United States District Court, District of Columbia
WILLIAM G. MOORE, JR., Plaintiff,
MICHAEL HARTMAN, et al., Defendants. WILLIAM G. MOORE, JR., Plaintiff,
UNITED STATES OF AMERICA, Defendant.
BERYL A. HOWELL, District Judge.
Over twenty years ago, the plaintiff, William G. Moore, Jr., filed these consolidated cases after his acquittal on serious felony charges. The ensuing years of litigation generated no fewer than sixteen judicial opinions and, more recently, a four-week concurrent jury and bench trial, in which the plaintiff sought over $235, 000, 000 for lost compensation, emotional and reputational damages. The jury returned a verdict for the defendants. The plaintiff now seeks a new jury trial on his claim against four living and one deceased former United States Postal Inspectors for retaliatory inducement to prosecution, under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971), Pl.'s Mot. for New Trial ("Pl.'s Mot."), Case No. 92-2288, ECF No. 511, and judgment in his favor on his claim against the United States for malicious prosecution, under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671 et seq. See generally Pl.'s Proposed Findings of Fact ("Pl.'s FOF"), ECF No. 126-1; Pl.'s Proposed Concl. of Law ("Pl.'s COL"), ECF No. 127.
Other Judges on this Court previously dismissed the plaintiff's Bivens claim against the Postal Inspectors twice and his FTCA claim against the United States three times, but the two claims at issue at trial and addressed in this Memorandum Opinion were revived each time on appeal. See Moore v. Hartman, Nos. 92-CV-2288 (NHJ), 93-CV-0324 (NHJ), 1993 WL 405785 (D.D.C. Sept. 24, 1993) ( 1993 Decision ) (granting motion to dismiss the plaintiff's Bivens and FTCA claims), aff'd in part, rev'd in part sub nom. Moore v. Valder, 65 F.3d 189 (D.C. Cir. 1995) ( Moore I ) (affirming dismissal of Bivens malicious prosecution claim, reversing dismissal of Bivens retaliatory prosecution claim and dismissal of FTCA claim); Moore v. Valder, No. 92-CV-2288, Mem. Op. (D.D.C. Feb. 5, 1998) ( 1998 Decision ) (denying summary judgment on Bivens claim against the Postal Inspector defendants, granting summary judgment on the Bivens claim against federal prosecutor, and granting summary judgment on the FTCA claim against the United States), aff'd in part, rev'd in part sub nom. Moore v. United States, 213 F.3d 705 (D.C. Cir. 2000) ( Moore II ) (affirming dismissal of Bivens retaliatory prosecution claim against federal prosecutor and FTCA abuse of process claim against the United States, and reversing dismissal of FTCA malicious prosecution claim against United States); Moore v. Hartman, 569 F.Supp.2d 133, 137 (D.D.C. 2008) ( 2008 Decision ) (granting summary judgment on the Bivens claim against the Postal Inspectors and the FTCA claim against the United States), rev'd, Moore v. Hartman, 644 F.3d 415, 426 (D.C. Cir. 2011) (Moore V) vacated sub nom. Hartman v. Moore, 547 U.S. 250 (2012) (vacating Moore V and remanding); Moore v. Hartman, 704 F.3d 1003 (D.C. Cir. 2013), cert. denied, 547 U.S. 250 (2013) ( Moore VI ) (reinstating Moore V ). This prolonged procedural history is set out below, after a brief overview of these cases, to provide context, first, for the factual findings and legal conclusions reached by this Court on the plaintiff's FTCA malicious prosecution claim against the United States and, second, for resolution of the plaintiff's motion for a new trial on his Bivens retaliatory inducement to prosecution claim against five former Postal Inspectors.
For the reasons discussed below, the Court reaches the same conclusion as the jury that heard the plaintiff's Bivens claim: The plaintiff has failed to prove, by a preponderance of the evidence, his FTCA claim of malicious prosecution by the United States. Moreover, the plaintiff is not entitled to un-do the jury verdict against him and re-do in a new trial his Bivens claim for retaliatory prosecution against the former Postal Inspectors.
Set out below is a brief overview of the factual background underlying these cases as well as a summary of the lengthy procedural history.
A. Factual Overview
In November 1989, another Judge on this Court granted the plaintiff's motion for a directed verdict of acquittal, under Rule 29 of the Federal Rules of Criminal Procedure, on criminal charges, inter alia, that he engaged in a conspiracy to defraud the United States, in violation of 18 U.S.C. § 371. United States v. Recognition Equip., Inc ., 725 F.Supp. 587, 587-88 (D.D.C. 1989). Rather than end the litigation between the parties, however, the plaintiff's acquittal triggered over twenty years of continuing litigation culminating in the concurrent bench and jury trial before this Court.
As detailed in the factual findings set out in Part III, infra, in July 1985, the Chief Postal Inspector opened an investigation into possible corruption at the highest level of the United States Postal Service ("USPS"). Over the course of the next three years, Postal Inspectors uncovered an illegal bribery and kickback scheme in which Peter Voss, the Vice Chairman of the USPS Board of Governors ("BOG"), took bribes from an outside consulting group to use his influence on a key subcommittee of the BOG to award a sole source contract for up to $400, 000, 000, to the consultants' client. If the scheme were successful, the Vice Chairman expected a percentage kickback from the sole source contract. The consultants' client and the source of the bribe monies paid to the BOG Vice Chairman was Recognition Equipment, Inc. ("REI"), a Dallas, Texas company headed by the plaintiff.
When the plaintiff took over as Chief Executive Officer ("CEO") of REI in 1982, he initiated a multi-pronged campaign to increase the company's business with USPS and, specifically, to obtain a sole source contract from USPS for the purchase of REI's mail sorting equipment, which used a different technology than that widely deployed by USPS. As part of what the plaintiff himself described as "aggressively pursu[ing] [the] contract, " 6/25/14 AM Tr. at 97,  the plaintiff (1) met with the highest management levels within USPS, including the Postmaster General and BOG members; (2) engaged members of the Texas congressional delegation to pressure USPS to alter its choice of mail-sorting technology and to introduce a bill designed to make REI the sole procurement contract winner; (3) testified before congressional committees and contributed to press reports critical of USPS's mail-sorting technology; and (4) hired, internally to REI, a new Vice President of Sales and Marketing, Robert W. Reedy, who was subsequently indicted with the plaintiff, to enhance the company's government contracting effort, as well as outside consultants to facilitate obtaining USPS contracts. At the recommendation of, and under pressure from, the corrupt BOG Vice Chairman, the plaintiff hired a small, Detroit-based consulting group, called Gnau and Associates, Inc. ("GAI"), at rates and terms far more expensive than comparative arrangements with REI's other outside consultants. The plaintiff's aggressive efforts to obtain a sole source contract for USPS mail-sorting equipment has been the centerpiece of his theory that he was targeted for prosecution due to his First Amendment protected activities. The public aspect of his campaign may have also made him an obvious target for the corrupt BOG Vice Chairman as a potential source of illegal payments, in return for steering to REI the USPS business so publicly and aggressively sought by the plaintiff.
In April 1986, a GAI employee, William Spartin, entered into a cooperation and non-prosecution agreement and unveiled the illegal bribery and kickback scheme to the Postal Inspectors. The following month, in May 1986, the BOG Vice Chairman pleaded guilty to criminal charges arising from his receipt of illegal payments from GAI, which had served as the conduit to funnel fees paid to GAI by REI to the BOG Vice Chairman. In the ensuing months, two additional co-conspirators from GAI, John Gnau and Michael Marcus, pleaded guilty, in October 1986 and January 1987, respectively, to charges relating to the illegal scheme.
Rather than rest on their laurels with the revelation of the illegal bribery and kickback scheme and the successful convictions of three co-conspirators, the Postal Inspectors, under the direction of the Chief Postal Inspector, continued their investigation by following the corrupt money to its source. This led the Postal Inspectors directly to REI, which had retained the convicted consultants under a lucrative retainer arrangement and which stood to benefit from the sole source contract that was one of the goals of the illegal scheme. As the plaintiff himself admitted during his testimony in this case, the connection between the conspirators and his company, REI, "looked suspicious, " 6/25/14 AM Tr. at 24, and presented such a "lousy set of circumstances, " id. at 25, that even the plaintiff agreed the investigation of REI and himself "would certainly be justified by the circumstances, " id. at 26.
Between the time of the guilty pleas of three co-conspirators in the illegal scheme and October 1988, Postal Inspectors collected additional documentary and other evidence, which they presented to the U.S. Attorney's Office for the District of Columbia ("DC USAO") in support of an indictment of the plaintiff, REI and Mr. Reedy. The DC USAO spent over a year considering whether to indict the company and two of its officers, holding at least seventeen internal meetings about this issue and providing defense counsel for the plaintiff and his co-defendants the opportunity to present, in writing and orally, reasons against an indictment. Nevertheless, after a meeting on September 22, 1988, between the then-U.S. Attorney for the DC USAO and defense counsel, the U.S. Attorney approved the indictment. Less than a month after this meeting, in October 1988, the grand jury returned the indictment, charging REI, the plaintiff and Mr. Reedy as co-conspirators in the illegal scheme.
As noted, the plaintiff and his co-defendants were acquitted at the criminal trial after the trial court concluded that the government had presented insufficient evidence in its case-in-chief "to establish a prima facie case that the Defendants conspired to defraud the United States." Recognition Equip., Inc., 725 F.Supp. at 587. Notably, in what may have been a strategic blunder, the trial prosecutor, former Assistant U.S. Attorney ("AUSA") Joseph Valder testified at the trial of the instant matter that he had held back evidence regarding a substantial number of missing pages from the notebook, labeled "Postal, " in which the plaintiff recorded notes about the USPS contracting effort, from the government's case-in-chief and, consequently, this evidence was not before the trial court for consideration during resolution of the Rule 29 motion for a judgment of acquittal. 7/17/14 AM Tr. at 30 (Valder testifying: "we had made a conscious judgment not to introduce in our case in chief in the criminal trial the fact of missing-Mr. Moore's missing pages from his Postal' notebook. It's a litigation strategy to hold it back for what we expected to be a vigorous cross-examination of Mr. Moore. So Judge Revercomb didn't have that fact before him or that set of information, but that was huge in the inspectors' judgment, the reviewers' judgment that Mr. Moore or someone under his direction or someone at the corporation had intentionally torn out" pages from his notebook). These missing pages from the plaintiff's notebook raised significant suspicion, due to information that participants in the illegal conspiracy had purged their files to cover-up their illegal scheme. 7/11/14 AM Tr. at 37-38 (Hartman testimony); 7/14/14 PM Tr. at 69 (Kormann testimony).
Following his acquittal, the plaintiff has relentlessly pursued damages claims against five Postal Inspectors, who had varying degrees of involvement in the investigation of the illegal bribery and kickback scheme, and against the United States. From the plaintiff's perspective, his five years of service in the U.S. Army and six years of service as CEO of a relatively small public company were poised to catapult him into a future career as CEO of a Fortune 100 or 500 company and for eligibility to be Secretary of Defense. 6/25/14 AM Tr. 62, 64. These career aspirations were quashed, according to the plaintiff, because of his indictment and warranted the damages he sought of over a quarter billion dollars. The past twenty-five years of consideration of the plaintiff's claims by the District Courts of the Northern District of Texas and the District of Columbia, the Court of Appeals for the D.C. Circuit on six separate appeals, and the U.S. Supreme Court on two appeals, left two claims for trial: the plaintiff's Bivens claim for retaliatory inducement to prosecution against five Postal Inspectors and an FTCA action for malicious prosecution against the United States.
B. Procedural History
Two years after his acquittal, the plaintiff filed, in the Northern District of Texas, a Bivens action for retaliatory prosecution against six Postal Inspectors and the AUSA who represented the government at trial, and an FTCA action against the United States. From the initiation of these lawsuits through 2008, two separate Judges on this Court concluded that the plaintiff's claims should be summarily resolved in favor of the defendants. See 1993 Decision (Holloway Johnson, J.); 2008 Decision (Urbina, J.). Each time, the district court's summary disposition rulings in favor of the defendants on the two claims at issue in the trial were reversed by the D.C. Circuit. See Moore I; Moore II; Moore IV . After the second remand, the district court denied the defendants' motion for summary judgment, Moore v. Hartman, Case No. 92-2288, Order, dated Aug. 8, 2003, ECF No. 283, and reconsideration with respect to the FTCA claim, Moore v. Hartman, Case No. 92-2288, dated Aug. 30, 2004, ECF No. 296, which decisions were affirmed on appeal, see Moore IV . The Supreme Court, however, vacated the appellate decision and remanded the case to the D.C. Circuit for further consideration in light of a decision in an unrelated case. Hartman, 132 S.Ct. 1740. Upon reconsideration, the D.C. Circuit, in 2013, reinstated its prior 2011 holding, see Moore VI, prompting this matter to proceed to trial on the plaintiff's Bivens retaliatory inducement to prosecution claim against the Postal Inspectors and his FTCA malicious prosecution claim against the United States. After hearing four weeks of evidence, the jury returned a verdict in favor of the defendant Postal Inspectors on the plaintiff's Bivens retaliatory prosecution claim. See Jury Verdict, ECF No. 507.
This procedural history is more fully discussed below.
1. Plaintiff's Initiation of Two Lawsuits
In November 1991, the plaintiff and his wife, Blanche K. Moore, filed a civil action in the United States District Court for the Northern District of Texas against six Postal Inspectors and an AUSA. None of these defendants were senior level managers or even supervisors within the USPS, the Postal Inspection Service or the DC USAO but, instead, were front-line agents and the trial prosecutor, who participated in the investigation and prosecution of the perpetrators of the illegal scheme. Although this complaint asserted five causes of action, only the Fifth Cause of Action, under Bivens, for retaliatory prosecution due to the plaintiff's exercise of his First Amendment rights survived the subsequent years of litigation to reach a jury. This claim alleged that "the defendants attempted to punish Plaintiff William G. Moore, Jr., because he directed criticism against the USPS, thereby depriving the Plaintiffs of their rights to free expression and to petition the government for redress of grievances guaranteed by the First Amendment of the United States Constitution." Bivens Compl. ¶ 36 ("Fifth Cause of Action"), Civ. No. 3:91-cv-02491-G (N.D. Tex. filed Oct. 14, 1992), ECF No. 1.
Shortly after the Bivens action was transferred to this Court, the plaintiff and his spouse filed a second complaint in the Northern District of Texas seeking damages against the United States under the FTCA for the same allegedly unlawful conduct with the identical causes of action set out in the Bivens action. See FTCA Compl.; Moore, et al. v. United States, Civ. No. 3:92-cv-02129-R, at 2 n.1 (N.D. Tex.), Mem. & Order, dated September 21, 1992, ECF No. 55. This case was also transferred to this Court and consolidated with the plaintiff's Bivens action. See Stipulated Order, Case No. 93-0324 (D.D.C. Mar. 3, 1993) (consolidating cases). Only the Second Cause of Action for malicious prosecution in the FTCA complaint survived for trial.
2. Key Judicial Decisions
The plaintiff's claims have received consideration from Judges and Justices at every level of the federal judicial system, resulting in multiple judicial opinions. This body of case law frames the issues for the conclusions of law on the plaintiff's FTCA claim and evaluating the plaintiff's motion for a new trial on his Bivens claim, necessitating review of the key decisions in this lengthy procedural history.
a. 1993 District Court Dismissal of Claims
In 1993, the first Judge on this Court to consider the plaintiff's claims dismissed both suits. Specifically, the Court dismissed the plaintiff's Bivens claim for malicious prosecution against the defendant Postal Inspectors for failure to assert more than "bare allegations of malice, " which were insufficient "to subject government officials either to the costs of trial or to the burdens of broad-reaching discovery." 1993 Moore, 1993 WL 405785 at *3-4 (internal quotations and citation omitted). As support for the plaintiff's contention that he was prosecuted to punish him for "aggressive lobbying" of the USPS and Congress to adopt REI's technology and "for suggesting qualified candidates for the position of Postmaster General, " the plaintiff offered six sources of purported "direct evidence:" "(1) the complaint itself, (2) the indictment in Moore's criminal case, (3) the testimony of Frank Bray at Moore's criminal trial, (4) Judge Revercomb's opinion entering a judgment of acquittal, (5) Moore's own affidavit, and (6) an affidavit executed by William Hittinger, a member of REI's board of directors." Id. at *4. The district court found that the first five evidentiary sources amounted to indirect evidence providing "only inferential proof of malice" insufficient to support the heightened standard required for a Bivens action. Id . The last item of evidence, the Hittinger Affidavit, recounted a lunch time conversation at which AUSA Valder and two of the defendant Postal Inspectors were present. According to the affidavit, AUSA Valder allegedly stated "that the merits of the case or whether the persons involved were guilty or not did not concern him. He explained that it was important to him that he win the case because he wanted to get a track record or some notoriety which would help him obtain a good position in private practice." Id. at *5. This evidence could not save the plaintiff's malicious prosecution Bivens claim against the Postal Inspectors because, although the court deemed this affidavit to be direct evidence of AUSA Valder's alleged improper motivation, "it provide[d] no evidence of the Inspectors' intent." Id. at *5 ("Nothing in the affidavit suggests that the Inspectors shared [AUSA] Valder's alleged motivations."). Given the insufficiency of the proffered evidence, the court dismissed the Bivens malicious prosecution claim against the Postal Inspectors. Id. at *6.
The court also dismissed the FTCA claims brought against the government, finding that the claims of constitutional violations of the First Amendment and the Fifth Amendment were barred by sovereign immunity since only common law tort claims were cognizable under the FTCA, id. at *7, and the remaining common law claims for malicious prosecution, false arrest and abuse of discretion were barred by the discretionary function exception to the FTCA, id. at *9. In applying the discretionary function exception, the court examined the plaintiff's allegations of prosecutorial misconduct "relating to the presentation of evidence to the grand jury, " "fail[ure] to disclose Brady material, " and that the "government harassed and intimidated witnesses, " id. at 8, and concluded that the alleged misconduct was so "closely linked to the exercise of prosecutorial discretion, " id., that "the discretionary function exception thus exempt[ed] the United States from liability for all the common law claims alleged in both the plaintiff['s] lawsuits." Id. at *9.
Upon concluding that (1) the Bivens claims against the Postal Inspectors failed to meet the heightened pleading standard required for malicious prosecution tort claims, (2) the claimed constitutional violations against the United States were precluded by the FTCA, and (3) the common law claims against the United States, under Bivens and the FTCA, were barred by the discretionary function exception, the court granted the defendants' motions to dismiss the consolidated actions brought by the plaintiff.
b. 1995-2000 Appellate Reversal of First Dismissal of Claims, Followed by District Court's Second Dismissal of FTCA Claim
On appeal, the D.C. Circuit affirmed in part and reversed in part the 1993 Decision. Moore I, 65 F.3d at 197. First, the D.C. Circuit affirmed the dismissal of the Bivens malicious prosecution claim against (1) AUSA Valder since "absolute immunity shield[ed] Valder from liability for the decision to prosecute Moore, " id. at 192, and (2) the Postal Inspector defendants because "it had not been clearly established that malicious prosecution violates any constitutional or statutory right" and, therefore, "qualified immunity defeat[ed] Moore's malicious prosecution claim, " id. at 195-96. While the Bivens malicious prosecution claim was dismissed as to all defendants, the D.C. Circuit reversed the dismissal of the Bivens retaliatory prosecution claim in Fifth Cause of Action in the Bivens complaint as to all of the defendants. Id. at 196. With respect to AUSA Valder, the Circuit acknowledged that "a prosecutor enjoys absolute immunity from section 1983 liability when he acts as an advocate by engaging in activities intimately associated with the judicial phase of the criminal process." Id. at 193 (internal quotations and citation omitted). As a result, "Valder's prosecutorial immunity insulate[ed] him from liability for his unquestionably advocatory decision to prosecute Moore" as well as "from liability for allegedly concealing exculpatory evidence from the grand jury and for allegedly manipulating evidence before the grand jury to create a false impression of what Moore knew about the alleged fraudulent schemes." Id. at 194. Nevertheless, the Circuit found that AUSA Valder had "not met his burden of establishing that absolute immunity protect[ed] him from potential liability for the other instances of misconduct alleged, " id., including allegations that he (1) "intimidated and coerced witnesses into changing their testimony to incriminate Moore, " id. at 191, and (2) "disclos[ed] grand jury testimony to unauthorized third parties, " id. at 192, 197. The Court opined that neither of these alleged actions would be the type of advocatory conduct that would shield a prosecutor from liability. Id. at 194-95.
Regarding the defendant Postal Inspectors, the D.C. Circuit found that the plaintiff's retaliatory prosecution claim "alleg[ed] the violation of clearly established law" with sufficient factual allegations "to meet any applicable heightened pleading standard" required for a viable Bivens claim. Id. at 196. Specifically, the Circuit pointed to the allegations in the complaint that: (1) "[i]n publicly criticizing the USPS Moore unquestionably exercised his first amendment rights, " and (2) "[t]wo of the postal inspectors, who reported to USPS management, heard and did not repudiate Valder's declaration that Moore's innocence was irrelevant to the prosecution he intended to pursue, " referring to the lunch conversation recounted in the Hittinger Affidavit. Id. As a result, the Court reversed the dismissal of and remanded the Fifth Cause of Action in the Bivens complaint for retaliatory prosecution against all of the defendants.
Finally, the Circuit affirmed in part and reversed in part the district court's dismissal of the plaintiff's FTCA claim against the United States. The discretionary function exception shielded the United States from "Moore's claims that Valder and the postal inspectors pressured witnesses into incriminating him, concealed and distorted exculpatory evidence to create a false impression of what he knew about the fraud schemes and withheld material exculpatory information from him after the grand jury returned an indictment." Id . at 197. By contrast, "[d]isclosing grand jury testimony to unauthorized third parties" was found not to be a "discretionary activity nor... inextricably tied to matters requiring the exercise of discretion." Id. at 197. Thus, the D.C. Circuit concluded that the district court erred in dismissing the FTCA claim in its entirety for lack of subject matter jurisdiction, since not all of the plaintiff's allegations of misconduct fell under the FTCA "discretionary function" exception. Id . In reversing and remanding the FTCA claim for malicious prosecution against the United States, the Circuit "express[ed] no view whether the allegation is otherwise cognizable under the FTCA or whether it is supported by the evidence." Id.
In sum, in its 1995 decision, the Circuit affirmed the dismissal of the Bivens malicious prosecution claim against all defendants, but reversed both the dismissal of the Bivens retaliatory prosecution claim against all defendants, and the dismissal of the FTCA malicious prosecution claim against the United States based upon the alleged unauthorized disclosure of grand jury testimony.
On remand, the district court for the second time dismissed the Bivens claim for retaliatory prosecution against AUSA Valder as well as the FTCA claim for malicious prosecution against the United States. See 1998 Decision . The plaintiff appealed the dismissal of his claims and the D.C. Circuit addressed the case for a second time.
c. 2000-2004 Appellate Reversal of District Court's Second Dismissal of FTCA Claim
In 2000, the D.C. Circuit affirmed the district court's decision to dismiss the plaintiff's Bivens retaliatory prosecution claim against AUSA Valder and the FTCA abuse of process claim against the United States, but reversed the dismissal of the FTCA malicious prosecution claim against the United States. Moore II, 213 F.3d at 710, 713. The FTCA malicious prosecution claim required proof of four elements under local law: "(1) the defendant's initiation or procurement of a criminal proceeding against the plaintiff; (2) absence of probable cause for the proceeding; (3) malicious intent on the part of the defendant; and (4) termination of the proceeding in favor of the plaintiff." Id. at 710 (citations omitted). The Court first noted the significant obstacles to satisfying the first element of the malicious prosecution claim in this case since "none of Valder's conduct can be the basis for a malicious prosecution claim against the government because he is not an investigative or law enforcement officer" and, other than "the conduct of the postal inspectors in disclosing grand jury material, " the "remainder of the postal inspector's conduct fell within the FTCA's discretionary function exception." Id. Thus, to satisfy the first element that the defendants procured the indictment, the plaintiff must establish "a chain of causation' linking the defendant's actions with the initiation of criminal proceedings, " which the plaintiff tried to show by alleging that "the postal inspectors' releasing of grand jury testimony to Spartin... caused Spartin to incriminate him, which led to his indictment and then his prosecution." Id. Since the plaintiff did not allege that the defendant Postal Inspectors made any misrepresentations to the grand jury, however, he needed to show that "but for the postal inspectors' disclosure of grand jury testimony to Spartin, he would not have implicated Moore before the grand jury." Id. at 711. "On the other hand, if Moore would have been indicted and prosecuted anyway, even without the postal inspectors' alleged misconduct and Spartin's testimony, then the United States cannot be held liable." Id. at 712. Since "the case [was] still at the pleading stage" where "there is no telling how the evidence will turn out" and the "complaint sufficiently set forth the first element of the malicious prosecution tort, " the Circuit remanded the FTCA malicious prosecution claim. Id.
On remand, the Postal Inspectors again moved for summary judgment on the plaintiff's Bivens retaliatory prosecution claim, arguing that qualified immunity shielded them from suit because the prosecution of the plaintiff was supported by probable cause. Defs.' Mot. for Summ. J., Moore v. Hartman, Case No. 92-2288 (D.D.C. July 30, 2001), ECF No. 254. Alternatively, they argued that summary judgment was proper because the plaintiff had not produced sufficient evidence of retaliatory motive. Id. The district court denied the Postal Inspectors' motion in a one-paragraph order, citing material disputed facts "surrounding the presentation of evidence to the grand jury and the disclosure of grand jury testimony as to a key prosecution witness." Order, Moore v. Hartman, Case No. 92-2288 (D.D.C. Aug. 5, 2003), ECF No. 283.
On interlocutory appeal, the D.C. Circuit affirmed the denial of summary judgment on the plaintiff's Bivens retaliatory prosecution claim, rejecting both grounds posited by the defendant Postal Inspectors. Moore v. Hartman, 388 F.3d 871, 872-3 (D.C. Cir. 2004) ( Moore III ). With respect to the first ground, the Court cited an earlier decision in Haynesworth v. Miller, 820 F.2d 1245 (D.C. Cir. 1987), stating that "[n]owhere does [that decision] suggest that lack of probable cause is an element of the claim, nor does its silence imply such a requirement." Moore III, 388 F.3d at 878. Rather, "[t]he standard Haynesworth articulated is this: once a plaintiff shows protected conduct to have been a motivating factor in the decision to press charges, the burden shifts to the officials to show that they would have pursued the case anyway. Given that probable cause usually represents only one factor among many in the decision to prosecute-some others being the strength of the evidence, the resources required for the prosecution, the relation to enforcement priorities, and the defendant's culpability-there is no reason to expect that the mere existence of probable cause will suffice under Haynesworth to protect government officials from liability." Id . Accordingly, the Circuit held that lack of probable cause is not required to establish a Bivens retaliatory prosecution claim in this Circuit. Id. at 879 ("several other circuits require lack of probable cause in retaliatory prosecution actions... these cases, however, are not the law of this circuit- Haynesworth is") (citations omitted).
With respect to the second ground on which the defendant Postal Inspectors sought summary judgment, the Court explained that, while "[q]ualified immunity generally shields public officials from civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known, " id. at 872-73 (internal quotations and citations omitted), this was not the circumstance presented. Instead, "the clearly established law of this circuit barred government officials from bringing charges they would not have pursued absent retaliatory motive, regardless of whether they had probable cause to do so." Id . at 872. As applied in this case, the Court found that "what the inspectors were doing-prosecuting a case they otherwise would have left alone-violated the First Amendment." Id. at 885. Thus, the Court affirmed the district court's finding that the defendant Postal Inspectors were not entitled to qualified immunity on the plaintiff's Bivens retaliatory prosecution claim and remanded the case "reassur[ing] both sides" that "the next step, presumably, will be preparation for trial." Id. at 886 (emphasis in original).
d. 2006 Supreme Court Review Requiring Proof of No-Probable Cause for FTCA Malicious Prosecution Claim
The next step, however, was not trial but rather consideration by the Supreme Court, which agreed with the defendant Postal Inspectors that "want of probable cause must be alleged and proven" to establish that a prosecution was induced in retaliation for protected speech. Hartman v. Moore, 547 U.S. 250, 252 (2006). Moreover, the Supreme Court placed the onus on the plaintiff to "show that the criminal action was begun without probable cause for charging the crime in the first place." Id. at 258. In reaching this conclusion, the Supreme Court reasoned that "the need to prove a chain of causation from animus to injury, with details specific to retaliatory-prosecution cases, ... provides the strongest justification for the no-probable-cause requirement." Id. at 259. The Court recognized that proving this causal connection is difficult, id . 261-265, but nevertheless specifically stated that "a plaintiff like Moore must show that the nonprosecuting official acted in retaliation, and must also show that he induced the prosecutor to bring charges that would not have been initiated without his urging." Id . at 262. Accordingly, having found absence of probable cause to be an element of the plaintiff's claim, the Supreme Court reversed and remanded the action.
e. 2007-2009 Appellate Reversal of District Court's Dismissal of Both Bivens and FTCA Claims
On remand to the district court, the defendants moved for summary judgment on the two claims remaining-the Bivens claim of retaliatory prosecution against the Postal Inspectors and the FTCA malicious prosecution claim against the United States-on the ground that "the plaintiff cannot prove the absence of probable cause." 2008 Decision, 569 F.Supp.2d at 134. While recognizing that "[o]rdinarily, when the facts are in dispute, the question of probable cause is one for the jury, " the district court concluded that, in this case, "[a] valid indictment conclusively determines the existence of probable cause to bring charges against a suspect." Id. at 137. "Because the plaintiff is unable to establish lack of probable cause, " id. at 134, the court granted summary judgment to the defendants and dismissed both the plaintiff's Bivens retaliatory prosecution claim against the Postal Inspector defendants as well as the FTCA malicious prosecutions claim against the United States. Id. at 141.
On appeal, in its fourth opinion pertaining to this action, the D.C. Circuit again disagreed with the district court's reasoning for dismissing the plaintiff's claims and remanded the case. Moore v. Hartman, 571 F.3d. 62, 65 (D.C. Cir. 2009) ( Moore IV ). With regards to the Bivens claim, the Circuit explained that "[u]nder the Supreme Court's decision, the three elements of a retaliatory prosecution claim are that: (1) the appellant's conduct allegedly retaliated against or sought to be deterred was constitutionally protected; (2) the government's bringing of the criminal prosecution was motivated at least in part by a purpose to retaliate for or to deter that conduct; and (3) the government lacked probable cause to bring the criminal prosecution against the appellant." Id. at 65 (citing Hartman, 547 U.S. at 265-66 and Moore II, 213 F.3d at 709 (describing the first two elements of a retaliatory prosecution claim)). Likewise, the Circuit recognized that a malicious prosecution claim requires, among other elements, proof of "lack of probable cause for the underlying prosecution." Id . at 66 (citations omitted).
The Circuit rejected the district court's finding that an indictment is conclusive evidence of probable cause and held that an indictment is prima facie evidence of probable cause and merely creates a presumption, which may then be rebutted by contrary evidence. Id. at 67-68. The case was remanded with instructions to "take into account the rebuttable presumption in favor of probable cause" and "consider whether appellant has offered enough evidence to create a genuine issue of material fact as to the legitimacy, veracity, and sufficiency of the evidence presented to the grand jury." Id. at 69. Under this standard the plaintiff needed to "present evidence that the indictment was produced by fraud, corruption, perjury, fabricated evidence, or other wrongful conduct undertaken in bad faith" to overcome the prima facie evidence of probable cause presented by the indictment. Id.
f. 2010-2013 District and Circuit Courts' Denial of Summary Judgment on Both Bivens and FTCA Claims
Upon remand, all defendants moved again for summary judgment on both the Bivens retaliatory prosecution and FTCA malicious prosecution claims, arguing that even under the Circuit's "newly articulated standard" the plaintiff could not establish lack of probable cause for his indictment. Moore v. Hartman, 730 F.Supp.2d 174, 177 (D.D.C. 2010) ( 2010 Decision ). Specifically, the defendants contended that "no evidence" shows that the alleged improper conduct of the defendants "resulted in the grand jury indictment" and, in any event, "probable cause existed to prosecute [the plaintiff]." Id . at 178. The court denied the defendants' renewed motion for summary judgment because of the existence of "a genuine issue of material fact as to whether the government lacked probable cause to prosecute him." Id . at 175. This conclusion rested on the following evidentiary proffer, from which a "reasonable factfinder could conclude the government procured the plaintiff's indictment through wrongful conduct undertaken in bad faith and that the government lacked probable cause to prosecute the plaintiff, " id . at 179 (internal quotation and citations omitted): (1) "the prosecutor made statements to grand jury witnesses to not reveal' certain portions of their testimony to the grand jury;'" (2) "senior attorneys in the U.S. Attorney's Office allegedly stated in memoranda that the government's evidence against [the plaintiff] was extremely thin, ' and openly questioned whether charges should be brought against [him];'" (3) "the postal inspectors stated in a memorandum after the grand jury investigation that witnesses could testify that [the plaintiff] was not aware of the conspiracy;'" and (4) "the postal inspectors improperly showed GAI Officer Spartin other witnesses' grand jury statements, intimidated Spartin by threatening to prosecute his son and tearing up his plea agreement, and lobbied the U.S. Attorney's Office to prosecute [the plaintiff].'" Id. (brackets in original; quoting Moore IV, 571 F.3d at 65).
The defendant Postal Inspectors appealed the denial of summary judgment on the Bivens claim, on grounds that, even if probable cause were lacking, their mistaken belief that probable cause was present- "termed arguable probable cause'"- entitled them to qualified immunity. Moore V. 644 F.3d at 422. Although in the Fourth Amendment context, arguable probable cause "shields a defendant from a Fourth Amendment wrongful prosecution claim as well as a Fourth Amendment arrest claim, " the D.C. Circuit concluded in its fifth opinion in this case that "arguable probable cause does not apply to a First Amendment retaliatory inducement to prosecution case because probable cause is not an element of the First Amendment right allegedly violated." Id. at 423 ("Unlike the Fourth Amendment claim, however, the First Amendment does not itself require lack of probable case in order to establish a retaliatory inducement to prosecution claim."); id . at 426 ("we conclude that the doctrine of arguable probable cause does not apply to a First Amendment retaliatory inducement to prosecution claim."). The Circuit stressed that, per the Supreme Court's 2006 holding, "probable cause' (not arguable probable cause) must be pleaded and proven as an element of a plaintiff's case in order to establish a causal link between those inducing the prosecution and the prosecutors themselves" - and "[w]hether the Postal Inspectors had probable cause is a disputed issue of fact to be decided by the jurors at trial." Id . Accordingly, the Circuit affirmed the district court's conclusion that the Postal Inspectors were not entitled to qualified immunity on the grounds of arguable probable cause. Id.
The Postal Inspectors appealed this ruling that they were not entitled to qualified immunity to the Supreme Court, which, on June 11, 2012, vacated the 2011 D.C. Circuit opinion in Moore V and remanded the case with instructions to give the matter further consideration in light of the decision in Reichle v. Howards, 132 S.Ct. 2088 (2012); see Hartman, 132 S.Ct. 2740. In Reichle, the Supreme Court found that its 2006 Moore v. Hartman decision and subsequent appellate decisions had muddied the legal waters and "injected uncertainty into the law governing retaliatory arrests, " id . at 2096, making it unclear to a reasonable person, at the time of the alleged First Amendment retaliatory arrest in the Reichle case, that "an arrest supported by probable cause could [still] give rise to a First Amendment violation, " thereby entitling the officer in Reichle to qualified immunity. Id. at 2097.
On remand, in a single page opinion, the D.C. Circuit provided its final word before trial on this matter, reinstating the 2011 opinion in Moore V, with the following explanation:
Because retaliatory arrest and retaliatory prosecution are distinct constitutional violations and because the precedent in this Circuit clearly established in 1988, when the challenged conduct by the Postal Inspectors took place, the contours of the First Amendment right to be free from retaliatory prosecution, nothing in Reichle changes our conclusion that the absence-of-probable-cause requirement is not "an element of a First Amendment retaliation violation." Moore V, 644 F.3d at 424. If the Postal Inspectors believe that the Court in Reichle meant to decide what it refused to decide in Hartman and bring to a halt this three decades old case involving evidence that, unlike in Reichle where probable cause was conceded, comes close to the proverbial smoking gun, " Moore v. Hartman, 388 F.3d 871, 884 (D.C. Cir. 2004) ( Moore III '), they are free to once again petition for certiorari and ask the Supreme Court if it wishes to end this saga. Moore V, 704 F.3d at 1004. The defendants took the Circuit up on its invitation, again petitioning the Supreme Court for certiorari, which request was denied in October 2013. The case then proceeded to the jury trial on the plaintiff's remaining two Bivens and FTCA claims.
3. Pre-Trial Motions in Limine
Prior to trial, the parties filed multiple motions in limine, regarding, inter alia, at least eighteen separate evidentiary issues. See, e.g., Defs.' Omnibus Motion in Limine, ECF No. 417, 419; Pl.'s Mot. Concerning Source of Payment of Any Judgment, ECF No. 422; Pl.'s Mot. to Exclude References to "Presumption" of Probable Cause, ECF No. 420; Defs.' Mot. to Exclude the Testimony of Pl.'s Damages Experts, ECF No. 418; Pl.'s Mot. to Exclude Certain Testimony by Defense Expert Witness Jerald Udinsky, ECF No. 423. These pre-trial motions were promptly resolved in order for the trial to commence on June 23, 2014. See Minute Order, dated June 17, 2014; Minute Order, dated June 20, 2014. The plaintiff seeks to re-litigate three of the pretrial motions in limine as part of his motion for a new trial, which motion challenges the rulings: (1) excluding indemnification evidence; (2) granting the defendants six rather than three preemptory challenges; and (3) excluding a prior judicial opinion. See, infra, Part VI. A. and B.1. & 2.
At the concurrent four week FTCA bench and Bivens jury trial the plaintiff presented a total of twenty-three witnesses, only eleven of whom provided live testimony, and over 200 trial exhibits. For the majority of his witnesses, the plaintiff presented lengthy portions of depositions by screening videotapes of the depositions or reading aloud from the deposition transcripts. The plaintiff presented the testimony of: (1) the plaintiff; (2) the five Postal Inspector defendants, via pretrial depositions; (3) two former colleagues of the plaintiff at REI; (4) Peter Voss, the former Vice Chairman of USPS BOG, who was convicted for his participation in the illegal scheme, via de bene esse deposition; (5) the former Chairman of the USPS BOG, the former Postmaster General and other senior managers at USPS; (6) former AUSA Valder, via pretrial deposition, and one of his supervisors from the DC USAO; (7) Charles Stillman, the plaintiff's defense counsel at his criminal trial; (8) Helene Goldberg, a former Director of the Constitutional and Specialized Torts Branch at the Department of Justice, who testified via deposition as the government's witness under Federal Rule of Civil Procedure 30(b)(6); and (9) five witnesses on the alleged damages sustained by the plaintiff, including three persons proferred as experts under Federal Rule of Evidence 702, as well as the plaintiff's son and a long-time friend.
The defendants presented over 100 trial exhibits and the testimony of nine witnesses, including the live testimony of the four living defendant Postal Inspectors, former AUSA Valder, two former supervisors from the DC USAO,  and a witness proffered as a damages expert.
Following presentation of the twenty-six unique witnesses and admission of 305 trial exhibits, the jury returned a verdict for the Postal Inspectors, finding that the plaintiff had failed to prove by a preponderance of the evidence that he was criminally prosecuted in retaliation for his First Amendment protected activities. Thereafter, the parties filed approximately 400 pages of proposed findings of fact as well as their respective proposed conclusions of law on the FTCA claim, and the plaintiff moved for a new jury trial. See Pl.'s Mot., ECF No. 511; Pl.'s COLs, ECF No. 125; Defs.' Proposed Concls. of Law ("Defs.' COLs"), ECF No. 127; Defs.' Errata on its Proposed Concls. of Law (Defs.' Errata COLs"), ECF No. 128; Pl.'s Reply in Supp. of COLs ("Pl.'s Reply COLs"), ECF No.131.
The plaintiff's FTCA claim for malicious prosecution is addressed first before turning to the plaintiff's motion for a new jury trial on the Bivens claim for retaliatory prosecution.
II. LEGAL STANDARDS
A. Law Applicable to FTCA Claim
The United States, as a sovereign, is absolutely immune from suit and, unless Congress has unequivocally consented to permit a cause of action, no court has jurisdiction to entertain a claim against the United States. United States v. Sherwood, 312 U.S. 584, 586-87 (1941); United States v. Testan, 424 U.S. 392, 399 (1976). Congress created a limited waiver of sovereign immunity of the United States by enacting the FTCA, the provisions of which must be strictly construed in favor of the United States. See Dep't of Army v. Blue Fox, Inc., 525 U.S. 255, 261 (1999); United States v. Mitchell, 445 U.S. 535, 538 (1980); United States v. Kubrick, 444 U.S. 111, 117-18 (1979); Tri-State Hosp. Supply Corp. v. United States, 341 F.3d 571, 575 (D.C. Cir. 2003); Girdler v. United States, 923 F.Supp.2d 168, 186 (D.D.C. 2013).
The FTCA creates liability for certain torts committed by agencies of the United States or their employees "in the same manner and to the same extent as a private individual under like circumstances...." 28 U.S.C. § 2674; see Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 217-18 (2008) ("In the FTCA, Congress waived the United States' sovereign immunity for claims arising out of torts committed by federal employees."). The Supreme Court has explained that "the effect of the Tort Claims Act is to waive immunity from recognized causes of action, not to visit the Government with novel and unprecedented liabilities." United States v. Brown, 348 U.S. 110, 112-13 (1954) (internal quotation marks and citation omitted).
Generally, the FTCA does not allow for malicious prosecution claims against the United States. 28 U.S.C. § 2680(h) ("The provisions of this chapter and section 1346(b) of this title shall not apply to... [a]ny claim arising out of... malicious prosecution..."). An exception exists, however, "with regard to acts or omissions of investigative or law enforcement officers." Id. The D.C. Circuit has concluded that the Postal Inspectors involved in the investigation of the plaintiff are "investigative or law enforcement officers, " within the meaning of the FTCA. Moore II, 213 F.3d at 710-11, n.4.
When the exception does apply, the liability of the United States for the negligent or wrongful acts or omissions of its employees, acting within the scope of their employment, is determined "in accordance with the law of the place where the act or omission occurred." 28 U.S.C. § 1346(b)(1); see also FDIC v. Meyer, 510 U.S. 471, 478 (1994) (noting that Supreme Court has "consistently held that § 1346(b)'s reference to the law of the place' means law of the State - the source of substantive liability under the FTCA") (collecting cases). In this case, the D.C. Circuit has already concluded that "[w]ith respect to Moore's FTCA action against the United States for malicious prosecution and abuse of process, the law of the place where the act or omission occurred' is controlling, '" and that "District of Columbia law must be consulted." Moore II, 213 F.3d at 710.
1. Federal Rule of Civil Procedure 52(a) Applicable to Findings and Conclusions by the Court
Pursuant to Federal Rule of Civil Procedure 52(a), "[i]n an action tried upon the facts without a jury, " the Court must "find the facts specially and state its conclusions of law separately." FED. R. CIV. P. 52(a)(1); see Ascom Hasler Mailing Sys., Inc. v. U.S. Postal Serv., 885 F.Supp.2d 156, 164 (D.D.C. 2012); Foxtrap, Inc. v. Foxtrap, Inc., 671 F.2d 636, 638-39 n.1 (D.C. Cir. 1982); FTC v. Beatrice Foods, Inc., 587 F.2d 1225, 1230 n.1 (D.C. Cir. 1978); D.C. Fed'n of Civic Ass'ns v. Volpe, 459 F.2d 1231, 1259 n.19 (D.C. Cir. 1971). The "[f]indings and conclusions may be incorporated in any opinion or memorandum of decision the court may file." Defenders of Wildlife, Inc. v. Endangered Species Scientific Auth., 659 F.2d 168, 176 (D.C. Cir. 1981).
In setting forth the findings of fact, the court need not "address every factual contention and argumentative detail raised by the parties, " Mayaguez v. Corporacion Para El Desarrollo Del Oeste, 824 F.Supp.2d 289, 295 (D.P.R. 2011), or "discuss all evidence presented at trial, " Wachovia Bank N.A., Nat. Ass'n v. Tien, No. 13-11971, 2014 WL 7399064, at *4 (11th Cir. Dec. 31, 2014). Instead, according to the Advisory Committee Notes for Federal Rule 52, "a judge need only make brief, definite, pertinent findings and conclusions upon the contested matters; there is no necessity for over-elaboration of detail or particularization of facts." Caffey v. Togo, 159 F.3d 635 (D.C. Cir. 1998) (internal quotation marks omitted); see Fasolino Foods Co. v. Banca Nazionale del Lavoro, 961 F.2d 1052, 1058 (2d Cir. 1992) ("[a]ll that is required by Rule 52(a) is that the trial court provide findings that are adequate to allow a clear understanding of its ruling").
Moreover, the court "[f]indings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous..." FED. R. CIV. P. 52(a)(6); see Anderson v. City of Bessemer City, N.C ., 470 U.S. 564, 573 (1985) ("Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.") (internal quotations and citation omitted); Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 340 (D.C. Cir. 1989) (the "clear error" standard applies at least with regards to "the particularized factual findings that underlay the district court's determination").
B. Federal Rule of Civil Procedure 59 Applicable to Plaintiff's Motion for New Trial
Under Federal Rule of Civil Procedure 59, following a jury trial, the court may grant a motion for a new trial "for any reason for which a new trial has heretofore been granted in an action at law in federal court." FED. R. CIV. P. 59(a)(1)(A). Rather than define the precise circumstances justifying a new trial, Rule 59 turns to case law and permits a new trial in those circumstances traditionally viewed as permitting a new trial. ABM Marking, Inc. v. Zanasi Fratelli, SRL, 353 F.3d 541, 543 (7th Cir. 2003) ("Rule 59(a), in a bit of a circular way, allows new trials in cases where new trials have been traditionally allowed at law."). "The court has the power and duty to order a new trial whenever, in its judgment, this action is required in order to prevent injustice." 11 Charles Alan Wright & Arthur R. Miller, et al., FED. PRAC. & PROC. CIV. § 2805 (3d ed. 2012). Accordingly, motions for a new trial are granted only when "the court is convinced that the jury verdict was a seriously erroneous result' and where denial of the motion will result in a clear miscarriage of justice.'" In re Lorazepam & Clorazepate Antitrust Litig., 467 F.Supp.2d 74, 87 (D.D.C. 2006) (citation omitted); see also Rice v. Dist. of Columbia, 818 F.Supp.2d 47, 60 (D.D.C. 2011) ("The standard for granting a new trial is not whether minor evidentiary errors were made but rather whether there was a clear miscarriage of justice."); Nyman v. FDIC, 967 F.Supp. 1562, 1569 (D.D.C. 1997) (same).
The high threshold for a new trial reflects the "well-settled" principle that "Rule 59 is not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a second bite at the apple.'" Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998); see also Aero Int'l, Inc. v. U.S. Fire Ins. Co., 713 F.2d 1106, 1113 (5th Cir. 1983). "Although parties may certainly request a new trial or amended findings where clear errors or manifest injustice threaten, in the absence of such corruption of the judicial processes, where litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted, to battle for it again." Int'l Ore & Fertilizer Corp. v. SGS Control Servs., Inc., 38 F.3d 1279, 1287 (2d Cir. 1994) (internal quotations and citation omitted). Moreover, a Rule 59 motion is not the appropriate vehicle to revisit the strategic litigation decisions of counsel at trial.
"The authority to grant a new trial... is confided almost entirely to the exercise of discretion on the part of the trial court." Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, (1980); McNeal v. Hi-Lo Powered Scaffolding, Inc., 836 F.2d 637, 646 (D.C. Cir. 1988) ("The decision whether to grant a motion for a new trial is ordinarily entrusted to the sound discretion of the trial court.'" (quoting Grogan v. Gen. Maint. Serv. Co., 763 F.2d 444, 447 (D.C. Cir. 1985)). In exercising this discretion, the court must "be mindful of the jury's special function in our legal system and hesitate to disturb its finding." Long v. Howard Univ., 512 F.Supp.2d 1, 6 (D.D.C. 2007) (internal quotation marks and citations omitted).
The Supreme Court has made clear that "[a litigant] is entitled to a fair trial but not a perfect one, ' for there are no perfect trials." McDonough Power Equip. v. Greenwood, 464 U.S. 548, 553 (1984) (quoting Brown v. United States, 411 U.S. 223, 231-232 (1973)). This principle is predicated on the sound pragmatic reasons that "[t]rials are costly, not only for the parties, but also for the jurors performing their civic duty and for society which pays the judges and support personnel who manage the trials. It seems doubtful that our judicial system would have the resources to provide litigants with perfect trials, were they possible, and still keep abreast of its constantly increasing caseload." Id. Thus, a "district court in passing on a motion for a new trial... must be guided by what substantial justice requires and must disregard errors that were harmless." FED. PRAC. & PROC. CIV., supra, § 2882.
III. FINDINGS OF FACT FOR PLAINTIFF'S FTCA CLAIM
The parties presented evidence on the plaintiff's FTCA claim over four weeks of trial. To facilitate review of this voluminous record, the findings of fact are divided into four sections: (1) the initiation and progression of the criminal investigation into the bribery and kickback scheme involving the Vice Chairman of USPS' BOG and others; (2) the investigation of the plaintiff and his co-defendants; (3) the consideration given within the DC USAO to bringing criminal charges against the plaintiff and his co-defendants; and (4) the plaintiff's alleged damages that he claims to have sustained as a result of being indicted.
Initiation and Progression of Investigation into Illegal Scheme
The plaintiff chose over twenty years ago to sue not only the United States under the FTCA but also the lowest level government employees involved in the investigation and prosecution of the criminal charges against him, despite the fact that virtually every significant step of this investigation leading to the indictment was approved by supervisory personnel. To provide context for the actions taken by the Postal Inspectors and their supervisors, the Court first describes the structure of the USPS, including the allocation of responsibilities within USPS for the award of contracts, and the USPS procurements that were underway when this investigation began, before turning to the criminal investigation at issue in this lawsuit.
1. Brief Overview of Pertinent Components of USPS
The USPS is structured with an eleven-person BOG, comprised of nine governors appointed by the President, the Postmaster General ("PMG") and the Deputy Postmaster General ("DPMG"). 7/8/14 AM Tr. at 72-73 (Carlin testimony). The PMG is appointed by the nine governors and then the nine governors and the PMG select the DPMG. Id. The PMG is the head of the USPS executive committee and the top manager within USPS. Once named, the PMG is a member of the BOG for all matters except rate-setting and classifications. 7/1/14 AM Tr. at 31 (Jellison Dep. testimony); 7/8/14 AM Tr. at 73 (Carlin testimony).
Two USPS committees figured in the investigation of the bribery and kickback scheme at issue in this case: BOG's Technology and Development Committee ("Technology Committee") and USPS management's Capital Investment Committee ("CIC"). During the relevant time period of the conspiracy, the Technology Committee had four members: Vice Chairman Peter Voss, Ruth Peters, George Camp, and DPMG Jackie Strange. 7/8/14 AM Tr. at 24 (Carlin testimony); 7/10/14 AM Tr. at 99 (Clauson testimony). The Technology Committee was tasked at the Board level with providing guidance on technology procurement issues within the USPS. 7/8/14 AM Tr. at 40 (Carlin testimony); 7/1/14 PM Tr. at 34 (Jellison Dep. testimony). By contrast, the CIC drew its members from senior USPS management and had the responsibility of deciding on all major capital investments. 7/1/14 PM Tr. at 34 (Jellison Dep. testimony). While "smaller procurements were approved and handled on lower levels, " significant contracts for over approximately $10 million dollars, required CIC's approval. 7/10/14 AM Tr. at 99-100 (Clauson testimony); see also 7/1/14 PM Tr. at 58 (Jellison Dep. testimony that: "if it were over $5 million, it had to go to the board for approval.").
The Postal Inspection Service is a USPS component with the mission of investigating waste, fraud and abuse within this government agency. Clauson Dep. at 16, Sept. 3, 1999 ("[t]he Postal Inspector is charged with responsibilities of carrying out the audit and criminal investigative and security missions of the United States Postal Service"); 7/8/14 AM Tr. at 58 (Carlin testimony). As such, Postal Inspectors are federal law enforcement officers and authorized to carry firearms and make arrests. 7/10/14 AM Tr. at 84 (Clauson testimony). With respect to criminal matters, the Postal Inspection Service operates highly independently of USPS management. 7/8/14 AM Tr. at 58-59 (Carlin testimony); 7/10/2014 AM Tr. at 135-36 (Clauson testimony).
2. USPS Automation Program
From the 1970s to the early 1980s, the USPS began an automation program to transition from sorting mail by hand to use of automated mail sorting machines. As part of this process, in 1980, the USPS decided to use optical character reading ("OCR") equipment that could identify key information in addresses to facilitate mail routing and delivery. Pl.'s Ex. 538 ¶ 1 (Stipulated Facts). Machines capable of reading a single line of the zip code at the bottom of an address were known as single-line optical readers ("SLOCR"). Id. ¶ 2. In "Phase I" of the USPS' mail automation process, which began in 1980, SLOCR machines were purchased from Pitney Bowes and Burroughs Corporation. Id. To implement Phase I most effectively, in the early 1980s, the USPS urged customers to use nine-digit ZIP codes ("ZIP"), which would provide sufficient routing information on the last line of an address to allow SLOCR machines to sort mail more granularly. See 7/7/14 AM Tr. at 36 (Jellison Dep. testimony); Robert Edwards Dep. 72, Feb. 15, 2000. As the plaintiff recognized, the USPS urged adoption of the nine-digit Zip codes because "it simplified the automation strategy, and the problem [USPS was] having is they had tremendous amount of mail and... all these employees who had to sort it." 6/24/14 AM Tr. at 117 (Plaintiff testimony).
At the time that USPS deployed the SLOCR machines, the technology for multi-line OCR machines ("MLOCR"), which could "read" more than the single, bottom line in an address, was still in the developmental stages. Indeed, USPS had invested almost $70, 000, 000 in REI for research and development of MLOCR machines. 6/24/14 AM Tr. at 104-05 (Plaintiff testimony: "I think we had received up to that point somewhere between 50 to 70 million dollars over a number of years in development funds...."); 6/25/14 AM Tr. at 70 (Plaintiff testimony: "And the postal service had given us, prior to my arrival, close to $70 million to build machines."). In addition, by 1983, the USPS had deployed five of the REI prototype MLOCR machines in various field offices for testing. Pl.'s Ex 25 at 32 (U.S. Office of Technology Assessment report, dated June 1984 ("OTA Report")). In the view of USPS, these field tests confirmed continuing operational concerns with the REI machines and, consequently, the USPS did not believe that REI's MLOCR machines were a viable option for mass deployment. 7/1/14 PM Tr. at 6 (Jellison Dep. testimony: "Q: You were opposed to going with REI, weren't you, Mr. Jellison? A: Not with REI. With the read machine they were offering as a multi-line machine"). At the same time, however, customers were not adopting the use of Zip as projected by USPS, which reduced the performance of, and efficiency savings from, SLOCR machines. 7/15/14 PM Tr. at 101 (Edwards testimony); 6/24/14 AM Tr. at 117 (Plaintiff testimony).
Despite the slow adoption of Zip, in January 1984, the BOG approved funding for "Phase II" of its automation strategy, which included the purchase of additional SLOCR machines. Pl.'s Ex. 538 ¶ 7 (Stipulated Facts).
Six months later, in June 1984, the United States Office of Technology Assessment issued a report entitled, "Review of Postal Automation Strategy, A Technical and Decision Analysis, A Technical Memorandum, " in response to congressional requests "to conduct a comparative technical and economic analysis" of SLOCRs and MLOCR machines. Pl.'s Ex. 25 at 1 (OTA Report). The OTA Report acknowledged that "multi-line OCR may not have been a technically viable alternative 3 or 4 years ago when USPS made its initial decision to go with single-line OCRs, " id. at 3, and that "[i]n the 1976-1980 period, when the basic USPS automation program was developed, the single-line optical character reader was, in the opinion of USPS, the only proven equipment, " id. at 16. The OTA Report noted that "[i]n the late 1970's, USPS procured one multi-line OCR from REI" that "did not satisfy USPS performance requirements, but the single-line OCRS of five foreign manufacturers did." Id. at 32. The OTA Report found that, with USPS research and development support, "REI has developed one of the leading multi-line OCRs on the world market, " id. at 8, and that "USPS test data indicate that the multi-line OCR performance is now [as of June 1984] fully competitive with single-line OCR performances, " id. at 32. Given that MLOCRs "offer a significant technical performance advantage over [SLOCRs] in processing 5-digit ZIP mail to the 9-digit level, " id . at 33, the OTA Report recommended a "strategy offering the greatest economic return to USPS, " namely: that "USPS proceed with the Phase II single-line OCR procurement, but simultaneously initiate release-loan testing... on single- to multi-line conversion, and then convert all single-line OCRs to multi-line as soon as possible, regardless of the level of Zip use, " id . at 3.
Consistent with the recommendation in the OTA Report to "proceed with the Phase II [SL]OCR procurement, " on July 9, 1984, the BOG referred the matter of the Phase II automation procurement to the BOG's Technology Committee. Pl.'s Ex. 538 at ¶ 10 (Stipulated Facts). The contract for Phase II of the automation program to supply 403 SLOCR machines, at a cost of $200, 000 each, was awarded, on July 10, 1984, to Electrocom Automation, Inc. ("ECA"), a domestic company that licensed the OCR technology from a German company, AEG-Telefunken ("AEG"). Id. at ¶ 11.
One year later, however, under the direction of PMG Paul Carlin, the USPS made a "mid-course" correction in the procurement process. This mid-course correction provided for two additional phases of the automation program: Phase IIA would involve "the development and testing of a retrofit kit to enable the Phase II single-line OCRs to read multi-line, that is four lines of the address rather than just the last line of the address... In addition, a Phase III plan was instituted which involved development and testing of a completely new multi-line machine to replace existing Phase I OCRs." Pl.'s Ex. 229 at 58 (ZIP⺶覚똪 Investigative Report to Congress, dated Jan. 1987, by Postal Inspection Service ("ZIP Report")).
3. Summer of 1985 Initiation of Investigation of BOG Vice Chairman Voss
In January 1985, USPS came under new leadership when Paul Carlin succeeded William Bolger as Postmaster General. Pl.'s Ex. 538 ¶ 12 (Stipulated Facts). Under pressure to reduce operational losses and increase mail sorting automation in the face of low adoption of Zip codes, PMG Carlin announced a mid-course correction on July 12, 1985 and, consistent with the OTA Report recommendation, further announced, on August 5, 1985, "that the next automation procurements would be decided by competitive testing, in two phases: Phase IIA would involve retrofitting ECA's existing SLOCRs with MLOCR capabilities, and Phase III would involve the purchase of new MLOCRs." Pl.'s Ex. 538 ¶¶ 15, 16 (Stipulated Facts). The contract for the Phase III purchase of new MLOCRs was estimated to be up to $400 million dollars. 7/10/14 AM Tr. at 93 (Clauson Testimony). Set against this backdrop of procurement decisions, certain events occurred in the early summer of 1985 that raised the concern of PMG Carlin and the Chief Postal Inspector ("CPI") Charles Clauson about possible corrupt dealings on the BOG.
a. June 1985 CIC Meeting
At a June 1985 meeting of the CIC attended by CPI Clauson, who was a CIC member, DPMG Jackie Strange, who served as a member of BOG's Technology Committee, made an announcement that made "people in the room... aghast... and shocked" and "thirty years later [it was] still edged in [their] mind[s]." 7/10/14 AM Tr. at 100-01 (Clauson testimony). Ms. Strange advised that the CIC "would not be asked for a decision on [the OCR] procurement, " id. at 100, because the Technology Committee had decided to give a sole source procurement contract, without competition, to REI, id. at 101. CPI Clauson testified that Ms. Strange's announcement was particularly disturbing because "the technology committee of the board specifically, is telling us [referring to the CIC] they want approval of this. They're telling us, not asking us to give them approval [for]... sole source procurement." Id. at 109.
After this meeting, CPI Clauson instructed Postal Inspector Dan Harrington to investigate what was going on within the Technology Committee. 7/10/14 AM Tr. at 102-03 (Clauson Testimony). CPI Clauson told Postal Inspector Harrington "that [he] wanted to really start checking out with greater intensity what was going on here, what the... technology committee of the Board of Governors was up to, who they were in contact with... [j]ust an inquiry to check out to see what was going on here." Id. at 102-03. CPI Clauson testified that his "suspicions were directed directly at Voss." Id. at 103. His "suspicion" grew because he "saw Voss get himself assigned to the... technology committee... saw him place a person as the head of [the] technology committee who was generally considered incompetent, a person he could easily manipulate. Id. at 108.
A few days after the CIC meeting, Ms. Strange "called [CPI] Clauson to her office for another reason... [a]nd at the conclusion of a brief discussion... she got up, closed the door and began talking about [the OCR] procurement." Id. at 111. Ms. Strange "indicated that Voss had threatened her regarding complying with his preference to give a sole source procurement contract to REI and that "he had misrepresented himself as speaking for the [BOG] in attempting to maneuver these preferences to actual commitment of a contract." Id. at 115; see Defs.' Ex. 19 (Memorandum of Interview of Jackie Strange, dated July 18, 1985, by CPI Clauson ("Strange Interview")). While "she had no evidence whatsoever of personal gain on the part of any persons involved in the [OCR Procurement] process" Ms. Strange expressed "her belief that no person would go to the extremes that Voss had gone to in an attempt to influence the procurement without some personal gain." Id. at 115; see Defs.' Ex. 19 (Strange Interview). That same day, CPI Clauson arranged for Ms. Strange to speak to Postal Inspector Harrington about Vice Chairman Voss' involvement in the OCR procurement process. Id. at 116.
Ms. Strange's information that "she was being personally threatened" by Vice Chairman Voss to award REI a sole source contract, highlighted for CPI Clauson the need to investigate Vice Chairman Voss and he subsequently assigned additional inspectors. Id. at 117. At this time, the focus of the investigation was Vice Chairman Voss, not the plaintiff. Id. at 118; 7/15/14 PM Tr. at 79-80 (Edwards testimony).
a. PMG Carlin's Suspicions Aroused
Just as CPI Clauson's suspicions had been heightened by Ms. Strange's announcement of the BOG Technology Committee's direction to the CIC about awarding a sole source contract to REI, PMG Carlin was concerned about the Technology Committee's focus on a single vendor, REI, in the procurement process. 7/8/14 AM Tr. at 40-41 (Carlin testifying: "And I have to say that in no other instance was the board so insistent on providing a contract to a specific individual as this one."); id . at 119-20 (Carlin testifying: Peter Voss and Ruth Peters "in effect became spokesmen for that organization"); id. at 120 (Carlin testifying: "you had one member of the board who was in effect acting as if he was a surrogate for a single vendor and doing unusual things"). Indeed, soon after Paul Carlin succeeded PMG William Bolger as USPS' PMG, Vice Chairman Voss pressured PMG Carlin to meet with GAI as representatives of REI in January 1985. 7/8/14 AM Tr. at 121 (Carlin testifying that he agreed to meet with GAI because Vice Chairman Voss "insisted"). Also at Vice Chairman Voss' request, PMG Carlin inspected REI's MLOCR prototype equipment in Chicago. Id . at 23 (Carlin testifying that at request of "Peter Voss, a member of the board, " he looked at prototype of REI machine "located in Chicago post office" and "the day-to-day operating officials... said it's a nice machine. It just doesn't help us. We don't use it at all."); id . at 44 (Carlin testifying "at the request of Peter Voss I did look at... one of five that had been provided by REI. What I found was that it was a nice machine. It just didn't work at that time in an operating environment. And the operating people told me we have too much mail coming through. We just can't keep trying to mother this thing along.").
PMG Carlin described the depth of involvement in the procurement process of BOG members as "highly unusual" and "out of the ordinary." 7/8/14 AM Tr. at 118. This left the distinct impression on him that "particularly one member... seemed to me had a vested interest in the outcome." Id. at 56. When PMG Carlin announced the mid-course correction in July, 1985, Vice Chairman Voss pushed for a sole source contract to be awarded to REI. 7/8/14 AM Tr. at 23-24, 40-41 (Carlin testimony). After he began cooperating, Vice Chairman Voss confirmed that "he responded to the pressures of Gnau and Associates, Inc. and Recognition Equipment, Inc. by pressuring Postmaster General Carlin and management to either award a sole source contract to Recognition Equipment, Inc. or test the competing machines within the next 60 days" because he "believed that a tightened test schedule would favor Recognition Equipment, Inc." Defs.' Ex. 65 at 11 (Interview Summary of Peter E. Voss presented to grand jury on August 28, 1986 ("Voss G.J. Interview Summary")); see also Pl.'s Ex. 165 at Bates SMFC3 11402 ("Factual Foundation Supporting Guilty Pleas" of Peter Voss, dated May 30, 1986, stating: "During May, June and July 1985, Peter Voss encouraged, recommended and instructed the Deputy Postmaster General that USPS purchase the MLOCR system from the Dallas corporation" and "to bypass the established review/approval process"). PMG Carlin testified that he "had been a member of the senior management since postal reorganization for 15 years at that point. Never once do I recall any single procurement, a company that was trying to get a contract, approaching and trying to manipulate the Board of Governors. This was the sole exception." 7/8/14 AM Tr. at 118.
PMG Carlin was apparently not alone in observing suspicious conduct by BOG members. He testified about being "alerted by counsel to the Board of Governors that there was skullduggery going on and that somebody could go to jail." 7/8/14 AM Tr. at 50 (Carlin testimony). Due to his concerns, PMG Carlin asked CPI Clauson to take the "highly unusual" step of assigning a Postal Inspector to monitor the new procurement phases instituted with the July 1985 mid-course correction, 7/8/14 PM Tr. at 57 (Carlin testimony), and ensure the process "was as fair and straightforward as it should be, " id . at 117. PMG Carlin publicly announced this measure in a July 14, 1985 memorandum to the BOG. Id. at 56; Pl.'s Ex. 73 (PMG Carlin Memorandum to BOG, dated July 14, 1985).
To carry out PMG Carlin's instruction for a dedicated Postal Inspector to monitor the next procurement phases in the USPS automation program, CPI Clauson assigned Postal Inspector Edwards "to monitor the procurement of multi-line equipment." 7/15/2014 AM Tr. at 79 (Edwards testimony); Edwards Dep. at 25-26, Feb. 15, 2000. Postal Inspector Edwards testified that, when given this assignment, CPI Clauson did not ask him to look into REI, and he "did not care which vendor won the [OCR Procurement] competition, [he] simply wanted the most reliable, accurate, lowest cost vendor to win legitimately, " 7/15/14 AM Tr. at 79-80.
In sum, by July of 1985, after being informed by Ms. Strange that Vice Chairman Voss used threats to persuade her to comply with his desire to award a sole source multi-million dollar OCR procurement contract to REI, CPI Clauson had decided to open an investigation into the conduct of members of the BOG Technology Committee, particularly Vice Chairman Voss. The concerns of PMG Carlin about the need to protect the procurement process only compounded CPI Clauson's suspicions.
4. Plaintiff and REI's Dealings with USPS Through Summer 1985
By July 1985, when CPI Clauson assigned Postal Inspectors to begin an investigation into BOG's Technology Committee and Vice Chairman Voss, the plaintiff had been REI's CEO for slightly over three years. In that time, he had undertaken a multi-pronged effort to increase USPS's purchases of REI's MLOCR machines. The critical underpinning of the plaintiff's claim of malicious prosecution is that he was targeted for criminal investigation and prosecution due to those efforts and, in particular, the plaintiff's public criticism of USPS management for choosing to deploy SLOCR technology in the early 1980's. In the plaintiff's view, his aggressive pursuit of USPS business for REI generated animosity towards him and his company by USPS management and resulted in his indictment. In evaluating the merits of this claim, a brief review of the historical business dealings between REI, the plaintiff and the USPS is helpful.
Significantly undercutting the plaintiff's view that USPS animosity towards the plaintiff was due to his public criticism of the USPS automation program is the evidence presented by the plaintiff at trial showing that before the plaintiff had engaged in any First Amendment protected activity, REI already had a "strained" relationship with USPS. 6/24/14 AM Tr. at 112 (Plaintiff testimony). Indeed, he testified that upon becoming CEO of REI in 1982, he set out to fix the company's relationship with USPS, since REI was on the brink of bankruptcy and increasing the postal business was one way to help turn the company around. 6/24/14 AM Tr. at 100-10. The plaintiff testified that his strategy to stabilize REI financially was "[n]ot at all" dependent on getting USPS business and that his decision "was whether we are going to pull the plug on postal or we were going to double down." 6/24/14 AM Tr. at 110; id. 6/25/14 PM Tr. at 66 (Plaintiff testifying that: "I was trying to... decide whether to fish or cut bait with the postal service.").
Shortly after he joined REI, the plaintiff reached out to then PMG William Bolger to "kind of try to smooth things out." 6/24/14 AM Tr. at 114 (Plaintiff testimony). PMG Bolger agreed to meet with the plaintiff about the state of REI's technology, id. at 115, and even suggested that REI might benefit from using a consulting firm, id. at 120. As reported in a Postal Inspector memorandum summarizing a November 20, 1985 meeting with the plaintiff, the plaintiff advised that PMG Bolger had "cited the past arrogance of REI management, but indicated there was no reason they could not do business in the future." Pl.'s Ex. 105 at 2.
At the time of the plaintiff's meeting with PMG Bolger in early 1982, USPS had already made a multi-year, multi-million dollar research and development investment in REI and had purchased about five REI prototype machines that were installed in various USPS field locations. Id. at 117-18; Pl.'s Ex. 25 at 32 (OTA Report noting that "USPS has provided enough support over the last 14 years to [REI] (of Dallas, Texas) such that REI has developed one of the leading multi-line OCRs on the world market"). The plaintiff admitted that "there were some criticism" of the performance of REI's MLOCR machines but attributed that to deficient air-conditioning at some locations. 6/24/14 AM Tr. at 118, 133. While the plaintiff did not believe the criticisms to be "a show-stopper to us, " this was apparently not a view shared by USPS, which had experienced scheduling delays and other issues with REI's performance. See, e.g., 7/1/14 PM Tr. at 20 (Jellison testifying: "we did not want to buy the machine that [REI] had. The machine was not up to date technologically, and we did not want to buy more of those machines."); 7/8/14 AM Tr. at 116 (Carlin testifying that he inspected an REI prototype machine in Chicago and "[i]t was not operating"); Pl.'s Ex. 291 at Bates SMFC4 00006 ("Details of Offense" prepared by Postal Inspectors, reporting that "[t]he USPS experience with REI was marred by cost overruns, delays in delivery of contracted services and unsatisfactory performance of machines after installation."); Defs.' Ex. 55 at 4 (Postal Inspectors' Preliminary Report, dated February 1986, noting that "[t]he REI-USPS relationship, however, had been unsatisfactory and prone to cost overruns, missed delivery schedules and equipment that was not state of the art.").
Rather than focus on fixing the problems perceived by USPS with REI's MLOCR machines, the plaintiff pushed forward with finding ways to secure more business. See, e.g., Pl.'s Ex. 196 at 10 (Interview Summary of Michael Marcus presented to grand jury on Oct. 23, 1986 ("Marcus G.J. Interview Summary") reporting Marcus statement that, at GAI's first meeting at REI Headquarters, "it was apparent that REI wished to continue a political approach... based on Robert Reedy's instruction to stay away from the technical details and statistics when discussing the REI multi-line machine with USPS management"). Indeed, the plaintiff did not testify about doing anything to address any perceived problems with the operations of REI's MLOCR machines. Instead, REI hired a Washington, D.C.-based consulting firm, Hill & Knowlton, to "go after a lot of government business, including postal" and to "understand better the various procurement strategies of government agencies. 6/24/14 AM Tr. at 119 (Plaintiff's testimony).
In addition, the plaintiff testified that he lobbied Congress "fifty" times on this issue. Id. at 123-24. The plaintiff wanted members of Congress to "understand that [REI] had the only machine-I know it was American built-that could satisfy the long-term needs of the postal service to process mail" and that was the "theme that [the plaintiff] kept hitting." Id. at 124. He also testified critically before Congressional committees about USPS' commitment to SLOCR machines because he "didn't think the ZIP projections were anywhere near reasonable and [that the USPS] had to fall back and go to the multi-line approach." Id. at 127.
In both August and November 1983, the plaintiff wrote to PMG Bolger urging the USPS to reconsider deployment of SLOCR technology. Pl.'s Ex. 11 (Letter, dated August 24, 1983, from plaintiff to Bolger); Pl.'s Ex. 16 (Letter, dated November 14, 1983, from plaintiff to Bolger). In response to the latter letter, the plaintiff recalled that PMG Bolger indicated that a study by the Congressional Office of Technology Assessment ("OTA") "was coming" to evaluate the automation project and that the plaintiff "should kind of hold off [his] criticisms." 6/24/14 AM Tr. at 127-28. In fact, the plaintiff testified that he was aware of the OTA study and had communicated his critical views about USPS' choice of SLOCR technology with the members of Congress who had requested the study, or their staffs. Id. at 131. Indeed, according to another witness, OTA staff preparing the OTA Report "had been very well briefed by REI, " which "had a heavy influence on the perception that these guys got." 7/1/14 PM Tr. at 45 (Jellison Dep. testimony). When the OTA Report was issued in June, 1984, the plaintiff "felt vindicated" and "because [REI] had the only multi-line machine that was deployable, " he thought REI was "in a position to get some business." 6/24/2014 AM Tr. at 132-134.
As noted, supra, in Part III. A.2., the OTA Report, had recommended continued purchase of SLOCR machines, but with a plan to convert such machines to MLOCR. Consistent with part of this recommendation, USPS moved forward in purchasing additional SLOCR machines by awarding a contract in July 1984 to ECA. See Pl.'s Ex. 538 ¶ 11 (Stipulated Facts). Nonetheless, in the plaintiff's view, USPS management was "ignoring our technology, " 6/24/14 PM Tr. at 14, and he and his REI team then began to "double down" on their pursuit of USPS business. In fact, faced with the USPS decision to purchase additional SLOCR machines, the plaintiff advised PMG Bolger that REI was going to lobby Congress and "go directly to his Board of Governors." 6/25/14 AM Tr. at 94-95 (Plaintiff's testimony).
The plaintiff did "go directly" to the BOG. In a July 1984 letter to Vice Chairman Voss, the plaintiff complained about "USPS management... dig[ging] in its collective heals" to purchase SLOCR machines incorporating "foreign developed technology which is substantially inferior to proven technology available in this country." Pl.'s Ex. 31 (Letter, dated July 2, 1984, from plaintiff to Vice Chairman Voss). The plaintiff further recommended that the "current Phase II procurement" be "split... along 90-10 lines, " which "would mean that my company would receive funds to build an additional 30-40 multi-line readers similar to the five (5) machines currently installed and operating in various post office locations today." Id . The plaintiff also spoke directly to Vice Chairman Voss in July 1984 and, during that conversation, Vice Chairman Voss told the plaintiff to "[s]tay in the game" because "[c]onditions have been changing" and "[t]hey are favorable to you guys." 6/25/14 AM Tr. at 83-87 (Plaintiff testimony). Vice Chairman Voss also told the plaintiff that he was "making points, taking heat, and working for you, " id., which comments were documented by Vice Chairman Voss's administrative assistant in her handwriting on the top of that the plaintiff's July 1984 letter. 7/10/14 PM Tr. at 92 (Hartman testimony); Pl.'s Ex. 31 (Letter, dated July 2, 1984, from Plaintiff to Voss).
a. September 3, 1984 Meeting of Vice Chairman Voss with REI Vice President Robert Reedy
As part of REI's effort to pursue a USPS contract aggressively, Mr. Reedy met with Vice Chairman Voss on September 3, 1984 at a restaurant in Dallas, Texas. At the meeting, Vice Chairman Voss recommended that REI hire GAI to help "improve our business with the Postal Service." 6/24/14 PM Tr. at 16 (Plaintiff testimony). By this time, John Gnau from GAI had arranged with Vice Chairman Voss that "Voss would receive a commission equal to 30% of the fees generated by Voss' referrals." Defs.' Ex. 65 at 2 (Peter Voss Interview Summary presented to grand jury on August 28, 1986 ("Voss G.J. Interview Summary")). Afterwards, Frank Bray discussed the dinner meeting with Mr. Reedy, and told the Postal Inspectors that Mr. Reedy described Vice-Chairman Voss as wanting a private place out of public view and appearing nervous about being seen with Mr. Reedy. Pl.'s Ex. 262 at 262 (Tr. of Frank Bray Grand Jury testimony, dated July 16, 1987 ("Tr. Bray G.J. testimony"), stating "Mr. Reedy reported to Frank Bray that Voss appeared a little uncomfortable during the meeting and Voss sought a table outside the hearing distance of other patrons"). When Mr. Reedy reported to the plaintiff about the dinner meeting, the plaintiff instructed Mr. Reedy "don't drop the ball on this one, " referring to the hiring of GAI, since he did not want to "make Peter Voss mad at us." 6/24/14 Tr. PM Tr. at 17 (Plaintiff testimony). Indeed, after the dinner meeting, Vice Chairman Voss contacted the plaintiff and Mr. Reedy on several occasions to ask about the status of hiring GAI. 6/24/14 PM Tr. at 23 (Plaintiff testifying that Voss may have contacted him by telephone indicating "[h]e was interested in not hanging this guy Gnau out to dry, let's get something done one way or the other.").
b. Early 1985 Retention by REI of GAI
Following a meeting at REI headquarters in January 1985 with John Gnau, REI retained GAI in February 1985, with a written agreement back-dated to January 15, 1985, on the following terms: GAI would be paid one percent of any revenue generated from the USPS, and $30, 000 in three installments of $10, 000 each, which amount would be deducted from the "one percent override on the revenue associated with the contract." 6/24/14 PM Tr. at 20-21 (Plaintiff testimony); 6/25/14 AM Tr. at 23 (Plaintiff testimony); Pl.'s Ex. 51 (REI's contract with GAI). The GAI retainer agreement was subsequently increased to $22, 000 per month. 6/25/14 AM Tr. at 23-24 (Plaintiff testimony). In comparison, REI was paying its other "prestigious" consultant, Hill & Knowlton, $5, 000 per month. 6/25/14 AM Tr. at 24, 66 (Plaintiff testimony). The plaintiff explained that the increased monthly retainer to GAI was due to an "expanded set of responsibilities and actions that we required of them, yes." 6/25/14 AM Tr. at 24. During the Postal Inspectors' investigation, subpoenas were issued to ascertain the nature of these expanded responsibilities assigned by REI that warranted the doubling of GAI's monthly retainer to an amount that was quadruple the amount paid to REI's other, well-established Washington, D.C. - based consultant.
c. July 1985 Lobbying by Plaintiff for "Buy American" Amendment
In July 1985, the plaintiff traveled to Washington, D.C. to meet with members of Congress about the so-called "Buy American" amendment sponsored by the Congressman from the plaintiff's home district. 6/24/14 PM Tr. at 38 (Plaintiff testimony). This amendment essentially required USPS to spend at least $200, 000, 000, by October 1, 1985, "for the acquisition of American-designed technology for automation of mail processing." Pl.'s Ex. 78 (Amendment to H.R. 3036 sponsored by Rep. Frost, dated July 25, 1985). REI was the only American firm at the time of the proposed amendment that made "American-designed technology" for OCR machines and, consequently, if the Frost "Buy American" amendment passed, the USPS would have had a single source to meet the requirements of the amendment and would have been required to buy REI machines. See 6/25/14 PM Tr. at 99-101 (Plaintiff testimony). Indeed, the plaintiff testified that he wanted enactment of the amendment "to make sure we got some postal business." Id . at 37. This amendment was never acted on by the House of Representatives. Id. at 101 (Plaintiff's testimony).
According to PMG Carlin, this amendment, if enacted, would not have affected the procurement process since USPS used non-appropriated funds for procurement and the amendment only imposed conditions on appropriated funds used to support mailing for non-profit organizations and the blind. 7/8/14 at 70 (PMG Carlin testifying: "[o]ur Appropriations Act was a limited amount of money, approximately a billion dollars, and it was for the purpose of providing free mailing to the blind, free mailings to the Congress and to some other non-profit organizations. That's all that it applied to.").
Investigation of Plaintiff
PMG Carlin testified that as part of the July 1985 mid-course correction to the USPS automation program, he envisioned competitive testing of the available technology for the next procurement phases. Rather than disregard REI's machines out of any animosity, he "wanted a competitive process so that we would have two machines going side by side and we get the best, pick the best of them. Now, I was not clear at the beginning whether it would be one or we choose both of them. I had no position on that. I just wanted to make sure that the Postal Service received equipment that worked all of the time. And worked as intended and at the best price." 7/8/14 AM Tr. at 119. He also wanted to ensure that the process was above-board and, to this end, requested from CPI Clauson the dedicated monitoring by a Postal Inspector. CPI Clauson has assigned Postal Inspector Edwards to this task. In the Fall of 1985, Postal Inspector Edwards was "still focused largely on the procurement and the need to have it go according to the procurement regulations." Edwards Dep. at 292, Feb. 15, 2000. Postal Inspectors Hartman, Kormann, and McIntosh were subsequently assigned to the investigation. When Postal Inspector Hartman joined the investigation, Postal Inspector Edwards told him that "[u]p until that point, there was an investigation or review of potentially improper activity by a particular Board of Governor member, Peter Voss. And also suspect activity by another governor, Ruth Peters." 7/10/14 PM Tr. at 40-41 (Hartman testimony).
The Postal Inspectors then became aware of an allegation made by AEG that "William Moore, the CEO of Recognition Equipment, Incorporated had proposed a deal to split two contracts, one for REI and one for AEG Telefunken." See 7/10/14 PM Tr. at 41 (Hartman testimony). AEG officials had filed a similar complaint with the German Embassy. 7/14/14 PM Tr. at 23 (Hartman testimony). This allegation posed an obvious risk of undermining the competitive testing of equipment envisioned by the mid-course correction and, as part of PMG Carlin's direction to monitor closely the procurement process for the automation program, the Postal Inspectors turned their attention to this allegation about the plaintiff.
1. November 1985 Interview with AEG Officials
In early November 1985, the Postal Inspectors interviewed AEG officials regarding their allegation that the plaintiff had proposed a deal to split the OCR procurement contracts. 7/10/14 PM Tr. at 43-44 (Hartman testifying: "the general topic of the interview with the officials from AEG" was "[the plaintiff's] offer of a compromise or deal where REI would get the phase three multi line stand-alone agreement. And AEG Telefunken would receive the phase [II]A conversion agreement to split the two contracts between the two companies."). According to AEG, the plaintiff threatened that if AEG did not agree to the deal, the plaintiff "could kill the phase [II]A conversion program." 7/10/2014 PM Tr. at 45 (Hartman testimony).
Following the meeting with AEG representatives, the Postal Inspectors sought guidance from two supervising attorneys at the United States Department of Justice ("DOJ")'s Public Integrity and Fraud sections. Postal Inspector Hartman testified that they met with the DOJ attorneys for "advice, guidance, [to] determine whether or not we could possibly start a grand jury investigation" because "[a]t that time, we had limited experience in antitrust matters" and whether the plaintiff's offer was "an antitrust violation." 7/10/14 PM Tr. at 44-45. According to the Postal Inspectors' memorandum to their supervisor, CPI Clauson, summarizing the DOJ meeting, the attorneys did not believe "that a federal criminal act had occurred on the basis of direct evidence we have at this time, " but "were positive and supportive of our efforts to date." Defs.' Ex. 51 at 1. One of the DOJ attorneys even presciently opined that "[g]ratuities... will be forthcoming." Id . The DOJ attorneys recommended that the inspectors continue the investigation and suggested certain investigatory steps, including "investigating vendor's (REI) intention and capability of actually competing on Phase II conversion" and analyzing documents "to detect and establish a pattern of irregular, possibly unethical behavior and possible perjury...." Id.
In accordance with the DOJ attorneys' instructions, the Postal Inspectors continued their investigation by conducting interviews with persons within USPS and REI involved in the automation program and gathering documentary evidence based on the leads they garnered through these interviews.
2. November 20, 1985 Interview of Plaintiff and Subordinates
On November 20, 1985, Postal Inspectors Hartman and Edwards interviewed the plaintiff at REI headquarters in Dallas, Texas regarding AEG's allegations. 7/10/14 PM Tr. at 51 (Hartman testimony). REI's Vice President of Sales and Marketing, Robert Reedy and REI's Vice President of Distributors Sales and Manager of Postal Programs, Frank Bray, were also present at this interview. Id. Postal Inspector Hartman asked "Mr. Moore, Mr. Reedy and Mr. Bray if any of them had ever met with or spoken to a Board of Governors member on an individual basis. In other words, one on one." Id. at 56. This question was prompted by suspicions about whether Vice Chairman Voss "had some sort of financial relationship or reason that he was pushing so hard for a sole source contract with REI." Id. "[I]f Voss does have an improper financial relationship with REI, then it would follow that he likely had spoke[n] with them or met with them. So that is why I asked the question to see whether or not any of these gentlemen had met with or even spoke to a governor." Id. at 57. When he asked the question, Postal Inspector Hartman "was looking at [the plaintiff]" but "Mr. Reedy answered that question... [h]is answer was no, that they had not met with any governor individually." Id. Postal Inspector Hartman made a record of this answer in his notes that: "Reedy never talked to board members individually." Defs.' Ex. 52 at USA-010-0529 (Hartman handwritten notes on Nov. 20, 1985). After hearing Mr. Reedy's answer, Postal Inspector Hartman "looked in the direction of the plaintiff... [who] nodded affirmation of Mr. Reedy's answer." 7/10/14 PM Tr. at 57; see also 7/11/14 PM Tr. at 7 (Hartman testifying: "Reedy answered and Mr. Moore affirmed. Nodded."). In a follow-up question, Postal Inspector Hartman asked "when you did meet with the Board of Governors were all three of you always present[?]" 7/10/14 PM Tr. at 58. The plaintiff said "yes, with the exception when one of them stepped in and out of the room for some reason." Id.  The Postal Inspector's notes of this meeting and their testimony reflect that at no point did the plaintiff and his subordinates indicate that Mr. Reedy had met over dinner with Vice Chairman Voss in September 1984.
The plaintiff denied any recollection of this question being asked or Mr. Reedy's answer, and testified that if he had thought that Mr. Reedy had lied to the Postal Inspectors, he "would have said, Reedy, tell them ...