Advanced Powder Solutions, Inc. v. United States ( 2022 )

In the United States Court of Federal Claims
No. 20-137C
(Filed: July 13, 2022)
)
ADVANCED POWDER SOLUTIONS, INC., )
)
Plaintiff, )
)
v. )
)
THE UNITED STATES, )
)
Defendant. )
)
Bryant S. Banes, Neel, Hooper & Banes P.C., Houston, TX, for Plaintiff. With him on the
briefs was Sarah P. Harris.
Eric J. Singley, Commercial Litigation Branch, Civil Division, United States Department
of Justice, Washington, D.C. With him on the briefs were Brian M. Boynton, Acting
Assistant Attorney General, Martin F. Hockey Jr., Acting Director, and Steven J. Gillingham,
Assistant Director.
OPINION AND ORDER
SOLOMSON, Judge.
Pending before the Court in this Contract Disputes Act 1 case is a motion by
Plaintiff, Advanced Powder Solutions, Inc. (“APS”), to compel discovery responses from
Defendant, the United States, acting by and through the Missile Defense Agency, part of
the Department of Defense.
The Court DENIES the motion.
I. PROCEDURAL AND FACTUAL BACKGROUND
APS filed its complaint on February 7, 2020, challenging the Missile Defense
Agency’s claim that it overpaid APS in connection with two government contracts. ECF
1 Pub. L. No. 95-563, 92 Stat. 2383 (1978) (codified as amended at 41 U.S.C. §§ 7101–7109).
No. 1; see also Advanced Powder Sols., Inc. v. United States, 2022 WL 839809 (Fed. Cl. Mar.
22, 2022). The government filed its answer on May 7, 2020. ECF No. 8. On July 17, 2020,
the Court ordered the parties to file cross-motions for summary judgment, ECF No. 11;
briefing on those motions concluded on March 19, 2021, ECF Nos. 23, 24, 28, 29, 32, 33.
The week after the conclusion of summary judgment briefing, APS moved for
leave to file a sur-reply. ECF No. 34. APS asserted, inter alia, that the government’s reply
brief was “the first time that APS has been able to determine the stated basis for the
Government’s claim against APS.” ECF No. 34-1 at 1. The Court granted APS’s motion
on April 15, 2021, ECF No. 37, and the government filed a response to APS’s sur-reply on
May 20, 2021, ECF No. 40. The Court also granted APS leave to conduct “limited
discovery” pursuant to APS’s new understanding of the government’s claim, ECF No.
42, and ordered counsel for APS to send written requests to the government articulating
which specific documents APS sought, see ECF No. 45 at 29:14–30:7. 2
Accordingly, on June 15, 2021, counsel for APS sent the government a set of
interrogatories and a set of requests for production of documents (“RFPD”). See ECF Nos.
50-1, 50-2. 3 On August 27, 2021, government counsel responded, see ECF Nos. 50-3, 50-4,
and ultimately agreed to produce thirty-three (33) documents, see ECF No. 50-5 at 2–8.
The government produced those documents on September 10, 2021. See id. at 2–3.
Due to an apparent technical problem, however, APS counsel “could not access
the documents” and requested via email, on September 10, 2021, that the government
provide a link to the documents. See ECF No. 50 (“Mot. Compel”) at 1. Government
counsel did not reply to the email, and APS counsel never followed up. Id. at 1–2. On
October 13, 2021, APS filed its motion to compel. Id. at 1. That same day, government
counsel sent APS counsel a link “that provided [APS] access to the documents.” ECF No.
52 (“Pl. Reply”) at 1. On October 27, 2021, the government filed its response to APS’s
motion to compel. ECF No. 51 (“Def. Resp.”). On November 3, 2021, APS filed its reply
brief. Pl. Reply at 1.
2 See also ECF No. 45 at 27:6–18 (APS counsel summarizing the documents to be requested via
discovery as (1) a set of “original incurred cost submissions . . . that APS submitted to the
government,” and (2) “the reconciliation” that the government conducted between sets of various
incurred cost submissions).
3Because this was APS’s second set of RFPDs, they were numbered 10 to 14. See ECF No. 50-2 at
4 (describing: (1) RFPD 10, covering “any incurred cost submissions, original or revised,
submitted by APS to the Government”; (2) RFPD 11, covering documents prepared by or for the
government related to incurred cost submissions; (3) RFPD 12, covering documents reconciling
incurred cost submissions with bank statements; (4) RFPD 13, covering various documents
related to challenged direct costs; and (5) RFPD 14, covering other documents related to
challenged direct costs).
2
In APS’s reply brief in support of its pending motion to compel, APS appears to
concede that the government has either produced, or no longer retains, all of the
documents responsive to each of APS’s RFPDs. Pl. Reply at 2–3 (noting, regarding RFPDs
10 and 11, that “the Government . . . no longer has the original incurred cost
submissions”); id. at 7 (acknowledging the government’s assertion that “responsive
documents have already been produced” regarding RFPD 12 and requesting only that
the government update its RFPD response accordingly); id. at 7–8 (noting, regarding
RFPDs 13 and 14, that the government’s response brief “suggests that no responsive
documents exist” and that, if that is true, the government should update its RFPD
responses to reflect as much). 4 Nevertheless, APS asserts that the government committed
“spoliation” when the government “fail[ed] to retain relevant evidence” that is putatively
responsive to RFPDs 10 and 11. Id. at 4–7. The evidence in question — incurred cost
submissions — are documents that APS prepared but that APS itself no longer possesses.
Id. at 4 n.4. Accordingly, APS asks the Court to “make an adverse inference finding
against the Government” regarding RFPDs 10 and 11. Id. at 7.
On June 1, 2022, the Court held a telephonic status conference to discuss, inter alia,
APS’s motion to compel. See ECF No. 60 (“Tr.”).
II. DISCUSSION
A. The Court Denies APS’s Motion to Compel
The Rules of the United States Court of Federal Claims (“RCFC”) allow parties to
“move for an order compelling disclosure or discovery” under a range of circumstances.
RCFC 37(a)(1). Among other things, a party can move to compel production of a required
disclosure, RCFC 37(a)(3)(A), or to compel production of a specific discovery response,
like “an answer, designation, production, or inspection,” RCFC 37(a)(3)(B); see also, e.g.,
New Orleans Reg’l Physician Hosp. Org., Inc. v. United States, 122 Fed. Cl. 807, 820 (2015)
(compelling a party “to redo its previous searches” for responsive documents); 3rd Eye
Surveillance, LLC v. United States, 158 Fed. Cl. 216, 232 (2022) (ordering that a party “clarify
[its] answers” to a series of RFPDs).
4 While APS’s concession regarding RFPDs 13 and 14 is somewhat ambiguous, see Pl. Reply at 8
(admitting that the government’s response brief “suggests that no responsive documents exist,”
but also noting that the government’s response to RFPDs 13 and 14 “suggests that [responsive]
documents exist, but the government simply will not produce them”), counsel for APS
abandoned the position that the government may be withholding responsive documents in a
subsequent telephonic status conference the Court held on June 1, 2022. ECF No. 60 at 5:1–3
(“[APS COUNSEL]: I believe the Government when they say they don’t have anything else.”); see
also Sergent’s Mech. Sys., Inc. v. United States, 157 Fed. Cl. 41, 54 (2021) (collecting cases for the
proposition that unambiguous admissions of counsel bind parties).
3
This Court exercises broad discretion regarding “the scope and conduct of
discovery.” Florsheim Shoe Co. v. United States, 744 F.2d 787, 797 (Fed. Cir. 1984); see also
Schism v. United States, 316 F.3d 1259, 1300 (Fed. Cir. 2002) (en banc) (“A trial court ‘has
wide discretion in setting the limits of discovery.’” (quoting Moore v. Armour Pharm. Co.,
927 F.2d 1194, 1197 (11th Cir. 1991))). That broad discretion extends to resolving motions
to compel. See New Orleans Reg’l Physician Hosp. Org., 122 Fed. Cl. at 815. When resolving
such motions, “‘court[s] must balance potentially conflicting goals’ with the
understanding that ‘[m]utual knowledge of all the relevant facts gathered by both parties
is essential to proper litigation.’” 3rd Eye Surveillance, 158 Fed. Cl. at 223 (second
alteration in original) (first quoting Petro-Hunt, LLC v. United States, 114 Fed. Cl. 143, 144
(2013); and then quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)).
The Court need not explore the outer bounds of its discretion in this case, however,
as APS concedes that the government has produced all responsive documents in its
possession. See Tr. at 5:1–3 (“[APS COUNSEL]: Well, I believe the Government when
they say they don’t have anything else.”); Pl. Reply at 2–3, 7–8. In light of that concession,
the Court agrees with the government that “there is nothing to compel.” Def. Resp. at 1.
Accordingly, the Court denies APS’s motion to compel. 5
B. The Court Denies APS’s Request For an Adverse Inference Sanction
APS further asserts that the government’s failure to retain the documents APS
desires was “tantamount to spoliation,” Pl. Reply at 4, and that the Court should thus
“use its inherent power” to “make an adverse inference finding against the Government,”
id. at 7. The Court declines to do so.
5In the alternative, the Court denies APS’s motion to compel for failing to meet-and-confer with
the government. RCFC 37 requires parties to include with any motion to compel “a certification
that the movant has in good faith conferred or attempted to confer with the person or party failing
to make disclosure or discovery in an effort to obtain it without court action.” RCFC 37(a)(1).
Although APS’s motion includes a conclusory certification, the requirement to confer “cannot be
shown merely through the perfunctory parroting of statutory language on the certificate to secure
court intervention.” Kansas City Power & Light Co. v. United States, 139 Fed. Cl. 546, 564 (2018)
(quoting Shuffle Master, Inc. v. Progressive Games, Inc., 170 F.R.D. 166, 171 (D. Nev. 1996)). Instead,
the requirement “mandates a genuine attempt to resolve the discovery dispute through
non[-]judicial means.” Id. (quoting Shuffle Master, Inc., 170 F.R.D. at 171). APS has not met this
requirement. See ECF No. 50-5 at 2–3 (email correspondence indicating that (1) the government
provided responsive documents to APS on September 10, 2021, and (2) APS counsel informed the
government the same day that APS counsel “believe[d]” they “need[ed] to be given a proper link”
to access the documents); Mot. Compel at 1–2 (indicating that APS filed its motion to compel,
without any communication after that email exchange, on September 10, 2021); Def. Resp. at 5
(“APS did not follow up or otherwise contact Government counsel after September 10, 2021. On
October 13, 2021[,] APS filed a motion to compel.”). RCFC 37 requires more than sending a single
email alluding to possible technical difficulties.
4
This Court may impose discovery sanctions pursuant to either: (1) RCFC 37, or
(2) the Court’s inherent power. See, e.g., United Med. Supply Co., Inc. v. United States, 77
Fed. Cl. 257, 264 (2007); 4DD Holdings, LLC v. United States, 143 Fed. Cl. 118, 130 (2019).
A litigant, however, “can only be sanctioned for destroying evidence if it had a duty to
preserve it.” Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1320 (Fed. Cir. 2011) (quoting
Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003)). That duty arises when
the party “knows or reasonably should know that evidence in its control may be relevant
to a reasonably foreseeable legal action.” Jones v. United States, 2022 WL 473032, at *4
(Fed. Cir. Feb. 16, 2022). The “breach of the duty to preserve evidence, either through
destruction of evidence or through failure to properly preserve it,” is known as
spoliation. Id.; see also West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999)
(“Spoliation is the destruction or significant alteration of evidence, or the failure to
preserve property for another’s use as evidence in pending or reasonably foreseeable
litigation.” (citing Spoliation, Black’s Law Dictionary (6th ed. 1990))).
With regard to the first sanctions path, “RCFC 37 provides an arsenal of discovery
sanctions designed to discourage delay, waste of resources, and dilatory practices in
favor of full disclosure of relevant information prior to trial.” Applegate v. United States,
35 Fed. Cl. 47, 56 (1996). This Court may impose sanctions pursuant to RCFC 37 “where
the spoliation violates a specific court order or disrupts the court’s discovery regime.”
United Med. Supply Co., 77 Fed. Cl. at 264. 6 APS, however, barely acknowledges this rule,
referring to RCFC 37 only in a one-sentence footnote. See Pl. Reply at 6 n.3.
As for the second path, this Court may impose sanctions “based on the court’s
inherent power to control the judicial process and litigation, a power that is necessary to
redress conduct ‘which abuses the judicial process.’” United Med. Supply Co., 77 Fed. Cl.
at 263 (quoting Chambers v. NASCO, Inc., 501 U.S. 32, 45–46 (1991)). Courts, however,
must exercise this inherent power with great “restraint and discretion.” Chambers, 501
U.S. at 44; see also Chapman L. Firm, LPA v. United States, 113 Fed. Cl. 555, 609 (2013) (“The
inherent power of courts is broad, but must be exercised by judges cautiously[.]”), aff’d,
583 F. App’x 915 (Fed. Cir. 2014). APS requests sanctions pursuant to the Court’s
“inherent power.” Pl. Reply at 6.
Specifically, APS requests that the Court impose a sanction on the government in
the form of an adverse inference. Pl. Reply at 4, 6–7. An “adverse inference” is a remedy
6Exceptions to this rule appear to include RCFC 37(b)(2) (allowing the Court to “issue further just
orders” when a party fails to obey a discovery order or pay expenses), and RCFC 37(e) (permitting
the Court to order sanctions for unreasonable loss of electronically stored information). Of
course, even had APS invoked RCFC 37 in its reply brief, neither of these rules would be at issue,
as APS has disclaimed any argument that the government failed to obey a discovery order, Tr.
5:1–3, and makes no claims that the rules of electronically stored information apply to the
documents in this case.
5
for spoliation, whereby the Court “may infer that the destroyed evidence would have
been favorable to the opposing side.” United Med. Supply Co., 77 Fed. Cl. at 263 (citing
Jonathan Judge, Reconsidering Spoliation: Common-Sense Alternatives to the Spoliation Tort,
2001 Wis. L. Rev. 441, 444 (2001)); see also Int’l Union, United Auto., Aerospace & Agr.
Implement Workers of Am. (UAW) v. NLRB, 459 F.2d 1329, 1336 (D.C. Cir. 1972) (“[T]he
[adverse inference] rule provides that when a party has relevant evidence within [its]
control which [it] fails to produce, that failure gives rise to an inference that the evidence
is unfavorable to [it].”), cited with approval in Day & Zimmermann Servs. v. United States, 38
Fed. Cl. 591, 602 n.13 (1997); Commercial Ins. Co. v. Gonzalez, 512 F.2d 1307, 1314 (1st Cir.
1975) (“It is elementary that if a party has evidence . . . in its control and fails to produce
it, an inference may be warranted that the document would have been unfavorable.”).
The United States Court of Appeals for the Federal Circuit, our appellate court, has held
that an adverse inference based on the destruction of evidence is appropriate when:
evidence has been destroyed and “(1) . . . the party having
control over the evidence had an obligation to preserve it at
the time it was destroyed; (2) . . . the records were destroyed
with a culpable state of mind; and (3) . . . the destroyed
evidence was relevant to the party’s claim or defense such
that a reasonable trier of fact could find that it would support
that claim or defense.”
Jandreau v. Nicholson, 492 F.3d 1372, 1375 (Fed. Cir. 2007) (alterations in original) (quoting
Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002)).
Importantly, “[t]he party seeking an adverse inference has the burden of establishing that
spoliation has occurred,” Chapman L. Firm, 113 Fed. Cl. at 610 (citing K-Con Bldg. Sys.,
Inc. v. United States, 106 Fed. Cl. 652, 666 (2012)), and “must . . . ‘come forward with
plausible, concrete suggestions as to what [the destroyed] evidence might have been,’”
Micron Tech., Inc., 645 F.3d at 1328 (second alteration in original) (emphasis omitted)
(quoting Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 80 (3d Cir. 1994)).
The Court declines to exercise its inherent power to find spoliation in this case.
As an initial matter, pursuant to RCFC 7, “[a] request for a court order must be
made by motion.” RCFC 7(b)(1). 7 APS acknowledges as much in its motion to compel.
7 Indeed, RCFC 37 generally requires that the party requesting sanctions do so via motion. See
RCFC 37(a)(3)(A) (“If a party fails to make a disclosure required by RCFC 26(a), any other party
may move . . . for appropriate sanctions.” (emphasis added)); RCFC 37(c)(1) (listing sanctions that
the Court may impose “on motion and after giving an opportunity to be heard” if a litigant fails
to identify a witness or provide required information (emphasis added)); RCFC 37(c)(2) (“[T]he
requesting party may move that the party who failed to admit pay the reasonable expenses . . . .”
6
See Mot. Compel at 8 (“Plaintiff reserves the right to bring a Motion for Sanctions against
the Government should the Government continue to fail to cooperate in discovery.”).
Thus, irrespective of a party’s chosen method in pursuing sanctions against another party
— i.e., whether via RCFC 37 or the Court’s inherent powers — the party seeking the
sanctions must do so via motion.
Here, however, APS has not filed a motion for sanctions in the form of an adverse
inference or otherwise; rather, APS makes an offhand request in a few terse paragraphs
in its reply brief in support of a motion to compel. See Pl. Reply at 4–7. Such an
undeveloped and sparse argument embedded in a reply brief is insufficient to constitute
a motion pursuant to RCFC 7(b)(1). See San Antonio Hous. Auth. v. United States, 143 Fed.
Cl. 425, 482 n.16 (2019) (denying transfer request where plaintiff filed no motion but
instead “improperly embedded [the request] within its response brief”); Kersten v. Quick
Collect, Inc., 152 F. Supp. 3d 1301, 1304 (D. Or. 2016) (“Because Defendant’s request for
sanctions is included in its response to Plaintiff’s motion, it is procedurally improper and
should be denied.”); Forto v. Cap. One Bank, N.A., 2017 WL 4168529, at *3 (N.D. Cal. Sept.
20, 2017) (“Plaintiff’s request to stay is procedurally improper; Plaintiff did not file it as a
separate motion and instead included it with her objections to [Defendant’s] Reply.”). 8
This procedural deficiency alone is a sufficient basis on which to deny APS’s request.
Moreover, even if APS had properly moved for sanctions, APS fails to meet its
burden to establish that an adverse inference is warranted here. First, APS sets its request
for an adverse inference on an exceedingly weak foundation. To support the central
proposition that the government was required to keep these documents (i.e., the first
requirement in the Federal Circuit’s three-part test), APS provides only an unexplained
list of guidance documents and regulations that, according to APS, “required” the
government to retain the evidence at issue. See Pl. Reply at 4.
(emphasis added)); RCFC 37(d)(1)(A) (“The court may, on motion, order sanctions . . . .” (emphasis
added)).
8Even if APS’s request for sanctions were viewed merely as an argument (and not as independent
request for court action, requiring a separate motion), a reply brief is an entirely inappropriate
medium for new arguments. See, e.g., Novosteel SA v. United States, 284 F.3d 1261, 1274 (Fed. Cir.
2002) (“Raising the issue for the first time in a reply brief does not suffice; reply briefs reply to
arguments made in the response brief—they do not provide the moving party with a new
opportunity to present yet another issue for the court’s consideration.”); Herbert v. Nat’l Acad. of
Scis., 974 F.2d 192, 196 (D.C. Cir. 1992) (“[A] [c]ourt . . . generally refuses to entertain arguments
raised for the first time in [a party]’s reply brief.”); United States v. Medeiros, 710 F. Supp. 106, 110
(M.D. Pa.) (“[I]t is improper for a party to present a new argument in his or her reply brief.”),
aff’d, 884 F.2d 75 (3d Cir. 1989); Kane Gas Light & Heating Co. v. Pennzoil Co., 587 F. Supp. 910, 912–
13 (W.D. Pa. 1984) (“[T]he presentation of additional evidentiary material in the reply brief was
improper; . . . to allow this practice would be to permit a practice of ‘sandbagging’, perhaps
allowable in poker, but not proper in a lawsuit.”).
7
In that regard, APS cites FAR 4.803(a)(17), (a)(19), (a)(40), (b)(4), (b)(19). See Pl.
Reply at 4. This regulation provides, in relevant part, as follows:
The following are examples of the records normally
contained, if applicable, in contract files:
(a) Contracting office contract file.
....
(17) Data and information related to the contracting
officer’s determination of a fair and reasonable price.
This may include—
(i) Certified cost or pricing data;
(ii) Data other than certified cost or pricing data;
(iii) Justification for waiver from the requirement to
submit certified cost or pricing data; or
(iv) Certificates of Current Cost or Pricing Data.
....
(19) Cost or price analysis.
....
(40) Any additional documents on which action was
taken or that reflect actions by the contracting office
pertinent to the contract.
....
(b) Contract administration office contract file.
....
(4) Certified cost or pricing data, Certificates of Current
Cost or Pricing Data, or data other than certified cost
or pricing data; cost or price analysis; and other
documentation supporting contractual actions
executed by the contract administration office.
....
(19) Any additional documents on which action was
taken or that reflect actions by the contract
administration office pertinent to the contract. . . . .
FAR 4.803(a)(17), (a)(19), (a)(40), (b)(4), (b)(19).
The Court has reviewed this regulation and fails to see how it “require[s]” the
government to retain the documents at issue. Pl. Reply at 4. The Court cannot
definitively conclude that the government was “required,” id., to retain the documents at
issue, as the cited regulation only specifies “examples of the records normally contained
8
. . . in contract files,” FAR 4.803. APS makes literally no effort to explain how that FAR
provision relates to document retention or discovery obligations in the context of
litigation and does not attempt to show whether this Court (or any other) has applied
that FAR provision for the purpose of imposing sanctions on the government. The mere
citation of a case, statute, or regulation does not an argument make. “Judges are not like
pigs, hunting for truffles buried in briefs,” United States v. Dunkel, 927 F.2d 955, 956 (7th
Cir. 1991), and, accordingly, the Court will not litigate this matter on behalf of APS. 9
As for the second adverse inference requirement — namely, whether “the records
were destroyed with a culpable state of mind,” Jandreau, 492 F.3d at 1375 — APS again
misses the mark and fails to present any evidence that the government was negligent, let
alone acted in bad faith, in failing to preserve the documents at issue. 10 As the Court
understands the facts, the missing documents are those APS prepared but that it no
longer possesses either. Without concrete evidence demonstrating the government’s
culpability, this is “a classic example of the pot calling the kettle black, if there ever was
one.” Petro-Hunt, L.L.C. v. United States, 90 Fed. Cl. 51, 59 (2009), aff’d, 862 F.3d 1370 (Fed.
Cir. 2017). It is not the responsibility of the government to ensure that there are electronic
back-up copies of APS’s own evidence in the event APS failed to preserve its own
physical copies of that evidence. The Court rejects, as untenable, APS’s implicit argument
that the government somehow was per se culpable here, when APS itself clearly failed to
preserve the documents it seeks. This Court will not hold the government responsible
for APS’s own failures. Whether this Court may have reached a different conclusion
given a proper motion with supporting evidence to show the government’s culpability is
not a question this Court will attempt to answer; that alternative reality is not before the
Court.
9The Court’s conclusion applies with equal force to APS’s unexplained citation to Sections 4-402,
4-403, 4-405, and 4-410 of the Defense Contract Audit Agency Contract Audit Manual (the
“DCAM”). See Pl. Reply at 4. Moreover, the DCAM itself specifically instructs auditors to avoid
citing the DCAM “in audit reports or correspondence” outside the Defense Contract Audit
Agency. DCAM 0-002.a (Nov. 2021); Cf. 1 Karen L. Manos, Government Contract Costs and Pricing
§ 3:5 (2d ed. 2009) (noting that the DCAM “do[es] not have the force and effect of law, and [is]
therefore not binding on contractors or the courts”).
10 In determining whether a party acted with a “culpable state of mind,” the party seeking the
sanction must demonstrate, at a minimum, the negligent destruction of evidence. See Kirkendall v.
Dep’t of Army, 573 F.3d 1318, 1327 n.6 (Fed. Cir. 2009) (noting that “there is a conflict in the circuits
as to whether more than mere negligence,” i.e., bad faith, “is required to support an adverse
inference” (citing Jandreau, 492 F.3d at 1376)). The Federal Circuit also has indicated, in dicta, that
a showing of bad faith is required. See Multiservice Joint Venture, LLC v. United States, 374 F. App’x
963, 966 (Fed. Cir. 2010) (noting, in a case on appeal from this Court, that “the test for an adverse
inference sanction” requires (1) “a finding of evidence destruction,” and (2) “bad faith by the
destructive party” (citing Eaton Corp. v. Appliance Valves Corp., 790 F.2d 874, 878 (Fed. Cir. 1986))).
This Court need not resolve the precise standard, however, because, as noted above, APS fails to
present evidence of culpability under either standard.
9
With regard to the third and final element of the Federal Circuit’s test for an
adverse inference sanction, APS, in essence, asks the Court to take APS at its word that
the missing documents would prove APS’s entire case and, thus, that APS is entitled to
judgment. But, it is the burden of the moving party to establish the necessity of an
adverse inference. See Chapman L. Firm, 113 Fed. Cl. at 610. APS asserts that “[i]f APS has
the original incurred cost submissions . . . , APS would be able to explain the
inconsistencies in the [contracting officer’s] determination of overpayment and
definitively show that the [the contracting officer’s final decision] fails to consider costs
that were later accepted.” Pl. Reply at 4. APS cites a single email from a Defense Contract
Management Agency administrative contracting officer, see ECF No. 52-2 at 2, but the
Court cannot discern how that email supports APS’s argument. APS’s conclusory
assertion about the putative import of the missing documents is insufficient to justify an
adverse inference sanction. As indicated above, the Court will not build APS’s legal
argument for APS.
At bottom, APS does not come close to meeting the legal standard for an adverse
inference. 11 The lack of a coherent argument, consisting of a robust analysis of the legal
standard as applied to demonstrable facts, renders APS’s request for an adverse inference
all but dead on arrival.
Finally, APS fails to explain what adverse inference, specifically, it wants the Court
to make. Instead, APS seems to ask Court to declare the entirety of the government’s
overpayment claim to be erroneous. See Pl. Reply at 4; id. at 7 (requesting “an adverse
inference finding against the Government as to th[e] point” that the government’s
overpayment calculation was erroneous); id. at 8 (requesting “an adverse inference” of
undefined terms). The undersigned is not telepathic and will not attempt to divine what
APS believes it is entitled to. Indeed, granting APS’s request, if anything, would be a
blatant abuse of this Court’s discretion and would directly conflict with the Court’s
responsibility to exercise restraint when issuing sanctions pursuant to the Court’s
inherent powers. See Chambers, 501 U.S. at 44 (warning that “inherent powers must be
exercised with restraint and discretion,” and characterizing “outright dismissal of a
lawsuit” as “a particularly severe sanction”).
Accordingly, the Court denies APS’s request for an adverse inference.
11The sole case APS cites for the proposition that this Court can impose an adverse inference
sanction pursuant to its inherent authority involved a party that requested sanctions in a motion.
Pl. Reply at 5–6 (citing United Med. Supply Co., 77 Fed. Cl. at 263).
10
III. CONCLUSION
For the above reasons, the Court DENIES APS’s motion to compel and its request
for sanctions.
IT IS SO ORDERED.
s/Matthew H. Solomson
Matthew H. Solomson
Judge
11