United States v. Honeywell Int'l

UNITED STATES OF AMERICA, Plaintiff, v. HONEYWELL INTERNATIONAL INC., Defendant.

Civil Action No. 08-0961 (PLF)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

September 29, 2020

OPINION AND ORDER

Pending before this Court is defendant Honeywell International Inc.'s Motion to Strike the Declaration of Christian Patton in Support of the United States' Response to Honeywell's Motion for Summary Judgment [Dkt. No. 227]. The government opposes this motion. United States' Memorandum in Opposition to Honeywell International Inc.'s Motion to Strike the Declaration of Christian Patton [Dkt. No. 228]. For the reasons that follow, the Court will deny Honeywell's motion to strike.¹

I. BACKGROUND

Complaint. On June 5, 2008, the government filed a complaint seeking damages and other relief. See Compl. The first two counts assert claims under the False Claims Act. Count Three, entitled unjust enrichment, alleges inter alia, that "[f]rom 2001 through 2005, the United States paid for defective Z Shield vests due to false statements and omissions by Honeywell." Id. ¶ 95. As relief, the government seeks "[t]he money paid to or received by Honeywell, directly or indirectly, relating to the sale of Z Shield vests to the United States." Id. at 34.

Initial Disclosure. Rule 26(a)(1)(A)(iii) of the Federal Rules of Civil Procedure requires a party to provide the other party with, inter alia, a computation of each category of damages. Fed. R. Civ. P. 26(a)(1)(A)(iii). In its initial disclosure, the government stated:

The United States' initial calculation of single damages is between $15 and $20 million dollars depending on if you use Honeywell's sales of Z Shield to Armor Holdings or Armor Holdings' sales of Z Shield vests to the United States. The bases and calculations of damages may be revised during litigation. Treble damages are statutory, 31 U.S.C. § 3729, et seq. Also, the United States is entitled to one statutory penalty per false claim.

US Initial Discl. at 31. The government's disclosure did not provide a computation of the monetary relief it sought for unjust enrichment, or otherwise supplement its computation of damages. See US Initial Discl.; US First Supp. Initial Discl.

Interrogatories. On March 1, 2012, Honeywell served the government with interrogatories. Interrogatory No. 20 stated:

Describe in detail the facts that form the basis for the United States' total claim for damages alleged in this case, including, but not limited to: the identification of each and every claim for payment making up the total damages claim, including information as to the customer, the date, the vest model number, and the amount paid for each such claim, and, where applicable in the case of non-federal purchases, the amount of funding and/or reimbursement by the United States for the claim; the amount of damages being alleged with respect to each such claim for payment; the basis or rationale for the calculation of such amount of damages; and any amounts to be set off from the United States' settlements with other companies and from Armor Holdings' programs for providing exchange vests and/or compensation for vests containing Z Shield.

Honeywell Second Interrog. at 6-7. The government's response to this interrogatory addressed statutory damages, but not monetary relief for unjust enrichment. See Gov't Opp. at 4 (citing US Resp. and Obj. to Honeywell's Second Interrog. at 9-27).

Patton Declaration. On June 7, 2019, Honeywell moved for summary judgment arguing, among other things, that the government could not recover under its unjust enrichment claim because the government "never disclosed any calculation of Honeywell's profits attributable to sales of [Armor Holdings Inc. ("AHI")] vest[s] containing Z Shield . . . or explained how it would go about calculating such damages." Def. Mot. SJ at 52. In response to Honeywell's motion, the government filed a brief in opposition and attached to it the declaration of Christian Patton. See Patton Decl. This declaration calculated that the amount of "potential unjust enrichment damages associated with Honeywell's sales of Z Shield to AHI are between $6,018,779.12 and $7,523,473.90." Id. ¶ 7.

Honeywell now moves to strike the Patton Declaration as an untimely disclosure under Rule 26 of the Federal Rules of Civil Procedure. Def. Mot. at 1.

II. LEGAL STANDARD

"'[D]istrict courts have broad discretion in structuring discovery.' Consequently, '[t]he decision to grant or deny a motion to strike is vested in the trial judge's sound discretion.'" Brooks v. Kerry, 37 F. Supp. 3d 187, 202 (D.D.C. 2014) (citations omitted). "The moving party 'bears a heavy burden as courts generally disfavor motions to strike.'" Ascom Hasler Mailing Sys., Inc. v. U.S. Postal Serv., 815 F. Supp. 2d 148, 162 (D.D.C. 2011) (quoting Canady v. Erbe Elektromedizin GmbH, 384 F. Supp. 2d 176, 180 (D.D.C. 2005)).

III. DISCUSSION

Defendant's motion raises two issues. First, is Mr. Patton an expert witness whose disclosure is required under Rule 26(a)(2), or is he a non-expert witness merely presenting summary evidence under Rule 1006 of the Federal Rules of Evidence? Second, does the word "damages" in Rule 26(a)(1) and in Honeywell's Interrogatory No. 20 include monetary relief for unjust enrichment?

A. Expert Witness vs. Summary Witness

Honeywell argues that "to the extent Mr. Patton is offering an expert opinion, DOJ did not serve a report or Rule 26(a)(2)(C) disclosure for Mr. Patton, as it did for other witnesses and as required under the Rules." Def. Mot. at 7. Rule 26 requires a party to "disclose to the other parties the identity of any witness it may use at trial to present evidence" as an expert witness. Fed. R. Civ. P. 26(a)(2)(A).

The government contends that the Patton Declaration is summary evidence, not expert testimony. See Gov't Opp. at 2.

1. Opinions or Conclusions

An expert witness is qualified to offer opinions or conclusions because of his or her specialized knowledge, skill, experience, training, or education. Fed. R. Evid. 702, 703. A summary witness is not an expert and is not permitted to express opinions or conclusions. See United States v. Caballero, 277 F.3d 1235, 1247 (10th Cir. 2002) (noting that witnesses who "summarized business records and client lists and presented them in condensed form . . . expressed neither a lay nor an expert opinion"). In order to constitute summary evidence, the witness' declaration or testimony cannot contain opinions or conclusions. See Colón-Fontánez v. Municipality of San Juan, 660 F.3d 17, 31 (1st Cir. 2011) (citing S.E.C. v. Franklin, 265 F. App'x 644, 646 (9th Cir. 2008) (finding "no error in allowing the preparer of the [summary exhibits] to testify because no expert opinions or conclusions were offered").

A calculation does not constitute a conclusion or opinion. According to Rule 1006, "[t]he proponent may use a . . . calculation to prove the content of voluminous writings." Fed. R. Evid. 1006. In the Patton Declaration, Mr. Patton calculated that Honeywell earned between $6,018,779.16 and $7,523,473.90 in profits from sales of Z Shield to AHI. Patton Decl. ¶ 7. This calculation was based on the deposition testimony of Mr. Gregory Herceg, Honeywell's General Manager for Advanced Fibers and Composites, who testified that Honeywell's profit margins on Z Shield sales were approximately 40%-50%. Id. ¶ 6. Based on his review of invoices produced by Honeywell during discovery, which showed how much AHI and its affiliates paid Honeywell for Z Shield, Mr. Patton calculated that Honeywell charged $15,046,947.79 for Z Shield ordered by ABA and Safariland between November 3, 2000 and May 20, 2005. Id. ¶¶ 2-3. Mr. Patton then multiplied that figure by 40%-50% to arrive at profit.Id. This calculation is appropriate for a summary witness and does not contain a conclusion or an opinion.

One sentence in Mr. Patton's Declaration does contain conclusions or opinions which are inappropriate for a summary witness. The Patton Declaration states:

I also reviewed the November 2, 2015 United States expert report of Mr. Joseph Anastasi. According to this report, ProTech, another AHI affiliate, also sold Z Shield vests. There are no invoices from Honeywell or AHI showing the purchase of Z Shield by ProTech. In his report, Mr. Anastasi discussed ProTech sales data and invoices for ProTech's sales to consumers. He mentioned that all invoices produced to the U.S. Department of Justice with respect to the ProTech sales data actually had Safariland or ABA as the issuing company on the header of the invoice facsimile. Mr. Anastasi stated that AHI acquired both ProTech and Safariland, and the subsequent integration of AHI's information technology systems affected the ability of AHI to reprint invoices utilizing a ProTech corporate header on the invoice facsimile. I note that Mr. Anastasi's comments regarding ProTech invoices concerned sales of Z Shield vests by ProTech, rather than invoices for purchases of Z Shield by ProTech from Honeywell (the latter being the focus of this Declaration). Nonetheless, Mr. Anastasi's analysis of the situation regarding a lack of ProTech invoices is informative when considered together with Ms. Robertson's representations in the above paragraph about Honeywell not selling Z Shield to any U.S. entities other than ABA or Safariland, and it helps explain why there are no invoices from Honeywell or AHI showing the purchase of Z Shield by ProTech. Accordingly, it appears that ProTech used some of the Z Shield sold to ABA and/or Safariland for the ProTech Z Shield vests.

Patton Decl. ¶ 5 (emphasis added). Although declaring that "[t]here are no invoices from Honeywell or AHI showing the purchase of Z Shield by ProTech," id., is a proper summary of voluminous invoices by a summary witness, Mr. Patton's asserted rationale for the lack of invoices is a matter of opinion or conclusion - not summary evidence. Most of the paragraph simply recounts conclusions from the expert...