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

March 24, 2011


The opinion of the court was delivered by: Richard W. Roberts United States District Judge


The government, by relator Aaron J. Westrick, filed a complaint against defendants Second Chance Body Armor, Inc. and related entities (collectively "Second Chance"), Toyobo Co., Ltd., Toyobo America, Inc. (collectively "Toyobo"), and individual defendants Thomas Bachner, Jr., Richard Davis, Karen McCraney, and James "Larry" McCraney, alleging violations of the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-33, as well as common law claims in connection with the sale of Zylon body armor. The individual defendants have moved to transfer venue to the Western District of Michigan.*fn1 Because the individual defendants have not shown that a transfer is in the interest of justice, their motion will be denied.


The background of this case is discussed fully in United States ex rel. Westrick v. Second Chance Body Armor, Inc., 685 F. Supp. 2d 129 (D.D.C. 2010). Briefly, the government alleges that Second Chance and Toyobo contracted for Toyobo to supply Second Chance with the synthetic fiber "Zylon" for use in manufacturing Second Chance bulletproof vests. Zylon ---- which Toyobo manufactured in Japan (Am. Compl. ¶ 47) ---- deteriorated more quickly than expected. Westrick, 685 F. Supp. 2d at 132. The government alleges that Second Chance and Toyobo knew about the accelerated degradation but concealed information about it from the government, which purchased Second Chance vests through various programs. Id. Second Chance and its related entities were primarily Michigan corporations,*fn2 Toyobo Co., Ltd. is a Japanese Corporation, Toyobo America, Inc. is a New York Corporation, and the individual defendants ---- who served as officers of Second Chance ---- all resided in Michigan when the government filed its amended complaint in September 2005. (Am. Compl. ¶¶ 6-19.)
In November 2005, defendants Larry and Karen McCraney filed a motion to dismiss or, in the alternative, to transfer venue to the Western District of Michigan. In January 2006, they withdrew their motion and stipulated that venue was proper in this district. Toyobo filed a motion to dismiss, discovery began while that motion was pending, and the motion to dismiss was later denied. Westrick, 685 F. Supp. 2d at 142. Toyobo unsuccessfully moved for reconsideration, United States ex rel. Westrick v. Second Chance Body Armor, Inc., 709 F. Supp. 2d 52 (D.D.C. 2010), and a scheduling conference was held at which the close of discovery was set for January 2012. In July 2010, the individual defendants moved to transfer venue, arguing that continuing to defend the suit in this district would impose on them financial hardship and inconvenience. (Defs.' Mem. of Law in Supp. of Their Mot. for Change of Venue ("Defs.' Mem.") at 1-2.) The government and the relator oppose the motion, arguing that transferring the case would inconvenience the other parties and witnesses and waste judicial resources.*fn3 (Opp'n of the U.S. to the Mot. to Change Venue ("Gov't Opp'n") at 2; Pl.-Relator's Opp'n to Mot. for Change of Venue ("Pl.-Relator's Opp'n") at 2.)


A case may be transferred to another venue under 28 U.S.C. § 1404(a) "[f]or the convenience of parties and witnesses, in the interest of justice[.]" See also Piper Aircraft Co. v. Reyno, 454 U.S. 235, 253 (1981). The moving party carries the burden of showing that a transfer is appropriate. Montgomery v. STG Int'l, Inc., 532 F. Supp. 2d 29, 32 (D.D.C. 2008); Onyeneho v. Allstate Ins. Co., 466 F. Supp. 2d 1, 3 (D.D.C. 2006). Because "'it is perhaps impossible to develop any fixed general rules on when cases should be transferred[,]' . . . the proper technique to be employed is a factually analytical, case-by-case determination of convenience and fairness." SEC v. Savoy Indus. Inc., 587 F.2d 1149, 1154 (D.C. Cir. 1978) (quoting Starnes v. McGuire, 512 F.2d 918, 929 (D.C. Cir. 1974) (en banc)).

"Any transfer under § 1404(a) is restricted to a venue where the action 'might have been brought.'" Robinson v. Eli Lilly & Co., 535 F. Supp. 2d 49, 51 (D.D.C. 2008) (quoting 28 U.S.C. § 1404(a)). A plaintiff may bring a claim under the FCA "in any judicial district in which . . . , in the case of multiple defendants, any one defendant can be found, resides, transacts business, or in which any act proscribed by section 3729 occurred." 31 U.S.C. § 3732(a); see also United States v. Intrados/Int'l Mgmt. Grp., 265 F. Supp. 2d 1, 6 (D.D.C. 2002). Because many of the defendants either reside or transact business in the Western District of Michigan, there is no question ---- and the relator and the government do not contest ---- that this action could have been brought in that district.*fn4 (See Gov't Opp'n at 9 (noting that "this action could have been brought in the W.D. Michigan"); Pl.-Relator's Opp'n at 4.)

After determining that venue in the proposed transferee district would be proper, a court then "must weigh in the balance the convenience of the witnesses and those public-interest factors of systemic integrity and fairness that, in addition to [the] private concerns [of the parties], come under the heading of 'the interest of justice.'" Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30 (1988).


The public factors to assess include "1) the local interest in making local decisions about local controversies, 2) the potential transferee court's familiarity with applicable law, and 3) the congestion of the transferee court compared to that of the transferor court." Demery v. Montgomery Cnty., Md., 602 F. Supp. 2d 206, 210 (D.D.C. 2009). All federal courts are presumed equally familiar with the law governing the plaintiffs' FCA claims, and this factor does not weigh either for or against transfer. See Montgomery, 532 F. Supp. 2d at 34.

The other two factors, however, weigh against transfer. Since millions of dollars in allegedly false claims were submitted in the District of Columbia (Gov't Opp'n at 19), this district has a significant interest in providing a forum for these allegations of fraud. See Dooley v. United Techs. Corp., 786 F. Supp. 65, 73 (D.D.C. 1992) (involving Racketeer Influenced and Corrupt Organizations Act claims), abrogated on other grounds by FC Inv. Grp. LC v. IFX Mkts., Ltd., 529 F.3d 1087, 1099 (D.C. Cir. 2008). With respect to the third factor, there may be a shorter median disposition time for cases in the Western District of Michigan than for cases in this district. (See Defs.' Mem. at 16 (comparing median disposition time of 26.4 months in the Western District of Michigan to a median disposition time of 33.1 months in this district).) Nonetheless, the risk of injecting unnecessary delay in resolving this case may be greater if this seven-year-old case is transferred. This Court is familiar with the multiple issues and lengthy procedural history of the case, and decided Toyobo's dispositive motions. Given the parties' voluminous filings, this experience is not insignificant, and a court in the Western District of Michigan will likely require a substantial amount of time to familiarize itself with the case. See Savoy Indus., Inc., 587 F.2d at 1156 (affirming denial of motion to transfer in part because of the delay that would arise while the transferee court familiarized itself with the complex case that the district court was already prepared to try); cf. Devaughn v. Inphonic, Inc., 403 F. Supp. 2d 68, 73 (D.D.C. 2005) (noting that "the case has not progressed so far that delay would result if another court must familiarize itself with the disputed facts or the procedural background"). Finally, to conserve judicial resources, "[l]instigation of . . . related claims in the same forum is strongly favored." Islamic Republic of Iran v. Boeing Co., 477 F. Supp. 142, 144 (D.D.C. 1979); see also SEC v. Daly, Civil Action No. 05-55 (CKK), 2006 WL 6190699, at *5 n.1 (D.D.C. Feb. 11, 2006). Because there are four other related cases pending before this Court, transferring this case would allocate inefficiently scarce judicial resources. Thus, the public factors weigh decidedly against transfer.


The private factors to assess include 1) the plaintiff's choice of forum, 2) the defendant's choice of forum, 3) where the claim arose, 4) the convenience of the parties, 5) the convenience of the witnesses, particularly if important witnesses may actually be unavailable to give live trial testimony in one of the ...

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