The district court denied the defendant’s motion for summary judgment on the government’s claim of unjust enrichment and motion to strike summary testimony. The defendant argued that the testimony was an expert witness declaration not summary testimony, but the court found the declaration relied on testimony and documents provided by the defendants to make calculations, without offering conclusory statements. The defendant also argued the government did not provide timely notice of the summary testimony, but the court reasoned that since no trial date had been set, the government had by definition provided the notice at least 30 days before the trial date. The defendant also argued the government should be precluded from seeking damages for unjust enrichment, because it failed to provide the basis for its calculation in response to the defendant’s interrogatory until it submitted the summary declaration. The court agreed the government failed to timely state the basis for the calculation of damages, but declined to levy sanctions, because the government had put the defendant on notice that it would seek such damages and because the information used to calculate the amount was within the defendant’s control.
Honeywell International Inc. moved to strike the declaration of a government witness in favor of the United States’ response to the defendant’s motion for summary judgment.
In 2008, the government filed a False Claims Act complaint against Honeywell, alleging the United States paid for defective Z Shield vests due to false statements and omissions by Honeywell. The government calculated damages between $15 and $20 million dollars, depending on whether the government calculated damages based on Honeywell’s sales to a third party vendor or the vendor’s sales to the government. The government asserted its entitlement to seek treble damages and one statutory penalty per false claim. The government’s disclosure did not provide a computation of the monetary relief it sought for unjust enrichment, or otherwise supplement its computation of damages.
In 2012, Honeywell served the government with two interrogatories. First, Honeywell asked the government to detail the facts forming its basis for the total claim for recovery, including the details of the claims for payment, such as date, vest model number, and amount paid. The interrogatory also asked the government to account for the third-party sales to the government and sought the basis for the government’s calculation of damages. The government’s response to this interrogatory addressed statutory damages, but not monetary relief for unjust enrichment.
In 2019, Honeywell moved for summary judgment, arguing that the government could not recover under its unjust enrichment claim because it never disclosed any calculation of Honeywell’s profits attributable to sales by the third-party vendor or explained how it would calculate these damages. In response, the government filed its opposition to the motion and attached the declaration of Christian Patton, which calculated that the amount of potential unjust enrichment damages associated with Honeywell’s sales of Z Shield to the vendor were between $6,018,779.12 and $7,523,473.90.
In its motion, Honeywell questioned whether Patton was an expert witness whose disclosure is required under Rule 26(a)(2), or was he a non-expert witness merely presenting summary evidence under Rule 1006 of the Federal Rules of Evidence? Second, the defendant questioned whether the word “damages” in Rule 26(a)(1) and in Honeywell’s Interrogatory No. 20 include monetary relief for unjust enrichment.
Honeywell argued that to the extent Patton offered an expert opinion, the Department of Justice did not serve a report or Rule 26(a)(2)(C) disclosure, as it did for other witnesses and as required. In response, the government argued that the declaration is summary evidence, not expert testimony.
As an initial matter, the court noted that a calculation does not constitute a conclusion or opinion.
Patton calculated that Honeywell earned between $6,018,779.16 and $7,523,473.90 in profits from sales of Z Shield to its vendor, based on the deposition testimony of a Honeywell executive and a review of invoices between Honeywell and the vendor. The court found this calculation appropriate for a summary witness and that it did not contain a conclusion or an opinion.
However, the court found Patton made a conclusory statement suggesting a reason why certain invoices were not provided during discovery. The court struck this portion of the declaration.
Next, the court considered the admissibility of underlying documents, which are fair game for summary witness testimony. The court noted Patton relied on five documents, including invoices, an expert report, and a defendant deposition. In its motion, Honeywell did not argue the documents were inadmissible or were not properly disclosed. Therefore, the court found no basis to find Patton could not rely on them for his testimony.
Next, the court considered whether Patton’s declaration was properly disclosed. Because summary witnesses need not be disclosed until thirty days before trial, and because no trial date had been set, the court found the government provided notice of summary evidence more than thirty days before trial.
Next, the court considered Honeywell’s challenge to the government’s damages for unjust enrichment, which it argued were not disclosed. The government argued that Rule 26 does not require disclosure of damages relating to equitable claims such as unjust enrichment. However, the court disagreed. The court found the rule’s reference to “other monetary relief” encompasses monetary relief for unjust enrichment as requested by the government in this case. While some courts have construed the term “damages” strictly as excluding equitable claims, the court was persuaded by the Tenth Circuit’s opinion that Rule 26 also “appears to require disclosure of calculations for equitable remedies providing monetary relief.” By failing to include the monetary relief for unjust enrichment in its initial disclosure, the government did not meet its obligations under Rule 26(a)(1).
Further, in its answer to one of the interrogatories, the government interpreted “damages” as not including monetary relief for unjust enrichment. Because the court already ruled that the government interpreted damages more narrowly than intended by the Rules, it held it need not determine the proper scope of the interrogatory.
After finding that the Patton declaration was properly disclosed, but that Rule 26 was violated when the government did not disclose the monetary relief it requests for unjust enrichment, the court then considered whether and what sanctions were appropriate.
Honeywell argued sanctions were appropriate, but the court found the defendant was put on notice of the government’s unjust enrichment claim by the complaint. In addition, the court found that the documents underlying the unjust enrichment calculation were at all times in Honeywell’s possession. The calculation was based on Honeywell’s invoices to its third party vendor and the deposition testimony of its own executive. The court concluded Honeywell did not suffer prejudice due to the government’s failure to offer its own calculation and declined to strike Patton’s testimony.
