Justia Government Contracts Opinion Summaries

In this appeal, the United States challenges its liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601-75, for a portion of the cost of cleaning up hazardous substances at three California facilities owned by Lockheed. The government acknowledges its own share of CERCLA liability and also that it agreed to reimburse Lockheed’s share via overhead charges on unrelated contracts. At issue is whether the government has a valid claim that the particular mechanism by which the United States will pay its share of the costs of environmental remediation under CERCLA interacts with the parties’ agreed-upon contract-based reimbursement method in a way that impermissibly requires the government to make double payment. The court concluded that the district court’s CERCLA judgment did not create any double recovery and the court rejected the government's arguments to the contrary; the government's protest that the crediting mechanism does not help, but instead harms it further, is unavailing; even assuming the court was in a position to review the equities of the parties’ own choice in their Billing Agreement to resort to the indirect-cost billing and crediting mechanism and their apparent decision to use that mechanism for payment and crediting of future costs, the government has not clearly identified how the crediting mechanism is a source of inequity; and, at this juncture, on appeal from the district court’s judgment imposing no liability on the government for past costs, section 114(b) simply is not implicated. Because the all of the government's claims fail, the court affirmed the judgment. View "Lockheed Martin Corp. v. United States" on Justia Law

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

KIF is a Tennessee coal-fired plant generating electricity. In 2008, a KIF coal-ash containment dike failed, spilling 5.4 million cubic yards of coal-ash sludge over 300 acres of adjacent land. The Tennessee Valley Authority (TVA) and the Environmental Protection Agency (EPA) responded, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and the National Oil and Hazardous Substances Pollution Contingency Plan. EPA delegated authority to TVA, 42 U.S.C. 9604(a)-(b). TVA engaged Jacobs as the prime contractor for planning and oversight of remediation. Jacobs provided a Site Wide Safety and Health Plan that applies to all construction at the site, and to CERCLA remediation activities in accordance with EPA’s Standard Operating Safety Guide. The Plaintiffs worked on the KIF remediation and, in 2013, sued, alleging that Jacobs improperly monitored fly ash; inadequately trained workers about hazards of inhaling toxic fly ash; inadequately monitored their medical conditions; denied requests for respirators and dust masks; exposed them to high concentrations of flyash toxic constituents; and fraudulently concealed that exposure. The district court dismissed for lack of subject-matter jurisdiction, concluding that Jacobs was entitled to government-contractor immunity as a corollary of the discretionary-function exception to the Tort Claims Act, 28 U.S.C. 2674. The Sixth Circuit reversed, finding that such immunity is not jurisdictional and that the court should have considered a motion to dismiss for failure to state a claim. View "Adkisson v. Jacobs Eng'g Grp, Inc" on Justia Law

In 1943, Congress approved a Compact between Kansas, Nebraska, and Colorado to apportion the “virgin water originating in” the Republican River Basin. In 1998, Kansas filed an original action in the Supreme Court contending that Nebraska’s increased groundwater pumping was subject to the Compact to the extent that it depleted stream flow in the Basin. The Court agreed. Negotiations resulted in a 2002 Settlement, which identified the Accounting Procedures by which the states would measure stream flow depletion, and thus consumption, due to groundwater pumping. The Settlement reaffirmed that “imported water,” brought into the Basin by human activity, would not count toward consumption. In 2007, Kansas claimed that Nebraska had exceeded its allocation. Nebraska responded that the Accounting Procedures improperly charged it for imported water and requested that the Accounting Procedures be modified. The Court appointed a Special Master, whose report concluded that Nebraska “knowingly failed” to comply, recommended that Nebraska disgorge part of its gains in addition to paying damages, and recommended denying an injunction and reforming the Accounting Procedures. The Supreme Court adopted the recommendations. Nebraska failed to establish adequate compliance mechanisms, given a known substantial risk that it would violate Kansas’s rights; Nebraska was warned each year that it had exceeded its allotment. Because of the higher value of water on Nebraska’s farmland than on Kansas’s, Nebraska could take Kansas’s water, pay damages, and still benefit. The disgorgement award is sufficient to deter future breaches. Kansas failed to demonstrate a “cognizable danger of recurrent violation” necessary to obtain an injunction. Amending the Accounting Procedures is necessary to prevent serious inaccuracies from distorting intended apportionment. View "Kansas v. Nebraska" on Justia Law

Following the 1941 attack on Pearl Harbor, each of the Oil Companies entered into contracts with the government to provide high-octane aviation gas (avgas) to fuel military aircraft. The production of avgas resulted in waste products such as spent alkylation acid and “acid sludge.” The Oil Companies contracted to have McColl, a former Shell engineer, dump the waste at property in Fullerton, California. More than 50 years later, California and the federal government obtained compensation from the Oil Companies under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601, for the cost of cleaning up the McColl site. The Oil Companies sued, arguing the avgas contracts require the government to indemnify them for the CERCLA costs. The Court of Federal Claims granted summary judgment in favor of the government. The Federal Circuit reversed with respect to breach of contract liability and remanded. As a concession to the Oil Companies, the avgas contracts required the government to reimburse the Oil Companies for their “charges.” The court particularly noted the immense regulatory power the government had over natural resources during the war and the low profit margin on the avgas contracts. View "Shell Oil Co. v. United States" on Justia Law

The companies obtained an oil and gas lease from the government for a 5760-acre tract on the Outer Continental Shelf. They made an initial bonus payment of $23,236,314 and have paid additional rental payments of $54,720 per year. The lease became effective on August 1, 2008, and had an initial term running through July 31, 2016. It provided that it issued pursuant to and was subject to the Outer Continental Shelf Lands Act of August 7, 1953, (OCSLA) 43 U.S.C. 1331 and “all regulations issued pursuant to the statute in the future which provide for the prevention of waste and conservation of the natural resources of the Outer Continental Shelf and the protection of correlative rights therein; and all other applicable statutes and regulations.” In 2010, an explosion and fire on the Deepwater Horizon semi-submersible oil drilling rig in the Gulf of Mexico killed 11 workers and caused an oil spill that lasted several months. As a result, the government imposed new regulatory requirements, Oil Pollution Act (OPA), 33 U.S.C. 2701. The companies sued for breach of contract. The Claims Court and Federal Circuit ruled in favor of the government, finding that the government made the changes pursuant to OCSLA, not OPA. View "Century Exploration New Orleans, LLC v. United States" on Justia Law

In a 1905 water exchange agreement, Big Ditch Irrigation Company conveyed its Big Cottonwood Creek water right to the Salt Lake City Corporation in exchange for the City's commitment to supply Big Ditch with a specified quantity of irrigation-quality water from City sources. Concerned that Big Ditch was infringing upon the City's water rights, the City initiated this case against Big Ditch and four Big Ditch shareholders in district court. The City sought declaratory judgment on several issues. Big Ditch and the shareholders counterclaimed. The district court granted summary judgment in favor of the City on most major issues. On appeal, the Supreme Court held that the district court properly dismissed the defendants' counterclaims and correctly concluded that the City holds title to the water rights conveyed in the agreement. The Court held, however, that the district court erred in (1) determining that Big Ditch did not have a right to file change applications; (2) determining that the parties had modified the agreement or, alternatively, that Big Ditch was estopped from enforcing its right to the amount of water specified in the agreement; and (3) refusing to dismiss the City's claims against the shareholders.View "Salt Lake City Corp. v. Big Ditch Irrigation Co." on Justia Law

The Village commenced this action against the Corps to require it to honor commitments made to the Village and other North Carolina towns when developing its plan to widen, deepen, and realign portions of the Cape Fear River navigation channel. The district court dismissed the complaint for lack of subject matter jurisdiction. The court agreed with the district court's holding that the Corps' failure to implement "commitments" made to the Village during development of the plans for the project was not final agency action subject to judicial review. The court also concluded that the alleged contracts on which the Village relied for its contract claims were not maritime contracts that justified the exercise of admiralty jurisdiction. Accordingly, the court affirmed the judgment. View "Village of Bald Head Island v. U. S. Army Corps" on Justia Law

Casitas Water District operates the Ventura River Project, which is owned by the U.S. Bureau of Reclamation and provides water to Ventura County, California, using dams, reservoirs, a canal, pump stations, and many miles of pipeline. In 1997, the National Marine Fisheries Service listed the West Coast steelhead trout as an endangered species and determined that the primary cause of its decline was loss of habitat due to water development, including impassable dams. Casitas faced liability if continued operation of the Project resulted in harm to the steelhead, 16 U.S.C. 1538(a)(1), 1540(a)–(b). In 2003, NMFS issued a biological opinion concerning operation of a fish ladder to relieve Casitas of liability. Casitas opened the Robles fish ladder, then filed suit, asserting that the biological opinion operating criteria breached its 1956 Contract with the government or amounted to uncompensated taking of Casitas’s property. The Claims Court dismissed, citing the sovereign acts doctrine. The Federal Circuit affirmed dismissal of the contract claim, but reversed dismissal of Casitas’s takings claim. The court again dismissed, holding that Casitas had failed to show that the operating criteria had thus far resulted in any reduction of water deliveries, so a takings claim was not yet ripe. The Federal Circuit affirmed. View "Casitas Mun. Water Dist. v. United States" on Justia Law

Indian Harbor sought reimbursement under the National Defense Authorization Act of 1993, 106 Stat. 2315, 2371; 107 Stat. 1547, 1745 for environmental cleanup costs associated with the development of the former Marine Corps Air Station Tustin military base in southern California. The Court of Federal Claims determined that Indian Harbor failed to identify a “claim for personal injury or property” that triggered the government’s duty to indemnify and dismissed. The Federal Circuit reversed, relying on the purposes of the Act, to encourage cleanup and redevelopment of former military installations. View "Indian Harbor Ins. v. United States" on Justia Law