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IN THE UNITED STATES COURT OF FEDERAL CLAIMS METRIC CONSTRUCTION CO., INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) No. 04-635C ) (Judge Charles F. Lettow) ) ) )
DEFENDANT'S OPPOSITION TO PLAINTIFF'S MOTION TO EXCLUDE DEFENDANT'S EXPERT WITNESSES AND DEFENDANT'S MOTION TO COMPEL PRODUCTION OF DISCOVERABLE INFORMATION After months of amicable discovery, including jointly agreed-upon modifications to the discovery schedule, and as the completion of discovery was approaching, plaintiff Metric Construction Co., Inc. ("Metric"), refused to cooperate with a final production of discoverable information and, instead, is now attempting to prevent defendant's experts from conducting a full examination of Metric's claim and even seeks to exclude defendant's experts from testifying altogether. Metric's motion
to exclude is without merit and obstructionist and should be denied. Further, we ask the Court to compel production of the
discoverable information we have requested (contained in Exhibit F, attached, and reprinted below), to stay the proceedings in this case until Metric fully complies with the Court's order, and to establish a new discovery deadline and pretrial schedule only upon our notification to the Court that Metric has fully complied with the Court's order.
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ARGUMENT I. Metric's Motion To Exclude Should Be Denied
Discovery had occurred following the September 29, 2004, joint preliminary status report upon a mutually agreed basis. addition to accomplishing document inspections and the depositions of several fact witnesses, discovery included two jointly agreed extensions of the discovery schedule. The first In
discovery extension was agreed upon because Metric wished to engage witnesses who profess to be experts in cost and schedule/delay analysis in an attempt to buttress Metric's certified claim which is notably lacking in support for the cost and scheduling/delay elements. The second discovery extension, which is particularly germane to this dispute, occurred after Metric's expert reports were issued. The purpose of the second discovery extension was
to provide the Government with the same opportunity that Metric took to permit the Government's experts to perform their work, issue reports, and then be deposed. parties informed the Court that they . . . are continuing with discovery and exchange of expert materials. Depositions of plaintiff's experts are scheduled for January 30 and 31, 2006, and the defendant has retained experts who will conduct their analysis, issue reports by February 15, 2006, and be available for deposition to be conducted by March 15, 2006. We propose to advise the Court of the status of the case and to propose a schedule for pretrial - 2 On December 20, 2005, the
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proceedings in a status report to be filed by March 30, 2006. Exhibit A (emphasis supplied). Although Metric relies upon this joint status report, and even attempts to transform it into a "court order" 1 (Motion to Exclude at 5), three aspects of the December 20, 2005, status report are contrary to Metric's motion to exclude. First, the
extension was agreed upon after Metric's experts had conducted their analysis and issued their reports, but before their depositions had been taken by the Government and before Metric had produced its experts' work papers which were not produced to the Government until approximately March 1, 2006, well after the February 15, 2006, deadline for defendant's expert reports. Exhibit D. Second, the December 20, 2005, status report makes it
clear that the parties were "continuing with discovery" and did not restrict further discovery activities to issuance of defendant's expert reports and depositions as alleged by Metric's motion to exclude. Exhibit A. Third, the December 20,
2005, status report clearly provides that the defendant's experts
The Court's order of December 21, 2005, stated that "The Court acknowledges the Parties' Joint Status Report, filed on December 20, 2005. The Court hereby requests that the parties submit a further Joint Status Report on or before March 30, 2006." The Court's order did not restrict the "continuing discovery" noted in the status report solely to expert reports and deposition. - 3 -
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have been retained but "will conduct their analysis" prior to issuing their reports. Id.
The Government deposed Metric's alleged experts 2 on January 31 and February 1, 2006, (the one-day delay occurred to accommodate Mr. Meacham's schedule) but the Government's experts required additional time to conduct their analysis, based largely upon the need to obtain Metric's experts' work papers and other discoverable information that had not been previously produced or copied by the Government. 3 Promptly after the January/February
2006 depositions, on February 7, 2006, defendant's counsel sent Metric's counsel an informal discovery request (attached in full as exhibit I), that said, in part: I think our deposition trip went smoothly and that we're on track to "promptly" conclude discovery, etc.
The qualifications of Metric's expert witnesses are suspect, at best, and are likely to be challenged at trial. Further, the scope of Metric's cost analyst's work was restricted solely to a critique of a DCAA audit report of a portion of Metric's claim and is, as such, irrelevant to proving Metric's claim itself. We acknowledge that the process of retaining our experts and having them conduct their analysis did not make significant progress prior to the depositions of Metric's expert witnesses. This is not particularly remarkable, however, given the fact that Metric's experts did not produce their work papers concurrently with their reports and that the level of cooperation that had existed previously in this case lead defendant's counsel to believe that Metric would continue to be reasonable with regard to disclosure of discoverable information. Although the discovery process has been slow at times, it has never ceased, mutually agreed-upon discovery events have been scheduled and occurred, and progress has continually been made towards its conclusion. - 4 3
2
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Although our experts will not be able to complete their work in time for us to report to the Court on 3/30 that we're done, I'm sure we'll be able to propose a schedule that has acceptable milestones for expert reports, depositions, etc., leading up to, and including, proposed dates for pretrial submissions and trial. (emphasis supplied). The February 7, 2006, discovery request clearly notified Metric that we were not on track to supply expert reports by February 15, 2006, and reasonably anticipated continued cooperation in proposing final dates for the conclusion of expert discovery and pretrial proceedings. 4 In addition, the discovery
request asked for three things; 1) access to a file cabinet of project documents that had previously been made available to Government counsel in May 2005 prior to the time that any experts had been retained by either party; 2) financial documents that would be examined by the Government's damages consultant and that had not been provided to the Government at any time in the past; and 3) information related to Metric's main "subcontractor" (whose costs comprise a large portion of Metric's claimed damages) that had never been provided to the Government in any form. Exhibit I. Metric did not respond to our February 7, 2006, request until February 15, 2006, questioning our experts' need to review
Despite Metric's claim of "prejudice," no dates for pretrial proceedings or trial have been established. Motion to exclude at 6. - 5 -
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Metric's documents "again."
Exhibit G, H.
We supplied a more
specific list of the information sought by our experts in a request of February 16, 2006 (Exhibit F), and even suggested probable responses "make your responses even easier." Id. We
also attempted to confirm a March 9, 2006, document inspection visit to Metric's office with an emails dated February 7, 15, 16, and 27, 2006. Exhibit E, F, H, I. It was at this point, on
March 1, 2006, that Metric refused to produce further information beyond its experts' work papers, cancelled our March 9, 2006, document inspection visit, and Metric's refusal became a genuine discovery dispute. Exhibit D.
Contrary to the facts summarized above, Metric's motion to exclude suggests that: The government's counsel has disregarded the Court's Order and ignored discovery deadlines. Government's counsel has completely disregarded the agreement to extend discovery solely for experts reports and depositions, and has attempted to complete its document discovery long after the discovery deadline. Motion to Exclude at 5. It is difficult to understand how Metric
can make these arguments when the December 20, 2005, joint status report expressly provided that the parties were "continuing with discovery" and it was Metric who refused to comply with the Government's February 7, 2006, discovery request. Metric's
statement that "[t]he United States never requested additional documents prior to the end of discovery" is flatly contradicted
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by our February 7, 2006, request for access to Metric's files, Metric's cost documents, and Metric's subcontractor's files. In sum, Metric's motion to exclude fails because the parties expressly represented that they agreed to "continuing with discovery" and Metric itself refused to continue with discovery in response to our requests for discoverable information. II. Metric Should Be Compelled To Produce The Discoverable Information Requested By The Government, And Necessary For Our Experts' Work
As shown above, the Government has made requests for clearly-discoverable information that has been refused by Metric. The information sought by the Government falls into three categories: 1) Metric's project records maintained at Metric's offices. Financial information related to this project and to Metric's corporate finances (relevant to several aspects of Metric claim including overhead claims, markups, etc.). All relevant project and financial records of Metric's subcontractor "E.L. Holmes" in whose name Metric seeks recovery of substantial costs.
2)
3)
Exhibit F [list]. Our request of February 16, 2006, contains the specific documents that Metric should be compelled to provide, all of
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which are undisputably discoverable. 5
Exhibit F.
Metric's The
refusal to produce the requested information is unjustified.
only basis for objecting to production of this information, other than its unavailing argument of timeliness, is that Metric produced its project records to Government counsel in May 2005 and that the Government should be in possession of some of the same documents requested. Exhibit C, D, G. These objections are
unfounded because Government counsel inspected the project records long before Metric had even retained its own experts and, when requested, Metric could not cite any authority that prevents a second inspection of documents anyway. Exhibit B. Further, as
we explained to Metric previously, the fact that Metric is not in possession of certain critical documents (such as the contract) is relevant to the issue of Metric's diligence and good faith in formulating, assembling, and certifying its claim. Exhibit B.
This is information that our damages analyst, a Certified Fraud Examiner, considers in conducting his analysis and rendering his opinions. The remainder of the information that we seek (subcontractor records and Metric's financial statements, etc.) has never been produced to the Government at all, and Metric has never suggested that it is not discoverable. It appears instead that Metric is
We have compiled our list as a separate document at Exhibit J. We have also noted that item 14, Metric's experts' work papers have already been produced. - 8 -
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reluctant to produce this information -- which heightens our suspicions regarding the questionable aspects of Metric's claim that caused us to request this information in the first place. In short, Metric possesses discoverable information that is clearly relevant, or at least calculated to lead to the discovery of admissible evidence, and Metric has refused to produce that information despite our requests. Instead, Metric has ceased
cooperating in discovery and refused to provide the information that was requested prior to the close of "continuing" discovery. Metric should be compelled to produce the requested information set forth in Exhibit J. In addition to an order compelling Metric to produce the information requested by the Government, we seek a suspension of further proceedings in this case until the Government reports to the Court that Metric has fully complied with our requests, whereupon further proceedings can be scheduled. CONCLUSION For the foregoing reasons, defendant respectfully requests that Metric's motion to exclude be denied and our motion to compel be granted. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director
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s/Deborah A. Bynum DEPORAH A. BYNUM Assistant Director s/Brian S. Smith BRIAN S. SMITH Attorney Commercial Litigation Branch Civil Division Department of Justice Washington, D. C. 20530 Tele: (202) 616-0391 Fax: (202) 353-7988 Attorneys for Defendant
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CERTIFICATE OF FILING I hereby certify that on April 13, 2006, a copy of foregoing "DEFENDANT'S OPPOSITION TO PLAINTIFF'S MOTION TO EXCLUDE DEFENDANT'S EXPERT WITNESSES AND DEFENDANT'S MOTION TO COMPEL PRODUCTION OF DISCOVERABLE INFORMATION" was filed electronically. 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/Brian S. Smith
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Appendix
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Exhibit A
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IN THE UNITED STATES COURT OF FEDERAL CLAIMS METRIC CONSTRUCTION CO., INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) No. 04-635C ) (Judge Charles F. Lettow) ) ) )
JOINT STATUS REPORT Pursuant to the Court's order of August 8, 2005, the parties have conferred and respectfully report that they are continuing with discovery and exchange of expert materials. Depositions of
plaintiff's experts are scheduled for January 30 and 31, 2006, and the defendant has retained experts who will conduct their analysis, issue reports by February 15, 2006, and be available for deposition to be conducted by March 15, 2006. We propose to
advise the Court of the status of the case and to propose a schedule for pretrial proceedings in a status report to be filed by March 30, 2006. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director s/Deborah A. Bynum DEPORAH A. BYNUM Assistant Director s/Brian S. Smith BRIAN S. SMITH Attorney
Case 1:04-cv-00635-CFL Document 17 Case 1:04-cv-00635-CFL Document 12 Filed 04/13/2006 Page 15 of 2 Filed 12/20/2005 Page 2 of 26
Commercial Litigation Branch Civil Division Department of Justice Washington, D. C. 20530 Tele: (202) 616-0391 Fax: (202) 353-7988 Attorneys for Defendant
s/Steven D. Meacham Peel Brimley, LLP 2014 East Madison Street Suite 100 Seattle, Washington 98122-2965 206/770-3339 Telephone 206/770-3490 Fax Attorney for Plaintiff December 20, 2005
K:\My Documents\Metric Construction\status report modify schedule.wpd
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Exhibit B
Date: Fri, 3 Mar 2006 10:34:16 -0800 (PST) From:"Brian Smith"
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Exhibit C
Subject: RE: Metric v. U.S. Date: Fri, 3 Mar 2006 17:22:42 -0800 From:"Steve Meacham"
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Exhibit D
From: [email protected] [mailto:[email protected]] Sent: Wednesday, March 01, 2006 12:00 PM To: Smith, Brian (CIV) Subject: RE: Metric Const v. U.S. Brian: You should have received a CD with Stuart and Paul working papers. Metric will not make its documents available to you again in 1000 Oaks. You reviewed them, marked what you wanted, per your request the documents you wanted were scanned and copies provided to you. The same also occurred with the DCAA. I will provide your expert with access to those documents relied upon by Metric's experts in Seattle. Let me know when you want that to occur. Steve
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Exhibit E
________________________________ From: [email protected] [mailto:[email protected]] Sent: Mon 2/27/2006 11:59 AM To: Steve Meacham Subject: RE: Metric Const v. U.S. Steve, Please confirm that we will get access to Metric documents on Thursday March 9 at M's office in 1,000 Oaks. Let's start at 10am and it'll probably take longer than my own inspection -- but no more than the rest of the day. Thanks, -- Brian
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Exhibit F
Date: Thu, 16 Feb 2006 15:52:12 -0800 (PST) From:"Brian Smith"
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9. Contract compliance notices [file cabinet, confirm?] 10. Notices of defective or rejected work [file cabinet, confirm?] 11. Bid documents; planned material quantities for Metric, and Holmes bid estimate to Metric. 12. Metric's subcontract/agreement with Holmes 13. Barge rental invoices [any that arent included in cert claims] 14. All of Hainline and Pepin's work papers in any form. 15. Hainline's Summary of Beach Landing Availability spreadsheet in electronic form copies we have are unreadable. 16. Financial statements, audit reports, footnotes, and accompanying supplementary schedules and information for MCCI and Holmes for 1997 to 2005. 17. Accounting policies and procedures, including capitalization and depreciation policies and procedures for MCCI and Holmes for 1997 to 2005. 18. Lists of all equipment owned by MCCI and Holmes 1997-2002, including equipment description, purchase date, acquisition costs [not quite the same as #4, above]
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Exhibit G
Date:Wed, 15 Feb 2006 16:09:57 -0800 (PST) From:"Brian Smith"
--- Steve Meacham
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Exhibit H
Date:Wed, 15 Feb 2006 15:42:21 -0800 (PST) From:"Brian Smith"
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Exhibit I
From: Smith, Brian (CIV) Sent: Tuesday, February 07, 2006 4:39 PM To: '[email protected]' Subject: Metric Const v. U.S. Steve: I think our deposition trip went smoothly and that we're on track to "promptly" conclude discovery, etc. Although our experts will not be able to complete their work in time for us to report to the Court on 3/30 that we're done, I'm sure we'll be able to propose a schedule that has acceptable milestones for expert reports, depositions, etc., leading up to, and including, proposed dates for pretrial submissions and trial. To that end, I need to bring the experts by Metric's offices to go through M's files for this project. I assume since I was shown all project related files in "that file cabinet" that we can simply do the same thing again. Our scheduling expert (Patti Jones) anticipated that all schedule related materials for the project will be located in those files. It is anticipated that our cost expert (David Cotton) will need to see some things that are not in the file cabinet and were not examined by DCAA, but we will make a specific request for those in advance of our visit. Mr. Cotton has access to DCAA's workpapers so he will try not to be redundant of anything that was already produced to DCAA. Please arrange so that we can visit Metric's office on Thursday March 9 to examine documents. Also, are the Holmes files related to this project contained in Metric's files, or at a separate location? If separate, where are they? We may need to examine them as well, unless they're so nonvoluminous that they can be sent to Metric, or directly to us. One more thing, both of Metric's experts indicated that they have workpapers in your offices. Please scan/send them to me, or send them to me and I'll scan them. Thanks, -- Brian
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Exhibit J
1. Contract including Division 1, and Specifications for contracts 6807 and 5553 2. Certified Payroll for years 1998-2002. 3. Meeting minutes for all meetings held between Metric and the Navy/COE 4. Correspondence and Email related to claim issues 5. Preconstruction conference meeting minutes 6. Material slips 7. Equipment Logs [basically any/all documents related to the equip that was used on SNI by any party] 8. Schedules and schedule updates in whatever form was used on the Projects: electronic files, if possible 9. Contract compliance notices 10. Notices of defective or rejected work 11. Bid documents; planned material quantities for Metric, and Holmes bid estimate to Metric. 12. Metric's subcontract/agreement with Holmes 13. Barge rental invoices 14. All of Hainline and Pepin's work papers in any form. [Already produced by Metric] 15. Hainline's Summary of Beach Landing Availability spreadsheet in electronic form copies we have are unreadable. 16. Financial statements, audit reports, footnotes, and accompanying supplementary schedules and information for MCCI and Holmes for 1997 to 2005. 17. Accounting policies and procedures, including capitalization and depreciation policies and procedures for MCCI and Holmes for 1997 to 2005. 18. Lists of all equipment owned by MCCI and Holmes 1997-2002, including equipment description, purchase date, acquisition costs [not quite the same as #4, above]
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