In the United States Court of Federal Claims
No. 11-130C
(Filed: May 26, 2021)
)
RETURN MAIL, INC., )
)
Plaintiff, ) Patent case; delayed discovery response;
) motion to preclude defendant’s use of
v. ) documents; monetary sanctions; RCFC
) 37(c)
UNITED STATES, )
)
Defendant. )
)
Lee L. Kaplan, Smyser Kaplan & Veselka, L.L.P., Houston, Texas, for plaintiff. With
him on the briefs was Jeff Potts, Smyser Kaplan & Veselka, L.L.P., Houston, Texas.
Shahar Harel, Trial Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Washington, D.C., for defendant. With him on the briefs were
Brian M. Boynton, Acting Assistant Attorney General, Gary L. Hausken, Director, and Rachel
Hicks, Attorney, Commercial Litigation Banch, Civil Division, United States Department of
Justice, Washington, D.C., as well as Rebecca Harker Duttry, Attorney, and Stephan J.
Boardman, Attorney, United States Postal Service, Washington, D.C.
OPINION AND ORDER
LETTOW, Senior Judge.
Pending before the court in this patent case is plaintiff’s motion to preclude defendant’s
use of previously withheld documents. This motion is the most recent addition to a procedural
history encompassing actions by this court, the Patent Trial and Appeal Board, the Court of
Appeals for the Federal Circuit, and the United States Supreme Court, involving the validity, vel
non, of the patent at issue. A stay of proceedings, entered in this case in October 2014, was lifted
in September 2019 following the conclusion of related proceedings. See Order of September 5,
2019, ECF No. 108. After discovery resumed, the parties scheduled the depositions of their
respective validity experts for March 23 and 26, 2021. See Pl.’s Mot. to Preclude Def.’s Use of
Previously Withheld Docs. (“Pl.’s Mot.”) at 1, ECF No. 155. One day after the deposition of the
government’s expert, the government produced 3 documents comprising 75 pages “without notice
to [plaintiff] that additional production was forthcoming.” Pl.’s Reply at 3, ECF No. 159. Three
days after the deposition of plaintiff’s expert, and on the last day of fact and expert discovery for
all defenses, the government produced an additional 10,214 documents amounting to 49,829
pages. Pl.’s Mot. at 1. Plaintiff requests that the government be precluded “from making any use
of these late-produced documents.” Id. at 3. In the alternative, plaintiff asks for “an award of
attorneys’ fees, expert fees, and costs incurred[,] . . . which can be computed later in the case.”
Pl.’s Reply at 8.
BACKGROUND
Plaintiff Return Mail, Inc. (“Return Mail”) filed suit in this court on February 28, 2011,
alleging “the unlicensed use and infringement . . . of the invention claimed in United States
Patent Number 6,826,548” (“the ’548 Patent”) by the United States Postal Service. Compl. ¶ 1,
ECF No. 1. That patent relates to a “method, system and program product for processing
returned mail.” ’548 Patent at 1. On October 3, 2011, defendant served its initial disclosures,
which, among other things, identified “Brett A. Raney, USPS Manager, . . . as a person likely to
have discoverable information on the ‘general subjects’ of OneCode ACS® service development
and operation and PARS system engineering.” Pl.’s Reply at 1. On December 5, 2011, after
receiving Return Mail’s first request for production, defendant “asserted no specific objections
and agreed to produce documents in response to” plaintiff’s request for “[a]ll other documents
and communications on which [y]ou rel[y] in support of any of [y]our defenses or counterclaims
in this action.” Id. at 1-2 (emphasis omitted).
A stay was entered in the case on October 21, 2014, following the Postal Service’s
petition to the Patent Trial and Appeal Board (“PTAB”) requesting institution of a covered
business method review of the ’548 Patent. See Order of October 21, 2014, ECF No. 83. The
PTAB acted on the Postal Service’s petition and concluded that all of the challenged claims were
“more likely than not” directed to ineligible subject matter. United States Postal Serv. v. Return
Mail, Inc., No. CBM 2014-00116, 2014 WL 5339212, at *19 (P.T.A.B. Oct. 16, 2014). Return
Mail appealed to the Federal Circuit, which affirmed the PTAB’s decision. Return Mail, Inc. v.
United States Postal Serv., 868 F.3d 1350 (Fed. Cir. 2017). The Supreme Court, however,
reversed and remanded, concluding that “a federal agency is not a ‘person’ who may petition [the
PTAB under the America Invents Act] for post-issuance review” of a patent. Return Mail, Inc. v.
United States Postal Serv., --- U.S. ---, 139 S. Ct. 1853, 1867 (2019). The Federal Circuit then
remanded the case to the PTAB “with instructions to dismiss in light of the Supreme Court’s
disposition.” Return Mail, Inc. v. United States Postal Serv., 774 Fed. Appx. 684 (Fed. Cir.
2019).
The stay in this case was lifted in September 2019, see Order of September 5, 2019, ECF
No. 108, and the court adopted a discovery schedule that encompassed all available defenses, see
Order of November 12, 2019, ECF No. 114 (setting discovery schedule); Order of January 9,
2020, ECF No. 130 (granting in part and denying in part defendant’s motion for reconsideration
of the scheduling order). While the government initially challenged all claims of the ’548 patent
on the basis of ineligible subject matter under 35 U.S.C. § 101, its potential defenses now include
contentions under 35 U.S.C. §§ 102, 103, 112, 305, and 307. See Return Mail, Inc. v. United
States, 152 Fed. Cl. 455, 458 (2021). Return Mail filed its first amended complaint on December
23, 2019, see First Am. Compl., ECF No. 128, which the government timely answered, see ECF
No. 129. Return Mail thereafter made its second request for production on January 8, 2021. See
Def.’s Resp. Ex. D, ECF No. 158-7. On February 24, 2021, this court granted defendant’s
motion to amend its invalidity contentions. See Return Mail, 152 Fed. Cl. at 457.
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The government’s production of documents to Return Mail in 2021 included 2,315 pages
of documents produced on February 24, 2021. See Pl.’s Reply at 3-4. An additional 568 pages
were produced on February 25, 2021. Id. at 3. Notably, however, the vast majority of document
production occurred after both defendant’s and plaintiff’s validity experts were deposed and on
the very date discovery closed. See Pl.’s Mot. at 1. Dr. Josef Lubenow, defendant’s validity
expert, was deposed on March 23, 2021. Id. One day after this deposition, the government
“informally produced three documents, 75 pages without Bates stamps.” Id. at 2. Dr. Scott
Nettles, plaintiff’s expert, was deposed on March 26, 2021. Id. at 1. On March 29, 2021, the last
day of fact and expert discovery for all defenses, defendant produced an additional 10,214
documents, amounting to 49,829 pages of material. Id. At a status conference held on April 13,
2021, defendant stated that between 95 percent and 99 percent of the last March production was
found researching the emails of one custodian, Brett Raney, Hr’g Tr. 5:4-21; 17:19-23 (Apr. 13,
2021); Def.’s Resp. at 5, ECF No. 158, who had been identified in October 2011, nine and one-
half years earlier, as having discoverable information, see Def.’s Resp. at 5 n.5; Pl.’s Reply at 4.
Return Mail subsequently moved to preclude the government “from making any use of”
the documents produced on March 29, 2021, Pl.’s Mot. at 3, and requested, in the alternative, “an
award of attorneys’ fees, expert fees, and costs incurred,” Pl.’s Reply at 8. After briefing, see
Def.’s Resp.; Pl.’s Reply; the court held a hearing on May 13, 2021.
STANDARDS FOR DECISION
Rule 26 of the Rules of the Court of Federal Claims (“RCFC”) generally governs the
discovery process. After making initial disclosures under RCFC 26(a), “parties may obtain
discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense.”
RCFC 26(b)(1). After making discovery responses and disclosures, a party has an ongoing
obligation to “supplement or correct” those responses and disclosures “in a timely manner if the
party learns that in some material respect the disclosure or response is incomplete or incorrect,
and if the additional or corrective information has not otherwise been made known to the other
parties during the discovery process or in writing.” RCFC 26(e)(1)(A). “As applied to expert
witnesses, ‘the party’s duty to supplement extends both to information included in the report and
to information given during the expert’s deposition.’” SD3, LLC v. Rea, 71 F. Supp. 3d 189, 194
(D.D.C. 2014) (quoting Fed. R. Civ. P. 26(e)(2)). Subparagraph 26(e)(1)(A) is “narrow” and
“only permits supplemental reports for the purpose of ‘correcting inaccuracies or adding
information that was not available at the time of the initial report.’” Id. (quoting Minebea Co. v.
Papst, 231 F.R.D. 3, 6 (D.D.C. 2005)).
If a party contravenes the obligations imposed by RCFC 26, the court has discretion to
impose sanctions under RCFC 37 unless the violation was “substantially justified” or
“harmless.” RCFC 37(c)(1). “If a party fails to provide information or identify a witness as
required by RCFC 26(a) or (e),” the court may preclude the party from using “that information or
witness to supply evidence[,] . . . may order payment of the reasonable expenses, including
attorney’s fees, caused by the failure[,] . . . and . . . may impose other appropriate sanctions.”
RCFC 37(c)(1). In determining whether sanctions are warranted, “the court may consider
surprise to the other party, whether there is opportunity to cure that surprise, the proponent’s
need for the evidence at trial, or other factors.” Hitkansut LLC v. United States, 127 Fed. Cl.
3
101, 107 (2016) (citing Scott Timber, Inc. v. United States, 93 Fed. Cl. 221, 226-27 (2010))
(additional citations omitted).
ANALYSIS
The facts of this dispute are comparable to those of Bowman Constr. Co. v. United States.
In Bowman, a company filed suit against the United States after the National Park Service
terminated for default its contract for the construction of a bicycle trail in Voyageurs National
Park, Minnesota. See Bowman Constr. Co. v. United States, 2020 WL 1970546, at *1 (Fed. Cl.
2020). One day before the contracting officer’s representative was to be deposed, the
government produced a “hard drive containing 2,928 pages of documents, which for the most
part had not been previously disclosed.” Id. Following the deposition, the company filed a
motion for sanctions pursuant to RCFC 37(c), arguing that the government had violated its
obligation to timely supplement its disclosures. Id. at *2. Even though the government had
disclosed the documents prior to the close of discovery, the court granted the company’s motion
in part. Id. at *5. The court awarded the company attorneys’ fees for conducting two reopened
depositions, attorneys’ fees for the briefing on the motion for sanctions, and the costs of the
reopened depositions. Id. The court declined, however, to grant the company’s initial request to
preclude the government from relying on the documents at issue. Id. at *4. 1
The government’s delayed disclosures in this case rival, and notably exceed, the belated
production in Bowman: the disclosures made on March 24 and 29, 2021 amount to 49,904 pages
of documents. See Pl.’s Mot. at 1-2. Plaintiff emphasizes the timing of the most recent
disclosures by defendant, noting that the government produced the bulk of documents on the
final day of fact and expert discovery for all defenses. See id. at 1. Moreover, while counsel for
the government in Bowman provided documents one day before the deposition of a government
witness, the most recent disclosure in this case occurred after the depositions of both parties’
expert witnesses. See id. Given that the documents at issue were discovered after researching
the email files of Brett Raney, a potential witness identified back in 2011, plaintiff further asserts
that these documents should have been produced years ago. Pl.’s Reply at 5; see also Hr’g Tr.
8:8-12 (May 13, 2021). Defendant counters that it complied with the court’s scheduling order
and that the documents produced were in response to the document requests plaintiff served on
February 9, 2021. Def.’s Resp. at 1; Hr’g Tr. 16:1-4; 19:19 to 20-1 (May 13, 2021).
Defendant’s belated production of documents, while technically occurring before the
close of discovery, warrants relief similar to the sanctions granted in Bowman. Producing these
documents while discovery was still open “does not constitute proper supplementation” under
RCFC 26(e)(1)(A) when the bulk of the production occurred after the parties’ experts had
already been deposed. Bowman, 2020 WL 1970546, at *2. While plaintiff’s second request for
production may have encompassed the documents at issue, defendant already had an obligation
to produce these documents under plaintiff’s 2011 request for production. See Pl.’s Reply at 2;
1
While the company in Bowman filed a supplemental brief to its motion stating that it no
longer sought to preclude the government from relying on the documents at issue, Bowman, 2020
WL 1970546, at *2, the court noted that the company’s initial “requested relief . . . appeared
draconian under the circumstances,” id. at *4 n.4.
4
see also id. Ex. 1 at 14-16 (Requests for Production Nos. 16-20), ECF No. 159-1. Disclosing
such a large amount of documents after both parties’ experts had been deposed “not only
violated the requirements for timely discovery under the Court’s rules, it also prevented
meaningful depositions, prejudiced both opposing counsel and the witnesses, and necessitate[s]
another round of depositions.” Bowman, 2020 WL 1970546, at *5.
The court recognizes, however, that precluding the use of documents, “often referred to
as the ‘default’ sanction[,] . . . is not always appropriate.” Bowman, 2020 WL 1970546, at *3.
“Exclusion of evidence is . . . an extreme sanction and should be applied only when lesser
sanctions are inadequate.” Zoltek Corp. v. United States, 71 Fed. Cl. 160, 171 (2006). While
plaintiff had initially limited its request to precluding defendant from using the documents
contained in the delayed disclosures, see Pl.’s Mot. at 1, the court finds that such a remedy would
be “draconian under the circumstances,” Bowman, 2020 WL 1970546, at *4 n.4. Ordering “the
payment of reasonable expenses, including attorney’s fees, that were incurred as a result of the
nondisclosure” can remedy the problem caused by defendant’s delay without precluding
thousands of pages of documents from use in this case. K-Con Bldg. Sys., Inc. v. United States,
106 Fed. Cl. 652, 660 (2012) (internal quotation marks and citations omitted). Here, as in
Bowman, the reopening of discovery and “the payment of reasonable expenses incurred as a
result of the delayed disclosure is appropriate.” Bowman, 2020 WL 1970546, at *3.
CONCLUSION
Plaintiff’s motion to preclude is GRANTED IN PART. Discovery will be reopened for
60 days, until July 26, 2021. The court will award plaintiff its fees and expenses for submitting
its motion for sanctions and one-third of its attorney time and all of the expert time for review of
the documents disclosed on March 24 and 29, 2021. In addition, the court will award plaintiff all
costs and expenses for the depositions that are taken during the extended discovery period. This
monetary relief, however, is contingent on plaintiff deposing Brett Raney. During the hearing,
counsel for plaintiff represented that he had not deposed Mr. Raney, nor did he plan to. Hr’g Tr.
8:17 to 9:12 (May 13, 2021). To be sure, defendant has focused chiefly on its defense under 35
U.S.C. § 101, 2 and Mr. Raney may not possess knowledge relevant to this defense. The fact that
Mr. Raney’s emails and corresponding attachments comprise the vast majority of the belatedly
disclosed documents, however, indicates that his deposition may prove useful to the case.
Therefore, if Mr. Raney is not deposed during the 60-day window for discovery, or if his
deposition by plaintiff is perfunctory, compensation for attorney time spent reviewing the belated
production will be reduced to 10 percent and compensation for expert time spent reviewing the
documents will be reduced to 25 percent.
The court further requests that plaintiff’s counsel submit a record of costs 30 days after
the close of discovery.
2
See, e.g., Joint Status Report, ECF No. 111 (proposing a discovery period for
defendant’s Section 101 defense exclusively); Mot. for Recons., ECF No. 118 (requesting that
discovery be conducted “only as to the affirmative defense of Section 101 patent eligibility”).
5
It is so ORDERED.
s/ Charles F. Lettow
Charles F. Lettow
Senior Judge
6