Justia Government Contracts Opinion Summaries

Global Rescue Jets, which does business as Jet Rescue, billed Kaiser at Jet Rescue’s usual and customary rates. Kaiser paid only a fraction of the billed amount, however, because in its view Jet Rescue’s services were covered by Medicare and thus subject to payment at the much lower Medicare-approved rates. Jet Rescue brought this action against Kaiser to recover the additional sums Kaiser allegedly owes. Jet Rescue argues that it was not required to exhaust administrative remedies before filing suit and that the exhaustion requirement should have been excused in any eventThe circuit court affirmed the district court’s dismissal, reasoning original Medicare beneficiaries must exhaust their administrative remedies before seeking judicial review of a claim for benefits. The panel also rejected Jet Rescue’s contention that the exhaustion requirement should be excused. The panel held that the exhaustion requirement may be excused if three conditions are satisfied: (1) the plaintiff’s claim is wholly collateral to a claim for Medicare benefits; (2) the plaintiff has made a colorable showing of irreparable harm; and (3) exhaustion would be futile. The panel concluded that Jet Rescue failed to meet the first and third requirements. Thus, the circuit court rejected both arguments and affirmed the district court’s judgment. View "GLOBAL RESCUE JETS, LLC V. KAISER FOUNDATION HEALTH PLAN" on Justia Law

Appellant, a California critical access hospital, sought Medicare reimbursement for the cost of keeping specialty doctors on call. Under the federal Emergency Medical Treatment and Active Labor Act, hospitals providing emergency room service must stabilize patients before releasing them or transferring them to another hospital. Additionally, California law requires all hospitals to perform certain procedures, including surgery. Appellant claims that it cannot comply with both state and federal law unless it can pay on-call compensation to specialists in surgery, obstetrics, pediatrics, and cardiology.Affirming the district court’s ruling, the D.C. Circuit held that Appellant is not entitled to Medicare reimbursement for the cost of keeping various specialty doctors on call. Appellant’s federal obligation to stabilize patients before release does not necessarily imply the need for various specialists. Thus, the Provider Reimbursement Review Board (“the Board”) reasonably concluded that Appellant had the ability to stabilize patients with existing emergency room physicians and that specialists were not required to be on call.Regarding Appellant’s state obligations, the Board’s conclusion that Appellant could satisfy the requirements by keeping a physician with surgical training on-site was reasonable. View "St. Helena Clear Lake Hospital v. Xavier Becerra" on Justia Law

In a suit under the False Claims Act (FCA), Proctor alleged that Safeway knowingly submitted false claims to government health programs when it reported its “retail” price for certain drugs as its “usual and customary” price, although many customers paid less than the retail price because of discount and price-matching programs. The district court granted Safeway summary judgment, concluding that Safeway’s pricing practices were “objectively reasonable” and no “authoritative guidance” cautioned against its interpretation of Medicare and Medicaid regulations.While the case was pending, the Seventh Circuit held that a defendant does not act with reckless disregard as long as its interpretation of the relevant statute or regulation was objectively reasonable and no authoritative guidance warned the defendant away from that interpretation. Failure to satisfy that standard for reckless disregard precludes liability under FCA’s actual knowledge and deliberate indifference provisions, which concern higher degrees of culpability.The Seventh Circuit then affirmed summary judgment in favor of Safeway. A footnote in a Centers for Medicare and Medicaid (CMS) manual does not constitute “authoritative guidance.” CMS can (and did) revise the manual at any time, and a single footnote in a lengthy manual does not support treble damages liability in this case. The other sources of guidance Proctor identified are unpersuasive because they do not come from the agency. View "Proctor v. Safeway, Inc." on Justia Law

Relators brought qui tam claims against dozens of defendants alleging healthcare fraud against the federal government in April 2017. H.I.G. Capital, LLC and H.I.G. Surgery Centers, LLC (“H.I.G.”) were among the defendants. Plaintiffs amended their complaint in January 2019.Previously, another group of relators filed qui tam claims against several of the same defendants; however, they did not name H.I.G. in their initial complaint. The federal government intervened, resulting in a $41 million settlement which included the defendants and both sets of relators. The settlement agreement released H.I.G. insofar as any independent conduct outside their status as investors in or owners of the defendants included in the settlement. Relators then amended their complaint a second time, narrowing their allegations to focus only on H.I.G.The district court granted H.I.G.’s motion to dismiss based on the first-to-file rule. The district court determined that, because the settled claim was pending at the time Relators filed their initial complaint, Relators’ complaint was barred if the actions were related. The district court found the cases were related and dismissed Relators’ claims.The Eleventh Circuit affirmed. Relators filed their complaints while the action that was eventually settled was pending. Thus, Relators’ case must be dismissed if the actions were related. The court then adopted the “same material elements” test relied upon by other circuit courts. Finding that the two cases contained the same material elements of fraud, the court concluded the district court properly dismissed Relators’ claims. View "Sheldon Cho, et al v. H.I.G. Capital, LLC, et al" on Justia Law

In 2012, United Healthcare of Mississippi (United) entered into provider agreements with Mississippi’s fourteen Community Mental Health Centers (CMHCs) to provide Medicaid services under the Division of Medicaid’s (DOM’s) managed care program. From 2012 until 2019, United paid the CMHCs an agreed upon amount for Medicaid services - 100 percent of the medicaid fee schedule rates. In July 2019, United unilaterally imposed a 5 percent rate cut, retroactive to January 1, 2019, and later demanded that the CMHCs refund 5 percent of all payments made from July 1, 2018, through December 31, 2018, all of which totaled more than $1 million. The CMCHs demanded that United immediately cease and desist from the 5 percent rate cut and recoupments. When United refused, the CMHCs filed a Complaint for Damages and Injunctive Relief, specifically requesting, inter alia, a preliminary injunction. United responded with a motion to compel arbitration and to stay the proceedings. After a two-day evidentiary hearing, the circuit court denied United’s motion to compel arbitration, granted the CMHCs’ request for injunctive relief, and issued a preliminary injunction. The limited issues presented to the Mississippi Supreme Court were whether the trial court properly enjoined United from imposing a 5 percent rate cut and whether the trial court erred by denying arbitration. After review, the Supreme Court affirmed the trial court’s decision to grant a preliminary injunction and to deny the motion to compel arbitration. View "United Healthcare of Mississippi Inc. et al. v. Mississippi's Community Mental Health Commissions, et al." on Justia Law

Curtin Maritime Corp. (Curtin) filed suit against its competitor, Pacific Dredge and Construction, LLC (Pacific), asserting one cause of action for violation of the Unfair Competition Law. The parties operated dredging vessels, and competed for contracts awarded by the U.S. Army Corps of Engineers (USACE). In its complaint, Curtin alleged Pacific was ineligible for two contracts it was awarded over Curtin because its vessel was not “entirely” built in the United States, a violation of the federal Merchant Marine Act of 1920 (commonly referred to as the Jones Act), and Pacific defrauded the Coast Guard in its successful application for certification that the vessel was U.S.-built. These allegations served as the sole basis for Curtin’s UCL claim. In response to the complaint, Pacific brought a motion under Code of Civil Procedure section 425.16 to strike Curtin’s claim, asserting it arose from protected speech and that Curtin could not show a probability of prevailing on the merits of its claim. The trial court agreed with Pacific that the claim arose from protected activity, but concluded Curtin had met its burden at this early stage of litigation to show the claim had minimal merit and denied the motion. Pacific appealed the ruling, contending the trial court erred because the claim was preempted by the Jones Act. After Pacific filed its notice of appeal, Curtin dismissed the underlying lawsuit and moved to dismiss the appeal as moot. Pacific opposed the motion, asserting the appeal was viable since reversal of the trial court’s order would provide Pacific the opportunity to seek attorney fees under the anti-SLAPP statute. The Court of Appeal agreed with Pacific that the appeal was not moot, and dismissal of the appeal was not appropriate. Further, the Court concluded Curtin did not show a probability of prevailing on the merits of its claim. Accordingly, the Court reversed the trial court’s order denying Pacific’s motion to strike, and directed the trial court to reinstate the case and issue an order granting the anti-SLAPP motion and striking Curtin’s claim. View "Curtin Maritime Corp. v. Pacific Dredge etc." on Justia Law

The government solicited bids for the provision of food and dining room operation services at the Fort Knox U.S. Army base and awarded the contract to the Kentucky Office of Vocational Rehabilitation (KOVR). Mitchco, previously KOVR’s subcontractor and its predecessor under a 2015 contract award, challenged the award. The contract was designated as set aside for small businesses and was subject to the Randolph-Sheppard Act (RSA), which provides that “[i]n authorizing the operation of vending facilities on Federal property, priority shall be given to blind persons licensed by a State agency [SLA],” 20 U.S.C. 107(b).Mitchco argued that KOVR was not a “small business concern,” and therefore was not eligible to receive the award. The Small Business Administration determined that KOVR was “other than a small business concern for the applicable size standard” Mitchco filed two unsuccessful protests with the Government Accountability Office, alleging that the agency improperly evaluated KOVR’s proposal and that KOVR violated the Procurement Integrity Act (PIA).After determining that the case was not moot, the Federal Circuit affirmed summary judgment in favor of the government. Mitchco was aware of the SLA priority notwithstanding the small business set-aside and did not protest the terms of the solicitation prior to bid submission and cannot challenge its applicability now. Nothing in the RSA requires a blind person at each facility. Mitchco did not establish a PIA violation. View "Mitchco International, Inc. v. United States" on Justia Law

VAS leased a facility that housed “ICE” in Warwick, Rhode Island. In 2017, the General Services Administration (GSA) issued a request for lease proposals for a facility to house ICE in Rhode Island. VAS offered the building that ICE was already occupying, indicating that the building met the requirements. After several revisions, GSA awarded the contract to a competitor. An Office of the Inspector General report found that the procurement was “significantly flawed,” because GSA accepted a late proposal; used a calculation of the lease’s present value that favored the chosen bid; awarded the contract to a bidder that did not own or control the property at the time of its proposal; failed to timely and adequately debrief VAS; and used unclear acquisition terminology. GSA declined to take any corrective action.The Claims Court dismissed VAS’s bid protest for lack of standing, reasoning that VAS failed to show it has a substantial chance of winning the lease. The Federal Circuit reversed. If VAS’s protest proves successful, VAS would have an opportunity to participate in any new procurement. Under such circumstances, a protester has a substantial chance of winning the award for standing purposes. View "VAS Realty, LLC v. United States" on Justia Law

Employees of a Navy services contractor, SA-TECH, sued the contractor in California state court for violations of the state’s labor laws. Before and during that suit, SA-TECH sought guidance from the Navy as to whether California’s labor laws applied to it and its subcontractors, given the federal nature of its service contract. Those requests went unanswered. SA-TECH’s claim with its contracting officer under the Contract Disputes Act was denied. SA-TECH then sought declaratory relief on the questions: whether the modified understanding of California labor laws would control SA-TECH’s operations on Navy and Navy-chartered ships; whether SA-TECH would be permitted or required by the Navy, under its contracts, to pay any sleep-time over-time; and whether costs incurred by SA-TECH in settling the state-court litigation would be allowable costs under its current contract.The district court dismissed the complaint, citing lack of subject matter jurisdiction pursuant to the Contract Disputes Act’s exhaustion requirements, 41 U.S.C. 7103(a)(1)–(3). The Fourth Circuit affirmed. SA-TECH did not specifically assert any legal or contractual grounds entitling it to the Navy’s opinion on its agency status. Its other issues are monetary claims for which SA-TECH did not present a requested sum certain, as required to exhaust its remedies. View "Systems Application & Technologies, Inc. v. United States" on Justia Law

Lexington solicited bids for relocating its city offices, including one from CRM, a local real estate development firm. Wellman was an executive at CRM. While the committee deliberated on the CRM proposal, two City Council members began receiving campaign contributions from CRM employees. These actions prompted an investigation under 18 U.S.C. 666, which prohibits “federal funds bribery.” Agents suspected a straw contribution scheme arranged by Wellman and funded by CRM. Wellman falsified documents and cajoled his straw contributors to lie. Prosecutors opened a separate grand jury inquiry into potential obstruction charges against Wellman.Wellman was convicted on 11 federal charges, including obstruction of an official proceeding and aiding and abetting numerous associates to make false statements to the FBI, and was sentenced to a year and a day in prison with a $10,000 fine. The district court applied a two-level obstruction of justice enhancement under U.S.S.G. 3C1.1 but ultimately varied downward based on Wellman’s character and service to the community. The Sixth Circuit affirmed, rejecting challenges to the sufficiency of the evidence and Wellman’s argument that, at most, he obstructed an investigation into violations of Kentucky campaign finance laws, not federal bribery. A reasonable jury could conclude that Wellman corruptly obstructed, influenced, or impeded a federal grand jury proceeding. View "United States v. Wellman" on Justia Law