Justia Government Contracts Opinion Summaries

Appellants filed an amended complaint seeking to invalidate a contract between the City of North Platte, Nebraska and Priority Medical Transport, LLC on the ground that the City provided insufficient notice of its conflict of interest with Priority Medical Transport before awarding the contract. The district court dismissed the complaint for failure to state a claim. The Supreme Court reversed, holding that the complaint contained causes of action under both Neb. Rev. Stat. 84-1411 of the Open Meetings Act and Neb. Rev. Stat. 49-14,102 of the Nebraska Political Accountability and Disclosure Act, and therefore, the district court erred in dismissing the amended complaint. View "Tryon v. City of North Platte" on Justia Law

In 2009, Pfizer, settled claims that it had violated the False Claims Act (FCA), 31 U.S.C. 3729, and entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services. Months later, Booker and Hebron, former Pfizer sales representatives, brought a qui tam action, allegedly on behalf of the United States and several states, asserting that Pfizer had continued to violate the FCA and state analogues. They alleged that Pfizer had continued to knowingly induce third parties to file false claims for payment for Pfizer drugs with government programs like Medicaid by marketing the drug Geodon for off-label uses, in violation of 21 U.S.C. 301, and paying doctors kickbacks for prescribing the drugs Geodon and Pristiq, in violation of the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), (g). They also alleged that Pfizer had violated the FCA "reverse false claims" provision, 31 U.S.C. 3729(a)(1)(G), by failing to pay the government money owed it under Pfizer's Agreement with HHS, and that Pfizer had violated the FCA's anti-retaliation provision, by terminating Booker's employment. All of these claims were resolved against relators, one on a motion to dismiss and the rest on summary judgment. None of the sovereigns intervened. The First Circuit affirmed the merits decisions and found no error in its management of discovery. The court found relators’ data “woefully inadequate to support their FCA claim.” View "Booker v. Pfizer, Inc." on Justia Law

Hirt, owner of Andy’s Pharmacies, alleged that Walgreen Company distributed kickbacks ($25 gift cards) to Medicare and Medicaid recipients when they transferred their prescriptions to Walgreens, in violation of the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b). Hirt claimed that Walgreens violated the False Claims Act, 31 U.S.C. 3729, by sending these fraudulent insurance claims to the government. The Sixth Circuit affirmed dismissal of his qui tam suit. Individual plaintiffs cannot bring qui tam complaints based upon information already in the public domain and must state with “particularity the circumstances constituting fraud or mistake.” Hirt’s complaint described the unlawful distribution of gift cards in general but not the submission of any claims obtained with those gift cards. He did not identify customers, dates on which they filled prescriptions at Walgreens, dates on which Walgreens filed reimbursement claims with the government, or even say that these unnamed customers filled any prescriptions at Walgreens at all, let alone that Walgreens processed them and filed reimbursement claims with the government. He did not allege personal knowledge of Walgreen’s claim submission procedures or allege facts “from which it is highly likely that a claim was submitted to the government.” View "Hirt v. Walgreen Co." on Justia Law

Cardi Corporation contracted with the State to construct a portion of a highway construction project dealing with Interstate 195 in Rhode Island (I-Way Project). Cardi subcontracted with High Steel to supply steel for the project. Asserting that it was never paid for 182,873 pounds of temporary steel bracing, High Steel brought suit against Cardi. In response, Cardi filed a third-party action for breach of contract against the State. The superior court granted summary judgment in favor of the State on the third-party suit. The Supreme Court affirmed, holding that the contract was clear and unambiguous and did not require payment for temporary bracing steel. View "High Steel Structures, Inc. v. Cardi Corp. v. State" on Justia Law

Plaintiff filed suit in state court against Crane and 24 other defendants to recover injuries allegedly caused by exposure to asbestos. After removal to federal district court, the district court remanded to state court. The court concluded that the military specifications and affidavits at issue provide a not-insubstantial and non-frivolous basis upon which Crane may assert government-contractor immunity. The court concluded, under 28 U.S.C. 1442(a)(1), that the facts in the record before it are sufficient to establish that Crane was “acting under” the Navy. In this case, Crane has established the requisite causal nexus between the charged conduct and its official authority. The court explained that Crane’s relationship with Zeringue derives solely from its official authority to provide parts to the Navy, and that official authority relates to Crane’s allegedly improper actions, namely its use of asbestos in those parts. Because Crane has established the right to remove the suit pursuant to section 1442, the court need not determine whether Crane independently established the right to remove Zeringue’s failure to warn claim. Accordingly, the court reversed and remanded. View "Zeringue v. Allis-Chalmers Corp." on Justia Law

Relator filed a qui tam suit against his former employer, Serco, under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging, inter alia, that the company submitted fraudulent claims for payment to the United States for work done under a government contract. The district court granted summary judgment for Serco. In Universal Health Servs., Inc. v. United States ex rel. Escobar, the Supreme Court rejected the contention that a government contract or regulation must expressly designate a requirement as a condition of payment in order to trigger liability under the theory of implied certification. The court affirmed the district court's grant of summary judgment on relator's FCA claim for submitting false or fraudulent claims for payment under an implied false certification theory of liability. In this case, relator has failed to establish a genuine issue of material fact regarding the materiality of Serco’s obligations to comply with ANSI-748 or provide valid EVM reports. The court concluded that no reasonable jury could return a verdict for relator given the demanding standard required for materiality under the FCA, the government’s acceptance of Serco’s reports despite their non-compliance with ANSI-748, and the government’s payment of Serco’s public vouchers for its work under Delivery Orders 49 and 54. The court also concluded that relator failed to raise a genuine issue of material fact regarding the submission of a false or fraudulent claim. Finally, the court rejected relator's conspiracy claim, FCA claim for wrongful retention of overpayments; and Tameny claim for wrongful termination. View "United States ex rel. Kelly v. Serco" on Justia Law

The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), enacted in 2016 to address Puerto Rico’s financial crisis, provides for a temporary stay of debt-related litigation against the Puerto Rico government. The statute, however, allows creditors to move for relief from the stay and directs courts to grant such relief “after notice and a hearing…for cause shown.” Movant Peaje Investments LLC and various appellants in Altair Global Credit Opportunities Fund (A), LLC v. Garcia-Padilla (the Altair Movants) filed lift-stay motions. The First Circuit (1) affirmed the district court’s denial of the Peaje Movant’s motion, holding that Peaje failed to set forth a legally sufficient claim of “cause” to lift the PROMESA stay; and (2) the Altair Movants presented sufficient allegations to entitle them to a hearing. View "Peaje Investments LLC v. Garcia-Padilla" on Justia Law

This case concerned a dispute relating to contracts for the construction of a municipal transportation terminal on land owned by a municipality (Municipality). Municipality awarded the construction project to OSSAM Construction Inc. (OSSAM). After disputes arose regarding payments for the work performed in connection with the construction contracts, Municipality notified OSSAM that the contract between the parties was being terminated. Municipality then took control of the construction site. OSSAM and related individuals (Plaintiffs) filed suit against Municipality and its officials, claiming, inter alia, that Defendants violated 42 U.S.C. 1983 when they acted under color of law to interfere with Plaintiffs' constitutional rights during the construction site takeover and that these actions consisted a breach of contract. The district court (1) dismissed Plaintiffs’ section 1983 claim, concluding that it lacked subject matter jurisdiction because the parties had failed to comply with the mediation/arbitration clause in their contract; and (2) declined to exercise supplemental jurisdiction over related state law claims. The First Circuit affirmed, albeit on different grounds, holding (1) the section 1983 claim should be dismissed for failure to state a claim; and (2) accordingly, there is no supplemental jurisdiction over the state law claims. View "Masso-Torrellas v. Municipality of Toa Alta" on Justia Law

JEM Contracting, Inc. (JEM) and Ohio Farmers Insurance Company (OFIC) executed two indemnity agreements so that JEM could obtain bonding from OFIC for construction projects. Thereafter, OFIC executed and delivered two surety bonds on behalf of JEM for two construction projects. JEM hired a subcontractor, Hollow Contracting (Hollow), to furnish labor and equipment for both projects. After a dispute arose between JEM and Hollow regarding payment for the work performed, Hollow filed a complaint against JEM and OFIC. The lawsuit was resolved, and the district court dismissed the litigation. Thereafter, OFIC filed a complaint seeking indemnification from JEM for attorney fees and costs incurred in the underlying litigation. In its answer, JEM alleged that the fees and costs OFIC incurred in the litigation were not covered under the indemnity agreements. The district court granted partial summary judgment on the pleadings in favor of OFIC, concluding that JEM was required to indemnify OFIC for “appropriate expenses.” The Supreme Court affirmed, holding that the district court did not err in granting partial summary judgment on the pleadings to OFIC on the limited issue of whether OFIC may seek indemnification from JEF pursuant to the indemnification agreements. View "Ohio Farmers Insurance Co. v. JEM Contracting, Inc." on Justia Law

This case involved a contract dispute between a local governmental entity that oversaw federal funded rebuilding projects in areas of Texas that were struck by Hurricane Ike and a construction contractor. After a dispute arose between the governmental entity and the contractor regarding the quality of the contractor’s work and payment due under the contracts, the contractor filed suit against the governmental entity for payments allegedly due. The governmental entity filed a plea to the jurisdiction, alleging governmental immunity. The trial court denied the plea, concluding that immunity had been waived by chapter 271 of the Local Government Code, which waives immunity if the contract provides “goods or services to the local governmental entity.” The court of appeals reversed. The Supreme Court reversed, holding that that the chapter 271 immunity waiver applied in this case. View "Byrdson Services, LLC v. South East Texas Regional Planning Commission" on Justia Law