United States v. Honeywell International Inc.
2011 U.S. Dist. LEXIS 73574
| D.D.C. | 2011Background
- Government sues Honeywell for FCA violations and unjust enrichment over Zylon-based Z Shield vests sold via Armor Holdings.
- Armor Holdings purchased Z Shield in large quantities and supplied vests to federal and other agencies; NIJ certified Z Shield met minimum standards.
- Honeywell allegedly knew Armor Holdings relied on Honeywell's technical data and actively managed test results to present favorable outcomes.
- Honeywell allegedly learned of rapid degradation of Zylon under light and moisture and conducted tests but did not fully disclose negative results.
- Armor Holdings warned customers to store vests in dry, cool conditions; despite warnings, Honeywell continued to represent Z Shield as safe and effective.
- NIJ decertified all Zylon products in 2005; the government argues it would not have purchased the vests if it knew of defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FCA claim based on presenting false claims survives. | HONEYWELL knowingly presented false claims by concealing degradation data. | Alleged falsity rests on scientific disagreements; not adequately pled as false claims. | Plaintiff states plausible false-presentment theory; denial of dismissal for this issue. |
| Whether the FCA claim based on fraudulent inducement is viable. | Misrepresentations induced Armor Holdings to sell to the government, tainting later claims. | No direct misrepresentation to the Government; theory is flawed. | Fraudulent inducement theory pleaded adequately; supports § 3729(a)(1). |
| Whether Honeywell acted with knowledge to support FCA scienter. | Honeywell knowingly concealed adverse data and manipulated disclosures. | Disagreements over scientific data do not prove knowledge of falsity. | Pleadings support an inference of actual knowledge; sufficient at this stage. |
| Whether the false statements theory under § 3729(a)(2) is adequately pled. | Honeywell knowingly made misrepresentations/omitted data to influence payment decisions. | Disagreeing data does not equal a false record; lack of direct reliance proof. | Adequate under Sanders and related cases to plead false records knowingly used to obtain payment. |
| Whether unjust enrichment claim is viable against Honeywell. | Government paid for defective vests; Honeywell retained payments unjustly. | Benefits flowed through Armor Holdings under contract; government-benefit theory unclear. | Unjust enrichment survives as to payment indirectly obtained; factual development needed. |
Key Cases Cited
- Allison Engine Co., Inc. v. United States ex rel. Sanders, 553 U.S. 662 (2008) (purpose of getting payment required for § 3729(a)(2))
- United States ex rel. Bettis v. Odebrecht Contractors of Cal., Inc., 393 F.3d 1321 (D.C. Cir. 2005) (fraudulent inducement can support FCA liability)
- United States v. Siewick v. Jamieson Sci. & Eng'g, Inc., 214 F.3d 1372 (D.C. Cir. 2000) (false records/statement theory under FCA)
- United States ex rel. Williams v. Martin-Baker Aircraft Co., Ltd., 389 F.3d 1251 (D.C. Cir. 2004) (Rule 9(b) particularity in FCA cases)
- United States v. Sci. Applications Int'l Corp., 626 F.3d 1257 (D.C. Cir. 2010) (implied certification theory for FCA)