United States and Toyobo Case Has Ended
Almost everyone who worked on the unbelievably long litigation settled last week between the United States and Toyobo for $66 million had to have learned a lot. For many of us it was our first exposure to major False Claims Act litigation.
It does not go without saying that the true hero in the story is Aaron Westrick who alleged fraud in the manufacture and sale of what were originally claimed to be bullet proof vests and sued under the False Claims Act to expose it.
Toyobo just paid $66 million to settle those claims and Mr. Westrick got $5.77 Million, which is less than 15% of the total because there were two lawsuits settled and the Government maintained that it brought some claims without his help.
I would still have to dispute that, but there is no disputing the long effort and perseverance of the lead Government attorney on the case Alicia Bentley who saw the whole thing through to the end along with the hard work done by my old firm of Kohn, Kohn & Colapinto…and many of the lawyers who worked on the case with/for them over 13 years. (There is still some outstanding litigation to be finished against some actors involved).
The case was of such importance that Attorney General Sessions provided a statement on its conclusion, which explains the motivation for almost everyone involved in the case to fight it this long:
Bulletproof vests are sometimes what stands between a police officer and death,” said Attorney General Jeff Sessions. “Selling material for these vests that one knows to be defective is dishonest, and risks the lives of the men and women who serve to protect us. The Department of Justice is committed to the protection of our law enforcement officers, and today’s resolution sends another clear message that we will not tolerate those who put our first responders in harm’s way.”
For more of the article click here.
One does not see a sitting Attorney General comment on the settlement of a False Claims Case, well, almost ever, but the product was sold to “protect” law enforcement people after all.
The law certainly has progressed since Dr. Westrick filed his case in 2004
For one thing 14 years ago when it was filed (14 years ago!) there simply were not as many major false Claims Act cases. Indeed only 432 qui tam cases were filed in 2004 as opposed to 671 last year.
The modern era of the law, starting with amendments that took hold in 1987 was relatively young and that meant that relatively fewer people knew about the law and fewer people filed cases.
The law suffered from some early difficult decisions such as Allison Engines, which made it difficult to hold sub-contractors liable in False Claims Cases, a fact that did not help this case, and which ultimately had to get fixed by Congress.
Nationwide cases were harder to, you had to file matters in each individual State Court where there was a State False Claims Act. Then as now though, this case was outside the usual type of case which still is most likely to be about health care litigation.
As a result, in 2004 there were fewer lawyers, investigators and less precedent to follow in bringing a procurement based False Claims Case.
The case is important and memorable though because of its stark facts. I mean how many times to you see a company create a product, which is supposed to be better lighter and stronger material for bullet proof vests only to find evidence that the stuff deteriorates fast and therefore can’t live up to its warranty?
Hopefully, not often, but I bet if we listen hard enough to the potential Relator’s out there we may find a few more such compelling cases in other industries…albeit nobody more heroic than Dr. Westrick.
Chemistry, law, international business, most of all unbelievable human nature, there’s a good book to be written and maybe a movie in Aaron Westrick’s case. It ends with him getting a decent amount of money, but over 14 years I think we all feel like he could have gotten more and nobody would have been offended. Did the Company have to pay enough? That’s a judgment for a later time.
What we can say is that you are unlikely to see any police force purchasing vests made with Toyobo’s material any time soon. Dr. Westrick was always first and foremost concerned with the safety of the officers who had to rely on this equipment. Dr. Westrcick and everybody involved won that battle, I’m glad to say.
I hope this also points to another battle. Some regulations are not so bad. You think maybe a regulation on what constitutes “bullet proof” if you are going to sell something you claim to be bullet proof is a bad idea?
When next you hear about the Defense Bar complaining about how those of us on the Plaintiff’s side bring “horrible” cases (as the lawyer pleading against the plaintiff’s in Escobar argued before the Supreme Court) you might want to know a little more about this case. Here is a bullet proof vest that is not bullet proof soon after sale sold to the government.
The next time you hear anyone say the False Claims Act Relator is greedy for getting a share of the proceeds, you might want to ask how much money Toyobo makes in a year, indeed how much they made in a year of selling these vests to the Government for first responders, police officers and anyone else going in harm’s way to protect us.
Even the lawyers who brought the case, I would point out, had to figure out how to get by for 14 years before they got anything on this settlement. Toyobo’s has no doubt had its profits re-invested many times over since then.
Aaron Westrick had to wait 14 years for this and I hope he enjoys every dime.
Nobody can doubt he earned it.