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United States, Ex Rel. v. Halliburton Co.

January 24, 2011


The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge



This is a qui tam action brought by Julie McBride, the relator, against Halliburton Company and other corporate defendants, including the company relator worked for, Services Employees International, Inc. The defendants, collectively called "KBR," provided support services to the military in Iraq. Relator worked as a Morale, Welfare and Recreation ("MWR") director, and claims, inter alia, that KBR "inflated headcounts (collected via 'situation reports,' commonly referred to as 'Sit Reps') documenting usage of its MWR facilities in Iraq and billed the government for 'costs' that were calculated based on those inflated headcounts." United States ex rel. McBride v. Hallburton Co., No. 05-CV-828, 2007 WL 1954441, at *1-2 (D.D.C. July 5, 2007).

Discovery has concluded, and disputes have arisen as to (1) whether relator may assert claims as to military bases other than Camps B3 and B4, after the parties submitted expert reports as to only Camps B3 and B4 by the deadline for the submission of expert reports; (2) whether defendants must provide additional information in response to certain interrogatories; (3) whether defendants may be compelled to do an additional search for certain electronically stored information; and (4) whether defendants should be sanctioned for not appearing at a Rule 30(b)(6) deposition that relator had noticed.*fn1 I resolve each of these issues in turn.


A. Background

Under Judge Kennedy's order, relator was to provide "expert rebuttal disclosures under Fed. R. Civ. P. 26, including expert rebuttal reports" by June 1, 2010. Order of May 3, 2010 [#102]. It is not disputed that in neither her initial expert report nor the rebuttal report did relator speak to any claims other than those based on Camps B3 and B4 under Task Order 59.

In her July 19, 2010 response to defendants' opposition to her motion to compel, however, relator indicated that she was going to claim that defendants has also perpetrated fraud at two other sites not mentioned in either her expert reports or her initial supplemental disclosures. Relator's Reply in Support of Her Motion to Compel ("Rep. Compel Docs.")[#111] at 10 n.11. Specifically, she was going to add (1) Camps C2 Remagen and C5 Taji to her list of sites where fraud occurred, and (2) extend the pertinent time frame for which she sought damages from March 2005 to February 2006. See Rep. Compel Docs. at 9-11. According to defendants, the new time period invoked a different pertinent contract document, Task Order 89.

Memorandum of Points and Authorities in Support of Defendants' Motion for Protective Order and Motion to Strike Supplemental Expert Report ("Prot. Memo.") [#119] at 6.

On July 19, 2010, relator served upon defendants a "supplemental report" from her expert that pertained to Camp C2 and C5. Id. On July 22, 2010 she served a Rule 30(b)(6) deposition notice--the first deposition request she had served--that included these two camps, Task Order 89, and a time period expanded through February 1, 2006 as deposition topics. Id.

B. The Supplemental Report Must Be Stricken

Taking the defendants' objection to the supplemental report first, it is clear that there is no right to file a supplemental expert report. To the contrary, the order accepting the parties' Joint Motion for Adjustment of Scheduling Order [#101] clearly anticipated the conclusion of the submission of expert reports and rebuttals. Order of May 3, 2010 [#102]. It certainly did not contemplate that there would be, in effect, another round of expert reports on claims that were not asserted in the initial or rebuttal reports.

Additionally, the applicable Federal Rule does not grant a license to file a supplemental report merely because one wants to. Rather, it imposes specific obligations upon a party to revise or supplement a previous expert report when it learns that in some material respect the expert's report or deposition testimony is "incomplete or incorrect," or by order of the court. Fed. R. Civ. P. 26(e)(1)(A). See Coles v. Perry, 217 F.R.D. 1, 3 (D.D.C. 2003)("Fed. R. Civ. P. 26(e) does not grant a license to supplement a previously filed expert report because a party wants to, but instead imposes an obligation to supplement the report when a party discovers the information it has disclosed is incomplete or incorrect."). No one is pretending that the supplemental report corrected a mistake or an incomplete statement from the first report, as one deals with Camps B3 and B4, and the other with Camps C2 and C5. Therefore, the motion to strike the supplemental report must be granted.

Whether relator may pursue events at Camps C2 and C5 under Task Order 89 for the period she wishes to address raises a different question to which the discovery rules do not speak. Discovery is a function of relevance, and relevance is defined by the claims and defenses asserted. Fed. R. Civ. P. 26(b)(1). The claims are asserted in the complaint, and the discovery must relate to them. Unfortunately, in this case, the parties are focusing on the discovery rules when, in my view, the true question presented is whether relator should now be permitted to amend her complaint to set forth her specific claims as to Camps C2 and C5 and any modification of the time period for which she seeks damages. Whether or not that report could speak to any issue not previously raised must be a function of whether or not relator could assert the claim at all, not whether her expert could speak to it.

Moreover, it must be recalled that the Second Amended Complaint [#52]*fn2 was not specific. Indeed, it claimed that the "head-counts . . . were inflated not only at Camp Fallujah, but throughout Iraq." Id. at ¶ 47. Second, it was Judge Kennedy who narrowed precisely the claims that relator was asserting when he stated:

Though the allegations undeniably are lean, McBride does allege that KBRSI submitted false claims regarding MWR headcounts. Her complaint states that payment under LOGCAP for MWR costs was based, at least "in significant part," on usage, i.e., "the number of patrons who utilize the facilities." Proposed 2nd Am. Compl. ¶ 24 ("[T]he U.S. paid KBR for the MWR facilities according to usage.").[FN18] Read in the light most favorable to McBride, this allegation may be deemed to state that Sit Rep usage statistics are used to calculate KBR's costs under LOGCAP. These costs are then submitted for payment to the government.

FN18 Elsewhere in the complaint (indeed, elsewhere in the same paragraph), McBride retreats from this assertion, alleging that KBR justified its need for greater spending on MWR and inflated an unidentified "budget" (none exists) based on the inflated headcounts. Proposed 2nd Am. Compl. ¶¶ 24-25, 44. Nonetheless, her most direct assertion--that usage statistics were used to calculate the costs claimed to the government--still remains.

United States ex rel. McBride v. Halliburton Co., et al., 05-CV-828, 2007 U.S. Dist. LEXIS 48112, at ...

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