[00:00:00] Speaker 04: Okay, I now call the final case for argument, URS Energy versus United States 192101. [00:00:07] Speaker 04: Council, Mr. Schooley, whenever you're ready, we're ready to proceed. [00:00:13] Speaker 01: May it please the court. [00:00:15] Speaker 01: This is Steve Schooley out of Orlando, Florida, and I represent the intervenors, Robert Kinghorn and Law Office of Frederick Huff, and have also represented the Florida Company Ground Improvement Techniques, or GIT. [00:00:29] Speaker 01: Kinghorn and Huff law firm seek reversal of the court-acclaimed April 30, 2019 denial of their motion intervening to seek a timely Rule 59E motion to alter or amend the court's January 11, 2019 U.S. [00:00:47] Speaker 05: judgment against the government. [00:00:50] Speaker 05: This is Judge Wallach. [00:00:52] Speaker 05: On page 8 of the red brief, [00:00:55] Speaker 05: The government provides some salient facts about the agreement respecting litigation and the impact it has on Mr. Kinghorn and Mr. Huff's interest here. [00:01:06] Speaker 05: In particular, our earlier conclusion that Mr. Kinghorn and Mr. Huff, quote, have expressly signed away any control, close quote, they may have had in this litigation. [00:01:22] Speaker 05: Do you bring those facts up anywhere in your blue brief? [00:01:25] Speaker 05: And if so, where? [00:01:28] Speaker 05: And if not, why not? [00:01:31] Speaker 01: Well, we didn't, because they never did sign away control. [00:01:38] Speaker 05: Wait, wait, wait. [00:01:40] Speaker 05: There was an express finding. [00:01:43] Speaker 05: Can you just ignore that? [00:01:49] Speaker 01: The rights of King, Orrin, and Huff arise out of the same agreement respecting litigation as the other three secured creditors did, but then the secured creditors transferred their rights to King, Orrin, and Huff in the settlement agreement addressing the remaining post-judgment interests that hasn't been awarded yet. [00:02:20] Speaker 05: Excuse me. [00:02:23] Speaker 05: It makes the decision of this court irrelevant? [00:02:28] Speaker 01: Well, no. [00:02:30] Speaker 01: It doesn't make it irrelevant because the agreement that Kinghorn and Huff entered into with the three secured creditors transferred all their rights to Kinghorn and Huff. [00:02:44] Speaker 01: Kinghorn and Huff [00:02:46] Speaker 01: now stand in the shoes of those three secured creditors as well as themselves? [00:02:52] Speaker 05: On page 32 of the Red Brief, the government quoting the court below argues that any interest your clients may have is not against the DOE, but against the three secured parties. [00:03:07] Speaker 05: What legal right as a GIT equity holder does Mr. Kinghorn have against the government? [00:03:15] Speaker 05: And same for Mr. Huff. [00:03:16] Speaker 05: Hasn't he signed away his right to independently sue? [00:03:23] Speaker 01: Well, no, he hasn't signed it away any more than the secured creditors had signed it away. [00:03:32] Speaker 01: They all have the right to seek recovery against the government because the Pennsylvania bankruptcy court preserved that right for either of the six [00:03:44] Speaker 01: secured creditors, including Mr. Kinghorn, in the agreement respecting litigation, or it could be stopped by GIT on behalf of all of them. [00:03:56] Speaker 00: So let's assume that you're right and that you had a ground for intervention. [00:04:00] Speaker 00: You waited months after you knew that the secured creditors were not seeking this post-judgment interest to move for leave to intervene. [00:04:11] Speaker 00: How is waiting months [00:04:14] Speaker 00: to intervene until there's a judgment here, not an untimely request? [00:04:21] Speaker 01: Well, when the security creditors moved for summary judgment, they requested the post-judgment interest. [00:04:29] Speaker 01: And in the appendix, page 166, they were seeking the full amount of the GIT judgment. [00:04:37] Speaker 01: And then in appendix 198, they [00:04:45] Speaker 01: requested CDA interest on a set amount from October 22, 2000 until paid, plus any applicable post-judgment interest. [00:04:54] Speaker 00: Yeah, but that's different post-judgment interest. [00:04:57] Speaker 00: You're confusing two things that are important to keep distinct. [00:05:02] Speaker 00: They requested post-judgment interest on their claim, but they didn't request the post-judgment interest that it was awarded in the earlier litigation. [00:05:14] Speaker 00: which is what you're seeking now. [00:05:17] Speaker 01: Well, you don't read it that way, Your Honor. [00:05:21] Speaker 01: It says plus any applicable post-judgment interest. [00:05:25] Speaker 01: It doesn't say it's limited to anything. [00:05:29] Speaker 01: It should be the post-judgment interest that was awarded in the second modified amended judgment, which is set forth at Appendix 428. [00:05:40] Speaker 00: So your only argument is that this refers to post-judgment interest, and that somehow a reasonable person would have construed that to include the post-judgment interest from the earlier litigation? [00:05:52] Speaker 01: Yes, because that's the kind of release that they're seeking. [00:05:57] Speaker 04: Is there anywhere, I mean, the specific release requested did not include non-CDA interest, which is what you're talking about here, right? [00:06:08] Speaker 04: Can you point up to anything other than the reference to full amount that would suggest that we were talking about a request for non-CDA interest? [00:06:19] Speaker 01: Yeah, the relief requested at Appendix 198 and then repeated again at Appendix 806. [00:06:28] Speaker 04: Well, what does it say at 198? [00:06:30] Speaker 04: It says the full amount, right? [00:06:33] Speaker 01: Well, that's actually at Appendix 166. [00:06:37] Speaker 04: Okay, so that, and what's it? [00:06:39] Speaker 01: And then at appendix 198, they request, it's requested, plus any applicable post-judgment interest, cost, attorneys and other expenses deemed equitable and just. [00:06:55] Speaker 00: That's post-judgment interest on this judgment, not post-judgment interest on the earlier judgment. [00:07:02] Speaker 01: Well, [00:07:05] Speaker 01: It's the same. [00:07:08] Speaker 01: No, it's not the same. [00:07:10] Speaker 01: They requested certification interest until it was paid. [00:07:18] Speaker 01: And then they say plus any applicable post-judgment interest. [00:07:23] Speaker 01: The only thing that could be the plus post-judgment interest is the interest that's set forth as post-judgment award in the original [00:07:34] Speaker 01: second modified amended judgment at page appendix 428. [00:07:38] Speaker 01: It's clearly set out there as post-judgment interest, and we're requesting plus any applicable post-judgment interest on top of the CDA interest. [00:07:53] Speaker 04: But you are following the proceedings in this entire case, and I assume you agree with the government. [00:07:59] Speaker 04: Tell us if you don't. [00:08:00] Speaker 04: that if there were a claim for non-CDA interest, there would have been a necessary argument and adjudication with respect to the entitlement to that particular interest. [00:08:14] Speaker 04: There was no discussion, no argument, no analysis of that. [00:08:20] Speaker 04: Was there? [00:08:21] Speaker 04: And don't you agree that somebody would have had to say something about it in order to award it? [00:08:29] Speaker 01: I would have expected that the security creditors, and we didn't know what their overall strategy was, but they requested... You know what they're filing for? [00:08:41] Speaker 04: You're getting copies of their filing. [00:08:44] Speaker 04: So wouldn't you have expected, if non-CBA interests were on the table, that something in the filing, something in the paper somewhere, [00:08:56] Speaker 04: would have dealt with the entitlement to that particular type of interest? [00:09:02] Speaker 01: Well, we thought that it was addressed. [00:09:05] Speaker 01: We thought it was addressed at Appendix 166, at Appendix 198, and then in the reply at Appendix 806. [00:09:17] Speaker 01: Judge Wallin. [00:09:23] Speaker 01: We didn't think we had the right... Judge Wallin. [00:09:26] Speaker 05: This is Judge Wallach. [00:09:27] Speaker 05: Did you make inquiry at that point when you thought so? [00:09:34] Speaker 01: No, we didn't, because we didn't think it was necessary. [00:09:38] Speaker 01: If we'd moved to intervene at that point, we would have been denied. [00:09:44] Speaker 05: Were you in communication with counsel? [00:09:48] Speaker 01: Yes, we were, not regularly. [00:09:51] Speaker 01: But there were things that they did that we didn't necessarily think was [00:09:57] Speaker 01: appropriate or complete because we had reversed the bankruptcy court out of the Ninth Circuit that said we were entitled to the interest and we thought that should have been raised more than it was. [00:10:16] Speaker 01: But communications with them, they amended the third amendment complaint to include a brief mention of that. [00:10:28] Speaker 00: Where? [00:10:31] Speaker 01: Oh, in a footnote, in the amended third-minute complaint. [00:10:36] Speaker 00: Where do we find that? [00:10:37] Speaker 00: Where? [00:10:43] Speaker 01: I'll have to look at that for you, Your Honor. [00:10:52] Speaker 04: Judges, anything else? [00:10:53] Speaker 05: No, Judge Wally. [00:10:55] Speaker 05: No. [00:10:57] Speaker 04: Uh, okay, Mr. Schooley, we'll turn to the other side and please have that citation ready when you come up on rebuttal. [00:11:04] Speaker 04: Yes, ma'am. [00:11:07] Speaker 04: Let's hear from the other side, government, council. [00:11:10] Speaker 03: Yes, your honor. [00:11:11] Speaker 03: May I please forward? [00:11:13] Speaker 03: The trial court appropriately rejected Mr. Kinghorn and Mr. Huff's untimely motion to intervene and correctly determined that they did not possess the requisite degree of legal interest in the judgment to justify intervention as a matter of right. [00:11:24] Speaker 03: The trial court also... [00:11:27] Speaker 03: Yes, Your Honor. [00:11:29] Speaker 05: This is Judge Wallach. [00:11:31] Speaker 05: On page seven of the Gray Brief, the appellants say your waiver arguments about their October 2019 settlement agreement are unfounded because they, quote, raise the change of circumstances and interest, close quote, later captured in that settlement agreement in their motion to intervene. [00:11:52] Speaker 05: I have two questions for you. [00:11:53] Speaker 05: One is, is there any merit at all to this argument? [00:11:56] Speaker 05: And two, [00:11:57] Speaker 05: have circumstances actually changed? [00:12:01] Speaker 05: And if they have, have appellants manufactured that change? [00:12:06] Speaker 03: Your Honor, I don't recall that the after-executed settlement agreement being mentioned in the motion to intervene. [00:12:12] Speaker 03: And I would be very surprised if it were there, because the settlement agreement, as I understand it from their appendix, the first time I saw it was in the appendix to the appeal of this brief. [00:12:22] Speaker 03: It's dated October 2019. [00:12:25] Speaker 03: And their motion to intervene [00:12:27] Speaker 03: was February 27, 2019. [00:12:30] Speaker 03: So it is, in my view, in the government's view, the case that they have manufactured a basis after the fact. [00:12:40] Speaker 03: Of course, that would not be a proper basis to reverse the trial court's decision, because this agreement was not presented to the trial court for its decision. [00:12:50] Speaker 03: In fact, they don't dispute any of the trial court's analysis [00:12:55] Speaker 03: of their particular legal rights under the agreement with respect to litigation, which is the operative legal document, at the time of the motion to intervene under judgment. [00:13:04] Speaker 03: They're merely resting on this act of executed document, which of course was never printed into the trial court's review. [00:13:11] Speaker 03: For that reason, it's not effective to call the trial court's judgment into question. [00:13:18] Speaker 05: This is Judge Wallach again. [00:13:19] Speaker 05: I look forward to hearing what you're opposing [00:13:23] Speaker 05: Council has to say about that in his reply. [00:13:29] Speaker 03: Yes, Your Honor. [00:13:29] Speaker 03: And as for the timeliness of the motion, it's quite clear that the motion was not timely. [00:13:35] Speaker 03: The summary judgment briefing was submitted in January 2018. [00:13:39] Speaker 03: If you look at Appendix Page 157, it's quite clear that the only post-judgment interest is being sought as CDA interest. [00:13:48] Speaker 03: Specifically, well, how is that created? [00:13:51] Speaker 04: Go ahead. [00:13:51] Speaker 04: I'm sorry. [00:13:52] Speaker 04: Go ahead. [00:13:53] Speaker 03: Mr. Barber, who's the attorney for the security creditor's state in his concluding paragraph, plaintiff respectfully requests that the court grant this motion in inter-summary judgment in favor of plaintiff and against the DOE in the amount of $9,842,711.83 plus CDA interest, accruing from October 22, 2010 until pay. [00:14:16] Speaker 03: The issue is that the prejudgment interest [00:14:19] Speaker 03: uh... that we thought which is the applicable interest all applicable interest i believe it's referred to uh... by my colleague was included within that my point eight million dollar underlying district court of war for the only interest that being thought at clearly preference mostly for summary judgment the amount of that district court that would include a pre-judgment interest pd interest accruing from october twenty-second twenty-tenant will pay that very clear uh... i don't think there's any credible [00:14:48] Speaker 03: an incredible claim that he proposed would be interveners didn't know or shouldn't have known based on this briefing. [00:14:56] Speaker 03: And indeed, if you read all the briefs that were submitted below, there's no discussion of post-judgment interests independent and apart from the CEA. [00:15:06] Speaker 03: So the idea that they did not know or shouldn't have known is simply not credible. [00:15:11] Speaker 04: Well, but their argument to what you're saying seems to be that they requested the full amount, and that was all that was necessarily required. [00:15:25] Speaker 04: The suggestion is that even in the absence of making specific arguments calling out non-CDA interest by asking for the full amount, that included that. [00:15:38] Speaker 04: Why is that wrong? [00:15:40] Speaker 03: Because the post, the $9.8 million, my understanding is the $9.8 million, that specific dollar figure that came out of the district court, it included prejudgment interest that the district court had awarded. [00:15:56] Speaker 03: If you look at the district court quarter, it also awarded some sort of compound post-judgment interest. [00:16:02] Speaker 03: That is never mentioned anywhere in the briefing, wasn't argued by the parties, never came up. [00:16:07] Speaker 03: The only post-judgment interest that's ever mentioned in the brief, the CDA interest specifically occurring from October 22nd, 2010, the date of the certified claim until paid. [00:16:18] Speaker 03: There really doesn't seem to be, from the government's point of view, any ambiguity in the proceeding law. [00:16:24] Speaker 03: Certainly, if we had understood them to be raising post-judgment interest in addition to pre-judgment interest, that is something the government would have briefed. [00:16:33] Speaker 03: But the government and the security creditors clearly had the same understanding of the pleadings. [00:16:41] Speaker 03: And candidly, it seems that the, if you look closely at the brief follow-up case, it seems that the interveners did too. [00:16:49] Speaker 03: When they talk about what happened here, for example, on page 22, they say there's no reason for the interveners to have expected that the three GIP creditors would decline a simple request to alter or amend judgment. [00:17:02] Speaker 03: So they were already, I think, and it seems that their brief suggests that they were already in the posture of understanding that the release that they wanted had not been thought over a year beforehand, and they were going to seek this post-judgment relief, which is, of course, a misuse of Rule 59, because Rule 59 is not intended to allow parties to raise an argument that could have been raised earlier. [00:17:27] Speaker 04: And correct me if I'm wrong, talking about the amount [00:17:30] Speaker 04: So what they're seeking in this post-judgment interest is like 50% of what the entire recovery was at the end of the day, right? [00:17:39] Speaker 04: It's something like... It's like 4.5 million? [00:17:42] Speaker 03: Yeah, I think the total recovery with CDA interest ended up being something like 13 million, but this would add an additional 4.5 million or so on top of it. [00:17:52] Speaker 03: Okay. [00:17:52] Speaker 03: So I think for that reason, I mean, we also have a situation here to the extent we consider timeliness of the arguments being raised. [00:18:00] Speaker 03: This is a situation where the prejudice definitely, the balance of prejudice falls in the government's favor because the government has undergone every single procedural step that would be necessary for us to achieve finality in this matter. [00:18:14] Speaker 03: We've achieved finality and are, and only to receive a very unusual [00:18:22] Speaker 03: motion for post-judgment release and to intervene when, as the district, as the trial court noted, the case was not at a preliminary stage. [00:18:29] Speaker 03: We're already after judgment. [00:18:31] Speaker 03: The party's rights have been adjudicated. [00:18:33] Speaker 03: We're all well on the road to deciding, in this case, not to appeal the underlying judgment. [00:18:39] Speaker 03: And now we get a whole new slew of arguments that could have been raised before. [00:18:43] Speaker 03: In those cases, when you're talking about timeliness and whether the court abused its discretion in determining that a filing was untimely, [00:18:51] Speaker 03: This is one of the factors that would waive heavily against the intervention in this case from Tommy's perspective. [00:18:58] Speaker 03: Also of note, we pointed out in our brief that actually appellants do not dispute. [00:19:04] Speaker 03: This is not a ministerial change. [00:19:06] Speaker 03: This is a... Well, they pay lip service to this being a ministerial change, but this is not a simple matter or typo made by the clerk. [00:19:15] Speaker 03: This is a whole different realm of argument [00:19:20] Speaker 03: significant arguments implicating the government's sovereign immunity and immunity from interest in the absence of expressed consent to be subject to that kind of judgment. [00:19:30] Speaker 03: So given all these considerations, the trial court was well within its discretion. [00:19:35] Speaker 03: The rule of this notion is untimely. [00:19:37] Speaker 00: Is it true that this post-judgment interest from the earlier litigation they're seeking [00:19:44] Speaker 00: would result in a double recovery to some extent because since there was pre-judgment interest awarded in this case? [00:19:52] Speaker 03: Yes, that's true. [00:19:54] Speaker 03: I think that mostly the duplication is most obvious, I think, is most obvious in the post-judgment context because interest awarded by the district court was compound, whereas the CDA's interest is simple. [00:20:08] Speaker 03: And so you have for the same time period the running of both compounds [00:20:13] Speaker 03: And the notion that sovereign immunity was ever waived to allow that flies in the face of the CDA, which occupies the space. [00:20:24] Speaker 03: This sort of answers the federal question for time. [00:20:27] Speaker 03: What kind of post-genetic interest can it prove? [00:20:29] Speaker 03: And also, as we noted in our briefing and the appellants did not mention, that if you look at the way the car is constructed, [00:20:37] Speaker 03: Interest is generally not allowed, is not allowable in situations that are roughly, I would say roughly analysis that is instructed. [00:20:47] Speaker 03: Not, roughly analysis is probably too strong, but in circumstances that are instructed. [00:20:52] Speaker 04: Can I just, just for clarification, so is the, your answer to Judge Dyke's question, yes, that the two interests that would have been some duplication with respect to the, some overlap in the amount, [00:21:06] Speaker 04: With respect to the post-judgment interest, is that a yes? [00:21:09] Speaker 04: And you need to talk a little slower. [00:21:12] Speaker 03: I'm sorry. [00:21:13] Speaker 03: I got excited. [00:21:15] Speaker 03: Yes, my answer to the judge's question was yes. [00:21:22] Speaker 03: Okay. [00:21:23] Speaker 03: So for these reasons, I think that the timely factors weigh heavily in the trial court's favor. [00:21:30] Speaker 04: And there's no dispute, right, that this would be [00:21:35] Speaker 04: the court could resolve this issue on that question and not reach the other questions with regard to intervention? [00:21:43] Speaker 03: Yes, Your Honor, that's the case. [00:21:47] Speaker 03: But I do think it's also significant that when we talk about the court's actual analysis of the rights, the appellants are relying on this after-executed settlement agreement and not actually alleging any error in the court [00:22:05] Speaker 03: understanding and construction of these units respecting litigation, which was the operative legal document. [00:22:12] Speaker 00: But if in fact the secured creditors had failed to request the full amount that would have given compensation to these appellants here, [00:22:29] Speaker 00: That would have been the basis for a motion for leave to intervene if it hadn't been timely, right? [00:22:38] Speaker 03: I'm not sure I would go quite that far. [00:22:43] Speaker 03: I think because of this particular structure of the agreement that these individuals entered into, as this court found, they had expressly signed away their control of the litigation. [00:22:57] Speaker 03: We made a judgment about, [00:22:59] Speaker 03: their choice of counsel and the adequacy of the representation that they hoped to achieve. [00:23:05] Speaker 03: I mean, I think it would be a very unusual circumstance if a litigant in the court of federal claims ended up not being happy with their counsel and attempted to intervene in a lawsuit just to get a better lawyer. [00:23:19] Speaker 03: So it's hard to concede that under the particular... This is an unusual case in that the agreement respecting litigation [00:23:29] Speaker 03: striking me as particularly ironclad in terms of getting the keys to the litigation to a different entity. [00:23:38] Speaker 03: So for that reason, I think that it would be very difficult for either Mr. Kinghorn or Mr. Huff, difficult if not impossible for them to justify intervention of right or permissive intervention, even if their motion has been timeless. [00:23:55] Speaker 03: If the panel has no further questions, Your Honor, [00:23:57] Speaker 03: For all the reasons stated today in oral argument in our brief, we respectfully request that you approve, you affirm the judgment of the software. [00:24:06] Speaker 04: Thank you. [00:24:09] Speaker 04: Mr. Schooley, you've got some rebuttal time. [00:24:12] Speaker 01: Yes, Your Honor. [00:24:13] Speaker 01: I was asked where did the input from us get incorporated in the third amendment complaint. [00:24:22] Speaker 01: That's at the second footnote and appendix 46. [00:24:26] Speaker 01: discusses the Ninth Circuit opinion that allowed us to seek interest against the Department of Energy. [00:24:34] Speaker 01: And the interest that we're seeking is awarded in the second amended judgment at page 420 [00:24:57] Speaker 01: 8? [00:24:59] Speaker 04: Appendix 428? [00:25:01] Speaker 01: Yes. [00:25:03] Speaker 01: And it's referred to in the four paragraphs on that page. [00:25:09] Speaker 01: And the $9,842,711.83 is the total of the $169.60, $149.9723, and $1,045. [00:25:26] Speaker 01: Those three numbers added together is in 9,842. [00:25:30] Speaker 01: It doesn't include three post-judgment interests, but those awards refer to the calculation of post-judgment interest on those amounts from the three different dates as being compound. [00:25:52] Speaker 01: Now, it's compound. [00:25:54] Speaker 01: was accepted by the government when it entered into its 1983. [00:25:57] Speaker 00: Yeah, but the problem is they only asked for the 9842, 71183. [00:26:04] Speaker 00: And they're specific on page 51 in the demand. [00:26:11] Speaker 00: And they did not ask for the post-judgment interest that was awarded in earlier litigation. [00:26:17] Speaker 00: And I'm not understanding why, seeing that, you didn't at that point [00:26:23] Speaker 00: they ask for leave to intervene? [00:26:27] Speaker 01: It's because they also ask for, and I'm looking at the reply, but the same in the motion at Phoenix 198, they also ask for plus any applicable post-judgment interest. [00:26:47] Speaker 01: The only other applicable post-judgment interest is the amount set for [00:26:53] Speaker 01: on appendix 428 in paragraphs 2, 3, and 4. [00:26:56] Speaker 00: No, no, that's CDA interest. [00:27:01] Speaker 00: CDALR post-judgment interest, right? [00:27:03] Speaker 01: Yes, but in the request for release, they ask for the CDA interest on set amounts until paid, and then also ask, plus any applicable post-judgment interest. [00:27:17] Speaker 01: The only applicable post-judgment interest would be the interest [00:27:22] Speaker 01: awarded the DIT on Appendix 428 in paragraphs 2, 3, and 4. [00:27:31] Speaker 01: And earlier in their motion, they said they were going to seek the full amount of the judgment, which would be at page Appendix 166. [00:27:44] Speaker 01: So we've taken the Appendix 166 plus Appendix 198 plus Appendix [00:27:51] Speaker 01: 806, all of those things point to the additional post-judgment interest that's set forth in the second modified amendment judgment. [00:28:03] Speaker 01: And it would not be duplicative, because it's just, it's additive. [00:28:11] Speaker 01: They get a credit for the CDA interest that was awarded, but then any additional post-judgment interest, and at the time of the briefing, [00:28:23] Speaker 01: Didn't ask for what ultimately was because we didn't know it would take so long for the government to pay. [00:28:32] Speaker 04: If there's any further... Any other further questions from the panel? [00:28:42] Speaker 05: Judge Wallace, no. [00:28:44] Speaker 04: No. [00:28:45] Speaker 04: Okay. [00:28:46] Speaker 04: Thank you. [00:28:46] Speaker 04: We thank both parties in the case to submit. [00:28:51] Speaker 04: That concludes our proceeding for this morning. [00:28:57] Speaker 03: The honorable court is adjourned until tomorrow morning at 10 a.m.