Herrmann v. United States
129 Fed. Cl. 780
Fed. Cl.2017Background
- Plaintiffs (U.S. citizens residing in London) challenge the IRS’s recharacterization of an $18,748,838 payment to Mina Gerowin Herrmann as a partnership distribution, seeking a refund for 2008 taxes and interest.
- Trial was set for January 23, 2017 in the Court of Federal Claims; several pretrial motions in limine and deposition-designation requests were filed by the parties and non-parties.
- Non-parties John Paulson and Christopher Bodak (New York residents and Paulson executives) sought to testify by live video transmission rather than appear in person.
- Plaintiffs sought removal of "attorneys’ eyes only" (AEO) designations on nine documents (pay/compensation records) to permit plaintiffs to review and remain in court during related testimony.
- The government moved to exclude two plaintiff summary exhibits (Exs. 314 and 1007) and the testimony of their preparer, Evan Cohen, arguing the summaries are improper under Fed. R. Evid. 1006 and that Cohen would function as an undisclosed expert.
- Plaintiffs moved to admit portions of non-party Nicola Dunn’s deposition (she resides in London); the government cross-designated additional portions for completeness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether non-party Paulson and Bodak may testify via contemporaneous video transmission | Testimony by video should be permitted because travel to D.C. would impose scheduling, childcare, and business burdens | Live, in-person testimony is preferred; witnesses had ample notice and are within reasonable travel distance | Denied — inconvenience is insufficient; good cause and compelling circumstances not shown; witnesses must appear in person |
| Whether to remove AEO designations from nine compensation documents | Plaintiffs need access to prepare testimony and remain in court during related testimony; info is old and not competitively sensitive | Paulson asserts privacy interests justify AEO protections | Granted — AEO removed for listed exhibits; confidentiality remains under protective order and anonymity preserved |
| Whether summary exhibits (Exs. 314, 1007) and preparer Cohen’s testimony should be excluded under Rule 1006 or as disguised expert evidence | Summaries are accurate condensations of voluminous admissible records and useful to the court; Cohen limited to authentication | Summaries allegedly mischaracterize/omit data and Cohen would act as an undisclosed expert | Denied — exhibits admissible under Rule 1006; underlying documents available; Cohen may testify only to creation, sources, and accuracy (no opinions/inferences) |
| Whether deposition testimony of Nicola Dunn (UK resident) may be used at trial | Dunn is unavailable (outside U.S.); designated deposition portions should be admitted | Government does not oppose and cross-designates additional portions for completeness | Granted — court will receive designated deposition testimony in lieu of live testimony |
Key Cases Cited
- Katzin v. United States, 124 Fed. Cl. 122 (2015) (approving video testimony when witness lived far from trial and testimony was brief)
- Scott Timber, Inc. v. United States, 93 Fed. Cl. 498 (2010) (discussing preference for live testimony and prior in-court testimony as a factor)
- Air Turbine Tech., Inc. v. Atlas Copco AB, 410 F.3d 701 (Fed. Cir. 2005) (considering geographic distance in subpoena and testimony disputes)
- Bath Iron Works Corp. v. United States, 34 Fed. Cl. 218 (1995) (analyzing limits on admissible summaries when underlying sources were not disclosed)
- Bannum, Inc. v. United States, 59 Fed. Cl. 241 (2003) (setting out Rule 1006 summary-foundational requirements)
- Long Island Sav. Bank, FSB v. United States, 67 Fed. Cl. 616 (2005) (admitting summaries while noting the court is not bound by inferences in the summary)