Justice Department gets long extension to perform e-discovery duties that Honeywell says it abysmally failed

In recent motions filed in the US District Court in Washington, DC, Honeywell leveled a severe attack against the Justice Department for an array of e-discovery failures. The defense contractor requested the imposition of sanctions, including hefty monetary sanctions to cover the expenses it says it incurred unnecessarily.

 

Federal magistrate Judge John Facciola, an expert in e-discovery, was recently appointed by US district Judge Richard W. Roberts to resolve the contentious discovery issues that Honeywell has raised.  

 

On Aug. 4, three days after Facciola was appointed, Roberts extended the deadline for the parties to exchange discovery until June 22, 2012. It was the sixth time Roberts has amended the scheduling order in the case.

 

 

The False Claims Act case revolves around allegations that Honeywell knowingly misrepresented the quality of the “Z Shield” body armor it sold to federal law enforcement agencies between 2001 and 2005.

 

In a motion to compel production and impose sanctions that Honeywell’s Washington lawyers, Kirkland Ellis, filed July 20, the government is accused of producing 121,000 electronic documents and the evidence of key witnesses belatedly and after much effort by the company. The government contractor and industrial giant also accuses the US of withholding favorable results of body armor testing and producing irrelevant and inappropriate office banter. Honeywell says the government “failed to abide by even the most basic discovery obligations.”

 

In its court papers, Honeywell says the “United States must play by the same rules that apply to all civil litigants in federal court.”  

 

 

Joel Androphy, an attorney who specializes in False Claims Act cases at Berg & Androphy in Houston, says the government has improved and increased the technology it needs to handle e-discovery in large cases, like Honeywell, that involve millions of e-documents. The problem, he says, however, are the scarce personnel resources that the government can command in these cases.

 

“It’s appalling how few lawyers the Department of Justice has,” he said, adding that the government could recover billions of dollars in False Claims Act cases simply by hiring a hundred more attorneys.

 

“A year [of a delay in completing discovery] seems to be off the deep end. It sounds to me like the government doesn’t have the staff. So the message is, ‘We’re busy, we’ll get to it eventually,’” Androphy continued. “It’s a lack of personnel, not competence.”  

 

In a July 28 motion to extend the discovery deadline, the DOJ said it had produced more than 550,000 documents since the case was filed and a three-million-page collection of paper and electronic communications that came from 36 federal agencies and 45 third parties. The government has four lawyers on the case.

 

 

“The problem is that there are too many cases and not enough government prosecutors," said Phillip Benson, a False Claims specialist at Warren Benson Law Group in San Diego. “The government has really tried to keep pace with the technology of e-discovery, and has been highly effective. But the growth of the number of lawyers hasn’t kept pace with the number of cases, and the size of the cases has ballooned as well.”

 

Michael Rosenblat, a Chicago attorney at Rosenblat & Associates, noted that the Justice Department often leverages the resources of the law firm that represents the whistleblower in False Claims Act, or “qui tam,” litigation. In those cases, a person not affiliated with the government files a case alleging fraud against the government on behalf of the government. The government sued Honeywell on its own after whistleblowers filed against other companies on similar grounds involving body armor.

 

Honeywell derive substantial benefits from its relationship with the government, having received $4.3 billion in government contracts since the start of 2010. Honeywell's resources, Benson says, as with those of other defense contractors, far exceed those of most private litigants and certainly those of the government.

 

 

“From what I’ve seen, big defense contractors don’t hold back on spending, especially when they have large exposure,” Benson said.

 

In its complaint, the Justice Department alleges that federal agencies purchased $20 million of defective body armor from Honeywell, a relatively small amount in the overall scheme of things. It is seeking to recover that amount in addition to civil penalties, statutory damages and interest.

 

Benson indicated that the Justice Department conducts a cost-benefit analysis to see if litigation is worth pursuing in cases like these.

 

Androphy said the government’s primary obligation is to expose fraud and seek justice. “If there’s a fraud, you can’t just ignore it, even if it’s a million dollar case,” he said.

 

 

According to Androphy, the government must also contend with multiple “firewalls” in its discovery procedures. Each federal agency has its own rules, bureaucracy and methods of producing information. Simply coordinating between agencies produces delays, he says.

 

Actually enforcing data production by those under a litigation hold is another matter altogether. In a recent ACEDS podcast, Albert Barsocchini, an attorney in San Francisco, said that lawyers often struggle with the wording of litigation holds in large cases with many custodians. He said that attorneys also occasionally fail to oversee the hold’s implementation, which could leave custodians confused about their production duties.

 

Whatever the cause, the cost of e-discovery inefficiency ultimately falls on the government-funding American people.

 

“The longer the case goes, the only group that really wins is the defense counsel,” Benson said. “It’s a net negative for the taxpayer because you’re taking longer and longer to try to recover what, in some cases, shouldn’t have been paid in the first place.”   

 

Justice Department spokesperson, Charles Miller, declined to comment on the extension of the discovery deadline. Honeywell did not respond to requests for comment.