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United States ex rel Laymon v. Bombardier Transportation USA

August 11, 2009


The opinion of the court was delivered by: Judge Nora Barry Fischer


I. Introduction

Currently before this Court are several motions in limine (Docket Nos. 73, 77, and 81) filed by the parties. Having heard oral argument on certain of the motions on July 15, 2009 (see Docket No. 90) and additional argument at the final pretrial conference on July 16, 2009 (see Docket No. 91), and after consideration of the parties' submissions, the Court addresses three of the outstanding motions (Docket Nos. 73, 81, and 83) in this consolidated Memorandum Opinion and Order.*fn1

II. Procedural and Factual Background*fn2

In 1995, Defendants Bombardier Transportation (Holdings) USA, Inc. and Bombardier Transportation ("Defendant") entered into a contract with the San Francisco Bay Area Rapid Transit ("BART") wherein Defendant agreed to recondition BART's rail cars. (Docket No. 55 at 4). The project was funded, in part, by the United States Department of Transportation ("DOT"). (Id.). Pursuant to federal regulations and the BART contract, Defendant was required to certify that it had complied with the DOT's Disadvantaged Business Enterprise ("DBE")*fn3 program relating to the participation of DBEs on the project. (Id.). BART and the DOT worked together throughout the course of the project to monitor Defendant's DBE participation and compliance. (Id.). As part of the program, Defendant was required to submit monthly DBE utilization reports to BART, including in each report the amounts awarded to DBEs as well as the amounts actually paid during each month. (Id. at 6). The numbers in these reports, submitted with Defendant's invoices, were required to be accurate under the BART contract and were forwarded to the DOT to allow the DOT to evaluate nationwide DBE participation. (Id.).

In early 2001, Defendant contracted with Plaintiff John R. Laymon, Jr.'s ("Plaintiff) company, JRL Enterprises, Inc., DBE certified by BART, to perform reconditioning work on rail cars. (Id. at 7). JRL's work began in March of 2001. (Id. at 8). From September of 2001 through November of 2002, Defendant submitted the required DBE status reports to BART certifying the amount that JRL had been awarded and paid. (Id.). Plaintiff claims that Defendant reported to BART that the value of the amount of JRL's work on the project was $3,378,296.00, while the work performed by JRL was allegedly only $981,251.00. (Id. at 9). Plaintiff also contends that the planned award amount included not only the $981,251.00 paid to JRL but also the cost of equipment purchased directly by Defendant, despite the fact that Defendant knew that only labor and materials paid for by the DBE were to be included. (Id.). Thus, Plaintiff claims Defendant overstated the amounts awarded and paid to JRL and that these numbers were used by BART to determine whether Defendant had met its DBE goals on the project. (Id. at 9-10).

The instant lawsuit was filed by Plaintiff under seal on February 14, 2005. (Docket No. 1). After the federal government declined to intervene on March 17, 2006 (Docket No. 10), the Court entered an order on April 3, 2006 directing that the Complaint be unsealed and served upon Defendant. (Docket No. 11). Plaintiff filed an Amended Qui Tam Complaint on September 11, 2007, based upon Defendant's alleged false statements concerning Plaintiff's participation on the BART project claiming violations of the False Claims Act, 31 U.S.C. § 3729, and the California False Claims Act, Cal. Gov. Code. § 12650. (Docket No. 31). The Court denied Defendant's motion for summary judgment on both claims on March 23, 2009. (Docket No. 56). However, Plaintiff's claim under the California False Claims Act was dismissed with prejudice on July 8, 2009 for lack of jurisdiction on motion of Defendant. (Docket No. 84). This matter is currently set for jury selection and trial to begin on August 17, 2009. (Docket No. 61). The motions in limine addressed herein were filed on June 30, 2009 (Docket Nos. 73, 77, and 81) and briefs in opposition were filed on July 14, 2009. (Docket Nos. 85, 87, and 89).

III. Discussion

A. Defendant's Motion in Limine to Exclude Evidence of Damages to the MBE/DBE Programs of the Federal Government (Docket No. 73)

i. Overview of Arguments

Defendant moves to exclude evidence of damages to the MBE/DBE programs of the federal government on the basis that Plaintiff has not proffered a witness from the federal government with the requisite personal knowledge of the MBE/DBE programs who would be able to testify as to the damages to those programs. (Docket No. 74 at 3). A witness outside the Department of Transportation ("DOT") would not have knowledge, Defendant contends, of any actual damage to the programs; therefore, he or she could not testify under Federal Rule of Evidence 602 as to actual damages. (Id.). Defendant further argues that because any opinion testimony on this topic would be of a technical nature relating to the federal government's contracting power in regard to its DBE program, a lay witness may not so testify under Rule 701. (Id.). Therefore, because Plaintiff has not proffered an expert on the issue of actual damages, there is no witness that should be permitted to testify on this matter. (Id.).

In response, Plaintiff contends that Donald Deemer, a senior civil rights officer at BART (hereafter "Deemer"), willtestify as to the purpose of the DBE program, the falsity of Defendant's statements, and the damage to the program as a result of those statements. (Docket No. 89 at 1). Plaintiff argues that Mr. Deemer is uniquely qualified to testify as to these facts as he is responsible for administering and overseeing the DBE program for BART (Id.). Because BART's DBE program is the federal program, Mr. Deemer's personal knowledge satisfies the "personal knowledge" requirement of Rule 602. (Id. at 2). Plaintiff further argues that Mr. Deemer is an expert in the DBE program according to Rule 702 as his position focuses on the program. (Id. at 3). Moreover, as is the case here, where there is no tangible benefit to the federal government by the DBE program, but rather an intangible lost benefit that may be difficult to quantify, the appropriate valuation of damages is the amount the government actually paid to Defendant. (Id.). Plaintiff states that Mr. Deemer, in addition to Steven Proctor, Susan Presley, and Christopher Gan,*fn4 can all testify regarding the amount paidto Defendant. (Id. at 4). Therefore, Plaintiff argues, these witnesses may testify as they have personal knowledge concerning the DBE program, the effect of Defendant's false statementson the same, and the quantity of that effect. (Id.).

ii. Plaintiff's Proffers and Testimony to Date

In his Witness List and Offers of Proof (Docket No. 62), Plaintiff proffers that Donald Deemer will testify as to the overall structure of BART's DBE program and the requirements of the BART and federal DBE program. (Docket No. 62 at 1). Mr. Deemer's duties, as the senior civil rights officer and DBE program supervisor, were to evaluate and monitor BART's contracts for DBE participation. (Docket No. 45 at 6: 7-25). Plaintiff states that Deemer will testify to the importance of accurate DBE status reports from Defendant and how those reports are used by BART and the federal government. (Id.). At his deposition,*fn5 Mr. Deemer testified that BART's DBE program is the federal program, as implemented by BART and approved by the DOT. (Docket No. 45-14 at 8: 7-9). To that end, he also stated that BART is required to provide the government quarterly reports demonstrating DBE participation, which were based on Defendant's DBE status reports. (Id. at 8: 16-23; 12:16-18). Defendant's alleged false statements were significant, Mr. Deemer testified, because they diluted DBE ...

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