Justia Government Contracts Opinion SummariesArticles Posted in Government Contracts
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
Department of Transportation v. Eagle Peak Rock & Paving, Inc.
The Department of Transportation’s Federal Highway Administration (FHWA) contracted with Eagle for construction work in Yellowstone National Park, to be completed by October 2018. The contract required Eagle to submit a schedule detailing how it would complete the project on time. By late January 2017, FHWA had rejected Eagle’s eight formal schedule submissions as not complying with the contract. In February 2017, the contracting officer terminated the contract for default, concluding that Eagle was insufficiently likely to complete the project on time.Eagle challenged the termination for default under the Contract Disputes Act of 1978 (CDA), 41 U.S.C. 7101–7109, before the Civilian Board of Contract Appeals, which ruled that the termination for default was improper. The Board converted the termination to one for the convenience of the government, relying heavily, though not exclusively, on its view of deficiencies in the contracting officer’s reasoning, rather than on de novo findings about whether the record developed before the Board showed that standard for termination for default was met. The Federal Circuit vacated and remanded for the Board to adjudicate the case de novo. The Board’s evaluation of the contracting officer’s reasoning exceeded the limited scope of the threshold inquiry. The Board also failed to separate that threshold analysis from its de novo evaluation of the evidence. View "Department of Transportation v. Eagle Peak Rock & Paving, Inc." on Justia Law
United States ex rel. Schutte v. Supervalu Inc.
Petitioners sued retail pharmacies under the False Claims Act (FCA), 31 U.S.C. 3729, which permits private parties to bring lawsuits in the name of the United States against those who they believe have defrauded the federal government and imposes liability on anyone who “knowingly” submits a “false” claim to the government. Petitioners claim that the pharmacies defrauded Medicaid and Medicare by offering pharmacy discount programs to their customers while reporting their higher retail prices, rather than their discounted prices, as their “usual and customary” charge for reimbursement. The Seventh Circuit concluded that the pharmacies could not have acted “knowingly” if their actions were consistent with an objectively reasonable interpretation of the phrase “usual and customary.”The Supreme Court vacated. The FCA’s scienter element refers to a defendant’s knowledge and subjective beliefs—not to what an objectively reasonable person may have known or believed. The FCA’s three-part definition of the term “knowingly” largely tracks the traditional common-law scienter requirement for claims of fraud: Actual knowledge, deliberate ignorance, or recklessness will suffice. Even though the phrase “usual and customary” may be ambiguous on its face, such facial ambiguity alone is not sufficient to preclude a finding that the pharmacies knew their claims were false. View "United States ex rel. Schutte v. Supervalu Inc." on Justia Law
Posted in: Government Contracts, Public Benefits, US Supreme Court
M.R. Pittman Group, LLC v. United States
The Army Corps of Engineers (USACE) solicited a contract for the repair of pumps in Louisiana. The webpage linking to the solicitation noted, “[t]his is a 100% Small Business Set Aside procurement" and cited NAICS Code: 811310--the official standard used to determine whether a business is a “small business concern.” The solicitation itself did not refer to Code 811310 but incorporated by reference Federal Acquisition Regulation 52.219-6, “Notice Of Total Small Business Set-Aside.” Pittman submitted the lowest bid. USACE requested that Pittman update its NAICS code status. Pittman did not qualify as a small business under Code 811310 and was ineligible for the award.Pittman filed a bid protest, arguing that the omission of Code 811310 meant that the solicitation could not be treated as a set-aside for small business concerns. The Government Accountability Office dismissed the protest. At a hearing, the parties discussed the "Blue & Gold" rule: A party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so before the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest action. The court dismissed for lack of subject matter jurisdiction under Blue & Gold. The Federal Circuit affirmed. While waiver under Blue & Gold does not deprive the Claims Court of subject matter jurisdiction, the error was harmless because Pittman waived its objection. View "M.R. Pittman Group, LLC v. United States" on Justia Law
Brown v. Oil City, et al.
By 2011, due to weathering and aging, the condition of the concrete stairs leading to the entrance of the Oil City Library (the “library”) had significantly declined. Oil City contracted with Appellants Harold Best and Struxures, LLC, to develop plans for the reconstruction of the stairs and to oversee the implementation of those design plans. The actual reconstruction work was performed by Appellant Fred Burns, Inc., pursuant to a contract with Oil City (appellants collectively referred to as “Contractors”). Contractors finished performing installation work on the stairs by the end of 2011. In early 2012, Oil City began to receive reports about imperfections in the concrete surface, which also began to degrade. In September 2013, Oil City informed Burns of what it considered to be its defective workmanship in creating the dangerous condition of the stairs. Between February 28, 2012 and November 23, 2015, the condition of the stairs continued to worsen; however, neither Oil City nor Contractors made any efforts to repair the stairs, or to warn the public about their dangerous condition. In 2015, Appellee David Brown (“Brown”) and his wife Kathryn exited the library and began to walk down the concrete stairs. While doing so, Kathryn tripped on one of the deteriorated sections, which caused her to fall and strike her head, suffering a traumatic head injury. Tragically, this injury claimed her life six days later. Brown, in his individual capacity and as the executor of his wife’s estate, commenced a wrongful death suit, asserting negligence claims against Oil City, as owner of the library, as well as Contractors who performed the work on the stairs pursuant to their contract with Oil City. The issue this case presented for the Pennsylvania Supreme Court was whether Section 385 of the Restatement (Second) of Torts imposed liability on a contractor to a third party whenever the contractor, during the course of his work for a possessor of land, creates a dangerous condition on the land that injures the third party, even though, at the time of the injury, the contractor was no longer in possession of the land, and the possessor was aware of the dangerous condition. To this, the Court concluded, as did the Commonwealth Court below, that a contractor may be subjected to liability under Section 385 in such circumstances. View "Brown v. Oil City, et al." on Justia Law
Burns Concrete, Inc. v. Teton County
This appeal concerned a district court’s award of attorney fees to Burns Concrete, Inc., and Burns Holdings, LLC (collectively “Burns”). After extensive litigation, Burns prevailed on the merits of its claims and judgment was entered against Teton County, Idaho. The district court awarded Burns attorney fees pursuant to the parties’ development agreement. Both Burns and Teton County appealed, arguing the district court abused its discretion in awarding the fees. Burns argued the district court should have awarded more fees, while Teton County argued it should have denied the fees or awarded less fees. Finding no reversible error in the district court's award, the Idaho Supreme Court affirmed. View "Burns Concrete, Inc. v. Teton County" on Justia Law
Elia Companies, LLC v. University Of Michigan Regents
Elia Companies, LLC, filed suit against the University of Michigan Regents, alleging breach of contract; violations of Michigan’s anti-lockout statute; breach of covenant for quiet possession; constructive eviction; conversion; and unjust enrichment. In 2013, plaintiff entered into a 10-year lease with defendant to obtain space at the Michigan Union for establishing a coffee shop. In March 2017, defendant disclosed its plans to renovate the Union. Plaintiff’s complaint alleged that the parties’ lease required that they negotiate a relocation of the leased premises. However, defendant terminated the lease on April 20, 2018, based on plaintiff’s alleged default and ordered plaintiff to vacate the premises. Plaintiff filed this action in August 2018, and defendant, over plaintiff’s objection, filed a notice of transfer removing the case to the Court of Claims pursuant to MCL 600.6404(3) and MCL 600.6419(1) of the Court of Claims Act (the COCA). Defendant moved for summary disposition, arguing that plaintiff’s action had to be dismissed because plaintiff failed to comply with the notice and verification requirements of MCL 600.6431 of the COCA. The Court of Claims agreed and dismissed plaintiff’s case. Plaintiff appealed, and the Court of Appeals affirmed in part and reversed in part. The panel affirmed the dismissal of plaintiff’s ancillary claims on governmental-tort-immunity grounds but reversed the dismissal of plaintiff’s contract claim. The Michigan Supreme Court determined the Court of Appeals erred when it excused plaintiff’s failure to timely comply with MCL 600.6431. “All parties with claims against the state, except those exempted in MCL 600.6431 itself, must comply with the requirements of MCL 600.6431.” Judgment was reversed and the matter remanded to the Court of Claims for reinstatement of summary judgment granted in defendant’s favor. View "Elia Companies, LLC v. University Of Michigan Regents" on Justia Law
TruConnect Communications, Inc. v. Maximus, Inc.
The Lifeline Program provides discounted telecommunications services to low-income Californians. The California Public Utilities Commission (CPUC) administers the program under Pub. Util. Code 871. A “third-party administrator,” qualifies applicants, and there are procedures for service providers to seek reimbursement from CPUC for “LifeLine-related costs and lost revenues.” TruConnect provides free wireless telephone service through LifeLine. CPUC changed the third-party administrator to Maximus. TruConnect claimed Maximus was “woefully unequipped” and asked CPUC to delay the rollout of new software. The launch nonetheless went forward. Maximus recruited TruConnect to assist. TruConnect allegedly invested hundreds of thousands of man-hours. Maximus subsequently subcontracted work to Solix. TruConnect claims it incurred losses of more than $14 million in connection with the launch. TruConnect sought reimbursement from CPUC, which paid some claims but denied compensation for “lost opportunities,” customers who wanted TruConnect’s services but were unable to enroll because of the flawed rollout.TruConnect sued Maximus and Solix. The trial court dismissed the action for lack of jurisdiction. The court of appeal reversed and remanded for determination of whether the lawsuit is nonetheless barred because CPUC is an indispensable party or for other reasons. Section 1759 does not bar the lawsuit since recovery would not conflict with a CPUC order or interfere with its oversight of LifeLine. View "TruConnect Communications, Inc. v. Maximus, Inc." on Justia Law
Ciminelli v. United States
Then-New York Governor Cuomo’s “Buffalo Billion” initiative administered through Fort Schuyler Management Corporation, a nonprofit affiliated with SUNY, aimed to invest $1 billion in upstate development projects. Investigations later uncovered a scheme that involved Cuomo’s associates--a member of Fort Schuyler’s board of directors and a construction company made payments to a lobbyist with ties to the Cuomo administration. Fort Schuyler’s bid process subsequently allowed the construction company to receive major Buffalo Billion contracts.The participants were charged with wire fraud and conspiracy to commit wire fraud 18 U.S.C. 1343, 1349. Under the Second Circuit’s “right to control” theory, wire fraud can be established by showing that the defendant schemed to deprive a victim of potentially valuable economic information necessary to make discretionary economic decisions. The jury instructions defined “property” as including “intangible interests such as the right to control the use of one’s assets,” and “economically valuable information” as “information that affects the victim’s assessment of the benefits or burdens of a transaction, or relates to the quality of goods or services received or the economic risks.” The Second Circuit affirmed the convictions.The Supreme Court reversed. Under Supreme Court precedents the federal fraud statutes criminalize only schemes to deprive people of traditional property interests. The prosecution must prove that wire fraud defendants “engaged in deception,” and also that money or property was “an object of their fraud.” The "fraud statutes do not vest a general power in the federal government to enforce its view of integrity in broad swaths of state and local policymaking.” The right-to-control theory applies to an almost limitless variety of deceptive actions traditionally left to state contract and tort law. The Court declined to affirm Ciminelli’s convictions on the ground that the evidence was sufficient to establish wire fraud under a traditional property-fraud theory. View "Ciminelli v. United States" on Justia Law
City of Chula Vista v. Stephenshaw
This dispute arose out of 2011 legislation that dissolved California’s redevelopment agencies and created a process for winding down their affairs. The Department of Finance (Department) determined that certain reimbursement agreements between the City of Chula Vista (City) and its former redevelopment agency (Agency) were not “enforceable obligations” under the redevelopment dissolution laws. Thus, despite having approved payment under the agreements on prior “recognized obligation payment schedules” (ROPS), the Department denied payment authorization on the fiscal year 2018-2019 and 2019-2020 ROPS. The City and the Chula Vista Redevelopment Successor Agency (together, plaintiffs) filed this action seeking to compel the Department to recognize the reimbursement agreements as enforceable obligations and approve the use of property tax revenues for such items on all current and future ROPS. The trial court denied the petition and entered judgment in favor of the Department. On appeal, plaintiffs argued the Department erred in rejecting the items as enforceable obligations under Health and Safety Code section 34171(d)(2). Alternatively, plaintiffs contended the Department should have been estopped from denying the items based on its prior approvals. The Court of Appeal concluded some of the disputed items were enforceable obligations, and reversed the trial court's judgment in part. View "City of Chula Vista v. Stephenshaw" on Justia Law