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

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS __________________________________________ INNOVAIR AVIATION LIMITED, Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant. ) ) ) ) ) ) ) ) ) ) )

DOCKET NO. 96-408C (Senior Judge Loren A. Smith)

PLAINTIFF INNOVAIR AVIATION LIMITED'S REPLY IN FURTHER SUPPORT OF MOTION IN LIMINE TO EXCLUDE TESTIMONY OF REID PIXLER AND OPPOSITION TO DEFENDANT'S MOTION FOR RECONSIDERATION More than two weeks after Innovair filed its motion to exclude the testimony of Assistant United States Attorney Reid Pixler and the Court already ruled to exclude Pixler's testimony, the Government has opposed Innovair's motion and moved that the Court reconsider its ruling. In its opposition and motion, the Government ignores the repeated findings that the desired testimony is irrelevant, blatantly mischaracterizes the negotiations between the Government, Basler Turbo Conversions ("BTC") and Innovair Aviation Limited ("Innovair"), and seeks to have this Court allow the testimony of a Government attorney who prosecuted an earlier iteration of this dispute, in which he routinely argued his own credibility, despite having had a duty to recuse himself in the Government's subsequently rejected case. His approach ultimately produced one of the few Equal Access to Justice Act

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("EAJA") awards ever entered against the United States. See United States v. Basler Turbo-67 Conversion DC-3 Aircraft, et al., 34 Fed. Appx. 346, 349 (9th Cir. 2002) (Basler II). Moreover, the Government has failed to point to any "manifest error of law, or mistake of fact" committed by this Court when it granted Innovair's motion to exclude Pixler's testimony. I. Pixler's Proposed Testimony is Irrelevant.

The Government once again seeks to relitigate issues it has lost before this Court. See, e.g., Innovair Aviation, Ltd. v. United States, 72 Fed. Cl. 415, 421 (2006) ("The Court notes that the Government made these same arguments to the Arizona District Court and had them rejected there. This Court rejects them as well."). Not only has this Court already held that Pixler cannot testify at trial, but it and the Ninth Circuit have also already ruled on the legal effect of the Substitute Res Bond, finding the bond's value irrelevant to the question of the value of the TLA now before this Court. Specifically, notwithstanding the Government's repetitive arguments concerning the Substitute Res Bond, in awarding summary judgment to Innovair, this Court held that the Government effected a taking of Innovair's TLA without just compensation and that the amount of the Substitute Res Bond did not represent a valuation of the TLA. Innovair, 72 Fed. Cl. at 416 (noting that "there never was a valuation of Innovair's interest in the TLA," id. at 424). Further, in its factual findings, the Court found that "the bond `was in place of the sum of $1,375,000 paid by Air Colombia to Innovair,'" and that "this sum was to secure the Government's interest in the TLA." Id. at 418 (quoting Substitute Res Bond ¶ 11)

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Moreover, in its first ruling on this dispute, the Ninth Circuit noted that "what Innovair paid [for the TLA] is not necessarily, or even particularly, a proper measure of what its rights are worth. The annals of economic history are replete with instances where people paid very little for an asset that ultimately made them a fortune, or paid a fortune for an asset and lost it all." United States v. Basler Turbo-67 Conversion DC-3 Aircraft, et al., 1996 WL 88075, at *2 (9th Cir. Feb. 29, 1996) (Basler I). Thus, as has already been made plain in this case, the $1.375 million that BTC deposited with the Arizona district court at the Government's request is neither the TLA's fair market value nor the amount necessary to put Innovair "in the same financial position as if there had been no taking," Whitney Benefits Corp., v. United States, 18 Cl. Ct. 394, 407 (1989), aff'd 926 F.2d 1169 (1991) (citation omitted), and is not relevant to the determination of the value of the TLA now before the Court, see Innovair, 72 Fed. Cl. at 425. It strains credulity and patience to suggest yet again and for the umpteenth time, as the Government does, that the $1.375 million demanded by the Government and then paid by BTC is determinative of or even relevant to the question of the value of the TLA. The $1.375 million Substitute Res Bond represents neither a valuation of the TLA nor "[t]he amount that a willing buyer and informed buyer. . . under no compulsion to buy, will pay, and what a willing and informed owner, under no compulsion to sell, will accept for property, after fair and voluntary dealing[.]" Whitney, 18 Cl. Ct. at 408 (citing United States v. Miller,

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317 U.S. 369, 373-74 (1943). (If probative at all, the fact that BTC was willing to pay $1.375 million to obtain the TLA demonstrates that BTC thought the TLA to be worth more than the bond amount ­ why else agree to pay it?) Pixler's testimony would shed no light on what price a willing buyer and a willing seller would reach for the TLA after fair and voluntary dealing. But through it, according to the Government's brief, Pixler would try to testify sixteen years after the fact about alleged out of court statements made by Innovair's former counsel that the government wants to suggest reflect Innovair's assessment of value. To construct the sentence is enough to show how contorted and unreliable Pixler's testimony would be. In any event, Pixler's own statements make plain that the Government's current assertion is unsupportable. In November 1991, while in the midst of negotiating the Substitute Res Bond, Pixler wrote to the United States Marshall's Service ("USMS") that if the Government were to hold the TLA and do nothing with it, "USMS will be responsible for millions of dollars of lost revenue to Innovair." See Ex. 1 at 8 (emphasis added). In the same letter, Pixler writes "[a]ll we want is the money." Id. at 2.

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II.

The Model Rules of Professional Responsibility Counsel Against Allowing Pixler's Testimony. Pixler's conduct in the prosecution of earlier phases of the present

dispute suggest that the Court should be especially skeptical of allowing an attorney for the Government to testify as a fact witness at the upcoming trial. In fact, the professionalism of Pixler's conduct has already been called into question by the United States District Court for the District of Arizona during the earlier iteration of this matter. The Ninth Circuit affirmed and expanded the district court's EAJA award, noting that "[i]t is true that the government seized Innovair's assets, despite knowing that the company was an innocent owner. Furthermore, it seems fair to say that some of the arguments relied upon by the government to avoid return of the assets were frivolous." Basler II, 34 Fed. Appx. at 348. Moreover, while the matter of imposing any professional discipline on Pixler is the province of the courts before which he practices, it is certain that Pixler's conduct violated the Model Rules of Professional Conduct. Specifically, except in certain limited circumstances, lawyers may not act as an advocate at a trial when the attorney is likely to be a necessary witness. Model Rules of Prof'l Conduct R. 3.7 (2002). Pixler was the trial counsel for the Government throughout the case often arguing the justification of his own conduct and decisions. Pixler is not counsel for the Government in the present case because the jurisdictional limitations of the district court necessitated this second action. All the same, the Government seeks to have him testify about his conduct as its lawyer and advocate.

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The fact that he is not counsel on the pleadings in this Court of Federal Claims action is a distinction without a difference. III. In Granting Innovair's Motion to Exclude Pixler's Testimony, The Court Did Not Make a Manifest Error of Law or Mistake of Fact. The Government correctly identifies the legal standard for granting a motion for reconsideration ­ that the movant must "point to a `manifest error of law, or mistake of fact' and demonstrate that the motion `is not intended to give an unhappy litigant an additional chance to sway the court," Stickland v. United States, 36 Fed. Cl. 651, 657 (1996) (citation omitted), yet fails to identify any such "manifest error" or "mistake" from which the Court's decision suffered. Rather, the Government bases its motion entirely on its complaint that the Court ruled prior to the submission of its response brief. See Opp. at 11. The Government ignores the fact that it presented its arguments in opposition to Innovair's motion during the Court's status conferences on September 24 and 26, 2007. The fact that the Government chose not to file a written opposition until well over two weeks after Innovair filed its motion and that the Court ruled on the motion during the intervening period after hearing oral argument from the parties simply does not qualify as the requisite "manifest error of law, or mistake of fact," nor has the Government cited any authority to suggest otherwise.

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CONCLUSION For the foregoing reasons, this Court should not reconsider its prior, and decidedly correct, decision and the Innovair respectfully requests that the Court grant the motion to exclude the testimony of Reid Pixler, as previously ordered, and deny the government's motion for reconsideration.

Respectfully submitted, s/Ty Cobb_________________________ Ty Cobb HOGAN & HARTSON L.L.P. 555 Thirteenth Street, N.W. Washington, D.C. 20004 (202) 637-5681 (direct) (202) 637-5910 (facsimile) Attorney of Record for Plaintiff Innovair Aviation Limited Of Counsel: H. Christopher Bartolomucci Audrey E. Moog HOGAN & HARTSON L.L.P. 555 Thirteenth Street, N.W. Washington, D.C. 20004 (202) 637-5810 (202) 637-5910 (facsimile) Dated: October 10, 2007

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CERTIFICATE OF SERVICE I hereby certify that on this 10th day of October, 2007, I filed the foregoing Plaintiff Innovair Aviation Limited's Reply in Further Support of Motion in Limine to Exclude Testimony of Reid Pixler and Opposition to Defendant's Motion For Reconsideration using the Court of Federal Claims' Electronic Court Filing system, which automatically caused notice to be sent to counsel of record for the parties. s/Ty Cobb_________________________ Ty Cobb Counsel for Innovair Aviation Limited

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