Cases at the Armed Services Board of Contract Appeals often require scientific or other technical evidence that is best explained by an expert witness. Though it conducts no jury trials and the rules do not expressly require it, the board generally considers itself the gatekeeper of junk scientific evidence. The board regularly considers motions challenging the admissibility of expert testimony. It also regularly grants them.

In the appropriate case, a pretrial motion to exclude an expert’s testimony can be an effective tool. Here we address the most common grounds for challenges to expert testimony at the ASBCA.

Expert testimony must be reliable.

The basic test for the admissibility of expert testimony in federal courts is set forth in Rule 702 of the Federal Rules of Evidence, which codifies the Supreme Court’s decisions in Daubert v. Merell Dow Pharmaceuticals, 509 U.S. 579 (1993), and Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999). Under Rule 702, expert testimony must not only be helpful, it must be based on sufficient facts or data, and be the product of reliable principles and methods.

Parties in litigation at the ASBCA are not exempt from the reliability requirement. The board frequently refers to the standards set forth in Rule 702 as a prerequisite to the consideration of expert testimony. Even without a jury, the board will exclude expert testimony that the board finds unreliable. Board rules are generally more flexible than the federal rules when it comes to the admissibility of evidence, but an expert’s opinion must be sufficiently reliable for the board to consider it. Universal Yacht Services, Inc., ASBCA No. 53951, 04-2 BCA ¶ 32648 (May 24, 2004) [pdf].

Contractors know that discovery is the most time-consuming and expensive part of litigation. Until now, the Federal Rules of Civil Procedure have done little to address the problem. Parties that preserve too much data are burdened with the cost of collecting and reviewing it. Parties that preserve too little risk not having access to key evidence or being penalized for spoliation.

While we’re not sure the problem can be fixed with a few changes to the procedural rules, reducing discovery costs appears to be a key goal of the recently-proposed amendments to the Federal Rules of Civil Procedure [pdf]. The revised rules were passed by the Judicial Conference of the United States in September 2014 and are now awaiting approval by the Supreme Court. Assuming they are approved, the amendments will become effective on December 1, 2015.

The proposed amendments have three primary objectives: (1) improve early and active judicial case management; (2) enhance the importance of proportionality in the discovery process; and (3) encourage greater cooperation among litigants. The amendments would also resolve an apparent circuit split over when sanctions may be imposed for failing to preserve electronically stored information. The changes aimed at accomplishing these objectives appear in the proposed amendments to Rules 1, 4, 16, 26, and 37.

Every Postal Service contractor should know the answer to certain fundamental questions: What procurement rules apply to the Postal Service and how do they differ from other agencies? What contract provisions are most likely to cause problems during performance? How do I identify and respond to changes and changed conditions? What recourse do I have when disputes arise?

That’s why our firm is presenting a full-day seminar on “Postal Service Contracting: What Every Contractor Should Know,” at the Westin Tysons Corner hotel on Thursday, November 6, 2014.

We start with the basics

We start with a primer on the creation, structure, and current management of the Postal Service. We provide vital background and statistical information that all postal contractors should know. We explore the pressing issues confronting the Postal Service today, its plans for the future, and how these issues will impact contractors. We conclude the session by setting out the 23 most important “culture pointers” encountered in the unique Postal Service contracting environment.

Controlling legal spend is a frequent and important topic of discussion, especially among in-house counsel and their litigation teams. Much of the discussion focuses on the problem of soaring discovery costs driven by the proliferation of electronic data. As an eDiscovery attorney, I employ early case assessment strategies and tools, technology-assisted review, and even low-cost outside staff attorneys to try and curtail the cost of discovery. In the end, the effectiveness of these cost-reduction alternatives hinges on whether clients have done their part to reduce the volume of data upstream.

Beyond implementing a formal records retention plan, there are a number of fairly simple steps that companies can take to help reduce litigation costs. Items 1-5 help reduce the volume of data that needs to be collected and reviewed. Items 6-8 will help ensure that your litigation budget is not exhausted on spoliation or sanctions motions.

1.   When implementing an email archive, be mindful of how it will impact litigation costs.

An email archive is not a cure to your litigation woes. Storing every company email that was sent or received in an email archive may make preservation easy, but it may also be contributing to your soaring discovery costs. Despite claims to the contrary, most archives have poor search and export features. It is also very difficult to pull out only responsive email from an archive.  Instead, you end up overspending on attorney review of irrelevant data or producing mounds of irrelevant data.

One way to control this issue is to tailor the archive for your own business and legal needs from the beginning. Do you really need every employee’s email messages for the last 10 years? Very few industries have regulatory requirements that require such broad retention. Even those that do usually only apply to a small subset of employees. Confirm any applicable regulatory requirements and consider your own business and legal needs. Consider creating email groups with different retention cycles.

Retaliating against an employee for reporting safety violations, the U.S. Postal Service asserted baseless terrorism charges against him. As a result, the employee was dismissed from his job, arrested, detained, harassed, criminally charged with committing acts of terrorism, and subjected to an extended campaign of public disparagement. That sounds like the exaggerated ranting of a would-be whistleblower seeking to cash in on a big pay day. But it’s not. These are the allegations made by the U.S. Department of Labor in a lawsuit it filed against its sister agency, the U.S. Postal Service, in an action filed in the U.S. District Court for the Eastern District of Missouri, Eastern Division, Case No. 4:14-cv-1233.

The attorney-client privilege applies with equal force to internal investigations today as it did 30 years ago thanks to the D.C. Circuit’s recent decision in In re: Kellogg Brown & Root, Inc., No. 14-5055 (D.C. Cir. June 27, 2014). The appeals court decision vacates the March 6, 2014 district court decision in the same case. At the district court, Judge James Gwin ruled that the attorney-client privilege did not protect documents developed during KBR’s internal investigations of potential fraud relating to its LOGCAP III contract. According to Judge Gwin, KBR’s investigations were not privileged because they were conducted “pursuant to regulatory law and corporate policy rather than for the purpose of obtaining legal advice.”

The D.C. Circuit’s decision reverses Judge Gwin’s ruling. The decision recognizes the “uncertainty generated by the novelty and breadth of the District Court’s reasoning” and echoes the Supreme Court’s concern that an “uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all.” If the district court’s decision were to stand, “businesses would be less likely to disclose facts to their attorneys and to seek legal advice.” The behavior created by this uncertainty in the attorney-client privilege would undercut the very compliance and disclosure regulations central to Judge Gwin’s analysis.

[UPDATE: On May 26, 2015, the Supreme Court reversed the Fourth Circuit’s decision in Carter and held that the Wartime Suspension of Limitations Act is limited to criminal offenses. Kellogg Brown & Root Services, Inc. v. Carter, No 12-1497 (U.S. May 26, 2015) [pdf]. Our discussion of the Carter decision is available here.]

Whether the Wartime Suspension of Limitations Act tolls the six-year statute of limitations for civil claims under the False Claims Act will soon be addressed by the Supreme Court. In Kellogg Brown & Root Services, Inc. v. United States ex rel Benjamin Carter, No. 12-1497 (July 1, 2014), the Court will have the opportunity to address several important questions about the application of the WSLA. Should it apply to civil claims or be limited to criminal actions? Does the tolling specified in the WSLA require a formal declaration of war? And does the WSLA apply to a qui tam claim in which the United States declines to intervene?

[Note:  The case also asks the Court to address whether the FCA’s “first-to-file” bar applies to cases filed after the first case is dismissed.  We’ll look at that question in another post.]

The case comes to the Supreme Court following the Fourth Circuit’s decision in U.S. ex rel Carter v. Halliburton Co., 710 F.3d 171 (4th Cir. 2013). In that case, the Fourth Circuit held that the WSLA tolled all civil actions—including civil FCA claims brought by qui tam relators—until the President or Congress declared a “termination of hostilities.” The Supreme Court accepted Halliburton’s petition for certiorari and will hear the case in 2015.

We believe the Fourth Circuit’s opinion represents a significant expansion of the WSLA. As Judge Agee points out in his dissenting opinion, a particularly troublesome aspect of the Fourth Circuit’s decision is its application of the WSLA to civil qui tam actions in which the United States has not intervened. The underlying purpose of the WSLA is to allow the law enforcement arm of the United States government to focus on its “duties, including the enforcement of the espionage, sabotage, and other laws’” in times of war. Id. (citing Bridges v. United States, 346 U.S. 209, 219 n. 18 (1953)). In a qui tam action initiated by a private citizen, the rationale for tolling the limitations period is diminished.

In its May 2014 report [pdf], the GAO found that the total number of contractor suspension and debarment actions continues to rise, more than doubling from 1,836 in FY 2009 to 4,812 in FY 2013. At a high level, the increase in suspension and debarments tracks the dramatic rise in federal contract spending. Looking at the data more closely suggests that all is not doom and gloom. Between 2012 and 2013, suspension actions increased by less than six percent. There were fewer debarments in 2013 than there were in 2012, and the decrease in some agencies is significant.

The 2014 annual report published by the Interagency Suspension and Debarment Committee [pdf] reflects these figures. According to this report, there were 836 suspensions and 1,722 debarments in FY 2012. There were 883 suspensions and 1,715 debarments in FY 2013. The number of suspension actions increased by less than six percent and the number of debarments decreased slightly from 2012 to 2013. The percentage of proposed debarments that became actual debarments also decreased.