[00:00:00] Speaker 01:
Our next case is number 21-23-10, Intelligent Investments, Inc.

[00:00:04] Speaker 01:
versus United States.

[00:00:07] Speaker 01:
Okay, Mr. Fleischer.

[00:00:10] Speaker 03:
Please the court.

[00:00:12] Speaker 03:
Ronald Gonzalez, who is basically the chief executive officer and only employee of Intelligent Investments, is a service-disabled veteran.

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The significance of that fact is twofold.

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Number one, had he not been a service disabled veteran, he would never have gotten the contract and we wouldn't be here.

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Secondly, it is this disability that contributed to the delays and the interruptions in discovery, and it's our position

[00:00:59] Speaker 03:
that the abuse of discretion on the part of the judge below is that she did not take into consideration in making that decision the effect of his disability.

[00:01:14] Speaker 01:
One thing that seems to me is missing from the record and that is, I'm correct about it, any medical evidence that his condition prevented him from responding to the discovery request.

[00:01:28] Speaker 03:
But the only part of the record in that respect is twofold was an email that I sent to Mr. Bigler that is in the record that indicated that he was experiencing problems responding to the additional request.

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When the trial judge ordered us to go ahead and

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go through the documents, go through these boxes of documents piecemeal.

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And I was trying to get Mr. Gonzalez to come into my office.

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And we're in the middle of a pandemic.

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He suffers from respiratory conditions.

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And I advised at that time that I was having difficulty getting him into my office because of those difficulties.

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And I had received information from

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his wife to that effect.

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Now, obviously the trial judge didn't know about that at the time.

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However, when I did finally submit my motion for stay, and I fault myself for not perhaps recognizing that and sitting down with my client and saying, well, you've got to get these things answered and not recognizing the fact that

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The reason he wasn't coming into my office was because of his PTSD and his fear of infection from the pandemic and so forth.

[00:02:58] Speaker 01:
That all may be true, but the concern that I'm expressing is that there isn't any medical evidence in the record to support that.

[00:03:07] Speaker 03:
Well, when I filed the motion for stay, it was accompanied by the statement from his psychologist at the VA

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that at that point in time, he was not able to... Okay, where do I find that in the record?

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It's referred to in the motion for stay.

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I quoted it, let me figure out where that is, in the record here for a minute.

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The motion to stay starts at

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appendix 151 and quoted in there 156 paragraph 17.

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Yes, that's the communication from the psychologist.

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And at that point I was asking for additional time to obtain the medical documentation that I needed to find out.

[00:04:13] Speaker 01:
Just a second.

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I'm trying to understand the timeframe of this statement in relation to the various letters to respond to discovery.

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When is the treating psychologist's statement in the course of this time period?

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It came after... So this state request was in June of 2021?

[00:04:47] Speaker 03:
On May 14th, I had requested that, and I'm going back to page 12, paragraph 12 of the motion for stay.

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On May 14th, I had asked him, he made an appointment to come see me to go through these documents in order to provide the response to the request for production.

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He called me that day and said he was suffering from some, that he couldn't come in.

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It was at that point that it dawned on me that he was suffering from some kind of depression that was keeping him from coming in to see me.

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I indicated I emailed his wife at that time.

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She responded that she's in the emergency room suffering from medical conditions.

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At that point, I advised, paragraph 18, I advised that I would need to come up with some medical documentation.

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And thereafter, I was provided with the letter from the VA doctor from the psychologist indicating his condition.

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And paragraph 18, I said, based on the contents of exhibit A, it would be necessary for counsel to obtain a medical release and get a more complete explanation from his treating psychologist.

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At that point, I was requesting a 60-day stay to try to further document that

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medical condition.

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And possibly the record might have been elaborated had there been a motion to dismiss that was ruled on as opposed to it being so responding.

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The motion to dismiss... I intended that as a helpful question.

[00:06:34] Speaker 02:
I'm sorry?

[00:06:35] Speaker 02:
I intended that as a helpful question.

[00:06:38] Speaker 03:
Oh yeah, I mean there had been a motion to dismiss, had been a

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file earlier been overruled.

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I mean, the court had denied it.

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And I understand.

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Isn't part of the problem here that this stuff we're now talking about is in May

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in June of 2021, but in response to the government's earlier motion to dismiss in January, you stated in your response that you'd already met with Mr. Gonzalez and you looked at the documents and that you were prepared to respond to the government's discovery requests.

[00:07:14] Speaker 04:
Isn't there an inconsistency there between what you told the court in January and then

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saying, oh, I haven't met with him.

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I can't go through the documents.

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And he has a medical issue that prohibits him from coming in to go to the documents.

[00:07:30] Speaker 04:
It sounds like you told the court, in order to get the actual motion to dismiss for failure of prosecution denied, that you'd already done that.

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But apparently, you hadn't, or at least you didn't follow through on your statement.

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And it's at 105.

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that having met with RG counsel is now in a position to respond to defend his discovery request.

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Perhaps I took an error in terminology.

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When I said we reviewed, I went over the files with him and asked him what was in the files.

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Are there documents responsive to this?

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And then I followed up with that and I answered

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the request for production saying all of this information is in the termination compensation documents, the termination for convenience settlement proposal.

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And my response to the request for production is none of these documents are in here.

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They're in, but they're all in this 450 page

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submission, settlement submission.

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Wait, so are you now saying that everything in that 10 boxes was unresponsive to the government's discovery requests?

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That's what I understood from my client, that it was all, all of those documents were summarized in the request for settlement.

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And that's what Mr. Balk told me and that was in my letter when I

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sent the letter to the attorneys.

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Did you review those documents in those boxes?

[00:09:22] Speaker 03:
No, I didn't go through the documents.

[00:09:24] Speaker 04:
Well, how can you make representations about what the documents are as counsel when you didn't personally review them?

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I was relying on my client's statement that these are, you know, these are the receipts, these are the weight bills, these are

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And specifically what they were looking for and what the judge asked me to go back and look for specifically were documents.

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They were looking for smoking guns indicating that my client had somehow engaged in some kind of communications, improper communications amounting to fraud.

[00:10:01] Speaker 04:
And you did an attempt to perform that review and look through those documents.

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yourself to determine whether there was anything responsive, even after telling the court in January that you could.

[00:10:16] Speaker 03:
When I said review, my statement to review was, with my client, what's in these boxes?

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And he told me what was in the boxes in my response to the request for production.

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And my letter of April 13th, 2021 to counsel stated,

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The reason that we have responded the way we had was I was relying on the expert witness's statement to me that there was nothing in those boxes that wasn't included in the termination settlement request, that those were just foundational documents for that.

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If my statement to the court that I reviewed them

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I didn't intend to mislead the court.

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I did not intend to say, I've gone through these 13 documents, 13 pages of documents page by page.

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I reviewed them with my client.

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I said, what's in these boxes?

[00:11:21] Speaker 02:
I was told... Can you just clarify, when the settlement proposal, did that merely refer to documents or attach documents?

[00:11:34] Speaker 03:
They did not attach those documents.

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They just summarized those documents.

[00:11:38] Speaker 02:
Was a request for production of the documents?

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The request for production of documents was very broad.

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Basically, we wanted to see every single piece of paper that was relied on.

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So a summary of them would not have been responsive to a request for the documents, even if those documents were.

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fully summarized.

[00:12:03] Speaker 03:
Is that right?

[00:12:04] Speaker 03:
That's right.

[00:12:05] Speaker 03:
I guess I could have copied 12 boxes worth of thousands of pages and sent them in and said instead I made the offer, you can send somebody out here to review all these boxes and see if you find something in there.

[00:12:20] Speaker 03:
You're certainly entitled to have it.

[00:12:24] Speaker 03:
The court felt that

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That response was not sufficient.

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And I understand that.

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And I understood the court's order to go back and go through those documents, those boxes piece by piece, and look for those.

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And that's what I was trying to get my client up to do when I became aware that he was suffering from severe psychological problems at that point in time.

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At the telephone conference with the judge, and that transcript is part of the record, I told the judge, I did not go through every single box.

[00:13:05] Speaker 03:
I don't think I'm required to go through every single box and look through every single page to comply with that discovery request.

[00:13:13] Speaker 03:
Well, she disagreed with me, and she ordered basically for us to do that.

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And that's what I attempted to do when my client

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became disabled.

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I advised the court of that fact in the motion for stay.

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And my position, it was an abuse of discretion not to give me that additional time to try to document whether or not my client was even going to be able to respond to these.

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Obviously, if he couldn't have, then we would have had to dismiss the lawsuit, because I don't think I could prove it any other way.

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But I at least wanted time to find out if he could be restored to a sufficient level of

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not having depression, that he could come in and go through those boxes piece by piece with me.

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And certainly, if the court misunderstood my representation in January to mean that I had gone through those boxes piece by piece, when we had the telephone conference with the judge, it was clear to her at that point in time that I had not gone through those documents piece by piece.

[00:14:18] Speaker 03:
And I told her that I had not gone by them, and I didn't think I was required to do that.

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So I don't believe I misled the court in any way, certainly not after we had that telephone conference.

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It was clear at that point that I had not.

[00:14:37] Speaker 02:
And that was that was substantially before the Suez-Bonte dismissal.

[00:14:43] Speaker 03:
Yes, I can't remember.

[00:14:45] Speaker 02:
A few months before.

[00:14:46] Speaker 03:
Yeah.

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Or a month before.

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I think the telephone conference was in March or

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I think that's when she told me to respond by May 15th.

[00:14:56] Speaker 03:
Thank you.

[00:14:58] Speaker 01:
Okay, we'll give you two minutes for rebuttal.

[00:15:00] Speaker 01:
Mr. Bigler?

[00:15:02] Speaker 05:
May it please the Court?

[00:15:04] Speaker 05:
The Court should affirm the trial court's decision.

[00:15:07] Speaker 01:
So the problem here is this.

[00:15:09] Speaker 01:
It seems to me that there was a failure to comply with discovery requests under Rule 37 and that some sanction would have been appropriate.

[00:15:18] Speaker 01:
But as I understand the society general case and subsequent circuit cases, if somebody fails to comply because of health problems, you can't dismiss simply on that basis.

[00:15:33] Speaker 01:
You have to find some lack of good faith or something like that, correct?

[00:15:42] Speaker 05:
No, that's not my reading of the rule.

[00:15:45] Speaker 05:
The rule states that if an order is not complied with, that the court can take those actions that are listed in Rule 37.

[00:15:56] Speaker 01:
But the Society General case says that that's not true.

[00:16:01] Speaker 01:
That the mere failure to comply is not a basis for imposing a sanction of dismissal.

[00:16:07] Speaker 01:
That there has to be something willful or bad faith about it.

[00:16:11] Speaker 01:
And I'm having difficulty seeing here where the willfulness or bad faith comes into play.

[00:16:20] Speaker 05:
There was not a finding of willfulness or bad faith.

[00:16:25] Speaker 05:
But I think the issue was, was there fault?

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And there was fault plaintiff.

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In this case, the appellant who was the plaintiff below had the ability to comply with the court's orders was given.

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extended their time to respond to our document requests 150 days.

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They failed to respond within that time.

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They failed to respond to my correspondence.

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And that's when I filed the motion dismissed for federal prosecute, which they also didn't respond to.

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The court then entered a show cause order and then denied my motion for federal prosecute, but gave them another 30 days to respond to the discovery.

[00:17:06] Speaker 05:
And they failed to meet that March 8th

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2021 deadline.

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And then when they did provide the responses on March 12th, for example, the document request, they simply referred to their cost proposal, which had already been in our possession.

[00:17:25] Speaker 05:
It shouldn't have taken them 11 months to develop document responses that

[00:17:32] Speaker 05:
could have been put together in an hour.

[00:17:33] Speaker 05:
They didn't object to a single request.

[00:17:35] Speaker 01:
Are you contending that there was evidence here of willfulness or bad faith?

[00:17:40] Speaker 05:
I am not, but what I'm saying is the court gave them numerous warnings, numerous orders to comply, and they failed to do so.

[00:17:50] Speaker 01:
There's no question a sanction was appropriate.

[00:17:53] Speaker 01:
The question is whether we can sustain a sanction of dismissal under these circumstances.

[00:18:00] Speaker 05:
Well, for example,

[00:18:01] Speaker 05:
In this court's decision in United Construction Products versus Tile Technologies, applying the Ninth Circuit Law, this court held that warnings of a lesser sanction are enough to meet the requirement of considering an alternate or a lesser sanction.

[00:18:20] Speaker 05:
And the court gave the appellant numerous warnings.

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When it denied our motion for federal prosecute, it warned

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that if the discovery, its order to comply by March 8th was not complied with, that it would dismiss the case at the status conference held on April 15th.

[00:18:41] Speaker 02:
Just to be clear, did the CSC say it would dismiss the case or it would consider dismissing the case?

[00:18:46] Speaker 05:
I believe it said it would dismiss the case, Your Honor.

[00:18:49] Speaker 05:
And then on March, I'm sorry, during the status conference on April 15th,

[00:19:00] Speaker 05:
The court again warned plaintiff stating, if a pattern emerges where discovery is not being complied with and the court's orders are not being complied with, the court will entertain a motion to dismiss pursuant to Rolls 16 and 37.

[00:19:14] Speaker 05:
That's in the record at pages 145 and 146.

[00:19:18] Speaker 05:
They received numerous warnings, and they still failed to comply with discovery.

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After more than a year, we didn't have any documents

[00:19:29] Speaker 05:
We had simply a response that said that everything responsive is attached to our termination for convenience or cost proposal.

[00:19:38] Speaker 05:
But we did, just to correct what Council said earlier, there were documents attached to that cost proposal, approximately 460 pages, which is approximately one ring of paper.

[00:19:53] Speaker 05:
But those were just things that supported their costs.

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What we were asking for in discovery were

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things that were entitled to, things that might undercut their cause, communications with their subcontractors, emails, things like that.

[00:20:07] Speaker 05:
None of that was in there because that was simply documents to support their cause.

[00:20:13] Speaker 05:
And this court has considered a similar situation in a case called Caden Corporation versus the United States, which we cited in our brief, where the appellant

[00:20:27] Speaker 05:
to various factors that the court should have considered and this court stated in its opinion, those factors do not overcome the flagrant character of appellant's defaults that the record reveals and they provide no basis for overturning the claims court dismissal of the complaint as an abuse of discretion.

[00:20:45] Speaker 05:
And that's really the question here is did the trial court abuse its discretion in dismissing intelligence complaint and the record amply

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demonstrates that it did not.

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The facts are not in dispute.

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They're in the record.

[00:21:01] Speaker 05:
Most of the facts are in the appellant's brief as well.

[00:21:06] Speaker 05:
So unless there are any other questions, I would just summarize by saying that because Intelligent failed

[00:21:14] Speaker 05:
to comply with the trial court's discovery orders, its dismissal was not an abuse of discretion in this court.

[00:21:20] Speaker 02:
Can you just trace through for me the question I asked you before about if you don't do something, I will dismiss?

[00:21:27] Speaker 02:
Are you referring to appendix 158, the December 16, 2020, shall cause order, or are you referring to something else?

[00:21:40] Speaker 05:
No.

[00:21:41] Speaker 05:
I believe I am responding not to the show pause order.

[00:22:00] Speaker 02:
Are you referring to 1-12, the February 2021 order on the motion to dismiss?

[00:22:05] Speaker 02:
Yes.

[00:22:06] Speaker 02:
So where's the language that you are relying on?

[00:22:12] Speaker 02:
Just the last sentence?

[00:22:13] Speaker 02:
The last sentence, there it is, Your Honor.

[00:22:17] Speaker 01:
I mean, the problem, it seems to me, is that this order, the so-espontive order of dismissal, was triggered by the failure to respond to the latest document production and the representations that would be compliance with it.

[00:22:40] Speaker 01:
Apparently, the circumstance was such that the corporate officer in question was unable to do that because of health problems.

[00:22:49] Speaker 01:
And as I understand the law, you can't take that sanction of dismissal because somebody doesn't comply because of health problems.

[00:23:00] Speaker 01:
So it may have been that earlier it was a failure to comply and no health problem excuse, but the thing that triggered the dismissal here

[00:23:08] Speaker 01:
was an action that apparently was sought to be excused on health grants, right?

[00:23:16] Speaker 05:
Well, they didn't file anything about that until they filed the motion to stay, which was on June 10th, which was almost a month after they were supposed to comply with the discovery on May 15th.

[00:23:34] Speaker 05:
They did attach a letter.

[00:23:36] Speaker 05:
It's not in the record from a clinical psychologist.

[00:23:39] Speaker 05:
But all that letter stated was that the client was being treated for PTSD and depression.

[00:23:45] Speaker 05:
There was nothing about any of the other hospitalization or any of the statements made by counsel in previous filings.

[00:23:53] Speaker 05:
And at that point, they already had 13 months to do this discovery, and the court

[00:24:04] Speaker 05:
The trial court did consider some of these challenges in page four of the appendix in the opinion and footnote one where the court dismissed the complaint.

[00:24:17] Speaker 05:
It did consider some of these problems and said that they basically don't make up for more than 14 months to provide discovery to the government.

[00:24:30] Speaker 02:
But I thought most of that 14 months was subject to a variety of agreed continuances of the due date.

[00:24:41] Speaker 02:
There were several 150-day continuances that you agreed to.

[00:24:47] Speaker 05:
150 days, that's correct, Your Honor.

[00:24:49] Speaker 05:
That's about five months.

[00:24:51] Speaker 02:
Were there not subsequent agreements to extend due dates?

[00:24:55] Speaker 02:
I thought there was another 30-day and another 60-day.

[00:24:58] Speaker 05:
There were no more agreements after that, Your Honor.

[00:25:00] Speaker 05:
That made the responses due in the middle of October.

[00:25:05] Speaker 05:
I didn't receive any responses in the middle of October.

[00:25:09] Speaker 05:
previously served discovery in September interrogatories and requests for admissions.

[00:25:15] Speaker 05:
Those were also due in October.

[00:25:16] Speaker 05:
I didn't receive any response to those.

[00:25:19] Speaker 05:
I sent him a letter saying, please respond to this discovery by November 5th.

[00:25:26] Speaker 05:
I didn't get a response to my letter.

[00:25:28] Speaker 05:
I then filed a motion to dismiss for failure to prosecute in mid-November and then they didn't respond to that.

[00:25:36] Speaker 05:
and then the court entered the show cause order and then they responded to it.

[00:25:41] Speaker 01:
Would it be fair to say that the court's dismissal order, the essential ingredient of that order was the failure to comply with this discovery request which was sought to be excused by the hospitalization?

[00:26:02] Speaker 05:
I think the reason that the trial judge dismissed the case was because she had entered orders and they weren't applied.

[00:26:09] Speaker 01:
But I don't think you're answering my question.

[00:26:12] Speaker 01:
Was this failure to comply because of the alleged hospitalization an essential ingredient of the decision to dismiss?

[00:26:23] Speaker 05:
I don't believe so.

[00:26:24] Speaker 05:
They failed to comply with the March 8th order.

[00:26:27] Speaker 01:
Well, that's your view, but what is it in the order here that would support it on the ground that, well, I put aside the hospitalization problem.

[00:26:40] Speaker 01:
There was such an earlier failure to comply that I'm going to dismiss.

[00:26:44] Speaker 01:
I don't see that in the order.

[00:26:46] Speaker 01:
Is there some language in there that suggests that the earlier conduct was itself sufficient to support the dismissal?

[00:26:53] Speaker 05:
Well, the court discussed the fact that it entered two orders in there.

[00:26:56] Speaker 05:
Sure, I understand that.

[00:26:58] Speaker 05:
And the court discussed their problems in that footnote, footnote one on page four, but there's nothing in the record, there's nothing, no affidavit or anything saying that there was a hospitalization.

[00:27:14] Speaker 05:
And there was nothing, I should add, there was nothing for the trial court

[00:27:18] Speaker 05:
The trial court didn't have any declarations or anything saying that the client was in the hospital or anything like that.

[00:27:24] Speaker 05:
All it had was statements of counsel that he had been hospitalized.

[00:27:30] Speaker 02:
Had there been an actual motion to dismiss on this ground from you, perhaps such declarations might have been forthcoming.

[00:27:39] Speaker 05:
That's possible, but the rules specifically allow the trial court to dismiss cases on its own

[00:27:46] Speaker 05:
motion when its orders are not being complied with.

[00:27:48] Speaker 01:
Not because somebody's in the hospital.

[00:27:53] Speaker 05:
Well, but as I said, there's no, I mean, she did wait until he filed the motion for stay.

[00:28:00] Speaker 05:
She had set the deadline of May 15th for them to provide the documents and conduct a search.

[00:28:09] Speaker 05:
Then on June 10th, he filed his motion to stay and she had that before she dismissed

[00:28:15] Speaker 05:
the case later in the month of June.

[00:28:23] Speaker 03:
Just very briefly, let me say this.

[00:28:45] Speaker 03:
I quoted from the psychologist in the motion on the motion for stay.

[00:28:54] Speaker 03:
In the record, I did not attach, make sure that exhibit A to that motion was attached.

[00:29:03] Speaker 03:
And if the court wishes, I can seek to supplement the appendix by supplying the court with the letter exhibit A that was attached to that motion, which is the letter from the psychologist

[00:29:15] Speaker 03:
which basically I just quoted in the motion.

[00:29:19] Speaker 02:
Did you know that that should be on the electronic docket in the Court of Federal Claims?

[00:29:27] Speaker 02:
That should be.

[00:29:28] Speaker 02:
And would that be under seal or not?

[00:29:30] Speaker 03:
No, it wasn't.

[00:29:31] Speaker 03:
I did not submit it under seal.

[00:29:33] Speaker 03:
It probably should have, because it was medical information.

[00:29:36] Speaker 03:
But because of the time constraints, I went ahead and attached it.

[00:29:40] Speaker 03:
So yes, it should be in the record as an attachment.

[00:29:46] Speaker 00:
Did it talk about the hospitalization?

[00:29:49] Speaker 03:
I'm sorry?

[00:29:50] Speaker 00:
Did it talk about the hospitalization?

[00:29:56] Speaker 03:
The meat of the letter is quoted.

[00:29:57] Speaker 03:
I think she just said he was under treatment.

[00:29:59] Speaker 03:
I don't know that she necessarily said that he was hospitalized in the VA hospital at that moment.

[00:30:06] Speaker 03:
And I don't know whether he was hospitalized at the VA at that moment.

[00:30:10] Speaker 03:
At this point, I was

[00:30:14] Speaker 03:
just trying to find some medical documentation to verify his mental breakdown at that point in time.

[00:30:24] Speaker 03:
It's not in the record, but the delay between the May 14th day and the May 15th day and

[00:30:36] Speaker 03:
the filing of my motion to stay was the time it took for me to try to get a letter from the treating psychologist documenting what was going on with my client.

[00:30:45] Speaker 03:
And within a few days of receiving that letter, that's when I filed the motion for stay supplemented with that document.

[00:30:53] Speaker 03:
And if I hadn't filed the motion for stay, I understand the court's frustration, believe me.

[00:31:02] Speaker 03:
And if I hadn't

[00:31:05] Speaker 03:
filed the motion for stay and had been given an opportunity to try to follow up and then didn't follow up with it with additional medical documentation, I could understand saying, look, you know, you haven't done your job.

[00:31:20] Speaker 03:
But all I was asking at that point in time was for additional time to try to document a situation so we could know whether we could go forward with this lawsuit and complete discovery or whether we were going to have to dismiss.

[00:31:33] Speaker 03:
And I believe the use of discretion was simply in not giving me that additional time, going ahead, ruling on it at that time without taking, without having an opportunity to fully consider the medical condition of my client.

[00:31:46] Speaker 01:
Okay.

[00:31:46] Speaker 01:
Thank you.

[00:31:46] Speaker 01:
Thank both counsel and the cases submitted.