WASHINGTON, D.C. (CN) - The government did not waive its right to sue body armor manufacturer Honeywell over bulletproof vests containing defective Zylon fibers, even though it continued to buy the vests after Honeywell offered to share data and test results, a federal judge ruled.
The United States claimed Honeywell submitted false claims for defective "Z shield" bulletproof vests that it sold to Armor Holdings, which resold them to state and local law enforcement agencies. The government alleged that Honeywell knew the body armor deteriorated faster than promised, but continued to sell it until 2005, when the National Institute of Justice decertified Zylon for use in bulletproof vests. It sued the company for false claims violations and unjust enrichment.
After a federal judge refused to dismiss the government's claims, Honeywell asserted affirmative defenses of waiver and estoppel. The company argued that the government knew at an early stage that Zylon vests could degrade in certain conditions and even set up a testing program to confirm it. Honeywell claimed that it offered to share its own scientific data and test results, but the government ignored its offers.
The United States asked the court to strike Honeywell's defenses, arguing that waiver and estoppel are invalid defenses when the government sues to recover money paid from the United States Treasury.
The government added that, even if Honeywell's defenses were legally valid, the company had failed to meet the high standards for such defenses.
U.S. District Judge Richard Roberts agreed in a Jan. 25 ruling. "Even if Honeywell's factual assertions are accepted as true, and deemed incorporated into the answer, Honeywell has not set forth the elements of either estoppel or waiver that are necessary in order to maintain these defenses against the government," Roberts wrote. "With respect to estoppel, Honeywell has not pointed to any definite representation by the government, only a failure of the government to accept Honeywell's offer of test results."
The court agreed that under D.C. Circuit precedent, equitable estoppel may apply to government agencies, but Honeywell had not met the standard requiring it to show a definite representation and affirmative misconduct by the government, and detrimental and reasonable reliance on government representation by Honeywell.
Honeywell cannot base its estoppel defense on the government's continued purchase of "Z shield" vests or its failure to accept Honeywell's offers of research assistance, the order adds.
With regard to the defense of waiver, Roberts found that Honeywell failed to "identify any clear and intentional relinquishment or abandonment by the Attorney General of the right to sue under the FCA [False Claims Act]," or that any Department of Justice employee had waived the right with authority.
The court struck the defenses, noting that removing an insufficient defense will "avoid wasting unnecessary time and money litigating the invalid defense".
Honeywell is free to use the allegations underlying the stricken defenses in support of its argument that it did not knowingly submit false claims, Roberts added. Honeywell is just one in a long list of body armor makers facing false claims lawsuits. South Florida company Point Blank Solutions agreed to pay $1 million to the federal government in November for knowingly manufacturing and selling defective Zylon bulletproof vests to state, local and tribal law enforcement agencies. The United States has settled with nine other participants in the Zylon body armor industry for more than $61 million, according to the Department of Justice.
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