Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States ex rel. Westrick v. Second Change Body Armor Inc.

United States District Court, D. Columbia.

September 4, 2015

UNITED STATES OF AMERICA, ex rel. WESTRICK, Plaintiffs,
v.
SECOND CHANCE BODY ARMOR INC., et al., Defendants. UNITED STATES OF AMERICA, Plaintiff,
v.
TOYOBO CO. LTD, et al., Defendants

Page 2

[Copyrighted Material Omitted]

Page 3

          For AARON J. WESTRICK, Ph.D, Plaintiff (1:04-cv-00280-RWR): Stephen M. Kohn, LEAD ATTORNEY, David K. Colapinto, KOHN, KOHN & COLAPINTO, LLP, Washington, DC; Anthony C. Munter, PRICE BENOWITZ, LLP, Washington, DC; Eric D. Snyder, PRO HAC VICE, NATIONAL WHISTLEBLOWERS LEGAL DEFENSE AND EDUCATION FUND, Washington, DC.

         For UNITED STATES OF AMERICA, ex rel, Plaintiff (1:04-cv-00280-RWR): Alicia J. Bentley, LEAD ATTORNEY, UNITED STATES DEPARTMENT OF JUSTICE, Civil Division, Washington, DC; Michael J. Friedman, LEAD ATTORNEY, Albert Thomas Morris, U.S. DEPARTMENT OF JUSTICE, Washington, DC; Jeehae Jennifer Koh, U.S. DEPARTMENT OF JUSTICE, Civil Frauds, Washington, DC; Jennifer Lynn Chorpening, UNITED STATES DEPARTMENT OF JUSTICE, Commercial Litigation - Civil Frauds, Washington, DC; Keith V. Morgan, U.S. ATTORNEY'S OFFICE, Washington, DC.

         For SECOND CHANCE BODY ARMOR INC, Defendant (1:04-cv-00280-RWR): William James Cople, III, LEAD ATTORNEY, HOLLINGSWORTH LLP, Washington, DC; James J. Parks, PRO HAC VICE, JAFFE, RAIT, HEUER & WEISS, P.C., Southfield, MI.

         For SECOND CHANCE SHIELD INC, IAG MANUFACTURING, S.A.R.L., SECOND CHANCE INTERNATIONAL, INC., SECOND CHANCE BODY ARMOR UK, LTD., Defendants (1:04-cv-00280-RWR): William James Cople, III, LEAD ATTORNEY, HOLLINGSWORTH LLP, Washington, DC.

         For SECOND CHANCE BODY ARMOR CANADA CO, SECOND CHANCE ARMOR, INC., Defendants (1:04-cv-00280-RWR): LISA SOKOLOWSKI, LEAD ATTORNEY, PRO HAC VICE, WEIL, GOTSHAL & MANGES, LLP, New York, NY; William James Cople, III, LEAD ATTORNEY, HOLLINGSWORTH LLP, Washington, DC.

         For TOYOBO AMERICA, INC, TOYOBO CO. LTD, Defendants (1:04-cv-00280-RWR): Holly Elizabeth Loiseau, LEAD ATTORNEY, WEIL, GOTSHAL & MANGES, L.L.P., Washington, DC; Brian Keith Gibson, Jed P. Winer, Susannah G. Heyworth, PRO HAC VICE, Konrad L. Cailteux, WEIL, GOTSHAL & MANGES, LLP, New York, NY; Christopher D. Barraza, Meghan A. McCaffrey, WEIL, GOTSHAL & MANGES, LLP, Washington, DC; Diane P. Sullivan, WEIL GOTSHAL & MANGES, LLP, Princeton, NJ.

         THOMAS E. BACHNER, JR., Defendant (1:04-cv-00280-RWR), Pro se, Eastport, MI.

         RICHARD C. DAVIS, Defendant (1:04-cv-00280-RWR), Pro se, Central Lake, MI.

         For TOYOBO AMERICA, INC, TOYOBO CO. LTD, TOYOBO AMERICA, INC, Cross Defendants (1:04-cv-00280-RWR): Brian Keith Gibson, PRO HAC VICE, WEIL, GOTSHAL & MANGES, LLP, New York, NY; Jed P. Winer, PRO HAC VICE, WEIL, GOTSHAL & MANGES, LLP, New York, NY; Susannah G. Heyworth, PRO HAC VICE, WEIL, GOTSHAL & MANGES, LLP, New York, NY.

         For UNITED STATES OF AMERICA, ex rel, Counter Defendant (1:04-cv-00280-RWR): Alicia J. Bentley, LEAD ATTORNEY, UNITED STATES DEPARTMENT OF JUSTICE, Civil Division, Washington, DC; Michael J. Friedman, LEAD ATTORNEY, Albert Thomas Morris, U.S. DEPARTMENT OF JUSTICE, Washington, DC; Jennifer Lynn Chorpening, UNITED STATES DEPARTMENT OF JUSTICE, Commercial Litigation - Civil Frauds, Washington, DC; Keith V. Morgan, U.S. ATTORNEY'S OFFICE, Washington, DC.

         For UNITED STATES OF AMERICA, Plaintiff (1:07-cv-01144-RWR): Alicia J. Bentley, LEAD ATTORNEY, UNITED STATES DEPARTMENT OF JUSTICE, Civil Division, Washington, DC; Jeehae Jennifer Koh, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Civil Frauds, Washington, DC; Michael Justin Friedman, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE FOR THE DISTRICT OF COLUMBIA, Washington, DC; Michael D. Granston, LEAD ATTORNEY, Albert Thomas Morris, U.S. DEPARTMENT OF JUSTICE, Washington, DC; Jennifer Lynn Chorpening, UNITED STATES DEPARTMENT OF JUSTICE, Commercial Litigation - Civil Frauds, Washington, DC.

         For TOYOBO CO. LTD, TOYOBO AMERICA, INC, Defendants (1:07-cv-01144-RWR): Christopher D. Barraza, WEIL, GOTSHAL & MANGES, LLP, Washington, DC; Diane P. Sullivan, WEIL GOTSHAL & MANGES, LLP, Princeton, NJ; Jed P. Winer, Natalie R. Blazer, PRO HAC VICE, Konrad Lee Cailteux, WEIL, GOTSHAL & MANGES, LLP, New York, NY.

Page 4

         MEMORANDUM OPINION AND ORDER

         RICHARD W. ROBERTS, Chief United States District Judge.

         The government brought these actions against defendants Second Chance Body Armor, Inc. and related entities (collectively " Second Chance" ), Toyobo Co., Ltd. and Toyobo America, Inc. (collectively " Toyobo" ), and individual defendants Thomas Bachner, Jr., Richard Davis, Karen McCraney, and Larry McCraney alleging violations of the False Claims Act (" FCA" ), 31 U.S.C. § § 3729-3733, and common law claims, in connection with allegedly defective body armor material made or sold by the defendants involving federally-funded purchases.

         Toyobo and the government each move for partial summary judgment on various claims in both actions.[1] In Civil Action 04-280, Toyobo's first motion for partial summary judgment " seeks dismissal of the United States' claims under the False Claims Act, 31 U.S.C. § 3729(a)-(c), in

Page 5

Counts 1, 2, and 3 of the Amended Complaint that are premised on the 'at least 40,549' Zylon-containing bullet-resistant vests purchased by federal agencies off of the General Service Administration's ('GSA') Multiple Award Schedule ('MAS')." Defs.' Toyobo Co., Ltd. and Toyobo America Inc.'s Mem. of P. & A. in Supp. of Their Mot. for Partial Summ. J., Civil Action No. 04-280, ECF No. 270-1 (" Toyobo's Mot. for Partial Summ. J. [270]" ) at 1. Toyobo filed a second motion for partial summary judgment seeking dismissal of " the United States' claims under the False Claims Act in Counts 1, 2, and 3 of the Amended Complaint related to vests purchased by state, local, and tribal law enforcement agencies for which the United States partially reimbursed those agencies under the [Bullet Proof Vest Grant Partnership Act][.]" Toyobo Co., Ltd. and Toyobo America Inc.'s Mem. of P. & A. in Supp. of Their Mot. for Partial Summ. J., Civil Action No. 04-280, ECF No. 343-1 (" Toyobo's Mot. for Partial Summ. J. [343]" ) at 2. The government filed a motion for partial summary judgment, or in the alternative summary adjudication of issues, on liability for " sales of the Ultima vest to the United States pursuant to the GSA Schedule[,]" and on " Toyobo's liability for its false statements in the form of its false and misleading degradation reports." United States' Mot. for Partial Summ. J. Against Defs. Toyobo Co. Ltd. and Toyobo America, Inc., Civil Action No. 04-280, ECF No. 344-1 (" Gov't Mot. for Partial Summ. J." ) at 1 n.1 and at 2.

         In Civil Action 07-1144, Toyobo moves for partial summary judgment on " the United States' claims under the False Claims Act (Counts 1, 2, and 3 of the Amended Complaint)" which includes the claims related to the bullet proof vests sold on the General Services Administration Schedule and those reimbursed by the United States through the Bullet Proof Vest Grant Partnership Act. Toyobo Co., Ltd. and Toyobo America Inc.'s Mem. of P. & A. in Supp. of Their Mot. for Partial Summ. J., Civil Action No. 07-1144, ECF No. 95-1 (" Toyobo's Mot. for Partial Summ. J. [95]" ) at 1. The government moves for partial summary judgment as to " only those vests which were sold to the United States by the Zylon Vest Manufacturers pursuant to the GSA Multiple Award Schedule[,]" and does not address vests sold through the Bulletproof Vest Grant Partnership Act. United States' Mem. of P. & A. in Supp. of its Mot. for Partial Summ. J. Against Defs. Toyobo Co. Ltd. and Toyobo America, Inc., Civil Action No. 07-1144, ECF No. 97-1 (" Gov't Mot. for Partial Summ. J. [97]" ) at 2 n.3.

         Because a genuine dispute as to material facts exists regarding claims for Zylon vests sold off of the General Service Administration's Multiple Award Schedule after a 2002 contract modification took effect, summary judgment will be denied to both the defendants and the government as to those claims. As the undisputed facts entitle defendants to judgment as a matter of law on the claims for the remaining Zylon vests sold off of that Schedule, summary judgment will be granted to the defendants and denied to the government as to those claims. Because a genuine dispute as to material facts exists regarding whether Toyobo disseminated false information into the market, summary judgment will be denied to both the government and the defendants regarding claims for Zylon vests reimbursed through the Bullet Proof Vest Grant Partnership Act.

         BACKGROUND

         The background of this case is set forth in United States ex rel. Westrick v. Second Chance Body Armor, Inc., 685 F.Supp.2d 129, 132-33 (D.D.C. 2010) and United States v. Toyobo Co., Ltd.,

Page 6

811 F.Supp.2d 37, 41-44 (D.D.C. 2011). 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. Second Chance, 685 F.Supp.2d at 132; Toyobo, 811 F.Supp.2d at 41-42. These Zylon vests were then sold to, or paid for by, the federal government through two different programs - - the General Services Administration contracting program and the Bullet Proof Vest Grant Partnership Act program. The government claims that Toyobo's false and fraudulent actions under each program give rise to liability under the False Claims Act. Specifically, the government claims that the bullet proof vests containing Zylon degraded without warning and did not maintain the same level of bullet-resisting efficacy during the five year warranty period. See Second Chance, 685 F.Supp.2d at 132; Toyobo, 811 F.Supp.2d at 41-42. Furthermore, the government claims that Second Chance and Toyobo knew that the vests were unable to maintain their bullet-resisting efficacy during the five year warranty period, did not inform the government or other buyers about this degradation concern, and intentionally placed false information into the market suggesting that there was no degradation concern. See Second Chance, 685 F.Supp.2d at 132; Toyobo, 811 F.Supp.2d at 41-43.

         A. General Services Administration Contracting Program

         The General Services Administration (" GSA" ), a federal agency responsible for administering the Multiple Award Schedule (" MAS" ) contracting program, negotiates contracts for commercial off-the-shelf items and makes those items available to various federal agencies without the need for those agencies to negotiate the prices or terms with contractors for themselves. Defs. Toyobo Co., Ltd. and Toyobo America Inc.'s Statement of Undisputed Material Facts in Supp. of Their Mot. for Partial Summ. J., 04-cv-280, ECF No. 270-2 (" Toyobo's SUMF [270]" ) at ¶ ¶ 11-12; Defs. Toyobo Co., Ltd. and Toyobo America, Inc.'s Statement of Undisputed Material Facts in Supp. of Their Mot. for Partial Summ. J., 07-cv-1144, ECF No. 95-2 (" Toyobo's SUMF [95]" ) at ¶ ¶ 7-8; United States' Combined Separate Statement of Material Facts (1) in Resp. to the Statement of Undisputed Facts of Defs. Toyobo Co. Ltd. and Toyobo America, Inc. in Supp. of Their Mot. for Partial Summ. J. against the United States; and (2) in Supp. of the United States' Statement of Facts in its Opp'n to Toyobo's Mot. for Partial Summ. J., 04-cv-280, ECF No. 295 (" Govt.'s SUMF [295]" ) at ¶ ¶ 11-12. " In 1995, GSA solicited offers to sell body armor on the MAS." Toyobo's SUMF [270] at ¶ 14; Toyobo's SUMF [95] at ¶ 9; Govt.'s SUMF [295] at ¶ 14. Second Chance responded to that solicitation and was subsequently awarded a contract from the GSA. Toyobo's SUMF [270] at ¶ ¶ 17-19; Govt.'s SUMF [295] at ¶ ¶ 17-19. " On October 23, 1998, GSA issued a modification of the Second Chance contract to add certain new body armor models to the MAS, one of which, the Ultima, contained Zylon." Toyobo's SUMF [270] at ¶ 20; Govt.'s SUMF [295] at ¶ 20. " On October 25, 1999, GSA issued another modification of the Second Chance contract to add another body armor model, the Tri-Flex, which also contained Zylon." Toyobo's SUMF [270] at ¶ 22; Govt.'s SUMF [295] ¶ 22. Various federal agencies purchased and received Zylon-containing vests from the MAS, and were invoiced directly by Second Chance. Toyobo's SUMF [270] at ¶ ¶ 28-30; Govt.'s SUMF [295] at ¶ ¶ 28-30.

Page 7

          Each Zylon vest came with the standard commercial warranty. Toyobo's SUMF [270] at ¶ ¶ 16-18; Toyobo's SUMF [95] at ¶ 22; Govt.'s SUMF [295] at ¶ ¶ 16-18. The standard commercial warranty substantively stated that the vests were

warranted to provide protection as stated on the protective panel label and to be free of defects in material and workmanship for the applicable warranty period . . . . The protection properties of the PANELS are warranted for five (5) years from the date of purchase . . . . If a defect is found in material or workmanship . . . during the applicable warranty period, return the vest directly to SECOND CHANCE. SECOND CHANCE, in its discretion, without cost to you, will repair or replace the defective part or the entire vest.

Toyobo's SUMF [270] ¶ 6; Govt.'s SUMF [295] at ¶ 6. The parties disagree as to the proper interpretation of this warranty and as to which, if any, additional agreements between the parties bear on the current dispute.

         B. Bullet Proof Vest Grant Partnership Act

         The Bullet Proof Vest Grant Partnership Act (" BPVGPA" ) program is a partial reimbursement program for state, local, and tribal law enforcement agencies. Toyobo's SUMF [95] at ¶ 42; Toyobo Co., Ltd. and Toyobo America Inc.'s Statement of Undisputed Material Facts in Supp. of Their Mot. for Partial Summ. J., 04-cv-280, ECF No. 343-2 (" Toyobo's SUMF [343]" ) at ¶ ¶ 5, 8; United States' Resp. to Defs. Toyobo Co., Ltd. and Toyobo America Inc.'s Statement of Undisputed Material Facts in Supp. of Their Mot. for Partial Summ. J., 04-cv-280, ECF No. 357-1 (" Govt.'s SUMF [357]" ) at ¶ ¶ 5, 8. The program operated following seven essential steps. First, Second Chance sent at least one Zylon vest to the National Institute of Justice (" NIJ" ) for the NIJ to certify that the vest complied with the NIJ's Ballistic Resistance of Body Armor Standard. Second, the Bureau of Justice Assistance (" BJA" ) placed the Zylon vest, along with other NIJ certified vests, on a list of approved vests. Third, a law enforcement agency used the BJA's online platform to inform the BJA that the agency intended to purchase approved vests. Fourth, the law enforcement agency purchased the approved vests from the vest manufacturer. Fifth, when it received the vests from the vest manufacturer, the law enforcement agency confirmed to the BJA that the agency purchased the vests. Sixth, the agency, after providing proof of purchase, requested reimbursement from the federal government's BPVGPA fund. Seventh, the law enforcement agency received a partial reimbursement for the costs of the purchased vests. See Toyobo's SUMF [343] at ¶ ¶ 5-27; Toyobo's SUMF [95] at ¶ ¶ 36-58; Govt.'s SUMF [357] ¶ ¶ 5-27.

         The government alleges that Zylon vests provided through these programs were defective and resulted in false claims being submitted to the government. Specifically, the government claims that some vests containing Zylon degraded spontaneously and at a rate unpredictable to the purchasers, making the vests unusable. Toyobo acknowledges some degradation of the Zylon fiber, but argues that this degradation and its behavior concerning the Zylon degradation issue do not constitute false claims under the FCA. Now, both parties move for partial summary judgment.

         DISCUSSION

         Under Federal Rule of Civil Procedure 56(a), a party may move for summary judgment on an individual claim or part of a claim. Fed.R.Civ.P. 56(a). Summary judgment is appropriate where the pleadings,

Page 8

the discovery and disclosure materials, and any affidavits show " that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id.; accord Moore v. Hartman, 571 F.3d 62, 66, 387 U.S. App.D.C. 62 (D.C. Cir. 2009). " The moving party bears the burden of providing a 'sufficient factual record that demonstrates the absence of a genuine issue of material fact.'" Walsh v. Fed. Bureau of Investigation, 905 F.Supp.2d 80, 84 (D.D.C. 2012) (quoting Peavey v. Holder, 657 F.Supp.2d 180, 187 (D.D.C. 2009)). At the summary judgment stage, a court must draw all " 'justifiable inferences'" from the evidence in favor of the nonmovant, Hunt v. Cromartie, 526 U.S. 541, 552, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)), but not assess credibility or weigh the evidence. Anderson, 477 U.S. at 255. " The nonmovant must either 'come forward with specific facts showing that there is a genuine issue for trial[,]' or show that the materials [submitted] by the movant do not establish the absence of a genuine dispute." United States v. DRC, Inc., 856 F.Supp.2d 159, 167 (D.D.C. 2012) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). " The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252. The same summary judgment standard applies to a motion for summary adjudication. Barsamian v. City of Kingsburg, 597 F.Supp.2d 1054, 1061 (E.D. Cal. 2009) (citing, in part, California v. Campbell, 138 F.3d 772, 780-81 (9th Cir. 1998)).

         I. TOYOBO'S MOTIONS FOR PARTIAL SUMMARY JUDGMENT ON THE GSA MAS COUNTS

         The government presents allegations under the False Claims Act, 31 U.S.C. § 3729(a)(1)-(3)(2004).[2] Second Am. Compl., 04-cv-280, ECF No. 408 at ¶ ¶ 287-297; Am. Compl., 07-cv-1144, ECF No. 73 at ¶ ¶ 239-248. In order to prevail on a claim under the version of the False Claims Act that was in effect when the complaints were filed, the government must prove that a person has " (1) knowingly present[ed], or cause[d] to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval," or " (2) knowingly [made], use[d], or cause[d] to be made or used, a false record or statement to get a false or fraudulent claim paid ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.