Justia Government Contracts Opinion SummariesArticles Posted in Civil Procedure
Stronghold Engineering, Inc. v. City of Monterey
Stronghold and the city entered into a 2015 contract to renovate the Monterey Conference Center. Before filing a lawsuit asserting a claim for money or damages against a public entity, the Government Claims Act (Gov. Code 810) requires that a claim be presented to the entity. Without first presenting a claim to the city, Stronghold filed suit seeking declaratory relief regarding the interpretation of the contract, and asserting that the Act was inapplicable.Stronghold presented three claims to the city in 2017-2019, based on its refusal to approve change orders necessitated by purportedly excusable delays. Stronghold filed a fourth amended complaint, alleging breach of contract. The court granted the city summary judgment, reasoning that the declaratory relief cause of action in the initial complaint was, in essence, a claim for money or damages and that all claims in the operative complaint “lack merit” because Stronghold failed to timely present a claim to the city before filing suit.The court of appeal reversed. The notice requirement does not apply to an action seeking purely declaratory relief. A declaratory relief action seeking interpretation of a contract is not a claim for money or damages, even if the judicial interpretation sought may later be the basis for a separate claim for money or damages which would trigger the claim presentation requirement. View "Stronghold Engineering, Inc. v. City of Monterey" on Justia Law
Whaley, et al. v. Dept. of Alabama Veterans of Foreign Wars of the United States
This appeal related to "electronic-bingo" operations conducted by the Department of Alabama Veterans of Foreign Wars of the United States ("the VFW") at some of its Alabama posts. Travis Whaley and Randall Lovvorn contracted with the VFW to superintend and promote its electronic-bingo operations. Between 1997 and 2013, Whaley served the VFW as adjutant, commander, and quartermaster at different times. For his part, Lovvorn served as the VFW's accountant. The VFW contracted with G2 Operations, Inc. ("G2"), to conduct its electronic-bingo operations. Under contract, G2 agreed to conduct electronic-bingo operations at VFW posts throughout Alabama, and the VFW would receive 10% of the gross revenue. All the proceeds from electronic bingo were deposited into a VFW bank account. The VFW also entered into contracts with Whaley and Lovvorn, assigning them specific roles in its electronic-bingo operations. Several years later, after being notified of a tax penalty from the IRS, the VFW discovered a shortfall of $1,782,368.88 from what it should have received under its contracts with G2. The VFW filed a complaint asserting claims against G2 as well as additional claims against other parties, which were eventually whittled down throughout litigation until only claims against Whaley and Lovvorn remained. A jury reached a verdict against Whaley and Lovvorn on VFW's claims of breach of contract, fraudulent suppression, and conversion, awarding $1,782,368.88 in compensatory damages and $2,000,000 in punitive damages. Because the VFW's claims rely upon its own involvement in illegal transactions, the Alabama Supreme Court reversed the trial court's judgment and rendered judgment in favor of Whaley and Lovvorn. View "Whaley, et al. v. Dept. of Alabama Veterans of Foreign Wars of the United States" on Justia Law
Ex parte Alabama Department of Transportation
Baldwin County Bridge Company, LLC ("BCBC"), filed suit against John Cooper in his official capacity as Director of the Alabama Department of Transportation ("ALDOT"), seeking to halt construction of a bridge that ALDOT had hired Scott Bridge Company, Inc. ("Scott Bridge"), to build over the Intracoastal Waterway in Baldwin County. That lawsuit spawned three matters before the Alabama Supreme Court. In the first, Cooper sought mandamus relief because the trial court entered an order compelling him to respond to certain discovery requests made by BCBC; he argued the information sought was protected from disclosure by the executive-privilege doctrine. On Cooper's motion, the Supreme Court stayed enforcement of the trial court's discovery order to allow the Court to consider Cooper's privilege argument. Meanwhile, the trial-court proceedings continued and, before the Supreme Court was able to rule on Cooper's mandamus petition, the trial court granted BCBC's motion for a preliminary injunction to halt construction of the bridge. Cooper appealed that injunction, arguing that it was unwarranted and that the $100,000 preliminary-injunction bond put up by BCBC was insufficient. Scott Bridge filed its own appeal challenging the preliminary injunction, while also arguing that the trial court erred by dismissing it from the case and by stating that it was not entitled to the protection of an injunction bond. After reviewing the briefs submitted by the parties in all three of these matters, the Supreme Court concluded BCBC's claim on which the preliminary injunction was based was barred by State immunity. Accordingly, the trial court had no subject-matter jurisdiction over that claim and the preliminary injunction had to be reversed. Although the Court ruled in favor of Cooper on this point, it nevertheless rejected his companion argument that the trial court should have been directed to increase the $100,000 preliminary-injunction bond on remand. The Court also rejected Scott Bridge's argument that that it was entitled to recover on the preliminary-injunction bond. Finally, because the discovery that Cooper sought to withhold based on executive privilege was being sought in conjunction with the claim that is barred by State immunity, the trial court's order compelling Cooper to produce that information was moot, as was Cooper's petition challenging that order. View "Ex parte Alabama Department of Transportation" on Justia Law
McInnis Electric Company v. Brasfield & Gorrie, LLC et al.
Construction firm Brasfield & Gorrie, LLC, received the prime contract to expand the University of Mississippi Medical Center Children’s Hospital in 2017. Electrical contractor McInnis Electric Company secured the winning bid to install the electrical and low voltage systems package for the project and subsequently signed a subcontract with Brasfield & Gorrie. Terms of the subcontract incorporated the prime contract, which were related to the same project by reference. The contract provided that work was set to begin on the project on February 15, 2018. However, McInnis, was directed not to report on site until June 4, 2018, and, due to delays, was unable to begin until July 23, 2018. As work progressed, the schedule allegedly became delayed as a result of Brasfield & Gorrie’s failure to coordinate the work of the various subcontractors. McInnis averred that Brasfield & Gorrie’s failure to coordinate and facilitate the work of the various subcontractors worsened as the project progressed, and Brasfield & Gorrie experienced turnover in management. This failure allegedly delayed McInnis’s work, which was not on the path toward completion, supposedly through no fault of its own. Construction issues were amplified when on March 11, 2020, Mississippi experienced its first reported case of COVID-19. On April 1, 2020, the Mississippi Governor instituted a shelter in place order in response to the ongoing pandemic, requiring certain nonessential businesses to close and recommending social distancing to reduce the spread of the coronavirus in Mississippi. The children’s hospital was not classified as an existing infrastructure as it was a nonoperational work in progress and thus was not subject to the executive order’s exception to the governmental shutdowns. By May 8, 2020, McInnis had suffered an approximately 40 percent loss in its workforce due to employees testing positive for COVID-19. Despite the decrease in the available workforce, Brasfield & Gorrie demanded McInnis perform under its contractual obligation. McInnis took measures to continue the work. Brasfield & Gorrie further declined requests for accommodation and instead terminated McInnis on May 13, 2020. The case before the Mississippi Supreme Court here stemmed from disagreements and a broken contract between the parties, contesting whether arbitration was appropriate to settle their disputes. The trial court compelled arbitration, and the Supreme Court affirmed. View "McInnis Electric Company v. Brasfield & Gorrie, LLC et al." on Justia Law
Westlands Water Dist. v. All Persons Interested
Westlands Water District (Westlands) appeals from a judgment of dismissal entered in a validation action filed pursuant to, inter alia, Code of Civil Procedure section 860 et seq. The subject matter was an anticipated contract between Westlands and the United States concerning the ongoing delivery of federal reclamation project water and repayment of certain financial obligations. The superior court declined to grant relief and ultimately dismissed Westlands’ validation action for multiple reasons. Most pertinently, the draft was found to be materially deficient in its failure to specify Westlands’ financial obligations under the anticipated contract. The Fifth Appellate District affirmed the judgment. The court explained that the “Repayment Obligation” cannot be determined without knowing the “Existing Capital Obligation” and/or the contents of exhibit D. The “Existing Capital Obligation” cannot be determined without knowing the contents of exhibit D. In the absence of exhibit D, both terms are useless for purposes of determining Westlands’ financial obligations, i.e., “the scope of the duty and the limits of performance.” Moreover, as Westlands admitted during the motion proceedings, exhibit D was not merely omitted from the draft attached to the complaint. Despite being expressly incorporated into the contract by reference, exhibit D did not exist when the complaint and the December 2019 motion were filed. Even when the motion was heard, there was only meager parol evidence of estimates ranging from $200 million to $362 million. Given the circumstances, the court agreed the contract presented for validation was missing an essential term and, therefore uncertain, i.e., not sufficiently definite to be binding and enforceable. View "Westlands Water Dist. v. All Persons Interested" on Justia Law
ECC International Constructors, LLC v. Secretary of the Army
In 2010, the Army Corps of Engineers awarded ECCI a contract to design and build a military compound in Afghanistan. In 2014, ECCI sought compensation for construction delays allegedly attributable to the government. After six years of unsuccessful settlement discussions, followed by a nine-day hearing before the Armed Services Board of Contract Appeals, the government—three months after the hearing—successfully moved to dismiss ECCI’s claim for lack of subject-matter jurisdiction for failure to state a “sum certain.”The Federal Circuit reversed. The requirement, established by the Federal Acquisition Regulation, that claims submitted under the Contract Disputes Act (CDA), 41 U.S.C. 7101–7109, state a “sum certain”—i.e., specify the precise dollar amount sought as relief—is not jurisdictional and is subject to forfeiture. The court noted the Supreme Court’s direction to “police this jurisdictional line.” Congress did not clearly state that a claim submitted under the CDA must include a sum certain: the sum-certain requirement is not even in the CDA itself. A claim that does not state a sum certain has not sufficiently pleaded the elements of a claim under the CDA and may be denied by the contracting officer and dismissed on appeal for failure to state a claim. If a party challenges a deficient sum certain after litigation has far progressed, however, that defense may be deemed forfeited. View "ECC International Constructors, LLC v. Secretary of the Army" on Justia Law
R&D Master Enterprises, Inc. v. Financial Oversight & Management Bd. for P.R.
The First Circuit affirmed the judgment of the district court dismissing this lawsuit against the Financial Oversight and Management Board for Puerto Rico (FOMB) and its executive director challenging the FOMB's alleged failure to review a sale agreement on untimeliness grounds, holding that the dismissal was proper, albeit on standing grounds.Appellants - several Puerto Rico corporations and individuals - brought this action claiming that the FOMB's alleged failure to review a $384 million loan sale agreement between the Economic Development Bank for Puerto Rico (BDE) and a private investment company violated their constitutional rights under the Fourteenth Amendment's Due Process and Equal Protection Clauses, and a statutory violation under the Puerto Rico Oversight, Management, and Economic Stability act . The district court granted the FOMB's motion to dismiss, concluding that the claims were time-barred. The First Circuit affirmed but on different grounds, holding that Appellants lacked standing because their complaint failed to allege that the FOMB's inaction caused their claimed injury. View "R&D Master Enterprises, Inc. v. Financial Oversight & Management Bd. for P.R." on Justia Law
United States ex rel. Polansky v. Executive Health Resources, Inc.
The False Claims Act (FCA) imposes civil liability on those who present false or fraudulent claims for payment to the federal government, 31 U.S.C. 3729–3733, and authorizes private parties (relators) to bring “qui tam actions” in the name of the government. A relator may receive up to 30% of any recovery. The relator must file his complaint under seal and serve a copy and supporting evidence on the government, which has 60 days to decide whether to intervene. As a “real party in interest,” the government can intervene after the seal period ends, if it shows good cause.Polansky filed an FCA action alleging Medicare fraud. The government declined to intervene during the seal period. After years of discovery, the government decided that the burdens of the suit outweighed its potential value, and moved under section 3730(c)(2)(A) (Subparagraph (2)(A)), which provides that the government may dismiss the action notwithstanding the objections of the relator if the relator received notice and an opportunity for a hearing.The Third Circuit and Supreme Court affirmed the dismissal of the suit. The government may move to dismiss an FCA action whenever it has intervened, whether during the seal period or later. It may not move to dismiss if it has never intervened. A successful motion to intervene turns the movant into a party; it can assume primary responsibility for the case’s prosecution, which triggers the Subparagraph (2)(A) right to dismiss, consistent with the FCA’s government-centered purposes. The government’s motion to dismiss will satisfy FRCP 41 in all but exceptional cases. The government gave good grounds for believing that this suit would not vindicate its interests. Absent extraordinary circumstances, that showing suffices for the government to prevail. View "United States ex rel. Polansky v. Executive Health Resources, Inc." on Justia Law
Adam Robinson v. DHS Office of Inspector General
Plaintiff sought judicial review of the Merit Systems Protection Board’s (MSPB) final decision affirming his removal from the Department of Homeland Security (DHS) but filed his complaint in the district court one day after the statutory deadline prescribed in 5 U.S.C. Section 7703(b)(2). The district court dismissed his complaint as untimely. The district court held in the alternative that Plaintiff had not presented facts to warrant equitable tolling. The DC Circuit affirmed the dismissal on the alternative ground that Robinson failed to show that he was entitled to equitable tolling. The court explained that in light of the combined weight of intervening United States Supreme Court authority and the decisions of the other circuits interpreting section 7703(b)(2) as a non-jurisdictional claims-processing rule since King, the court now holds that section 7703(b)(2)’s thirty-day filing deadline is a non-jurisdictional claims-processing rule. As such, the record shows that Plaintiff chose to mail his complaint by standard mail four days before the statutory filing deadline and assumed the risk his complaint would arrive late. On these facts, Plaintiff’s decision to use standard mail is a 14 “garden variety claim of excusable neglect” insufficient to warrant equitable tolling. View "Adam Robinson v. DHS Office of Inspector General" on Justia Law
Huntington Ingalls v. DOWCP
Plaintiff worked at Huntington Ingalls Incorporated as a sheet-metal mechanic. After leaving the company, Plaintiff complained of hearing loss. Plaintiff selected and met with an audiologist. An administrative law judge denied Plaintiff’s Longshore and Harbor Workers’ Compensation Act (LHWCA). Plaintiff appealed this decision to the Department of Labor’s Benefits Review Board. The Board reversed its initial decision on whether Plaintiff could choose his own audiologist. The Company timely petitioned for review. The question is whether audiologists are “physicians” under Section 907(b) of LHWCA. The Fifth Circuit denied the Company’s petition for review. The court reasoned that based on the education they receive and the role that they play in identifying and treating hearing disorders, audiologists can fairly be described as “skilled in the art of healing.” However, audiologists are not themselves medical doctors. Their work complements that of a medical doctor. But, the court wrote, Optometrists, despite lacking a medical degree, are able to administer and interpret vision tests. And based on the results of those tests, optometrists can prescribe the appropriate corrective lenses that someone with impaired vision can use to bolster his or her ability to see. Audiologists are similarly able to administer hearing tests, evaluate the resulting audiograms, and then use that information to fit a patient with hearing aids that are appropriately calibrated to the individual’s level of auditory impairment. Because the plain meaning of the regulation includes audiologists, and because that regulation is entitled to Chevron deference, audiologists are included in Section 907(b) of the LHWCA’s use of the word “physician.” View "Huntington Ingalls v. DOWCP" on Justia Law