[00:00:00] Speaker 04:
This council being willing to change its schedule so we can hear the cases today.

[00:00:06] Speaker 04:
We have five cases on the calendar today.

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A case from the Court of Federal Claims, two patent cases, one from the district court, one from PTO, which is submitted in the briefs will not be argued.

[00:00:28] Speaker 04:
trademark case from the PTO and an employee case from the Merit Assistance Protection Board covering most of the spectrum of our jurisdiction.

[00:00:38] Speaker 04:
The first case is J. Anthony Dobbins versus the United States, 2015, 50-20, 21, 2017, 12-14, Mr. Hawke.

[00:00:52] Speaker 03:
May it please the court.

[00:00:56] Speaker 03:
We're going to talk about

[00:00:57] Speaker 03:
initially the good faith and fair dealing duty.

[00:01:01] Speaker 03:
The trial court began its analysis in this case by recognizing that the good faith and fair dealing duty may not be used to craft a better deal than the parties made for themselves.

[00:01:10] Speaker 03:
It does not create an amorphous companion contract with latent provisions that modify the parties agreement.

[00:01:15] Speaker 03:
But then the court went ahead and did exactly that.

[00:01:18] Speaker 03:
We have a four and a half page settlement agreement.

[00:01:21] Speaker 03:
It's at appendix 330 through 334.

[00:01:23] Speaker 03:
That's what I'm going to talk about today.

[00:01:26] Speaker 03:
And going through basically the introductory and 13 substantive paragraphs, nowhere in the agreement does it impose any kind of obligation on the part of the government along the lines of what the trial court imposed upon the government in this case.

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In fact, in dealing with a direct breach claim, the trial court found that certain ATF policies and guidance documents were not included in the contract, could not be the basis for an express breach finding.

[00:01:55] Speaker 03:
But after having done that, the court looked really to what the nature of the grievances were that led to the contract to conclude that Mr. Dobbins was concerned about having some protection and safety beyond that he experienced that led to the grievances in the settlement agreement.

[00:02:13] Speaker 04:
The trial court said this was the story of demonstrated misfeasance, failure of ATF officials to abide with the spirit of a contract.

[00:02:24] Speaker 03:
In the spirit of the contract, what is the contract?

[00:02:26] Speaker 03:
The contract states what its spirit was in the very first paragraph, the preliminary paragraph, which says that the contract was to fully resolve and settle any and all issues and disputes arising out of Mr. Dobbins' employment.

[00:02:37] Speaker 03:
And then it lists the various grievances that Mr. Dobbins had.

[00:02:40] Speaker 03:
But nowhere in this contract, in the four and a half pages, does the agency take on any responsibilities other than those that are typical of a contract resolving an employee grievance.

[00:02:52] Speaker 03:
We can go through them all.

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Paragraph one, they provide a retroactive promotion.

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Paragraph two, they agree to his request to be sent back to Tucson.

[00:03:03] Speaker 03:
And as part of that, they agree that to the extent they need to move him in the future, they will confer with him, which was one of his grievances ahead of time when they were moving him to California and to DC.

[00:03:15] Speaker 03:
They didn't really confer with him or allow him to have input in that process.

[00:03:19] Speaker 04:
And there was an agreement to pay $373,000.

[00:03:21] Speaker 04:
Exactly.

[00:03:21] Speaker 04:
That was paid, right?

[00:03:23] Speaker 03:
That was paid.

[00:03:24] Speaker 03:
Then we go and there was issues in the case below about Mr. Dobbins engaging in public discourse concerning some of the very interesting aspects of his employment.

[00:03:38] Speaker 03:
The agency agreed to not pursue discipline and to later on agreed to deal with outside employment and speaking opportunities and consistent with agency regulations.

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We go on and on through all the expungement of the records.

[00:03:56] Speaker 03:
All of these things are very standard provisions that are in settlement agreements that we entered into all the time with our employees.

[00:04:03] Speaker 03:
The key four paragraphs I want to talk about this morning are at the end, 10, 11, 12, and 13.

[00:04:12] Speaker 03:
Beginning with 10.

[00:04:15] Speaker 03:
This was the subject of the trial court's breach analysis, but it's also very relevant to the good faith and fair dealing question.

[00:04:22] Speaker 03:
Ten is the provision we've seen before, that the agreement does not constitute an admission by the agency or Mr. Dobbins of any violation of law or rule or wrongful act or omission, and that the agency would agree to comply with all laws regarding or otherwise affecting the employee's employment by the agency.

[00:04:38] Speaker 03:
Now, at the trial there was a discussion about what does that mean vis-a-vis these ATF orders.

[00:04:44] Speaker 03:
And the trial judge in our mind correctly held that the ATF orders are not included in the contract for effectively two reasons.

[00:04:52] Speaker 03:
One, the juxtaposition between sentence one and sentence two in paragraph 10 leads one to conclude that laws in the second sentence does not include agency policies and guidelines.

[00:05:04] Speaker 03:
It's not a law.

[00:05:06] Speaker 03:
And we point out, although it wasn't available to the trial court at the time, that that's consistent with the Supreme Court's decision in McLean, although that case was dealing with a statute, has the same effect here when reading a contract.

[00:05:18] Speaker 03:
The trial court indicated that to the extent there was any ambiguity in the contract, and at various times the trial court seemed to suggest there might be, they allowed Mr. Dobbins to put on parole evidence over our objections.

[00:05:29] Speaker 03:
But as the trial court found as a factual matter, the parole evidence couldn't establish that any of these ATF orders were actually envisioned by the parties to be included in the contract.

[00:05:40] Speaker 03:
I think Mr. Dobbins thought that they were, but the government folks involved did not.

[00:05:46] Speaker 03:
So at the end of the...

[00:05:47] Speaker 01:
I may be jumping ahead a little bit, but it does deal with paragraph 10, which is obviously a critical paragraph.

[00:05:54] Speaker 01:
Request for admission 12 and your response to request for admission 12 seems to me to at least open the door potentially to an argument that paragraph 10 is acknowledged by the government to import a requirement of safety.

[00:06:12] Speaker 01:
And I'm particularly directing your attention to the

[00:06:16] Speaker 01:
question, the request, is that did, in essence, did ATF have an obligation to protect the physical safety of plaintiffs?

[00:06:23] Speaker 01:
And the answer that you gave is admits to the extent that the obligation identified in the request pursuant to the language of paragraph 10 is established by statute, regulation, or ATF order.

[00:06:38] Speaker 01:
It sounds like that is an admission.

[00:06:41] Speaker 01:
There was some.

[00:06:44] Speaker 01:
tortured language, perhaps, but it does open the door to saying, this is acknowledgement that the order had a role to play.

[00:06:54] Speaker 03:
My first response is it's really, as we explain in our briefs, we don't view it as an admission.

[00:07:01] Speaker 03:
And to the extent that we responded the way we did, I think we explained in our briefs the basis for doing so.

[00:07:06] Speaker 03:
At the time, the court was suggesting to the parties that at that time, the laws could include this

[00:07:12] Speaker 03:
type of things.

[00:07:14] Speaker 01:
But you were resisting that position.

[00:07:15] Speaker 01:
It would have seemed to me to be wise to write an admission that at least acknowledged that that wasn't your position, because I'm not sure why this admission, if it is taken as an admission that you in fact agree that you have an obligation to protect safety under paragraph 10, why that doesn't override the position you were taking legally as to the meaning of the paragraph.

[00:07:40] Speaker 03:
Well, I think as we explained,

[00:07:41] Speaker 03:
Your Honor, we're operating within the framework of the existing direction from the court at the time.

[00:07:48] Speaker 03:
And we were being very careful in identifying the fact that, well, our position is that they're not laws.

[00:07:57] Speaker 03:
This is a matter of interpretation for the contract.

[00:08:00] Speaker 03:
And that not only do you have the McLean argument, but you have

[00:08:06] Speaker 03:
the folks that actually did the negotiating say during the trial that that's not what was envisioned by the parties, that instead what we're talking about here are more standard employment laws.

[00:08:18] Speaker 04:
To include things like, for example... Mr. Hockey, you can use your time as you see fit, but you're a third of the way through your time and you haven't mentioned the point of your main appeal, the breach of good faith and fair dealing.

[00:08:31] Speaker 03:
Right.

[00:08:31] Speaker 03:
Well, I mean, but anticipating that to the extent we are successful on that,

[00:08:36] Speaker 03:
Mr. Dobbins is going to try to take a shot at the paragraph 10 holding.

[00:08:41] Speaker 03:
To respond to the other aspect about paragraph 10, which... What page of the appendix is this on?

[00:08:55] Speaker 03:
333.

[00:08:57] Speaker 03:
It goes from 332 to 333.

[00:08:59] Speaker 03:
It straddles those two pages.

[00:09:02] Speaker 03:
The settlement agreement.

[00:09:04] Speaker 03:
Another aspect about paragraph 10,

[00:09:06] Speaker 03:
Which has some.

[00:09:07] Speaker 02:
I meant the admission.

[00:09:14] Speaker 01:
Admission is on 1990 to 1990.

[00:09:17] Speaker 01:
I'm sorry, 1992 to 1993 in volume two.

[00:09:34] Speaker 03:
To go back, are we still talking about it?

[00:09:36] Speaker 03:
I mean, I was going to continue with the discussion on good faith and fair dealing, Chuck Bryson, unless you want me to continue.

[00:09:45] Speaker 03:
That the agency will agree to comply with all laws regarding otherwise affecting the employee's employment by the agency.

[00:09:49] Speaker 03:
What's not often focused on in this case, but not only is there an idea here suggested by Mr. Dobbins that there's an obligation on the part of the government to perform these duties, but in

[00:10:03] Speaker 03:
developed within that idea is the idea that the remedy for such an alleged breach would be the contract.

[00:10:08] Speaker 03:
In other words, that an employee for the federal government who otherwise is bound by statutory and regulatory procedures with respect to remedying his rights through the Civil Service Reform Act and similar statutes or regulations can bring a breach of contract at the Court of Federal Claims under the Tucker Act.

[00:10:29] Speaker 03:
And this court has recognized that although it is possible

[00:10:33] Speaker 03:
to bring a breach of contract under a settlement agreement, referencing Holmes and Cunningham.

[00:10:40] Speaker 03:
The idea is not to litigate grievances, which is what this case is trying to do.

[00:10:46] Speaker 03:
What we're trying to do is to litigate grievances that took place after the settlement agreement, under the idea that they were somehow anticipated in the settlement agreement.

[00:10:54] Speaker 03:
But there's nothing in the settlement agreement that imposes the obligations at issue.

[00:10:58] Speaker 03:
They might be very well new grievances,

[00:11:01] Speaker 03:
But those grievances should be handled the way every grievance should be handled through the normal statutorily available processes.

[00:11:08] Speaker 03:
Paragraph 11, the parties agree that the terms of the agreement are unique to the facts and circumstances, and that the agreement may not be used as a basis by either party seeking or justifying similar terms in any subsequent case.

[00:11:21] Speaker 03:
That's also a provision that we tend to see a lot, and perhaps the court has as well.

[00:11:26] Speaker 03:
Here, frankly, looking at this provision, especially the second sentence,

[00:11:31] Speaker 03:
One has to ask oneself, why have a statement in the document which says that if there's a similar case in the future, that you can't use this agreement as a basis to obtain similar relief?

[00:11:46] Speaker 03:
If to the extent there is a similar case in the future and the parties anticipated that that would be handled under this existing contract, one would think that the second sentence of paragraph 11 wouldn't be necessary.

[00:11:56] Speaker 03:
So there is an argument there that, frankly, under the language of this course,

[00:12:01] Speaker 03:
good faith and fair dealing cases, including Metcalfe, you have a provision which arguably counsels against reading this as a basis to use as a breach for future grievances that Mr. Dobbins might have with the agency.

[00:12:15] Speaker 03:
Paragraph 12, obviously the integration clause, basically saying that to the extent you have parole evidence or other types of evidence that alter or attempt to alter the

[00:12:29] Speaker 03:
plain meaning of this document, which would, I think, still you can argue about admissions.

[00:12:36] Speaker 03:
But if we're talking about what does the plain language of this document say, plain language of the document says what it is.

[00:12:40] Speaker 03:
And any change to that language requires a written modification, which is not present in this case.

[00:12:48] Speaker 03:
Paragraph 13 is your standard paragraph regarding what happens if there is a considered breach of the contract.

[00:12:54] Speaker 03:
And that, in this case, as is often the case,

[00:12:58] Speaker 03:
The remedy is to go back and either ask for, like if the payment didn't happen, ask for the payment to happen or otherwise you can restart your case that led you down this road.

[00:13:11] Speaker 03:
Taking all of this together and including those prior paragraphs which we just touched upon about what the obligations were, nowhere in this document, in this four and a half page document, do you have obligations of the sort that Mr. Dobbin suggests should be placed on the government.

[00:13:26] Speaker 03:
I mean there's a question about

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Clearly, the agency has Mr. Dobbins' safety and protection at heart just because he's an employee.

[00:13:35] Speaker 03:
The question here isn't that.

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The question here is, does this document provide Mr. Dobbins with any other type of right that isn't enjoyed by any other type of agent?

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And our position is no.

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This document is simply a resolution of a grievance.

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And when we have grievances, there's various ways you can resolve them.

[00:13:53] Speaker 01:
I'm not sure that's a fair characterization of his position.

[00:13:56] Speaker 01:
It seems to me what he's saying is

[00:13:58] Speaker 01:
He has those rights that are enjoyed by others, not additional rights, but his position, I think, is that because you didn't follow, as he sees it, the orders that you would have followed in other people's cases, that he was deprived of the same rights that others would have and that this contract gave him those rights.

[00:14:16] Speaker 03:
So, well, paragraph 10 seems to be the back door into how you get there, but all that says is I will provide you the same rights as everybody else.

[00:14:25] Speaker 03:
And frankly, if there's a violation of those rights, then one would presume that the indication of that violation would follow the typical remedial scheme provided by Congress and not one provided by contract, unless there's some really expressed language which would overcome the concerns raised by Fausto and Elgin and this court's decisions in Bobula and Cunningham about litigating what are really agency grievances before the Court of Federal Claims under a Tucker Act theory.

[00:14:54] Speaker 03:
the statutory remedies bill.

[00:14:56] Speaker 02:
That all makes sense, but the problem is that you included this provision in the agreement about compliance with laws, which would seem to give him some rights under the agreement if there was a violation of a law, right?

[00:15:09] Speaker 03:
We would suggest that to the extent that court were to read this contract in that language to impose upon the government an entirely different type of relationship with Mr. Dobbins than

[00:15:25] Speaker 03:
That would require some heavy lifting, some express language.

[00:15:29] Speaker 03:
It's not something that could simply be implied into the paragraph 10 language, which simply says that the government will comply with all laws regarding or otherwise affecting the employee's employment.

[00:15:39] Speaker 01:
So what did he get from that sentence that he didn't already have in the form of a grievance?

[00:15:44] Speaker 03:
He may not have gotten anything in the sense of an extra reward or something, but that language is generally put

[00:15:55] Speaker 03:
Well, it's often put in, and I don't know what led it here.

[00:15:59] Speaker 03:
The testimony indicates that there were folks from counsel's office who added some language into the contract, including the two folks testified that that may be what that language came from.

[00:16:10] Speaker 03:
But generally, it's an idea that after you sign the contract, we're not going to terminate you or take some other sort of adverse action.

[00:16:18] Speaker 03:
But again, if something like that were to happen.

[00:16:21] Speaker 01:
If they did that, if they terminated him, would his remedy be

[00:16:24] Speaker 01:
to proceed to the MSPB, or was his remedy B to proceed on a breach of contract?

[00:16:29] Speaker 03:
We would argue that his remedy under Fausto and those cases would be to proceed through the statutory available process.

[00:16:36] Speaker 01:
And even if this sentence had read, and we won't terminate you for at least two years for any cause, would he then have an action under the contract?

[00:16:45] Speaker 01:
Or would he still have to go to challenge the termination on the basis that it was unjustified?

[00:16:53] Speaker 03:
a more difficult question where there's an actually expressed promise to take or not take a particular action that might be inconsistent with the law.

[00:17:00] Speaker 03:
In other words, if the agency under the law had every right to terminate Mr. Dobbins for something, but it promised in a contract that it would not, then that may present a different question.

[00:17:12] Speaker 03:
We don't have that here.

[00:17:13] Speaker 03:
All we just have is this reference to the laws.

[00:17:17] Speaker 04:
Mr. Hockney, you wanted to save 10 minutes for rebuttal.

[00:17:20] Speaker 04:
You've got about three and a half left.

[00:17:22] Speaker 04:
Do you want to save that?

[00:17:23] Speaker 03:
Three and a half for my total rebuttal?

[00:17:26] Speaker 03:
Yes.

[00:17:29] Speaker 03:
I thought we had 10 minutes each, or?

[00:17:31] Speaker 03:
Maybe I did speak wrong.

[00:17:32] Speaker 03:
Am I reading this wrong?

[00:17:33] Speaker 03:
All right, we're good?

[00:17:35] Speaker 03:
All right, so I need to save that for my rebuttal.

[00:17:36] Speaker 03:
Yes.

[00:17:37] Speaker 03:
Then I'm going to save it for my rebuttal.

[00:17:39] Speaker 04:
Just to read it.

[00:17:47] Speaker 00:
Good morning, Your Honor.

[00:17:48] Speaker 00:
It's James Reed for Plaintiff Cross Appellant J. Anthony Dobbins.

[00:17:52] Speaker 00:
May it please the Court?

[00:17:53] Speaker 00:
Before I start, and as a reciprocity here with my colleague, Mr. Hockey, we did have an order from the Court allowing 20 minutes per side.

[00:18:02] Speaker 00:
Mr. Hockey started with 20 minutes.

[00:18:05] Speaker 00:
Thank you very much, Your Honor.

[00:18:06] Speaker 04:
You are starting with 20 minutes.

[00:18:08] Speaker 00:
Thank you very much, Your Honor.

[00:18:10] Speaker 00:
This is, fortunately, for a variety of reasons, not a typical Federal Circuit appeal.

[00:18:15] Speaker 00:
Following a three-week trial with 29 witnesses, Mr. Dobbins proved that the government violated the covenant of good faith and fair dealing in a 2007 settlement agreement, which the court has already discussed with Mr. Hockey.

[00:18:27] Speaker 00:
That settlement agreement resolved, among other complaints, an EEO claim protesting ATF Smith's mismanagement and non-responsiveness to years of death and violence threats.

[00:18:37] Speaker 00:
Included within the EEO claim was a standard Form 95 emotional distress damages statement.

[00:18:43] Speaker 00:
Deputy Director Ronald Carter was ATF's negotiator.

[00:18:46] Speaker 00:
Under our trial court's North Star housing decision, the government speaks with one voice.

[00:18:51] Speaker 00:
And therefore, in our opinion, Mr. Carter was the government in those negotiations.

[00:18:57] Speaker 00:
All of the relevant trial testimony confirmed that the settlement agreement was for one purpose, the protection and safety of Mr. Dobbins.

[00:19:06] Speaker 00:
As context, and the Enron decision says context, context, context, and interpreting a contract

[00:19:12] Speaker 00:
In 2004 and 2005, ATF conducted risk assessments and concluded that extreme risks of death and violence to Mr. Dobbins existed.

[00:19:21] Speaker 00:
ATF testified at trial, multiple agents, that threats from international crime syndicates such as the Hells Angels, the Aryan Brotherhood, and MS-13 never expire.

[00:19:32] Speaker 00:
A 2007 limited threat assessment conducted only over a three-day period did not find new threats but concluded that the prior critical risks remained.

[00:19:42] Speaker 00:
Mr. Dobbins had two kinds of undercover fictitious identifications.

[00:19:47] Speaker 00:
The first were approximately 20 protection and safety IDs and a few remaining undercover IDs.

[00:19:54] Speaker 00:
The protection and safety IDs were to disguise the Dobbins family vehicles, their utility billing, their tax records, and most importantly, the location of their residence.

[00:20:03] Speaker 04:
Where was the breach of an express provision of the agreement?

[00:20:09] Speaker 00:
Your Honor, of course, the trial court found that there was a breach of the covenant of good faith and fair dealing.

[00:20:15] Speaker 01:
But not a breach of the contract.

[00:20:17] Speaker 00:
But not a breach.

[00:20:18] Speaker 00:
The trial court found that there was not a breach of an express term in the contract.

[00:20:22] Speaker 00:
And the main argument that the trial court made, which I would reiterate, is that the withdrawal of both the covert undercover mission IDs, along with the William and Sasha Johnson fictitious IDs, recklessly endangered the family.

[00:20:39] Speaker 00:
because, Judge Laurie, you bring it up, I'll go right ahead to our position we advanced in the brief, is that there should have been a finding of a breach of an express term of the contract.

[00:20:53] Speaker 00:
We argue that ATF orders were encompassed within paragraph 10 of the settlement.

[00:21:00] Speaker 02:
Excuse me, sir.

[00:21:01] Speaker 02:
That could not support the judgment, could it?

[00:21:05] Speaker 00:
Well, the judgment was an award of $173,000 in emotional distress damages.

[00:21:10] Speaker 00:
Our position is that as long as the contract is breached, whether through the spirit of the contract and therefore a breach of the covenant or through an express term of the contract.

[00:21:21] Speaker 02:
But if you were going to try to sustain the judgment on the basis of the violation of the orders, you'd have to tie

[00:21:30] Speaker 02:
the orders into what the government did and say that the government breached the orders.

[00:21:39] Speaker 02:
That wasn't done by Judge Allegra when he wrote this opinion.

[00:21:44] Speaker 02:
He did not tie the violations that he found to be violations of the covenant of good faith and fair dealing to any violation of the orders, right?

[00:21:55] Speaker 00:
That is correct, Judge Saik.

[00:21:58] Speaker 00:
We're saying that Judge Allegra erred in that regard.

[00:22:01] Speaker 00:
We are saying, and we advanced it in our briefs, that there is a plentiful trial record through the report of investigation, October 11, 2012, and May 10, 2013, by Internal Affairs Division at ATF that found that multiple ATF orders were violated.

[00:22:21] Speaker 02:
I don't think we're answering my question.

[00:22:23] Speaker 02:
My question is, how could we possibly

[00:22:26] Speaker 02:
Even if we were to agree with you that laws included orders, and even if we were to agree that that provided a theory for breach of contract, this judgment couldn't be sustained on that basis because it's not based on a violation of the orders, right?

[00:22:45] Speaker 00:
Your Honor, it's based on a violation of the covenant of good faith and fair dealing.

[00:22:50] Speaker 00:
You're correct, Your Honor.

[00:22:50] Speaker 00:
However, I would respectfully submit that if this court were to find

[00:22:55] Speaker 00:
unlike Judge Allegra, that ATF orders are encompassed within the word all laws in paragraph 10, which in the second sentence, which is the prospective compliance obligation as opposed to the first sentence of paragraph 10, which is the disclaimer by ATF.

[00:23:12] Speaker 00:
If this court were to find, were to determine on a de novo review that orders are inside the two words all laws in paragraph 10,

[00:23:21] Speaker 00:
As under Rule 36, the Department of Justice conceded, and as Judge Bryson correctly indicated, in RFA response number 12, but it goes right through 18, the Department of Justice specifically concedes in their Rule 36 responses that ATF Orders 3040.1a and .2a are both contained within paragraph 10.

[00:23:45] Speaker 00:
We would submit, Your Honor, that as long as you find that on de novo review,

[00:23:51] Speaker 00:
Judge Allegra should have found that ATF orders were in paragraph 10.

[00:23:55] Speaker 00:
You have an independent and sufficient ground to affirm the award of $173,000.

[00:23:59] Speaker 02:
I simply do not understand that, since he never tied the amount of damages to the alleged violation of these orders.

[00:24:08] Speaker 00:
Your Honor, Judge Allegra tied the damages in two manners.

[00:24:13] Speaker 00:
And by the way, the record, and we're talking about emotional distress damages, so I'll point out that the record includes Dr. Todd Lineman's testimony.

[00:24:20] Speaker 00:
and the Department of Justice's expert, Dr. Kevin Leahy.

[00:24:24] Speaker 00:
Basically, both of the psychologists and psychiatrists agreed that Mr. Dobbins had extreme emotional distress based on ATF's abandonment of him, and then their pursuit of him as the arson suspect for years after the two top arson agents in Arizona cleared him.

[00:24:41] Speaker 00:
Now, there is nothing unique about the covenant versus

[00:24:48] Speaker 00:
finding a breach of the contract through paragraph 10, a violation of ATF orders, because the fulcrum violation are the orders contained in Special Agent Trainor's IAD report on the withdrawal of the covert IDs, in which he listed a good four or five ATF orders that were violated.

[00:25:07] Speaker 00:
And in his October 11, 2012, report of investigation regarding ATF's arson response to the August 10, 2008 arson,

[00:25:16] Speaker 00:
He listed another half dozen to 10 ATF orders that were violated.

[00:25:21] Speaker 02:
Could I ask you a question about the 60B motion?

[00:25:24] Speaker 02:
Of course, Your Honor.

[00:25:28] Speaker 02:
I'm not sure that I understand the theory of why in order to claim sanctions, to seek sanctions, you would have to set aside the judgment.

[00:25:38] Speaker 02:
Isn't it the case that even after a final judgment has been entered that the court would still have the authority to impose sanctions for misconduct during the case?

[00:25:47] Speaker 00:
Well, Your Honor, of course, you're referring to our cross appeal to continue the remand proceedings under Rule 60B.

[00:25:54] Speaker 00:
And the fact is that the judgment is entered.

[00:26:00] Speaker 00:
The matter is closed in the trial court.

[00:26:03] Speaker 00:
But you're not answering my question.

[00:26:04] Speaker 02:
My question is,

[00:26:06] Speaker 02:
Why do you need to set aside the judgment, which you like, in order to get sanctions?

[00:26:13] Speaker 02:
Even after a final judgment is entered, can't you seek sanctions?

[00:26:18] Speaker 00:
Not in the newly assigned trial judge's opinion, Your Honor.

[00:26:21] Speaker 00:
And that was exactly the reason that Judge Allegra issued his December 1, 2014, indicative ruling.

[00:26:26] Speaker 00:
He felt he no longer had jurisdiction to do that.

[00:26:29] Speaker 00:
Now, his indicative ruling was limited.

[00:26:32] Speaker 00:
just to the misconduct proceedings, and he did not want to reopen the $173,000 award or those underlying findings.

[00:26:41] Speaker 00:
And this court in December of 2014 sent a limited remand back to the trial court to allow us to pursue depositions, discovery, and an evidentiary hearing with the opportunity for my client to

[00:26:57] Speaker 00:
seek sanctions, or at least to have an additional ground for damages, attorneys fees under the Equal Access to Justice Act.

[00:27:06] Speaker 00:
As the briefs indicate, we discovered a ream of emails that suggested, and this is distasteful for me to point out, I'm sure it's awkward to hear, but there were a number of emails discussing a threat against our witness, Christopher Treanor, by the government's witness.

[00:27:23] Speaker 00:
The same day he got the threat, he found his SUV, his government vehicle had been vandalized.

[00:27:29] Speaker 00:
We don't know what the government's role was in that impermissible contact, but we do know through a ream of emails that the trial attorneys kept it from us and kept it from the judge.

[00:27:41] Speaker 00:
Judge Allegra felt the integrity of his courtroom had been violated, and he allowed Agent Dobbins and I to return to the trial court to find out what happened and to satisfy ourselves with an application for sanctions if

[00:27:53] Speaker 00:
the evidence fit and made that appropriate.

[00:27:56] Speaker 01:
The sanctions request that you made, you're implicit and actually explicit as well, I think in your brief, is that these sanctions, if imposed, would be issued in your favor.

[00:28:09] Speaker 01:
That is to say, you would get whatever monetary sanctions were issued.

[00:28:14] Speaker 01:
Why would that be the case if what we're talking about is, for example, attorney misconduct,

[00:28:21] Speaker 01:
did not affect the judgment as such, but may have been conduct that was sanctionable by the judge.

[00:28:28] Speaker 01:
Why wouldn't that be a sanction which the judge would impose on the attorney, but not in your favor?

[00:28:33] Speaker 00:
And Your Honor, I understand that it very well could be.

[00:28:35] Speaker 00:
We don't know the shape or form that that motion for sanctions.

[00:28:38] Speaker 01:
I'm hard pressed to know why that would, in any circumstance, lead to a judgment in your favor if you weren't able to show there were additional damages above and beyond

[00:28:49] Speaker 01:
the damages that you've already presented evidence on?

[00:28:53] Speaker 00:
For two reasons, Your Honor.

[00:28:54] Speaker 00:
Under the law of the jury verdict method in calculating emotional distress damages, when you come up with that number, it has a lot to do with the egregiousness of the government's conduct.

[00:29:05] Speaker 00:
If we had found out during the third week of trial that our witness had been threatened, that the government had retained that information, or if they just turned it over right away, that our witness had been contacted and threatened, we would have been able

[00:29:18] Speaker 00:
Your Honor, may I say it differently?

[00:29:20] Speaker 00:
We don't know how Christopher Traynor might have been more effective, more aggressive, more assertive in his testimony.

[00:29:27] Speaker 02:
You're not trying to reopen the damages award.

[00:29:31] Speaker 02:
You say specifically that you're not asking to reopen the damages award, right?

[00:29:36] Speaker 00:
That's correct, Your Honor.

[00:29:37] Speaker 02:
So what are we talking about here?

[00:29:39] Speaker 02:
Did you make a motion for sanctions in the district court?

[00:29:42] Speaker 02:
I mean in the Court of Federal Claims?

[00:29:44] Speaker 00:
Your Honor, we had not yet, because we had just finished the written discovery.

[00:29:49] Speaker 00:
We were scheduling depositions.

[00:29:52] Speaker 00:
We had them scheduled once already.

[00:29:53] Speaker 00:
So there was no request for sanctions?

[00:29:56] Speaker 00:
Your Honor, the proceedings were terminated.

[00:29:58] Speaker 00:
Just answer.

[00:29:59] Speaker 00:
Yes, sir.

[00:30:00] Speaker 00:
There was no request for sanctions made.

[00:30:02] Speaker 00:
The proceedings terminated too quickly.

[00:30:05] Speaker 00:
And Judge Seck, if I may, the point here is to simply replicate the order of remand that this court issued

[00:30:14] Speaker 00:
Almost four years ago to the day, this court in December 2014 said that the trial court will keep the award in place, the findings in place, and this is for a limited remand purpose to investigate the scope of proceedings that Judge Allegra described in his December 1, 2014 indicative ruling.

[00:30:36] Speaker 00:
So we did this once already.

[00:30:37] Speaker 00:
It's just that the moment Judge Allegra retired, very tragically, the trial court

[00:30:43] Speaker 00:
terminated the proceedings and did so after we had gotten the emails that, in our perspective, almost sealed the deal.

[00:30:51] Speaker 00:
And we felt either we were going to have an additional ground under the Equal Access to Justice Act for returning fees, or we were going to have sanctions.

[00:30:58] Speaker 00:
And if they were directed into the court's funds, all right, that's fine.

[00:31:03] Speaker 00:
But in the end, we feel this case stands for something a little more than money, and Judge Allegra trusted us to get to the bottom of it.

[00:31:11] Speaker 00:
Your Honor, there are a couple of points in particular I would like to make if I can, and then I'd like to reserve some time.

[00:31:18] Speaker 00:
Can I proceed?

[00:31:19] Speaker 04:
Please proceed.

[00:31:20] Speaker 00:
All right.

[00:31:21] Speaker 00:
On the issue of orders and laws as the second point, Judge Allegra engaged in a linguistic exercise, which I thoroughly appreciate, but we differ with somewhat.

[00:31:34] Speaker 00:
Judge Allegra indicated that we did not harmonize the use of the word law between sentence one and sentence two.

[00:31:41] Speaker 00:
of paragraph 10.

[00:31:42] Speaker 00:
However, I would point out to the court that in the first sentence, the disclaimer sentence, the word order does not appear.

[00:31:48] Speaker 00:
Now the Department of Justice in their rule 36 admissions states that in paragraph 10, orders are there and they specifically say it's within the words all laws.

[00:31:58] Speaker 00:
Now as we know, law is a collective noun.

[00:32:00] Speaker 00:
It is a term of art in this industry.

[00:32:02] Speaker 00:
It's not the equivalent of a statute.

[00:32:04] Speaker 00:
It's not the equivalent of an order.

[00:32:06] Speaker 00:
It's also not a rule or regulation, which are specifically denominated in sentence one.

[00:32:11] Speaker 00:
And so in the second sentence, the government has agreed that the word order is inside all laws.

[00:32:18] Speaker 00:
And certainly ATF did not intend for possible violations of ATF orders to be outside the scope of the disclaimers in sentence one.

[00:32:28] Speaker 00:
So the only place in this linguistic exercise that the word order can be to harmonize the rule 36 admissions

[00:32:35] Speaker 00:
to harmonize the use of law across those two sentences is inside the word law, along with statutes.

[00:32:42] Speaker 00:
We would contend that this is a reasonable, contextual, logical interpretation of law, and it's one that should be followed.

[00:32:49] Speaker 01:
Now, Mr. Reed, the question of what these admissions really mean seems to me, in reading the language, for example, of request number 12 and the admission,

[00:33:04] Speaker 01:
The government admits to the extent that the obligation is established by statute regulation or ATF order, which is really kind of circular.

[00:33:16] Speaker 01:
It seems to me it says nothing more, at least if you read it on its face, than we admit that the obligation is established to the extent that it's established.

[00:33:26] Speaker 01:
So why does it say any more than that?

[00:33:29] Speaker 00:
Well, Your Honor, I would say that's not the only one.

[00:33:32] Speaker 00:
There are six RFA responses.

[00:33:33] Speaker 01:
I know, but I think they all have essentially the same structure.

[00:33:38] Speaker 00:
Except, Your Honor, with all due respect, the second sentence, and this is at appendix 1990 and 1991, RFA response number five, because we've selected RFA response five and then 12 through 18 sequentially.

[00:33:53] Speaker 00:
The second sentence of RFA five, again, appendix 1990 and 91,

[00:33:57] Speaker 00:
ATF Order 3040.1A and ATF Order 3040.2A provide the agency's guidelines and procedures for reporting, investigating, evaluating, and handling threats of violence and intimidation made against agents or family members of agents.

[00:34:12] Speaker 01:
Yes, but this isn't tied, Request Number 5 isn't tied to the contract.

[00:34:16] Speaker 01:
That's merely saying that it has an obligation to protect agents, which it has admitted as late as Mr. Hockey's opening argument.

[00:34:25] Speaker 01:
that it does.

[00:34:26] Speaker 01:
That doesn't go to whether the contract provides for any specific remedy.

[00:34:32] Speaker 00:
Yes, Your Honor, but that's the turnkey definition, because in the second sentence of RFA response number five, it says this is the purpose of 3040.1, 3040.2a.

[00:34:43] Speaker 00:
They are essentially the 3,000 series of ATF orders.

[00:34:47] Speaker 00:
In RFA responses 12 through 18, it then goes on to describe

[00:34:51] Speaker 00:
all of the kinds of things that are inside paragraph 10.

[00:34:56] Speaker 00:
And once you link response RFA number 5 to 12 through 10, then you have the complete puzzle finished.

[00:35:04] Speaker 00:
It's a two-step process, Your Honor.

[00:35:07] Speaker 04:
Mr. Reed, you wanted to save three minutes for rebuttal?

[00:35:11] Speaker 00:
Yes, Your Honor.

[00:35:11] Speaker 04:
And that'll only be on the cross appeal.

[00:35:14] Speaker 00:
Yes, Your Honor.

[00:35:16] Speaker 00:
If I may then,

[00:35:18] Speaker 00:
Then that's what I'll do.

[00:35:19] Speaker 04:
Thank you, sir.

[00:35:20] Speaker 00:
You may continue.

[00:35:21] Speaker 00:
Use it.

[00:35:24] Speaker 00:
I think I'll use the rest for Rule 60.

[00:35:25] Speaker 00:
Thank you, sir.

[00:35:31] Speaker 03:
Mr. Hoppe, you have four things to say and three and a half minutes to do it.

[00:35:37] Speaker 03:
First one, having had a moment to compare the 5 through 11 versus 12 through 18, I think our position in his first bunch talked generally.

[00:35:47] Speaker 03:
not with respect to the settlement argument, Your Honor.

[00:35:50] Speaker 03:
And we're talking about the ATF orders here.

[00:35:51] Speaker 03:
And the second group have the phrase that we intentionally put in there pursuant to the language of paragraph 10, which is our way of saying, to the extent the court makes a finding that is included, well, then it's included.

[00:36:04] Speaker 03:
But our position here throughout, and frankly, why we went and litigated this case forever and are appearing before this court now, is that it's not included.

[00:36:12] Speaker 01:
Yeah, it would have been a lot easier just to say that.

[00:36:14] Speaker 01:
Yeah, sorry.

[00:36:15] Speaker 01:
It's a large appendix.

[00:36:17] Speaker 01:
No, I mean, it would have been easier in the admission.

[00:36:20] Speaker 01:
Oh, right, right.

[00:36:21] Speaker 01:
Just to say, no, we don't admit it.

[00:36:24] Speaker 03:
To borrow the usual position in admissions, isn't it?

[00:36:29] Speaker 02:
The second thing I want to mention briefly, you agreed that in order to seek sanctions in the context of this case, there was no need for a Rule 60B motion.

[00:36:41] Speaker 03:
I would respond this way, Your Honor, which is not responsive.

[00:36:45] Speaker 03:
But the only item before this court

[00:36:48] Speaker 03:
is the Rule 60 motion and as the record demonstrates including Mr. Dobbins briefs, Mr. Dobbins isn't seeking relief under Rule 60.

[00:36:57] Speaker 02:
If your position is that they can't get sanctions without getting Rule 60B relief first, you have a problem.

[00:37:05] Speaker 03:
I don't, we haven't taken a position on that question in this case.

[00:37:08] Speaker 03:
Well what's the answer?

[00:37:09] Speaker 03:
Do you need Rule 60B relief?

[00:37:11] Speaker 03:
I think there are, I think that sanctions aren't limited to Rule 60 in the

[00:37:17] Speaker 03:
sanctions in little s. But when one makes a motion before the lower court under Rule 60, then they have to meet the requirements of Rule 60, which we believe haven't been satisfied.

[00:37:28] Speaker 03:
I'm not sure that I understand your answer.

[00:37:29] Speaker 02:
Well, my question... Do they need to get 60B relief in order to move for sanctions?

[00:37:35] Speaker 03:
I think that based upon... I think in any other case, generally, people don't need to move under Rule 60.

[00:37:44] Speaker 03:
to move the lower court for a sanctions relief, if that's the question, Your Honor.

[00:37:48] Speaker 03:
OK.

[00:37:49] Speaker 03:
And here, the problem with even moving for sanctions is that the findings of the special master in the trial court, with respect to the Rule 60, and ultimately it's more simply than that the court below relied upon the testimony, it goes beyond that to the point where it was clearly there's no evidence at all.

[00:38:06] Speaker 02:
I don't understand the latter part of your answer.

[00:38:08] Speaker 02:
I mean, if they don't have to move to set aside the judgment under Rule 60B,

[00:38:13] Speaker 02:
to move for sanctions, they have a problem because they didn't move for sanctions.

[00:38:16] Speaker 03:
They have a problem right now, your honor, because this court does not have a motion for sanctions before it.

[00:38:21] Speaker 03:
Neither did the trial court below.

[00:38:23] Speaker 03:
So what this court says about a motion for sanctions, in our view, is completely advisory.

[00:38:28] Speaker 03:
What this court has before it is a motion for Rule 60 relief.

[00:38:31] Speaker 03:
And as we explain in our papers, we don't believe that.

[00:38:34] Speaker 02:
Well, it would be appropriate if you had to get the Rule 60B relief in order to move for sanctions.

[00:38:40] Speaker 03:
Right.

[00:38:40] Speaker 03:
We didn't understand that that was

[00:38:42] Speaker 03:
I'm not in a position here to say that that's required, and my initial reaction would be, I don't think that you need to move under Rule 60 to seek sanctions.

[00:38:53] Speaker 03:
But anyway, so that takes care of accidentally the Rule 60 discussion, which I'm not going to repeat our briefs, but I think it's pretty clear that we think that the determination by the special master and the trial court on Rule 60 was proper.

[00:39:05] Speaker 03:
I would just highlight again a comment earlier.

[00:39:07] Speaker 03:
We don't see an explanation at all for the damages in this case.

[00:39:12] Speaker 03:
And I want to say one last thing about the ATF orders.

[00:39:19] Speaker 03:
And that is, we do believe that they're not incorporated under this contract.

[00:39:24] Speaker 03:
But we also don't believe they were violated here.

[00:39:26] Speaker 03:
The ATF orders with respect to the fire relate to the ATF orders 3040.2 and 2A, which came after the settlement agreement.

[00:39:33] Speaker 03:
And basically, the bottom line with those orders is, if there's a credible threat to an agent, the agency will take various steps to make sure that that agent is

[00:39:42] Speaker 03:
And the most serious of those steps would be to move the agent.

[00:39:46] Speaker 03:
And after the fire here, Mr. Dobbins was asked to move by the ATF, an APPX 393-95.

[00:39:52] Speaker 03:
And he turned them down because he wanted to stay in Tucson.

[00:39:56] Speaker 04:
So we don't think there's even a violation there.

[00:39:58] Speaker 04:
Mr. Hoffman, as you say, your time has ended.

[00:40:01] Speaker 03:
Okay.

[00:40:01] Speaker 03:
Well, my last comment then is the best characterization from the agency on the credentials question could be found at

[00:40:08] Speaker 03:
Mr. Modelli's testimony at APPX 15264.

[00:40:11] Speaker 03:
Thank you very much.

[00:40:13] Speaker 04:
Thank you.

[00:40:13] Speaker 04:
Mr. Hawking, Mr. Reed, there's a little rebuttal time on the cross appeal.

[00:40:19] Speaker 00:
Thank you, Your Honor.

[00:40:22] Speaker 00:
I want to really focus on what we're asking for procedurally with respect to the proceedings, because I think if we're not careful, we'll reach an outcome that Judge Dyke, you're actually wanting to protect us against.

[00:40:35] Speaker 00:
We are not cross appealing now.

[00:40:38] Speaker 00:
for editor of the damages.

[00:40:40] Speaker 00:
We are not cross appealing to set aside the findings in terms of the covenant of good faith and fair dealing.

[00:40:46] Speaker 00:
We are trying to offer the court an additional independent and sufficient ground to rely upon.

[00:40:54] Speaker 00:
But with respect to Rule 60, all we wanted to do was to replicate

[00:40:59] Speaker 00:
the remand order from four years ago.

[00:41:01] Speaker 00:
Now that remand order was very cautious and very careful and very thoughtful regarding Judge Legra's indicative ruling.

[00:41:09] Speaker 00:
And it made very clear in the remand order that we're not opening up anything else.

[00:41:13] Speaker 00:
We're not going to the merits on this.

[00:41:14] Speaker 00:
We're not setting aside the 173.

[00:41:17] Speaker 00:
We are simply restoring jurisdiction to the trial court for enough time to take a look at what happened and very particularly to take a look based on

[00:41:27] Speaker 00:
footnote 25 of the trial court opinion, when there was actually a counsel of record from ATF who contacted the Phoenix SAC Thomas Atterberry and tried to get him not to reopen the arson investigation, those kinds of things were going on.

[00:41:42] Speaker 00:
Judge Allegra wanted us to find out what was going on, and then as the case law we put in our brief indicates, once it's opened up, once we have the facts to support

[00:41:53] Speaker 00:
a sanctions motion, and I would never think of filing a sanctions motion unless I had the preliminary facts first.

[00:41:58] Speaker 00:
I would never take the court's time on that, and I take sanctions motions very seriously.

[00:42:02] Speaker 00:
That was the reason that Judge Allegra had let us precede any kind of motion like that with discovery, with some depositions, with an evidentiary hearing.

[00:42:11] Speaker 00:
At that point, then we would know the remedy that was appropriate.

[00:42:14] Speaker 00:
We don't know that remedy yet.

[00:42:16] Speaker 00:
What we don't want the court to do and what we ask that the court not do

[00:42:21] Speaker 00:
is open up the entire proceeding and send it back down to the trial court with us no longer tragically having Judge Allegra there with familiarity with the record, knowing what he would do with it.

[00:42:35] Speaker 00:
We simply lost that.

[00:42:36] Speaker 00:
And at that point, Mr. Dobbins and I just, we locked down the case in chief.

[00:42:41] Speaker 00:
So unless this court can determine that you can send us back down in a limited way just to look at the misconduct and see if sanctions or EJA grounds are available, then

[00:42:51] Speaker 00:
We simply don't want to go back down there.

[00:42:54] Speaker 00:
And I thank the court for your deliberation.

[00:42:56] Speaker 04:
Thank you, counsel.

[00:42:57] Speaker 04:
We'll take the case under advisement.