Free 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 OF AMERICA, ) ) Defendant. ) )

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

INNOVAIR AVIATION LIMITED'S OPPOSITION TO DEFENDANT'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 COURT ORDER REGARDING DEFENDANT'S PRETRIAL FILINGS AND THE COURT'S PRETRIAL CONFERENCE AND PLAINTIFF'S REQUEST TO HOLD OCTOBER 4, 2007 PRETIRAL CONFERENCE IN PERSON

Plaintiff Innovair Aviation Limited ("Innovair") opposes in part Defendant's Emergency Motion in Limine and opposes Defendant's Motion to Modify Court Order. Innovair further requests that the Court modify the Scheduling Order to provide that the pretrial conference on October 4, 2007 be held in person rather than by telephone. Innovair does not oppose Defendant's motion for leave to depose Arthur Cobb on the subject of his Supplemental Report and has confirmed with Mr. Cobb that he is available on October 1 for a deposition in Washington, D.C. 1/ Notwithstanding Defendant's hue and cry, the submission of Mr. Cobb's Supplemental Report causes no prejudice to Defendant. It was submitted to Defendant a 1/
Mr. Cobb would also be available for a supplemental deposition on Friday, October 5.

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month before trial and in its entirety is a mere nine (9) pages long, of which two (2) pages are prefatory material containing no new information. It follows the same methodology and format as Mr. Cobb's initial May 1, 2007 report and does not reference or depend upon any additional data apart from that which Mr. Cobb considered when creating his May 1, 2007 report. See American Federal Bank FSB v. United States, 72 Fed. Cl. 586, 626-27 (2006) (after denying motion to exclude supplemental expert report and permitting deposition of expert shortly before trial, Court later denied motion for sanctions related to costs associated with effort to address opinions in Supplemental Report; although expert "did submit new calculations [in his supplemental report], [ ] they reflected the same general methodology as that applied in [initial report]"); Smithkline Becham PLC v. Teva Pharmaceuticals USA, Inc., 2007 WL 1827208, at *3 (D.N.J. June 22, 2007) (finding no violation of Fed. R. Civ. P. 26(a)(2)(B) when a supplemental expert declaration did not contain new information and did not directly contradict the expert's prior testimony or submissions). Moreover, Mr. Cobb's May 1, 2007 report clearly states that it is a preliminary analysis and that "[t]he analysis and this report may be supplemented upon receipt of additional documents and information." Cobb & Assoc. May 1, 2007 Report at 2, 3. The Government's experts made similar reservations in their reports. The two reasons for which the Supplemental Report is being offered are first, to respond to recentlydeveloped testimony from Defendant's expert witnesses that there was no market for converted DC-3 aircraft during the relevant period, and second, to provide a valuation of the Technology License Agreement ("TLA") based strictly upon Innovair's distributor

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contract with United Technologies Corporation. Thus, the Supplemental Report will prove a beneficial aid to the Court in determining the value of the TLA and to the parties in presenting their respective cases regarding its value. The Supplemental Report provides an alternative calculation of the value of Innovair's TLA based solely upon net income from sales pursuant to Innovair's distributor contract with United Technologies Corporation. The Supplemental Report responds to the collective theme presented in Defendant's expert reports that there was no real market for the product licensed under the TLA, a position that the Government did not put forward in the 1998 trial in the District Court of Arizona and that apparently was only recently developed in the few months preceding the scheduled trial date. Although Innovair firmly disputes Defendant's position, Innovair's counsel considers it prudent to present the Court with a calculation of value based solely upon Innovair's contractual rights under a "take or pay" contract Innovair and UTC executed prior to the taking, which required UTC to purchase five conversion kits per year for each of the seven years of the contract. See, e.g., Kaiser-Francis Oil Co. v. Producer's Gas Co., 870 F.2d 563, 570 (10th Cir. 1989) (affirming summary judgment enforcing take or pay contract); B.F. Goodrich Co. v. Vinyltech Corp., 711 F.Supp. 1513, 1520-21 (D. Ariz. 1989) (enforcing take or pay contract on summary judgment). Thus, regardless of market demand for the DC-3 conversion licensed under the TLA taken by the Government, just compensation for the TLA is at least equal to the value conveyed by the enforceable Innovair-UTC Distributor Contract, and it will be helpful to the Court to have available an analysis of and testimony concerning the value generated by that contract alone.

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Innovair objects to Defendant's request to extend the deadlines for its pretrial filings and to move the date of the pretrial conference from October 4 to the following week. The current deadline for these filings is already less than two and a half weeks before trial, providing Innovair only very limited time to digest and prepare to address the Government's legal and factual positions. There is no reason that the short Supplemental Report should delay the filing of Defendant's pretrial brief, witness list and exhibit lists. The Supplemental Report postdates and is not discussed in Innovair's pretrial brief, so the Defendant is fully able to prepare its pretrial brief prior to Mr. Cobb's second deposition. Moreover, Innovair would not object to Defendant's request to supplement its pretrial brief following Mr. Cobb's deposition to address the Supplemental Report. If, however, the deadline for Defendant's pretrial filings was extended by one week, there would be only ten days from the filing of Defendant's brief, witness list and exhibit list to the start of the trial on October 16, 2007, leaving little time to digest and plan for the presentation of witnesses and exhibits at trial. Innovair must receive the Defendant's pretrial brief as scheduled on September 28 ­ already only seventeen days before trial ­ in order to anticipate the Government's case sufficiently to prepare its witnesses, organize its rebuttal case and consider possible impeachment evidence. Furthermore, any delay in the date for the pretrial conference ­ already scheduled for just eleven days before trial ­ would be unnecessary and would impede the parties from the orderly final planning for their respective trial presentations. 2/

The Government makes no mention in its motion that, after declining to identify its witnesses in response to an interrogatory, it refused Innovair's request to depose several

2/

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Innovair also requests that the Court hold the pretrial conference in person in order to promote the most effective and productive results. Defendant has identified fifteen (15) potential witnesses -- compared to the three witnesses it presented at trial on the same issue in the District of Arizona -- and apparently seeks to transform what should be a one-week trial into a multi-week endeavor. Moreover, Defendant provided copies of its proposed exhibits to Innovair two weeks after the deadline for Innovair to file objections to Defendant's exhibit had come and gone. Innovair respectfully suggests that an inperson pretrial conference would facilitate orderly and efficient trial preparation and presentation by the parties. CONCLUSION For the foregoing reasons, Innovair respectfully requests that the Court deny Defendant's motion to exclude testimony concerning the opinions set forth in Mr. Cobb's Supplemental Report, and deny Defendant's motion to extend its pretrial filing deadlines and to reschedule the pretrial conference. Innovair, however, does not oppose Defendant's alternative request for leave to take a supplemental deposition of Mr. Cobb

witnesses identified for the first time on its August 9, 2007 Witness List. In the interests of causing the least disruption to on-going trial preparation work, Innovair refrained from making a motion to the Court concerning Defendant's refusal with respect to those witnesses for whom there is existing deposition testimony from other proceedings. Innovair will, however, file a motion to exclude the testimony of two Government witnesses, Charles McKee and Reid Pixler, shortly. McKee has never been identified as a witness in this or the prior District Court of Arizona proceeding and has no known connection to the parties or the facts in this case. Indeed, he appears to be a non-disclosed expert witness slipped onto the Government's Witness List as a purported fact witness. Pixler was the Assistant United States Attorney who prosecuted the underlying unsuccessful forfeiture proceeding. His testimony is irrelevant to the issue of just compensation. Moreover, the presentation of evidence by the attorney who prosecuted the underlying case raises significant questions of impropriety, and should be excluded.

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concerning his Supplemental report on October 1, 2007. Innovair also respectfully requests that the Court hold the pretrial conference in person on October 4, 2007.

Respectfully submitted,

Of Counsel: Christopher Bartolomucci Audrey E. Moog HOGAN & HARTSON LLP 555 13th Street, N.W. Washington, D.C. 20004 (202) 637-6575 Dated: September 20, 2007

s/ Ty Cobb______________ Ty Cobb HOGAN & HARTSON LLP 555 13th Street, N.W. Washington, D.C. 20004 (202) 637-6575 Attorney of Record for Plaintiff Innovair Aviation Limited

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CERTIFICATE OF SERVICE I hereby certify under penalty of perjury that on September 20, 2007, I filed the foregoing INNOVAIR AVIATION LIMITED'S OPPOSITION TO DEFENDANT'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 COURT ORDER REGARDING DEFENDANT'S PRETRIAL FILINGS AND THE COURT'S PRETRIAL CONFERENCE AND PLAINTIFF'S REQUEST TO HOLD OCTOBER 4, 2007 PRETRIAL CONFERENCE IN PERSON 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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