United States v. Honeywell International, Inc.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-0961 (PLF)
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HONEYWELL INTERNATIONAL INC., )
)
Defendant. )
__________________________________________)
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
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The Court has reviewed the following documents in connection with the pending
motion: Complaint (“Compl.”) [Dkt. No. 1]; Defendant Honeywell International Inc.’s Motion
for Summary Judgment (“Def. Mot. SJ”) [Dkt. No. 204]; The United States of America’s
Opposition to Honeywell International Inc.’s Motion for Summary Judgment (“Gov’t Opp. SJ”)
[Dkt. No. 209]; Patton Declaration (“Patton Decl.”) [Dkt. No. 209-4]; Reply in Support of
Honeywell International Inc.’s Motion for Summary Judgment (“Def. Reply SJ”) [Dkt. No. 214];
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 (“Def. Mot.”) [Dkt.
No. 227]; Def. Mot. Exhibit 2, Initial Disclosures of the United States of America (“US Initial
Discl.”) [Dkt. No. 227-3]; Def. Mot. Exhibit 3, First Supplemental Initial Disclosures of the
United States of America (“US First Supp. Initial Discl.”) [Dkt. No. 227-4]; Def. Mot. Exhibit 4,
The United States’ Responses and Objections to Honeywell International Inc.’s Second Set of
Interrogatories (“US Resp. and Obj. to Honeywell’s Second Interrog.”) [Dkt. No. 227-5]; United
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.
States’ Memorandum in Opposition to Honeywell International Inc.’s Motion to Strike the
Declaration of Christian Patton (“Gov’t Opp.”) [Dkt. No. 228]; Gov’t Opp. Exhibit 3, Honeywell
International Inc.’s (Honeywell) First Set of Interrogatories to Plaintiff United States of America,
(“Honeywell First Interrog.”) [Dkt. No. 228-4]; Gov’t Opp. Exhibit 4, Honeywell International
Inc.’s Second Set of Interrogatories to Plaintiff United States of America (“Honeywell Second
Interrog.”) [Dkt. No. 228-5]; and Reply Memorandum in Support of Honeywell International
Inc.’s Motion to Strike the Declaration of Christian Patton (“Def. Reply”) [Dkt. No. 229].
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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.
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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.
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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.
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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 report of Mr. Joseph Anastasi and representations
made by Ms. Cynthia J. Robertson, Attorney, Jenner & Block LLP. But the last sentence of
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paragraph five concludes that “it appears that ProTech used some of the Z Shield sold to ABA
and/or Safariland for the ProTech Z Shield vests.” Id. That sentence therefore must be stricken
for the Patton Declaration to be properly considered as a declaration of a summary witness.
2. Admissibility of Underlying Documents
Summary witnesses are permitted to testify about summary exhibits and to
summarize otherwise admissible evidence. See United States v. Lemire, 720 F.2d 1327, 1346-50
(D.C. Cir. 1983); United States v. Naegele, Criminal No. 05-0151, 2007 WL 172324, at *1
(D.D.C. 2007). “Summary evidence is admissible as long as the underlying documents also
constitute admissible evidence and are made available to the adverse party.” Tamarin v. Adam
Caterers, Inc., 13 F.3d 51, 53 (2d Cir. 1993); see Colón-Fontánez v. Municipality of San
Juan, 660 F.3d at 29-32 (“Rule 1006 provides that only the underlying documents, not the
summaries themselves, must be produced to the opposing party.”).
The Patton Declaration relies on five documents: (1) List of Z Shield invoices
from Honeywell to ABA and Safariland provided as a summary exhibit pursuant to Rule 1006 of
the Federal Rules of Evidence; (2) Sample Invoice from Honeywell to ABA; (3) Letter, dated
August 17, 2007, from Ms. Cynthia J. Robertson to Ms. Alicia J. Bentley, Trial Attorney, United
States Department of Justice; (4) November 2, 2015 United States expert report of Mr. Joseph
Anastasi; and (5) October 7, 2009 deposition of Mr. Gregory Herceg. Patton Decl. at 3.
In moving to strike, Honeywell does not argue that the documents underlying the
Patton Declaration are inadmissible. Nor does Honeywell dispute that they were properly
disclosed in discovery. See generally Def. Mot; Def. Reply. Therefore, at this time, there is no
reason to conclude that Mr. Patton cannot rely on these documents in his declaration.
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3. Disclosure of Patton Declaration
Under Rule 26(a)(3), a party must provide to the other parties and promptly file
information about witnesses and an identification of each document or other exhibit, including
summaries of other evidence, that it may present at trial at least thirty days before trial, unless the
court orders otherwise. Fed. R. Civ. P. 26(a)(3).
The government first disclosed the Patton Declaration as an attachment to its
Opposition to Honeywell International Inc.’s Motion for Summary Judgment, which was filed on
August 2, 2019. Gov’t Opp. SJ. Honeywell does not dispute that summary witnesses need not
be disclosed until thirty days before trial. See Def. Reply. No trial date has been set in this case.
To the extent that the Patton Declaration contains summary evidence, it has been provided more
than thirty days before trial as required by Rule 26(a)(3).
B. Meaning of “Damages”
Rule 26 of the Federal Rules of Civil Procedure requires a party to disclose “a
computation of each category of damages claimed.” Fed. R. Civ. P. 26(a)(1)(A)(iii). Further,
“[a] party who has made a disclosure under Rule 26(a)—or who has responded to an
interrogatory, request for production, or request for admission—must supplement or correct its
disclosure or response: (A) in a timely manner if the party learns that in some material respect
the disclosure or response is incomplete or incorrect, and if the additional or corrective
information has not otherwise been made known to the other parties during the discovery process
or in writing; or (B) as ordered by the court.” Fed. R. Civ. P. 26(e)(1)(A). The 1993 Advisory
Committee’s Note provides that “[a] party claiming damages or other monetary relief must, in
addition to disclosing the calculation of such damages, make available the supporting documents
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for inspection and copying . . . .” Fed. R. Civ. P. 26 advisory committee’s note to 1993
amendment.
The government argues that Rule 26 does not require disclosure of damages
relating to equitable claims such as unjust enrichment. Gov’t Opp. at 6. The Court disagrees. In
the Court’s view, the reference to “other monetary relief” encompasses monetary relief for unjust
enrichment as requested by the government here. While some courts have construed the term
“damages” strictly as excluding equitable claims, Northern Natural Gas Co. v. L.D. Drilling,
Inc., 405 F. Supp. 3d 981, 1002-03 n.3-4 (D. Kan. 2019); S.E.C. v. Razmilovic, Civil Action
No. 04-2276, 2010 WL 2540762, at *2 (E.D.N.Y. June 14, 2010), this Court is persuaded by the
view recently expressed by the Tenth Circuit that Rule 26 also “appears to require disclosure of
calculations for equitable remedies providing monetary relief,” United States v. RaPower-3,
LLC, 960 F.3d 1240, 1253 (10th Cir. 2020). By failing to include the monetary relief for unjust
enrichment in its initial disclosure, the government did not meet its obligations under
Rule 26(a)(1).
Similarly, in answering Interrogatory No. 20, the government interpreted
“damages” as not including monetary relief for unjust enrichment. Gov’t Opp. at 4 (citing US
Resp. and Obj. to Honeywell’s Second Interrog. at 9-27). The Court has already ruled that the
government interpreted damages more narrowly than intended by the Rules. Therefore, the
Court need not determine the proper scope of the interrogatory.
C. Rule 37 Failure to Disclose
The Court has concluded that the government did not violate Rule 26 of the
Federal Rules of Civil Procedure by failing to disclose Mr. Patton as a potential witness or the
substance of his declaration during discovery. See supra Part III(A). But the government did
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violate Rule 26 by failing to include the monetary relief it requests for unjust enrichment in its
initial disclosures to Honeywell. The question then becomes whether striking the Patton
Declaration is an appropriate sanction for the government’s failure to disclose.
“If a party fails to provide information or identify a witness as required by
Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence
on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is
harmless.” Fed. R. Civ. P. 37(c)(1). “The sanction of preclusion is ‘automatic and mandatory’
unless the party can show that the failure to disclose was ‘either substantially justified or
harmless.’” Armenian Assembly of Am., Inc. v. Cafesjian, 746 F. Supp. 2d 55, 66
(D.D.C. 2010) (citations omitted). “A Rule 37(c)(1) exclusion, however, is an ‘extreme
sanction’ that should be used sparingly.” Sherrod v. McHugh, 334 F. Supp. 3d 219, 269
(D.D.C. 2018) (quoting Richardson v. Korson, 905 F. Supp. 2d 193, 200 (D.D.C. 2012)); see also
Burns v. Levy, Civil Action No. 13-898, 2019 WL 6465142, at *18 (D.D.C. Dec. 2, 2019).
As the Court has already rejected Honeywell’s challenge to the summary witness
in this case, the Court will now address Honeywell’s challenge to the government’s failure to
disclose its theory of unjust enrichment and its calculation of those damages. Honeywell relies
primarily on Burns v. Levy, Civil Action No. 13-898, 2019 WL 6465142 (D.D.C. Dec. 2, 2019).
In Burns, the plaintiff was sanctioned for loss of income because she used the cryptic language
“to be determined” to refer to the loss amount and never provided any computations. Id. at *22.
But the plaintiff in Burns was not sanctioned with respect to attorneys’ fees because she provided
enough information to put defendant on notice. Id. at *26. Honeywell was put on notice of the
government’s unjust enrichment claim by the Complaint, which alleges one count of unjust
enrichment. Compl. ¶¶ 94-97. In addition, the documents underlying the unjust enrichment
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calculation were at all times in Honeywell’s possession. The calculation was based on invoices
AHI and its affiliates paid Honeywell for Z Shield and the deposition testimony of Gregory
Hercerg, Honeywell’s General Manager for Advanced Fibers and Composites. Patton Decl.
¶¶ 2-3, 6. Honeywell has not suffered prejudice by not receiving a calculation of its own profits.
As the government’s failure to provide a computation of damages for unjust enrichment was
harmless, this Court will not strike the Patton Declaration. Accordingly, it is hereby
ORDERED that 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] is GRANTED in part and DENIED in part. The final
sentence in paragraph five of the Patton Declaration [Dkt. No. 209-4] is stricken and the
remainder of the declaration and its attachments are admitted.
SO ORDERED.
/s/
PAUL L. FRIEDMAN
United States District Judge
DATE: September 29, 2020
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