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

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No. 05-776C (Judge Sweeney)

IN THE UNITED STATES COURT OF FEDERAL CLAIMS

AG-INNOVATIONS, INC., LARRY FAILLACE, LINDA FAILLACE, and HOUGHTON FREEMAN, Plaintiffs, v. THE UNITED STATES OF AMERICA, Defendant.

REPLY IN SUPPORT OF PLAINTIFFS' CROSS-MOTION TO COMPEL THE UNITED STATES TO IDENTIFY AND PRODUCE A RULE 30(b)(6) DESIGNEE(S) ON CERTAIN TOPICS

Respectfully submitted,

By:

/s Jonathan L. Abram Jonathan L. Abram

OF COUNSEL: Raymond S. Calamaro Kevin S. Willen HOGAN & HARTSON, LLP 555 Thirteenth Street, N.W. Washington, DC 20004 (202) 637-5600 (202) 637-5910 (facsimile) Dated: September 24, 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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TABLE OF CONTENTS Page TABLE OF AUTHORITIES .......................................................................................................... ii ARGUMENT...................................................................................................................................2 I. The Government Concedes That It Is Obligated To Designate A Witness(es) In Response To An RCFC 30(b)(6) Deposition Notice, Not Cherry-Picked Testimony. ...................................................................................................3 Dr. Hall Was Not Deposed On Behalf Of The USDA; Plaintiffs, Therefore, Are Entitled To Depose The USDA On Topic ## 9, 12, And 14. .......................................8 The Government's Topic-Specific Objections Are Without Merit. ..................................11 The Government Must Produce A Designee On Topic ## 2, 7, 8, 13, And 20 Because These Topics Are Relevant.............................................................................12 1. 2. 3. B. V. Topic # 2 Is Relevant To Show Plaintiffs' Sheep Did Not Carry A TSE Into The United States.............................................................................12 Topic ## 7 And 8 Relate To The Health Of The Sheep. ...................................14 Topic ## 13 And 20 Address Whether Plaintiffs Received Fair Market Value For Their Property......................................................................15

II. III. A.

Dr. Sutton's Testimony Did Not Fully Satisfy The Government's Obligation To Respond To Revised Topic # 3. .................................................................16 Plaintiffs' Alternative Proposal Is A Reasonable Compromise.........................................19

CONCLUSION..............................................................................................................................19 CERTIFICATE OF FILING............................................................................................................1 INDEX TO APPENDIX ................................................................................................................(i) Declaration of Kevin S. Willen..................................................................(iii) Excerpted pages 73-75 from Linda A. Detwiler, D.V.M. Deposition Transcript dated January 30, 2007........................................Pls.' App. 126-129 Letter, dated July 15, 1999, from Thomas J. Amidon, Esq. to Dr. William G. Smith.............................................................Pls.' App. 130-132

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TABLE OF AUTHORITIES CASES: Page(s)

Alloc, Inc. v. Unilin Décor N.V., Nos. 02-C-1266, 03-C-342, 04-C-121, 2006 WL 2527656 (E.D. Wis. Aug. 29, 2006) ..........................................................................4 Archer Daniels Midland Co. v. Aon Risk Servs., Inc. of Minn., 187 F.R.D. 578 (D. Minn. 1999)..............................................................................................12 Boston Edison Co. v. United States, 75 Fed. Cl. 557 (2007)...........................................................2 Calzaturficio S.C.A.R.P.A. s.p.a. v. Fabiano Shoe Co., 201 F.R.D. 33 (D. Mass. 2001).................................................................................................................. 13-14 Canal Barge Co. v. Commonwealth Edison Co., No. 98 C 0509, 2001 WL 817853 (N.D. Ill. July 19, 2001)...........................................................................................................12 Capital Props., Inc. v. United States, 49 Fed. Cl. 607 (2001)..........................................................4 EEOC v. Thorman & Wright Corp., 243 F.R.D. 421 (D. Kan. 2007) .............................................6 Foster-Miller, Inc. v. Babcock & Wilcox Can., 210 F.3d 1 (1st Cir. 2000) ....................................8 Fresenius Med. Care Holdings, Inc. v. Roxane Labs., Inc., No. 2:05-CV-0889, 2007 WL 1026439 (S.D. Ohio Mar. 30, 2007)..........................................................................4 ICE Corp. v. Hamilton Sundstrand Corp., No. 05-4135-JAR, 2007 WL 1732369 (D. Kan. June 11, 2007) .............................................................................................................4 In re Vitamins Antitrust Litig., 217 F.R.D. 229 (D.D.C. 2002).....................................................11 King v. Pratt & Whitney, a Div. of United Techs. Corp., 161 F.R.D. 475 (S.D. Fla. 1995), aff'd, 213 F.3d 646 (11th Cir. 2000)..........................................................2, 5 LendingTree, Inc. v. LowerMyBills, Inc., No. 3:05CV153-C, 2006 WL 2443685 (W.D.N.C. Aug. 22, 2006).........................................................................................................4 Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992)...................................................................15 Quality Aero Tech., Inc. v. Telemetrie Elektronik GmbH, 212 F.R.D. 313 (E.D.N.C. 2002) .........................................................................................................................3 Robbins v. NCO Fin. Sys., Inc., No. 2:06 CV 116, 2006 WL 3833352 (N.D. Ind. Dec. 12, 2006) ........................................................................................................12 Rose Acre Farms, Inc. v. United States, 373 F.3d 1177 (Fed. Cir. 2004), cert. denied, 545 U.S. 1104 (2005) ..........................................................................................15

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Rose Acre Farms, Inc. v. United States, 75 Fed. Cl. 527 (Fed. Cl. 2007) .....................................15 SEC v. Selden, 484 F. Supp. 2d 105 (D.D.C. 2007)................................................................ 10-11 United States v. Taylor, 166 F.R.D. 356 (M.D.N.C.), aff'd, 166 F.R.D. 367 (M.D.N.C. 1996) ....................................................................................6 Yancey v. United States, 915 F.2d 1534 (Fed. Cir. 1990).............................................................14 RULES: Fed. R. Civ. P. 30(a)(2)(A) advisory committee's note (1993) .......................................................3 RULES OF THE COURT OF FEDERAL CLAIMS "RCFC": RCFC 26(b)(1) .........................................................................................................................12, 16 RCFC 30(a)(2) .................................................................................................................................3 RCFC 30(a)(2)(A)............................................................................................................................3 RCFC 30(b)(6) ....................................................................................................................... passim RCFC 30(a)(2)(B)............................................................................................................................9

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In its Opposition,1/ the Government concedes that RCFC 30(b)(6) requires, in response to a proper deposition notice, designation of a live witness(es), not cherry-picked selections from prior deposition testimony of individuals who were not designated or prepared to testify as representatives on behalf of the governmental agency involved. It cites neither a single case nor any other authority for the proposition that prior deposition testimony may be offered to satisfy its RCFC 30(b)(6) obligations on behalf of the United States Department of Agriculture ("USDA"). Despite the clear requirement of the rule, when the Government selected prior testimony that fully covered a topic contained in plaintiffs' USDA 30(b)(6) deposition notice, plaintiffs accepted that designation. But other topics remain unsatisfied. Plaintiffs' cross-motion focuses narrowly on those deposition topics in which the Government has failed to abide by RCFC 30(b)(6) and in which that failure matters. In other words, plaintiffs' cross-motion is about the Government's obligation to designate a witness on those topics about which no knowledgeable and prepared witness has yet testified. Plaintiffs did their part under RCFC 30(b)(6) when they provided reasonably-particular deposition topics.2/ It is now the Government's turn.

/ Plaintiffs will refer to the Government's Opposition To Plaintiffs' Cross-Motion To Compel The United States To Identify And Produce A Rule 30(b)(6) Designee On Certain Topics as the "Government's Opposition" or "Opposition" and will cite it as "Gov't's Opp'n at ___." Plaintiffs will refer to their own Memorandum in Support of their Cross-Motion to Compel as "Plaintiffs' Memorandum" or "Opening Memorandum" and will cite it as "Pls.' Mem. at ___." To reduce repetition in the documentary record, plaintiffs, when appropriate, will rely on documents submitted in the Government's two appendices. References to the Government's appendices will be cited as "Gov't's App. at ___." References to plaintiffs' two appendices will be cited as "Pls.' App. at ___."
2

1

/ The fact that the Government's Opposition does not even discuss its supposed overbroad objections reveals the Government's own recognition that plaintiffs have gone to great lengths to ensure these topics were designated with "reasonable particularity." (See Pls.' Mem. at 26-27 for specific examples of the revisions that plaintiffs have made.)
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ARGUMENT The Government's lack of diligence and timely response to plaintiffs' 30(b)(6) deposition notice to the USDA created the issue about which the Government now complains. On February 12, 2007, in accordance with RCFC 30(b)(6), plaintiffs identified in their Original Rule 30(b)(6) Notice of Deposition to the USDA dated February 12, 2007 (hereinafter "Original USDA 30(b)(6) Deposition Notice") reasonably-particular topics for deposition. Plaintiffs further revised those topics on June 28, 2007, after extensive negotiations with the Government. (See Revised Rule 30(b)(6) notice dated June 28, 2007 (hereinafter "Revised USDA 30(b)(6) Deposition Notice"); Gov't's App. at 116-125.)3 Plaintiffs have gone above and beyond their RCFC 30(b)(6) duties, trying repeatedly to schedule the USDA 30(b)(6) deposition(s) (see Pls.' Mem. at 9-12), and accepting the Government's retroactively-selected testimony for eight topics that are not at issue (i.e., Topic ## 4, 6, 10, 15, and 16-19). Upon receipt of plaintiffs' USDA 30(b)(6) Deposition Notice, the Government had a duty to designate a live witness(es) capable of addressing the topics on behalf of the USDA. See Boston Edison Co. v. United States, 75 Fed. Cl. 557, 565 (2007); King v. Pratt & Whitney, a Div. of United Techs. Corp., 161 F.R.D. 475, 476 (S.D. Fla. 1995), aff'd, 213 F.3d 646 (11th Cir. 2000). For more than five months, the Government completely neglected that duty as to all but two topics, leaving plaintiffs no choice but to move to compel. In its Opposition, the Government claims it may satisfy its 30(b)(6) obligations by pointing to prior testimony of non30(b)(6) witnesses, even though they were not prepared to testify as designees, many of them acknowledged they could not do so, and the cherry-picked selections leave out testimony that

3

When appropriate, plaintiffs will refer collectively to their Original USDA 30(b)(6) Deposition Notice and their Revised USDA 30(b)(6) Deposition Notice as "USDA 30(b)(6) Deposition Notice." -2-

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hurts the Government's case. At the end of the day, the Government was, and remains, obligated to produce a designee(s) to plaintiffs' USDA 30(b)(6) Deposition Notice. The Government has failed to do so, and none of its post-hoc justifications excuse that failure or absolve its obligation to comply with the rule.4/ I. The Government Concedes That It Is Obligated To Designate A Witness(es) In Response To An RCFC 30(b)(6) Deposition Notice, Not Cherry-Picked Testimony.

The Government alleges that plaintiffs have to accept cherry-picked, after-the-fact designations of deposition testimony in lieu of a live witness(es). Having shirked its duty to designate witnesses under RCFC 30(b)(6) for months and months, during which time plaintiffs went forward with the depositions of individual witnesses, the Government now proclaims that its deposition testimony designations are appropriate because "plaintiffs have already deposed the primary witnesses who are capable of explaining why the agency took the course of actions that it did." (Gov't's Opp'n at 27.)5/
4

/ The Government claims that it agreed to go forward with RCFC 30(b)(6) depositions on the assumption that it would decrease the number of witnesses that needed to be deposed. (See Gov't Opp'n at 3.) But it was the Government that left plaintiffs' 30(b)(6) notice of the USDA languishing in its inbox, while plaintiffs dutifully deposed individuals as required by this Court's rules and then-existing discovery deadlines. By arguing that plaintiffs already have deposed its most knowledgeable witnesses (see Gov't's Opp'n at 27), the Government effectively admits that the current situation has nothing to do with RCFC 30(a)(2) and everything to do with the Government's failure to plan ahead. Additionally, as the Government must know, an RCFC 30(b)(6) deposition counts only as one deposition for purposes of RCFC 30(a)(2)(A). Fed. R. Civ. P. 30(a)(2)(A) advisory committee's note (1993) ("A deposition under [Federal Rule] 30(b)(6) should, for purposes of this limit, be treated as a single deposition even though more than one person may be designated to testify."); Quality Aero Tech., Inc. v. Telemetrie Elektronik GmbH, 212 F.R.D. 313, 319 (E.D.N.C. 2002) ("[A Federal Rule] 30(b)(6) deposition is separately counted as a single deposition, regardless of the number of witnesses designated.").
5

/ Plaintiffs question whether they have in fact previously deposed "the primary witnesses who are capable of explaining why the agency took the course of actions that it did." The topics request testimony regarding decisions made by the USDA. In the Government's Opposition, it admits that the decision-makers at the USDA included Drs. Craig Reed and Alfonso Torres, neither of whom plaintiffs have had the opportunity to depose. (Gov't's Opp'n at 33.) -3-

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Plaintiffs have no interest in duplicating work, having already accepted the Government's selections of prior testimony as that of the USDA on certain topics because that testimony fully satisfied the topic. (See Pls.' Mem. at 2, 13 & 16.) But for other topics, the selections either did not fully address the disputed topics or there exists no record evidence discussing them. Those topics are the subject of this cross-motion. The Government concedes that the law on responding to a valid RCFC 30(b)(6) is wholly contrary to its position. It cites no case or any other single authority in support of its proposition that retrospective designations of deposition testimony constitute an appropriate response to an RCFC 30(b)(6) deposition notice. See Alloc, Inc. v. Unilin Décor N.V., Nos. 02-C-1266, 03-C342, 04-C-121, 2006 WL 2527656, at *2 (E.D. Wis. Aug. 29, 2006) ("[An entity] may not, as it suggests, review prior deposition testimony and designate it as [Federal Rule] 30(b)(6) testimony."); LendingTree, Inc. v. LowerMyBills, Inc., No. 3:05CV153-C, 2006 WL 2443685, at *2 (W.D.N.C. Aug. 22, 2006) (holding that a party in response to a Federal Rule 30(b)(6) notice could not designate prior deposition testimony without propounding party's consent). Courts have been very clear that individual depositions are not a substitute for 30(b)(6) testimony. See ICE Corp. v. Hamilton Sundstrand Corp., No. 05-4135-JAR, 2007 WL 1732369, at *3 (D. Kan. June 11, 2007) (finding previous individual depositions do not substitute for Federal Rule 30(b)(6) deposition); Fresenius Med. Care Holdings, Inc. v. Roxane Labs., Inc., No. 2:05-CV0889, 2007 WL 1026439, at *1 (S.D. Ohio Mar. 30, 2007) (same); Capital Props., Inc. v. United States, 49 Fed. Cl. 607, 613 (2001) (same). The requirement of designating a witness(es) prior to a deposition exists for many reasons. RCFC 30(b)(6) entitles a party to question an designee who is adequately prepared to

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testify on behalf of a governmental agency (here, the USDA) on topics described with reasonable particularity. See King, 161 F.R.D. at 476. The Government now claims that the witnesses plaintiffs deposed as individuals were fully prepared as RCFC 30(b)(6) witnesses, even though the Government said exactly the opposite when attempting to rationalize why it omitted some of the witnesses' testimony from its retrospective designations. According to the Government now, [e]ach witness prepared him or herself extensively for his or her deposition by reviewing in-depth the documents that were related to the matters over which they had responsibility during the relevant time period, by speaking with and meeting with Government counsel concerning the topics about which they expected to provide testimony, and by contacting other individuals who had knowledge concerning matters about which they may have lacked first-hand knowledge. (Gov't's Opp'n at 32.) But the Government said just the opposite when plaintiffs' counsel requested that all of the deposition testimony of certain witnesses be designated as USDA testimony. In declining this solution, counsel for the Government explicitly acknowledged that the USDA could not designate the entirety of the depositions of Drs. Detwiler, Hall, Race, Rubenstein, Smith, and Zeilenga, because these witnesses "were not the most knowledgeable person[s] to provide testimony; and . . . [that] they had not prepared to testify at the deposition." (See Gov't's App. at 127 (emphasis added).)6/ The Government's statement that its witnesses were adequately prepared as 30(b)(6) designees also is not supported by the record. (See Pls.' Mem. at 31-32.) RCFC 30(b)(6) requires designation of a witness or witnesses fully prepared to testify for the governmental agency on the topic at issue. See United States v. Taylor, 166 F.R.D. 356, 360-61 (M.D.N.C.),
6

/ The Government accuses plaintiffs of attempting "to mislead the Court" by quoting this statement. (Gov't's Opp'n at 32.) Plaintiffs find the Government's repeated inflammatory mischaracterizations improper, especially given that plaintiffs quoted the Government's own language. It is not plaintiffs' fault that the Government cannot square this language with its changed position. -5\\\DC - 090737/000002 - 2606262 v7

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aff'd, 166 F.R.D. 367 (M.D.N.C. 1996) (holding Federal Rule 30(b)(6) obligates a party to prepare its designee(s) to testify "beyond matters personally known to that designee or to matters in which that designee was personally involved"). Yet, the Government itself notes that its witnesses only reviewed "the documents that were related to the matters over which they had responsibility" (Gov't's Opp'n at 32 (emphasis added)); in other words, the Government witnesses testified only to their personal knowledge. Though the Government now contends that its witnesses contacted other individuals regarding matters outside their personal knowledge (Gov't's Opp'n at 32), the record shows that only two witnesses spoke to anyone other than the Government attorneys about the substance of the case: Drs. Stephen Mark Hall and Linda Detwiler. (See Pls.' Mem. at 31-32.) But Dr. Detwiler spoke only with Dr. Hall (Gov't's App. at 568 (Detwiler Dep. 16:17-19)), and Dr. Hall failed to speak with any of the USDA officials. (Pls.' App. at 075 (Hall Dep. 21:4-14)); see EEOC v. Thorman & Wright Corp., 243 F.R.D. 421, 426 (D. Kan. 2007) (Federal Rule 30(b)(6) deponent must speak with relevant persons and review relevant documents). The sworn testimony of these individuals belies the Government's assertion that they were prepared as RCFC 30(b)(6) designees. The truth is that they prepared and gave their depositions in their individual capacities ­ and quite rightly so, since the Government failed to designate them in advance of their depositions. Because the witnesses were not prepared as, nor designated as, RCFC 30(b)(6) designee(s), plaintiffs cannot be forced to accept their retrospectively-selected testimony as an after-the-fact response to plaintiffs' USDA 30(b)(6) Deposition Notice. Even if the Government's witnesses had been adequately prepared as 30(b)(6) designees, the Government's failure to designate them prior to the depositions deprived plaintiffs of the appropriate notice that the depositions would be 30(b)(6) depositions. Obviously, an individual

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deposition explores the knowledge of the individual deponent; an RCFC 30(b)(6) deposition explores the full range of a topic(s) on which the witness is designated. The two are very different, which is why the rule requires advance designation. Had the Government indicated that the depositions were to be pursuant to RCFC 30(b)(6), counsel for plaintiffs would have posed different questions. Counsel for plaintiffs also would have explored certain issues that they otherwise did not because they knew ­ and were specifically told during certain depositions ­ that the witnesses were not policy makers. Although these two examples do not represent everything that would have been different had plaintiffs' been given pre-deposition notice, they underscore why the Government's offered designations are lacking and why, on some of the disputed topics, there simply is no prior deposition testimony. Plaintiffs should not be punished for the Government's delay in timely responding to the USDA 30(b)(6) Deposition Notice.7/ The Government's retrospective identification of testimony from prior individual depositions also is flawed for the additional reason that the Government has cherry-picked the testimony that it likes. As one example, the Government essentially admits to having not initially selected certain testimony of Dr. William Smith because its litigation counsel believed the testimony to be "misleading." (Gov't Opp'n at 28.) But when a party puts forth an RCFC 30(b)(6) designee, it does not have the privilege of editing out the portions of the transcript. Another example is even more glaring: The Government also acknowledged that it chose not to select certain testimony from a witness whom it says testified to Topic 20 because that testimony "does not represent the position of the agency." (See Gov't App. at 127.) Again, RCFC 30(b)(6)
7

/ The Government argues that it could not have made witness identifications earlier because it did not have plaintiffs' 30(b)(6) topics until February 12, 2007. However, it clearly was on notice on January 11, 2007, that plaintiffs intended to issue a 30(b)(6) notice to the USDA. (Pls.' Mem. at 7; Pls.' App. at 009-10.) Moreover, even if this contention were true, the Government still neglected to designate 30(b)(6) witnesses in time for the seven depositions that followed its initial receipt of the deposition topics. -7-

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is based on the bedrock notion that testimony is the job of witnesses, not litigation counsel. Had the witness been properly designated, the USDA would not have the option of hushing its witnesses when they gave unfavorable testimony. These are just two examples, but they are representative of how the deposition designations are cherry-picked. The Government also alleges that "[p]laintiffs have not in their briefs identified any testimony that was relevant to [the disputed topics] which the Government has unreasonably refused to accept as responsive to the topics." 8/ (Gov't's Opp'n at 29.) The assertion so twists the law it is hard to know where to begin. First, plaintiffs gave several examples and reasons above why the Government's designations were inadequate. They have given many more in their correspondence regarding this issue. (See Gov't's App. at 058-062; 108-115.) Second, the Government, not plaintiffs, carries the responsibility of designating witnesses. See Foster-Miller, Inc. v. Babcock & Wilcox Can., 210 F.3d 1, 17 (1st Cir. 2000) (holding party subject to Federal Rule 30(b)(6) notice cannot shift burden of identifying designee to noticing party). Given that nothing in RCFC 30(b)(6) permits retrospective selection of prior deposition testimony in the first place, there certainly is nothing that makes doing so plaintiffs' responsibility. II. Dr. Hall Was Not Deposed On Behalf Of The USDA; Plaintiffs, Therefore, Are Entitled To Depose The USDA On Topic ## 9, 12, And 14.

One of the most blatant examples of how the Government has distorted the RCFC 30(b)(6) process is the 30(b)(6) deposition of the National Veterinary Services Laboratory ("NVSL") through Dr. Hall. The NVSL was deposed on February 22, 2007, after the Government had received plaintiffs' 30(b)(6) deposition notices for the USDA and for the NVSL. / Throughout its Opposition, the Government refers to plaintiffs' examples of its insufficient designations as "proposals" and "counter-proposals." As plaintiffs noted in their Opening Memorandum, these citations were merely examples of the fact that the Government selectively chose testimony to designate and omitted other relevant portions; they were not proposals of testimony the Government could designate to satisfy its obligations. -8\\\DC - 090737/000002 - 2606262 v7

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(See Pls.' Mem. at 8.) Despite possessing both notices, the Government designated Dr. Hall only in response to the NVSL 30(b)(6) Deposition Notice, not the USDA 30(b)(6) Deposition Notice. (See Pls' App. at 019.) But the Government now claims it need not designate a USDA witness for Topic ## 9, 12, and 14 because plaintiffs already deposed Dr. Hall on what the Government contends were "virtually identical" NVSL topics.9/ Plaintiffs certainly agree we have no right, absent court permission, to re-depose an already-deposed party. See RCFC 30(a)(2)(B). However, the USDA has not been deposed on these topics. And there is a world of difference between the two deposition notices with regard to the contested topics: the topics identified in the NVSL 30(b)(6) Deposition Notice address testing methodologies and other science-related information regarding the tests performed by or on behalf of the NVSL, while the USDA deposition topics address policy-oriented issues and decisions made by the USDA. The Government continues to assert that the USDA and the NVSL are the same governmental entity. However, for purposes of the RCFC 30(b)(6) notices submitted in this case, the USDA and the NVSL are separate entities that plaintiffs have a right to depose separately. The Government's after-the-fact assertion that Dr. Hall testified on behalf of both the NVSL and the USDA is flatly inconsistent with the Government's objections during the deposition that certain policy decisions were "beyond the scope of the topics listed" and "beyond the scope of [Dr. Hall's] responsibilities" because he was "not a policy maker." (See Pls.' App. at 079-080 (Hall Dep. 124:17-125:3).) Indeed, Dr. Hall does not make policy decisions on behalf of the

/ Plaintiffs do not concede, as the Government alleges, that the NVSL and USDA topics are "virtually identical" (see Gov't's Opp'n at 16). To the contrary, the topics address the same issues from vastly different perspectives: science versus policy. -9\\\DC - 090737/000002 - 2606262 v7

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USDA. Nor did the Government designate or prepare him to testify for the USDA about those decisions. Clearly, his deposition is no substitute for testimony from the USDA. The Government also cannot deny the fact that numerous bureaucratic layers separate the NVSL, which is a unit of a branch (Veterinary Services) of an agency (APHIS) of the USDA, from the USDA itself. (Gov't's Opp'n at 17.) APHIS, one of at least seventeen agencies of the USDA (Gov't's App. at 481-83), "is a multifaceted Agency with a broad mission that includes protecting and promoting U.S. agricultural health, regulating genetically engineered organisms, administering the Animal Welfare Act and carrying out wildlife damage management activities." (Gov't's App. at 485.) The NVSL is one unit of a branch of this "multifaceted Agency," charged with the limited purpose of "safeguard[ing] U.S. animal health and contribut[ing] to public health by ensuring that timely and accurate laboratory support is provided by their nationwide animal-health diagnostic system." (Gov't's Opp'n at 511). Plaintiffs are entirely justified in noticing a deposition of the USDA that focuses on the decisions that it made in this case, and a separate deposition of the NVSL that focuses on the testing methodologies used and the results obtained. (See Gov't's App. at 508-513.) The Government fails materially to distinguish SEC v. Selden. In SEC v. Selden, the plaintiff served two Federal Rule 30(b)(6) subpoenas on both the United States Food and Drug Administration ("FDA") and the Center for Biologics Evaluation and Review, a division of the FDA. See 484 F. Supp. 2d 105, 106 (D.D.C. 2007). The Government notes that it has not raised Touhy regulations to preclude this deposition, but that does not change the fact that the Selden court allowed the plaintiff to depose the FDA and one of its divisions in separate 30(b)(6) depositions. See id.

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The Government also inappropriately distinguishes In re Vitamins Antitrust Litigation. Like the parent and subsidiary that objected to the Federal Rule 30(b)(6) deposition in In re Vitamins, the Government in the present case conducted itself as if the NVSL and the USDA were separate entities. In re Vitamins Antitrust Litig., 217 F.R.D. 229, 233 (D.D.C. 2002). Although the Government never explicitly argued the NVSL and the USDA were separate, it effectively conceded that fact when it failed to contest the separate RCFC 30(b)(6) notices served on the NVSL and the USDA and when it designated Dr. Hall only in response to the NVSL 30(b)(6) Deposition notice. (See Pls.' App. at 019.) Furthermore, the In re Vitamins court did not rest its holding solely on the prior claim of the parent and subsidiary. Like the wholly-owned subsidiary and its parent in In re Vitamins, NVSL and USDA are separate entities, and plaintiffs are "entitled to question an educated [Federal Rule] 30(b)(6) witness from both." In re Vitamins Antitrust Litig., 217 F.R.D. at 233. The Government also is incorrect that permitting plaintiffs to depose the NVSL and the USDA separately means that plaintiffs could in turn "command the appearance of a representative from each of the 19 agencies, as well as all of their branches, as well as USDA." (Gov't's Opp'n at 018.) RCFC 30(b)(6) will always be limited by relevancy. Here, the two most relevant entities are the USDA and the NVSL. Precluding a deposition of USDA would force plaintiffs to put on a case without ever having deposed certain decision-makers that decided to take and slaughter plaintiffs' sheep. The Court should not condone the Government's attempt to block access to the USDA's decision-makers by hiding behind a sub-sub-sub unit of the USDA. III. The Government's Topic-Specific Objections Are Without Merit.

The overall focus of the Government's argument is on the nitty-gritty of the designations that it identified and why the USDA should not be forced to produce a witness on certain topics. The USDA is required to identify a designee(s) on all of the disputed topics in the Revised - 11 \\\DC - 090737/000002 - 2606262 v7

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USDA 30(b)(6) Deposition Notice. Nevertheless, plaintiffs will respond to the Government's topic-oriented objections.10/ A. The Government Must Produce A Designee On Topic ## 2, 7, 8, 13, And 20 Because These Topics Are Relevant.

Topic ## 2, 7, 8, 13, and 20 are reasonably calculated to lead to the discovery of admissible evidence. See RCFC 26(b)(1). In this case, plaintiffs must have the opportunity to respond to the Government's nuisance defense, see Robbins v. NCO Fin. Sys., Inc., No. 2:06 CV 116, 2006 WL 3833352, at *3 (N.D. Ind. Dec. 12, 2006) (overruling relevance objection where Federal Rule 30(b)(6) topics related to defenses asserted), and to explore the Government's valuation of the sheep. See Canal Barge Co. v. Commonwealth Edison Co., No. 98 C 0509, 2001 WL 817853, at *2 (N.D. Ill. July 19, 2001) (determining when party takes a particular position, it must submit to questioning regarding that position at a Federal Rule 30(b)(6) deposition).11/ 1. Topic # 2 Is Relevant To Show Plaintiffs' Sheep Did Not Carry A TSE Into The United States.

Topic # 2 relates to the USDA's decision to permit the Faillaces to import live sheep from Belgium in 1996, and specifically requests testimony on import protocols and health certificates that establish that plaintiffs' sheep did not have scrapie when they entered the country. (See Gov't's App. at 175-77, 192-94, 199-201, & 230-33.) This information bears directly on

/ The previous section applied to all of the disputed topics for which the Government has refused to designate a witness(es) or has failed to completely satisfy, specifically Topic ## 2, 3, 5, 7-9, 11-14, and 20. Because the Government makes no specific objection to Topic ## 5 or 11 beyond that of not wanting to put forward a live designee(s) for these topics, plaintiffs do not separately address these two topics.
11

10

/ The Government's reliance on Archer Daniels Midland Co. v. Aon Risk Services, Inc. of Minnesota is misplaced. Notably, Archer did not actually grant a protective order that sought to preclude a 30(b)(6) deposition on certain topics. 187 F.R.D. 578, 589-90 (D. Minn. 1999). - 12 \\\DC - 090737/000002 - 2606262 v7

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whether plaintiffs' sheep carried a "foreign" disease into the United States and demonstrates the foreign certifications that showed that plaintiffs' sheep were free of a TSE. Even assuming the Government's position that "the import documents . . . have no bearing upon the question of whether plaintiffs' sheep were or were not infected with a [TSE] of foreign origin" (Gov't's Opp'n at 10), the Government cannot deny that these documents do involve whether plaintiffs' sheep were infected with scrapie, which was at the time the only TSE believed naturally to infect sheep. And though the Government suggests otherwise, it claims it never ruled out that the sheep had scrapie. (See Gov't's App. at 072.) Therefore, the scrapiestatus of the sheep goes directly to whether former 21 U.S.C. § 134a and the supposed "other regulations" on which the Government relied are applicable, given that scrapie has been present in the United States since the 1940's. Further, the scrapie-status of the sheep bears on whether the Government can assert a nuisance defense based on an allegedly foreign "disease." The Government's argument that it "does not have any way to prepare itself about a number of the documents plaintiffs have identified . . . because they were prepared by the plaintiffs themselves . . . or by officials from Belgium or the Netherlands" (see Gov't's Opp'n at 10-11), is a non-sequitur and flies in the face of established case law.12/ See Calzaturficio S.C.A.R.P.A. s.p.a. v. Fabiano Shoe Co., 201 F.R.D. 33, 38-39 (D. Mass. 2001) (rejecting company's argument that a Federal Rule 30(b)(6) designee could not testify about documents that were not prepared by that company). Moreover, the Government reviewed and relied on the health certificates when it permitted the sheep to be imported (see Gov't's App. at 165, 175-77, & 192-94), and the protocols were negotiated and followed by the USDA itself (see Pls.' App. at / The Government's allegation that plaintiffs have requested a witness to testify about a "vast array of documents" is untrue. Topic # 2 requests a designee to address less than 30 documents. It is well within the Government's capability to prepare a witness to testify to this topic. - 13 \\\DC - 090737/000002 - 2606262 v7

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126-129 (Detwiler dep. at 73:16-75:4)). Plaintiffs are entitled to question the USDA about the documents that it considered in its decision to allow the sheep to be imported. 2. Topic ## 7 And 8 Relate To The Health Of The Sheep.

Topic ## 7 and 8 both relate to whether the sheep actually had an "atypical TSE of foreign origin." Again, this information is relevant to the Government's nuisance defense and to determine whether plaintiffs have a Fifth Amendment or statutory takings claim. See Yancey v. United States, 915 F.2d 1534, 1539 (Fed. Cir. 1990). The fact the Government summarily declined Mr. Freeman's offer to sell animals to the USDA and the Belgian Government's offer to repatriate some of the animals supports plaintiffs' theory that the Government slaughtered the sheep not to protect the United States from any alleged "disease" but rather to protect public perception that the United States was safe from BSE. The Government's litigation counsel now says that "[p]laintiffs are incorrect" about this theory. (Gov't's Opp'n at 11.) Not only does this response fail to address relevancy, but also it is narrow-minded: If the USDA's focus had truly been eliminating the potential of BSE in the United States, allowing Belgium to repatriate the sheep would have satisfied that concern. But regardless, the Government cannot avoid discovery simply by asserting that plaintiffs are wrong.13/ Topic ## 7 and 8 also addresses the Government's inexplicable insistence on slaughtering hundreds of animals rather than adopting the more humane options presented by both Mr. / The Government virtually concedes the point when it argues that return of the original imports to Belgium or acceptance of Mr. Freeman's offer would not have lessened public concern. With regard to the return of original imports to Belgium, the USDA contends (wrongly) that the original imports carried a foreign disease into the United States. Return of the sheep would certainly address that perceived problem. This is especially true given that none of the original imports tested positive for any disease. Mr. Freeman's offer to sell the USDA certain animals also included provisions for ongoing testing, and an agreement that Mr. Freeman would not sell animals to other farms and would not sell sheep meat. (See Pls.' App. at 130-32.) Both offers would have assisted the USDA in its campaign to preserve the BSE-free image of the United States. - 14 \\\DC - 090737/000002 - 2606262 v7

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Freeman and the Belgian Government. At a minimum, as described in plaintiffs' Opening Memorandum, Topic ## 7 and 8 are relevant to rebut the Government's nuisance defense ­ that it had no choice but to take and slaughter the sheep to avert a public health threat. (See Pls.' Mem. at 45-46 (discussing Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1032 n.18 (1992).) Finally, the Government is flatly wrong in claiming that Rose Acre bars consideration of least restrictive alternatives. Rose Acre Farms, Inc. v. United States, 373 F.3d 1177, 1193-94 (Fed. Cir. 2004), cert. denied, 545 U.S. 1104 (2005). Rather, Rose Acre's holding was based on the fact that the plaintiff did not even "contend that there was no nexus between [the Government's] means and the substantial public purpose underlying the regulations." Rose Acre, 373 F.3d at 1195. The court never held that least-restrictive alternatives were irrelevant to takings analysis. And notably, on remand from the Federal Circuit, this Court still determined that a Fifth Amendment taking had occurred when the USDA forced plaintiffs to divert healthy eggs to breaker plants based on the suspicion that the eggs were salmonella-infested. Rose Acre Farms, Inc. v. United States, 75 Fed. Cl. 527, 536 (Fed. Cl. 2007). 3. Topic ## 13 And 20 Address Whether Plaintiffs Received Fair Market Value For Their Property.

The Government claims that it need not provide a witness on Topic ## 13 and 20 because they go to the question whether plaintiffs bore a disproportionate share of the burden. No depositions would be needed if that were the issue ­ these plaintiffs unquestionably bore a disproportionate share of the burden when the Government seized and killed their sheep. But as noted in Plaintiffs' Memorandum (Pls.' Mem. at 47-48), Topics ## 13 and 20 address the Government's decision to pay full value to other shepherds and leave their pastures unquarantined while, in response to plaintiffs' efforts to save their sheep, refusing to pay them full value for their sheep and by imposing years-long quarantines on their real property.

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The Government established a price for this specific breed of sheep when it paid other shepherds for them. When it came to paying for plaintiffs' sheep, however, the Government, determined to drive their prices down, hired appraisers who ignored the prices the Government itself had paid for other East Friesian sheep in the same time period. For this and other reasons, the Government's appraisers claimed pricing that significantly undervalued the true market price of plaintiffs' sheep. In short, the Government's appraisals were done to provide the Government justification for paying plaintiffs millions of dollars less than what they would have been paid had they agreed to give up their sheep prior to the Declaration of Extraordinary Emergency. The Government again attempts to defeat plaintiffs' argument for relevance with a selfserving statement that "the Government harbored no bias against the plaintiffs." (Gov't's Opp'n at 15.) Clearly, plaintiffs disagree, and the facts do not support it. But regardless, the Government's statement does not come close to a relevance argument. In an argument that turns fair market value on its head, the Government claims that "the payment of different prices for different sheep at a different time" is not admissible evidence that the Government failed to pay fair market value for plaintiffs' sheep. (Gov't's Opp'n at 16.) But these "different sheep" were the progeny of plaintiffs' sheep, and this "different time" was just a year before the Government issued the Declaration of Extraordinary Emergency and conducted its appraisals. Plaintiffs are entitled to show these significant differences in valuation to prove their case that the Government has not paid them fair market value for their sheep. B. Dr. Sutton's Testimony Did Not Fully Satisfy The Government's Obligation To Respond To Revised Topic # 3.

Underlying the dispute over Revised Topic # 3 is the fact that plaintiffs' revised Topic # 3 was based entirely on the proposition that the Government would confirm that there were no regulations applicable to transmissible spongiform encephalopathies ("TSEs") in sheep other

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than the scrapie regulations about which Dr. Diane Sutton was put forward to testify. The Government now claims that that it did not rely on the scrapie regulations for the authority to issue the Declaration of Extraordinary Emergency, but rather some other source. (Gov't's Opp'n at 21; Pls.' App. at 118 (Sutton dep. at 236:8-18).) Yet, the only regulations on which plaintiffs obtained USDA testimony regarding TSEs in sheep were those that addressed scrapie, both classical and atypical scrapie; plaintiffs do not have USDA testimony on the other regulations upon which the USDA purportedly relied in seizing plaintiffs' sheep. It is unfair for the Government to use the negotiated language of Revised Topic # 3 against plaintiffs when it well knows that the language depended on the Government's confirmation of the fact that no other regulations existed. Revised Topic # 3 sought information about the regulations applicable to TSEs in sheep, with the understanding that the scrapie regulations represented the only applicable regulations regarding TSEs in sheep.14/ The parties do not dispute that Dr. Sutton only was designated regarding the regulations applicable to scrapie, both classical and atypical scrapie; but plaintiffs contend that Topic # 3 also covers additional regulations, i.e., regulations applicable to TSEs in sheep other than scrapie. The Government itself admits that the language "or any other type of TSE" in Revised Topic # 3 "implied that the scrapie regulations did in fact apply to TSE[s] other than scrapie." (Gov't's Opp'n at 022-023.) And plaintiffs made their understanding of this topic very clear to the Government when two days before Dr. Sutton's deposition, during a June 25th telephone conference, the Government first informed plaintiffs that the USDA considered other
14

/ The fact that the Government initially suggested revisions of Topic # 3 as a result of plaintiffs' understanding that the scrapie regulatory program was the only authority from which the USDA derived authority to regulate TSEs in sheep is of no consequence. (See Gov't's Opp'n at 21-22 n.9.) The parties are before the court now to discuss revised Topic # 3 and whether the Government adequately responded to revised Topic # 3. - 17 \\\DC - 090737/000002 - 2606262 v7

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regulations to be applicable to sheep believed to have a TSE other than scrapie. (Pls.' Mem. at 40.) 15/ Thereafter, plaintiffs explicitly noted that "[p]laintiffs accept that Dr. Sutton is being designated to testify only with regards to the items identified in Topic # 3 as they relate to scrapie. However, we do not consider the Government to have satisfied its obligation to produce a witness as to the remainder of the items identified in Topic # 3." (See Pls.' App. at 062-063.) The Government alleges that plaintiffs have not identified a single question not answered by the testimony on Topic # 3 (Gov't's Opp'n at 25), but the Government itself indicated during the deposition that Dr. Sutton was not being designated to testify to questions relating to the regulation of TSEs other than scrapie. (See Pls.' App. at 112-14 (Sutton dep. at 23:2-15).) Plaintiffs cannot now be faulted for failing to ask questions which the Government explicitly stated Dr. Sutton was not being designated to testify regarding. As for specific questions, the paragraphs on page 21 of the Government's Opposition raise a number of issues relating to the USDA's general statutory and/or regulatory authority about which plaintiffs have never had the opportunity to question a USDA designee.

15

/ As supposed proof that counsel for plaintiffs agreed to limit Topic # 3 to the regulation of scrapie (as opposed to any other type of TSE in sheep), the Government cites to a June 25, 2007, e-mail in which counsel for plaintiffs wrote that the failure to remove the phrase "or any other type of TSE" was an oversight. (Gov't's App. at 548.) The Government's reliance on this phrase, to the exclusion of other language contained in the same e-mail, is misleading. In response to the Government's e-mail requesting that plaintiffs remove the "or any other type of TSE" language from Topic # 3, counsel for plaintiffs wrote: "It was an oversight, but I still do not understand what difference it makes. Can you explain please?" (Id.) This language clearly demonstrates the misunderstanding that had occurred based on the Government's representations. It was only after plaintiffs made this inquiry that the Government first explained that the USDA considered other regulations applicable to sheep believed to have a TSE other than scrapie. The parties discussed this issue in conferences on June 25 and June 26, 2007, but the language "or any other type of TSE" remained in Topic # 3 because no resolution was ever reached. - 18 \\\DC - 090737/000002 - 2606262 v7

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V.

Plaintiffs' Alternative Proposal Is A Reasonable Compromise.

Should the Court decide that the Government may designate testimony in lieu of producing a live witness(es), plaintiffs alternatively request that the Government be precluded from cherry-picking testimony and be required to designate the entirety of the depositions of Drs. Detwiler, Hall, Race, Rubenstein, Smith, and Zeilenga. The Government suggests that this solution reveals plaintiffs' "true motives" for refusing to accept the Government's designations: A desire to annoy, oppress, and burden the Government. But in fact, plaintiffs proposed this solution as an alternative to what already is significantly protracted discovery. The Government also contends that it cannot designate entire depositions because many of these witnesses testified to matters outside the deposition topics. (Gov't's Opp'n at 30-31.) Obviously, portions of the deposition that relate to a particular topic identified in the Revised USDA 30(b)(6) Deposition Notice would be the testimony used for that topic. But, the deposition as a whole would constitute binding testimony on the USDA. This solution is a reasonable compromise in an effort to avoid additional depositions of USDA personnel. But the Government cannot have it both ways: It cannot decline to identify a 30(b)(6) designee because an already-deposed witness was allegedly "prepared" but then turn around and contend that the testimony of the witness cannot be used in its entirety because that witness testified to matters behind which the Government does not wish to stand. CONCLUSION For the foregoing reasons, plaintiffs respectfully request that this Court grant plaintiffs' cross-motion to compel and order the Government to produce an appropriate designee(s) to address Topic ## 2, 3, 5, 7-9, 11-14, and 20 identified in plaintiffs' Revised USDA 30(b)(6) Deposition Notice. As outlined in Plaintiffs' Memorandum, if the Court decides that the Government may designate testimony in response to the Revised USDA 30(b)(6) Deposition - 19 \\\DC - 090737/000002 - 2606262 v7

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Notice, plaintiffs alternatively request the Court order the Government to designate the entirety of Drs. Detwiler, Hall, Race, Rubenstein, Smith, and Zeilenga's individual deposition testimony. If the Court decides not to adopt either of these solutions, plaintiffs request that the Court permit plaintiffs to depose certain USDA decision-makers involved in the case, including Drs. Dan Glickman, Ron DeHaven, Craig Reed, and Alfonso Torres. Respectfully submitted,

By:

/s Jonathan L. Abram Jonathan L. Abram

OF COUNSEL: Raymond S. Calamaro Kevin S. Willen HOGAN & HARTSON, LLP 555 Thirteenth Street, N.W. Washington, DC 20004 (202) 637-5600 (202) 637-5910 (facsimile) Dated: September 24, 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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CERTIFICATE OF FILING The undersigned certifies under penalty of perjury that on this 24th day of September, 2007, I caused a true and correct copy of the foregoing Reply In Support Of Plaintiffs' Cross-Motion To Compel The United States To Identify And Produce A Rule 30(b)(6) Designee(s) On Certain Topics, and the Plaintiffs' Appendix 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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