Justia Government Contracts Opinion Summaries

In a national emergency, the Department of Defense can augment its own capabilities with aircraft drawn from the "Civil Reserve Air Fleet," composed of aircraft owned by commercial carriers but committed voluntarily for use during emergencies. The Fleet is divided into teams of airlines. The Department awards mobilization value points; the more points a member has, the more non-emergency Department air transportation the member can bid on. Points are transferrable within teams. Members of defendant's team have a contract with a one-year term and a separate three-year agreement concerning distribution of business among members. Plaintiff's suit is based on a 2006 three-year agreement in the form of a letter. A change from what members of the team had been doing ultimately led to plaintiff's withdrawal from the team. Plaintiff subsequently went into bankruptcy. Plaintiff won a jury verdict of almost $66 million. The Seventh Circuit reversed, holding that the "agreement" did not include crucial terms and was so indefinite as to be unenforceable. The court also criticized the regression analysis on which the award was calculated. A promissory estoppel claim, while not preempted, failed on the facts. View "ATA Airlines, Inc. v. FedEx Corp." on Justia Law

Airlines, users of airports owned by the City of Chicago, have use agreements that make they city responsible for runway clearing. The airlines pay a per-landing fee, based on the city's actual expenses. In 1999 and 2000 the airports were crippled by severe snowstorms. The city obtained $6,000,000 in reimbursement from FEMA under the Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121. Years later FEMA ordered the city to return the money, based on a provision of the Act concerning duplicate benefits. FEMA asserted that the use agreements entitled the city to reimbursement of costs from the airlines. After exhausting administrative remedies the city filed suit. The district court denied the airlines' motion to intervene. The Seventh Circuit reversed. Finding that the airlines have standing, the court stated that t would not be as "efficient to litigate this three-cornered dispute in two lawsuits rather than one." View "City of Chicago v. Fed. Emergency Mgmt. Agency" on Justia Law

A newborn suffered severe brain damage because doctors failed to promptly diagnose and treat an infection contracted at his 2003 birth. He was born prematurely and certain tests, normally done during pregnancy, were not performed by the federally-subsidized clinic where the mother received care. The clinic and its doctors are deemed federal employees under the Federally Supported Health Centers Assistance Act, 42 U.S.C. 233(g)-(n), and shielded from liability under the Federal Tort Claims Act. In 2005 the parents filed suit in state court and, in 2006, HHS denied an administrative claim for damages. Within six months of the denial the case was removed to federal court. In 2010, the district court held that the claim was filed within the two year statute of limitations under the FTCA (28 U.S.C. 2401(b)) and awarded more than $29 million in damages against the government. The Seventh Circuit affirmed. A claim only accrues when a plaintiff obtains sufficient knowledge of the government-related cause of his injury; the plaintiffs were reasonably diligent. View "Arroyo v. United States" on Justia Law

In 2001 plaintiff received prenatal care from a clinic that receives federal funds. Its physicians and the clinic are deemed federal employees for purposes of malpractice liability, so that the United States could be substituted as a party to a suit. 28 U.S.C. 2679(d)(1); claims would be governed by the Federal Tort Claims Act, and neither would face liability. For complex situations, the clinic contracted with UIC for specialists. Plaintiff's baby died following a difficult delivery. She sued the clinic, its doctor, the delivery hospital, and two UIC physicians who assisted. The U.S. Department of Health and Human Services denied claims for damages. The district court entered summary judgment for the UIC doctors under the Illinois Good Samaritan Act, which shields physicians who provide "emergency care without fee to a person," 745 ILCS 49/25, but declined to dismiss the case against the government, which had been substituted for the clinic. The Seventh Circuit reversed, first holding that the district court had derivative jurisdiction. Although the salaried UIC doctors did not receive a direct financial benefit from the delivery, their employer billed the clinic for services. There was evidence that one doctor submitted a billing form with respect to the delivery; the other made a "bad faith" decision not to bill. View "Rodas v. Seidlin" on Justia Law

Based on her part in billing Indiana Medicaid for ambulance service while running a car service to take patients to medical appointments, defendant was convicted of Medicaid fraud, 18 U.S.C. 1347, and conspiracy to defraud the U.S. government, 18 U.S.C. 371. She was sentenced to 33 months in prison and to pay restitution of $846,115. The Seventh Circuit affirmed. Data relating to time-stamping of bills, which may have established that multiple people submitted bills, was not concealed; the government simply failed to extract (before trial) information to which it and the defense had access. Even if the data was "Brady" material, it would not have changed the outcome. The judge did not err in telling the jury that a scheduled witness was ill without saying that the witness had refused treatment. View "United States v. Gray" on Justia Law

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