Silver State Solar Power South, LLC v. United States

In the United States Court of Federal Claims
No. 18-266T
Filed: October 19, 2020 1

SILVER STATE SOLAR
POWER SOUTH, LLC,
Plaintiff,
v.

THE UNITED STATES,
Defendant.

ORDER
TAPP, Judge.
On June 5, 2020, the United States filed a Motion in Limine (Def.’s Mot. in. Lim., ECF
No. 51) seeking to exclude various portions in 13 of the 16 declarations used as appendices to
Silver State’s opposition to the United States’ Motion for Summary Judgment (Pl.’s Resp.
Summ. J., ECF No. 46). For the reasons stated below, United States’ Motion is GRANTED-IN-
PART and DENIED-IN-PART.
The United States objects to Silver State’s reliance on fact witness testimony presented in
declarations submitted with its opposition to the United States’ motion for partial summary
judgment. See RCFC 56(c)(2) (providing that, in response to summary judgment briefing, “[a]
party may object that material cited to support . . . a fact cannot be presented in a form that
would be admissible in evidence”). The purpose of a motion in limine is to “to prevent a party
before trial from encumbering the record with irrelevant, immaterial or cumulative matters. Such
a motion enables a court to rule in advance on the admissibility of documentary or testimonial
evidence and thus expedite and render efficient a subsequent trial.” INSLAW, Inc. v. United
States, 35 Fed. Cl. 295, 302–03 (1996); see also Dairyland Power Coop. v. United States, 123
Fed. Cl. 220, 222 (2015).
The United States asserts that Silver State’s declarations contain statements which
purport to offer expert opinion by a lay witness, as well as statements that purport to explain,
analyze, or decide legal concepts. The Court will address those arguments in turn.

1
This Order was originally filed under seal on September 18, 2020, (ECF No. 54). The Court provided parties the
opportunity to review this opinion for any proprietary, confidential, or other protected information and submit
proposed redactions no later than October 19, 2020. The Joint Status Report of October 19, 2020 (ECF No. 56),
indicates that the parties propose no redactions. Thus, the sealed and public versions of this Order are identical,
except for the publication date and this footnote.
 I. Acceptable testimony under Federal Rule of Evidence 701
The United States repeatedly objects to statements of lay witnesses based on perceptions
gathered in the course of their business. The jurisprudence concerning lay witness testimony
offered by employees within a particular industry warrants a more comprehensive discussion.
Generally, Federal Rules of Evidence (Fed. R. Evid.) 701 and 702 govern the
admissibility of opinion testimony offered by lay witnesses and expert witnesses respectively.
While the line between lay witness opinion testimony and expert witness testimony is not always
clear, drawing such a distinction is vital in ensuring disclosure requirements are properly applied.
The United States’ arguments relate specifically to witnesses who are offering expert opinion as
lay witnesses. Rule 701 provides:
If a witness is not testifying as an expert, testimony in the form of an opinion
is limited to one that is:
(a) rationally based on a witness’s perception;
(b) helpful to clearly understanding the witness’s testimony or to
determining a fact in issue;
(c) not based on scientific, technical, or other specialized knowledge
within the scope of Rule 702.
Fed. R. Evid. 701. If a witness’s testimony fails to meet any one of the three foundational
requirements, it is inadmissible. See id. In contrast, Rule 702, which governs the requirements of
expert testimony, states:
A witness who is qualified as an expert by knowledge, skill, experience,
training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will
help the trier of fact to understand the evidence or to determine a fact in
issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts
of the case.
Fed. R. Evid. 702. In United States v. Henderson, the 11th Circuit held that the “essential
difference” between expert and lay opinion witnesses is the expert's ability to answer
hypothetical questions. 409 F.3d 1293, 1300 (11th Cir. 2005) (internal alteration, quotation
marks, and citation omitted).
“The burden is on the proponent to provide adequate foundation for the testimony.”
United States v. Freeman, 730 F.3d 590, 595–96 (6th Cir. 2013) (citing United States v. Grinage,
390 F.3d 746, 749 (2d Cir. 2004)). Thus, many declarations are constrained by the requirements
of Rule 701—that a lay witness is only permitted to give their opinion or interpretation of an
event when they have some personal knowledge of that incident. The objective of such testimony

2
is to put “the trier of fact in possession of an accurate reproduction of the event.” Id. at 595
(quoting Advisory Committee Notes to Fed. R. Evid. 701). Said differently, lay opinion
testimony is permitted under Rule 701 because it has the effect of describing something that the
fact finder could not otherwise experience for themselves by drawing upon the witness’s sensory
and experiential observations that were made as a first-hand witness to a particular event. Id. at
597 (quoting United States v. Jayyousi, 657 F.3d 1085, 1120 (11th Cir. 2011) (Barkett, J.,
concurring in part and dissenting in part)). This recognizes the reality that “eyewitnesses
sometimes find it difficult to describe the appearance or relationship of persons, the atmosphere
of a place, or the value of an object by reference only to objective facts.” United States v. Garcia,
413 F.3d 201, 211 (2d Cir. 2005). Accordingly, Rule 701 permits witnesses “to testify to their
personal perceptions in the form of inferences or conclusory opinions.” Id. (citing Advisory
Committee Notes on 1972 Proposed Rules and on 2000 Amendments and 4 Weinstein's Federal
Evidence § 701.03[4][b]).
The 2000 Advisory Committee Notes to Rule 701 state: “[T]he distinction between lay
and expert witness testimony is that lay testimony ‘results from a process of reasoning familiar in
everyday life,’ while expert testimony ‘results from a process of reasoning which can be
mastered only by specialists in the field.’” (internal citation omitted). Sometimes, lay witness
testimony about specialized matters may display the hallmarks of testimony normally offered by
experts. This issue has been addressed in other cases before this Court. For instance, DataMill,
Inc. v. United States, 91 Fed. Cl. 722 (2010), involved testimony by lay witnesses gained through
their day-to-day experiences in the field. There, the Court concluded:
The general application of Rule 701 indicates that a lay witness may testify
about facts within his or her range of generalized knowledge, experience, and
perception.” The opinion “must have a rational connection to those facts.”
Where the testimony is based upon personal knowledge of the facts
underlying the opinion and the opinion is rationally related to the facts, a lay
witness may, “under certain circumstances[,] express an opinion even on
matters appropriate for expert testimony.
91 Fed. Cl. at 736 (internal citations omitted).
The statements at issue here elicit the declarants’ personal observations based upon their
experience within the solar power development industry. This type of lay testimony is
permissible under Rule 701. The fact that a witness has specialized knowledge does not
necessarily preclude the witness from testifying under Rule 701, but the testimony must not be
“rooted exclusively in [the witness’s] expertise . . .” Bank of China, N.Y. Branch v. NBM LLC,
359 F.3d 171, 181 (2d Cir. 2004) (excluding testimony of an employee assigned to investigate
defendant when the testimony reflected the employee's specialized knowledge in international
banking rather than knowledge gained in the course of his investigatory work); Teen–Ed, Inc. v.
Kimball Int’l, 620 F.2d 399, 402–03 (3d Cir. 1980) (explaining “[t]he fact that [the witness]
might have been able to qualify as an expert witness on the use of accepted accounting principles
in the calculation of business losses should not have prevented his testifying on the basis of his
knowledge of appellant’s records about how lost profits could be calculated from the data
contained therein”). The Federal Circuit, in Union Pacific Resources Co. v. Chesapeake Energy
Corp., recognized that lay opinion testimony based upon extensive experience in an industry is
admissible under Rule 701 and permitted eight witnesses with experience in the drilling industry

3
to testify based on their own personal experiences as employees of major oil drilling companies.
236 F.3d 684, 693 (Fed. Cir. 2001); see also Farner v. Paccar, Inc., 562 F.2d 518, 529 (8th Cir.
1977).
More recently, in RP1 Fuel Cell, LLC v. United States, 120 Fed. Cl. 288 (2015), the
Court ruled that the testimony of lay witnesses for companies seeking investment tax credit
grants for equipment associated with fuel cell power plants was admissible, since witnesses did
not testify outside of the range of their personal knowledge and work experience as employees
and owner of companies. RP1 Fuel Cell discusses the multitude of other cases within the Court
of Federal Claims that analyzed the same issue, including DataMill:
In Global Computer Enterprises, Inc. v. United States, a decision by the
United States Court of Federal Claims, the court discussed whether or not lay
witness opinion testimony “‘from individuals with decades of experience’”
working in information technology would be acceptable. See Global
Computer Enter., Inc. v. United States, 88 Fed. Cl. at 65. The judge concluded
that, “[a]s the Federal Circuit recognized in Union Pacific Resources Co., lay
opinion testimony based upon extensive experience in an industry is
admissible under Rule 701.” Id. at 67 (citing Union Pac. Res. Co. v.
Chesapeake Energy Corp., 236 F.3d at 693). The Global Computer
Enterprises court allowed lay opinion testimony from the experienced
professionals, noting that “[a]ll of the proffered opinions . . . are based upon
circumstances they have observed or encountered within the industry and
reflect a general knowledge of their work.” Id. In BPLW Architects &
Engineers v. United States, another judge of this court reiterated that a lay
witness can testify on his or her “perception,” as long as it is connected to
their personal knowledge. See BPLW Architects & Eng’rs, Inc. v. United
States, 106 Fed. Cl. 521, 545 (2012) (citing DataMill, Inc. v. United States,
91 Fed. Cl. at 734; and 1 McCormick on Evidence § 10 (6th ed. 2006) (“[A]
witness may testify to an event or occurrence that he has seen himself, but
not one that he knows only from the description of others.”)).
120 Fed. Cl. at 319.
Here, both parties cite RP1 Fuel Cell but disagree as to its implication. The United States
argues that lay witnesses (versus expert witnesses) are not permitted to rely on specialized
knowledge or offer testimony that touch on “specialized topics” such as “valuation, identification
of intangible assets, power purchase agreements, EPC agreements, accounting methods, and
renewable energy transactions.” (Def.’s Mot. in. Lim. at 4). In addition, the United States
distinguishes RP1 Fuel Cell from this case, noting that RPI Fuel Cell involved a post-trial
challenge to lay witness testimony, where the lay witnesses’ testimony already had been
admitted into the record at trial and opposing counsel had the opportunity to object to the live
testimony. (Def.’s Rep. at 11, citing RP1 Fuel Cell at 290–91). The Court finds that this
distinction immaterial. As Silver State correctly observes, RP1 Fuel Cell indicates that the
industry-based testimony of Plaintiff’s fact witnesses is permissible under Rule 701.
In coming to the same conclusion as RP1 Fuel Cell, the Court follows the numerous other
jurisdictions that have reached the same conclusion. See, e.g., Merritt Hawkins & Assocs., L.L.C.
v. Gresham, 861 F.3d 143 (5th Cir. 2017) (holding lower court did not abuse its discretion by
4
allowing company president to testify as lay witness regarding training expenses since training
expenses for employees was routine matter within witness's personal knowledge as company
president); Accurso v. Infra-Red Servs., Inc., 169 F. Supp. 3d 612 (E.D. Pa. 2016) (holding lay
opinion of employer’s officer regarding former employee’s damages was admissible; testimony
was based on officer’s perception, would be susceptible to cross-examination, and officer had 35
years of experience in industry); Craig Outdoor Advert., Inc. v. Viacom Outdoor, Inc., 528 F.3d
1001 (8th Cir. 2008) (holding testimony of railroad employee regarding his understanding of
relationship between railroad and its site leasing agent was relevant, and thus admissible since
employee had personal knowledge of railroad billboard industry, his testimony was helpful to
understanding of facts and issues in case, and testimony did not involve specialized scientific or
technical knowledge); United States v. Munoz-Franco, 487 F.3d 25 (1st Cir. 2007) (holding bank
officers did not testify beyond scope of personal knowledge by expressing lay opinion based on
knowledge of business operations and practices acquired during employment).

II. Legal Conclusions and Opinions, Hearsay, and Foundation

Under Rule 704, witnesses are expressly permitted to offer their opinions on ultimate
issues. However, no witness, whether a fact or expert witness, is permitted to offer his or her
own legal interpretation because it usurps the province of the Court to determine the law. See
Burkhart v. Washington Metro. Area Transit Auth., 112 F.3d 1207, 1212 (D.C. Cir. 1997)
(“Expert testimony that consists of legal conclusions cannot properly assist the trier of fact in
either respect, and thus it is not ‘otherwise admissible.’” (internal citation omitted)); Sparton
Corp. v. United States, 77 Fed. Cl. 1, 6 (2007) (“Plaintiff is not entitled to present its legal
arguments from the witness stand in the guise of expert testimony and the weight of authority
recommends exclusion of the testimony under these circumstances.”). Matters of law are
ultimately reserved for the Court. As such, any statement purporting to explain, analyze, or
decide legal concepts, which are matters for the Court to decide, must be excluded.

Hearsay, which “is a statement, other than one made by the declarant while testifying at
the trial or hearing, offered in evidence to prove the truth of the matter asserted,” Fed. R. Evid.
801(c), is not admissible unless an exception applies. Fed. R. Evid. 802; see also Fed. R. Evid.
803-804 (enumerating hearsay exceptions). Ultimately, statements not based upon a declarant’s
personal knowledge or contain hearsay are not admissible. See, e.g., Vesom v. Atchison Hosp.
Ass’n, 279 Fed. App’x 624, 632-34 (10th Cir. 2008) (affirming the district court’s determination
to strike two affidavits because they were not based upon personal knowledge, contained
inadmissible hearsay, or consisted of conclusory statements); Amie v. El Paso Indep. Sch. Dist.,
253 Fed. App’x 447, 452 (5th Cir. 2007) (determining that the district court did not abuse its
discretion by striking an individual’s affidavit that contained “no factual support for her personal
knowledge”); cf. Ryco Constr., Inc. v. United States, 55 Fed. Cl. 184, 196 (2002) (striking
portions of a declaration that contained legal conclusions but declining to strike portions
pertaining to factual issues where the declarant had participated in discussions and made
statements based upon personal knowledge). The Court will not consider statements based on
hearsay unless it is readily apparent that an exception applies.

For testimony to be admissible, proper foundation must be laid as to the witness’s
personal knowledge, observations, and experience. Pursuant to Rule 602, a witness may testify to

5
a matter only if evidence is introduced sufficient to support a finding that the witness has
personal knowledge of the matter. Evidence to prove personal knowledge may consist of the
witness's own testimony. Fed. R. Evid. 602. The Court will not consider statements which lack a
factual foundation.

III. Rulings

1. Roger Bredder

Roger Bredder has been employed at First Solar, Inc. (“First Solar”) since April 2011.
(Pl.’s Resp. Summ. J., Ex. A at 41). Bredder’s current title is Director, Business Origination
Eastern United States; during the relevant time period for the Silver State Solar Power South
(“SSSPS”) project, Bredder was Director, N.A. Business Development. (Id.). Responsibilities of
that position include client coverage and sales, selling solar modules, buying and selling
development assets, and selling EPC services. (Id.).

Statement Objection Ruling Rationale
“SSSPS was not engaged Expert Opinion; Overruled. As to whether this
in any business activities Legal Conclusion statement qualifies as an
when we sold all of the expert opinion, this
membership interests in statement was made by an
SSSPS to NextEra in May employee based on
2014.” (Id. at 48). perceptions during their
course of business. Since
employee had personal
knowledge of this
industry, their statement is
helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge. As
to whether this qualifies as
a legal conclusion, the
Court finds that this
statement is based on the
declarant’s opinion
developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts.

“There was no way Foundation Overruled. As to the adequacy of
NextEra would have paid foundation prior to this

6
hundreds of millions of statement, the Court finds
dollars to First Solar unless that proper foundation has
and until they got been laid as to Declarant’s
appropriate value in return role in the subject
. . ..” (Id. at 53). transaction or industry
allowing this statement to
be admissible.

“. . . the project company Legal Conclusion; Overruled. As to whether this
was not engaged in any Expert Opinion. statement qualifies as an
business activities.” . . . “A expert opinion, this
business did not exist.” (Id. statement was made by an
at 54). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this
industry, their statement is
helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge. As
to whether this qualifies as
a legal conclusion, the
Court finds that this
statement is based on the
declarant’s opinion
developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts.

“Plaintiff’s counsel has Legal Opinion, Overruled. This statement was made
asked me to respond to the Expert Opinion by an employee based on
question whether the perceptions from their
purchase price for the course of business. Since
project assets transferred employee had personal
under the MIPSA was knowledge of this
intentionally set at cost so industry, their statement is
that any excess value in helpful to clear
those assets was paid understanding of facts and
under the EPC Agreement. issues presented in case
The answer is no. As far as and does not involve

7
I know, the MIPSA specialized scientific or
purchase price was always technical knowledge. As
going to be set as a to whether this qualifies as
reimbursement of our a legal conclusion, the
development costs. This Court finds that this
had been industry practice statement is based on the
for many years.” (Id.). declarant’s opinion
developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts. However,
the Court also finds that
this statement requires an
assessment of credibility
of the declarant. Thus,
while otherwise
admissible, the Court will
not consider its substance
for purposes of summary
judgment.

“I would add that it was Expert Opinion, Overruled. As to whether this
very important, perhaps Foundation statement qualifies as an
more so for NextEra, that expert opinion, this
the two agreements reflect statement was made by an
payment for the specific employee based on
items being delivered and perceptions during their
for the specific obligations course of business. Since
being assumed.” (Id. at employee had personal
55). knowledge of this
industry, their statement is
helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge. As
to the adequacy of
foundation prior to this
statement, the Court finds
that proper foundation has
been laid as to Declarant’s
role in the subject
transaction or industry
allowing this statement to

8
 be admissible. However,
the Court also finds that
this statement requires an
assessment of credibility
of the declarant. Thus,
while otherwise
admissible, the Court will
not consider its substance
for purposes of summary
judgment.

“The buyer, on the other Expert Opinion, Overruled. As to whether this
hand, would have a Foundation statement qualifies as an
different view. They would expert opinion, this
not be so much concerned statement was made by an
about our costs, but employee based on
making sure that what they perceptions during their
were paying for, when course of business. Since
they were actually paying employee had personal
for it, had the value to knowledge of this
them that was being industry, their statement is
reflected in those helpful to clear
schedules. From NextEra's understanding of facts and
standpoint, they did not issues presented in case
want to pay too much, too and does not involve
soon and be exposed if specialized scientific or
there was a default on the technical knowledge. As
contract.” (Id. at 58–59). to the adequacy of
foundation prior to this
statement, the Court finds
that proper foundation has
been laid as to Declarant’s
role in the subject
transaction or industry
allowing this statement to
be admissible.

“In my experience, the Expert Opinion; Overruled. As to whether this
model was standard for a Foundation 2 statement qualifies as an
self-developed project like expert opinion, this
Silver State South – it is statement was made by an
standard for First Solar and employee based on

2
This statement is listed twice in Defendant’s objections. Because it appears to be a scrivener’s
error, the Court will address it once.
9
also in the industry.” (Id. perceptions during their
at 60). course of business. Since
employee had personal
knowledge of this
industry, their statement is
helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge. As
to the adequacy of
foundation prior to this
statement, the Court finds
that proper foundation has
been laid as to Declarant’s
role in the subject
transaction or industry
allowing this statement to
be admissible.

“In the [Investment Tax Expert Opinion Overruled. This statement was made
Credit] space, my by an employee based on
understanding is the perceptions during their
treatment of a project course of business based
specific [Power Purchase on their personal
Agreement] was fairly understanding. Since
understood and settled.” employee had personal
(Id. at 61). knowledge of this
industry, their statement is
helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge.

“I do not agree with the Expert Opinion Overruled. As to whether this
suggestion that a PPA has statement qualifies as an
separate value apart from expert opinion, this
the power plant.” (Id. at statement was made by an
63). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this

10
 industry, their statement is
helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge.
Further, the Court finds
that because this statement
is applicable to the subject
transaction as opposed to
the industry, it will
therefore be considered in
that narrow sense.

“So I would not view the Expert Opinion Sustained. As to whether this
PPA as having any statement qualifies as an
material value when we expert opinion, this
closed the sale of the statement describes
project.” (Id. at 64). “material value” and
therefore involves
specialized scientific or
technical knowledge
which must be testified to
by an expert witness.

2. Max Gardner

Max Gardner was employed at First Solar from 2010 through April 3, 2020 and involved
in the negotiations and transactions with NextEra regarding Silver State. (Pl.’s Resp. Summ. J.,
Ex. B at 1–2). Most recently, Gardner’s title was Vice President of Financial Planning and
Corporate Development, but Gardner was previously Manager of Project Finance, Director of
Project Finance, and Vice President of Americas, Project Finance. (Id.).

Statement Objection Ruling Rationale
“NextEra’s goal was to Foundation Sustained. As to the adequacy of
achieve the lowest possible foundation prior to this
prices under the MIPSA statement, the Court finds
and the EPC Agreement that an adequate foundation
and to shift risk under has not been laid allowing
those contracts to First this statement to be
Solar.” (Id. at 7). admissible. This declarant
cannot testify to the goals
or thoughts of a company
he was not employed by.

11
“The EPC Agreement is a Legal Conclusion Sustained. As to whether this qualifies
mixed supply and services as a legal conclusion, the
contract.” (Id. at 9). Court finds that this
statement, insomuch as it
classifies types of
contracts, purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence.

“There is nothing Legal Conclusion, Sustained. As to whether this qualifies
extraordinary about this Expert Opinion as a legal conclusion, the
provision in the MIPSA . . . Court finds that this
The EPC Agreement was statement, insomuch as it
in fact signed on the classifies whether the
closing date but this does MIPSA and EPC
not mean that the MIPSA Agreement were part of a
and the EPC Agreement single transaction, purports
were part of a single to explain, analyze, or
transaction.” (Id. at 10). decide legal concepts
which must be determined
by the Court after
consideration of all facts
and evidence.

“That is, no party other Expert Opinion Sustained. As to whether this
than First Solar could have statement qualifies as an
taken on the scope, risk, expert opinion, this
and timing elements of the statement involves
EPC Agreement.” (Id. at specialized scientific or
11). technical knowledge which
must be testified to by an
expert witness.

“The fact that the MIPSA Expert Opinion; Sustained. As to whether this qualifies
included adjustment Legal Conclusion as a legal conclusion, the
information relevant to the Court finds that this
EPC Price does not, in my statement purports to
view, make the two explain, analyze, or decide
separate agreements a legal concepts which must
single transaction.” (Id. at be determined by the Court
12). after consideration of all
facts and evidence.
Specifically, whether the

12
 MIPSA and EPC
Agreement were a part of a
single transaction is an
issue that must be decided
by the Court.
“The MIPSA and the EPC Legal Conclusion Sustained. As to whether this qualifies
Agreement were separate as a legal conclusion, the
contracts that had separate Court finds that this
purposes and timing.” (Id.). statement purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence.
Specifically, whether the
MIPSA and EPC
Agreement were a part of a
single transaction is an
issue that must be decided
by the Court.

“A Project Model is a Expert Opinion Overruled. As to whether this
common tool in the solar statement qualifies as an
industry that is used to expert opinion, this
objectively adjust the EPC statement was made by an
Price after the parties have employee based on
reached agreement on the perceptions during their
EPC Price and the return course of business. Since
(“internal rate of return” or employee had personal
“IRR”) required by the knowledge of this industry,
purchaser of the solar their statement is helpful to
project.” (Id. at 14). clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“The acquisition was Legal Conclusion Sustained. As to whether this qualifies
exempted, however, as a legal conclusion, the
because substantially all of Court finds that this
the assets held by SSSPS at statement attempts to apply
the closing date and that or explain federal
were being acquired were regulations and purports to
exempt ‘unproductive real explain, analyze, or decide
property’ pursuant to 16 legal concepts which must
C.F.R. § 802.2(c).” (Id. at be determined by the Court

13
18). after consideration of all
facts and evidence.

“The only amount that Expert Opinion Overruled. As to whether this
NextEra paid on account of statement qualifies as an
the PPA was the $84,857 expert opinion, this
amount allocated to the statement was made by an
PPA in Exhibit T to the employee based on
MIPSA.” (Id. at 20). perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“NextEra paid only Expert Opinion Overruled. As to whether this
$84,857 on account of the statement qualifies as an
PPA under the MIPSA, expert opinion, this
which was the agreed-upon statement was made by an
cost that the parties employee based on
allocated to the PPA under perceptions during their
Exhibit T to the MIPSA.” course of business. Since
(Id. at 28). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“First Solar did not view Expert Opinion Overruled. As to whether this
the PPA as an ‘above statement qualifies as an
market’ contract.” (Id. at expert opinion, this
29). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts

14
 and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“As I testified in my Expert Opinion; Overruled. As to whether this
deposition, the Legal Conclusion statement qualifies as an
interconnection agreement expert opinion, this
was not a source of statement was made by an
revenue for the project. It employee based on
represented an ongoing perceptions during their
liability to the ultimate course of business. Since
project owner (here, employee had personal
NextEra).” (Id. at 32). knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“The LGIA for Silver State Foundation; Expert Overruled. As to the adequacy of
South had similar terms as Opinion; Legal foundation prior to this
other interconnection Conclusion statement, the Court finds
agreements entered into by that proper foundation has
First Solar and other been laid as to Declarant’s
developers during this role in the subject
period.” (Id.). transaction or industry
allowing this statement to
be admissible. As to
whether this statement
qualifies as an expert
opinion, this statement was
made by an employee
based on perceptions
during their course of
business. Since employee

15
 had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

3. Jaime Scarff

Jaime Scarff has been employed at NextEra Energy Resources, LLC, and its predecessor,
FPL Group (“NextEra”). (Pl.’s Resp. Summ. J., Ex. C at 276). Scarff is currently Director of
Development—Mergers and Acquisitions Distributed Generation. (Id.). At the time of the Silver
State Project, Scarff was Project Director, Business Development. (Id. at 277).

Statement Objection Ruling Rationale
“The MIPSA and the EPC Foundation; Expert Overruled. As to the adequacy of
Agreement were separately Opinion; Legal foundation prior to this
negotiated and had separate Conclusion statement, the Court finds
terms and conditions. They that proper foundation has
were not intended to and been laid as to Declarant’s
did not represent one role in the subject
project sale transaction, as transaction or industry
I understand the Defendant allowing this statement to
is arguing. The two be admissible. As to
agreements represent two whether this statement
market contracts. They are qualifies as an expert
the same types of opinion, this statement was
agreements used in other made by an employee
acquisitions undertaken by based on perceptions
NextEra and that are during their course of
common in wind and solar business. Since employee
transactions.” (Id. at 280). had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and

16
 issues presented in case
and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“There was nothing unique Expert Opinion Overruled. As to whether this
about this adjustment.” (Id. statement qualifies as an
at 281). expert opinion, this
statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“The MIPSA purchase Legal Conclusion Overruled in As to whether this qualifies
price and the EPC price part and as a legal conclusion, the
were separately negotiated sustained in Court finds that the first
and represented separate part. sentence is based on the
pricing. The parties declarant’s opinion
intended that the prices developed through the
under the two contracts be regular course of business
separately determined and and does not purport to
there was no total pricing explain, analyze, or decide
or combined pricing.” (Id.). legal concepts. However,
the Court finds that the
second sentence (“The
parties intended that the
prices under the two
contracts be separately
determined and there was

17
 no total pricing or
combined pricing”)
purports to explain,
analyze, or decide legal
concepts which must be
determined by the Court
after consideration of all
facts and evidence.

“The Financial Model was Expert Opinion Overruled. As to whether this
typical for solar energy statement qualifies as an
projects like Silver State expert opinion, this
South. There was nothing statement was made by an
unique about the Financial employee based on
Model that we used for perceptions during their
Silver State South.” (Id. at course of business. Since
282). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“It is typical in transactions Expert Opinion Overruled. As to whether this
like Silver State South . . .” statement qualifies as an
(Id. at 283). expert opinion, this
statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“I have been advised by Foundation; Expert Overruled. As to the adequacy of
Plaintiff's counsel that the Opinion; Legal foundation prior to this
Defendant has asserted that Conclusion statement, the Court finds
the EPC price was that proper foundation has
determined using the been laid as to Declarant’s

18
Financial Model. That was role in the subject
not the case. The EPC transaction or industry
price was separately and allowing this statement to
independently negotiated be admissible. As to
by our E&C group, namely whether this statement
Mr. Brannen, and then qualifies as an expert
presented to First Solar as opinion, this statement was
our offer for their EPC made by an employee
work. The EPC price was a based on perceptions
negotiated number between during their course of
the parties. Once the business. Since employee
parties agreed to an EPC had personal knowledge of
price, the Financial Model this industry, their
was used to capture statement is helpful to clear
assumptions underlying the understanding of facts and
EPC price, and make issues presented in case
adjustments to the EPC and does not involve
price as we completed our specialized scientific or
diligence and made technical knowledge. As to
changes to the facility's whether this qualifies as a
design, output and legal conclusion, the Court
underlying assumptions. In finds that this statement is
general, the adjustments based on the declarant’s
under the Financial Model opinion developed through
caused a reduction in the the regular course of
EPC price. I would add business and does not
that from NextEra's purport to explain, analyze,
perspective, we were or decide legal concepts.
interested in only one
number in the Financial
Model - the single cell that
included the adjusted EPC
price which was the
amount we would have to
pay to First Solar to build
the power plant. For the
avoidance of doubt, the
Financial Model was not
used to determine the EPC
price as a function of a rate
of return, but limited to
determining EPC price
adjustments as described
above. We had our own
internal model that
calculated NextEra's return

19
 information and was more
relevant for our purposes
than First Solar's Financial
Model.” (Id. at 283–84).

“I also have been advised Expert Opinion Overruled in As to whether this
that the Defendant has part and statement qualifies as an
asserted that the Financial sustained in expert opinion, this
Model reflected Silver part. statement was made by an
State South's "use of both employee based on
tangible and intangible perceptions during their
assets." I am not sure what course of business. Since
that even means. If the employee had personal
suggestion is that the knowledge of this industry,
Financial Model included their statement is helpful to
revenues for power sold clear understanding of facts
under the PPA, every and issues presented in
financial model in the case and does not involve
industry includes this same specialized scientific or
information. The Financial technical knowledge.
Model related to the power However, the portion
plant that was to be built at stating, “every financial
Silver State South and the model in the industry
return generated by that includes this same
plant. The purpose of the information,” involves
Financial Model was not to specialized scientific or
value the PPA or to reflect technical knowledge which
the “use” of the PPA.” must be testified to by an
(Id.). expert witness. As such,
that portion will not be
considered by the Court.

4. Gregory Schneck

Gregory Schneck has been employed by NextEra since 1998. (Pl.’s Resp. Summ. J., Ex.
C at 587). Schneck’s current title is Vice President, Business Development Services; during the
relevant transaction, Schneck was Vice President, Business Development, with responsibilities
focused on developing solar energy properties. (Id. at 588).

Statement Objection Ruling Rationale
“There was nothing Expert Opinion Overruled. As to whether this
uncommon from my statement qualifies as an
perspective about the expert opinion, this
MIPSA and the EPC statement was made by an
Agreement with respect to employee based on
Silver State South.” (Id. at perceptions during their

20
591). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“I understand from Expert Opinion. Overruled. As to whether this
Plaintiff’s counsel that the statement qualifies as an
Defendant has asserted that expert opinion, this
the MIPSA and the EPC statement was made by an
Agreement for Silver State employee based on
South were really one perceptions during their
transaction that transferred course of business. Since
the Silver State South employee had personal
project to NextEra. I knowledge of this industry,
disagree with that their statement is helpful to
characterization. I clear understanding of facts
considered them to be two and issues presented in
separate transactions for a case and does not involve
number of reasons.” (Id. at specialized scientific or
592). technical knowledge.
Based on the
inapplicability of the
specific objection, the
statement is admissible.
This ruling does not
preclude objections made
during the pendency of
trial.

“The MIPSA is a common Expert Opinion Overruled. As to whether this
transaction and the terms statement qualifies as an
of the MIPSA transaction expert opinion, this
in the case of Silver State statement was made by an
South were consistent with employee based on
other project acquisitions perceptions during their
by NextEra- whether course of business. Since
NextEra also hired the employee had personal
seller of the project as its knowledge of this industry,
EPC contractor (as was the their statement is helpful to
case with Silver State clear understanding of facts
South) or not.” (Id. at 593). and issues presented in

21
 case and does not involve
specialized scientific or
technical knowledge.

“The reimbursement Expert Opinion Overruled. As to whether this
method used in the MIPSA statement qualifies as an
for Silver State South was expert opinion, this
similar to other project sale statement was made by an
transactions that I have employee based on
worked on. This method perceptions during their
was common.” (Id. at 594). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“I understand that the Expert Opinion Overruled. As to whether this
Defendant has pointed to statement qualifies as an
the Project Financial expert opinion, this
Model used to set the EPC statement was made by an
Price as evidence that the employee based on
MIPSA and EPC perceptions during their
Agreement represented course of business. Since
one, combined purchase employee had personal
price for the project. I do knowledge of this industry,
not agree that the Project their statement is helpful to
Financial Model had this clear understanding of facts
significance.” (Id. at 595). and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“I also understand that the Legal Conclusion Overruled. As to whether this qualifies
Defendant has asserted that as a legal conclusion, the
the Renewable Power Court finds that this
Purchase and Sale statement is based on the
Agreement (“PPA”) declarant’s opinion
between Southern developed through the
California Edison regular course of business
Company (“SCE”) and the and does not purport to
project company should be explain, analyze, or decide
treated as a separate legal concepts. Based on

22
intangible asset and that the inapplicability of the
additional value should be specific objection, the
assigned to it over and statement is admissible.
above that assigned to it in This ruling does not
the MIPSA. I disagree with preclude objections made
the Defendant’s assertion during the pendency of
for multiple reasons.” (Id. trial.
at 596).

“In my experience, buyers Expert Opinion Overruled. As to whether this
would pay what we paid statement qualifies as an
for the bundle of safe expert opinion, this
harbor modules, contracts, statement was made by an
and permits that was employee based on
transferred under the perceptions during their
MIPSA.” (Id. at 597). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“I disagree with this Expert Opinion Overruled. As to whether this
assertion.” (Id.). statement qualifies as an
expert opinion, this
statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“All projects have risks, Expert Opinion Overruled. As to whether this
but Silver State South was statement qualifies as an
more complicated than expert opinion, this
most projects.” (Id. at 598). statement was made by an
employee based on

23
 perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“In order to mitigate this Foundation Overruled. As to the adequacy of
risk, NextEra attempted to foundation prior to this
shift the Section 1603 risk statement, the Court finds
to First Solar, as the that proper foundation has
developer of the project. been laid as to Declarant’s
The Section 1603 risk was role in the subject
similar to other risks transaction or industry
associated with the Silver allowing this statement to
State South project that the be admissible.
parties negotiated and
allocated between the
owner and the
developer/contractor. In
this circumstance, First
Solar agreed to accept a
portion of the risk related
to the Section 1603 grant –
up to a $100 million cap –
in the form of an
indemnity. NextEra
remained at risk for the
remaining amounts of the
grant for the project.” (Id.
at 603).

“Tax indemnities are Expert Opinion Overruled. As to whether this
typical in the renewable statement qualifies as an
energy industry. The risk expert opinion, this
allocation that the parties statement was made by an
agreed upon in the Silver employee based on
State South deal was not perceptions during their
uncommon.” (Id.). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to

24
 clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.
5. Garth Henderson

Garth Henderson has been employed as an accountant for NextEra since June of 2002.
(Pl.’s Resp. Summ. J., Ex. B at 62).

Statement Objection Ruling Rationale
“NextEra’s financial Expert Opinion; Overruled. As to whether this
accounting books and Foundation statement qualifies as an
records show that there is expert opinion, this
not an excess of total statement was made by an
consideration over the employee based on
aggregate book value of perceptions during their
the tangible and intangible course of business. Since
assets purchased in employee had personal
NextEra's acquisition of knowledge of this industry,
Silver State South.” (Id. at their statement is helpful to
65) (emphasis in original). clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
the adequacy of foundation
prior to this statement, the
Court finds that proper
foundation has been laid as
to Declarant’s role in the
subject transaction or
industry allowing this
statement to be admissible.

“Applying ASC 805 and Expert Opinion Overruled. As to whether this
the principles above, I statement qualifies as an
concluded that NextEra' s expert opinion, this
purchase of Silver State statement was made by an
South was not a business employee based on
combination because Silver perceptions during their
State South was not a course of business. Since
business as of May 23, employee had personal
2014, the date that the sale knowledge of this industry,
of Silver State South their statement is helpful to
closed. Specifically, at the clear understanding of facts

25
time of its acquisition on and issues presented in
May 23, 2014, construction case and does not involve
of the Silver State South specialized scientific or
solar facility had not technical knowledge.
started; Silver State South
was not capable of
providing a return or other
economic benefits to
NextEra and would not be
capable of providing a
return or other economic
benefits until construction
of the solar facility was
completed (not for another
two years until 2016); and
neither NextEra nor any
other market participant
would be capable of
conducting or managing
the assets acquired from
First Solar as a business as
of the May 23, 2014
acquisition date. As a result
of my conclusion that
Silver State South was not
acquired as a business, the
Silver State South sale was
accounted for as an
acquisition of a bundle of
assets under ASC 805-50,
Business Combinations -
Related Issues.” (Id. at 67–
68).

“The total consideration is Expert Opinion Overruled in As to whether this
comprised of two amounts part and statement qualifies as an
. . . For GAAP accounting sustained in expert opinion, the first
purposes, contractual part. portion of the statement
liabilities are treated as part was made by an employee
of the total consideration based on perceptions
under certain during their course of
circumstances.” (Id. at 69– business. Since employee
70). had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and

26
 issues presented in case
and does not involve
specialized scientific or
technical knowledge.
However, the Court finds
that the second portion
(“For GAAP accounting
purposes, contractual
liabilities are treated as part
of the total consideration
under certain
circumstances.”) involves
specialized scientific or
technical knowledge which
must be testified to by an
expert witness. That
portion of the statement
will not be considered by
the Court.

“ . . . Those assets include Expert Opinion; Overruled. As to whether this
both the tangible and Legal Conclusion statement qualifies as an
intangible assets acquired expert opinion, this
in the acquisition but do statement was made by an
not include any goodwill or employee based on
going concern value.” (Id. perceptions during their
at 70). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“The PPA did not meet the Expert Opinion Overruled. As to whether this

27
first criterion above statement qualifies as an
because it was not expert opinion, this
separable.” (Id. at 71). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“None of the total Expert Opinion; Overruled in As to whether this
consideration was allocated Legal Conclusion part and statement qualifies as an
to goodwill or going sustained in expert opinion, this
concern value because part. statement was generally
goodwill and going made by an employee
concern value did not exist based on perceptions
in the acquisition of Silver during their course of
State South. As stated business. Since employee
above, NextEra treated the had personal knowledge of
acquisition of Silver State this industry, their
South as the acquisition of statement is helpful to clear
a bundle of assets. NextEra understanding of facts and
did not treat the acquisition issues presented in case
of Silver State South as a and does not involve
business combination specialized scientific or
involving the acquisition of technical knowledge.
a business. Therefore, there However, the portion in the
was no goodwill or going second sentence stating,
concern value recorded or “or recordable,” involves
recordable in NextEra's specialized scientific or
financial accounting books technical knowledge which
and records.” (Id. at 71– must be testified to by an
72). expert witness. As such,
that portion will not be
considered by the Court.
As to whether this qualifies
as a legal conclusion, the
Court finds that this
statement is based on the
declarant’s opinion
developed through the

28
 regular course of business
and does not purport to
explain, analyze, or decide
legal concepts.

“NextEra’s financial Expert Opinion. Overruled. As to whether this
accounting books and statement qualifies as an
records reflect a bargain expert opinion, this
purchase . . . There was no statement was made by an
goodwill or going concern employee based on
value reflected in perceptions during their
NextEra’s financial course of business. Since
accounting books or employee had personal
records.” (Id. at 72). knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Further, I am aware that Hearsay; Sustained. As to whether this
Bill Brannen, who was Foundation; Expert statement constitutes
NextEra’s lead negotiator Opinion inadmissible hearsay, the
in the EPC negotiations, Court finds that this
expressly disagreed with statement encompasses an
this statement.” (Id. at 75). out-of-court statement and
is offered to prove the truth
of the matter asserted.
Further, as to the adequacy
of foundation prior to this
statement, the Court finds
that an adequate foundation
has not been laid allowing
this statement to be
admissible.

“I have no reason to Hearsay; Expert Overruled. As to whether this
disagree with Mr. Opinion statement constitutes
Brannen’s testimony or his inadmissible hearsay, the
analysis of the EPC Court finds that this is not
Agreements for Silver offered to prove the truth
State South and McCoy of the matter asserted.
Solar.” (Id.).

6. William Brannen

29
 William Brannen recently retired from NextEra after having been employed there since
1979. (Pl.’s Resp. Summ. J., Ex. A at 1). Brannen was the lead negotiator for NextEra on the
Engineering, Procurement, and Construction Agreement (“EPC Agreement”). (Id.).

Statement Objection Ruling Rationale
“Those Assets have limited Expert Opinion Overruled. As to whether this
value without the statement qualifies as an
construction of the expert opinion, this
associated power plant.” statement was made by an
(Id. at 6). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Thus the adjustment to the Expert Opinion Overruled. As to whether this
MIPSA was consistent statement qualifies as an
with the parties’ agreement expert opinion, this
and is typical for a MIPSA statement was made by an
transaction . . . It is typical employee based on
for the mechanics of the perceptions during their
adjustment here. . ..” (Id. at course of business. Since
12). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Few, if any, were able to Expert Opinion Overruled. As to whether this
offer production guaranties statement qualifies as an
like First Solar.” (Id. at expert opinion, this
13). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal

30
 knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“The fundamental Expert Opinion Overruled. As to whether this
misconception in the statement qualifies as an
Defendant’s view is that expert opinion, this
once the development stage statement was made by an
is complete, the EPC risks employee based on
are minimal, and a project perceptions during their
necessarily will get course of business. Since
constructed. This view is a employee had personal
gross mischaracterization. knowledge of this industry,
The consequences (what their statement is helpful to
can be lost) in the clear understanding of facts
development stage are low and issues presented in
- hundreds of thousands of case and does not involve
dollars. The consequences specialized scientific or
in the EPC stage are technical knowledge.
hundreds of millions and
maybe a billion dollars.”
(Id. at 17).

“There is a well-known Expert Opinion Overruled. As to whether this
risk management concept statement qualifies as an
known as “Low expert opinion, this
Probability, High Impact” statement was made by an
or “LPHI” events that employee based on
could happen. The perceptions during their
allocation of risk course of business. Since
associated with LPHI employee had personal
events is one of the most knowledge of this industry,
critical aspects of the their statement is helpful to
negotiations with an EPC clear understanding of facts
contractor. Any one of and issues presented in
several possible case and does not involve
occurrences presented specialized scientific or
LPHI risks that could have technical knowledge.
resulted in catastrophic
cost and schedule impacts.
These LPHI events can
occur in the development

31
stage of the project, and
their impact might result in
termination of the project,
but at a point where
relatively little investment
was at risk. Once the
construction phase under
the EPC Agreement
begins, on the other hand,
high-dollar commitments
are at risk” (Id.).

“As an illustration, the Expert Opinion Overruled. As to whether this
Defendant’s focus on the statement qualifies as an
PPA as a separate asset of expert opinion, this
extraordinary value ignores statement was made by an
that the PPA cost about employee based on
$85,000 – if the project perceptions during their
does not get built, the course of business. Since
developer or owner is out employee had personal
$85,000. Compare that to knowledge of this industry,
some of the examples that I their statement is helpful to
highlighted in my clear understanding of facts
deposition where NextEra and issues presented in
ended up with a $60 case and does not involve
million loss on a solar specialized scientific or
thermal plant because of a technical knowledge.
nine-month delay in
construction. $85,000
versus $60 million brings
some focus to the realities
of development-stage risks
versus the genuine EPC-
stage risks.” (Id. at 17–18).

“In the EPC business, there Expert Opinion Sustained. As to whether this
can be big swings, statement qualifies as an
depending on what you expert opinion, this
discover, even with statement testifies to the
something that seems as EPC industry as a while
straightforward as a PV and involves specialized
solar facility.” (Id. at 20). scientific or technical
knowledge which must be
testified to by an expert
witness.

32
“Labor is a serious factor Expert Opinion Overruled. As to whether this
in the success or failure of statement qualifies as an
a project . . ..” (Id.). expert opinion, this
statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Defendant’s ‘trade or Expert Opinion; Overruled. As to whether this
business’ contention Legal Conclusion statement qualifies as an
assumes that Silver State expert opinion, this
South facility would statement was made by an
necessarily be built when employee based on
NextEra closed on the sale perceptions during their
of the project company and course of business. Since
the development assets.” employee had personal
(Id. at 20–21). knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“Moreover, ‘shovel ready’ Expert Opinion Overruled. As to whether this
does not equate with the statement qualifies as an
absence of risk. . ..” (Id. at expert opinion, this
21). statement was made by an
employee based on

33
 perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Second, the EPC Price Expert Opinion Overruled. As to whether this
had to stand on its own and statement qualifies as an
reflect standard terms and expert opinion, this
conditions and market- statement was made by an
based pricing.” (Id. at 22). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Third, the MIPSA and the Expert Opinion; Overruled. As to whether this
EPC Agreement had Legal Conclusion statement qualifies as an
independent substance . . expert opinion, this
..” (Id.). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s

34
 opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.
“Defendant appears to have Expert Opinion Overruled. As to whether this
a fundamental statement qualifies as an
misunderstanding of a expert opinion, this
fixed price EPC statement was made by an
Agreement.” (Id. at 23). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“This is a common Expert Opinion Overruled. As to whether this
construction industry statement qualifies as an
practice.” (Id. at 24). expert opinion, this
statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“ . . . This is the nature of a Expert Opinion; Overruled. As to whether this
fixed price EPC Legal Conclusion statement qualifies as an
Agreement.” (Id.) expert opinion, this
statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,

35
 their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“For this reason, the PPA Expert Opinion; Overruled. As to whether this
contract itself involves a Legal Conclusion statement qualifies as an
relatively low-risk expert opinion, this
investment.” (Id. at 26). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“It is well known in the Foundation; Expert Overruled. As to the adequacy of
industry that many of the Opinion; Hearsay foundation prior to this
projects with those statement, the Court finds
executed PPAs, at a very that proper foundation has
high percentage, failed been laid as to Declarant’s

36
with no power ever being role in the subject
generated or sold.” (Id.). transaction or industry
allowing this statement to
be admissible. As to
whether this statement
qualifies as an expert
opinion, this statement was
made by an employee
based on perceptions
during their course of
business. Since employee
had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge. As to
whether this statement
constitutes inadmissible
hearsay, the Court finds
that this statement does not
encompass an out-of-court
statement and is not
offered to prove the truth
of the matter asserted.

“The EPC Price did not Expert Opinion; Sustained. As to whether this qualifies
include any payout for the Legal Conclusion as a legal conclusion, the
PPA – either stated or Court finds that this
implied.” (Id.). statement purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence.
Whether the EPC Price
included payout for the
PPA is a determination
reserved for the Court.

“ . . . Mr. Henderson’s use Expert Opinion; Overruled. As to whether this
of the McCoy Solar project Legal Conclusion statement qualifies as an
. . . was not a valid market expert opinion, this
reference . . .” (Id. at 27). statement was made by an

37
 employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“There have been Foundation; Expert Overruled. As to the adequacy of
numerous times, in my Opinion foundation prior to this
experience, where the statement, the Court finds
accountants’ that proper foundation has
characterization of been laid as to Declarant’s
transactions is different role in the subject
than the realities of those transaction or industry
transactions.” (Id. at 28). allowing this statement to
be admissible. As to
whether this statement
qualifies as an expert
opinion, this statement was
made by an employee
based on perceptions
during their course of
business. Since employee
had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge.

38
“. . . typically there is a Expert Opinion Overruled. As to whether this
range of EPC prices.” (Id. statement qualifies as an
at 29). expert opinion, this
statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Considering this Legal Conclusion; Sustained in As to whether this
information, there is Expert Opinion part and statement qualifies as an
independent confirmation overruled in expert opinion, this
by qualified parties that the part. statement was made by an
EPC Price was a market employee based on
price for Silver State perceptions during their
South. If the EPC Price for course of business. Since
Silver State South was at employee had personal
market for the EPC knowledge of this industry,
services First Solar was their statement is helpful to
providing under the EPC clear understanding of facts
Agreement, it is not clear and issues presented in
to me how anyone could case and does not involve
contend that NextEra was specialized scientific or
paying for something else technical knowledge. As to
under that agreement, whether this qualifies as a
namely some amount for legal conclusion, the Court
an “above market” PPA finds that the first portion
that was acquired under a of this statement is based
separate contract.” (Id. at on the declarant’s opinion
30). developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts. However,
the Court finds that the
latter portion of the second
sentence (“. . . namely
some amount for an “above
market” PPA that was

39
 acquired under a separate
contract.”) purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence. This
ruling does not preclude
objections made during the
pendency of trial.

“The Cash Grant Expert Opinion; Overruled. As to whether this
Agreement in no way Legal Conclusion statement qualifies as an
reflects a view by NextEra expert opinion, this
that any part of the EPC statement was made by an
Price was a payment for employee based on
the PPA or any other perceptions during their
intangible asset.” (Id. at course of business. Since
31). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

7. Beth Deane

Beth Deane is Chief Counsel, Project Development at First Solar and provided legal
support for development of the Silver State Solar project. (Pl.’s Resp. Summ. J., Ex. A at 122).

Statement Objection Ruling Rationale
“In other words, SSS could Legal Conclusion Overruled. As to whether this qualifies
not claim to have a firm as a legal conclusion, the
and contractually- Court finds that this
recognized source of statement is based on the

40
revenue until declarant’s opinion
[(Commercial Operation developed through the
Date)] was achieved.” (Id. regular course of business
at 124). and does not purport to
explain, analyze, or decide
legal concepts.

“Notwithstanding the Legal Conclusion; Sustained. As to whether this qualifies
deadline for achieving Expert Opinion as a legal conclusion, the
COD, the PPA required Court finds that this
SSS to complete key statement purports to
development and explain, analyze, or decide
transmission-related legal concepts which must
activities well in advance be determined by the Court
of the COD deadline . . ..” after consideration of all
(Id.). facts and evidence. This
statement ultimately
describes a document that
speaks for itself. Contract
interpretation is left to the
discretion of the Court.

“Notwithstanding the COD Legal Conclusion Sustained. As to whether this qualifies
deadline in the PPA, under as a legal conclusion, the
Section 2.04(c)(v) of the Court finds that this
PPA, SCE’s ‘Procurement statement purports to
Group’ had the right to explain, analyze, or decide
terminate the PPA if the SS legal concepts which must
project was not energized be determined by the Court
by December 31, 2016.” after consideration of all
(Id.). facts and evidence. This
statement ultimately
describes a document that
speaks for itself. Contract
interpretation is left to the
discretion of the Court.

“The rights of SCE’s Legal Conclusion Sustained. As to whether this qualifies
Procurement Group to as a legal conclusion, the
terminate the PPA were not Court finds that this
affected by the obligations statement purports to
of SCE’s Transmission explain, analyze, or decide
group to deliver legal concepts which must
transmission upgrades . . be determined by the Court
..” (Id.). after consideration of all
facts and evidence. This

41
 statement ultimately
describes a document that
speaks for itself. Contract
interpretation is left to the
discretion of the Court.
“. . . SCE’s Transmission Expert Opinion; Sustained. As to whether this qualifies
Group was only required to Legal Conclusion as a legal conclusion, the
use ‘reasonable efforts’ to Court finds that this
meet those deadlines; there statement purports to
was no impact on SCE if explain, analyze, or decide
the deadlines were missed legal concepts which must
and no remedies for SSS if be determined by the Court
SCE’s Transmission group after consideration of all
failed to deliver the facts and evidence. This
upgrades consistent with statement ultimately
the estimated describes a document that
interconnection schedule.” speaks for itself. Contract
(Id. at 125). interpretation is left to the
discretion of the Court.

“To be transformed into Legal Conclusion; Overruled. As to whether this qualifies
actual revenue, various Expert Opinion as a legal conclusion, the
risks that SSS did not Court finds that this
control and that could have statement is based on the
resulted in termination of declarant’s opinion
the PPA, had to be developed through the
eliminated. Only then regular course of business
could SS become a revenue and does not purport to
generating business.” (Id.). explain, analyze, or decide
legal concepts. As to
whether this statement
qualifies as an expert
opinion, this statement was
made by an employee
based on perceptions
during their course of
business. Since employee
had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge.

42
“In addition to fundamental Legal Conclusion; Sustained. As to whether this qualifies
conditions, such as having Expert Opinion as a legal conclusion, the
transmission facilities built Court finds that this
to allow the plant to be statement purports to
energized, the PPA also explain, analyze, or decide
required the following legal concepts which must
conditions be met to be determined by the Court
achieve COD . . ..” (Id. at after consideration of all
126). facts and evidence. This
statement ultimately
describes a document that
speaks for itself. Contract
interpretation is left to the
discretion of the Court.

“Beyond the requirements Expert Opinion; Sustained. As to whether this qualifies
to achieve COD, the PPA Foundation; Legal as a legal conclusion, the
imposed other conditions Conclusion Court finds that this
on SSS before SSS could statement purports to
become a revenue explain, analyze, or decide
generating business. Most legal concepts which must
notably, to lawfully make a be determined by the Court
sale of energy at the after consideration of all
negotiated price set forth in facts and evidence. This
the PPA, SSS had to obtain statement ultimately
approval from the [FERC] . describes a document that
. . Any failure by SSS to speaks for itself. Contract
comply with this obligation interpretation is left to the
was an event of default discretion of the Court.
under Section 6.01(c)(vii)
of the PPA.” (Id.).

“In addition, there were Legal Conclusion Overruled in As to whether this qualifies
other potential hurdles that part and as a legal conclusion, the
had to be overcome before sustained in Court finds that the first
SSS could become a part. statement statement is
revenue generating based on the declarant’s
business . . .. In other opinion developed through
words, the business of the regular course of
selling power under the business and does not
SCE PPA did not become purport to explain, analyze,
viable for SSS until it or decide legal concepts.
obtained FERC’s approval However, the Court finds
to sell power at ‘market- that the second statement
based’ rates, as reflected by (“In other words, the
the negotiated PPA rate.” business of selling power

43
(Id. at 127). under the SCE PPA did not
become viable for SSS
until it obtained FERC’s
approval to sell power at
‘market-based’ rates, as
reflected by the negotiated
PPA rate.”) purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence.

“Finally, with respect to Expert Opinion; Overruled. As to whether this
evaluating the value of the Legal Conclusion statement qualifies as an
PPA, it is important to expert opinion, this
understand that PPAs are statement was made by an
typically specific to the employee based on
project site and electric perceptions during their
generating facility course of business. Since
described in detail in the employee had personal
PPA.” (Id. at 128). knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“That meant that the SSS Expert Opinion; Sustained. As to whether this qualifies
PPA, like other SCE PPAs Legal Conclusion as a legal conclusion, the
could not be transferred to Court finds that this
another site or project or statement purports to
sold to an entity that did explain, analyze, or decide
not control the SSS site or legal concepts which must
project . . .. [T]he PPA be determined by the Court
would be have been after consideration of all

44
 worthless.” (Id.). facts and evidence. This
statement ultimately
describes a document that
speaks for itself. Contract
interpretation is left to the
discretion of the Court.

“Moreover, First Solar Expert Opinion; Overruled. As to whether this
tested the provision in a Foundation statement qualifies as an
typical SCE PPA that expert opinion, this
restricts sellers from statement was made by an
changing sites. In employee based on
particular, First Solar had a perceptions during their
favorable PPA for a site course of business. Since
located on land to be leased employee had personal
from a tribe in the knowledge of this industry,
Southwestern United their statement is helpful to
States. It turned out that the clear understanding of facts
land was not suitable for and issues presented in
construction of the project, case and does not involve
due to hydrology and other specialized scientific or
issues. In an effort to technical knowledge. As to
preserve the PPA, First the adequacy of foundation
Solar tried to move the prior to this statement, the
project to an adjacent area Court finds that proper
within the tribe's foundation has been laid as
reservation, but was not to Declarant’s role in the
successful in convincing subject transaction or
SCE to change the site. industry allowing this
First Solar allowed the statement to be admissible.
PPA to be terminated
because the site could not
be changed to make the
project viable.” (Id.).

8. Steven Robertson

Steven Robertson was employed at First Solar, having previously served as Tax Manager,
Tax Director, and interim head of tax in the tax department before becoming Vice President,
Tax. (Pl.’s Resp. Summ. J., Ex. C at 1). During Robertson’s tenure, Robertson’s responsibilities
included aspects of tax compliance and tax accounting. (Id.).

Statement Objection Ruling Rationale
“Parties responding to the Hearsay; Legal Overruled. As to whether this
Section 1603 grant Conclusion statement constitutes
program were uncertain inadmissible hearsay, the

45
regarding the IRS’s and Court finds that this
Treasury’s intentions of the statement does not
tax treatment of PPAs.” encompass an out-of-court
(Id. at 4). statement and is not
offered to prove the truth
of the matter asserted. As
to whether this qualifies as
a legal conclusion, the
Court finds that this
statement is based on the
declarant’s opinion
developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts.

“I did not view the Expert Opinion Overruled. As to whether this
proposed Silver State statement qualifies as an
South transactions to expert opinion, this
involve the same fact statement was made by an
pattern as the projects that employee based on
had prompted NextEra’s perceptions during their
concerns.” (Id.). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“First Solar was compelled Expert Opinion; Overruled. As to whether this
by Treasury to follow this Hearsay statement qualifies as an
approach because of the expert opinion, this
positions Treasury was statement was made by an
taking in this time period – employee based on
whether First Solar agreed perceptions during their
with those positions or not. course of business. Since
Although First Solar was employee had personal
disappointed with this knowledge of this industry,
result, I believe that First their statement is helpful to
Solar had done exactly clear understanding of facts
what we were and issues presented in
recommended to do by Ms. case and does not involve

46
Neubauer.” (Id. at 6). specialized scientific or
technical knowledge. As to
whether this statement
constitutes inadmissible
hearsay, the Court finds
that this statement does not
encompass an out-of-court
statement and is not
offered to prove the truth
of the matter asserted.

“As my March 21, 2014 Expert Opinion; Overruled. As to whether this
report to Mr. Widmar . . . Legal Conclusion statement qualifies as an
indicates, KPMG’s expert opinion, this
conclusion regarding the statement was made by an
expected cost basis to employee based on
calculate the Section 1603 perceptions during their
grant for Silver State South course of business. Since
came within the guidelines employee had personal
that other tax practitioners knowledge of this industry,
were seeing approved by their statement is helpful to
the Treasury.” (Id.). clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“To my knowledge, no one Foundation Overruled. As to the adequacy of
at First Solar ever took the foundation prior to this
position or came to the statement, the Court finds
conclusion that the Silver that proper foundation has
State South PPA been laid as to Declarant’s
represented a separate role in the subject
intangible asset as a matter transaction or industry
of tax law.” (Id. at 6–7). allowing this statement to
be admissible.

47
“It was my understanding, Legal Conclusion Overruled. As to whether this qualifies
the PPA was a market PPA as a legal conclusion, the
when it was executed, and Court finds that this
the pricing under the PPA statement is based on the
was fixed. . . I did not declarant’s opinion
agree with the suggestion developed through the
that lowering construction regular course of business
costs equates with and does not purport to
intangible asset value explain, analyze, or decide
attributable to a fixed-price legal concepts.
PPA.” (Id. at 7).

“During my time at First Legal Conclusion; Sustained. As to whether this qualifies
Solar, its position, in Expert Opinion as a legal conclusion, the
general, was that Internal Court finds that this
Revenue Code Section statement purports to
1060 did not apply to the explain, analyze, or decide
sale by First Solar of legal concepts which must
projects such as Silver be determined by the Court
State South that had not after consideration of all
started construction. facts and evidence. The
Section 1060 applies only application of IRC 1060
to an “applicable asset and applicable asset
acquisition,” which is acquisition must be
defined as an acquisition of determined by the Court.
a group of assets that
constitutes a trade or
business. A project like
Silver State South that has
not started construction is
not a trade or business.”
(Id.).

“I understand from Foundation; Overruled. As to the adequacy of
Plaintiff's counsel that the Hearsay; Legal foundation prior to this
Defendant continues to rely Conclusion statement, the Court finds
upon certain statements in that proper foundation has
the KPMG report as been laid as to Declarant’s
evidence that First Solar role in the subject
determined Section 1060 transaction or industry
applies to the Silver State allowing this statement to
South transactions with be admissible. As to
NextEra.” (Id.). whether this statement
constitutes inadmissible
hearsay, the Court finds
that this statement does not

48
 encompass an out-of-court
statement and is not
offered to prove the truth
of the matter asserted. As
to whether this qualifies as
a legal conclusion, the
Court finds that this
statement is based on the
declarant’s opinion
developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts.

“From my perspective I Expert Opinion; Overruled. As to whether this
wasn’t engaging KPMG to Legal Conclusion statement qualifies as an
prepare a Section 1060 expert opinion, this
analysis. Ms. Neubauer statement was made by an
never mentioned Section employee based on
1060 in her correspondence perceptions during their
with Mr. Nelson, and my course of business. Since
view and Mr. Nelson’s employee had personal
view was very clear that knowledge of this industry,
Section 1060 could not their statement is helpful to
apply to the Silver State clear understanding of facts
South transaction or similar and issues presented in
transactions.” (Id. at 8). case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.
Based on the
inapplicability of the
specific objections, the
statement is admissible.
This ruling does not
preclude objections made
during the pendency of

49
 trial.

“As I discussed in my Hearsay; Legal Overruled. As to whether this
deposition, I advised Conclusion statement constitutes
KPMG upfront that I did inadmissible hearsay, the
not believe Section 1060 Court finds that this
applied because Silver statement does not
State South did not involve encompass an out-of-court
the sale of a trade or statement and is not
business.” (Id.). offered to prove the truth
of the matter asserted. As
to whether this qualifies as
a legal conclusion, the
Court finds that this
statement is based on the
declarant’s opinion
developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts. Based on
the inapplicability of the
specific objections, the
statement is admissible.
This ruling does not
preclude objections made
during the pendency of
trial.

“Among other things, I Expert Opinion; Overruled. As to whether this
noted that IRC Section Legal Conclusion statement qualifies as an
1060 did not apply to the expert opinion, this
sale of the Silver State statement was made by an
South project to NextEra . . employee based on
..” (Id.). perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court

50
 finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

9. Michael O’Sullivan

Michael O’Sullivan recently retired from NextEra after having been Senior Vice
President of Development. (Pl.’s Resp. Summ. J., Ex. B at 151).

Statement Objection Ruling Rationale
“Question: What did Foundation; Expert Overruled. As to the adequacy of
Energy Resources pay for Opinion foundation prior to this
the Silver State South statement, the Court finds
project company and the that proper foundation has
project assets held by the been laid as to Declarant’s
project company? role in the subject
transaction or industry
Answer: Energy allowing this statement to
Resources 3 paid be admissible. As to
approximately $92 million. whether this statement
This payment represented qualifies as an expert
an amount roughly equal to opinion, this statement was
costs and expenses made by an employee
previously paid by First based on perceptions
Solar to develop the project during their course of
through the closing date.” business. Since employee
(Id. at 153). had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge.

“Question: When Energy Expert Opinion; Overruled. As to whether this
Resources acquired Silver Legal Conclusion statement qualifies as an
State South, was the expert opinion, this

3
This particular declarant refers to NextEra Energy Resources, LLC as “Energy Resources.” The
Court will continue to refer to this company and its subsidiaries collectively as “NextEra.”
51
project company engaged statement was made by an
in any business activities? employee based on
perceptions during their
Answer: No. The project course of business. Since
company was not engaged employee had personal
in any business activities. knowledge of this industry,
Any activity by the project their statement is helpful to
company at this stage was clear understanding of facts
pre-business, early and issues presented in
development activity.” (Id. case and does not involve
at 153–54). specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“When the project Expert Opinion; Overruled. As to whether this
company was acquired, it Legal Conclusion statement qualifies as an
was years away from expert opinion, this
engaging in any active statement was made by an
business.” (Id. at 154). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

52
“Question: Is there a Expert Opinion Overruled. As to whether this
market for PPAs? statement qualifies as an
expert opinion, this
Answer: No. There is no statement was made by an
market for PPAs as employee based on
standalone perceptions during their
documents/assets.” (Id.). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Question: Did Energy Foundation; Legal Overruled. As to the adequacy of
Resources view the SCE Conclusion; Expert foundation prior to this
PPA for Silver State South Opinion statement, the Court finds
as an ‘above-market PPA’? that proper foundation has
been laid as to Declarant’s
Answer: No. The PPA was role in the subject
competitively bid at the transaction or industry
time and was the subject of allowing this statement to
a bilateral negotiation be admissible. As to
between First Solar’s whether this qualifies as a
predecessor and SCE. legal conclusion, the Court
After signing the PPA, finds that this statement is
SCE presented the PPA for based on the declarant’s
approval to the California opinion developed through
Public Utilities the regular course of
Commission (“CPUC”). business and does not
The CPUC’s approval was purport to explain, analyze,
required before SCE could or decide legal concepts.
recover its costs from As to whether this
ratepayers. The CPUC statement qualifies as an
approved the PPA, expert opinion, this
establishing that the PPA statement was made by an
was not “above market.” employee based on
(Id.). perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts

53
 and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Question: Did Energy Expert Opinion Overruled. As to whether this
Resources pay a premium statement qualifies as an
on account of the PPA (i.e., expert opinion, this
a premium above the cost statement was made by an
of negotiating the PPA)? employee based on
perceptions during their
Answer: No.” (Id.). course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Question: Did Energy Expert Opinion; Overruled. As to whether this
Resources agree to pay any Legal Conclusion statement qualifies as an
portion of the fixed price expert opinion, this
under the EPC contract as a statement was made by an
premium for the PPA or employee based on
any of the development perceptions during their
assets held by the project course of business. Since
company? employee had personal
knowledge of this industry,
Answer: No.” (Id. at 154– their statement is helpful to
155). clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

54
 “Question: Are PPAs Expert Opinion Overruled. As to whether this
comparable? statement qualifies as an
expert opinion, this
Answer: No.” (Id. at 155). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

10. Daniel Nelson

Daniel Nelson was formerly Vice President, Tax and Trade, at First Solar, serving as the
global head of tax and managing the company’s tax department. (Pl.’s Resp. Summ. J., Ex. B at
116).

Statement Objection Ruling Rationale
“Section 1603 grants were Legal Conclusion Sustained. As to whether this qualifies
provided in lieu of tax as a legal conclusion, the
credits and was to follow Court finds that this
the United States federal statement purports to
income tax rules – in explain, analyze, or decide
particular, the rules legal concepts which must
applicable to the be determined by the Court
investment tax credit after consideration of all
([ITC]).” (Id. at 118). facts and evidence. The
application of Section 1603
and similar tax rules are
reserved for determination
by the Court.

“The ITC and tax basis Expert Opinion; Overruled in As to whether this
rules were well-settled and Legal Conclusion; part and statement qualifies as an
understood by tax Foundation sustained in expert opinion, this
practitioners and industry part. statement was made by an
participants. The employee based on
administrators of the perceptions during their
Section 1603 program at course of business. Since
Treasury, on the other employee had personal
hand, did not have tax knowledge of this industry,

55
expertise and, to my their statement is helpful to
knowledge, did not utilize clear understanding of facts
the IRS’s tax expertise. and issues presented in
Treasury, instead, relied on case and does not involve
advisers with little if any specialized scientific or
background in relevant tax technical knowledge. As to
matters.” (Id. at 119). whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.
As to the adequacy of
foundation prior to this
statement, the Court finds
that proper foundation has
been laid as to Declarant’s
role in the subject
transaction or industry
allowing the first sentence
of this statement to be
admissible. However, as to
the second sentence (“The
administrators of the
Section 1603 program at
Treasury, on the other
hand, did not have tax
expertise and, to my
knowledge, did not utilize
the IRS’s tax expertise.
Treasury, instead, relied on
advisers with little if any
background in relevant tax
matters.”), the Court finds
that an adequate foundation
has not been laid allowing
this statement to be
admissible.

“During my time at First Expert Opinion Overruled. As to whether this
Solar, there were a number statement qualifies as an
of areas where Treasury expert opinion, this
diverged from these well statement was made by an

56
settled and understood ITC employee based on
and tax basis rules and perceptions during their
developed their own course of business. Since
internal views.” (Id.). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“One of the principal areas Expert Opinion; Overruled. As to whether this
of divergence between the Legal Conclusion; statement qualifies as an
Treasury administrators, on Foundation expert opinion, this
the one hand, and the IRS statement was made by an
and industry participants, employee based on
on the other hand, involved perceptions during their
the identification of course of business. Since
intangible assets for United employee had personal
States federal income tax knowledge of this industry,
purposes and, specifically, their statement is helpful to
whether a PPA was a clear understanding of facts
separate intangible asset and issues presented in
that was not eligible for the case and does not involve
Section 1603 grant.” (Id.). specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.
As to the adequacy of
foundation prior to this
statement, the Court finds
that proper foundation has
been laid as to Declarant’s
role in the subject
transaction or industry
allowing this statement to
be admissible.

57
“Priv. Ltr. Rul. 201214007 Expert Opinion; Sustained. As to whether this qualifies
was not remarkable to me Legal Conclusion; as a legal conclusion, the
because it merely Foundation; Court finds that this
confirmed what tax Hearsay statement purports to
practitioners already explain, analyze, or decide
understood based on well legal concepts which must
settled and understood tax be determined by the Court
principles, namely that after consideration of all
location-specific real estate facts and evidence. Tax
leases are not stand-alone principles and rulings
intangibles but represent surrounding them are
the value of the underlying within the purview of the
real estate being leased.” Court’s interpretation.
(Id. at 120).

“Later in 2012, the IRS Foundation; Expert Overruled in As to the adequacy of
published a second ruling Testimony; Hearsay part and foundation prior to this
(201249013) withdrawing sustained in statement, the Court finds
Priv. Ltr. Rul. 201214007, part. that proper foundation has
apparently at Treasury's been laid as to Declarant’s
insistence . . .. This role in the subject
approach created transaction or industry
uncertainty in the industry allowing the first part
at a time when participants statement to be admissible.
were making substantial As to whether the first part
investments under the of the statement qualifies
Section 1603 mandate.” as an expert opinion, this
(Id. at 120). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether the latter portion
of the statement (“. .
.apparently at Treasury's
insistence . . .. This
approach created
uncertainty in the industry
at a time when participants

58
 were making substantial
investments under the
Section 1603 mandate.”)
qualifies as an expert
opinion, this statement
involves specialized
scientific or technical
knowledge which must be
testified to by an expert
witness. As to whether
either part of the statement
constitutes inadmissible
hearsay, the Court finds
that this statement does not
encompass an out-of-court
statement and is not
offered to prove the truth
of the matter asserted.

Throughout this period, I Legal Conclusion; Sustained. As to whether this qualifies
was of the firm view that a Expert Opinion as a legal conclusion, the
plant-specific PPA should Court finds that this
not be treated as a separate statement purports to
intangible from the explain, analyze, or decide
associated power plant. legal concepts which must
The relationship between a be determined by the Court
power plant and a plant- after consideration of all
specific PPA can be facts and evidence. Tax
analogized to the principles and
acquisition of property implementation of the IRC
(e.g., a building) subject to are within the purview of
a lease. The tax code, the Court’s interpretation.
Internal Revenue Code
(“IRC”) Section 167(c)(2),
provides that if property is
acquired subject to a lease
no portion of the cost is
allocated to the leasehold
interest. Instead, the entire
cost is taken into account
in determining the cost
basis and depreciation
deduction with respect to
the property subject to
lease. This IRC provision
was enacted consistent

59
with decades of court
precedent, including a
decision of the United
States Supreme Court.
These cases effectively
hold that the income
generating ability of an
asset, such as real estate, is
an inherent attribute of the
tangible asset, not a
separate intangible. This
was not only my view; the
IRS relied upon Section
167(c)(2) in Priv. Ltr. Rul.
201214007. This also was
consistent with how leases
and PPAs were treated,
generally, for United States
federal income tax
purposes and, specifically,
for ITC and depreciation
purposes. (Id. at 120–121).

“I also formed a view on Expert Opinion; Sustained. As to whether this qualifies
whether a facility-specific Legal Conclusion as a legal conclusion, the
PPA is a ‘customer-based Court finds that this
intangible’ under IRC statement purports to
Section 197 while it explain, analyze, or decide
remains a mere executory legal concepts which must
contract . . .. There are two be determined by the Court
reasons why a facility- after consideration of all
specific may not meet this facts and evidence. Tax
definition . . ..” (Id. at 121). principles and
implementation of the IRC
are within the purview of
the Court’s interpretation.

“This position was not only Expert Opinion; Sustained. As to whether this qualifies
consistent with the existing Legal Conclusion as a legal conclusion, the
guidance from the IRS . . . Court finds that this
it was consistent with my statement purports to
understanding . . .. I explain, analyze, or decide
continue to believe this is legal concepts which must
the correct tax treatment of be determined by the Court
the PPA.” (Id. at 122). after consideration of all
facts and evidence. Tax

60
 principles and treatment of
the PPA are within the
purview of the Court’s
interpretation.

“I repeat several of my Prior Consistent Overruled. As to whether this is
comments to the KPMG Statement objectionable as a “prior
report here which are consistent statement,” the
relevant to the issues Court finds that the
addressed in the objection is improper for
Defendant's summary purposes of summary
judgment filing: judgment and must be
2. Page 1 - they refer to overruled.
Section 1060. I think they
should footnote that this is
not a 1060 transaction but
that 1060 is referenced in
the report for purposes of
defining FMV for tax
purposes.
***
4. Page 2 - PPA - The
description of the PPA
should clearly address
whether it's location-
specific, and whether there
are purchase options. As
we know, location-specific
PPA's mean that PPA is of
nominal value until such
time as the required facility
is completed.
***
6. Page 2/3 - The bullets
should include reference to
the fact that the PPA is
facility-specific, and
should ideally suggest that,
accordingly, any "value" of
the PPA is an inherent
value of the Facility.
Economic reference should
ideally be made to leases
and real estate, where the
value of real estate is a
function of the price of

61
underlying leases.
My comments (# 4 and #
6) are consistent with my
perspective and research as
discussed above. I discuss
the application of IRC
Section 1060 in the
separate section below.”
(Id. at 124–25).

“IRC Section 1060 is the Legal Conclusion; Sustained. As to whether this qualifies
tax code section that Expert Opinion as a legal conclusion, the
addresses the allocation of Court finds that this
purchase price in the case statement purports to
of the acquisition or sale of explain, analyze, or decide
a going concern or active legal concepts which must
trade or business . . .. [i]t is be determined by the Court
well known to most tax after consideration of all
practitioners.” (Id. at 125). facts and evidence. Tax
regulations are within the
purview of the Court’s
interpretation.

“As I explained in my Prior Consistent Overruled. As to whether this is
deposition in the Desert Statement; Expert objectionable as a “prior
Sunlight matter, I was very Opinion consistent statement,” the
firm on the application of Court finds that the
IRC Section 1060. On objection is improper for
occasion, a seller or buyer purposes of summary
would propose to add a judgment and must be
provision to the agreements overruled. As to whether
to the effect that IRC this statement qualifies as
Section 1060 applied, as an expert opinion, this
they liked the optical value statement was made by an
of having an agreed-upon employee based on
seller-buyer valuation. I perceptions during their
philosophically disagreed course of business. Since
that IRC Section 1060 employee had personal
applied or could apply in knowledge of this industry,
circumstances where First their statement is helpful to
Solar was selling an clear understanding of facts
unconstructed project. For and issues presented in
that reason, I (or my team case and does not involve
members at First Solar) specialized scientific or
would strike provisions in technical knowledge.
draft agreements, in those

62
circumstances, that
referenced IRC Section
1060. My recollection is
that counterparties would
almost always agree to
drop the reference, as they
well understood that
Section 1060 was not
applicable to these
transactions. That said,
they seemed to like the
Section 1060 allocation in
Agreements as they liked
the optics that "agreed
upon" buyer seller
allocations have upon IRS
audit.” (Id. at 126).

“This treatment of IRC Expert Opinion; Overruled in As to whether this
Section 1060 was Legal Conclusion part and statement qualifies as an
particularly true of Silver sustained in expert opinion, this
State South, where part. statement was made by an
construction had not even employee based on
started when it was sold to perceptions during their
NextEra. There was not course of business. Since
and could not be an active employee had personal
trade or business at this knowledge of this industry,
point in time. There was no their statement is helpful to
power plant or any means clear understanding of facts
to generate electricity and and issues presented in
revenue. With the case and does not involve
exception of the KPMG specialized scientific or
report discussed above, I technical knowledge. As to
do not recall any whether this qualifies as a
discussion between First legal conclusion, the Court
Solar and NextEra finds that, with one
regarding the application of exception, this statement is
IRC Section 1060 to Silver based on the declarant’s
State South. We did not opinion developed through
view that provision as the regular course of
applicable.” (Id. at 126). business and does not
purport to explain, analyze,
or decide legal concepts.
However, the Court also
finds that the portion
stating, “[t]here was not

63
 and could not be an active
trade or business at this
point in time,” purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence. As
such, that portion of the
statement will not be
considered by the Court.

“With respect to the Foundation; Expert Overruled. As to the adequacy of
KPMG report, my Opinion; Relevance foundation prior to this
September 22, 2013 statement, the Court finds
comments with respect to that proper foundation has
KPMG’s report speak for been laid as to Declarant’s
themselves. I stated role in the subject
specifically that “this is not transaction or industry
a 1060 transaction”. It is allowing this statement to
consistent with First be admissible. As to
Solar’s general position whether this statement
with respect to IRC Section qualifies as an expert
1060, in this same time opinion, this statement was
period. I understood that made by an employee
KPMG was not reaching based on perceptions
any conclusions in its during their course of
report regarding the business. Since employee
application of IRC Section had personal knowledge of
1060. Rather, they were this industry, their
referencing IRC Section statement is helpful to clear
1060 “for purposes of understanding of facts and
defining FMV for tax issues presented in case
purposes.” If KPMG had a and does not involve
different view, I do not specialized scientific or
believe that view was ever technical knowledge. As to
conveyed to First Solar. I whether the statement is
can state unequivocally relevant, the Court finds
that I did not make a that the statement is of
determination that IRC probative value and tends
Section 1060 applied to the to make a proposition of
Silver State South legal consequence more or
transactions. I also do not less probable.
believe that Mr. Robertson
or anyone else at First
Solar made such a

64
 determination.” (Id. at
126–27).

“I do not think that Foundation; Expert Sustained. The Court finds that an
Treasury was relying upon Opinion; Relevance adequate foundation has
IRC Section 1060 to not been laid allowing this
reallocate tax basis to statement to be admissible.
PPAs in this time period . .
..” (Id. at 127).

11. Kenneth Stein

Kenneth Stein has been a Manager of Environmental Permitting at NextEra since 2009.
(Pl.’s Resp. Summ. J., Ex. D at 1). In that role, Stein oversees environmental permitting for
various energy development projects, including the acquisition of Silver State. (Id. at 1–2).

Statement Objection Ruling Rationale
“Delay would have been Expert Opinion Overruled. As to whether this
catastrophic to Silver State statement qualifies as an
South. . . . Additionally, expert opinion, this
while there were statement was made by an
environmental issues that employee based on
were resolved before perceptions during their
closing, the inherent course of business. Since
environmental risk employee had personal
associated with Silver State knowledge of this industry,
South remained present their statement is helpful to
through Commercial clear understanding of facts
Operation Date (COD).” and issues presented in
(Id. at 3). case and does not involve
specialized scientific or
technical knowledge.

“Removing this Expert Opinion Overruled. As to whether this
transparency into statement qualifies as an
mitigation measures expert opinion, this
created ill-will among the statement was made by an
environmental groups. It employee based on
also increased the risk that perceptions during their
a public dispute would course of business. Since
arise requiring Silver State employee had personal
South to defend knowledge of this industry,
potentially—and their statement is helpful to
inevitably—costly legal clear understanding of facts
action.” (Id. at 5). and issues presented in
case and does not involve

65
 specialized scientific or
technical knowledge.

“In my view, a batched BO Expert Opinion Overruled. As to whether this
is not ideal because it statement qualifies as an
increases the likelihood expert opinion, this
that a final BO will be re- statement was made by an
opened due to some type of employee based on
triggering event (e.g., perceptions during their
wildlife injured, artifacts course of business. Since
uncovered).” (Id. at 7). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“But Silver State South Expert Opinion Overruled. As to whether this
was not like other projects. statement qualifies as an
The “take” during the expert opinion, this
construction period was statement was made by an
four adult tortoises; and employee based on
only three adults during the perceptions during their
operating period.” (Id. at course of business. Since
8). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“The situation was ripe for Expert Opinion; Sustained. As to whether this qualifies
a Preliminary Injunction Legal Conclusion as a legal conclusion, the
filing.” (Id. at 9). Court finds that this
statement purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence.
Ripeness and principles
surrounding a Preliminary

66
 Injunction are left to the
interpretation of the Court.

“The environmental issues Expert Opinion; Overruled. As to whether this
with the Ivanpah project— Legal Conclusion statement qualifies as an
a physically huge project expert opinion, this
that had tortoise and avian statement was made by an
impacts—had left a bad employee based on
impression. It was highly perceptions during their
unlikely litigation would course of business. Since
not be sought by employee had personal
environmental knowledge of this industry,
organizations.” (Id. at 11). their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“There were many Expert Opinion Overruled. As to whether this
significant risks with Silver statement qualifies as an
State South- among others, expert opinion, this
outstanding litigation, statement was made by an
ongoing cultural risks, and employee based on
of course, the substantial perceptions during their
environmental issues. course of business. Since
Some, but not all, of the employee had personal
development risks knowledge of this industry,
associated with Silver State their statement is helpful to
South were resolved before clear understanding of facts
NextEra closed on the and issues presented in
acquisition. Some risks case and does not involve
were specifically allocated specialized scientific or
to First Solar under the technical knowledge.
separate Engineering,
Procurement, and
Construction agreement

67
 between the parties.
However, NextEra
inherited many of these
risks- the ongoing litigation
and inherent risks
associated with owning a
solar facility in the
development and
construction phase.” (Id. at
15).

12. Robert Stephens

Robert Stephens has been a tax specialist in NextEra’s tax department since 1999 and is
currently Senior Tax Counsel. (Pl.’s Resp. Summ. J., Ex. F at 1). Stephens’ responsibilities
include tax research, transaction work, tax work related to development activities and project
acquisitions, tax compliance, and the Section 1603 grant. (Id.).

Statement Objection Ruling Rationale
“The IRS’s conclusion in Legal Conclusion; Overruled. As to whether this qualifies
Private Letter Ruling . . . Expert Opinion as a legal conclusion, the
was consistent with Court finds that this
NextEra’s longstanding statement is based on the
position regarding unit- declarant’s opinion
contingent PPAs . . .. developed through the
[analysis of Treasury regular course of business
paper].” (Id. at 4). and does not purport to
explain, analyze, or decide
legal concepts. As to
whether this statement
qualifies as an expert
opinion, this statement was
made by an employee
based on perceptions
during their course of
business. Since employee
had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge.

“Treasury’s position was Expert Opinion; Overruled in As to whether this

68
never clearly defined, and Legal Conclusion part and statement qualifies as an
there was no legal support sustained in expert opinion, this
provided.” (Id.). part. statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that the first portion
of this statement is based
on the declarant’s opinion
developed through the
regular course of business
and does not purport to
explain, analyze, or decide
legal concepts. However,
the Court finds that the
second portion (“. . . and
there was no legal support
provided.”) purports to
explain, analyze, or decide
legal concepts which must
be determined by the Court
after consideration of all
facts and evidence.

“Treasury’s position Expert Opinion; Sustained in As to whether the first
created confusion and Legal Conclusion part and sentence of this statement
uncertainty among market overruled in (“Treasury’s position
participants and was part. created confusion and
inconsistent with the uncertainty among market
applicable tax rules. At the participants and was
end of the process, inconsistent with the
Treasury issued generic applicable tax rules.”)
award letters that did not qualifies as an expert
provide any meaningful opinion, this statement
explanation for reducing involves specialized
grants. There was no scientific or technical

69
administrative appeal knowledge which must be
process like there is within testified to by an expert
the IRS. Applicants were witness. As to whether the
faced with the decision of remainder of this statement
either accepting Treasury's qualifies as an expert
reduction or litigating the opinion, this statement was
reduction. NextEra and made by an employee
other applicants had to based on perceptions
navigate through this during their course of
process in a number of business. Since employee
cases.” (Id. at 5). had personal knowledge of
this industry, their
statement is helpful to clear
understanding of facts and
issues presented in case
and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.

“NextEra’s unit-contingent Legal Conclusion Sustained. As to whether this qualifies
PPA position was as a legal conclusion, the
confirmed by the United Court finds that this
States Court of Federal statement purports to
Claims in Alta Wind I explain, analyze, or decide
Owner-Lessor C et al. v. legal concepts which must
United States, 12.8 Fed. Cl. be determined by the Court
702 (Fed. Cl. 2016). In after consideration of all
Alta Wind, the Court of facts and evidence.
Federal Claims concluded Interpretation and
that PPAs should be treated application of case law are
like land leases, which are legal concepts within the
not treated as separate discretion of the Court.
assets from the land, and
that "the close nexus
between the wind farm
facilities and their
respective PPAs means that

70
the PPAs cannot be viewed
as separate intangible
assets." 128 Fed. Cl. at
721. The Court of Federal
Claims’ decision was
consistent with the
reasoning of Private Letter
Ruling 201214007 and
NextEra's position on unit-
contingent PPAs. The
Court of Appeals for the
Federal Circuit vacated the
Court of Federal Claims'
decision, in July 2018, but
did not address the unit-
contingent PPA issue.” (Id.
at 5–6).

“Moreover, the facts of Expert Opinion; Sustained. As to whether this qualifies
Silver State South, in my Legal Conclusion as a legal conclusion, the
view, compared favorably Court finds that this
to the facts of Alta Wind statement purports to
because NextEra purchased explain, analyze, or decide
Silver State South as a legal concepts which must
“greenfield project”— be determined by the Court
before any construction after consideration of all
had started and years facts and evidence.
before it became Interpretation and
operational. Treasury, application of case law are
however, declined to legal concepts within the
follow the Court of Federal discretion of the Court.
Claims’ decision . . ..” (Id.
at 6).

“Based on my experience Expert Opinion Sustained. As to whether this
with the Silver State South statement qualifies as an
transactions, and my expert opinion, this
perspective as a tax statement ascribes value to
specialist, I do not agree the transaction as a whole
that there was any and therefore involves
combined value or that the specialized scientific or
parties ever intended to technical knowledge which
agree to a simple price . . .. must be testified to by an
I do not agree with expert witness.
Treasury’s or Defendant’s
characterization . . ..” (Id.

71
at 9).

“I further disagree that Expert Opinion Overruled. As to whether this
NextEra paid a premium statement qualifies as an
on account of the PPA or expert opinion, this
that value was transferred statement was made by an
from the MIPSA to the employee based on
EPC . . ..” (Id.). perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“As discussed above, Legal Opinion Overruled. As to whether this qualifies
NextEra had several as a legal conclusion, the
pending applications Court finds that this
before Treasury when the statement is based on the
negotiations with First declarant’s opinion
Solar started in earnest in developed through the
2013. Treasury had started regular course of business
raising issues regarding the and does not purport to
pricing of projects and the explain, analyze, or decide
valuation of PPAs. legal concepts.
Treasury had developed
certain internal
benchmarks about what the
development and
construction costs and
profit markups should be
and applied those
benchmarks to scrutinize
Section 1603 grant
applications. NextEra was
experiencing, in this same
timeframe in 2013,
potential reductions in its
grant awards (but nowhere
even close to the
magnitude that Treasury
would later propose for
projects like Silver State

72
South).” (Id. at 9).

“NextEra’s concern was Expert Opinion; Overruled. As to whether this
focused on Treasury’s Foundation statement qualifies as an
conduct . . .. The indemnity expert opinion, this
provision was not intended statement was made by an
as acceptance of Treasury’s employee based on
position.” (Id. at 10). perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
the adequacy of foundation
prior to this statement, the
Court finds that proper
foundation has been laid as
to Declarant’s role in the
subject transaction or
industry allowing this
statement to be admissible.

“Trade or business is a Expert Opinion Overruled. As to whether this
well-established concept statement qualifies as an
under the tax law, and it is expert opinion, this
a concept that pervades the statement was made by an
day-to-day practice of tax employee based on
departments like perceptions during their
NextEra’s. In my course of business. Since
experience, a development employee had personal
stage, preconstruction knowledge of this industry,
project like Silver State their statement is helpful to
South cannot be a trade or clear understanding of facts
business. NextEra did not and issues presented in
acquire a trade or business case and does not involve
when it acquired the Silver specialized scientific or
State South project in May technical knowledge.
2014. For these reasons, Based on the
we concluded that IRC inapplicability of the
Section 1060 did not specific objection, the
apply.” (Id. at 12). statement is admissible.
This ruling does not

73
 preclude objections made
during the pendency of
trial.

“Indirect costs are Legal Conclusion Overruled. As to whether this qualifies
identified and allocated to as a legal conclusion, the
the tangible property items Court finds that this
in the cost segregation statement is based on the
study on a pro rata basis in declarant’s opinion
accordance with the cost developed through the
capitalization rules under regular course of business
IRC Section 263(a) and and does not purport to
IRC Section 263A.” (Id. at explain, analyze, or decide
14). legal concepts.

“The Management Reports Expert Opinion Overruled. As to whether this
are required by the statement qualifies as an
independent accountant expert opinion, this
examination procedures statement was made by an
and were executed in employee based on
exactly the form prescribed perceptions during their
by those procedures (see course of business. Since
Exhibit 3, page 3).” (Id. at employee had personal
15). knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“EY’s team included Expert Opinion Overruled. As to whether this
several of the most statement qualifies as an
reputable and highly- expert opinion, this
experienced technical statement was made by an
experts in renewable employee based on
energy transactions and perceptions during their
cost segregation analysis in course of business. Since
the country . . ..” (Id.). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

74
“Those certifications are Expert Opinion Overruled. As to whether this
provided in accordance statement qualifies as an
with the AICPA attestation expert opinion, this
procedures prescribed by statement was made by an
Treasury.” (Id. at 16). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“Silver State South was a Expert Opinion; Overruled in As to whether this
development stage, Legal Conclusion part and statement qualifies as an
preconstruction project, sustained in expert opinion, this
and not a trade or business part. statement was made by an
to which goodwill or going employee based on
concern value could under perceptions during their
any circumstances attach.” course of business. Since
(Id. at 17). employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that the first sentence
is based on the declarant’s
opinion developed through
the regular course of
business and does not
purport to explain, analyze,
or decide legal concepts.
However, the Court finds
that the portion containing
“. . . not a trade or business
to which goodwill or going
concern value could under

75
 any circumstances attach,”
purports to explain,
analyze, or decide legal
concepts which must be
determined by the Court
after consideration of all
facts and evidence.

“Based on my experience, Expert Opinion Overruled. As to whether this
valuation is required in statement qualifies as an
only two circumstances . . expert opinion, this
..” (Id. at 18). statement was made by an
employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“However, after analyzing Expert Opinion; Overruled. As to whether this
the circumstances in the Legal Conclusion statement qualifies as an
paper, we determined that expert opinion, this
Silver State South did not statement was made by an
involve any peculiar employee based on
circumstances that would perceptions during their
require a valuation. course of business. Since
Notably, there were no employee had personal
affiliated parties or related knowledge of this industry,
transactions (as described their statement is helpful to
in Treasury's paper) present clear understanding of facts
in the acquisition of Silver and issues presented in
State South.” (Id.). case and does not involve
specialized scientific or
technical knowledge. As to
whether this qualifies as a
legal conclusion, the Court
finds that this statement is
based on the declarant’s
opinion developed through
the regular course of
business and does not

76
 purport to explain, analyze,
or decide legal concepts.

“GAAP treatment of Expert Opinion; Sustained. As to whether this
transactions and assets is Legal Conclusion statement qualifies as an
often different from their expert opinion, this
federal income tax statement interprets
treatment. Specifically, tax Generally Accepted
does not recognize a Accounting Principles and
services contract like the involves specialized
EPC Agreement as a scientific or technical
liability.” (Id.). knowledge which must be
testified to by an expert
witness.

“Although SSSPS’s Expert Opinion; Sustained. As to whether this qualifies
applications satisfied all of Legal Conclusion as a legal conclusion, the
the requirements set forth Court finds that this
in Section 1603 in order to statement purports to
qualify for the full cash explain, analyze, or decide
grant amounts requested, . . legal concepts which must
..” (Id. at 20). be determined by the Court
after consideration of all
facts and evidence. The
application of Section 1603
and similar tax rules are
reserved for determination
by the Court.

13. Steven Wozniak

Steven Wozniak is currently Chief Engineer, PV Power Plant Development and
Execution at First Solar and was previously a Senior Director and an Electrical Engineering
Manager. (Pl.’s Resp. Summ. J., Ex. G at 1). Wozniak is responsible for project execution
through the development period until “hand-over” to the customer in all phases of engineering,
procurement, management & construction. (Id.).

Statement Objection Ruling Rationale
“I have not identified any Expert Opinion Overruled. As to whether this
amounts being invoiced or statement qualifies as an
any payments being made expert opinion, this
on account of any power statement was made by an
purchase agreement. . .. employee based on
Based on my examination perceptions during their
of the invoices and course of business. Since
associated documentation, employee had personal

77
I did not find any amounts knowledge of this industry,
being invoiced or any their statement is helpful to
payments being made on clear understanding of facts
account of this PPA.” (Id. and issues presented in
at 3–4). case and does not involve
specialized scientific or
technical knowledge.

“I did not find any amounts Expert Opinion Overruled. As to whether this
under those change orders statement qualifies as an
being invoiced or any expert opinion, this
payments being made on statement was made by an
account of the PPA.” (Id. at employee based on
4). perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“I did not find any amounts Expert Opinion Overruled. As to whether this
under those materials being statement qualifies as an
invoiced or any payments expert opinion, this
being made on account of statement was made by an
the PPA.” (Id.). employee based on
perceptions during their
course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

“I did not find any amounts Expert Opinion Overruled. As to whether this
under those materials being statement qualifies as an
invoiced or any payments expert opinion, this
being made on account of statement was made by an
the PPA.” (Id.). employee based on
perceptions during their

78
 course of business. Since
employee had personal
knowledge of this industry,
their statement is helpful to
clear understanding of facts
and issues presented in
case and does not involve
specialized scientific or
technical knowledge.

Relevant statements of the sustained objections will not be considered for purposes of the
pending motion for summary judgment. Should the declarants be produced at trial, they should
be instructed that those specific statements are inadmissible.

The Court has filed this ruling under seal. The parties shall confer to determine proposed
redactions to which all the parties agree. By no later than October 19, 2020, the parties shall file
a joint status report indicating their agreement with the proposed redactions, attaching a copy of
those pages of the Court’s ruling containing proposed redactions, with all proposed redactions
clearly indicated. The parties also shall, by the same date, file any redacted versions of
documents they filed under seal in this case to the extent such redacted versions have not already
been filed.
IT IS SO ORDERED.
s/ David A. Tapp
DAVID A. TAPP, Judge

79