Justia Government Contracts Opinion Summaries

Plaintiff H.C. Equities, L.P. asserted contract claims against its commercial tenant, the County of Union, after the County began to withhold rent payments in response to a dispute about the condition of the leased commercial buildings. During negotiations to settle the contract matter, the County directed its co-defendant, the Union County Improvement Authority (Authority), to assess the County’s real estate needs. H.C. Equities obtained a copy of a consultant’s report prepared as part of that assessment and objected to statements in the report about the condition of the buildings that it had leased to the County. H.C. Equities filed suit against the County and the Authority, asserting conspiracy claims against both defendants and trade libel and defamation claims against the Authority. Plaintiff did not apply for permission to file a late tort claims notice until more than eight months after the expiration of the one-year period allowed under N.J.S.A. 59:8-9 for the filing of such motions. The trial court held that H.C. Equities had failed to file the notices of claim that the Tort Claims Act required and dismissed its tort claims. H.C. Equities appealed, and the Appellate Division reversed the trial court. Relying on a combination of excerpts from three letters written by H.C. Equities’ counsel, the Appellate Division found that H.C. Equities substantially complied with the Act’s notice of claim provisions. The New Jersey Supreme Court disagreed that a finding of substantial compliance with the Tort Claims Act could be premised on comments made by plaintiff’s counsel in three different letters sent to lawyers representing the defendant public entities. The Supreme Court did not find that H.C. Equities’ letters, individually or collectively, communicated the core information that a claimant had to provide to a public entity in advance of filing a tort claim. The Appellate Division’s determination was reversed, and the matter remanded to the trial court. View "H.C. Equities, LP v. County of Union" on Justia Law

U.S. Venture, Inc. (“Venture”) appealed a Commonwealth Court decision affirming the determination of the Pennsylvania Board of Claims (“Board”) that its dispute with the Commonwealth involving two grant agreements was not within the subject matter jurisdiction of the Board and that its claim was barred by sovereign immunity. The Pennsylvania Supreme Court found that any ambiguity within the relevant statutory provisions had to be resolved in favor of preserving sovereign immunity. Alternatively, the Court found these written grant agreements were in fact “grants,” which were not subject to the limited waiver of sovereign immunity. View "U.S. Venture Inc. v. Dep of Comm & Econo Dev" on Justia Law

Kennedy worked for Novo, promoting a new diabetes drug, Victoza. FDA approval of Victoza included specific conditions concerning a possible risk of thyroid cancer. According to Kennedy, in preparation for Victoza’s commercial launch, she was directed to market the drug in ways inconsistent with those FDA limitations. Kennedy filed a False Claims Act (FCA) complaint, alleging that Novo caused people to submit millions of dollars in false claims for payment under federal health care programs. Several such cases were consolidated in the District of Columbia. The government intervened. Novo, the government, and Kennedy reached a settlement for $46.5 million.The government filed a separate complaint against Novo, under the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301, alleging Victoza was an unlawfully “misbranded” drug. In the FDCA Settlement, Novo admitted that it had trained its employees to undermine the risks and agreed to pay the government $12,150,000. Kennedy was not a party to the FDCA litigation.Kennedy sought a share of the FDCA Settlement, arguing that it was an “alternate remedy” under the FCA, 31 U.S.C. 3730(c)(5). The D.C. Circuit reversed Kennedy’s award. The FCA confines qui tam plaintiffs to recoveries only for claims seeking relief based on fraud or falsehoods covered by that statute. The government’s separate FDCA enforcement action did not involve the type of claim cognizable under the FCA, nor did it allege a false or fraudulent effort to obtain money or property from the government. Kennedy received an agreed-upon FCA payment with knowledge of the separate action and is not entitled to further recovery. View "Kennedy v. Novo A/S" on Justia Law

ICE issued a solicitation for the provision of detention, food, and transportation at its Florence Detention Center. Asset was the incumbent contractor. ICE responded "yes" to, “Arizona charges 4.5% ‘business tax’; will the Federal Government issue a tax exemption certificate to the successful offeror?” Asset’s initial proposal indicated that “[s]ales taxes were not charged” based on that answer. ICE selected Akima's proposal. Asset filed a bid protest. ICE took voluntary corrective action and issued Amendment 17; Amendment 19 subsequently clarified that ICE “CANNOT delegate its tax-exempt status” and instructed that offerors review their proposals and provide their best and final prices. Asset responded that it had reviewed Amendment 19 and that its proposal did not require revision but did not remove the tax-exempt language from its proposal. ICE again clarified the tax-exempt status question via Amendment 20. Asset again responded that it did not need to amend its proposal but the tax-exempt certificate language remained. ICE ultimately selected Akima, concluding that Asset was ineligible for the award because the tax-exempt certificate language rendered its proposal a contingent price. Asset filed another bid protest, disputing ICE’s best-value analysis. The GAO agreed that ICE improperly determined that Asset’s bid contained contingency pricing but concluded that Asset “was not prejudiced” because ICE’s best-value analysis was “reasonable,”The Claims Court concluded that Asset lacked standing to bring the bid protest. The Federal Circuit affirmed. Asset’s proposal was non-responsive to the requirements of the Solicitation, as explicitly amended, making it ineligible for the award. View "Asset Protection and Security Services, L.P. v. United States" on Justia Law

In 2002, Farfield contracted with SEPTA for improvements on Philadelphia-area railroad tracks. The federal government partially funded the project. Work concluded in 2007. As required by federal regulation, Department of Labor (DOL) prevailing wage determinations were incorporated into the contract. Farfield was required to submit to SEPTA for transmission to the Federal Transit Administration a copy of Farfield’s certified payroll, setting out all the information required under the Davis-Bacon Act, 40 U.S.C. 3142(a), with a “Statement of Compliance” averring that the information in the payroll was correct and complete and that each worker was paid not less than the applicable wage rates and benefits for the classification of work performed, as specified in the applicable wage determination. Falsification of a payroll certification could subject Farfield to criminal penalties or civil liability under the False Claims Act (FCA).A union business manager suspected that Farfield had won government contracts with low bids by intending to pay less-skilled workers to perform certain work that would otherwise have been the bailiwick of higher-skilled, higher-paid workers. Ultimately, the union filed a qui tam FCA complaint. The United States declined to intervene. The court entered a $1,055,320.62 judgment against Farfield: $738,724.43 to the government and $316,596.19 to the union, plus $1,229,927.55 in attorney fees and $203,226.45 in costs. The Third Circuit affirmed. In view of the totality of the circumstances, Farfield’s Davis-Bacon violations were not minor or insubstantial. View "International Brotherhood of Electrical Workers v. Farfield Co" on Justia Law

The city of Puyallup (City) hired Conway Construction Company to build a road. The contract allowed the City to terminate the contract early either for its convenience or on Conway’s default, but a termination for convenience would result in more costs for the City. The City ended up terminating the contract partway through construction, claiming Conway defaulted. After a lengthy bench trial, the trial court concluded that Conway was not in default when the City terminated the contract and converted the termination into one for convenience. After review, the Washington Supreme Court affirmed the trial court’s decision. Further, the Court held that the City was not entitled to an offset for any defective work discovered after termination because the City did not provide Conway with the contractually required notice and opportunity to cure. View "Conway Constr. Co. v. City of Puyallup" on Justia Law

AGRED filed suit seeking a declaratory judgment regarding its rights and obligations under a written agreement with the United States. The Corps, acting on behalf of the United States, moved to dismiss for lack of subject matter jurisdiction on the grounds that AGRED lacks standing.The Eighth Circuit affirmed the district court's dismissal of AGRED's declaratory judgment claim based on lack of subject matter jurisdiction and agreed with the district court that AGRED's injury was not caused by the Corps. In this case, AGRED failed to establish a connection between its injury of being enjoined from charging fees for access a lake plaintiff owns and the Corps' conduct. The court explained that there are several kinks in AGRED's causal chain, including that AGRED's injury results directly from FOLEA's thus far successful lawsuit. In this case, there is no real contractual dispute between AGRED and the Corps. Therefore, AGRED fails to meet the causation requirement for standing because it cannot show that its injury is fairly traceable to the Corps. View "Agred Foundation v. U.S. Army Corps of Engineers" on Justia Law

Cimino, a former IBM senior sales representative, filed a qui tam action, alleging that IBM violated the False Claims Act, 31 U.S.C. 3729(a)(1)(A), by fraudulently inducing the IRS to enter a $265 million license agreement for “unwanted, unneeded” software. IBM allegedly devised a scheme to pressure the IRS into a long-term renewal deal by conducting an audit, anticipating that the IRS was overusing the software and therefore would owe significant compliance penalties. IBM would then offer to waive penalties in exchange for a new agreement. Contrary to IBM’s expectations, Deloitte’s initial audit showed the IRS was not significantly overusing the licenses. IBM never released these audit results to the IRS but worked with Deloitte to manipulate the results. Deloitte eventually presented the IRS with a false audit. Once the new agreement was in place, IBM allegedly charged an $87 million fee for prospective licenses and support, which “were, upon information and belief, never actually provided.”After a four-year investigation, the government declined to intervene in the qui tam case. The district court dismissed Cimino’s complaint. The D.C. Circuit reversed in part. In light of Supreme Court precedents interpreting the FCA to incorporate the common law, but-for causation is necessary to establish a fraudulent inducement claim. Cimino plausibly pleaded causation, as well as materiality. The court affirmed the dismissal of Cimino’s presentment claims because he failed to plead them with the requisite particularity. View "Cimino v. International Business Machines Corp." on Justia Law

The Fifth Circuit affirmed the district court's grant of summary judgment in favor of Couvillion in a declaratory judgment action brought by Taylor, seeking tort damages and equitable relief for Couvillion's trespass and unauthorized activities at the MC20 Site. The court concluded that Couvillion was entitled to immunity under Yearsley v. W.A. Ross Construction Company, 309 U.S. 18 (1940), where there was no genuine fact dispute as to whether Couvillion's actions were authorized and directed by the government, and where Couvillion's authority to carry out its actions was validly conferred by Congress. View "Taylor Energy Company, LLC v. Couvillion Group, LLC" on Justia Law

Rite Aid’s “Rx Savings Program” provides generic prescription drugs at reduced prices. The program is free and widely available but excludes customers whose prescriptions are paid by publicly funded healthcare programs like Medicare or Medicaid. Federal regulations require pharmacies to dispense prescriptions for beneficiaries of those programs at their “usual and customary charge to the general public” (U&C rate). Rahimi alleged that Rite Aid overbilled the government programs because the amounts it charged did not take into account the lower Rx Savings Program prices. Rahimi claimed Rite Aid's submission of bills for those covered by publicly funded health insurance, representing the price to be the U&C rate, violated the False Claims Act, 31 U.S.C. 3729(a).The Sixth Circuit affirmed the dismissal of Rahimi’s claim. The Act’s public disclosure bar precludes qui tam actions that merely feed off prior public disclosures of fraud. From the beginning, communications about the Rx Savings Program have stated that publicly funded health care programs were ineligible for the discounted prices. Before Rahimi’s disclosures, Connecticut investigated membership discount prices; the Department of Health and Human Services announced that it would review Medicaid claims for generic drugs to determine the extent to which large chain pharmacies are billing Medicaid the usual and customary charges for drugs provided under their retail discount generic programs; and a qui tam action was unsealed in California, describing an identical scheme. View "Rahimi v. Rite Aid Corp." on Justia Law