Justia Government Contracts Opinion Summaries

These interlocutory appeals were from a district court order that, inter alia, compelled a law firm (Mintz Levin) to produce documents relating to a fraud allegedly committed by David Gorski in his operation of Legion Construction, Inc. in order to qualify for and obtain government contracts. Gorski and Legion appealed the portion of the order that required attorney-client privileged documents connected with Mintz Levin’s representation of Legion to be produced under the crime-fraud exception. The government cross-appealed the portion of the district court decision to exclude communications between Gorski and his personal attorney from the production order. The First Circuit (1) dismissed Gorski’s appeal for want of appellate jurisdiction, holding that the Court did not have jurisdiction over Gorski’s appeal but did have jurisdiction over Legion’s appeal and the government’s cross-appeal; (2) affirmed the production order as to Mintz Levin, holding that a prima facie case for the crime-fraud exception had been made; and (3) vacated the district court’s decision to exclude Gorski’s communications with his personal attorney from the production order, holding that the district court employed incorrect legal reasoning with regard to these documents. View "United States v. Gorski" on Justia Law

Plaintiff filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., and for defamation under Michigan law, alleging that WSU engaged in a fraudulent scheme to inflate the amount of funding that it received from the federal government for research grants and that he was fired in retaliation for complaining about the scheme to university officials and refusing to participate in it. The court concluded that the district court correctly held that WSU is an arm of the State of Michigan and therefore not a “person” subject to liability under the FCA; the district court was correct in dismissing plaintiff’s defamation claim as barred by the Eleventh Amendment; plaintiff failed to plead his conspiracy and “Reverse False Claim Act” claims with particularity under Fed. R. Civ. P. 9(b); plaintiff's argument that his retaliation claim under the FCA should not have been dismissed because, while WSU may not be a “person” under the FCA, WSU is an “employer” under the FCA that may still be sued for retaliation, is forfeited; and the district court properly denied plaintiff’s request to amend the complaint as futile. Accordingly, the court affirmed the judgment. View "Kreipke v. Wayne State Univ." on Justia Law

After the United States prevailed in a civil action brought pursuant to the False Claims Act (FCA), 31 U.S.C. 3729, based on certifications by MWI to the Bank to secure loans financing MWI's sale of water pumps to Nigeria, a jury awarded the government $7.5 million in damages. The damages were trebled to $22.5 million pursuant to the FCA. Because an FCA defendant is entitled to an offset from the trebled damages by any amount paid to compensate the government for the harm caused by the false claims, and the district court considered Nigeria’s repayment of the loan to be compensatory, MWI’s damages were reduced from $22.5 million to $0. The district court did impose civil penalties at the highest level. The government appealed and MWI cross-appealed. The court reversed the judgment because the government failed to establish that MWI knowingly made a false claim. Absent evidence that the Bank, or other government entity, had officially warned MWI away from its otherwise facially reasonable interpretation of an undefined and ambiguous term, the FCA’s objective knowledge standard, as the Supreme Court clarified while this litigation was pending in Safeco Insurance Co. of America v. Burr, did not permit a jury to find that MWI “knowingly” made a false claim. View "United States ex rel. Purcell v. MWI Corp." on Justia Law

Respondent was the low bidder on a government construction contract. The Purchasing Division of the Department of Administration and the Lottery Commission (collectively, the Agency), however, awarded the contract to Petitioner, the next low bidder, determining that Petitioner was the lowest qualified responsible bidder on the project. Petitioner filed suit to rescind the contract. The circuit court ordered the Agency to award the contract to Respondent, concluding that the determination to disqualify Respondent was not rational. The Supreme Court affirmed, holding that the Agency abused its discretion when it awarded the construction contract to Petitioner. View "Wiseman Constr. Co. v. Maynard C. Smith Constr. Co." on Justia Law

White Oak Corporation and the Department of Transportation entered into a contract for the reconstruction of a bridge and a portion of Interstate 95 in the City of Bridgeport. The project experienced significant delays such that the Department and White Oak reassigned the contract to another contractor for completion. White Oak subsequently filed a notice of claim and demand for arbitration seeking compensation for money wrongfully withheld by the Department, as liquidated damages, for delays in the project. An arbitration panel concluded that the liquidated damages clause in the parties’ contract was unenforceable, and therefore, White Oak was entitled to a return of nearly $5 million withheld by the Department. The trial court granted White Oak’s application to confirm the arbitration award. The Appellate Court reversed, concluding that the arbitration panel exceeded its authority in rendering an award on White Oak’s claim. The Supreme Court reversed, holding that the Appellate Court incorrectly determined that, in a prior action brought by the Department to enjoin the arbitration, the trial court limited the scope of the arbitrable issues in the present case to a claim of wrongful termination such that the arbitration panel lacked jurisdiction to decide White Oak’s liquidated damages claim. View "Dep’t of Transp. v. White Oak Corp." on Justia Law

USF&G filed suit in the Court of Federal Claims under the Tucker Act, 28 U.S.C. 1491(a)(1), seeking reimbursement from the government for legal expenses and settlement costs it allegedly incurred in its capacity as general liability insurer for Gibbs Construction, a government contractor. USF&G alleged that, in a contract for renovation work at the New Orleans main post office, the U.S. Postal Service agreed to indemnify Gibbs and its agents against any liability incurred as a result of asbestos removal work under the contract. USF&G alleged that the Postal Service failed to indemnify Gibbs in connection with a lawsuit filed against Gibbs by a former Postal Service police officer, in which the officer claimed that he contracted mesothelioma as a result of asbestos removal during performance of the contract, and that, as Gibbs’s general liability insurer, it was required to litigate and settle the officer’s claim. The Federal Circuit affirmed dismissal. The Claims Court lacked jurisdiction under a theory of equitable subrogation. View "Fid. & Guar. Ins. Underwriters, Inc. v. United States" on Justia Law

A jury found Ferrell, a licensed psychologist, and Bryce, Ferrell’s employee, guilty of six counts of healthcare fraud, 18 U.S.C. 1347. Ferrell was sentenced to 88 months of imprisonment. The Seventh Circuit affirmed, upholding the district court’s refusal to admit two out-of-court statements made by Bryce’s brother (also Ferrell’s employee), and contained in a voicemail and an email. The district court held that these statements were hearsay and did not fall within Rule 804(b)(3)’s hearsay exception. The district court held that although the brother was unavailable to testify, the statements were not against his interest and the corroborating circumstances did not indicate that his statements were trustworthy. The court also upheld admission of testimony by another doctor concerning Ferrell’s conduct while in Texas. The court found that the testimony did not constitute impermissible character evidence under Fed. R. Evid. 404(b). View "United States v. Ferrell" on Justia Law

The County Assessor for Eddy County sought to use money in a county property valuation fund (as established by the Legislature in 1986) to contract with a private company for technical assistance in locating and valuing oil and gas property. The County Commission for Eddy County refused to approve the proposed plan because it believed that a contract to pay private, independent contractors to assist the County Assessor in the performance of the Assessor’s statutory duties exceeded the Commission’s lawful authority. The Supreme Court was persuaded that the County Commission did have such authority under law, and that the contract under consideration here would not have exceed that authority or be otherwise ultra vires. The district court having previously issued a declaratory judgment to that same effect, the Supreme Court affirmed. View "Robinson v. Bd. of Comm'rs of the Cty. of Eddy" on Justia Law

In 2014, the Arkansas State Highway and Transportation Department issued a bid invitation for a janitorial and cleaning-services contract. O.J.’s Service Two, Inc. submitted a bid for the contract. The Highway Department, however, awarded the contract to another bidder, RazorClean. O.J.’s protested the contract award, contending that RazorClean’s bid did not conform to the specifications in the bid invitation. The Highway Department denied O.J.’s protest. Thereafter, O.J.’s filed suit against the Highway Department and other state defendants (collectively, “Defendants”) requesting a writ of mandamus compelling Defendants to follow the Arkansas procurement laws and regulations and requiring Defendants to declare the contract with RazorClean null and void and to award the contract to O.J.’s. Defendants filed a motion to dismiss, asserting that O.J.’s claims were barred by sovereign immunity. The circuit court denied the motion. Defendants subsequently filed this interlocutory appeal. The Supreme Court dismissed the appeal as moot, holding that because the contract at issue in the lawsuit had been fully performed, the matter is now moot, and none of the exceptions to the mootness doctrine apply. View "Ark. Highway & Transp. Dep't v. O.J.’s Serv. Two, Inc." on Justia Law

In 2005 the Army Corps of Engineers invited bids on a federal reservoir project in Illinois. One of the successful bidders was Slurry, which leased from Pileco a trench cutter made by Bauer. Slurry was a prime contractor on the Corps of Engineers’ project; the Miller Act, 40 U.S.C. 3131, requires prime contractors on some government construction projects to post bonds. Slurry used Fidelity as surety. The bond insured against a failure by Slurry to pay subcontractors, such as Pileco. Contending that the cutter was defective, Slurry refused to pay the agreed rental price. Pileco sued Slurry and Fidelity, asserting breach of contract that Fidelity violated the Miller Act by failing to reimburse Pileco for costs associated with Slurry’s reneging on its obligation to pay. Slurry counterclaimed. A second trial resulted in a verdict in Pileco’s favor except for a $357,716 equitable adjustment in favor of Slurry, based on time that cutter was inoperable because of a defect attributable to Pileco. The net result was that Pileco was awarded $2.23 million against Slurry for breach of contract and the same amount against Fidelity for the Miller Act violation. The Seventh Circuit affirmed, except with respect to the denial of prejudgment interest and costs. View "Pileco, Inc. v. Slurry Systems, Inc." on Justia Law