United States v. Honeywell Int'l Inc.

• Decision Date: 25 November 2020
• Docket Number: Civil Action No. 08-0961 (PLF)
• Citation: 502 F.Supp.3d 427
• Parties: UNITED STATES of America, Plaintiff, v. HONEYWELL INTERNATIONAL INC., Defendant.
• Court: U.S. District Court — District of Columbia

502 F.Supp.3d 427

UNITED STATES of America, Plaintiff,

v.HONEYWELL INTERNATIONAL INC., Defendant.

Civil Action No. 08-0961 (PLF)

United States District Court, District of Columbia.

Signed November 25, 2020

Edan Rotenberg, Pro Hac Vice, Reed Super, Pro Hac Vice, Super Law Group LLC, Reed Super, Super Law Group LLC, New York, NY, Daniel J. Mullen, Ransmeier & Spellman, Thomas F. Irwin, Conservation Law Foundation, Daniel J. Mullen, Ransmeier & Spellman, Concord, NH, for Plaintiff.

Wilbur A. Glahn, III, Jennifer L. Parent, McLane Middleton, Manchester, NH, P. Stephen Gidiere, III, Thomas G. DeLawrence, Pro Hac Vice, Balch & Bingham, Birmingham, AL, for Defendant.

OPINION

PAUL L. FRIEDMAN, United States District Judge

Defendant, Honeywell International Inc. ("Honeywell") moves for summary judgment. Plaintiff, the United States, opposes the motion. Upon consideration of the parties’ written submissions, the relevant case law, and the relevant portions of the record in this case, the Court will deny the defendant's motion for summary judgment.¹

I. FACTUAL AND PROCEDURAL HISTORY

This action has been the subject of three prior opinions: United States v. Honeywell Int'l Inc. ("Honeywell I"), 798 F. Supp. 2d 12 (D.D.C. 2011) (motion to dismiss); United States v. Honeywell Int'l Inc. ("Honeywell II"), 841 F. Supp. 2d 112 (D.D.C. 2012) (motion to strike); United States v. Honeywell Int'l Inc. ("Honeywell III"), 318 F.R.D. 202 (D.D.C. 2016) (motion for leave to amend complaint). Also pertinent are a series of decisions in a separate but related action: United States ex rel. Westrick v. Second Chance Body Armor Inc. ("Second Chance I"), 128 F. Supp. 3d 1 (D.D.C. 2015) (motion for summary judgment); United States ex rel. Westrick v. Second Chance Body Armor Inc. ("Second Chance II"), Civil Action No. 04-280, 2016 WL 3033937 (D.D.C. Feb. 11, 2016) (first motion to reconsider); United States ex rel. Westrick v. Second Chance Body Armor Inc. ("Second Chance III"), Civil Action No. 04-0280, 2017 WL 8809510 (D.D.C. Mar. 31, 2017) (second motion to reconsider); United States ex rel. Westrick v. Second Chance Body Armor Inc. ("Second Chance IV"), 266 F. Supp. 3d 110 (D.D.C. 2017) (third motion to reconsider).

The procedural history and facts relevant to this motion are recounted below.

A. Procedural History

On June 5, 2008, the government filed a complaint naming as the defendant, Honeywell International Inc. ("Honeywell") and alleging violations of the False Claims Act ("FCA"), 31 U.S.C. §§ 3729 - 33, and unjust enrichment under the common law. Complaint ("Compl.") [Dkt. No. 1] ¶¶ 86-97. On July 8, 2011, the Court denied Honeywell's motion to dismiss, holding that the government had pled its claims with sufficient particularity. Honeywell I, 798 F. Supp. 2d at 12. Subsequently, on January 25, 2012, the Court struck Honeywell's affirmative defenses of waiver and estoppel. Honeywell II, 841 F. Supp. 2d at 112. On July 29, 2016, the Court permitted the government to amend its complaint. Honeywell III, 318 F.R.D. at 202. The Amended Complaint, filed on August 1, 2016, included allegations about Z Shield degradation due to its water-based coating and fragility, and Honeywell's manipulation of Z Shield warehouse data. Gov't Opp. at 6; Am. Compl. ¶¶ 48-60, 90-96. Discovery has closed, and Honeywell now moves for summary judgment. See Def. Mot. at 1.

B. Facts

Honeywell is a United States corporation "which manufactures, inter alia , high performance fabrics and shields made of high performance fibers for use in ballistic vests." USCSUMF ¶ 1; HRUSCSUMF ¶ 1 (undisputed).² One of Honeywell's products was Z Shield, made using Zylon fiber, which Honeywell obtained from Toyobo Co. ("Toyobo"). USCSUMF ¶¶ 4,7; HRUSCSUMF ¶¶ 4,7 (undisputed). Honeywell contracted with Dutch States Mines High Performance Fibers ("DSM"), from 2000 to 2001, and FMS Enterprises Migun Ltd. ("FMS"), from 2002 to 2005, to manufacture Z Shield. USCSUMF ¶¶ 14-15; HRUSCSUMF ¶¶ 14-15 (undisputed). Honeywell sold Z Shield to Armor Holdings Inc. ("AHI") from approximately 2000 to July 2001 and from March 2002 to 2005 for the purpose of incorporating Z Shield into bullet resistant vests. See USCSUMF ¶ 17; HRUSCSUMF ¶ 17 (undisputed). AHI was made up of three body armor divisions: (1) American Body Armor ("ABA"), (2) Safariland, and (3) ProTech. USCSUMF ¶ 18; HRUSCSUMF ¶ 18 (undisputed). AHI purchased over 120,000 pounds of Z Shield from Honeywell for more than fifteen million dollars. USCSUMF ¶ 261; HRUSCSUMF ¶ 261 (undisputed). Honeywell marketed Z Shield to AHI as "the best ballistic product in the market for ballistic resistance, even better than woven Zylon fabric." USCSUMF ¶ 16; HRUSCSUMF ¶ 16 (undisputed); see also USCSUMF ¶ 24; HRUSCSUMF ¶ 24 (undisputed).

1. Sales Under the GSA MAS and BVPGA

AHI sold vests containing Z Shield under two programs that are at issue here: (1) "the General Services Administration's (‘GSA’) contracting program known as the Multiple Award Schedule[s] (‘MAS’)," and (2) "a federal program called the Bulletproof Vest Partnership (‘BVP’)." HSUMF ¶ 67; USRHSUMF ¶ 67 (undisputed).

a. GSA MAS

AHI, through its subsidiaries, sold Z Shield containing vests directly to federal government agency purchasers through GSA MAS contracts. HSUMF ¶ 69; USRHSUMF ¶ 69 (undisputed). "On July 24, 1995, GSA released a solicitation 7FXG-B3-95-84 l l-B seeking offers for law enforcement equipment, including body armor, to be listed on the GSA MAS." USCSUMF ¶ 27; HRUSCSUMF ¶ 27 (undisputed). GSA awarded ABA contract No. GS-07F-9549G (hereinafter "1997 ABA Contract") for the term of June 1, 1997 through July 31, 2001. USCSUMF ¶ 27; HRUSCSUMF ¶ 27 (undisputed); Gov't Opp., Ex. 32 [Dkt. No. 209-7] (ABA's GSA Contract). This contract provided that the warranty was the "[s]tandard [c]ommercial [w]arranty." Gov't Opp., Ex. 32 at GSA002-0180 (ABA's GSA Contract). The 1997 ABA warranty provided that " ‘[f]or five years after date of purchase [ABA] warrants that the ballistic panels will pass the [National Institute of Justice ("NIJ")] protocol for ballistic intervention and their [NIJ] designated velocities during an actual occurrence, not necessarily during the [NIJ] independent laboratory retest procedure.’ " USCSUMF ¶ 33 (quoting Gov't Opp., Ex. 46 [Dkt. No. 209-8] at GSA002-0358 (ABA Limited Warranty)); HRUSCUMF ¶ 33 (not disputing cited fact). On March 10, 1997, ABA provided this written warranty to a GSA representative. USCSUMF ¶ 33; HRUSCUMF ¶ 33 (undisputed) Gov't Opp., Ex. 45 [Dkt. No. 209-8] (Mar. 10, 1997 letter from ABA to GSA).

In 2000, AHI began selling vests containing Z Shield. USCSUMF ¶ 27; HRUSCSUMF ¶ 27 (undisputed). GSA renewed ABA's contract to run for an additional five-year period from August 1, 2001 through July 31, 2006. USCSUMF ¶ 29; HRUSCSUMF ¶ 29 (undisputed); Gov't Opp., Ex. 36 [Dkt. No. 209-7] (ABA's GSA Contract renewal). The renewal makes no mention of the warranty. See Gov't Opp., Ex. 36 (ABA's GSA Contract renewal). The renewal states that "[a]ll other terms and conditions remain unchanged." Id. at GSA002-0841. At least as early as November 28, 2001, vests containing Z Shield were included on the 1997 ABA Contract's distributor pricelist under the GSA. USCSUMF ¶ 30; HRUSCSUMF ¶ 30 (undisputed); Gov't Opp., Ex. 39 [Dkt. No. 209-7] (Nov. 28, 2001 contract modification). The modification makes no mention of the warranty. See Gov't Opp., Ex. 39 (Nov. 28, 2001 contract modification). The modification states that "[a]ll other terms and conditions remain as initially negotiated or subsequently modified. No other changes." Id. at GSA002-0779.

GSA awarded ProTech contract No. GS-07F-9947H (hereinafter "1998 ProTech Contract") for the term of April 1, 1998 through March 31, 2003. USCSUMF ¶ 27; HRUSCSUMF ¶ 27 (undisputed); Gov't Opp., Ex. 33 [Dkt. No. 209-7] (ProTech's GSA Contract). This contract provided that the warranty was the "[s]tandard [c]ommercial [w]arranty." Gov't Opp., Ex. 33 at GSA002-1288 (ProTech's GSA Contract). The 1998 ProTech warranty provided that "PROTECH ARMORED PRODUCTS warrants the ballistic integrity of its products for a period of five (5) years from the date of original purchase from PROTECH. This warranty covers only the ballistic performance for which the product is specifically designed for and the ballistic threat level stated." USCSUMF ¶ 34; HRUSCSUMF ¶ 34 (not disputing cited fact); Gov't Opp., Ex. 47 [Dkt. No. 209-8] (ProTech's Limited Warranty). In 2000, AHI began selling vests containing Z Shield. USCSUMF ¶ 27; HRUSCSUMF ¶ 27 (undisputed). GSA renewed ProTech's contract to run for an additional five year-period from April 1, 2003 through March 31, 2008. USCSUMF ¶ 29; HRUSCSUMF ¶ 29 (undisputed); Gov't Opp., Ex. 37 [Dkt. No. 209-7] (ProTech's GSA Contract renewal). Like ABA's renewal, this renewal makes no mention of the warranty language, see Gov't Opp., Ex. 37 (ProTech's GSA Contract renewal), and states that "[a]ll other terms and conditions remain as initially negotiated or subsequently modified.... No other changes," id. at AHI016-2088.

In August 2005, GSA removed all vests containing Zylon from its GSA MAS schedules. USCSUMF ¶ 237; HRUSCSUMF ¶ 237 (undisputed); HSUMF ¶ 240; USRHSUMF ¶ 240 (undisputed).

b. BVP

"[AHI] also sold Z Shield vests to state, local and tribal police with reimbursements paid for by the Federal Government via the BVP [The Bulletproof Vest Partnership] Program." USCSUMF ¶ 31; HRUSCSUMF ¶ 31 (undisputed). BVP "is a federal program through which state and local law enforcement agencies receive federal funding for body armor." HSUMF ¶ 72; USRHSUMF ¶ 72 (undisputed). The BVP program "reimburses states, localities, and tribal jurisdictions up to 50% of the cost of each unit of eligible body armor purchased." HSUMF ¶ 73; USRHSUMF ¶ 73 (undisputed). "Under the BVP program, the federal government would only reimburse for certain vest models identified on the BVP website." HSUMF ¶ 75; USRHSUMF ¶ 75 (undisputed)....