United States District Court, W.D. Virginia, Danville Division
JACKSON L. KISER, Senior District Judge.
On December 19, 2014, Defendants Armet Armored Vehicles, Inc. ("Armet") and William R. Whyte ("Whyte") (collectively "Defendants") filed a motion seeking a stay of this action "pending the outcome of the criminal proceedings" against Whyte. (Defs.' Mot to Stay Civil Action, Dec. 19, 2014 [ECF No. 79].) On January 8, 2015, the Fourth Circuit Court of Appeals issued its opinion in United States ex rel. Badr v. Triple Canopy, Case Nos. 13-2190 &13-2191, wherein the Court of Appeals stated that the "implied certification" theory of liability under the False Claims Act is viable in this Circuit. In light of that decision, Plaintiff filed a Motion asking me to reconsider the dismissal of several counts of his Complaint because they premised liability under the FCA on Defendants' implied certification of compliance with the contractual provisions of Defendants' contract with the government. (See Pl.'s Mot. to Reconsider, Jan. 15, 2015 [ECF No. 85].) Both motions were briefed by the parties, and I heard oral arguments on both issues on February 2, 2015. For the reasons stated herein, I will deny Defendants' Motion to Stay and grant Defendants' Motion to Reconsider. Upon reconsideration of my prior ruling, Defendants' Motion to Dismiss [ECF No. 62] will be denied in its entirety. Every count of Plaintiff's First Amended Complaint is viable.
I. STANDARD OF REVIEW
Motion for Stay
"[T]he power to stay proceedings is incidental to the power inherent in every court to control the dispositions of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance." Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936). "A motion to stay, though not expressly provided for by the Federal Rules of Civil Procedure, is a power inherent in the courts under their general equity powers and in the efficient management of their dockets.'" PBM Nutritionals, LLC v. Dornoch Ltd., 667 F.Supp.2d 621, 631 (E.D. Va. 2009) (quoting Williford v. Armstrong World Indus., Inc., 715 F.2d 124, 127 (4th Cir. 1983). In using this authority, courts are given wide latitude to "weigh competing interests and maintain an even balance.'" Williford, 715 F.2d at 127 (quoting Landis, 299 U.S. at 255). "Courts may consider factors relevant to the stay, including whether all necessary parties are present in each action, convenience, and judicial economy and comity." PBM, 667 F.Supp.2d at 631 (citing Int'l Nickel Co. v. Martin J. Barry, Inc., 204 F.2d 583, 585-86 (4th Cir. 1953)).
"Ultimately, the party seeking a stay must justify it by clear and convincing circumstances outweighing potential harm to the party against whom it is operative.'" Id. (quoting Williford, 715 F.2d at 127). "This requires a clear case of hardship or inequity in being required to go forward.'" Id. (quoting Landis, 299 U.S. at 255). If inequity or hardship cannot be shown, then a stay is not warranted. See Aventis Pharma Deutschland GMBH v. Lupin Ltd., 403 F.Supp.2d 484, 489 (E.D. Va. 2005)).
Motion to Reconsider
Pursuant to Federal Rule of Civil Procedure 54(b), "[A]ny order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties[, ] does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." "The Fourth Circuit has offered little guidance on the standard for evaluating a Fed.R.Civ.P. 54(b) motion, but has held motions under Rule 54(b) are not subject to the strict standards applicable to motions for reconsideration of a final judgment.'" Joe Hand Promotions, Inc. v. Double Down Entm't, LLC, Case No. 0:11-cv-02438, 2012 WL 6210334, at *2 (D.S.C. Dec. 13, 2012) (quoting Am. Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514 (4th Cir. 2003)). Such a distinction arises "because a district court retains the power to reconsider and modify its interlocutory judgments... at any time prior to final judgment when such is warranted." Am. Canoe, 326 F.3d at 514-15. "In this regard, district courts in the Fourth Circuit, in analyzing the merits of a Rule 54(b) motion, look to the standard for a motion under Fed.R.Civ.P. 59 for guidance. Therefore, the following are appropriate reasons for granting a Rule 54(b) motion: (1) to follow an intervening change in controlling law; (2) on account of new evidence; or (3) to correct a clear error of law or prevent manifest injustice." Joe Hand, 2012 WL 6210334, at *2 (citing Beyond Sys., Inc. v. Kraft Foods, Inc., Case No. PLM-08-409, 2010 WL 3059344, at *2 (D. Md. Aug. 4, 2010)). "Furthermore, a motion for reconsideration is not an opportunity to rehash issues already ruled upon because a litigant is displeased with the result." Id.
II. FACTUAL BACKGROUND
The facts are adequately set forth in my opinion on Defendants' first Motion to Dismiss. (See Mem. Op. pgs. 2-6, Aug. 26, 2014 [ECF No. 58].) They need not be repeated here.
III. DEFENDANTS' MOTION FOR STAY
The gravamen of Defendants' Motion to Stay is their belief that Whyte, in responding to discovery or testifying in the civil case in either his individual or capacity as a corporate representative for Armet, see Fed.R.Civ.P. 30(b)(6), could inadvertently waive his Fifth Amendment protections in the criminal case.
While it is true that Whyte's statements during discovery or at trial could later be used by the government against Whyte in the criminal trial, see Fed.R.Evid. 801(d)(2), that fact does not mean that Whyte will inadvertently waive his Fifth Amendment protections entirely in a separate, subsequent proceedings. First, the "testimonial waiver" that Defendants fear only applies to testimony given "in the context of the same judicial proceeding...." Klein v. Harris, 667 F.2d 274, 288 (2d Cir. 1981) (citing United States v. Housand, 550 F.2d 818, 821 n.3 (2d Cir. 1977), cert. denied, 431 U.S. 970 (1977)). The criminal case is not the same "judicial proceeding" as the civil case, and thus the "testimonial waiver" analysis has no bearing in this context. Moreover, even if Whyte does testify, he only waives his Fifth Amendment rights as to the statements he chooses to make. See Harrison v. United States, 392 U.S. 219, 222 (1968) ("A defendant who chooses to testify waives his privilege against compulsory self-incrimination with respect to the testimony he gives, and that waiver is no less effective or complete because the defendant may have been motivated to take the witness stand in the first place only by reason of the strength of the lawful evidence against him." (emphasis added)). Testifying in part in the civil proceeding does not mean that he cannot invoke his rights against self-incrimination in a separate, subsequent criminal proceeding.
The proper consideration is whether and to what extent Whyte's Fifth Amendment rights are implicated in the civil case, and whether those considerations warrant a stay. As the Supreme Court stated in 1973, the Fifth Amendment "not only protects the individual against being involuntarily called as a witness against himself in a criminal prosecution but also privileges him not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings." Lefkowitz v. Turley, 414 U.S. 70, 77 (1973). It is well-established that a litigant is free to exercise his right against self-incrimination at any stage of a civil proceeding to which he is a party or a witness. Accord N. River Ins. Co., Inc. v. Stefanou, 831 F.2d 484, 486 (4th Cir. 1987) (holding that a party may invoke the Fifth Amendment privilege ...