Justia Government Contracts Opinion Summaries

Schindler filed suit alleging that WMATA arbitrarily eliminated it from consideration of a bid to replace escalators throughout WMATA's Metrol Rail System stations even though it complied with the Request for Proposal's (RFP) requirements and offered a better value than that proposed by the awardee.The DC Circuit affirmed the district court's dismissal sua sponte of Schindler's complaint based on lack of subject matter jurisdiction on the ground that WMATA, an interstate compact entity, had not waived its sovereign immunity. The court explained that neither the interstate compact creating WMATA, the Authority's procurement documents nor the Administrative Procedure Act waives WMATA's sovereign immunity for challenges to procurement decisions like Schindler's. View "Schindler Elevator Corp. v. Washington Metropolitan Area Transit Authority" on Justia Law

The Randolph-Sheppard Act (RSA) gives licensed blind individuals priority to operate vending facilities on federal property, 20 U.S.C. 107(b). The Secretary of Education promulgates implementing regulations and designates state agencies to administer the program. The RSA includes a grievance scheme for vendors to challenge a state’s operation of its Randolph-Sheppard program through the state licensing agency. A licensee dissatisfied with the results of the state’s hearing may seek further review before the Secretary, who must “convene a panel to arbitrate the dispute.” In the District of Columbia, the designated licensing agency is the Rehabilitation Services Administration.The plaintiffs, current and former vendors in the District’s Randolph-Sheppard program, claim that the District discriminated against them, based on their blindness, specifically by discriminatory inspections of vending facilities and failing to provide aids such as human or electronic readers. The plaintiffs did not pursue the Randolph-Sheppard grievance procedure but filed a lawsuit, claiming disability-based discrimination under Title II of the Americans with Disabilities Act, section 504 of the Rehabilitation Act, and the District of Columbia Human Rights Act. The district court dismissed the case for failure to exhaust administrative remedies. The D.C. Circuit affirmed. The plaintiffs had to proceed through the RSA grievance procedure before pursuing their discrimination claims in court; no futility exception could apply here. View "Patten v. District of Columbia" on Justia Law

In 2008, four long-term care hospitals that treat patients who are dually eligible for the Medicare and Medicaid programs were denied reimbursement by the Secretary of Health and Human Services for “bad debts,” unpaid coinsurances and deductibles owed by patients. The Secretary denied reimbursement on the grounds that the hospitals failed to comply with the “must-bill” policy, 42 C.F.R. 413.89(e)(2), which requires hospitals to bill the state Medicaid program to determine whether Medicaid will cover the bad debts first, and obtain a “remittance advice” indicating whether the state “refuses payment,” before seeking reimbursement under Medicare. uring the relevant time period, the hospitals were not enrolled in Medicaid and were unable to bill their state Medicaid programs; they claim they were previously reimbursed and that there was an abrupt policy change.The D.C. Circuit affirmed summary judgment for the Secretary, concluding that substantial evidence supported a finding that there was no change in policy. The court rejected arguments that the denial decision impermissibly required them to enroll in Medicaid, despite the fact that Medicaid participation is voluntary, and was arbitrary. View "New LifeCare Hospitals of North Carolina LLC v. Becerra" on Justia Law

Kennedy worked for Novo, promoting a new diabetes drug, Victoza. FDA approval of Victoza included specific conditions concerning a possible risk of thyroid cancer. According to Kennedy, in preparation for Victoza’s commercial launch, she was directed to market the drug in ways inconsistent with those FDA limitations. Kennedy filed a False Claims Act (FCA) complaint, alleging that Novo caused people to submit millions of dollars in false claims for payment under federal health care programs. Several such cases were consolidated in the District of Columbia. The government intervened. Novo, the government, and Kennedy reached a settlement for $46.5 million.The government filed a separate complaint against Novo, under the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301, alleging Victoza was an unlawfully “misbranded” drug. In the FDCA Settlement, Novo admitted that it had trained its employees to undermine the risks and agreed to pay the government $12,150,000. Kennedy was not a party to the FDCA litigation.Kennedy sought a share of the FDCA Settlement, arguing that it was an “alternate remedy” under the FCA, 31 U.S.C. 3730(c)(5). The D.C. Circuit reversed Kennedy’s award. The FCA confines qui tam plaintiffs to recoveries only for claims seeking relief based on fraud or falsehoods covered by that statute. The government’s separate FDCA enforcement action did not involve the type of claim cognizable under the FCA, nor did it allege a false or fraudulent effort to obtain money or property from the government. Kennedy received an agreed-upon FCA payment with knowledge of the separate action and is not entitled to further recovery. View "Kennedy v. Novo A/S" on Justia Law

Cimino, a former IBM senior sales representative, filed a qui tam action, alleging that IBM violated the False Claims Act, 31 U.S.C. 3729(a)(1)(A), by fraudulently inducing the IRS to enter a $265 million license agreement for “unwanted, unneeded” software. IBM allegedly devised a scheme to pressure the IRS into a long-term renewal deal by conducting an audit, anticipating that the IRS was overusing the software and therefore would owe significant compliance penalties. IBM would then offer to waive penalties in exchange for a new agreement. Contrary to IBM’s expectations, Deloitte’s initial audit showed the IRS was not significantly overusing the licenses. IBM never released these audit results to the IRS but worked with Deloitte to manipulate the results. Deloitte eventually presented the IRS with a false audit. Once the new agreement was in place, IBM allegedly charged an $87 million fee for prospective licenses and support, which “were, upon information and belief, never actually provided.”After a four-year investigation, the government declined to intervene in the qui tam case. The district court dismissed Cimino’s complaint. The D.C. Circuit reversed in part. In light of Supreme Court precedents interpreting the FCA to incorporate the common law, but-for causation is necessary to establish a fraudulent inducement claim. Cimino plausibly pleaded causation, as well as materiality. The court affirmed the dismissal of Cimino’s presentment claims because he failed to plead them with the requisite particularity. View "Cimino v. International Business Machines Corp." on Justia Law

ACC, the subcontractor on a Corps flood protection project, filed suit against the prime contractor, Hirani, for breach of contract and the providers of Hirani's payment bond, Colonial, under the Miller Act for unpaid labor and materials. The district court entered judgment in favor of ACC and awarded damages against both defendants.The DC Circuit remanded the case to the district court to make findings of fact as to when the Prime Contract was terminated and whether ACC performed labor or supplied material on April 29 and/or April 30. In the event that Colonial and Hirani cannot meet their burden to show that ACC's Miller Act claim was untimely, then this court can resolve the parties' other Miller Act contentions. If Hirani and Colonial show that termination occurred before April 29 or that ACC performed no labor or supplied no material on April 29 or 30, the court can then address the Miller Act statute of limitations issue. The court affirmed the restitution damages award against Hirani on ACC's contract claim where ACC has not provided the court with any basis to deviate from the principle of D.C. law that restitution, not quantum meruit, is the proper remedy where there is an express contract between the parties. The court deferred addressing other issues raised by the parties. View "United States v. Hirani Engineering & Land Surveying, PC" on Justia Law

Relator filed suit under the False Claims Act (FCA), alleging that a handful of large chemical manufacturers violated the Toxic Substances Control Act (TSCA) by repeatedly failing to inform the EPA of information regarding the dangers of isocyanate chemicals. The DC Circuit affirmed the district court's dismissal of the action, declining relator's invitation to be the first court to recognize FCA liability based on defendants' failure to meet a TSCA reporting requirement and on their failure to pay an unassessed TSCA penalty. View "United States ex rel. Kasowitz Benson v. BASF Corp." on Justia Law

Plaintiff, a former government contractor with security clearance, filed suit raising numerous constitutional and security claims after his security clearance was revoked. The district court dismissed 23 counts, partially dismissed Count 21 and granted summary judgment to the government on the remainder of that count, and ordered plaintiff to file a more definite statement about the other six counts (Counts 23-27 and 29). The district court later granted summary judgment for the government as to those six counts.As to the frivolous constitutional claims, they were barred by Department of Navy v. Egan, 484 U.S. 518 (1988). As to the Privacy Act claims, the court affirmed the dismissal of the claims because they failed on the merits. As to the Due Process Claims under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), they were properly dismissed because the officials were entitled to qualified immunity. As to challenges to the DOHA proceeding, the court assumed without deciding that plaintiff had a cognizable liberty interest but that his claim was not viable. As to claims of illegal search and claims under the Store Communications Act, the district court correctly dismissed these counts for failure to state a claim. Finally, as to claims of unlawful interrogation, the district court properly concluded that plaintiff failed to establish personal jurisdiction of the defendants. Accordingly, the court affirmed the district court's judgment. View "Palmieri v. United States" on Justia Law

Relator filed two suits alleging that Verizon violated the False Claims Act by overbilling the government in its telecommunications contracts. The D.C. Circuit affirmed the district court's holding that relator's second qui tam action violated the first-to-file bar and that, to proceed, he must file a new action; upheld the dismissal of the second suit without prejudice under the first-to-file bar; rejected Verizon's claim that relator's action should be dismissed with prejudice under the public disclosure bar; and held that the district court did not abuse its discretion in declining to dismiss relator's action with prejudice under Rules 8 and 9. View "Shea v. Cellco Partnership" on Justia Law