TEXTAINER EQUIPMENT MANGEMENT LIMITED, ET AL. v. USA

Filing 148

ORDER granting 145 Motion to Compel; denying 142 Motion for Protective Order. Stay on discovery now lifted. Limited discovery closes by 8/19/2013. Joint Status Report due by 8/23/2013. Signed by Judge Nancy B. Firestone. (lb) Copy to parties.

In the United States Court of Federal Claims
No. 08-610C
(Filed: July 22, 2013)

TEXTAINER EQUIPMENT
MANAGEMENT LIMITED, et al.,
Plaintiffs,
v.
THE UNITED STATES,
Defendant.

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ORDER DENYING PLAINTIFFS’ MOTION FOR A PROTECTIVE ORDER
AND GRANTING DEFENDANT’S MOTION TO COMPEL
The court is in receipt of the parties’ briefing on plaintiffs’ July 3, 2013 motion for
a protective order and the government’s July 15, 2013 motion to compel. These motions
follow the court’s May 15, 2013 order in this Fifth Amendment takings case joining
Capital Lease Limited (“Capital”) as the “real party in interest” in this matter. Capital
allegedly owned the intermodal shipping containers that are the subject of plaintiffs’
takings action at the time of the alleged taking. Following joinder of Capital, the court
allowed the parties to conduct limited discovery into “Capital’s takings claim and the
government’s possible False Claims Act counterclaim” against Capital. Order at 16, ECF
No. 141. The present motions for a protective order and to compel were filed in
connection with this limited discovery period.

Plaintiff Capital has moved for a protective order relieving Capital from the
government’s request for a Rule 30(b)(6) deposition regarding Capital’s takings claim
and the government’s counterclaim. See Rules of the United States Court of Federal
Claims 30(b)(6) (“Notice or Subpoena Directed to an Organization.”). In support,
Capital argues that the seventeen discovery topics designated by the government in its
Rule 30(b)(6) deposition notice go beyond the scope of this court’s order, that the
government’s requests amount to harassment, that the sole director of Capital, Mr. Jacob
Versnel, has no personal knowledge of any matter relating to the government’s
counterclaim or any issue relating to Capital’s takings claim, and that all relevant
information on Capital’s takings claim is already before the court.
The government argues in response that its 30(b)(6) deposition notice is within the
scope of discovery granted by the court because the government seeks information
relating to four basic topics: (1) Capital’s ownership of the containers at issue; (2)
Capital’s insurance claim, which implicates both ownership issues and Capital’s standing
to bring its takings claim; (3) Capital’s corporate status, which implicates Capital’s
standing to bring its takings claim, and (4) the government’s possible counterclaims. The
government argues that Capital has not provided good cause for a protective order
because the government’s discovery requests seek basic information on Capital’s
standing and ownership of the containers, and are therefore within the scope of the
court’s limited discovery order regarding “Capital’s takings claim.” Order at 16.
The government has also moved to compel Capital to respond adequately to the
government’s first set of interrogatories and document requests. Capital’s initial
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responses to the government’s discovery requests generally objected to the requests as
outside this court’s limited discovery order or irrelevant or duplicative of prior discovery
requests in this case. After consideration of the parties’ arguments, the court DENIES
Capital’s motion for a protective order and GRANTS the government’s motion to
compel.
As the newly-joined “real party in interest” in this case, Capital now bears the
burden of proving (1) that it is the owner of the containers for which it seeks
compensation, (2) the number of containers that it alleges were taken by the government,
(3) that it has the legal capacity to bring this takings claim, and (4) that it owns the
takings claim. See, e.g., Skip Kirchdorfer, Inc. v. United States, 6 F.3d 1573, 1580 (Fed.
Cir. 1993). The topics identified in the government’s Rule 30(b)(6) notice of deposition,
the government’s interrogatories, and the government’s request for production of
documents are all appropriate because they relate to Capital’s ownership of the
containers, its capacity to sue, and its ownership of the takings claim. 1 As such, the
1

In addition, while Capital argues that the limitations period has run on the government’s fraud
counterclaim, a determination of whether the counterclaim is barred on statute of limitations
grounds is premature because discovery has not yet been completed. The court expressly
allowed limited discovery on the government’s counterclaim in its May 15, 2013 order.
Moreover, the court agrees with the government that its requests for information and documents
relating to Capital’s insurance claim regarding the subject containers are within the scope of
discovery because the requests seek information on Capital’s ownership of the containers and its
takings claim. Capital’s insurance policy contains a subrogation clause that states: “[Capital]
shall do whatever is reasonable and necessary to secure rights which relate to insured claims
and/or preserve those rights and shall do nothing to prejudice them. Proceeds of any recovery
efforts effected by the Assurer are for their account until the total amount of their claim payment
has been met. The balance of proceeds is then for [Capital’s] account. However, title to lost and
constructive total loss Equipment shall remain with [Capital.]” Def.’s Mot. to Compel, App. at
A33.

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requested discovery is relevant and potentially necessary to the resolution of this action,
and within the scope of the court’s limited discovery order. 2 In addition, Capital has not
otherwise made a “particularized factual showing” that it will suffer harm if the court
does not issue a protective order regarding the Rule 30(b)(6) deposition of Capital. Iris
Corp. Berhad v. United States, 84 Fed. Cl. 489, 492 (2008) (internal quotation omitted).
Rather, a Rule 30(b)(6) motion in this case is necessary to bind Capital. See Exxon
Research & Eng’g Co. v. United States, 44 Fed. Cl. 597, 601 n.3 (1999). Nor has Capital
demonstrated how, “despite the broad and liberal construction . . . afforded the federal
discovery rules,” the government’s requests are not relevant or unduly burdensome or
oppressive, given Capital’s own burden, as the newly-joined “real party in interest,” of

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Capital also argues that the government’s discovery requests are improper because, even if
Capital could not demonstrate it owns the subject containers or has standing to bring its claim,
Green Eagle Investments (“Green Eagle”)—which owns 100% of Capital’s stock—may still
bring the takings action. However, Green Eagle’s ability to bring Capital’s takings claim
implicates issues under the Anti-Assignment Acts (in particular, the Assignments of Claims Act,
31 U.S.C. § 3727) that also may turn on Capital’s current corporate status. See L-3 Commc’ns
Integrated Sys., L.P. v. United States, 84 Fed. Cl. 768, 777 (2008) (noting that the “operation of
law” exception to the Anti-Assignment Acts’ bar on the transfer of claims against the
government “generally involves situations where, for all intents and purposes, the contract with
the Government continues with essentially the same entity, which has undergone a change in its
corporate form or ownership”).
In particular, if Capital cannot bring this takings action and argues that it transferred its takings
claim to Green Eagle, the court will have to determine whether this transfer is barred by the AntiAssignment Acts or falls within an exception to the Acts. While agreement by Capital to be
bound by the outcome of Green Eagle’s suit can be a factor that the court will consider in
determining, if necessary, whether the Anti-Assignment Acts operate to bar any transferred
claim, see L-3, 84 Fed. Cl. at 778, the court must also consider the nature of the corporate
reorganization at issue, see id. at 777. Contrary to plaintiffs’ contention, therefore, even if both
Green Eagle and Capital have agreed, regardless of which entity brings the claim, that they will
both be bound by any holding in this case, the court will still need to determine the precise
relationship between Green Eagle and Capital in order to resolve any issues of law regarding the
Anti-Assignment Acts.

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demonstrating ownership of the subject containers and its capacity to bring this takings
case. 3 Ford Motor Co. v. United States, 84 Fed. Cl. 168, 172 (2008) (quotation omitted).
The court therefore grants the government’s motion to compel adequate responses
to its initial discovery requests and denies Capital’s motion for a protective order
regarding the Rule 30(b)(6) deposition of Capital. Capital must designate the most
knowledgeable person or persons to testify upon its behalf regarding the topics listed in
the government’s Rule 30(b)(6) deposition notice. Because of the relationship between
(1) Textainer Equipment Management Limited (“Textainer”), the manager of Capital’s
containers, (2) Green Eagle Investments (“Green Eagle”), which owns 100% of Capital’s
stock, and (3) Capital, the owner of the containers allegedly taken, a current or former
official or officials from Green Eagle or Capital may be the appropriate 30(b)(6)
deponent or deponents.
The stay on the limited discovery period is now lifted. The parties shall have until
August 19, 2013 to complete discovery in accordance with this order. 4 By August 23,
2013, the parties shall file a joint status report indicating next steps in this litigation.

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To the extent that Capital argues that the government has waived any objections regarding
Capital’s ownership of the 477 containers at issue, the court disagrees. While the government
may have waived objections to the ownership issue for the purposes of past summary judgment
motions, the ownership issue was never squarely decided by the court, and therefore has not been
waived for the purposes of the entire action. See Charles Alan Wright & Arthur R. Miller et al.,
18B Federal Practice and Procedure § 4478 (“A position that has been assumed without decision
for purposes of resolving another issue is not the law of the case . . . .”).
4

At the July 17, 2013 joint status conference regarding the parties’ instant discovery motions,
the government indicated that, as to its discovery requests relating to its fraud counterclaim, it
would accept an amended answer by plaintiffs indicating that Green Eagle and Textainer also do
not possess additional responsive documents or information.

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IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge

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