Tuesday, September 22, 2009

Deem It All!

This post is really background to the next couple posts.

The Court of International Trade is not known for disputes over discovery or the admissibility of evidence. But, if you want to see a customs case involving hard-fought battles over evidence, look no further than Kahrs International v. U.S. The first opinion in this matter involved a highly unusual motion by the United States to have the Court withdraw deemed admissions. This week, two more opinions came out. Let's deal with them in order.

The underlying dispute has to do with the treatment of wood veneer flooring strips. The defendant failed to timely respond to several requests to admit from the plaintiff. A request to admit is a discovery tool through which one side simply asks the other to admit some fact as a means of taking it off the table as an issue. If the other side does not respond, the fact is deemed to have been admitted.

The Court, however, has discretion to relieve the party of it's deemed admissions where it will not serve the goal of getting to the merits of the case and the withdrawal of the admission will not prejudice the other parties ability to bring or defend its case. In other words, if the Court feels it can get to the merits without substantial prejudice to the other party, it can un-deem the admissions. Importantly, the focus is not on what caused the late response or no response. This is not about the quality of excuses, it is about getting to the right result fairly.

The Court noted that leaving the deemed admissions deemed would lead to a victory for the plaintiff on at least some counts. Further, the Court noted that the defendant's answer to the complaint effectively denied these same allegations. Accordingly, the deemed admissions did not serve the goal of a decision on the merits. Thus, the Court found the first prong to have been satisfied.

To satisfy the second prong, the plaintiff would need to show prejudice. In this situation, prejudice is not simply having to prove the otherwise admitted fact. It relates to the inability to prove that fact otherwise. On this point, the Court found that the delay in answering the requests was not substantial and that the plaintiff has the opportunity to depose witnesses necessary to prove the otherwise deemed admitted fact. Thus, it was unable to show prejudice.

As a result, the Court ordered that the deemed admissions be deemed withdrawn, which is a lot of deeming.

The second opinion in this case, resolves Kahrs' motion to file a reply brief and to exclude certain evidence. That will be the next post.

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