Justia Government Contracts Opinion Summaries

In 1948, the United States and Ohio entered into a cost-sharing agreement to construct and maintain the Tom Jenkins Dam and Burr Oak Reservoir to control flooding in southeast Ohio’s Hocking River Basin. The U.S. Army Corps of Engineers determined that the Project required acquisition of property interests under and surrounding the dam, including subsurface mineral rights. Those interests were acquired and the dam was built. In 2010, Ohio entered into leases that granted Buckingham, a coal company, rights to construct a corridor beneath Project lands to connect non-Project parcels that Buckingham already owned and to sell coal extracted in the process. The United States unsuccessfully sought a temporary restraining order. The district court determined that the Project would not be placed at risk by the leases. The United States then unsuccessfully sought a declaratory judgment that the cost-sharing agreement preclude Ohio (or any third party authorized by Ohio) from conducting mining activity in Project lands without the Corps’ prior approval. The Sixth Circuit reversed. Ohio was required to acquire land “necessary” for the Project, including “coal in the lands lying below elevation 750,” so that the United States would not have to litigate to protect the Project or to alter operations to avoid litigation. The Agreement did not grant Ohio a unilateral right to sell, lease, or otherwise dispose of those same rights. View "United States v. State of Ohio" on Justia Law

The Medocks’ company, MAS, transported patients to kidney dialysis for Medicare reimbursement. Reimbursement of non-emergency ambulance transport is allowed only if medically necessary for bedridden patients; both a driver and an EMT must accompany any such passenger. Certification of medical necessity (CMN) must be signed by a doctor. A “run sheet” is reviewed by a Medicare contractor other than the ambulance company, such as AdvanceMed, to reduce fraud. AdvanceMed identified MAS as a high biller in Tennessee for dialysis ambulance transport and audited MAS. MAS’s records were missing some CMNs. Covert surveillance resulted in videotapes of patients walking, riding in the front seat, being double-loaded, being driven by single-staffed ambulances, or being transported by wheelchair. MAS had billed the transports as single-passenger and “stretcher required.” Executing a search warrant at the Medlocks’ home, agents seized CMNs and run tickets; some had been altered or forged. The Sixth Circuit reversed a conviction for aggravated identity theft, 18 U.S.C. 1028A, agreeing that misrepresentations that certain beneficiaries were transported by stretcher did not constitute a “use” of identification, but affirmed health-care fraud convictions, rejecting arguments that the court should have instructed the jury that Medicare, not merely a prudent person, was the relevant decision-maker; that Medicare would have reimbursed MAS without their misrepresentations; and that refusal to sever a defendant was prejudicial. View "United States v. Medlock" on Justia Law

The DeSoto County School District entered into a contract with a private entity called the Mississippi High School Activities Association (“MHSAA”). The terms of the contract allowed MHSAA to decide whether School District students were eligible to play high school sports. In making its decisions, MHSAA applied its own rules and regulations, and neither the School District nor its school board had input into the process. In 2012, R.T. was a star quarterback for Wynne Public School in Wynne, Arkansas. His parents, the Trails, decided that a change of school districts would be in R.T.’s best interests, so in January 2013 they bought a house in Olive Branch and enrolled R.T. in Olive Branch High School. Their daughter was to remain in Wynne until the school year ended. MHSAA determined that R.T. was eligible to compete in spring sports and allowed R.T. to play baseball. MHSAA conditioned R.T.’s continuing eligibility on the Trails’ daughter also enrolling in the School District at the start of the 2013-2014 school year. But, because the Trails’ daughter did not want to leave her friends behind in Arkansas, the family decided that one parent would stay in Arkansas with their daughter, as they had done during the spring semester, and the other parent would move to Mississippi and remain with R.T. On the eve of the 2013 football season, MHSAA notified the school and R.T. that, under its interpretation of its rules and regulations, R.T. was ineligible to play because it had determined that his family had not made a bona fide move to the School District. Neither the School District nor Olive Branch High School appealed through MHSAA’s internal procedure, so the Trails immediately filed a petition for a temporary restraining order (TRO) and preliminary injunction in the DeSoto County Chancery Court. The chancellor signed an ex-parte order granting the TRO and revoking MHSAA’s adverse eligibility determination. "While it generally is true that high school students have no legally protected right to participate in high school athletics,25 once a school decides to create a sports program and establish eligibility rules, the school—or as in this case, MHSAA—has a duty to follow those rules; and it may be held accountable when it does not do so. . . . And where, as here, the school delegates its authority to control student eligibility through a contract with a private entity, we hold that students directly affected by the contract are third-party beneficiaries of that contract. For us to say otherwise would run contrary to the very reason for extracurricular activities, which is to enrich the educational experience of the students." R.T. had standing to challenge MHSAA's eligibility decision that prevented him from playing high school sports. The Court affirmed the chancery court in this case, and remanded the case for further proceedings. View "Mississippi High School Activities Association, Inc. v. R.T." on Justia Law

In February 1995, the State executed a contract with Perini Corporation to design and build South Woods in Bridgeton (the Project), a twenty-six building medium- and minimum-security correctional facility. Perini subcontracted with L. Robert Kimball & Associates, Inc. as the architect and engineer. Defendant Natkin & Company was designated the principal contractor for heating, ventilation, and air conditioning (HVAC). The design that Kimball provided to Perini included an underground HTHW distribution system to serve the entire Project. It also included a central plant from which the hot water was distributed to the various buildings that comprised the Project. Perma-Pipe, Inc. manufactured the underground piping used in the HTHW system. Natkin furnished and installed the underground piping system and the boilers and heat exchangers housed in the central plant. Defendant Jacobs Facilities, Inc. (formerly known as CRSS Constructors, Inc.), was retained by the State to provide construction oversight services. In 2008, the State filed a complaint against Perini, Kimball, Natkin, Jacobs, and Perma-Pipe in which it alleged that the HTHW system failed in March 2000, and on several subsequent occasions, and that these failures were caused by various defects including design defects, defective site preparation for the pipes, defective pipes, and deficient system design. The State asserted breach of contract against Perini, negligence and professional malpractice against Kimball, negligence and breach of contract against Natkin, and breach of contract against Jacobs. Against Perma-Pipe, the State asserted a claim under the New Jersey Products Liability Act (PLA), as well as breach of implied warranties, negligence, and strict liability in tort. All defendants moved for summary judgment, arguing that the Project was substantially complete well before April 28, 1998, and that, therefore, the statute of repose barred the State's complaint. The Appellate Division reversed the orders granting summary judgment in favor of defendants Perini, Kimball, Natkin, and Jacobs. The panel held that the statute of repose was triggered when defendants substantially completed their work on the entire project, no earlier than May 1, 1998, the date when the minimum-security unit and garage were certified as substantially complete. After its review, the Supreme Court held that the statute of repose does not begin to run on claims involving an improvement that serves an entire project (including those parts constructed in multiple, uninterrupted phases) until all buildings served by the improvement have been connected to it. In addition, the Court held that the statute of repose did not apply to claims relating solely to manufacturing defects in a product used in the HTHW system. View "New Jersey v. Perini Corporation" on Justia Law

Respondent New Hampshire Department of Administrative Services (appealed a Superior Court order that granted summary judgment in favor of petitioner CaremarkPCS Health, LLC (Caremark). In 2010, the Department issued a Request for Proposals (RFP) for pharmacy benefit management services for the State of New Hampshire’s health plan. In response to the RFP, Caremark submitted a bid, which ultimately led to a final negotiated contract with the Department. The Governor and Executive Council approved the contract on November 17, 2010. Both the bid and final contract included statements to the effect that certain information set forth in those documents is proprietary and constitutes trade secrets of Caremark. In 2011, the Department received multiple requests to inspect and copy Caremark’s bid and the final contract. Two of the requests were made by Caremark’s competitors. Caremark, after being informed by the Department of the requests, responded that certain confidential information contained in the bid and final contract was exempt from disclosure under the Right-to-Know Law. The parties disputed whether certain information was subject to disclosure. The trial court ruled that certain information constituting trade secrets under the New Hampshire Uniform Trade Secrets Acts (UTSA) was exempt from disclosure under the Right-to-Know Law. Specifically, the trial court ruled that disclosure of Caremark’s trade secrets by the Department would constitute a “misappropriation” under the UTSA and, therefore, that the subject information is exempt from disclosure under the Right-to-Know Law. On appeal, the Department argued that the trial court erred in finding that the UTSA prohibited the Department from disclosing Caremark’s trade secrets under the “otherwise prohibited by statute” exemption in RSA 91-A:4, I. Finding no error, the Supreme Court affirmed. View "CaremarkPCS Health, LLC v. New Hampshire Dept. of Admin. Svc." on Justia Law

PegaStaff, an agency that provides temporary staffing, provides staffing to Pacific Gas & Electric (PG&E), through a staffing agency with which PG&E directly contracted, initially Corestaff and later Agile. The California Public Utilities Commission (CPUC) adopted General Order 156 to implement Public Utilities Code Article 5, the purpose of which is to encourage and develop the use of women, minority and disabled veteran-owned business enterprises (WMDVBEs) within the public utility sector. PegaStaff is not a WMDVBE and after PG&E adopted a program to increase the utilization of WMDVBEs, its provision of staff to PG&E was substantially reduced. PegaStaff filed suit against the CPUC, PG&E, Corestaff and Agile, challenging the constitutionality of Article 5 and General Order 156. The trial court determined that it did not have subject matter jurisdiction, entered judgment in favor of the CPUC, and denied PegaStaff’s motion to transfer its claims. The court of appeal affirmed. PegaStaff was required to first exhaust its administrative remedies and it has not done so. View "PegaStaff v. Cal. Pub.Utils. Comm'n" on Justia Law

Former employees filed a qui tam False Claims suit against Heritage College, a for-profit school, alleging it fraudulently induced the Department of Education (DOE) to provide funds by falsely promising to keep accurate student records as required by 20 U.S.C. 1094(a)(3). They claimed that Heritage altered grade and attendance records from 2006 to 2012 to ensure students made satisfactory progress and to avoid refunds, thereby maximizing Title IV funds. Around 97% of Heritage students receive Title IV aid, accounting for about 90% of gross tuition. From 2009 to 2012, the DOE disbursed $32,817,727 to Heritage. Each relator also alleged retaliation under the FCA and wrongful discharge under state law. For purposes of summary judgment, Heritage did not dispute that it altered records. The district court granted summary judgment to Heritage, finding that any false statements were not material to government funding decisions. The Eighth Circuit reversed and remanded the FCA claim, but affirmed the employment claims. Heritage could not have executed the participation agreement without stating it would maintain adequate records and without the agreement Heritage could not have received any Title IV funds. Heritage's actions with respect to the plaintiffs were not retaliatory. View "Miller v. Weston Educ., Inc." on Justia Law

In 1996, SUFI contracted with the Air Force to operate telephone systems in lodging facilities on bases in Germany. SUFI installed equipment at no cost to the Air Force, which agreed that guests would make calls exclusively through SUFI’s network. The Air Force quickly broke its promise of exclusivity. SUFI initiated administrative proceedings. In 2004, the Armed Services Board of Contract Appeals found the Air Force in material breach. The parties entered into a partial settlement in 2005. SUFI then submitted claims to the contracting officer, totaling $131 million. The contracting officer failed to issue a decision for more than six months before issuing a final decision denying all of SUFI’s claims except one. The Board found in SUFI’s favor on 22 claims. In 2010, SUFI submitted a claim for attorney fees and requested a decision within 60 days. More than six months passed; Air Force counsel told SUFI to consider its claim “deemed denied.” SUFI filed suit The Court of Federal Claims awarded attorney fees with interest but denied overhead and lost profit. The Federal Circuit rejected the government’s argument that SUFI failed to exhaust administrative remedies. The contracting officer’s delay rendered the contractual remedy inadequate and unavailable, regardless of the Board’s discretionary authority to review an appeal where the contracting officer fails to issue a decision in “a reasonable time.” The court held that SUFI is entitled to attorney fees under common law; vacated the denial of overhead and profit; and remanded for recalculation of interest. View "SUFI Network Servs., Inc. v. United States" on Justia Law

The National Institute on Drug Abuse (NIDA) within the National Institutes of Health issued Request for Proposal for the “NIH Pain Consortium Centers of Excellence in Pain Education Coordination Center.” NIDA initially issued the solicitation as a small business set-aside under North American Industry Classification System code 541712, “Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),” which limits offerors to small businesses with 500 employees or fewer. A prospective offeror appealed the NAICS code designation to the U.S. Small Business Administration Office of Hearings and Appeals, which ordered NIDA’s contracting officer to amend the solicitation to change the NAICS code designation to 541611, “Administrative Management and General Management Consulting Services.” Palladian sought to enjoin NIDA from accepting and evaluating proposals under the new code, which rendered Palladian ineligible to compete. The Court of Federal Claims granted Palladian’s motion for judgment on the administrative record, finding that the contracting officer’s NAICS code amendment was arbitrary and capricious because NAICS code 541611 did not best describe the statement of work for the solicitation. The Federal Circuit reversed, finding that Palladian failed to exhaust its administrative remedies. View "Palladian Partners, Inc. v. United States" on Justia Law

The Medicare program provides federally funded healthcare to the elderly and the disabled. See Title XVIII of the Social Security Act, 42 U.S.C. 1395. Under a “complex statutory and regulatory regime” called Medicare Part A, the Government reimburses participating hospitals for care that they provide to inpatient Medicare beneficiaries. Most hospitals are reimbursed for inpatient hospital services pursuant to a standardized rate, but the Social Security Act also provides a method for calculating reimbursement rates for certain rural hospitals that qualify as “sole community hospital[s]” (SCHs) or that qualify as “medicare-dependent small rural hospital[s]” (MDHs). SCHs and MDHs receive reimbursement based on either the standard rate or a hospital-specific rate derived from its actual costs of treatment in one of the base years specified in the statute, whichever is higher. MDHs and SCHs challenged revisions to the rules covering their Medicare reimbursements for inpatient hospital services, arguing that the Medicare statute forbids the Secretary from modifying the hospitals’ reimbursements with budget neutrality adjustments from years prior to the base year. The district court rejected the claims. The D.C. Circuit affirmed, finding that the revisions were neither arbitrary nor manifestly contrary to the statute. View "Adirondack Med. Ctr. v. Burwell" on Justia Law