Justia Government Contracts Opinion Summaries

Liberty’s 325 patent, issued in 2010, is “directed to a projectile structured to be discharged from a firearm and designed to overcome the disadvantages and problems associated with conventional firearm projectiles such as, but not limited to lead or steel jacketed projectiles.” The patent grew out of the U.S. military’s “Green Ammunition Program,” developed in response to concerns that lead-based ammunition was polluting military training ranges. The 325 patent sought to address “problems of lethality” with the conventional Army “green” ammunition. The Claims Court held that ammunition rounds used by the Army embody the claims of the patent, violating 28 U.S.C. 1498. The Federal Circuit reversed, holding that the trial court erred in construing claim terms: reduced area of contact; intermediate opposite ends. When the terms are construed correctly, the Army rounds do not embody the claimed invention. The court affirmed the Claims Court's rejection of a breach of contract claim based on a non-disclosure agreement signed by the named inventor of the 325 patent and an Army official during negotiations for a possible contract. The Army official did not have authority to enter into an NDA on behalf of the government. View "Liberty Ammunition, Inc. v. United States" on Justia Law

In order to receive federal housing funds (42 U.S.C. 2000d; the Fair Housing Act, 42 U.S.C. 3601; and “42 U.S.C. 608(e)(5), 5304(b)(2), and 12705(b)(15)), the City of Chicago must certify that it is in compliance with federal requirements related to reducing the city’s admitted racial segregation. Hanna filed a qui tam suit, alleging that the city violated the False Claims Act because its policies, particularly “aldermanic privilege” and strategic zoning of relatively wealthy neighborhoods, have actually increased segregation, making its certifications false. Under “aldermanic privilege,” the City grants each alderman the “full authority to determine whether and where affordable, multifamily rental housing will be built and renovated in the ward.” The Seventh Circuit affirmed the dismissal of the complaint. Hanna did not allege the circumstances of the purported fraud with sufficient particularity to satisfy Federal Rule of Procedure 9(b). Hanna apparently had no insider information. He did not allege the “time, place, … and the method by which the misrepresentation was communicated” to him. Hanna’s complaint gave no information about which regulatory provisions Hanna thinks the city violated; it does not draw a link between the statutes Hanna cited and any particular alleged false certification. View "Hanna v. City of Chicago" on Justia Law

In 2015, Jones, a veteran, filed 16 appeals with the Merit Systems Protection Board (MSPB), alleging that the U.S. Department of Health and Human Services (HHS) violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4301–4333, when it did not select him for various job vacancies. An administrative judge consolidated the appeals and ultimately denied relief in an Initial Decision. That Decision became the Final Decision of the MSPB when Jones did not timely file a petition for review. The Federal Circuit affirmed, first holding that it had jurisdiction, rejecting an argument that there was no . final MSPB decision from which Jones could appeal. The AJ properly found that neither direct nor circumstantial evidence supported Jones’s USERRA claim and failed to demonstrate by a preponderance of the evidence that his military service was a motivating factor in HHS’s decision not to hire him for the subject job vacancies. View "Jones v. Dept. of Health & Human Servs." on Justia Law

In this appeal, the United States challenges its liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601-75, for a portion of the cost of cleaning up hazardous substances at three California facilities owned by Lockheed. The government acknowledges its own share of CERCLA liability and also that it agreed to reimburse Lockheed’s share via overhead charges on unrelated contracts. At issue is whether the government has a valid claim that the particular mechanism by which the United States will pay its share of the costs of environmental remediation under CERCLA interacts with the parties’ agreed-upon contract-based reimbursement method in a way that impermissibly requires the government to make double payment. The court concluded that the district court’s CERCLA judgment did not create any double recovery and the court rejected the government's arguments to the contrary; the government's protest that the crediting mechanism does not help, but instead harms it further, is unavailing; even assuming the court was in a position to review the equities of the parties’ own choice in their Billing Agreement to resort to the indirect-cost billing and crediting mechanism and their apparent decision to use that mechanism for payment and crediting of future costs, the government has not clearly identified how the crediting mechanism is a source of inequity; and, at this juncture, on appeal from the district court’s judgment imposing no liability on the government for past costs, section 114(b) simply is not implicated. Because the all of the government's claims fail, the court affirmed the judgment. View "Lockheed Martin Corp. v. United States" on Justia Law

To address Monterey County’s water needs, two public agencies and a water company entered into five interrelated agreements, in 2010-2011, to collaborate on a water desalination project. After it was revealed that a board member of one of the public agencies had a potential conflict of interest, the water company took the position that the agreements were void under Government Code section 1090. That board member was eventually convicted under a statute that prohibits “financially interested in any contract made by them in their official capacity, or by any body or board of which they are members.” In an action for declaratory relief, the trial court agreed that four of the five agreements were void. The court of appeal affirmed, rejecting an argument that the challenges were time barred and that the trial court lacked jurisdiction to consider the parties’ dispute. A public agency is not bound by the 60-day limitation period that governs validation actions when it seeks a judicial determination of the validity of a contract under section 1090. View "Cal.-Am. Water Co. v. Marina Coast Water Dist." on Justia Law

Zafer, an Ankara, Turkey, contractor, and the Army Corps of Engineers (USACE) entered into a firm-fixed-price contract to construct the MILCON Support Facility at the Bagram Air Force Field in Afghanistan. Zafer was responsible for delivering materials to the site, and assumed the risk “for all costs and resulting loss or profit.” After issuing notice to proceed, USACE recognized that it could not make the project site available immediately and increased the contract price and set a new completion date. In November 2011, Pakistan closed its border from the seaport city of Karachi along the land routes into Afghanistan in response to a combat incident with the U.S. and NATO. The route remained closed for 219 days, Zafer notified USACE that the closure would greatly impact its delivery of materials and requested direction on how to proceed. USACE replied that the closure was “purely the act of Pakistan governmental authorities,” that the U.S. government was “not responsible” and denied further compensation. Zafer subsequently, repeatedly, asked for payment for additional costs. In 2013, Zafer submitted an unsuccessful request for an equitable adjustment. The contracting officer found no evidence supporting a constructive change claim. The Claims Court granted USACE summary judgment. The Federal Circuit affirmed. Zafer failed to designate specific facts to establish a constructive change claim based on either a constructive acceleration theory or on a government fault theory. View "Zafer Taahhut Insaat v. United States" on Justia Law

Former FBI agent Robert Lustyik wanted to help his friend and business partner, Michael Taylor, in return for payment. Taylor owned American International Security Corporation (AISC), a company that offered security and defense contracting services. The Department of Defense awarded AISC a contract in 2007 to provide training and related services to Afghan Special Forces. In mid-2010, the United States began investigating AISC regarding fraud and money laundering in connection with the 2007 contract. In September 2011, the United States filed a civil forfeiture action against assets owned by Taylor and AISC, which resulted in the seizure of more than $5 million dollars from AISC’s bank account. Lustyik used his status as an FBI agent to impair the government’s investigation of Taylor, including attempting to establish Taylor as a confidential source. Lustyik was indicted on charges related to the obstruction of justice. Prior to trial, Lustyik pleaded guilty to all charges in the indictment without a plea agreement. After his plea, his lead counsel withdrew and Lustyik obtained new counsel. On the eve of sentencing, counsel sought an order allowing him to obtain security clearance to review classified material he believed might be relevant for sentencing. The district court, having previously reviewed the documents, deemed them irrelevant to the sentencing issues, denied the motion, and subsequently sentenced Lustyik to 120 months’ imprisonment. Lustyik argued on appeal that the district court’s order denying his counsel access to the classified materials violated his Sixth Amendment rights at sentencing. Finding that the district court’s decision was not presumptively prejudicial to Lustyik’s advocacy at sentencing, nor did the district court abuse its discretion in concluding the documents were not relevant for sentencing, the Tenth Circuit affirmed. View "United States v. Lustyik" on Justia Law

Relator filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729-33, alleging that his former employer, AAKC, violated the FCA by submitting claims for Medicare reimbursement of anesthesia services at the “Medical Direction” rate. Relator alleged that, because AAKC anesthesiologists were not present in the operating room during patients’ “emergence” from anesthesia, and therefore AAKC did not comply with the Medicare conditions of payment for submitting such claims. The district court granted AAKC summary judgment. The court granted the United States leave to appear as amicus curiae supporting neither party. The court concluded that, because the agency had not clarified an obvious ambiguity in its Step Three regulation for decades, AAKC’s failure to obtain a legal opinion or prior CMS approval cannot support a finding of recklessness. The court also concluded that the district court did not abuse its discretion in refusing to consider a new theory first articulated in relator's summary judgment papers. Finally, the court rejected relator's claim that AAKC violated 42 C.F.R. 415.110(b). Accordingly, the court affirmed the judgment. View "Donegan v. Anesthesia Assoc." on Justia Law

Plaintiff filed a qui tam suit under the Minnesota False Claims Act (MFCA), Minnesota Statutes Annotated 15C.01 et seq., and the federal False Claims Acts (FCA), 31 U.S.C. 3729 et seq., against UMMC, alleging that UMMC fraudulently induced MDHS to overreimburse it for services provided to Medical Assistance (MA) patients. The district court granted UMMC's motion to dismiss and denied plaintiff's motion for leave to amend the complaint for a third time. Plaintiff alleges that UMMC's false or fraudulent claim is that it's children's unit was a "children's hospital." The court concluded that, in the absence of a statutory definition of "children's hospital," it was reasonable for UMMC to inquire about the proper classification of its children's unit. A reasonable interpretation of ambiguous statutory language does not give rise to a FCA claim. The court also concluded that the district court did not incorrectly hold plaintiff to Rule 9(b)'s heightened pleading standard; plaintiff's second amended complaint fails to demonstrate that UMMC violated section 3729(a)(1)(G); and the court found no violation of section 3729(a)(1)(C). Finally, the court concluded that plaintiff's proposed amendments would be futile. Accordingly, the court affirmed the judgment. View "Olson v. Fairview Health Serv." on Justia Law

Appellant City of Allentown (City) contracted with appellee A. Scott Enterprises, Inc. (ASE), to construct a new public road. After arsenic-contaminated soil was discovered at the worksite, the City suspended work on the project. Following testing, it was determined construction could resume if precautions were taken. Accordingly, the City instructed ASE to obtain revised permits and proceed with the project. However, the existing contract did not include terms regarding the potential for contaminated soil, despite the fact the City was aware there might be contamination prior to entering into the contract, and ASE declined to proceed, explaining it would incur substantial additional costs due to the contaminated soil. The parties made several attempts to reach an agreement in which ASE would continue the construction, but to no avail. Consequently, ASE sued the City to recover its losses on the project, alleged breach of contract, and sought compensation under theories of quantum meruit and unjust enrichment, as well as interest and a statutory penalty and fee award for violations of the prompt pay provisions of the Procurement Code. After a trial, a jury found the City breached its contract with ASE and also withheld payments in bad faith. In this discretionary appeal, the issue this case presented for the Supreme Court's review was whether an award of a statutory penalty and attorney fees under the prompt payment provisions of the Commonwealth’s Procurement Code was mandatory upon a finding of bad faith, irrespective of the statute’s permissive phrasing. The Court held such an award was not mandatory, and therefore reversed the order of the Commonwealth Court and remanded the case to the trial court for further proceedings. View "A. Scott Enterprises v. City of Allentown" on Justia Law