Justia Government Contracts Opinion Summaries

In 2012, the FTC announced the “Robocall Challenge,” under 15 U.S.C. 3719(b). The public was invited to create “innovative solutions to block illegal robocalls.” for a $50,000 prize. Contestants granted the FTC non-exclusive, irrevocable, royalty free and worldwide license and agreed to release the FTC from all liability. The FTC received about 800 submissions. The judges, with little guidance from the contest rules, decided that the frontrunners would be those entries that proposed using filtering as a service (FaaS) to block robocalls. Frankel’s submission proposed a “traceback” solution rather than FaaS. When his submission was not chosen, Frankel sued under the bid protest provisions of 28 U.S.C. 1491(b) and alleging breach of contract. The Federal Circuit affirmed the Claims Court’s rejection of both theories. His contract with the FTC was not a procurement contract, so Frankel did not have standing to register an objection to the award under section 1491(b). Frankel is unable to show “fraud, irregularity, intentional misconduct, gross mistake, or lack of good faith.” Any other breach of contract claim based on the judging process is barred by the limitation of liability clause. View "Frankel v. United States" on Justia Law

Inclusion, Inc., Inclusion North, Inc., and Inclusion South, Inc., (collectively Inclusion) provided residential rehabilitation support services to Idahoans eligible for Medicaid. In September 2012, Inclusion filed a complaint against the Idaho Department of Health and Welfare (IDHW), alleging IDHW breached binding Medicaid Provider Agreements by failing to adequately reimburse Inclusion for its services. In June 2013, Inclusion amended its complaint with unjust enrichment and quasi-estoppel claims. The district court granted summary judgment for IDHW, concluding no triable issue of fact supported Inclusion’s claims. IDHW then moved for attorney fees under Idaho Code section 12-120(3) and requested $74,925.00 in fees. The district court found that IDHW’s requested award was based on a reasonable amount of hours and a reasonable hourly rate, as determined by the Boise market. As the district court acknowledged, “the hourly rate requested is reasonable and certainly well within the rate in the marketplace in the Fourth District in Ada County, in particular.” Even so, the district court took issue with how IDHW’s requested award was not based on the actual hourly rate billed during litigation. As the district court explained, “[e]xcept where the award of attorney fees is paid to the lawyer, fees awarded to a party should not exceed the amount the client actually paid for the lawyer.” To that end, the district court multiplied 599.4 hours of work by $54.00 per hour1 to award a total of $30,857.11. IDHW moved to reconsider, but the district court upheld the award for $30,857.11. IDHW timely appealed, arguing the district court abused its discretion by basing the award on the amount billed by the Attorney General. The Supreme Court agreed, vacated the judgment and granted IDHW its requested award. View "Inclusion, Inc v. Id. Dept. of Health & Welfare" on Justia Law

Kase was exposed to asbestos insulation used on nuclear submarines during the early 1970s. The trial court rejected claims against a broker that arranged for asbestos-containing insulation to be shipped to the Mare Island Naval Shipyard, where workers packed it around the submarine piping it protected. The court held, on summary judgment, that the Navy‘s procurement of asbestos insulation for its nuclear submarines implicated the government contractor defense set forth in the Supreme Court’s 1988 holding, Boyle v. United Technologies Corp. The broker procured the insulation pursuant to and in compliance with relatively detailed performance and testing specifications, although those specifications did not expressly call out for asbestos in the insulation. According to undisputed evidence, the specifications could only be met by asbestos-containing insulation, and the only product on the Navy‘s approved list of suitable products was the product at issue, Unibestos. The court of appeal affirmed, stating that the defense does not necessarily exclude the procurement of products also sold commercially. The Navy‘s procurement of the asbestos insulation at issue occurred after years of evaluating and weighing the utility of and the health hazards associated with asbestos products and pursuant to specifications that required an asbestos product. View "Kase v. Metalclad Insulation Corp." on Justia Law

In 2013, the Orange County Department of General Services issued a request for proposals (RFP) from companies to provide transportation of children receiving preschool special education services in three transportation zones in the County. ACME Bus Corp. (ACME), which held the contract at the time, submitted two alternative proposals. Orange County awarded transportation contracts for the first two zones to Quality Bus Service, LLC and for the third zone to VW Trans, LLC. ACME subsequently commenced this proceeding against the County, Quality, and VW, seeking to vacate the award of the contracts. Supreme Court dismissed the proceeding. The Court of Appeals reversed, holding that the County’s scoring mechanism in the cost category deviated from the formula stated in the RFP, and therefore, its award was arbitrary and capricious. View "ACME Bus Corp. v. Orange County" on Justia Law

Papp alleged that his late wife suffered secondary “take home” asbestos exposure while washing the work clothes of her first husband, Keck. Keck had several jobs that exposed him to asbestos. Papp sued multiple companies in New Jersey. In a deposition, he indicated that the landing gear Keck sandblasted was for a C-47 military cargo plane, built by Boeing’s predecessor. Boeing removed the case, citing the federal officer removal statute, 28 U.S.C. 1442(a)(1). Boeing asserted that it was entitled to government contractor immunity because the C-47 was produced for, and under the specific supervision of, the U.S. military and that the supervision extended to labels and warnings for all parts of the aircraft, including those parts laden with the asbestos to which Keck would later be exposed. The district court remanded, reasoning that Boeing, as a contractor and not a federal officer, had a “special burden” to demonstrate “that a federal officer or agency directly prohibited Boeing from issuing, or otherwise providing, warnings as to the risks associated with exposure to asbestos contained in products on which third-parties … worked or otherwise provided services.” The Third Circuit reversed, holding that the statute extends to contractors who possess a colorable federal defense and that Boeing made a sufficient showing of such a defense. View "Papp v. Fore-Kast Sales Co Inc" on Justia Law

Service Employees International Union, Local 509 (Union) brought a declaratory judgment action against the Department of Mental Health (DMH) maintaining that certain contracts DMH made with private vendors were “privatization contracts” subject to the requirements of the Pacheco Law. The Union sought a declaration invalidating the contracts because DMH did not comply with the statutory prerequisites of the Pacheco Law. The case was dismissed. The Supreme Judicial Court remanded the case. On remand, DMH again successfully moved to dismiss the Union’s declaratory judgment action on the basis that it was moot because the initial contracts had expired and the remaining extant renewal contracts were immune from challenge by virtue of Mass. Gen. Laws ch. 7, 53. The Union appealed, asserting that because the non-compliant initial contracts were invalid under Mass. Gen. Laws ch. 7, 54, so too were any renewal contracts made pursuant to them. The Supreme Judicial Court vacated the judgment of dismissal, holding that the protection afforded renewal contracts by section 53 is not extended to those renewal contracts made pursuant to timely challenged and subsequently invalidated privatization contracts under section 54. View "Service Employees International Union, Local 509 v. Department of Mental Health" on Justia Law

In 1994, Rocky Mountain and the Bureau of Land Management entered into the Helium Contract, giving Rocky Mountain the right, for up to 25 years, to extract helium gas from roughly 21,000 acres of federal lands in Colorado and Utah. Rocky Mountain never extracted helium from the property and, after one year, stopped paying rent. In 2004, the Bureau informed Rocky Mountain that it had cancelled the contract due to nonpayment. The parties entered into a Settlement Agreement, under which the Bureau was required to provide Rocky Mountain with data about gas composition on the land covered by the Helium Contract and Rocky Mountain had to pay $116,579.90 (back rent) so that the Helium Contract would be reinstated. Rocky Mountain subsequently objected that the Bureau's information as incomplete, refused to pay the $116,579.90, and informed the Bureau that it wanted to pursue mediation under the Agreement. When the parties were unable to agree whether the information was complete, the Bureau sent a termination letter. The Claims Court rejected Rocky Mountain’s breach of contract suit for lack of jurisdiction and on the merits. The Federal Circuit agreed that the Helium Contract was terminated in 2004 and never reinstated, but found that the court had jurisdiction over the Settlement Agreement dispute. View "Rocky Mountain Helium, LLC v. United States" on Justia Law

In 2011, in response to a severe budget crisis, the Government of the Virgin Islands enacted the Virgin Islands Economic Stability Act (VIESA), which reduced most government employees’ salaries by 8%. Many government employees were covered by collective bargaining agreements that set forth detailed salary and benefit schedules. Their unions sued, alleging that the VIESA salary reductions constituted an impermissible impairment of the collective bargaining agreements, in violation of the Contract Clause of the United States Constitution. The district court, after a bench trial, held that VIESA did not violate the Contract Clause. The Third Circuit reversed, first holding that the issue is not moot, although VIESA has expired. The court’s determination will have a preclusive effect in pending arbitration between the unions and the government, concerning wages not paid in the interim. VIESA’s substantial impairment of the collective bargaining agreements was not reasonable in light of the fact that the government knew of its precarious financial condition when it agreed to the contracts. View "United Steel Paper and Forestry Rubber Manufacturing Allied Industrial & Service Workers International Union AFL- CIO- CLC v. Government of the Virgin Islands" on Justia Law

This case arose more than fifteen years ago as a bid-rigging scheme conjured up by shipping businesses to defraud the United States. In the qui tam proceedings at issue, a jury returned a verdict in 2011 against the Gosselin defendants. Relators appealed, contesting the district court's refusal to award civil penalties. The court granted relief and remanded for further proceedings. On remand, the district court was called upon to resolve the issue of whether relator Kurt Bunk was entitled to recover his judgment from another defendant, Government Logistics N.V. (GovLog). As a preliminary issue, the court concluded that the Peacock v. Thomas principle is inapplicable here, and the district court’s exercise of supplemental jurisdiction over the successor corporation liability claim against GovLog was entirely appropriate. The court concluded that the district court properly declined to apply the substantial continuity test here. However, the district court erred by dismissing Bunk's successor corporation liability claim as insufficiently pleaded. Finally, the court concluded that the district court erred in making the summary judgment award to GovLog. Accordingly, the court vacated and remanded for further proceedings. View "US ex rel. Kurt Bunk v. Government Logistics N.V." on Justia Law

Relator filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729-3733, claiming that Fresenius violated the FCA by billing the government for overfill that it received for no cost—allegedly a violation of the statutes governing Centers for Medicare and Medicaid Services (CMS) billing. The district court granted Fresenius's motion for summary judgment. Because the allegations that are the basis of this complaint were publicly disclosed and relator is not an original source, the court lacks jurisdiction to hear this case. The court did not reach the merits of the motion for summary judgment. Accordingly, the court reversed the district court's grant of summary judgment on the merits and remanded for entry of an order dismissing the case for lack of subject matter jurisdiction. View "United States ex. rel. Saldivar v. Fresenius Medical Care Holdings, Inc." on Justia Law