Justia Government Contracts Opinion Summaries

Articles Posted in U.S. 6th Circuit Court of Appeals
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In 2004 Taylor, an employee of the IRS, began applying for promotions and transfers, and was rejected until she received a promotion in 2006. In 2004, after being denied a promotion, Taylor filed her first discrimination complaint and was assigned to work in a unit supervised by Shields. While working in this unit, Taylor alleges that Shields took several retaliatory actions against Taylor, including written reprimands, a three-day suspension without pay, and providing negative references for Taylor to prospective employers. Based on these alleged actions, Taylor filed additional complaints for retaliation. In 2005, the IRS and Taylor entered into a settlement agreement. Taylor subsequently alleged noncompliance by the IRS. In 2006 and 2008, the agency issued decisions concluding that although the IRS had breached the agreement, it was currently in compliance. Taylor did not appeal either decision, but filed a complaint alleging retaliation under 42 U.S.C. 2000e-16(a) and breach-of-settlement-agreement. The district court dismissed. The Sixth Circuit affirmed with respect to the breach claim, holding that Congress has not waived sovereign immunity with respect to such claims, but reversed with respect to retaliation.View "Taylor v. Geithner" on Justia Law

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Erie County filed a purported class action on behalf of itself and other counties in northern Ohio, claiming that Morton and Cargill conspired to fix the price of rock salt in northern Ohio by geographically dividing the market and excluding competition, in violation of Ohio’s Valentine Act (Ohio Rev. Code 1331.01-1331.15), analogous to federal antitrust statutes, including the Sherman Act (15 U.S.C. 1-7). The district court dismissed, finding that the alleged facts were just as consistent with lawful parallel conduct as with a conspiracy. The Sixth Circuit affirmed. The alleged “failure to compete” indicates no more than a natural and independent desire to avoid a turf war and preserve profits guaranteed by regional dominance. Erie County’s concession that it was not bound by the “Buy Ohio” law defeated its claim of conspiracy evidenced by submission of sham bids. View "Erie Cnty. v. Morton Salt Co." on Justia Law

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Taylor owned a convenience store. In 2008, the store received authorization to redeem benefits through the Supplemental Nutrition Assistance Program, a federally funded program providing nutritional assistance to needy individuals. In 2010-2011, the USDA conducted an undercover operation. Taylor allowed undercover police officers and confidential informants working under USDA special agents to redeem SNAP benefits for cash that Taylor knew would be used to purchase illegal drugs. Taylor once exchanged a firearm for SNAP benefits. Taylor pled guilty to conspiracy to defraud the U.S., SNAP fraud, drug distribution, and being a felon in possession of a firearm. Based on the firearm conviction and Taylor’s criminal history, the probation officer recommended an enhanced sentence under the Armed Career Criminal Act, 18 U.S.C. 924(e), resulting in a Guidelines range of 188 to 235 months. The district court sentenced Taylor to 188 months. Graves, a friend of Taylor’s, worked in the store and would stand outside the store and either sell drugs to people who redeemed benefits for cash or tell them where to find drugs. Graves also sold an informant a firearm and split the proceeds with Taylor’s wife. The district court sentenced Graves to 200 months. The Sixth Circuit affirmed. View "United States v. Taylor" on Justia Law

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Tasis and his brother ran a sham medical clinic, recruited homeless Medicare recipients who had tested positive for HIV, hepatitis or asthma, paid the “patients” small sums in exchange for their insurance identification, then billed Medicare for infusion therapies that were never provided. During four months in 2006, the Center billed Medicare $2,855,785 and received $827,000 in return. The scheme lasted 15 months, during which Tasis and his collaborators submitted $9,122,159.35 in Medicare claims. An auditor notified the FBI. After an investigation, prosecutors indicted Tasis on fraud and conspiracy claims. Over Tasis’s objection, co-conspirator Martinez testified that she and Tasis had orchestrated a a similar scam in Florida. The court instructed the jury to consider Martinez’s testimony about the Florida conspiracy only as it related to Tasis’s “intent, plan and knowledge.” The jury found Tasis guilty, and the trial judge sentenced him to 78 months in prison and required him to pay $6,079,445.93 in restitution. The Sixth Circuit affirmed, rejecting various challenges to evidentiary rulings. View "United States v. Tasis" on Justia Law

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Circle C contracted to construct buildings at the Fort Campbell military base. The agreement included determinations of hourly wages for electrical workers. Circle C has had government contracts for 20 years; its co-owner and a bookkeeper attended training on the prevailing wage requirement for federal government contracts. PT was Circle C’s subcontractor on 98 percent of the electrical work, but did not have a written contract. Circle C provided PT with the wage determination excerpts from its contract, but did not explain the Davis-Bacon Act (40 U.S.C. 3142) prevailing wage requirements nor verify whether PT submitted its own payroll certifications, nor monitor PT’s eight employees’ work on the project, nor take measures to ensure payment of proper wages. One of the PT electricians claimed violation of the federal False Claims Act, 31 U.S.C. 3729(a)(2). The Department of Labor found inaccurate or false payroll certifications. The district court awarded treble damages: $1,661,423.13. The Sixth Circuit affirmed summary judgment in favor of plaintiffs, but remanded for recalculation of the damages. Circle C, an experienced contractor, made false statements, acted in reckless disregard of the truth or falsity of the information, and the false statements were “material” to the government’s decision to make payment.View "Wall v. Circle C Constr., L.L.C." on Justia Law

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Semrau, a Ph.D. in clinical psychology, owned companies that provided psychiatric care to nursing home patients in Tennessee and Mississippi, using contracting psychiatrists who submitted records describing their work. The companies then billed the services to Medicare or Medicaid through private insurance carriers. Services are categorized into five-digit Current Procedural Terminology Codes, published by the American Medical Association. The Centers for Medicare and Medicaid Services sets reimbursement levels for each code as well as “relative value units” corresponding to the amount of work typically required for each service. After audits indicated that the companies had been billing at a higher rate than could be justified by the services actually performed, “upcoding,” Semrau was convicted of healthcare fraud, 18 U.S.C. 1347, and was sentenced to 18 months of imprisonment and ordered to pay $245,435 in restitution. The Sixth Circuit affirmed, rejecting Semrau’s claim that results from a functional magnetic resonance imaging lie detection test should have been admitted to prove the veracity of his denials of wrongdoing. There was ample evidence that Semrau was aware of accepted definitions of the CPT codes; he expressly agreed not to “submit claims with deliberate ignorance or reckless disregard of their truth or falsity.” View "United States v. Semrau" on Justia Law

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Watkins, an African-American, worked for the school district, overseeing security systems. Fultz supervised Watkins and, relying on Watkins’s advice, Fultz awarded Vision a $182,000 annual contract for service of security cameras. Vision’s president, Newsome, testified that Watkins called her and talked about a “finder’s fee.. Newsome went to Cleveland for a customer visit. She e-mailed Watkins and he replied: “Absolutely$.” Newsome believed that Watkins expected her to pay him at their meeting. Newsome notified Fultz. At the meeting, Watkins requested “an envelope.” After Fultz contacted police, the FBI recorded meetings at which Newsome gave Watkins $5,000 and $2,000. A white jury convicted on two counts of attempted extortion “under color of official right” (Hobbs Act, 18 U.S.C. 1951), and one count of bribery in a federally funded program, 18 U.S.C. 666(a)(1)(B). The court determined a total offense level of 22, applying a two-level enhancement for obstruction of justice, another two-level enhancement for bribes exceeding $5,000, and a four-level enhancement for high level of authority, plus an upward variance of 21 months under 18 U.S.C. 3553(a), and sentenced Watkins to six years’ incarceration. The Sixth Circuit affirmed, rejecting challenges to jury instructions, sufficiency of the evidence, the jury’s racial composition, and the reasonableness of the sentence.View "United States v. Watkins" on Justia Law

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In August 2008 Ellington accepted the position of Deputy Clerk of the City Council of East Cleveland. The City Council wanted him, but then-Mayor, Brewer, stood in the way. After resolution of an approximately three-month-long standoff between the sides, Ellington began receiving regular paychecks and compensation for wages unpaid since he had begun performing services. Ellington sued, claiming that failure to issue him paychecks between August 2008 and November 2008 violated the minimum wage and overtime provisions of the Fair Labor Standards Act, 29 U.S.C. 201–219, article II, section 34a of the Ohio Constitution; and the Ohio Minimum Fair Wage Standards Act, Ohio Rev. Code 4111.01–.99. The district court concluded that Ellington, as an employee of the City Council, was subject to the “legislative employee” exclusions to the federal and state minimum wage and overtime provisions and granted summary judgment in favor of defendants. The Sixth Circuit affirmed. To conclude that Ellington, who has been found to be an employee of a legislative body, is covered by the FLSA because, as Deputy Clerk of Council, he is also part of the City of East Cleveland’s workforce would effectively excise the FLSA’s “legislative employee” exclusion. View "Ellington v. City of East Cleveland" on Justia Law

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Access to the Ambassador Bridge between Detroit and Windsor, Ontario necessitated traversing city streets. The state contracted with the Company, which owns the Bridge, to construct new approaches from interstate roads. The contract specified separate jobs for the state and the Company. In 2010, the state obtained a state court order, finding the Company in breach of contract and requiring specific performance. The Company sought an order to open ramps constructed by the state, asserting that this was necessary to complete its work. The court denied the motion and held Company officials in contempt. In a 2012 settlement, the court ordered the Company to relinquish its responsibilities to the state and establish a $16 million fund to ensure completion. Plaintiffs, trucking companies that use the bridge, sought an injunction requiring the state to immediately open the ramps. The district court dismissed claims under the dormant Commerce Clause, the motor carriers statute, 49 U.S.C. 14501(c), and the Surface Transportation Assistance Act, 49 U.S.C. 31114(a)(2). The Sixth Circuit affirmed. For purposes of the Commerce Clause and statutory claims, the state is acting in a proprietary capacity and, like the private company, is a market participant when it joins the bridge company in constructing ramps. View "Mason & Dixon Lines Inc. v. Steudle" on Justia Law

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The center provided care for children of low-income parents and sought license renewal in 2005. The application remained pending for 15 months. During that period, the state agency, ODJFS, reduced its capacity from 88 to 38 children. The agency responsible for funding under Title XX, which provides government assistance for child care, 42 U.S.C. 1397, discontinued public assistance for its services, based on a proposed adjudication, which would reject the renewal application based on alleged improper use of physical discipline and failure to adequately ensure that employees did not have disqualifying criminal convictions. While the matter was pending, the center experienced difficulty with third-party contracts, including liability insurance and workers compensation renewal certification, and went out of business. The center sued under 42 U.S.C. 1983 and state law, claiming tortious interference with business relationships, based on racial animus. After the center also filed in the Ohio Court of Claims, the district court dismissed the claims against ODJFS. The center continued to amend its federal pleadings, including addition of an antitrust claim, but the claims were ultimately dismissed. The Sixth Circuit affirmed, finding that any unwaived claims were barred by the Local Government Antitrust Act. View "Wee Care Child Ctr., Inc. v. Lumpkin" on Justia Law