Advanced Powder Sols. v. United States

• Decision Date: 13 July 2022
• Docket Number: 20-137C
• Parties: ADVANCED POWDER SOLUTIONS, INC., Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

ADVANCED POWDER SOLUTIONS, INC., Plaintiff, v. THE UNITED STATES, Defendant.

No. 20-137C

United States Court of Federal Claims

July 13, 2022

Bryant S. Banes, Neel, Hooper & Banes P.C., Houston, TX, for Plaintiff. With him on the briefs was Sarah P. Harris.

Eric J. Singley, Commercial Litigation Branch, Civil Division United States Department of Justice, Washington, D.C. With him on the briefs were Brian M. Boynton, Acting Assistant Attorney General, Martin F. Hockey Jr., Acting Director, and Steven J. Gillingham, Assistant Director.

OPINION AND ORDER

Matthew H. Solomson Judge

Pending before the Court in this Contract Disputes Act^[1] case is a motion by Plaintiff, Advanced Powder Solutions, Inc. ("APS"), to compel discovery responses from Defendant, the United States, acting by and through the Missile Defense Agency, part of the Department of Defense.

The Court DENIES the motion.

I. PROCEDURAL AND FACTUAL BACKGROUND

APS filed its complaint on February 7, 2020, challenging the Missile Defense Agency's claim that it overpaid APS in connection with two government contracts. ECF No. 1; see also Advanced Powder Sols., Inc. v. United States, 2022 WL 839809 (Fed. Cl. Mar. 22, 2022). The government filed its answer on May 7, 2020. ECF No. 8. On July 17, 2020, the Court ordered the parties to file cross-motions for summary judgment, ECF No. 11; briefing on those motions concluded on March 19, 2021, ECF Nos. 23, 24, 28, 29, 32, 33.

The week after the conclusion of summary judgment briefing, APS moved for leave to file a sur-reply. ECF No. 34. APS asserted, inter alia, that the government's reply brief was "the first time that APS has been able to determine the stated basis for the Government's claim against APS." ECF No. 34-1 at 1. The Court granted APS's motion on April 15, 2021, ECF No. 37, and the government filed a response to APS's sur-reply on May 20, 2021, ECF No. 40. The Court also granted APS leave to conduct "limited discovery" pursuant to APS's new understanding of the government's claim, ECF No. 42, and ordered counsel for APS to send written requests to the government articulating which specific documents APS sought, see ECF No. 45 at 29:14-30:7.^[2]

Accordingly, on June 15, 2021, counsel for APS sent the government a set of interrogatories and a set of requests for production of documents ("RFPD"). See ECF Nos. 50-1, 50-2.^[3] On August 27, 2021, government counsel responded, see ECF Nos. 50-3, 50-4, and ultimately agreed to produce thirty-three (33) documents, see ECF No. 50-5 at 2-8. The government produced those documents on September 10, 2021. See id. at 2-3.

Due to an apparent technical problem, however, APS counsel "could not access the documents" and requested via email, on September 10, 2021, that the government provide a link to the documents. See ECF No. 50 ("Mot. Compel") at 1. Government counsel did not reply to the email, and APS counsel never followed up. Id. at 1-2. On October 13, 2021, APS filed its motion to compel. Id. at 1. That same day, government counsel sent APS counsel a link "that provided [APS] access to the documents." ECF No. 52 ("Pl. Reply") at 1. On October 27, 2021, the government filed its response to APS's motion to compel. ECF No. 51 ("Def. Resp."). On November 3, 2021, APS filed its reply brief. Pl. Reply at 1.

In APS's reply brief in support of its pending motion to compel, APS appears to concede that the government has either produced, or no longer retains, all of the documents responsive to each of APS's RFPDs. Pl. Reply at 2-3 (noting, regarding RFPDs 10 and 11, that "the Government . . . no longer has the original incurred cost submissions"); id. at 7 (acknowledging the government's assertion that "responsive documents have already been produced" regarding RFPD 12 and requesting only that the government update its RFPD response accordingly); id. at 7-8 (noting, regarding RFPDs 13 and 14, that the government's response brief "suggests that no responsive documents exist" and that, if that is true, the government should update its RFPD responses to reflect as much).^[4] Nevertheless, APS asserts that the government committed "spoliation" when the government "fail[ed] to retain relevant evidence" that is putatively responsive to RFPDs 10 and 11. Id. at 4-7. The evidence in question - incurred cost submissions - are documents that APS prepared but that APS itself no longer possesses. Id. at 4 n.4. Accordingly, APS asks the Court to "make an adverse inference finding against the Government" regarding RFPDs 10 and 11. Id. at 7.

On June 1, 2022, the Court held a telephonic status conference to discuss, inter alia, APS's motion to compel. See ECF No. 60 ("Tr.").

II. DISCUSSION

A. The Court Denies APS's Motion to Compel

The Rules of the United States Court of Federal Claims ("RCFC") allow parties to "move for an order compelling disclosure or discovery" under a range of circumstances. RCFC 37(a)(1). Among other things, a party can move to compel production of a required disclosure, RCFC 37(a)(3)(A), or to compel production of a specific discovery response, like "an answer, designation, production, or inspection," RCFC 37(a)(3)(B); see also, e.g., New Orleans Reg'l Physician Hosp. Org., Inc. v. United States, 122 Fed.Cl. 807, 820 (2015) (compelling a party "to redo its previous searches" for responsive documents); 3rd Eye Surveillance, LLC v. United States, 158 Fed.Cl. 216, 232 (2022) (ordering that a party "clarify [its] answers" to a series of RFPDs).

This Court exercises broad discretion regarding "the scope and conduct of discovery." Florsheim Shoe Co. v. United States, 744 F.2d 787, 797 (Fed. Cir. 1984); see also Schism v. United States, 316 F.3d 1259, 1300 (Fed. Cir. 2002) (en banc) ("A trial court 'has wide discretion in setting the limits of discovery.'" (quoting Moore v. Armour Pharm. Co., 927 F.2d 1194, 1197 (11th Cir. 1991))). That broad discretion extends to resolving motions to compel. See New Orleans Reg'l Physician Hosp. Org., 122 Fed.Cl. at 815. When resolving such motions, "'court[s] must balance potentially conflicting goals' with the understanding that '[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation.'" 3rd Eye Surveillance, 158 Fed.Cl. at 223 (second alteration in original) (first quoting Petro-Hunt, LLC v. United States, 114 Fed.Cl. 143, 144 (2013); and then quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)).

The Court need not explore the outer bounds of its discretion in this case, however, as APS concedes that the government has produced all responsive documents in its possession. See Tr. at 5:1-3 ("[APS COUNSEL]: Well, I believe the Government when they say they don't have anything else."); Pl. Reply at 2-3, 7-8. In light of that concession, the Court agrees with the government that "there is nothing to compel." Def. Resp. at 1. Accordingly, the Court denies APS's motion to compel.^[5]

B. The Court Denies APS's Request For an Adverse Inference Sanction

APS further asserts that the government's failure to retain the documents APS desires was "tantamount to spoliation," Pl. Reply at 4, and that the Court should thus "use its inherent power" to "make an adverse inference finding against the Government," id. at 7. The Court declines to do so.

This Court may impose discovery sanctions pursuant to either: (1) RCFC 37, or (2) the Court's inherent power. See, e.g., United Med. Supply Co., Inc. v. United States, 77 Fed.Cl. 257, 264 (2007); 4DD Holdings, LLC v. United States, 143 Fed.Cl. 118, 130 (2019). A litigant, however, "can only be sanctioned for destroying evidence if it had a duty to preserve it." Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1320 (Fed. Cir. 2011) (quoting Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003)). That duty arises when the party "knows or reasonably should know that evidence in its control may be relevant to a reasonably foreseeable legal action." Jones v. United States, 2022 WL 473032, at *4 (Fed. Cir. Feb. 16, 2022). The "breach of the duty to preserve evidence, either through destruction of evidence or through failure to properly preserve it," is known as spoliation. Id.; see also West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999) ("Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation." (citing Spoliation, Black's Law Dictionary (6th ed. 1990))).

With regard to the first sanctions path, "RCFC 37 provides an arsenal of discovery sanctions designed to discourage delay, waste of resources, and dilatory practices in favor of full disclosure of relevant information prior to trial." Applegate v. United States, 35 Fed.Cl. 47, 56 (1996). This Court may impose sanctions pursuant to RCFC 37 "where the spoliation violates a specific court order or disrupts the court's discovery regime." United Med. Supply Co., 77 Fed.Cl. at 264.^[6] APS, however, barely acknowledges this rule, referring to RCFC 37 only in a one-sentence footnote. See Pl. Reply at 6 n.3.

As for the second path, this Court may impose sanctions "based on the court's inherent power to control the judicial process and litigation, a power that is necessary to redress conduct 'which abuses the judicial process.'" United Med. Supply Co., 77 Fed.Cl. at 263 (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991)). Courts, however, must exercise this inherent power with great "restraint and discretion." Chambers, 501 U.S. at 44; see also Chapman L. Firm, LPA v. United States, 113 Fed.Cl. 555, 609 (2013) ("The inherent power of courts is broad, but must be exercised by judges cautiously[.]"), aff'd, 583 Fed.Appx. 915 (Fed. Cir. 2014). APS requests...