Justia Government Contracts Opinion Summaries

The United States Bureau of Land Management leased 2,500 acres of geothermal mineral rights in Hidalgo County, New Mexico to Plaintiff Lightning Dock Geothermal HI-01, LLC (LDG), a Delaware company. LDG developed and owned a geothermal power generating project in Hidalgo County. LDG also developed a geothermal well field on the subject tract as part of its project. Defendant AmeriCulture, a New Mexico corporation under the direction of Defendant Damon Seawright, a New Mexico resident, later purchased a surface estate of approximately fifteen acres overlying LDG’s mineral lease, ostensibly to develop and operate a tilapia fish farm. Because AmeriCulture wished to utilize LDG’s geothermal resources for its farm, AmeriCulture and LDG (more accurately its predecessor) entered into a Joint Facility Operating Agreement (JFOA). The purpose of the JFOA, from LDG’s perspective, was to allow AmeriCulture to utilize some of the land’s geothermal resources without interfering or competing with LDG’s development of its federal lease. Plaintiff Los Lobos Renewable Power LLC (LLRP), also a Delaware company, was the sole member of LDG and a third-party beneficiary of the JFOA. The parties eventually began to quarrel over their contractual rights and obligations. Invoking federal diversity jurisdiction, Plaintiffs LDG and LLRP sued Defendants Americulture and Seawright in federal court for alleged infractions of New Mexico state law. AmeriCulture filed a special motion to dismiss the suit under New Mexico’s anti-SLAPP statute. The district court, however, refused to consider that motion, holding the statute authorizing it inapplicable in federal court. After review of the briefs, the Tenth Circuit Court of Appeals agreed and affirmed. View "Los Lobos Renewable Power v. Americulture" on Justia Law

The United States Bureau of Land Management leased 2,500 acres of geothermal mineral rights in Hidalgo County, New Mexico to Plaintiff Lightning Dock Geothermal HI-01, LLC (LDG), a Delaware company. LDG developed and owned a geothermal power generating project in Hidalgo County. LDG also developed a geothermal well field on the subject tract as part of its project. Defendant AmeriCulture, a New Mexico corporation under the direction of Defendant Damon Seawright, a New Mexico resident, later purchased a surface estate of approximately fifteen acres overlying LDG’s mineral lease, ostensibly to develop and operate a tilapia fish farm. Because AmeriCulture wished to utilize LDG’s geothermal resources for its farm, AmeriCulture and LDG (more accurately its predecessor) entered into a Joint Facility Operating Agreement (JFOA). The purpose of the JFOA, from LDG’s perspective, was to allow AmeriCulture to utilize some of the land’s geothermal resources without interfering or competing with LDG’s development of its federal lease. Plaintiff Los Lobos Renewable Power LLC (LLRP), also a Delaware company, was the sole member of LDG and a third-party beneficiary of the JFOA. The parties eventually began to quarrel over their contractual rights and obligations. Invoking federal diversity jurisdiction, Plaintiffs LDG and LLRP sued Defendants Americulture and Seawright in federal court for alleged infractions of New Mexico state law. AmeriCulture filed a special motion to dismiss the suit under New Mexico’s anti-SLAPP statute. The district court, however, refused to consider that motion, holding the statute authorizing it inapplicable in federal court. After review of the briefs, the Tenth Circuit Court of Appeals agreed and affirmed. View "Los Lobos Renewable Power v. Americulture" on Justia Law

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

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), enacted in 2016 to address Puerto Rico’s financial crisis, provides for a temporary stay of debt-related litigation against the Puerto Rico government. The statute, however, allows creditors to move for relief from the stay and directs courts to grant such relief “after notice and a hearing…for cause shown.” Movant Peaje Investments LLC and various appellants in Altair Global Credit Opportunities Fund (A), LLC v. Garcia-Padilla (the Altair Movants) filed lift-stay motions. The First Circuit (1) affirmed the district court’s denial of the Peaje Movant’s motion, holding that Peaje failed to set forth a legally sufficient claim of “cause” to lift the PROMESA stay; and (2) the Altair Movants presented sufficient allegations to entitle them to a hearing. View "Peaje Investments LLC v. Garcia-Padilla" on Justia Law

This case arose more than fifteen years ago as a bid-rigging scheme conjured up by shipping businesses to defraud the United States. In the qui tam proceedings at issue, a jury returned a verdict in 2011 against the Gosselin defendants. Relators appealed, contesting the district court's refusal to award civil penalties. The court granted relief and remanded for further proceedings. On remand, the district court was called upon to resolve the issue of whether relator Kurt Bunk was entitled to recover his judgment from another defendant, Government Logistics N.V. (GovLog). As a preliminary issue, the court concluded that the Peacock v. Thomas principle is inapplicable here, and the district court’s exercise of supplemental jurisdiction over the successor corporation liability claim against GovLog was entirely appropriate. The court concluded that the district court properly declined to apply the substantial continuity test here. However, the district court erred by dismissing Bunk's successor corporation liability claim as insufficiently pleaded. Finally, the court concluded that the district court erred in making the summary judgment award to GovLog. Accordingly, the court vacated and remanded for further proceedings. View "US ex rel. Kurt Bunk v. Government Logistics N.V." on Justia Law

Knight Systems, Inc., owned and operated by Buddy Knight, engaged primarily in the mortuary transport business until 2007. Knight Systems entered into an asset purchase agreement with Palmetto Mortuary Transport, Inc., a business owned by Donald and Ellen Lintal. Pursuant to the agreement, Knight Systems sold various tangible assets, goodwill, and customer accounts (including body removal service contracts with Richland County, Lexington County, and the University of South Carolina) to Palmetto in exchange for a purchase price of $590,000. The agreement also contained an exclusive sales provision that obligated Palmetto to purchase body bags at specified discounted prices from Knight Systems for ten years, and a non-compete clause. At issue in this case was a Richland County-issued request for proposal (RFP) seeking mortuary transport services from a provider for a period of five years. At that time, Palmetto still held the services contract with Richland County as a result of the Agreement. Palmetto timely submitted a response to the RFP. One day before responses to the RFP were due, Buddy accused Palmetto of breaching the agreement by buying infant body bags from other manufacturers in 2008. After this telephone conversation, Buddy consulted with his attorney and submitted a response to the RFP. After the RFP deadline passed, Buddy contacted an official at the Richland County Procurement Office, seeking a determination that Knight Systems be awarded the mortuary transport services contract because it was the only provider of odor-proof body bags required by the RFP. Although Palmetto asserted its response to the RFP contained the lowest price for services and had the highest total of points from the Richland County Procurement Office, Richland County awarded Knight Systems the mortuary transport services contract for a five-year term. Palmetto filed a complaint against Knight, asserting claims for breach of contract, breach of contract accompanied by a fraudulent act, and intentional interference with prospective contractual relations. A special referee ruled in favor of Palmetto, and Knight appealed. Knight argued the special referee erred in failing to find: (1) the geographic restriction in the parties' covenant not to compete was unreasonable and void; (2) the Covenant's territorial restriction was unsupported by independent and valuable consideration; (3) the Covenant was void as a matter of public policy; and (4) the Covenant became void after any breach by Palmetto. The Supreme Court found that the Covenant's 150-mile territorial restriction was unreasonable and unenforceable. Accordingly, the Court reversed and remanded for further proceedings. View "Palmetto Mortuary Transport v. Knight Systems, Inc." on Justia Law

The trial court found that a general contractor, Jeff Tracy, Inc., doing business as Land Forms Construction, did not have a valid license while performing work on a project for City of Pico Rivera. Therefore, the court ordered Land Forms to disgorge all compensation paid to it by the City. Land Forms appealed, contending that the trial court improperly denied it a jury trial. The court concluded that Land Forms was entitled to a jury trial on these issues, and therefore reversed the judgment. However, the court found that Land Forms is not entitled to any apportionment where Business and Professions Code section 7031, subdivision (b) does not allow apportionment as a matter of law. Accordingly, the court reversed the trial court's judgment. View "Jeff Tracy, Inc. v. City of Pico Rivera" on Justia Law

The Judicial Council of California, (JCC) entered into a contract with Jacobs Facilities, a wholly owned subsidiary of Jacobs. Performance of the contract required a license under the Contractors’ State License Law. Facilities was properly licensed when it commenced work. Later, Jacobs, as part of a corporate reorganization, transferred the employees responsible for the JCC contract to another subsidiary and caused the new subsidiary to obtain a contractor’s license, while permitting the Facilities license to expire. Facilities remained the signatory on the JCC contract until a year later, when the parties entered into an assignment to the new, licensed subsidiary. JCC sued under Bus. & Prof. Code 7031(b), which requires an unlicensed contractor to disgorge its compensation. Defendants contended that Facilities had “internally” assigned the contract to the new subsidiary prior to expiration of its license; JCC ratified the internal assignment when it consented to the assignment to the new subsidiary; and Facilities had “substantially complied” with the law. After the jury found for defendants on the other defenses, the substantial compliance issue was not decidedd. The court of appeal reversed, concluding Facilities violated the statute when it continued to act as the contracting party after its license expired, and remanded for a hearing on substantial compliance. View "Judicial Council of Cal. v. Jacobs Facilities, Inc." on Justia Law

Columbus Cheer Company ("CCC") entered into a rental contract for the use of school facilities. Subsequently, CCC was informed that Columbus Municipal School District ("CMSD") would not honor the contract with CCC. CCC filed a complaint against CMSD. The complaint read in part: "[p]laintiff Columbus Cheer Company is a profit corporation licensed to due [sic] business in the state of Mississippi . . . ." The prayer sought judgment for plaintiff (CCC). Defendants filed their motion to dismiss or for summary judgment, asserting that CCC was an administratively dissolved corporation; therefore, CCC could not have entered into a valid contract with CMSD, and CCC did not possess the requisite legal status to initiate suit. The trial court entered an order granting Defendants' motion for summary judgment. CCC appealed, and the issues on appeal were: (1) whether a dissolved corporation could pursue a legal action; and if not, (2) could the corporation's shareholders pursue the same action in their own name? The Supreme Court answered both questions "no." View "Columbus Cheer Company v. City of Columbus" on Justia Law

The respondents, two developers and an architectural firm, Stevens & Wilkinson of South Carolina, Inc. (S&W), entered into a Memorandum of Understanding (MOU) with the City of Columbia as part of a larger project team to develop a publicly-funded hotel for the Columbia Metropolitan Convention Center. The City eventually abandoned its plan under the MOU, and the respondents brought suit on several causes of action including breach of contract and equitable relief. The City moved for summary judgment arguing the MOU was not a contract and therefore the contract claims failed. The circuit court agreed and, rejecting the equitable claims as well, granted summary judgment in favor of the City. The respondents appealed and the court of appeals affirmed in part and reversed in part. The Supreme Court reversed. Because the MOU was comprised of agreements to execute further agreements, there was no meeting of the minds on numerous material terms which had not yet been defined. Accordingly, the court of appeals was reversed with respect to that portion of the court's judgment; the Supreme Court held the MOU was unenforceable as a matter of law. The Supreme Court agreed with the circuit court and reinstated its judgment in favor of the City. View "Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia" on Justia Law