United States District Court, District of Columbia
UNITED STATES OF AMERICA, ex. rel. Louis Scutellaro, Plaintiff,
CAPITOL SUPPLY, INC., Defendant.
A. HOWELL Chief Judge
relator, Louis Scutellaro, brings this lawsuit against the
defendant, Capitol Supply, Inc., pursuant to the qui
tarn provision of the False Claims Act("FCA"),
31 U.S.C. § 3730(b)(1), alleging that the defendant
falsely certified that the products it sold to federal
agencies were manufactured in compliance with the Trade
Agreements Act("TAA"), 19 U.S.C. §§ 2501
et 5eg., and Buy American Act ("BAA"), 41
U.S.C. §§ 8301 et seq., which together
require that products sold to the government come only from
designated countries. Rel's First Am. Compl.
("Rel's FAC")¶¶ 10-20, ECF No. 27.
The relator contends that thousands of the products sold by
the defendant to the U.S. government came from non-designated
countries. The United States intervened with respect to
Fellowes brand document shredders, pursuant to 31 U.S.C.
§ 3730(b)(4)(A). See generally U.S. First Am.
Compl. in Partial Intervention ("U.S. FAC"), ECF
far, this litigation has spanned seven years. The relator
filed his initial complaint in June 2010, see generally
RqVs Compl., ECF No. 1, and the government subsequently
served the defendant with two subpoenas duces tecum,
m 2010 and 2011, to obtain country of origin
("COO") information for products sold by the
defendant to federal agencies. U.S. Pet. Summ. Enf. OIG
Subpoena ("U.S. Pet."), Ex. 1, Decl. of Crystal
Johnson, Special Agent, OIG ("Johnson
Decl.")¶¶ 10, 12, Misc. No. 13-373 (BAH), ECF
No. 1-1. The defendant, however, failed to comply fully with
the subpoenas, leading this Court to grant the
government's Petition for Summary Enforcement of the
subpoenas. See generally Order Granting U.S. Pet.,
No. 13-mc-373-BAH, ECF No. 17; see also generally United
States v. Capitol Supply, Inc. ("Capitol
Supply"), 27 F.Supp.3d 91 (D.D.C. 2014). When the
defendant's failure to comply with the subpoenas
persisted, the government moved for sanctions, and this Court
entered a Conditional Order of Contempt against the defendant
on August 6, 2014. See generally Order Granting in
Part and Denying in Part U.S. Mot. Sanctions ("Civil
Contempt Order"), No. 13-mc-373-BAH, ECF No. 27.
Ultimately, the defendant filed a certification conceding
that it had retained no COO information responsive to the
subpoenas prior to July 2009 and only incomplete information
thereafter. Def.'s Supp. Cert, at 1, Feb. 27, 2015, ECF
No. 72-1. Discovery was then temporarily stayed for
mediation, see Minute Order (dated Aug. 3, 2015),
which proved unsuccessful.
stay having been lifted, see Minute Order (dated
Feb. 8, 2016), the parties have now filed a total of five
motions. First, the relator and the government have each
filed a motion for an adverse inference. See
generally Relator's Mot. Adverse Inference
("Rel's Mot. Adv. Inf."), ECF No. 93; U.S. Mot.
Adverse Inference ("U.S. Mot. Adv. Inf."), ECF No.
95. Second, the defendant has filed a motion for summary
judgment predicated on the public disclosure bar.
See Def.'s Supp. Mot. Summ. J. ("Def.'s
MS J"), ECF No. 92. The relator and the government also
have each moved for summary judgment. U.S. Mot. Summ. J.
("U.S. MS J"), ECF No. 94; Rel's Mot. Summ. J.
("Rel's MS J"), ECF No. 96. For the reasons set
forth below, the motions for adverse inference are granted,
and all three motions for summary judgment are denied.
the longevity of this litigation, the procedural history is
described after setting out the facts pertinent to the
pending motions, which facts have also been summarized in a
prior opinion. See Capitol Supply, 27 F.Supp.3d 91,
93-94 (D.D.C. 2014).
Defendant's Business with the Federal Government
defendant offers for sale to the federal government nearly
one million products from thousands of manufacturers under
various Federal Supply Schedule contracts with the General
Services Administration ("GSA") through the GSA
Advantage! website. Def.'s Opp'n U.S. Pet., Ex. 1,
Decl. of Robert Steinman Supp. Opp'n U.S. Pet.
("Steinman Decl.")¶¶ 2-3, Misc. No.
13-373 (BAH), ECF No. 8-1. The defendant obtained its first
contract with GSA in 1985 and, by 1996, the federal
government was its primary source of business. Rel's SMF
¶¶ 8-9. As of April 2016, the defendant held eight
federal contracts, six of which are GSA contracts.
See Def.'s Omnibus Stmt. Genuine Issues of
Material Fact ("Def.'s SMF") ¶ 9, ECF No.
114. During the pendency of this litigation, the government
has renewed seven of the defendant's contracts, and
awarded the defendant two new contracts. Id. ¶
defendant entered into one of these contracts with GSA,
Multiple Award Schedule Contract No. GS-02F-0100N, U.S. MSJ,
Ex.lA, MAS Contract 0100N, ECF No. 94-3, on January 6, 2003.
The contract, which permits the defendant to advertise and
sell certain office supplies to various federal agencies
through the GSA Advantage! website, is governed by specific
regulations and provisions of the Federal Acquisition
Regulation ("FAR"). These regulations require,
inter alia, that all vendors selling products to
federal agencies retain records regarding the COO of each of
their products. MAS Contract 0100N at 64 (incorporating 48
C.F.R. § 52.225-5); Def.'s Am. Answer¶ 10, ECF
No. 54-1; Johnson Decl. ¶ 8a. Under the FAR applicable
to MAS Contract 0100N, the defendant certifies that each
"end product" sold is TAA compliant. See
MAS Contract 0100N at 84-86; Def.'s SMF ¶ 6; see
also 48 C.F.R. § 52.225-6(a) ("The offeror
certifies that each end product, except those listed in
paragraph (b) of this provision, is a U.S.-made or designated
country end product, as defined in the clause of this
solicitation entitled 'Trade Agreements.'"); 48
C.F.R. § 52.225-5(b) ("The Contractor shall deliver
under this contract only U.S.-made or designated country end
products except to the extent that, in its offer, it
specified delivery of other end products in the provision
entitled 'Trade Agreements Certificate.'"). In
its invoices, however, the defendant does not expressly
certify the COO for its products, or, for that matter,
compliance with the TAA. Def.'s SMF ¶¶ 19-20.
MAS Contract 0100N, the defendant sold a variety of office
supplies, including document shredders manufactured by
Fellowes, Inc. ("Fellowes"), to a number of federal
agencies through the GSA Advantage! website. U.S. FAC
¶¶ 8; Def.'s Am. Answer ¶ 8. The defendant
obtained the goods from several suppliers, none of which
expressly certified that the Fellowes document shredders were
TAA compliant. See, e.g., U.S. MSJ, Ex. 6, United
Stationers' Letter of Supply, ECF No. 94-9; id.,
Ex. 8, Tech Data Terms & Conditions of Sale, ECF No.
94-11; id., Ex. 7, Ingram Micro Letter of Supply and
accompanying Fellowes Letter of Supply ("Ingram Micro
Letter of Supply"), ECF No. 94-10.
Defendant's Tracking of COO Data
to the defendant, its "computer system and management of
COO information has significantly evolved over time."
Def.'s SMF ¶ 21. When the defendant entered the
office-products business in 2003, its only supplier was
United Stationers. Id. ¶ 23. The original price
list was compiled in a spreadsheet and a "rudimentary
database in Microsoft Access was developed."
Id. ¶ 24. United Stationers provided the
defendant with COO data "approximately four times per
year, " and, accordingly, the defendant manually updated
its COO information on a quarterly basis in the Microsoft
Access database. Id. ¶¶25, 29.
in 2005 or 2006, over the course of more than one year, the
defendant migrated its COO files from Microsoft Access to a
more automated system housed on an "SQL Server."
Id. ¶ 30. In order to track the COO of products
offered for sale, suppliers transmitted the COO "data
feeds" to the SQL server directly. Rel's MSJ, Ex. 4,
Dep. of Stuart Fox ("Fox Dep.") at 38-40, ECF No.
96-8. The vendors had different "update
schedules, " and some information was updated
"daily, some weekly, some monthly, some quarterly, and
some only when [the vendor] sent [the defendant] new
pricing." Def.'s SMF ¶ 31. According to the
defendant, if a product was TAA non-compliant, the system was
designed to prevent that product from being either advertised
or sold through the GSA Advantage! website. Fox Dep. at
141:14- 142:5; see also Def.'s SMF¶ 33
("When non-compliant COO information was detected
(whether from a manufacture [sic], vendor, or the GSA
itself), Capitol would seek a contract modification to have
the product removed from the schedule and the GSA
website."). The defendant later asserts, however, that
under this system, "even though a product with
non-compliant COO information may be listed for sale on the
GSA website, if/when the product is ordered through the GSA
website, Capitol's internal system will not process the
sale because such products are identified as
unavailable." Def.'s SMF¶ 37. Given the
differing descriptions of the defendant's handling of
non-compliant products, the record is unclear whether the
company's system actually prevents non-compliant products
from being listed for sale on the GSA Advantage! website or
from being sold.
June or July 2009, the historical COO data for the products
offered for sale by the defendant under its GSA contracts was
not retained in the system. Def.'s Supp. Cert, at 1;
see also Steinman Decl. ¶ 6. Instead, it was
overwritten as new data came in from each of the
defendant's suppliers. Def.'s Supp. Cert, at 1;
see also Steinman Decl. ¶ 6; Fox Dep. at 51-55.
From July 2009 to November 2010, the defendant transitioned
to anew system whereby COO information was "tracked by
vendor and a history of what a vendor indicated was the COO
was preserved on each update." Def.'s SMF ¶ 35.
Although the defendant explains that this transition was
prompted because it learned that suppliers often had
"conflicting COO information, " id. ¶
34, the defendant's IT contractor, Stuart Fox, testified
that the defendant began retaining COO information in
response to the September 2010 subpoena "just to be
safe, " Fox Dep. at 53:13-55:20. Thereafter, in December
2010, the defendant created a "country of origin history
table" that preserved COO information from the
"data feeds" received from its suppliers.
Id. at 69:17-72:16; see also Steinman Decl.
¶6. The defendant does not explain why it waited until
2009 to retain COO data when GSA began notifying the
defendant about issues with the company listing non-compliant
products on the GSA Advantage! website as early as 2005.
See infra Part I.A.4.
GSA Contractor Assistance Visits
to the defendant's contracts, Industrial Operations
Analysts ("10As") from the GSA conduct regularly
scheduled "Contractor Assistance Visits"
("CAVs"). Def.'s SMF ¶ 42. According to
the GSA, "a CAV serves several purposes: to clarify the
terms and conditions of the subject contract; to assist with
contractor questions and concerns; to identify potential
problems; to gather contractor performance data; and to
verify processes including the contractor's sales
tracking system, trade agreements, and other key contract
requirements." Id. ¶ 44 (citing
id., Ex.3, GSA's New Contractor Orientation
PowerPoint dated August 2012 ("GSA PowerPoint") at
11, ECF No. 114-3). Following a CAV, a "Report
Card" is issued to the contractor based on observations
made during the visit. See GSA PowerPoint at 13. The
GSA explains that a Report Card is a
"'snap-shot' in time of [the contractor's]
Multiple Award Schedule contract after a [CAV]" and
"deals directly with performance against some of the
main MAS Terms and Conditions." Id. at 14.
Brady, the GSA Director of the Supply Management Division,
testified that "[i]n part, the CAV visit evaluates
record retention practices." Dep. of Tom Brady
("Brady Dep.") at 72:12-14, ECF No. 102. Mr. Brady
stated that "maintenance of COO information [is] a key
contract requirement." Id. at 73:20-22. IOAs
who conducted CAVs of the defendant were advised that the
defendant did not retain historical COO information for every
product, at least until approximately 2009 or 2010.
Def.'s SMF ¶ 57. For every Report Card in the
record, ranging in date from 2007 through 2014, one IOA,
Wendy Springer, who worked in the Atlanta Regional Office,
was the "assigned IOA." See generally
Def.'s Opp'n U.S. & Rel's MSJs, Composite Ex.
2, GSA Report Cards, ECF No. 113-2; see also Dep. of
Wendy Springer, Vol. I ("Springer Dep. I") at 6:12,
ECF No. 103. Ms. Springer, who never gave the defendant
a critical mark for its COO tracking, testified that she
"didn't see anything wrong with then-process or
their understanding of the Trade Agreements Act."
Springer Dep. I at 67:2-6. Ms. Springer also testified that
she could not recall having informed the defendant "that
it would be violating any law by failing to retain
contemporaneous COO records." Id. at 106:1-12.
Further, in one of her CAV reports, dated September 26, 2007,
Ms. Springer stated that the defendant "demonstrate[d]
compliance with the Trade Agreements Act" and
"maintains a database of all products with a listing of
country of origin to ensure all products offered are TAA
compliant." Def.'s SMF, Ex. 4, CAV Report dated
Sept. 26, 2007 at 1-2, ECF No. 114-4. The IOAs' review of
documentation and processes was, however, limited. Ms.
Springer explained that the defendant controlled the scope of
the CAVs by selecting three small samples of data, such as
"a letter of supply or just any document that shows that
they have some sort of documents that are source documents,
" that Ms. Springer would review. Springer Dep. I at
GSA Notice s of TAA Violations
the IOAs in the Regional Office were issuing the defendant
favorable reviews, back at the GSA's New York City
offices, Michelle Williams, the GSA Trade Agreements Act and
GSA Advantage! Coordinator, was regularly notifying the
defendant via email that certain TAA non-compliant products
were being offered for sale by the defendant on the GSA
Advantage! website. See, e.g., U.S. MSJ, Ex. 4A at
1, ECF No. 94-7. On September 21, 2005, for example, Ms.
Williams informed the defendant that over 400 Chinese-made
goods were being offered for sale by the defendant on the
website, in breach of the TAA and MAS Contract 0100N.
Id., Ex. 4A at 1-10. China is not included on the
list of designated countries under the TAA. See 48
C.F.R. § 25.003 (listing designated countries). Among
the 400 products were 45 office products manufactured by
Fellowes, including document shredders. See U.S.
MSJ, Ex. 4A at 1-10. Mr. Steinman acknowledged the email and
pledged to remove the defendant's TAA non-compliant
products from the GSA Advantage! website within two weeks.
See generally Rel's MSJ, Ex. 16, ECF No. 96-20.
the same month, however, on September 29, 2005, Ms. Williams
again notified the defendant that the U.S. Army had
complained that hundreds of Chinese-made products were
offered for sale by the defendant on the GSA Advantage!
website, as well as a Department of Defense website.
See U.S. MSJ, Ex. 4B, ECF No. 94-7. Among these
products were twenty-one office products made by Fellowes,
including document shredders. See Id. at 1-6. Ms.
Williams sent at least fifteen additional notices of possible
TAA violations between 2006 and 2012 on the following dates:
April 21, 2006; August 22, 2006; November 5, 2007; March 16,
2009; April 13, 2009; July 2, 2009; August 24, 2009; October
15, 2009; August 3, 2010; November 15, 2010; April 11, 2011;
April 19, 2011; January 9, 2012; June 8, 2012; and February
13, 2012. Id., Exs. 4C-4Q, ECF No. 94-7.
April 2006 notice, Ms. Williams informed the defendant that
it needed to "conduct a self-assessment of the current
processes, procedures and/or systems ... in place to monitor
the country of origin for all products offered under [its]
Schedule contract." Id., Ex. 4C; see also
id., Ex. 4D-4Q. Further, Ms. Williams stressed that
"compliance with the Trade Agreements Act is a serious
issue" and warned the defendant that the Department of
Justice "has been proactive in conducting
investigations, and a number of settlements have already been
reached under the qui tam provision of the False
Claims Act." Id., Ex. 4C at 1-2.
over a dozen notices during a six year period, the defendant
continued to offer TAA non-compliant products for sale on the
GSA Advantage! website. Consequently, on September 14, 2011,
the defendant received a "Cure Notification Letter"
from Edward Lew, a Senior Contracting Officer with GSA
Federal Acquisition Services, due to the defendant's
"continued contract violations, " citing in
particular "non-TAA items listed on [the
defendant's] schedule." Id., Ex. 5, Cure
Notification Letter ¶ 4, ECF No. 94-8. The letter
informed the defendant that until the violations were
rectified, it would not be permitted to offer any products
for sale on the GSA Advantage! website. On September 22,
2011, however, Mr. Lew informed the defendant that the GSA
had determined that the defendant's cure plan "met
the necessary requirements set forth in the cure
letter." Id., Ex. 10 at 2, ECF No. 94-13. The
record is unclear what the defendant included in the
"cure plan" to show that "necessary
requirements" were met. Mr. Lew expected that the GSA
Advantage! website and the DOD website would "be fully
operational" for the defendant "some time [the next
day]." Id. The defendant, however, was
apparently dissatisfied with this result, as it responded to
Mr. Lew's notification by declaring that "GSA should
make best efforts to restore [the defendant] to all
purchasing channels" that same day "to mitigate the
harm the GSA ha[d] arbitrarily, capriciously and needlessly
imposed on Capitol Supply." Id. at 1. Moreover,
one of the defendant's attorneys notified Mr. Lew that
she was sharing Mr. Lew's notification with the
defendant's lobbying firm, which would "in turn,
share [Mr. Lew's] response with Members of Congress
including those who have appropriations authority over"
the GSA. Id. Later that day, the defendant's
lobbyist wrote to Mr. Lew that "Congressional oversight
[was] now reviewing [GSA's] progress and contracting
methodology." Id., Ex. 11 at 1, ECF No. 94-14.
The Relator's and the Government's Damages
damages calculations performed by the relator's and the
government's experts are not the most accessible, in part
because the plaintiffs had to cull sales and COO data from
disparate sources given the defendant's deficient
recordkeeping procedures for many years. The relator retained
Dr. Dwight Steward, an economist and statistician, to
calculate damages based on sales and COO data. See
Rel's SMF ¶ 114. In performing his
calculations, Dr. Steward relied upon sales and COO data
supplied by the GSA, the defendant, and the defendant's
suppliers. Id. ¶¶117, 130, 139,
Steward's damages calculation proceeded in four stages.
See Decl of Dr. Steward, PhD ("Steward
Decl.") ¶ 3, ECF No. 96-52 ("I was asked to
break down the analysis into four stages based on the
information used in each stage."). In the first stage,
Dr. Steward relied on sales and COO data provided by
suppliers as well as sales data provided by the defendant.
Id. ¶ 4. In stages two and three, Dr. Steward
relied upon GSA sales data and COO data provided by the
defendant. Id. ¶¶ 13, 20. Stage four
utilized GSA sales data supplied by the defendant and COO
data provided by the defendant's vendors. Id.
¶29. Dr. Steward performed an "overlap
analysis" to ensure that "sales of products were
not double-counted by being included in multiple stages of
the calculations." Id. ¶ 38. "The
total number and value of the TAA non-compliant sales for all
four stages were calculated by adding the totals for all four
stages and subtracting the overlaps." Id.
Steward's report contains "four possible single
damages amounts" depending on how the calculations were
performed, id. ¶ 41:
1. 21, 860 TAA non-compliant sales worth $4, 223, 734.00
2. 24, 245 TAA non-compliant sales worth $4, 788, 156.06
3. 22, 471 TAA non-compliant sales worth $4, 271, 335.00
4. 24, 808 TAA non-compliant sales worth $4, 834, 716.06
Steward suggests that his stage one damages calculation is
probably "most accurate" because the underlying
data was obtained via subpoenas to the defendant's
suppliers, and the subpoenas "limit themselves to GSA
sales, " and because the defendant's own sales files
"regularly did not include original manufacturer
identification numbers needed to match [the defendant's]
sales files to vendor supplied COO files." Id.
part, the government retained Richard P. Kozlow, an
accountant, auditor, risk management professional, and
consultant on financial and operational control. U.S. MSJ,
Ex. 12, Richard P. Kozlow Expert Report ("Kozlow
Rep.")¶ 1, ECF No. 94-15. Mr. Kozlow relied on
sales data provided by the defendant and COO information
provided by the defendant, Fellowes, and the defendant's
suppliers (United Stationers and Ingram Micro).
Id.¶4. In performing his calculations, Mr.
Kozlow "followed the relevant elements of the
International Standards for the Professional Practice of
Internal Auditing and Generally Accepted Audit Standards.
Id. Mr. Kozlow opines that, from December 24, 2003,
through December 5, 2011, the defendant sold to the
government 827 Fellowes shredders worth $579, 919.65.
Id. ¶ 7. Of these sales, Mr. Kozlow concluded
that 588 (or 71.1%) of those shredders, worth $183, 709.92
(or 31.7%) were manufactured in China. Id. Mr.
Kozlow reported that he was unable to determine the COO of 65
Fellowes shredder sales, totaling $62, 824.51, because
"Capitol Supply failed to include accurate information
on model numbers that could be related back to Fellowes, Inc.
product listings." Id. ¶ 9.
Kozlow revised his initial report because he had originally
duplicated 81 items. Dep. of Richard P. Kozlow at 52:4-16,
ECF No. 110. Further, Mr. Kozlow explained that his analysis
for identifying COO information "was not an exact
science" because "[t]he vendor line items file had
a variety of different descriptions for the same product. ...
It was also not consistent in listing model numbers.
Sometimes model numbers were included in the description
line; sometimes they were not. Sometimes model numbers showed
in the model number column; very often they did not."
Id. at 66:8-67:1.
the government seeks treble damages, the government concludes
that the gross total for damages under the FCA, for just the
Fellowes document shredders, is $551, 129.76. U.S. MSJ at 14.
The government assumes "that the value of the
Chinese-made shredders was the price paid by the United
States in each transaction" and, thus, $183, 709.92
maybe subtracted from the trebled damages, resulting in a
total damages award of $367, 419.84. Id. The
government also asks for an award of "civil penalties in
the amount of $10, 000 for each false claim or certification,
totaling $5.88 million." Id.
defendant takes issue with Dr. Steward's and Mr.
Kozlow's damages analyses. See Def.'s SMF
¶¶ 110, 113-57; Def.'s Opp'n U.S. &
Rel's MSJs at 13-24.
relator's original complaint, filed on behalf of the
United States against the defendant, pursuant to the qui
tarn provisions of the FCA, 31 U.S.C. § 3730(b),
alleges that the defendant was "selling products to the
United States Government that did not originate in designated
countries under the Trade Agreements Act, and therefore .. .
present[ed] false claims to the United States Government for
payment, " Rel's Compl. ¶5, ECF No. 1.
Specifically, the complaint alleges that the defendant
"falsely claimed that Fellowes Manufacturing
Company's paper shredders, " which were offered for
sale through Capitol's Federal Supply Schedule contracts,
"were made in the United States, whereas, in truth and
in fact, they were manufactured in China." Id.
¶ 16. The complaint also alleges that the defendant
"falsely market[s] numerous other products ... as being
manufactured in the United States when they are not,
including, but not limited to: light bulbs (incandescent,
fluorescent, halogen, sodium, etc.), light fixtures (indoor
and outdoor), thermostats, televisions, computer monitors,
computer back up power supplies, electric heaters, exhaust
fans, batteries, ballasts for fluorescent fixtures, vacuum
cleaners, clocks and timers. Most, if not all, of the
products are made in China or Mexico." Id.
The Government's Investigation and Intervention
receiving the relator's qui tam complaint, the
GSA's Office of Inspector General ("OIG")
initiated an investigation into the alleged FCA violations.
See Johnson Decl. ¶ 9. On November 4, 2010, OIG
"served the first of two subpoenas duces tecum upon
Capitol Supply requesting all product, sales and country of
origin information for Fellowes brand shredders sold pursuant
to all GSA schedule contracts from January 2004 through the
date of the subpoena." See U.S. Pet. ¶
5(a), Misc. No. 13-373 (BAH), ECF No. I. A second subpoena
was issued in June 2011 "requesting all information on
Multiple Award Schedule Contract No. GS-02F-0100N, including
all sales and country of origin information for all products
sold during the period of January 1, 2004 through the date of
the subpoena." Id. ¶5(b). The government
intervened only with respect to Fellowes document shredders,
allegedly made in China. U.S. FAC ¶¶ 11-12.
unsatisfied with the defendant's document production in
response to the two subpoenas, the government filed a
Petition for Summary Enforcement of Inspector General
Subpoena on April 16, 2013, which was granted and the
defendant directed to comply with the subpoenas. See
generally Order Granting U.S. Pet, Misc. No. 13-373
(BAH), ECF No. 17; see also generally Capitol
Supply, 27'F'. Supp. 3d 91 (rejecting the
defendant's argument that further compliance with the
subpoenas would be unreasonable because (1) the defendant had
already produced voluminous documents and further production
would be an undue burden; (2) the defendant had produced
documents in the format in which the documents are received
and had no obligation to convert records into any other
format requested by the OIG; and (3) the defendant had no
obligation to produce records already in the government's
possession). Notwithstanding the Court's pellucid
instruction, the defendant continued to drag its feet in
producing the information sought in the subpoenas, prompting
the government to move for sanctions in July 2014. See
generally Pet's Mot. Sanctions, Misc. No. 13-373
(BAH), ECF No. 20. After another hearing, the Court entered a
Conditional Order of Contempt against the defendant on August
6, 2014, giving the defendant until September 2, 2014, to
comply with the Court's previous Order. See
Civil Contempt Order.
defendant filed a Notice of Compliance with Court Orders on
September 2, 2014, certifying that it had "produced to
the Plaintiffs via e-mail credentials to a FTP site
containing the documents being produced." Def.'s
Notice of Compliance with Court Order at 1, Misc. No. 13-373
(BAH), ECF No. 28. Six months later, the defendant filed a
Supplemental Certification in the instant case, which finally
disclosed that "Capitol does not have any information on
the Country of Origin for any sale prior to June 2009. From
July 2009 through November 2010, Capitol's information in
its computer database on the Country of Origin for sales are
incomplete. From December 2010 through the present day,
Capitol's computer database has the majority of
information it received from manufacturer or vendor Country
of Origin data feeds." Def.'s Supp. Cert. atl.
Furthermore, the Supplemental Certification indicated that
"Capitol does not have any e-mail correspondence prior
to the approximate date of July, 2011." Id.
Defendant's Motion to Dismiss
the government's intervention, the defendant filed
motions to dismiss the relator's First Amended Complaint
and the government's Complaint in Partial Intervention.
See Def.'s Mot. Dismiss Rel's FAC, ECF No.
35; Def.'s Mot. Dismiss U.S. FAC, ECF No. 36. On March
18, 2014, this Court held amotions hearing and granted the
defendant's motion "with respect to [the
relator's] claims that are identical to those raised in
the" government's First Amended Complaint, but
denied the motion in all other respects. Minute Entry (dated
March 18, 2014). Further, the Court dismissed the common law
claims raised in the government's First Amended Complaint
under Counts III and IV, leaving only the FCA claims under
Counts I and II. Id.; see also U.S. FAC