United States Ex Rel. Westrick v. Second Chance Body Armor, Inc.

266 F. Supp. 3d 110
CourtDistrict Court, District of Columbia
DecidedJuly 14, 2017
DocketCivil Action No. 2007-1144
StatusPublished
Cited by7 cases

This text of 266 F. Supp. 3d 110 (United States Ex Rel. Westrick v. Second Chance Body Armor, Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Ex Rel. Westrick v. Second Chance Body Armor, Inc., 266 F. Supp. 3d 110 (D.D.C. 2017).

Opinion

OPINION

PAUL L. FRIEDMAN, United States District Judge

This matter is before the Court on the motion of the Únited States for reconsideration [Dkt. 450 in Civil Action No. 04-0280 and Dkt. 184 in Civil Action No. 07-1144] of the Court’s September 4, 2015 Memorandum Opinion and Order granting in part and denying in part the parties’ cross motions for partial summary judgment on the United States’ common law claims- and claims under the False- Claims Act (“FCA”), 31 U.S.C. § 3729, et seq. (1994). See United States ex rel. Westrick v. Second Chance Body Armor Inc., 128 F.Supp.3d 1 (D.D.C. 2015), reconsideration denied in part sub nom. United States v. Second Chance Body Armor Inc., No. 04-0280, 2016 WL 3033937 (D.D.C.. Feb. 11, 2016). 1 The United States contends that the'Court erred in limiting its fraudulent inducement FCA claim because the Court *114 failed to consider the declarations of General Services Administration (“GSA”) Contract Specialist Kellie Stoker. It also argues that the Court’s express and implied false certification analysis failed to address several warranties, assurances, or so-called “extra-contractual considerations” in the government’s contracts with vest manufacturers other than Second Chance Body Armor, Inc. (“Second Chance”). Toyobo Company, Ltd. and Toyobo America, Inc. (collectively, “Toyobo”) oppose the motion. 2 Upon consideration of the parties’ written submissions, the relevant case law, the entire record in this case, and the oral argument held on May 11, 2016, the Court will grant reconsideration in part and deny it in part. 3

I. FACTUAL AND PROCEDURAL BACKGROUND

Judge Richard W. Roberts, to whom these two related (but not consolidated) cases were previously assigned, fully recounted their factual and procedural history in several prior opinions. See, e.g., United States ex rel. Westrick v. Second Chance Body Armor Inc., 128 F.Supp.3d at 5-7; United States v. Toyobo Co., Ltd., 811 F.Supp.2d 37, 41-44 (D.D.C. 2011); United States ex rel. Westrick v. Second Chance Body Armor, Inc., 685 F.Supp.2d 129, 132-33 (D.D.C. 2010). Nonetheless, the Court sets forth here the facts and procedural posture relevant to the United States’ FCA claims in an effort to clarify the issues for trial.

A. Factual Background

The United States’ Second Amended Complaint in Civil Action No. 04-0280 alleges that Toyobo contracted with Second Chance to sell them defective Zylon fiber for use in bulletproof vests, which Second Chance then sold to the United States under both (1) the Bulletproof Vest Partnership Grant Act of 1998, 42 U.S.C. § 3796⅞ et seq. (“BPVGPA”), and (2) the General Services Administration’s Multiple Award Schedule (“GSA MAS”). Second Amended Complaint ¶¶ 1-5 (Dec. 30, 2013) [Dkt. 408 in Civil Action No. 04-0280]. 4 *115 The United States’ Amended Complaint in Civil Action No. 07-0144, by contrast, alleges the same conduct based on Toyobo’s contracts with five vest manufacturers other than Second Chance: (1) Armor Holdings, Inc. and its subsidiaries American Body Armor, Inc., Safariland, Inc., and Pro-Tech; (2) Point Blank Body Armor,. Inc. and its subsidiary Protective Apparel Corporation of America, Inc.; (3) First Choice Armor, Inc.; (4) Gator Hawk, Inc.; and (5) Protective Products International, Inc. (collectively, the “other vest manufacturers”). Am Compl.' ¶¶ 1-5, 14-25; see also May 11, 2016 Hr’g Tr. at 12:19-13:11.

In , 1995, Toyobo began to communicate with the United States about the use of Zylon fiber for government “ballistic” .applications such as bulletproofs vests. US Supp., Ex. 23 at PDF page 143 [Dkt. 195]. In literature Toyobo sent to the United States at that time, Toyobo touted its testing data showing Zylon’s “superior tensile strength,” “high temperature abrasion resistance,” low “moisture regain,” and “stability] against humidify.” Id., Ex. 24 at PDF pages 147-48. Those conversations led the United States to contract with Second Chance to sell Zylon bulletproof vests on the GSA MAS from 1995 to 2001. See Declaration of Kellie Stoker in Support of United States’ Response to Toyo-bo’s Motion for Partial Summary Judgment ¶¶ 4-8 (March 15, 2012) [Dkt. 194-4] (“First Stoker Declaration”).

On March 30, 2001, Toyobo began to learn — through its own internal testing— that Zylon “stored in a warehouse for one year showed a strength lowering of about 20%.” US Supp., Ex. 90 at 1-2 [Dkt. 195-2]; see also May 11, 2016 Hr’g Tr. at 49:24-49:25 (“[W]e are willing to agree that the beginning of the fraudulent period is March 2001.” (statement of government counsel)). In July 2001, notes from an internal Toyobo meeting show that Toyobo concluded that a “Zylon hydrolysis (?) problem [had] surfaced,” that “[i]t is extremely regrettable that sufficient study was not done in the development stage and we feel responsible,” and that Toyobo must “enlighten the bulletproof customers.” US Supp., Ex. 52 at PDF pages 13-14 [Dkt. 195-2], It was then that Toyobo created the “Zylon Strength Degradation Improvement Project,” known as “ZKP,” in order to “conduct an investigation to understand” why Zylon degraded under conditions of heat and humidity and “propose urgent measures” to address that degradation. Id., Ex. 95 at PDF page 167.

On July 5, 2001, Toyobo sent the first of quarterly (and later, semi-annual) letters to “valued customers” including vest manufacturers and. “[f]ederal scientists,” see US Supp. at 8, which described in very general terms Toyobo’s Zylon so-called “aging test” under conditions of heat and humidity. See id., Exs. 6-22 at PDF pages 81-141 [Dkt. 195]. 5 The first of those letters frankly stated the result of Toyobo’s preliminary testing — evidenced by attached graphical data — that “the strength of Zylon fiber decreases under high temperature and humidity conditions” of 80 and 60 degrees Celsius and 80% humidity, id. Ex. 6 at PDF page 82, but it also stated that Toyobo “expect[ed] almost no strength loss at about 40 degree C even at 80% humidity.” Id. On July 19, 2001, Toyo-bo sent another letter to “valued customers,” concluding that, despite that testing data, Toyobo “understand[s] that ZYLON *116 fiber is a superior material for body armor[.]” Id., Ex. 100 at PDF page 195 [Dkt. 195-2]. Subsequent letters from Toyobo to Second Chance on July 25, 2001, and August 28, 2001, respectively, stated that Toyobo “ha[d] not reached [a] conclusion” about Toyobo’s Zylon testing at 40 degrees Celsius and warned that any results were “provisional.” Id., Exs. 7-8, PDF pages 87, 90 [Dkt. 195]. 6

By December. 2001, Toyobo’s internal ZKP project had compiled much more detailed and 'troubling findings about Zylon degradation than the anodyne data Toyobo communicated to vest manufacturers and federal scientists before and after that date.

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266 F. Supp. 3d 110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-westrick-v-second-chance-body-armor-inc-dcd-2017.