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

September 30, 2012


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


The United States brought this action against defendants Toyobo Co., Ltd. and Toyobo America, Inc. (collectively "Toyobo"), individual defendants Thomas Bachner, Jr. and Richard Davis, and others*fn1 alleging violations of the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733, as well as common law claims, in connection with the sale of allegedly defective body armor. Bachner has moved for several forms of relief. He seeks to file a counterclaim against the United States asserting malicious prosecution, tortious interference with contracts, unlawful investigatory and litigation tactics, invasion of privacy, and submission of false statements and documents by the Department of Justice attorneys in federal courts; the appointment of an independent investigator; suspension of the current scheduling order; sanctions against the government; and reconsideration of the order denying his motion to transfer venue to the Western District of Michigan. The government opposes and moves to strike or dismiss the counterclaim under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and Rule 12(b)(6) for failure to state a claim for which relief can be granted, and to strike the counterclaim under Rule 12(f).

Because the counterclaim is barred by sovereign immunity, leave to add the counterclaim will be denied and the government's motion to dismiss or strike it will be granted. Because appointing an independent investigator is neither authorized nor warranted, there is no good cause to suspend the scheduling order, there has been no sanctionable conduct by the government, and Bachner has not demonstrated that justice requires reconsidering a change of venue, Bachner's remaining requests for relief will be denied.


The background of this case is set forth fully in United States ex rel. Westrick v. Second Chance Body Armor, Inc., 685 F. Supp. 2d 129, 132-33 (D.D.C. 2010). Briefly, the government's amended complaint filed on September 19, 2005 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. Id. at 132-33. The government purchased the vests both through the General Service Administration's Multiple Award Schedule contracting program and directly from Second Chance or from Second Chance distributors. (Am. Compl. ¶¶ 28-31.) Zylon deteriorated more quickly than expected, and the government alleges that Second Chance and Toyobo knew about the prospect of accelerated degradation while continuing to sell the vests and concealed that information from the government. Westrick, 685 F. Supp. 2d at 132.

In February 2006, Bachner through counsel filed an answer to the government's amended complaint stating no counterclaims. (Def. Bachner's Answer to Am. Compl.) Years later, individual defendants Bachner, Davis, and the McCraneys, by then pro se, moved to transfer venue, arguing that continuing to defend the suit in this district would impose on them financial hardship and inconvenience. The motion to transfer venue was denied because the defendants failed to show that the transfer was in the interests of justice. United States ex rel. Westrick v. Second Chance Body Armor, Inc., 771 F. Supp. 2d 42, 44 (D.D.C. 2011).

In September 2011, Bachner docketed a filing stating a counterclaim against the United States alleging prosecutorial misconduct during the ongoing investigation of Second Chance and the individual defendants under the FCA and moving for various forms of relief. (Mem. Facts in Support of Def. Bachner Jr.'s Counterclaim ("Def.'s Mem.") at 2.) In particular, Bachner moves for the appointment of an independent investigator to examine the government's alleged misconduct, suspension of the scheduling order to allow the investigator to proceed, and sanctions against the government for lack of disclosure, misrepresentations, and unfair settlement practices. (Id. at 1-3, 29-30.) Bachner seeks $2.75 million dollars in damages for lost employment, $700,000 for legal fees, punitive damages, and summary dismissal. (Id. at 30.) Finally, Bachner asks that the order denying transfer of venue to the Western District of Michigan be reconsidered "in the interests of justice." (Id. at 31.)

The government argues that leave to add the counterclaim should be denied or the counterclaim should be stricken or dismissed because it is untimely filed, is not compulsory, is futile as barred by sovereign immunity, fails to state a claim upon which relief can be granted, and is insufficient as a matter of law. (Gov't Mem. in Supp. of Their Mot. to Strike and/or Dismiss the Counterclaim ("Gov't Mem.") at 3, 15.) In addition, the government opposes appointing an independent investigator for lack of statutory authority (id. at 28-29), imposing sanctions as barred by sovereign immunity and unwarranted in any event (id. at 29-42), and reconsidering transferring venue because it is untimely and Bachner alleges no new grounds to consider. (Id. at 42.)



Generally, "[a] pleading must state as a counterclaim any

claim that -- at the time of its service -- the pleader has against an opposing party[.]" Fed. R. Civ. P. 13(a). Two rules govern adding a counterclaim after the initial pleadings have been filed. Rule 15(a) grants discretion to the court to grant leave to file a counterclaim to a party who omitted the counterclaim from the original responsive pleading when the opposing party does not consent. Rule 13(e) vests discretion in the court to allow the counterclaim if the claim accrued to a party after the earlier pleading was filed.*fn2 See Montecatini Edison, S.P.A. v. Ziegler, 486 F.2d 1279, 1282 n.9 (D.C. Cir. 1973); Fed. R. Civ. P. 13(e), 15(a)(2).

Bachner filed his initial pleading -- his answer -- through counsel in February 2006. Portions of Bachner's pro se counterclaim, filed in September 2011, pertain to events which occurred before he filed his answer in February 2006 and could be construed under Rule 15 as omitted claims. Bachner's pre-answer claims allege malicious prosecution (see Def.'s Mem. at 9-11 (citing the government's choice to prosecute the Second Chance executives in September 2005)), and tortious interference with contract (see Def.'s Mem. at 12-13 (alleging interference with Bachner's employment in July and September 2005)). Bachner's other claims allege events from 2006 to 2010 during the FCA investigation and litigation: unlawful litigation tactics (see Def.'s Mem. at 14 (citing placing Bachner and other defendants on the General Services Administration's ("GSA's") Excluded Parties Listing System in August 2006)); invasion of privacy (see Def.'s Mem. at 20-22 (citing investigations in September 2008)) and malicious prosecution (see Def.'s Mem. at 15-16, 26-29 (citing vindictive "persecution" in April 2008, intimidation and threats in June 2008, improper settlement tactics in April 2009, failure to supervise in May 2010 and bad faith litigation tactics in July 2010)). They could be construed under Rule 13(e) as claims which accrued during this litigation.

A. Omitted counterclaims

Under Rule 15(a), Bachner can add an omitted counterclaim now "only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). The decision to grant or deny leave to amend is within the court's discretion. Garnes- El v. District of Columbia, 841 F. Supp. 2d 116, 123 (D.D.C. 2012) (citing Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996)). A court should "determine the propriety of amendment on a case by case basis, using a generous standard[,]" Harris v. Sec'y, U.S. Dep't of Veterans Affairs, 126 F.3d ...

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