Justia Government Contracts Opinion SummariesArticles Posted in International Trade
Acetris Health, LLC v. United States
Acetris obtains its pharmaceutical products from Aurolife, which makes them in a New Jersey facility, using an active pharmaceutical ingredient made in India. Acetris had contracts to supply the VA with several pharmaceutical products, including Entecavir (used to treat hepatitis B). The VA requested that Acetris recertify its compliance with the Trade Agreements Act of 1979 (TAA), which bars the VA from purchasing “products of” certain foreign countries, such as India. Ultimately, the VA requested that Acetris obtain a country-of-origin determination. Customs concluded that the Acetris products were products of India. Acetris agreed to cancel its Entecavir contract. The VA issued a new solicitation seeking proposals for Entecavir, indicating that it would continue to rely on the Customs determination. Acetris filed suit, challenging the VA’s interpretation of the TAA. The VA awarded the Entecavir contract to Golden, consistent with its policy to award contracts to the lowest-price technically acceptable bid. The government moved to dismiss the suit, arguing that Acetris lacked standing because Acetris would not have won the contract regardless of the interpretation of the TAA and that Acetris’ earlier-filed Court of International Trade suits divested the Claims Court of jurisdiction under 28 U.S.C. 1500.The Claims Court denied the government’s motions and rejected the government’s interpretation of the TAA. The Federal Circuit affirmed in part, holding that the suit is justiciable and agreeing with the Claims Court. The court remanded for the entry of a declaratory judgment and injunction. View "Acetris Health, LLC v. United States" on Justia Law
Customs Fraud Investigations LLC v. Victaulic Co.
CFI, comprised of former insiders from the pipe fitting industry, brought a False Claims Act qui tam action against Victaulic, a global manufacturer and distributor of pipe fittings. The complaint alleged that Victaulic, for many years, imported millions of pounds of improperly marked pipe fittings without disclosing that the fittings are improperly marked, thereby avoiding paying marking duties. CFI alleged that Victaulic imported approximately 83 million pounds of fittings from overseas, 2003-2013, and a miniscule fraction of Victaulic’s fittings for sale in the U.S. bear any indication of their foreign origin, with an even smaller percentage bearing country of origin markings required by 19 U.S.C. 1304. The district court dismissed with prejudice, rejecting Victaulic’s jurisdictional argument that CFI’s complaint was based primarily on publicly available information, but finding that it failed to cross the threshold from possible to plausible. The court stated that it believed the FCA’s reverse false claims provision did not cover failure to pay marking duties, but declined to rule on those grounds because the complaint was based on legal conclusions unsupportable by the facts alleged. The Third Circuit vacated. Failure to pay marking duties may give rise to reverse false claims liability. CFI’s complaint contains enough reference to hard facts, combined with other allegations and an expert’s declaration, to allege a plausible course of conduct by Victaulic to which liability would attach. View "Customs Fraud Investigations LLC v. Victaulic Co." on Justia Law
Folliard v. Government Acquisitions, Inc., et al.
Relator filed suit under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging that the HP products Govplace sold to the federal government originated from non-designated countries, in violation of the Trade Agreements Act of 1979 (TAA), 19 U.S.C. 2501-2581. The court affirmed the district court's grant of summary judgment to Govplace, concluding that the district court properly exercised its discretion in managing discovery and that Govplace reasonably relied on Ingram Micro's certification. The court concluded that a contractor like Govplace is ordinarily entitled to rely on a supplier's certification that the product meets TAA requirements. In this case, Govplace has informed the GSA during multiple Contractor Administrator Visits that it relies on Ingram Micro's Program in representing that the country of origin information for the items listed in its GSA schedule is accurate, and GSA's Administrative Report Cards evaluating Govplace have all concluded that Govplace has complied with the TAA. View "Folliard v. Government Acquisitions, Inc., et al." on Justia Law
Triple A Int’l, Inc. v. Democratic Republic of the Congo
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:  a commercial activity carried on in the United States by the foreign state; or  upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or  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
Mabey Bridge & Shore, Inc. v. Schoch
The Pennsylvania Steel Products Procurement Act,73 Pa. Cons. Stat. 1881-1887, prohibits the use of temporary bridges made out of foreignsteel on public works projects. The district court rejected a claim that the law was preempted by the Buy America Act, 23 U.S.C. 313, and that it violated the Commerce Clause, Contract Clause, and Equal Protection Clause. The Third Circuit affirmed. The federal Act contemplates more restrictive state laws. The state law was authorized by Congress, is rational, and did not, at its enactment, impair plaintiff's existing contracts. View "Mabey Bridge & Shore, Inc. v. Schoch" on Justia Law
Yannacopoulos v. Gen. Dynamics
The qui tam suit, brought by a former contractor for one of the defendants, alleges that defendants violated the False Claims Act, 31 U.S.C. 3729(a)(1) in connection with a sale of F-16 fighter jets to Greece, which paid for the jets with money borrowed from the United States. The district court granted summary judgment in favor of defendants. The Seventh Circuit affirmed. An FCA claim requires proof of an objective falsehood. There was no evidence to support allegations: that defendant lied about use of funds loaned by the U.S. to capitalize a Greek business development company; that defendant failed to disclose promptly its decision to delete a price adjustment clause from the draft contract; that defendant made misrepresentations relating to provisions concerning spare part purchases and an ill-fated "depot program;" and concerning a number of misrepresentations in two amendments to the contract. View "Yannacopoulos v. Gen. Dynamics" on Justia Law