WASHINGTON (CN) - A federal judge refused to sanction the Justice Department in a lawsuit arising from its allegations that Honeywell International sold defective bulletproof vests to the military and law enforcement agencies.
The government sued Honeywell in 2008, alleging that the company submitted false claims for defective "Z shield" bulletproof vests it sold to Armor Holdings, which resold them to state and local law enforcement agencies.
The United States claimed that Honeywell knew that the "Z shield" degraded quickly in hot and humid environments, but continued to sell the material until the National Institute of Justice decertified it for use in bulletproof vests.
A federal judge in February struck Honeywell's defenses of waiver and estoppel, finding that Honeywell had not met the high standards for such defenses.
Honeywell sought sanctions against the Department of Justice, accusing it of failed litigation holds and improper discovery.
Honeywell claimed the Justice Department failed to issue litigation holds to certain key custodians, misrepresented that its production was nearly complete but failed to disclose relevant data, produced documents that were not responsive to the discovery demands, and used inadequate discovery practices, and witnesses whose testimony was inaccurate.
Honeywell claimed it was severely prejudiced by the government's improper discovery and asked for an immediate production of all relevant information and for monetary compensation.
The government countered that it had imposed careful litigation holds and had cured any deficiencies as soon as it became aware of them. It claimed that Honeywell could not prove that it was prejudiced by the alleged deficiencies.
U.S. District Judge John Facciola ruled that imposing sanctions at this stage in the litigation would be premature.
Facciola said that the Justice Department's alleged deficient discovery had not prejudiced the judicial system, because no trial date had been reset. He noted that U.S. District Judge Richard Roberts, who previously struck Honeywell's defenses, had extended the discovery deadline to Oct. 22.
Facciola said it is impossible to establish whether Honeywell has been irreparably prejudiced by the government's alleged misconduct before the end of the discovery process in October, and that harsh sanctions such as the ones sought by Honeywell must be based on "flagrant or egregious misconduct."
"Here, the government would lose entirely a claim that may be central to its case," Facciola wrote. "Considering whether to give such sanctions before discovery ends would be unusual in any case. It is particularly foolhardy to do so in one involving the deadly serious allegation by the Department that Honeywell knowingly sold a product that was incapable of stopping a bullet aimed at a police officer's heart, if the weather was either too warm or too humid. Fairness to both parties in such a case requires that any resolution other than on the merits be placed on the most solid evidentiary basis possible."
Any sanctions must be based on the government's behavior during the entire discovery process and on the potential evidence yet to be produced, Facciola wrote.
He denied Honeywell's motion to compel, noting that the government is obligated by law to make a complete and correct disclosure.
Facciola ruled that monetary compensation can be awarded only at the end of the discovery process, and suggested that the remaining discovery would benefit from more active judicial supervision.
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