[00:00:52] Speaker 03:
Okay, our next case this morning is number 16-1960, Toro versus United States, Mr. Avery.

[00:00:58] Speaker 02:
Good morning.

[00:00:59] Speaker 02:
My name is Michael Avery, and I represent Carlos Toro, the appellant in this matter, who is seeking leave to amend his complaint in the United States Court of Federal Claims.

[00:01:10] Speaker 02:
Leave to amend a pleading should only be denied where there is undue delay, bad faith, or dilatory motive.

[00:01:17] Speaker 02:
repeated failure to cure deficiencies by previous amendments, undue prejudice, or futility of amendment.

[00:01:25] Speaker 04:
Let's start with futility of amendment.

[00:01:27] Speaker 04:
Even if he amend the way he proposed, we still have a set of limitations problem.

[00:01:32] Speaker 02:
Your Honor, I would suggest that we don't, as Mr. Toro's claims are broken down into distinct investigations.

[00:01:40] Speaker 02:
wherein his agreement that will be alleged in the amended complaint.

[00:01:44] Speaker 04:
But they all relate back to the time that he was aware that he wasn't being compensated for this undercover work that he was doing.

[00:01:51] Speaker 02:
Yes, Your Honor.

[00:01:51] Speaker 02:
However, the agreement between Mr. Toro and the DEA wasn't for a blanket amount for the entirety of his time.

[00:02:00] Speaker 02:
It was for purchase of information

[00:02:02] Speaker 02:
for specific, distinguishable, identifiable investigations.

[00:02:07] Speaker 02:
So for example, he would be going to Columbia to investigate a target that would be subject to purchase of information when he returned, provided the information, as well as for reimbursement of his expenses for that particular distinct investigation.

[00:02:26] Speaker 02:
So each one of his investigations was subject to purchase of information.

[00:02:31] Speaker 04:
For example, just that allegation right there, how was that supported in the complaint by way of an agreement with the government?

[00:02:37] Speaker 02:
It was not, Your Honor, and that's why we're here.

[00:02:39] Speaker 02:
There's no agreement.

[00:02:41] Speaker 02:
The complaint was inarticulate, and if the court grants leave to amend,

[00:02:47] Speaker 02:
Mr. Toro is prepared to provide specific, non-frivolous allegations of the implied-in-fact contract that will show offer except... Was amateur provided in the motion to amend below?

[00:03:01] Speaker 02:
It was not drawn.

[00:03:03] Speaker 02:
It was not.

[00:03:04] Speaker 02:
I'm prepared to articulate what Mr. Toro will provide in the amended complaint, should the court agree to allow it.

[00:03:13] Speaker 04:
It seems to me that that should have been provided to the court below.

[00:03:16] Speaker 04:
when the original motion to amend was made.

[00:03:19] Speaker 02:
Well, it should have, Your Honor.

[00:03:21] Speaker 02:
It was not.

[00:03:22] Speaker 02:
But I don't believe that stayed under the record.

[00:03:24] Speaker 04:
It's not in the record that we're looking at.

[00:03:27] Speaker 04:
So how can we review that?

[00:03:29] Speaker 02:
Well, what we're asking you to review is the denial of the leave to amend, that the court favors resolution on the merits.

[00:03:38] Speaker 02:
the court's favor allowing an amendment when there has been no undue delay.

[00:03:43] Speaker 02:
There's been no prejudice to the government.

[00:03:45] Speaker 02:
And the government's really only arguing that futility of amendment.

[00:03:48] Speaker 02:
And should the court grant leave to amend, Mr. Toro is prepared to overcome that in his amended plea.

[00:03:56] Speaker 04:
Does that address the court's question?

[00:03:57] Speaker 04:
Well, I just don't see how we can address the issue from your perspective, that you have an agreement now that was not presented to the trial court.

[00:04:06] Speaker 04:
The trial court found

[00:04:08] Speaker 04:
the complaint to be fatally defective.

[00:04:12] Speaker 04:
We have a statute of limitations problem.

[00:04:15] Speaker 04:
We can review the agreement that you purport to have, because it's not part of the record.

[00:04:22] Speaker 02:
Well, we're not asking the court to make a decision.

[00:04:24] Speaker 04:
It seems to me to be futile.

[00:04:26] Speaker 04:
It's a futile appeal.

[00:04:27] Speaker 02:
Well, I would disagree, Your Honor, in that we're not asking the court to review the sufficiency of the complaint.

[00:04:34] Speaker 02:
We're asking the court to allow Mr. Toro to file the amendment complaint, which we contend that the judge at the Court of Claims should have granted at the time of the motion.

[00:04:47] Speaker 03:
Well, without any showing to the Court of Federal Claims that the amendment would have cured the deficiencies?

[00:04:54] Speaker 02:
Well, Your Honor, we would make the allegation that the amended complaint would have cured those deficiencies.

[00:04:59] Speaker 00:
Along the same lines as both of my colleagues are questioning you, even in your blue brief to us, the only thing that you have alleged anywhere that you would change about the amended complaint is on page 6, where you explain that you would identify the people who he contracted with in 1986, the specific DEA agents.

[00:05:20] Speaker 00:
That wouldn't solve the problem

[00:05:24] Speaker 00:
of the fact that this contract, you've only ever alleged one contract.

[00:05:28] Speaker 00:
It was consummated according to your allegations in 1986.

[00:05:34] Speaker 00:
And all you have claimed that you are willing to amend, or the only thing you've put forth below or to us that you would do by way of amendment, is give further detail on that 1986 contract by naming the individuals involved.

[00:05:48] Speaker 00:
The problem you have is that none of that

[00:05:52] Speaker 00:
could possibly help you overcome the statute of limitations problem.

[00:06:04] Speaker 00:
doesn't get you over the statute of limitations problem.

[00:06:07] Speaker 00:
And that really is the heart of the futility issue that I have.

[00:06:11] Speaker 02:
Your Honor, I would argue that it would for the following reason, that the agreement that was made between the DEA agents and Mr. Toro in 1986 was for reimbursement of his expenses,

[00:06:25] Speaker 02:
and for compensation for the purchase of information for specific investigations.

[00:06:31] Speaker 00:
And those specific investigations... Okay, but that 1986 agreement couldn't have covered investigations that arose later, right?

[00:06:40] Speaker 00:
It only covered the ones in 1986.

[00:06:43] Speaker 02:
Correct, Your Honor.

[00:06:44] Speaker 00:
And he knew by absolutely positively, no later than 2015,

[00:06:51] Speaker 00:
that all of the information he was giving between 86 and 2015, he never got a dollar of compensation for.

[00:06:59] Speaker 00:
So he knew.

[00:07:00] Speaker 00:
So the contract was in 86.

[00:07:03] Speaker 00:
From 86 to 2015, he is supplying what is accepted to be useful, valuable information to the government, and he never receives a single penny of compensation despite his concerted efforts.

[00:07:14] Speaker 00:
So along that logic,

[00:07:17] Speaker 00:
How is it not the case that by 2015, he was surely on notice that the government had no intention to compensate him for all of this, and therefore was in unequivocal breach, assuming all of your facts are correct?

[00:07:30] Speaker 02:
I understand the court's point, but with regard to that though, Your Honor, I would suggest that from 2009, his complaint was filed in 2015, that anything that was, any breaches that occurred between 2009 and 2015 would in fact fall within the statute of limitations.

[00:07:49] Speaker 02:
And he claims before 2009 may be subject to the statute of limitations and would be futile.

[00:07:55] Speaker 02:
But those claims and those breaches that arose for specific, distinguishable events for the purchase of information between 2009 and 2015 would be subject to a non-futile amendment.

[00:08:09] Speaker 03:
Even if that were true, you still did not allege in the original complaint

[00:08:15] Speaker 03:
who, a person with authority to make a contract, to all sorts of details that would be necessary to find a contract which were missing from the original complaint.

[00:08:25] Speaker 03:
And you never told the Court of Federal Claims, and you have never told us, indeed, in your briefs, how you're going to supply those missing elements that are necessary for a contract claim.

[00:08:37] Speaker 02:
Understand, Your Honor, the identity of the individuals

[00:08:40] Speaker 02:
was in the original complaint.

[00:08:41] Speaker 03:
It's not a question of identity of the individuals.

[00:08:43] Speaker 03:
It's alleging that there's someone with authority who entered into a contract.

[00:08:48] Speaker 02:
Yes, Your Honor.

[00:08:48] Speaker 02:
And those individuals that were in the complaint did have authority.

[00:08:52] Speaker 03:
And in the amended complaint... There's no such allegations.

[00:08:54] Speaker 02:
Well, if the court would grant leave to amend, those specific allegations will be made with those same-named individuals through their capacity as special agents.

[00:09:05] Speaker 03:
You never told the Court of Federal Claims that.

[00:09:07] Speaker 02:
That's correct, Your Honor.

[00:09:09] Speaker 02:
And that's the point.

[00:09:11] Speaker 04:
And even if we were to buy that argument, you're still facing the statute of limitations problem.

[00:09:17] Speaker 04:
Are you arguing there's a continuing claim doctrine applicable here?

[00:09:22] Speaker 04:
In the alternative, yes, Your Honor, I am, because these are distinct.

[00:09:25] Speaker 04:
It doesn't apply.

[00:09:26] Speaker 04:
The continuing claim doctrine doesn't apply here.

[00:09:28] Speaker 02:
Well, I would suggest that it does fit the rationale for the continuing claims.

[00:09:34] Speaker 02:
I know the courts have not held it to be so in these informing cases.

[00:09:39] Speaker 02:
But if the court will allow the amendment to go forward, then those issues where the distinct investigations which triggered... It seems like your client is now throwing good money after bad.

[00:09:54] Speaker 04:
I mean, if the statute of limitations has told this action, I mean, if you can't go forward with it, then why should we allow you to amend?

[00:10:04] Speaker 02:
Well, Your Honor, I believe that the court will allow it to go forward after the amendment when it sees those claims that arose in 2009 to the point of the filing that fall within the statute of limitations that are separate and distinguishable.

[00:10:19] Speaker 04:
Maybe had you made all these arguments and presented adequate data and information to the trial court, then we'd have a basis on which to see if you have an appeal that's

[00:10:33] Speaker 04:
that's worthy.

[00:10:36] Speaker 04:
But you don't have that.

[00:10:38] Speaker 02:
Well, Your Honor, had I been allowed to amend at the trial court level, I would have had that, but my motion was denied.

[00:10:44] Speaker 04:
But when you moved to amend, I'll say it one more time, when you moved to amend, you should have presented that material at that point, and you did not.

[00:10:50] Speaker 02:
I did not, Your Honor, but I would suggest that it's not a fatal flaw, that the court should grant leave to amend to cure that.

[00:10:58] Speaker 02:
as there is an allegation that this can be cured by an amendment.

[00:11:05] Speaker 00:
Well, your allegation is it can be cured by an amendment, but you've given us no specific facts, even on appeal.

[00:11:10] Speaker 00:
Forget about before the lower court that make me think it could be cured.

[00:11:16] Speaker 00:
And this is, especially in light of the statute of limitations problem, and this is an issue I review for an abuse of discretion.

[00:11:22] Speaker 02:
Well, Your Honor, I would suggest

[00:11:24] Speaker 02:
In the brief, citing the DEA agent's manual 6612.43, which gives the special agents in charge the authority to purchase information, those same special agents were alleged by name in the original complaint that by

[00:11:42] Speaker 02:
clearing that up and defining that those individuals who were sacks, who had authority under that code section, which was cited in the original complaint and in the brief, would in fact give authority and cure the authority problem.

[00:11:57] Speaker 02:
Now, and again, the issue of the statute of limitations, it's a disagreement.

[00:12:01] Speaker 04:
The authority that we're interested in isn't the authority to go out and pay off informants.

[00:12:08] Speaker 04:
It's the authority of a person authorized

[00:12:11] Speaker 04:
within any of these agencies to enter into a contract with Mr. Torres.

[00:12:17] Speaker 02:
Well, that in and of itself is a contract, Your Honor.

[00:12:20] Speaker 04:
No, it's not.

[00:12:22] Speaker 04:
Your client apparently, on his own dime, went to these places, out of his own pocket paid informants, and he did all of this with no agreement of any kind that he's going to get reimbursed or repaid.

[00:12:37] Speaker 02:
Well, I would suggest to the court, Your Honor, that in fact he did have an agreement with those special agents in charge who did contract with him in this respect that when you go out and perform... But you never produced that agreement.

[00:12:53] Speaker 02:
There is no writing, Your Honor.

[00:12:54] Speaker 02:
There's no question.

[00:12:55] Speaker 02:
No, there's no agreement.

[00:12:56] Speaker 02:
Well, it's an implied-in-fact contract, Your Honor.

[00:12:58] Speaker 02:
And that's what Mr. Toro is prepared to provide specific non-frivolous allegations of the implied-in-fact contract should the court grant the lead to amend.

[00:13:09] Speaker 02:
Your Honor, I will reserve the rest of my time unless there are further questions.

[00:13:12] Speaker 03:
Thank you, Mr. Everett.

[00:13:17] Speaker 03:
Mr. Rodriguez?

[00:13:19] Speaker 01:
Good morning.

[00:13:19] Speaker 01:
May I please record?

[00:13:20] Speaker 01:
i would start with something that mister toros council just mentioned he said that uh... leave to mention be freely given except for quote when there's a repeated failure to cure deficiencies here we are eighteen months after the filing of the complaint that i believe that court's concern about the lack of details is it wasn't repeated i mean this was the first time that complaint was sought to be amended right no what i mean that by this year honor is the fact that eighteen months and we still have no idea who

[00:13:49] Speaker 01:
the agents with authority entered into the alleged contract with Mr. Toro what the alleged terms were, what date the alleged contract was signed.

[00:13:58] Speaker 03:
There's not a repeated issue here, right?

[00:14:00] Speaker 01:
No, it's not a repeated issue.

[00:14:01] Speaker 01:
These are repeated deficiencies.

[00:14:02] Speaker 01:
These are deficiencies that were made known to Mr. Toro's counsel.

[00:14:05] Speaker 03:
I guess I would use the word multiple rather than repeated, but go ahead.

[00:14:09] Speaker 01:
I guess my point, Your Honor, is that there has been ample opportunity for Mr. Toro to cure these deficiencies.

[00:14:15] Speaker 00:
And during the last 18 months.

[00:14:18] Speaker 01:
Correct, Your Honor.

[00:14:19] Speaker 01:
And that simply has not occurred.

[00:14:21] Speaker 01:
And like I said, to date, we still have no idea.

[00:14:24] Speaker 01:
Even if we were to try to break apart the claim and say, OK, well, what about the 2012 allegation from paragraph 18 of the complaint?

[00:14:32] Speaker 01:
Perhaps there's something there.

[00:14:33] Speaker 01:
We have no way of determining what damages Mr. Toro is asserting for each of the claims that he alleges in his complaint or how he arrived at the $5 million damages figure that he claims.

[00:14:45] Speaker 01:
so i think you know that the other issue with this of course well where it is such limitations problem uh... something that mister toro has never briefed has never responded either this court would work below and i i think that's a training or concerned about the continuing claims doctrine is valid because that doctrine has never been applied to a confidential form a case

[00:15:06] Speaker 01:
It's usually applied to periodic pay cases.

[00:15:09] Speaker 03:
But look, if he had a contract and there's a serious problem that he doesn't really allege that things are necessary for a contract, if there was a failure, if there was a request unpursuant to that contract in 2012 to take a certain action and he wasn't paid for that action, there wouldn't be a statute of limitations problem with that, would there?

[00:15:34] Speaker 01:
uh... i think you are uh... it's it's possible that would not be but again to be applying

[00:15:40] Speaker 03:
the continuing claims doctrine no it's not the continuing claims doctrine is when the periodic payments over the course of time you can have a general contract that authorizes the government to make specific requests of the informant you know in 2012 do this get this information and then there's no payment pursuant to that seems to me the statute of limitations hasn't run because that's within six years of the suit

[00:16:10] Speaker 01:
right uh... i think you are a bit under that uh... that's right right and that hypothetical uh... if mister foro could demonstrate that there were discrete and distinct wrongs pursuant to the alleged contract with their associated damages for each of those wrongs perhaps there would be a claim now in this particular case mister toros never made allegations never attempted

[00:16:34] Speaker 01:
to break apart any of the claims in the 29-year period for which he says he worked under the implied in fact contract.

[00:16:42] Speaker 01:
So while there could perhaps be some claim related to a 2012 alleged breach, those aren't the allegations in the complaint.

[00:16:50] Speaker 01:
And again, we still have no idea how Mr. Toro is determining that he's owed $5 million in total for 29 years of alleged breaches.

[00:17:00] Speaker 03:
I'm curious, and maybe this is something I can't talk about,

[00:17:04] Speaker 03:
But does the DEA in fact enter into contracts with informants in which it promises to pay money in return for certain services?

[00:17:13] Speaker 01:
Yes, Your Honor.

[00:17:14] Speaker 01:
The DEA does enter into written contracts in which it promises to pay money and expenses.

[00:17:21] Speaker 01:
Each contract is different.

[00:17:23] Speaker 01:
This actually brings me to Mr. Toro's next argument about the DEA manual.

[00:17:29] Speaker 01:
Now, he claims that the DEA manual allows agents

[00:17:33] Speaker 01:
to pay commissions, essentially, pursuant to agreements.

[00:17:39] Speaker 01:
Now, that argument was also made by Mr. Toros' counsel in the Princess cases.

[00:17:44] Speaker 01:
And there, the Court of Federal Claims actually looked at the DEA manual.

[00:17:48] Speaker 01:
And in looking at it, the Court of Federal Claims noted that if there is an agreement pursuant to that section of the DEA manual that would pay commissions, it is always in writing

[00:18:00] Speaker 01:
because first of all it's highly unusual, but it's always in writing because, quote, there should be no gaps in understanding of the terms of the agreement.

[00:18:08] Speaker 01:
So again, I think that this idea that the DEA just enters into contracts has no regard for any written documents and then also orally agrees to authorize commissions is frankly not supported by the record or by any of the DEA's actual past history.

[00:18:28] Speaker 01:
So here I feel like this is sort of a frivolous argument.

[00:18:31] Speaker 01:
Again, the breakdown of this complaint is really that there was one agreement, a singular agreement, that governed 29 years of activity for which Mr. Toro claims he was not paid.

[00:18:42] Speaker 01:
So again, we don't have any of these central elements of an implied in fact contract.

[00:18:48] Speaker 01:
And Mr. Toro's?

[00:18:50] Speaker 04:
Was Mr. Toro, I don't know, you may not be able to answer this, but was Mr. Toro reporting back to the DEA submitting reports?

[00:18:58] Speaker 01:
but my understanding is that there were reports as pursuant to any confidential source who's working with an assigned dea agents that there are reports that there is paperwork is a paper trail uh... and and again there are documents that reflect the understanding of both the agents and confidential source so would you pay for that that activity uh... my understanding is that he was paid

[00:19:22] Speaker 01:
for that activity he was paid expenses was he paid compensation beyond expenses my understanding your honor based on on discussions with the dea is that there was compensation provided both for expenses and as well as uh... compensation just for being a confidential source above the expenses that were paid is that between the eighty six and two thousand fifteen time frames that's correct your honor why didn't you give me this in the record uh... well uh...

[00:19:51] Speaker 01:
wasn't your burden but it wasn't what you exactly wasn't a burden to put it there uh... we we did our own research on this obviously before we filed a motion to dismiss and determine whether or not we should answer the complaint uh... we determined that Mr. Toro's allegations were completely inaccurate and that there was not just one agreement that governed the conduct there was a written agreement and that pursuant to the terms of the agreement Mr. Toro was compensating so just to make sure I understand something are you telling me there

[00:20:21] Speaker 00:
So you've told us that there was, in fact, an agreement under which he was actually compensated, both compensation and expenses as well.

[00:20:32] Speaker 00:
That agreement was in writing?

[00:20:34] Speaker 00:
Is that what you're saying?

[00:20:35] Speaker 01:
That's correct, Your Honor.

[00:20:36] Speaker 01:
At least the agreement.

[00:20:37] Speaker 01:
I believe that there was at least one agreement.

[00:20:41] Speaker 01:
There may have been others dependent on the specific task for which he was assigned.

[00:20:46] Speaker 04:
I see.

[00:20:46] Speaker 04:
But if they were to ask you for a copy of that agreement?

[00:20:50] Speaker 04:
Sorry, Your Honor?

[00:20:50] Speaker 01:
we were asked for the car we were never asked for a copy of that in fact that you know again the allegations of the complaint are clear that there isn't this in the position of the government that there have been no agreement with this no that's not the position in fact you can uh... if you have to choose to look at the uh... the transcript of the world government of the government's motion to dismiss where Judge Wheeler asked that same question and we did answer we said look

[00:21:17] Speaker 01:
our understanding is that there was an agreement that there is a paper trail for each and every assignment that Mr. Toro was given and that pursuant to the contract in place he was compensated.

[00:21:28] Speaker 01:
So all of this has been consistent as far as our position.

[00:21:31] Speaker 01:
It was made known to the trial court below.

[00:21:34] Speaker 03:
And he's never alleged here that he wasn't properly compensated pursuant to the written agreements.

[00:21:40] Speaker 01:
He's never... Well, the allegations are a little bit fuzzy.

[00:21:44] Speaker 01:
i believe in the complaint he says he was never paid anything and then later uh... both the trial court and for this court claims that he was actually paid expenses but no compensation uh... but again i i believe the allegation is clear he's paid zero compensation throughout his time and that's simply not true so it doesn't have any disagreement i think that doesn't respond my question my understanding is that neither in the original complaint nor in any of the uh... colloquy

[00:22:13] Speaker 03:
in connection with the dismissal of the complaint or the motion to amend.

[00:22:17] Speaker 03:
He never alleged that there was a written agreement which was breached.

[00:22:23] Speaker 01:
He never alleged that.

[00:22:23] Speaker 01:
That's correct.

[00:22:24] Speaker 01:
He simply alleges there was an oral agreement signed sometime in 1985 or 1986 about which he has no other factual information that would meet the essential elements of an implied in fact contract.

[00:22:38] Speaker 01:
If there are no further questions, I'll forgo the use of the rest of my time.

[00:22:41] Speaker 01:
OK.

[00:22:41] Speaker 01:
Thank you.

[00:22:41] Speaker 01:
Thank you, Mr. Rothering.

[00:22:47] Speaker 02:
Please court.

[00:22:50] Speaker 02:
Mr. Toro is not alleging that he's owed commissions, as was represented by the government.

[00:22:56] Speaker 03:
He's not making a claim under any written agreement, right?

[00:23:00] Speaker 02:
Your Honor, Mr. Toro has represented to me that there was no written agreement, that he was not aware of a written agreement, that he did not enter into a written agreement.

[00:23:08] Speaker 02:
So as far as Mr. Toro, from his perspective, what he's represented to me is that he did not enter into a written agreement.

[00:23:16] Speaker 02:
There was no writing.

[00:23:17] Speaker 02:
Had I had the writing, I would have used that as a basis.

[00:23:19] Speaker 02:
for the complaint.

[00:23:21] Speaker 02:
So from what he's alleged and the information he's provided me, which is extensive, there was no writing.

[00:23:28] Speaker 02:
He is alleged and continues to allege that he was reimbursed for his expenses, but he was not paid compensation pursuant to an implied, in fact, contract that he had during the course of his work with the DEA.

[00:23:43] Speaker 02:
So, you know, the information is in the hands of the government.

[00:23:46] Speaker 02:
I mean, the government says they have a writing.

[00:23:48] Speaker 02:
No, it's not been asked for, but Mr. Toro told me there was a writing.

[00:23:53] Speaker 02:
That's why if the court will consent to allow an amendment, the allegations will be made with specificity

[00:24:00] Speaker 02:
We can get into discovery.

[00:24:02] Speaker 02:
If it's then appropriate for a motion for summary judgment, that's a different issue.

[00:24:07] Speaker 02:
But the lower court didn't even tangentially address and dictate the issue of the statute of limitations.

[00:24:14] Speaker 02:
There was no ruling by Judge Wheeler in the Court of Federal Claims with regard to the statute of limitations issue.

[00:24:20] Speaker 02:
There are these distinct events that can be identified and for which Mr. Toro will request the court grant leave to amend.

[00:24:27] Speaker 02:
If there are no further questions, that's all played.

[00:24:30] Speaker 03:
Thank you, Mr. Avery.

[00:24:31] Speaker 03:
Thank you.

[00:24:31] Speaker 03:
Both council cases submitted.