United States v. Honeywell International, Inc.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-0961 (PLF)
)
HONEYWELL INTERNATIONAL INC., )
)
Defendant. )
__________________________________________)

OPINION

Defendant Honeywell International Inc. (“Honeywell”) moves this Court pursuant

to 28 U.S.C. § 1292(b) to certify for interlocutory appeal its November 25, 2020 order denying

summary judgment. Defendant Honeywell International Inc.’s Motion for Certification

Under 28 USC § 1292(b) (“Def. Mot.”) [Dkt No. 235]. Plaintiff, the United States, opposes the

motion. United States of America’s Opposition to Honeywell’s Motion for Certification of the

Damages Part of the Court’s November 25, 2020 Order Pursuant to 28 U.S.C. §1292(b) (“Gov’t

Opp.”) [Dkt. No. 237]. Upon consideration of the parties’ written submissions, the relevant case

law, and the relevant portions of the record in this case, the Court will grant Honeywell’s

motion.1

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The documents considered in connection with the pending motion include:
Complaint (“Compl.”) [Dkt. No. 1]; First Amended Complaint (“Am. Compl.”) [Dkt. No. 163];
Defendant Honeywell International Inc.’s Motion for Summary Judgment (“Def. Mot. SJ”) [Dkt.
No. 204]; Memorandum in Support of Honeywell International Inc.’s Motion for Summary
Judgment (“Def. Mem. SJ”) [Dkt. No. 204]; The United States of America’s Opposition to
Honeywell International Inc.’s Motion for Summary Judgment (“Gov’t Opp. SJ”) [Dkt.
No. 209]; Reply in Support of Honeywell International Inc.’s Motion for Summary Judgment
 I. FACTUAL AND PROCEDURAL HISTORY

The United States brought this action against Honeywell under the False Claims

Act (“FCA”), 31 U.S.C. §§ 3729-33, and the federal common law of unjust enrichment. Compl.

¶ 1; Am. Compl. ¶ 1. The United States alleges that Honeywell made false statements and

omissions in relation to the sale of defective body armor containing a Honeywell product, Z

Shield, which was sold to the United States and to state, local, and tribal law enforcement

agencies funded in part by the United States. Compl. ¶ 1; Am. Compl. ¶ 1.

This action has been the subject of four prior opinions: United States v.

Honeywell Int’l Inc. (“Honeywell I”), 798 F. Supp. 2d 12 (D.D.C. 2011) (motion to dismiss);

United States v. Honeywell Int’l Inc. (“Honeywell II”), 841 F. Supp. 2d 112 (D.D.C. 2012)

(motion to strike); United States v. Honeywell Int’l Inc. (“Honeywell III”), 318 F.R.D. 202

(D.D.C. 2016) (motion for leave to amend complaint); United States v. Honeywell Int’l Inc.

(“Honeywell IV”), 502 F. Supp. 3d 427 (D.D.C. 2020) (motion for summary judgment). The

Court has previously recounted the factual and procedural history of this litigation, most recently

in its opinion denying Honeywell’s motion for summary judgment. See Honeywell IV, 502 F.

(“Def. Reply SJ”) [Dkt. No. 214]; Plaintiff United States of America’s Supplemental Brief
Requested By Order of This Court (“Gov’t Suppl. Br. SJ”) [Dkt. No. 221]; Honeywell
International Inc.’s Supplemental Brief (“Def. Suppl. Br. SJ”) [Dkt. No. 222]; Plaintiff United
States of America’s Sur-Reply to Honeywell’s Supplemental Brief (“Gov’t Surreply SJ”) [Dkt.
No. 224]; Defendant Honeywell International Inc.’s Motion for Certification Under 28 USC
§ 1292(b) (“Def. Mot.”) [Dkt No. 235]; Memorandum in Support of Honeywell International
Inc.’s Motion for Certification Under 28 USC § 1292(b) (“Def. Mem.”) [Dkt. No. 235]; United
States of America’s Opposition to Honeywell’s Motion for Certification of the Damages Part of
the Court’s November 25, 2020 Order Pursuant to 28 U.S.C. §1292(b) (“Gov’t Opp.”) [Dkt.
No. 237]; Reply Memorandum in Support of Honeywell International Inc.’s Motion for
Certification Under 28 USC § 1292(b) (“Def. Reply”) [Dkt. No. 238]; and April 19, 2021 Joint
Status Report (“April 19, 2021 Joint Status Report”) [Dkt. No. 242].

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Supp. 3d, at 434-47. The Court therefore will limit its discussion here to the issues presented by

Honeywell’s motion pursuant to 28 U.S.C. § 1292(b).

On June 7, 2019, after the close of discovery, Honeywell moved for summary

judgment, arguing that the United States could not succeed at trial under any theory of FCA

liability or unjust enrichment and that there was no genuine dispute as to any material fact. See

Def. Mot. SJ at 1. As relevant to this present motion, Honeywell argued that it was entitled to a

pro tanto offset, or “dollar-for-dollar reduction,” of its FCA statutory damages liability, based on

amounts the United States had received through settlements with other defendants for common

damages. Def. Mem. SJ. at 47. Honeywell contended that a pro tanto offset would entitle it to

summary judgment, because the amount the United States had received through such settlements

was greater than the amount of Honeywell’s alleged FCA statutory damages liability, resulting in

“no statutory damages left to be determined at trial.” Id. at 50. The United States argued in

response that the Court should apply the proportionate share methodology for calculating

damages offsets, whereby “each defendant must pay its proportionate share of the damages as

determined by the fact finder at trial.” Gov’t Opp. SJ at 45. Under the proportionate share

approach, summary judgment would be inappropriate because the fact finder would still need to

calculate Honeywell’s proportionate share of common damages. See id. at 46.

On November 25, 2020, the Court issued its opinion and order denying

Honeywell’s motion for summary judgment. Honeywell IV, 502 F. Supp. 3d 427; Nov. 25, 2020

Order [Dkt. No. 232]. With respect to the measure of damages, the Court determined that the

proportionate share approach to calculating damages offsets applies in an FCA case involving

multiple alleged joint tortfeasors, and therefore, that a factual question remains as to

Honeywell’s FCA statutory damages liability. Honeywell IV, 502 F. Supp. 3d, at 485-86.

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 On December 18, 2020, Honeywell moved pursuant to 28 U.S.C. § 1292(b) to

certify for interlocutory appeal the Court’s November 25, 2020 order denying summary

judgment on the grounds that the proportionate share approach governs damages offsets. Def.

Mot. at 1. On January 6, 2021, the United States filed its memorandum of law opposing

interlocutory appeal, and on January 19, 2021, Honeywell filed its reply in support of

certification. Gov’t Opp.; Def. Reply.

II. LEGAL STANDARD

Section 1292(b) provides:

When a district judge, in making in a civil action an order not
otherwise appealable under this section, shall be of the opinion that
such order involves a controlling question of law as to which there
is substantial ground for difference of opinion and that an immediate
appeal from the order may materially advance the ultimate
termination of the litigation, he shall so state in writing in such order.

28 U.S.C. § 1292(b). This provision represents a departure from the “basic policy of postponing

appellate review until after the entry of a final judgment,” Coopers & Lybrand v. Livesay, 437

U.S. 463, 475 (1978) (citations omitted), and provides “an avenue for review” of certain nonfinal

orders “in appropriate cases,” Van Cauwenberghe v. Biard, 486 U.S. 517, 530 (1988).

Pursuant to Section 1292(b), the district court may certify an order for immediate

appeal if it makes the following three findings: “(1) the order involves a controlling question of

law; (2) a substantial ground for difference of opinion concerning the ruling exists; and (3) an

immediate appeal would materially advance [the ultimate termination of] the litigation.” Molock

v. Whole Foods Mkt. Grp., 317 F. Supp. 3d 1, 4 (D.D.C. 2018) (quoting APCC Servs., Inc. v.

Sprint Commc’ns Co., 297 F. Supp. 2d 90, 95 (D.D.C. 2003)). Interlocutory appeal is only

appropriate if all three requirements are satisfied. See Swint v. Chambers Country Comm’n, 514

U.S. 35, 46 (1995) (“[Section] 1292(b)[] accord[s] the district courts circumscribed authority to

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certify for immediate appeal interlocutory orders deemed pivotal and debatable.”); Walsh v. Ford

Motor Co., 807 F.2d 1000, 1002 n.2 (D.C. Cir. 1986) (stating that the district court must make all

three findings described in the statute). “This screening procedure serves the dual purpose of

ensuring that [interlocutory] review will be confined to appropriate cases and avoiding

time-consuming jurisdictional determinations in the court of appeals.” Coopers & Lybrand v.

Livesay, 437 U.S. at 461.

A. Controlling Question of Law

The first requirement of Section 1292(b) is that the order contain “a controlling

question of law.” “A ‘question of law is an abstract legal issue or what might be called one of

‘pure’ law, matters the court of appeals can decide quickly and cleanly without having to study

the record.’” Arias v. DynCorp, 856 F. Supp. 2d 46, 53-54 (D.D.C. 2012) (quoting Elkins v.

District of Columbia, 685 F. Supp. 2d 1, 8 n.2 (D.D.C. 2010)). Where “the crux of an issue

decided by the Court is fact-dependent,” however, certification is inappropriate as this “could

only result in the court of appeals improperly wading into the factual pond of an ongoing

matter.” Keystone Tobacco Co. v. U.S. Tobacco Co., 217 F.R.D. 235, 238-39 (D.D.C. 2003).

The requirement that an issue be “controlling” means that a ruling on that issue

“would require reversal if decided incorrectly or [] could materially affect the course of [the]

litigation with resulting savings of the court’s or the parties’ resources.” Molock v. Whole Foods

Mkt. Grp., 317 F. Supp. 3d at 4 (quoting Jud. Watch, Inc. v. Nat’l Energy Pol’y Dev. Grp., 233

F. Supp. 2d 16, 19 (D.D.C. 2002)). “[T]he resolution of an issue need not necessarily terminate

an action in order to be controlling, but instead may involve a procedural determination that may

significantly impact the action.” Air Transp. Ass’n v. U.S. Dep’t of Agric., 317 F.

Supp. 3d 385, 394 (D.D.C. 2018) (quoting APCC Servs., Inc. v. Sprint Commc’ns Co., 297 F.

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Supp. 2d at 96). “The impact that the appeal will have on other cases is also a factor supporting

a conclusion that the question is controlling.” APCC Servs., Inc. v. Sprint Commc’ns Co., 297

F. Supp. 2d at 96.

B. Substantial Ground for Difference of Opinion

The second requirement of Section 1292(b), “substantial ground for difference of

opinion,” is “often established by a dearth of precedent within the controlling jurisdiction and

conflicting decisions in other circuits,” and “also exists where a court’s challenged decision

conflicts with the decisions of several other courts.” APCC Servs., Inc. v. Sprint Commc’ns

Co., 297 F. Supp. 2d at 97-98; see also Gov’t of Guam v. United States, No. 17-cv-2487, 2019

WL 1003606, at *5 (D.D.C. Feb. 28, 2019) (finding substantial ground for difference of opinion

where “there is no controlling precedent from the D.C. Circuit” and “the other courts of appeals

that have analyzed this issue are split”). “A mere claim that the district court’s ruling was

incorrect does not demonstrate a substantial ground for difference of opinion.” Singh v. George

Washington Univ., 383 F. Supp. 2d 99, 104 (D.D.C. 2005) (quotation marks omitted).

“It is not necessarily enough, however, that there are conflicting decisions in other

circuits.” Molock v. Whole Foods Mkt. Grp., 317 F. Supp. 3d at 5. Similarly, “[t]he mere fact

that a substantially greater number of judges have resolved the issue one way rather than another

does not, of itself, tend to show that there is no ground for difference of opinion.” APCC Servs.,

Inc. v. Sprint Commc’ns Co., 297 F. Supp. 2d at 98 (emphasis added) (quoting In Re Vitamins

Antitrust Litig., Misc. No. 99-197, MDL No. 1285, 2000 WL 33142129, at *2 (D.D.C.

Nov. 22, 2000)). Rather, in addition to considering prior decisions, a court “must analyze the

strength of the arguments in opposition to the challenged ruling.” Molock v. Whole Foods Mkt.

Grp., 317 F. Supp. 3d at 5 (quoting APCC Servs., Inc. v. Sprint Commc’ns Co., 297 F. Supp. 2d

6
at 98). If “the arguments in favor of each parties’ position . . . are not without merit,” a court

may conclude that “the issue is truly one on which there is a substantial ground for dispute.”

Nat’l Veterans Legal Servs. Program v. United States, 321 F. Supp. 3d 150, 155 (D.D.C. 2018).

C. Materially Advance the Ultimate Termination of the Litigation

To satisfy the third requirement of Section 1292(b), that “immediate appeal from

the order may materially advance the ultimate termination of the litigation,” the moving party

must show that “reversal would hasten or at least simplify the litigation in some material way,

such as by significantly narrowing the issues, conserving judicial resources, or saving the parties

from needless expense.” Molock v. Whole Foods Mkt. Grp., 317 F. Supp. 3d at 6. Although the

movant need not show that reversal would end the litigation, it must identify an impact on the

proceeding that is more than merely speculative. See Molock v. Whole Foods Mkt. Grp., 317 F.

Supp. 3d at 6; cf. Keystone Tobacco Co., Inc. v. U.S. Tobacco Co., 217 F.R.D. at 239 (“A

possible impact on case strategy . . . is too intangible a repercussion on the progress of a case to

justify certification of interlocutory appeal.”).

D. Certification Appropriate as a Discretionary Matter

Even where the district court “confirm[s] that the moving party has satisfied all of

the elements of section 1292(b) . . . it must also conclude that certification is appropriate as a

discretionary matter.” Azima v. RAK Inv. Auth., 325 F. Supp. 3d 30, 35 (D.D.C. 2018). The

party seeking certification must overcome the “strong congressional policy against piecemeal

reviews” by showing that “exceptional circumstances justify a departure from the basic policy of

postponing appellate review until after the entry of final judgment.” Citizens for Resp. & Ethics

in Wash. v. Am. Action Network, 415 F. Supp. 3d 143, 144-45 (D.D.C. 2019) (quoting Jud.

Watch, Inc. v. Nat’l Energy Pol’y Dev. Grp., 233 F. Supp. 2d at 20; Coopers & Lybrand v.

7
Livesay, 437 U.S. at 475); see also Tolson v. United States, 732 F.2d 998, 1002 (D.C.

Cir. 1984) (“Section 1292(b) ‘is meant to be applied in relatively few situations and should not

be read as a significant incursion on the traditional federal policy against piecemeal appeals.’”

(quoting 10 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL

PRACTICE AND PROCEDURE § 2658.2, at 80 (2d ed. 1983))).

E. Court of Appeals Review

Once a district court certifies a nonfinal order for interlocutory review, “[a] court

of appeals may then, in its discretion, determine whether the order warrants prompt review.”

Van Cauwenberghe v. Biard, 486 U.S. at 530; see also Walsh v. Ford Motor Co., 807 F.2d

at 1002 n.2 (“The decision whether to grant an interlocutory appeal from an order of a district

court under § 1292(b) is within the discretion of the court of appeals.”). “[T]he appellate court

may address any issue fairly included within the certified order because it is the order that is

appealable, and not the controlling question identified by the district court.” Yamaha Motor

Corp. v. Calhoun, 516 U.S. 199, 205 (1996) (quotation marks omitted).

III. DISCUSSION

Honeywell argues that interlocutory appeal is warranted because (1) the method

of calculating damages offsets in an FCA case is a question of law that would require reversal if

decided incorrectly; (2) there is an acknowledged difference of opinion between judges in this

district regarding the method of calculating damages offsets in an FCA case; and (3) a ruling by

the D.C. Circuit requiring application of the pro tanto methodology would reduce Honeywell’s

FCA statutory damages to zero, narrowing the areas of dispute for trial and avoiding the need to

litigate the relative fault of parties that have already reached settlements with the United States.

Def. Mem. at 1-2.

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 The United States responds that (1) Honeywell fails to establish a controlling

question of law because it does not show specific cost or time savings that would result from a

D.C. Circuit ruling in its favor; (2) Honeywell does not show substantial ground for difference of

opinion because Honeywell fails to address the concerns underlying this Court’s prior conclusion

that the proportionate share approach should apply; and (3) interlocutory appeal would not

materially advance the ultimate termination of the litigation because, even if the pro tanto

approach applies and Honeywell’s FCA statutory damages reduce to zero, the same causes of

action would remain and the same issues of relative fault would be disputed at trial. Gov’t Opp.

at 2, 9-19. The United States emphasizes that in any event, it would still be entitled to FCA

penalties, and its federal common law unjust enrichment cause of action against Honeywell

would be unaffected by reversal on the method of calculating damages offsets. Id. at 1, 10-11.

A. The Order Concerns a Controlling Question of Law

1. Honeywell Has Identified a Question of Law

The Court agrees that the issue on which Honeywell seeks interlocutory appeal

involves a question of law. The appropriate method for calculating damages offsets is the

quintessential “abstract legal issue” that “the court of appeals can decide quickly and cleanly

without having to study the record.” Arias v. DynCorp, 856 F. Supp. 2d at 53-54. This is clear

from the fact that in concluding that the proportionate share methodology applies, the Court

analyzed existing case law concerning the measure of damages offsets and considered, in the

abstract, which approach is most likely to promote settlement and serve the interests of judicial

economy, equity, and practicality. See Honeywell IV, 502 F. Supp. 3d at 480-86. In contrast to

other sections of the Court’s opinion denying summary judgment, this section included almost no

discussion of the facts of this case. See id. The Court’s conclusions were not grounded in how

9
either method would likely play out in this particular case. See id.; cf. Keystone Tobacco Co.,

Inc. v. U.S. Tobacco Co., 217 F.R.D. at 238-39 (“Where the crux of an issue decided by the

Court is fact-dependent, the Court has not decided ‘a controlling question of law’ justifying

immediate appeal). Honeywell does not seek to appeal the Court’s rulings regarding the

existence of any issue of material fact to be determined at trial; it instead seeks review of the

Court’s conclusion that the proportionate share methodology will govern its financial obligation

in this case. See Def. Mem. at 1-2. Honeywell has identified a question of law.

2. The Question is Controlling

The measure of damages offsets is controlling because the Court’s ruling

requiring application of the proportionate share methodology plainly “would require reversal if

decided incorrectly.” In Re Vitamins Antitrust Litig., 2000 WL 33142129, at *1. In addition, if

the D.C. Circuit determines that the pro tanto methodology applies, this would also undercut the

Court’s conclusion that summary judgment was not warranted on the issue of damages, because

this conclusion depended on the fact that “proportionate fault has not been adjudicated, [and] a

question of fact remains.” Honeywell IV, 502 F. Supp. 3d at 485-86. Under the pro tanto

approach, it would not be necessary to adjudicate Honeywell’s proportionate fault. See id.

Because this Court found that under the pro tanto approach “the damages amount for which

Honeywell may be responsible, after offsets, reduces to zero ($0),” reversal on appeal could

eliminate the need to adjudicate further factual questions concerning Honeywell’s FCA statutory

damages liability. Id. at 480.

Other judges within this district have also treated issues pertaining to the measure

of damages as “controlling” for purposes of Section 1292(b) certification. See Nat’l Veterans

Legal Servs. Program v. United States, 321 F. Supp. 3d at 153-54 (stating that a ruling that

10
determined whether and in what amount a party faced financial liability “would require reversal”

if incorrect); In re Korean Air Lines Disaster of Sept. 1, 1983, 935 F. Supp. 10, 16

(D.D.C. 1996), aff’d, 117 F.3d 1477 (D.C. Cir. 1997) (authorizing interlocutory appeal on

plaintiffs’ right to recover damages for mental anguish and grief pursuant to 28 U.S.C. § 764

under Korean law). In addition, as Honeywell points out, the D.C. Circuit has accepted

interlocutory appeals on the availability of disgorgement as a remedy, providing further support

for the proposition that questions of law concerning available damages are “controlling” within

the meaning of Section 1292(b). See Lewis v. Pension Benefit Guar. Corp., 912 F.3d 605, 609

(D.C. Cir. 2018) (accepting interlocutory appeal pursuant to Section 1292(b) on the availability

of disgorgement); United States v. Philip Morris USA, Inc., 396 F.3d 1190, 1197 (D.C.

Cir. 2005) (same)).2

The United States responds primarily by asserting that Honeywell has not

identified “any cost or time savings from witnesses it would not call or documents it would not

use at trial, if the D.C. Circuit ruled in its favor,” Gov’t Opp. at 17, but no such showing is

required under the first prong of Section 1292(b). Nor is it credible to suggest that “the litigation

would be conducted in the same way” using the proportionate share method as it would be using

the pro tanto method. See id. (quoting 16 CHARLES ALAN WRIGHT, ARTHUR R. MILLER &

2
Honeywell also cites to Castellanos-Contreras v. Decatur Hotels, LLC, 622
F.3d 393 (5th Cir. 2010). The Court does not find this case instructive. The question certified
for interlocutory appeal in Castellanos-Contreras was whether federal law required employers to
reimburse workers for certain expenses. Id. at 397. If federal law required such reimbursements,
employers who failed to provide reimbursements would have violated the Fair Labor Standards
Act by effectively reducing wages below minimum wage. Id. The Fifth Circuit did rule that
“whether such expenses are, as a category, reimbursable is a legal question that can properly be
the subject of interlocutory review” pursuant to Section 1292(b). Id. at 399. This determination
did not, however, relate to the measure of damages and is not analogous to the issue on which
Honeywell seeks interlocutory appeal.
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EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3930 (3d ed. 2020)). As discussed

further in Section III(C), infra, if the pro tanto method governs and Honeywell’s statutory

damages reduce to zero, the jury would be left to adjudicate the United States’ unjust enrichment

claim and to determine the number of FCA violations for which penalties may be awarded. See

Gov’t Opp. at 1, 10; Def. Reply at 8. If the jury determines that FCA violations did occur, the

Court would set the FCA penalty level from within the statutorily prescribed range and multiply

that dollar amount by the number of violations. Cook County, Ill. v. United States ex rel.

Chandler, 538 U.S. 119, 132 (2003) (stating that if the jury finds FCA liability, “the court alone

sets any separate penalty”)); see, e.g., United States ex rel. Miller v. Bill Harbert Int’l Construct.,

Inc. (“Miller I”), 501 F. Supp. 2d 51, 58 (D.D.C. 2007) (calculating FCA penalties by

multiplying the number of penalties identified by the jury by the $10,000 penalty level set by the

court). There would be no need for either the jury or the Court to resolve factual questions

regarding Honeywell’s degree of proportionate fault as compared to other parties who settled

previously. The pro tanto methodology therefore would significantly narrow the issues and

streamline subsequent proceedings in this case.

B. There is Substantial Ground for Difference of Opinion

Honeywell argues that the second requirement of Section 1292(b) is satisfied

because “[n]either the Supreme Court nor the D.C. Circuit has opined as to whether the pro tanto

or proportionate share approach applies to FCA cases involving multiple joint tortfeasors.” Def.

Mem. at 9. In addition, Honeywell maintains that “[t]he only other case in this District to

consider the issue,” Judge Lamberth’s decision in Miller v. Holzmann (“Miller II”), 563 F.

Supp. 2d 54 (D.D.C. 2008), “applied the pro tanto approach.” Def. Mem. at 9. Honeywell

reasons that in parting ways with Miller II, this Court created an “intra-circuit split,” and that

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certifying interlocutory appeal “will allow the D.C. Circuit an opportunity to weigh in on a

question of first impression for the Circuit.” Id. at 9-10. The Court agrees.

The only argument the United States makes in response is that “this Court has

already analyzed the legal arguments advanced by Honeywell and reached the right result” in

determining that the proportionate share approach should apply. Gov’t Opp. at 19. The United

States asks the Court to conclude that because the Supreme Court in McDermott, Inc. v.

AmClyde, 511 U.S. 202 (1994), found the proportionate share approach superior to the pro tanto

approach, and because McDermott is not limited to the admiralty context as Honeywell suggests,

there can be no substantial ground for difference of opinion. Id. at 20-21, 24. This argument,

however, merely reiterates this Court’s analysis and its reliance on McDermott. While the Court

continues to believe that it reached the correct conclusion, the United States’ response does not

grapple with the fact that there is an intra-circuit split on an important question of law.

This Court embraced the proportionate share approach as “superior,” McDermott,

Inc. v. AmClyde, 511 U.S. at 217, but the fact remains that “there is no decision from the D.C.

Circuit endorsing either the pro tanto or the proportionate share approach in FCA cases.”

Honeywell IV, 502 F. Supp. 3d at 481. In his post-McDermott decision in Miller II, Judge

Lamberth applied the pro tanto rule in an FCA case, reasoning that it “‘remains a viable

alternative’ in non-admiralty cases.” Id. (quoting Miller II, 563 F. Supp. 2d at 144 n.143). In

addition, some district courts outside the D.C. Circuit have applied a pro tanto methodology in

FCA cases. See Def. Mem. at 10 (citing U.S. ex rel. Bunk v. Birkart Globistics GmbH & Co.,

Civil Action No. 02-1168, 2011 WL 5005313, at *16 (E.D. Va. Oct. 19, 2011); and United States

13
v. Zan Mach. Co., 803 F. Supp. 620, 624 (E.D.N.Y. 1992)).3 In other words, there is no

controlling precedent on this precise question of law, and there are conflicting decisions by

district court judges, including within this district.

The Court also agrees that the measure of damages offsets in an FCA case is

“truly [an issue] on which there is a substantial ground for dispute” and that “the arguments in

support of” applying the pro tanto approach “are not insubstantial.” APCC Servs., Inc. v. Sprint

Commc’ns Co., L.P., 297 F. Supp. 2d at 98. While the Court has concluded that the

proportionate share approach would, on balance, produce a more equitable result, it

acknowledges that concerns related to overcompensating the United States could weigh in favor

of the pro tanto approach. See Honeywell IV, 502 F. Supp. 3d at 483-85. Similarly, although

the Supreme Court in McDermott deemed the proportionate share approach “superior,” it

observed that “the arguments for the two approaches are closely matched.” McDermott, Inc. v.

AmClyde, 511 U.S. at 217. The justifications for applying the pro tanto methodology therefore

cannot be wholly “without merit.” Nat’l Veterans Legal Servs. Program v. United States, 321 F.

Supp. 3d at 155.

The United States maintains that Honeywell has failed to account for the

considerations underlying the Court’s determination in its opinion on summary judgment that

neither judicial economy nor promotion of settlement clearly favor the pro tanto methodology.

Gov’t Opp. at 18-19 (quoting Honeywell IV, 502 F. Supp. 3d, at 486). Yet this is an argument

3
This Court has explained previously that Bunk is distinguishable and not
instructive in determining which methodology should apply in this case, because the court in
Bunk reduced a group of defendants’ share of damages based on a credit for that group’s own
payments, not for payments made by others. Honeywell IV, 502 F. Supp. 3d at 482. This case
nonetheless arguably shows a degree of variation among courts regarding the methodology for
calculating damages offsets in an FCA case.
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for why this Court decided the issue correctly, not an argument against certification. In

evaluating the second prong of Section 1292(b), a court “must analyze the strength of the

arguments in opposition to the challenged ruling to decide whether the issue is truly one on

which there is a substantial ground for dispute.” APCC Servs., Inc. v. Sprint Commc’ns Co.,

L.P., 297 F. Supp. 2d at 98 (emphasis added). To successfully argue that there is no substantial

ground for dispute, the United States would need to show that the arguments that favor the pro

tanto methodology lack strength. It has not done so.

The Court remains unpersuaded by the argument Honeywell advances for

applying the pro tanto approach; it “has not faltered in its abiding belief” that the proportionate

share approach is most suitable in an FCA case. Gov’t of Guam v. United States, 2019

WL 1003606, at *5. Nonetheless, “given [Judge Lamberth’s] opposing view” in Miller II, as

well as the considerations discussed above, “there unquestionably exists substantial ground for

different interpretations.” Id. Reasonable jurists can, and do, disagree.

C. Immediate Appeal May Materially Advance the Ultimate Termination of the Litigation

Honeywell argues that a D.C. Circuit ruling requiring application of the pro tanto

methodology would eliminate “the need to litigate comparative fault,” and the “complex pre-trial

proceedings aimed at establishing how the proportionate share approach will be applied and what

evidence can be admitted to establish proportionate fault.” Def. Mem. at 11. Honeywell

elaborates that “reversal would obviate the need to delve into certain aspects of DOJ’s monetary

harm at trial, including evidence related to DOJ’s vest expenditures and the value received by

DOJ from Z Shield containing vests,” and would “streamline the testimony and exhibits at trial.”

Def. Reply at 8.

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 The United States responds that even if the D.C. Circuit were to rule that the pro

tanto method applies, this “would not eliminate a single cause of action or defendant[,] much

less end the case.” Gov’t Opp. at 10. According to the United States, “the federal common law

of unjust enrichment cause of action would be unaffected” and “all of the FCA causes of action

would remain as to the mandatory penalty per false claim.” Id. The United States contends that

in litigating these remaining components of the case, “Honeywell will still have every incentive

to blame other potential wrongdoers . . . for problems with Honeywell’s patented Z Shield

ballistic-resistant material.” Id. at 10-11. Finally, the United States maintains that “this case is

close to trial and therefore in a poor procedural posture for an interlocutory appeal.” Id. at 12.

The Court agrees with Honeywell that reversal on appeal would narrow the issues

to be resolved at trial. If this case were to proceed under the proportionate share approach,

Honeywell would be entitled to “‘a credit’ for each settling defendant’s ‘proportionate share of

responsibility for the total obligation,’ which is based on each defendant’s degree of fault.”

Honeywell IV, 502 F. Supp. 3d at 480 (quoting McDermott, Inc. v. AmClyde, 511 U.S. at 210).

Before proportionate share offsets could be calculated, therefore, the jury would need to

determine “Honeywell’s proportionate share of fault as compared to prior settling defendants.”

Def. Suppl. Br. SJ at 6; see also Gov’t Suppl. Br. SJ at 4 (“That credit [that Honeywell would

receive under the proportionate share approach] is determined by the percentage of fault

attributed to the settling defendants.”). In other words, at trial, the jury would need to consider

and reach a conclusion on the extent to which the United States’ alleged overpayment for Z

Shield-containing vests resulted from Honeywell’s alleged statements and omissions, versus

those of other settling parties. See Def. Mem. at 2.

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 If the D.C. Circuit reverses and directs this Court to apply the pro tanto

methodology, by contrast, “there will be no need to determine” Honeywell’s share of

comparative fault. Nat’l Veterans Legal Servs. Program v. United States, 321 F. Supp. 3d

at 154. The Court has already found that under the pro tanto approach, the United States’

damages amount to $34,922,273, while the other settling defendants have already compensated

the United States $36,042,241 for common damages. See Honeywell IV, 502 F. Supp. 3d

at 479-80. As a result, the United States has received more from other settling defendants than

the amount Honeywell would owe under the pro tanto approach, and therefore, Honeywell’s

FCA statutory damages after offsets would reduce to zero. Id. at 480.

If Honeywell’s FCA statutory damages reduce to zero, the parties would be left to

litigate FCA penalties and the United States’ common law unjust enrichment claim. See Gov’t

Opp. at 1, 10; Def. Reply at 8; see also Def. Mem. SJ at 46 n.14. To resolve the unjust

enrichment claim, the jury would need to determine the amount, if any, by which Honeywell has

been enriched as a result of the United States’ indirect payments to Armor Holdings for Z Shield

Vests. See Am. Compl. ¶¶ 144-45; Honeywell IV, 502 F. Supp. 3d at 485-87. This inquiry

would focus on the transfer of value from the United States to Honeywell, rather than on

Honeywell’s share of fault.

With respect to FCA penalties, the jury would need to adjudicate whether some

number of FCA violations occurred. See United States v. Bornstein, 423 U.S. 303, 313 (1976)

(holding that the statutory penalty is multiplied by the number of acts in violation of the FCA);

U.S. ex rel. Schwedt v. Planning Research Corp., 59 F.3d 196, 199 (D.C. Cir. 1995) (“Each

individual false claim or statement triggers the statute’s civil penalty.”). The jury’s inquiry

would be twofold: whether Honeywell caused false claims to be submitted in violation of the

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FCA, and if so, the number of such false claims. See 31 U.S.C. § 3729(a)(1); U.S. ex rel.

Schwedt v. Planning Research Corp., 59 F.3d at 199. Based on these findings, the Court would

set the level of FCA penalties from within the statutory range and multiply that dollar figure by

the number of false claims. See 31 U.S.C. § 3729(a)(1); Cook County, Ill. v. United States ex

rel. Chandler, 538 U.S. at 132 (“[I]f [the jury] finds liability . . . the court alone sets any separate

penalty.”)); Miller I, 501 F. Supp. 2d at 56 (“The determination of the amount of the statutory

civil penalties rests within the discretion of the district court.”).

Neither of the issues that would remain for resolution, therefore, requires a

determination concerning Honeywell’s proportionate fault alongside that of other settling

defendants. Even if applying the pro tanto methodology “would not eliminate a single cause of

action or defendant,” Gov’t Opp. at 10, it would remove the need to litigate comparative fault

and to adjudicate an entire category of damages, and would “significantly alter the issues to be

addressed” at trial, Nat’l Veterans Legal Servs. Program v. United States, 321 F. Supp. 3d at 155.

The United States suggests that appeal could “take far more time . . . than simply

finishing trial preparation and proceeding to trial.” Gov’t Opp. at 12. Yet as Honeywell points

out, “[t]here is no pre-trial schedule.” Def. Reply at 9. While a gradual resumption of jury trials

is underway in this district, following the massive disruption caused by the global COVID-19

pandemic, priority is being given to criminal trials and it is uncertain when a trial in this case

could in fact proceed. See In re: Fifth Extension of Authorization for Use of Video

Teleconferencing and Teleconferencing for Certain Criminal and Juvenile Delinquency

Proceedings, Standing Order No. 21-33 (BAH) (June 11, 2021); In re: Limited Resumption of

Criminal Jury Trials in Light of Current Circumstances Relating to the COVID-19 Pandemic,

Standing Order No. 21-10 (BAH) (Mar. 5, 2021). Indeed, the parties themselves have proposed

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that a trial in this case would not commence sooner than February 2, 2022. See Apr. 19, 2021

Joint Status Report at 1.

D. Immediate Appeal is Appropriate as a Discretionary Matter

For many of the same reasons discussed in the preceding section, the Court

concludes that interlocutory appeal is appropriate as a discretionary matter. The potential

savings in terms of time and judicial and party resources are substantial. The potential delay is

less significant, given the procedural posture of this case and the likely time that must elapse

before a trial can commence. If the D.C. Circuit agrees with this Court that the proportionate

share approach applies, Honeywell could owe the United States millions of dollars in FCA

statutory damages. If the D.C. Circuit reverses on this question of law, however, Honeywell’s

FCA statutory damages obligation would reduce to zero dollars. Given the extent to which an

appellate ruling may alter Honeywell’s financial obligation this case, the Court is satisfied that

“exceptional circumstances justify a departure from the basic policy of postponing appellate

review until after the entry of final judgment.” Citizens for Resp. & Ethics in Wash. v. Am.

Action Network, 415 F. Supp. 3d at 144-45 (quoting Coopers & Lybrand v. Livesay, 437 U.S.

at 475).

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 IV. CONCLUSION

For the foregoing reasons, the Court will grant Defendant Honeywell

International Inc.’s Motion for Certification Under 28 USC § 1292(b) [Dkt No. 235]. An order

consistent with this opinion will issue this same day.

SO ORDERED.

/s/

PAUL L. FRIEDMAN
United States District Judge
DATE: June 18, 2021

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