by Ben Vernia | February 3rd, 2012
On January 25, in U.S. v. Honeywell, Inc., a case in which the government alleges Honeywell provided body armor manufactured with defective ballistic material, Judge Richard W. Roberts granted the government’s motion to strike the company’s defenses of waiver and estoppel. Although he acknowledged that striking pleadings is generally disfavored, he nevertheless found the standard to be met in the case.
With regard to estoppel, Judge Roberts stated that under D.C. Circuit precedent, equitable estoppel may apply to government agencies, but that the standard was an exacting one, requiring the defendant to show a definite representation, detrimental and reasonable reliance, and affirmative misconduct by the government. Examining Honeywell’s proffered evidence – that the government knew of the material’s deficiencies and never responded to Honeywell’s offer to share its data, he found it fell short. The company failed to show, Judge Roberts wrote, any definite representation by the U.S., just a failure to accept the test results. Likewise, the company did not show any reasonable and detrimental reliance on government representations, just that the company continued to sell the material. Finally, even if the government’s failure to accept the company’s offer of research assistance could be characterized as misconduct, it was not an affirmative act sufficient to serve as the basis for estoppel.
Turning to waiver, he also found that the company failed to demonstrate any clear relinquishment or abandonment by the Attorney General of the right to sue under the False Claims Act, or that any Department of Justice attorney did so with authority.
The court, therefore, struck the defenses, noting that the company retained the right to marshal facts underlying them in support of its argument that it did not knowingly cause the submission of false claims.
