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

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS NORTH STAR ALASKA HOUSING CORP., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 98-168C (Judge Allegra)

DEFENDANT'S RESPONSE TO PLAINTIFF'S MOTION FOR SANCTIONS, OTHER REMEDIES, AND A PRESERVATION ORDER DUE TO THE GOVERNMENT'S ADMITTED SPOLIATION OF DOCUMENTS Defendant, the United States, opposes the motion of plaintiff, North Star Alaska Housing Corp., to compel production of documents, for sanctions for alleged spoliation of documents, and for a preservation order. for the following reasons. I. North Star Does Not Comply With Rule 37 The Court should deny North Star's request that the Court compel the production of documents because North Star does not comply with Rule 37 of the Rules of the United States Court of Federal Claims ("RCFC"). Although not mentioned in its motion, The Court should deny the motion,

on the Court's electronic filing system North Star's motion is described as one pursuant to Rule 37. Rule 37 provides remedies

for failure to make disclosure or cooperate in discovery, including sanctions. North Star requests that the Court compel

the production of electronic data from hard drives and network backup tapes. Plaintiff's Motion For Sanctions, Other Remedies,

And A Preservation Order Due To The Government's Admitted

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Spoliation Of Documents ("Pl. Mot.") at 16.

Rule 37(a)(2)(B)

allows a party to move for an order compelling inspection in accordance with a request for inspection pursuant to Rule 34. Rule 37(d) allows a party to move for an order in the case of failure to respond to a request for inspection pursuant to Rule 34. In both cases, however, the motion must include a

certification that the movant has in good faith conferred or attempted to confer with the party failing to make the discovery in an effort to secure the information or obtain the response without court action. RCFC 37(a)(2)(B), (d). North Star's

motion includes no such certification. North Star also does not identify any Rule 34 discovery request that it seeks to enforce. The enforcement mechanism of

Rule 37 contemplates parties having formally resorted to an underlying discovery rule, for example, Rule 34. See Schwartz A

v. Mktg. Publ'g Co., 153 F.R.D. 16, 21 n.12 (D. Conn. 1994).

Rule 34 document production request must be signed by the party's attorney of record. See RCFC 11(a). It must also be accompanied A

by a certificate of service.

See RCFC 5.1(a), (b), 34(a).

request contained in an informal letter is not a Rule 34 request. See id. at 21 n.12; cf. Oneida, Ltd. v. United States, 43 Fed. Cl. 611, 617-18 (1999) (holding that defendant could not analogize letter to expert requesting documents to a formal subpoena duces tecum so as to bring the request within -2-

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Rule 45(c)). deposition.

Nor is an oral request for documents made at a See Schwartz, 153 F.R.D. at 18, 21; All West Pet

Supply Co. v. Hill's Pet Prods., 152 F.R.D. 634, 639 (D. Kan. 1993). But see Dixon v. Cappellini, 88 F.R.D. 1, 2 (M.D. Pa.

1980) (holding that oral request made at deposition followed the spirit, if not the procedure of Rule 34, where material requested was described with reasonable particularity and both parties were aware of which documents were involved). North Star relies upon

letters, none of which is signed by North Star's attorney of record or accompanied by certificates of service (Pl. Mot. at 8; Exhibits ("Exhs.") 7, 8, 10, 11), and appends a deposition transcript reflecting an oral request, not made by North Star's attorney of record, for one employee's emails. p. 82 at 16-18. Pl. Mot. Exh. 1,

That oral request and those letters are not

formal requests pursuant to Rule 34. North Star refers, in its motion, to requests for production served upon us on December 24, 2004. Pl. Mot. at 2. Indeed, one

of the letters upon which North Star relies invokes those requests. Pl. Mot. Exh. 7. North Star does not identify which

of those requests the Court should enforce; but if North Star is requesting that the Court enforce any of Requests for Production Nos. 1 through 3 (Appendix ("App.") 7), the Court should deny that request. We objected to those requests (App. 11-13), and

North Star has not challenged those objections before this Court. -3-

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Because the document requests that are the subject of North Star's motion were made outside the parameters of Rule 34, North Star should not be allowed to resort to Rule 37 to enforce any of those requests. Cf. Schwartz, 153 F.R.D. at 18, 21 (denying

motion to enforce letter and oral document requests). North Star also argues that the Government violated the Court's April 13, 2005 order by not providing, by April 22, 2005, all the documents that North Star requested arising from depositions. Pl. Mot. at 16. Rule 37(b)(2) provides for

sanctions against a party that violates an order providing for discovery. The Court's April 13 order, however, did not require

that the Government produce documents to North Star by April 22; it required that the Government respond to North Star's document requests by that date. North Star does not argue that the

Government failed to respond to its requests by April 22; indeed, North Star submits April 19 and 22, 2005 letters that reflect the fact that we responded to North Star's requests by the date that the Court set. II. Pl. Mot. Exhs. 11, 12.

North Star Does Not Demonstrate That Spoliation Occurred Or That Any Adverse Inference Is Warranted The Court should deny North Star's request that the Court

draw adverse inferences from the spoliation of evidence.

North

Star requests that the Court draw adverse inferences from the deletion of emails and the destruction of one employee's original

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inspection forms.

Pl. Mot. at 15-16.

To be sure, a party has a

duty to preserve material evidence not only during litigation but also during that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation. Renda Marine, Inc. v. United States, That obligation is triggered once the Id. Spoliation,

58 Fed. Cl. 57, 60 (2003).

party has notice that litigation may occur.

however, refers to the destruction or withholding of critically probative evidence resulting in prejudice to the opposing party. Slattery v. United States, 46 Fed. Cl. 402, 404 (2000). And

although courts may draw an adverse inference where it can be shown that evidence was destroyed in bad faith, more than mere negligence or even gross neglect is required to prove bad faith. See Hardwick Bros. Co., II v. United States, 36 Fed. Cl. 347, 416-18 (1996) (citing Eaton Corp. v. Appliance Valves Corp., 790 F.2d 874, 878 (Fed. Cir. 1986)). A showing of bad faith

requires clear and convincing evidence of, for example, a specific intent to injure. Am-Pro Protective Agency, Inc.

v. United States, 281 F.3d 1234, 1241 (Fed. Cir. 2002). North Star does demonstrate that any spoliation occurred. North Star identifies six Government employees who, it argues, destroyed documents related to the Birchwood Homes lease that is the subject of these consolidated cases. Pl. Mot. at 12. But

one of those employees, Edward Miller, testified that he did not -5-

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destroy Birchwood documents and did not possess email files. Mot. Exh. 6, p. 110 at 3, 13-14. With respect to the other five employees, North Star does not demonstrate that it has been prejudiced or that critically probative evidence was destroyed.

Pl.

North Star alludes to Housing

Manager Connie Kiser's destruction of some of her wall calendars (Pl. Mot. at 9 n.3), but does not explain how any of those calendars is critically probative of any of the issues in these consolidated cases. It also argues that Rodney Everett's deleted

emails "likely contain the personal observations he made when developing his recommendations for the Contracting Officer" (Pl. Mot. at 13), but fails to identify any contracting officer actions at issue, or how Mr. Everett's observations are critically probative of any issue in these cases. Rather, North Star focuses upon the deletion of emails between housing inspectors and Ms. Kiser, and the destruction by one of those inspectors, Yolanda Klumb, of copies of housing inspection forms that she made before providing the originals to Ms. Kiser. Pl. Mot. at 3, 11-12. North Star, however, does not

demonstrate that the Government had a duty to preserve those emails and copies. North Star appears to argue that the duty to

preserve those documents arose with the filing of Case No. 98168C on March 9, 1998 (Pl. Mot. at 11), but points to nothing in Case No. 98-168C that put the Government on notice that emails -6-

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between housing inspectors and Ms. Kiser, and copies of housing inspection forms in the possession of Ms. Klumb, were relevant to that case. Indeed, nothing in that case triggered that duty;

Case No. 98-168C concerns disputes over repairs from a fire, refuse collection, carpet depreciation, downtime calculation, and an incentive fee award for 1998; not housing inspections. Amended Complaint, Case No. 98-168C at 4, 5, 9-10, 16. North Star argues that the emails are relevant to its claim that the Government has diminished the value of Birchwood Homes. Pl. Mot. at 13. North Star did not raise that "diminution in Second

value" issue until September 4, 2002, when it submitted its request for a decision upon that issue to the contracting officer. App. 17. Later, on November 19, 2002, North Star filed

the complaint in Case No. 02-1632C, which alleges that the Government has diminished the value of Birchwood Homes. No. 02-1632C Complaint ("Compl.") at 2 ¶ 5. Case

Although North Star

argues that the emails "likely document that Ms. Kiser frequently changed how housing inspection standards were applied, altering how the housing office assessed what work was needed in North Star's units and allocated the costs of that work" (Pl. Mot. at 13), neither the September request nor the Case No. 02-1632C complaint raises that issue. Rather, the September request and

the complaint assert that work authorization forms do not accurately reflect damage noted on inspection forms, and that the -7-

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Government bases work authorization upon a "post-cleaning inspection" rather than a "list of maintenance items agreed upon by the Site Manager and Government Inspector at the pretermination and termination inspections." No. 02-1632C Compl. at 16-17 ¶¶ 56-57. App. 24-25; Case

Those assertions,

however, raise issues of Government reliance upon the result of one type of inspection rather than another, and of one type of form not matching another type of form; not of changes in the application of housing inspection standards. Neither the

September request nor the complaint in Case No. 02-1632C, therefore, triggered any duty to preserve emails between housing inspectors and Ms. Kiser, or Ms. Klumb's copies of housing inspection forms. Even if the September 2002 request and the complaint triggered such a duty, North Star does not demonstrate that those emails and copies are critically probative, or that it is prejudiced by their destruction. North Star argues that

unproduced emails and documents "may detail some of the specific incidents," presumably of discrepancies between inspectors' repair and cost-allocation decisions and Ms. Kiser's, that are "contested in this case." Pl. Mot. at 12-13. But the only such

incidents referenced in the September 2002 request relate to Units 745, 748, and 1004 (App. 24), which North Star did not mention in the complaint. And, in the September request, North -8-

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Star indicated that it is able to ascertain discrepancies between inspectors' repair and cost-allocation decisions and Ms. Kiser's by comparing work authorizations and inspection forms for particular units. App. 24.

Finally, North Star presents no evidence that emails or copies of housing inspections forms were destroyed in bad faith. Indeed, the most North Star shows is that Government employees were not advised to retain all emails and documents related to North Star and Birchwood Homes, and that employees decided on their own not to retain certain emails and other documents. North Star does not demonstrate, for example, that Government employees were instructed by superiors to destroy documents related to North Star or Birchwood Homes, or that Government employees destroyed documents related to North Star or Birchwood Homes in order to deprive North Star of relevant evidence in these consolidated cases. III. North Star Does Not Meet The Requirements For The Adoption Of A Preservation Order The Court should deny North Star's request for a preservation order because North Star does not meet the requirements for the adoption of such an order. North Star

requests that the Court adopt a preservation order requiring the preservation of evidence, noting that "more litigation is both pending and anticipated." Pl. Mot. at 16. A party seeking a

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preservation order must demonstrate that the order would not be unduly burdensome, and that the particular steps to be adopted will be effective, but not overbroad. States, 60 Fed. Cl. 133, 138 (2004). Pueblo of Laguna v. United North Star does not propose

any particular preservation steps; and its request is overbroad, covering not only these consolidated cases but, potentially, Case No. 04-1396C and actions that North Star has not yet commenced. Pl. Mot. at 16-17. For these reasons, the Court should deny North Star's motion, in its entirety. Respectfully submitted, PETER D. KEISLER Assistant Attorney General

s/David M. Cohen DAVID M. COHEN Director

OF COUNSEL WILLIAM. M. EDWARDS Assistant District Counsel United States Army Corps of Engineers Alaska District

s/Timothy P. McIlmail TIMOTHY P. MCILMAIL Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Telephone: (202) 307-0361 Facsimile: (202) 514-7965 Attorneys for Defendant -10-

May 16, 2005

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Certificate of Filing I hereby certify that on May 16, 2005, a copy of the foregoing Defendant's Response To Plaintiff's Motion For Sanctions, Other Remedies, And A Preservation Order Due To The Government's Admitted Spoliation Of Documents 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. system. Parties may access this filing through the Court's

s/Timothy P. McIlmail