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

Case 1:05-cv-00448-NBF

Document 52

Filed 05/22/2007

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

RAYTHEON COMPANY,
Plaintiff,
v.

UNITED STATES OF AMERICA,

Defendant.

) ) ) ) ) ) ) ) ) ) )

No. 05-448C
Judge Nancy B. Firestone

PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR AN ORDER MODIFYING EXPERT WITNESS SCHEDULE
Plaintiff Raytheon Company respectfully submits this Opposition to Defendant's Motion
for an Order Modifying Expert Witness Schedule ("Defendant's Motion"). On Januar 24, 2007,

Defendant submitted the paries' most recent proposed schedule for expert discovery to the

Cour. In its transmission of the proposed schedule, Defendant stated that "the paries have
discussed and agreed upon a revised schedule for expert witness discovery to propose for the
Cour's consideration." However, despite this agreed schedule which was incorporated into the

Cour's Januar 29, 2007 Order, and the day before expert witness disclosures, expert reports
and responses to written expert witness requests were required to be exchanged, Defendant has

moved for an order modifying the expert witness schedule. Defendant's basis for it request to

stagger the expert witness schedule is solely that its expert "canot express an opinion
concerning calculations that the expert has never seen." Defendant's counsel has apparently not
bothered to review the documents produced in discovery because all of the detailed actuarial

calculations supporting Raytheon's segment closing adjustment proposals for each of the four
segments at issue in this case have been produced. Consequently, there is no basis whatsoever

for Defendant's motion.

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i. DEFENDANT'S ASTONISHING CONTENTION THAT IT WILL

NOT KNOW THE BASES FOR PLAINTIFF'S CLOSING
SEGMENT CALCULATIONS UNTIL IT RECEIVES PLAINTIFF'S EXPERT REPORT, EXPERT DISCLOSURE AND DISCOVERY RESPONSE IS ERRONEOUS AND WITHOUT MERIT
Defendant contends that it "wil not know until it receives the expert reports of plaintiff s

designated experts, and plaintiff s related expert disclosures and discovery responses, the bases
for the critical calculations of

the pension and PRB deficits of each ofthe four closed segments."

Defendant's Motion at p. 6. Defendant's contention is erroneous and wholly without merit.

Defendant knows or should know the bases for Raytheon's pension and postretirement
benefit ("PRB") deficit calculations for each of

the four closed segments because the governent

was provided this information by Raytheon over four years ago. Raytheon included these

detailed actuaral calculations

1 in its segment closing adjustment proposals that it submitted to

the governent after the sale of each of the four segments. Indeed, these segment closing

submittals were reviewed by both the Defense Contract Audit Agency ("DCAA") and Defense

Contract Management Agency Contractor Insurance/Pension Review ("CIPR") team. As
Terence J. Murhy, former Assistant Controller for Governent Accounting of Raytheon

testified in Raytheon's 30(b)(6) deposition, the CIPR team's actuar, George Matray,
communicated directly with Mercer, and no exceptions were taken to the amount of the deficits

computed by Mercer. Murphy Dep. Tr. 151, 194-95 and attached hereto as Exhibit 1.
Furhermore, Mr. Murhy testified that in preparing Raytheon's claims, he used the pension and
PRB deficits computed by Mercer. ¡d. at 194-95.

The pension and PRB deficits of each of the relevant segments were determined by Raytheon's outside actuary, Mercer Human Resources.

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By way of ilustration, attached as Exhibit 2 is the pension and PRB deficit calculation
that Raytheon submitted for the Printed Wire Fabrication segment closing.

Mercer's detailed actuarial calculations for all four of the segment closings were
produced by both Plaintiff and Defendant in the course of discovery in this action. At no time,
however, has the governent ever taken exception to the amount of the deficits computed by

Mercer. Astonishingly, Defendant now contends that it does not know the bases for the pension
and PRB calculations and as a result, alleges that a staggered schedule for expert discovery is

necessar. Defendant's motion is nothing short of frivolous and appears to have been fied for

no other purose than to delay these proceedings.

II. DEFENDANT'S FAILURE TO MEET THE COURT'S DEADLINE

FOR EXCHANGE OF EXPERT REPORTS, EXPERT
DISCLOSURES AND DISCOVERY RESPONSES DOES NOT JUSTIFY STAGGERING THE EXPERT SCHEDULE AND
EXTENDING DEFENDANT'S TIME TO PRODUCE ITS EXPERT REPORT, EXPERT DISCLOSURE AND DISCOVERY RESPONSE
At the eleventh hour, Defendant requests that the expert schedule remain the same for
Plaintiff, but be extended for Defendant and thus staggered, on the basis of information known to
Defendant prior to the paries agreeing upon the curent schedule for expert discovery. The

Cour should not continue to indulge Defendant's flagrant disregard for the Cour's scheduling
orders.

On December 15, 2006, Defendant filed a Motion for Enlargement of Time to Complete
Fact Discovery on the basis that (1) it failed to meet the Cour's deadline for producing

documents; and (2) it was contemplating filing a motion to compel a fuher RCFC 30(b)(6)
deposition because Plaintiffs designated witness testified that Plaintiff relied on its independent

actuary, Mercer, to compute the amount of the pension and PRB deficits, but the witness - Mr.

Murhy - could not independently explain the complex actuarial calculations. It is worth noting

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that Defendant's counsel asked the witness to testify about these calculations from memory,

without showing him any of the documents prepared by Mercer.

On December 21, 2007, Raytheon fied its Opposition to Defendant's Motion for

Enlargement of Time to Complete Fact Discovery stating that determining the amount of a

pension or PRB deficit (i.e., the difference between the actuarial accrued liabilities and the
market value of the assets allocated to a segment) is an extremely complex undertaking that

requires the services of an actuar and like most governent contractors, Raytheon engaged the
services of an independent actuar - Mercer - to make those calculations. Moreover, Raytheon
stated that contrar to Defendant's assertion, Mr. Murhy provided Raytheon's response to all of
the areas listed in the notice of deposition. The problem was not that Mr. Murphy was "unable to

provide any information," but that Defendant's counsel did not like the information Mr. Murhy
provided.
On Januar 19, 2007, the Cour granted Defendant's Motion for Enlargement of Time to

Complete Fact Discovery for the sole purose of completing the production of documents, but

did not grant the motion to allow Defendant to file a motion to compel fuher deposition
discovery regarding the pension and PRB deficits. At no time during the course of the paries'
discussions regarding the expert discovery schedule did Defendant request that the expert

reports, disclosures and discovery requests be staggered as it now proposes. Indeed, on Januar

24, 2007, after the Cour ruled on Defendant's Motion for Enlargement of Time as discussed
above, Defendant transmitted the paries' proposed schedule for expert discovery to the Court
(Exhibit 3), which was incorporated into the Cour's Order dated Januar 29,2007.

Now, almost four months later and on the eve of the expert discovery deadline,
Defendant contends that the schedule should be staggered, resulting in an enlargement of time

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for Defendant to produce its expert report, expert disclosure and discovery response. Plaintiff

objects to such enlargement of time for Defendant, as well as the staggering of the expert
discovery schedule. As set forth above, there is no merit to Defendant's contention that it does

not know the bases for the pension and PRB deficit calculations of each of the four closed
segments. Indeed, Defendant's Motion appears to be nothing more than a stall tactic.

CONCLUSION
Defendant's continued attempts to delay the progress of this case is unfairly prejudicing
Plaintiff s ability to prepare its case and causing Plaintiff to incur needless costs in responding to
frivolous motions. Defendant should not be permitted to fie such an uneritorious motion for

modification of the expert discovery schedule. Raytheon therefore respectfully requests the
Cour to deny Defendant's Motion for an Order Modifying Expert Witness Schedule.

Respectfully submitted,

Date: May 22, 2007

~~~~:m~~ ~
Washington, DC 20036 Telephone: (202) 955-8536 Facsimile: (202) 530-9533

GIBSON, DUN & CRUTCHER LLP ~~1\.. z. 1050 Connecticut Avenue, NW 't. ~~fr

kmanos~gibsondun.com
Of Counsel:

Christyne K. Brennan GIBSON, DUN & CRUTCHER LLP

Attorney of Record for Plaintiff RAYTHEON COMPANY

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CERTIFICATE OF SERVICE
I hereby certify that on the 22nd day of May, 2007, a copy of

the foregoing Plaintiffs

Opposition to Defendant's Motion for an Order Modifying Expert Witness Schedule was fied

electronically. I understand that notice of this filing wil be sent to all parties by operation of the

Cour's electronic fiing system. Paries may access this filing through the Court's system.

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