ Acting Assistant Attorney General

forthcoming three depositions, we may need to conduct one or more follow-up depositions to insure that we have addressed all relevant matters concerning the new plaintiffs in this case. -7-

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/s/ Jeanne E. Davidson JEANNE E. DAVIDSON Director

OF COUNSEL: DARLENE BOLINGER United States Department of Agriculture Office of General Counsel 1400 Independence Ave., S.W. Washington, D.C. 20250

/s/ Sheryl L. Floyd SHERYL L. FLOYD Senior Trial Counsel ROBERT CHANDLER Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 307-0282 Facsimile: (202) 514-8624 Attorneys for Defendant

NOVEMBER 28, 2007

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CERTIFICATE OF FILING I hereby certify that on this 28th day of NOVEMBER, 2007, a copy of this "DEFENDANT'S RESPONSE TO PLAINTIFFS' MOTION TO JOIN ADDITIONAL PARTY PLAINTIFFS AND FOR LEAVE TO FILE AN AMENDED COMPLAINT " was filed e1ectronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing, through the Court's system.

/s/ Sheryl L. Floyd