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

Case 1:96-cv-00408-LAS

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

No. 96-408C (Judge Smith)

DEFENDANT'S REPLY IN SUPPORT OF ITS EMERGENCY MOTION IN LIMINE OR, IN THE ALTERNATIVE, MOTION FOR LEAVE TO TAKE THE DEPOSITION OF PLAINTIFF'S EXPERT AND DEFENDANT'S MOTION TO MODIFY COURT ORDER REGARDING DEFENDANT'S PRETRIAL FILINGS AND THE COURT'S PRETRIAL CONFERENCE Defendant, the United States, respectfully replies to plaintiff's opposition to the Government's emergency motion in limine or, in the alternative, motion for leave to take deposition of plaintiff's expert and defendant's motion to modify the Court's order regarding the Government's pretrial filings and the Court's pretrial conference, filed on September 20, 2007 (Pl. Resp.). Innovair's response to our motion is outrageous. Now, on the retreat after reading the Government's experts' reports and faced with their own expert's own concessions at their depositions, plaintiff, Innovair Aviation, Ltd. (Innovair), has made an eleventh hour attempt to recast its case. See Pl. Resp. at 3.1 The Court should reject Innovair's last-ditch effort to

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Innovair states: The Supplemental Report responds to the collective theme presented in Defendant's expert reports that there was no real market for the project licensed under the TLA, a position that the Government did not put forward in 1998 in the District Court of Arizona and that apparently was only recently developed in the few months preceding the scheduled trial date.

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sandbag the Government. Its effort to introduce its Supplemental Report of Cobb & Associates, Ltd. at this late stage in the proceedings substantially prejudices the Government's defense of this case. The Court's March 12, 2007 scheduling order reflects a schedule that Innovair largely insisted upon, ostensibly due to the limited availability of Innovair's principal, Bryan Carmichael, who moves from California to Australia in November to enjoy the winter months in warmer climate. That schedule contemplated a firm deadline of May 1, 2007 for the submission of Innovair's expert reports and two months for the Government to respond. Now, nearly five months after the deadline for submitting its expert reports, after the Government has gone to great effort to develop convincing expert testimony, and on the eve of the deadline for the Government's pre-trial brief and the trial itself, Innovair has casually served upon the Government a last-minute report it openly acknowledges changes its theory of damages in the case in response to the Government's successful prosecution of discovery. Fundamental principles of judicial management and fairness dictate that Innovair should not get a second bite at the apple and that the Court should grant our motion in limine precluding Innovair from

Pl. Resp. at 3. First, Innovair mischaracterizes the Government's position. It is Mr. Ernest Arvai's opinion, the Government's expert, that the market for the BT-67, the converted DC-3 produced by Basler Turbo Conversions and Innovair, is a special purpose or "niche" market. Second, Innovair neglects to point out that it had been the Government's position at the 1998 Arizona district court proceeding that the Court lacked jurisdiction to determine the fair market value of the Technology License Agreement. The Government's position was upheld on appeal. Basler Turbo-67 Conversion DC-3 Aircraft, et al. v. United States, 248 F.3d 1173 (9th Cir. 2000). Third, Innovair also fails to acknowledge that it has had the Government's expert reports since July 9, 2007. Innovair's complaint that it has not had enough time to understand the Government's position is disingenuous given that it insisted upon the pretrial schedule that the Court adopted in its March 12, 2007 order. -2-

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introducing through its expert, Mr. Arthur Cobb, any testimony not contained in Mr. Cobb's May 1, 2007 expert report. At a minimum, however, the Government is entitled to the modest an enlargement of the time for filing its pre-trial memorandum of contentions of fact and law that it has requested. Plaintiff has proposed to put forward a brand new theory of damages, the central issue of this trial. The Government has every right to determine the reasons for and bases of Mr. Cobb's new report before taking any position on the law and facts at issue here. To require otherwise would invert process of civil discovery and the process contemplated by this Court's March 12, 2007 scheduling order. Innovair's only opposition to the Government's alternative request for an enlargement is that Innovair will not have sufficient time to prepare for the October 16, 2007 trial. Pl. Resp. at 4. But it is Innovair itself, not the Government, that has initiated this eleventh hour change to the schedule contemplated by this Court. Not only has Innovair filed its new report, but it also now requests that it be allowed to depose Government fact witnesses whom it chose not to depose during discovery.2 Pl. Resp. at 4, n.2. Any prejudice that Innovair would suffer as a result of an enlargement of the Government's time to file its brief is the result of its own inability to follow its own schedule. Innovair stated at the parties' meeting of counsel that it has "four teams" working on this case. The Government has two lawyers, both of whom are juggling numerous cases other than this one. The Government should not suffer in its defense for Innovair's lack of diligence.

In fact, for reasons that remain a mystery, Innovair did not depose any fact witnesses in this case. -3-

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In any event, whatever the Court decides, the Court should permit the Government to take an additional week, until October 5, 2007, to prepare its pretrial filings because it has had to address plaintiff's last-minute effort to derail the proceedings in this case. The Government has had to turn its attention away from preparing its pretrial filings to address the appearance of Innovair's out-of-time expert report. Moreover, should the Court permit Innovair to introduce at trial the opinion of Mr. Cobb concerning the matters discussed in his Supplemental Report, the Government should be afforded an opportunity to evaluate what impact these opinions would have upon its own case and to apprise the Court of its position in its pretrial brief. The Government would not be in a position to determine the possible impact of Mr. Cobb's supplemental opinion upon its case until after it deposed Mr. Cobb on October 1, 2007. Finally, Innovair contends that the Government's witness, Charles McKee, was "nondisclosed" and "has no known connection to the parties or the facts in this case." Pl. Resp. at 5. Innovair's statement is careless and wrong. Mr. McKee's connection to this case was, in fact, disclosed by plaintiff's own expert, Barbara Beyer, who in her deposition on June 26, 2007, acknowledged Mr. McKee as the author of one of the documents, a report prepared by Ms. Beyer's company in connection with the contract that is the subject of Mr. Cobb's new report, upon which Innovair now relies. Defendant's Appendix 2. Innovair, through due diligence, could have identified Mr. McKee at any time. Moreover, given that it was Mr. Reid Pixler, who, as the Assistant United States Attorney, negotiated a price with Innovair and Basler Turbo Conversions, Inc., for the sale of the Technology License Agreement, that is the subject of Innovair's taking claim in this case, Mr. Pixler's testimony regarding these negotiations is highly relevant in this case and not likely to raise questions of impropriety.

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For the foregoing reasons, we respectfully request that the Court grant our motion for an enlargement of time to file our pretrial filings on October 5, 2007, and that the Court reschedule the pretrial conference currently scheduled to occur on October 4, 2007. In addition, we respectfully request that the Court grant our motion in limine, or in the alternative, our motion to take the deposition of Mr. Arthur Cobb, on October 1, 2007. Respectfully submitted,

PETER D. KEISLER Assistant Attorney General

/s/ Jeanne E. Davidson JEANNE E. DAVIDSON Director

/s/ Sheryl L. Floyd SHERYL L. FLOYD Senior Trial Counsel BRIAN T. EDMUNDS Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 616-8278 Attorneys for Defendant SEPTEMBER 21, 2007

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CERTIFICATE OF FILING I hereby certify that on this 21st day of SEPTEMBER, 2007, a copy of this "DEFENDANT'S REPLY IN SUPPORT OF ITS EMERGENCY MOTION IN LIMINE OR, IN THE ALTERNATIVE, MOTION FOR LEAVE TO TAKE THE DEPOSITION OF PLAINTIFF'S EXPERT AND DEFENDANT'S MOTION TO MODIFY COURT ORDER REGARDING DEFENDANT'S PRETRIAL FILINGS AND THE COURT'S PRETRIAL CONFERENCE" was filed e1ectronically. 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/ Sheryl L. Floyd

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