Justia Government Contracts Opinion Summaries

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BGT contracted with the Navy to construct and deliver a generator. The Navy agreed to supply but failed to deliver an exhaust collector and engine mounts (government-furnished equipment "GFE"). Consistent with Federal Acquisitions Regulations (FAR), the contract provides that the Navy “shall consider” an equitable adjustment if it does not deliver the GFE; gives the Navy the right to modify its GFE commitments; and provides that the Navy “shall consider” an equitable adjustment if it modifies those GFE commitments. It requires that equitable adjustments be made according to 48 C.F.R. 52.243-1. The contract also incorporates a clause from outside FAR, providing that no statement or conduct of government personnel shall constitute a change and that the contractor shall not comply with any order, direction, or request of government personnel unless it is issued in writing and signed by the Contracting Officer. The Navy accepted the completed generator but rejected BGT’s request for an equitable adjustment.The Claims Court dismissed BGT’s subsequent lawsuit, finding that BGT had contractually waived its claims of constructive change through ratification, official change by waiver, and breach for failure to award an equitable adjustment and insufficiently alleged a breach of the implied duty of good faith and fair dealing. The Federal Circuit affirmed the dismissal of the good faith and fair dealing claim but vacated the dismissal of the remaining claims. Even assuming that the contracting officer is not chargeable with having ordered the withdrawal of the GFE, there is an alternate pathway to relief. If relief under the standard FAR provisions were not available, the government could avoid liability for reneging on its GFE commitments in any case simply by withdrawing GFE without written notice from the contracting officer. View "BGT Holdings LLC v. United States" on Justia Law

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In 2014, Edelweiss filed under seal its qui tam complaint, seeking to recover more than $700 million in false claims allegedly paid by the state and political subdivisions. The defendants were entities involved in the marketing of government-issued variable-rate bonds. The Attorney General reportedly received multiple extensions of the 60-day period for investigation and in October 2015, filed a notice declining to intervene. The next day, Edelweiss successfully moved to further extend the seal to January 2016. Edelweiss’s second motion to extend the seal, (to June) was also granted. Edelweiss filed no further motions to extend the seal but, for two years after the seal period expired, did not move to lift the seal despite two admonitions from the court. In June 2018, Edelweiss finally asked the court to unseal the case but did so incorrectly. Ultimately, the clerk of the court informed Edelweiss that it had unsealed the action around December 4, 2018. Weeks later, Edelweiss began serving the defendants.The court of appeal affirmed the dismissal of the defendants. The time from October 2015 to December 2018 is included in the three-year period during which service must be accomplished because, even if Edelweiss was unable to serve the summons until the seal was lifted, the continuing of the seal after October 2015 was not a circumstance beyond Edelweiss’s control, Code of Civ. Proc. 583.240. View "Edelweiss Fund, LLC v. JP Morgan Chase & Co." on Justia Law

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Aetna brought a qui tam action to recover damages and fees occasioned by the surgical center's fraudulent billing practices. The trial court denied the surgical center's petition to compel arbitration of the quit tam action. At issue is Aetna's claims of fraudulent insurance billing practices by the surgical center and its healthcare billing services in violation of the Insurance Fraud Protection Act (IFPA).The Court of Appeal affirmed and concluded that the qui tam action is not subject to arbitration because it is brought on behalf of the state which is not a party to the contract between the insurance company and the surgical center. In this case, California is the real party in interest and it cannot be compelled to arbitrate this qui tam IFPA action because it is not a signatory to the contracts. View "California ex rel. Aetna Health of California Inc. v. Pain Management Specialist Medical Group" on Justia Law

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Boeing entered into contracts with the Air Force that require Boeing to deliver technical data with “unlimited rights,” meaning that the government has the right to “use, modify, reproduce, perform, display, release, or disclose [the] technical data in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so.” Notwithstanding the government’s unlimited rights, Boeing retains ownership of any technical data it delivers under the contracts.Boeing marked each submission to the Air Force with a legend that purports to describe Boeing’s rights in the data with respect to third parties. The government rejected Boeing’s technical data, finding that Boeing’s legend is a nonconforming marking because it is not in the format authorized by the contracts under the Defense Federal Acquisition Regulation Supplement, Subsection 7013(f). Boeing argued that Subsection 7013(f) is inapplicable to legends that only restrict the rights of third parties. The Armed Services Board of Contract Appeals agreed with the government.The Federal Circuit vacated. Subsection 7013(f) applies only in situations when a contractor seeks to assert restrictions on the government’s rights. The court remanded for resolution of an unresolved factual dispute remains between the parties regarding whether Boeing’s proprietary legend, in fact, restricts the government’s rights. View "Boeing Co. v. Secretary of the Air Force" on Justia Law

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Dr. Braun worked at the National Institutes of Health (NIH) for almost 32 years as a research doctor with a specialty in neurological disorders. He obtained tenured status in 2003. In 2016, the NIH, which is located within the U.S. Department of Health and Human Services, removed Dr. Braun from his position after an audit revealed that his records were incomplete for all but 9% of the human subjects who had participated in his research over the course of six years.The Merit Systems Protection Board rejected Braun’s argument that an NIH policy required de-tenuring of tenured scientists (which NIH had not done in his case) before they could be removed for performance-related reasons and that the NIH committed certain other errors. The Board reasoned that the cited NIH policy allows removal “for cause” without de-tenuring. The Federal Circuit affirmed. The “for cause” provision was properly applied to this case. The evidence permitted the conclusions that Dr. Braun, “over a long period of time,” failed to a “dramatic and disturbing” degree, to comply with protocol requirements that exist “for the safety of the patients and the credibility of the research.” There was no denial of due process. View "Braun v. Department of Health and Human Services" on Justia Law

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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

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Dr. Korban and his medical practice Delta, practice diagnostic and interventional cardiology. In 2007, Dr. Deming filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729(a)(1)(A)–(C), (G) against Korban, Jackson Regional Hospital, and other Tennessee hospitals, alleging “blatant overutilization of cardiac medical services.” The United States intervened and settled the case for cardiac procedures performed in 2004-2012. Korban entered into an Integrity Agreement with the Office of Inspector General, effective 2013-2016 that was publicly available and required an Independent Review Organization. The U.S. Department of Justice issued a press release that detailed the exposed fraudulent scheme and outlined the terms of Korban’s settlement. In 2015, Jackson Regional agreed to a $510,000 settlement. The Justice Department and Jackson both issued press releases.In 2017, Dr. Maur, a cardiologist who began working for Delta in 2016, alleged that Korban was again performing “unnecessary angioplasty and stenting” and “unnecessary cardiology testing,” paid for in part by Medicare. In addition to Korban and Jackson, Maur sued Jackson’s corporate parent, Tennova, Dyersburg Medical Center, and Tennova’s corporate parent, Community Health Systems. The United States declined to intervene. The district court dismissed, citing the FCA’s public-disclosure bar, 31 U.S.C. 3730(e)(4). The Sixth Circuit affirmed. Maur’s allegations are “substantially the same” as those exposed in a prior qui tam action and Maur is not an “original source” as defined in the FCA. View "Maur v. Hage-Korban" on Justia Law

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In this infrastructure development dispute, the Supreme Court vacated the judgment of the court of appeals concluding that the Legislature had not waived immunity for Plaintiff's declaratory relief claims against the City of New Braunfels, holding that because Plaintiff relied on the court of appeals' holding in a previous appeal that declaratory relief was available and the Open Meeting Act and Tex. Local Gov't Code chapter 252 afforded alternative relief to consider, remand was required in the interest of justice.Plaintiff sued the City seeking declaratory relief for violations of the Open Meetings Act and the contract-bidding provisions of chapter 252. The trial court denied the City's jurisdictional plea based on governmental immunity, and the court of appeals affirmed, permitting Plaintiff's claims to proceed. Plaintiff prevailed at an ensuing trial, and the trial court awarded declaratory relief. The court of appeals reversed, concluding that the City was immune. The Supreme Court vacated the judgment and remanded the case, holding that this was a compelling case requiring a remand in the interest of justice. View "Carowest Land, Ltd. v. City of New Braunfels, Texas" on Justia Law

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Plaintiff County of Monterey (County) appealed when the trial court denied its petition for writ of mandate and complaint for declaratory and injunctive relief. The County was the successor agency for its former redevelopment agency ("RDA"), and challenged decisions by the Department of Finance (Department) relating to a development known as the East Garrison Project, which was part of the Fort Ord Redevelopment Project located on a closed military base in Monterey. The County claimed the trial court erroneously determined that a written agreement entered into between its former RDA and a private developer (real party in interest, UCP East Garrison, LLC) was not an enforceable obligation within the meaning of the dissolution law because the former RDA did not have the authority to approve the agreement on the date the governor signed the 2011 dissolution legislation. The County further contended the trial court erred in determining the County failed to show the Department abused its discretion in disapproving two separate requests for funding related to administration of the East Garrison Project. The County claimed these administrative costs were expended to complete an enforceable obligation within the meaning of the dissolution law, and therefore the Department should have approved its requests for payment of such costs. Finally, the County argued the Department’s application of the dissolution law improperly impaired UCP’s contractual rights. The Court of Appeal rejected each of the County's contentions and affirmed judgment. View "County of Monterey v. Bosler" on Justia Law

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The Supreme Court affirmed the circuit court's dismissal of West Virginia Counties Group Self-Insurance Risk Pool, Inc.'s (WVCoRP) claims against Great Cacapon Volunteer Fire Department, Inc. (VFD), holding that the circuit court did not err.When a fire destroyed the building where VFD was housed, the owner of the building, the Morgan County Commission, was reimbursed for the loss by WVCoRP. Seeking to recover the funds it expended, WVCoRP sued the VFD and other parties for negligence. In the process, WVCoRP invoked a contractual right to subrogation. The circuit court determined that the claims against VFD were barred by W. Va. Code 29-12A-13(c), which prohibits claims against political subdivisions made under a right of subrogation. The Supreme Court affirmed, holding (1) WVCoRP's claims spring from its coverage contract with the Commission and fall within any plain meaning of subrogation; and (2) section 29-12A-13(c) is not an insurance law of the State from which WVCoRP is exempt. View "West Virginia Counties Group v. Great Cacapon Volunteer Fire Department, Inc." on Justia Law