Justia Government Contracts Opinion Summaries
Articles Posted in Constitutional Law
United States v. Lustyik
Former FBI agent Robert Lustyik wanted to help his friend and business partner, Michael Taylor, in return for payment. Taylor owned American International Security Corporation (AISC), a company that offered security and defense contracting services. The Department of Defense awarded AISC a contract in 2007 to provide training and related services to Afghan Special Forces. In mid-2010, the United States began investigating AISC regarding fraud and money laundering in connection with the 2007 contract. In September 2011, the United States filed a civil forfeiture action against assets owned by Taylor and AISC, which resulted in the seizure of more than $5 million dollars from AISC’s bank account. Lustyik used his status as an FBI agent to impair the government’s investigation of Taylor, including attempting to establish Taylor as a confidential source. Lustyik was indicted on charges related to the obstruction of justice. Prior to trial, Lustyik pleaded guilty to all charges in the indictment without a plea agreement. After his plea, his lead counsel withdrew and Lustyik obtained new counsel. On the eve of sentencing, counsel sought an order allowing him to obtain security clearance to review classified material he believed might be relevant for sentencing. The district court, having previously reviewed the documents, deemed them irrelevant to the sentencing issues, denied the motion, and subsequently sentenced Lustyik to 120 months’ imprisonment.
Lustyik argued on appeal that the district court’s order denying his counsel access to the classified materials violated his Sixth Amendment rights at sentencing. Finding that the district court’s decision was not presumptively prejudicial to Lustyik’s advocacy at sentencing, nor did the district court abuse its discretion in concluding the documents were not relevant for sentencing, the Tenth Circuit affirmed. View "United States v. Lustyik" on Justia Law
Duit Constr. Co. v. Ark. State Claims Comm’n
Plaintiff, a construction company, filed this suit after the Arkansas State Claims Commission (ASCC) denied a claim by Plaintiff related to a contract Plaintiff had entered into with the Arkansas State Highway Commission (ASHC) to complete a highway improvement project. Plaintiff named as defendants the ASCC, the ASHC, and the Arkansas State Highway and Transportation Department (ASHTD). In its complaint, Plaintiff challenged the constitutionality of the method by which the State resolves claims against it, asserting that the procedures violated the Due Process Clause. After a remand by the Supreme Court, the circuit court dismissed Plaintiff’s due process claim and equal protection claim as barred by sovereign immunity. On appeal, Plaintiff argued that the circuit court erred in dismissing its due process claim. The Supreme Court affirmed, holding that Plaintiff failed to demonstrate an unconstitutional act on the part of Defendants that would except its due process claim from the doctrine of sovereign immunity. View "Duit Constr. Co. v. Ark. State Claims Comm'n" on Justia Law
Robinson v. Bd. of Comm’rs of the Cty. of Eddy
The County Assessor for Eddy County sought to use money in a county property valuation fund (as established by the Legislature in 1986) to contract with a private company for technical assistance in locating and valuing oil and gas property. The County Commission for Eddy County refused to approve the proposed plan because it believed that a contract to pay private, independent contractors to assist the County Assessor in the performance of the Assessor’s statutory duties exceeded the Commission’s lawful authority. The Supreme Court was persuaded that the County Commission did have such authority under law, and that the contract under consideration here would not have exceed that authority or be otherwise ultra vires. The district court having previously issued a declaratory judgment to that same effect, the Supreme Court affirmed. View "Robinson v. Bd. of Comm'rs of the Cty. of Eddy" on Justia Law
Barlow & Haun, Inc. v. United States
Trona is a sodium carbonate compound that is processed into soda ash or baking soda. Because oil and gas development posed a risk to the extraction of trona and trona worker safety, the Bureau of Land Management (BLM), which manages the leasing of federal public land for mineral development, indefinitely suspended all oil and gas leases in the mechanically mineable trona area (MMTA) of Wyoming. The area includes 26 pre-existing oil and gas leases owned by Barlow. Barlow filed suit, alleging that the BLM’s suspension of oil and gas leases constituted a taking of Barlow’s interests without just compensation and constituted a breach of both the express provisions of the leases and their implied covenants of good faith and fair dealing. The Federal Circuit affirmed the Claims Court’s dismissal of the contract claims on the merits and of the takings claim as unripe. BLM has not repudiated the contracts and Barlow did not establish that seeking a permit to drill would be futile. View "Barlow & Haun, Inc. v. United States" on Justia Law
Maher Terminals LLC v. Port Auth. of NY
In 2000 the Port Authority signed a 30-year lease for the largest marine terminal at Port Elizabeth (445 acres including structures and berthing) with Maher, which handles cargo. The Lease requires “Basic Rental,” (in 2012, $50,413 per acre, totaling $22,433,612) plus “Container Throughput Rental,” based on the type and volume of cargo at Maher’s terminal. For eight years, Maher was exempted from Throughput Rental. Since 2008 the first 356,000 containers are exempted; for containers 356,001 to 980,000, Maher paid $19.00 per container in 2012; and for each additional container, Maher paid $14.25. Maher must handle a minimum amount of cargo to maintain the Lease and pay an annual guaranteed minimum Throughput Rental. Maher paid $12.5 million in Throughput Rental in 2010, and expected the 2012 amount to be $14 million. Maher claims the Port Authority profits from the Lease and uses the revenue to fund harbor improvements and projects unrelated to services provided to Maher or vessels. In 2012 Maher sued, alleging violations of the Constitution’s Tonnage Clause; the Rivers and Harbors Appropriation Act, 33 U.S.C. 5(b); and the Water Resources Development Act, 33 U.S.C. 2236. The Third Circuit affirmed dismissal, agreeing that Maher lacked standing to bring its Tonnage Clause and RHA claims because it was not a protected vessel and did not adequately plead that fees imposed on vessels were not for services rendered. Maher’s WRDA claim failed because Maher had not shown that the Authority imposed fees on vessels or cargo and because the WRDA did not prohibit use of Lease revenue to finance harbor improvements. View "Maher Terminals LLC v. Port Auth. of NY" on Justia Law
Grupp v. DHL Express
Relators filed suit under the California False Claims Act, Gov. Code, 12650 et seq., alleging that DHL overcharged and fraudulently billed the State for delivery services. The trial court concluded that the action was preempted by the Airline Deregulation Act of 1978, 49 U.S.C. 41713(b)(1), and Federal Aviation Administration Authorization Act of 1994, 49 U.S.C. 14501(c)(1). The trial court then granted judgment on the pleadings. After remand from the California Supreme Court, the court concluded that People ex rel. Harris v. PAC Anchor Transportation, Inc. does not apply in this case. The court held, as it had before, that the application of the State Act in this case would constitute an impermissible regulation of DHL’s prices, routes and services in conflict with federal law. Accordingly, the court affirmed the trial court's order. View "Grupp v. DHL Express" on Justia Law
Duit Constr. Co. Inc. v. Bennett
Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" on Justia Law
DiLuzio v. Village of Yorkville
DiLuzio, owned Yorkville buildings that burned under suspicious circumstances. Fire Chief Klubert led the firefighting and coordinated with Mayor DiFilippo on a decision to demolish part of a building immediately, without inspection or formal decision. Klubert and DiFilippo ordered Officer Davis to find DiLuzio and bring him to a meeting. At that meeting, DiLuzio insisted the buildings could be repaired. DiFilippo ordered Nemeth to demolish most of the south building, but left part intact, even though it had suffered the worst damage. Days later, Police Chief Morelli (on orders from DiFilippo) approached DiLuzio’s son with a low-ball offer from an anonymous investor, to purchase the property “as is.” DiLuzio declined. Morelli approached DiLuzio with another offer months later. DiLuzio declined again. Morelli, Klubert, and DiFilippo began to issue citations, threatening $600 per day fines. The Village dismissed the first citation, which included false statements about inspections and authorizations. Morelli falsified a State Fire Marshall citation threatening $1,000 per day fines. The Village then passed a criminal ordinance concerning unkempt properties. Morelli charged DiLuzio, falsely notarizing his own signature. DiLuzio filed a 42 U.S.C. 1983 action. The Sixth Circuit affirmed.summary judgment for defendants on some claims, but denied qualified immunity to DiFilippo and Klubert on the due process claim concerning demolition; to Morelli and Davis on substantive due process claims; and to Nemeth because he was not a state actor. View "DiLuzio v. Village of Yorkville" on Justia Law
Rosaura Building Corp. v. Municipality of Mayaguez
Rosaura Building Corp. (“Rosaura”) filed a lease contract petition form offering its building as property for Head Start classrooms. The Mayor of the Municipality of Mayguez rejected the contract. Rosaura brought a civil rights claim for equitable relief and damages pursuant to 42 U.S.C. 1983 against the Mayor and the municipal government (collectively, “Defendants”), claiming that Defendants’ rejection of the contract was solely motivated by Rosaura’s political beliefs. The district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that the district court (1) did not err in granting the dismissal of the claims against the Municipality, as there was no practical effect in dismissing the claims against the municipal government where a mayor’s “employment decisions ipso facto” constitute the official policy of the municipality; and (2) did not err in dismissing the claims against the Mayor in his official capacity, as Rosaura failed to state a First Amendment retaliation cause of action and failed to state an equal protection claim by not alleging what protected activity it exercised and was a substantial motivating factor in bringing about the Mayor’s purported retaliation. View "Rosaura Building Corp. v. Municipality of Mayaguez" on Justia Law
Deputy Sheriffs’ Assn. v. County of San Diego
The issue this case presented for the Court of Appeal's review was whether the California constitution's prohibition against the impairment of contracts precluded the application of the defined benefit formulas and employee contribution provisions of the California Public Employees' Pension Reform Act of 2013 to County of San Diego safety employees who were hired after the Act's effective date, but who were covered by preexisting collective bargaining agreements containing conflicting terms. After review, the Court concluded the application of the defined benefit formula provisions did not result in a constitutionally prohibited impairment of the agreements. The Court did not reach the constitutional question as to the application of the employee contribution provisions as the Court concluded their application resulted in a statutorily prohibited impairment of the agreements. The Court affirmed the judgment as to the application of the defined benefit formula provisions and remanded the case back to the superior court for further proceedings as to the application of the employee contribution provisions. View "Deputy Sheriffs' Assn. v. County of San Diego" on Justia Law