Case 3:15-cv-03018-JAF Document 48 Filed 01/04/16 Page 1 of 17 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO WAL-MART PUERTO RICO, INC., ) ) Plaintiff, ) ) v. ) Case No. 3:15-cv-03018-JAF ) JUAN C. ZARAGOZA-GÓMEZ, in his official ) capacity as Secretary of the Treasury of the ) Commonwealth of Puerto Rico, ) ) Defendant. ) JOINT PLAN FOR DISCOVERY Pursuant to this Court’s orders the parties respectfully submit this Joint Plan for discovery on jurisdiction and the merits. Meet and Confers Counsel for both parties met and conferred telephonically about this plan on December 28, December 30, and January 4. Counsel have succeeded in reaching agreement on some important issues—including a joint proposed protective order, submitted concurrently herewith. Counsel for both parties continue to meet and confer in good faith to resolve the outstanding discovery issues that remain. Counsel respectfully request additional time for these conferences, and will submit updates to this plan when additional dates and details are confirmed. The parties’ respective positions are set forth in more detail below. Wal-Mart PR’s Proposed Discovery Plan 1. During the December 28 meet-and-confer, Wal-Mart PR suggested that counsel for the Secretary propose topics for deposition, and Wal-Mart PR would then find persons 1 Case 3:15-cv-03018-JAF Document 48 Filed 01/04/16 Page 2 of 17 knowledgeable about those topics to testify. In response, on December 30, counsel for the Secretary stated that he wished to depose the following persons: Wal-Mart PR’s “external auditor”; Wal-Mart PR’s “controller” or “CFO”; and an employee of the parent company, Wal- Mart Stores, Inc., with knowledge of the transfer pricing policies between that company and Wal-Mart PR. Over the weekend, Wal-Mart PR worked to identify those three witnesses and find dates when they would be available. On the morning of January 4, Wal-Mart PR offered to make these three witnesses available for deposition in San Juan, at the offices of McConnell Valdes, for one-day depositions, to be held on January 12, 13, and 14. 2. Meanwhile, Wal-Mart PR began requesting documents and depositions from the Secretary. On December 29, Wal-Mart served a detailed jurisdictional discovery request containing 30(b)(6) topics and document requests. (Exhibit D). On December 30, Wal-Mart PR sent subpoenas to the Secretary for third party depositions (Exhibits A, B, and C). On the morning of January 4, Wal-Mart PR served a second discovery request relating to the merits (Exhibit E). These requests are discussed further below, in the “Details of Wal-Mart PR’s Discovery Plan” section. 3. There are two primary issues on which the parties have not yet reached agreement. The first issue is the dates for Wal-Mart PR’s personnel to testify. Though Wal- Mart PR has agreed to depose the Hacienda personnel when they are available (later in January, according to counsel for the Secretary) the counsel for the Secretary has not agreed to do so for Wal-Mart personnel. Counsel for the Secretary has indicated that he would not be ready to depose Wal-Mart PR’s personnel on January 12, 13, and 14, and has requested that these depositions be post-poned. 2 Case 3:15-cv-03018-JAF Document 48 Filed 01/04/16 Page 3 of 17 4. Wal-Mart PR respectfully submits that January 12, 13, and 14 are appropriate dates for these depositions. Wal-Mart PR proposed these dates because the Secretary represented that its witnesses would not be available until later in January. Double-tracking depositions later in January will add undue burden on both parties. Wal-Mart PR has confirmed the witnesses’ availability on January 12, 13 and 14 and has offered to make these witnesses available in San Juan (including any who live in Arkansas). Counsel have been informed that some of these witnesses have other commitments later in January. Given the numerous tasks that must be accomplished between now and the evidentiary hearing – e.g., the depositions of the Secretary’s witnesses, the preparation of expert reports, the depositions of the experts, etc. – Wal-Mart PR’s position is that the parties simply do not have the luxury of delaying the depositions of currently-available witnesses. 5. The second issue of disagreement is the scope and timing of the Secretary’s discovery requests. At approximately 7pm Atlantic Time, counsel for the Secretary greatly expanded the discovery requests beyond the three specific witnesses that he requested during the meet and confer on December 30. The new requests also go far beyond what this Court ordered at the December 23 hearing. As the Court will see in the Secretary’s plan, below, the Secretary’s discovery requests now include entirely new topics, including for example, the “[c]orporate structure of Wal-Mart Stores, Inc.” including “the conglomerate’s structure (organizational chart and history of changes in since Wal-Mart began operations in Puerto Rico (4 February 1991)”; the “percentage of net taxable income over gross income for years 2004 thru 2015 of all jurisdictions in which Wal-Mart Stores, Inc. or related entities are engaged in a trade or business”; and some requests that are difficult even to understand, including, for example, “volume and nature of uncontrolled transactions taken into account for analyzing their 3 Case 3:15-cv-03018-JAF Document 48 Filed 01/04/16 Page 4 of 17 comparability with the multi-jurisdictional transaction entered into.” These requests are needlessly expansive and unduly burdensome. Wal-Mart’s discovery requests, by contrast, were (1) provided long before the deadline for this plan; (2) have thus far drawn no objection from counsel for the Secretary; and (3) are narrowly focused on the issues identified by the Court. See Exhibits A through D (jurisdictional discovery requests served on December 29 and 30); Exhibit E (merits discovery requests, adding a few topics relevant to merits issues, served the morning of January 4). 6. To date, counsel for the Secretary has not provided any dates for depositions of Hacienda personnel, nor responded to the document requests. 7. Wal-Mart PR respectfully proposes the following discovery schedule: Jan. 8: Initial disclosures pursuant to Rule 26(a) Jan. 11: KPMG 30(b)(6) deposition by Wal-Mart PR, in San Juan (pending confirmation from KPMG—subpoena attached as Exhibit A) Jan. 12: Parties disclose expert witnesses Jan. 12: Governor’s Working Group 30(b)(6) deposition by Wal-Mart PR, in San Juan (pending confirmation from the Working Group—subpoena attached as Exhibit B) Jan. 12: One of three Wal-Mart PR witnesses to be deposed by Hacienda, in San Juan Jan. 13: One of three Wal-Mart PR witnesses to deposed by Hacienda, in San Juan Jan. 14: One of three Wal-Mart PR witnesses to deposed by Hacienda, in San Juan (pending confirmation from Hacienda—Wal-Mart PR has offered three witnesses covering the topics requested) Jan. 15: Conway MacKenzie LLC 30(b)(6) deposition, by Wal-Mart PR, in Detroit, MI or in San Juan, PR (pending confirmation from Conway MacKenzie—subpoena attached as Exhibit C) Jan. 18-20: Treasury 30(b)(6) deposition(s), by Wal-Mart PR, in San Juan (the deposition notices and document requests are attached as Exhibits D and E) Jan. 19: Parties simultaneously exchange expert reports 4 Case 3:15-cv-03018-JAF Document 48 Filed 01/04/16 Page 5 of 17 Jan. 21: Joint pre-trial order submitted to Court Jan. 201: Deposition of Secretary Zaragoza-Gomez, in San Juan, on one of these dates, depending on witness availability (pending confirmation from counsel for the Secretary, who is checking on witness availability—deposition notice and document request (if any) to be served later) Jan. 212: Deposition of GDB President Acosta Febo, by Wal-Mart PR, in San Juan deposition notice and document request (if any) to be served later) Jan. 21-27: Depositions of experts, by both parties, in San Juan (each deposition to last one day, and to be determined based on witness and counsel availability) Jan. 27: Discovery ends Feb. 2-5: Four-day trial Details of Wal-Mart PR’s Discovery Plan 8. Wal-Mart PR’s Rule 30(b)(6) deposition(s) of Treasury, and related document requests. On December 29, Wal-Mart PR served its first request for 30(b)(6) deposition and document request on the Secretary. This request is directed to jurisdictional issues. It is attached as Exhibit D. On December 30, the Court expanded the scope of the hearing to include the merits. On January 4, Wal-Mart PR served its second 30(b)(6) deposition and document request on the Secretary. This request is directed to merits issues. It is attached as Exhibit E. a. Wal-Mart PR has requested the Secretary schedule the requested 30(b)(6) deposition(s) on January 18-20, and to produce the requested documents, relevant to each topic, no later than the week of January 11-15 (Wal-Mart PR has 1 In earlier meet and confers, Wal-Mart PR proposed a broader range of acceptable dates for Secretary Zaragoza- Gomez’s deposition and President Acosta Febo’s deposition: January 19-27. Hearing no specifics from counsel for the Secretary, however, Wal-Mart PR respectfully submits that the schedule would work most efficiently if these witnesses were deposed on the specific dates stated above. This would permit the experts to respond, in their depositions, to any new facts disclosed in the fact depositions. However, Wal-Mart PR remains available to take these depositions on any dates in this range on which these witnesses are available.