United States District Court, D. Columbia
MÜ NCHENER RÜ CKVERSICHERUNGS-GESELLSCHAFT AKTIENGESELLSCHAFT IN MÜ NCHEN, Plaintiff,
NORTHROP GRUMMAN RISK MANAGEMENT INC., et al., Defendants
MUNCHENER RUCKVERSICHERUNGS-GESELLSCHAFT AKTIENGESELLSCHAFT
IN MUNCHEN KONIGINSTR, Plaintiff: Donald C. Holmes, LEAD
ATTORNEY, DONALD C. HOLMES & ASSOCIATES, P.A., Greensboro,
MD; Gerald M. Fisher, PRO HAC VICE, FREEMAN, FREEMAN, SMILEY
LLP, Los Angeles, CA.
NORTHROP GRUMMAN RISK MANAGEMENT INC., a Vermont Corporation,
NORTHROP GRUMMAN CORPORATION, A Delaware Corporation,
NORTHROP GRUMMAN SHIPBUILDING, A Delaware Corporation,
Defendants: Barry Jay Fleishman, LEAD ATTORNEY, KILPATRICK
TOWNSEND & STOCKTON, LLP, Washington, DC; Adam Howard
Charnes, KILPATRICK TOWNSEND & STOCKTON LLP, Winston-Salem,
E. BOASBERG, United States District Judge.
C. Holmes, counsel for reinsurance company Munich Re, is on a
mission to hold Northrop Grumman Corporation and Huntington
Ingalls (formerly Northrop Grumman Shipbuilding) accountable
for purportedly defrauding the Navy. He hopes to make
hundreds of millions of dollars for doing so by bringing a
False Claims Act suit in Mississippi. While attempting to
establish the alleged fraud, however, Holmes improperly used
sensitive documents provided by the Navy under a protective
order issued five years ago by this Court in a separate
proceeding that has long since been terminated.
this year, the district court presiding over the FCA action
in the Southern District of Mississippi dismissed
Holmes's case, in part because he had violated this
Court's protective order. See United States ex
rel. Holmes v. Northrop Grumman Corp., No.
13-85, 2015 WL 3504525 (S.D.Miss. June 3, 2015). With that
decision pending on appeal, Holmes now moves this Court to
reopen the case here to " correct" his "
inadvertent noncompliance" with the protective order. In
particular, he asks for a modification of the order to allow
him to use the protected documents in his FCA suit. As his
Motion is both unconvincing and misleading, the Court finds
no reason to alter the order's terms.
litigation involves the intersection of two different cases
in other forums: a foreign arbitration of a reinsurance
dispute in London and a False Claims Act suit in Mississippi.
The instant Motion seeks to modify a protective order issued
by this Court in relation to the former in order to assist
Holmes in the latter. In setting forth the facts, the Court
draws from both the decision in the FCA suit and other
pleadings in this case.
Grumman Risk Management, Inc. (NGRMI) is the "
captive" insurer of Northrop Grumman Corporation
(Northrop), a large U.S. defense contractor. See Am. Compl.,
¶ 4. NGRMI insured its parent company for certain losses
over $1 million. See id. Münchener
Rückversicherungs-Gesellschaft Aktiengesellschaft in
Munchen Koniginstr (Munich Re) is a German company that
reinsured Northrop's covered losses. See id., ¶
¶ 2, 4. In 2008, Munich Re initiated arbitration
proceedings against NGRMI in London to dispute a claim for
losses caused by Hurricane Katrina and to seek reimbursement
under the companies' reinsurance contract. See id.,
the arbitration was pending, Munich Re filed a request with
the U.S. Navy for documents the Navy had received from
Northrop Grumman Shipbuilding, Inc., a former subsidiary of
Northrop that has since been spun off as an independent
company named Huntington Ingalls, Inc. See id.,
¶ 19; Opp. at 3 n.2. According to Munich Re, the Navy
agreed to release the requested documents provided that an
enforceable protective order was put in place to ensure that
they would be used only for the arbitration proceedings. See
Compl., ¶ 3 & Exh. 1 (Proposed Protective Order), ¶
Re then filed a Complaint in this Court on April 6, 2010,
against NGRMI, Northrop, and Huntington Ingalls (collectively
" Northrop Grumman" ), asking, inter alia,
for the Court to issue a protective order. See Compl., ¶
13. (Curiously, although Munich Re admits this was a
miscellaneous action, the company filed the Complaint as a
civil case. See id., ¶ 1.) Counsel for Munich Re, Donald
C. Holmes and Gerald Fisher, explicitly stated in the
Complaint here that they sought these documents " in aid
of private foreign arbitration only" and that they were
" in no way . . . attempt[ing] to usurp the power of the
. . . arbitration tribunal" for another purpose. See Am.
Compl., ¶ 22 (emphasis added). Although discovery had
not yet begun in the arbitration proceedings, see Def.'s
First Mot. for Extension of Time to Respond, ¶ ¶ 2,
10, Munich Re was apparently eager to obtain the requested
documents. In the following weeks, the company filed multiple
motions to expedite and oppositions to Defendants'
motions for extension of time. See, e.g., Pl.'s First
Mot. to Expedite (Apr. 26, 2010) at 6 (" The entry of
the protective order should take place in an expedited
fashion so Plaintiff can proceed with gathering and
marshaling proof from U.S. Navy documents . . . ." );
Pl.'s Opp. to First Mot. for Extension (May 7, 2010) at 5
(" There is no reason for further delay." );
Pl.'s Second Mot. to Expedite (May 12, 2010) at 3 ("
Plaintiff urgently needs . . . the entry of the protective
order . . . ." ); Pl.'s Opp. to Second Mot. for
Extension (May 17, 2010) at 4 (" Plaintiff needs the
documents it seeks at the earliest possible date." ).
2, 2010, while the litigation in this Court was still
pending, Holmes and Fisher filed a qui tam lawsuit
against Northrop and Huntington Ingalls under the False
Claims Act, which was later transferred to the Southern
District of Mississippi, seeking over $2.5 billion in
damages. See Holmes, 2015 WL 3504525, at *2, 6.
Pursuant to the provisions of the Act, the lawsuit was filed
under seal and not made known to this Court. See 31 U.S.C.
§ 3730(b)(2); Holmes, 2015 WL 3504525, at *1.
The qui tam complaint alleged that Northrop and
Huntington Ingalls had defrauded the Navy in the amount of no
less than $835 million by using government funds earmarked
for Hurricane Katrina-related expenses to cover cost overruns
incurred before the hurricane. See Id. at *2. Holmes
and Fisher further averred that they expected the documents
they had requested from the Navy would prove these
allegations. See Id. at *5 n.5.
weeks later, Munich Re and Northrop Grumman stipulated to a
protective order here, see Joint Mot. for Protective Order,
and on June 24, 2010, the Court approved it. See ECF No. 20
(Order Granting Joint Mot. for Protective Order). The
protective order entered was substantially similar to the one
Munich Re had initially proposed. Compare Protective Order
with Proposed Protective Order. The final version included a
" Good Cause Statement" section in which each party
explained why the order was necessary. Northrop Grumman noted
that because the company is a major defense contractor for
the United States, the material disclosed by the Navy would
include both its " sensitive business material" and
information " vital to the national defense."
See id. at 2 (explaining that, if disclosed without
an enforceable protective order, these documents would "
jeopardize Northrop's competitive edge in the
marketplace" and pose a risk to national security).
Munich Re, in turn, stated that it needed the requested
documents for the arbitration and, recognizing the
documents' sensitive nature, agreed they should be
protected. See id. at 3. Finally, Northrop Grumman and Munich
Re further stipulated that the Navy's Touhy Regulations,
which govern the agency's responses to information
requests, prohibited the Navy from disclosing the requested
information absent a ...