Justia Government Contracts Opinion Summaries

In 2005, Curtis McGhee and another individual brought claims against the City alleging violations of civil rights sounding in malicious prosecution. The City sought coverage under insurance policies issued by CIC and Columbia. On appeal, the City and McGhee challenged the district court's order granting summary judgment to CIC and Columbia, on CIC's and Columbia's declaratory judgment claims concerning coverage under the various insurance policies. The court concluded that the district court correctly refused to consider and correctly denied additional discovery of extrinsic evidence. The court also concluded that the alleged malicious prosecution and resulting personal injuries occurred when the underlying charges were filed against McGhee in 1977. Therefore, the court affirmed the district court's judgment that the following policies did not afford coverage to the City for the malicious prosecution claims: the two excess liability policies issued by CIC; four of the special excess liability policies issued by Columbia; and the commercial umbrella liability policy issued by Columbia. As to the 1977-78 special excess liability policy issued by Columbia, the court reversed the district court's judgment regarding the applicability of the reasonable expectations doctrine. The court remanded for further proceedings. View "Chicago Ins. Co., et al v. City of Council Bluffs, et al" on Justia Law

The Medicare program pays teaching hospitals to cover "direct" and "indirect costs of medical education," 42 U.S.C. 1395ww(d)(5)(B), (h). Direct costs include expenses such as residents' salaries. Indirect costs are incurred due to "general inefficiencies" and "extra demands placed on other staff." Congress created a formula for calculating indirect expenses based on full-time equivalency interns; an HHS regulation referred to time residents spend in the "portion of the hospital subject to the prospective payment system or in the outpatient department of the hospital." In reimbursing plaintiff, HHS excluded from the FTE count time residents spent on pure research, unrelated to treatment of a patient. While appeal of a decision favoring the hospital was pending, Congress enacted the Patient Protection and Affordable Care Act, 124 Stat. 119, 660–61. For the years at issue, HHS must include in FTE: "all the time spent by an intern or resident in an approved medical residency training program in non-patient care activities, such as didactic conferences and seminars, as such time and activities are defined by the Secretary." HHS promulgated a regulation specifying that eligible non-patient care activities do not include time residents spend conducting pure research. The Sixth Circuit upheld the regulation as within the Secretary's authority and applicable to the years at issue. View "Henry Ford Health Sys. v. Dept. of Health & Human Servs." on Justia Law

A contractor, renovating military housing, obtained a performance bond under the Miller Act (40 U.S.C. 3131 (b)) and abandoned the project after completing 12 percent of the work. The government had paid 40 percent of the contract price. The surety contracted for completion, but the second contractor discovered code violations and incurred penalties for late completion. Costs were reimbursed by the surety, which filed suit under the Tucker Act, 28 U.S.C. 1491. The Federal Circuit held that the Claims Court lacked jurisdiction. The court previously held that the Claims Court has jurisdiction under the Act over sureties' claims based on a theory of equitable subrogation; this case does not involve equitable subrogation because the government made payments at issue before receiving notice of the contractor's default. The waiver of sovereign immunity under the Act does not extend to impairment of suretyship claims apart from the theory of equitable subrogation. The Contract Disputes Act, 41 U.S.C. 601, applies to a surety's claim against the government arising from a takeover agreement between the government and surety for completion of a bonded contract following the principal obligor’s default; the surety failed to satisfy CDA jurisdictional prerequisites. View "Lumbermens Mut. Cas. Co. v. United States" on Justia Law

Plaintiff, employed by a company contracted to do grounds maintenance, was injured while mowing grass at an Army base. A deteriorating steam pipe fell, striking him in the head. The district court granted summary judgment to the United States, reasoning that under the Kentucky Workers' Compensation Law, the United States was an up-the-ladder contractor, or statutory employer, so that plaintiff's only remedy was the workers' compensation benefits he received from his direct employer. The Sixth Circuit affirmed, holding that the U.S. government is a "person" entitled to the up-the-ladder defense and that the waiver of immunity under the Federal Torts Claims Act, 28 U.S.C. 1346, provides for claims in the same manner and to the same extent as a private individual. The government "secured the payment of compensation" by hiring a contractor and, therefore, cannot be treated as an employer that did not secure benefits. The work performed by plaintiff was a "regular and recurrent" part of work at the facility and the government was entitled to contractor immunity. View "Himes v. United States" on Justia Law

A podiatrist, primarily serving elderly patients, was convicted of healthcare fraud counts that resulted in a loss of $120. The podiatrist was sentenced to 18 months in prison followed by three years of supervision and ordered to pay more than $244,000, based on acquittal counts. The Sixth Circuit affirmed the conviction, but vacated and remanded the sentence. There was sufficient evidence that the podiatrist mailed bills for patients who were not actually treated and for work done by staff no longer employed at the office. Sentencing based on acquittal counts is not unconstitutional if those counts have been established by a preponderance of evidence, but the sentence was unreasonable. Although a court need only make a reasonable estimate of loss, the court relied solely on statistical evidence about loss from up-coding without a sound representative sample. The acquittal counts were part of a broad scheme to defraud and an award of restitution, based on those counts, was proper.