Justia Government Contracts Opinion Summaries

Zoltek’s patent, "Controlled Surface Electrical Resistance Carbon Fiber Sheet Product" concerns manufacturing carbon fiber sheets with controlled surface electrical resistivity. The filters were used in F-22 fighter jets, which Lockheed designed and built under government contract. Zoltek claimed infringement in a 1996 suit against the U.S. under 28 U.S.C. 1498(c). The Federal Circuit held that the statute did not waive sovereign immunity because the manufacturing process began in a foreign country and that Zoltek could not allege patent infringement as a taking under the Tucker Act. On remand, the court allowed Zoltek to add a claim against Lockheed under 35 U.S.C. 271(g) and transfer the case. The Federal Circuit court reconsidered its earlier decision and concluded that suit against the government is not barred and that 1498(c) does not apply to this case because the infringement was based on activities in the U.S. An independent cause of action is available under 28 U.S.C. 1498(a) for direct infringement by the government or its contractors that is not dependent on 35 U.S.C. 271(a). When the government is subject to suit under 1498(a) for alleged infringement by a contractor, the contractor is immune from individual liability. View "Zoltek Corp. v. United States" on Justia Law

During World War II, the U.S. contracted with oil companies for the production of aviation fuel, which resulted in production of hazardous waste. The waste was dumped at the California McColl site. Several decades later, the oil companies were held liable for cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601, and sought reimbursement from the government based on the contracts. The district court entered summary judgment on liability, finding that the contracts contained open ended indemnification agreements and encompassed costs for CERLCA cleanup, and awarded $87,344,345.70. The trial judge subsequently discovered that his wife had inherited 97.59 shares of stock in a parent to two of the oil companies. The judge ultimately vacated his summary judgment rulings; severed two companies from the suit and directed the clerk to reassign their claims to a different judge; reinstated his prior decisions with respect to two remaining companies; and entered judgment against the government ($68,849,505). The Federal Circuit vacated and remanded for reassignment to another judge. The judge was required to recuse himself under 28 U.S.C. 455(b)(4) and the error was not harmless.View "Shell Oil Co. v. United States" on Justia Law

The company has been under contract with the U.S. Army’s Morale, Welfare, and Recreation Fund since 1993 to build and operate a hotel at a military base on Oahu. With 18 years remaining on the agreement, the Armed Services Board of Contract Appeals determined that the Fund breached the core of the contract and the parties entered the damages phase of the dispute. The company filed a separate complaint alleging that the Fund had done nothing to cure its ongoing breach. The ASBCA dismissed the second complaint as duplicative. The Federal Circuit affirmed, finding that the company voluntarily waived its right to appeal to the court under its negotiated contract with the Fund. View "Minesen Co. v. McHugh" on Justia Law

In 2008 the district court calculated damages for the government's partial breach of the Standard Contract for disposal of spent nuclear fuel using the 1991 Annual Capacity Report and the duty of good faith and fair dealing. The Federal Circuit, having set the 1987 ACR as the appropriate acceptance rate for a causation analysis under the Standard Contract, remanded. On remand, the district court set the amount of damages at $89,004,415. The Federal Circuit affirmed, holding that the new judgment accounts for the proper causation times and principle. View "Pacific Gas & Elec. Co. v. United States" on Justia Law

Plaintiff, a concessionaire for a recreation facility at Lake Berryessa, made improvements for a resort, boat ramps, roads, sewage system, retaining walls, water purification plant, and parking. Before its agreement expired, plaintiff and others sued, under the Tucker Act (28 U.S.C. 1491(b)(1)-(4)) challenging a plan for soliciting new concessionaire bids, claiming that the federal agency had to require new concessionaires to compensate for facilities. The Court of Federal Claims held that outgoing concessionaires had to remove or abandon the facilities, unless the government required that they remain, in which case concessionaires would receive compensation for selected facilities. The Federal Circuit affirmed. When plaintiff's agreement expired in 2008, it left intact facilities behind, although the government did not request that it do so. Two years later, the government contracted with a new company. Plaintiff claims that the company or the government have used the facilities and filed a complaint, claiming that the government should be found to have retrospectively required their retention. The claims court dismissed based on issue preclusion and that plaintiff had no property interest in the facilities after expiration of the lease. The Federal Circuit affirmed, finding that the government did not "require" that the facilities be left. View "Laguna Hermosa Corp. v. United States" on Justia Law

In 2009, plaintiff applied for an IT specialist position with the Miami VA Healthcare System. He did not get the job and, after exhausting rights before the Department of Labor, filed an appeal, asserting that the VA violated his rights relating to veteran's preference. The AJ concluded that the Merit Systems Protection Board had no authority to review the merits of the VA’s non-selection of plaintiff. The Board agreed. The Federal Circuit vacated. There is no way to determine whether the Veterans' Preference Act (58 Stat. 390) has been violated without examining the grounds for non-selection. The Board has jurisdiction to determine whether the VA properly afforded plaintiff the right to compete for the job and properly determined, in accordance with 5 C.F.R. § 302.302(d), that he was not qualified for the position View "Lazaro v. Dep't of Veterans Affairs" on Justia Law

In 2010, the court of claims awarded owners $3,043,051, plus interest, for the temporary taking of a blanket easement over five parcels in the Otay Mesa area of San Diego County, California, limiting the government's liability to the period April, 1999 to October, 2008. The taking was the result of Border Patrol activities outside the boundaries of an easement that had been purchased by the government for those purposes, and included creating new roads, constructing a permanent tented structure, and installing under-ground motion-detecting sensors. The Federal Circuit affirmed the limitation of liability to five parcels and the stated time period, but reversed the calculation of damages. The claims court erred in concluding that the taking was temporary rather than a permanent physical taking. The government stipulated that its easement was "perpetual" and has not removed its equipment. View "Otay Mesa Prop. v. United States" on Justia Law

In 1983, Congress enacted the Nuclear Waste Policy Act, 42 U.S.C. 10101–10270, to provide for government collection and disposal of spent nuclear fuel and high-level radioactive waste. The NWPA authorized the Department of Energy to contract for disposal. In return for payment of fees into the Nuclear Waste Fund, the Standard Contract provided that the DOE would begin to dispose of SNF and HLW not later than January 31, 1998. Because collection and disposal did not begin, courts held that the DOE had breached the Standard Contract with the nuclear energy industry. The trial court found breach of plaintiff's contract, but granted summary judgment in favor of the government regarding the implied covenant of good faith and fair dealing and set damages for the breach at $10,014,114 plus the cost of borrowed funds for financing construction of a dry fuel storage project. On reconsideration, the trial court reduced damages to $9,735,634 and denied the cost of borrowed funds. The Federal Circuit affirmed with respect to borrowed fund, but and reversed denial of overhead costs. View "System Fuels, Inc. v. United States" on Justia Law

In 2010 the Department of Defense began the process of procuring digital planetariums for use in teaching astronomy. Before posting its intention to sole-source the contract, the Department communicated with its existing vendor to inquire about terms. The Department posted notice of intent to award a sole-source contract to that vendor, stating that if any party challenged the award, it should file a statement, detailing its capability to fulfill the order. The Department approved a Justification and Authorization as required for a sole-source procurement, indicating that curriculum standards and lessons for the vendor's components are already in place. In response to a statement by another bidder, the Department had its existing vendor provide additional specifications to add to the notice. After the contract was awarded to the existing vendor, plaintiff complained to a congressman, then filed suit. The Court of Federal Claims held that plaintiff could not demonstrate prejudice, a prerequisite for standing, because it did not have a substantial chance of winning the contract, having failed to submit a statement of capability. The Federal Circuit affirmed, holding that plaintiff was not an interested party. View "Digitalis Educ. Solutions, Inc. v. United States" on Justia Law

Incentives under the National Housing Act, to encourage private developers to meet the needs of moderate income families, included below-market 40-year mortgages, with an option to prepay after 20 years. Restrictions, for example, on rent increases, were in effect until the mortgage was paid off. The prepayment option gave developers an opportunity to convert to market rate housing. To avoid a shortage of affordable housing, Congress enacted Emergency Low Income Housing Preservation Act, 101 Stat. 1877 (1988), and Low-Income Housing Preservation and Resident Homeownership Act, 104 Stat. 4249 (1990) under which an owner needed HUD approval to prepay or to go through regulatory hoops. In 1996 Congress restored prepayment rights. Plaintiff was prohibited from prepayment for five years, 10 days. The Court of Federal Claims held that the restriction of prepayment rights constituted a taking but did not constitute a breach of contract, because there was no privity between HUD and plaintiff. The Federal Circuit affirmed on the contract claim, but reversed with respect to temporary taking. The evidence did not demonstrate that plaintiff's investment backed expectations were objectively reasonable in light of industry practice,View "CCA Assocs. v. United States" on Justia Law