Justia Government Contracts Opinion Summaries

The Ninth Circuit reversed the district court's dismissal of relator's qui tam action under the False Claims Act (FCA) against KCI, alleging that the company submitted false claims to Medicare. The panel held that relator sufficiently alleged that KCI violated the Act by adequately alleging a fraudulent scheme to submit false claims and reliable data that led to a strong inference that false claims were actually submitted. The panel also held that relator sufficiently alleged that KCI acted with the requisite scienter under the Act, and KCI's false claims were material to the government's payment decision. View "United States ex rel Godecke v. Kinetic Concepts, Inc." on Justia Law

Plaintiffs Startley General Contractors, Inc. ("Startley"), and Mandy Powrzanas, appealed the denial of their renewed motion to have Jefferson Circuit Court Judge Robert Vance, Jr. recuse himself from the underlying action the plaintiffs filed against the Water Works Board of the City of Birmingham ("BWWB"), Board members, Jones Utility and Contracting Co., Inc., and Richard Jones (collectively, “defendants.”). Plaintiffs alleged the defendants conspired to violate Alabama's competitive-bid law in ways that resulted in financial harm to the plaintiffs. Plaintiffs contended that Judge Vance had received monetary contributions to his 2018 campaign for Chief Justice of the Alabama Supreme Court from law firms and attorneys representing the defendants. The Alabama Supreme Court concluded the renewed motion to recuse did not fall under the auspices of section 12–24–3, Ala. Code 1975, because it was not based on campaign contributions in "the immediately preceding election." Moreover, “even if [section] 12–24–3 did apply, the plaintiffs failed to establish a rebuttable presumption for recusal because, in order to meet the required threshold, the plaintiffs: (1) included contributions from law firms and individuals who were not ‘parties,’ as that term is defined in 12–24–3(c), to the case; (2) aggregated campaign contributions from multiple parties in contravention to 12–24–3(b) addressing campaign contributions made by ‘a party to the judge or justice’; and (3) incorrectly assumed that ‘total campaign contributions raised during the election cycle’ refers to one-month totals for campaign contributions rather than the ordinary meaning of an ‘election cycle,’ which concerns a longer period.” The Court concluded plaintiffs did not establish that a single, actual "party" to this case gave a "substantial campaign contribution" that would give rise to the conclusion that "[a] reasonable person would perceive that [Judge Vance's] ability to carry out his ... judicial responsibilities with impartiality is impaired." View "Startley General Contractors, Inc. v. Water Works Board of the City of Birmingham et al." on Justia Law

Fistes appealed from the trial court's judgment sustaining without leave to amend defendants' demurrer to Fistes' third amended complaint, seeking a declaration that the contract the District awarded to GDL for the remediation of school properties was void due to violations of the Public Contract Code and the Government Code.The Court of Appeal held that Fistes alleged facts sufficient to establish standing under Code of Civil Procedure section 526a based on its payment of state taxes that fund the District. The court also held that the district court erred in sustaining the demurrer based on uncertainty without leave to amend. In this case, although Fistes has not adequately alleged a cause of action against the Lopezes, it has made a sufficient showing for leave to amend. Accordingly, the court reversed and remanded for further proceedings. View "A.J. Fistes Corp. v. GDL Best Contractors, Inc." on Justia Law

Charte, a district manager, became aware of American Tutor’s questionable billing and recruiting practices and expressed her concerns to the company's officers. Charte was terminated. Charte contacted the New Jersey Department of Education and the U.S. Department of Education about the practices she had observed. American Tutor sued Charte in state court for defamation, tortious interference with advantageous economic relations, and product disparagement. While that state lawsuit was pending, Charte brought this qui tam action on behalf of the United States. As required by the False Claims Act, 31 U.S.C. 3729(a)(1)(A), the action remained under seal for seven years while the government investigated. The state court action was dismissed after the parties settled. The federal government did not intervene. The district court unsealed the complaint, then found that the qui tam action was barred by New Jersey’s equitable entire controversy doctrine. The Third Circuit vacated, finding the doctrine inapplicable. The qui tam suit did not belong to Chartre when she entered into the settlement agreement; she could not unilaterally settle and dismiss the qui tam claims during the government’s investigation. Charte followed every statutory requirement, including filing the qui tam action under seal and not disclosing its existence; she was “not trying to hide the ball.” Application of the entire controversy doctrine to this case, where the relator was the defendant in a previously filed private suit, would incentivize potential False Claims Act defendants to “smoke out” qui tam actions by suing potential relators and then quickly settling. View "Charte v. American Tutor Inc" on Justia Law

After a jury found that Allied Corporation was liable under the False Claims Act (FCA) for misrepresentations about its compliance with the Federal Housing Act underwriting guidelines, the jury awarded over $85.6 million in damages and found Defendant Hodge and Allied Capital liable under the FCA for misrepresentation. The jury awarded more damages and also found all three defendants were liable under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).The Fifth Circuit affirmed, holding that the evidence was sufficient to convict defendants. The court rejected defendants' claims of error regarding the admission of expert testimony, and held that the district court did not err by dismissing a juror shortly before the remaining jurors reached their verdict based mainly on the juror's lack of candor and his threatening behavior. View "United States v. Hodge" on Justia Law

The Federal Reserve Act of 1913 established a system that includes the Federal Reserve Board of Governors and 12 regional Reserve Banks. The Board exercises broad regulatory supervision over the Reserve Banks, which serve as banks to the U.S. government and to commercial banks who are members of the Federal Reserve System. The Act set the statutory rate for dividend payments on Federal Reserve Bank stock at six percent per year, which remained in effect until 2016, when an amendment (12 U.S.C. 289(a)(1)) effectively reduced the dividend rate for certain stockholder banks to a lower variable rate. Plaintiffs argued that banks that subscribed to Reserve Bank stock before the amendment are entitled to dividends at the six percent rate and that, by paying dividends at the amended rate, the government breached a contractual duty or effected a Fifth Amendment taking. The Federal Circuit affirmed the dismissal of the suit. There is no “clear indication” of the government’s intent to contract in either the language of the Federal Reserve Act or the circumstances of its passage. Plaintiffs did not allege a legally cognizable property interest arising from its “statutory rights” and the requirement that member banks subscribe to reserve bank stock under the Act does not constitute a regulatory taking. View "American Bankers Association v. United States" on Justia Law

In November 2008, the Anderson County, South Carolina Council (2008 Council) approved a $1.1 million Severance Agreement for county administrator Joey Preston (Preston). In January 2009, a new county council (2009 Council) was sworn in, and filed suit seeking to invalidate the Severance Agreement. The circuit court ruled that, despite tainted votes, the Severance Agreement was valid and also held: (1) public policy rendered neither the Severance Agreement nor the vote adopting it void; (2) Preston did not breach a fiduciary duty because he owed no duty to disclose Council members' personal conflicts of interest; (3) the County failed to prove its claims for fraud, constructive fraud, and negligent misrepresentation; (4) the 2008 Council's approval of the Severance Agreement was neither unreasonable or capricious nor a product of fraud and abuse of power; (5) the County's constructive trust claim no longer remained viable; (6) rescission was unavailable as a remedy; (7) the County had unclean hands; (8) adequate remedies at law barred the County from invoking the court's equitable jurisdiction; (9) the County breached the covenant not to sue in the Severance Agreement by bringing this lawsuit; and (10) the issue concerning the award of attorney's fees should be held in abeyance pending the final disposition and filing of a petition. Pertinent here, a panel of the Court of Appeals found the trial court erred in refusing to invalidate the 2008 Council's approval of the Severance Agreement based upon the absence of a quorum, and reversed. The South Carolina Supreme Court determined this judgment was made in error: the County lacked a quorum. The matter was remanded to the circuit court to determine the exact amount Preston had to refund the County. View "Anderson County v. Preston" on Justia Law

The Moodys leased Pine Ridge Indian Reservation parcels for agriculture. The government has a trust responsibility for Indian agricultural lands, 25 U.S.C. 3701(2). The Secretary of the Interior is authorized to participate in the management of such lands, with the participation of the beneficial owners and has delegated some responsibilities to the Bureau of Indian Affairs (BIA). BIA regulations generally allow Indian landowners to enter into agricultural leases with BIA approval. Each Moody lease defined “the Indian or Indians” as the “LESSOR.” The Claims Court concluded that the Oglala Sioux Tribe signed the leases. Other lease provisions distinguished between the lease parties and the Secretary of the Interior/United States. Issues arose in 2012. The BIA sent letters canceling the leases, noting that the Moodys could appeal the decision to the Regional Director. Within the 30-day appeal period, the Moodys returned with a cashier’s check in the proper amount, which the BIA accepted. The BIA informed the Moodys that they need not appeal, could continue farming, and did not require written confirmation. Subsequently, the Moodys received trespass notices and were instructed to vacate, which they did. The Moodys did not appeal within the BIA but sued the government. The Federal Circuit affirmed the Claims Court’s dismissal of the written contract claims for lack of jurisdiction because the government was not a party to the leases, for failure to state a claim upon which relief could be granted because the Moodys did not have implied-in-fact contracts with the government, and for failure to raise a cognizable takings claim because their claim was based on the government’s alleged violation of applicable regulations. View "Moody v. United States" on Justia Law

Under a 2011 contract with the U.S. Army Corps of Engineers (USACE), HHL was to provide transportation services in Afghanistan. After the contract expired, HHL requested additional compensation based on alleged contract violations: suspension of work, changes to the contract requirements, and termination of the original contract. After various preliminary submissions, HHL submitted a “Request for Equitable Adjustment (REA)” with a sworn statement by HHL’s Deputy Managing Director having “full management [authority].” The submission requested that it be “treated as a[n] REA,” not as a claim, and requested $4,137,964 in compensation. HHL’s request was denied in what the contracting officer characterized as the “Government’s final determination in this matter.” The Armed Services Board of Contract Appeals concluded that it did not have jurisdiction because “[a]t no point, in six years of communication with the [USACE], has HHL requested a contracting officer’s final decision” under 41 U.S.C. 7103(a)(1). The Federal Circuit reversed and remanded, concluding that there was a request for a final decision by a contracting officer and a final decision entered by the contracting officer. A defect in the certification of a claim does not preclude jurisdiction over the claim; HHL can cure any issues with its certification on remand. View "Hejran Hejrat Co. Ltd v. United States Army Corps of Engineers" on Justia Law

In this case, the issue presented for the Pennsylvania Supreme Court's review was whether the Commonwealth Court disregarded the law when it vacated a grievance arbitration award based on its independent interpretation of the parties’ collective bargaining agreement (“CBA”). Millcreek Township Educational Support Personnel Association (the “Association”) and Millcreek Township School District (the “District”) were parties to a CBA that became effective on July 1, 2011, and was set to expire on June 30, 2016. Negotiations for a successor CBA began January 26, 2016 when the Association offered its initial proposal to the District. Approximately one month later, the District presented a counter proposal in which it sought, among other items, to eliminate a no subcontracting provision. The Association rejected this proposal. On March 29, 2016, with successor CBA negotiations ongoing between the Association and the District, the District issued a request for proposals (“RFP”) seeking quotes from prospective bidders for the provision of custodial labor services. On April 7, 2016, upon learning that the District had issued an RFP to subcontract the bargaining unit’s work, the Association filed a grievance with the District. Pursuant to the Pennsylvania Supreme Court’s decisions under the Public Employee Relations Act (“PERA”), a reviewing court had to apply the highly deferential two-prong “essence test” to grievance arbitration awards: (1) the court had to decide whether the issue was encompassed by the CBA; and (2) the court had to uphold the arbitrator’s award if the arbitrator’s interpretation could rationally be derived from the CBA. Subject to a narrow exception for awards that violate a dominant public policy, proper application of the essence test prohibits a court from vacating an arbitrator’s award unless “the award indisputably and genuinely is without foundation in, or fails to logically flow from, the [CBA].” The Supreme Court had "no trouble" concluding that the award in this case drew its essence from the CBA and because no public policy would be violated by its enforcement, it reversed the decision of the Commonwealth Court. View "Millcreek Twp SD v. Millcreek Twp ESPA" on Justia Law