Justia Government Contracts Opinion Summaries

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Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging that defendants submitted claims to Medicare without adequate authorization from the relevant Medicare beneficiaries and claims that were the product of unsolicited telemarketing calls to Medicare beneficiaries. The Eleventh Circuit affirmed the district court's grant of summary judgment to defendants with one modification. The court explained that, although the district court applied an erroneous scienter standard, the evidence proffered by relators as to defendants' state of mind with respect to the assignment of benefits forms was insufficient to survive summary judgment under the proper standard. The district court did not err in granting summary judgment as to relators' claims that defendants violated Medicare's unsolicited telephone contact rules. View "Phalp v. Lincare, Inc." on Justia Law

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In 2008, Lee began an appointment under the Federal Career Intern Program (FCIP) with U.S. Citizenship and Immigration Services, Department of Homeland Security. Before that appointment. Lee had completed almost six years of federal service under a series of term appointments. In 2010, the agency notified Lee that her FCIP appointment would expire on March 15, 2010, and that upon completion of the appointment, the agency would not convert it into a competitive service appointment. She completed her FCIP term and was terminated from federal service. A Merit Systems Protection Board Administrative Judge dismissed her appeal for lack of jurisdiction. The Board and Federal Circuit affirmed. Lee was not subject to an adverse action appealable to the Board; successful completion of her internship and satisfaction of other Office of Personnel Management requirements did not guarantee her the right to further federal employment when her internship expired. View "Lee v. Merit Systems Protection Board" on Justia Law

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Third Circuit rejects "reverse" False Claims Act suit involving Small Business Administration. The SBA, a federal agency, provided $90 million to L Capital, a venture capital group, through the purchase of securities. L Capital invested $4 million in preferred shares of Simparel. The Certificate of Incorporation specified that Simparel must pay preferred shareholders accrued dividends if Simparel’s Board exercised its discretion to pay the dividends or if Simparel underwent liquidation, dissolution, or windup. The SBA was appointed as L Capital’s receiver after Simparel failed to comply with its funding agreement. Petras, Simparel’s Chief Financial Officer, claimed that this failure resulted in the SBA becoming a preferred shareholder, entitled to accrued dividends. The Simparel Board never declared dividends nor did Simparel undergo liquidation, dissolution, or windup. Petras claimed that the Simparel defendants engaged in fraudulent conduct—to which he objected—to avoid paying the contingent dividends: hiding Simparel’s deteriorating financial condition; failing to hold board meetings: and neglecting to send the SBA Simparel’s financial statements. The Third Circuit affirmed dismissal of the “reverse FCA” claim. The Simparel defendants could not have “knowingly and improperly avoid[ed] or decrease[d] an obligation” to pay the accrued dividends at the time of their alleged misconduct because the obligation did not yet exist. View "Petras v. Simparel, Inc." on Justia Law

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On remand from the United States Supreme Court, the Fourth Circuit held that the Government stated a claim under the False Claims Act (FCA), 31 U.S.C. 3729(a), against Triple Canopy. The Fourth Circuit reconsidered its earlier panel decision in light of Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016), and held that the Government properly alleged an FCA claim -- that Triple Canopy knowingly presented false claims -- under section 3729(a)(1)(A). In this case, the Government sufficiently alleged falsity, and nothing in Universal Health undermines the Fourth Circuit's earlier conclusion that Triple Canopy's falsity was material. The Fourth Circuit reinstated those portions of its opinion that were not impacted by Universal Health, and remanded for further proceedings. View "United States ex rel. Badr v. Triple Canopy" on Justia Law

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Substantial evidence supported finding that hospital’s contracts with physicians violated Anti-Kickback statute. Novak and Nagelvoort participated in a scheme under which Sacred Heart Hospital paid illegal kickbacks to physicians in exchange for patient referrals. Novak was the Hospital’s owner, President, and Chief Executive Officer. Nagelvoort was an outside consultant, and, at various times. served as the Hospital’s Vice President of Administration and Chief Operating Officer. Federal agents secured the cooperation of physicians and other Hospital employees, some of whom recorded conversations. Agents executed warrants and searched the Hospital and its administrative and storage facilities. The prosecution focused on direct personal services contracts, teaching contracts, lease agreements for the use of office space, and agreements to provide physicians with the services of other medical professionals. The Seventh Circuit affirmed their convictions under 42 U.S.C. 1320a-7b(b)(2)(A) and 18 U.S.C. 371, rejecting arguments that there was insufficient evidence to prove that they acted with the requisite knowledge and willfulness under the statute; that the government failed to prove that certain agreements fell outside the statute’s safe harbor provisions; and that Nagelvoort withdrew from the conspiracy when he resigned his position, so that any subsequent coconspirator statements were not admissible against him. View "United States v. Naglevoort" on Justia Law

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The Supreme Court held that governmental entities’ contract-based actions, including claims for indemnification, that fall within Ariz. Rev. Stat. 12-552(A) are subject to the eight-year statute of repose, notwithstanding Ariz. Rev. Stat. 12-510, which provides that claims by governmental entities are generally not barred by statutes of limitations, or the common law doctrine known as “nullum tempos occurit regi” (time does not run against the king). Carlos Tarazon sued the City of Phoenix after he developed mesothelioma while working on projects for the City. The City filed a third-party complaint against eight-two developers and eight contractors, seeking indemnification. The superior court granted the motions to dismiss filed by the Developers and Contractors, ruling that section 12-552(A) applied to bar the City’s claims. The Supreme Court affirmed in part and reversed in part, holding (1) the statute of repose applied for the Contractors having the requisite contractual relationship with the City; but (2) the statute of repose did not apply for the Developers whose only relationship with the City was as permittees. View "City of Phoenix v. Glenayre Electronics, Inc." on Justia Law

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Shareholders lacked standing to challenge, as an illegal exaction, U.S. government’s acquisition of AIG stock as loan collateral. In 2008, during one of the worst financial crises of the last century, American International Group (AIG) was on the brink of bankruptcy and sought emergency financing. The Federal Reserve Bank of New York granted AIG an $85 billion loan, the largest such loan to date. The U.S. Government received a majority stake in AIG’s equity under the loan, which the Government eventually converted into common stock and sold. One of AIG’s largest shareholders, Starr, filed suit alleging that the Government’s acquisition of AIG equity and subsequent actions relating to a reverse stock split were unlawful. The Claims Court held that the Government’s acquisition of AIG equity constituted an illegal exaction in violation of the Federal Reserve Act, 12 U.S.C. 343, but declined to grant relief for either that or for Starr’s reverse-stock-split claims. The Federal Circuit vacated in part, holding that Starr and the shareholders it represented lack standing to pursue the equity acquisition claims directly, as those claims belong exclusively to AIG, rendering the merits of those claims moot. The court affirmed as to Starr’s reverse-stock-split claims. View "Starr International Co. v. United States" on Justia Law

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Tightened security at base, preventing access by contractor's ex-felon employees, did not justify contract adjustment. Malmstrom Air Force Base in Great Falls, Montana, houses intercontinental ballistic missiles. Garco's contract to construct base housing incorporated Federal Acquisition Regulation 52.222-3, providing that contractors may employ ex-felons and requiring contractors to adhere to the base access policy. Malstrom’s access policy indicated that it would run the employees’ names through the National Criminal Information Center. “Unfavorable results will be scrutinized and eligibility will be determined on a case-by-case basis.” Garco’s subcontractor, JTC, experienced difficulty bringing its crew onto the base. JTC used workers from a local prison’s pre-release facility. JTC had not encountered access problems in its performance of other Malmstrom contracts over the preceding 20 years. Security had been tightened after an incident where a prerelease facility worker beat his manager. JTC requested an equitable adjustment of the contract, stating that its inability to use convict labor greatly reduced the size of the experienced labor pool so that it incurred $454,266.44 of additional expenses; JTC did not request a time extension. The Federal Circuit affirmed the Armed Services Board of Contract Appeals’ denial of the claim, rejecting a claim of constructive acceleration of the contract. The court concluded that there was no change to the base access policy. View "Garco Construction, Inc. v. Secretary of the Army" on Justia Law

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The Eighth Circuit affirmed the dismissal of relator's False Claims Act (FCA), 31 U.S.C. 3729 et seq., suit based on the public disclosure bar. Relator alleged that defendants sought reimbursement from Medicare and Medicaid for ineligible drugs. The Eighth Circuit concluded that the amended public disclosure bar was appropriately resolved on a motion to dismiss, even assuming that it no longer poses a jurisdictional question; relator's complaint was insufficient to plausibly state that she qualified as an original source; the district court did not abuse its discretion in denying leave to amend; and the district court did not abuse its discretion by allowing Paddock and Perrigo to jointly file a motion to dismiss the second amended complaint. View "United States ex rel. Ambrosecchia v. Paddock Laboratories" on Justia Law

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Relators filed a qui tam suit against Keiser University under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging that the University falsely certified compliance with a federal law banning incentive payments to university admissions counselors. After relators appealed a limited trial victory, the United States stepped in and settled the case with Keiser, securing a larger monetary recovery than relators did at trial. On appeal, relators challenged the district court's ruling as to the United States and the district court's subsequent award of reduced attorneys' fees and costs. The Eleventh Circuit affirmed the judgment, holding that the United States did not need to satisfy the good-cause intervention requirement for qui tam actions under 31 U.S.C. 3730(c)(3) because that subsection applies only when the government intervenes for the purpose of actually proceeding with the litigation—not when it is stepping in only for the purpose of settling and ending the case; the proposed settlement was fair, adequate, and reasonable; the district court did not err in declining to compel discovery in this case; and the district court did not abuse its discretion in awarding fees and costs. View "United States v. Everglades College" on Justia Law