UNITED STATES, ex rel. WESTRICK, Plaintiffs, v. SECOND CHANCE BODY ARMOR, INC., et al., Defendants.
Civil Action No. 04-280 (RWR).
United States District Court, District of Columbia.
Sept. 30, 2012.
893 F. Supp. 2d 258
RICHARD W. ROBERTS, District Judge.
William James Copie, III, Hollingsworth LLP, Eric C. Lyttle, Holly Elizabeth Loiseau, Michael J. Lyle, Weil, Gotshal & Manges, LLP, Washington, DC, James J. Parks, Jaffe, Rait, Heuer & Weiss, P.C., Southfield, MI, Brian Keith Gibson, Jed P. Winer, Jeremy T. Grabill, Konrad L. Cailteux, Susannah G. Heyworth, Weil, Gotsh-al & Manges, LLP, New York, NY, for Defendants.
Thomas E. Bachner, Jr., Eastport, MI, pro se.
Richard C. Davis, Central Lake, MI, pro se.
MEMORANDUM OPINION AND ORDER
RICHARD W. ROBERTS, District Judge.
The United States brought this action against defendants Toyobo Co., Ltd. and Toyobo America, Inc. (collectively “Toyobo“), individual defendants Thomas Bachner, Jr. and Richard Davis, and others1 alleging violations of the False Claims Act (“FCA“),
Because the counterclaim is barred by sovereign immunity, leave to add the counterclaim will be denied and the government‘s motion to dismiss or strike it will be granted. Because appointing an independent investigator is neither authorized nor warranted, there is no good cause to suspend the scheduling order, there has been no sanctionable conduct by the government, and Bachner has not demonstrated that justice requires reconsidering a change of venue, Bachner‘s remaining requests for relief will be denied.
BACKGROUND
The background of this case is set forth fully in United States ex rel. Westrick v. Second Chance Body Armor, Inc., 685 F.Supp.2d 129, 132-33 (D.D.C.2010). Briefly, the government‘s amended complaint filed on September 19, 2005 alleges that Second Chance and Toyobo contracted for Toyobo to supply Second Chance with the synthetic fiber “Zylon” for use in manufacturing Second Chance bulletproof vests. Id. at 132-33. The government
In February 2006, Bachner through counsel filed an answer to the government‘s amended complaint stating no counterclaims. (Def. Bachner‘s Answer to Am. Compl.) Years later, individual defendants Bachner, Davis, and the McCra-neys, by then pro se, moved to transfer venue, arguing that continuing to defend the suit in this district would impose on them financial hardship and inconvenience. The motion to transfer venue was denied because the defendants failed to show that the transfer was in the interests of justice. United States ex rel. Westrick v. Second Chance Body Armor, Inc., 771 F.Supp.2d 42, 44 (D.D.C.2011).
In September 2011, Bachner docketed a filing stating a counterclaim against the United States alleging prosecutorial misconduct during the ongoing investigation of Second Chance and the individual defendants under the FCA and moving for various forms of relief. (Mem. Facts in Support of Def. Bachner Jr.‘s Counterclaim (“Def.‘s Mem.“) at 2.) In particular, Bachner moves for the appointment of an independent investigator to examine the government‘s alleged misconduct, suspension of the scheduling order to allow the investigator to proceed, and sanctions against the government for lack of disclosure, misrepresentations, and unfair settlement practices. (Id. at 1-3, 29-30.) Bachner seeks $2.75 million dollars in damages for lost employment, $700,000 for legal fees, punitive damages, and summary dismissal. (Id. at 30.) Finally, Bachner asks that the order denying transfer of venue to the Western District of Michigan be reconsidered “in the interests of justice.” (Id. at 31.)
The government argues that leave to add the counterclaim should be denied or the counterclaim should be stricken or dismissed because it is untimely filed, is not compulsory, is futile as barred by sovereign immunity, fails to state a claim upon which relief can be granted, and is insufficient as a matter of law. (Gov‘t Mem. in Supp. of Their Mot. to Strike and/or Dismiss the Counterclaim (“Gov‘t Mem.“) at 3, 15.) In addition, the government opposes appointing an independent investigator for lack of statutory authority (id. at 28-29), imposing sanctions as barred by sovereign immunity and unwarranted in any event (id. at 29-42), and reconsidering transferring venue because it is untimely and Bachner alleges no new grounds to consider. (Id. at 42.)
DISCUSSION
I. LEAVE TO ADD COUNTERCLAIM
Generally, “[a] pleading must state as a counterclaim any claim that—at the time of its service—the pleader has against an opposing party[.]”
Bachner filed his initial pleading—his answer—through counsel in February 2006. Portions of Bachner‘s pro se counterclaim, filed in September 2011, pertain to events which occurred before he filed his answer in February 2006 and could be construed under
A. Omitted counterclaims
Under
Undue delay, undue prejudice to the defendant or futility of the proposed amendment are factors that may warrant denying leave to amend. Richardson v. United States, 193 F.3d 545, 548-49 (D.C.Cir.1999) (holding that the motion to amend should be granted “in the absence of undue delay, bad faith, undue prejudice to the opposing party, repeated failure to cure deficiencies, or futility“); Smith v. Café Asia, 598 F.Supp.2d 45, 47 (D.D.C.2009) (citing Atchinson v. District of Columbia, 73 F.3d 418, 425 (D.C.Cir.1996)).
A district court may deny a motion to amend a pleading as futile if the amended pleading would not survive a motion to dismiss. In re InterBank Funding Corp. Sec. Litig., 629 F.3d 213, 218 (D.C.Cir.2010); see also Truesdale v. United States Dep‘t of Justice, No. 12-5012, 2012 WL 3791281, at *1 (D.C.Cir. Aug. 15, 2012). In
Bachner‘s tort claims suggest an examination of the Federal Tort Claims Act (“FTCA“) for any applicable waiver of the government‘s immunity here. The FTCA provides a waiver of sovereign immunity in civil actions based on “injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment[.]”
The D.C. Circuit has affirmed that “suits for damages against the United States under the ... Constitution and ... under the common law must be brought pursuant to the limited waiver of sovereign immunity in the FTCA, which requires that the claimant have exhausted his administrative remedies before filing suit.” Benoit v. U.S. Dep‘t Agric., 608 F.3d 17, 20 (D.C.Cir.2010) (citing McNeil v. United States, 508 U.S. 106, 113 (1993), and citing other sources). The district court “‘lacks subject matter jurisdiction over common law tort claims against the United States for which a plaintiff has not exhausted his administrative remedies.‘” Hill v. United States, 562 F.Supp.2d 131, 134 (D.D.C.2008) (quoting Hayes, 539 F.Supp.2d at 398-99). To satisfy the administrative exhaustion requirements, a claimant must first file “(1) a written statement sufficiently describing the injury to enable the agency to begin its own investigation, and (2) a sum-certain damages claim.” GAF Corp. v. United States, 818 F.2d 901, 919 (D.C.Cir.1987) (referring to
In this case, Bachner‘s claims for tortious interference with employment contracts cannot be sustained under the FTCA due to the explicit exception in
Even assuming that his letter on February 14, 2011 satisfied the administrative presentment requirement, both the alleged interference with Bachner‘s employment in 2005 and malicious prosecution of the individual defendants in 2005 occurred before February 14, 2009, beyond the two-year FTCA statute of limitations. Because Bachner did not complain of these actions within the two-year period after they arose, he has lost the opportunity to allege them in a counterclaim.
Because Bachner has failed timely to assert and exhaust under the FTCA claims for events occurring before he filed his answer, the court lacks subject matter jurisdiction over those claims and will deny leave to file them in a counterclaim.
B. Matured or after-acquired counterclaims
Under
Bachner‘s post-answer claims include invasion of privacy and malicious prosecution. Bachner‘s privacy claim arises from a Treasury agent‘s alleged harassment and intimidation of Bachner and his family in September 2008. Bachner‘s claims of malicious prosecution are based on alleged events occurring before February 14, 2009, including placing him on GSA‘s excluded parties list in August 2006, vindictive “persecution” in April 2008, and intimidation and threats in June 2008. All are barred by sovereign immunity as beyond the FTCA statute of limitations. Because Bachner‘s claims are based on actions before February 14, 2009 and he has not satisfied administrative exhaustion requirements, he may not allege them in a counterclaim.
Bachner‘s malicious prosecution claims based on allegations after February 14, 2009, including improper settlement tactics in April 2009, failure to supervise in May 2010 and bad faith litigation tactics in July 2010, are not similarly time-barred. Allowing the claims nevertheless would be futile. Sovereign immunity bars them since Bachner has not shown that he has satisfied his exhaustion requirement of making a sum-certain demand. Moreover, the claims would not survive a motion to dismiss. Under District of Columbia law, a plaintiff must prove four elements of malicious prosecution: “(1) that the underlying suit terminated in plaintiff‘s favor; (2) malice on the part of the defendant; (3) lack of probable cause for the underlying suit; and (4) special injury occasioned by the plaintiff as the result of the original action.” Nader v. Democratic Nat‘l Comm., 567 F.3d 692, 697 (D.C.Cir.2009) (citing Morowitz v. Marvel, 423 A.2d 196, 198 (D.C.1980)). Since this suit has not terminated in his favor, these remaining malicious prosecution claims are premature and cannot be added under
II. MOTION FOR THE APPOINTMENT OF AN INDEPENDENT INVESTIGATOR
Bachner asks the court to have an independent investigation launched into the Department of Justice‘s Second Chance FCA investigation. (Def.‘s Mem. at 29.) To do so while Justice‘s investigation is ongoing and this litigation is pending would risk judicial imprudence. But even if it did not, Bachner has provided no authority in law for the court to even be able to do what he asks. If Bachner‘s request for the appointment of an independent investigator is intended as a request to appoint an independent counsel or special prosecutor under the Ethics in Government Act,
Because granting Bachner‘s request would be inappropriate, and Bachner presents no authority to grant it in any event, his motion for an independent investigator will be denied.
III. MOTION FOR SANCTIONS
Bachner seeks sanctions against the government based on “prosecutorial misconduct” and “vexatious, malicious conduct and malfeasance.” (Def.‘s Mem. at 31.) There are three relevant sources of the court‘s sanction power—Rule 11, Rule 37, and the court‘s inherent power.
Discovery sanctions are appropriate under
Finally, the district court is afforded inherent power to sanction parties for bad faith conduct. Chambers v. NASCO, Inc., 501 U.S. 32, 44, 50, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991). In order to sanction conduct under this authority, the court must find, by clear and convincing evidence, that a party “committed sanctionable misconduct that is tantamount to bad faith.” Ali, 636 F.3d 622, 627; see also United States v. Wallace, 964 F.2d 1214, 1219 (D.C.Cir.1992) (stating that “it is settled that a finding of bad faith is required for sanctions under the court‘s inherent powers“).
While Bachner argues numerous grounds for sanctions against the government, he asserts only two claims which could be potentially redressed by sanctions under the law. He alleges that the government lawyers made false statements to this court in August 2010 concerning the settlement between Second Chance and the United States. (Def.‘s Mem. at 23-24.) He also argues that, despite the unsealing of grand jury investigation materials involving this case, the government has failed to “release all the federal agent investigatory notes[.]” (Def.‘s Mem. at 19.) The government responds that the statements were true and that the notes are protected from disclosure under the work product privilege. (Gov‘t Mem. at 30, 39-40.)
Bachner‘s allegations do not warrant imposing sanctions against the government.
IV. MOTION FOR RECONSIDERATION
Bachner moves for reconsideration of this court‘s order denying the defendants’ motion to transfer venue to the Western District of Michigan.
Bachner does not assert that the order denying transfer of venue is based on a misunderstanding, reached an issue not presented by the parties, failed to consider controlling law or facts, or has been affected by a fundamental change in the law. His makes a bare, unsupported request for a “re-evaluation of the Change of Venue Motion, to the Western District of Michigan, in the interests of justice.” (Def.‘s Mem. at 31.) There being no good cause shown for the request, it will be denied.
CONCLUSION AND ORDER
Allowing Bachner‘s counterclaim would be futile. Suspending the scheduling order to permit an unauthorized appointment of an independent investigator is not warranted. No basis for sanctions against the government or reconsideration of the order denying a venue transfer has been presented. Accordingly, it is hereby
ORDERED that leave for Bachner to file a counterclaim be and hereby is, DENIED. It is further
ORDERED that Bachner‘s motion [254] for appointment of an independent investigator, for suspension of the current scheduling order, for sanctions, and for reconsideration of the order denying a transfer of venue be, and hereby is, DENIED. It is further
ORDERED that the government‘s motion [257] to dismiss and/or strike Bachner‘s counterclaim be, and hereby is, GRANTED.