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BP Amoco Chemical Co. v. Flint Hills Resources LLC

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION


October 25, 2009

BP AMOCO CHEMICAL COMPANY, PLAINTIFF/COUNTER--DEFENDANT,
v.
FLINT HILLS RESOURCES LLC, DEFENDANT/COUNTER--PLAINTIFF.
FLINT HILLS RESOURCES LLC, THIRD-PARTY PLAINTIFF,
v.
BP CORPORATION NORTH AMERICA INC., THIRD-PARTY DEFENDANT.

The opinion of the court was delivered by: Judge Amy J. St. Eve

BP AMOCO'S DESIGNATIONS FROM THE RULE 30(B)(6) DEPOSITION OF FLINT HILLS' GLENN PERSONEY ON DUE DILIGENCE

Attached as Exhibit 1 are BP Amoco's designations from the Rule 30(b)(6) deposition of Glenn Personey, who was Flint Hills' corporate representative on the subject of due diligence. Exhibit 1 includes (i) BP Amoco's designations, Flint Hills' objections, and BP Amoco's responses, and (ii) Flint Hills' counter-designations and BP Amoco's general objection to them.

For the reasons stated in Exhibit 1, BP Amoco's Rule 30(b)(6) designation of 5:22-5:25, 6:25-7:7, 9:17-10:1, 10:15-11:3, and 157:4-157:19 should be permitted, and Flint Hills should not be permitted to make the counter-designations it has specified.

Exhibit 1

Exhibit 1: Glenn Personey Rule 30(b)(6) Deposition

The parties have by agreement submitted to the Court the following two issues which may moot all remaining disagreements: (1) Flint Hills' objection to BP Amoco's designation 157:4-157:19, and (2) BP Amoco's objection that Flint Hills' conditional counterdesignations are not appropriate for counterdesignations to 157:4-157:19. After the Court's rulings, BP Amoco reserves the right to make specific objections to Flint Hills' counterdesignations. Flint Hills reserves the right to make specific objections to BP Amoco's additional designations.

BP Amoco: 5:22-5:25 Flint Hills: No Objection

BP Amoco: 6:25-7:7 Flint Hills: No Objection

BP Amoco: 9:17-10:1, 10:15-11:3 Flint Hills: No Objection;

BP Amoco: 157:4-157:19 Flint Hills:

Objection: Relevance, Unfair Prejudice

Relevance: This testimony is offered (403), Misleading, Confusing. to show that, at the time of the sale, This Court ruled at the pretrial conference Flint Hills concluded that the on September 2, 2009 (pp 63 -- 64): "I am equipment now at issue was in not going to let you use this one during compliance with the PSA, and that the your opening. Whether or not you can use age, wear, and tear of that equipment it during trial, I'll see after I've heard what was within what the PSA allowed. Flint Hills has put in as its case and if This testimony also clarifies for the they've opened the door. What concerns jury the purpose for which the me here, although I note there was no unavailable due diligence team objection at the deposition, but what deposition designations (Clem, concerns me here is the first question: At Guillemette, Proops, Kotis, and the time of the sale, did Flint Hills believe Geisenhoff) are being offered (i.e., not the condition of assets representation was to show knowledge of defects, but accurate? Again, that's irrelevant, and instead to show that Flint Hills did not that's the - - that is the issue that we don't view the age, wear, and tear of the want the jury to consider and that they equipment now at issue as being out of can't consider. I understand why you put compliance with the PSA.) it in there to put it in context, but I'm concerned about the misleading nature of it. So you may not use that one during Flint Hills has waived its your opening." objection: As the Court has noted, the cited 30(b)(6) testimony was not Flint Hills Has Not Opened the Door: phrased as well as it could have been. Flint Hills did not open the door during This, however, was a problem with the trial, and instead consistently objected to form of the question. Flint Hills did testimony regarding Flint Hills' knowledge of the condition of assets, and whether not object during the deposition to the Flint Hills believed the condition of assets form of the question. Thus BP Amoco warranty was true. Flint Hills made its had no opportunity to cure the defect. counter-designations conditional on the Court denying its objections to BP's designations.

Flint Hills did not waive its right to object: At the time of the deposition, the question was relevant to Flint Hill's fraud claim. Moreover, the hearsay objection was not waived because, under F.R.Civ.P. 32 (b), objections can be made at trial to "any deposition testimony that would be inadmissible if the witness were present and testifying." The designated testimony would not be admissible if Mr. Personey were testifying at trial. Rule 32(b) is subject to 32(d)(3)(A), but hearsay objections are not waived under that rule "unless the ground for the objection might have been corrected at that time." The relevance objection could not have been cured -- there is no way the questioner could somehow transform this irrelevant and misleading testimony into admissible testimony.

FLINT HILLS' COUNTER- BP AMOCO'S GENERAL RESPONSE DESIGNATIONS TO COUNTER-DESIGNATIONS

If the Court sustains Flint Hills' BP Amoco designated a significant amount objections to BP's designations, Flint of testimony from Clem, Guillemette, Hills does not have any counter- Proops, Kotis, and Geisenhoff regarding designations. If the Court overrules the particular findings of the due diligence this objection, substantial counter- team, and Flint Hills made extensive designations are necessary to provide counter-designations to this testimony. BP context for Mr. Personey's testimony, Amoco now cites less than one page (16 including the limited nature of Flint lines) of substantive 30(b)(6) testimony on Hills' due diligence, and the many BP the topic of what Flint Hills' ultimate assurances regarding the condition of conclusion was based on those findings, the assets. Westinhouse Electric Corp i.e., that the age, wear, and tear of v. Wray Equipment Corp, 286 F2d 491, particular assets now at issue met the PSA. 494 (1st Cir. 1961)("The opposing In response, Flint Hills does not counter-party is entitled under the rule to have designate any testimony on this topic, but the context of any statement, or any instead designates 53 pages of testimony qualifications made as part of the (i) relating to the particular findings of the due diligence team ("the limited nature of Designation Objection and Response deponent's testimony also put into Flint Hills' due diligence"), (ii) relating to evidence."). Contrary to BP's Flint Hills' theory that BP Amoco gave objections, these designations are assurances at the October 20, 2003 "necessary for completeness." For meeting that ended Flint Hills' due example, the meaning and weight of diligence ("the many BP assurances"), and any testimony by Flint Hills witnesses (iii) relating to what Flint Hills allegedly regarding the condition of assets is discovered after the sale. These extensive directly impacted by what information counter-designations are not responsive to the witness had (and did not have) at BP Amoco's lone designation (page 157:4-the time the statement was made. 19), and should not be allowed. Flint Hills Indeed, in some cases BP gave Flint had an opportunity to call Mr. Personey Hills specific assurances that the asset affirmatively on a range of topics in its was in good condition, and/or that case in chief, and should not be allowed to repairs would be made before the sale do so during BP Amoco's case under the (but BP did not then make the repairs.) guise of counter-designations.

E.g. 327:14 -- 329:3 (Dueker In the alternative, if Flint Hills is representation that firewater system permitted to make its counter-designations repairs could not cost more than regarding the particular findings of the due $50,000); 341:25 -- 343:7 (feed tanks diligence team ("the limited nature of Flint did not require any "significant work"); Hills' due diligence"), then his full 115:22 -- 116:9 (John D'Andrea told testimony on that topic should be Flint Hills that BP would make repairs designated for completeness and to allow to the firewater system in 2003); the jury to assess his credibility and 345:13 -- 346:7 (Capital Projects List knowledge of that subject: Composite DX showed lab roof would be repaired in 2584, DX 2585, 2586 & 29:8-29:22, 2003, with no money allocated to 30:19-30:25, 33:13-34:3, 34:18-36:7, 42:4-repairs of the lab roof in 2004 or 2005); 44:2, 48:22-49:5, 52:18-55:7, 56:12-62:11, 366:20 -- 367:6; 367:24 -- 368:8; 65:15-67:6, 69:7-69:11, 69:22-69:25, 70:9-371:24 -- 372:3 (BP assurance that it 70:18, 70:24-71:6, 75:1-75:20, 77:7-77:13, would fix the PIA sewer line). Flint 79:8-79:14, 81:9-82:4, 84:5-84:23, 89:12-Hills' counter-designations should "in 91:14, 94:18-95:10, 95:15-96:19, 98:3-fairness" be considered by the jury 98:11, 98:25-100:8, 100:16-101:18, 103:6-with the testimony designated by BP. 104:18, 104:19-106:16, 106:25-113:1, F.R.Civ.P. 32 (a)(6). This conclusion 114:2-115:21, 118:1-120:11, 128:2-is not changed by BP's assertion that 130:24, 133:19-135:2, 138:13-139:4, the testimony "should have been 146:20, 149:8, 149:11-151:25, 153:4-154:4 designated, if at all, during Flint Hills' case in chief", as evidenced by Flint In the alternative, if Flint Hills is Hills' willingness to withdraw all of its permitted to make its counter-designations counter-designations if the Court relating to its theory that BP Amoco gave sustains its objections to BP's assurances at the October 20, 2003 designation of the irrelevant testimony meeting that ended Flint Hills' due regarding whether Flint Hills believed diligence ("the many BP assurances"), then the warranty was true. his full testimony on the topic of the October 20 meeting should be designated.

In particular, BP Amoco should be permitted to designate its cross- BP did not object at the deposition to examination of Mr. Personey regarding any of Flint Hills' counter- whether the October 20 meeting related to designations. and resulted in a price reduction which ended Flint Hills' equipment due diligence. This is necessary for completeness and to allow the jury to assess his credibility and Flint Hills disagrees with BP's knowledge of the subject: 163:18-213:9 & characterization of the "Nature of Composite DX 2587. testimony." In the alternative, if Flint Hills is

BP repeatedly responds that Personey permitted to make its counter-designations is not "unavailable" because he is a relating to what Flint Hills allegedly Flint Hills employee and because he is discovered post-sale, BP Amoco should be listed as a "may call" witness. But all permitted to designate testimony that is required for unavailability under concerning Personey's lack of knowledge F.R.Civ.P 32(a)(4)(B) is that Personey of the Joliet Plant after the sale for (who lives and works in Kansas), be completeness and to allow the jury to more than 100 miles from the place of assess his credibility: 379:14-380:4, trial. Similarly, Rule does 32 (a)(4)(B) 382:2-22, 386:1-386:7. does not recognize the distinction attempted by BP, that the jury should only hear the portion of the deposition where BP's attorney's, rather than FHR's attorneys, are asking the questions.

6: 1 - 4 Nature of testimony: Personey was deposed once before in this case. Objection: not necessary for completeness of 157:4-19.

8:11 -- 17 Nature of testimony: Personey reviewed documents to prepare for deposition. Objection: not necessary for completeness of 157:4-19.

41:3 -- 42:3 Nature of testimony: Personey takes the position that pre-sale spending estimates were rough estimates. Objection: not necessary for completeness of 157:4-19.

49:6 -9 Nature of testimony: Personey states he is not aware of Mr. Guillemette and Geisenhoff's findings that Flint Hills would spend its own money to repair Designation Objection and Response sewers after the sale. Objection: not necessary for completeness of 157:4-19.

55:8 -- 56:11 Nature of testimony: Personey states that

Flint Hills did not think the wastewater feed tanks were a problem. Objection: not necessary for completeness of 157:4-19.

67:7 -- 69:6 Nature of testimony: Personey states that

Flint Hills would pay more attention to "big ticket" capital projects on the capital project list. Objection: not necessary for completeness of 157:4-19.

115:22 -- 116:9 Nature of testimony: Personey mentions a conversation (of which he has no personal knowledge) between Tracy Clem and John D'Andrea regarding BP Amoco's plan to fix the firewater pumps. Objection: not necessary for completeness of 157:4-19.

130:25 -- 131:9; 131:17 -- 132:9 Nature of testimony: Personey talks about

Mr. Geienhoff's late October 2003 tank due diligence and conclusions regarding spending. Objection: not necessary for completeness of 157:4-19.

152:1 -- 153:3 Nature of testimony: Personey characterizes the nature of the projects Flint Hills anticipated doing after the sale regarding the electrical system and sewers. Objection: not necessary for completeness of 157:4-19.

300:4 -- 301:1 Nature of testimony: Personey characterizes the money Flint Hills spent on due diligence as including due diligence and other activities. Objection: not necessary for completeness of 157:4-19.

324:4 -- 17; 324;23 -- 326:14 Nature of testimony:

(TX 5163 (Admitted)) Personey characterizes the nature of the projects Flint Hills anticipated doing after the sale regarding the sewers and waste treatment facility.

Personey (who has no personal knowledge of the post-sale period) testifies to what Flint Hills allegedly discovered after the sale and the claims Flint Hills then made.

Personey (who was not at the October 20 meeting) states what he believes BP Amoco's plant manager said at that meeting.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

327:14 -- 329:3 (TX 2166 (Admitted)) Nature of testimony: Personey reads from an internal BP email (which he did not receive) and states what he believes BP Amoco and its plant manager said at the October 20 meeting (which he did not attend).

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

330: 15 -- 25 Nature of testimony: Personey discusses the effect of the October 20 meeting (which he did not attend) on Tracy Clem's firewater system estimate.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr.

Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

332: 8 -- 14 Nature of testimony: Personey discusses what BP Amoco's plant manager said at the October 20 meeting (which he did not attend) and whether it was true (despite his lack of post-sale knowledge).

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

335:9 -- 336:25 (TX 5163)(Admitted) Nature of testimony: Personey discusses the effect of the October 20 meeting (which he did not attend) on Tracy Clem's electrical system estimate.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

337:7 -- 339:24 Nature of testimony: Personey discusses what BP Amoco's plant manager said at the October 20 meeting (which he did not attend) regarding tanks and tank maintenance.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

341:25 -- 343:7 (TX 2174(Admitted)) Nature of testimony: Personey discusses what BP Amoco's plant manager and reliability manager said at the October 20 meeting (which he did not attend) regarding tanks.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

344:12 -- 22; 345:13 -- 16; 345:24 -- Nature of testimony: Personey (who

346:7 (TX 5237.010(Admitted)) lacks knowledge of the post-sale period) states what Flint Hills allegedly discovered about the lab roof after the sale.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

348:16 -- 349:1 Nature of testimony: Personey agrees that

PSA has no exceptions for capital spending plans or what Flint Hills might have learned.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

Nature of testimony: Personey discusses 353:11 -- 354:7 the Geisenhoff's claim that inspection files were disorganized, and claims that after the sale (a subject Personey has no personal knowledge of) Flint Hills discovered that D'Andrea had been instructed to narrowly answer questions.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

354:22 -- 356:22 Nature of testimony: Personey discusses the purpose of Geisenhoff's late October 2003 tank due diligence. Personey discusses the October 20 meeting that he did not attend. Personey discusses what FHR allegedly learned after the sale (despite his lack of personal knowledge on that subject).

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

363:14 -- 364:23; 365:7 -- 22 (TX Nature of testimony: Personey discusses 779(Admitted)) how the $24 million version of Claim 56 (which Flint Hills no longer is asserting) compares to Tracy Clem's pre-sale electrical system estimate.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

366:20 -- 367:6; 367: 24 -- 368:8 Nature of testimony: Personey is asked whether Flint Hills did further due diligence of ongoing piping repairs observed during the plant tour.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr.

Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

371:24 -- 372:3 Nature of testimony: Personey states that after the sale (a subject he has no knowledge of) an employee told Flint Hills management to dig up the PIA sewer line.

Objection: this series of designations is from an extensive direct examination of Mr. Personey conducted by Mr. Kuckelman at the deposition. It is not 30(b)(6) testimony or an admission, as it was elicited by and is offered by Flint Hills. Nor is Mr. Personey unavailable to Flint Hills, as he was disclosed as a may call witness, and is a current employee. It is not necessary for completeness of 157:4-19 and should have been designated, if at all, during Flint Hills' case in chief.

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