Free Brief in Support of Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cv-1263-PSF-MEH ROBERT M. FRIEDLAND, Plaintiff, v. TIC-- THE INDUSTRIAL COMPANY and GEOSYNTEC CONSULTANTS, INC. f/k/a GEOSERVICES, INC Defendants. __________________________________________________________________________ DEFENDANTS' JOINT REPLY IN SUPPORT OF ITS MOTION TO STRIKE PLAINTIFF' DESIGNATION OF REBUTTAL EXPERT WITNESSES AND TO S PRECLUDE DESIGNATION OF FURTHER EXPERTS __________________________________________________________________________ Defendants TIC ­The Industrial Company and Geosyntec Consultants, Inc. respectfully submit the following Reply in Support of their Motion to Strike Plaintiff' s Designation of Rebuttal Expert Witnesses and to Preclude Designation of Further Experts (" Motion to Strike" ). INTRODUCTION The parties to this litigation expressly stipulated to a Modified Scheduling Order that required Friedland to submit all additional expert reports by August 11, 2006, and pushed the discovery cut-off date to November 17, 2006. The changes to the original scheduling order were intended, in the words of the parties'stipulated motion, to " facilitate the remaining discovery and relieve the Court of the burden of deciding GeoSyntec' Motion to Compel." s

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Friedland' attempt to designate additional experts long after the deadline set for submission s of expert reports plainly violated the parties'negotiated agreement and the clear terms of the Modified Scheduling Order. The issue of additional expert designations arose after the Defendants submitted the report of Luke Danielson, whose analysis demonstrates that Friedland cannot meet his prima facie burden to prove that he has incurred more than his fair share of response costs related to the Summitville Mine (the " Mine" Conveniently, and erroneously, ). Friedland argues that the Defendants should have the burden to disprove this element of his claim and that he now requires additional expert " rebuttal"testimony on the point. Not only are additional expert designations prohibited by the Modified Scheduling Order, two of the expert reports are entirely irrelevant and do not meet the standard for rebuttal witness designations under the Federal Rules. In light of Friedland' willful disregard of the s Modified Scheduling Order, Defendants request that the Court grant Defendants'Joint Motion to Strike Plaintiff' Designation of Rebuttal Expert Witnesses, order Friedland to s reimburse Defendants'costs in responding to these designations and preclude him from endorsing any further expert witnesses, rebuttal or otherwise. ARGUMENT

I.

As it relates to discovery deadlines, the Modified Scheduling Order replaced the original Scheduling Order. The purpose and language of the Stipulated Motion for Modification of Scheduling

Order and Related Relief [Docket # 127] makes clear that the parties intended to replace the

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original Scheduling Order with a new set of procedures. In so doing, the parties established a new process in which to complete discovery in an expedited manner, stating that " [a]ll parties have recently conferred at length and in good faith to resolve the current discovery disputes and have agreed . . . upon the process set forth below that will both facilitate the remaining discovery and relieve the Court of the burden of deciding GeoSyntec' Motion to s Compel[.]"Stip. Mot. at 2-3 (emphasis added). In terms of discovery deadlines, the Modified Order was intended to be comprehensive and to supersede the original Scheduling Order. Plaintiff' post hoc resurrection of the original Scheduling Order contravenes the s schedule established by the Modified Scheduling Order. According to the Modified Scheduling Order, all discovery, including expert discovery, was to be completed by November 17, 2006. Friedland' interpretation of the Scheduling Order, as modified, is s incorrect because it would mean Friedland could have served his designation of rebuttal witnesses by November 20, three days after the completion of discovery. Under this scenario, Defendants would have been entirely precluded from deposing Friedland' rebuttal s expert witnesses. See IBM Corp., 1995 WL 115421 at *2 and *4 (" [e]ven conceding that Fasco' interpretation of Rule 26(a)(2)(C) is reasonable, the discrepancy between the s discovery deadline and the Rule' disclosure schedule should have alerted Fasco that there s might be a problem with its interpretation." (attached as Exhibit G to Defs. Mot. to Strike, ) docket # 227). Scheduling orders, and all other orders of the Court, should be read to give full affect

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to the explicit language in the order. United States v. Browning, 518 F.2d 714, 716-717 (10th Cir. 1975); United States v. Broderick Inv. Co., 955 F. Supp. 1268, 1277 (D. Colo. 1997). Reading the Modified Order to allow rebuttal expert designations, especially when there exists no evidence that the Modified Order intended to preserve such designations, makes the discovery cutoff language meaningless. See Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 287 (3d Cir. 1991); United States v. Greyhound Corp., 363 F. Supp. 525, 534 (D. Ill. 1973). Friedland cannot creatively interpret the Modified Scheduling Order to suit his needs in contravention of the express deadlines in the Court' order. s Defendants agree that terms in the original Scheduling Order, that do not address issues of discovery and are not in conflict with terms in the Modified Scheduling Order, still have effect. That is why counsel for GeoSyntec operated with the understanding that section 7(c) of the original Scheduling Order, relating to the timing of opposition briefs to dispositive motions, was not altered. However, the language of the stipulated motion with regard to expert discovery and the timeline to complete discovery should have made it clear to Friedland that the rebuttal expert designation provision of the original Scheduling Order was superseded by the Modified Scheduling Order. It is ironic that Friedland would use GeoSyntec' November 6, 2006 letter to defend s his submittal of rebuttal expert designations. When GeoSyntec had a concern with the interaction between the original Scheduling Order and the Modified Order, counsel for GeoSyntec contacted Friedland' counsel in order to ensure the parties were of a common s understanding. Friedland did not extend to Defendants the same courtesy. Instead of

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approaching Defendants, Friedland made impermissible expert designations and filed for an extension of time in order to designate additional rebuttal experts. In both motions, Friedland made no mention of either the original Scheduling Order, which Friedland now argues is controlling, or the Modified Order. At the very least, Friedland' failure to be s proactive has caused Defendants to incur additional costs in drafting this motion and has delayed these proceedings. II. The rebuttal expert reports of Johnson and Gropper are immaterial and should be stricken. Jennifer Johnson' and Mitchell Gropper' reports are improper, even assuming that s s rebuttal expert reports are allowed under the Modified Scheduling Order. Federal Rule of Civil Procedure 26(a)(2)(C) allows rebuttal evidence " the evidence is intended solely to if contradict or rebut evidence on the same subject matter identified by another party[.]" Luke Danielson never opined that the corporate veil between Friedland and any of the Galactic corporations (Galactic Resources, Ltd., Galactic Resources, Inc., and SCMCI) should be pierced.1 By completely failing to address Danielson' analysis of Friedland' personal acts s s of direction and control over the Mine, the Johnson and Gropper reports do not " explain, repel, counteract or disprove the evidence of the adverse party."Crowley v. Chait, 322 F. Supp. 2d 530, 550-551 (D.N.J. 2004) (internal citations omitted). Therefore, the reports of Under this doctrine, a court will disregard a corporate entity, or pierce the corporate veil, and consider the actions ostensibly taken by the corporation to be those of its shareholders if " stockholders'disregard of the corporate entity made it a mere instrumentality for the the transaction of its own affairs... there is such unity of interest in ownership that the separate personalities of the corporation and the owners no longer exist; and to adhere to the doctrine of corporate entity would promote injustice or protect fraud." Gude v. City of Lakewood, 636 P.2d 691, 697 (Colo. 1981) (citing cases).
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Johnson and Gropper ­focused solely on the legal standards applicable to piercing the corporate veil ­are neither proper nor permitted under the Federal Rules. See Slicex, Inc. v. Aeroflex Colorado Springs, Inc., 2006 WL 1932344, at *3 (D. Utah 2006) (" Court may the prevent a rebuttal expert from providing irrelevant evidence or invading the province of the fact finder." [attached as Exhibit J]. ) Danielson' report addresses a completely different issue than the reports of Johnson s and Gropper. Danielson' report addresses Friedland' personal acts and decisions regarding s s the Mine' operations, his failures with regard to environmental management issues, and the s amount of control he exerted at the Mine. In his analysis, Danielson applied the correct standard for determining an executive' personal CERCLA liability under Bestfoods. See s United States v. Bestfoods, 524 U.S. 51, 66-67 (1998); Browning-Ferris Ind. of Ill., Inc. v. Ter Maat, 195 F.3d 953, 955-956, 961 (7th Cir. 1999); Norfolk Southern Ry. Co. v. Gee Co., 1999 WL 286287 *2-3 (N.D. Ill. Apr. 23, 1999) [attached as Exhibit I to Defs. Mot. to Strike, docket # 227]. There is no question that " simply describing an individual who owned stock and held an officer's position in a corporation"is not sufficient to state a claim for personal liability of that individual under CERCLA, and Defendants have never made this argument. See Norfolk Southern Ry. Co., 1999 WL 286287 at *4. Instead, Defendants have consistently argued that Friedland directly and personally engaged in behavior that created the environmental disaster at Summitville.

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In contrast, the Johnson and Gropper reports address only the irrelevant issue of whether the corporate veil between Friedland and his corporate entities should be pierced, rendering Friedland liable to the same extent as the corporations, because the corporate entity was disregarded and the " separate personalities of the corporation and the owners no longer exist." See Gude, 636 P.2d at 697. While Danielson' report focuses on Friedland' s s personal acts, Friedland' experts are fixated on a ghost argument, asserted by no party or s expert, that all corporate actions should be attributed to Friedland under a theory of piercing the corporate veil. By putting forward such obviously irrelevant expert reports, Friedland either fundamentally misconstrues Defendants'argument or is attempting to confuse the issue. Either way, the expert reports are neither proper rebuttal nor relevant to the issues of this case, and must therefore be stricken. The foundations for the reports are also vastly different. While Danielson' report is s a fact-intensive analysis of Friedland' personal acts of management and control over the s Mine over many years, Johnson and Gropper spend the majority of their reports reviewing recent case law developments regarding piercing the corporate veil. While Johnson and Gropper give legal opinions that fail to address the facts giving rise to Friedland' liability, s Danielson' report articulates an extensive factual basis for his opinions. Not only did s Danielson review thousands of pages of documents, he was also " intimately familiar with these events, since [he] was a member of the Colorado Mined Land Reclamation Board, the permitting agency that had the principal regulatory responsibility for the project... [he] investigated the environmental, regulatory and financial failure that led to the collapse of the

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Summitville mining project and the takeover of the site by the Environmental Protection Agency." Expert Report of Luke Danielson at 2 [attached as Exhibit H to Defs. Mot. to Strike, Docket # 227]. Friedland cannot refute Danielson' fact and opinion testimony with his " s rebuttal" experts'unrelated legal opinions that the corporate veil should not be pierced. An analysis of Friedland' personal liability for cleanup costs requires a review of whether Friedland s " directly and personally engaged in conduct that led to the specific environmental damage at issue in the case,"not a review of whether corporate formalities were followed. Sidney S. Arst Co. v. Pipefitters Welfare Educ. Fund, 25 F.3d 417, 421 (7th Cir. 1994). Because the Johnson and Gropper reports fail to rebut any of Danielson' conclusions, fail to address the s underlying facts in support of Danielson' conclusions, and rely on a legal theory never s articulated by Friedland or the Defendants, they should be stricken as experts and precluded from testifying at trial. CONCLUSION Plaintiff has ignored the terms of the Modified Scheduling Order setting discovery procedures and deadlines, and has introduced irrelevant expert designations that would not qualify as " rebuttal,"even if they had been timely made. Defendants therefore request that the Court grant Defendants'Joint Motion to Strike Plaintiff' Designation of Rebuttal Expert s Witnesses, order Friedland to reimburse Defendants'costs in responding to these designations, and preclude him from endorsing any further expert witnesses, rebuttal or otherwise.

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Respectfully submitted this 13th day of March 2007.

Colin C. Deihl, Esq. Faegre & Benson LLP 3200 Wells Fargo Center 1700 Lincoln Street Denver, CO 80203 Telephone: (303) 607-3651 Facsimile: (303) 607-3600 E-mail: [email protected] Delmar R. Ehrich, Esq. Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 Attorneys for Defendant The Industrial Company

Terrence M. Ridley, Esq. Marian L. Carlson, Esq. Wheeler Trigg Kennedy, LLP 1801 California Street, Suite 3600 Denver, CO 80202-2617 Attorneys for Defendant Geosyntec Consultants, Inc.
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CERTIFICATE OF SERVICE

I hereby certify that on March 13, 2007, true and correct copies of the foregoing DEFENDANTS' JOINT REPLY IN SUPPORT OF ITS MOTION TO STRIKE PLAINTIFF' DESIGNATION OF REBUTTAL EXPERT WITNESSES AND TO S PRECLUDE DESIGNATION OF FURTHER EXPERTS was electronically filed via Electronic Case Filing (ECF) with the United States District Court for the District of Colorado and served electronically on the following: John D. Fognani, Esq. R. Kirk Mueller, Esq. Perry L. Glantz, Esq. Fognani & Faught, PLLC 1700 Lincoln Street, Suite 2222 Denver, Colorado 80203 Terence M. Ridley, Esq. Marian L. Carlson, Esq. Wheeler Trigg Kennedy LLP 1801 California St., Suite 3600 Denver, Colorado 80202-2617 Paul J. Sanner, Esq. Hanson, Bridgett, Marcus, Vlahos & Rudy, LLP 333 Market Street, Suite 2100 San Francisco, California 94105-2173

s/ Jan Sullivan
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