Justia Government Contracts Opinion Summaries

Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" on Justia Law

DiLuzio, owned Yorkville buildings that burned under suspicious circumstances. Fire Chief Klubert led the firefighting and coordinated with Mayor DiFilippo on a decision to demolish part of a building immediately, without inspection or formal decision. Klubert and DiFilippo ordered Officer Davis to find DiLuzio and bring him to a meeting. At that meeting, DiLuzio insisted the buildings could be repaired. DiFilippo ordered Nemeth to demolish most of the south building, but left part intact, even though it had suffered the worst damage. Days later, Police Chief Morelli (on orders from DiFilippo) approached DiLuzio’s son with a low-ball offer from an anonymous investor, to purchase the property “as is.” DiLuzio declined. Morelli approached DiLuzio with another offer months later. DiLuzio declined again. Morelli, Klubert, and DiFilippo began to issue citations, threatening $600 per day fines. The Village dismissed the first citation, which included false statements about inspections and authorizations. Morelli falsified a State Fire Marshall citation threatening $1,000 per day fines. The Village then passed a criminal ordinance concerning unkempt properties. Morelli charged DiLuzio, falsely notarizing his own signature. DiLuzio filed a 42 U.S.C. 1983 action. The Sixth Circuit affirmed.summary judgment for defendants on some claims, but denied qualified immunity to DiFilippo and Klubert on the due process claim concerning demolition; to Morelli and Davis on substantive due process claims; and to Nemeth because he was not a state actor. View "DiLuzio v. Village of Yorkville" on Justia Law

Bridge Company appeals a district court judgment ordering it to donate a toll bridge to the cities of Fargo, North Dakota, and Moorhead, Minnesota, free and clear of all liens. In May 1986, the cities and the Company entered into an agreement for the purpose of construction and operation of a private toll bridge over the Red River connecting the cities. The bridge was completed and started operations on June 1, 1988. The bridge was originally financed with publicly-sponsored bonds issued by Moorhead and capital from an investment firm. In 2004, the cities agreed to allow the Company to refinance the indebtedness, but the refinancing was required to be completely amortized by June 1, 2013, which was 25 years from the commencement of the operation of the bridge. The bank refinancing the debt required personal guarantees from the Company's two shareholders. As of June 1, 2013, the Company owed approximately $75,000 on the refinanced loan. In early September 2013, the Company's two shareholders satisfied their personal guarantees for the debt, and as of September 6, 2013, none of the original indebtedness for construction of the bridge remained outstanding. During the 25-year time span, the Company's records reflected $108,761 was paid for maintenance and repair of the bridge. All of these bills were paid by the Company before February 6, 2014. However, taxes remained owing to Cass County, North Dakota, and Clay County, Minnesota, and the unpaid taxes constituted a lien on the bridge. The district court found that during the 25-year period between June 1, 1988, and June 1, 2013, the bridge was closed 249 days because of flooding on the Red River. Applying an Acts of God clause in the original agreement, the court ruled the 25-year period was extended 249 days to February 5, 2014, and because there was no qualifying debt in existence as of that date, the Company was required to donate the bridge to the cities free and clear of any liens. Because the district court did not err in interpreting the parties' agreement and the court's findings of fact were not clearly erroneous, the North Dakota Supreme Court affirmed the district court's judgment. View "City of Moorhead v. Bridge Co." on Justia Law

Nursing Personnel appealed the district court's partial judgment awarding plaintiff $185,962.12 in attorneys' fees under the attorneys' fees provision of the False Claims Act (FCA), 31 U.S.C. 3730(d)(1). Nursing Personnel filed the appeal to challenge time entries in plaintiff's fee petition. The court held that Nursing Personnel waived its challenge to the time entries by failing to raise this objection before the district court. Accordingly, the court affirmed and remanded for the limited purpose of awarding plaintiff appellate attorneys' fees. View "United States ex rel. Keshner v. Nursing Personnel Home Care" on Justia Law

Hospitals that are disadvantaged by their geographic location may reclassify to a different wage index area for certain Medicare reimbursement purposes by applying for redesignation to the Medicare Geographic Classification Review Board. Section 401 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, enacted 10 years after the Board was established, creates a separate mechanism by which qualifying hospitals located in urban areas “shall [be] treat[ed] . . . [as] rural” for the same reimbursement purposes. To avoid possible strategic maneuvering by hospitals, the U.S. Department of Health and Human Services issued a regulation providing that hospitals with Section 401 status cannot receive additional reclassification by the Board on the basis of that status, 42 C.F.R. 412.230(a)(5)(iii) (Reclassification Rule). Geisinger, a hospital located in an urban area, received rural designation under Section 401 but was unable to obtain further reclassification by the Board pursuant to the Reclassification Rule. Geisinger sued. The district court upheld the regulation. The Third Circuit reversed, finding that Section 401 is unambiguous: HHS shall treat Section 401 hospitals as rural for Board reclassification purposes, 42 U.S.C. 1395ww(d)(8)(E)(i) View "Geisinger Cmty. Med. Ctr. v. Sec'y United States Dep't of Health & Human Servs." on Justia Law

McClellan operated T&M Daycare. Nearly all of its clients participated in an Illinois program that reimbursed daycare centers. To qualify, a parent or guardian had to reside in Illinois, be employed or attend school, and have an income below a specified amount. McClellan instructed T&M’s director to falsify records so that T&M could receive state reimbursement. McClellan was also seen changing numbers on sheets submitted for state reimbursement of meals. McClellan purchased Paragon restaurant. The Department of Homeland Security had been investigating information that illegal aliens were working there. Paragon’s manager agreed to record conversations with McClellan and to provide documentary evidence that McClellan was paying wages in cash and was not reporting those wages to the state. McClellan used T&M’s account to purchase a house, where undocumented kitchen staff lived rent‐free. Recorded conversations revealed McClellan’s knowledge of the workers’ illegal status. Agents executed search warrants and found 12 workers without legal status. McClellan was charged with harboring illegal aliens, 8 U.S.C. 1324(a)(1)(A)(iii); mail fraud, 18 U.S.C. 1341, based on his submission of fraudulent employment tax reports; and engaging in a monetary transaction involving criminally derived property, 18 U.S.C. 1957, based on the transfer of T&M funds for the house purchase. The Seventh Circuit affirmed his convictions, rejecting challenges to the sufficiency of the evidence and to jury instructions. View "United States v. McClellan" on Justia Law

Plaintiff appealed his dismissal from a qui tam suit concerning the billing practices of government contractor CH2M Hill. The court held, as a matter of first impression, that the False Claims Act (FCA), 31 U.S.C. 3730(d)(3), requires the dismissal of a qui tam relator convicted of the conduct giving rise to the fraud, even if he or she only played a minor role. In this case, plaintiff, like many of his colleagues, submitted false time cards, and, as a result, received at least $50,000 for falsely claimed overtime hours. Accordingly, the court affirmed the judgment. View "Schroeder v. United States" on Justia Law

Plaintiffs filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., claiming that State Farm submitted false claims to the government for payment on flood policies arising out of damage caused by Hurricane Katrina. On appeal, plaintiffs primarily challenged the district court's discovery ruling and State Farm principally challenged the jury verdict. The court concluded that the district court's denial of plaintiffs' request for additional discovery after the verdict in their favor was an abuse of discretion because it affected plaintiffs' substantial rights and therefore, the court reversed the district court’s decision. However, the court affirmed the district court’s decisions with respect to the seal violations, subject matter jurisdiction, and State Farm’s motion for judgment as a matter of law. The court remanded for further proceedings. View "Rigsby v. State Farm Fire & Casualty Co." on Justia Law

Upon remand of relator's qui tam suit, the district court ruled that the District violated the False Claims Act (FCA), 31 U.S.C. 3729(a), when it submitted a Medicaid reimbursement claim for FY 1998 and imposed the maximum penalty of $11,000. Both parties appealed. The court reversed and remanded, concluding that the relevant federal regulations, which were incorporated into the District’s Medicaid State Plan, required the District to maintain records supporting its Medicaid reimbursement claims that could be produced for audit. Pursuant to contractual obligations, relator’s firm was to prepare the FY 1998 interim Medicaid claims and year-end cost report, and consequently his firm, not the District, had physical possession of the underlying documentation supporting the District’s claim. Given this arrangement, the District reasonably understood when it submitted the claim for payment that it could, through the firm, make the supporting records available for audit. View "United States ex. rel. Davis v. District of Columbia" on Justia Law

Relator filed a qui tam action against Tuomey under the False Claims Act (FCA), 31 U.S.C. 3729-33, and the government intervened. The jury determined that Tuomey did not violate the FCA, but the district court vacated the verdict and granted the government's motion for a new trial after concluding that it had erroneously excluded excerpts of a Tuomey executive's deposition testimony. In this appeal, Tuomey contends that the district court erred in granting the government’s motion for a new trial, and Tuomey raised numerous other challenges. The court concluded that the district court correctly granted the government’s motion for a new trial, albeit for a reason different than that relied upon by the district court. The court affirmed the district court’s order granting a new trial on the alternative ground urged by the government - that it was prejudiced by the exclusion of the executive’s testimony and other related evidence of his warnings to Tuomey regarding the legal peril that the employment contracts posed. The court rejected Tuomey’s claims of error following the second trial. Accordingly, the court affirmed the district court’s judgment. View "U.S. ex rel. Drakeford v. Tuomey" on Justia Law