UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

KEVIN J. MURRAY

CIVIL NO. 08-15147

Plaintiff,

HON. LAWRENCE P. ZATKOFF

-vs- MAG. JUDGE MONA K. MAJZOUB

TIMOTHY F. GEITHNER, Secretary, U.S. 

Department of Treasury, and BOARD OF

GOVERNORS OF THE FEDERAL

RESERVE SYSTEM,

Defendants.

 /

DEFENDANTS’ BRIEF IN OPPOSITION TO PLAINTIFF’S

MOTION TO STRIKE

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ISSUES PRESENTED

I. Whether a document provided to Defendant Department of the Treasury by American

International Group, Inc. (“AIG”) on Monday, May 7, 2010, after Defendants had

completed their search for documents responsive to Plaintiff’s discovery request, which

was discovered by Defendants’ counsel on Friday, June 18, 2010, and provided to

Plaintiff pursuant to Fed. R. Civ. P. 26(e) on Monday, June 21, 2010, should be stricken.

II. Whether the Declaration of John T. Fassl, which authenticates the above-referenced

document, should be stricken because Fassl was not identified on Defendants’ trial

witness list.

i

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MOST PERTINENT AUTHORITY

Fed. R. Civ. P. 26(e)

Fed. R. Civ. P. 37(c)

Sommer v. Davis, 317 F.3d 686 (6th Cir. 2003) 

Ryder Auto. Carrier Group, Inc. v. Gen. Teamsters Sales & Serv. & Indus. Union Local No. 654,

1997 WL 540893 (6th Cir. 1997)

ii

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INTRODUCTION

On June 6, 2010, Plaintiff filed a motion for summary judgment in this matter, arguing

inter alia that American International Group, Inc. (“AIG”) is unable to account for the funds

provided to it by Defendant United States Department of the Treasury (“Treasury Department”)

pursuant to a Securities Purchase Agreement dated April 17, 2009 (“Series F SPA”). Pursuant to

Section 3.10 of the Series F SPA, however, AIG provides the Treasury Department with just such

an accounting in the form of sworn certifications detailing AIG’s use of Series F funds. See

Series F SPA § 3.10 (attached as Exhibit 13 to Defendants’ Brief in Opposition to Plaintiff’s

Motion for Summary Judgment). Plaintiff now seeks to strike the Section 3.10 certification AIG

provided Treasury on May 7, 2010 (the “May 7 Certification”), which Defendants relied on to

rebut the arguments made in Plaintiff’s motion for summary judgment. Plaintiff also moves to

strike a declaration that Defendants filed for the sole purpose of authenticating the May 7

Certification. Plaintiff’s motion has no basis and should be denied. 

BACKGROUND

The document at issue in the present motion – the May 7 Certification – is a signed

certification AIG provided the Treasury Department on May 7, 2010, pursuant to Section 3.10 of

the Series F SPA. See May 7 Certification (Ex. 12-A to Defs.’ Opp. to Pl.’s Mot. for Summ. J.). 

Section 3.10 provides in pertinent part that AIG will account for its use of the Series F funds and

establish internal controls to assure compliance with the expected use of the Series F funds. See

Ex. 12-A at 27. It further provides that AIG will report to the Treasury Department, on a

quarterly basis, the actual use of the Series F funds, and note all instances in which AIG did not

comply with the expected use of the Series F funds. Id. The accounting required by Section 3.10

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must be certified as accurate by an AIG senior executive officer and delivered to the Treasury

Department. Id. The May 7 Certification identifies each of the four drawdowns AIG made of the

Series F funds, the various expenditures AIG made on May 13, 2009, August 13, 2009,

November 13, 2009, and February 19, 2010, with those Series F funds, and how those actual

expenditures compare with AIG’s prior written notices dated May 7, 2009, August 6, 2009,

November 6, 2009, and February 11, 2010, identifying the contemplated uses of those funds. See

May 7 Certification; see also Exs. 1-K through 1-O to Defs.’ Mot. for Summ. J. (Outlines for

Drawdown Requests 1 through 4 and Series F Actual Use of Funds). As set forth in Defendants’

submissions in support of their motion for summary judgment and in opposition to Plaintiff’s

motion for summary judgment, the May 7 Certification further establishes that none of the Series

F funds have been diverted to support the sale of shariah-compliant products. See Defs.’ Opp. to

Pl.’s Mot. for Summ. J. at 4; see also Series F Actual Use of Funds (attached as Ex. 1-O to Defs.’

Mot. for Summ. J.).

Defendants provided over five thousand pages of documents in response to Plaintiff’s

July 14, 2009 request for production of documents. These documents were discovered through

searches conducted immediately after Plaintiff served his discovery request, and again after

Plaintiff filed his Amended Complaint. The final searches were completed far enough in

advance of the May 15, 2010 discovery deadline to enable counsel to review the documents for

privilege and to produce the final group of documents to Plaintiff by May 11, 2010. The May 7 1

In a letter accompanying Defendants’ May 11, 2010 production of responsive records, counsel 1

for Defendants stated that “Defendants have now completed their search for documents relevant

to the Series F transactions and the attached documents constitute Defendants’ final production

in response to Plaintiff’s First Request for Production of Documents.” See May 11, 2010 Letter

from Straus to Yerushalmi and Muise (Ex. 1 to Pl. Mot.). Counsel for Defendants also stated,

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Certification, however, was received by the Treasury Department after Defendants had concluded

their search for records responsive to Plaintiff’s July 14, 2009 request for documents. As a

result, Defendants did not discover the May 7 Certification prior to either the end of the

discovery period or the June 6, 2010 deadline for dispositive motions. It was not until Plaintiff

filed his motion for summary judgment that the relevance of Section 3.10 and its certification

requirement became apparent to Defendants. In his motion for summary judgment, Plaintiff

simply ignored documents that Defendants produced detailing AIG’s actual use of the Series F

funds, see, e.g., Series F Actual Use of Funds (attached as Ex. 1-O to Defs.’ Mot. for Summ. J.),

and instead argued that AIG could not account for how it spent these funds. In preparing

Defendants’ response to this argument, counsel for Defendants noticed that beyond the periodic

accountings AIG provided to the Treasury Department, see, e.g., id., Section 3.10 of the Series F

SPA specifically required that AIG provide signed certifications further accounting for its use of

funds.2

In order to meet its obligations under Federal Rule of Civil Procedure 26(e), and to

however, that “In accordance with Defendants’ continuing obligation under Rule 26(e), should

Defendants locate any additional documents responsive to Plaintiff’s First Request for

Production of Documents, Defendants will produce such documents, subject to the objections set

forth in Defendants’ Responses to Plaintiff’s First Request for Production of Documents, once

they have been identified and reviewed for privilege and for information subject to the protective

orders entered in this case.” Id. (emphasis added). Plaintiff has never challenged the adequacy

of Defendants’ response to his request for documents, and the time for doing so has long since

passed. See Scheduling Order (Doc. No. 19).

This provision had presumably also escaped Plaintiff’s notice. Although the terms of the Series

2

F SPA, including the requirement that AIG provide Section 3.10 certifications to the Treasury

Department, have been available to the public since April 2009, Plaintiff never asked for these

certifications from the Treasury Department, despite the fact that they had not been discovered

during Defendants’ multiple searches for responsive records and therefore not produced.

3

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provide additional evidence to rebut Plaintiff’s argument, counsel for Defendants asked the

Treasury Department to locate the most recent Section 3.10 certification. This document, as well

as less recent Section 3.10 certifications, were received by counsel for Defendants on the evening

of Friday, June 18, 2010, and provided to counsel for Plaintiff on the morning of Monday, June

21, 2010, well in advance of the deadline for Plaintiff’s opposition to Defendants’ Motion for

Summary Judgment. See Pl. Mot. at 2.

ARGUMENT

I. Defendants’ Production of the Section 3.10 Certification Complied with Federal

Rule of Civil Procedure 26(e) and, in Any Event, Was Substantially Justified and

Harmless.

Federal Rule of Civil Procedure 37(c), pursuant to which Plaintiff brings his motion,

states, “If a party fails to provide information or identify a witness as required by Rule 26(a) or

26(e), the party is not allowed to use that information or witness to supply evidence on a motion,

at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Here, Rule

37(c) is not even implicated because Defendants fully complied with their duty to supplement

under Rule 26(e). Moreover, even assuming arguendo that Plaintiff could demonstrate that

Defendants’ production of the May 7 Certification violated Rule 26(e) in some manner, any

possible violation was both substantially justified and harmless. Accordingly, Plaintiff’s motion

to strike the May 7 Certification from the record should be denied.

A. Defendants Fully Complied with Fed. R. Civ. P. 26(e).

Under Rule 26(e)(1)(A), a party must supplement its document production “in a timely

manner if the party learns that in some material respect the disclosure or response is incomplete.” 

See Fed. R. Civ. P. 26(e)(1)(A). Defendants properly acknowledged this obligation when making

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what Defendants believed to be their final production of documents. See Ex. 1 to Pl.’s Mot.

(letter from Straus to Yerushalmi and Muise (May 11, 2010) (stating “should Defendants locate

any additional documents responsive to Plaintiff’s First Request for Production of Documents,

Defendants will produce such documents”). That is precisely what happened with respect to the

May 7 Certification. 

Indeed, although the Advisory Note to the 1993 Amendments to Rule 26(e) states that

“[s]upplementations need not be made as each new item of information is learned,” see Fed. R.

Civ. P. 26(e) advisory committee’s note (1993 Amendments), Defendants supplemented their

discovery response immediately upon becoming aware of additional documents responsive to

Plaintiff’s request. See Background, supra, and Pl.’s Mot. at 2 (quoting email from Coleman to

Yerushalmi and Muise (June 21, 2010)). Moreover, Defendants provided the supplemental

response to Plaintiff one week before the parties’ respective responses to their cross-motions for

summary judgment were due, three weeks before the parties’ replies were due, and more than

five months prior to the trial date. Because Defendants fully complied with Rule 26(e) in

supplementing their discovery responses and, therefore, did not “fail[] to provide information or

identify a witness as required by Rule . . . [26](e),” see Fed. R. Civ. P. 37(c), there is no basis for

striking those supplemental responses, and Plaintiff’s motion must be denied.

B. Any Delay Was Substantially Justified and Harmless.

Rule 37(c) makes clear that supplemental disclosures should not be excluded where any

delay in their disclosure was substantially justified or harmless. Fed. R. Civ. P. 37(c). As the

Sixth Circuit has stated, exclusion of evidence is not appropriate where “there is a reasonable

explanation of why Rule 26 was not complied with or the mistake was harmless.” Bessemer &

5

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Lake Erie R.R. v. Seaway Marine Transp., 596 F.3d 357, 370 (6th Cir. 2010); see also Thorne v.

Steubenville Police Officer, 463 F. Supp. 2d 760, 770 (S.D. Ohio 2006), rev’d on other grounds

in part sub nom. Thorne v. Lelles, 243 Fed. Appx. 157 (6th Cir. 2007) (holding that exclusion is

“a drastic remedy and should be exercised with caution”). A delay is “‘harmless’ [if it] involves

an honest mistake on the part of a party coupled with sufficient knowledge on the part of the

other party.” Sommer v. Davis, 317 F.3d 686, 692 (6th Cir.2003) (quoting Vance v. United

States, No. 98-5488, 1999 WL 455435, at *5 (6th Cir. June 25, 1999)).

In the rare cases in which courts have excluded material under Rule 37(c), the party

seeking to introduce the supplemental evidence did so in a manner that fell far short of the

diligent efforts to supplement their discovery responses that Defendants undertook here. See,

e.g., SPX Corp. v. Bartec USA, LLC, 574 F. Supp. 2d 748, 755 (E.D. Mich. 2008) (excluding

supplemental interrogatory responses pursuant to Rule 37(c) because the party seeking to

introduce the information did not disclose it until months after it had knowledge of it, despite

having amended its discovery responses six times between having knowledge of the information

and ultimately disclosing it); Hochstein v. Microsoft Corp., 2009 WL 2498481, at *3 (E.D. Mich.

2009) (excluding supplemental discovery which was not disclosed until six months after the

discovery cut-off and which “changed the landscape of the case by adding additional claims and

theories”).

Here, by contrast, as soon as Defendants became aware of the document and its relevance,

they promptly sent it to Plaintiff’s counsel. Moreover, Defendants did not receive the May 7

Certification from AIG until after they had completed their search for documents responsive to

Plaintiff’s discovery requests and only eight days before the discovery cutoff. In these

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circumstances, any arguable delay in Defendants’ production of the Certification was

substantially justified and, therefore, the document should not be excluded under the plain

language of Rule 37(c).

Additionally, any delay in producing the May 7 Certification was harmless because

Plaintiff had “sufficient knowledge” of the information contained in the May 7 Certification;

indeed, he was on notice of the existence of the Certification itself. See Sommer, 317 F.3d at

692. As explained in the Background Section, supra, prior to producing the May 7 Certification,

and before the discovery cut-off, Defendants had discovered and produced documents containing

the same “use of funds” information. See, e.g., Series F Actual Use of Funds (attached as Ex.

1-O to Defs.’ Mot. for Summ. J.). Moreover, Plaintiff was put on notice of the existence of May

7 Certification by the Series F SPA itself. The publicly-available Series F SPA, a copy of which

Defendants produced to Plaintiff during discovery, contains the requirement that AIG account for

its use of funds and provide appropriate certifications. Under these circumstances, any slight

delay in producing the May 7 Certification was harmless and thus not subject to Rule 37(c)

sanctions.

Indeed, Plaintiff himself must have viewed the May 7 Certification as harmless since he

chose not to address it in any way in his Reply in Support of Plaintiff’s Motion for Summary

Judgment, filed two weeks after Defendants produced the document. It is also telling that

Plaintiff has nowhere alleged – neither in his summary judgment Reply nor in the instant Motion

to Strike – that the timing of Defendants’ production of the May 7 Certification harmed him in

any way. 

In short, Plaintiff was on notice of the existence of the May 7 Certification, had actual

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knowledge of its contents through other documents that Defendants produced, had an opportunity

(which he chose not to exercise) to address the substance of the May 7 Certification in his

summary judgment Opposition and Reply, and has never alleged, must less demonstrated, that he

was harmed by any delay in producing that Certification. Without demonstrated harm, there is

no basis for moving to strike the May 7 Certification under Rule 37(c).

II. There is no Basis for Excluding the Declaration of John T. Fassl, a Declarant Whom

Defendants Will Not Call to Testify at Trial.

Plaintiff contends that the Fassl Declaration should be stricken from the record because

Defendants did not name Fassl on their trial witness list. See Pl. Mot. Strike at 4. However, the 3

purpose of Fassl’s testimony is to authenticate evidence submitted in opposition to Plaintiff’s

motion for summary judgment, and Federal Rule of Civil Procedure 56 “does not require that

affiants be included in a witness list before their affidavits may be used to support a motion for

summary judgment.” See Ryder Auto. Carrier Group, Inc. v. Gen. Teamsters Sales & Serv. &

Indus. Union Local No. 654, 1997 WL 540893, at *3 (6th Cir. 1997) (citing Fed. R. Civ. P. 56).

As Defendants have no intention of calling Fassl as a trial witness, but submitted his declaration

only to authenticate the May 7 Certification for summary judgment purposes, there is no basis for

Plaintiff moves the court to strike both the Section 3.10 certification and the Fassl Declaration, 3

but neither is subject to a motion to strike. See Fox v. Michigan State Police Dept., 173 Fed.

Appx. 372, 375 (6th Cir. 2006). In Fox, the Sixth Circuit stated that “[e]xhibits attached to a

dispositive motion are not ‘pleadings’ within the meaning of Fed. R. Civ. P. 7(a) and are

therefore not subject to a motion to strike.” See id. In denying a party’s motion to strike, the

Northern District of Ohio found that rather than striking evidence, a court should disregard

evidence it deems inadmissible; “there is no basis in the Federal Rules for [striking it].” 

Lombard v. MIC Telecommunications Corp., 13 F. Supp. 2d 621, 625 (N.D. Ohio 1998) (citing

Dawson v. City of Kent, 682 F. Supp. 920 (N.D.Ohio 1988), aff’d, 865 F.2d 257 (6th Cir. 1988)).

Inasmuch as Plaintiff asks the Court to strike either the document or the Declaration, his motion

should be denied.

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Plaintiff’s motion to strike his declaration. Further, contrary to Plaintiff’s insinuation, the

omission of Fassl from Defendants’ trial witness list is fully compliant with the Court’s

Scheduling Order, which states that the parties must “exchange complete trial witness lists on or

before: MAY 3, 2010 . . . . NO WITNESS MAY BE CALLED FOR TRIAL UNLESS THAT

WITNESS’ NAME AND ADDRESS IS LISTED . . . .” See Dckt. No. 19. Defendants had no

obligation to include Fassl’s name on Defendants’ trial witness list as they do not intend to call

Fassl as a witness for trial.

Moreover, just as is the case with respect to supplemental discovery responses, witnesses

not disclosed prior to the deadline should not be excluded where the late disclosure was harmless

and substantially justified, as the Fassl Declaration certainly is. See Fed. R. Civ. P. 37(c);

Argument Section I(B), supra. The Declaration offers testimony on a single, discrete matter: the

authentication of the May 7 Certification. It in no way “changed the landscape of the case by

adding additional claims and theories.” See Hochstein, 2009 WL 2498481, at *3. Defendants

could not have anticipated the need for the Fassl Declaration until becoming aware of the

existence of the May 7 Certification while preparing their opposition to Plaintiff’s motion for

summary judgment. Accordingly, Defendants were substantially justified in not listing Fassl on

their trial witness list.

Furthermore, because Defendants do not intend to call Fassl as a witness as trial, because

the testimony in his affidavit is limited to authenticating a single document, and because Plaintiff

was on notice of the existence of the Section 3.10 certification requirement in the Series F SPA,

Defendants’ failure to include Fassl on their trial witness list is harmless. Defendants have

clearly acted in good faith, exclusion of the Fassl Declaration is unwarranted, and Plaintiff’s

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motion should be denied. Cf. Ahmed v. L. & W Eng’g Co., 2009 WL 2143827, at *5 (E.D. Mich.

2009) (refusing to exclude witnesses added after deadline where trial was not for over a month

and a half, there was no evidence of bad faith, and disclosing party was diligent in adding

witnesses).

CONCLUSION

For the foregoing reasons, Defendants respectfully request that the Court deny Plaintiff’s

Motion to Strike.

Respectfully submitted,

TONY WEST

Assistant Attorney General

BARBARA L. MCQUADE

United States Attorney

JOHN R. GRIFFITHS

Assistant Director, Federal Programs Branch

/s/ Julie Straus 

JOHN R. COLEMAN

JULIE STRAUS

Trial Attorneys, U.S. Department of Justice

Civil Division, Federal Programs Branch

20 Massachusetts Ave., N.W., Room 6126

Washington, D.C. 20530

Telephone: (202) 514-7857

Facsimile: (202) 616-8460

Email: Julie.Straus@usdoj.gov

DATED: July 27, 2010

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CERTIFICATE OF SERVICE

I hereby certify that on July 27, 2010, I electronically filed the foregoing paper with the

Clerk of the Court using the ECF system, which will send notification of such filing to the

following: Robert J. Muise, David Yerushalmi.

/s/ Julie Straus 

Julie Straus

Trial Attorney, U.S. Department of Justice

Civil Division, Federal Programs Branch

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