Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_11-cv-03577/USCOURTS-alnd-2_11-cv-03577-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Contract Dispute

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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ALABAMA 

ALABAMA AIRCRAFT 

INDUSTRIES, INC., ALABAMA 

AIRCRAFT INDUSTRIES, INC. - 

BIRMINGHAM, AND PEMCO 

AIRCRAFT ENGINEERING 

SERVICES, INC. 

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 Plaintiff, 

 CIVIL ACTION NUMBER: 

v. 2:11-cv-03577-RDP 

 

THE BOEING COMPANY, 

BOEING AEROSPACE 

OPERATIONS, INC. AND BOEING 

AEROSPACE SUPPORT 

CENTER, 

 

 Defendant. 

REPORT AND RECOMMENDATION 

Before the Special Master is Boeing’s “Motion to Compel Testimony 

on Topics 5, 20, and 32 of Boeing’s Rule 30(b)(6) Deposition Notice” (“the 

Motion” or “Boeing’s Motion”), which was filed with the Special Master on 

October 9, 2015. The Motion has since been fully briefed, with AAI 

submitting a Response on October 23, 2015 (“AAI’s Response”) and 

Boeing filing a Reply (“Boeing’s Reply”) on October 30, 2015. For the 

reasons explained below, it is the recommendation of the Special Master 

that Boeing’s Motion be GRANTED. 

FILED

 2016 Feb-09 AM 08:55

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 1 of 14
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I. FINDINGS OF FACT 

1. Boeing served AAI with a Rule 30(b)(6) deposition notice (“the 

Notice”) on March 9, 2015. Boeing’s Motion, Ex. 1 (“Notice of 

Deposition”). 

2. The Notice identified forty-seven (47) topics to be addressed at 

deposition, including the three (3) that are the subject of Boeing’s Motion, 

Topics 5, 20, and 32. Boeing’s Motion, Ex. 1. The disputed Topics read 

as follows: 

5. The specific proprietary materials and 

information contained within each category 

identified in plaintiff’s List of Proprietary 

Information (Dkt. # 98). This Topic includes 

what specific materials and information within 

each category Pemco/AAI considered to be 

proprietary; why Pemco/AAI considered those 

materials proprietary; how Pemco/AAI 

identified, designated, and protected those 

materials; how Pemco/AAI used those 

materials in its work on the KC-135 PDM 

program and its bids for the Recompete 

contract; who had access to those materials; 

and any advantage or other benefit the 

materials provided Pemco/AAI over 

competitors who did not possess the 

materials. 

. . . 

20. Each specific component of Boeing’s 

independent Recompete bid proposals that 

allegedly contains or otherwise reflects 

misappropriated Pemco/AAI proprietary 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 2 of 14
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information, and the relevant volume and 

page numbers within those proposals that 

allegedly contain or otherwise reflect the 

allegedly misappropriated Pemco/AAI 

proprietary information. 

. . . 

32. The unpaid creditor claims that Pemco/AAI 

allegedly suffered due to Pemco/AAI’s loss of 

the Recompete contract, including the creditor 

claims asserted in Pemco/AAI’s bankruptcy 

proceedings, whether and the extent to which 

those creditor claims were discharged in 

bankruptcy, and all substantiating documents. 

Boeing’s Motion, Ex. 1 at 3, 5, & 6. 

3. Topics 5 and 20 touch on much the same information, 

addressing different sides of the same “proprietary information” coin. 

Indeed, per Boeing’s characterization, “[w]hereas Topic 20 asks AAI to 

identify where its proprietary information is contained or reflected in 

Boeing’s independent bid documents, Topic 5 asks what makes this 

information proprietary in the first place.” Boeing’s Motion at 14. Topic 

32, meanwhile, seeks information regarding a component of AAI’s alleged 

damages, namely, its “unpaid creditor claims.” Boeing’s Motion at 15. 

4. Since the Notice was issued in March 2015, the parties have—

with varying degrees of commitment and success—attempted to reach an 

agreement as to the proper scope and methodology for Topics 5, 20, and 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 3 of 14
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32. Boeing’s Motion at 1. Negotiations intensified during July and August 

of 2015, with the parties exchanging numerous proposals and haggling 

over the same. Boeing’s Motion, Exs. 6, 7, 8, 9, 11, 12, 14, 15, 16, & 17. 

5. As to Topic 5, AAI proposed the following language in a letter 

dated July 6, 2015 (“the July 6 Proposal”): 

Plaintiffs will provide Boeing with a list of the 

Bates Numbers in the Plaintiffs’ production and/or 

Boeing’s production that Plaintiff may use at trial as 

instances or evidence of Plaintiffs’ provision and/or 

Boeing’s receipt of AAI’s propriety information (“PI”), 

to support their claims with regard to proprietary 

information. Plaintiffs also agree to designate, after 

the lists have been supplied, and after Boeing 

provides Plaintiffs with a list of such bates 

numbered documents which Boeing wishes to cover 

in testimony, one or more witnesses who can testify 

regarding: (1) what specific documents Pemco/AAI 

considered to be proprietary or contain or reflect 

proprietary information, as well as the specific 

information Pemco/AAI considered to be proprietary 

within any document so identified; (2) why 

Pemco/AAI considered that information to be 

proprietary; (3) how Pemco/AAI used that 

information in its work on the KC-135 PDM program 

and/or its bids for the Recompete contract; (4) AAI’s 

view of any advantage or other benefit the 

information could have provided to Pemco/AAI 

competitors who did not possess the materials; and 

(5) Pemco/AAI’s protection of such materials, 

including any identification or designations thereof. 

Boeing’s Motion, Ex. 6 at 1. However, by letter dated July 13, 2015, AAI 

apparently withdrew its July 6 Proposal, seeking instead to link Boeing’s 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 4 of 14
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Topic 5 to its own Topics 30-32 in an attempt to create a package deal. 

Boeing’s Motion, Ex. 12. Boeing sought to accept AAI’s July 6 Proposal by 

letter dated July 21, 2015, and reiterated its willingness to accept the July 6 

Proposal—if still available—in a letter dated July 22, 2015. Boeing’s 

Motion, Ex. 7 at 1 (“Boeing accepts plaintiff’s counter-proposal for Topics 5 

and 36 as articulated in your July 6 letter.”); Boeing’s Motion, Ex. 14 at 3 

(“Boeing accepted this version of Topic 5 on July 21, but your email today 

stated that your July 13 letter was intended to withdraw your July 6 

proposal. We are willing to proceed on Topic 5 as plaintiff proposed on 

July 6. Please confirm that you will stand by your July 6 proposal.”). 

Although AAI purported to “stand by its [July 6] proposal on Boeing’s Topic 

5” in an email dated July 29, 2015 (Boeing’s Motion, Ex. 15) and Boeing 

confirmed the parties’ agreement on Topic 5 in a letter dated August 5, 

2015 (Boeing Motion, Ex. 16 at 2), AAI proposed additional Topic 5 

language in a letter dated August 7, 2015 (Boeing’s Motion, Ex. 17 at 2) 

(“Plaintiffs will provide . . . to support their claims with regard to proprietary 

information, other than Boeing documents which Plaintiffs contend 

either reflect or demonstrate Boeing’s knowledge or use of 

Pemco/AAI’s PI (which, instead, is the subject of Boeing’s Topic 20).”), 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 5 of 14
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leading the parties to conclude that they had reached an impasse regarding 

Topic 5. 

6. As to Topic 20, AAI proposed the following language in the 

aforementioned July 6, 2015 letter: 

Plaintiffs will, in accordance with the Court’s 

scheduling order, designate an expert witness to 

testify regarding each specific component of 

Boeing’s independent Recompete bid proposals 

and related pricing models and discussion, that 

contains or is based on, or is reflective of 

knowledge of, Pemco/AAI proprietary information. 

In addition, again following Boeing’s complete 

production of not only its bid documents but also its 

related and underlying internal pricing documents 

(e.g., emails, memos, PPTs, spreadsheets), and 

related testimony under Rule 30(b)(6) on AAI’s 

Topics 21, 22 and 41 to Boeing, which are viewed 

as essential for pinning down Boeing’s bid 

submissions, Plaintiffs will designate a corporate 

representative who will identify each specific 

component of Boeing’s independent Recompete bid 

proposals that is, in Plaintiffs’ view, believed to 

contain, or be based on, or be reflective of 

knowledge of, Pemco/AAI proprietary information, 

once an opportunity has been provided for a 

detailed review of Boeing’s authenticated bid 

documents and underlying pricing models for each 

phase of the bidding. 

Boeing’s Motion, Ex. 6 at 2. Responding in a letter dated July 21, 2015, 

Boeing rejected the condition that AAI’s Topics 21, 22, and 41 be 

addressed first, and also suggested some slightly amended language: 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 6 of 14
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Plaintiffs will designate a corporate 

representative who will identify each specific 

component of Boeing’s independent Recompete bid 

proposals that is, in Plaintiffs’ view, believed to 

contain, or be based on, or be reflective of 

knowledge of, Pemco/AAI proprietary information, 

and the corresponding volume and page numbers 

within those proposals that Plaintiffs believe to 

contain, or be based on, or be reflective of 

knowledge of, the alleged Pemco/AAI proprietary 

information. 

Boeing’s Motion, Ex. 7 at 2. However, not only did AAI refuse to budge 

from the language and conditions of its July 6 proposal, but, by letter dated 

August 6, 2015, it also requested that Boeing allow AAI’s corporate 

representative to interview twenty-four (24) present or former Boeing 

employees regarding the subject matter of Topic 20, in preparation for 

examination on the Topic by Boeing. Boeing’s Motion, Ex. 8 at 3 (“AAI 

requests that, at times convenient to Boeing and the following persons and 

at Boeing-designated locations, Boeing make the following present and 

former Boeing employees available to AAI’s designee for Topic 20 to 

interview them on what they know, what they did, and what documents they 

are aware of, relative to Boeing’s Topic 20.”). Shortly thereafter, the parties 

declared an impasse as to Topic 20. Boeing’s Motion, Ex. 9. 

7. As for Topic 32, AAI wholeheartedly objected to the subject 

matter in its Responses to Boeing’s Notice (Boeing’s Motion, Ex. 2), and 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 7 of 14
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the parties did not subsequently engage in any meaningful negotiation as 

to the Topic, thus leaving them at impasse (Boeing’s Motion, Ex. 9). 

8. Having reached impasses as to Topics 5, 20, and 32, Boeing 

filed its Motion with the Special Master on October 9, 2015, AAI submitted 

its Response on October 23, 2015, and AAI filed its Reply on October 30, 

2015. 

II. CONCLUSIONS OF LAW 

For the reasons outlined below, it is the undersigned’s legal 

conclusion that AAI should be compelled to provide corporate testimony on 

Topics 5, 20, and 32 in accordance with the language proposed (Topic 20) 

and accepted (Topic 5) in Boeing’s letter of July 21, 2015 (Boeing’s Motion, 

Ex. 7) and the language originally laid out (Topic 32) in Boeing’s Notice 

(Boeing’s Motion, Ex. 1). 

A. Topic 5 

The parties’ inability to reach a lasting agreement as to Topic 5 is a 

perfect example of an unnecessary discovery dispute. To recap, AAI 

submitted a Topic 5 proposal to Boeing on July 6, 2015 that utilized an 

accepted methodology (i.e., the exchange of document lists) and was 

almost identical in scope to that proposed in Boeing’s Notice. 

Subsequently, Boeing accepted the proposal (provided that the proposal 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 8 of 14
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was still valid), AAI confirmed the continuing validity of the proposal, and 

Boeing confirmed AAI’s confirmation. However, not content to let a nonexistent discovery dispute rest, AAI subsequently proposed the inclusion of 

additional Topic 5 language, bringing us to this current state of contention. 

AAI argues that the additional language (supra at 5-6) is necessary to 

clarify the differences between Topics 5 and 20 (AAI’s Response at 2-3), 

given the possibility for overlap in the Topics’ subject matter. However, 

AAI’s argument falls flat for a number of reasons. First, the additional 

language simply reiterates what is already revealed by a close reading of 

the two Topics and what has already been acknowledged by both parties: 

“The parties agree on the dichotomy between Boeing’s 30(b)(6) Topics 5 

and 20—Topic 5 seeks to have AAI identify its PI in its production and in 

Boeing’s production and to provide testimony on how that information 

constitutes PI, and Topic 20 seeks to have AAI identify in Boeing’s bid 

submissions and supporting documents where AAI’s PI is listed or where 

AAI believes Boeing’s knowledge of that PI is ‘reflected.’” AAI’s Response 

at 2. Second, even if the Topics could be construed as overlapping, the 

practical import of such overlap would be limited; indeed, AAI controls the 

actual scope of the Topic (as its initial list will dictate what documents are 

addressed under the umbrella of Topic 5), and its use of the same 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 9 of 14
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corporate representative for Topics 5 and 201 obviates any concern that it 

will have to prepare multiple representatives for the same subject matter. 

Because the additional language is unnecessary, the undersigned 

concludes that AAI should be compelled to provide Topic 5 testimony in 

accordance with the proposal agreed upon by the parties, i.e., AAI’s July 6 

Proposal. 

B. Topic 20 

The parties’ dispute as to Topic 20 primarily centers on the extent 

and specificity of the testimony sought, with AAI arguing (a) that the Topic 

seeks information that goes beyond what it is prepared to rely on in making 

its “proprietary information” claims (AAI’s Response at 5),2

 and (b) that it is 

incapable of providing “full and complete testimony” as to the specific 

information sought by Boeing (AAI’s Response at 4).3

 Neither argument 

 1 AAI notified the Special Master of this reality at the parties’ January 28, 2016 

status conference. 

2 “While there may be some instances where AAI’s corporate witness can point 

to individual pieces of Pemco PI that were included in Boeing’s bid or portions of 

Boeing’s bid that were obviously drafted as a result of its misuse of AAI’s PI, the main 

thrust of AAI’s theory as to PI is that, as a result of their prior teaming agreement, 

Boeing had knowledge [of] Pemco’s PI, and with that knowledge, Boeing crafted a bid 

that it knew would underbid or otherwise be a ‘better’ bid than Pemco’s.” AAI’s 

Response at 5 (emphasis added). 

3 “Boeing’s Topic 20 seeks, at least in part, internal Boeing information that AAI 

does not and cannot know (and thus cannot prepare a witness to testify about) . . .” 

AAI’s Response at 4. 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 10 of 14
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convinces the undersigned that Boeing’s most recent proposal (supra at 7) 

is inappropriate. 

AAI is correct in noting that “one can prove wrongful conduct in a 

competition by demonstrating the defendant held knowledge of the 

competitor’s costs or pricing methodology sufficient for the defendant to 

adjust its own bid to undercut the opponent’s price” (AAI’s Response at 9); 

however, regardless of whether AAI chooses to prove its proprietary 

information claims through use of a generalized theory (like the one quoted 

above) or through reference to specific instances in Boeing’s Recompete 

bid proposals that demonstrate the use of AAI’s proprietary information, 

Boeing is entitled to gauge AAI’s ability to pursue the latter theory by asking 

it to identify the “specific component[s]” of the Boeing bid proposals, as well 

as the “corresponding volume and page numbers,” that evidence the use of 

AAI’s proprietary information. Indeed, Rule 26(b)(1) permits parties to 

“obtain discovery regarding any nonprivileged matter that is relevant to any 

party’s claim or defense and proportional to the needs of the case . . . ,” 

and there is little question that Topic 20—as most recently framed by 

Boeing—is directly relevant to the claims advanced by AAI in Counts Three 

and Four of its Third Amended Complaint (Doc. 97). FRCP 26(b)(1). 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 11 of 14
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Furthermore, any suggestion by AAI that it cannot fully provide the 

testimony requested by Topic 20 presupposes a standard of 

responsiveness that differs from that contemplated by Rule 30(b)(6), which 

only requires corporate representatives to “testify about information known 

or reasonably available to the organization.” FRCP 30(b)(6) (emphasis 

added). Where the use of proprietary information in Boeing’s Recompete 

bid proposals is identifiable, AAI’s corporate representative should be 

prepared to testify to such, doing so with as much specificity (including 

volume and page numbers) as possible. However, all involved are aware 

that the use of proprietary information does not always manifest itself in 

tangible ways, and, as such, AAI is not expected to fill the gap in 

particularity that may understandably exist. 

In light of the fact that Boeing’s July 21 Proposal is permissible under 

Rule 26(b)(1), the undersigned concludes that AAI should be compelled to 

provide corporate testimony in accordance with the same, provided that its 

obligations only extend to the bounds of Rule 30(b)(6). 

C. Topic 32 

As noted above, the parties have engaged in virtually no negotiations 

as to Topic 32, evidently because AAI has taken the position that “the most 

expedient way to respond to Topic 32 is by referring to the relevant 

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bankruptcy pleadings that are not only a matter of public record but also 

should already be in the possession of Boeing (or its attorneys) because of 

its substantial involvement in AAI’s bankruptcy.” AAI’s Response at 12. 

However, despite AAI’s protestations otherwise, Boeing is entitled to live 

corporate testimony regarding Topic 32. 

Indeed, it is well established that, “[in] responding to a Rule 30(b)(6) 

notice or subpoena, a corporation may not take the position that its 

documents state the company’s position and that a corporate deposition is 

therefore unnecessary.” QBE Ins. Corp. v. Jorda Enterprises, Inc., 277 

F.R.D. 676, 689 (S.D. Fla. 2012) (citing Great American Ins. Co. of New 

York v. Vegas Const. Co., Inc., 251 F.R.D. 534, 539 (D. Nev. 2008)); see 

also In re Vitamins Antitrust Litigation, 216 F.R.D. 168, 172 & 174 (D.D.C. 

2003). As such, it is the undersigned’s legal conclusion that AAI should be 

compelled to designate a corporate representative to testify as to Topic 32, 

and that such testimony should be based on the Topic 32 subject matter 

identified in Boeing’s Notice (supra at 3). 

III. RECOMMENDATIONS 

For the reasons outlined above, the undersigned makes the following 

recommendation to the Court: 

Case 2:11-cv-03577-RDP Document 182 Filed 02/09/16 Page 13 of 14
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 Boeing’s Motion should be GRANTED. AAI should be 

compelled to provide corporate testimony in the manner 

proposed in Boeing’s Notice (Topic 32) and July 21, 2015 letter 

(Topics 5 and 20). 

Respectfully Submitted, 

s/David J. Middlebrooks 

David J. Middlebrooks ASB- 8553-D58D 

OF COUNSEL: 

LEHR MIDDLEBROOKS VREELAND 

 & THOMPSON, P.C. 

P.O. Box 11945 

Birmingham, Alabama 35202-1945 

(205) 326-3002 

Fax: (205) 326-3008 

CERTIFICATE OF SERVICE 

I hereby certify that on February 9, 2016, I electronically filed the 

foregoing with the Clerk of the Court using the CM/ECF system which will 

send notification of such filing to the following: 

s/David J. Middlebrooks 

OF COUNSEL 

509318 

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