Justia Government Contracts Opinion SummariesArticles Posted in US Court of Appeals for the Second Circuit
United States v. Strock
The United States appealed the district court's dismissal of its claims under the False Claims Act (FCA) and federal common law against SCI. The government's claims stemmed from its belief that a service-disabled veteran's ownership in VECO was illusory. Rather, the government alleges that the company was controlled by Defendant Lee Strock, who set up VECO as a front to funnel contract work for his company, SCI.The Second Circuit concluded that the district court's finding with respect to materiality was erroneous because it was premised on too restrictive a conception of the FCA materiality inquiry set out in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016); the government has plausibly alleged materiality in this case; the district court's conclusion that the complaint failed to allege defendants' knowledge was erroneous as to Lee Strock, and potentially as to SCI, but not as to Cynthia Golde; and the district court should not have dismissed the common law claims on jurisdictional grounds because it had original jurisdiction over these claims under 28 U.S.C. 1345. Accordingly, the court affirmed in part, reversed in part, and vacated in part. View "United States v. Strock" on Justia Law
G4S International Employment Services (Jersey), Ltd. v. Newton-Sealey
The Second Circuit denied a petition for review of the Benefit Review Board's decision affirming the ALJ's award of disability benefits to an employee of a defense contractor under the Defense Base Act (DBA), which extends workers' compensation benefits under the Longshore and Harbor Workers' Compensation Act to certain employees of U.S. government contractors working overseas.In this case, the employee alleged that his injuries arose out of and in the course of his employment, thereby establishing a prima facie case for benefits under the LHWCA. The court held that the record supports the Board's conclusion that petitioner failed to present sufficient evidence to prove that the named defendants were not employers. Therefore, the Board did not err when it affirmed the ALJ's finding that the employee's claims were not barred under Section 933(g) of the LHWCA. View "G4S International Employment Services (Jersey), Ltd. v. Newton-Sealey" on Justia Law
United States ex rel. Hanks v. Florida Cancer Specialists
Relator appealed the district court's dismissal of his Fifth Amended Complaint, which asserts claims under the False Claims Act and related state laws against certain healthcare providers, physician oncology practices, and group purchasing organizations. Relator alleged that defendants conspired with Amgen, a pharmaceutical company, to purchase Amgen drugs at discounted rates with knowledge that Amgen would fail to report the discounts to government agencies.Although the Second Circuit held that relator's appeal was timely, the court did not reach the merits of his appeal. Rather, the court vacated and remanded for the district court to determine whether the False Claims Act's public disclosure bar applies to relator's claims--a jurisdictional question the district court elided when it dismissed relator's complaint on other grounds. View "United States ex rel. Hanks v. Florida Cancer Specialists" on Justia Law
M.E.S., Inc. v. Safeco Insurance Co. of America
The Second Circuit affirmed the district court's summary judgment dismissal of all claims in the Second Amended Complaint against defendants in an action stemming from construction projects with the U.S. Army Corps of Engineers. The court held that MES's claims failed to articulate any support for its accusations that Safeco breached its contractual obligations or engaged in bad faith or tortious conduct. The court noted that the claim that Safeco acted inappropriately by attending the cure meetings was particularly frivolous. In this case, MES failed to identify any good faith basis, in law or on the basis of the agreements at issue, for its assertion that Safeco had no right to take steps to meet its obligations under the surety bonds. The court sua sponte awarded Safeco double costs. View "M.E.S., Inc. v. Safeco Insurance Co. of America" on Justia Law
United States ex rel. Wood v. Allergan, Inc.
A violation of the False Claims Act's (FCA) first‐to‐file bar cannot be remedied by amending or supplementing the complaint. Relator filed a qui tam action against Allergan, alleging that the pharmaceutical company violated the FCA through a kickback scheme. The Second Circuit reversed and remanded with instructions for the district court to dismiss relator's Third Amended Complaint without prejudice. In this case, relator was not the first relator to sue Allergan under the FCA based on the alleged kickback scheme. View "United States ex rel. Wood v. Allergan, Inc." on Justia Law
Fabula v. American Medical Response, Inc.
Plaintiffs Chorches and Fabula filed a qui taim suit under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., against AMR, alleging that AMR made false statements and submitted false Medicare and Medicaid claims. Plaintiff Fabula also alleged a retaliation claim. The Second Circuit vacated the district court's dismissal of the claims and held that Chorches has pled the submission of false claims with sufficient particularity under Fed. R. Civ. P. 9(b), as applied in the qui tam context, and that Fabula's refusal to falsify a patient report, under the circumstances of this case, qualified as protected activity. Accordingly, the court remanded for further proceedings. View "Fabula v. American Medical Response, Inc." on Justia Law