UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
UNITED STATES, ex rel. )
WESTRICK, )
)
Plaintiffs, )
)
v. ) Civil Action No. 04-280 (RWR)
)
SECOND CHANCE BODY ARMOR, )
INC. et al., )
)
Defendants. )
______________________________)
MEMORANDUM OPINION AND ORDER
The government, by relator Aaron J. Westrick, filed a
complaint against defendants Second Chance Body Armor, Inc. and
related entities (collectively “Second Chance”), Toyobo Co.,
Ltd., Toyobo America, Inc. (collectively “Toyobo”), and
individual defendants Thomas Bachner, Jr., Richard Davis, Karen
McCraney, and James “Larry” McCraney, alleging violations of the
False Claims Act (“FCA”), 31 U.S.C. §§ 3729-33, as well as common
law claims in connection with the sale of Zylon body armor. The
individual defendants have moved to transfer venue to the Western
District of Michigan.1 Because the individual defendants have
not shown that a transfer is in the interest of justice, their
motion will be denied.
1
The individuals defendants also moved for a hearing on
their motion to transfer. That motion will be denied.
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BACKGROUND
The background of this case is discussed fully in United
States ex rel. Westrick v. Second Chance Body Armor, Inc., 685 F.
Supp. 2d 129 (D.D.C. 2010). Briefly, the government 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. Zylon –– which Toyobo
manufactured in Japan (Am. Compl. ¶ 47) –– deteriorated more
quickly than expected. Westrick, 685 F. Supp. 2d at 132. The
government alleges that Second Chance and Toyobo knew about the
accelerated degradation but concealed information about it from
the government, which purchased Second Chance vests through
various programs. Id. Second Chance and its related entities
were primarily Michigan corporations,2 Toyobo Co., Ltd. is a
Japanese Corporation, Toyobo America, Inc. is a New York
Corporation, and the individual defendants –– who served as
officers of Second Chance –– all resided in Michigan when the
government filed its amended complaint in September 2005. (Am.
Compl. ¶¶ 6-19.)
In November 2005, defendants Larry and Karen McCraney filed
a motion to dismiss or, in the alternative, to transfer venue to
the Western District of Michigan. In January 2006, they withdrew
2
Second Chance Body Armor, Inc. filed for bankruptcy in the
Western District of Michigan in 2004.
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their motion and stipulated that venue was proper in this
district. Toyobo filed a motion to dismiss, discovery began
while that motion was pending, and the motion to dismiss was
later denied. Westrick, 685 F. Supp. 2d at 142. Toyobo
unsuccessfully moved for reconsideration, United States ex rel.
Westrick v. Second Chance Body Armor, Inc., 709 F. Supp. 2d 52
(D.D.C. 2010), and a scheduling conference was held at which the
close of discovery was set for January 2012. In July 2010, the
individual defendants moved to transfer venue, arguing that
continuing to defend the suit in this district would impose on
them financial hardship and inconvenience. (Defs.’ Mem. of Law
in Supp. of Their Mot. for Change of Venue (“Defs.’ Mem.”) at 1-
2.) The government and the relator oppose the motion, arguing
that transferring the case would inconvenience the other parties
and witnesses and waste judicial resources.3 (Opp’n of the U.S.
to the Mot. to Change Venue (“Gov’t Opp’n”) at 2; Pl.-Relator’s
Opp’n to Mot. for Change of Venue (“Pl.-Relator’s Opp’n”) at 2.)
DISCUSSION
A case may be transferred to another venue under 28 U.S.C.
§ 1404(a) “[f]or the convenience of parties and witnesses, in the
interest of justice[.]” See also Piper Aircraft Co. v. Reyno,
454 U.S. 235, 253 (1981). The moving party carries the burden of
3
Defendant Toyobo filed a stipulation stating that it does
not oppose the motion.
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showing that a transfer is appropriate. Montgomery v. STG Int’l,
Inc., 532 F. Supp. 2d 29, 32 (D.D.C. 2008); Onyeneho v. Allstate
Ins. Co., 466 F. Supp. 2d 1, 3 (D.D.C. 2006). Because “‘it is
perhaps impossible to develop any fixed general rules on when
cases should be transferred[,]’ . . . the proper technique to be
employed is a factually analytical, case-by-case determination of
convenience and fairness.” SEC v. Savoy Indus. Inc., 587 F.2d
1149, 1154 (D.C. Cir. 1978) (quoting Starnes v. McGuire, 512 F.2d
918, 929 (D.C. Cir. 1974) (en banc)).
“Any transfer under § 1404(a) is restricted to a venue where
the action ‘might have been brought.’” Robinson v. Eli Lilly &
Co., 535 F. Supp. 2d 49, 51 (D.D.C. 2008) (quoting 28 U.S.C.
§ 1404(a)). A plaintiff may bring a claim under the FCA “in any
judicial district in which . . . , in the case of multiple
defendants, any one defendant can be found, resides, transacts
business, or in which any act proscribed by section 3729
occurred.” 31 U.S.C. § 3732(a); see also United States v.
Intrados/Int’l Mgmt. Grp., 265 F. Supp. 2d 1, 6 (D.D.C. 2002).
Because many of the defendants either reside or transact business
in the Western District of Michigan, there is no question –– and
the relator and the government do not contest –– that this action
could have been brought in that district.4 (See Gov’t Opp’n at 9
4
Although it concedes that the case could have been brought
in the Western District of Michigan under the FCA venue
provision, the government suggests two reasons why venue may
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(noting that “this action could have been brought in the W.D.
Michigan”); Pl.-Relator’s Opp’n at 4.)
After determining that venue in the proposed transferee
district would be proper, a court then “must weigh in the balance
the convenience of the witnesses and those public-interest
factors of systemic integrity and fairness that, in addition to
[the] private concerns [of the parties], come under the heading
of ‘the interest of justice.’” Stewart Org., Inc. v. Ricoh
Corp., 487 U.S. 22, 30 (1988).
I. PUBLIC INTERESTS
The public factors to assess include “1) the local interest
in making local decisions about local controversies, 2) the
potential transferee court’s familiarity with applicable law, and
still not be proper in the Western District of Michigan. First,
some of the individual defendants stipulated to venue in the
District of Columbia. (Gov’t Opp’n at 3.) However, the
individual defendants have not moved under 28 U.S.C. § 1406(a) to
transfer for improper venue but rather have moved under 28 U.S.C.
§ 1404(a) to transfer in the interests of justice. Because
transfer under § 1404(a) could be appropriate even if venue in
this district is proper, the stipulation is immaterial.
Second, the government notes that a court in the Western
District of Michigan dismissed under the forum non conveniens
doctrine another action against defendant Toyobo, see German Free
State of Bavaria v. Toyobo Co., Ltd., 480 F. Supp. 2d 948, 957
(W.D. Mich. 2007), and speculates that there may be additional
procedural litigation if Toyobo moves to dismiss on those grounds
in the Western District of Michigan should the motion to transfer
be granted. (Gov’t Opp’n at 9-10 & n.7.) However, a forum non
conveniens dismissal has no bearing on whether venue was proper
in the dismissing jurisdiction, see id. at 951-52, and there is
no question that the FCA authorizes venue in the Western District
of Michigan. See 31 U.S.C. § 3732(a).
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3) the congestion of the transferee court compared to that of the
transferor court.” Demery v. Montgomery Cnty., Md., 602 F. Supp.
2d 206, 210 (D.D.C. 2009). All federal courts are presumed
equally familiar with the law governing the plaintiffs’ FCA
claims, and this factor does not weigh either for or against
transfer. See Montgomery, 532 F. Supp. 2d at 34.
The other two factors, however, weigh against transfer.
Since millions of dollars in allegedly false claims were
submitted in the District of Columbia (Gov’t Opp’n at 19), this
district has a significant interest in providing a forum for
these allegations of fraud. See Dooley v. United Techs. Corp.,
786 F. Supp. 65, 73 (D.D.C. 1992) (involving Racketeer Influenced
and Corrupt Organizations Act claims), abrogated on other grounds
by FC Inv. Grp. LC v. IFX Mkts., Ltd., 529 F.3d 1087, 1099 (D.C.
Cir. 2008). With respect to the third factor, there may be a
shorter median disposition time for cases in the Western District
of Michigan than for cases in this district. (See Defs.’ Mem. at
16 (comparing median disposition time of 26.4 months in the
Western District of Michigan to a median disposition time of 33.1
months in this district).) Nonetheless, the risk of injecting
unnecessary delay in resolving this case may be greater if this
seven-year-old case is transferred. This Court is familiar with
the multiple issues and lengthy procedural history of the case,
and decided Toyobo’s dispositive motions. Given the parties’
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voluminous filings, this experience is not insignificant, and a
court in the Western District of Michigan will likely require a
substantial amount of time to familiarize itself with the case.
See Savoy Indus., Inc., 587 F.2d at 1156 (affirming denial of
motion to transfer in part because of the delay that would arise
while the transferee court familiarized itself with the complex
case that the district court was already prepared to try); cf.
Devaughn v. Inphonic, Inc., 403 F. Supp. 2d 68, 73 (D.D.C. 2005)
(noting that “the case has not progressed so far that delay would
result if another court must familiarize itself with the disputed
facts or the procedural background”). Finally, to conserve
judicial resources, “[l]itigation of . . . related claims in the
same forum is strongly favored.” Islamic Republic of Iran v.
Boeing Co., 477 F. Supp. 142, 144 (D.D.C. 1979); see also SEC v.
Daly, Civil Action No. 05-55 (CKK), 2006 WL 6190699, at *5 n.1
(D.D.C. Feb. 11, 2006). Because there are four other related
cases pending before this Court, transferring this case would
allocate inefficiently scarce judicial resources. Thus, the
public factors weigh decidedly against transfer.
II. PRIVATE INTERESTS
The private factors to assess include
1) the plaintiff’s choice of forum, 2) the defendant’s
choice of forum, 3) where the claim arose, 4) the
convenience of the parties, 5) the convenience of the
witnesses, particularly if important witnesses may
actually be unavailable to give live trial testimony in
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one of the districts, and 6) the ease of access to
sources of proof.
Demery, 602 F. Supp. 2d at 210.
A. Forum choices
A plaintiff’s choice of forum is entitled to deference,
unless that forum has no meaningful relationship to the
plaintiffs’ claims or to the parties. See Veney v. Starbucks
Corp., 559 F. Supp. 2d 79, 84 (D.D.C. 2008). Because the United
States is the real party in interest in a qui tam action filed by
a relator, the United States’ choice of forum is entitled to
principal deference. See United States ex rel. Penizotto v.
Bates E. Corp., No. CIV.A. 94-3626, 1996 WL 417172, at *2 (E.D.
Pa. July 18, 1996) (surveying other courts). Here, the
government and the relator have chosen the same forum, as the
relator filed suit in this district and the government did not
disturb that choice when it elected to intervene. (Gov’t Opp’n
at 24; Pl.-Relator’s Opp’n at 5.) The individual defendants
carry a weighty burden to demonstrate that the plaintiffs’ forum
choice should be disturbed in favor of the individual defendants’
choice. Since there is at least some meaningful relationship
between the plaintiffs’ claims and the parties and this district,
see infra II(B), the individual defendants have not carried that
burden.
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B. Where the claims arose
The individual defendants argue that the plaintiffs’ claims
arose in Michigan because Second Chance was a Michigan
corporation, and it developed and tested its vests in Michigan.
(Defs.’ Mem. at 9.) Where “‘most of the relevant events occurred
elsewhere,’” deference to the plaintiff’s choice of forum is
weakened. Aftab v. Gonzales, 597 F. Supp. 2d 76, 80 (D.D.C.
2009) (quoting Hunter v. Johanns, 517 F. Supp. 2d 340, 344
(D.D.C. 2007)). However, the government alleges that multiple
aspects of the fraud took place outside of Michigan, including in
this district. Specifically, the government claims that
thousands of Second Chance vests were shipped to federal agencies
in Washington, D.C. resulting in approximately $1 million in
claims for payment. (Gov’t Opp’n at 19.) State, local, and
Indian law enforcement agencies submitted in this district to the
federal government over $12.5 million in claims for reimbursement
for vests purchased under the Bullet Proof Vest Grant Partnership
Act. (Id.; Am. Compl. ¶ 29.) Toyobo manufactured the Zylon
fiber in Second Chance vests in Tsuruga, Japan. (Am. Compl.
¶ 47.) Second Chance and Toyobo representatives met in Los
Angeles, California in 2001 to discuss a strategy to cope with
Zylon’s degradation and in Osaka, Japan in 2002, where Toyobo
asserted that further testing would prove that Zylon’s fiber
strength would stop deteriorating over time. (Am. Compl. ¶¶ 81,
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88.) Ultimately, while the parties do not allege that most of
the relevant events occurred in this district, neither do the
parties allege that most of the relevant conduct occurred in the
Western District of Michigan. In any event, the conduct that
gives rise to an FCA claim is filing a false claim for payment,
and this district was the locus for many such filings in this
case. This factor does not weigh in favor of transfer.
C. Convenience of the parties
A court may consider whether litigating in a particular
forum would cause a party to suffer a hardship, such as from
significant expense. Kotan v. Pizza Outlet, Inc., 400 F. Supp.
2d 44, 50 (D.D.C. 2005). The party requesting transfer should
provide documented proof of financial hardship. See Daly, 2006
WL 6190699, at *5. However, “‘[u]nless all parties reside in the
selected jurisdiction, any litigation will be more expensive for
some than for others.’” Kotan, 400 F. Supp. 2d at 50 (quoting
Moses v. Bus. Card Express, Inc., 929 F.2d 1131, 1139 (6th Cir.
1991)). Thus, for this factor to weigh in favor of transfer,
litigating in the transferee district must not merely shift
inconvenience to the plaintiffs, but rather should lead to an
overall increase in convenience for the parties. See Daly, 2006
WL 6190699, at *5.
The individual defendants assert that continuing to litigate
in this district “will translate into ever mounting expenditures
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for flights, hotel accommodations, food, and other miscellaneous
expenses[.]” (Defs.’ Mem. at 11.) In support of their argument,
the individual defendants cite defendant Bachner’s proof of claim
filed on December 1, 2009 in the Second Chance Bankruptcy action
in the Western District of Michigan. That proof of claim
estimated $1,000,000 in future legal fees for Bachner to defend
himself through trial and $40,000 in anticipated travel fees.
(Defs.’ Reply, Ex. 1 at 10.) The individual defendants base
their argument that continuing to litigate the case in this
district is prohibitively expensive on travel and miscellaneous
costs alone; they do not argue and have not provided evidence
that litigating in Michigan will reduce their legal fees. Since
the individual defendants’ estimated travel expenses make up only
a small fraction of the costs they expect to incur litigating the
suit in this district, they have not shown that transferring this
case will result in more than marginal relief from any financial
hardship they may be suffering. Thus, they have not shown that
transferring the case will lead to a net increase in convenience
for all parties. This factor, therefore, does not weigh in favor
of transfer.
D. Convenience of witnesses
When considering the convenience of witnesses, a court must
pay particular attention to whether important witnesses will be
available to give live trial testimony. Montgomery, 532 F. Supp.
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2d at 33. Because the FCA provides for nationwide service of
trial subpoenas, 31 U.S.C. § 3731(a), all prospective witnesses
will be available for trial in either district. A transferee
district, though, may be more convenient for witnesses even if
the witnesses would not be unavailable to testify in the
transferor district. Id. at 33 n.5. While the individual
defendants have identified seven trial witnesses for whom the
Western District of Michigan would represent a more convenient
forum (Defs.’ Mem. at 12-13), the plaintiffs have identified
twelve witnesses who live in the Washington, D.C. area and
another five witnesses who live in the Boston-Washington corridor
and for whom this district would represent a more convenient
forum in which to testify.5 (Gov’t Opp’n at 18; Ex. 3.) This
factor weighs against transfer.6
CONCLUSION AND ORDER
The individual defendants have not shown that a transfer to
the Western District of Michigan is in the interests of justice.
Accordingly, it is hereby
5
The individual defendants do not dispute that this
district will be more convenient for these witnesses. Instead
they argue that the government will be better able to afford to
transport these witnesses to the Western District of Michigan.
(Defs.’ Reply at 14.) This argument bears on the convenience of
the parties, not the convenience of the witnesses.
6
Neither party argues that either district provides easier
access to sources of proof.
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ORDERED that the individual defendants’ motion [237] to
transfer venue be, and hereby is, DENIED. It is further
ORDERED that the individual defendants’ motion [245] for a
hearing be, and hereby is, DENIED.
SIGNED this 24th day of March, 2011.
__________/s/_______________
RICHARD W. ROBERTS
United States District Judge