Justia Government Contracts Opinion Summaries

In 2009 the Fire Protection District passed an ordinance under which it took over fire alarm monitoring for all commercial properties in the District. Private alarm companies that had previously provided that service sued, alleging interference with their business, illegal monopoly, violations of constitutional rights, and exceeding statutory powers. Before the district court issued an opinion on remand, the District repealed the 2009 ordinance. Under a new ordinance, the District would not own any transmitters and would permit property owners to contract with private companies for alarm transmission, monitoring, and equipment; signals would still be transmitted via the District’s network to the District’s receiver. The district court entered a modified permanent injunction, requiring the District to permit alarm companies to receive and transmit signals directly from property alarm boards, independently of the District. The injunction barred the District from requiring that fire signals be sent to its station, charging residents for fire protection services, or selling or leasing fire alarm system equipment. It required the District to allow alarm companies to use any technology equivalent to wireless transmission and compliant with the NFPA code, to adopt the most current version of the NFPA code, and to refund fees. The Seventh Circuit affirmed as modified. The new injunction sets appropriate boundaries and does not contravene the earlier decision in most ways. The court struck provisions requiring refunds to subscribers and requiring the District to adopt the most current versions of the NFPA code. View "ADT Sec. Servs., Inc. v. Chicago Metro. Fire Prevention Co." on Justia Law

KBR allegedly accepted kickbacks from two companies angling to win subcontracts on KBR's prime contract to service American armed forces in military theaters across the world. At issue on appeal was whether, and if so under what conditions, the Anti-Kickback Act's (AKA), 41 U.S.C. 55(a)(1), civil suit provision extended vicarious liability to an employer for the acts of its employees. The court discerned no persuasive evidence of congressional intent in section 55(a) to vary from the common law norm of permitting vicarious liability for employee actions taken under apparent authority. The court reversed the district court's ruling granting KBR's motion to dismiss the government's AKA claim, concluding that the district court erred in finding that section 55(a)(1) did not allow the government to allege vicarious liability. Accordingly, the court remanded for further proceedings. View "United States v. Kellogg Brown & Root, Inc." on Justia Law

Clark, the owner and president of an East St. Louis Illinois company, was charged with making false statements in violation of 18 U.S.C. 1001(a)(3). Clark’s company had entered into a hauling services subcontract with Gateway, general contractor on a federally funded highway project in St. Louis, Missouri. Employers must pay laborers working on certain federally-funded projects the “prevailing wage,” calculated by the Secretary of Labor based on wages earned by corresponding classes of workers employed on projects of similar character in a given area, and maintain payroll records demonstrating prevailing wage compliance, 40 U.S.C. 3142(b) The indictment charged that Clark submitted false payroll records and a false affidavit to Gateway, representing that his employees were paid $35 per hour, when they actually received $13-$14 per hour. The district court dismissed for improper venue, finding that when a false document is filed under a statute that makes the filing a condition precedent to federal jurisdiction, venue is proper only in the district where the document was filed for final agency action. The Seventh Circuit reversed. Although the effects of the alleged wrongdoing may be felt more strongly in Missouri than in Illinois, the Southern District of Illinois is a proper venue. View "United States v. Clark" on Justia Law

The Authority was formed under Ga. Code 46-4-82(a) to provide member municipalities with natural gas. It operates as a non-profit, distributing profits and losses to member municipalities: 64 in Georgia, two in Tennessee, 12 in other states. It pays its own operating expenses and judgments; it is exempt from state laws on financing and investment for state entities and has discretion over accumulation, investment, and management of its funds. It sets its governance rules; members elect leaders from among member municipalities. Smyrna, Tennessee has obtained gas from the Authority since 2000, using a pipeline that does not run through Georgia. The Authority entered a multi-year “hedge” contract for gas acquisition, setting price and volume through 2014, and passed the costs on. The market price of natural gas then fell due to increased hydraulic fracturing (fracking), but Smyrna was still paying the higher price. Smyrna sued for breach of contract, violations of the Tennessee Consumer Protection Act, breach of fiduciary duty, and unjust enrichment. The district court denied the Authority’s motion to dismiss based on sovereign immunity under Georgia law and the Eleventh Amendment. The Sixth Circuit affirmed, stating that the Authority’s claim that any entity referred to as a state “instrumentality” in a Georgia statute is entitled to state-law sovereign immunity “requires quite a stretch of the imagination.” View "Town of Smyrna, TN v. Mun. Gas Auth. of GA" on Justia Law

Blackout performs asphalt paving work and other construction services and had contracts with the Chicago Transit Authority that were terminable at will. The CTA informed Blackout that it would not do business with the firm for the next year (debarment) and did not give a reason. Illinois law allows judicial review of debarment by public bodies, but Blackout did not avail itself of that process, nor did it sue for libel, although it insists that public announcement of debarment is defamatory, but filed suit in federal court under 42 U.S.C. 1983, claiming deprivation of “occupational liberty” without due process. The district court dismissed, noting that that inability to work for a single employer is not deprivation of occupational liberty and that there was no allegation of inability to work for public or private entities other than the CTA. The Seventh Circuit affirmed, noting that Blackout won a school district contract after the CTA debarment. View "Blackout Sealcoating, Inc. v. Peterson" on Justia Law

McDonough is an engineering firm that frequently does design jobs for the Illinois Department of Transportation (IDOT). The Illinois Procurement Code provides that, absent required signatures, a contract of the type in dispute is not valid and not an enforceable debt, 30 ILCS 500/20-80(d). McDonough claimed that IDOT owed it $2 million for additional work on three projects, none of which had a supplemental agreement that was fully executed. McDonough claimed that it continued working without the agreements because it was IDOT’s normal business practice always to sign an agreement after a prior approval letter was sent. Based on findings that McDonough had made accounting errors that called its business integrity into question, the chief procurement officer suspended McDonough’s status as a “prequalified vendor” automatically eligible to bid on IDOT projects. McDonough claimed that refusal to sign the agreements deprived it of property interests in the debts without due process of law. Faced with threats, of bankruptcy, the district court entered a temporary restraining order, effectively ordering state officials to pay. The Seventh Circuit vacated, finding that the suit is, in substance, an effort to have a federal court order state officials to make payments from the state treasury to remedy alleged breaches of contract and is prohibited by the Eleventh Amendment. View "McDonough Assocs., Inc. v. Schneider" on Justia Law

The pro se plaintiff filed a qui tam suit against the university and nine chemistry professors, charging that they defrauded the United States in violation of several federal statutes by obtaining federal grant money on the basis of plagiarized research papers. He does not allege that the fraud harmed him, but apparently sought a “bounty,” 37 U.S.C. 3730(d)(1-2). The district court dismissed. The Seventh Circuit affirmed, stating that to maintain a suit on behalf of the government, a qui tam plaintiff has to be either a licensed lawyer or represented by a lawyer. Georgakis is neither and cannot maintain the suit in his individual capacity because he does not claim to have been injured. View "Georgakis v. IL State Univ." on Justia Law

USM builds military boats. Working with VT Halter, USM designed a special-operations craft with a hull made out of composite materials for use in competing for the Navy's “MK V Special Operations Craft and Transporter System Contract.” With its 1993 bid, VT Halter submitted drawings stamped with a “Limited Rights Legend” to invoke Defense Federal Acquisition Regulations Supplement Section 252.227-7013(a)(15), which limits governmental use and disclosure of certain information. VT Halter won the contracts and delivered 24 Mark V special-operations craft. In 2004, the Navy awarded University of Maine a research grant to improve the ride and handling of the Mark V and provided detailed design drawings of the Mark V to contractors, stamped with the DFARS Limited Rights Legend, but did not obtain VT Halter’s consent for disclosure. The Navy awarded Maine Marine a contract to design and construct a prototype Mark V.1. USM sued under the Federal Tort Claims Act, 28 U.S.C. 1346(b), alleging misappropriation of trade secrets. The district court awarded damages, but the Fifth Circuit held that the matter lay exclusively within the jurisdiction of the Court of Federal Claims under the Tucker Act, 28 U.S.C. 1491(a)(1). The Fifth Circuit vacated the judgment and ordered transfer. The Federal Circuit affirmed. View "U.S. Marine, Inc. v. United States" on Justia Law

ITT is a for-profit institution with more than 140 locations and offers post-secondary education. Leveski, who worked at the ITT campus, alleged, under the qui tam provisions of the False Claims Act, 31 U.S.C. 3730(b) that ITT knowingly submitted false claims to the Department of Education to receive funds from federal student financial assistance programs under the Higher Education Act, 20 U.S.C. 1001. The district court dismissed for lack of jurisdiction, finding that the allegations had already been publicly disclosed and that Leveski was not the original source of the allegations. The court granted sanctions of $394,998.33 against Leveski's lawyers. The Seventh Circuit reversed, finding the allegations that ITT paid illegal incentive compensation throughout Leveski’s employment as a recruiter and financial aid assistant, sufficiently distinct from prior public disclosures to give the court jurisdiction. The court noted the lack of temporal overlap with allegations by other ITT employees and Leveski’s more detailed allegations. View "Timothy J. Matusheski v. ITT Educational Services, Inc" on Justia Law

Triple A, a Michigan corporation, has offices in Dearborn, Michigan, the Congo (previously known as Zaire), and Sierra Leone. In 1993, Zaire ordered military equipment worth $14,070,000 from Triple A. A South Korean manufacturer shipped the equipment to Zaire at Triple A’s request. For 17 years, Triple A sought payment from Zaire and then the Congo without success. In 2010, Triple A sued the Congo for breach of contract. The district court dismissed the case, citing lack of jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1602. The Sixth Circuit affirmed, citing the language of the Act, under which federal courts have jurisdiction “in any case in which the action is based upon” the following: [1] a commercial activity carried on in the United States by the foreign state; or [2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. View "Triple A Int'l, Inc. v. Democratic Republic of the Congo" on Justia Law