The opinion of the court was delivered by: Judge Amy J. St. Eve
BP AMOCO CHEMICAL COMPANY AND BP CORPORATION NORTH AMERICA INC.'S RENEWED MOTION SEEKING ADDITIONAL RELIEF IN LIGHT OF FHR'S UNTIMELY DISCLOSED DOCUMENT PRODUCTION AND CLAIMS
Discovery closed in this case long ago. Yet, in February 2009, well after the close of discovery, FHR amended its interrogatory answers by submitting a new Claim Chart which significantly modified the damages it seeks in this case. Then, in May 2009, FHR produced over 48,000 pages of new documents, many of which were created well before the close of fact and expert discovery -- documents which supposedly support the new damages figures contained in FHR's "revised" February 2009 Claim Chart. In response to this late document production and Claim Chart, BP Amoco filed a motion on May 21, 2009 seeking relief. (Dkt. # 547)
The Court granted the motion, in part, by ordering FHR to make available a Rule 30(b)(6) witness for deposition. After further disagreement, (Dkt. # 571), FHR produced a Rule 30(b)(6) witness last week (on June 25, 2009) to testify about its newly produced documents and how those documents relate to FHR's revised and new damages claims. The deposition confirms what BP Amoco said in its May 21 Motion about FHR's discovery conduct: specifically, FHR's failure to timely produce documents upon which it is relying, and its revised February 2009 Claim Chart, have severely prejudiced BP Amoco.
The prejudice is in three parts. First, experts: FHR's newly produced documents and revised damages Claim Chart are different than the materials reviewed by BP Amoco's experts and upon which their expert reports were based. BP Amoco's experts have never been given the opportunity to analyze this new information, and to modify their opinions and reports accordingly. Nor has BP Amoco been given the opportunity to use this new evidence in cross-examining FHR's experts and their opinions about FHR's claims, including its damages. Moreover, it is now clear that FHR will use this new information in an attempt to criticize or render irrelevant much of the work done by BP Amoco and its experts during the fact and expert discovery phases of this case.
Second, changing claim facts: FHR's newly produced documents and revised damages Claim Chart mean that certain of the fact discovery done for many individual claims is now irrelevant or of little significance. During discovery, BP Amoco took the fact depositions of many persons identified by FHR as having knowledge about the damages claims. Documents were used, facts were tied down, and positions were ascertained. But again, it is now clear that FHR will use this new information in an attempt to criticize or render irrelevant much of the fact development and work done by BP Amoco in preparing to rebut various of the claims FHR is asserting.
Third, unknown factual basis for claims: FHR's revised damages Claim Chart now contains damages figures for which BP Amoco has little information or understanding. If the Claim Chart had been revised during fact discovery, and the documents produced earlier, various FHR fact witnesses could have been questioned about the revisions and the basis for them. But, as confirmed by the Rule 30(b)(6) deposition last week, the basis for various claims is unknown, or fundamentally different than what BP Amoco learned during fact and expert discovery.
During the hearing of May 27, 2009, the Court observed that BP Amoco has been prejudiced. (Ex. 1, 05/27/09 Hr'g. at 7) The question, of course, is to what degree. The Rule 30(b)(6) deposition, combined with the sheer magnitude and importance of the late produced documents, and revised Claim Chart, confirm that the prejudice here is substantial and cannot be cured. In fact, over 100 of the newly produced documents are on FHR's Trial Exhibit list. Accordingly, BP Amoco seeks an order barring and striking each of FHR's claims that (i) are the subject of its untimely document production and (ii) seek revised damages amounts reflected on its untimely February 2009 Claim Chart. In addition, BP Amoco seeks to bar and preclude any and all testimony, exhibits, and damages supported by or related to untimely produced documents, including those in FHR's May 2009 production, and its February 13, 2009 Claim Chart.*fn1
Since this litigation began in September 2005, the parties have engaged in extensive discovery including discovery focused upon FHR's alleged damages and damages causation. The parties had approximately three years to complete that discovery before expert reports were prepared and served.*fn2 On October 6, 2008, after spending substantial time reviewing FHR's document productions and forming opinions based on those documents and FHR's damages claims, BP Amoco's experts submitted their initial reports. BP Amoco's liability and damages experts issued reports analyzing the damages for each of FHR's claims, including its actual and estimated alleged damages. FHR's experts also submitted their reports, purportedly in support of the damages claims as then disclosed. For the next several months, BP Amoco and FHR each presented their liability and damages experts for deposition regarding their disclosed opinions, which included opinions about whether the equipment at issue in FHR's claims required repairs or replacement and whether the claimed damage amounts as stated in FHR's June 9, 2008 Claim Chart were reasonable and/or included betterments.*fn3
Expert discovery concluded. But at the end of that discovery, FHR produced its February 13, 2009 Claim Chart, which was radically different than the previous version. (Compare Ex. 3, 02/13/09 Claim Chart, with Ex. 4, 06/09/08 Claim Chart) Various claims were dropped -- while BP Amoco is not complaining about the dropped claims, FHR's latest Claim Chart confirms that such claims never should have been brought -- and many of the remaining claims were changed significantly. For some of the remaining claims, the damages sought were increased; for others, the damages sought were reduced; and still for others, the breakdown between alleged incurred and future estimated damages changed significantly.
The explanations for the revised damages claims, set forth in the February 13, 2009 Claim Chart, were presumably to be reflected in the nearly 49,000 pages of documents first produced in May 2009. Indeed, FHR represented to the Court that its May 2009 document production was "to some extent backup. for the [February 13, 2009] damages chart.." (Ex. 1, 5/27/09 Hrg. Trans. at 5). But upon review of the documents, BP Amoco could make little sense of how the new damages documents explained the newly revised damages claims.
As the Court knows, BP Amoco believes that FHR's discovery conduct has not only violated the Rules, but has prejudiced BP Amoco. Now that BP Amoco has had the opportunity to review the documents and take the Rule 30(b)(6) deposition of FHR, the prejudice, and the unique nature and extent of FHR's conduct, has been further revealed. The facts with respect to four of FHR's largest claims -- Claims 56, 72, 77 and 15 -- are illustrative.
CLAIM 56: Until February 2009, Claim 56 for the electrical system was in the amount of $30 million, of which approximately $29 million was for future "estimated" damages. FHR now seeks $8.1 million for this claim, of which $7 million is for future "estimated" damages. FHR's reason for abandoning a vast majority of the claimed necessary work is unclear from FHR's untimely document production. Indeed, many of the recently produced documents still reference the previously alleged $30 million damage amount. But FHR's 30(b)(6) witness, Mr. Nicol, shed little light on this last week. He testified, binding FHR, that "I didn't review the documents or we didn't attempt to explain that difference. And in my review of the documents, I didn't find any document that would explain that difference." (Ex.6, 6/25/09 Nicol 30(b)(6) Dep. at 238:9-12)Instead,Nicol testified that the $7 million is only for the A Substation that is part of the plant's electrical system but that he had never seen a proposal for the work allegedly needed. (Id. at 244:14-18) He explained that he has only seen an internal FHR document that had an estimate of $6.8 million for the A Substation, and that FHR had simply "rounded up" its damage claim by $200,000:
Q: And was the cost for the A substation that's on that document $7 million?
A: It's roughly $7 million.
Q: And when you say "roughly", to the best of your knowledge, what was that estimate?
Q: And so do you know what the difference is between -- what the reason is for the difference between the $6.8 million that stated in that document and ...