Justia Government Contracts Opinion Summaries

Nightingale provided home health care and received Medicare reimbursements. The Indiana State Department of Health (ISDH) visited Nightingale’s facility and concluded that Nightingale had deficiencies that placed patients in “immediate jeopardy.” ISDH recommended that the Centers for Medicare & Medicaid Services (CMS), terminate Nightingale’s Medicare agreement. ISDH conducted a revisit and concluded that Nightingale had not complied. Before CMS terminated the agreement, Nightingale filed a petition to reorganize in bankruptcy and commenced sought to enjoin CMS from terminating its provider agreement during the reorganization, to compel CMS to pay for services already provided, and to compel CMS to continue to reimburse for services rendered. The bankruptcy court granted Nightingale relief. While an appeal was pending, ISDH again found “immediate jeopardy.” The injunction was dissolved. A Medicare ALJ and the Departmental Appeals Board affirmed termination. After failing to complete a sale of its assets, Nightingale discharged patients and closed its Indiana operations by August 17, 2016. On September 16, 2016, the district court concluded that the bankruptcy court had lacked subject-matter jurisdiction to issue the injunction and stated that the government could seek restitution for reimbursements for post-injunction services. CMS filed a claim for restitution that is pending. Nightingale separately initiated a civil rights action, which was dismissed. In consolidated appeals, the Seventh Circuit vacated the decisions. The issue of whether the bankruptcy court properly granted the injunction was moot. Nightingale’s constitutional claims were jurisdictionally barred by 42 U.S.C. 405(g). View "Nightingale Home Healthcare, Inc. v. United States" on Justia Law

Comments that the Court of Federal Claims made during a hearing, before the government’s corrective action materially altered the relationship between the parties, were not sufficient to qualify the contractor as a “prevailing party” under the Equal Access to Justice Act, 28 U.S.C. 2412(a), (d)(1)(A). The Federal Circuit remanded the case, which involved Dellew’s post-award bid protest, alleging that the Army improperly awarded TSI a contract because TSI did not accept a material term of the request for proposals when it refused to cap its proposed general and administrative rate, and the contract awarded varied materially from TSI’s proposal. During oral argument, the Claims Court provided “hint[s]” about its views favorable to Dellew on the merits, and repeatedly expressed its belief that corrective action would be appropriate. The Army subsequently terminated the TSI contract. The Claims Court dismissed Dellew’s action, determined that it retained jurisdiction despited mootness, and awarded Dellew $79,456.76 in fees and costs, stating that it made “numerous substantive comments during oral argument regarding the merits,” that “carried a sufficient judicial imprimatur to materially alter the relationship between [Dellew] and [the Government] such that [Dellew] qualifies as a prevailing party under the EAJA.” View "Dellew Corp. v. United States" on Justia Law

The court affirmed the denial of a motion to intervene in a False Claims Act (FCA), 31 U.S.C. 3729-3733, suit brought by the Government against Sprint because the movant did not meet the requirements in the four-part test set out in Sw. Ctr. for Biological Diversity v. Berg. John C. Prather had filed an earlier qui tam suit against Sprint and others, alleging the companies were defrauding federal and state governments. The Government elected not to intervene and the district court later dismissed Prather's suit for lack of jurisdiction. The Government then filed its own FCA suit against Sprint and the district court denied Prather's motion to intervene based on lack of standing. As a preliminary matter, the court agreed with the Fourth Circuit that the parties' settlement and dismissal of a case after the denial of a motion to intervene does not as a rule moot a putative-intervenor's appeal. Here, the Government's settlement agreement with Sprint and the dismissal of the underlying action did not moot this appeal. On the merits, Prather lacked a significantly protectable interest in this case, the statute's qui tam recovery provisions in section 3730(d) did not apply to relators jurisdictionally barred under section 3730(e)(4); and Prather cannot obtain a monetary bounty under the FCA on his jurisdictionally barred claims. View "United States v. Sprint Communications" on Justia Law

Diaz submitted an unsolicited proposal to the U.S. Department of the Navy’s Indian Head Explosive Ordnance Disposal Technology Division (IHEODTD) pursuant to Federal Acquisition Regulation (FAR) Subpart 15.6. An IHEODTD contracting officer conducted an initial review of Diaz’s proposal and determined that it did not satisfy two requirements of FAR 15.606-1: that it be innovative and unique and include sufficient detail to permit a determination that government support could be worthwhile and the proposed work could benefit the agency’s research and development or other mission responsibilities. The Court of Federal Claims dismissed Diaz’s complaint for lack of subject matter because he lacked standing under 28 U.S.C. 1491(b)(1). The Federal Circuit affirmed. Diaz did not possess the requisite direct economic interest to satisfy his “burden of establishing the elements of standing.” Diaz cannot demonstrate that he “had a substantial chance of winning the contract” because, at the very least, his proposal did not conform to the requirements of FAR Subpart 15.6, which governs unsolicited proposals. View "Diaz v. United States" on Justia Law

KPCC filed suit against KBR, a general contractor supporting the Government's military operations in Iraq, alleging claims for breach of contract, fraud, and promissory estoppel. At issue was a 2010 contract for, inter alia, KBR's leasing, with an option to purchase, a dining facility constructed by KPCC in Iraq. The district court dismissed the complaint, concluding that the political-question doctrine rendered nonjusticiable the contract dispute at issue. Applying de novo review, under the discriminating inquiry required by Baker v. Carr, the court concluded that the claims presented required resolution of contractual disputes for which there existed judicially manageable standards. Therefore, there was no justiciable political question. The court disposed of KBR's remaining claims regarding the act-of-state doctrine and regarding a contractor's defense from its strict execution of a constitutionally authorized government order. Accordingly, the court vacated the district court's judgment and remanded. View "Kuwait Pearls Catering Co. WLL v. Kellogg Brown & Root Services, Inc." on Justia Law

Plaintiff filed suit in state court against Crane and 24 other defendants to recover injuries allegedly caused by exposure to asbestos. After removal to federal district court, the district court remanded to state court. The court concluded that the military specifications and affidavits at issue provide a not-insubstantial and non-frivolous basis upon which Crane may assert government-contractor immunity. The court concluded, under 28 U.S.C. 1442(a)(1), that the facts in the record before it are sufficient to establish that Crane was “acting under” the Navy. In this case, Crane has established the requisite causal nexus between the charged conduct and its official authority. The court explained that Crane’s relationship with Zeringue derives solely from its official authority to provide parts to the Navy, and that official authority relates to Crane’s allegedly improper actions, namely its use of asbestos in those parts. Because Crane has established the right to remove the suit pursuant to section 1442, the court need not determine whether Crane independently established the right to remove Zeringue’s failure to warn claim. Accordingly, the court reversed and remanded. View "Zeringue v. Allis-Chalmers Corp." on Justia Law

Before Hurricane Katrina, State Farm issued federal government-backed flood insurance policies and its own homeowner policies. Relators, former claims adjusters for a State Farm contractor (Renfroe) filed a complaint under seal in April 2006, claiming that State Farm instructed adjusters to misclassify wind damage as flood damage to shift its insurance liability to the government. The district court extended the seal several times at the government’s request, lifting it in part in January 2007 for disclosure to another district court hearing a suit by Renfroe against the relators. In August, the court lifted the seal. The government declined to intervene. State Farm moved to dismiss on grounds that the relators’ attorney had disclosed the complaint’s existence to news outlets, which issued stories about the fraud allegations, but did not mention the False Claims Act (FCA, 31 U.S.C. 3729) complaint and the relators had met with a Congressman who later spoke against the purported fraud. Under the FCA: “The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders.” The court decided against dismissal, balancing actual harm to the government, severity of the violations, and evidence of bad faith. The Fifth Circuit and a unanimous Supreme Court affirmed. A seal violation does not mandate dismissal. The FCA has several provisions expressly requiring the dismissal, indicating that Congress did not intend to require dismissal for a violation of the seal requirement. This result is consistent with the purpose of section 3730(b)(2), which was enacted to “encourage more private enforcement suits,” and to protect the government’s interests when a relator filing a civil complaint could alert defendants to a pending federal criminal investigation. View "State Farm Fire & Casualty Co. v. United States ex rel. Rigsby" on Justia Law

Relator-appellee Jeffrey Simoneaux brought a qui tam action against his former employer, E.I. duPont de Nemours & Company ("duPont"), under the False Claims Act ("FCA"). He contended that duPont had violated the reverse-false-claims provision by concealing an obligation to pay the United States a penalty arising from alleged violations of the Toxic Sub-stances Control Act ("TSCA"). He also averred that duPont had retaliated against him in violation of the FCA. DuPont unsuccessfully moved for summary judgment on both claims, and the Fifth Circuit permitted an interlocutory appeal. Because duPont had no “obligation” to pay the United States, the Court reversed and remanded the denial of summary judgment on the reverse false claim. With respect to the retaliation claim, the Court dismissed the appeal for lack of jurisdiction. View "Simoneaux v. E. I. DuPont de Nemours & Co." on Justia Law

The City of Rochester’s Department of Public Works owned and operated the Rochester Water System, which provided water to residents of the City. The City operated three water storage tanks, one of which is the Rochester Hill Water Storage Tank (the Tank). Whitman & Howard n/k/a AECOM Technical Services, Inc. (AECOM) designed the Tank and oversaw its construction by Chicago Bridge & Iron n/k/a CB&I, Inc. (CB&I). CB&I completed the Tank in 1985, and it was placed into service that same year. In June 2009, the City contracted defendant Marcel A. Payeur, Inc. (Payeur) to service the Tank by recoating the Tank’s interior and exterior, installing a mixer, and modifying the Tank to accommodate the mixer. Defendant Wright-Pierce performed the engineering and design work for the modification project. Payeur substantially completed the modification, under Wright-Pierce’s supervision, in November 2009. In December 2011, the Tank developed a leak. The City had to evacuate nearby residents, drain the Tank, and remove it from service. The City inspected the Tank and discovered that Payeur had failed to properly construct the modifications in accordance with Wright-Pierce’s design. The City filed suit against Payeur in November 2012, alleging breach of contract, breach of warranty, negligence, and unjust enrichment. In April 2014, the City named CB&I, AECOM, and Wright-Pierce as additional defendants. The City’s amended complaint alleged that Wright-Pierce had failed to properly supervise Payeur’s 2009 modification work; it also alleged that, in 1985, CB&I had failed to properly construct the Tank in accordance with AECOM’s design, and AECOM had failed to adequately monitor CB&I. CB&I and AECOM moved to dismiss the City’s claims against them, arguing that the claims were time-barred. The superior court dismissed the City’s claims against CB&I and AECOM pursuant to a six year statute of limitations in effect when CB&I and AECOM substantially completed their contract with the City. The City appealed, arguing the superior court erred in refusing to apply the doctrine of “nullum tempus occurrit regi (“time does not run against the king”). Finding no reversible error, the New Hampshire Supreme Court affirmed. View "City of Rochester v. Marcel A. Payeur, Inc." on Justia Law

Inclusion, Inc., Inclusion North, Inc., and Inclusion South, Inc., (collectively Inclusion) provided residential rehabilitation support services to Idahoans eligible for Medicaid. In September 2012, Inclusion filed a complaint against the Idaho Department of Health and Welfare (IDHW), alleging IDHW breached binding Medicaid Provider Agreements by failing to adequately reimburse Inclusion for its services. In June 2013, Inclusion amended its complaint with unjust enrichment and quasi-estoppel claims. The district court granted summary judgment for IDHW, concluding no triable issue of fact supported Inclusion’s claims. IDHW then moved for attorney fees under Idaho Code section 12-120(3) and requested $74,925.00 in fees. The district court found that IDHW’s requested award was based on a reasonable amount of hours and a reasonable hourly rate, as determined by the Boise market. As the district court acknowledged, “the hourly rate requested is reasonable and certainly well within the rate in the marketplace in the Fourth District in Ada County, in particular.” Even so, the district court took issue with how IDHW’s requested award was not based on the actual hourly rate billed during litigation. As the district court explained, “[e]xcept where the award of attorney fees is paid to the lawyer, fees awarded to a party should not exceed the amount the client actually paid for the lawyer.” To that end, the district court multiplied 599.4 hours of work by $54.00 per hour1 to award a total of $30,857.11. IDHW moved to reconsider, but the district court upheld the award for $30,857.11. IDHW timely appealed, arguing the district court abused its discretion by basing the award on the amount billed by the Attorney General. The Supreme Court agreed, vacated the judgment and granted IDHW its requested award. View "Inclusion, Inc v. Id. Dept. of Health & Welfare" on Justia Law