Justia Government Contracts Opinion Summaries

Under the Urbanized Area Formula Program, 49 U.S.C. 5307, the Federal Transportation Administration (FTA) administers grant funding to urban transit programs for “operating costs of equipment and facilities for use in public transportation.” Recipients must submit “financial, operating, and asset condition information” to the National Transit Database. The agency apportions grants based, in part, on the number of Vehicle Revenue Miles (VRM) that accrue while a vehicle is “in revenue service,” available to the general public. In 2005, the Illinois House of Representatives called for a performance audit of the Chicago Transit Authority (CTA). The audit concluded that the CTA, from possibly as early as 1986, had been overstating its VRM and had received higher than justified UAFP disbursements. Notified of the report, the FTA required that CTA revise its data from 2011 forward. In 2012, a nonprofit watchdog organization contacted the Department of Justice requesting an investigation into the CTA’s reporting practices. The group then filed suit under the qui tam provision of the False Claims Act, 31 U.S.C. 3730. The Seventh Circuit affirmed dismissal, agreeing that the district court lacked subject matter jurisdiction because the allegations of wrongdoing had been publicly disclosed at the time the action was filed. View "Cause of Action v. CTA" on Justia Law

In 2011, Bogina sued under the False Claims Act, 31 U.S.C. 3729, seeking compensation for exposing fraud allegedly perpetrated against the federal government and several state governments. Defendants included a major supplier of medical equipment to institutions reimbursed by Medicare and other federal programs and its customer, a chain of nursing homes. The district judge dismissed the federal claims as being too similar to those in a prior suit and relinquished jurisdiction over the state claims. The Seventh Circuit affirmed, finding differences between this suit and an earlier suit “unimpressive” and stating that it did not matter that the alleged fraud continued. View "Bogina v. Medline Indus., Inc." on Justia Law

Plaintiffs, Woodward employees, filed a qui tam action under the False Claims Act, alleging that Woodward falsely certified helicopter engine parts that it sold to the government. Plaintiffs had complained that the sensors at issue did not meet quality standards and had refused to work on the order. Following an investigation, a Defense Contract Management Agency Technical Specialist concluded that there was “nothing either incorrect or wrong with the procedures, assembly, or testing of the sensors.” The government continues to order, pay for, and use Woodward’s sensor The Seventh Circuit affirmed summary judgment in favor of Woodward, agreeing that even if Woodward made false statements to the government, no reasonable jury could find that it made the statements knowingly or that the statements were material. View "Marshall v. Woodward, Inc." on Justia Law

A jury found Ferrell, a licensed psychologist, and Bryce, Ferrell’s employee, guilty of six counts of healthcare fraud, 18 U.S.C. 1347. Ferrell was sentenced to 88 months of imprisonment. The Seventh Circuit affirmed, upholding the district court’s refusal to admit two out-of-court statements made by Bryce’s brother (also Ferrell’s employee), and contained in a voicemail and an email. The district court held that these statements were hearsay and did not fall within Rule 804(b)(3)’s hearsay exception. The district court held that although the brother was unavailable to testify, the statements were not against his interest and the corroborating circumstances did not indicate that his statements were trustworthy. The court also upheld admission of testimony by another doctor concerning Ferrell’s conduct while in Texas. The court found that the testimony did not constitute impermissible character evidence under Fed. R. Evid. 404(b). View "United States v. Ferrell" on Justia Law

In 2005 the Army Corps of Engineers invited bids on a federal reservoir project in Illinois. One of the successful bidders was Slurry, which leased from Pileco a trench cutter made by Bauer. Slurry was a prime contractor on the Corps of Engineers’ project; the Miller Act, 40 U.S.C. 3131, requires prime contractors on some government construction projects to post bonds. Slurry used Fidelity as surety. The bond insured against a failure by Slurry to pay subcontractors, such as Pileco. Contending that the cutter was defective, Slurry refused to pay the agreed rental price. Pileco sued Slurry and Fidelity, asserting breach of contract that Fidelity violated the Miller Act by failing to reimburse Pileco for costs associated with Slurry’s reneging on its obligation to pay. Slurry counterclaimed. A second trial resulted in a verdict in Pileco’s favor except for a $357,716 equitable adjustment in favor of Slurry, based on time that cutter was inoperable because of a defect attributable to Pileco. The net result was that Pileco was awarded $2.23 million against Slurry for breach of contract and the same amount against Fidelity for the Miller Act violation. The Seventh Circuit affirmed, except with respect to the denial of prejudgment interest and costs. View "Pileco, Inc. v. Slurry Systems, Inc." on Justia Law

Plaintiffs, a putative class of electrical workers, claimed that their respective employers, in collusion with Metropolitan Pier and Exposition Authority (MPEA, which used electricians supplied by the employers) wrongfully terminated them, in violation of a collective bargaining agreement (CBA) and federal labor law and circumvented the CBA-mandated hiring process and that their union, International Brotherhood of Electrical Workers, failed to adequately represent them in the CBA-mandated grievance process. The district court denied motions to dismiss four counts, but dismissed a declaratory judgment motion against MPEA and two employers, and the claim of state law tortious interference with contracts against MPEA. The district court held that, as a political subdivision, MPEA is not an “employer” under Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. 185. Plaintiffs appealed only the dismissal of the tortious interference claim against MPEA. The Seventh Circuit affirmed, rejecting an argument that jurisdiction was created by the need to interpret the CBA. With respect to political subdivisions, section 301 preempts not only claims “founded directly” on the collective bargaining agreement, but also state law claims that indirectly implicate a collective bargaining agreement. View "Healy v. Metro. Pier & Exposition Auth." on Justia Law