Justia Government Contracts Opinion Summaries

Ascendium Education Solutions (“Ascendium”) is a Program guarantor that previously charged debt-collection costs to defaulting Program borrowers who entered loan rehabilitation agreements. Ascendium challenged the Department of Education’s Rule, 34 C.F.R. Section 682.410(b)(2)(i), under the Administrative Procedure Act (“APA”), arguing that the Department of Education and its Secretary (collectively, the “Department”) did not have statutory authority to promulgate the Rule because the Rule conflicts with the Act. The district court ruled that Ascendium lacked standing to challenge the Rule as it applies to borrowers who enter repayment agreements. But the district court held that the Rule exceeded the Department’s authority under the Act with respect to borrowers who enter rehabilitation agreements. Both Ascendium and the Department appealed.   The DC Circuit reversed in part and affirmed in part. The court concluded that Ascendium has standing to challenge the entirety of the Rule, that the Rule is consistent with the Act and therefore is lawful, and that the Rule is not arbitrary or capricious. The court explained that the Rule prohibits a guarantor from charging collection costs to a borrower who enters a repayment plan or a rehabilitation agreement during the initial default period: It implicitly deems such costs “unreasonable” under the circumstances. The court concluded that the Rule is consistent with the Act’s requirement that “reasonable” collection costs must be passed on to borrowers. Further, the court explained that the Department’s response to Ascendium’s comment adequately refuted Ascendium’s assumption that the purpose of the Rule should be to incentivize guarantors to enter rehabilitation agreements by allowing them to charge collection costs. View "Ascendium Education Solutions, Inc. v. Miguel Cardona" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the summary judgment entered by the Cuyahoga County Court of Common Pleas in favor of Warrensville Heights in this real property dispute, holding that the agreement between the parties in this case was valid and enforceable.The Beachwood City School District Board of Education sought approval from the state board of education for a transfer of territory it annexed in 1990 to the Beachwood City School District. The Warrensville Heights City School District Board of Education, whose district the annexed territory was a part of, objected. In 1997, Beachwood and Warrensville Heights agreed that the territory would not transfer to the Beachwood City School District but that the districts would share the tax revenue generated from real property located within the territory. The court of common pleas granted summary judgment for Warrensville Heights, concluding that the parties' agreement was not valid. The court of appeal reversed. The Supreme Court affirmed, holding that the 1997 agreement required neither approval nor a fiscal certificate and therefore was valid and enforceable. View "Beachwood City School District Bd. of Education v. Warrensville Heights City School District Bd. of Education" on Justia Law

Plaintiff Thomas Lowell provided piano tuning services to defendant Medford School District and assisted in producing concerts performed in defendant’s facilities. While providing production assistance for a particular concert, plain- tiff noticed an echo near the stage. He complained to the school theater technician, Stephanie Malone, and, later, feeling that Malone had not adequately responded, he followed up with her. Malone reported to her supervisor that plaintiff appeared to be intoxicated, that he “smelled of alcohol,” and that “this was not the first time.” The supervisor repeated Malone’s statements to a district support services assistant. The assistant sent emails summarizing Malone’s statements to three other district employees, including the supervisor of purchasing. The assistant expressed concerns that appearing on district property under the influence of alcohol violated district policy and the terms of plaintiff’s piano tuning contract. Plaintiff brought this defamation action against Malone, the supervisor and assistant, later substituting the School district for the individual defendants. Defendant answered, asserting multiple affirmative defenses, including the one at issue here: that public employees are entitled to an absolute privilege for defamatory statements made in the course and scope of their employment. The trial court granted defendant's motion for summary judgment on that basis. The Oregon Supreme Court reversed, finding that defendant as a public employer, did not have an affirmative defense of absolute privilege that entitled it to summary judgment. View "Lowell v. Medford School Dist. 549C" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the trial court and remanded this case for further remand to the superior court with instructions to reinstate its earlier order granting summary judgment in favor of the Attorney General, holding that the New Hanover County Board of Education's amended complaint did not suffice to support a claim pursuant to N.C. Gen. Stat. 147-76.1.This case arose from the Board of Education's challenge to the Attorney General administration of an environmental enhancement grant program funded by payments made by Smithfield Foods, Inc. and its subsidiaries pursuant to an agreement between the companies and the Attorney General. The trial court granted summary judgment for the Attorney General and dismissed the Board of Education's allegations that the payments received from the Smithfield companies under the agreement constituted civil penalties that should have been made available to public schools pursuant to N.C. Const. Art. IX, 7. The Supreme Court upheld the trial court's judgment, holding that the court of appeals erred by concluding that the Board of Education’s complaint sufficed to support a claim for relief pursuant to section 147-76.1. View "New Hanover County Board of Education v. Stein" on Justia Law

Dr. Braun worked at the National Institutes of Health (NIH) for almost 32 years as a research doctor with a specialty in neurological disorders. He obtained tenured status in 2003. In 2016, the NIH, which is located within the U.S. Department of Health and Human Services, removed Dr. Braun from his position after an audit revealed that his records were incomplete for all but 9% of the human subjects who had participated in his research over the course of six years.The Merit Systems Protection Board rejected Braun’s argument that an NIH policy required de-tenuring of tenured scientists (which NIH had not done in his case) before they could be removed for performance-related reasons and that the NIH committed certain other errors. The Board reasoned that the cited NIH policy allows removal “for cause” without de-tenuring. The Federal Circuit affirmed. The “for cause” provision was properly applied to this case. The evidence permitted the conclusions that Dr. Braun, “over a long period of time,” failed to a “dramatic and disturbing” degree, to comply with protocol requirements that exist “for the safety of the patients and the credibility of the research.” There was no denial of due process. View "Braun v. Department of Health and Human Services" on Justia Law

Restore was asked to mitigate and repair significant fire damage at Proviso East High School, having provided similar service to the District in the past. The District’s customary practice when contracting for repair and payment of losses covered by insurance was to proceed without a recorded vote of its Board. The fire loss was covered by insurance. The District’s superintendent executed contracts with Restore.The District was subject to the School District Financial Oversight Panel (FOP) and Emergency Financial Assistance Law (105 ILCS 5/1B-1) and the Financial Oversight Panel Law (105 ILCS 5/1H-1). The FOP’s chief fiscal officer attended construction meetings and approved numerous subcontracts, quotations, bids, sales orders, change orders, and invoices. Although there was no recorded vote, “a majority of the Proviso Board knew and informally approved" the work. Restore was paid by the insurers for all but $1,428,000. Restore sued, seeking recovery from the District based on quantum meruit. The District argued that it had no obligation to pay because the contracts had not been let out for bid and approved by a majority vote as required by the School Code (105 ILCS 5/1-1).The Illinois Supreme Court affirmed the reinstatement of the case following dismissal. The failure of a governmental unit to comply with required contracting methods is not fatal to a plaintiff’s right to recover based on quasi-contract or implied contract principles. The Board was subject to the FOP; the FOP was fully apprised of and approved the work. Any misconduct was on the part of the Board; allowing Restore to recover presents no “risk of a raid on the public treasury.” View "Restore Construction Co., Inc. v. Board of Education of Proviso Township High Schools District 209" on Justia Law

Education Code section 17406 authorizes school districts to use lease-leaseback agreements for construction or improvement of school facilities: the school district leases its own real property to a contractor for a nominal amount, and the contractor agrees to construct or improve school facilities on the property and lease the property and improvements back to the district. At the end of the lease-leaseback agreement, title to the project vests in the school district. California Taxpayers Network brought a reverse validation action (Code Civ. Proc. 863), challenging a lease-leaseback agreement between Mount Diablo School District and Taber Construction, alleging that the Education Code requires “genuine lease-leaseback agreements,” which “provide for financing of the school facility project over time,” but defendants’ lease-leaseback contracts were “sham leases”; that the contracts were illegal because a public bidding process is required for school construction projects; and that Taber provided professional preconstruction services to the District regarding the project before entering the lease-leaseback contracts. The court of appeals affirmed dismissal of claims "that attempt to engraft requirements on the transaction" that are not part of the Education Code. The court reversed in part, holding that the plaintiff did state a conflict of interest claim against Taber sufficient to withstand a demurrer. View "California Taxpayers Action Network v. Taber Construction, Inc." on Justia Law

Nelson spent six months as the Director of Education at Sanford‐Brown College, a for‐profit educational institution in Milwaukee. After he resigned, Nelson initiated suit under the False Claims Act (FCA), 31 U.S.C. 3729. Based on its receipt of federal subsidies from the U.S. Department of Education, Nelson alleges that the college’s recruiting and retention practices resulted in the transmission of thousands of false claims to the government, potentially subjecting the college and its corporate parent to hundreds of millions of dollars in liability. After the United States declined to intervene, the district court ultimately entered summary judgment in favor of Sanford‐Brown. The Seventh Circuit affirmed. The district court did not err by holding that its subject matter jurisdiction was limited to the period of time when Nelson was employed by SBC (2008-2009). FCA liability is not triggered by an institution’s failure to comply with Title IV Restrictions after its entry into a Program Participation Agreement, unless the relator proves that the institution’s application to establish initial Title IV eligibility was fraudulent. Sanford-Brown entered into its PPA in 2005. View "United States v. Sanford-Brown, Ltd." on Justia Law

The DeSoto County School District entered into a contract with a private entity called the Mississippi High School Activities Association (“MHSAA”). The terms of the contract allowed MHSAA to decide whether School District students were eligible to play high school sports. In making its decisions, MHSAA applied its own rules and regulations, and neither the School District nor its school board had input into the process. In 2012, R.T. was a star quarterback for Wynne Public School in Wynne, Arkansas. His parents, the Trails, decided that a change of school districts would be in R.T.’s best interests, so in January 2013 they bought a house in Olive Branch and enrolled R.T. in Olive Branch High School. Their daughter was to remain in Wynne until the school year ended. MHSAA determined that R.T. was eligible to compete in spring sports and allowed R.T. to play baseball. MHSAA conditioned R.T.’s continuing eligibility on the Trails’ daughter also enrolling in the School District at the start of the 2013-2014 school year. But, because the Trails’ daughter did not want to leave her friends behind in Arkansas, the family decided that one parent would stay in Arkansas with their daughter, as they had done during the spring semester, and the other parent would move to Mississippi and remain with R.T. On the eve of the 2013 football season, MHSAA notified the school and R.T. that, under its interpretation of its rules and regulations, R.T. was ineligible to play because it had determined that his family had not made a bona fide move to the School District. Neither the School District nor Olive Branch High School appealed through MHSAA’s internal procedure, so the Trails immediately filed a petition for a temporary restraining order (TRO) and preliminary injunction in the DeSoto County Chancery Court. The chancellor signed an ex-parte order granting the TRO and revoking MHSAA’s adverse eligibility determination. "While it generally is true that high school students have no legally protected right to participate in high school athletics,25 once a school decides to create a sports program and establish eligibility rules, the school—or as in this case, MHSAA—has a duty to follow those rules; and it may be held accountable when it does not do so. . . . And where, as here, the school delegates its authority to control student eligibility through a contract with a private entity, we hold that students directly affected by the contract are third-party beneficiaries of that contract. For us to say otherwise would run contrary to the very reason for extracurricular activities, which is to enrich the educational experience of the students." R.T. had standing to challenge MHSAA's eligibility decision that prevented him from playing high school sports. The Court affirmed the chancery court in this case, and remanded the case for further proceedings. View "Mississippi High School Activities Association, Inc. v. R.T." on Justia Law

Former employees filed a qui tam False Claims suit against Heritage College, a for-profit school, alleging it fraudulently induced the Department of Education (DOE) to provide funds by falsely promising to keep accurate student records as required by 20 U.S.C. 1094(a)(3). They claimed that Heritage altered grade and attendance records from 2006 to 2012 to ensure students made satisfactory progress and to avoid refunds, thereby maximizing Title IV funds. Around 97% of Heritage students receive Title IV aid, accounting for about 90% of gross tuition. From 2009 to 2012, the DOE disbursed $32,817,727 to Heritage. Each relator also alleged retaliation under the FCA and wrongful discharge under state law. For purposes of summary judgment, Heritage did not dispute that it altered records. The district court granted summary judgment to Heritage, finding that any false statements were not material to government funding decisions. The Eighth Circuit reversed and remanded the FCA claim, but affirmed the employment claims. Heritage could not have executed the participation agreement without stating it would maintain adequate records and without the agreement Heritage could not have received any Title IV funds. Heritage's actions with respect to the plaintiffs were not retaliatory. View "Miller v. Weston Educ., Inc." on Justia Law