Free Motion for Joinder - District Court of Federal Claims - federal

Case 1:05-cv-00776-MMS

Document 57

Filed 11/08/2007

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ) ) ) ) ) ) ) ) ) ) ) )

AG-INNOVATIONS, INC., LARRY FAILLACE, LINDA FAILLACE, and HOUGHTON FREEMAN, Plaintiffs,

No. 05-776C (Judge Sweeney)

v. THE UNITED STATES OF AMERICA, Defendant.

PLAINTIFFS' MOTION TO JOIN ADDITIONAL PARTY PLAINTIFFS AND FOR LEAVE TO FILE AN AMENDED COMPLAINT Pursuant to Rules 15(c)(2), and 17(a), of the Rules of the United States Court of Federal Claims ("RCFC"), plaintiffs Ag-Innovations, Inc., Larry Faillace, Linda Faillace, and Houghton Freeman (collectively "plaintiffs") request leave from this court to add Doreen Freeman, Skunk Hollow Farm, Inc. ("SHF"), and Freeman Family LLC ("FFLLC"), as party plaintiffs to this action and to file the attached proposed Amended Complaint.1 These new plaintiffs are related to or owned by plaintiff Freemen and hold legal title to certain the assets that are the subject of this litigation.2

A copy of the proposed Amended Complaint is attached at Tab 1. A black-line version identifying changes from the original Complaint to the proposed Amended Complaint is attached at Tab 2. 2 Despite relying on the planned addition of these parties as a basis for its September 2007 motion for an enlargement of the discovery period, the Government now refuses to consent to adding these parties. On November 7, 2007, the Government indicated it would consent only if plaintiffs agreed to yet another three-month extension of the discovery period. The parties first learned of the role of these new parties back in July 2007, and the Government already received a three-month discovery extension as a result. Discovery began over twenty months ago. The time has come for it finally, at last, to end.

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RCFC 17(a) provides that "[e]very action shall be prosecuted in the name of the real party in interest." A real party in interest is a party who "possesses the right sought to be enforced." Am. Mar. Transp., Inc. v. United States, 18 Cl. Ct. 283, 290 (1989). It operates so as to allow a real party in interest to "step[] into the shoes of the timely filed [p]laintiff." Holland v. United States, 62 Fed. Cl. 395, 401 (2004). Just as plaintiffs Houghton Freeman, Ag-Innovations, Inc., and Linda and Larry Faillace have property interests in the chattel and real property at issue, so too do SHF, FFLLC, and Doreen Freeman. SHF is a Vermont corporation of which Mr. Freeman is the sole shareholder. In 1996, Mr. Freeman purchased certain purebred East Friesian sheep after their importation by the Faillaces for sale in the United States. During discovery in July 2007, the parties learned that shortly after this purchase, Mr. Freeman conveyed ownership of the sheep to SHF as part of a capital contribution to the company. Thus, SHF is the party that owned the sheep and the genetic material at the time of their seizure; it possesses the right to pursue constitutional and statutory compensation claims for these items against the United States. FFLLC is a New York limited liability corporation jointly owned by Mr. Freeman and his wife, Doreen Freeman. FFLLC currently holds title to the real property known as Skunk Hollow Farm that the Government quarantined. At the time that the quarantine was issued, Mr. Freeman was the title-owner. In 2003, for reasons unrelated to this lawsuit, Mr. Freeman elected to place legal title of Skunk Hollow Farm in FFLLC. As holder of legal title to the real property, FFLLC also now has the right to pursue claims against the United States for constitutional and statutory compensation. And as shareholders, Mr. Freeman and Mrs. Freeman possess "a direct and cognizable property interest in the potential liquidation surplus." First Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d 1279, 1296 (Fed. Cir. 1999) (granting shareholder 2
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standing to bring a takings claim against the FDIC for terminating a financial assistance agreement with a bank). In considering whether joinder under RCFC 17(a) is proper, this court considers three factors: (1) whether the defendant will be prejudiced; (2) whether the factual allegations will change; and (3) whether the defendant was aware of relevant parties. See Deponte Invs., Inc. v. United States, 60 Fed. Cl. 9, 10 (2004). The Government will suffer no prejudice from the addition of these new parties. Their addition is solely to assure that all real parties in interest are included, and the Government has already had a full opportunity to take discovery related to their interests in the property at issue. In sum, the addition of these parties requires no additional discovery beyond what is already contemplated, and it certainly requires no additional time beyond the three months the Government already received to complete that discovery. None of the underlying factual allegations will change. The proposed new parties complain of the exact same conduct, transactions, and occurrences that were set forth in plaintiffs' original Complaint, with respect to exactly the same property. They also assert the exact same constitutional and statutory theories of liability and amount of damages. Finally, the Government had knowledge of these parties. Given the Government's RCFC 30(b)(6) subpoena of SHF dated September 13, 2007, and its requests for documents pertaining to SHF and FFLLC, the Government clearly was aware of the existence of these parties and knew of their involvement. And except for seeking to tie the joinder of these new parties to a need for an extension of the discovery period a fourth time, it has not raised any legitimate basis for an objection.

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For these reasons, plaintiffs respectfully requests that their motion be granted, that SHF, FFLLC, and Doreen Freeman be added as parties to this action, and that plaintiffs be granted leave to file their proposed Amended Complaint.3 Respectfully submitted,

By:

/s Jonathan L. Abram Jonathan L. Abram

OF COUNSEL: Raymond S. Calamaro Kevin S. Willen HOGAN & HARTSON, L.L.P. 555 Thirteenth Street, N.W. Washington, DC 20004 (202) 637-5600 (202) 637-5910 (facsimile) Dated: November 8, 2007

HOGAN & HARTSON, LLP 555 Thirteenth Street, N.W. Washington, DC 20004 (202) 637-5681 (direct) (202) 637-5910 (facsimile) Attorney of Record for Plaintiffs Ag-Innovations, Inc., Larry Faillace, Linda Faillace and Houghton Freeman

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In addition to the joinder of these new parties, plaintiffs' proposed Amended Complaint makes two technical changes that also would cause no prejudice to the Government. In paragraph 5, it corrects the allegation that the Faillaces owned the real property on which the quarantine was instituted. Discovery has revealed that the Faillaces in fact lease this property. The Amended Complaint also corrects the heading of Count II to reflect the fact that plaintiffs are seeking constitutional compensation for the quarantined properties (rather than statutory compensation as originally misidentified). The allegations themselves and substance of Count II remain the same. 4

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CERTIFICATE OF FILING The undersigned certifies under penalty of perjury that on this 8th day of November, 2007, I caused a true and correct copy of the foregoing Plaintiffs' Motion to Join Additional Party Plaintiffs and for Leave to File an Amended Complaint, along with the attached exhibits, to be filed with the Court and to be served via the Court's electronic filing system on the following: Sheryl L. Floyd, Senior Trial Counsel Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, N.W. Washington, DC 20530

By:

/s Kevin S. Willen Kevin S. Willen

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