BG GROUP PLC v. REPUBLIC OF ARGENTINA, CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT, SC No. 12–138, March 5, 2014. Justice Breyer states the issue as “The question before us is whether acourt of the United States, in reviewing an arbitration award made under the Treaty, should interpret and apply the local litigation requirement de novo, or with the deference that courts ordinarily owe arbitration decisions. That is to say, who—court or arbitrator—bears primary responsibility for interpreting and applying the local litigation requirement to an underlying controversy? In our view, the matter is for the arbitrators, and courts must review their determinations with deference.” The court holds that a US court should apply provisions concerning arbitration using the standards for interpreting similar provisions in ordinary contracts and that arbitrator decisions should reviewed with deference. Reversed and remanded. Chief Justice Roberts dissents joined by Justice Kennedy.
UNITED STATES v. BORMES,
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT, SC No. 11192, November 13, 2012.
Not a procurement law case but the Supreme Court discusses the Little Tucker Act and the Tucker Act. The Court vacates the underlying Federal Circuit decision. Court’ Synopis: Respondent Bormes, an attorney, filed suit against the Federal Government, alleging that the electronic receipt he received when paying his client’s federal-court filing fee on Pay.gov included the last fourdigits of his credit card number and the card’s expiration date, inwillful violation of the Fair Credit Reporting Act (FCRA), 15 U. S. C.§1681 et seq. He sought damages under §1681n and asserted jurisdiction under §1681p, as well as under the Little Tucker Act, whichgrants district courts “original jurisdiction, concurrent with the United States Court of Federal Claims, of . . . [a]ny. . . civil action or claim against the United States, not exceeding $10,000 in amount, founded . . . upon . . . any Act of Congress,” 28 U. S. C. §1346(a)(2). In dismissing the suit, the District Court held that FCRA did not explicitly waive the Federal Government’s sovereign immunity. Bormes appealed to the Federal Circuit, which vacated the District Court’s decision, holding that the Little Tucker Act provided the Government’s consent to suit because the underlying statuteFCRAcould fairly be interpreted as mandating a right of recovery in damages.
Held: The Little Tucker Act does not waive the Government’s sovereign immunity with respect to FCRA damages actions. Pp. 411. (a) The Little Tucker Act and its companion statute, the TuckerAct, provide the Federal Government’s consent to suit for certain money-damages claims “premised on other sources of law,” United States v. Navajo Nation, 556 U. S. 287, 290. The general terms of the Tucker Acts are displaced, however, when a law imposing monetary liability has its own judicial remedies. In that event, the specific remedial scheme establishes the exclusive framework for determining the scope of liability under the statute. See, e.g., Hinck v. United States, 550 U. S. 501. Pp. 47.
(b) FCRA is such a statute. Its detailed remedial scheme sets “out a carefully circumscribed, time-limited, plaintiff-specific” cause of action, and “also precisely define[s] the appropriate forum,” 550 U. S., at 507. FCRA authorizes aggrieved consumers to hold “any person”who “willfully” or “negligent[ly]” fails to comply with the Act’s requirements liable for specified damages, 15 U. S. C. §§1681n(a), 1681o; requires enforcement claims to be brought within a specifiedlimitations period, §1681p; and provides that jurisdiction will lie “inany appropriate United States district court, without regard to theamount in controversy,” ibid. Because FCRA enables claimants to pursue monetary relief in court without resort to the Tucker Act, only its own text can determine whether Congress unequivocally intended to impose the statute’s damages liability on the Federal Government. Pp. 710.
626 F. 3d 574, vacated and remanded.
KEN L. SALAZAR, SECRETARY OF THE INTERIOR, ET AL., PETITIONERS
v. RAMAH NAVAJO CHAPTER ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE TENTH CIRCUIT No. 11-551, June 18, 2012. Indian
Self-Determination and Education Assistance Act (ISDA), 25 U. S. C. § 450
et seq., contracts. [The court’s Syllabus erroneously cites to Title
45.) Congress required Interior to pay the full amount of contract support
costs for ISDA self-determination contracts entered into with the tribes and
provided that in event of disputes that the tribes could proceed under the
Contract Disputes Act. Interior’s appropriation was not sufficient to
pay all of the support costs so it paid the tribes on a pro rata basis from
appropriations that were still available. The tribes filed suit in a district
court for breach of contract which granted summary judgment for the government
and the Tenth Circuit reversed reasoning “that Congress made sufficient
appropriations ‘legally available’ to fund any individual tribal
contractor’s contract support costs, and that the Government’s
contractual commitment was therefore binding.”
In an opinion by Justice Sotomayer the court affirms. The opinion is replete with cites to basic contract principles including those to GAO’s Red Book. Following Cherokee Nation of Okla. v. Leavitt, 543 U. S. 631, the opinion notes “Our conclusion in Cherokee Nation followed directly from well-established principles of Government contracting law. When a Government contractor is one of several persons to be paid out of a larger appropriation sufficient in itself to pay the contractor, it has long been the rule that the Government is responsible to the contractor for the full amount due under the contract, even if the agency exhausts the appropriation in service of other permissible ends.” and “Contractors are responsible for knowing the size of the pie, not how the agency elects to slice it. Thus, so long as Congress appropriates adequate funds to cover a prospective contract, contractors need not keep track of agencies’ shifting priorities and competing obligations; rather, they may trust that the Government will honor its contractual promises.”
Chief Justice Roberts, joined by Justices Ginsberg, Breyer and Alito dissents arguing that the majority’s opinion cannot be reconciled with statutory language “subject to the availability of appropriations.”
BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY v. ROCHE MOLECULAR SYSTEMS, INC., ET AL., No. 091159, June 6, 2011. The Court affirms the Federal Circuit decision and holds that “The Bayh-Dole Act does not automatically vest title to federally funded inventions in federal contractors or authorize contractors to unilaterally take title to such inventions.” (From court’s syllabus)
GENERAL DYNAMICS CORP. v. UNITED STATES, SC No. 09-1298,
May 23, 2011. Court’s Syllabus: Held: When, to protect state secrets, a
court dismisses a Government contractor’s prima facie valid affirmative
defense to the Government’s allegations of contractual breach, the
proper remedy is to leave the parties where they were on the day they filed
(a) The CFC held that, since invocation of the state-secrets privilege obscured too many of the facts relevant to the superior- knowledge defense, the issue of that defense was nonjusticiable, even though petitioners had brought forward enough unprivileged evidence for a prima facie showing. In this situation, the Court must exercise its common-law authority to fashion contractual remedies in Government-contracting disputes. The relevant state-secrets jurisprudence comes not from United States v. Reynolds, 345 U. S. 1, which deals with the Government’s evidentiary privilege against court-ordered disclosure of state and military secrets, but from Totten v. United States, 92 U. S. 105, and Tenet v. Doe, 544 U. S. 1, two cases dealing with alleged contracts to spy.
Where liability depends on the validity of a plausible superior- knowledge defense, and when full litigation of that defense “would inevitably lead to the disclosure of” state secrets, Totten, supra, at 107, neither party can obtain judicial relief. It seems unrealistic to separate the claim from the defense, allowing the former to proceed while barring the latter. Claims and defenses together establish the justification, or lack of justification, for judicial relief; and when public policy precludes judicial intervention for the one it should also preclude judicial intervention for the other. Suit on the contract, or for performance rendered or funds paid under the contract, will not lie, and courts should leave the parties to the agreement where they stood on the day they filed suit. The Government suggests that at the time of suit, petitioners had been held in default by the contracting officer and were liable for the ensuing consequences. But that was merely one step in the parties’ contractual regime. The “position of the parties” at the time of suit is not their position with regard to legal burdens and the legal consequences of contract-related determinations, but their position with regard to possession of funds and property. Pp. 510.
(b) Neither side will be entirely happy with this resolution. General Dynamics (but not Boeing) wants to turn the termination into one for convenience and reinstate the CFC’s $1.2 billion award, but that is not an option under the A12 agreement. Moreover, state secrets would make it impossible to calculate petitioners’ damages. The Government wants a return of the $1.35 billion it paid petitioners for work never accepted, but the validity of that claim depends on the nonjusticiable issue whether petitioners are in default. As in Totten, see 92 U. S., at 106, the Court’s refusal to enforce this contract captures what the ex ante expectations of the parties were or reasonably ought to have been. They must have assumed the risk that state secrets would prevent the adjudication of inadequate performance claims. Moreover, this ruling’s impact here is likely much more significant than its impact in future cases, except to the extent that it renders the law more predictable and hence more subject to accommodation by contracting parties. Whether the Government had an obligation to share its superior knowledge about stealth technology is left for the Federal Circuit to address on remand.
567 F. 3d 1340, vacated and remanded.
SCHINDLER ELEVATOR CORP. v. UNITED STATES EX REL. KIRK, SC No. 10-188, May 16, 2011. False Claims Act case. From the syllabus-“A federal agency’s written response to a FOIA request for records constitutes a ‘report’ within the meaning of the FCA’s public disclosure bar.”
UNITED STATES v. TOHONO O’ODHAM NATION, SC No. 09-846, April 25, 2011. The Supreme Court holds that 28 U. S. C. § 1500 bars a pending action from being brought in the COFC when the two suits are for or in respect to the same claim, precluding CFC jurisdiction, if they are based on substantially the same operative facts, regardless of the relief sought in each suit. Here the Court found that the substantial overlap in operative facts between the Nation’s District Court and CFC suits precludes jurisdiction in the CFC. Both actions allege that the United States holds the same assets in trust for the Nation’s benefit, and they describe almost identical breaches of fiduciary duty. The Court reverses and remands the Federal Circuit decision which had reversed a COFC opinion.
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION et al. v .
NELSON et al., SC No. 09-530, January 19,2011. Reversed and remanded.See 9th Circuit case below.
From the holding Assuming, without deciding, that the Government’s challenged inquiries implicate a privacy interest of constitutional significance, that interest, whatever its scope, does not prevent the Government from asking reasonable questions of the sort included on SF-85 and Form 42 in an employment background investigation that is subject to the Privacy Act’s safeguards against public disclosure.
Court’s Syllabus The National Aeronautics and Space Administration (NASA) has a workforce of both federal civil servants and Government contract employees. Respondents are contract employees at NASA’s Jet Propulsion Laboratory (JPL), which is operated by the California Institute of Technology (Cal Tech). Respondents were not subject to Government background checks at the time they were hired, but that changed when the President ordered the adoption of uniform identification standards for both federal civil servants and contractor employees. The Department of Commerce mandated that contract employees with long-term access to federal facilities complete a standard background check, typically the National Agency Check with Inquiries (NACI), by October 2007. NASA modified its contract with Cal Tech to reflect the new requirement, and JPL announced that employees who did not complete the NACI process in time would be denied access to JPL and face termination by Cal Tech.
The NACI process, long used for prospective civil servants, begins with the employee filling out a standard form (here, Standard Form 85, the Questionnaire for Non-Sensitive Positions (SF-85)). SF-85 asks whether an employee has “used, possessed, supplied, or manufactured illegal drugs” in the last year. If so, the employee must provide details, including information about “treatment or counseling received.” The employee must also sign a release authorizing the Government to obtain personal information from schools, employers, and others during its investigation. Once SF-85 is completed, the Government sends the employee’s references a questionnaire (Form 42) that asks open-ended questions about whether they have “any reason to question” the employee’s “honesty or trustworthiness,” or have “adverse information” concerning a variety of other matters. All SF-85 and Form 42 responses are subject to the protections of the Privacy Act.
With the deadline for completing the NACI process drawing near, respondents brought suit, claiming, as relevant here, that the background-check process violates a constitutional right to informational privacy. The District Court declined to issue a preliminary injunction, but the Ninth Circuit reversed. It held that SF-85’s inquiries into recent drug involvement furthered the Government’s interest in combating illegal-drug use, but that the drug “treatment or counseling” question furthered no legitimate interest and was thus likely to be held unconstitutional. It also held that Form 42’s open-ended questions were not narrowly tailored to meet the Government’s interests in verifying contractors’ identities and ensuring JPL’s security, and thus also likely violated respondents’ informational-privacy rights.
SKILLING v. UNITED STATES, SC No. 08-1394, June 24, 2010. Certiorari to the 5th Circuit. Count 1 of the indictment in the distrct court charged Skilling with, inter alia, conspiracy to commit “honest-services” wire fraud, 18 U. S. C. §§371, 1343, 1346, by depriving Enron and itsshareholders of the intangible right of his honest services. In an opinion by Justice Ginsburg the Court holds ”In proscribing fraudulent deprivations of ‘the intangible right of honest services,’ §1346, Congress intended at least to reach schemes to defraud involving bribes and kickbacks. Construing the honest-services statute to extend beyond that core meaning, we conclude, would encounter a vagueness shoal. We therefore hold that §1346 covers only bribery and kickback schemes. Because Skilling’s alleged misconduct entailed no bribe or kickback, it does not fall within §1346’s proscription.”
ASTRUE, COMMISSIONER OF SOCIAL SECURITY v. RATLIFF, SC No. 08-1322, June 14, 2010. The Supreme Court holds that an award of EAJA fees is to the prevailing party, not the attorney, and may be offset when there is a pre-existing debt owed to the government.
GRAHAM COUNTY SOIL AND WATER CONSERVATION DISTRICT, ET AL., PETITIONERS v. UNITED STATES EX REL. KAREN T. WILSON. SC No. 08-304, March 30, 2010. Qui tam False Claims Act case. Public disclosure bar of 31 USC § 3730(e)(4)(A). The Court reviews a Fourth Circuit decision which held that only federal administrative reports, audits or investigations, qualify as public disclosures under the FCA. In an opinion by Justice Stevens, the Court reverses and holds that the term administrative is not limited to federal sources. Justice Sotomayor, joined by Justice Breyer, dissents. [But see Pub Law 111-148 which amends 3730(e)(4) by including a Federal qualifier-jaw]
ALLISON ENGINE CO., INC., ET AL. v. UNITED STATES EX REL.
SANDERS ET AL., SC No. 07-214, June 09, 2008. Court vacates and remands to
the Sixth Circuit this qui tam FCA case. Unanimous decision by Justice Alito.
Syllabus by the Reporter of Decisions
Held: 1. It is insufficient for a plaintiff asserting a §3729(a)(2) claim to show merely that the false statement’s use resulted in payment or approval of the claim or that Government money was used to pay the false or fraudulent claim. Instead, such a plaintiff must prove that the defendant intended that the false statement be material to the Government’s decision to pay or approve the false claim. Pp. 5-8.
(a) The Sixth Circuit’s interpretation of §3729(a)(2) impermissibly deviates from the statute’s language, which requires the defendant to make a false statement “to get” a false or fraudulent claim “paid or approved by the Government.” Because “to get” denotes purpose, a person must have the purpose of getting a false or fraudulent claim “paid or approved by the Government” in order to be liable. Moreover, getting such a claim “paid . . . by the Government” is not the same as getting it paid using “government funds.” Under §3729(a)(2), a defendant must intend for the Government itself to pay the claim. Eliminating this element of intent would expand the FCA well beyond its intended role of combating “fraud against the Government.” Rainwater v. United States, 356 U. S. 590, 592. Pp. 5-6.
(b) The Government’s contention that “paid . . . by the Government” does not mean literal Government payment is unpersuasive. The assertion that it is customary to say that the Government pays a bill when a recipient of Government funds uses those funds to pay involves a colloquial usage of the phrase “paid by” that is not customarily employed in statutory drafting, where precision is important and expected. Section 3729(c)’s definition of “claim” does not support the Government’s argument. The definition allows a request to be a “claim” even if it is not made directly to the Government, but, under §3729(a)(2), it is necessary that the defendant intend that a claim be “paid by the Government,” not by another entity. Pp. 6-7.
(c) This does not mean, however, that §3729(a)(2) requires proof that a defendant’s false statement was submitted to the Government. Because the section requires only that the defendant make the false statement for the purpose of getting “a false or fraudulent claim paid or approved by the Government,” a subcontractor violates §3729(a)(2) if it submits a false statement to the prime contractor intending that contractor to use the statement to get the Government to pay its claim. However, if a subcontractor makes a false statement to a private entity but does not intend for the Government to rely on the statement as a condition of payment, the direct link between the statement and the Government’s decision to pay or approve a false claim is too attenuated to establish liability. The Court’s reading gives effect to Congress’ efforts to protect the Government from loss due to fraud but also ensures that “a defendant is not answerable for anything beyond the natural, ordinary, and reasonable consequences of his conduct.” Anza v. Ideal Steel Supply Corp., 547 U. S. 451, 470. Pp. 7-9.
2. Similarly, it is not enough under §3729(a)(3) for a plaintiff to show that the alleged conspirators agreed upon a fraud scheme that had the effect of causing a private entity to make payments using money obtained from the Government. Instead, it must be shown that they intended “to defraud the Government.&lrdquo; Where their alleged conduct involved the making of a false statement, it need not be shown that they intended the statement to be presented directly to the Government, but it must be established that they agreed that the statement would have a material effect on the Government’s decision to pay the false or fraudulent claim.
RICHLIN SECURITY SERVICE CO. v. CHERTOFF, SECRETARY OF HOMELAND SECURITY, SC No. No. 06-1717, June 02, 2008. CAFC decision reversed, Supreme Court holds that a prevailing party that satisfies EAJA’s other requirements may recover its paralegal fees from the Government at prevailing market rates.
JOHN R. SAND & GRAVEL COMPANY, PETITIONER v. THE UNITED STATES, No. 06-1164, January 08, 2008. The Court affirms the decision of the CAFC that the six year statute of limitations, 28 USC 2501, cannot be waived. Justices Stevens and Ginsberg file separate dissents.
KSR INTERNATIONAL CO., PETITIONER v. TELEFLEX INC. ET AL., SC No. 04-1350, April 30, 2007. Not a contract case, but an anxiously waited Supreme Court decision the addressing 35 USC § 103, Conditions for patentability; non-obvious subject matter. In an unanimous opinion, the Court reverses the CAFC and begins by “rejecting the rigid approach of the Court of Appeals.” The Court holds (from the syllabus) that “The Federal Circuit addressed the obviousness question in a narrow, rigid manner that is inconsistent with §103 and this Court’s precedents. KSR provided convincing evidence that [a feature of the device] was a design step well within the grasp of a person of ordinary skill in the relevant art and that the benefit of doing so would be obvious. Its arguments, and the record, demonstrate that the Engelgau patent’s claim 4 is obvious.”
ROCKWELL INTERNATIONAL CORP. et al. v. UNITED STATES et
al, SC No. 05-1272, March 27, 2007. False Claims Act case. The Court
reverses the Tenth Circuit and holds that the relator Stone, was not an
original source. From the Courts’ Syllabus:
1. Section 3730(e)(4)’s original-source requirement is jurisdictional. Thus, regardless of whether Rockwell conceded Stone’s original-source status, this Court must decide whether Stone meets this jurisdictional requirement.
2. Because Stone does not meet §3730(e)(4)(B)’s requirement that a relator have “direct and independent knowledge of the information on which the allegations are based,” he is not an original source.
(a) The “information” to which subparagraph (B) speaks is the information on which the relator’s allegations are based rather than the information on which the publicly disclosed allegations that triggered the public-disclosure bar are based. The subparagraph standing on its own suggests that disposition. And those “allegations” are not the same as the allegations referred to in subparagraph (A), which bars actions based on the “public disclosure of allegations or transactions” with an exception for cases brought by “an original source of the information.” Had Congress wanted to link original-source status to information underlying public disclosure it would have used the identical phrase, “allegations or transactions.” Furthermore, it is difficult to understand why Congress would care whether a relator knows about the information underlying a publicly disclosed allegation when the relator has direct and independent knowledge of different information supporting the same allegation.
(b) In determining which “allegations” are relevant, that term is not limited to “allegations” in the original complaint, but includes the allegations as amended. The statute speaks of the relator’s “allegations,” simpliciter. Absent some limitation of §3730(e)(4)’s requirement to the initial complaint, this Court will not infer one. Here, where the final pretrial order superseded prior pleadings, this Court looks to the final pretrial order to determine original-source status.
(c) Judged according to these principles, Stone’s knowledge falls short. The only false claims found by the jury involved insolid pondcrete discovered after Stone left his employment. Thus, he did not know that the pondcrete had failed; he predicted it. And his prediction was a failed one, for Stone believed the piping system was defective when, in fact, the pondcrete problem would be caused by a foreman’s actions after Stone had left the plant. Stone’s original-source status with respect to a separate, spray-irrigation claim did not provide jurisdiction over all of his claims. Section 3730(e)(4) does not permit jurisdiction in gross just because a relator is an original source with respect to some claim.
3. The Government’s intervention in this case did not provide an independent basis of jurisdiction with respect to Stone. The statute draws a sharp distinction between actions brought by a private person under §3730(b) and actions brought by the Attorney General under §3730(b). An action originally brought by a private person, which the Attorney General has joined, becomes an action brought by the Attorney General only after the private person has been ousted.
PAT OSBORN, PETITIONER v. BARRY HALEY et al., No. 05-593, January 22, 2007. Not a contracts case, instead a FTCA case where petitioner Osborn, a contractor employee, alleges that she was fired because Haley, a Forest Service employee, tortiously interfered with her employment. The United States Attorney, serving as the Attorney General’s delegate, certified, pursuant to the Westfall Act, that Haley was acting within the scope of his employment at the time of the conduct alleged in Osborn’s complaint and had the case removed to the Federal District court. After the US asserted that the alleged wrongdoing never occurred, the District Court, relying in Osborn’s allegations, entered an order that rejected the Westfall Act certification, denied the Government’s motion to substitute the United States as defendant in Haleyr’s place, and remanded the case to the state court. The Sixth Circuit vacated the District Court’s order, holding that a Westfall Act certification is not improper simply because the United States denies the occurrence of the incident on which the plaintiff centrally relies. The Supreme Court affirms. In an opinion by Justice Ginsburg the court holds that the Attorney General’s certification is conclusive for purposes of removal, i.e., once certification and removal are effected, exclusive competence to adjudicate the case resides in the federal court, and that court may not remand the suit to the state court.
BP AMERICA PRODUCTION CO. v. BURTON, No. 05-669, December 11, 2006. Writing for the Court, Justice Altio summarizes the case as follows-“This case presents the question whether administrative payment orders issued by the Department of the Interior’s Minerals Management Service (MMS) for the purpose of assessing royalty underpayments on oil and gas leases fall within 28 U. S. C. §2415(a), which sets out a 6-year statute of limitations for Government contract actions. We hold that this provision does not apply to these administrative payment orders, and we therefore affirm.”
GARY KENT JONES, PETITIONER v. LINDA K. FLOWERS et al. No. 04-1477, April 26, 2006. Not a contract case. Supreme Court holds that where certified mail notices of tax delinquency and subsequent sale of property are returned “unclaimed” that State must take reasonable additional effort to notify property owner.
GRAHAM COUNTY SOIL & WATER CONSERVATION DISTRICT
et al. v. UNITED STATES ex rel. WILSON, No. 04-169, June 20, 2005. False
Claims Act case. The Court reverses and remands to the Fourth Circuit.
Syllabus The False Claims Act (FCA) prohibits a person from making false or fraudulent claims for payment to the United States. 31 U.S.C. § 3729(a). That prohibition may be enforced in suits filed by the Attorney General, §3730(a), and in qui tam actions brought by private individuals in the Government’s name, §3730(b)(1). A 1986 amendment to the FCA created a private cause of action for an individual retaliated against by his employer for assisting an FCA investigation or proceeding, §3730(h), and revised the FCA’s statute of limitations, §3731(b). Section 3731(b) provides that “[a] civil action under section 3730 may not be brought ... more than 6 years after the date on which the violation of section 3729 is committed.” In 2001, respondent Wilson brought an FCA qui tam action against petitioners, along with an FCA retaliation claim. Petitioner Graham County Soil and Water Conservation District employed Wilson as a secretary. Wilson alleged that petitioner county officials retaliated against her for alerting federal officials to the purported fraud and for cooperating with the ensuing investigation, ultimately forcing her 1997 resignation from the District. Petitioners successfully moved to dismiss the retaliation claim as untimely, on the ground that North Carolina’s 3-year statute of limitations governed Wilson’s FCA action and barred it. Reversing, the Fourth Circuit found it unnecessary to borrow a state limitations period because one was supplied by §3731(b)(1).
Held: Section 3731(b)(1)’s limitations period does not govern §3730(h) retaliation actions. Instead, the most closely analogous state statute of limitations applies. Pp. 4-13.
(a) To determine the applicable statute of limitations for a cause of action created by federal statute, this Court asks first whether the statute expressly supplies a limitations period. If not, the most closely analogous state limitations period applies. Pp. 4-5.
(b) Section 3730(h) is a subsection of §3730, but §3731(b)(1) is nonetheless ambiguous about whether a §3730(h) retaliation action is “a civil action under section 3730” as that phrase is used in §3731(b)(1). Another reasonable reading is that §3731(b)(1)’s limitations period applies only to §§3730(a) and (b) actions. Section 3731(b)(1) starts the limitations period running on “the date on which the violation of section 3729 is committed,” that is, on the date the false claim was actually submitted. That language casts doubt on whether §3731(b)(1) specifies a limitations period for retaliation actions. For even a well-pleaded retaliation complaint need not allege that the defendant submitted a false claim, leaving the limitations period without a starting point if §3731(b)(1) is applicable. By contrast, the section naturally applies to well-pleaded §§3370(a) and (b) actions. Those actions require a plaintiff to plead that the defendant submitted a false claim and therefore necessarily specify when §3731(b)(1)’s time limit begins. At a minimum this anomaly shows that §3731(b)(1) is ambiguous about whether “action under section 3730” means all actions arising under that section. Pp. 5-7.
(c) Two considerations show that the better way to resolve this ambiguity is to read the 6-year period to govern only §§3370(a) and (b) actions. First, the very next subsection, §3730(c), uses the similarly unqualified phrase “action brought under section 3730” to refer only to §§3370(a) and (b) actions. Second, reading §3731(b)(1) to apply only to those actions is in keeping with the default rule that Congress generally drafts statutes of limitations to begin when the plaintiff has a complete and present cause of action. Where, as here, there are two plausible constructions, this Court should adopt the construction that starts the time limit running when the cause of action (here retaliation) accrues. This approach resolves §3731(b)(1)’s ambiguity in petitioners’ favor. Reading §3731(b)(1) to exclude retaliation actions will generally start the limitations period running when the cause of action accrues, for the likely analogous state statutes virtually all start when the retaliatory action occurs. However, under the reading favored by Wilson and the Government, the limitations period would begin at best on the date an actual or suspected FCA violation occurred, which would precede the retaliatory conduct. Pp. 7-12.
(d) The Court of Appeals should determine in the first instance the appropriate state statute of limitations to borrow. Pp. 12-13.
CHEROKEE NATION OF OKLA. V. LEAVITT (02-1472), No. 02-1472,
311 F.3d 1054, reversed; No. 03-853, 334 F.3d 1075, affirmed; and both cases
remanded. March 1, 2005. Supreme Court affirms the Federal Circuit decision which had affirmed
an IBCA decision.
Syllabus: The Indian Self-Determination and Education Assistance Act (Act) authorizes the Government and Indian tribes to enter into contracts in which tribes promise to supply federally funded services that a Government agency normally would provide, 25 U.S.C. § 450(f); and requires the Government to pay, inter alia, a tribe’s “contract support costs,” which are “reasonable costs” that a federal agency would not have incurred, but which the tribe would incur in managing the program, §450j-1(a)(2). Here, each Tribe agreed to supply health services normally provided by the Department of Health and Human Services’ Indian Health Service, and the contracts included an annual funding agreement with a Government promise to pay contract support costs. In each instance, the Government refused to pay the full amount promised because Congress had not appropriated sufficient funds. In the first case, the Tribes submitted administrative payment claims under the Contract Disputes Act of 1978, which the Department of the Interior (the appropriations manager) denied. They then brought a breach-of-contract action. The District Court found against them, and the Tenth Circuit affirmed. In the second case, the Cherokee Nation submitted claims to the Department of the Interior, which the Board of Contract Appeals ordered paid. The Federal Circuit affirmed.
Held: The Government is legally bound to pay the “contract support costs” at issue.
A list member notes there were sufficient unrestricted appropriations each year to cover the costs, even though the agency had spent them on “higher priority” needs and then claimed lack of appropriated funds.
SCARBOROUGH v. PRINCIPI, No. 02-1657, May 3, 2004. Court reverses Federal Circuit. Holds that a timely fee application, pursuant to 28 USC §2412(d), may be amended after the 30-day filing period has run to cure an initial failure to allege that the Government’s position in the underlying litigation lacked substantial justification. Thus, Scarborough’s fee application, as amended, qualifies for consideration and determination on the merits. (SC Syllabus)
NATIONAL PARK HOSPITALITY ASSOCIATION v. DEPARTMENT OF THE INTERIOR et al., No..02-196, May 27, 2003. Writing for the Court, Justice Thomas vacates and remands a DC Circuit decision which held that the Contract Disputes Act did not apply to National Park Service concession contracts. Justice Thomas’ opinion holds that the controversy is not yet ripe for resolution and judicial resolution of the question presented here should await a concrete dispute about a particular concession contract. Justice Breyer, with whom Justice O’Connor joins, dissents.
COOK COUNTY, ILLINOIS v. UNITED STATES ex rel. CHANDLER, No. 01-1572, March 10, 2003. Court affirms the seventh circuit decision and holds that local governments are “persons” subject to qui tam actions under the False Claims Act (FCA), 31 U.S.C. §§ 3729-3733.
ELDRED et al. v. ASHCROFT, ATTORNEY GENERAL, N0. 01-618, January 15, 2003. Court affirms opinion below and finds that the Copyright Term Extension Act ("CTEA") which extended the term of a copyright from creation to 70 years after author’s death, is constitutional.
FRANCONIA ASSOCIATES, et al., v. US, No. 01-455, June 10, 2002
FESTO CORP. v. SHOKETSU KINZOKU KOGYOKABUSHIKI CO., No. 00-1543, May 28, 2002.
LUJAN v. G & G FIRE SPRINKLERS, INC., No. 00-152, April 17, 2001. Finding that the California Labor Code, which provides for withholding sums from a contractor where its subcontractors were not paying proper prevailing wages, did not deprive the subcontractor of due process, the Court reverses the 9th Circuit. Writing for the Court, Chief Justice Rehnquist notes that "... if California makes ordinary judicial process available to respondent for resolving its contractual dispute, that process is due process." Finding that such existed the Court reversed.
MOBIL OIL EXPLORATION & PRODUCINGSOUTHEAST, INC. v. UNITED
STATES (99-244) 177 F.3d 1331, reversed and remanded. Justice Breyer
delivered the opinion of the Court, and summarized the opinion as follows:"
Two oil companies, petitioners here, seek restitution of $156 million
they paid the Government in return for lease contracts giving them rights to
explore for and develop oil off the North Carolina coast. The rights were not
absolute, but were conditioned on the companies obtaining a set of
further governmental permissions. The companies claim that the Government
repudiated the contracts when it denied them certain elements of the
permission-seeking opportunities that the contracts had promised. We agree
that the Government broke its promise; it repudiated the contracts; and it
must give the companies their money back."
[Opinion cites the Restatment of Contracts, Farnsworth, Williston, Corbin and other contract law Hornbook references.]
VERMONT AGENCY OF NATURAL RESOURCES v.UNITED STATES ex rel. STEVENS (98-1828) 162 F.3d 195, reversed. Justice Scalia delivered the opinion of the Court which held "... that a private individual has standing to bring suit in federal court on behalf of the United States under the False Claims Act, 31 U.S.C. § 3729-3733, but that the False Claims Act does not subject a State (or state agency) to liability in such actions. The judgment of the Second Circuit is reversed." The Eleventh Amendment issue was not reached.
ADARAND CONSTRUCTORS v.SLATER US SupCt, No.99-295, January 12, 2000.align="center" [Another decision in this long drawn out case. See the case for the facts and background.] On writ of certiorari to the 10th Circuit Court of Appeals, the Court reverses and remands to the 10th Circuit its decision which found the action to be moot. Finding that the 10th Circuit had "confused mootness with standing" and that the respondent did not meet the heavy burden of asserting mootness. The Opinion concludes with the following: "It is no small matter to deprive a litigant of the rewards of its efforts, particularly in a case that has been litigated up to this Court and back down again. Such action on grounds of mootness would be justified only if it were absolutely clear that the litigant no longer had any need of the judicial protection that it sought. Because that is not the case here, the petition for writ of certiorari is granted, the judgment of the United States Court of Appeals for the Tenth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion. It is so ordered."
ARIZONA DEPARTMENT OF REVENUE, PETITIONER v. BLAZE CONSTRUCTION COMPANY, INC., US SupCt, No. 97-1536, March 2, 1999. In an opinion by Justice Thomas, the Court holds that a State generally may impose a nondiscriminatory tax upon a private company’s proceeds from contracts with the Federal Government, when the federal contractor renders its services on an Indian reservation. PDF Version
DEPARTMENT OF THE ARMY, PETITIONER v. BLUE FOX, INC., US SupCt, No. 971642, January 20, 1999. The Supreme Court unanimously reversed the Ninth Circuit’s panel decision in our Blue Fox case. In an opinion authored by the Chief Justice, the Court held that the APA does not waive sovereign immunity to permit an unpaid subcontractor to bring an action against the United States. The Court ruled that as a form of substitute and not specific relief, Blue Fox’s action to enforce an equitable lien fell outside the scope of the APA’s waiver of sovereign immunity for relief "other than money damages." The Court noted that its decision was consistent with long-standing precedent establishing that sovereign immunity bars creditors fr10 The United States, as amicus curiae, challenges the District Court’s analysis. The Government argues that there is no basis in the text of the FCA for distinguishing between a fraudulently inflated bid and a fraudulently deflated one, and maintains that FCA liability should attach to claims under any fraudulently induced contract. See Br. for the United States at 14-15. The United States further claims that there are at least two reasons why the Government might reject a low bid if it knew it was fraudulent. First, the Government has an interest in preserving the integrity of the bidding process. Second, a low bid carries the risk of the bidder’s default if it wins the contract. See id. at 21-23. We need not resolve this dispute. Because we conclude that, on the evidence in this case, no reasonable jury could findom attaching or garnishing funds in the Treasury and from enforcing liens against property owned by the United States. PDF Version
Hughes Aircraft Co. v. U.S. ex rel. Schumer , US SupCt, No. 95-1340, 6/16/97. Court holds that 1986 amendment to False Claims Act did not apply retroactively to pre-1986 conduct.
LEITER et al. v. UNITED STATES. No. 261, May 10, 1926.
CARNELL CONSTRUCTION CORPORATION Plaintiff – Appellee,2 v. BLAINE SQUARE, LLC Defendant – Appellant, and DANVILLE REDEVELOPMENT & HOUSING AUTHORITY Defendant, Fourth Circuit No. 13-1239, March 06, 2014. Virginia contract for public housing. The court holds “that a corporation can acquire a racial identity and establish standing to seek a remedy for alleged race discrimination under Title VI.” A de novo issue for the Fourth Circuit as the court discusses other circuit opinions on the issue and the dictum in Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 263 (1977)
United States of America ex.rel and KEVIN GRUPP, ROBERT MOLL, Plaintiffs-Appellants v. DHL Express (USA), Inc., Second Circuit 12-3829, February 05, 2014. The district court dismissed this qui tam action because relators did not notify the Surface Transportation Board(STB), an element of the Department of Transportation, within 180 days as required by 49 U.S.C. § 13710(a)(3)(B). The circuit court reverses and remands. The court rejects DHL’s argument that that § 13710(a)(3)(B) and the FCA can be reconciled because the 180-day rule is a notice requirement, not a statute of limitations; so long as relators provide notice to the carrier within the 180-day period, they need not file suit for up to six years. Thus, in DHL’s view, because the statutes are not in direct conflict, both must be given effect.” The court notes “However, this argument ignores the purpose of the FCA’s tolling provision. See 31 U.S.C. § 3731(b). In 1986, when Congress amended FCA Section 3731(b) to include the tolling provision –- which permits actions for up to three years after the government’s discovery of the violation or the time at which the government should have discovered the violation –- it provided the following justification: “[F]raud is, by nature, deceptive [and] such tolling . . . is necessary to ensure the Government’s rights are not lost through a wrongdoer’s successful deception.” S.Rep. No. 99-345, at 15 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5280. Application of the 180-day rule would completely nullify the tolling allowance inasmuch as the Government is often unlikely to become aware of fraud immediately following the violation. For similar reasons, the rule as understood by DHL, would pose an even more substantial obstacle to relators’ ability to bring qui tam actions.”
AGILITY DEFENSE & GOVERNMENT SERVICES, AGILITY
INTERNATIONAL, INC., Plaintiffs–Appellees, versus U.S. DEPARTMENT OF DEFENSE,
SECRETARY OF DEFENSE, DEFENSE LOGISTICS AGENCY, DIRECTOR OF THE DEFENSE
LOGISTICS AGENCY, Defendants–Appellants, Eleventh Circuit No. 13-10757,
December 31, 2013. Plaintiffs/appellees were were affiliates of Public
Warehousing Company, K.S.C.. Public Warehousing was suspended by DoD after being
indicted by a grand jury for fraud. Pursuant to FAR 9.407, appellees were also
suspended as affiliates of Public Warehousing. Plaintiffs sued and the district
court ordered the suspensions lifted. “The district court ruled that the
agency did not have the power to suspend the affiliates indefinitely even if it
initially had the power to suspend the affiliates based solely on their
affiliate status. Because neither the United States nor its agencies initiated
legal proceedings against the affiliates within 18 months of their suspension
notices, the district court declared the suspensions contrary to law and ordered
the agency to terminate the suspensions.”
The Eleventh Circuit court reverses. After a detailed examination and discussion of the regulations the court concludes “The Suspension of an Affiliate of an Indicted Government Contractor May Exceed 18 Months When Legal Proceedings Have Been Initiated Against the Indicted Government Contractor.” The court also holds that “A Suspension of an Affiliate that Exceeds 18 Months Is Not a Violation of Due Process Because the Regulation Affords an Affiliate Constitutionally Sufficient Process To Contest Its Suspension.”
CHERYL HARRIS, Co-Administratrix of the Estate of Tyan D.
Maseth, deceased; DOUGLAS MASETH; Co-Administrator of the Estate of Ryan D.
Maseth, deceased, Appellants v. KELLOGG BROWN & ROOT SERVICES, INC., Third
Circuit No. 12-3204, August 01, 2013. Plaintiff sued KBR for wrongful death of a
service man who was electrocuted in a shower at a base in Iraq.
Plaintiff’s allege that KBR caused Staff Sergeant Maseth’s death by
negligently performing its maintenance duties under two contracts with the
United States. The District Court dismissed the suit holding that the case was nonjusticiable and—alternatively—that the plaintiffs’ claims were preempted by the federal policy embodied in 28 U.S.C. § 2860(j).
The Third Circuit reverses and remands to the District Court concluding “We will remand to the District Court for proceedings consistent with this opinion. The plaintiffs’ claims are not preempted by the combatant-activities exception, and it is possible that those claims are not foreclosed by the political-question doctrine. To decide the latter issue, the District Court will first need to decide which state’s law applies. If Pennsylvania law applies, then this case lacks any nonjusticiable issues and may proceed. But if either Tennessee or Texas law applies, then the case contains nonjusticiable issues. At the least, in that situation, the District Court will need to eliminate any damages that are based on proportional liability but allow the case to move forward to provide such other remedies as may exist.”
United States of America, ex rel., DAVID R. VAVRA, et al., Plaintiffs UNITED STATES OF AMERICA, Intervenor - Appellant v. KELLOGG BROWN & ROOT, INCORPORATED, Defendant - Appellee, Fifth Circuit No. 12-40447, July 19, 2013. In a case of first impression the Fifth Circuit finds that the Anti-Kickback Act, 41 U.S.C. §§ 8701–07, does not foreclose holding an employer vicariously liable for the acts of its employees. KBR employees allegedly accepted kickbacks from firms wishing to subcontract with KBR. The District court found finding that § 55(a)(1) does not allow the government allege vicarious liability. The Fifth Circuit reverses.
Irene TRITZ, an individual, Plaintiff–Appellant,
UNITED STATES POSTAL SERVICE; The California Franchise Tax Board; Internal Revenue Service, Defendants–Appellees, Ninth Circuit No. 10–56967, July 9, 2013. Plaintiff sued in District Court for breach of settlement agreements in personnel disputes. Because the action was for more than $10,000 the District Court dismissed for lack of jurisdiction holding that the COFC had exclusive jurisdiction for that amount.
The Ninth Circuit reverses concluding “that the Tucker Act’s grant of jurisdiction to the Court of Federal Claims to hear such claims is concurrent with the independent grant of jurisdiction to the United States district courts under the Postal Reorganization Act 39 U.S.C. §§ 401 and 409. The government argues “that the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101–09, bars district courts from hearing breach of contract claims against the Postal Service. For certain claims sounding in contract, the CDA ‘established a comprehensive framework for resolving contract disputes between executive branch agencies and government contractors.’ Menominee Indian Tribe v. United States, 614 F.3d 519, 521 (D.C.Cir.2010). Under the CDA, parties to covered disputes may only appeal to the relevant board of contract appeals or the Court of Federal Claims; appeal to the district courts is not available. 41 U.S.C. §§ 7103–05. Rejecting this argument the court states “However, the CDA only applies to specified categories of procurement contracts. See 41 U.S.C. § 7102(a) (providing that the CDA applies to contracts for ‘(1) the procurement of property, other than real property in being; (2) the procurement of services; (3) the procurement of construction, alteration, repair, or maintenance of real property; or (4) the disposal of personal property.’). Tritz’s 1991 and 2006 Settlement Agreements are not procurement contracts within the meaning of the CDA, so the CDA does not apply.”
X TECHNOLOGIES, INCORPORATED, Plaintiff - Appellee v. MARVIN TEST SYSTEMS, INCORPORATED, doing business as Marvin Geotest, Defendant - Appellant, Fifth Circuit No. 12-50230, June 11, 2013. Appellant(Geotest) appeals the jury verdict which found that appellant had breached an exclusive teaming agreement and awarded $336,000 plus attorney’s fees. The teaming agreement concerned an Air Force procurement initially set aside for small businesses. Geotest, which was not small entered into teaming agreement with a small business, X Technologies(X Tech). The agreement provided:
This is an exclusive agreement between X-Tech and Geotest. X-Tech will submit Geotest’s workshare as part of X-Tech’s proposal as a response to this RFP. Geotest will not team up with any other company for solicitation FA8224-09-R-0104 except that Geotest may provide prices for the TS-217 tester only (without any software licenses, support or training) to other potential bidders.X Tech submitted a bid with Geotest as a critical subcontractor. X Tech was the only bidder and the Air Force considered the bid too high and resolicited on a full and open bases. X Tech resubmitted its bid with Geotest. Geotest submitted its own bid and was awarded the contract. X Tech sued for breach arguing that Geotest had teamed with Raytheon in contravention of the exclusive teaming agreement. The District Court jury rejected Geotest’s argument that it had only licensed software from Raytheon. The Fifth Circuit affirms. Geotest argued “that there was no evidence to support the jury’s finding that, by its conduct, Geotest failed to comply with the agreement.” Rejecting that argument the court notes; “However, the jury was presented with evidence that Geotest teamed with Raytheon, including Geotest’s use of the term ‘team’ in its technical proposal to USAF to describe its relationship with Raytheon, as well as internal Raytheon emails in which Raytheon characterizes its affiliation with Geotest on the bid as teaming. This evidence is more than no evidence and is thus sufficient to support the jury’s finding. The district court properly entered final judgment in favor of X Tech based on the jury’s verdict.” UNITED STATES OF AMERICA, ex rel. HEIDI HEINEMAN-GUTA, Relator, Plaintiff, Appellant, v. GUIDANT CORPORATION; BOSTON SCIENTIFIC CORPORATION, individually and as Successor-in-Interest to Guidant Corporation, Defendants, Appellees, First Circuit No. 12-1867 May 31, 2013. FCA case. Plaintiff appeals the dismissal of its FCA action for lack of jurisdiction under the first-to-file provision of 31 § 3730(b)(5) of the FCA. Appellant argues the earlier filed action did not meet the pleading particularity requirements of Rule 9 (b) of the Federal Rules of Civil Procedure and therefore was not a valid reason to dismiss plaintiff’s action. In a case of first impression the First Circuit denies the appeal holding that “for the purposes of the first-to-file rule, the earlier-filed complaint need not meet the heightened pleading standard of Rule 9(b) to provide sufficient notice to the government of the alleged fraud and bar a later-filed complaint under § 3730(b)(5); earlier-filed complaints must provide only the essential facts to give the government sufficient notice to initiate an investigation into allegedly fraudulent practices.”
MORPHO DETECTION, INC., PETITIONER v. TRANSPORTATION SECURITY ADMINISTRATION, RESPONDENT, DC Circuit No. 12-1339, May 28, 2013. Synopsis from ODRA: The Court of Appeals for the DC Circuit just decided an appeal from an ODRA decision in Morpho Detection Inc. v. TSA. The Morpho appellate decision may be of interest to the PCL community as follows: 1) like the ODRA, the court declined to reach the question of whether the Christian doctrine applies to the FAA’s Acquisition Management System (AMS), and 2) the court refused to adopt a broad interpretation of “administrative action” as found in the tax clause. Delving into the second point further, the court reasoned that even if a state tax authority interprets a long-standing but ambiguous tax statute for the first time, and the result is against the contractor, the state determination is not an “after imposed” tax for the purpose of the "Federal, States, and Local Taxes - Fixed Price, Noncompetitive" clause. Versions of this clause are found in both the AMS (at clause 3.4.2-7) and FAR 52.299-4.
William RÍOS–PIÑEIRO, Plaintiff, Appellant, v. UNITED STATES of America, Defendant, Appellee. First Circuit No. 12–1618, April 15, 2013. Plaintiff’s letter carrier contract with the Postal Service was terminated for cause. The PSBCA denied the appeal and plaintiff did not appeal the PSBCA decision. Plaintiff then brought FTCA suit in the district court alleging negligent supervision, invasion of privacy, and malicious prosecution. Relying on the factual findings of the PSBCA’s the district court granted summary judgment to government. The First Circuit affirms holding that the final PSBCA decision be accorded collateral estoppel. The court notes that “Supreme Court has stated its preference for applying issue preclusion ‘to those determinations of administrative bodies that have attained finality.’ Astoria Fed. Sav. & Loans Ass'n v. Solimino, 501 U.S. 104, 107 (1991)” Judge Howard continues “Even if the PSBCA’s factual findings may have preclusive effect as a general matter, however, we still must be satisfied that collateral estoppel applies in this specific instance. We look to the following four factors: 1) that both the prior and subsequent proceedings involved " ‘the same issue of law or fact;’ 2) that ‘the parties actually litigated’ the issue in the prior proceeding; 3) that the prior proceeding ‘actually resolved the issue in a final and binding judgment’; and 4) that ‘its resolution of that issue of law or fact was essential to its judgment.’ Monarch Life Ins. Co., 65 F.3d at 978.” Finding that the factual issues were identical the court answers the questions in the affirmative and accords collateral estoppel to the PSBCA decision.
M.E.S., INC., GEORGE MAKHOUL, Plaintiffs-Appellants, v. ELLA SNELL, in her
individual capacity, RAYNETTE GURNEY, in her individual capacity, CHRISTOPHER
NASTASI, in his individual capacity, ANTHONY LEVESANOS, in his individual
capacity, Second Circuit Docket No. 12-1657-cv, March 19, 2013.
Plaintiff had contracts with the Corps of Engineers which plaintiff believe were
unfairly terminated. Plaintiff appealed to the ASBCA and subsequently, at
plaintiff's request, the appeal was dismissed without prejudice for plaintiff to
decide whether it or its surety would manage the appeal. Instead of reopening
the appeal at the ASBCA, plaintiff filed a suit in the distict court Invoking
Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388
(1971), MES and Makhoul sued named Corps personnel in their individual
capacities. MES now appeals the dismissal by the district court which held that
the CDA preculded a Bivens type action.
Writing for the court Judge Raggi notes "Although this court has not previously considered the preclusive effect of the CDA on Bivens claims, two of our sister circuits have done so and concluded that the statute's complex procedural and substantive framework is comprehensive, precluding Bivens claims by aggrieved government contractors that relate to or derive from contract disputes. See Evers v. Astrue, 536 F.3d 651, 657 (7th Cir. 2008); Janicki Logging Co. v. Matee¨, 42 F.3d 561, 564–65 (9th Cir. 1994)."
The decision discusses the Bivens decision and the Supreme Court's admonition in Bush v. Lucas, 462 U.S. at 368 that if the conduct at issue is "governed by comprehensive procedural and substantive provisions [of law] giving meaningful remedies against the United States" then it is 'inappropriate' for courts 'to supplement that regulatory scheme with a new judicial remedy.'" In affirming the dismissal by the district court, Judge Raggi concludes "To summarize, we conclude that, in enacting the Contract Disputes Act of 1978, Congress created a comprehensive scheme for securing relief from the United States for any disputes pertaining to federal contracts. The existence of that statutory scheme precludes MES from pursuing Bivens claims against federal employees in their individual capacities for alleged violations of due process or the First Amendment in terminating MES's federal construction contracts with the U.S. Army Corps of Engineers."
UNITED STATES ex rel. BENJAMIN CARTER, Plaintiff-Appellant,
v. HALLIBURTON CO.; KELLOGG BROWN & ROOT SERVICES, INC.; SERVICE EMPLOYEES
INTERNATIONAL, INC.; KBR, INC., Defendants-Appellees, Fourth Circuit No.
12-1011, March 18, 2013. Qui tam False Claims Act case. The government did not intervene. The district court had dismissed the case with prejudice partly because the “complaint had been filed beyond the six-year
statute of limitations in the FCA and was not tolled by the
Wartime Suspension of Limitations Act (WSLA), 18 U.S.C. § 3287,
which the court ruled does not apply to nonintervened qui tam cases.”
The Fourth Circuit reverses. The majority finds that the WSLA does not require a formanl declaration of war as if that is what congresss intended it would have so stated. The court also notes “that requiring a declared war would be an unduly formalistic approach that ignores the realities of today, where the United States engages in massive military campaigns resulting in enormous expense and widespread bloodshed without declaring a formal war. In fact, the United States has not declared war since World War II. However, there have been extensive military engagements in Vietnam, Korea, Kosovo, Afghanistan, and twice in Iraq. Indeed, the Supreme Court has found that the laws of war apply to non-declared wars, for example the war in Afghanistan. See Hamdi v. Rumsfeld, 542 U.S. 507, 518 (2004) (holding that the detention of enemy combatants during conflicts is an incident of the rules of war). Surely these circumstances result in situations in which fraud can easily be perpetuated against the United States just as much as a formally declared war. The purpose of the WSLA—to combat fraud at times when the United States may not be able to act as quickly because it is engaged in ‘war’—would be thwarted were we to find that the United States must be involved in a declared war for the Act to apply. See generally Wartime Enforcement Fraud Act of 2008, S. Rep. No. 110-431, at 1-3.” The majority also holds “whether the suit is brought by the United States or a relator is irrelevant to this case because the suspension of limitations in the WSLA depends upon whether the country is at war and not who brings the case.”
Judge Agee writes a vigorous dissent disagreeing with the majority that the WSLA applies when the united States is not a plaintiff or intervenor.
THE UNITED STATES,Plaintiff-Appellee v. OSCAR RENDA,
Defendant-Appelant, Fifth Cir. No. 11-41203, February 20, 2013. Corps of
Engineers dredging contract. The court introduces the case as follows:
“This case, which arose out of a government dredging contract, requires us
to delimit the scope of a corporate officer’s personal liability under 31 U.S.C. § 3713
(the ‘Priority Statute’). Specifically, we are called upon to decide
(1) whether the decision of a contracting officer rendered pursuant to the
Contract Disputes Act of 1978, as amended, 41 U.S.C. § 7101 et seq. (the
‘CDA”’), constitutes a ‘claim’ within the meaning of the
Priority Statute, and, if so, whether a debtor’s representative has
‘notice’ of that claim, necessary to trigger personal liability
under the Priority Statute, if he has actual knowledge of its existence but
relies on the erroneous advice of counsel as to its validity. Answering both
questions affirmatively, we AFFIRM.”
See relevant COFC and Federal Circuit decisions on the Renda Marine case. While Renda Marine was appealing the deemed denial of its claims in the COFC the CO issued a November 26, 2002, final decision on government counterclaims demanding payment of $11,860,000. Renda took no action on the CO’s claims as its counsel advised that the claim was nullity and that the government to had to assert it in the pending COFC action. On July 31, 2003, Renda caused Renda Marine to transfer all of its assets, totaling $8,563,066, to its unsecured creditors. Renda Marine was insolvent at that time. In 2005, after receiving $2 million settlement of a malpractice claim from it lawyer, Renda had the $2 million tranfrrd to Oscar Renda Contracting, Inc. Renda Marine was insolvent at that time.
The government brought this action under the Priority Act to recover from Oscar Renda personally the amounts, plus interest transferred from Renda Marine. As noted above, the Fifth Circuit affirms that a government claim under the CDA is a claim under the Priority Act and that erroneous advice from counsel has no effect on the actual knowledge requirement.
ATLANTIC MARINE CONSTRUCTION COMPANY, INC., Fifth Circuit No. 12-50826,
November 19, 2012. Suit between a Corps of Engineers prime contractor,
Atlantic, petitioner here, and its subcontractor “J-Crew.” The
subcontract contained a forum selection clause stating that any disputes would
be litigated in a court located in Virginia. A dispute arose and J-Crew sued
in a Texas Federal Court. In the district court Atlantic moved to dismiss the
suit “under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. §
1406, arguing that the forum-selection clause obligated J-Crew to bring
suit in Virginia. Alternatively, Atlantic moved to transfer the case to the
Eastern District of Virginia under 28 U.S.C. § 1404(a).” The district
court denied the motions to dismiss or transfer. Atlantic now request the
Fifth Circuit to issue a “writ of mandamus directing the district court
to dismiss the case or transfer it to the United States District Court for the
Eastern District of Virginia.”
The Fifth Circuit denies mandamus. Finding instructive the Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), the opinion notes “The core of Stewart is the directive of Congress that allocation of matters among the federal district courts is not wholly controllable by private contract. Rather the agreement of parties will signify in the district court’s allocating decision, tempering the private agreement’s reflection of private interests with the public interest attentive to the usual metrics of this case law, such as time to trial and convenience of witnesses. The contention that dismissal may be under § 1406 or Rule 12(b)(3) empties Stewart of force and confounds the plain language § 1406.”
Judge Haynes issues a special concurrence. He argues that the disrrict court erred in its ruling and urges “the parties to request review of today’s decision by the United States Supreme Court, so it may consider whether this area of the law would benefit from its further guidance.”
UNITED STATES OF AMERICA, ex rel., JULIE WILLIAMS,
Plaintiffs-Appellees, JOHN MARTINEZ, M.D., Plaintiff, v. RENAL CARE GROUP, INC.;
RENAL CARE GROUP SUPPLY COMPANY; FRENSENIUS MEDICAL CARE HOLDINGS, INC.,
Defendants-Appellants, Sixth Circuit No. 11-5779 , October 05, 2012. False
Claims Act case. The district court found for the government on all counts
alleging that the defendants violated the False Claims Act by submitting claims
while knowing that RCGSC was a sham corporation created for the sole purpose of
increasing Medicare reimbursements while knowing that it was not in compliance
with Medicare rules and regulations.
Recognizing the complexity of the relevant statutes and regulations the Sixth Circuit reverses and grants summary judgment in favor of defendants finding “The defendants did not act with reckless disregard of the alleged falsity of their submissions to Medicare. And given that there is no evidence in the record that they acted with actual knowledge (in violation of 31 U.S.C. § 3729(b)(1)(A)(i)), or in deliberate ignorance of the truth (in violation of 31 U.S.C. § 3729(b)(1)(A)(ii)), they are therefore not liable under Count One of the complaint for False Claims Act liability.” Judge Cole also comments that “Why a business ought to be punished solely for seeking to maximize profits escapes us.” and “The False Claims Act is not a vehicle to police technical compliance with complex federal regulations.”
UNITED STATES OF AMERICA, ex rel. BRIAN X- WALL, Plaintiffs-Appellees, v. - CIRCLE C CONSTRUCTION, L.L.C., - Defendant-Appellant, -PHASE TECH, LLC, Sixth Circuit No. 10-6645, October 01, 2012. False Claims Act case involving false certifications of Davis-Bacon Act wages paid from an Army contract for construction at Fort Campbell, Kentucky. Appellant argues that the District Court erred when it rejected appellant’s primary jurisdiction argument that the matter should have been a Davis-Bacon Act matter before the Department of Labor(DOL) rather than a False Claims Act case. The Circuit court rejects this argument with a good discussion of the primary jurisdiction issue. In particular Judge Griffin notes that “the courts have drawn a dichotomy between a contractor’s misrepresentation of wages and its misclassification of workers. This dichotomy is best illustrated in United States ex rel. Windsor v. DynCorp, Inc., 895 F. Supp. 844, 85152 (E.D. Va. 1995), in which the plaintiffs brought a qui tam action against a government contractor, DynCorp, alleging that it violated the FCA when it intentionally misclassified, and consequently underpaid, certain employees.” He notes that here the issue is not a misclassification which may require DOL input, but the falsification of the certification that the proper wages had been paid. While affirming the District Courts holding on liability, the court does reverse the damages award and remands for a recalculation of the damages.
United States of America ex rel. Daniel Feldman, Plaintiff-Appellee, v. Wilfred van Gorp and Cornell University Medical College, Defendants-Appellants, Second Circuit Nos. 10-3297( Lead) 11-975 (Con), September 05, 2012. False Claims Act Qui tam case. The Second Circuit court denies defendants motion for judgment as a matter of law or for a new trial, but instead affirms a judgment for plaintiff on false claims submitted by Cornell in its grant renewal applications. The court summarizes as follows, “We conclude that: 1) where the government has provided funds for a specified good or service only to have defendant substitute a non-conforming good or service, a court may, upon a proper finding of False Claims Act liability, calculate damages to be the full amount of the grant payments made by the government after the material false statements were made; 2) there was sufficient evidence from which a reasonable jury could determine that the false statements at issue were material to the government’s funding decision; and 3) the district court did not abuse its discretion in excluding evidence of inaction on the part of the National Institutes of Health in response to the plaintiff’s complaint regarding the fellowship program in which he had been enrolled.” Good discussion of the materiality and damages issues.
NYLE J. HOOPER, Plaintiff-Appellant, v. LOCKHEED MARTIN CORPORATION, Defendant-Appellee, UNITED STATES OF AMERICA, Ex rel., Plaintiff, Ninth Circuit No.11-55278, August 2, 2012. Qui tam case, Air Force cost reimbursement plus award fee contract. The Ninth Circuit reverses the District court which granted Lockheeds motion for summary judgment. The Circuit Court holds “As a matter of first impression, we conclude that false estimates, defined to include fraudulent underbidding in which the bid is not what the defendant actually intends to charge, can be a source of liability under the FCA, assuming that the other elements of an FCA claim ... are met.” The court remands stating “We also REVERSE and REMAND the district courts dismissal of Hooper’s claim that Lockheed violated the FCA by knowingly underbidding the contract. Having determined that FCA liability may be premised on false estimates, we hold that there is a genuine issue of material fact whether Lockheed acted either knowingly, in deliberate ignorance of the truth, or in reckless disregard of the truth when it submitted its bid for the Air Force RSA IIA contract.”
Randall Little, et al v. Royal Dutch Shell, P.L.C. Fifth Circuit No. 11-20320, July 31, 2012. Interesting case. Qui tam suit brought by auditors of Interior’s Minerals Management Service(MMS). Part of MMS’s mission was to uncover theft or fraud in the royalty programs. The district court dismissed the action finding that relators were not persons under the False Claims Act. The Fifth Circuit reverses finding that there is “no basis to except such an employee from personhood.” The court also finds that the district court used an overly broad conception of the public disclosure bar and remands for reconsideration of the public disclosure issue.
UNITED STATES OF AMERICA, Plaintiff - Appellee, v. RALPH MERRILL, Defendant - Appellant Eleventh Circuit No. 11-11432, June 27, 2011. Conviction of Merrill upheld in the government contract fraud case. AEY sold ammunition that was manufactured by a Communist China military company. See earlier background at POGO/Rolling Stones articles. and the COFC case AEY, Inc. v. THE UNITED STATES, COFC No. 09-330C, May 24, 2011.
US ex rel. Jon H. Oberg v. Kentucky Higher Education et
al, Fourth Circuit No. 10-2320, June 18, 2012. False Claims Act case.
Relator alleged that corporations organized by four states, Kentucky,
Pennsylvania, Vermont, and Arkansasdefrauded the United States Department of
Education. The district court granted appellees’ motions to dismiss on
the ground that they were “state agencies” and therefore not
subject to suit under the False Claims Act. The Fourth Circuit vacates and
remands finding that the district court did not properly determine whether
appellees were persons under the FCA.
The court notes, and agrees, that several other circuits “have recognized that the arm of- the-state analysis used in the Eleventh Amendment context provides the appropriate legal framework for this inquiry.” The court recognizes “In applying the arm-of-the-state analysis, we consider four nonexclusive factors:
(1) whether any judgment against the entity as defendant will be paid by the State or whether any recovery by the entity as plaintiff will inure to the benefit of the State;
(2) the degree of autonomy exercised by the entity, including such circumstances as who appoints the entity’s directors or officers, who funds the entity, and whether the State retains a veto over the entity’s actions;
(3) whether the entity is involved with state concerns as distinct from non-state concerns, including local concerns; and
(4) how the entity is treated under state law, such as whether the entity’s relationship with the State is sufficiently close to make the entity an arm of the State.
AL SHIMARI et al v. CACI INTERNATIONAL, et al, Fourth Circuit Nos. 10-1921, 10-1891, 09-1335, May 11, 2012. Abu Ghraib prison case. Appeals from the District Court decisions denying motions to dismiss common law tort claims and claims under the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350. Defendants argued that the suits should be dismissed for several reasons including the political question doctrine, combatant activities exception to the Federal Tort Claims Act and absolute official immunity because its employees had performed delegated governmental functions. En banc decision dismissing the interlocutory appeals for lack of jurisdiction and expressing the need for a more fully developed record for the District Court to decide the issues. In almost 80 pages of dissenting opinions several judges disagree with the majority and would dismiss the claims.
UNITED STATES OF AMERICA v. CURTIS G. WHITEFORD, Appellant, MICHAEL B. WHEELER, Appellant, Third Circuit Nos. 10-1023 & 10-1373, April 13, 2012. Appellants were officers in the United States Army Reserve who were deployed to Iraq in 2003 to work for the Coalition Provisional Authority(CPA). Both defendants were convicted of charges including conspiracy under 18 U.S.C. § 371, and bribery under 18 U.S.C. § 201(b)(2) for participating in a bid-rigging scheme. The Third Circuit rejects all of appellants’ arguments and affirms the convictions. The court rejects Wheeler’s that he was not a public official at the time. The court notes “Whiteford and Wheeler were ‘employees’ of the federal government when they were deployed to Iraq. 5 C.F.R. § 2635.102(h) (providing that officers in the uniformed services are employees of the DoD). Their acts ... were taken in their ‘place of trust’ at CPA-SC. Accordingly, Whiteford and Wheeler were ‘public officials’ in the performance of ‘official acts’ during the time in question, and 18 U.S.C. § 201(b)(2) applied to their conduct.” The court also rejects appellants argument that there was no showing that the CPA was part of the U.S. Government. The court notes “Section 371 of Title 18 has both an offenses prong and a ‘defraud’ prong. Only the latter requires that the conspirators intend to harm the federal government.” and “the indictment, jury instructions, and verdict sheets all make clear that Whiteford and Wheeler were charged with, tried for, and convicted of, violating the ‘offenses’ prong of § 371. Even the underlying crimes which Whiteford and Wheeler were found guilty of conspiring to achieve—bribery, interstate transportation of stolen property, wire fraud, and unlawful possession of weapons— do not require the United States to be the intended target of the criminal activity. Accordingly, the status of the CPA as a U.S. entity has no bearing on the sufficiency of the evidence.”
ADAM J. SHIRVINSKI, Plaintiff-Appellant, v. UNITED STATES COAST GUARD; STEPHEN HOSHOWSKY; BOOZ ALLEN HAMILTON, INC.; UNITED STATES OF AMERICA, Defendants-Appellees, and GLOBAL STRATEGIES GROUP, INCORPORATED, Defendant, Fourth Circuit No. 10-2424, March 12, 2012. Plaintiff and appellant here is a retired US Coast Guard(“USCG”) Captain and was a subcontractor to a subcontractor on USCG’s Deepwater project. Plaintiff was terminated from his position after his conduct was questioned by the USCG. Appellant brought a procedural due process claim against the USCG and tort actions against a separate contractor for allegedly causing the termination of his at-will consulting agreement and now appeals the district court’s summary judgment decision for defendants. The Fourth Circuit affirms noting that “permitting these claims to go forward would reward artful pleading and impermissibly constitutionalize state tort law, ... .” The decision discusses the due process claim against the government and the Virginia state law claims against the private parties and affirms the district court on both grounds. In discussing the due process claim the court notes “that the Supreme Court “has repeatedly admonished judges to be wary of turning the Due Process Clause into ‘a font of tort law’ by permitting plaintiffs to constitutionalize state tort claims through artful pleading. For that reason, the Supreme Court has required plaintiffs in cases involving allegedly defamatory statements by the government to show more than reputational injury in order to prevail on a constitutional claim. "[I]njury to reputation by itself [is] not a liberty’ interest protected under the [Due Process Clause]." Instead, a plaintiff must demonstrate that his reputational injury was accompanied by a state action that "distinctly altered or extinguished" his legal status if he wants to succeed. (citations omitted)”
THE UNITED STATES, Plaintiff-Appellee v. 300 UNITS OF RENTABLE HOUSING, LOCATED ON APPROXIMATELY 57.81 ACRES OF EIELSON AIR FORCE BASE, Defendant, and POLAR STAR ALASKA HOUSING CORPORATION, Defendant-Appellant, Ninth Circuit No. 09-35990, February 14, 2012. The government exercised an option to extend a 20 year lease of housing for one year. After the parties were unable to agree on the rental, the government filed a protective eminent domain action to condemn a five-month leasehold in the houses. The district court concluded that the exercise of the option was effective and therefore no taking had taken place. The district court denied Polar Star’s request to determine the amount of rent due as it was a contract claim over which it lacked jurisdiction. The Ninth Circuit affirms. The court rejects the argument that the exercise was not effective as the amount of the rent was not included in the exercise. As a matter of first impression the court notes “Because the Project Lease included a method the court could apply to determine the rent, we hold that the option was enforceable. The fact that the parties did not ultimately agree on the rent prior to the renewal date did not render the option invalid, because the option clause does not expressly require agreement on the rent prior to renewal.”
ANTHONY P. SAUER, Director of the California Department of Rehabilitation, Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF EDUCATION, REHABILITATION SERVICES ADMINISTRATION, Defendant-Appellee, DAVID ZELICKSON, Intervenor-Appellee, Ninth Circuit No. 10-55642, February 03, 2012. Randolph- Sheppard Vending Stand Act case. The district court issued a decision enforcing an arbitration decision under 20 U.S.C. § 107d-1(a) of the Randolph- Sheppard Vending Stand Act. The district court ruled the Department of Education pay damages as specified by the arbitration panel. The Ninth Circuit reverses concluding “that the Act does not impose a statutory obligation on a state licensing agency to sue a federal agency for its failure to comply with a Randolph-Sheppard arbitration award. The 2008 arbitration panel therefore committed a legal error when it interpreted the Act as requiring DOR to bring an action against GSA, and that DOR’s failure to do so made it liable for compensatory damages. Because DOR had no statutory obligation to sue GSA to enforce the 2000 Arbitration Award, the 2008 arbitration panel’s ruling that DOR became liable for the damages against GSA by failing to bring such an enforcement action was ‘not in accordance with law’ and must be set aside. See 5 U.S.C. § 706(2)” Interesting discussion of the Randolph- Sheppard Vending Stand Act’ arbitration procedures.
MABEY BRIDGE & SHORE, Inc., Appellant v. BARRY J. SCHOCH, Secretary of Transportation of the Commonwealth of Pennsylvania1, Third Circuit No. 11-1406, January 2, 2012. Title 23 USC § 313 Buy America case. Appellant appeals the district court decision that the Pennsylvania Steel Act is not unconstitutional when it requires any purchase of steel, with exception not relevant here, to be steel made in the United States. Appellant argues that the Steel Act is preempted by the Buy America provision of Title 23 or is prohibited by the dormant Commerce Clause of the U.S. Constitution. The Third Circuit denies the appeal. The court finds the provision in 23 USC § 313(d) specifically allows the State to apply more restrictive requirements. The court also rejects the Commerce Clause argument as the State here is acting as market participant rather than a market regulator.
Antilles Cement Corporation v. Fortuno, First Circuit No. 09-1314, January 17, 2012. Buy American Act case. The court begins the opinion with this statement: “These appeals present two complex questions of first impression: Does the Buy American Act (BAA), 41 U.S.C. §§ 8301-8305 (formerly codified at 41 U.S.C. §§ 10a-10d), preempt two Puerto Rico statutes? And if not, do those Puerto Rico statutes unconstitutionally interfere with Congress’s power to regulate foreign commerce?” Puerto Rico “Law 109” is a domestic preference statute for construction financed with federal or Commonwealth of Puerto Rico funds. The other local statute, “Law 132” requires a special label for foreign manufactured cement.The district court had invalidated the local laws as being preempted by the Buy American Act. The First Circuit affirms in part and reverses in part. The court holds that as a market participant Puerto Rico could have a domestic preference statute, Law 109, that was more onerous than the BAA and that the provisions of Law 109 do not implicate the Commerce Clause of the U. S. Constitution. The court also holds that “to the extent that Law 132 discriminates against sellers of foreign cement, it contravenes the Foreign Commerce Clause.” Good discussion of a state acting as a “market participant” as opposed to a “market regulator.”
UNITED STATES OF AMERICA, v. RENDA MARINE, INC.,
Defendant-Appellant, Fifth Circuit No. 10-41296, January 13, 2012. In what
may be close to the last decision in this long running Corps of Engineers
dredging contract dispute, Renda appeals the District
Court decision which found for the government in a suit to enforce a COFC
judgment. (See earlier COFC and Federal Circuit decisions.) The Fifth Circuit
affirms. It rejects the argument that the six year statute of limitations
barred the government’s claim finding that the period runs from the time
of the issue of the CO’s decision, noting “The Government cannot
seek to enforce a CO’s decision until that decision has been rendered,
nor do the federal courts have jurisdiction until that time. Thus, this suit
clearly falls within the statute of limitations.”
The court also rejected that the argument “that the district court lacked subject matter jurisdiction over Count II because the Government never made an affirmative claim to the CO for repayment of the $3,083,833, nor did the Government make a counterclaim for that amount in the CFC.” noting that “It would be wholly inefficient to require the Government to submit a separate claim to a CO for repayment of a sum to which the CFC and Federal Circuit have already ruled the Government is entitled, especially since the CO would be bound by those decisions.”
UNITED STATES DEPARTMENT OF THE NAVY, NAVAL UNDERSEA WARFARE CENTER DIVISION NEWPORT, RHODE ISLAND, PETITIONER v. FEDERAL LABOR RELATIONS AUTHORITY, RESPONDENT On Petition for Review of an Order of the Federal Labor Relations Authority, DC Circuit No. 10-1304, January 13, 2012. Appropriations law case. A list member pointed out this case stating “This is a labor law case where the Navy appealed a Federal Labor Relations Authority finding that the Government must continue to provide employees bottled water after the water was determined safe to drink. The Navy provided the bottled water after an EPA report indicated that water fountains in the buildings contained components manufactured with lead. The Navy replaced those fountains and had the water tested. When the Navy stopped providing bottled water, the union complained that the bottled water was a condition of employment.” Judge Kavanaugh starts the opinion as follows: “This case turns on whether a government agency may provide employees with free bottled water even when safe and drinkable water is available from water fountains at their work sites. Under federal appropriations law, the answer is no.” Good appropriations law case.
UNITED STATES OF AMERICA, EX REL. SHELDON BATISTE, APPELLANT v. SLM CORPORATION, APPELLEE, DC Circuit No. 10-7140, November 04, 2011. Qui tam case. The DC Circuit affirms the dismissal of relator’s case as barred by the first-to-file rule. As a matter of first impression the court also holds that “the earlier-filed complaint need not meet the heightened pleading standards of Rule 9(b) to allege facts sufficient to prompt a government investigation, and, thus, to bar later-filed complaints under FCA.”
Albert D. CAMPBELL, Petitioner-Appellant, v. COMMISSIONER
OF INTERNAL REVENUE, Respondent-Appellee, Eleventh Circuit No. 10-13677,
Sept. 28, 2011. The court affirms the decision of the United States Tax Court
that qui tam payments received by taxpayer as relator are includable in gross
income. Although noting that the issue is one of first impression for the
Circuit it agrees with other courts that have addressed the issue finding that
qui tam payments should be includable in gross income.
See Tax Court case.
Comments from a list member-Interestingly, it appears that the tax court considered the entire $8.75M take as income, but viewed the $3.5M paid in attorneys fees as a deduction and did not consider that exclusion on his tax form to be bad faith and subject to the accuracy penalty.
In all, it appears that on his remaining $5.25M, he owes $3,044,000 in taxes, accuracy penalty of $608,800, and a delinquency penalty of $151,955.50.
This means that of his $8.75M, he paid $3.5M to his attorneys and $3,804,755.50 to the IRS.
His final after tax take on the litigation is $1,445,244.50.
SUHAIL NAJIM ABDULLAH AL u SHIMARI; TAHA YASEEN ARRAQ RASHID; SAAD HAMZA HANTOOSH AL-ZUBAE; SALAH HASAN NUSAIF JASIM AL-EJAILI, Plaintiffs-Appellees, v. CACI INTERNATIONAL, INCORPORATED; CACI PREMIER TECHNOLOGY, INCORPORATED, Defendants-Appellants. KELLOGG BROWN & ROOT SERVICES, INCORPORATED, Amicus Supporting Appellants, Fourth Circuit No. 09-1335, September 21, 2011. Plaintiffs, Iraqi citizens, bring this tort action against a government contractor alleging that they were tortured while being detained in the Abu Ghraib prison near Baghdad. On an interlocutory appeal from the district court which refused the contractor’s motion to dismiss the action. The Fourth Circuit reverses and concludes “based on the uniquely federal interests involved in this case, that the plaintiffs’ tort claims are preempted and displaced under the reasoning articulated in Boyle v. United Technologies Corp., 487 U.S. 500 (1988)., as applied to circumstances virtually identical to those before us in Saleh v. Titan Corp., 580 F.3d 1 (D.C. Cir. 2009), cert. denied, __ U.S. __, No. 09- 1313, 2011 WL 2518834 (June 27, 2011). The court remands with instructions to dismiss. Judge Niemeyer dissents arguing that accepting an interlocutory appeal was inappropriate and that the majority applies Boyle too broadly. See a companion case, WISSAM ABDULLATEFF SAEED AL-QURAISHI, Plaintiff-Appellee, v. ADEL NAKHLA, Defendant-Appellant, and L-3 SERVICES, INCORPORATED; CACI INTERNATIONAL, INCORPORATED; CACI PREMIER TECHNOLOGY, INCORPORATED, Defendants, Fourth Circuit No. 10-1921, September 21, 2011.
UNITED STATES OF AMERICA EX REL. SUSAN HUTCHESON AND PHILIP BROWN, Plaintiffs, Appellants, v. BLACKSTONE MEDICAL, INC., Defendant, Appellee, 1st Cir. No. 10-1505, June 01, 2011. FCA case. Relator alleged “that Blackstone engaged in a nationwide kickback scheme to induce physicians to use its medical devices in spinal surgeries and that Blackstone knew this scheme would cause physicians and hospitals (unwittingly) to present federal healthcare programs with payment claims that contained material misrepresentations.” The District court dismissed the action holding that relator’s allegations did not state a claim under the FCA and that the hospital claims were not false or fraudulent, and that while the doctor claims were false or fraudulent, those claims were not materially false or fraudulent. The First Circuit reverses and remands noting “After reviewing the facts and the district court’s analysis, we reject two purported limitations on FCA liability Blackstone advances, one of which was adopted by the district court and the other of which appears to draw support from the district court’s opinion. First, we reject the argument that, in the absence of an express legal representation or factual misstatement, a claim can only be false or fraudulent if it fails to comply with a precondition of payment expressly stated in a statute or regulation. Second, we reject the argument that a submitting entity’s representations about its own legal compliance cannot incorporate an implied representation concerning the behavior of non-submitting entities. These purported limitations do not appear in the text of the FCA and are inconsistent with our case law. Having rejected these two purported limitations, we hold that Hutcheson’s complaint, in alleging that the hospital and physician claims represented compliance with a material condition of payment that was not in fact met, states a claim under the FCA that the hospital and physician claims for payment at issue in this case were materially false or fraudulent. It follows that Hutcheson has stated a claim that Blackstone knowingly caused the submission of materially false or fraudulent claims in violation of the FCA. In reaching this conclusion, we do not adopt the judicially created conceptual framework employed by the district court, nor do we adopt any categorical rules as to what counts as a materially false or fraudulent claim under the FCA.”
NICHOLAS P. TIDES and MATTHEW CRAIG NEUMANN, Plaintiffs-Appellants, v. THE BOEING COMPANY, Defendant-Appellee, 9th Cir. No. 10-35238, May 03, 2011. Sarbanes-Oxley whistleblower case. The 9th circuit affirms the district court and holds “that by its express terms, the whistleblower provision of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A(a)(1), protects employees of publicly-traded companies who disclose certain types of information only to the three categories of recipients specifically enumerated in the Actfederal regulatory and law enforcement agencies, Congress, and employee supervisors. Leaks to the media are not protected.”
MARY ANGELA CAFASSO, United States ex rel., Plaintiff-counter-defendant- Appellant, v. GENERAL DYNAMICS C4 SYSTEMS, INC., Defendant-counter-claimant- Appellee, 9th Cir. Nos. 16181, 16607, March 24, 2011. False Claims Act case. “Cafasso alleges that her former employer General Dynamics C4 Systems (GDC4S), a technology company that services the military, defrauded the government by withholding disclosure of new inventions which, GDC4S had agreed by contract, the government had rights to use and license.” The 9th Circuit affirms the dismissal of the complaint. While first holding “that claims of fraud or mistake—including FCA claims—must, in addition to pleading with particularity, also plead plausible allegations.” The court notes “Cafasso’s complaint alleges no false claim. While her pleading alleges that GDC4S’s non-disclosure of new inventions deprived the United States of lower-cost services by third-party entities, it does not allege that GDC4S falsely asserted an entitlement to obtain or retain government money or property. It does not allege that GDC4S made a demand for payment, fraudulently used a receipt, participated in an unauthorized purchase of government property, or used a false record or statement.”
UNITED STATES OF AMERICA, APPELLEE v. COURTNEY A. STADD, APPELLANT, DC Circuit No. 09-3121, March 04, 2011. The court affirms the conviction of a former NASA Interim Associate Administrator on one count of committing an act affecting a personal financial interest in violation of 18 U.S.C. Sections 208(a) and 216(a)(2) and two counts of making false statements in violation of 18 U.S.C. Sect. 1001(a)(2). Stadd was the sole proprietor of a consulting firm which had as a client an element of the University of Mississippi. The matter related to an earmark of $15 million dollars for Mississippi.
ANSELMA CROSSING, L.P., Appellant v. UNITED STATES POSTAL SERVICE, 3rd Cir. No. 10-2307, February 25, 2011. The Third Circuit affirms that the CDA, 41 U.S.C. Sections 7101-7109, “bars breach of contract and ‘essentially contractual’ claims against the United States Postal Service (“USPS”) in the district courts of the United States.” The court rejects the argument that the “sue and be sued” provisions of the Postal Reorganization Act, 39 USC 401 allow such actions to be brought in district courts.
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. JOHN REECE ROTH, Defendant-Appellant, 6th Cir. No. 09-5805, January 05, 2011. Arms Export Control Act case. Roth appeals his conviction of one count of conspiracy, fifteen counts of exporting defense articles and services without a license, and one count of wire fraud. The Circuit court affirms the conviction. Roth argues “(1) the Phase II data and the data included in the Agency Proposal are not defense articles or services as a matter of law; (2) the district court incorrectly instructed the jury as to willfulness and improperly failed to deliver his proposed instruction regarding ignorance of the law; and (3) there was insufficient evidence to support the jury’s conclusion that he willfully exported the Agency Proposal.” The court rejects the arguments holding, in part, “... we hold that section 2778(c)[22 USC 2778(c)] does not require a defendant to know that the items being exported are on the Munitions List. Rather, it only requires knowledge that the underlying action is unlawful.”
STEPHANIE RODRIGUEZ V. GENERAL DYNAMICS ARMAMENT & TECHNICAL PRODUCTS, INC., 9th Cir. No. 10-15813, November 30, 2010. Tort suit, government contractor defense. General Dynamics(GD) appeals the denial of its motion for summary judgment on the government contractor defense. GD argues that the “government contractor defense confers an immunity from suit and that the denial of summary judgment may be reviewed immediately under the collateral order doctrine.” The Ninth Circuit court dismisses the appeal for lack of jurisdiction concluding “We dismiss this appeal for lack of jurisdiction. Consistent with our prior decisions, we hold that the government contractor defense does not confer absolute or qualified immunity. Accordingly, the denial of a motion for summary judgment based on the government contractor defense is not usually appealable under the collateral order doctrine. Certainly, the district court’s order in issue here, grounded on genuine issues of material fact, is not immediately appealable. General Dynamics has also failed to make the type of extraordinary showing required for us to treat its appeal as a petition for an extraordinary writ of mandamus.” Good discussion of immunity and government contractor defense issues.
UNITED STATES OF AMERICA, APPELLEE v. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, APPELLANT, DC Cir No. 09-5385, December 03, 2010. False Claims Act case. NRC contract. SAIC “principally argues that no liability may attach for its claims for payment because its contract nowhere designated compliance with these conflict of interest requirements as express conditions of payment.” The court vacates the judgment and remands for new trial “because the district court’s ‘collective knowledge’ instruction conflicted with the FCA’s scienter standard, the proper application of which is critical to ensuring that FCA liability attaches only for false or fraudulent claims and not for accidental or even negligent breaches of contract.” Regarding the argument by SAIC, the court does note that “requests for payment can be ‘false or fraudulent’ under the FCA when submitted by a contractor that has violated contractual requirements material to the government’s decision to pay regardless of whether the contract expressly designates those requirements as conditions of payment.”
UNITED STATES OF AMERICA, Plaintiff-Appellant/Cross-Appellee, v. UNITED TECHNOLOGIES CORPORATION, Defendant-Appellee/Cross-Appellant, Sixth Cir. Nos. 08-4256/4257, November 18, 2010. False Claims Act case, Air Force jet engine contract. (See earlier Federal Circuit decision affirming the ASBCA TINA decision.) Judge Sutton starts the opinion with the following - “Fighter jet engines propel planes faster than the speed of sound, a sight that may be as exhilarating to watch as it must be to experience. Not so the procurement process for awarding contracts to make jet engines.” “The district court (1) ruled for the government on liability under the False Claims Act but held that it had suffered no damages and (2) ruled that the government’s administrative proceedings precluded it from raising its common law claims.” The circuit court affirms the liability determination but reverses the district court’s damages determination and its claim-preclusion ruling. The opinion notes that the FCA does not require reliance, as opposed to TINA, but only materiality. Good discussion of the common law claims of the government which could not have been properly raised at the ASBCA under the board’s CDA jurisdiction.
IN RE: KATRINA CANAL BREACHES LITIGATION. STEERING COMMITTEE, Plaintiff-Appellant, v. WASHINGTON GROUP INTERNATIONAL, INC., 5th Circuit No. 09-30449, September 14, 2010. Tort claims against a Corps of Engineers contractor for flood damages resulting from Hurricane Katrina. The district court granted summary judgment for defendant(WGI) based on government contractor immunity (“GCI”). The 5th circuit reverses holding that “Because the specifications for the work at issue were not reasonably precise, WGI has no GCI, so we reverse the summary judgment and remand.” The court finds that defendant fails the first prong of the Boyle defense-“Liability for design defects in military equipment cannot be imposed, pursuant to state law, when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States.”Boyle v. United Technologies Corp., 487 U.S. 500 (1988).
MENOMINEE INDIAN TRIBE OF WISCONSIN, APPELLANT v. UNITED STATES OF AMERICA, ET AL., APPELLEES, DC Circuit No. 09-5005, July 30, 2010. Contract with the Indian Health Service for administering health services to tribal members. Appellant submitted claims to the CO in 2005 for costs it claimed were due for 1995 to 2004 contract years. The district court dismissed the claims for 1995-1998 holding that the CDA six year statute of limitation provision at 41 USC 605(a) was jurisdictional for contracts entered into after October 1, 1995 and that the 1995 contract claim was barred by laches. Appellant argues that the limitations period should be tolled. The DC Circuit reverses holding that 605(a) is not jurisdictional and remands to the district court for consideration of whether equitable tolling is appropriate and that the district court should reconsider if the delay in filing the 1995 claim prejudiced the government.
H.B. Rowe Co. Inc. v. Tippett, 4th Circuit No. 09-1050, July 22, 2010. Appellant challenges under the Equal Protection clause the North Carolina statute and practice to promote minority and women representation in state construction projects. The District Court had ruled for the state on all points. The Fourth Circuit affirms under strict scrutiny standards the provisions for African American and Native American subcontractors. However, finding that the State has failed to justify its application of the statutory scheme to women, Asian American, and Hispanic American subcontractors, the court reverses the District Court “insofar as it upholds the constitutionality of section 136- 28.4 as applied to women, Asian American, and Hispanic American subcontractors. ”
ABDULWAHAB NATTAH v. BUSH, DC Cir No. 08-5119, May 28, 2010. The DC Circuit reverses, in part, and remands the suit against various government officials and L-3 Services, Inc. Nattah alleges breach of an employment contract by L-3 and the subsequent sale of him into slavery to the US Army and injury in Iraq. The District Court dismissed the action. The Circuit Court remands for further action the non-monetary claims against the Secretary of the Army noting that “Sovereign immunity therefore does not protect the Secretary from Nattah’s non-monetary claims.” The court also concludes that “Nattah’s complaint states a claim against L-3 for breach of its oral contract with Nattah.”
UNITED STATES OF AMERICA ex rel. DANIEL KIRK, Plaintiff-Appellant, v. SCHINDLER ELEVATOR CORPORATION, Defendant-Appellee, 2nd Cir. No. 09-1678-cv, April 06, 2010. Qui tam case. The District Court dismissed the case in part because it held that the documents submitted by the defendant and obtained by FOIA requests to the government were barred by the public disclosure bar of the False Claims Act. The Second Circuit reverses holding that “that whether documents produced in response to a FOIA request are enumerated sources under 31 U.S.C.§ 3730(e)(4)(A) is to be determined by assessing the nature of the documents themselves; they are not ‘administrative . . . report[s] . . . or investigation[s]’ simply by virtue of having been gathered by an agency responding to a FOIA request. We further hold that Kirk stated valid claims under the FCA when he asserted (1) that Schindler had failed to file VETS-100 reports in certain years, and (2) that Schindler had filed false VETS-100 reports in certain years because it had filed reports that purported to detail the number of covered veterans in its workforce while in fact the company no measures to identify such veterans.”
US ex rel. Radcliffe v. Purdue Pharma L.P., 4th Cir. No. 09-1202, March 24, 2010. False Claims Act case. The court affirms the dismissal of the FCA suit, but on different grounds. The court holds that a qui tam action is barred where the government had knowledge of the alleged fraud prior to the relator’s pre-filing broad release of any actions against the firm. Good discussion of the policy and case law behind enforcing a qui tam relator’s release.
UNITED TECHNOLOGIES CORPORATION, PRATT & WHITNEY DIVISION, APPELLANT v. UNITED STATES DEPARTMENT OF DEFENSE AND DEFENSE CONTRACT MANAGEMENT AGENCY, APPELLEES, DC Cir. No. 08-5435, March 23, 2010. Reverse FOIA case. Firms appeal the District Court decision upholding the release of certain DCMA documents evaluating their respective quality control processes. Finding that DCMA failed to provide a reasoned basis for its conclusion that the release would not cause competitive harm, the DC Circuit reverses and remands to the District Court to require DCMA to articulate a satisfactory explanation, if it can, why the release of the information will not cause substantial competitive harm.
THOMAS L. CREEL v. THE UNITED STATES and LLOYD F. MERCER, M.D, 5th Cir. No. 07-60703, March 01, 2010. Tort suit for a knee replacement that went wrong against the VA and Mercer, a doctor who was providing contract services to the VA. The district court dismissed the action against Mercer finding that he was a government employee. The 5th circuit reverses. After noting the “The critical factor in determining whether an individual is an employee of the government or an independent contractor is the power of the federal government to control the detailed physical performance of the individual.” Linkous v. United States, 142 F.3d 271, 275 (5th Cir. 1998). The court then considered a number of other factors that the Restatement (Second) of Agency § 220 identifies as relevant. Concluding the court found “After considering all of the Restatement factors, we conclude that Mercer was an independent contractor. The ‘power of the federal government to control the detailed physical performance’ of Mercer’s services was insufficient to establish an employer-employee relationship. Therefore, the district court erred in ruling that Mercer was an employee of the United States. This being the case, the district court improperly granted Mercer’s motion to dismiss and denied the Government’s motion to dismiss.”
Dominic F. Baragona v. Kuwait Gulf Link Transport, 11th Cir. No. 09-12770, January 21, 2010. Plaintiffs’ son was killed in Iraq in a traffic collision with a truck operated by defendant(KGL), a Kuwait corporation. The court affirms the Georgia District Court decision which had vacated a default judgment against defendant after finding “that KGL lacked minimum contacts with Georgia sufficient to support the exercise of personal jurisdiction under Georgia’s long-arm statute ... ” The circuit court rejects the argument by plaintiff that the inclusion of the liability insurance provision clause of FAR 52-228-8 of the Federal Acquisition Regulation in a contract with the US government waives the defense of lack of personal jurisdiction.
COUNTY OF SANTA CLARA, Plaintiff-Appellant, v. ASTRA USA, INC.; ASTRAZENECA PHARMACEUTICALS LP, et al. 9th Cir. No. 06-16471, December 09, 2009. Plaintiffs are clinics appealing the dismissal of their suit, for failure to state a claim, in a breach of contract action of a contract between HHS and pharmaceutical companies. The dismissal is reversed. The court finds that plaintiffs are intended direct beneficiaries of those contracts. Good discussion of federal common law and statutory issues for third party beneficiaries.
IN RE: KATRINA CANAL BREACHES LITIGATION, Fifth Circuit No. 07-30272, November 25, 2009. “Appellants sued the United States and thirty-two defendants who dredged the Mississippi River Gulf Outlet to recover damages sustained during Hurricane Katrina. The district court dismissed the claims against the dredgers because it determined that the defendants acted pursuant to contracts with the United States government under authority granted by an act of Congress.” The Fifth Circuit affirms agreeing with the District Court that defendants had government-contractor immunity under Yearsley v. W.A. Ross Construction Co.(309 U.S. 18 (1940). and Boyle v. United Technologies Corp., 487 U.S. 500 (1988).
UNITED STATES OF AMERICA EX REL. GORDON F.B. ONDIS, Relator, Appellant, v. CITY OF WOONSOCKET ET AL., Defendants, Appellees, First Circuit No. 08-2389, November 18, 2009. FCA case. The court states the issue here as “Whether a response to a FOIA request constitutes a public disclosure within the purview of the FCA is a question of first impression in this circuit.” The court affirms the dismissal by the District Court on the public disclosure bar. Good discussion of the case law in the various circuits on public disclosure.
UNITED STATES OF AMERICA v. DYLAN C. STARNES, Appellant No. 08-1691 UNITED STATES OF AMERICA v. CLEVE-ALLAN GEORGE, Appellant, Third Circuit Nos. 08-1691 and 07-3341, September 24, 2009. Appellants were convicted and sentenced for violations of the Clean Air Act and making false statements in conjunction with asbestos removal for a contract for demolition in the US Virgin Islands. The Third Circuit affirms the convictions and sentences. Good discussion of the “Knowingly and Willfully” requirements of 18 USC 1001.
HAIDAR MUHSIN SALEH, ET AL., APPELLANTS v. TITAN CORPORATION, APPELLEE CACI INTERNATIONAL INC. AND CACI PREMIER TECHNOLOGY, INC., INTERVENORS, DC Circuit No. 08-7008, September 11, 2009. From the decision below “Named [appellants] in both of these cases are Iraqi nationals who allege that they or their late husbands were tortured or otherwise mistreated while detained by the U.S. military at Abu Ghraib and other prisons in Iraq. Defendants are government contractors who provided interpreters (Titan)1 or interrogators (CACI)2 to the U.S. military in Iraq.” The circuit court affirms the dismissal against Titan, but reverses the decision of the lower court allowing the case against CACI to proceed relying on Boyle v. United Technologies Corp., 487 U.S. 500 (1988). The court holds that “During wartime, where a private service contractor is integrated into combatant activities over which the military retains command authority, a tort claim arising out of the contractor’s engagement in such activities shall be preempted.” Good discussion of the preemption doctrine. Judge Garland dissents in a 38 page opinion.
RHONDA SALMERON, Plaintiff-Appellant, v. ENTERPRISE RECOVERY SYSTEMS, INC., et al., 7th Circuit No. 08-3375, August 17, 2009. FCA case. Court affirms the district court’s dismissal with prejudice of the case for attorney misconduct.
UNITED STATES OF AMERICA, Plaintiff-Appellee, versus DEWITT JACKSON MAXWELL, a.k.a. JACK, Defendant-Appellant, 11th Circuit No. 07-11301, August 19, 2009. The 11th circuit affirms the conviction and sentence of appellant who as a result “of his participation in a fraudulent scheme to obtain construction contracts set aside for socially and economically disadvantaged companies at Miami International Airport ... was convicted by a jury in the United States District Court for the Southern District of Florida of mail fraud, wire fraud, conspiracy to commit mail and wire fraud, money laundering, and conspiracy to commit money laundering in violation of 18 U.S.C. §§ 2, 1341, 1343, 1349, 1956, and 1957. He was subsequently sentenced to a term of imprisonment of sixty months followed by twenty-four months of supervised release.” The court rejects all of appellants arguments, namely: (1) his right to cross-examination was wrongfully limited by the district court in violation of the Sixth Amendment; (2) the convictions were not supported by sufficient evidence; and (3) the rejection of his proffered jury instructions on a “good faith” defense amounted to clear error.”
UNITED STATES OF AMERICA, Plaintiff-Appellant, versus CERTAIN REAL PROPERTY, Located at 317 Nick Fitchard Road, N.W., Huntsville, AL, together with all improvements, fixtures, and appurtenances thereon, et. al., 11th Circuit No. 08-14334, August 19, 2009. The government appeals from a decision awarding attorney fees under the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”) The government had filed a civil forfeiture action based on circumstances arising from a contract with Axion to supply parts for the Black Hawk helicopter. After moving for a stay in the forfeiture action the government issued criminal indictments alleging various false statements and export law violations. After acquittal on all criminal charges the forfeiture action was ultimately dismissed with prejudice. The district court awarded attorney fees incurred in the criminal case finding that pursuant to CAFRA, the claimants are entitled to recover both fees incurred in defending the civil forfeiture action and fees incurred in defending the criminal case. The district court noted that the criminal case was a related proceeding because the work was “‘useful and of a type ordinarily necessary to secure the final result obtained from the litigation.’” The 11th Circuit vacates the lower court’s decision, with one judge dissenting, noting “While our reading of CAFRA § 4(a), 28 U.S.C. § 2465(b)(1) alone is sufficient to warrant a reversal of the district court’s award of attorney fees for work done in defense of a criminal prosecution, we add that the Hyde Amendment also supports our conclusion.”
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. PELETI PELETI, JR., Defendant-Appellant, 7th Circuit No. 08-1507, August 04, 2009. Peleti, an Army warrant officer in Iraq, pled guilty to a bribery charge of accepting $50,000 for influence in obtaining contracts. The Circuit Court upholds the decision of the District court in refusing to allow Peleti to withdraw his guilty plea.
United States of America, ex rel; ALFRED J LONGHI, JR Plaintiff--Appellee v. UNITED STATES OF AMERICA Intervenor--Appellee v. LITHIUM POWER TECHNOLOGIES INC; MOHAMMED ZAFAR A MUNSHI Defendants--Appellants United States Court of Appeals, Fifth Circuit. No. 08-20306, July 09, 2009. FCA case, DOD SBIR program. The Fifth Circuit affirms the District Court decision finding for the government in the forfeiture and statutory damages arising from false statements in appellant’s proposals. The court adopts the Fourth Circuit tests: “(1) whether ‘there was a false statement or fraudulent course of conduct; (2) made or carried out with the requisite scienter; (3) that was material; and (4) that caused the government to pay out money or to forfeit moneys due (i.e., that involved a claim).’” United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir.2008) (quoting Harrison, 176 F.3d at 788). ” The court also affirms the award of attorney fees to the relator. Note that the court appears to soften the blow, but not the damages, with this comment: “Based on the foregoing analysis, we conclude that the Defendants violated the FCA. The irony of this situation is not lost on the court. Lithium Power blatantly deceived the BMDO and the Air Force and received funds that it was not entitled to. But it appears that the company then went on to successfully design and manufacture lithium-based batteries that the BMDO and the Air Force found to be satisfactory. The Defendants ability to deliver on the hoped for "‘ends,’ however, does not justify the means it employed to receive the SBIR grants. We affirm the judgment of liability.”
ANNETTE CARMICHAEL, Individually and as Guardian for Keith Carmichael, KEITH CARMICHAEL, an incapacitated adult, Plaintiffs-Appellants, versus KELLOGG, BROWN & ROOT SERVICE, INC., HALLIBURTON ENERGY SERVICES INC., et al., Defendants-Appellees, 11th Circuit No. 08-14487, June 30, 2009. Plaintiff Keith Carmichael, an Army sergeant, was seriously injured when the gasoline tanker in which he was riding as a “shooter” overturned while part of a military convoy in Iraq. The 11th Circuit affirms the dismissal of the negligence action against KBR, the employer of the driver, for lack of jurisdiction on political question grounds. Good discussion of political question issues associated with military operations.
UNITED STATES OF AMERICA on the relation of CURTIS J. LUSBY, Plaintiff-Appellant, v. ROLLS-ROYCE CORPORATION, 7th Circuit No. 08-3593, June 30, 2009. Qui tam case. The 7th Circuit reverses the district court which had dismissed the qui tam action on a claim preclusion theory based on earlier whistleblower litigation. The court states “we join the fifth circuit in concluding that the resolution of personal employment litigation does not preclude a qui tam action, in which the relator acts as a representative of the public. The special status of the United States counsels against reflexive transfer of rules of preclusion from private to public litigation.”
Julie W. Brinson v. Raytheon Company, 11th Circuit No. 08-12308, June 24, 2009. Plaintiff is the surviving spouse of an Air Force officer who died when the aircraft manufactured by Ratheon crashed. The circuit court affirms the judgment for Raytheon on the government contractor defense based on Boyle v. United Technologies Corp., 487 U.S. 500 (1988). The court addresses the first two prongs of the Boyle defense; 1. Approval of reasonably precise specifications, and 2. Conformity to Reasonably Precise Specifications. Good discussion of these issues. The court also decides as a matter of first impression for the Circuit that Raytheon may rely on “post-design, post-production evidence as additional evidence to satisfy the first prong of the Boyle test.”
THE UNITED STATES DEPARTMENT OF TRANSPORTATION, ex rel. AUGUST W. ARNOLDhttp://www.ca11.uscourts.gov/opinions/ops/200812308.pdf, an individual v. CMC ENGINEERING; ERDMAN ANTHONY ASSOCIATES, INC.; L. ROBERT KIMBALL & ASSOCIATES; M.A. BEECH; MACKIN ENGINEERING; MCTISH, KUNKEL & ASSOCIATES; MICHAEL BAKER, JR., INC; SAI CONSULTING ENGINEERS, INC; VE ENGINEERING, INC., 3rd Cir. No 07-1617, May 05, 2009. FCA qui tam case. Alleged false claims submitted by contractors to the Pennsylvania Department of Transportation(PennDOT). 80% of the funding for PennDOT was provided by the Federal Highway Administration. The court vacates the dismissal by the District Court and remands for consideration under Allison Engine. The court concludes “Allison Engine does not conclusively determine the outcome of Arnold’s case, but it is instructive. Examining Arnold’s claims under the rubric of Allison Engine, it is clear that the mechanism of the funding scheme by which PennDOT pays its contractors is determinative of whether the District Court’s dismissal of the claims was appropriate. If the Federal Highway Administration was involved in the disbursement of funds from PennDOT to the consultants upon submission of the fraudulent claims in any way, Arnold’s claims may be actionable under the FCA and it is possible the consultants’ motion to dismiss should have been denied. In light of Allison Engine, the District Court should reconsider its view that a relator can never successfully allege violations of the FCA as they pertain to state transportation agencies.”
UNITED STATES OF AMERICA ex rel. DRC, INCORPORATED, ex rel. ROBERT J. ISAKSON; WILLIAM D. BALDWIN, Plaintiffs-Appellants, v. CUSTER BATTLES, LLC et al., 4th Cir. No. 07-1220, April 10, 2009. FCA case with the Iraq Coalition Provisional Authority. Court reverses the District Court decision which had vacated the jury verdict on the Dinar Exchange cost-plus contract and orders that the District Court shall give the relators an option for a new trial. The court affirms the decision granting summary judgment for Custer on the fixed price airport contract. Regarding the cost contract the court concludes “(1) that the district court erred in limiting the relators’ claim for damages on the Dinar Exchange Contract to a claim for $3 million; (2) that the court erred in ruling as a matter of law that the relators did not present evidence sufficient to demonstrate that Custer Battles presented false claims on the Dinar Exchange Contract to officers or employees of the United States; (3) that the court erred in implying a requirement of presentment in 31 U.S.C. §. 3729(a)(2)”
United States ex rel. JAMES H. GRUBBS, M.D, Plaintiff-Appellant v. RAVIKUMAR KANNEGANTI, M.D.; GEORGE E. GROVES, M.D., KASHI S. BAGRI, M.D.; SHARAD B. KULKARNI, M.D.; SRIYA DE SILVA, M.D.; BAPTIST HOSPITALS OF SOUTHEAST TEXAS, doing business as Memorial Hermann Baptist Beaumont Hospital; JOHN DOE ONE; JOHN DOE TWO; JOHN DOE THREE; JOHN DOE FOUR; JOHN DOE FIVE; SUDHEER KAZA, M.D.; and RAJEN DESAI, M.D., 5th Cir. No. 07-40963, April 08, 2009. FCA case. Court reverses, except as to the hospital, the dismissal by the district court for failure to meet the pleading requirements of Rule 9(b). Good discussion of the pleading requirements for the “presentment provision in § 3729(a)(1), the false record or statement provision in § 3729(a)(2), and the conspiracy provision in § 3729(a)(3).”
In re: NATURAL GAS ROYALTIES QUI TAM LITIGATION (CO2 Appeals).,JACK J. GRYNBERG, ex rel. United States, Plaintiff - Appellant, v. EXXON COMPANY, et al, 10th Cir. No. 08-8004, March 17, 2009. FCA case. Relator appeals the dismissal of its suit under the first-to-file rule of 31 U.S.C. § 3730(b)(5) because a 1996 suit had alleged the same essential facts. The 10th circuit reverses noting “While the allegations in the [1996 suit] complaint might have been sufficient to put the government on notice of the fraud that Mr. Grynberg alleges against Exxon, Amerada Hess, ARCO, Oxy-USA, and Cross Timbers, that complaint did not name any of these parties as defendants. This is so even though the Coalition complaint specifically identified Exxon, Amerada Hess, and Arco, for without naming them as defendants, the two actions cannot be said to state the same essential claim. Mr. Grynberg’s current claims might have trouble surmounting § 3730(e)(4)’s public disclosure bar, but they are not barred by § 3730(b)(5)’s first to- file bar.” Good discussion of § 3730(b)(5).
UNITED STATES ex rel. RUTH RITCHIE, Plaintiff/Relator - Appellant, v. LOCKHEED MARTIN CORP. and LOCKHEED MARTIN SPACE SYSTEMS CO., Defendants - Appellees, 10th Cir. Nos. 07-1295 & 08-1112, March 06, 2009. FCA case. Relator, Ritchie, appeals the District Court decision granting summary judgment to Lockheed because of releases signed by Ritchie prior to the filing of the qui tam suit. “Ritchie argues the releases are unenforceable because they were signed without the government’s consent and because their enforcement would be contrary to the federal policies underlying the False Claims Act. Before Ritchie signed the releases, Lockheed disclosed the fraud allegations to the federal government, which conducted its own audit and investigation of the charges billed under the federal contract. Because the federal interests served by enforcing releases signed after disclosure to the federal government outweigh the interests served by not enforcing them, this court concludes the releases are enforceable.”
United States of America v. Russell Hoffmann, appellant, Eighth Circuit No. 06-4007, February 25, 2009. Corps of Engineers contract. Appellant appeals his bribery conviction under 18 USC 201(c)(1)(A) for providing golf clubs to a Corps employee in anticipation of a favorable performance evaluation. Although the Corps employee never issued the requested evaluation the court affirms the conviction noting that “a reasonable juror could conclude that the emails—together with the other evidence and testimony—were sufficient to find the accused guilty beyond a reasonable doubt.” One judge dissents.
United States of America for the use of Lighting and Power Services, Inc., etc v. Interface Construction Corp., 8th Cir No. 07-3678, January 29, 2009. Miller Act case. Interface appeals the decision to deny the motion by Interface to compel arbitration. Interface was the prime, Henderson, the subcontractor and Lighting and Power Services, Inc.(LPS) a sub of Henderson to perform electrical work. LPS was not paid and brought the action against Interface, Henderson and the surety under the Miller Act to recover unpaid amounts for material and labor. Although the contract between Interface and Henderson did contain an arbitration clause there was no mention of arbitration in the surety’s bond or in the contract between Henderson and LPS. The 8th Circuit affirms holding that “a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” (citations omitted)
UNITED STATES OF AMERICA, Plaintiff - Appellee, v. DOLORES MAE ARREOLA, Defendant - Appellant, 10th Cir. No. 07-2168, December 08, 2008. The 10th Circuit affirms the finding of the district court that a CO employed by Los Alamos National Laboratory (“LANL”) occupied a position of trust and it was therefore proper to increase her sentence for criminal activities.
UNITED STATES OF AMERICA, Plaintiff-Appellee v. MORTEZA EGHBAL; MARILYN SYLVIA TRUJILLO, 9th Cir No. 07-55372, December 05, 2008. FCA case. Defendants appeal the district court decision finding that they violated the FCA. Defendants purchased HUD-foreclosed homes and resold them for profit to buyers with mortgage secured loans insured by HUD. For buyers who lacked sufficient assets to cover the down payment on the properties, defendants provided the down payment for the buyers by depositing their own personal funds into escrow via cashiers’ checks and signed statements they had not provided the down payments and subesequently pled gulity to making false statements. When some of the buyers defaulted HUD paid out about $2.8 million, representing the balances owing on the 27 defaulted mortgages. The district court FCA case resulted in a judgment of $5,702,664 plus the civil penalty of $148,000. D4fendants “contend that the Government failed to show that their false statements set into motion a false claim, because they sought only to fraudulently induce HUD to insure the mortgage, not to have the buyers default or cause the mortgage holders to make claims on HUD.” The 9th Circuit disgrees and affirms the district court decision noting “that liability under the FCA nevertheless attaches, because the false statements were ‘relevant to the government’s decision to confer a benefit.’” The court further noted that it agreed “with the district court that the false statements at issue here bore directly upon the likelihood that the buyers would be unable to make their mortgage payments, and thus the misrepresentations had a causal connection to the subsequent defaults sufficient to support FCA liability.”
UNITED STATES OF AMERICA, ex rel. BOBBY MAXWELL, Plaintiffs-Appellants, v. KERR-McGEE OIL & GAS CORPORATION, 10th Cir. No. 07-1193, September 10, 2008. FCA case. The 10th Circuit reverses and holds “that the transfer of information between a federal employee and a state government auditor who is under a duty of confidentiality is not a public disclosure and therefore does not deprive the courts of jurisdiction.”
FREE ENTERPRISE FUND AND BECKSTEAD AND WATTS, LLP, APPELLANTS v. PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD, ET AL., APPELLEES, DC Cir. No. 07-5127, August 22, 2008. Court affirms the district court’s decision upholding the Sarbanes-Oxley Act of 2002. The court summarizes its holding as “We hold, first, that the Act does not encroach upon the Appointment power because, in view of the Commission’s comprehensive control of the Board, Board members are subject to direction and supervision of the Commission and thus are inferior officers not required to be appointed by the President. Second, we hold that the for-cause limitations on the Commission’s power to remove Board members and the President’s power to remove Commissioners do not strip the President of sufficient power to influence the Board and thus do not contravene separation of powers, as that principle embraces independent agencies like the Commission and their exercise of broad authority over their subordinates. Accordingly, we affirm the grant of summary judgment to the Board and the United States.”
UNITED STATES OF AMERICA, ex rel. IRWIN EISENSTEIN, Plaintiff-Appellant, v. CITY OF NEW YORK, MICHAEL BLOOMBERG, JOHN DOE, JANE DOE, 2nd Cir. Docket No. 06-3329-cv, August 19, 2008. False Claims Act case. The court dismisses the appeal, disagreeing with several other circuits, the court holds that where the US has not intervened the time for filing an appeal is 30 days, not 60 days where the US is a party.
SOUTHWEST MARINE, INC., Petitioner-Appellant, v. UNITED STATES OF AMERICA, GORDON R. ENGLAND, States Secretary of the Navy, in his official capacity, 9th Cir. No. 07-55229, August 06, 2008. Maritime contract. The court affirms the District court decision that costs of fees incurred by Southwest Marine during its unsuccessful defense of a private party Clean Water Act lawsuit were not allowable costs under Subpart 31.2 of the Federal Acquisition Regulation. Good discussion of allowability issues under the FAR. The decision concludes “that the District Court properly determined that the costs incurred by Southwest Marine in conjunction with its unsuccessful defense of the NRDC’s Clean Water Act lawsuit are unallowable because Southwest Marine’s costs are similar to costs disallowed in FAR § 31.205-47(b). Additionally, we conclude that FAR § 31.204, § 31.205-33 and § 31.205-47 constitute permissible constructions of 10 U.S.C. §§ 2324(f) and 2324(k), and that the District Court’s application of these FAR provisions, alone and in combination, did not violate 10 U.S.C. § 2324.”
CACI PREMIER TECHNOLOGY, INCORPORATED; CACI INTERNATIONAL, INCORPORATED, Plaintiffs-Appellants, v. RANDI RHODES; PIQUANT, LLC, d/b/a Air America Radio, 4th Cir. No. 06-2140, August 05, 2008. Not a contract case. 4th Circuit affirms summary judgment in favor of defendants in this defamation case brought by CACI over events occurring in the Abu Ghraib prison in Iraq. The court agrees with the district court that the radio broadcasts were protected by the First Amendment.
UNITED STATES OF AMERICA, ex rel. SNAPP, INC., Plaintiff-Appellant, v. FORD MOTOR COMPANY, 6th Cir. No. 07-1474, July 09, 2008. Qui tam False Claims Act case alleging fraud by Ford in its representations of contracting with small businesses. The court vacates the District court’s order denying relator’s motion to file an amended complaint and remands for the District court to consider United States ex rel Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493, 502 (6th Cir. 2007). Good discussion of Rule 9(b)’s special pleading standard and the FCA.
UNITED STATES EX REL. K & R LIMITED PARTNERSHIP, APPELLANT v. MASSACHUSETTS HOUSING FINANCE AGENCY, APPELLEE. DC Cir. No. 07-7014, July 08, 2008. Qui tam False Claims Act case. “Is this love, baby, or is it ... [just] confusion?” Quoting Jimi Hendrix, the Court affirms the District Court’s grant of summary judgment to defendant. The opinion concludes “At bottom, K & R and MassHousing simply disagree about how to interpret ambiguous contract language. Given that and K & R’s inability to point to anything ‘that might have warned [MassHousing] away from the view it took,’ [citation omitted], there is no genuine issue as to whether MassHousing knowingly presented false claims to HUD.”
Dennis Larson v. Granite Re Inc., 8th Cir. No. 07-1186/1188, July 07, 2008. Payment bond claim disputes between surety and subcontractors to a BIA contract with The Chippewa Band of Indians. Circuit court affirms the District Court decision that claims arising prior to the contract guaranteed by the bond are not recoverable. [Is this the way business is conducted?-jaw]
ZURICH AMERICAN INSURANCE COMPANY, et al v. O’HARA REGIONAL CENTER FOR REHABILITATION et al, 10th Cir. Nos. 06-1357 and 06-1370, June 18, 2008. False Claims Act case. “The question presented in this consolidated case is whether general liability insurance policies trigger a duty to defend false billing claims made by the United States and the State of Colorado. O’Hara Regional Center for Rehabilitation argues that its insurance carriers should defend and indemnify it against the government’s lawsuit under the False Claims Act and state common law claims.” The Circuit Court affirms holding that “the applicable insurance policies do not cover these types of claims.” The insurance policies at issue provided for coverage of professional services. O'Hara argued that the false claims arose for defects in professional services. The court disagrees stating that “Because the underlying lawsuit does not allege an injury caused by an activity covered by the insurance policies at issue in this case, the insurers do not have a duty to defend or indemnify O’Hara.”
Nelson v. NASA, 9th Cir. No. 07-56424, June 20, 2008. Earlier January 11, 2008 opinion vacated and replaced. Not a contract case, but interesting. CALTECH employees challenge NASA’s recently adopted requirement that “low risk” contract employees like themselves submit to in-depth background investigations. In summary the court finds “Appellants have demonstrated serious questions as to their informational privacy claim, and the balance of hardships tips sharply in their favor. We therefore conclude that the district court abused its discretion in denying Appellants’ motion for a preliminary injunction, and we reverse and remand.”
US v. DAVID H. SAFAVIAN, DC Cir. No 06-3139, June 17, 2008. The court overturns the conviction of the former OFPP Administrator and orders a new trial.
Taylor v. Sturgell, Acting Administrator, Federal Aviation Administration, et al, SC No. 07-371, June 12, 2008. FOIA case. The court rejects the theory of preclusion by “virtual representation” relied upon by the DC Circuit and vacates and remands the case. Appellant was precluded by the lower courts from litigating an FOIA request because an “associate” had lost an earlier FOIA appeal for the same documents.
US ex rel. Wilson v. Graham County Soil et al, Fourth Cir. No.07-1322, June 09, 2008. False Claims Act case. Court vacates and remands noting that “We conclude that the public disclosure bar applies to federal administrative audits, reports, hearings or investigations, but not to those conducted or issued by a state or local governmental entity. Factual questions remain in this case, however, about whether an investigation and report issued by a federal agency satisfy certain other requirements of the public disclosure bar, and those factual issues must be resolved by the district court in the first instance. Accordingly, we vacate the district court’s decision rejecting Wilson’s claims and its decision denying the defendants’ request for attorneys’ fees, and we remand for further proceedings.”
Lane et al v. HALLIBURTON, et al, 5th Cir. No. 06-20874, May 28, 2008. The 5th Circuit reverses and remands the district court decision which had dismissed tort actions against Halliburton from deaths and injuries in Iraq as nonjusticiable under the political question doctrine. The circuit court concludes “that the case needs further factual development before it can be known whether that doctrine is actually an impediment.” Good discussion of the political question doctrine and the Supreme Court decision in Baker v. Carr, 369 U.S. 186, 217 (1962).
UNITED STATES OF AMERICA ex rel. DAVID L. WILSON, JAMES WARREN, Plaintiff-Appellant, v. KELLOGG BROWN & ROOT, No. 07-1516 INCORPORATED; KBR, INCORPORATED; KELLOGG BROWN & ROOT SERVICES, INCORPORATED; SERVICES EMPLOYEES INTERNATIONAL, INCORPORATED, Defendants-Appellees, Fourth Circuit Court of Appeals, No, 07-1516, May 16, 2008. Qui tam False Claims Act case, LOGCAP contract. Relators claim, among other items, that the signing of a DD 1155 was a false claim. The court affirms the district court denial for leave to file a third amended compliant. Judge Wilkinson begins the opinion with this paragraph-“Since initiating this litigation, Relators have consistently sought to shoehorn what is, in essence, a breach of contract action into a claim that is cognizable under the False Claims Act. This misguided journey must come to an end. If every dispute involving contractual performance were to be transformed into a qui tam FCA suit, the prospect of litigation in government contracting would literally have no end. The district court properly recognized this danger, and we affirm its judgment.”
MARIE BERNADETTE MENDIONDO v. CENTINELA HOSPITAL MEDICAL CENTER, 9th Cir. No. 06-55981, April 01, 2008. Retaliation claim under the Federal and California False Claims Acts. Ninth Circuit reverses the District court and holds “that the notice pleading standard in Federal Rule of Civil Procedure 8(a) applies to claims for wrongful termination under the FCA and CFCA.”
BIODIVERSITY CONSERVATION ALLIANCE v. RICHARD C. STEM, US Forest Service, 10th Cir. No. 07-1061, March 18, 2008. EAJA case. Court reverses the award by the District Court of attorney fees based on the lower court’s finding that Biodiversty was a prevailing party. Following Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001) the Circuit court holds that neither the mootness of the case below or the issue of a preliminary injunction resulted a judicial determination that “must lend judicial teeth to the merits of the case.”
In re "Agent Orange" Prod. Liability Litig., 2nd Cir. No. 5-1760-cv, Decided 02/21/08, Eratta March 25, 2008. The 2nd Circuit affirms the lower court upholding the government contractor defense in these Agent Orange cases.
United States of America, ex rel, ROBERT DANIEL MARCY, on behalf of the United States of America, c/o James Letten & John Ashcroft Plaintiff - Appellant v. ROWAN COMPANIES INC; NEWFIELD EXPLORATION GULF COAST, INC, formerly known as EEX Corporation; NEWFIELD EXPLORATION CO; REMINGTON OIL & GAS CORP, Fifth Circuit No. 06-31238, March 05, 2008. Qui tam False Claims Act case. Appellant appeals the dismissal of its case for failure to state a FCA claim. Appellant argued that when “Defendants intentionally failed to report the discharge of oil or hazardous substances as required ..., and that Defendants intentionally omitted a record of the discharges ... ” it committed a FCA violation under defendants’ oil and gas lease granted by the US. The Fifth Circuit affirms finding that appellants fails the materiality test holding that “Because the environmental requirements that Marcy references were not prerequisites to continuation of the lease, Marcy fails to state a claim under Section 3729(a)(2).” Regarding the reverse FCA issue the court notes that the “allegation that Defendants submitted the false certification to avoid potential environmental liability is legally insufficient to make a reverse false claim under Section 3729(a)(7).”
MICHELLE HOYTE, BRINGING THIS ACTION ON BEHALF OF THE UNITED STATES OF AMERICA, APPELLANT, UNITED STATES OF AMERICA, APPELLEE v. AMERICAN NATIONAL RED CROSS, DC Cir. No. 06-5230, March 04, 2008. Qui tam False Claims Act case. Hoyte appeals the dismissal by the district court after the government moved to dismiss pursuant to 31 USC 3730(c)(2)(A). Following Swift v. United States, 318 F.3d 250 (D.C. Cir. 2003), which concluded that the government had an unfettered right to dismiss under 3730(c)(2)(A), the court affirms the dismissal. The court rejects the request “to recognize a new exception for a dismissal ‘clearly contrary to manifest public interest,’” The court also rejects the retaliation claim, for which Judge Tatel dissents.
John Timson v. Sophia M. Sampson, et al, and THE UNITED STATES Ex. Rel. 11th Cir. No. 07-12797, February 27, 2008. Qui tam case. 11th Circuit affirms the dismissal if this pro se case. The court agrees with the 7th, 8th and 9th circuits which have held that a pro se plaintiff may not maintain a qui tam action as the real party in interest is the United States.
In re "AGENT ORANGE" PRODUCT LIABILITY LITIGATION, 2nd Cir. No. 05-1760-cv, February 22, 2008. Plaintiffs are military veterans who claim injury from “Agent Orange” manufactured by defendants under government contracts. Court affirms summary judgment for defendants on the government contractor defense. (See companion case, Isaacson v. Dow Chemical Co., affirming the decision to refuse to remand to the state courts and agreeing that district court had jurisdiction over these actions under the federal officer removal statute, 28 U.S.C. § 1442(a)(1). Good discussion of the Government Contractor Defense as set out in Boyle v. United Technologies Corp., 487 U.S. 500 (1988).
Canadian Commercial Corporation And Orenda Aerospace Corporation, Appellees V. Department Of The Air Force, Appellant, DC Cir. No. 06-5310, January 29, 2008. FOIA case, Air Force contract. The DC Circuit court affirms the decision by the district court which, upon finding that the Air Force’s decision to disclose prices was arbitrary and capricious, had enjoined the Air Force from releasing line-item price information. The court rejects the argument of the Air Force that line-item prices do not come within Exemption 4 of the FOIA. The court also rejects the argument that FAR 15.503(b)(iv) requires the disclosure of unit prices pointing out that 15.506(e)(1) precludes the release of any information ... exempt from release under the Freedom of Information Act. Judge Tatel writes a concurring opinion
Nelson et al v. NASA et al, 9th Cir. No. No. 07-56424, January 11, 2008. Not a contract case, but interesting. CALTECH employees challenge NASA’s recently adopted requirement that “low risk” contract employees like themselves submit to in-depth background investigations. The court states “The district court denied Appellants’ request for a preliminary injunction, finding they were unlikely to succeed on the merits and unable to demonstrate irreparable harm. Because Appellants raise serious legal and constitutional questions and because the balance of hardships tips sharply in their favor, we reverse and remand.”
SCHOOL DISTRICT OF THE CITY OF PONTIAC, et al., Plaintiffs-Appellants, v. SECRETARY OF THE UNITED STATES DEPARTMENT OF EDUCATION, Defendant-Appellee. Sixth Cir. No. 05-2707, January 07, 2008. Financial assistance case. 6th circuit reverses the district court which had dismissed this challenge to the “No Child Left Behind Act of 2001(NCLB)”. The court examines 20 USC 7907(a) which prohibits the Federal Government from mandating a State “to spend any funds or incur any costs not paid for under this chapter.” and reverses noting that “Because statutes enacted under the Spending Clause of the United States Constitution must provide clear notice to the States of their liabilities should they decide to accept federal funding under those statutes, and because we conclude that NCLB fails to provide clear notice as to who bears the additional costs of compliance ... ” Judge McKeague dissents.
TINA MARIE GONTER; CHARLES WILLIAM GONTER, bringing this action on behalf of the United States of America, as relators, Plaintiffs-Appellants (06-4184)/ Cross-Appellees, UNITED STATES OF AMERICA, Interested Party, v. HUNT VALVE COMPANY, INC., et al., Defendants, GENERAL DYNAMICS, MARINE SYSTEMS DIVISION, ELECTRIC BOAT, Defendant-Appellee/ Cross-Appellant (06-4256), NORTHRUP GRUMMAN NEWPORT NEWS, formerly known as Newport News Shipbuilding, Defendant-Appellee/ Cross-Appellant (06-4266), Sixth Circuit Nos. 06-4184/4256/4266, December 18, 2007. False Claims Act fee litigation. Plaintiff law firm appeals the district courts determination of fees arguing that greater fees were justified. Defendants appeal arguing the plaintiff does not have standing to appeal and that fees awarded by the distract court were excessive. The 6th Circuit affirms the district court’s fee determination as within the discretion of the judge, but does increase the amount claimed for the fee litigation portion of the case. Recognizing that is a case of first impression for the 6th Circuit, the Circuit court also finds that plaintiff law firm does have standing, as the real party of interest, following decisions of the 5th and 7th circuits.
UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF E & H STEEL CORPORATION vs. C. PYRAMID ENTERPRISES, INC.; FIDELITY & DEPOSIT COMPANY OF MARYLAND; and ZURICH AMERICAN INSURANCE COMPANY, 3rd Cir. No. 06-4209, November 27, 2007. Miller Act case. Pyramid was the prime on an Air Force construction contract. Pyramid issued a purchase order to Havens Design-Build to provide custom fabricated structural steel. Havens contracted with E&H Steel to fabricate the steel and deliver it to the construction site. Havens was paid by Pyramid but went bankrupt before paying E&H. E&H brought suit against Pyramid and its sureties, asserting entitlement to reimbursement from the Miller Act payment bond. The Circuit court reverses the district court that had held that “Havens was a material supplier and not a ‘subcontractor’ under the Miller Act. Therefore, E & H was not entitled to recover on the bond.” In finding that Havens was a subcontractor Judge Weis’ opinion presents a good discussion of the issue and case law.
ABHE & SVOBODA, INC. v. ELAINE CHAO, SECRETARY, UNITED STATES DEPARTMENT OF LABOR, DC Cir. No. 06-5305, November 23, 2007. Appellant challenges the withholding of contract payments for violation of the Davis-Bacon Act. The court affirms “that the district court correctly dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) the contractor’s claims of estoppel, failure to follow Department regulations, and denial of due process by failing to give fair consideration to the contractor’s challenges to the job classification determination.” The court dismisses for lack of subject matter jurisdiction the contractor’s claim that a limited area practice survey was not supported by substantial evidence. The court also affirms “the grant of summary judgment to the Secretary on the contractor’s claim that the Department violated due process by failing to give fair notice of the requirement to abide by local practices regarding job classifications.” Regarding notice to the contractor the court first notes that parties dealing with the government are expected to know the law, and then states that a commercial reporter (CCH) carried a relevant Wage Appeals Board decision. The court notes “While this case is not officially published, its inclusion in a commercial reporter and its treatment in subsequent judicial and administrative cases provide adequate notice that contractors must use the job classifications of signatory unions when wage determinations are based on collective bargaining agreements.”
Jeanette McMahon et. al. v. Presidential Airways, 11th Cir. No. 06-15303, October 05, 2007. Plaintiffs in the District court were representatives of Army soldiers who were killed when the aircraft operated by Presidential under contract to DOD crashed in Afghanistan. Presidential now appeals the denial by the district court of its motion that “the suit is barred by the principles of Feres v. United States, 340 U.S. 135, 71 S. Ct. 153 (1950), the political question doctrine, and the combatant activities exception to the Federal Tort Claims Act (FTCA).” In a 72 page opinion the 11th circuit affirms the lower court. Good discussions of derivative Feres immunity and the political question issues.
EXPERIMENTAL HOLDINGS, INC. v. Secretary of Commonwealth of Kentucky Finance and Administration, 6th Cir. No. 06-6394, September 25, 2007. Bid protest of contract for lease of real property. The Circuit court affirms the District Court’s dismissal of EHI’s claim based on a deprivation of property without due process, brought under 42 U.S.C. § 1983. EHI had alleged that the State had limited discretion under the Kentucky procurement statutes and it abused that discretion. The Circuit court notes that even if it assumes “that the procedural requirements outlined in the statute were not followed, EHI’s claim fails because it ‘cannot have a protected property interest in the procedure itself.’” Lacking a substantive right to the contract the to the contract, EHI has not asserted a cognizable property interest, and the district court was therefore correct in dismissing plaintiff’rsquo;s federal law claim.
UNITED STATES OF AMERICA v. BARBARA LESSNER, 3rd Cir. 06-1030, August 08, 2007. Defendant was a Procurement Contracting Officer, Team Leader, at the Defense Supply Center in Philadelphia and pled guilty to 21 counts of wire fraud, defense procurement fraud, and obstruction of justice. She appeals several elements of her 51-month sentence and a $938,965.59 order of restitution. The court affirms, upholding all of the trial judges actions. Good case detailing procurement issues.
UNITED STATES OF AMERICA ex rel. LOUANNE BOOTHE, Plaintiff-Appellant, v. SUN HEALTHCARE GROUP, INC., 10th Cir.No. 06-2156, August 07, 2007. False Claims Act case. The court reverses the district court which had dismissed the case after determining that it had no jurisdiction finding that three of plaintiff’s ten allegations were based upon information already in the public domain and that plaintiff was not an original source of that information. In reversing and remanding the 10th circuit notes “We agree jurisdiction is lacking with respect to the three claims the district court analyzed. While we have not yet had occasion to address whether, as the district court’rsquo;s holding suggests, a deficiency in one claim precludes jurisdiction over all claims joined in the same lawsuit, today we clarify that it does not. Just as finding three bad apples does not necessarily warrant discarding the barrel, we hold that an independent jurisdictional analysis of each of Ms. Boothe’s remaining seven claims of fraud is necessary, and accordingly remand for further proceedings.”
UNITED STATES OF AMERICA, EX REL; PHIL HEFNER, UNITED STATES OF AMERICA, EX REL. v. HACKENSACK UNIVERSITY MEDICAL CENTER; CENTER FOR INFECTIOUS DISEASES, P.A.; NORTH JERSEY PRIMARY CARE ASSOCIATES, P.A., 3rd Cir. No. 06-2287, July 17, 2007. FindLaw Synopsis: In a qui tam action under the False Claims Act involving, inter alia, alleged false Medicare claims and invoices, an order denying reconsideration of summary judgment for defendants and denying an alternate remedy pursuant to 31 U.S.C. section 3730(c)(5) is affirmed where: 1) the district court properly found that plaintiff did not present sufficient evidence for a reasonable jury to conclude that defendants' conduct satisfied the FCA's scienter requirement; 2) there was no evidence that plaintiff's employer knew that he was acting in furtherance of an FCA claim when it fired him, for purposes of a retaliation claim; and 3) the district court properly rejected a claim to a share of money repaid by defendant to the government. A relator is not entitled to a share in the proceeds of an alternate remedy when the relator's qui tam action under section 3729 is invalid.
UNITED STATES OF AMERICA ex rel. EDWARD BOGART et al v. KING PHARMACEUTICALS et al., 3rd Cir. No. 06-2098, July 16, 2007. FindLaw Synopsis: In qui tam litigation brought against pharmaceutical companies, a district court's ruling rejecting plaintiff's claim for additional attorney's fees following certain settlements is affirmed over plaintiff's meritless contentions that he was entitled to be paid up to one-third of those settlements' total as attorney's fees under a common fund theory of recovery.
DUNN & BLACK, P.S., Plaintiff-Appellant, and FIDELITY DEPOSIT COMPANY OF MARYLAND, a Maryland corporation; AMERICAN GUARANTY & LIABILITY INSURANCE COMPANY, a New York corporation, Intervenors, v. UNITED STATES OF AMERICA, Defendant-Appellee, and ENVIRONMENTAL RECLAMATION INC., an Idaho corporation, 9th Cir. No. No. 05-35766, July 11, 2007. Interesting case. Underlying contract with the FHWA. The court describes the case as “We must decide whether a law firm can bring an action against the United States to recover attorney’s fees from monies that its client was awarded as a result of a settlement with the Federal Highway Administration, but never received because the Internal Revenue Service requested that payment be withheld to offset unpaid tax liabilities.” The court vacates the district court’s summary judgment for the government and orders the case to be dismissed as the court lacked jurisdiction to hear the law firm’s case.
Donald Greer v. Elaine Chao, Secretary of the United States Department of Labor, 8th Circuit No. 06-2246, July 09,2007. Appellant Greer filed an complaint with OFCCP alleging that his employer, Eaton Corporation, failed to comply with the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). OFCCP investigated and notified Greer that it would not seek enforcement actions as it had not found sufficient evidence that Eaton had violated VEVRAA. Greer filed suit in the district court seeking APA review of the agency action. The District Court granted summary judgment to the Secretary of Labor and Greer appeals. In an opinion by Associate Justice O'Connor, sitting by designation, the 8th circuit affirms holding that “the Secretary of Labor’s response in this case represents a decision committed to agency discretion and is, therefore, immune from judicial review.”
United States of America, ex rel; PATRICIA LAIRD; ET AL, Plaintiffs, United States of America, ex rel; JAMES MAYFIELD, Plaintiff-Appellant, versus LOCKHEED MARTIN ENGINEERING & SCIENCE SERVICES CO. Defendant-Appellee, 5th Cir. No. 06-20225, June 27, 2007. FCA qui tamcase, NASA CPAF contract. Court affirms the grant of Lockheed’s motion for summary judgment by the District court which found that “(1) there was no evidence that Lockheed submitted a false bid within the meaning of the FCA; (2) the parties had established a postcontract relationship that precluded FCA liability; (3) Lockheed’s 533 cost projections were neither false nor material and therefore not false claims; and (4) NASA ratified Lockheed’s facilities overcharges.“
UNITED STATES OF AMERICA v. JOHN VITILLO, VITILLO CORPORATION and VITILLO ENGINEERING, INC., 3rd Cir., Nos. 05-4330/4331/4332, June 25, 2007. Vitillo and the named firms were convicted under 18 USC 666 , “Theft or bribery concerning programs receiving Federal funds.” Vitillo (and the named firm) was a contractor for the Reading Regional Airport Authority (the Authority or RRAA), a local government agency that received significant funding from the Federal Aviation Administration. The court affirms the conviction and holds that an independent contractor, such as Vitillo, is an agent under 18 USC 666 which governs conduct of “an agent of an organization, or of a State, local, or Indian tribal government or any agency thereof”
UNITED KINGDOM MINISTRY OF DEFENCE, Secretary of State for Defence, as represented by the United Kingdom Ministry of Defence, Defence Procurement Agency, v. TRIMBLE NAVIGATION LIMITED, 4th Cir. No. 06-1062, May 10, 2007. See earlier 4th circuit opinion which had held that the CDA did not apply to a suit by a third party beneficiary. The Fourth Circuit now affirms a district court decision which held a foreign government is not a third-party beneficiary of a contract for military goods between the United States and a domestic military contractor, where the foreign government agreed to purchase those goods from the United States under the Foreign Military Sales program. The majority concludes “In sum, recognizing a beneficiary right of UK MOD to enforce the U.S.-Trimble agreements would be contrary to the intent and structure of the AECA[Arms Export Control Act], as well as contrary to the intent of the United States, as evidenced by the U.S.-Trimble agreements and the LOA[Letter of Agreement]. Because underlying statutory law prohibits the recognition of third-party beneficiary status and because the intent of the United States was not to create such status for UK MOD via the U.S.-Trimble agreements, the district court was correct in dismissing UK MOD’s complaint.” Judge Traxler dissents
UNITED STATES OF AMERICA v. GEORGIA L. THOMPSON, 7th Cir No. 06-3676, April 20, 2007. State procurement official’s conviction over turned by the Seventh Circuit. Interesting case. Also see blog discussing this case.
In Re: BALTIMORE MARINE INDUSTRIES, INCORPORATED, Debtor. ALAN M. GROCHAL, Appellant, and MAERSK LINE, LIMITED; MILITARY No. 06-1206 SEALIFT COMMAND, Plaintiffs, v. OCEAN TECHNICAL SERVICES CORPORATION; MCALLISTER TOWING OF BALTIMORE, INCORPORATED, Defendants-Appellees, 4th Cir. No. 06-1206, February 09, 2007. Bankruptcy case. Fourth Circuit vacates and remands a decision that “awarded the funds directly to the subcontractors and thus excluded the sums from the contractor’s bankruptcy estate.” The court distinguishes Pearlman v. Reliance Insurance Co., 371 U.S. 132 (1962), relied upon by the District court and notes that Pearlman dealt with the rights of a surety, not subcontractors. The decision holds “Because an unpaid subcontractor is not subrogated to the contractor’s interest in the funds, the contractor’s interest remains and must be included in the bankruptcy estate. Consequently, the bankruptcy court and district court erred in relying upon Pearlman to award the interpleaded funds directly to OTS.”
UNITED STATES OF AMERICA, ex rel., PAUL E. ATKINSON; EUGENE SCHORSCH v. PA. SHIPBUILDING CO.; FIRST FIDELITY BANK, N.A.; SUN SHIP, INC., 3rd Cir. No. 04-3374, January 12, 2007. False Claim Act case, Navy shipbuilding contract. Th court affirms the dismissal by the District Court of all counts for jurisdictional reasons, The court concludes “We hold that Atkinson’s FCA action must be dismissed in its entirety under FED. R. CIV. P. 12(b)(1) for want of jurisdiction. All of the allegations and transactions involved in each of the counts were publicly disclosed under § 3730(e)(4)(A). Moreover, Atkinson is not an original source of any of the allegations or transactions including the defendants’ failure to record, and failure to ensure recordation, of the instruments named in the Trust Indenture. We conclude that a plaintiff/relator cannot rely solely on information available in the public domain to substantiate original source status under § 3730(e)(4)(B). Such a relator does not have direct and independent knowledge of the information that forms the basis of the FCA claim. 31 U.S.C. §§ 3730(e)(4)(A)-(B).”
UNITED STATES OF AMERICA ex rel. ROGER L. SANDERS and ROGER L. THACKER, v. ALLISON ENGINE COMPANY, INC., GENERAL MOTORS CORPORATION, GENERAL TOOL COMPANY, and SOUTHERN OHIO FABRICATORS, 6th Cir. No. 05-3502, December 19, 2006. False Claims Act case, Navy contract. Relators allege false claims submitted by a second tier subcontractor that were ultimately paid by the government. The district court found for the defendants because the allegedly false claims were not presented to the government, following the DC Circuit in US ex rel Edward L. Totten v. BOMBARDIER CORPORATION AND ENVIROVAC, INC.,DC Cir. No. 03-7128, August 27, 2004. The Sixth Circuit reverses disagreeing with Totten. Judge Gibbons’ opinion held- “ The plain language of the statute, the legislative history, and the decisions of the Supreme Court and other courts lead us to conclude that the district court and the Totten court erred in reading a presentment requirement into all subsections of the False Claims Act. We hold that while liability under § 3729(a)(1) turns on whether a claim has been presented to the government, subsections (a)(2) and (a)(3) do not require such a showing. Rather, a relator under these two subsections must show that government money was used to pay the false or fraudulent claim. This requirement comports with the policy rationale behind the FCA—protecting the government fisc—while ensuring that the statute applies only to claims submitted to the government and not to private entities.” Judge Batchfelder dissents.
UNITED STATES OF AMERICA, ex rel., Plaintiff, and CHARLOTTE RAE BLY-MAGEE, Plaintiff-Appellant, v. BRENDA PREMO; CATHERINE CAMPISI; JIM KAY; WARREN HAYES, a/k/a Ronald E. Glousman, MD; KEITH S. FOSTER; EDNA LARSON; KENNETH SMEDBERG; VERNE ALBRIGHT; LOS ANGELES COUNTY DEPARTMENT OF MENTAL HEALTH, e/s/a County of Los Angeles; LOS ANGELES COUNTY OFFICE OF EDUCATION, 9th Cir. No. 05-55556, December 13, 2006. False Claims Act case. The Ninth circuit, agreeing with the Eighth Circuit, holds that a published audit report by a state agency is a “public disclosure” under 31 U.S.C. § 3730(e)(4)(A).
THE UNITED STATES v. Capital Sand Co., Inc. in rem, 8th Cir. No. 05-3405, October 25, 006. Admiralty case. Court affirms the District court decision awarding Corps of Engineers overhead as an element of damages resulting from the allision of a barge with a lock. The majority opinion states that “We hold that the Corps need not establish a direct connection between overhead charges and a particular repair project, but may recover overhead charges that are justified by a reasonable relationship to the repair work.” Judge Bye dissents, reasoning that precedent requires that “the overhead arose naturally and is factually related to the particular breach.” [I learn something new-“allision” is a noun meaning -the striking of one ship by another.-jaw]
THE UNITED STATES v. T&W EDMIER CORP, 7th Cir. No. 06-1237, October 10, 2006. Corps of Engineers contact. Edmier filed a claim with the CO who decided that Edmier was due $3.5 million and the government paid that amount. Edmier appealed that decision and the ASBCA found that Edmier was only entitled to $1.9 million. The government then filed a collection action in the District court to recover the excess $1.6 million. The District court found for the government. Edmier argues that the suit should be dismissed for lack of jurisdiction because the CDA required the government to submit the dispute to the CO for an administrative decision. The 7th Circuit, finding Edmier’s CDA argument a “mystery”, holds otherwise noting that “Because the Contract Disputes Act allows the [ASBCA] to make an independent decision and decrease as well as increase the award, there is no reason to rerun the process before the United States may collect any net balance in its favor.”
Brooklyn Legal Services Corp. B and Legal Services for New York City, et al. v/. Legal Services Corporation, 2nd Cir. Nos. 05-0340-cv(L), 05-0360-cv(CON), 05-0787-cv(CON), 05- 0792-cv(CON),05-0925-cv(XAP), September 08. 2006. The Second Circuit Court of Appeals ruled earlier this month in an ongoing Legal Services Corporation case dealing with limitations on Federal grantees' activities involving non-Federal funds. Some LSC grantees sued on constitutional grounds to prevent LSC from enforcing a regulation requiring grantees to separate themselves physically and financially from any “affiliate” organizations that perform work prohibited by an appropriations law. Some of the restrictions include participating in class action suits, seeking attorneys' fees, and personally soliciting clients. The Second Circuit did not resolve the constitutionality issue, but vacated a preliminary injunction entered by a district court and ordered that court to apply a different legal standard to the rule. The case has also been known as Velazquez v. Legal Services Corp. or Dobbins v. Legal Services Corp.
UNITED STATES OF AMERICA; STATE OF CALIFORNIA, ex rel. ROMAN ZARETSKY; ROBERT YARDLEY, Plaintiffs-Appellants, v. JOHNSON CONTROLS, INC.; MICHAEL MATHES; RICHARD BEDDIE, Defendants-Appellees, and MICHAEL PUTICH, 9th Cir. No. 04-55536, August 09, 2006. Federal and California False Claims Act case. Relators filed a civil action in state court alleging bid rigging which was voluntarily dismissed. Relators subsequently filed a qui tam action which was dismissed by the District Court. “The district court granted [Johnson Control’s] motion on the ground that there was no subject matter jurisdiction under 31 U.S.C. § 3730(e)(4). The court held that to qualify as an ‘original source’ under the FCA, a prospective relator must provide the government with the pertinent information prior to the ‘public disclosure’ at issue if, but only if, the ‘public disclosure’ occurs through a private lawsuit brought by the prospective relator.” The Ninth Circuit reverses holding “ the federal and state statutes do not require that an individual report relevant information to the government prior to the ‘public disclosure’ at issue to qualify as an ‘original source.’” [Good discussion of issues and cases-jaw]
PATRICIA A. LUNA v. THE UNITED STATES, 7th Circuit No. 04-4143, July 17, 2006. Court affirms judgment in favor of the U.S. in a suit arising out of injuries to a contractor employee on a Naval base where the U.S. Navy was the plaintiff’s “borrowing employer,” and thus immune to tort suits under the Illinois Workers Compensation Act.UNITED STATES OF AMERICA, and PATRICIA HAIGHT, ex rel. and Defense of Animals, v. CATHOLIC HEALTHCARE WEST, 9th Cir. No. 03-16937, April 19, 2006. The court reverses the District Court which had dismissed relator’s claims as they relied on information that had been obtained under the FOIA. The court concludes- “We hold that whether a document obtained via FOIA request should invoke the jurisdictional bar should be determined by reference to the nature of that document itself. If the document obtained via FOIA request is a public disclosure of a ‘criminal, civil, or administrative hearing, . . . a congressional, administrative, or [General] Accounting Office report, hearing, audit, or investigation, or [is] from the news media,’ then the jurisdictional bar is applicable. If, as was the case here, the document obtained via FOIA does not itself qualify as an enumerated source, its disclosure in response to the FOIA request does not make it so.”
MISTICK PBT, D/B/A MISTICK CORPORATION v. ELAINE CHAO, SECRETARY, UNITED STATES DEPARTMENT OF LABOR DC Cir. No. 04-5340, March 17, 2006. The Court affirms the District Court’s dismissal of this action involving the Department of Labor’s conformance regulations, 29 C.F.R. § 5.5(a)(1)(ii)(A), which explain how the Secretary of Labor determines the wages for a type of job that is left out of the Department’s pre-bid wage decision for Davis-Bacon Act prevailing wage determinations. The Court, however, disagrees with the District court which held that under “United States v. Binghamton, 347 U.S. 171, 176-78 (1954), ... the courts have no jurisdiction to review whether the Secretary’s wage determination correctly represents the ‘wages . . . prevailing, ... ’ ” Instead, while finding that the actions of Labor were not arbitrary and capricious under the APA, the court holds that “In accordance with our prior decision in Ball, Ball & Brosamer, Inc. v. Reich, 24 F.3d 1447, 1451 (D.C. Cir. 1994), we conclude that the Davis-Bacon Act does not provide clear and convincing evidence that Congress sought to preclude review under the Administrative Procedure Act (“APA”), 5 U.S.C. § 701, et seq., of violations of Department regulations.”
BONNEVILLE POWER ADMINISTRATION v. MIRANT CORPORATION, 5th Cir. No.04-11264, February 13, 2006. Bankruptcy case. The court affirms a District court decision finding that BPA violated the automatic stay and rejects the argument by BPA that the Bankruptcy Code “permits it to terminate the executory contract pursuant to the contract’s ipso facto clause. See § 365(e)(2)(A).” The informative Fifth Circuit opinion addresses “the intersection of three relevant statutory provisions: 11 U.S.C. § 362(a) (the automatic bankruptcy stay); 11 U.S.C. § 365(e)(2)(A) (permitting a nondebtor party to an executory contract to terminate or modify such contract when applicable law excuses the nondebtor from accepting or rendering performance to the trustee or an assignee); and the Anti-Assignment Act (or “the Actrtdq b), 41 U.S.C. § 15 (prohibiting transfer of contracts to which the United States is a party).”
UNITED STATES OF AMERICA, ex rel. DR. BRENT GEAR v. EMERGENCY MEDICAL ASSOCIATES OF ILLINOIS, INC., and ILLINOIS/INDIANA EM-1 MEDICAL SERVICES, S.C., 7th Cir. No. 05-2235 & 05-3202, February 01, 2006. FCA qui tam case. Court affirms the dismissal by the District Court under the public disclosure bar. The court holds that even though the particular defendants here were not named in earlier government reports addressing the type of fraud disclosed here, the action is still barred by the public disclosure provision of the FCA. The court notes “The disclosures at issue here were of industry-wide abuses and investigations. Defendants were implicated. Industry-wide public disclosures bar qui tam actions against any defendant who is directly identifiable from the public disclosures." (citations omitted)
JEFF WALBURN v. LOCKHEED MARTIN CORPORATION; LOCKHEED MARTIN UTILITY SERVICES, INC., 6th Cir. No. 04-3458, December 20, 2005. False Claims Act qui tam case. Court affirms the dismissal by the District Court under the first-to-file bar of 31 U.S.C. § 3730(b)(5). Plaintiff files a False Claims Act suit based on facts disclosed four years years earlier in 1996 when plaintiff sued Lockheed for compensatory and punitive damages as a result of his exposure to gases at [a plant operated by Lockheed]. In affirming the dismissal the court concludes -“Walburn’s failure to report his allegations of fraud to the federal government before filing his 1996 suit precludes him from enjoying original source status.”
WENDY RENEE BENNETT-NELSON; JOY MARIE BOYKIN v. LOUISIANA BOARD OF REGENTS, Etc.; ET AL., 5th Cir. No. 03-31198, November 28, 2005. Court reverses District Court which had dismissed action as barred by the Eleventh Amendment. Appellants, hearing impaired students, brought this action under Title II of the Americans with Disabilities Act of 1990 (“ADA”) and § 504 of the Rehabilitation Act of 1973. Circuit court holds that “the University, as a recipient of federal financial assistance, has waived its Eleventh Amendment immunity.”
UNITED STATES OF AMERICA ex rel. Jeffrey E. Main, v. OAKLAND CITY UNIVERSITY, 7th Cir. No. 05-2016, October 20, 2005. False Claims Act Case arising from 20 USC 1094 which conditions institutional eligibility on a commitment to refrain from paying recruiters contingent fees for enrolling students. The District Court held that even willful falsehoods in the phase one application process do not violate the FCA because no payment from the Treasury is made in that phase of the application. The Circuit Court reverses. After noting that no published decisions exist on “whether a multi-stage process forecloses liability for fraud in the first stage, the answer is No. 05-2016 3 straightforward. The False Claims Act covers anyone who ‘knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government’ . 31 U.S.C. §3729(a)(2). The University ‘uses’ its phase-one application (and the resulting certification of eligibility) when it makes (or ‘causes’ a student to make or use) a phase-two application for payment. No more is required under the statute.”
Autery v. US , 9th Cir. No. 04-35105, September 12, 2005. Plaintiffs invoke the Federal Tort Claims Act (FTCA) to alleging negligence by DOE for the failure to maintain firebreaks which resulted in fire damages. DOE had contracted with Fluor, which turn had subcontracted for fire prevention services. The Court affirms the the dismissal by the District Court on the grounds that independent-contractor exception bars this FTCA suit against the United States.
McNutt, ex rel., v. Haleyville Med. Supplies, 11th Cir., No. 04-14458 11th Cir.,September 09, 2005. MediCare case. The Court answers affirmatively the following question for interlocutory appeal: “whether a violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)[,] can form a basis for a claim pursuant to the False Claim[s] Act, 31 U.S.C. § 3729(a)(1) and 31 U.S.C. § 3729(a)(3).”
UNITED KINGDOM MINISTRY OF DEFENCE, Secretary of State for Defence, as represented by the United Kingdom Ministry of Defence, Defence Procurement Agency, v. TRIMBLE NAVIGATION LIMITED, 4th Cir. No. 04-1129, September 06, 2005. Fourth Circuit reverses the District Court which found that the Contract Disputes Act (“CDA”) divested district courts of jurisdiction in this Foreign Military Sales case. Writing for the Fourth Circuit, Judge Traxler finds that the procedures mandated by CDA do not apply to a suit by a third-party beneficiary as the CDA only applies to the parties of a government procurement contract. A very interesting case of first impression.
TIMM ADAMS, et al. v. US, 9th Cir., Nos. 04-35129, 04-35247, 04-35248 and 04-35154, August 23, 2005. Federal Tort Claims Act (“FTCA”) case. The Bureau of Land Management (“BLM”) contracted with helicopter firms to apply herbicide to certain BLM managed lands in Idaho. Plaintiff’s, farmers and landowners, sued the contractors and BLM alleging that improper application of the herbicide had caused it to drift onto their land causing damages. The contractors petitioned the government to certify them as government employees under 28 USC 2671 of the FTCA which defines employees of the United States as including “... persons acting on behalf of a federal agency in an official capacity,...” The government rejected the petition on the ground that certification was not available corporate entities and the District Court affirmed the government’s denial. The Ninth Circuit affirms. Judge Thompson notes that even though the Dictionary Act, 1 USC 1, states that persons includes corporations, the exception “unless the context indicates otherwise”, applies here. Following the guidance of Rowland v. California Men’s Colony, 506 U.S. 194 (1993), the Court determines that the intent of Congress was to individuals, not corporations or other entities.
PATRICK CAMPBELL, M.D., United States of America and State of California ex rel., Plaintiff-Appellant, UNITED STATES OF AMERICA, Intervenor-Appellee, v. REDDING MEDICAL CENTER, a California corporation; et al., 9th Cir. No. 03-17082, August 22, 2005. False Claims Act case. The first-to-file bar of 31 USC 3730(b)(5) does not bar the “filing of a subsequent related action when the first action is jurisdictionally defective because the relator was not an original source of publically disclosed information.”
United States of America, ex rel, DOUGLAS W. WILLIAMS, v. BELL HELICOPTER TEXTRON INC., 5th Cir. No. 04-10468, July 13, 2005. False Claims Act case, Marine contract. The government did not intervene. Fifth Circuit affirms the District Court’s dismissal of relator’s case for failure to plead with particularity. The US appeals the District court decision that also dismissed the complaint against the United States with prejudice. In dismissing the complaint the District court stated that it believed “the United States has had ample opportunity to participate in the prosecution of those claims if she had any notion that any of them has the slightest merit.” The Circuit court disagrees and modifies the judgment to be without prejudice to the US. The opinion finds that the dismissal “was unwarranted where, as here, the relator’s claims were dismissed on a Rule 12(b)(6) motion based on a lack of specificity in the complaint as required by Rule 9(b).”
UNITED STATES ex rel. SANFORD GROSS v. AIDS RESEARCH ALLIANCE-CHICAGO, 7th Cir. No. 04-2566, July 06, 2005. NIH sponsored research grant. Qui tam case.Court affirms the dismissal of the case for the failure to plead with specificity that “a false statement is used to get a false or fraudulent claim paid or approved by the Government.” The court also notes “It was not incumbent upon the district judge to become an expert in all of the regulations governing NIH grant compliance so that he could piece together a theory on why any particular form listed in the second amended complaint might have fraudulently caused the government to cut a check. False claim allegations must relate to actual money that was or might have been doled out by the government based upon actual and particularlyidentified false representations. On this, the complaint is silent.”
JEROME STEVENS PHARMACEUTICALS, INC. v. FDA, DC Cir. No. 04-5238, April 08, 2005. Trade Secrets, not a contract case. Plaintiff submitted trade secrets and confidential information to the FDA as part of a New Drug Application. The government subsequently published the information on a publicly available web site. Plaintiff brought FTCA and APA claims in the district court, which dismissed the claims. The Circuit court reverses the dismissal of the tort claims and remands to the district court. The court finds that the disclosure of the information may have violated several statutes, including 18 USC 1905, and that the pleadings should not have been construed as linking the disclosure to other actions of the FDA which were properly discretionary functions of the government.
AMERICAN JEWISH CONGRESS, APPELLEE v. CORPORATION FOR NATIONAL AND COMMUNITY SERVICE, APPELLANT UNIVERSITY OF NOTRE DAME, APPELLANT, DC Cir. No. 04-5317, March 08, 2005. Financial assistance case involving grants to educational institutions which trim AmeriCorps participants. DC Circuit reverses the District Court which had “found that the practice of permitting individual participants to teach religion in addition to secular subjects and the $400 cash grants to sponsoring organizations result ‘in impermissible government indoctrination in violation of the establishment clause of the First Amendment.’ ” In reversing the court relies on recent decisions upholding programs of true private choice, particularly Zelman v. Simmons-Harris, 536 U.S. 639, 649 (2002), which it believes controls this case. The court concludes “The government does not promote religion in violation of the Establishment Clause when it reimburses all grantees, religious and secular alike, for a portion of the costs they incur in complying with the requirements of the AmeriCorps program.”
KEVIN O’ROURKE v. SMITHSONIAN INSTITUTION PRESS and THE SMITHSONIAN INSTITUTION, 2nd Cir., No. 04-0151-cv, February 16, 2005. Plaintiff appeals a District Court decision dismissing its claim for copyright infringement against the Smithsonian Institution for lack of jurisdiction. The District Court held that 28 USC 1498(b) provided the US Court of Federal Claims with exclusive jurisdiction for copyright claims against the United States. The Circuit court rejects the arguments by O’Rourke that the Smithsonian should not be included within the phrase “United States” in 1498(b). The Court concludes “... that the Smithsonian is within the term "the United States" in 28 U.S.C. § 1498(b). That section waives sovereign immunity with respect to copyright infringement claims brought against the United States, but only to the extent that such claims are brought in the United States Court of Federal Claims. Accordingly, we affirm the judgment of the district court, dismissing the present action for lack of subject matter jurisdiction.” Good discussion of legislation establishing and the status of the Smithsonian.
DAVID E. RIDENOUR; JEFFREY B. PETERS; MARK GRAF, Plaintiffs-Appellants, UNITED STATES OF AMERICA, ex rel., Plaintiff-Appellee, v. KAISER-HILL COMPANY, L.L.C., and Statutory Agent: Corporation Services Company; WACKENHUT SERVICES LIMITED LIABILITY COMPANY, and Statutory Agent: James A. Dierker; EG&G ROCKY FLATS, INC., and Statutory Agent: C.T. Corporation, 10th Cir. No. 01-1510, February 09, 2005. Qui Tam case. Court holds that “... the FCA does not require the Government to intervene prior to moving to dismiss a qui tam action... ” Judge Egan dissents stating: “I dissent only on the basis of the majoritys determination that the FCA does not require the Government to intervene prior to moving to dismiss a qui tam action. In my view, where the Government has declined to intervene during the sixty-day seal period, it is required to intervene upon a showing of good cause under 31 U.S.C. § 3730(c)(3) before moving to dismiss the action. I believe a plain reading of the statute requires it, canons of statutory construction support such a result, and such a reading does not render the FCA unconstitutionally infirm.” However, he concurs in the result in the result “because, here, the Government has shown good cause to intervene under 31 U.S.C. § 3730(c)(3), as the district court found, and the reasons for intervention support dismissal under any standard.”
UNITED STATES OF AMERICA EX REL. ALVA BETTIS, APPELLANT v. ODEBRECHT CONTRACTORS OF CALIFORNIA, INC., ET AL., DC Cir. No. 04-5051, January 11, 2005. Qui Tam case, Corps of Engineers contract. The relator relies on the fraud-in-inducement theory arguing that contractor “fraudulently induced the Corps to award it the disputed contract by submitting an intentionally undervalued bid and making other false representations in order to win the contract, with the intention of subsequently obtaining upward modifications to the contract price.” The District Court had granted summary judgment for the contractor on two grounds: one that as a matter of law “where it is alleged that the defendant has submitted a fraudulently deflated bid in order to obtain a contract, a FCA action cannot succeed without proof that one or more requests for payment under the contract were fraudulent in themselves.” (the government filed an amicus contesting this ground); and secondly that relator’s evidence was insufficient to show that the Corps was fraudulently induced to award the contract. The DC Circuit affirms the District Courts decision, but only on the lack of sufficient evidence ground. The Court discusses the fraud-inducement argument but does not resolve that argument as it concludes “that on the evidence in this case, no reasonable jury could find that Odebrecht fraudulently induced the Corps to enter into the contract, we do not address whether a fraud-in-the-inducement claim based on a fraudulent low bid can succeed absent proof that one or more requests for payment under the contract induced by the low bid were false in themselves.”
ex rel. JACK J. GRYNBERG, v. PRAXAIR, INC. and NIELSON & ASSOCIATES, INC., and UNITED STATES OF AMERICA, Intervenor, 10th Cir. Nos. 01-1214 & 01-1242, November 15, 2004. Qui tam case. Circuit court affirms the District court decision that dismissed the case finding no subject matter jurisdiction as the claim was based on publicly disclosed information and that relator was not the original source. The court, however, reverses the district court’s denial of attorney fees to Praxair. In an opinion by Judge O’Brien, the court follows the 7th Circuit case in Citizens for a Better Env’t v. Steel Co., 230 F.3d 923 (7th Cir. 2000), and holds that the district court has jurisdiction to decide the attorney fee issue even if it does not have subject matter jurisdiction for the underlying case. Noting that the district court found that there was “...no evidence indicating any Praxair involvement ... other than providing accurate volume and price data...” and concluded that “Praxair was thus totally irrelevant to the royalty underpayments that Grynberg alleges.” the court remands to the district court requiring it to articulate its reasons why Praxair was not entitled to attorney fees.
RUSSELL E. DINGLE, THOMAS L. REMPFER, UNITED STATES OF AMERICA, EX REL.,v. BIOPORT CORPORATION, ROBERT MYERS, 6th Cir. No. 03-1841, October 28, 2004. Court affirms the dismissal of a qui tam false claims action for lack of jurisdiction due to the public disclosure bar. Court discusses the algebra of transactions referenced in 31 USC 3730(e)(4)a as represented by the DC Circuit as “If X + Y = Z, Z represents the allegation of fraud and X and Y represent its essential elements. In order to disclose the fraudulent transaction publicly, the combination of X and Y must be revealed from which readers or listeners may infer Z, i.e., the conclusion that fraud has been committed.” Finding that “...the allegations and transactions discussed in the public disclosures are sufficiently definite to give the government enough information about possible fraud... ”, the Court affirms the dismissal.
US ex rel Edward L. Totten v. BOMBARDIER CORPORATION AND ENVIROVAC, INC., DC Cir. No. 03-7128, August 27, 2004. Qui Tam False Claims Act case. Statutory interpretation case. In an opinion by Judge Roberts the DC Circuit affirms the district court's dismissal of an alleged false claim submitted to Amtrak. Judge Garland writes a lengthy dissent. Judge Roberts holds that since Amtrak is not a part of the government, the requirement of 31 U.S.C. § 3729(a)(1) that the claim “be presented to an officer or employee of the United States Government ” is a bar to the action. Judge Roberts rejects the statutory interpretation arguments by the government and the dissent that the claim definition of § 3729 (c) which provides that a claim “ includes any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.” mandates an interpretation which allows the claim even if not presented directly to the government. Judge Garland, in dissent, describes the majority as applying the “cannons of statutory destruction.”
United States of America, ex rel., TONI R. BARRON; VICKY J. SCHEEL, v. DELOITTE & TOUCHE, L.L.P.; DELOITE & TOUCHE CONSULTING GROUP, L.L.C.; DELOITTE & TOUCHE CONSULTING GROUP HOLDING, L.L.C.; MEDICAID CLAIM SOLUTIONS OF TEXAS, INC.; NATIONAL HERITAGE INSURANCE CO. 5th Cir. No. 03-50507, August 11, 2004. False Claims Act case. Court reverses the district court’s holding that National Heritage Insurance Company's (NHIC) role as a Medicaid fiscal intermediary is barred by Texas’s Eleventh Amendment immunity. The court applies the six factor Clark test —1. Whether the state statutes and case law view the agency as an arm of the state; 2. The source of the entity’s funding; 3. The entity’s degree of local autonomy; 4. Whether the entity is concerned primarily with local as opposed to statewide problems; 5. Whether the entity has the authority to sue and be sued in its own name; 6. Whether the entity has the right to hold and use property.— and determines that Texas would not be liable for judgment against NHIC. [Citing Clark v. Tarrant County, 798 F.2d 736, 744-45 (5th Cir. 1986).
UNITED STATES FOR THE USE AND BENEFIT OF SPECTRUM CONTROL SYSTEMS, INC., v. STAFFCO CONSTRUCTION, INC., Defendant-Appellee, ECLECTIC COMPANY, INC., Defendant-Appellant, 6th Cir. No. 03-3651, July 22, 2004. Unpublished decision. Suit by subcontractor against prime for breach and under the Miller Act. Eclectic was a sub to Staffco and had litigated a claim on Staffco’s behalf before the ASBCA. Court affirms the grant of summary judgment by the district court in favor of Staffco. The court notes that the ASBCA’s determination of a particular issue had a preclusive effect on Eclectic’s Miller Act claim. Issue preclusion “dictates that once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving any party to the prior litigation.”
McDONNELL DOUGLAS CORPORATION v. US DEPARTMENT OF THE AIR FORCE and F. WHITTEN PETERS, SECRETARY OF THE AIR FORCE, DC Circ. No. 02-5342, July 27, 2004. Court reverses, in part, the earlier District Court decision and holds that the option year prices and vendor CLIN prices are protected from disclosure. Judge Garland writes a lengthy decision concurring in part and dissenting in part. McDonnell had argued both an APA and Trade Secret Acts violation in the District Court, but only pursues the APA claim on appeal.
MARK E. HANSON, Esq. v. USAID, 4th Cir. No. 03-2305, June 16, 2004. FOIA case. Court affirms the District Court’s grant of summary judgment that held that the document fell under the FOIA exemption for attorney work product prepared in anticipation of litigation. USAID was funding a water treatment project in Egypt and had hired CDM to provide construction, administration and management services for the project. At USAID’s request, CDM hired Roy, an attorney, as a neutral third party to provide advice and consultation on a request from the project contractor (JV) for additional funds due to delay. Roy’s contract directed him to provide a report to USAID and the Egyptian government’s agent, NOPWASD. Roy provided his report to USAID and a copy of a draft report to JV. Plaintiff, an attorney representing JV filed an FOIA request with USAID for a copy of the report. The request was denied as falling within the exemption 5 USA § 552(b)(5), as an attorney work product prepared in anticipation of litigation. Plaintiff sued in the District Court. The Fourth Circuit addressed three issues—... whether USAID enjoyed an attorney client relationship with Roy, such that the attorney-client privilege would even apply to communications between them.(*citations omitted). Second, ... whether the Roy Report fell under the attorney work product exemption to FOIA. See 5 U.S.C. § 552(b)(5). Third, ... whether Roy’s unilateral release of the report to the JV amounted to a waiver of this privilege.” The court answered the first two questions in the affirmative and found that the release of the draft did not waive the privilege as to USAID.
PUBLIC UTILITY DISTRICT NO. 1 OF SNOHOMISH COUNTY, WASHINGTON v. FEMA, 9th Cir. No. 03-35104, June 14, 2004. FEMA provided disaster relief grants pursuant to the Stafford Act to plaintiff in 1996 and 1997. The FEMA IG subsequently audited the grants and disallowed certain costs primarily based on overhead for fringe benefits which plaintiff had applied to overtime hours even though the fringes benefits generally remained constant and were not subject to overtime hours worked. Plaintiff brought suit alleging violations of the APA. The District court granted summary judgment for the government. Plaintiff appeals. The Circuit Court affirms on all counts concluding-“In sum, there is no basis in law to support the District’s contention that FEMA acted in an arbitrary and capricious manner when it conducted post-award audits of the District’s federal disaster relief grants. In times of emergency and where disaster relief is needed urgently, FEMA should be permitted to act reasonably and consistently with applicable Federal laws and regulations in making a preliminary determination as to an applicant’s eligibility for federal disaster relief. At the same time, FEMA should not be constrained by concerns that such preliminary calculations are subject to res judicata, or that FEMA is without authority to conduct an audit to ensure that its calculations are consistent with applicable Federal laws and regulations. Were we to accept the District’s argument, we would needlessly hamper FEMA’s goal that “eligible assistance be delivered as expeditiously as possible consistent with Federal laws and regulations.” 44 C.F.R. § 206.200(b) (1996). This would be unacceptable and is not required by law. The agency’s decisions that have been challenged, all of which relate to its audit process, are not arbitrary and capricious and do not conflict with the law. The agency’s audit determinations and the district court’s judgment upholding the agency show no legal error.”
US ex rel. Karen T. Wilson v. Graham County, 4th Cir. No. 03-1122, May 25, 2004. False Claims Act retaliation case. Court reverses the district court and holds that the six year limitation period of the FCA applies to retaliation claims. The court finds “no ambiguity undermining the conclusion that Congress intended the revised limitations period of § 3731(b)(1) to apply to all claims under § 3730, including retaliation claims under § 3730(h). We are unpersuaded that Congress’s addition of language referring to "the date on which the violation of section 3729 is committed" was intended to exclude § 3730(h) from the ambit of § 3731(b)(1), and that the consequences of the resulting statutory scheme are not absurd, but are in keeping with the FCA’s purpose.” One judge dissents.
Coalition for Government Procurement, et al. v. Federal Prison Industries, Inc., et al., 6th Cir. No. 01-2231, April 12, 2004. Challenge to the Federal Prison Industries (FPI) by the Coalition for Government Procurement (CGP) on claims based on the UNICOR organic statute, the APA and Fifth Amendment takings. Except for one moot claim the 6th Circuit affirms the district courts grant of summary judgment for the government. Good discussion of the historical background of the FPI/UNICOR. The court finds that CGP cannot prevail on its APA claims as it has not shown that the action of the agency was arbitrary capricious or otherwise not in accordance with law. Although recognizing that the Federal Circuit has held that as a NAFI the FPI is not subject to jurisdiction under the Tucker Act for a claim for monetary damages, the court declines "... to construe the requested relief as seeking monetary damages; therefore, the district court properly asserted its jurisdiction over the Coalition’s takings claim." The court discusses the standards for regulatory non-categorical takings and "... employs an "ad hoc, factual inquiry," into three significant factors: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action." Finding that CGP had failed to prevail on these factors, summary judgment to the government was properly awarded to the government.
UNITED STATES OF AMERICA, ex rel, DONALD PATRICK J ADRIAN, V. REGENTS OF THE UNIVERSITY OF CALIFORNIA, et al., 5th Cir., No. 03-30243, March 30, 2004. False Claims Act case. The complaint alleged that the Regents of the University of California as manager of the Lawrence Livermore National Laboratory violated the FCA. Court affirms the district court’s holding that the Regents of the University of California are not persons under the FCA even though the Regents may have competed against private companies for the contract to operate the Livermore lab
US v. REITMEYER et al.. 10th Cir., No.02-5151, February 4, 2004. Major Fraud Act case. Corps of Engineers contract. Court affirms the district court which had dismissed the government’s indictment on statute of limitations grounds. The Corps had awarded a fixed price contract for a groundwater treatment plant. Contractor filed a $4 million dollar differing site conditions claim on May 16, 1994. On February 15, 2003, more than seven years after the claim was filed he government filed an indictment under the Major Fraud Act charging the companies and certain officers with executing and attempting to execute A scheme to defraud the US. The court rejects all of the government’s argument that there was a continuing scheme which extended the limitations period. The court held that the execution was complete when the claim was filed on May 16, 1994 and seven year statute of limitations had expired when the indictment was filed.
WICKWIRE GAVIN, P.C. v. US POSTAL SERVICE, 4th Cir. No. 02-2310, January 30, 2004. FOIA case. Court affirmed the district court and held that the Postal Act Reorganization Act provision at 39 USC 410(c)(2) which provides that " information of a commercial nature, including trade secrets, whether or not obtained from a person outside the Postal Service, which under good business practice would not be publicly disclosed;" was a statute within the scope of 5 USC 552(b)(3) and therefore the Postal Service did not have to disclose the information requested by Wickwire or show that competitive harm would be caused by such disclosure.
LION RAISINS INC. v. UNITED STATES DEPARTMENT OF AGRICULTURE, 9th Cir., No. 02-16696, January 15, 2004. Not a contracts decision, but an FOIA case about a firm who has been a party in recent contract cases. Court reverses a portion of a district court decision that relied on in camera review of the government’s sealed declaration as the sole factual basis for its “law enforcement” decision. 5 U.S.C. § 552(b)(7)(A). The court remanded to the district court to require the government to submit detailed public declarations or other material in support of its “law enforcement” exemption. The court held that “..the district court’s reliance on in camera review as a substitute for public affidavits deprived both the district court and this court of the informed advocacy upon which the fairness of adversary proceedings depends. Because the district court failed to require that the government submit as much information as possible in the form of public declarations before relying on in camera review, it lacked an adequate factual basis for its decision.”
ROLE MODELS AMERICA, INC., v. LES BROWNLEE, ACTING SECRETARY OF THE ARMY, DC Cir., No. 02-5037, January 13, 2004. Plaintiff, a non-profit educational organization, seeks EAJA fees for its work in an earlier case where the court had enjoined the Army from disposing of certain property until it had corrected procedural errors which had deprived plaintiff of the opportunity to compete for the property. The government opposes arguing that plaintiff was not the prevailing party as it had not yet acquired the property, the government’s position was substantially justified and the fees are so excessive that they should be drastically reduced.. The court finds that plaintiff was the prevailing party as it obtained what it sought, the correction of errors by the Army so plaintiff could compete. The court discounts the government’s argument that its litigation position was substantially justified and looks at the underlying administrative action where Judge Tatel finds that "... the regulations were so clear and the Secretary’s failure to comply with them so obvious that his actions could not ’appear correct to a reasonable person. The court does however, agree that the fees requested are not reasonable. Judge Tatel notes that plaintiff "...seeks compensation for the work of two partners, one counsel, one associate, six legal assistants, one law clerk, two research librarians, and a legislative specialist. Their hourly rates range from $495 for the lead partner to $285 for the associate to $165 for the law clerk. According to Role Models, these fourteen individuals logged a total of 1058 hours in connection with the appeal and with the preparation of its fee petition. Multiplying the appropriate rates and the number of hours, Role Models requests $342,741.25 in legal fees. It also seeks $12,773.44 for expenses...." The requested fees even include two hours of a partner’s time in completing the application for admission to the D.C. Circuit Bar. After a complete discussion of the fees and expenses issues the court awards a total of $83,236.
US EX REL. EDWIN P. HARRISON v. WESTINGHOUSE SAVANNAH RIVER COMPANY, 4th Cir., Nos. 02-2020, 02-202, December 19, 2003. DOE False Claims Act case. Court affirms the district court holding that a certification of no organizational conflict of interest was material. Westinghouse had used an employee of a subcontractor, GPC, to prepare a recommendation to DOE that a project be subcontracted rather than be performed by Westinghouse. The GPC employee apparently was intimately involved in preparing Westinghouse procurement sensitive documents. DOE approved and Westinghouse issued an RFP and received four offers, one from GPC. The same employee that assisted Westinghouse with the recommendation to DOE worked on preparing GPC’s proposal for the project. GPC certified that it had no OCI and Westinghouse selected GPC for the award and submitted to proposal and the no-OCI certification to DOE for approval. Plaintiff, a former vice-president of GPC brought the case alleging that the submission of a no-OCI certification was false claim.
NISH; RCI, Inc., v. RUMSFELD and NEW MEXICO COMMISSION FOR THE BLIND; ROBERT VICK, Intervenors, 10th Cir. No. 02-2089, November 14, 2003. Air Force contract. Court affirms district court decision finding that the procurement of mess hall cafeteria services were included in the Randolph-Sheppard Act ("RS Act"). Plaintiffs previously had the contract for full food services at the Kirtland AFB under the provisions of the Javits-Wagner-O’Day Act ("JWOD Act"). Before executing options to extend plaintiff’s contract, the Air Force determined that the RS Act applied to mess hall contracts and took priority over the JWOD Act. The Air Force then awarded a contract to intervenor the state licensing agent under the RS Act. Plaintiff filed suit seeking declaratory and injunctive relief. The Court rejects plaintiff’s arguments that the RS Act (1) applies only to vending facility concessions and may not be applied to procurement contracts for military mess halls; (2) confers no authority on the Department of Education to regulate military procurement through application to military mess halls; and (3) does not constitute an exception to the open competition requirements of the Competition in Contracting Act ("CICA"). The Court finds that the statutory definition of vending facilities in the RS Act as including cafeterias was not ambiguous and that the Department of Educations interpretation was owed Chevron deference. The court also held that the definition of "procurement’ in 41 U.S.C. "is sufficiently broad to encompass the award of the cafeteria contract authorized by the RS Act in this case." Finally, insofar as the RS Act and JWOD Act may be in conflict, the court held the RS Act prescribes a priority for blind vendors in the operation of cafeterias on federal property, whereas the JWOD is a more general procurement statute. Following the maxim that the specific intention takes precedence over one of general intention, the court holds that "the RS Act must control."
LEBOEUF, LAMB, GREENE & MACRAE, L.L.P. v. SPENCER ABRAHAM, SECRETARY, UNITED STATES DEPARTMENT OF ENERGY, DC Cir. No. 02-5265, October 28, 2003. Bid protest. [From a district court decision that we touted as most likely the last bid protest decision from a district court.] In an opinion by Judge Roberts, the DC Circuit vacates and remands to the District Court to determine the adequacy of DOE’s determination of the awardee’s apparent conflict of interest. The court finds that "because Leboeuf raised a material issue of disputed fact regarding the adequacy of the Department’s regulatory compliance, summary judgment to the Department was inappropriate". Judge Roberts also directs that "the district court also shall address LeBoeuf’s contention that awarding the Yucca Mountain contract to [awardee] violated Nevada’s Code of Professional Responsibility."
SHERBROOKE TURF, INC. v. MINNESOTA DEP’T OF TRANSP., 8th Cir., Nos. 02-1665 and 3016 October 06, 2003. Court affirms district court decisions that found that Minnesota and Nebraska’s implementation of DOT’s Disadvantaged Business Enterprises (DBE) program met the strict scrutiny standard of Adarand. The court rejected "appellants’ contention that their facial challenges to the DBE program must be upheld unless the record before Congress included strong evidence of race discrimination in construction contracting in Minnesota and Nebraska." However, the court did hold that "On the other hand, a valid race-based program must be narrowly tailored, and to be narrowly tailored, a national program must be limited to those parts of the country where its race-based measures are demonstrably needed. To the extent the federal government delegates this tailoring function, a State’s implementation becomes critically relevant to a reviewing court’s strict scrutiny." Finding that the States’ implementation met the strict scrutiny test, the district court decisions were affirmed.
US Ex Rel Sean Bledsoe v. Community Health Systems, Inc.; Sparta Hospital Corporation d/b/a White County Community Hospital, 6th Cir., No.01-6375, September 10, 2003. False Claims Act case. Court reverses district court’s dismissal of relator’s complaint with prejudice for failure to comply with Rule 9(b), finding that such dismissal was an abuse of discretion as relator did not receive sufficient notice of the defects in its complaint. Court also reverses the district court’s denial of relator’s motion to recognize a settlement between the government, which did not intervene in relator’s case, and the defendants. As a matter of first impression in this circuit the court holds "..that "alternate remedy" [of 31 USC 3730(c)(5)] refers to the government’s pursuit of any alternative to intervening in a relator’s qui tam action." Because the court finds that the relator may be entitled to a share of the settlement agreement proceeds the matter us remanded back to the district court for further proceedings.
US v. TABER EXTRUSIONS, LP, et al. 8th Cir. No. 02-2965, August 27, 2003. Army case. False Claims Act case. Summary judgment for government in a False Claims Act suit is reversed, as defendant, a subcontractor, created genuine issues as to whether pro forma invoices it submitted were false or fraudulent under 31 U.S.C. section 3729(a), and whether defendant knew contractor would use its pro forma invoices in a manner to defraud the U.S. (Based on Find Law synopsis.)
INFORMATION HANDLING SERVICES, INC. v. DEFENSE AUTOMATED PRINTING SERVICES, el al.. DC Cir., No. 02-5192, August 12, 2003. DC Circuit finds that commercial publisher had standing to allege that DEFENSE AUTOMATED PRINTING SERVICES("DAPS") an element of DoD, violated 10 U.S.C. 2462 and implementing procurement regulations by maintaining maintaining a DAPS Internet accessible database without undertaking a cost comparison study to determine whether DAPS could "develop and maintain a digitized database for DoD documents more economically than commercial sources." The court reverses the DC District Court decision grant the government’s motions to dismiss and for summary judgment and remands.
US EX REL LAIRD v. LOCKHEED MARTIN ENG’G AND SCIENCE SERVS. CO., 5th Cir., No. 02-40504, June 24, 2003. Plaintiff did qualify as an "original source" of the information publicly disclosed in his prior state court lawsuit. Thus, the district court did not lack subject matter jurisdiction pursuant to the "public disclosure" provisions of the False Claims Act.(Find Law synopsis)
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, ET AL. v. US, DC Circuit affirms district court decision finding that Section 8014 of the Defense Appropriations Act for fiscal year 2000, which granted an outsourcing preference for firms under 51 percent Native American ownership, is rationally related to a legitimate legislative purpose and thus constitutional.
CERVANTES v. US, 9th Cir., No. 01-56929, June 2, 2003. [Not a contract case, but evidence that justice does prevail, but no thanks to the US Attorney.] The "detention of goods" exception to the sovereign immunity waiver under the Federal Tort Claims Act cannot apply to the government’s negligent failure to remove 119 pounds of marijuana hidden in a car sold to plaintiff, who was later incarcerated for transporting those drugs. (Find Law synopsis)
HUDGENS v. BELL HELICOPTERS/TEXTRON and DYNCORP., 11th Cir., Nos. 02-12357, -13284, April 25,2003. Court affirms district court holding that government contractor defense applies to service contracts.
SCAFAR CONTRACTING, INC. v. SECRETARY OF LABOR; OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, 3rd Cir., No. 02-3335, April 15, 2003. Court holds that “The language of, and policy behind, the EAJA counsels that the term “final disposition” means final and unappealable. Thus, an application for attorney’s fees pursuant to 5 U.S.C. § 504 is timely if filed prior to the expiration of 30 days from the date the decision of the agency becomes final and unappealable.”
UNDER SEAL v. UNDERSEAL, 4th Cir., No. 02-1683, 1684, April 14, 2003. FCA case. Court affirms order unsealing a FCA complaint originally filed as a qui tam action. Court holds that sealing under the FCA is only justified in order that the government may investigate. [Most of the opinion addresses whether or not the court has jurisdiction under the collateral order doctrine.]
United States ex rel. Patrick M. Hays v. Luverne Hoffman, et al. 8th Cir., Nos. 01-3888 -3891, April 09, 2003. Minnesota Department of Human Services reports were public disclosures underlying qui tam claims under the FCA, and plaintiff was the original source of only one of those disclosures, therefore district court lacked jurisdiction over most of the qui tam claims. Relator did establish that he was original source that defendants falsely claimed that apples given as gifts to employees were a Medicaid-reimbursable food expense.
Sullivan v. Shimp, 6th Cir., No. 01-4193, April 01, 2003. Air Force contracts trial attorney Shimp was working at WPAFB for 4 hours on Sunday preparing documents for a trip to California on Monday to litigate a contract dispute. On the way home from the base he had an auto accident and injured appellant. Court affirms District Court decision that Shimp was not acting within the scope of his employment when the accident took place. [Therefore US is not a party to the suit for damages to appellant.]
UNITED STATES OF AMERICA EX REL. JOSEPH T. SIEWICK, v. JAMIESON SCIENCE AND ENGINEERING, INC., ET AL., DC Cir., No. 02-7035, March 28, 2003. DC Circuit affirms that a corporate shareholder and director is not the “employer” of a corporate employee within the meaning of the False Claims Act, 31 U.S.C. § 3730(h).
Susan J. Swift v.US, DC Cir., No. 01-5312, February 11, 2003. False Claims Act case. US need not intervene before requesting dismissal
US, ex rel. MARY L. HOLMES v. CONSUMER INS. GROUP, No. 01-1077 10th Cir. February 10, 2003. Government employee who obtains information about fraud and who is required to report that fraud, may still be a “person” entitled to bring a civil action under the False Claims Act, 31 U.S.C. § 3730(b)(1).
Trifax Corp. v. District of Columbia, DC Cir., No. 01-7195, January 14, 2003. Trifax appeals from the grant of summary judgment denying its Fifth Amendment’s Due Process claim that the District of Columbia Inspector General, by releasing an allegedly defamatory audit report, deprived it of liberty to engage in its chosen business. Trifax claims to have suffered "broad preclusion" from government contracting. The court affirms. Judge Tatel notes that although "...government stigmatization that broadly precludes individuals or corporations from a chosen trade or business deprives them of liberty in violation of the Due Process Clause", Trifax failed to show anything remotely close to "broad preclusion."
Randolph Wilkins v. St. Louis Housing Authority, 8th Cir., Nos. 02-1332/02-1471, December 31, 2002. Eighth Circuit holds that a municipal corporation is an employer under the whistle blower provisions of the False Claims Act and is subject to suit under 31 U.S.C. § 3730(h).
The Human Development Corporation of Metropolitan St. Louis v. HHS, 8th Cir., No. 02-1986, December 5. 2002. Court reverses in part and affirms in part a District Court decision. The Circuit Court found that the decision of HHS Departmental Appeals Board was not supported by substantial evidence on one of the claims.
UNITED STATES OF AMERICA ex rel. Martin Becker v. WESTINGHOUSE SAVANNAH RIVER COMPANY, 4th Cir., No.01-2452, September 27, 2002. False Claims Act case. Fourth circuit joins several other circuits and holds "...that the government’s knowledge of the facts underlying an allegedly false record or statement can negate the scienter required for an FCA violation."
United States of America ex rel. Brett Roby v. Boeing, 6th Cir., No. 00-4157, September 12, 2002. A High-Value Items Clause ("HVIC"), set forth in FAR 52.246-24, 52.246-24, Limitation of Liability-High-Value Items, did not serve as a defense to damages for loss of the helicopter, under the False Claims Act.
DELTA FOUNDATION, INC. v. HHS, 5th Cir., No. 01-60592, August 20, 2002. In affirming a decision of a District Court which had upheld a decision of the HHS Departmental Appeals Board ("DAB") the Fifth Circuit holds that "...that there is a sufficiently adversarial nature to HHS proceedings so as to impose an issue exhaustion requirement to those proceedings. A claimant must therefore exhaust all issues in a request for review by the DAB in order to preserve judicial review of those issues."
Courtney v. Smith, 6th Cir. No. 00-4554, July 23, 2002. Sixth circuit follows Federal Circuit in finding that government employees do not have standing to challenge an A-76 decision. Dissenting, Judge Merritt argues that because the Circular defines federal employees as "Directly affected parties ..." that such employees are "adversely affected or aggrieved" persons who should have standing. [Interestingly, the majority gives considerable weight to the current circular’s "preference" to rely on private contractors. Would it have made a difference if the preference language is eliminated, as the Administrator of OFPP has indicated it will be in a future revision of the Circular?]
Building and Construction Trades Department, AFL-CIO, et al. v. Joe Allbaugh, Director, Federal Emergency Management Agency, et al., DC Cir. No. 01-5436. E.O. 13202 and Project Labor Agreements case. Court reverses the District Court and concludes "... that the President acted within his constitutional authority in issuing Executive Order No. 13,202 and that the Executive Order expresses a proprietary policy that is not subject to preemption by the NLRA. Therefore, the judgment of the district court is reversed and its injunction is vacated."
PETER VEECK, doing business as Regional Web v. SOUTHERN BUILDING CODE CONGRESS INTERNATIONAL, INC., 5th Cir., No. 99-40632, June 7, 2002. A copyright rather than a public contract law case, but interesting just the same. In an en banc decision the court reverses the earlier ruling of a panel and finds that there is no infringement where a party publishes a copyrighted work (a building code) when such code had been adopted as law by a community. Those list members who work with establishing recommended codes, such as the ABA Model Procurement code, may find this opinion of particular interest.
MD Public Service v. US, 4th Cir., No. 01-1792, May 31, 2002. Fourth Circuit adopts the holding of the Federal Circuit in American Fed. of Gov’t Employees, AFL-CIO v. United States, 258 F.3d 1294 that an interested party under the ADRA is limited to an "actual or prospective bidder or offeror" as provided in CICA §S 3551(2). Because the Maryland Public Service Commission was not a bidder, and the actual bidder in the case below did not appeal, the Public Service Commission has no standing and the appeal is therefore dismissed.
PAMELA WOOD, GLENROY WOOD v. US, 1st Cir., No. 01-2028, May 10, 2002. Federal Tort Claims case. Discretionary exception to FTCA protects government from a claim that government’s failure to ensure that contractor was performing in a safe manner was actionable.
United States of America, ex rel.; Edward T. Augustine v. Century Health Services, Inc., et al.. 6th Cir. No. 01-5019, May 7, 2002. FCA Case. Court affirms the District Court, which found for the government, and adopted the theory of liability "...that a false implied certification may constitute a false or fraudulent claim even if the claim was not expressly false when it was filed. Instead, liability can attach if the claimant violates its continuing duty to comply with the regulations on which payment is conditioned."
US v. SOUTHLAND MANAGEMENT CORPORATION; ET AL, 5th Cir., No. 00-60267, April 11, 2002, Revised April 12, 2002. Fifth Circuit tackles the "materiality" of a FCA claim and holds "...once a claimant has made a certification of compliance with a statutory or regulatory provision or a provision of a contract mandated by statute or regulation, the claimant is subject to liability under the Act for submitting a false claim if that certification of compliance is known by the claimant to be false."
Amfac Resorts, L.L.C. v. United States Department of the Interior, et al., DC Cir. 00cv02838, 00cv02885, 00cv02937, 00cv03085, March 1, 2002. This case arises from a series of concession contracts with the National Park Service and the right of renewal of those contracts. Appellants’ argue in favor of an "implied" right of renewal that "...rests on the ’Christian doctrine,’ named after G.L. Christian & Assocs., 312 F.2d 418, 424 (Ct. Cl. 1963)" which requires "that long-standing and deeply-ingrained agency policies, such as the [Park Service’s] entrenched policy of granting concessioners renewal rights in exchange for concessioner investments, form a mandatory part of all government contracts." Judge Randolph notes that the DC Circuit has never adopted the Federal Circuit’s Christian doctrine. However, as explained by Judge Randolph, Appellants reliance on the doctrine fails here as even the Federal Circuit has stated that "it is not enough that the legislative or regulatory provision is important or significant (assuming one could make such rankings). To constitute a contractual obligation even though not written in the contract, the provision must be a mandatory contract clause, a clause the legislation--or as in Christian, 312 F.2d at 424, the regulation--requires to be included in contracts." Here the court found that the renewal provision contained in the statute at issue here "was by no stretch a mandatory contract term". The case also holds that the Contract Disputes Act does not apply to these concession contracts and also includes some good discussion of implied contractual rights.
UNITED STATES EX REL. ANTHONY J. DUNLEAVY v. COUNTY OF DELAWARE, 3rd Cir., No. 00-3691, January 29, 2002. False Claims Act suit. Third Circuit concludes that "...that a local government cannot be subject to suit by a qui tam relator under the Act."
UNITED STATES of America ex rel. Janet CHANDLER, Ph.D. v. COOK COUNTY, Illinois, 7th Cir., Nos. 00-4110 & 01-1810, January 22, 2002. False Claims Act suit. Seventh Circuit holds that "...counties are not only amenable to the FCA but also are subject to the same penalties as other defendants."
WASHINGTON-DULLES TRANSPORTATION, LIMITED v. METROPOLITAN WASHINGTON AIRPORTS AUTHORITY, 4th Cir., No. 00-2153, August 29, 2001. Reversing a District Court decision, the Fourth Circuit finds that the federal district court has jurisdiction over the alleged violation of MWAA’s procurement regulatons and that appellant has standing to bring the action.
US v. AMERICAN STATES INSURANCE COMPANY, 11th Cir., No. 00-1154, May 31, 2001. American States appeals from a district court decision finding it liable for damages in the breach of a surety agreement. 11th Circuit reverses, holding that the six year statute of limitations of 28 U.S.C. § 2415(a) bars the suit by the government.
Riley vs. St Luke’s Epis Hosp, 5th Cir., No. 97-20948, May 25, 2001. By an 11-2 en banc decision the court finds that qui tam provisions of the False Claims Act do not violate the Take Care and Appointents Clauses of Article II. (See below for the earlier 5th Circuit decision in this case.)
US , ex rel. Garibaldi v. Orleans Parish School Board, 5th Cir., No. 99-30550, March 28, 2001. Court finds that local governments, here a school board, and not subject to the False Claims Act. Judge Davis nears conclusion of his opinion with the following statement. "The punitive damages regime of the False Claims Act shows a congressional intent that the False Claims Act should not be applied to local governments. There is no contrary expression of legislative intent and no purpose behind the False Claims Act that undermine that conclusion. For these reasons, we conclude that the term person in the liability provisions of the False Claims Act does not include local governments like the School Board. Therefore, the judgment of the district court is VACATED and judgment is RENDERED in favor of the Appellant, the Orleans Parish School Board."
US v. BANKERS INSURANCE COMPANY, 4th Cir., No. 00-1342, March 27, 2001. When the underlying contract contains an arbitration provision the 4th Circuit panel, with one judge dissenting, holds that a False Claims Act is subject to arbitration when requested by one of the parties.
US v. MACKBY, 9th Cir., No. 99-15605, March 21, 2001. Court remands to the district court to determine whether or not the False Claims Act civil damages and treble damages determined by the district court "violate the Excessive Fines Clause of the Eighth Amendment."
MD/DC/DE Broadcasters Association, et al. v. FCC, No. 00-1094, DC Cir., January 16, 2001. Not a contract case, but DC Circuit finds an FCC rule "... does put official pressure upon broadcasters to recruit minority candidates, thus creating a race-based classification that is not narrowly tailored to sup port a compelling governmental interest and is therefore unconstitutional." Citing Adarand.
Faye Anastasoff v. US, (PDF Version only.) No. 99-3917EM, 8th Cir., December 18, 2000. Eastern District of Missouri Civil case - civil procedure. Tax case. While considering a request for an enbanc hearing, the Court moots the case after learning that the government had refunded tax which was the basis for underlying action. Regarding prior opinion and the issue of the precedential effect of unpublished opinions court states "We sit to decide cases, not issues, and whether unpublished opinions have precedential effects no longer has relevance for the decision in this tax related case. [See prior 8/22/2000 case below]
Trayon Redd v. Lawrence H. Summers, Civ. No. 99-5329, December 1, 2000. DC Cir. When can the government be liable for a claim brought under § 504 of the Rehabilitation Act of 1973 by the employee of a government contractor? Here appellent, Redd, appeals from the District Court’s dismissal of her complaint that she was discharged from her position as a tour guide, because of her weight, by a contractor of the Bureau of Printing and Engraving. This case doesn’t answer that question, but remands to the district court for a consideration of § 504, 29 U.S.C. § 794 (a). That provision prohibits an individual with a disability from being excluded, soley because of that disability, from "... any program or activity conducted by any Executive agency..."
Multimax, Inc. v. Federal Aviation Administration, No. 99-1515, November 21, 2000, DC Cir. The opinion, once again underscores the deferential standard that is to be applied in federal procurement related cases. See case below at the FAA at http://www.faa.gov/agc/ 99_140od.htm
Adarand Constructors Inc. v. Slater, No. 97-1304, 10th Cir., September 25, 2000. The latest, Adarand VII, in a long running case involving minority subcontractor preferences in the highway construction area. On remand from the Supreme Court, the 10th Circuit considers, and reverses, the district court decision which had previously found an "Adarand" violation. The Court here considers the changes in the statutory and regulatory bases for the preference program and concludes that the strict scrutiny standards of a "compelling interest" and "narrowly tailored" remedies are met.
J.A. Jones Management Services v.FAA, No. 00-1023, DC Cir. September 29, 2000. Bid Protest case. Court upholds the decision of the FAA Administrator pursuant to the highly deferential arbitrary and capricious standard.
Faye Anastasoff v. US, (PDF Version only.) No. 99-3917EM, 8th Cir., August 22, 2000. Eastern District of Missouri Civil case - civil procedure. Tax case. Court finds unconstitutional that portion of Eighth Circuit Rule 28A(i) which states that unpublished opinions are not precedent. Court provides a detailed discussion of precedent and unpublished opinions. [Mooted-see 12/18/2000 opinion above]
Advanced Management Technology, Inc. v. FAA, No. 99-1134, DC
Cir. May 12, 2000.
DC Circuit dismisses for lack of standing AMTI’s suit based on earlier findings by the FAA in a bid protest matter. AMTI claimed reputational injury, monetary injury and that it was deprived of a right to a legal procurement process.
The Iceland Steamship Company, Ltd.-Eimskip and Van Ommeren Shipping (USA) LLC v. Department of the Army No. 99-5088, DC Cir. January 11, 2000. align="center" DC Circuit Court reverses a bid protest action, holding that courts review of a contracting officer’s responsibility determination is "an especially deferential application of the arbitrary and capricious standard."
National Center for Manufacturing Sciences v. Department of Defense, No 98-5576, DC Cir,. January 4, 2000.align="center" Recission of unobligated earmarked funds leaves "earmarkee" without a legal claim to funds. District Court decision affirmed.
Riley vs. St Luke’s Epis Hosp No. 97-20948, November 15, 1999. 5th Circuit holds that qui tam actions brought by uninjured relators violate the Constitution’s Take Care Clause and the constitutional doctrine of separation of powers when the government has not intervened in the suit. (May 25, 2001. The Court reverses this decision in an en banc ruling.)
US v. Kenney, No. 98-2128(11th Cir), August 26, 1999. Court affirms a district court conviction under 18 U.S.C. §201(c)(1)(B) that found that an employee of a firm with a contract with the Air Force was a "public official".
McDonnell Douglas Corporation v. NASA, DC Cir. No.98-5251, June 25, 1999. Reverse FOIA suit. DC Circuit reverses the District Court which had granted summary judgment in favor of NASA’s decision to release certain line item prices in McDonnell’s contract. Although not deciding if the information was required (National Parks test) or voluntarily (Crticial Mass test), Judge Silberman stated "If commercial or financial information is likely to cause substantial competitive harm to the person who supplied it, that is the end of the matter, for the disclosure would violate the Trade Secrets Act." Finding that McDonnell prevailed on the substantial competitive harm test, the Court reversed.
Adarand Constructors Inc. v. Slater, No. 97-1304, (10th Cir) March 4, 1999. 10th Circuit moots Adarand, vacates the District Court’s decision and directs the court to dismiss. The Court finds that since Adarand has now been certified as an DBE by the State of Colorado. "it can no longer assert a cognizable constitutional injury."
GENERAL DYNAMICS CORPORATION v. US, No.96-55821. (9th Cir) March 27, 1998. Circuit court reverses and remands the District Court decision which found the Government liable for negligence of DCAA auditors under the FTCA. The Circuit Court holds that the action is barred by the discretionary function exception, which applies to prosecutors. The Court also said " The actions taken against General Dynamics and its employees will not be recorded as the Department of Justice’s finest hour, nor, considering the ultimate candid request for dismissal, was it the Department’s darkest one. A mistake was made, but, because prosecutors do not have ichor in their veins, mistakes can be expected from time to time. Mistakes, however, do not necessarily equal governmental liability." Judge O’SCANNLAIN dissented in part.
Blue Fox, Inc. v. United States, No. 96-35648, (9th Cir.) August 25, 1997. 9th Circuit reverses District Court and holds "that the Administrative Procedures Act permits [a subcontractor’s] equitable lien claim against the Army because an action for specific performance for the payment of money is not an action for money damages." Dissent filed.Supreme Court reverses. See above.
Veda, Incorporated v. U.S., No. 96-3638, (6th Cir.), April 11, 1997. Essentially a bid protest case brought before the recent change in statute granting pre- and post-award jurisdiction to District Courts in bid protest actions. Court reversed District Court which had dismissed action as within exclusive jurisdiction of Court of Federal Claims. Court found that Veda’s suit was for injunctive relief, not money damages and was therefore properly with jurisdiction of District Court. Reversed and remanded. PDF version.
Dynalantic Corp. v. DOD, No. 96-5260, (DC Cir.), June 10, 1997. The DC Circuit Court reversed the earlier District Court decision and found that Dynalantic Corp. had standing to bring its suit challenging the (8)a program. The Court summarized as follows: "In sum, the interdependency of various provisions of the Act and the 8(a) regulatory scheme demonstrates that Dynalantic’s injury -- its inability to compete on equal footing with 8(a) participants -- is traceable to the 8(a) program and is likely to be redressed by a decision holding all or part of the program unconstitutional. Dynalantic thus has standing to challenge the constitutionality of the 8(a) program, and the judgment of the district court is reversed."
United States of America ex rel. American Systems Consulting,
Inc., et al., Relators, v. ManTech Advanced Systems lnt'l Inc., et al.,
Defendants, S.D. Ohio Case No. 2:08-cv-733, February 27, 2014. Qui tam case, DeCA contract. Relator claims defendant ManTech made a material misrepresentation to the government under the FCA when it submitted its final proposal and failed to inform the government that the program manager, Kendall-Sperry, it had proposed had resigned and was no longer with the company. The government learned of this when relator filed an agency protest making the same allegation. The agency took corrective action and reevaluated ManTech’s proposal and reached the same decision to award the contract to ManTech.
The court grants summary judgment for the defendant. The court notes “The Government’s failure to act when apprised of Kendall-Sperry’s unavailability precludes a finding that ManTech’s failure to disclose was material.” The court rejects as contradictory to the evidence relator’s argument that the court should ignore the government’s testimony that the unavailability of Kendall-Sperry would have no bearing on the decision to award as it was “easier” for the government to simply continue with the award. The court also rejects the opinion of relator’s expert that Kendall-Sperry was an important element in the proposal and was a material factor in the evaluation. The court discusses the cases on expert testimony and concludes that the opinion was speculative and contrary to the evidence and was a legal conclusion rather than an expert opinion.
SOUTHWEST MARINE INCORPORATED, a dissolved California corporation; Plaintiff, v. Raymond MABUS, Secretary of the Navy, S.D. California Civil No. 3:12–cv–0526–GPC–WMC., Feb. 19, 2014. Navy fixed-price incentive contract for ship overhaul. FAR § 31.201–5 Credits was incorporated in to the contract and provided
The applicable portion of any income, rebate, allowance, or other credit relating to any allowable cost and received by or accruing to the contractor shall be credited to the Government either as a cost reduction or by cash refund. See 31.205-6(j)(3) for rules governing refund or credit to the Government associated with pension adjustments and asset reversions.The contract also contained the Incentive Price Revision–Firm Target provision, FAR § 52.216–16.
LARRY GRANT CONSTRUCTION; and MA-CHIS LOWER CREEK INDIAN TRIBE ENTERPRISES, INC. Plaintiffs, v. KAREN G. MILLS, Administrator U.S. Small Business Administration. D.D.C. Civil Action No. 12-00837 (BJR), July 24, 2013. Plaintiff, LGC, challenges the decision of SBA’s Office of Hearings and Appeals that it is other than small based on a affiliation with LCITE. The court grants plaintiff’s motion for summary judgment and vacates the OHA decision. The court notes “The record must show that the SBA ‘considered the relevant factors and explained the facts and policy concerns on which it relied, and [that] those facts have some basis in the record.’ Horner, 854 F.2d at 498. The SBA points to nothing in the record that explains why it assumed LCITE’s joint venture receipts had already been discounted, and, aside from a single vague reference to its analyst’s ‘experience,’ offers no explanation here. Because the SBA has not ‘explained the facts,’ or, more precisely, the assumption ‘on which it relied,’ its size determination of LGC was arbitrary and capricious, in violation of the APA, 5 U.S.C. § 706(2)(A).
UNITED STATES OF AMERICA, Plaintiff, v. SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION, D.D.C Civil Action No. 04-1543 (RWR), July 22,
2013. OCI False Claims Act case on remand from the DC
Circuit. See previous district court case. The D.C.
Circuit vacated the judgment on FCA liability and damages and remanded the case
for further proceedings. SAIC now moves for summary judgment regarding the FCA
knowledge element and damages and the government moves for partial summary
judgment regarding the FCA falsity element.
The court denies both motions find that “there are genuine disputes of material fact regarding the FCA scienter and falsity elements and damages.”
The court concludes “There is sufficient evidence for a reasonable jury to find that SAIC knew that its claims and statements were false, but also that SAIC’s challenged business relationships did not create potential or actual OCIs. Because SAIC has not shown that the amount of FCA damages under the 1992 contract is the ‘same issue’ as the breach of contract damages, the government is not precluded from arguing that it is entitled to FCA damages under the 1992 contract beyond $78. The government provided sufficient evidence to show that there is a genuine dispute as to the value of SAIC’s services provided under the 1999 contract.”
UNITED STATES of America ex rel., Omar BADR, Plaintiff–Relator, v. TRIPLE CANOPY, INC., Defendant. E.D. Virginia No. 1:11–cv–288 (GBL/JFA). June 19, 2013. Qui tam action alleging fraudulent billing. Defendant moves to dismiss. Judge Lee grants the motion to dismiss noting
“ The Court holds that the false claims violations, alleged in Count I of the Government's Complaint and all five counts of Relator’s Complaint, fail to state a claim because they do not sufficiently allege the presentment of a false statement or certification in support of a demand for payment or claim by Defendant.FN1 The Court holds that the false records claim, Count II of the Government’s Complaint, must be dismissed for failure to plead presentment of and reliance on a false claim. The Court holds that the Government’s fraud claims, Counts IV and V, must be dismissed for failure to plead reliance upon any false statements. The Court holds that the Government’s unjust enrichment claim, Count VII, must be dismissed because quasi-contractual remedies are not available where an express contract controls a dispute.”
UNITED STATES of America, Plaintiff, v. UNITED TECHNOLOGIES CORPORATION, Defendant. S.D. Ohio No. 3:99–CV–093, June 17, 2013. FCA case. On remand from the Sixth Circuit opinion. See earlier District court decision. The Circuit Court affirmed the FCA liability determination but reversed the damages decision and the holding that earlier litigation at the ASBCA barred common law damages under a claim preclusion doctrine.
The court focuses “upon three instructions from the Sixth Circuit: First, ‘[t]o calculate the difference between what the government paid and what it should have paid, [taking] account for the diminished value of the new warranties.’ 626 F.3d at 322. Second, to ‘calculate the difference between what the government paid each year—FEC III, IV, and V—and what it should have paid each year.’ FN1 Id. Third, to ‘calculate what the government eventually paid each year during FEC III, IV, V, and VI, what it should have paid each year based on what the government received, then take the difference between the two.’”The court awards common law damages of $108,995,143 plus interest and FCA treble damages of $356,960,504 plus penalties of $7,090,000.
SHAVER TRANSPORTATION COMPANY v. THE UNITED STATES, D.Oregon No. 3:12–cv–01448–SI, June 05, 2013. Plaintiff is a third tier subcontractor that provided towing services for vessels owned by the Maritime Administration(MARAD). MARAD contracted with Interocean, as the Ship Manager, for various services which in turn subcontracted with PCMA who ordered towing services from plaintiff. Plaintiff alleges it has not been paid and brings this suit arguing that the government breached its maritime contract with plaintiff. The government moves to dismiss for lack of jurisdiction arguing that the government has not waived its sovereign immunity for this claim. After discussing the interaction between the Suits in Admiralty Act(SAA), 46 U.S.C. § 30901 et seq., and the Public Vessels Act(PVA), 46 U.S.C. § 31101 et seq, the court concludes “that the PVA constitutes an explicit waiver of the United States’ sovereign immunity for maritime breach of cointract(sic) claims involving public vessels.” However, the court concludes that plaintiff is not a contractor or in privity with the government under the CDA and dismisses the suit. The court also rejected the argument by plaintiff that its contract was for the benefit of the U.S. as PCMA was an agent of the government. The court notes that the MARAD contract with Interocean expressly states:
“When the Ship Manager acquires products or services as a prime contractor from a subcontractor under the procedures set forth in Attachment J–2, the Ship Manager is not an agent of the United States. Under the Cointract(sic) Disputes Act the subcontractor has no direct right to sue the United States or the Maritime Administration for claims and disputes arising under its cointract(sic) with the Ship Manager since there is no privity of cointract(sic) between such subcontractor and the Maritime Administration.”
CYBERLOCK CONSULTING, INC., Plaintiff, v. INFORMATION EXPERTS, INC., Defendant. ED VA No. 1:12cv396 (JCC/TCB). April 3, 2013. Plaintiff, Cyberlock sues for breach of a teaming agreement which it argues required defendant, Information Experts(IE) to award it a subcontract for 45% of the work for an OPM contract which was awarded to IE. The court grants summary judgment for IE finding that the teaming agreement required further negotiations and concluded “that the most reasonable reading of Second Teaming Agreement, construed as a whole, is that any seemingly mandatory language to award Cyberlock with a portion of the prime contract was modified by the provisions indicating that: (1) the award of such work would require the negotiation and execution of a future subcontract; (2) the award of such work was dependent on the success of such future negotiations; (3) any future executed subcontract was subject to the approval or disapproval of OPM FIS; and (4) suggesting that the framework set out for the work allocation in a future subcontract potentially could change as it merely was based on the work anticipated to be performed by Cyberlock as then-presently understood by the parties.” The court also notes “As such, the Court finds that the post-award obligations in the Second Teaming Agreement unambiguously set out an agreement to negotiate in good faith to enter into a future subcontract. As discussed above, such an agreement ‘is precisely the type of agreement to agree that has consistently and uniformly been held unenforceable in Virginia.’”
Robert WINSTON, et al, Plaintiffs,
ACADEMI TRAINING CENTER, INC., Defendant.
E.D. VA, Civil Action No. 1:12–cv–767.
March 13, 2013. False Claims Act case. Plaintiffs were employees of defendant who held a State Department contract to provide security services in Afghanistan. plaintiffs signed independent contractor agreements (ICAs) with defendant. Plaintiffs “allege that Academi unlawfully retaliated against them when they reported Academi for submitting false claims and
records to the State Department.” Academi argues that the action should be stayed or dismissed until arbitration, as required in the ICAs, is complete. The court first examines whether arbitration is appropriate for a False Claims Act case. Although not completely ruling out arbitration in a FCA case the court finds that “the
ICAs do include provisions that preclude the effective vindication of the Plaintiffs' rights under the FCA.
For example, no discovery is allowed in arbitration under the ICAs. FCA claims are often document intensive. In this case, the Plaintiffs claim that Academi was falsely certifying contractors as having passed the firearms training. It will be difficult, if not impossible, to prove those claims without the allegedly falsified documents. And it will be difficult, if not impossible, to obtain those documents without discovery.
Also, the fee shifting provision of § 20.7 of the ICAs requires Plaintiffs to pay all fees and costs that arise from the arbitration, regardless of the outcome. The False Claims Act, on the other hand, provides attorney’s fees to successful plaintiffs, therefore the fee shifting provision of the ICAs frustrates the clear intent of Congress.”
The courts also finds that the ICAs are unconscionable insofar as state law claims are present and denies the motion to dismiss or stay.
DEFENSE SUPPORT SERVICES LLC, Plaintiff, v. OFFSHORE SERVICE VESSELS LLC, Defendant., E.D.VA Case Number I: l 2-cv-1243 (AJT/TCB, January 22, 2013. Synopsis by list member: This decision staying an arbitration brought by a Navy prime against a subcontractor. It upholds the position that arbitrability of a contract dispute is to be determined by the court and not by an arbitrator. It also discusses teaming agreements merging into subcontracts.
McALLISTER TOWING AND TRANSPORTATION COMPANY, INC. and McAllister Towing of Philadelphia, Inc., Plaintiffs, v. THE UNITED STATES, ED Pa Civil Action No. 122208. Jan. 8, 2013. Plaintiff was a subcontractor to a Navy prime contractor for the movement of ships at the Philadelphia Navy Yard. Plaintiff brings this action for indemnity to recover the settlement and the costs it incurred from an injury during towing operations. The government moves “to dismiss McAllister’s claim by arguing there was never a contract between the two and, absent a contract, there can be no waiver of the United States' sovereign immunity.” The court denies the motion to dismiss agreeing with plaintiff ’s argument “that discovery must be allowed to proceed to determine whether or not the contract even if unauthorized-was later ratified by an authorized agent. This is a reasonable request. Though the United States asserts in its briefing that no such ratification took place, McAllister’s stated need to fully investigate the contractual relationship is a valid one.
UNITED STATES of America, ex rel. Jon H. OBERG, Plaintiffs, v. PENNSYLVANIA HIGHER EDUCATION AUTHORITY, et al., Defendants, E.D. VA, Civil Action No. 01:07cv960, December 5, 2012. Qui tam suit against entities created by their respective states for the purpose of generating higher educational opportunities, each with defined powers within their state code. The district court had earlier dismissed the actions as defendants were state agencies. The Fourth Circuit vacated the decision. The Fourth Circuit determined that the arm-of-the-state analysis used in the Eleventh Amendment context provides the appropriate legal standard in deciding whether an entity is a “person” subject to suit under the False Claims Act (“FCA”), as there is a “ virtual coincidence of scope’ between the statutory inquiry under the FCA and the Eleventh Amendment sovereign immunity inquiry”. United States of America ex rel. Jon H. Oberg v. Kentucky Higher Educ. Student Loan Corp., 681 F.3d 575, 580 (4th Cir.2012) (internal citations omitted). The Fourth Circuit adopted the four factors set forth in S.C. Dep't of Disabilities & Special Needs v. Hoover Universal, Inc., 535 F.3d 300 (4th Cir.2008), to be used in applying the arm-of-the-state analysis.
First, whether any judgment against the entity as Defendant will be paid by the State or whether any recovery by the entity as plaintiff will inure to the benefit of the State. Oberg, 681 F.3d at 580.
The second factor in the arm-of-the-state analysis inquires into the degree of autonomy exercised by the entity, including such circumstance as who appoints the entity's directors or officers, who funds the entity, and whether the State retains a veto over the entity's actions. Oberg, 681 F.3d at 580.
We now turn to the third factor of the arm-of-the-state analysis, which considers whether the entity is involved with state concerns as distinct from non-state concerns, including local concerns. Oberg, 681 F.3d at 580.
Lastly, we consider how the entity is treated under state law, such as whether the entity's relationship with the State is sufficiently close to make the entity an arm-of-the-state. Oberg, 681 F.3d at 580.After applying the four factors the Court “finds that each Defendant is an arm of each of their respective states. Accordingly, each Defendant is not a person who may be sued by a qui tam relator, Plaintiff in this action, under the False Claims Act. Plaintiff has therefore not stated a claim upon which relief can be granted against any of the Defendants, and Defendants Motions to Dismiss should be granted.”
UNITED STATES for the Use and Benefit of C & J OF CROWN POINT, L.L .C. v. Wayne A. SINGLETON, et al. E.D. Louisiana, Civil Action No. 110857. Dec. 4, 2012. Case arises from a subcontractor from a dispute from dredging contract. Summary judgment is denied for both parties but the decision discusses the Louisiana law requirement to prove an oral contract and notes “Further, in Louisiana, an oral contract that exceeds five hundred dollars in value, must be proven by one credible witness and corroborating evidence. La. C.C. art. 1846. ‘To meet the burden of proof of an oral contract by a witness and other corroborating circumstances, a party may serve as his own witness and the other corroborating circumstances' may be general and need not prove every detail of the plaintiff's case.’ Pennington., 652 So.2d at 639 (citations omitted). ‘However, the corroborating circumstances that are required must come from a source other than the plaintiff. ’ Id. (emphasis added)” The case also discusses the distinction between the concept of quantum meruit at common law and the concept of quantum meruit at civil law. Noting that in Louisiana “The five requirements for a showing of unjust enrichment, or actio de in rem verso, are: (1) there must be an enrichment, (2) there must be an impoverishment, (3) there must be a connection between the enrichment and resulting impoverishment, (4) there must be an absence of ‘justification’or ‘cause’ for the enrichment and impoverishment, and (5) there must be no other remedy at law available to plaintiff.”
UNITED STATES OF AMERICA, et al., Petitioners, v. ISS MARINE SERVICES, INC., Respondent, D.DC, Miscellaneous Action No. 12-481 (BAH), November 21, 2012. The government brings this action to enforce the respondent’s compliance with an administrative subpoena duces tecum issued by the Inspector General of the U.S. Department of Defense to obtain an internal audit report relating to ship husbanding contract with the government in the mideast. The primary question presented by the Government’s Petition is whether the Audit Report enjoys the protection of either the attorney-client privilege or the work-product doctrine. The decision sets out the standards for enforcing an administrative subpoena and goes into detail for the attorney-client and work-product privileges. Judge Howell grants the government’s motion and concludes “For the reasons discussed above, the Audit Report is entitled to neither the attorney-client privilege nor work-product protection. Even if the work-product protection applied, however, the Government has established that it has a substantial need for the Audit Report in order to prepare its case and that it cannot, without undue hardship, obtain the Audit Report’s substantial equivalent by other means. Therefore, the Government’s Petition for Enforcement of Inspector General Subpoena and to Compel Production of Audit Report and Related Records, ECF No. 1, will be GRANTED, and the respondent must comply with the Subpoena within 14 days. Additionally, the Court concludes that the public’s interest in open judicial proceedings require that this action be unsealed immediately.”
LAKE CUMBERLAND ASSOCIATION, Plaintiff v. UNITED STATES ARMY CORPS OF ENGINEERS, W.D. Kentucky, Civil Action No. 1:12CV00121JHM. Nov. 6, 2012. Plaintiff sue for injunctive and declaratory relief to stop the Corps from proceeding with a Notice of Availability(NOA) of a marina lease on a lake which is part of a flood control project. Plaintiff argues that the NOA is a final agency action which is addressable under the APA. The government moves to dismiss for lack of jurisdiction. The court dismisses the suit. Judge McKinley notes “To state a claim for relief under the APA, a plaintiff must allege that his or her injury stems from a final agency action for which there is no other adequate remedy in court. ‘Bangura v. Hansen, 434 F.3d 487, 500 (6th Cir.2006)(citing 5 U.S.C. 704). Two conditions must be satisfied for agency action to be final: First, the action must mark the consummation of the agency's decisionmaking process-it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which ‘legal consequences will flow.’ Bennett v. Spear, 520 U.S. 154,177178 (1997) (citation omitted); see also Bangura, 434 F.3d at 500501; Air Brake System, Inc. v. Mineta, 357 F.3d 632, 639 (6th Cir.2004)). ‘The core question is whether the agency has completed its decisionmaking process, and whether the result of that process is one that will directly affect the parties.‘ Franklin v. Massachusetts, 505 U.S. 788, 797 (1992).” He finds there is no agency action “Contrary to the Plaintiff's argument, the Notice of Availability of a Lease is not an action that marks the consummation of the agency‘s decision-making process. Bennett, 520 U.S. at 177178. No final binding decision from the Corps has been issued with respect to the lease. The NOA is tentative and interlocutory in nature. In fact, both the Master Plan and the NOA contain information indicating that the Corps may at any time withdraw the NOA and/or may not award the lease. (See NOA at 6)(‘The Government reserves the right to withdraw this NOA at any time if it is determined to be in the best interests of the Government.’); (citations omitted)”
Commonwealth of KENTUCKY, by and through the CABINET FOR WORKFORCE DEVELOPMENT KENTUCKY DEPARTMENT FOR THE BLIND, Plaintiff v. UNITED STATES, by and through Honorable Leon E. PANETTA, Secretary of Defense, and Honorable John McHugh, Secretary of the Army, Defendant, W.D. Kentucky, No. 5:12CV132. Oct. 23, 2012. Plaintiff seeks a TRO and PI preventing the Army from procuring dining facility attendant services by a HUbZone set aside rather than under the RandolphSheppard Vending Stand Act(RSA). The government argues that the court lacks jurisdiction as plaintiff has not exhausted its administrative remedies by pursuing arbitration by the Department of Education(DOE) as provided by the RSA. Plaintiff counters that DOE ruled in its favor previously on almost an identical factual situation and it would unduly burdensome to require it to pursue arbitration again. The court denies plaintiff’s motions and dismisses the action pending plaintiff’s exhaustion of administrative remedies. The court notes “Based on the apparently evolving policy on the applicability of the RSA to contracts for DFA-only services, requiring the KDB to submit its claims to a DOE arbitration panel before requesting relief from this Court is not forcing it to relitigate the same issue. The KDB asserts that because the Solicitation has been set aside for HUBZone businesses and not under JWOD, the joint committee’s recommendations and Ives’s testimony are irrelevant. However, a report co-authored by the DOE, the same agency charged with adjudicating potential violations of the RSA, asserted that ‘when the DoD needs dining support services,’ the contracts would be set aside under JWOD ‘(or small businesses if there is no JWOD nonprofit agency capable or interested ).’ Thus, a DOE arbitration panel may find the Solitation proper in light of the language in these recommendations.”
UNITED STATES of America, v. John Raymond Anthony WHITE, Defendant, S.D.NY No. 10 Cr. 516(SHS), October 02, 2012. Court(PACER) Synopsis-OPINION as to John Raymond Anthony White. Following a five-day jury trial, defendant John White was convicted on April 20, 2011 of mail fraud in violation of 18 U.S.C. Section 1341; three counts of major fraud against the United States in violation of 18 U.S.C. Section 1031; making a false statement to a federal law enforcement officer in violation of 18 U.S.C. Section 1001(a); and witness tampering in violation of 18 U.S.C. Section 1512(b)(3). During the sentencing phase, a dispute arose over the proper method of calculating loss pursuant to section 2B1.1 of the Sentencing Guidelines and Application Note 3(F)(ii) to that section, which addresses loss in connection with the receipt of government benefits. For the reasons set forth below, this Court concludes that where a defendant fraudulently receives a government contract that has been set aside for a targeted group and subsequently renders services to the government pursuant to that contract, the loss is the value of the benefit the defendant obtains—in this case, the actual or intended profit under the contract —not the full face value of the contract....[See Opinion]... III. CONCLUSION: For the reasons set forth above, this Court concludes that the value of the loss caused by White, for the purposes of section 2B1.1(b) of the Sentencing Guidelines, is the value of the actual or intended benefits obtained—in this case, his actual or intended profit—and not the face value of the set-aside contracts White fraudulently procured.
ANDREW N. MARTIN-SMITH, et al., Plaintiffs, v. RAMCOR SERVICES GROUP, INC., D.NEV No. 2:10-CV-00403-PMP-VCF, September 25, 2012. WARN Act(29 U.S.C. 2101) case. Plaintiffs were employees of Ramcor providing security guard services to various Veterans Affairs facilities. Ramcor was not selected for award on the recompetition and was so advised by VA on December 09, 2009. Ramcor informed its employees on December 11, 2009 that Ramcor did not win the contract and that their last day of employment with Ramcor would be December 31, 2009. All plaintiffs who interviewed with the successor contractor accepted employment except for Martin-Smith. Plaintiffs argue that they did not receive the 60 day notice required by the Act. The court grants summary judgment for Ramcor on the WARN Act count. It finds that the Act does not apply as less than 50 full time employees were affected. It also rejects argument of plaintiffs that the number of subcontractor employees should be included in the analysis.
SEBASTIAN PHILLIPS, et. al, Plaintiffs, v. RAYMOND E. MABUS, et. al, D.D.C. Civil Action No. 11-2021 (EGS, September 30, 2012. Plaintiff alleges that it was subject to a de facto disbarment by actions of the Navy and includes claims against Navy officials and ex-employees of plaintiff. Plaintiff also moves to enforce a stipulated preliminary injunction which it alleges the NAVY has violated. The government, and other defendants, move to dismiss all counts. Judge Sullivan denies all of the motions. He finds that plaintiff has adequately pleaded a de facto debarment to withstand a motion to dismiss at this stage of the case. Good discussion of the de facto debarment issues.
DYNALANTIC CORPORATION, Plaintiff, v. UNITED STATES DEPARTMENT OF DEFENSE, et al., D D.C. Civil Action No. 95-2301 (EGS), August 15, 2012. In this long running case Plaintiff challenges the constitutionality of the 8(a) program and application by DoD to the military simulation and training industry. Judge Sullivan finds that the 8(a) program to be constitutional, but that DoD did not meet the strict scrutiny test for its application here.
He concludes “For the foregoing reasons, the Court concludes that the Section 8(a) program, 15 U.S.C. § 637(a)(1), is constitutional on its face. However, based on the record before it, the Court is unable to conclude that Defendants have produced evidence of discrimination in the military simulation and training industry sufficient to demonstrate a compelling interest. Therefore, DynaLantic prevails on its as-applied challenge.
Accordingly, Defendants’ Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART; Plaintiff’s Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART. The Small Business Administration and the Department of Defense are hereby enjoined from awarding procurements for military simulators under the Section 8(a) program without first articulating a strong basis in evidence for doing so. Plaintiff’s remaining requests for declaratory and injunctive relief are DENIED.” Good discussion of the 8(a) program and regulations plus the law resulting from the Adarand and Rothe cases.
ORION TECHNICAL RESOURCES, LLC, Plaintiff-Appellant, v. LOS ALAMOS NATIONAL SECURITY, LLC and COMPA INDUSTRIES, INC., IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO, Opinion Number: 2012-NMCA-097 August 06, 2012. Your list members may be interested in the attached case from New Mexico. It started out looking just like a federal bid protest against Los Alamos National Lab’s management company (LANS) but filed in NM state court. It was originally based on a quasi-government argument and assumed LANS had to follow the FAR. It morphed into a case based on state public procurement law and then morphed again into an implied-in-fact contract case -- raising the possibility that disappointed subcontract bidders have recourse to state court. Fortunately, my client is now out of it and -- so far as I know -- it is headed for trial.
AGILITY DEFENSE AND GOVERNMENT SERVICES, INC., et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF DEFENSE, et al., Defendants. N.D. Alabama,Civil Action No. CV11S4111NE. June 26, 2012. Plaintiffs seek declaratory and injunctive relief to lift plaintiff’s suspension from government contracting. Plaintiffs are direct or indirect subsidiaries of Public Warehousing Company(PWC) a Kuwaiti firm. PWC was indicted for fraud and the government suspended PWC and subsequently subsidiaries of PWC including plaintiffs. Plaintiffs’ suspensions have been effect for 31 months. “Plaintiffs present four counts in their complaint. The first three counts are based upon the Administrative Procedure Act. In the first count, plaintiffs allege that the Defense Logistics Agency has provided an inadequate rationale for the suspensions. In the second count, plaintiffs allege that the suspensions are punitive. And in the third, they argue that the suspensions are excessive in duration. In the fourth count, plaintiffs allege that the continuing suspensions violate the Due Process Clause of the Fifth Amendment to the United States Constitution.” The court rejects the argument by that the issues are not justiciable as they are left to agency discretion. The court does find that the continuing suspension does violate the provisions of FAR 9.407-4 Period of suspension which provides:
(a) Suspension shall be for a temporary period pending the completion of investigation and any ensuing legal proceedings, unless sooner terminated by the suspending official or as provided in this subsection.The court concludes “that the interpretation of the regulation proposed by plaintiffs is the correct one. That is, no contractor may be suspended for greater than eighteen months unless legal proceedings are initiated against that contractor itself, regardless of the basis for the initial decision to suspend the company. The facts in the record are undisputed: plaintiffs were suspended on the sole basis of their affiliation with PWC; no legal proceedings have been initiated against them; and they have remained suspended for thirty-one monthsi.e., nearly twice the regulatory limit of eighteen months. Their continued suspension is contrary to law, in violation of the APA. Therefore, their suspensions must be terminated. Summary judgment is due to be granted in favor of plaintiffs, and against defendants.”
(b) If legal proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless an Assistant Attorney General requests its extension, in which case it may be extended for an additional 6 months. In no event may a suspension extend beyond 18 months, unless legal proceedings have been initiated within that period.
(c) The suspending official shall notify the Department of Justice of the proposed termination of the suspension, at least 30 days before the 12-month period expires, to give that Department an opportunity to request an extension.
UNITED STATES OF AMERICA, Plaintiff, v. KELLOGG BROWN & ROOT SERVICES, INC., D.D.C. 10-cv-530 (RCL), April 23, 2012. False Claims Act case on the LOGCAP III contract. See earlier decision dismissing the government’ unjust enrichment and payment by mistake claims. The government moves to dismiss KBR’s Counterclaim and to strike KBR’s first affirmative defense. Judge Lamberth “finds that KBR’s recoupment counterclaim must be dismissed for failure to exhaust administrative remedies and for failure to state a claim. The Court also finds that KBR’s first affirmative defense of material breach must be struck as precluded by the LOGCAP III contract.” He also discusses and rejects the government argument that the counterclaim and affirmative defense are barred by judicial estoppel. Regarding the government's political question argument, he “finds that although this case may potentially generate nonjusticiable political questions, absent some discovery, and more detailed briefing by the parties specifically concerning the political question problem, the Court cannot perform the ‘discriminating analysis’ required to resolve this problem.”
WENDY WAGNER, et al., Plaintiffs, v. FEDERAL ELECTION COMMISSION, D.D.C. Civil Action No. 11-1841 (JEB), April 16, 2012. Plaintiffs challenge the ban on political contributions for government contractors as proscribed at 2 U.S.C. § 441c(a). Before the court is plaintiff’s motion for a preliminary injunction to prevent the Federal Election Commission from enforcing the ban until a final determination has been reached in this action. The court denies the motion finding little likelihood of success under either the First Amendment or the equal-protection(due process) guarantee of the Fifth Amendment.
FISHER-CAL INDUSTRIES, INC., Plaintiffs, v. UNITED STATES OF AMERICA, et al., D D.C. No. 11-791, March 19, 2012. Plaintiff challenges a decision by the Air Force to insource services which plaintiff was providing. The government moves to dismiss for lack of subject matter jurisdiction. The court agrees and dismisses the case following decisions of other courts that an insourcing decision is in connection with a procurement and that the COFC has exclusive jurisdiction. The court also rejects the reliance by plaintiff that “Resource Conservation Group v. United States, 597 F.3d 1238 (Fed. Cir. 2010)(‘RCG’), for the proposition that insourcing is a nonprocurement decision that ‘cannot be characterized as a ‘process of acquiring property or services.’” noting that “the disparate circumstances and issues presented in RCG from the case before the Court, RCG provides little support for the plaintiff’s argument that insourcing decisions fall outside 28 U.S.C. § 1491(b).”
1200 SIXTH STREET, LLC, Plaintiff, v. UNITED STATES of America, acting by and through the GENERAL SERVICES ADMINISTRATION, E.D. Michigan No. 11-12948, March 15, 2012. Plaintiff sues for damages incurred when GSA failed to complete a real estate transaction. Judge Lawson starts his opinion as follows: “Justice Oliver Wendell Holmes, Jr. once wrote: ‘Men must turn square corners when they deal with the Government.’[citation omitted] Add to that caution the further warning that one chooses to do business with the General Services Administration at its peril, and the lesson of this case emerges.” The court grants the motion of the government to dismiss for lack of jurisdiction noting “Although the plaintiff has tried to plead around that doctrine, in the end the plaintiff’s theories of liability all are based on the statements by the GSA's employees that the government intend to close the deal, which proved to be a misrepresentation for which the government is immune from liability.” Good discussion of the Supreme Court and other cases dealing with misrepresentation by government employees.
CS-360 LLV v. U.S. Department of Veteran Affairs, D. D.C. Civil Action No. 11-00078, March 06, 2012. (Synopsis from a list member.) In the first known court challenge of a VA SDVOSB verification denial, a federal judge grants plaintiff CS360’s Motion for Summary Judgment by remanding the denial back to the agency based on the VA’s failure to provide a satisfactory contemporaneous explanation for its decision to deny CS360’s application for inclusion in the VetBiz Vendors Information Pages (VIP) database. Being in the VIP database would have made CS360 eligible to compete for VA SDVOSB set-aside contracts. CS360 had asked the court to find that the VA’s denial of SDVOSB verification was arbitrary and capricious under the Administrative Procedures Act. In a 42-page opinion Judge Kollar-Kotelly ruled that, “[i]n this case, the defects in the VA’s written decisions are so many and so significant that they affect the whole, and preclude the Court from effectively exercising it review function.” The court further stated that, “[S]imply put, on this sparse and disjointed record, the Court cannot find that the VA has provided a rational connection between the facts found and the choice made.’” Meanwhile, the court dismissed CS360’s challenges that the VA decision was without due process and that the VA acted beyond its statutory authority in establishing its verification regulatory process.
UNITED STATES of America ex rel. Kurt BUNK and Daniel Heuser, Plaintiffs/Relators, v. BIRKART GLOBISTICS GMBH & CO., et al., Defendants. United States of America ex rel. Ray Amnions, Plaintiff/Relator, v. The Pasha Group, et al., Defendants. E.D VA. Nos. 1:02cv1168. Feb. 14, 2012. False Claims Act Case. Judge Trenga introduces the case as follows: “These consolidated actions present claims asserted under the False Claims Act, 31 U.S.C. § 3729(a)(1)-(3)(2000) (‘FCA’). Beginning on July 18, 2011, this case was tried before a jury, which on August 4, 2011, returned a verdict against the Gosselin Defendants and in favor of the United States with respect to what has been referred to in this litigation as the ‘DPM claim’ filed and pursued by Relator Bunk, without the intervention of the United States. Presently pending before the Court is the Plaintiffs’ post-trial motion for an award of civil penalties under the False Claims Act with respect to the DPM claim. For the reasons stated herein, the Court concludes that the mandatory civil penalty of at least $50,248,000 constitutes an unconstitutionally excessive fine in violation of the Eighth Amendment and, having made that determination, further concludes that it does not have the discretion to fashion some other civil penalty that would be within constitutional limits; and therefore no civil penalty will be imposed.”
UNITED STATES OF AMERICA, ex rel. GORDON GREEN v. SERVICE CONTRACT EDUCATION AND TRAINING TRUST FUND, et al., D.D.C. Civil Action No. 09-738 (RWR), February 13, 2012. FCA case. The court dismisses the suit finding, in part, that publication of certain facts on a publicly available website was a public disclosure under the Act.
Alan H. DONN, Plaintiff, v.
A.W. CHESTERTON CO., INC., et al., Defendants, E.D. Pa, Civil Action No.
2:10CV62071ER. Feb. 1, 2012. Plaintiff sues for damages from his exposure
to asbestos while aboard several Navy submarines. Defendants were suppliers of
equipment to the Navy which contained asbestos. Defendants move to dismiss for
lack of jurisdiction arguing that the case is preempted, and, presents a
non-justiciable political question. The court discusses Boyle v. United Technologies Corp., 487
U.S. 500 (1988)., and rejects the field preemption argument noting “At
bottom, without sufficient evidence that locates the intent to preempt state
law within the Constitution, by action of Congress, or some other federal
policy to displace the entire field of state tort law with respect to
Plaintiff's claims (i.e., asbestos exposure claims by servicemen aboard Naval
vessels), this case falls within the Boyle limiting principle. Accordingly,
the Court holds that the war powers, federal regulations, and law related to
government procurement do not occupy the field of state tort law as it relates
to Defendants' duty to warn.”
Similarly, the court rejects defendant’s conflict exemption argument that the court should extend Boyle by applying Saleh v. Titan Corp., 580 F.3d 1 (D.C.Cir.2009) noting “Saleh is not helpful to Defendants in this case. In Saleh, the defendants performed a uniquely military service interrogation at a military prison during wartime. In essence the Saleh defendants had stepped directly into the shoes of military personnel. Here, by contrast, Defendants are not involved in military operations during wartime. Rather, Defendants' role was to supply equipment to be used by the Navy aboard Naval vessels, a factual scenario squarely within the contours of Boyle and far afield from the circumstances in Saleh that prompted that court to look beyond Boyle.”
The court rejects the political question argument noting “Finally, finding that Plaintiff's claims present a non-justiciable political question would upset years of jurisprudence in asbestos litigation and also call into doubt the applicability of Boyle to government procurement contracts. The Court cannot and, of course will not, under the guise of the political question doctrine, avoid the clear direction of Boyle.” Good discussion of the exemption and political question issue.
UNITED STATES OF AMERICA, v. HONEYWELL INTERNATIONAL, INC.,
Defendant, DDC No. Civil Action No. 08-961, January 25, 2012. False Claims
Act case. “The government moves to strike the first affirmative defense
of waiver and estoppel on the grounds that waiver and estoppel are legally
invalid defenses where, as here, the action is by the United States government
for recovery of money paid from the United States Treasury.” The
government relies primarily on Office of
Personnel Mgmt. v. Richmond, 496 U.S. 414 (1990), for the
proposition that courts are prohibited from applying equitable doctrines such
as waiver and estoppel to prevent the government from bringing claims to
recover funds paid improperly from the Treasury. The court does not accept
such a broad reading of Richmond and notes that the DC Circuit has not done
so. However the court does recognize that “‘There is a clear
presumption in this Circuit against invoking the doctrine [of equitable
estoppel] against government actors in any but the most extreme
circumstances.’) The government ‘may not be estopped on the same
terms as any other litigant [may be].’ [citations omitted] The party
asserting equitable estoppel ‘must show that (1) ‘there was a
‘definite’ representation to the party claiming estoppel,’
(2) the party ‘relied on its adversary's conduct in such a manner as to
change his position for the worse,’ (3) the party's ‘reliance was
reasonable’ and (4) the government ‘engaged in affirmative
The court grants the motion to strike noting “With respect to estoppel, Honeywell has not pointed to any definite representation by the government, only a failure of the government to accept Honeywell’s offer of test results.” and with respect to waiver ”Honeywell fails to identify any clear and intentional relinquishment or abandonment by the Attorney General of the right to sue under the FCA. Nor has Honeywell presented any support for the proposition that Department of Justice employees acted with the Attorney General’s authority to waive the right to bring an FCA case during those employees' interactions with Honeywell.”
COMPANHIA BRASILEIRA CARBURETO DE CALCIO -- CBCC, et al., APPELLANTS, V. APPLIED INDUSTRIAL MATERIALS CORPORATION, et al., APPELLEES, D.C. Court of Appeals, No. 11-SP-500, January 26, 2012. On certification from the D.C. Circuit the court considers the following issue:
|Under District of Columbia law, does a petition sent to a federal government agency in the District provide a basis for establishing personal jurisdiction over the petitioner when the plaintiff has alleged that the petition fraudulently induced unwarranted government action against the plaintiff?|
After discussing the “government contracts” exception to the DC long-arm statute and the court concludes as a matter of first impression that the answer to the certified question is yes. The court does stress the need that the alleged fraud be pled with specificity.
MENOMINEE INDIAN TRIBE OF WISCONSIN v. THE UNITED STATES, D.D.C. No. 07-cv-0812 (RMC), January 24, 2012. On remand from the DC Circuit opinion which held that the CDA statute of limitations was subject to equitable tolling in appropriate cases. The court reviews the case considering the Supreme Court’s holding “that a litigant must establish two things for equitable tolling to apply: ‘(1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way.’”Holland v. Florida, 130 S. Ct. 2549, 2562 (2010). The court finds for the government on the equitble tolling issue and concludes “Menominee is correct that equitable tolling is more than just a mechanical application of the two Holland factors. However, 1) Menominee cannot point to any affirmative act it took in over six years to pursue its claim diligently; 2) filing an administrative claim is a relatively simple process; 4) there was no affirmative misconduct on the part of the government; and 5) Menominee does not present any additional facts from which the Court could find equitable tolling aside from those found insufficient to support class action tolling. Thus, equitable tolling is inappropriate and the Court will enter summary judgment will on behalf of the United States.”
UNITED STATES of America ex rel, Cliff BERGLUND, Plaintiff, v. The BOEING COMPANY, Defendant. D. Oregon No. 03:02cv193AC, Dec. 13, 2011. False Claims Act case. The court grants Boeing’s motion for sanctions and awards monetary sanctions plus dismissal of count II of the complaint. The following somewhat describes the judge’s conclusion “Here, it is beyond dispute Berglund knew the evidence he was destroying or altering or lying about was potentially indeed, actuallyrelevant to his claims against Boeing. His intentional conduct of lying about the altered emails supports a finding Berglund understood the character and nature of his actions. Despite clear notice, i.e., the pendency of the litigation and the court's order of the need to preserve evidence in this case, Berglund elected to alter or destroy evidence and later lie about his conduct. That is willful conduct, and Berglund makes no argument that, for purposes of this analysis, he did not act wilfully.”
UNITED SPACE ALLIANCE, LLC, Plaintiff, v. HILDA L. SOLIS, in her official capacity as United States Secretary of Labor, et al, D.D.C. Civil Action 11-746 (RCL), November 14, 2011. Office of Federal Contract Compliance(OFCCP) case. Plaintiff challenges a DOL order for plaintiff to produce certain information. Plaintiff “challenges the lawfulness of that order on the basis of its Fourth Amendment right to be free from unreasonable searches and seizures, the government’s obligations under the Administrative Procedure Act, and several other grounds.” The government moves to dismiss or, in the alternative, for summary judgment. After a good discussion of procedural and legislative rules, Chief Judge Lamberth grants the government’s motion for summary judgment. He concludes “Despite the vigor with which United Space has litigated it, there is surprisingly little at stake in this case. The Department of Labor has not accused United Space of employment discrimination. It has not ordered United Space to permit agency investigators onto company premises. The Department has merely required United Space to submit data about its employee compensation. The Court understands that United Space and the entire community of federal contractors are keenly interested in how OFCCP decides whether to request additional data on a contractor’s compensation practices, but that interest does not allow those companies or this Court to interfere with the agency’s investigatory practices. Submission to such lawful investigations is the price of working as a federal contractor.” He issues a temporary stay until November 28, 2011 to allow the D.C Circuit to review the issue.
UNITED STATES OF AMERICA, Plaintiff, v. FIRST CHOICE ARMOR & EQUIPMENT, INC. et al., D.D.C. Civil Action No. 09-1458 (RWR), August 29, 2011. The government brings the action alleging violations of the False Claims Act, the Federal Debt Collection Procedures Act(FDCPA) and breach of contract for the purchase of Zylon body armor. Defendant moves to dismiss for failure to state a claim and lack of jurisdiction. The court dismisses the payment by mistake and unjust enrichment claims finding that law in the DC Circuit bars those claims where an express contract is also pled. The court refuses to dismiss the other claims. Regarding the FDCPA claim, which defendants argue should not be considered because the defendants did not owe a debt to the government, the court notes that “Because the FDCPA allows the United States to obtain a remedy before judgment on a claim or a debt, the government can proceed under the statute when it alleges against a defendant claims under the FCA, regardless of whether judgment has been entered on those claims. See United States ex rel. Doe v. DeGregorio, 510 F. Supp. 2d 877, 883-84 (M.D. Fla. 2007). Conceptually, a party that violates the FCA incurs a debt to the government as soon as the government pays the fraudulent claim. Id. Thus, by alleging that the defendants submitted false claims and made false statements under the FCA, the government sufficiently alleges the existence of a debt under the FDCPA.”
GLEN O’GILVIE, Plaintiff, v. CORPORATION FOR NATIONAL COMMUNITY SERVICE, et al., D.D.C. Civil Action No. 10-cv-00531 (ABJ), August 10, 2011. Plaintiff brings this APA action and seeks declaratory relief in challenging a debarment which expired in December 2009. Plaintiff did not challenge the debarment when issued in June 2009. The court grants the motion of the government to dismiss as moot finding that the alleged harm to reputation is only speculative. The court concludes “Since plaintiff has not alleged any facts from which the court could infer that there is a likelihood that actual harm that could flow from his expired debarment, and the Court need not accept his legal conclusions, plaintiff’s allegations are ‘too attenuated to establish injury in fact,’ Hickey, 649 F. Supp. 2d at 777, and he lacks standing. Since the Court will dismiss plaintiff’s claim for lack of subject matter jurisdiction, it need not address the defendants’ motion to dismiss on substantive grounds.”
THE UNITED STATES v. KELLOGG BROWN & ROOT SERVICES, INC.. D.D.C. No. 10-cv-530 (RCL), August 03, 2011. False Claims Act case. The government asserts False Claims Act, breach of contract, unjust enrichment and payment by mistake claims against KBR. The government claims all arise from the allegation that “KBR knowingly billed the government for the cost of private security contractors in Iraq, an expense the government argues is forbidden by the contract.” KBR moves to dismiss. Chief Judge Lamberth dismisses the unjust enrichment and payment by mistake claims which he deems quasi-contractual remedies not available where there is an express contract. He denies the motion to dismiss the FCA and breach claims. He notes that “The holding in SAIC II [United States v. Sci. Applications Int’l Corp. (SAIC II), 626 F.3d 1257, 1266 (D.C. Cir. 2010)] controls this case. Rather than having to show that KBR violated provisions of the LOGCAP III contract that expressly conditioned payment on compliance, the government need only show that ‘the contractor withheld information about its noncompliance with material contractual requirements.’” Regarding the breach of contract claim he notes that since action also includes fraud claims, the ASBCA would not have jurisdiction under the CDA.
UNITED STATES OF AMERICA, rel. ANTHONY HEAD Plaintiff, v. THE KANE COMPANY, et al., Defendants, D.D.C. Civil Action No. 05-317 (GK), July 25, 2011. False Claims Act case alleging various fraud actions including fraud under the Service Contract Act(SCA). On motions by defendants to dismiss. The court dismisses the conspiracy and retaliation claims, but allows the bulk of the SCA claims to go forward.
Ricky Allen LEE and Paul Vernon Rigsby, individually, and on behalf of all others similarly situated, Plaintiffs, v. ITT CORPORATION, an Indiana corporation, and ITT Federal Services International Corporation, a Delaware corporation, Defendants, W.D. Washington No. C10-0618-JCC., June 24, 2011. Plaintiffs, employees on an army contract in Kuwait, move for class certification of their suit against ITT. Plaintiffs “allege that Defendants breached their contracts with Plaintiffs by failing to pay overtime as required by Kuwaiti law and the contracts, by failing to pay for all hours worked, by failing to provide breaks as required by Kuwaiti law, and by failing to provide housing and meals at no cost.” The opinion discusses the requirements for certification under Rule 23(a) and Rule 23(b) of the Federal Rules of Civil Procedure. The court denies certification.
UNITED STATES of America ex rel. Bobby L. MAXWELL, Plaintiff, v. KERR-McGEE OIL & GAS CORPORATION, Defendant. D. Colorado, Civil Action No. 04-cv-01224-MSK-CBS, June 2, 2011. FCA case, award of attorney fees. Although the underlying case is on appeal the court considers relator’s claims for attorney fees, including a one third enhancement for risk of non-payment, attorney expenses and fees for his own testimony as an expert. The court awards the requested amount for attorney fees, $2,178,632.25. The court rejects the request for enhanced attorney fees noting that “Because the contingency fee agreement allows Maxwell’s attorneys to recover both a 55 percent contingent fee and a statutory attorney fee award under 31 U.S.C. § 3730(d)(2), there is no need to compensate Maxwell’s counsel for risk associated with undertaking representation in this matter-Maxwell and his attorneys have already done so.” The court declines to compensate relator as an expert witness finding “there is no showing that he reasonably anticipated being compensated as an expert witness.” and noting that generally parties are not awarded witness fees.
RED RIVER HOLDINGS, LLC, Petitioner v. UNITED STATES of America, Respondent, D. MD., Civil No. PJM 10-534, May 31, 2011. Red River appeals from the holding in the ASBCA decision below in this maritime case. The Navy entered in to a 59 month charter with the vessel MV A1 C William H. Pitsenbarger which Red River had purchased, reflagged, renamed and modified in anticipation of the charter award. [William H. Pitsenbarger received the Medal of Honor posthumously-jaw] The Navy terminated the contract for convenience and redelivered the vessel to Red River about two months short of the 59 month period. The contract contained the commercial items TFC clause, 48 C.F.R. § 52.212-4(l). Red River’s termination claim for the early delivery included an aggregation of loan principal, interest, and insurance payments. The ASBCA denied the appeal holding the TFC clause allows recovery only for costs incurred after a contract has been terminated (i.e., settlement costs), and not for costs incurred in preparation for contract performance that cannot be recouped as a result of termination. The District Court disagrees with the ASBCA interpretation of the clause, a creature of FASA, and reverses. The Court finds instructive the decision of the AGBCA in Jon Winter & Assocs., Dep't Agric. Bd. contract App. No.2005-129-2, 2005 AGBCA LEXIS 31, and also mentions the article by Paul J. Seidman, TERMINATION FOR CONVENIENCE OF FAR PART 12 COMMERCIAL ITEM CONTRACTS: Is Fair Compensation Required?. After a good discussion of the subject clause the court holds “that § 52.212-4(l) of the FAR entitles a commercial items contractor whose contract is terminated for the Government’s convenience to the following: (1) payment of ‘a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination’; and (2) a payment as compensation for settlement costs or costs reasonably incurred in anticipation of contract performance, provided such costs are not adequately reflected as a percentage of the work performed, [FN17] and provided such costs could not have been reasonably avoided. [FN18] To the extent that the Board’s decision below concluded that § 52.212-4(l)'s reference to ‘reasonable charges’ does not include costs incurred ‘solely for the purpose of contract performance, or incurrence of costs in anticipation of such performance,’ Red River Holdings, 2009-2 B . C.A. (CCH) ¶ 34,304, at 169,457, that decision is inconsistent with the Court's holding here and must therefore be REVERSED.” The Court’s remand requires the ASBCA to address several critical questions
JAMES J. FLANAGAN SHIPPING CORPORATION v. DEPARTMENT OF THE ARMY OF THE UNITED STATES, E.D. TX, Civil Action No. 1:10-CV-718, May 27, 2011. Army contract for terminal and stevedoring services. Plaintiff brings this action to enforce a settlement agreement it alleges was agreed to by the Army. The court grants the government’s motion to dismiss for lack of jurisdiction. Following Fifth Circuit precedent the court notes that even in maritime cases, as this is, the CDA requires that contract claims be the subject of a contracting officers decision. Finding no evidence that plaintiff submitted a documented claim to the CO the court dismiss the action without prejudice.
UNITED STATES ex rel. Benjamin CARTER, Plaintiff, v. HALLIBURTON COMPANY, et al., Defendants, E.D. Virginia, No. 1:10cv864 (JCC/TCB), May 24, 2011. False Claims Act case. The court dismisses the action under the first to file provisions of 31 USC 3730(b)(5) because relator had a related case on appeal to the Fourth Circuit when this action was filed. The court rejects the argument of relator that once an appeal is filed there is longer a pending action in the district court. The opinion notes “Even assuming Carter's argument has some legs, an appeal in an action does not divest all courts of jurisdiction. Instead, ‘[t]he filing of a notice of appeal ... confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal.’ Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982) (per curiam) (emphasis added). Plainly, the filing of a notice of appeal vests jurisdiction in the appellate court and, as stated above, a case is pending until the appeal is disposed of. de Rodulfa, 461 F.2d at 1253. Thus, regardless of the district court’s jurisdiction, the appellate court has jurisdiction over a case on appeal, and while on appeal that case is a pending action for purposes of the first-to-file bar. Moreover, although an appeal vests jurisdiction in the appellate court, the district court retains some jurisdiction. For instance, ‘the district court ... [has] authority to entertain a timely motion to alter or amend the judgment under [Federal Rule of Civil Procedure] Rule 59, even after a notice of appeal had been filed.’ Griggs, 459 U.S. 56. at 59.”
UNITED STATES OF AMERICA ex rel. RICHARD F. MILLER, v. RCL BILL HARBERT INTERNATIONAL CONSTRUCTION, INC., et al., D.D.C. No. 95-cv-1231, May 12, 2011. FCA attorney fee case. A long and complicated case first filed under seal in 1995 which Judge Lamberth describes as an“anti-Robin Hood” case. After an affirmation and reversal of various claims by the DC Circuit, Judge Lamberth decides that relator is entitled to 80 per cent of its attorney fees following the guidlelines of Hensley v. Eckerhart, 461 U.S. 424 (1983). He concludes “After seven years of investigation and litigation, and seven weeks of intensive trial work, several citizens of the United States concluded what Mr. Miller had long suspected-defendants, along with others, engaged in sordid and deceptive practices to defraud the United States and extract millions in undeserved payments intended to benefit people in developing nations. The D.C. Circuit’s subsequent holdings, while mandating a new trial for certain defendants, do not undermine the jury’s conclusions as to BIE and HUK. The Court is thus unwilling to release these defendants from their obligations to compensate Mr. Miller’s counsel for their extensive and tireless work, which resulted in what the Court views as nothing less than a tremendous victory. In such circumstances, and for the reasons set forth above, the Court holds that 20% reduction to reflect the dismissal of certain claims is appropriate.”
UNITED STATES v. BREHM, E.D. VA No. 1:11-CR-11, March 30, 2011. Brehm was charged with assault with a dangerous weapon at Kandahar Airfield, Afghanistan. Brehm, a citizen of South Africa, was employed by a government contractor, DynCorp, in Afghanistan. Brehm challenges the jurisdiction under the Military Extraterritorial Jurisdiction Act (“MEJA”) and argues the constitutionality of the Act as applied to him in this prosecution. He moves to dismiss and “contends that as applied to him, MEJA (1) violates the Due Process Clause of the Fifth Amendment because there are insufficient contacts between him and the Unites States to justify the United States’ exercise of jurisdiction; and (2) exceeds Congress’s enumerated legislative powers under Article I, Section 8 of the United States Constitution.” The court denies the motion concluding “that this prosecution is neither arbitrary nor fundamentally unfair when considered in light of Brehm’s nexus to the United States and the effects of his alleged conduct on United Slates’ interests. The Court also concludes that MEJA is within the legislative authority of Congress.”
TAMIMI GLOBAL COMPANY LIMITED v. TAMIMI GLOBAL COMPANY LIMITED, SD TX No. 11-0585, March 24, 2011. Tamimi moves to enforce a Foreign Arbitration Award against KBR. Tamimi was a subcontractor to KBR to provide dining services to the military in Iraq. KBR opposes the confirmation and seeks a stay pending proceeding in the COFC and the United States. KBR “argues that it would be against public policy to confirm an arbitration award involving a contract procured through fraud.” The court denies the stay and confirms the arbitration award concluding “that a stay is not warranted and confirmation is appropriate because the allegations made by the United States in the Court of Claims, even if proven, would not lead this Court to refuse confirmation on public policy grounds. In this case, the allegations by the United States are that KBR was a participant in the alleged fraud. To the extent Tamimi was paying kickbacks to obtain dining services subcontracts, KBR--through its managerial employees--was accepting those kickbacks. The ‘irregularities’ were reported to KBR higher level personnel, but KBR elected not to investigate. If the United States proves its allegations, it will prove that KBR does not have clean hands, having engaged in fraud to the same extent as Tamimi. Enforcement of an arbitration award or other judgment in favor of one party alleged to have committed fraud against the other party allegedly engaged in the same fraudulent misconduct does not violate the most basic notions of morality and justice.”
UNITED STATES OF AMERICA ex rel., BOBBY GARRISON, and RUDOLF0 GAONA, JR., v. CROWN ROOFING SERVICES, INC., M Y PALMER, R.D. CHATMON, USS ENGINEERING, LLC, and JAMEEL HATTAB, SD TX, CIVIL ACTION NO. H-07-1018, March 16, 2011. Anti-Kickback Act case, NASA contracts. NASA COTRs allegedly manipulated NASA competitions to see that awards were directed to Crown Roofing. Defendants move to dismiss arguing that the Anti-Kickback Act only applies where a kickback flowed from a lower to higher tier party, not the case here. Defendants also argue that the government’s quasi-contract claims for unjust enrichment must be dismissed as the Master contract at issue was an express contract. The court rejects both arguments finding that the Anti-Kickback Act, 41 USC 8701 et seq, is not so limited. Regarding the unjust enrichment claim the court notes and that the “Government has pled facts from which it may be inferred that the Master Contract was void because it was tainted by fraud.”
UNITED STATES of America, ex rel., Wayne B. KOLBECK, v. POINT BLANK SOLUTIONS, INC., et al. E.D. VA, Civil Action No. 1:08cv1187, February 01, 2011. False Claims Act case. Defendant has filed for Chapter 11 bankruptcy, government has declined to intervene. The court stays the action, concluding “In conclusion, because the government has declined to intervene in the instant qui tam FCA matter, the action does not constitute ‘an action or proceeding by a governmental unit’ so as to fall within the § 362(b)(4) governmental police powers exception to the Bankruptcy Code's automatic stay. Given this, the matter is appropriately stayed against the two remaining corporate defendants in bankruptcy pursuant to 11 U.S.C. § 362(a).
THE WASHINGTON CONSULTING GROUP, INC., v. RAYTHEON TECHNICAL SERVICES COMPANY, LLC, and CHARLES E. KEEGAN,, D.D.C. No. 10-0265, January 20, 2011. Plaintiff brought the action in DC Superior Court asserting “state common law claims for tortious interference with economic advantage, unfair competition, and misappropriation of confidential and proprietary information, as well as violations of the D.C. Uniform Trade Secrets Act. ” Plaintiff alleged “that defendants used improper means to secure the award of a Federal Aviation Administration (“FAA”) contract worth almost $1 billion. According to plaintiff, Raytheon and Keegan -- who was having an affair with a high-ranking FAA official at the time -- conspired with the FAA to structure the contract bidding process and to misuse plaintiff's proprietary information in such a way as to ensure that Raytheon, rather than plaintiff, would receive a ten-year FAA contract to train air traffic controllers.” Defendants removed the action to this court arguing that the case turns on substantial questions of federal law and falls “within the narrow category of cases over which federal courts have jurisdiction under Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005).” The court now grant plaintiff’s motion and remands to the DC Superior Court finding that case would not present a substantial question of federal law within the meaning of Grable. Good discussion of remand issues.
UNITED STATES OF AMERICA, v. RALPH MERRILL, SD FL Case No. 08-20574-CR, October 08, 2010. Criminal action for violation of DFARS § 252.225-7007 Prohibition on Acquisition of United States Munitions List Items from Communist Chinese Military Companies. An example of some the complexities in dealing with motions in limine for expert testimony.
UNITED STATES v. RENDA Marine, ED TX No. 4:08-cv-443, September 30, 2010. Corps of Engineers dredging contract. See COFC decision and Federal Circuit decision. The government brings this action to enforce the decision of the COFC. Renda argues that the US does not have enforceable judgments. The court grants the government’s motion for judgment on the pleadings and rejects all of the arguments by Renda. Regarding the position that the US is required to file an administrative claim to recover the overpayment the court notes “ ... when the CFC determines a contractor is entitled to less than what it claims, the government need not file a separate claim to recover the amount already paid on the claim.” The court also rejects the argument that the government’s count I claim is barred by the statute of limitations of 28 § 2415(a). The court agrees with the government that “the administrative proceedings were not complete until December 11, 2007, when the Federal Circuit affirmed the CFC’s decision denying Renda leave to amend its complaint to challenge the contracting officer’s final decision.”
UNITED STATES of America ex rel. Sheldon Batiste, v. SLM CORPORATION, D.D.C. No. 08-425 (RJL), Sept. 27, 2010. False Claims Act case against Sallie Mae. The court dismisses the action for lack of jurisdiction under the “first-to-file” rule based on the earlier filing of a similar action in a California district court. In FN 3 the court rejects the argument by plaintiff that his suit is not an opportunistic filing as the earlier suit was still under seal when plaintiff filed its suit. Judge Leon notes “Although the ‘first-to-file’ rule aims to prevent opportunistic filing, that is not its only aim. By awarding the spoils to the first-filer, the rule also aims to encourage the prompt reporting of fraud. Furthermore, as mentioned above, once the government is made sufficiently aware of the alleged fraud so that it can pursue its own investigation into the matter, little is gained by subsequent, duplicative claims from less-vigilant whistle-blowers.”
Venancio Aguasanta ARIAS, et al., Plaintiffs, v. DYNCORP, et al., Defendants. D.D.C. Civil Action Nos. 01-1908 (RWR), 07-1042(RWR), September 15, 2010. Various provinces of Ecuador bring this Alien Tort Claims Act suit claiming damages by pesticide spraying by US government contractors. The court finds that the provincial plaintiffs lack standing and do not qualify under their claimed parens patriae capacity. After recognizing that the DC Circuit “has precluded foreign nations from asserting parens patriae standing ‘unless there is a clear indication by the Supreme Court or one of the two coordinate branches of government to grant such standing”, the Court also rejects the argument by the provincal plaintiffs that they may proceed as they are provinces, not foreign nations.” The court notes that the provinces “do not claim and have not shown that they have conceded any of their sovereignty to the U.S. government.”
IN RE: KBR, INC., BURN PIT LITIGATION. D. MD No. RWT 09md2083, September 08, 2010. Consolidated tort cases for injuries alleged from exposure to waste disposal “burn pits” by KBR in Iraq and Afghanistan. Judge Titus starts his opinion with a quote from ”Lieutenant Milo Minderbender, a fictional war profiteer during World War II, expressed the following capitalist sentiment in Joseph Heller’s novel Catch-22: ‘Frankly, I’d like to see the government get out of war altogether and leave the whole field to private individuals.’” Defendants move to dismiss arguing the political question doctrine, “derivative sovereign immunity” and “combatant activities” exceptions in the FTCA. After a good discussion if these issues, Judge Titus denies the motions to dismiss and orders the parties to confer on limited discovery matters.
KISKA CONSTRUCTION CORPORATION - U.S.A. and KAJIMA ENGINEERING AND CONSTRUCTION, INC., a Joint Venture, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, D. D.C. Civil Action No. 09-817, September 09,2010. Both parties challenge the ASBCA decision in Appeals of -- KiSKA Construction Corp.-USA and Kajima Engineering and Construction, Inc., A Joint Venture, ASBCA Nos. 54613, 54614, February 19, 2009. Judge Kollar-Kotelly affirms the ASBCA decision in all matters contested by the parties. A rather rare decision where breach claims go to a court and equitable adjustment claims to an administrative forum. Good discussion of the jurisdictional issues in these type of cases and the doctrines of res judicata and collateral estoppel.
PACIFIC MARITIME FREIGHT, INC., Plaintiff v. Sonia L. FOSTER; the Foster Group, Inc.; and Does 1 through 10, inclusive, S.D. CA No. 10-cv-0578-BTM-BLM, Aug. 24, 2010. Plaintiff contracted with defendant for assistance in obtaining GSA Price List Contracts(FSS?) and other work for the Navy. Plaintiff now brings this action for “(1) breach of fiduciary duty (generally), (2) breach of fiduciary duty (phantom GSA listings), (3) breach of the implied covenant of good faith and fair dealing, (4) breach of contract, (5) fraud, (6) intentional interference with prospective economic advantage, (7) trade-secret misappropriation and unfair competition, (8) rescission, and (9) a declaration that no future compensation is due to defendants.” The court dismisses a few of the counts, but allows the others to go forward. [Appears to be a horror story if a firm doesn't have its own GSA and government contracting expertise.-jaw]
SHAW ENVIRONMENTAL, INC. vs. TELEDYNE BROWN ENGINEERING,
INC., N.D. Alabama Civil Action No. CV-09-S-01100-NE, August 24, 2010.
[Synopsis by list member Jay DeVecchio, Jenner & Block] One of the
difficulties in litigation between prime contractors and subcontractors on a
federal program is sorting out for the court how Federal Acquisition
Regulation flowdown clauses, which often are very different from typical
commercial contract terms, are to be applied and interpreted.
In one of the very few decisions addressing the application of both the FAR and federal cost-reimbursement contract principles to subcontracts, the court granted summary judgment to a subcontractor sued by the prime for breach of a cost reimbursement subcontract. The prime demanded that the subcontractor perform corrective action, but refused to pay for the work. In turn, the subcontractor declined to perform absent additional funding. The Court dismissed the prime’s breach action with prejudice, finding that state law did not control the subcontract, and that the duty of a subcontractor under a cost-reimbursement contract that incorporated the appropriate FAR clauses is only to provide its best efforts within the available funds -- that is, the subcontractor’s primary obligation is not to complete the contract, but to work until the funds allotted to the contract have been expended.
The case contains a clear and accurate discussion of how the FAR’s Limitation of Cost clause (FAR 52.232-20) applies to a cost reimbursement subcontract, and how this type of subcontract differs fundamentally from a firm fixed price subcontract. According to the District Court, and consistent with prime contract principles, the subcontractor generally has no obligation to proceed, and bears no liability for not proceeding, unless there is sufficient money on the contract.
VERO TECHNICAL SUPPORT, INC. v. U.S. DEPARTMENT OF DEFENSE, et.al., S.D. Florida No. 10-14162-CIV, August 18. 2010. Plaintiff has a contract to provide weather-related services to various Army sites. Plaintiff, pleading an APA action, seeks a permanent injunction to prevent DOD from implementing an insourcing decision to bring those services in-house. The government moves to dismiss for lack of subject matter jurisdiction. The court agrees finding that insourcing is a procurement related matter with exclusive jurisdiction in the COFC pursuant to the ADRA. Good discussion of the policy behind the ADRA and court cases defining procurement. The court concludes. “In its attempt to secure district court APA jurisdiction, the Plaintiff limits its claim to just the Defendant’s insourcing decision. The Plaintiff maintains that its claim is neither a procurement protest by an interested party (for Tucker Act purposes) or a breach of contract (for CDA purposes). In trying to avoid COFC jurisdiction by defining away its claim for relief, the Plaintiff effectively eviscerates the claim. The Defendant’s insourcing decision cannot be considered in isolation, ignoring both the procurement context in which it was reached or the Plaintiff’s interest in maintaining the contract. Moreover the purpose behind these jurisdictional restrictions-the creation of one forum for resolving procurement and contract disputes-would not be served by keeping the Complaint here.”
IQBAL SINGH and IMS, P.C. v. RUSSELL G. WELLS et al, N.D. NY No. 1:09-cv-500, August 17, 2010. Plaintiff alleges that defendants[Corps of Engineers employees] “expressly procure[d] the termination of Plaintiffs’ government contracts and prevented the award of more work. . . based upon the racial and ethnic origin of Mr. Singh and the employees of IMS, or the perceived alienage of Mr. Singh and the employees of IMS.” (See earlier 2009 and 2010 cases at the COFC) The court grants the motion by the government to dismiss finding that the three year statute of limitations bars the action. The court notes that plaintiff was aware of any discriminatory decisions by 1997 at the latest.
MORRIS-GRIFFIN CORPORATION v. C & L SERVICE CORPORATION,. E.D. VA No. Civ. No. 2:10cv298, August 16, 2010. Plaintiff(MGC), no longer eligible for 8(a) status, is a subcontractor to defendant(CLS) and moves for a TRO and PI to enjoin CLS from withholding payments to MGC. CLS is an 8(a) firm which holds an 8(a) contract to provide mortgage loan services to HUD, although it had no experience in that area and relies on MGC to provide “the bulk of the human and financial capital needed to execute the HUD Contract.” The court denies the motion holding that “The Court finds that MGC and CLS deliberately procured a government contract that violated applicable federal regulations, including 13 C.F.R. § 125.6(a) and 13 C.F.R. § 121.103. The parties' current dispute is a direct result of these violations and of CLS' claimed efforts to bring the parties into compliance with applicable federal regulations. The Court cannot enforce the parties' subcontract, even though CLS through Barbara Moore, its principal officer, has blatantly violated the terms and conditions of the subcontract with MGC, for it is plainly contrary to law.”
PACIFIC FLEET SUBMARINE MEMORIAL ASSOCIATION, INC., dba, the USS Bowfin Submarine Museum and Park, v. UNITES STATES DEPARTMENT OF THE NAVY, et al, DHI No. 09-00467 DAE-KSC, July 23, 2010. Earlier “the Court found, inter alia, that the U.S. Navy violated the Randolph-Sheppard Vending Stand Act, 20 U.S.C. 107- 107f (the ‘RSA’), by not requiring private companies that lease Navy land on the Pearl Harbor Naval Base to comply with the RSA.” Plaintiff, a lessee of land on the base, brings this action arguing “that any action to enforce the blind vendor priority on the Bowfin Museum property is a violation of its federal rights.” The court dismisses most of the complaint. Following a US Federal Court of Claims decision in Colo. Dep’t of Human Services v. United States, 74 Fed. Cl. 339 which found “that a non-blind vendor has no rights under the RSA and no administrative remedies to pursue.” The court “concludes that Bowfin Museum has neither express nor implied standing to sue under the RSA.”
THE UNITED STATES v. WESTERN TITANIUM, INC. et al., S.D. CA No. 08-CR-4229, July 01, 2010. Court dismisses the False Claims Act and 18 USC § 38, Fraud involving aircraft or space vehicle parts in interstate or foreign commerce, counts against defendants holding that the “at war” provision of the Wartime Suspension of Limitations Act, 18 U.S.C. §§ 3287, [prior to the 2008 Pub. L. 110-329 amendment], does not apply to the hostilities in Iraq. The court distinguished its holding from a contrary ruling by the Ninth Circuit which dealt with a narrowly construed sovereign immunity issue.
UNITED STATES OF AMERICA ex rel. BRADY FOLLIARD, Plaintiff-Relator, v. CDW TECHNOLOGY SERVICES, INC., and CDW GOVERNMENT, INC., DDC Civil Action No. 07-2009, June 28, 2010. Qui tam False Claims Act. Relator’s claims are based upon the fact that defendants’ products were falsely listed on the SEWP website as TAA-compliant. (See earlier April 19, 2010 decision) Judge Huvelle now dismisses the suit for lack of jurisdiction pursuant to the first to file provision of 31 USC 3730(b)(5). Relying on United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214 (D.C. Cir. 2003), she finds that the material elements in the instant suit and an earlier action by a different party are nearly identical where they allege that “(1) CDWG presented a claim to the government related to HP products listed through a procurement portal; (2) the claim was false by virtue of CDWG’s failure to adhere to the requirements imposed upon government contractors in accordance with the TAA and related regulations; and (3) CDWG knew the claims were false.” She also rejects the argument by the relator and government that the action should not be dismissed because the contracts and agencies are not the same. Judge Huvelle notes that 31 USC 3130 places the responsibility to investigate on the Attorney General, not the individual agency.
MTS LAWN & LANDSCAPING SERVICES, INC., Plaintiff, v. John E. POTTER, Postmaster General, Defendant, W.D. Michigan, No. 1:09-CV-1094, May 13, 2010. Plaintiff filed a contract based action against the Postal Service in Michigan courts which was removed to the Federal District court. The court dismiss the action for lack of jurisdiction noting that “MTS has failed to show that Congress has waived sovereign immunity for the Postal Service beyond that set forth in the CDA, see Diversified Energy, Inc. v. TVA, 339 F.3d 437, 444 (6th Cir.2003) (noting that the CDA is a conditional waiver of immunity for agencies that contract with others for services or property), such that jurisdiction is proper in this Court or the state court.” The court rejects the argument that the contract forum selection clause, which specified a local court, trumps the sovereign immunity provisions if the CDA.
UNITED STATES OF AMERICA ex rel. BRADY FOLLIARD, Plaintiff-Relator, v. CDW TECHNOLOGY SERVICES, INC., and CDW GOVERNMENT, INC., DDC Civil Action No. 07-2009 (ESH), April 19, 2010. Qui tam False Claims Act. Relator’s claims are based upon the fact that defendants’ products were falsely listed on the SEWP website as TAA-compliant. In denying a motion to dismiss under Rule 9(b) the court notes “Because Rule 9(b) permits knowledge to be pled generally, there is no basis for dismissal for failure to plead knowledge with particularity. [citations omitted] Relator avers that defendants ‘knowingly’ submitted false claims premised upon misrepresentations about HP products’ countries of origin. He also alleges that although defendants were required by their contracts and relevant regulations to comply with the TAA, and although they received HP’s vendor product list which stated the country of origin for each product, they nonetheless falsely listed 140 products on the SEWP website as TAA-compliant. If proven, these allegations would constitute circumstantial evidedence of their ‘actual knowledge, deliberative ignorance or reckless disregard of the truth or falsity of [those products’ country of origin] information.’” [See dismissal above.]
UNITED STATES OF AMERICA, ex rel. WILLIAM A. THOMAS v. SIEMENS AG, et al., Ed Pa. CIVIL ACTION NO. 09-4414, April 23, 2010. False Claims Act case against German company, Siemans AG, dismissed for failure to provide service under the Hague Convention and failure to prove that US subsidiaries were agents to accept service.
NATALIE DELLINGER v. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, ED VA No. 1:10cv25, April 02, 2010. Plaintiff sues alleging that SAIC violated the anti-retaliation provisions of the Fair Labor Standards Act by refusing to hire her for a position at the Sherman Kent School of the CIA after they received notice that she had filed a separate FLSA action against a former employer. The court grants the motion of SAIC to dismiss finding that “Plaintiff has not alleged facts sufficient to show that she was an ‘employee’ of SAIC within the meaning of 29 U.S.C. § 215(a)(3).”
UNITED STATES OF AMERICA, ex rel., MICHAEL J. DEKORT, and MICHAEL J. DEKORT, individually, Plaintiffs, v. INTEGRATED COAST GUARD SYSTEMS, A JOINT VENTURE, LOCKHEED MARTIN CORPORATION, A JOINT VENTURE PARTNER, and NORTHROP GRUMMAN SHIP SYSTEMS, INC., A JOINT VENTURE PARTNER, Defendants, ND TX Civil Action No. 3:06-CV-1792-O, April 05, 2010. Qui tam action, Coast Guard Deepwater contract. The court denies in part and grants in part various motions by defendants to dismiss. The court dismisses relator’s fraud-in-the-inducement claims, but retains several others including the alter ego claim noting “In short, having considered Relator’s allegations, the parties’ arguments, and applicable law, the Court concludes that Relator has stated a claim sufficient to withstand ICGS’s motion to dismiss allegations that ICGS and Lockheed are alter-egos. Whether a preponderance of the evidence supports these allegations, and whether justice and fairness will ultimately require that the Court pierce the corporate veil, is fact-intensive, and thus an issue to be decided later.”
ESSEX ELECTRO ENGINEERS, INC. v. THE UNITED STATES, D.D.C No. 09-372, February 6, 2010. FOIA case plaintiff seeks unit prices of a contract awarded to a competitor, Fidelity. The Army only provided redacted unit prices and plaintiff brings this action. Judge Leon grants the government’s motion to dismiss finding that “it is clear that release of the requested information would likely cause substantial harm to Fidelity’s competitive position.” and notes that “When determining whether Exemption 4 applies, actual harm does not need to be demonstrated; evidence supporting the existence of potential competitive injury or economic harm is enough for the exemption to apply.”
UNITED STATES, ex rel. WESTRICK, v. SECOND CHANCE BODY ARMOR, INC., et al., D.D.C Civil Action No. 04-280 (RWR), February 23, 2010. False Claims Act case involving body armor. Toyobo one of the defendants moves to dismiss for failure to state a claim and sufficiently plead fraud. Toyobo supplied a synthetic fiber, “Zylon” to Second Chance which manufactured and sold the vests to others including the US. “The government alleges that the defendants knew, within the meaning of the FCA, that the body armor was defective and that Zylon provided less protection than ‘[d]defendants had represented [and] warranted and/or [was] required by the contract specifications.’” The court denies the motion to dismiss. One item of note regarding the False Statements count is the court’s discussion of the Fraud Enforcement and Recovery Act of 2009 (“FERA”) which provided for § 3729(a)(1)(B)’s retroactive application ‘to all claims under the False Claims Act . . . that are pending on or after’ June 7, 2008.” The court notes that the amended provision applies here.
Ingrid FISHER, et al., Plaintiffs, v. HALLIBURTON, et al., Defendants. Reginal Lane, Plaintiff, v. Halliburton, et al., Defendants. Kevi Smith-Idol, Plaintiff, v. Halliburton, et al., Defendants, S.D. Texas, Civil Action Nos. H-05-1731, H-06-1971, H-06-1168. February 08, 2010. On remand from the 5th Circuit. After more discovery ordered by the 5th Circuit, the court denies Halliburton’s motions to dismiss based on political question and the government contractor defense. The court notes that plaintiff’s intentional tort and fraud claims are not barred by the government contractor defense as the LOGCAP “contract did not--and could not--impose on defendants a duty to defraud those employees into entering their employment contracts, or that upon entering the contracts to commit other intentional torts against them.” The court also rejects the argument by Halliburton that because the contract was a rated contract it would be subject to criminal liability if it refused to perform finding that “the DO rating on the LOGCAP contract did not remove KBR’s ability to stop convoys when it judged the conditions were critical.” In reexamining the political question issue after further discovery under the Baker v. Carr, 369 U.S. 186, 217, standards the court finds: “that the defendants have not demonstrated that the final decisions to send the plaintiffs’; convoys on those days, and at those precise times were military decisions;” and “there is no indication that the political question doctrine has moved any closer to the forefront. The claims are still state law tort claims, governed by state tort laws”.
UNITED STATES POSTAL SERVICE v. SUNSHINE DEVELOPMENT, INC., M.D PA, CIVIL ACTION NO. 1:07-CV-2101, December 09, 2009. 1962 Lease contract with option to purchase at end of each lease period, provided that the government give a one year notice of the election to purchase. The government sues for specific performance requiring defendant to sell the property arguing that it had exercised the purchase option. Defendant argues that the purchase option has expired and that it is entitled to fair market rent as the USPS has not vacated the property and that the continued possession by the USPS constitutes a taking. The court finds for defendant on the liability issue holding that the notice to exercise the purchase option must be given by a person with contracting authority which did not happen here. The court rejects the argument by the government that it had ratified the action by tendering a check a year later.[The decision denying the request by the government for reconsideration is included.]
UNITED STATES of America ex rel. DRC, INC., et al., Plaintiffs, v. CUSTER BATTLES, LLC, et al., Defendants, E.D. Va. No. 1:04cv199, October 14, 2009. FCA case. Court awards $9,198,000 in damages and sets relators’ share at the statutory maximum of 30%.
Northrop Grumman Overseas Services Corp. v. Canada (Attorney General), 2009 SCC 50, November 5, 2009. The Supreme Court of Canada issued today a rare decision on procurement law. The decision deals with the right of a U.S. supplier to challenge Canadian federal government solicitations under the Agreement on Internal Trade (an agreement between the federal and provincial governments).
State of WISCONSIN DEPARTMENT OF WORKFORCE DEVELOPMENT, Division of Vocational Rehabilitation, Plaintiff, v. UNITED STATES DEPARTMENT OF EDUCATION, Margaret Spellings, in her official capacity as Secretary of the United States Department of Education, and Janet Dickey, Defendants, W.D. Wisconsin No. 09-cv-011-bbc, November 03, 2009. Randolph-Sheppard Act case. Plaintiff challenges an arbitration award which found that the award was arbitrary and capricious, lacked sufficient evidence, violated the Randolph- Sheppard Act and violated the Eleventh Amendment. The court upholds the award’s “determination of liability and its holding that plaintiff must help defendant Dickey develop, expand and upgrade her present facility.” The court finds that damages are not authorized but upholds the “decision that plaintiff must help defendant Dickey in developing, expanding and upgrading her present facility, ... ”
UNITED STATES of America ex rel. Roger L. SANDERS, et al., Relators, v. ALLISON ENGINE COMPANY, INC., et al., Defendants. S.D. Ohio Nos. 1:95-cv-970, 1:99-cv-923, October 27, 2009. Returning to the District Court after the decision of the Supreme Court the District Court now concludes “The FCA as amended by FERA[Fraud Enforcement and Recovery Act of 2009] may not be applied to the Defendants in this case. A plain reading of the retroactivity clause results in the conclusion that the FCA as amended by FERA does not apply to this case. Also, retroactive application of the new FCA language to these Defendants violates the Ex Post Facto Clause. Retroactive application violates the Ex Post Facto Clause because Congress intended for the FCA to be punitive and because FCA sanctions are punitive in purpose and effect.”
CHRISTOPHER J. ALF v. MICHAEL B. DONLEY et al., DDC Civil Action No.: 09-0802 (RMU), October 29, 2009. Plaintiff brought this action to enjoin his debarment by the Air Force. Judge Urbina grants the motion for a preliminary injunction. In concluding that it is likely that plaintiff may prevail on the merits, Judge Urbina notes that the debarment decisions appear to be logically flawed and Air Force did not properly support its finding that the firm’s wrongdoing could be imputed to plaintiff.
NEWPORT AERONAUTICAL SALES v. DEPARTMENT OF THE AIR FORCE, DDC Civil Action No. 04-1283 (GK), October 07, 2009. FOIA case. Plaintiff is a commercial data library that provides qualified military contractors, including small businesses, technical data received from U.S. military agencies on an overnight basis for the purposes of facilitating contract bids. The court grants the government’s motion to dismiss the denial to provide some 155 Technical Orders requested under the FOIA. The court agrees with the Air Force that the requested data is barred from disclosure by 10 U.S.C. § 130, “Authority to Withhold From Public Disclosure Certain Technical Data.”. The court notes that once it has determined that the data falls under FOIA Exemption 3, it has no jurisdiction to review the Air Force regulation implementing 10 USC § 130. Judge Kessler notes “Based on this analysis, the Court concludes that Defendant Air Force’s showing is sufficient to establish that the information requested is exempt from FOIA under 10 U.S.C. § 130. Thus, Plaintiff’s challenge to the Department’s application of Directive 5230.25 does not constitute a claim under 5 U.S.C. § 552. To put it simply, Congress has exempted from FOIA coverage the 155 Technical Orders that NAS seeks, and therefore FOIA does not grant jurisdiction over Plaintiff’s claim.”
EMPIRE ENTERPRISES JKB, INC., Plaintiff, v. UNION CITY CONTRACTORS, INC., Nova Casualty Company, and Nova American Groups, Inc., Defendants. No. 05-CV-6461P, September 25, 2009. Corps of Engineers contract for removal of debris. Plaintiff sues for breach of contract by the prime, Union City, and a Miller Act claim against the surety Nova. Subsequent to trial on the breach issue, Union filed for Chapter 7 bankruptcy which invoked the automatic stay. The court notes that while the breach decision is stayed, the stay does not apply to the surety. The court finds for the plaintiff and also awards prejudgment interest on the claim.
United States v. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, DDC Civil Action No. 04-1543, September 15, 2009. NRC contract. False Claims Act case based on allegations that SAIC failed to disclose Organizational Conflicts of Interest (OCIs) where contract required such disclosure. (See earlier decisions.)After a jury verdict finding SAIC liable, SAIC moves for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) or, in the alternative, for a new trial under Rule 59. The court denies the motions, concluding “Given all of the evidence presented at trial and the reasonable inferences that could be drawn from it, there was sufficient evidence upon which a reasonable jury could find for the United States on its FCA and breach of contract claims. SAIC is not entitled to judgment as a matter of law on any count. In addition, SAIC has not shown that the instructions given to the jury were erroneous or that any other error was committed at trial such that it would be a clear miscarriage of justice not to grant SAIC a new trial. SAIC’s motion for judgment as a matter of law or, in the alternative, for a new trial, will be denied.”
GENERAL ELECTRIC COMPANY, Plaintiff, v. DEPARTMENT OF THE AIR FORCE, DDC Civil Action No. 01-1549 (CCB), August 28, 2009. Reverse FOIA case. GE attempts to prevent the release of unit prices for its jet engine contracts. The court grants summary judgment for GE noting “The administrative record therefore shows that disclosure of unit pricing information would likely pose substantial competitive harm to GE from its customers; that showing is sufficient to deem the information ‘confidential’ for purposes of FOIA Exemption 4 and the Trade Secrets Act.”
AMERICAN CIVIL LIBERTIES UNION et al., Plaintiffs, v. Eric HOLDER, et al., Defendants, E.D. VA Civil Action No. 1:09-cv-042, August 21, 2009. The court rejects the arguments that the sealing provisions of the False Claims Act are an unconstitutional violation of the First Amendment.
CLP RESOURCES, INC., Plaintiff, v. KENTUCKY BLUEGRASS CONTRACTING, LLC, Defendant. Kentucky Bluegrass Contracting, LLC, Third Party Plaintiff, v. PPR/Lion's Pride Construction Systems, LLC; Morgan Buildings and Spas Inc.; BKJ Solutions, Inc.; Travelers Casualty and Surety Company of America; and Employers Mutual Casualty Company, Third Party Defendants. WD OK, No. CIV-08-1198-M, Aug. 19, 2009. Plaintiff, CLP, is a fourth tier subcontractor on a Corps of Engineers construction contract and sues to collect unpaid amounts and Kentucky Bluegrass(KBC) brings a third party compliant against the sureties and the prime contractor(BKJ). The court dismisses finding no contract or implied contract and also rejects KBC’s indemnity claims against BKJ and the sureties.
Charles Hickey Jr., et al. v. Mary Susan Chadick, et al., SD Ohio, No. 08-00824, August 12, 2009. Plaintiff brings an APA action and challenges its expired 2005 and 2008 debarments and their listing in the archives of the Excluded Parties List System or “EPLS” list. The court denies the government’s motion to dismiss and finds that plaintiff has standing. Good discussion of the standing issue. [The opinion is silent on whether or not the debarments were ever challenged when issued-jaw]
THE BOEING COMPANY v. U.S. DEPARTMENT OF THE AIR FORCE, DDC No. 05-365, May 18, 2009. Reverse FOIA case. Global Positioning System contract. Boeing requests declaratory relief against the release of wrap-around rates for the years 2000-2004 arguing that the information could be used to predict Boeing’s future labor rates. Judge Kessler grants the government ’s motion for summary judgment finding that Boeing has not carried its burden to show that the release would likely cause it competitive harm. Good discussion of FOIA issues and case law.
Ousama KARAWIA and International Services, Inc. v. UNITED STATES DEPARTMENT OF LABOR, SD NY No. 08CV5471, May 07. 2009. Plaintiff(ISI) challenges its debarment for Service Contract Act violations. The court grants summary judgment for the government concluding “ISI does not meet its burden to establish that "unusual circumstances" warrant relief from debarment under the SCA. Although the record reflects that ISI has established some of the prerequisites to relief, such as cooperation in the investigations and repayment of monies due, ISI has failed to establish the absence of aggravating factors: ISI's numerous violations of the Act after receiving specific notice about how to comply with it constitutes culpable neglect. Consequently, after considering the parties' arguments and reviewing the record before me de novo, but with deference for the fact finding below, I conclude that the ARB Decision must be affirmed. Accordingly, ISI's motion for summary judgment is DENIED and the DOL's motion for summary judgment is GRANTED.”
FRANKLIN D. HOLDREN, et al., Plaintiffs, v. BUFFALO PUMPS, INC., et al., Defendants, D MA Civil Action No. 08cv10570-NG, May 04, 2009. FTCA case. Plaintiff bring claims against various manufactures for their failure to warn of the dangers of asbestos associated with their products in pumps used by the Navy. The District Court grants the motion to remand back to state courts noting that “Under the circumstances, the Court finds that defendants have not shown the type of genuine and ‘significant conflict’ between federal policy and state law that would support the federal contractor defense. See Boyle, 487 U.S. at 511-12. Nor have they shown any causal relationship between the Navy's directives and their failure to warn about asbestos.” Good discussion of the Federal removal standards.
CHERYL A. HARRIS, Co-Administratix of the Estate of RYAN D. MASETH, deceased, and DOUGLAS MASETH, Co-Administrator of the Estate of RYAN D. MASETH, deceased, Plaintiffs, v. KELLOGG, BROWN & ROOT SERVICES, INC., WD PA. Civil Action No. 08-563, March 31, 2009. FTCA suit. Plaintiffs bring this wrongful death action against KBR, a contractor in Iraq, and allege that KBR’s negligence proximately caused Staff Sergeant Maseth’s death by electrocution while taking a shower. KBR moves to dismiss arguing that action presents non-justiciable political questions and are exempted by the combatant activities exception to the FTCA. The court denies the motion to dismiss. Good discussion of the political question and combatant activities issues.
UNITED STATES OF AMERICA ex rel. DANIEL KIRK v. SCHINDLER ELEVATOR CORPORATION, SD NY No. 05 Civ. 2917 (SHS), March 30, 2009. FCA case. Realtor obtained information from DOL via FOIA requests that form the basis for his FCA allegations. The court dismisses the action concluding “Because the Court finds, on these facts, (1) that the DOL’s responses to the Kirks’ FOIA requests constituted administrative investigations and reports, (2) that those investigations and reports publicly disclosed the allegations or transactions underlying Kirk's claims, (3) that those claims are ‘based upon’ the public disclosure, and (4) that Kirk was not an original source of the information, it concludes that Kirk's remaining claims are statutorily barred.” Reversed
KORMENDI/GARDNER PARTNERS, Plaintiff, v. SURPLUS ACQUISITION VENTURE, LLC, et al., DDC Civil Action 08-00423 (HHK), March 31, 2009. Plaintiff, (“KGP”) brings this action as a third-party beneficiary of a contract between a United States’ Defense Reutilization and Marketing Service (“DRMS”), and Surplus Acquisition Venture, LLC and Government Liquidation.Com, LLC (“Surplus”). The complaint, which seeks damages for breach of contract or, in the alternative, a recovery in quantum meruit, was filed in the Superior Court of the District of Columbia. Surplus removed the action to the District Court. The District Court now concludes it lacks jurisdiction to hear the matter and grants the motion of plaintiff to remand the case back to the Superior Court. In rejecting the arguments by Surplus why the court should retain jurisdiction the opinion discusses federal question jurisdiction for government contracts, the Boyle exception, the Federal Officer Removal Statute and finally rejects the request by Surplus to allow jurisdictional discovery.
PLAINVILLE ELECTRICAL PRODUCTS COMPANY, INC. v. BECHTEL BETTIS, INC., D.CT CIVIL ACTION NO. 3:06cv920 (SRU), March 26, 2009. Plaintiff, a subcontractor and disappointed bidder alleges various actions, including breach of contract(FAR Rights in Data clause), breach of implied contract, promissory estoppel, fraudulent misrepresentation, negligent misrepresentation, violation of the Connecticut Unfair Trade Practices Act ("CUTPA"), violation of the Connecticut Uniform Trade Secrets Act ("CUTSA"), and unjust enrichment. Defendant operates a nuclear propulsion laboratory for the United States Navy and the United States Department of Energy. The courts grants defendant’s motion for summary judgment.
Anil SINHA and AKS Associates, International Corp. v. DEFENSE LOGISTICS AGENCY, Defense Supply Center Richmond and DCMA Chicago,, ND IL No. 08 C 5487, March 23, 2009. Plaintiff sues under the APA seeking rescission of its debarment and money damages for lost business opportunities. The court dismisses the action for lack of jurisdiction holding that suits for money damages are excluded under the APA.
IRON PARTNERS, LLC, an Oregon limited liability company, v. MARITIME ADMINISTRATION, ORDER UNITED STATES DEPARTMENT OF TRANSPORTATION; KAISER VENTURES, LLC; KSC RECOVERY INC.; KAISER STEEL CORPORATION; AND KAISER COMPANY, INC., WD WA Case No. C08-5217 RBL, March 05.2009. Plaintiff brings this CERCLA, FTCA and state law action for claims for clean-up of property, it now owns, which was contaminated during shipbuilding activities in World War II. The Maritime Administration had contracted with Kaiser to build ships “faster than they could be sunk.” The court dismisses the FTCA claim, which it styles as a trespass claim, for lack of jurisdiction. The court finds that the actions of the Maritime Administration fell within the discretionary and contractor exceptions of the FTCA.
UNITED STATES OF AMERICA, ex rel. RICHARD F. MILLER, Plaintiffs, v. BILL HARBERT INTERNATIONAL CONSTRUCTION, INC., et al., DDC No. 95-1231 (RCL), February 26, 2009. FCA attorney fees and costs case. Judge Lamberth continues to award fees in this case, for which he had previously awarded some $7.5 million in fees and expenses. In discussing the estimate for attorney fees, he notes “Although this idea is simple in theory, it creates the loathsome task of wading through pages of time entries to determine compensation. For example, this Court produced a 169 page opinion (including appendices) in response to the first fee petition in this case. See Miller v. Holzmann, 575 F. Supp. 2d 2 (D.D.C. 2008). Now the parties are back again filing massive briefs to debate the intricacies of, among other things, block billing and what constitutes a ‘clerical task.’ This process not only takes up too much of the Court’s time but also requires a remarkable amount of time on the part of counsel and a large amount of money on the part of the clients. As a result, fee litigation like the litigation that has occurred in this case is yet another reason to proclaim that ‘[t]his is the time to get rid of the billable hour.’See Jonathan D. Glater, Billable Hours Giving Ground at Law Firms, N.Y. Times, January 30, 2009 at A1 (quoting partner at Cravath, Swaine & Moore).
TYBRIN CORPORATION v. UNITED STATES DEPARTMENT OF THE AIR FORCE, et al., SD Ohio No. 3:08-cv-002, February 19, 2009. Reverse FOIA case. Plaintiff, a contractor for the Air Force Consolidated Acquisition of Professional Services program known as CAPS, submitted emails to the Air Force regarding the eligibility of HMRTech2, a defendant, to receive actual work under the CAPS program. The Air Force subsequently disqualified HMRTech 2 from further participation in the CAPS program. HMRTech 2 apparently submitted a FOIA request for the emails which the Air Force is prepared to disclose. Plaintiff objects arguing that the emails are commercial information protected from disclosure by 5 U.S.C. § 552(b)(4) which governs trade secrets and commercial or financial information obtained from a person and privileged or confidential. The court finds that “Tybrin’s practice is to keep matters such as the emails in question confidential, not only in the sense that they are not released to the general public, but also that there(sic) distribution within the corporation is controlled.” Given the absence of controlling Sixth Circuit authority, the court follows Public Citizen Health Research Group v. FDA, 702 F. 2d 1280 (D.C. Cir. 1983) and finds the emails to be commercial information and protected from disclosure. The court permanently enjoins the Air Force from releasing the emails.
US v. MENOMINEE TRIBAL ENTERPRISES, Marshall Pecore, and Conrad Waniger, Defendants, WD WI No. 07-C-316, January 16, 2009. FCA case. Following Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 780-781 (2000) the court dismisses the action against Menominee holding that a tribe is not a person for purposes of the FCA
UNITED STATES OF AMERICA ex rel. BENJAMIN CARTER, Plaintiff, v. HALLIBURTON COMPANY et al, ED VA No. 1:08cv1162 (JCC), January 13, 2009. FCA case relating to the delivery of potable and non-potable water to bases in Iraq. The court dismisses the action finding that “Plaintiff cannot rely on reprehensibility and revulsion to state an FCA claim when he cannot meet the applicable pleading requirements.”
UNITED STATES OF AMERICA, ex rel. Norman Rille and Neal Roberts Plaintiff/Counterclaim-Defendant vs SUN MICROSYSTEMS, INC., a Delaware Corporation Defendant/Counterclaim-Plaintiff, ED Arkansas No. 4:04CV00986-WRW, October 28, 2008. False Claims Act case relating to GSA Multiple Award Schedule contracts with Sun Microsystems. The court dismisses for lack of jurisdiction two counterclaims made by Sun; negligent performance of the audits and breach of contract by the Government. The court finds that the audit were discretionary and the government is immune from the claims, sounding in tort, even if the audits were performed negligently. The breach claim is covered by the CDA and was never submitted to the CO. The court rejects the argument by Sun that the CDA contains an exception for fraud claims. The court notes that “The fraud exception, however, applies to fraudulently submitted claims, not to claims by a contractor that the Government committed fraud on a contract.”
UNITED STATES, ET AL., EX REL. MARK RADCLIFFE, v. PURDUE PHARMA L.P., ET AL, WD VA No. No. 1:05CV00089, October 14, 2008. Qui tam case. The District Court, following the Ninth Circuit, refuses to dismiss relator’s case based on a release he gave defendant when leaving his employment. Chief District Judge Jones finds “that under these circumstances, enforcement of the release would undermine important public interests associated with the FCA, as well as the countervailing interest in settling litigation. The generalized interest in settling litigation is outweighed in the present circumstances by public interests that would be impaired by enforcement of this release, and so analysis under the Rumery [Town of Newton v. Rumery, 480 U.S. 386, 107 S.Ct. 1187, 94 L.Ed.2d 405 (1987),] test does not favor enforcing Radcliffe's release.”
TRIANCO, LLC v. INTERNATIONAL BUSINESS MACHINES CORPORATION, ED PA No. 06-cv-3533, October 15, 2008. Teaming Agreement case for a solicitation for installing computerized checkstands at Department of Defense commissaries worldwide. On remand from the 3rd Circuit non-precedential decision for further clarification regarding Trianco’s consideration under the agreement and Trianco’s claim for unjust enrichment. The court rejects the unjust enrichment claim finding that “a legally recognized claim for breach of this agreement precludes Trianco’s unjust enrichment claim over the subject matter of that agreement.” The court notes that Trianco could have pursued a breach of contract claim against IBM for breach of their duty to negotiate in good faith under the Teaming Agreement, but chose not to so allege. Good discussion of Type I and Type II preliminary agreements under New York law.
JAMES M. HARRINGTON vs. CIBA VISION CORPORATION, W.D.NC, No. 3:08-cv-00251-FDW, August 28, 2008. Qui tam, 35 USC 292, False Marking case. Not a contract case, but interesting. Court requests the opinion of the Attorney General on the argument of defendant that the statute violates the "Take Care" of the constitution. The court notes that the FCA provides numerous methods of executive control, but the False Marking statute contains no such controls.
Bunnatine H. GREENHOUSE, Plaintiff, v. Pete GEREN, [Secretary of the Army] et al., D. DC, No. 07-182 (EGS), September 02, 2008. Plaintiff is the former “Principle(sic) Assistant Responsible for Contracting (‘PARC’) of the US Army Corps of Engineers (’USACE‘)” and brings this action for wrongful removal and claims violations of the APA, Whistleblower Protection Act(WPA) and Privacy Act. Facts hinge around contracts for KBR in Iraq. The court dismisses the APA and WPA claims, but denies the motion by the government to dismiss the Privacy Act claims.
UNITED STATES of America, ex rel. Janaki
RAMADOSS, et al., Plaintiffs, v. CAREMARK INC., et al., Defendants, W.D.
Texas, No. SA-99-CA-00914-WRF. Aug. 27, 2008. FCA Qui tam healtcare case.
Interesting case discussing FCA issues. The court concludes “For the
foregoing reasons, the Court makes the following rulings: (1) the Court denies
summary judgment for Caremark on the issue of whether the alleged false claims
at issue in this litigation must be presented to the Government; (2) the Court
grants summary judgment in favor of Caremark and denies summary judgment for
the Government with respect to the ‘falsity’ element of reverse
FCA claims based on Caremark applying restrictions that existed in the
corresponding plan on pre-Goetz denials; (3) the Court grants summary judgment
in favor of Caremark and denies summary judgment for the Government with
regard to the ‘obligation’ element of the FCA for Caremark's
denials of reimbursement requests made to state Medicaid agencies; (4) the
Court grants summary judgment in favor of Caremark that the FCA's statute of
limitations provision prohibits the Government's FCA claims prior to August
19, 1999; (5) the Court grants summary judgment in favor of Caremark and
denies summary judgment for the Government on the issue of common law
recoupment; (6) the Court both grants and denies summary judgment for
Caremark, and denies summary judgment for the Government, with respect to the
examples of alleged false claims listed below; and (7) the Court grants
summary judgment in favor of Caremark and denies summary judgment for the
Government with regard to alleged false claims that are based on
out-of-network or preauthorization restrictions, as the Court finds that such
restrictions are substantive.
This ruling means that the plaintiffs in this litigation are precluded from arguing that Caremark is subject to FCA liability under 31 U.S.C. § 3729(a)(7) for denial of reimbursement requests based on a restriction that existed in the corresponding plan, whether substantive or procedural, if the denial occurred before the initial holding in the Goetz case. This does not preclude the plaintiffs from arguing that the various Medicaid agencies are entitled to statutory reimbursement, an issue that has not been briefed at this point in time. The holding also precludes the plaintiffs from alleging that Caremark's denials of reimbursement requests based on preauthorization or out-of-network restrictions are false under the reverse false claims provision of the FCA, both before Goetz and after, because the Court has determined that such restrictions are substantive and therefore, do not discriminate against Medicaid.” [See Caremark v. Goetz, 480 F.3d 779]
AMERICAN SMALL BUSINESS LEAGUE, Plaintiff, v. UNITED STATES SMALL BUSINESS ADMINISTRATION, N.D, CA No. C 08-00829 MHP, August 25, 2008. Not a direct contracts case, but an interesting FOIA case. Plaintiff requested from the SBA a list of the small business entities and contract amounts contained in a Goaling Report which SBA referenced in a press release. SBA moves to dismiss for lack of jurisdiction and argues that the information is not an agency record as the database containing the information is a GSA, not a SBA record. The court denies the motion finding that the information is contained in a SBA agency record. The court notes “That the SBA may have had to direct GSA to generate computer code to extract and compile the list of small businesses and contract amounts requested by the League is encompassed in the SBA’s obligation to ‘search’ for electronic records.”
UNITED STATES OF AMERICA ex rel. RHONDA SALMERON, Relator v. ENTERPRISE RECOVERY SYSTEMS, INC., et al., ND IL No. 05 C 4453, August 18, 2008. False Claims Act case. Court applies the ultimate sanction, dismissal of relator’s case for attorney misconduct. See supplemental August 21, 2008 opinion discussing the right of the US to re-enter the battle if warrented.
THE UNITED STATES v. United Technologies Corporation, SD Ohio, No. 3:99-cv-093, August 01, 2008. False Claims Act case, Air Force contract. The latest in a long series of ASBCA and Federal Circuit decisions over this contract, the district court finds that United Technologies violated the FCA by submitting false information during contract negotiations. Noting that “reliance is not an element of a cause of action under the False Claims Act in the Sixth Circuit” and that the government suffered no actual damages the court awards the government the statutory maximum fine of $10,000 per invoice submitted, for a total of $7,090,000.
US v. MARY LOUISE DENESE SLAEY, et al., ED Pa. No 06-cv-4930, July 23, 2008. False Claims Act case. GSA contracts. Defendants counterclaim alleging negligence, fraud, breach of contract and constitutional claims. The government moves to dismiss arguing, for the most part, sovereign immunity issues. The court dismisses the contract and constitutional claims, but allows the negligence and fraud claims to remain. The court notes that counterclaims are compulsory, but the contract claims are covered by the CDA and that plaintiffs have not exhausted their administrative remedies.
Rosita QUADE, for her minor son, Dewayne Quade, Plaintiff, v. Joanne B. BARNHART, Commissioner of Social Security, Defendant. D. Arizona, No. CV 05-015-TUC-RCC, July 7, 2008. Social Security payments EAJA case. Court interprets EAJA and its purpose to allow payment of fees directly to the attorney. After discussing the various fee shifting statutes the court concludes “The judicial interpretation of the EAJA further supports the view that an award of attorney's fees under the EAJA should be paid directly to the attorney. To interpret the statute differently would require the Court to narrowly focus on the literal language of the statute, overlook the legislative intent behind its enactment, and disregard the effects of the interpretation on Congress’s goal of reducing the deterrents and disparity in bringing meritorious litigation against the government, while providing an unintended windfall to prevailing parties.”
UNITED STATES OF AMERICA, vs. RUSSELL T. HAWLEY and HAWLEY INSURANCE, INC., ND IA, No. C 06-4087-MWB, June 23, 2008. False Claims Act case regarding crop insurance reinsured by the Federal Crop Insurance Corporation. See earlier decision in this case on the presentation issue of 31 U.S.C. § 3729(a)(1).. After considering the Supreme Courts decision in Allison Engine, the court sua sponte finds for the defendant on all counts concluding “Upon review of the Supreme Court's recent decision in Allison Engine; review of the parties’ trial briefs addressing, inter alia, the impact of the Allison Engine decision on this case; review of the Allison Engine decision; review of Iowa law applicable to common-law fraud claims; and review of the record, stipulations, and arguments previously submitted in support of the parties' cross-motions for summary judgment, the court finds that the government's remaining claims pursuant §§ 3729(a)(2) and (a)(3) of the FCA and Iowa common law, in Counts Two, Three, and Four, respectively, are not submissible as a matter of law. Review of the same materials also leads the court to reject the government’s request, in its Trial Brief, that the court reconsider its previous grant of summary judgment in the defendants’ favor on the FCA claim pursuant to § 3729(a)(1) in Count One.”
THE NATIONAL FEDERATION OF THE BLIND, et al. v. MARGARET SPELLINGS, DDC Civil Action No. 05-1839 (CKK), June 24, 2008. Plaintiffs bring a mandamus action to require the governmemt “to comply with a 1974 amendment to the Randolph-Sheppard Act that directed the Secretary of Health, Education, and Welfare to assign an additional ten full-time employees to Randolph-Sheppard Act-related activities.” Thecourt dismisses the case finding that plaintiffs lack standing.
THE UNITED STATES v. Jerry Brooks, SD NY, No. 08 Civ. 35, May 16, 2008. GSA contract, 18 USC 1001 case. Defendant argues that the action is prohibited by the 5 year statute of limitations because a leap year added another day which should have not been counted. The court disagrees holding that the term years in 18 USC 3282 means calendar years.
UNITED STATES OF AMERICA, Plaintiff, v. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, DDC, Civil Action No. 04-1543 (RWR), May 15, 2008. NRC contract. False Claims Act case based on allegations that SAIC failed to disclose Organizational Conflicts of Interest (OCIs) where contract required such disclosure. (See earlier decision denying SAIC’s motion to dismiss.) The court denies motions for summary judgment and sets the matter for trial. The Court does grant the motion by SAIC to dismiss the government’s quasi-contractual claims and some damage claims.
THE STATE OF CALIFORNIA ex rel. DENNIS DOCKSTADER et al., v. BETH HAMBY et al., Court Of Appeal Of The State Of California, Fourth Appellate District, No. G038349, April 25, 2008. Qui tam case under the California False Claims Act (CFCA). “Plaintiffs brought the lawsuit under the California False Claims Act (CFCA) (citation omitted), seeking to recover funds on behalf of the State of California. Plaintiffs allege defendants, while acting as employees of the Los Angeles Unified School District (LAUSD), submitted false requests to the state seeking funding for new school construction.” The court affirms the dismissal of the case. The court rejects the argument that even though plaintiffs may not bring a qui tam suit against LAUSD directly, the LAUSD employees involved are fair game. Noting that the California Supreme Court has held that school district is not a person under the CFCA, the court holds that a suit against school employees “is tantamount to a suit against LAUSD itself.” because the CFCA also “requires a government agency, on timely request, to defend and indemnify a public employee against claims arising out of an act or omission occurring within the scope of his or her employment.”
UNITED STATES ex rel. Denise ROMANO, Plaintiff, v. NEW YORK-PRESBYTERIAN HOSPITAL, Defendant, SD New York No. No. 00 Civ. 8792(LLS), April 02, 2008. New York Medicaide False Claims Act case. Defendant moves for summary judgment on the presentment issue of 31 USC 3729(a)(1) arguing that the claims were not presented to “to an officer or employee of the United States Government... ” The court denies the motion. The court rejects the holding of US ex rel Edward L. Totten v. BOMBARDIER CORPORATION AND ENVIROVAC, INC., 380 F.3d 488, 363 U.S. App. D.C. 180 (D.C. Cir. 2004), and instead finds the better rule to be that voiced by the Sixth Circuit in UNITED STATES OF AMERICA ex rel. ROGER L. SANDERS and ROGER L. THACKER, v. ALLISON ENGINE COMPANY, INC., GENERAL MOTORS CORPORATION, GENERAL TOOL COMPANY, and SOUTHERN OHIO FABRICATORS, and notes that the conduct here violates § 3729(a) (2), which punishes any person who “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government.” The court holds that “There is no ‘presentment’ requirement preventing liability from being imposed under § 3729(a)(2).”
THE UNITED STATES v. RUSSELL T. HAWLEY and HAWLEY INSURANCE, INC., ND IA No. C 06-4087-MWB, April 03, 2008. False Claims Act case, Federal Crop Insurance program. The government “asserts that the defendant insurance agent and his company participated in a scheme to obtain federally reinsured crop insurance payments for persons not eligible for such benefits.” Following US ex rel Edward L. Totten v. BOMBARDIER CORPORATION AND ENVIROVAC, INC., 380 F.3d 488, 363 U.S. App. D.C. 180 (D.C. Cir. 2004), the court grants summary judgment for the defendant on the presentation issue of 31 U.S.C. § 3729(a)(1). Summary judgment on other FCA counts are denied due to disputed factual issues.
LINDA M. JOYCE, Plaintiff v. JOHN E. POTTER, POSTMASTER GENERAL, in his official capacity, and UNITED STATES POSTAL SERVICE, MD FLA Case No. 5:06-cv-339-Oc-10GRJ, April 02, 2008. This is a follow-up to a decision in which a District Court awarded EAJA fees to a government (postal) contractor who obtained a preliminary injunction after her security clearance was improperly revoked. At that time, the Court awarded a portion of the EAJA fees at market rate, finding that the Government acted in bad faith when it sought to restore her security clearance in return for her agreement to waive her right to recover attorney fees. The Government wasn’t happy with that and filed a motion to alter judgment. In the attached decision, the Court affirms its original holding, and adds some additional language. The Court stated “it will not condone the Government’s attempt to coerce plaintiff’s to waive their right to attorney’s fees in bad faith under the guise of public policy.” The Court also awarded the contractor EAJA fees at market rate for the attorney time incurred in responding to the Government’s motion to alter. The Court also applied CPI-adjustment to the statutory rate forthe other attorney fees incurred, which it had not addressed in the original EAJA award decision. By contesting the Court’s decision, the Government’s liability for attorney fees increased from $54,000 to $78,000.[Description by counsel for plaintiff and a list member-jaw]
THE UNITED STATES v. DYNAMICS RESEARCH CORP. D MA Civil Action No. 03cv11965-NG, March 31, 2008. Air Force contracts. Following criminal guilty pleas by two of Dynamics’ officers the court grants the government’s motion for summary judgment for liability for False Claims Act, Anti-Kickback Act and breach of contract claims. Damages are deferred for future factual findings. The court finds that Dynmamics is vicariously liable for its officer’s conduct under a theory of apparent authority. Good discussion of FCA issues and apparent authority. [A horror story of contractor employee malfeasance-jaw]
UNITED STATES ex rel. JENNIFER J. FAY v. NORTHROP GRUMMAN CORPORATION, and NORTHROP GRUMMAN SPACE AND MISSION SYSTEMS CORPORATION, D CO Civil Action No. 06cv00581EWNMJW, March 27, 2008. False Claims Act case, Air Force contract. Court dismisses with prejudice claims of the relator and without prejudice for the government and denies a request for a hearing finding that relator has not shown that the “Government has not fully investigated the allegations, or that the Government’s decision was based on arbitrary and improper considerations.” The Government asserted “that continued litigation would pose an unacceptable risk to national security due to the potential for the disclosure of classified information.”
Stephens, et al. v. Astrue, D MD CIVIL NO. SKG-05-2574, March 12, 2008. EAJA Social Security appeals case. Magistrate Judge Gauvey holds that the EAJA allows fee awards directly to the attorney. After a review of the statutes, legislative intent and case law she concludes “Having considered the entire body of caselaw interpreting fee shifting statutes, many of the decisions preceding the EAJA’s enactment and subsequent amendment,16 including Duncan, the only relevant Fourth Circuit precedent, the Court concludes that the EAJA allows - indeed anticipates - fee awards directly payable to the attorney. Examination of the legislative history of the EAJA and principles of statutory construction support an interpretation of the EAJA that awards fees to counsel, rather than to the prevailing party, as most truly reflecting Congress’ intent in enacting the statute. Such an interpretation avoids an otherwise absurd result: granting a windfall to the plaintiff and thwarting Congress’ intent to enable litigants to bring meritorious litigation. Thus, this Court believes that attorney’s fees awarded under the EAJA must be paid directly to the attorney. Such an interpretation will encourage attorneys to represent plaintiffs on appeal regardless of their economic status or federal debts, thereby furthering the statutory purpose of continuing to reduce the deterrents and disparity that exist in bringing litigation against the Government. See H.R. Rep. No. 96-1418, at 6 (1980). This Court’s decision promotes the most reasonable interpretation of the statute, is consistent with both the policies and purposes behind the statute and prior judicial interpretations of similar statutes, and prevents the absurd and unjust result that would result from a literal construction of a statute, in this Social Security appeals context.”
L-3 COMMUNICATIONS WESTWOOD CORPORATION VERSUS ROBICHAUX ET AL., ED LA Civil Action No. 06-279, February 29, 2008. “Plaintiff contends that defendants are liable to it for their alleged violations of the Computer Fraud and Abuse Act (CFAA), the Louisiana Uniform Trade Secrets Act (LUTSA), the Louisiana Unfair Trade Practices and Consumer Protection Act (LUTPA), for tortious interference in business relations, and for breach of contract and breach of fiduciary duties.” Thanks to list member Joseph Petrillo who points out that “One of the important issues involved (at pages 12 - 25) whether the items in question were trade secrets if the Government had ‘unlimited rights’ in them.”
HUBER, INC. v. NEPTUNE SCIENCES, INC., ET AL, ED LA CIVIL ACTION NO. 07-7079, January 31, 2008. Plaintiff was a subcontractor to Norhrop-Grumman Avondale for a ship construction contract. Plaintiff then contracted with defendant, Neptune for various work. Plaintiff sued Neptune in Louisiana courts for breach of contract. (Neither the government or Northrop are affected by the dispute between Huber and Neptune.) Neptune now alleging substantial issues of federal law notices removal the action to the Federal District court. The court remands the matter back to the state courts finding that “the connection to the prime contract between Avondale and the Government is too far removed from the subcontract at issue in this case.”
UNITED STATES OF AMERICA, ex rel., PAUL E. ATKINSON, Plaintiff, v. PENNSYLVANIA SHIPBUILDING CO. and FIRST FIDELITY BANK, N.A., ED PA No. 94-7316, January 22, 2008. False Claims Act case. The third circuit affirmed the district court dissmissal of the FCA case for lack of jurisdiction. Pursant to 28 USC 1919, Defendant now claims some $28,000 in costs of depositions. The court rejects relator’s argument that costs may only be awarded where the underlying action was “frivolous or vexatious” and instead states that it “will evaluate the justness of ordering payment of costs by giving ‘careful scrutiny’ to items proposed by winning parties as costs.” Finding the costs to be just, the court awards $28,275.99.
UNITED STATES of America, ex rel. Alfred J. LONGHI, Jr., Plaintiffs, v. LITHIUM POWER TECHNOLOGIES, INC., and Mohammed Zafar A. Munshi, Defendants. S.D. Texas, Civil Action No. H-02-4329. Jan. 3, 2008. False Claims Act case, damages decision. DOD SBIR awards. In the liability decision the court found that “the invoices based on all four contracts at issue here are ‘false claims’ based on a fraudulent inducement theory.” After discussing damages cases, the court finds that there was no benefit to the government of the SBIR program and holds that “the proper amount of actual damages for the Four Contracts is the amount paid out on the Four Contracts--$1,657,455.00-- multiplied by three for a total of $4,972,365.00.” Regarding forfeiture, the court notes “Here, the court has found that the causative acts are the Four Contracts. Therefore, ..., the court will assess one forfeiture for each of the Four Contracts. However, because the defendants' fraud was systematic and knowing, the court will assess the maximum amount for each forfeiture. The forfeiture for Army Phase I is $10,000 and the forfeiture for each of the remaining three contracts is $11,000. Therefore, the total forfeiture is $43,000.00”
UNITED STATES ex rel. Neil LOCKHART, Plaintiff, v. GENERAL DYNAMICS CORP. et al., Defendants, N.D. Florida No. 4:04CV296-RH/WCS, January 03, 2008. False Claims Act case. Relator informed his employer of alleged fraud in failure to test as required by the government contract, and the employer reported the matter to DOD under its Voluntary Disclosure Program. Three days later--before the government took any action or made any inquiries in response to the voluntary disclosure relator filed this FCA suit. The court rejects defendant’s motion to dismiss under the public disclosure provision of the Act. Lacking any action by the government the court holds that the referral to DOD was not an administrative hearing or investigation of 31 USC 3730 (e)(4)(A).
WILLIAM J. HILBERT, et al., v. MCDONNELL DOUGLAS CORP., et al., DMA, Civil Action No. 07CV11900-NG, January 03, 2007. Plaintiff sues for damages in state court from contraction of mesothelioma, a fatal asbestos-related disease, claiming that defendants filed to warn of the hazards of asbestos exposures. Defendants seek to remove the case to federal court based on the “federal contractor defense.” District Judge Gertner denies the motion to remove. After discussing the elements of the defense, as related to the removal, she concludes: “The defendants have not shown that contracts or regulations provided reasonably precise specifications as to any warnings regarding asbestos. For that reason, the defendants cannot show a conflict between their federal contractual obligation and the state-law duty to warn, and have not established a colorable federal defense. By the same reasoning, the defendants have failed to establish a causal connection between acts done pursuant to the federal contract and the plaintiff's injury. Therefore, this Court does not have removal jurisdiction pursuant to the federal officer removal statute, 28 U.S.C. § 1442, and is without subject-matter jurisdiction to hear the case.”
IN RE KATRINA CANAL BREACHES CONSOLIDATED LITIGATION, ED LA NO. 05-4182, November 27, 2007. In this consolidated litigation plaintiff’s allege that defendant Washington Group International, Inc. (KGII) performed certain work pursuant to a contract with the Army Corps of Engineers which caused the collapse of a flood wall which protected the Lower Ninth Ward and St. Bernard. KGII moves for dismissal on the basis of a contractor defense and an argument that plaintiff has not alleged actionable negligence. The court denies the motion to dismiss noting that the contractor defense fails where “there are allegations that the contractor performed any negligent act or omission or any intentional act that was beyond the scope of the task.” The court also reviews the complaint according to Louisiana’s four prong duty-risk analysis —I. Was the conduct in question a substantial factor in bringing about the harm to plaintiffs, i.e., was it a cause in-fact of the harm which occurred? II. Did the defendant owe a duty to the plaintiff? III. Was the duty breached? IV. Was the risk, and harm caused, within the scope of protection afforded by the duty breached?“ and finds that an actionable cause of negligence has been stated.
DOMINIC F. BARAGONA, et al., Plaintiffs, v. KUWAIT GULF LINK TRANSPORT COMPANY, et al., ND GA No. 1:05-cv-1267-WSD, November 05, 2007. Wrongful death tort case for the death of an Army colonel in Iraq when his Humvee was struck by a truck driven by an employee of defendant contractor. Court analyzes Iraq and Georgia law and finds for plaintiff in the amount of $4,907,048.
TWI d/b/a/ SERVCO SOLUTIONS (formerly known as THEODORE WILLE INTERGRADE, GMBH, ZUG, SWITZERLAND) v. CACI INTERNATIONAL, INC., ED VA No. 1:07cv908 (JCC), November 09, 2007. Plaintiff seeks “punitive damages for its claims of breach of implied warranty of authority, fraudulent misrepresentation, negligent misrepresentation, and common-law negligence, on the grounds that CACI made misrepresentations regarding its authority to bind the government... ” CACI was a government contractor responsible for ‘securing and facilitating solicitations, contracts and orders between governments principals and third parties.’” The court dismisses the suit, finding in part, “Public policy as well as settled law dictates that the same immunity from tort suits afforded to government officials should also be awarded to those who perform delegated actions in the government’s stead. ... and ... Defendant, the one to whom the government delegated the function of awarding contracts, is also immune from state law tort liability for discretionary actions performed within the scope of employment.”
ILHAM NASSIR IBRAHIM, et al., Plaintiffs, v. TITAN CORPORATION, et al., D D.C. Civil Action No. 04-1248, November 06, 2007. “Named plaintiffs in both of these cases are Iraqi nationals who allege that they or their late husbands were tortured or otherwise mistreated while detained by the U.S. military at Abu Ghraib and other prisons in Iraq. Defendants are government contractors who provided interpreters (Titan)1 or interrogators (CACI)2 to the U.S. military in Iraq.” The court concludes- “The critical differences between the ways that contract translators and contract interrogators were managed and supervised lead to different outcomes. Because the facts on the ground show that Titan linguists performed their duties under the exclusive operational control of the military, the remaining state law claims against Titan are preempted and must be dismissed. Because a reasonable trier of fact could conclude that CACI retained significant authority to manage its employees, however, I am unable to conclude at this summary judgment stage that the federal interest underlying the combatant activities exception requires the preemption of state tort claims against CACI. This does not mean that CACI may not successfully prove this affirmative defense at trial, but the task of sorting through the disputed facts regarding the military’s command and control of CACI’s employees will be for the jury.
LAKE UNION DRYDOCK COMPANY, INC. v. THE UNITED STATES, W.D. Washington No. C05-2146RSL, Oct. 10, 2007. Admiralty case, NOAA contract to repair and convert a Navy T-AGOS vessel into a NOAA research vessel. After completion of the contract, plaintiff found that it had incurred a loss and then, after meeting with its employees to determine the reason for the loss, submitted a certified claim to the CO for some $526,000 alleging various breach theories. This case is an appeal from the denial of its claim. The Court finds in favor of NOAA on all of plaintiff’s claims for breach of implied warranty, breach of contract for cumulative delay and disruption, cardinal change, and unjust enrichment.
READY TRANSPORTATION, INC., et al., Plaintiffs, v. AAR MANUFACTURING, INC.; AAR MOBILITY SYSTEMS; DEFENSE CONTRACT MANAGEMENT AGENCY; DEPARTMENT OF DEFENSE, ED CA No. 2:06-cv-1053-GEB-KJM, August 20, 2007. Plaintiff’s allege that DCMA failed to enforce a DCMA regulation requiring other defendants to award contracts on a best value basis. The court grants the government’s motion to dismiss holding that APA requires plaintiffs to allege a specific failure by the government, which they did not do here.
UNITED STATES OF AMERICA, Plaintiff, v. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, DDC No. Civil Action No. 04-1543 (RWR), August 22, 2007. False Claims Act case. The court denies SAIC’s motion to dismiss finding, in part, that “... although the 1992 contract incorporated by reference an OCI definition taken from an inoperative regulation, the contract remained valid and required SAIC to disclose relationships that presented an OCI as defined by that regulation.”
Northrop Grumman Corporation v. Factory Mutual Insurance Company, CD CA No. CV 05-08444, August 16, 2007. Not a government contract case, but an interesting case of contract interpretation. At issue was the question of whether the excess insurance policy sold by Factory to Grumman excluded the loss caused by a storm surge from Hurricane Katrina. The court grants summary judgment for Northrop. The court notes “that the Ninth Circuit has observed that while the rule of contract interpretation applying to coverage provisions ‘favors the insured over the insurer,’ the contract interpretation rule applicable to exclusions is ‘substantially’ even more stringent.” The court found that the burden was on Factory to state the flood exclusion unambiguously which the court found it had failed to do so.
ROTHE DEVELOPMENT CORPORATION, Plaintiff, VS. THE U.S. DEPARTMENT OF DEFENSE and THE U.S. DEPARTMENT OF AIR FORCE, WD TX, Civil Action No. SA-98-CV-1011-XR, August 10, 2007. The latest in this long running case challenging the constitutionality of the price evaluation adjustment(PEA) program provisions found at 10 USC 2323 which provided a preference adjustment for SDBs. See earlier 2004 district court decision, the 2001 and 2005 Federal Circuit decisions. In an 188 page opinion the court grants the government’s motion for summary judgment finding that Congress has a compelling interest in reauthorizing the PEA program and that the statute and implementing regulations were narrowly tailored.
UNITED STATES ex rel. Thomas M. UBL, Relator v. IIF DATA SOLUTIONS, and Charles Patten, Sr., Defendants, ED VA Civil Action No. 1:06cv641, August 01, 2007. False Claims Act qui tam case, GSA Multiple Award Schedule (MAS) contracts. The court denies defendants motion to dismiss noting that “ With respect to Ubl’s claim concerning the three alleged fraudulently induced GSA contracts, a review of the amended complaint makes clear that Ubl has adequately stated a claim under the False Claims Act in that he alleges (i) a false statement (IIF’s misrepresentation about its commercial history), (ii) knowingly made by [ defendant vice president], (iii) that was ‘material’ in that it was capable of influencing GSA action by causing the agency to enter into contracts at higher prices that it would otherwise have paid, and (iv) that involved a false claim to the government. It is equally clear that Ubl adequately states a claim cognizable under the False Claims Act with respect to the specific instances of overbilling and inflated invoices submitted at [defendant vice president’] direction.”
LINDA M. JOYCE, Plaintiff, -vs- JOHN E. POTTER, POSTMASTER GENERAL, in his official capacity, and UNITED STATES POSTAL SERVICE, MD FL Case No. 5:06-cv-339-Oc-10GRJ, July 16, 2007. EAJA case. See earlier decision on the underlying issue. Court grants EAJA fees finding that “Plaintiff and her counsel were met at all passes by bureaucratic stonewalling.” The Court also found that certain fees were recoverable at market rates because of bad faith by the Postal Service in its efforts to “provide the Plaintiff with all the relief she requested in this action, if only she waive her statutory right to attorney fees.”
MARIA CANALES, et al. v. HENRY M. PAULSON, Secretary of the ) Treasury, et al, DCD No. Civil Action No. 06-1330 (GK), July 16, 2007. Plaintiff challenges her debarment by Treasury. Judge Kessler overturns the debarment finding that “because [the debarring official] did not in any way explain his decision to impose debarment rather than a lesser sanction, given the strength of the mitigating factors, the Court cannot conclude that that decision was rational or that [the debarring official] satisfied the procedures outlined in FAR § 9.406.1(a).”
JOSE DAVID PARILLA v. UNITED STATES OF AMERICA :: v. M&M LAWN CARE, INC., ED Pa No. 06-2858, July 12, 2007. Plaintiff “has sued the United States under the Federal Tort Claims Act, 28 U.S.C. § 1346, for personal injuries he suffered while performing landscaping services in the Government's Philadelphia National Cemetery. At the time, plaintiff was an employee of M&M Lawn Care, Inc. ("M&M") which had a contract with the United States to provide such services. The United States has joined M&M as a third-party defendant and seeks from it indemnity or contribution.“ The court grants summary judgment for the contractor on the US indemnity issue holding that the PA workers compensation statute precludes third-party indemnity where, as here, the contract with the US does not contain a specific mention of indemnification for this type of claim.
MANAGEMENT ASSOCIATION FOR PRIVATE PHOTOGRAMMETRIC SURVEYORS, et al. v, THE UNITED STATES, ED Va No. 1:06cv378, June 14, 2007. See earlier decision. Plaintiff’s challenge the FAR implementation of the Brooks Architect-Engineers Act (“Brooks Act”), at 48 C.F.R.§ 36.601-4(a)(4). The court now grants the government’s motion to dismiss for lack of standing. Good discussion of the Brooks Act amendments and the constitutional standing issues. Judge Ellis discusses “third party and associational standing ... whether it is appropriate to combine or stack third party and associational standing in this way that is, whether an association may, under any circumstances, assert the putative injuries in fact of its members’ employees.” Judge Ellis ultimately concludes that plaintiffs were unqualified to bid on a major EPA contract and in regards to a UDSDA contract plaintiff “has not provided authoritative constructions of the pertinent state laws establishing that the services solicited by the USDA need not be performed by a licensed person. Nor has it made any showing at all that Oklahoma would discipline Blackwell or his firm for bidding on the USDA contract.”
WESTERN SURETY COMPANY, a South Dakota corporation, individually and as assignee of WESTRA CONSTRUCTION COMPANY, INC., Plaintiff and Counter Defendant, v. ALLIANCE STEEL CONSTRUCTION, INC., Defendant, Counter Plaintiff and Third-Party Plaintiff, v. WESTRA CONSTRUCTION, INC., Third-Party Defendant, WD WI No. 06-C-326-C, May 24, 2007. Corps of Engineers contract. Poor and late performance by sub allegedly resulted in prime receiving an unsatisfactory performance evaluation from the Corps. Sub had agreed to “To pay for any expense the Contractor [prime] may suffer as a result of the Sub-Contractor’s failure to carry out the provisions of this agreement.” Prime claims damages include lost profits. Citing Hadley v. Baxendale, 9 Ex. 341, 156 Eng. Rep. 145 (1854), the court denies the lost profits claim finding that the agreement to “pay for any expense” could not be read to include lost profits.
PUBLIC WAREHOUSING COMPANY K.S.C., v. DEFENSE SUPPLY CENTER PHILADELPHIA(DSCP), et al., DC DC Civil Action No. 07-0502 (JDB), May 22, 2007. Plaintiff seeks injunctive relief from the government’s refusal to issue past performance evaluations of plaintiff’s contracts with DSCP. Plaintiff contends that DSCP’s actions violate the Federal Acquisition Regulations, 48 C.F.R. §§ 42.1502-.1503, and are arbitrary and capricious in violation of the Administrative Procedure Act, 5 U.S.C. § 706. Judge Bates dismisses the action finding that the matter falls with ADRA, 28 U.S.C. § 1491(b)(1), and therefore within the exclusive jurisdiction of the COFC. Good discussion of the ADRA and the “in connection with a procurement or a proposed procurement” language of 1491(b)(1).
EDMUND C. SCARBOROUGH, et al. v. FRANCIS J. HARVEY, Secretary of the Army, et al. DC DC Civil Action No. 05-1427 (RBW), May 22, 2007. Privacy Act case. Plaintiffs seek actual and compensatory damages as well as attorneys’ fees and costs for multiple alleged violations of the Privacy Act, 5 U.S.C. 552a et seq. (2000), in connection with an Army investigation into the issuance of possibly fraudulent surety bonds to the United States government by a number of individuals and entities, including the plaintiffs. The Court denies the government’s motion to dismiss finding that the Criminal Alert Notice Notice (CAN) and letters distributed by the government are “records” within the meaning of 552a(a)(4) and that the disclosure of the information contained therein is actionable under the Privacy Act.” The court rejects the government’s argument that the disclosure of entrepreneurial information, rather than personal information is not a Privacy Act matter and holds that there is nothing in the statute to indicate an intent to exclude certain classes of information simply because they do so in relation to the individual’s business dealings or entrepreneurial activities, rather than his or her personal life.
THE UNITED STATES OF AMERICA FOR THE USE AND BENEFIT OF PRN ASSOCIATES, INC., vs. K&S ENTERPRISE, INC., MID-STATE SURETY CORPORATION, FOLKSAMERICA REINSURANCE COMPANY, SD IN, NO. 1:04-cv-00470-DFH-JMS, March 27, 2007 (NOT INTENDED FOR PUBLICATION IN PRINT). Plaintiff brings a Miller Act suit against the prime and its surety for a debt plaintiff claims is owed to it.. The court dismisses that action as untimely under the Miller Act provision, 40 U.S.C. § 3133(b)(4), which requires suit within one year of the completion of the work. The opinion notes that warranty work does not toll the one year limitation.
UNITED STATES OF AMERICA ex rel. DRC, INC., et al., Plaintiffs, v. CUSTER BATTLES, LLC, et al., ED VA Case No. I:04cv199, February 02, 2007. False Claims Act case with Iraq’s Coalition Provisional Authority (“CPA”). Court grants summary judgment for defendant finding that: “(i) That Custer Battles did not make a false statement because it did not represent to the CPA that it would provide a fixed number of 138 security personnel; (ii) That, even assuming Custer Battles made such a false statement, Custer Battles did not do so with the requisite scienter; and (iii) That, even assuming Custer Battles knowingly made a false statement, the statement was not material to the CPA’s decision to award it the BlAP contract.”
MANAGEMENT ASSOCIATION FOR PRIVATE PHOTOGRAMMETRIC SURVEYORS, COUNCIL ON FEDERAL PROCUREMENT OF ARCHITECTURAL AND ENGINEERING SERVICES, NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS, AMERICAN SOCIETY OF CIVIL ENGINEERS v. THE UNITED STATES, ED VA. Civil Action No. 1:06cv378, December 13, 2006. Plaintiff’s challenge the FAR implementation of the Brooks Architect-Engineers Act (“Brooks Act”), at 48 C.F.R.§ 36.601-4(a)(4). The court denies the government’s motion to dismiss for lack of standing. Good discussion of the required constitutional and prudential standing issues. Judge Ellis also notes that “At issue here is ‘obstacle preemption’, which operates when state law ‘stands as an obstacle to the accomplishment of the full purposes and objectives of Congress.’” Judge Ellis concludes “To summarize, for one of plaintiffs’ members to suffer injury in fact he must be plausibly threatened with discipline by a state authority if he bids on a federal project procured by non- QBS methods, and the law of the state where he seeks to bid must not define the services sought as ‘architectural or engineering’ such that they must be performed by a licensed professional. Since the facts pled may be construed as encompassing this possibility, they are not insufficient at this stage, but one of plaintiffs’ members meeting the requisite criteria must be produced to avoid summary judgment on Article III standing.”
UNITED STATES OF AMERICA, for the use and benefit of ALLIED CONTRACTORS GROUP, L.L.C. and ALLIED CONTRACTORS GROUP, L.L.C., v. EDSTROM CONSTRUCTION INC., and INSURANCE CO. OF THE WEST, Idaho District, ID Case No. CV-05-372-E-BLW, November 09,2006. Miller Act case. Defendant, the prime ECI, moves for summary judgmenrt arguing that plaintiff, Allied, was not a subcontractor. The District Court denies the motion noting that “there is no restriction under the Miller Act requiring plaintiffs to prove that they are ‘subcontractors.’” and that “Allied alleges that it furnished labor to ECI, an entity that furnished a bond pursuant to 40 U.S.C. § 3131. No more is required; there is no additional requirement that Allied be found to be a ‘subcontractor.’”
U.S.A. f/u/b ARICA CONSULTING & CONTRACTING, INC., v. GREAT AMERICAN INSURANCE COMPANY, DM MD, Civil No. CCB-05-2430, November 02, 2006. Suit against a Miller Act surety from a VA contract. Court grants summary judgment for the surety finding that plaintiff was a sub-subcontractor and “was required to but did not give ninety-day notice under the Miller Act, 40 U.S.C. § 3131 et seq., of its claim against the payment bond issued by GAIC.” Although the relationships between the firms was somewhat confusing, the court rejected plaintiff’s argument that the sub and prime were the same entity noting that “The standard for ‘piercing the corporate veil’ in Maryland — as well as under federal law — however, is strict.”
DALE EMERY v. BIOPORT CORPORATION, ED Wash, Case No. No. 06-CV-0008-AAM, October 31.2006. Not a procurement contact case. Plaintiff sues for personal injury alleging arising from the injection, by DOD, of an anthrax vaccine he received while working for a government contractor in Texas. Court dismisses the case for lack of personal jurisdiction over plaintiff, a Michigan corporation. Although the court finds that plaintiff was doing business with Washington, the facts did not support a conclusion that plaintiff was doing business in Washington. Or as Judge McDonald puts it “While it is perhaps true BioPort has ‘stepped through the door, there is no indication that it has sat down and made itself at home.’” [citations omitted]
LINDA M. JOYCE, v. JOHN E. POTTER, POSTMASTER GENERAL, in his official capacity, and UNITED STATES POSTAL SERVICE, MD FLA, Case No. 5:06-cv-339-Oc-10GRJ, October 16, 2006. Plaintiff has a contract to deliver mail, but was informed that she had been denied access to non-public areas of the Post Office and therefore could not personally carry out her contracts. District Court finds that plaintiff has been denied her liberty interest in her reputation without due process of law and enjoins the Post Office to provide plaintiff with a name-clearing hearing. See subsequent EAJA decision.
UNITED STATES OF AMERICA ex rel. DRC, INC., et al. v. CUSTER BATTLES, LLC, et al., ED VA, No. 1:04cv199, August 16, 2006. Court vacates jury verdict on False Claims Act case finding that the CPA was not a US Government entity. The court notes “Thus, it follows that because the CPA was not a U.S. government entity, and therefore U.S. employees of the CPA were not working in their official capacity as employees or officers of the United States government, relators have demonstrably failed to provide sufficient evidence to enable a jury to find presentment, as required by both § 3729(a)(1) and § 3729(a)(2).” The court does uphold the whistle-blower claim.
CANADIAN COMMERCIAL CORP., et al. v. DEPARTMENT OF THE AIR FORCE, D. DC Civil Action No. 04-1189(JDB), August 03, 2006. Reverse FOIA case. Court enjoins the Air Force from releasing plaintiffs’ base and option year prices. Judge Bates finds that the Air Force decision to release the prices was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" under the APA,...” Good discussion of FOIA decisions and the recent decision of DC Circuit in McDonnell Douglas v. Air Force, 375 F.3d 1182 (D.C. Cir. 2004)
WEDJ/THREE C'S. Inc., UNITED COOLAIR CORP., NEIL R. TUCKER and JEFFREY E. KOSER v. DEPARTMENT OF DEFENSE, Procurement Fraud Branch, MD Pennsylvania No. 4:CV-05-2427, July 24, 2006. Army debarment action. Court upholds decision to debar plaintiffs for use of surplus materials without authorization and the submission of false test and other reports. The court notes that it is not its role to substitute its decision for the decision of the SDO(Suspension and Debarment Official) and finds that the actions of the SDO were not arbitrary or capricious.
US v. DYNAMICS RESEARCH CORP., Defendant and Third- Party Plaintiff, v. GREGG M. AZCUY & STORAGE ENGINE, INC., Third-Party Defendants, D Mass., Civ. No. 03-11965-NG, July 17, 2006. False Claims Act (FCA) and Anti-Kickback Act (AKA) issues. Order on motions by third party defendants to dismiss attempts by Dynamics to obtain contribution and indemnification from third parties. In what it terms a case of first impression the court holds that “the AKA does not provide an implied right of action for indemnification or contribution.”
Alliance for Open Society International v. USAID, SD New York, No. 05-8209, May 09, 2006. Judge Victor Marrero of the United States District Court for the Southern District of New York holds that the so-called “anti-prostitution pledge requirement,” imposed by the US Agency for International Development (USAID) and the Department of Health on Human Services on grant recipients, violates the First Amendment rights of two plaintiff organizations, the Alliance for Open Society International (AOSI) and Pathfinder.
THE PRUDENTIAL INSURANCE COMPANY v. PRUSKY, ED PA No. 04-CV-462, July 22, 2005. Not a government contracts case. In dismissing a complaint that Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001-7006, (“the E-Sign Act”) required Prudential to accept an electronic transaction, the Court said “The purpose of the Act is to protect transactions from legal challenges that are solely based on the electronic form of the agreement. As the statute makes clear, the use or acceptance of electronic signatures is not mandatory. Specifically, the E-Sign Act states: “This title does not...require any person to agree to use or accept electronic records or electronic signatures, other than a governmental agency with respect to a record other than a contract to which it is a party.”” §7001(b)(2).
UNITED STATES OF AMERICA ex rel. DRC, INC., et al. v. CUSTER BATTLES, LLC, et al, ED. VA. DC. Case No. 1:04cv199, July 08,2005. False Claims Act case, Coalition Provisional Authority (CPA). Judge Ellis allows the action to proceed, but only insofar as funds came from seized or vested funds. Judge Ellis holds that the FCA does not apply to Development Funds for Iraq (DPI funds) as there would be no loss to the United States for a false claim paid from those funds. The decision does not decide the status of the CPA. Judge Ellis notes that “Although it initially appeared otherwise, it now appears unnecessary to reach and decide at this time whether the CPA is an instrumentality of the United States. This is so because it appears on this record that the Custer Battles contracts were paid with United States funds in reliance on claims that defendants caused to be presented to officers of the United States Army.” also that “Discerning the status of the CPA is not an easy task.”
PATRIOT CONTRACT SERVICES v. US, ND CA DC No. C 04-5428 MJJ, May 23, 2005. Military Sealift Command maritime contract, post-award bid protest. The Court denies plaintiff’s motion for an injunctions. While agreeing with the recent GAO advisory opinion that plaintiff had raised questions about awardee’s conduct, the court finds that the record is “sufficiently ambiguous with regard to whether the awardee actually engaged in fraud that the Court cannot find that Plaintiff has met its burden.. ”
ROTHE DEVELOPMENT CORP. v. U.S. DEPARTMENT OF DEFENSE, WD Tex DC No. CIV.A.SA-98-CA-1011, July 2, 2004. Decision challenging the constitutionality of § 1207 of the National Defense Authorization Act of 1987 (“the 1207 program”). [SDB 10 percent price adjustment program]. On remand from the Federal Circuit’s 2001 decision. Rothe had lost out to an Asian American SDB firm in 1998 because of the price adjustment. Although the contract award was stayed by the Federal Circuit, the Air Force cancelled the solicitation and recompeted without the SDB preference. Another firm received the award. Rothe challenges the program as applied to it in 1998 for declaratory relief as well as a facial challenge of unconstitutionality as to the 2003 reauthorization. the court concludes as follows—“In 1992, Congress did not statistically document the need for this race-based remedial program. Therefore, the Court GRANTS, in part, Rothe’s Motion for Summary Judgment and DENIES, in part, the Government’s Motion. Rothe’s facial challenge to the 2003 program seeks prospective declaratory and injunctive relief. The Government demonstrated that Congress relied, in part, on statistical evidence for the 2003 reauthorization. Because this statistical evidence, when coupled with Congress’ long documentary history of anecdotal and private discrimination, meets the strong basis in the evidence test, it was Rothe’s burden to establish that no set of circumstances exists under which the 5% goal and PEA program could be constitutional. Rothe did not meet that ultimate burden. Thus, the Court GRANTS, in part, the Government’s Motion for Summary Judgment, and DENIES, in part, Rothe’s Motion. Because the position of the United States was substantially justified in this action, each side shall bear their own costs.”
U.S. v.PHILIP MORRIS INCORPORATED, et al., D.DC, Civ Action No. 99-2496 (GK), April 6, 2004. (Not a contract case.) Judge Kessler disqualifies a former Department of Justice attorney and his firm for violation of the District of Columbia Rules of Professional Conduct Rule 1.11 the "revolving door" rule.Jacques Abadie III v. DC Contract Appeals Board and Business Software Associates, Inc., Intervenor, DC Court of Appeals No. 01-AA-355, March 4, 2004. DC Court of Appeals holds that the DC Contract Appeals Board has jurisdiction over a termination for default of a contract awarded by the Office of the Chief Financial Officer (OCFO) of the District of Columbia. The court found that the contract at issue was for "the procurement of goods and services" and not one for "professional services" which may be exempt from certain provisions of the District’s Procurement Practices Act (PPA).
KITTY HAWK AIR CARGO, INC. v. ELAINE L. CHAO, Secretary of Labor, ND Tex DC. No. 3:01-CV-1356-K, January 26, 2004. The court granted a motion for summary judgement on behalf of the plaintiff Kitty Hawk Aircargo, Inc. The issue was whether airline pilots flying for a U.S. Postal Service prime contractor under contracts subject to the Service Contract Act were exempt as "professional employees", and thus not subject to Department of Labor wage determinations. The court held that the Department of Labor’s Administrative Review Board’s decision that a college degree was required in order to meet the professional exemption was "arbitrary, capricious, an abuse of discretion, and not in accordance with law". (Synopsis by Gerry Doyle-plaintiff’s attorney)
Hansford T. JOHNSON, Acting Secretary of the Navy v. ADVANCED ENGINEERING & PLANNING CORPORATION, INC., D. E.D. Virginia, No. CIV.A. 03-652-A, November 17, 2003. Navy appeals an ASBCA decision which allowed the contractor to recover its preparation costs for an equitable adjustment. Court affirms the ASBCA finding that the REA was not a claim under the Contract Disputes Act when submitted. The court agreed with the ASBCA that the REA was not a claim as it had not been certified in accordance with FAR 33.207, but only in accordance with the requirements of DFARS 252.243-7002, implementing 10 U.S.C. Section 2410(a). Judge Ellis notes that "Contrary to the Navy’s contention, Reflectone did not overrule the portion of the Bill Strong decision on which the Board relied, or eliminate the CDA certification requirement. Reflectone merely overruled Dawco Construction, Inc. v. United States, 930 F.2d 872 (Fed.Cir.1991), and its progeny, holding instead that the "FAR 33.201 definition of ’claim’ does not require a pre-existing dispute unless the submission is a ’routine request for payment." ’ Reflectone, 60 F.3d at 1579 (emphasis in original). Reflectone clearly did not address the portion of FAR 33.201 that concerns certification."
LAWRENCE JONES and NATIONAL
ASSOCIATION GOVERNMENT EMPLOYEES V. US, Dist Ct., Mass., No. 02-10775-NG,
March 13, 2003. (1.7M pdf file] [From a list member] The district court
dismissed a suit brought by government employees and their union to enjoin the
Air Force from contracting out to Del-Jen, Inc., the civil engineering
function at Hanscom Air Force Base pursuant to OMB Circular A-76.
The case shows the difficulty and length of time it takes to conduct a cost comparison under the Circular. In December 1998, the Air Force announced it was undertaking a cost comparison study. The Air Force reached a tentative decision to contract out in September 2000. The employees and union appealed, and the Air Force reversed itself in February 2001, electing to keep the work in house. The contractor then appealed the decision. The appeal was denied in October 2001. The contractor then filed a bid protest with the GAO. In January 2002, the GAO sustained the protest recommending the Air Force review the cost comparison again. In April 2002, the Air Force again announced its intention to award to the contractor. The employees and Union once again appealed and then filed suit in district court. In June 2002, the Air Force concluded its reviews and awarded the contract to Del-Gen.
In March 2003, the district court dismissed the suit for lack of standing, finding no "injury-in-fact" (the employees would be reassigned or offered jobs by the contractor) and the interests to the employees do not fall within the zone of interests of the statute that authorizes the cost comparison study. The court said: "While it is clear that contracting out is a troubling way of circumventing having to deal with federal government employees and their unions ... the case law protects the government’s ability to engage in this practice."
EG&G Inc. v. The Cube Corporation, Circuit Court of Fairfax County, VA., Chancery No. 178996, December 23, 2002. This case arises from a teaming agreement that the parties entered into to bid on and perform a NASA contract. The Court finds for EG&G and grants specific performance in favor of EG&G against The Cube Corporation and permanently enjoins Cube from terminating EG&G as a subcontractor.[Note: this is 1.5M pdf file]
DAVID M. WALKER, Comptroller General of the United States, v. RICHARD B. CHENEY, D.DC, Civil Action No. 02-0340 (JDB), December 09, 2002. In a 43 page opinion, Judge Bates dismisses the suit by the Comptroller General against the Vice President finding "Because the Comptroller General does not have the personal, concrete, and particularized injury required under Article III standing doctrine, either himself or as the agent of Congress, his complaint must be dismissed."
MCDONNELL DOUGLAS CORPORATION v. US DEPARTMENT OF THE AIR FORCE et al., Civ No. 00-1693 (RWE), August 27, 2002. District Court finds that Air Force was correct in its determination that Boeing’s pricing information was compelled and not voluntary and its decision to release line item and option year prices pursuant to a FOIA request was proper. [Reversed in part, see DC Circuit decision.]
LEBOEUF, LAMB, GREENE & MACRAE, LLP v. SPENCER ABRAHAM, Secretary, AND THE U.S. DEPARTMENT OF ENERGY, Civ No. 01-0269 (RMU), D.DC, Issued July 30, 2002, and unsealed during the week of August 5, 2002. In what is most likely the last bid protest decsion from a District Court, the court rules in favor of DOE, finding that request for remedy is moot and that DOE did not violate APA in awarding the contract.
AFGE v.US et al, D.DC, No. 00-936, March 29, 2002. A-76 case. District court finds that section 8014(3) of the FY 2000 Defense Appropriations Act is constitutional. Court holds that preference for firms owned by Native Americans is not a race based classification requirng strict scrutnity under Adarand.
BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-CIO, et al. v. JOE M. ALLBAUGH, DIRECTOR FEMA. et al., D.DC, No. 01-00902 (EGS), November 7, 2001. DC District Court permanently enjoins the government from enforcing E.O. 13202, issued 02/17/2001, against the Wilson Bridge Project Labor Agreement. Judge Sullivan concludes his opinion with "Accordingly, the plaintiffs’ motion for summary judgment is GRANTED and the defendants’ motion for summary judgment is DENIED. Constitutional and statutory precedent of longstanding persuades the Court that the President lacked the requisite authority for Executive Order 13202 § 3 and that Executive Order 13202 in its entirety is preempted by the NLRA. Accordingly, enforcement of Executive Order 13202 is permanently enjoined by the Court."
COREL CORPORATION v. US, D.DC No. 99-3348, September 17, 2001. Judge Roberts grants the government’s motion for summary judgment. Corel had challenged DOL’s decision to standardize on the Microsoft Office suite of products and the subsequent buy under a GWAC. Judge Roberts’ holdings, either directy or implicity, include: (1) DOL’s decision to standardize was not subject to CICA as it was not a procurement; (2) the subsequent actual procurement was governed by FASA, not CICA; and (3) regarding APA review of the standardization decision, Judge Roberts finds "particularly convincing" the government’s argument that "APA review is precluded by statute because FASA bars bid protests in connection with the issuance of a task or delivery orders. See 41 U.S.C.A. § 253j(d)."
MCI WORLDCOM, INC. v. GSA, SPRINT COMMUNICATIONS COMPANY, L.P. v. GSA D.DC, Nos. 00-914 and 00-915, September 07, 2001. FOIA case. Judge Kessler enjoins GSA from releasing "unit prices" of firms’ FTS 2001 contracts. Court finds that GSA’s decision to release "unit prices" is "arbitrary and capricious because: (1) it is contrary to §§ FAR 15.503 and 15.506, the Trade Secrets Act, and FOIA Exemption 4; (2) violates GSA’s own FOIA regulations; and (3) represents a departure from GSA precedent without reasoned explanation." Court finds that FAR 1997 rewrite did no more than codify law existing at the time of the McDonnell Douglas decision of the Circuit Court, 180 F.3d 303, 306. (892K pdf scanned file)
BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-CIO, et al. v. JOE M. ALLBAUGH, DIRECTOR FEMA. et al., D.DC, No. 01-00902 (EGS), August 13, 2001. DC District Court enjoins the government from enforcing E.O. 13202, issued 02/17/2001, against the Wilson Bridge Project Labor Agreement. (See FAC 97-26 at http://www.contracts.ogc.doc.gov/cld/far.html#far< /a> for related procurment regulations.
BALTIMORE GAS AND ELECTRIC COMPANY, et al v. CALDERA, Civil No. AMD 00-2599, March 12, 2001. D.MD. Judge Davis essentially affirms an earlier GAO decision which found that a solicitation for privatization of utilities at military installations was not defective for failure to acknowledge a requirement for state and local approval before selected contractor can commence performing natural gas and electric distribution services at the installations is denied, where 10 U.S.C. §2688(b) requires that if more than one utility or entity expresses an interest in a conveyance, the conveyance shall be carried out using competitive procedures.
NOVELL et al. v.
US, Civ. No. 00-1400, July 26, 2000. D.D.C, Judge Emmet G. Sullivan
Judge Sullivan dismisses this post award Scanwell case holding that an earlier COFC decision which dismissed the action for lack of jurisdication controls under the doctrine of res judicata. Judge Sullivan states "Unfortunately for plaintiffs, however, this Court agrees with defendants that there no longer is such an independent, APA-based jurisdiction [Scanwell] for the district courts in government bid protest cases; rather, Congress effectively subsumed APA jurisdiction of the district courts into the more specific jurisdictional language of ADRA." [PDF Version]
NISH and Goodwill Services, Inc. v. William S. COHEN, Secretary of Defense, et al., No. 99-1632-A, April 25, 2000. From the opinion-"This case involves interpretation of the Randolph-Sheppard Act ("R-S Act" or "Act") and its applicability to appropriated fund contracts for cafeteria and military mess hall services. See 20 U.S.C.A. §§ 107-107. The issue for the Court is whether the inclusion of the term "cafeteria" in the 1974 Amendments to the R-S Act created a priority for blind vendors to operate military mess halls and a corresponding exception to government procurement law that normally requires government agencies to acquire goods and services through full and open competition. The matter is currently before the Court on cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure ("FRCP") 56. Plaintiffs NISH and Goodwill Services, Inc. ("Plaintiffs"), in their motion, insist that neither the R-S Act nor its 1974 Amendments intended the inclusion of procurement programs for the operation of military mess halls; interpretation as such, Plaintiffs claim, violates the Competition in Contracting Act ("CIC Act"). In contrast, Defendants Department of Defense ("DOD") and Department of the Army ("DOA", collectively "Defendants"), along with Intervenors, contend that the R-S Act’s priority for blind vendors applies to all cafeterias on federal property, including military mess halls. For the reasons stated below, the Court holds that, as a matter of law, addition of the term "cafeteria" to the R-S Act, when viewed in conjunction with corresponding regulations and available case law, supports the R-S Act’s coverage of the military mess hall services at Fort Lee, Virginia."
Protest of WX Solutions, Inc., Docket No.: 13-ODRA-00647, January 08, 2014. Protestor argues that the CO wrongly determined that it was not small because of an affiliation with its subcontractor. In a quite heavily redacted opinion FAA denies the protest. The opinion notes
“‘In determining whether affiliation exists, SBA will consider the totality of the circumstances, and may find affiliation even though no single factor is sufficient to constitute affiliation.’ 13 C.F.R. § 121.103(a)(5). The Contracting Officer concluded that WX and CSR are affiliated on the basis of totality of the circumstances ‘based on her earlier findings.’ FF 49. The remainder of the record provides substantial indicia of affiliation when the applying the totality of the circumstances standard. These include, but are not limited to:
Considering all aspects of the relationship, the ODRA finds that the Contracting Officer’s Size Determination on this point was supported by substantial evidence, had a rational basis and was not arbitrary, capricious or an abuse of discretion.”
- The dependence on CSR resources and experience, as referencedc= throughout the WX proposal.
- The reliance on [REDACTED] to meet the financial requirements found in Provision L.10 of the Solicitation.
- The reliance on [REDACTED] to meet the [REDACTED] requirements of the Solicitation.
Protest of Potter
Electric Company, FAA Docket No. 13-ODRA-00657, July 29, 2013. Post-award
protest for certain electrical conduit and switch vault site work related to a
larger project for the construction of a new Air Traffic Control Tower at
McCarran International Airport. Award had been originally made to intervenor
Wadley, but as a result of a protest by Potter the CO made a determination that
Wadley was ineligible for award as a small business. Wadley’s contract was
terminated for convenience and a contract was awarded to Potter, protestor here.
Wadley protested arguing that FAA’s consideration of Wadley’s size
and interpretation of the Ostensible Subcontractor rule was in error. The CO
again reviewed the application of the Ostensible Subcontractor Rule , and
reconsidered “all aspects” of the relationship between Wadley and
its electrical subcontractor, what constituted performance of the “primary
and vital” portions of the work, and the effect of a
mentor-protégé agreement between Wadley and another company and
found Wadley to be eligible for the award on its own merits and awarded the
contract to Wadley.
Protestor argues that Wadley did not meet the contract requirements because its subcontractor is a large business, and Wadley is unable to do the work without unduly relying on its subcontractor to complete the project. Protest further also alleges that Wadley was not qualified under the NAICS Code listed in the solicitation.
The FAA denies the protest. Although noting that FAA is exempted from the normal small business contracting rules for Government procurements, as a matter of AMS policy, the FAA is required to implement and aggressively strive to provide small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals attainable and reasonable opportunities to participate as prime contractors and subcontractors. The opinion concludes “Potter has failed to meet its burden of demonstrating by substantial evidence that the Contracting Officer’s final decision to take the voluntary corrective action at issue in this Protest and award the contract to Wadley was irrational, arbitrary and capricious, an abuse of discretion, or otherwise failed to comply with the AMS.”
Protest of Diamond Antenna & Microwave Corporation, ODRA Docket No.: 12-ODRA-00605 and 12-ODRA-00617, December 05, 2012. Diamond protests the proposed single source award to intervenor, Kelvin, for beacons. Protestor argues that the market research was defective and that FAA’s justification for the single source was irrational. FAA’s justification stated
“ Kevlin Corporation has proprietary data rights for the design and fabrication of the ASRS-4 type rotary coupler. The parts to be purchased are all sub-assemblies to the ARSR-4 rotary coupler.  The cost and time associated with re-engineering, designing and prototype testing of new replacement critical parts would not be cost effective nor would it meet mission requirements without causing excessive delay to this program. It could take years to produce even a prototype design that would then require lengthy field testing to determine suitability performance.  Additionally, continuing with Kevlin Corporation rotary couplers enforces configuration management.”ODRA sustains the protest finding “that the Center’s single source decision to award a Contract for the Beacons and Receivers to Kevlin is not consistent with the FAA’s Acquisition Management System (“AMS”), is not properly supported by substantial evidence in the record, and therefore lacks a rational basis.”
Protest of Science
Applications International Corporation Under Solicitation No.
DRFAWA-11-R-ETASS Docket No.: 12-ODRA-00606, October 16, 2012. Post-award
protest of a FAA contract for en route technical assistance support services
(ETASS). The decision address the two remaining issues which protestor argues: 1. “The FAA
improperly reduced SRA’s proposed price by removing a ‘subcontractor[NATS]
profit’ that was not presented in SRA’s proposal or identified in
SRA’s response to the FAA’s clarification requests as ‘fixed
fee.’ . . . ”] and (2) “The FAA wrongfully accepted a
non-compliant proposal from TASC that violated the costs-plus-percentage-of-cost
prohibition. . . . ”
ODRA denies the protest. It finds that NATS had submitted its proposal to the FAA as required by the solicitation and the FAA properly reduced the fee disclosed in NAT’s. Second, regarding the CPPC issue ODRA notes that although it is not bound by statute to reject CPPC contracts, it has long been its policy to do so.[I either never realized this or its been long forgotten-jaw] ODRA rejects the CPPC issue concluding “ . . that the Contracting Officer had a rational basis to conclude that TASC was not offering a CPPC contract, and the ODRA recommends that this aspect of the Protest be denied.”
Protest of Brand Consulting Group, Inc., Docket No.: 12-ODRA-00598, 2012. Post-award bid protest. Brand challenges its disqualification based on the evaluation finding that its proposal did not meet a mandatory solicitation requirement. ODRA notes that protestor “must demonstrate by substantial evidence (i.e., by the preponderance of the evidence), that the challenged actions by the designated evaluation and source selection officials failed in a prejudicial manner to comply with the Acquisition Management System (‘AMS’).” In a heavily redacted opinion, ODRA agrees with the agency that protestor did not meet a mandatory requirement and was properly disqualified from further consideration.
Protest of Harris IT Services Corporation. Docket No. 12-ODRA-00604, May 22, 2012. Protestor requests that the acquisition process be suspended during the pendency of the protest. ODRA sets out the four factors to be considered in such a suspension: (1) the Protester has alleged a substantial case worthy of adjudication; (2) irreparable injury will likely result from a stay or lack of a stay; (3) the relative hardships on the parties favor a suspension; and (4) a suspension would be in the public interest. 14 C.F.R. § 17.15(d)(2) (2012). The first factor is de-emphasized in favor of a balancing of the other three. [citation omitted] The Protester, as the party requesting the suspension, bears the burden of demonstrating compelling reasons to overcome the AMS presumption. ODRA denies the request concluding “although the Harris Protest presents a substantial case, the remaining three factors of the suspension test do not support its Request. Inasmuch as Harris has not demonstrated that compelling reasons exist to stay activities during the pendency of this Protest, the ODRA declines to order a temporary stay and will not recommend that a permanent suspension be ordered. The Harris Suspension Request therefore is denied.”
Protest of Diamond Antenna & Microwave Corporation, Docket No.: 11-ODRA-00583, January 18, 2012. Protest of FAA’s sole source award of a rotary coupler as used in the ARSR-4 radars. Protestor argues that it has the necessary proprietary information to produce the rotary coupler and decision to award a sole-source contract was arbitrary and capricious. ODRA denies the protest concluding “It is well established that the ODRA will review the single source justification on the basis of the information the Product Team had at the time of its decision. Protest of J&J Electronic Systems, 05-ODRA-00340. Ultimately, it is the offeror’s responsibility to make sure that its submission satisfies the express requirements of the Solicitation. Protest of Team Clean, 09-ODRA-00499. Given Diamond’s failure to provide the required documentation of its right to use OEM data, the ODRA finds that Diamond has not met its burden to demonstrate that the Center’s single source award for a Rotary Coupler lacks a rational basis or was otherwise arbitrary, capricious, or an abuse of discretion. Diamond’s attempt to submit required supporting information after the award decision, and during the course of the Protest proceedings, cannot provide a basis for attacking the award. Protest of Aydin Displays, Inc., 11-ODRA-0057“
Protest of Antenna Products Corporation, Docket No. 11-ODRA-00580, October 21, 2011. Protestor challenges a sole source award to dBS. ODRA dismisses the protest as untimely finding that information the protestor gained from FOIA requests was only supplemental to information already known by protestor. Although not reached on the merits, protestor argues “that the single source award provides dBS with an improper and unfair competitive advantage in that: (1) the terms of the Contract will prevent future competitive procurements given the proprietary restrictions on technical data developed under the Contract;”[This appears to be the first decision since the FAA Administrator has designated the Director and Dispute Resolution Officers of the Office of Dispute Resolution for Acquisition (ODRA) as Administrative Judges along with delegated authority to decide ODRA matters.]
Protest of Aydin Displays, Inc., Docket No.: 11-ODRA-00578, October 12, 2011. Protestor challenges the award of a FAA contract for liquid crystal displays to replace existing CRT displays. Protestor challenges the “fail” scores it received in the technical evaluation and its “high risk ” rating. The protest is denied. The opinion’concludes “The ODRA finds no material errors in the actions of the Product Team in this procurement action. To the contrary, the responsibility for Aydin’s loss in this competition falls squarely on Aydin itself. Not only did Aydin unjustifiably modify the Performance Matrix and [DELETED] decline to provide current supporting documentation, Aydin also declined Product Team’s invitations to address disqualifying weight and ESD issues prior to the Factor One and Two evaluations.”
Protest of Systems Research and Applications Corporation, Docket: 10-ODRA-00562, August 08, 2011. Protest of FAA’s award of a potentially $1.4 Billion cost-plus-award-fee contract for National Airspace System Integration Support Services. Protestor alleges many errors primarily in the evaluation ot its proposal. In an 148 page opinion the FAA denies the protest finding “that the evaluation was rationally based and consistent with the SIR and AMS. As required by the AMS, the SSO reviewed the evaluators’ reports, and based on their findings, rendered his own selection decision which also was rationally based on the evaluation criteria established in the SIR and the AMS. AMS Policy § 126.96.36.199.1.2.5. The record further shows that the SSO’s award decision is supported by substantial evidence, and is not arbitrary, capricious, nor an abuse of discretion. Accordingly, the ODRA recommends that this ground of the Protest be denied.
Protest of Apptis, Inc., Docket No.: 10-ODRA-00557, July 14, 2011. Final recommendations and remedy for the faulty award described in the earlier decision. ODRA adopts the recommendation of the parties concluding “The initial Findings and Recommendations in this Protest determined that the Product Team awarded a second contract under the Solicitation without following mandatory procedures stated in the Acquisition Management System. Nothing in these Findings and Recommendations on the Final Remedy alters that conclusion, or authorizes a Product Team, now or in the future, to disregard such requirements. The ODRA finds that the negotiated remedy proposed by the Parties alleviates the prejudicial harm caused by the procurement deficiencies and is in the public interest. Given that the Administrator has previously sustained the Protest, and based on the foregoing consideration of the negotiated remedy, the ODRA recommends as a final remedy that: 1) the limitation on the modifications and awards of additional task orders under the TASC Contract, as stated in the Initial Order, be lifted; 2) the TASC Contract be permitted to remain in place and administered without special procedures or limitations resulting from this Protest; and 3) no further contracts be awarded under the existing Solicitation.”
Protest of Rivertown Contractors, Inc., Docket No.: 11-ODRA-00573, May 18, 2011. Protestor challenges the finding that its proposal was nonresponsive and its elimination from competition. The solicitation required detailed past performance information and the protestor’s “proposal only provided the handwritten general statement: ‘previous NAV-AIDS work for great [sic] Lakes Region” and the names of three contracting officers.” The protest is denied noting “It is well established in the ODRA that the offeror bears the responsibility of insuring that its proposal conforms to the requirements of the solicitation. See, e.g., Protest of Team Clean, Inc., 09-ODRA-00499. Under the circumstances here, the ODRA concludes that Rivertown’s proposal was not in substantial compliance with the Solicitation’s express requirement for past performance information.”
Protest of Apptis, Inc., Docket No.: 10-ODRA-00557, May 13, 2011. Apptis protests the second award arguing that the solicitation did not provide for multiple awards. See earlier decision on the same procurement where Apptis’ protest of the first award to BAH was denied. The protest is sustained and the agency is directed to refrain from issuing additional task orders until the matter is finally resolved. The solicitation did not contain the provisions that were required if multiple awards were contemplated. The decision also finds “that the express intent and language of the Solicitation, as well as the requirements of the AMS, permitted only one full and open, non-small business set aside award, i.e., the award made to BAH.” The decision also finds that Apptis was prejudiced although that portion of the decision has many redactions. In what it describes as a “remarkable assertion” the decision also rejects the argument by the Product Team “that unprecedented powers under the AMS and the FAA’s acquisition authority permit a Product Team to ignore the Solicitation if a ‘rational basis’ can be stated.”
Protest of JDDA Facility Group, Docket No.: 11-ODRA-00566, May 13, 2011. Appellant protests it elimination from the procurement after the CO determined that he had doubts about whether a past performance reference was independent of protestor and that the other references did not respond. ODRA denies the protest finding that the decision of the CO was not arbitrary or capricious and notes “While JDDA challenges that fact, it has provided no evidence to support that any attempt was made by either of the two companies to contact the Contracting Officer in response to his inquiry. Ultimately, it is the offeror’s responsibility to ensure that its references are responsive to the Agency’s legitimate request for past performance information.”
Protest of Apptis, Inc., Docket No.: 10-ODRA-00535, March 25, 2011. Post-award protests of a cost-plus-fixed-fee, level-of-effort, task- order, term type contract to Booze Allen Hamilton, Inc. (“BAH”) for systems engineering support for the Federal Aviation Administration’s (“FAA”) Systems Engineering 2020 Program. The decision notes “The issues presented in the Protests range the full spectrum of common protest grounds. To summarize in the broadest of terms, Apptis asserts that the Contracting Officer, Source Selection Official, evaluators and other agency officials involved (collectively, “Product Team”) failed to comply with the cost realism requirements of the Acquisition Management System (“AMS”), failed to [REDACTED], and failed to assign performance risks after finding that the cost to the FAA of BAH’s performance will likely equal $[REDACTED] above its “cost/price” proposal. Apptis also charges many flaws in the technical evaluation, including unstated evaluation criteria, disparate treatment, unequal communications, failures to award strengths, inconsistencies, and failures to adequately explain conclusions. Apptis also raises issues regarding organizational conflict of interest (“OCI”) and personal conflict of interest (“COI”).” In a 109 page opinion the ODRA denies all of the protest grounds.
Protest of CGH Technologies, Inc., Docket No.: 10-ODRA-00556, March 25, 2011. Post-award bid protest in support of the development of the NextGen Air Traffic System. Protester challenges the fairness of its evaluation and alleges that the debriefing was inadequate. After a failed ADR attempt this decision follows. ODR denies the protest agreeing that CGH was ineligible for award for failure to comply with the Limitation on Subcontracting Clause. The decision also notes “While the purpose of a debriefing is to instill confidence that an offeror was treated fairly and to reduce the risk of protest, the failure to provide a meaningful debriefing is not, in and of itself, an independent basis for protest.”
Protest of Systems Atlanta, Inc., Docket No. 10-ODRA-00530, November 23, 2010. Post-award protest. In a 236 page opinion with over 100 protest issues and over 400 findings, the ODRA sustains a few evaluation sub-factor issues and orders a reevaluation of those issues to determine whether it would change the award decision.
Protest of Counter Trade Products, Inc., Docket No. 10-ODRA-00539, September 17, 2010. Protestor argues that its proposal was late because of FAA security procedures. The protest is denied. Protestor offered no credible evidence of the time the proposal was received at the FAA facility or the time of the alleged delay by security procedures.
Protest of Affiliated Movers of Oklahoma City, Inc ODRA Docket 10-ODRA-00526, 07/20/2010 (FAA Digest) Dismissed and denied in part. On April 7, 2010, Affiliated Movers of Oklahoma City, Inc. ("Affiliated") filed a post-award bid protest with the ODRA. The Protest challenged the award of a contract to another company for commercial office relocation services for the Mike Monroney Aeronautical Center ("MMAC"). Affiliated's Protest challenged as unacceptable the MMAC's evaluation of its proposal, which, in pertinent part, involved special responsibility requirements. The ODRA found that the record did not substantiate Affiliated's allegation of improper evaluation by the MMAC. Rather, the record showed that the MMAC reasonably concluded that Affiliated did not demonstrate the required experience and therefore was unacceptable under the terms of the Solicitation and the evaluation plan. The ODRA recommended that the Affiliated Protest be dismissed in part and the remainder denied.
Protest of Adsystech, Inc., Docket No.: 09-ODRA-00508, July 16, 2010. FAA contract for “Financial Analysis and Support Services” (FASS) “On the merits, the ODRA recommends sustaining the Protest in part under Counts Four and Five to the extent they assert that the Product Team lacked a rational basis for the conclusions reached during the Phase 1 and Phase 2 evaluations. The absence of a rational basis for both the Phase 1 and Phase 2 evaluations, and the failure by the Product Team to document the evaluations, renders the best value determination flawed, and necessitates re-opening the competition.” ODRA orders that a new competiton be conducted with a new CO and evaluation team noting “(a) it took 20 months to evaluate proposals and award the contract; (b) without good cause or explanation, the Product Team lost substantial documentation that it was obligated to create, retain, and submit in the Agency Response; (c) also without explanation and contrary to the Solicitation and Evaluation Plan, the Product Team failed to videotape the oral presentations that otherwise could be used for a reevaluation; and (d) the CO exceeded her authority by deviating from known mandatory AMS clauses without obtaining the requisite approval from the FAA Acquisition Executive.”
Protest of Columbus Technologies and Services, Inc., Docket No.: 10-ODRA-00514, May 19, 2010. Post-award bid protest. Sustained in part as ODRA finds that the FAA’s evaluation of awardees corporate experience and past performance deviated from the solicitation evaluation criteria, and communications regarding technical factors lacked a rational basis and were contrary to the Acquisition Management System and the solicitation.
Protest of Sentel Corporation, Docket No.: 09-ODRA-00512, April 22, 2010. [From the decision] “As detailed in the following discussion, the ODRA recommends that Sentel’s Protest partially be sustained because CSSI misrepresented prior to award the availability of one key person offered in its proposal, and because CSSI was ineligible for award due to its failure to submit a subcontracting plan as part of its proposal. These issues, standing alone, are dispositive of the Protest, but additionally, the ODRA concludes that the evaluation of CSSI’s cost proposal lacked a rational basis and was inconsistent with terms of the Solicitation. Finally, the ODRA recommends denying Sentel’s challenge to the treatment of CSSI’s alleged organizational conflicts of interest (‘OCI’). As discussed in more detail below, the ODRA therefore recommends that the Protest be sustained in part, that the contract to CSSI be terminated for the convenience of the Government, and that the Product Team be directed to award a new contract to Sentel.”
Protest of Perera Construction, Inc., Docket No. 09-ODRA-00507, March 09, 20010. Solicitation for a qualified vendors list for construction of facilities at the Oakland International Airport and Palm Springs International Airport. Protestor argues that it was improper to delete it from the competition for failure to show an Earned Value Management System certification where the solicitation requirement was ambigious. The protest is denied an ODRA notes “In the above solicitation documents, the Region clearly placed all potential offerors, including Perera, on notice that any submission that did not address EVMS would be deemed "non-responsive," and the bidder excluded from the next phase of the competition. It is undisputed in this case that Perera neither filed a protest of the EVMS requirement prior to the submission of its SIR Response nor did it address the EVMS requirement in its Response. The ODRA has held on more than one occasion that ultimately it is the bidder’s responsibility to ensure that its submission strictly conforms to the requirements of the solicitation involved. (citation omitted) Under the circumstances here, the ODRA concludes that the Region’s decision to exclude Perera from further competition had a rational basis and cannot be said to have been arbitrary, capricious, or and abuse of discretion.”
Protest of Kodiak Northwest, Inc., Docket No. 09-ODRA-00505, January 29, 2010. Procurement for snow blower to be attached to a front end loader. Protester argues “that the specification improperly included proprietary items ‘that restricted and eliminated competition.’” The protest is dismissed as untimely as the argument that “the solicitation was proprietary and overly restrictive raises issues that were apparent prior to submission of proposals” and the protest was not filed until after award.
Protest of Evolver, Inc. Docket No.: 09-ODRA-00495 The protest of Evolver challenged an award by the FAA of a contract for second level maintenance and engineering support services for the National Airspace System (“NAS”). The Protester alleged that the FAA’s evaluation process was flawed in that: the FAA improperly evaluated the Protestor’s technical proposal using an unstated evaluation criterion; the past performance evaluation lacked a rational basis; and the analysis of the Protester’s price was not properly supported. The ODRA concluded, for the reasons set forth in the Findings & Recommendation, that the Protest should be sustained in part. As a remedy, the ODRA recommended the FAA be directed to correct the faulty past performance evaluation and obtain additional information in order to determine whether the Protester’s price proposal, which was significantly lower than those of the other offerors, actually presented a risk for the Agency. After taking these steps, the FAA would determine whether the proposal of the Awardee or the Protestor represents the best value to the Agency.
Protest of Enterprise Engineering Services, LLC, Docket No. Protest of Enterprise Engineering Services, Docket Np. LLC09-ODRA-00490, Enterprise Engineering Services, LLC (“Protester”) protested the competitive award of a Socially and Economically Disadvantaged Business (“SEDB”) set-aside contract (“Contract”) to Arctic Slope Regional Corp, Research and Development Solutions (“Awardee”). The Contract, commonly known as the “SOS-7 contract”, is the seventh in a series of “Service Operations Support” contracts for second-level maintenance services in support of the National Airspace System (“NAS”). The Contract is an indefinite delivery, indefinite quantity (“IDIQ”) type, involving one base year and six potential option years. The Protest challenged the contract eligibility of the Awardee as well as the evaluation process that led to the award. The Protester alleged that the Awardee is a second-tier subsidiary of an Alaska Native Corporation with revenues that exceed $2.2 billion, and therefore, is too large to qualify for award under this SEDB set-aside procurement. The Protester also alleged that it was prejudiced by a flawed evaluation that included, among other things, the FAA’s alleged failure to follow the evaluation criteria set forth in the Solicitation, unreasonable ratings of offerors and unequal treatment of offerors. The Awardee intervened in the Protest and filed a request for dismissal of the Protest based on allegations that the Protester itself does not qualify as an SEDB due to its affiliation with a larger company. The ODRA concluded that the Protest should be sustained in part on two grounds due to flaws in the evaluation. The ODRA also concluded that the remaining grounds alleging evaluation flaws lack merit and should therefore be denied. As for the challenge to the size of the Awardee, the ODRA determined that the Awardee is eligible for award under the applicable legal standards relating to Alaska Native Corporations and the Acquisition Management System (“AMS”). Finally, the Awardee’s request to dismiss the Protest was denied because the Contracting Officer had not rendered a decision that the Protester was ineligible as an SEDB. The FAA was directed to reevaluate the Protester’s technical proposal in a manner consistent with the ODRA’s Findings and Recommendations, and take additional actions as necessary.
Protest of Enterprise Engineering Services, LLC, Docket No.:
09-ODRA-00490, September 14, 2009. From the order-Enterprise Engineering
Services, LLC (“EES”) filed the above Protest challenging the
competitive award of a Socially and Economically Disadvantaged Business
(“SEDB”) set-aside Contract to Arctic Slope Regional Corp,
Research and Development Solutions (“ARTS”) under Solicitation
DTFACT-09-R-00007. The Contract, commonly known as the “SOS-7
Contract”, is the seventh in a series of “Service Operations
Support” contracts for the provision of second-level maintenance
services in support of the National Airspace System.
The Protest asserts several grounds, including challenges to the eligibility of ARTS as an SEDB and the conduct of the offer evaluation process. For the reasons set forth therein, I adopt and incorporate by reference the attached Findings and Recommendation of the Office of Dispute Resolution for Acquisition (“ODRA”), and hereby: (1) deny the ARTS Request for Dismissal; (2) partially sustain the EES Protest and direct the Center to undertake remedial actions, as recommended by the ODRA; and (3) deny the remainder of the Protest.
Protest of Carahsoft Technologies Corporation Avue Technologies Corporation Pursuant to Solicitation No. HSTSOl08-HRMOlO [ODRA Docket No. 08TSA-034, April 02, 2009. ODRA denies the protest finding “that the award of the contract in question was consistent with the requirements of the AMS, rationally based and supported by substantial evidence in the record. With regard to the allegations of organizational conflicts of interest, the Protester has not met its burden of proof.” Regarding a timeliness issues relating to an OCI allegation, the ODRA rejects a “Google” rule urged by the awardee and TSA. ”Relying on Protest of Raisbeck Commercial Air Group, Inc. 99-0DRA-00123, Lockheed Martin argues that Carahsoft/Avue had constructive notice of its grounds for protest on September 5,2008, well after the seven business day requirement for filing. ld. Based on Lockheed Martin's reading of Raisbeck, Lockheed Martin would have the ODRA adopt what is tantamount to a ‘Google’ rule for notice requirements. In fact, TSA in its Response urges that ‘[t]he Protester should be charged with the knowledge of something that is part of the public domain and that a simple, five-minute Internet search would have uncovered.” “The ODRA views such a standard as overly broad and too vague. Further, information posted on the Internet is not always factually reliable.”
Protests of Hi-Tec Systems, Inc, ODRA Nos. 08-ODRA-00459 and -00460, February 2009. Pre-award protests. Protestor argues that the solicitations should have been set aside for small businesses. Noting that the Small Business Act has limited applicability to the agency, the ODRA recommends that the protests be denied concluding “that the Program Office complied with the applicable statute and AMS[Acquisition Management System] policy to provide obtainable and reasonable opportunities for small businesses owned and controlled by socially and economically disadvantaged individuals to participate in contracts awarded by the FAA and as subcontractors. AMS § 188.8.131.52.1. The Program Office’s actions in this regard had a rational basis, are neither arbitrary, capricious, nor an abuse of discretion, and are supported by substantial evidence.”
Protest of Deloitte Consulting LLP, ODRA No. 08-TSA-036, January 2009. “The Solicitation involves a contract (‘Contract’) for implementation and business support services for the Secure Flight Program. For the reasons set forth below, the ODRA finds that: (1) the TSA improperly deviated from the stated evaluation criteria in Section M, Factor 7 of the Solicitation; and (2) the deviation clearly prejudiced Deloitte. Therefore, the ODRA recommends that the Protest be sustained.”
Protest of Ribeiro Construction Company, Inc. Pursuant to Solicitation No. HST04-8-R-CT8021, TSA Docket No. 08-TSA-031, August 05, 2008. Bid protest for the design and construction of a baggage screening and test facility at the Washington Reagan National Airport. In an 83 page opinion FAA ODRA recommends denial of the protest which, for the most part, alleged that the awardee had a prohibited organizational conflict of interest and was improperly favored by TSA.
Consolidated Protests of Diversified Management Solutions, Inc., Alaska Weather Operations Services, Inc. Docket Nos. 08-ODRA-00430, 08-ODRA-00431, July 25, 2008. Requests for reconsideration by protestors and awardees of the May 23, 2008 ODRA decision. All requests are denied.
Bid Protests of Diversified Management Solutions, Inc. and Alaska Weather Operations, Inc. Docket 08-ODRA-00430 and 08-ODRA-00431 (Consolidated), 05/23/2008 Protests sustained. The protests of Diversified Management Solutions, Inc. and Alaska Weather Operations Services, Inc. cumulatively challenged a total of three contract awards made pursuant to Solicitation No. DTFAWA-07-R-00006 for the performance of non-automated contractor weather operation services. Among other things, the protests challenged the FAA’s evaluation of proposals and determinations of eligibility for award. During the proceedings, the Program Office filed a motion to dismiss the Alaska Weather protest which was denied and granted in part. Alaska Weather’s challenges to the terms of the Solicitation were summarily dismissed as untimely, but the remaining challenges against the technical and price evaluations of both the Alaska Weather and the awardee’s proposals were found to present timely and justiciable issues that required adjudication in accordance with the ODRA’s Procedural Regulations. (Decision on Motion to Dismiss). On the merits, the ODRA found that the proposals of the awardees and the protesters received disparate treatment and that the evaluation plan used in the evaluation was not consistent with the terms of the solicitation. The ODRA recommended that both protests be sustained and that the Program Office be directed to reopen the competition for the groups protested. (Order).
Protest of Ribeiro Construction Company, Inc, Docket No. 08-TSA-031, April 30, 2008. ODRA declines to recommend suspension of performance during the protest finding “that while the Ribeiro Protest has alleged a substantial case, compelling reasons do not support imposing a suspension. The ODRA finds in this regard that: Ribeiro has failed to demonstrate that irreparable injury will occur in the absence of a suspension; and that the relative harm that would be caused by a suspension, as well as the public interest in a secure transportation system, militate against any suspension-related delay in the completion of the Project.”
Protest of CNI Aviation, LLC, Docket No.: 07-ODRA-00428, February 07, 2008. CNI protests the implementation of the remedy ordered by the FAA Administrator in the earlier protest of HyberNet Solutions. The protest is dismissed for failing to state a claim for which relief may be granted. The decision holds that there are only two ways to challenge such an order: 1) a request for reconsideration (denied here) and 2) a challenge in the Court of Appeals (pending).
Protest of HyperNet Solutions, Incorporated Protest of Essential Administrative Services, LLC, Docket Nos. 07-ODRA-00416 and 07-ODRA-00418 (Consolidated for Decision) December ,2007. Post-award bid protest of a contract which requires the performance of administrative support services for approximately 5,000 personnel for up to five years. In a 60 page heavily redacted opinion, “The ODRA recommends that the HyperNet Protest be sustained. As a remedy, the ODRA recommends that the CNI Contract be terminated and award of a contract be made to HyperNet. The ODRA further recommends that, notwithstanding the faulty evaluation of the EAS Proposal, the EAS Protest be denied for lack of prejudice.” The ODRA concludes “The record in this case evidences fatal deficiencies in the conduct of this competition. Moreover, the award decision does not have a consistently supported rationale and lacks proper documentation in support of the award decision.11 Inexplicably, the Center selected CNIwhose offered price was close to [DELETED] higher than that of HyperNet, whose technical merit had been evaluated lower than HyperNet, and whose past performance rating was essentially equivalent to that of HyperNet.”
Protest of New Bedford Panoramex
Corporation, ODRA Docket No. 07-ODRA-00414
,October 12, 2007, ODRA Digest:The record established that the decision to “downselect” the protester from continued participation in the competition had a rational basis and was not arbitrary, capricious, or an abuse of discretion. The Product Team evaluators found the protester’rsquo;s proposal to be “high risk” for a number of reasons, but principally because of the proposal’rsquo;s failure to properly address the question of how its equipment would interface with equipment to be furnished by the Agency. This interface requirement was an express and significant requirement of the Solicitation. Moreover, under the express terms of the Solicitation the finding that the protester’rsquo;s proposed interface presented a “high risk” required its immediate disqualification. The ODRA found ample support for the rating assigned and therefore recommended the Protest be denied.
Protest of Caribe
Electronics, Ltd., Inc., ODRA Docket No.: 07-ODRA-00412, August 20,
ODRA Digest: Protest denied. Protester filed a pre-award protest challenging a Solicitation that had been issued by the FAA Aeronautical Center (“Center”) for support services required at the FAA’s Center for Management and Executive Leadership (“CMEL”). The protester, which was a small, woman-owned 8(a) business concern, complained that the Center’s decision not to issue the Solicitation as a small business set-aside and the Center’s decision to consolidate the services required, i.e., food, desk support, and maid/linen services, effectively prevented it and other small businesses from competing for award of the Contract. The support services in question previously had been provided by Embry Riddle Aeronautical University (“ERAU”) pursuant to a lease agreement, which was scheduled to expire on August 1, 2007. The Center was negotiating a new lease arrangement with ERAU, which has requested that the support services be procured separately from any new lease arrangement. Award of a new contract for the provision of the services had not been made at the time the parties filed their submissions at the ODRA. However, the ODRA subsequently was informed that the contract was going to be awarded to a small business. The protester did not participate in the competition. The protest record established that the Center was not mandated by any FAA policy to set aside this Contract for small business. Nonetheless, the Contracting Officer took serious and substantial steps to attempt to determine whether to limit the competition to small businesses. Ultimately, the Contracting Officer decided to issue this Solicitation on a size-unrestricted basis. The ODRA found no factual or legal basis to support Caribe’s challenge to the Center’s decisions to: (1) conduct the competition on a non-size-restricted basis; and (2) combine the services into a single contract with a single contractor. The Contracting Officer fully complied with the requirements of the Acquisition Management System and went beyond those requirements to attempt to determine whether a sufficient number of small businesses would be interested in competing for the award. Under such circumstances, the ODRA could not conclude that the Contracting Officer acted irrationally, or abused her discretion or that her actions were arbitrary or capricious.
Protest of J&S Services, Inc., ODRA Docket No.
07-ODRA-00408, May 21, 2007,
ODRA Digest: Protest denied. J&S Services, Inc (“J&S”) filed a protest concerning the acquisition by the Alaskan Region of a radar tower. J&S alleged that it should have been awarded the Contract and that the much lower priced that had been offered by the successful offeror was too low for the work involved. The ODRA found that the award price was consistent with the Government’s estimate of the cost for the work and further, that it is well established that in a competition such as this, the offeror may choose, for various reasons, to offer a product to the Government at a very low price, even if the price offered does not result in a profit to the contractor. In this case the protester was outbid by a wide margin, which may reflect that the awardee had access to a prefabricated tower; whereas, the Protester was proposing a custom solution.
Protest of Mechanical Retrofit Solutions Incorporated, ODRA No. 07-ODRA-00402, April 03, 2007. ODRA denies the protest finding that the CO's finding that protestor was not responsible. [The redactions in the decision mask some of the details for the CO's decision.] ODRA also finds that although a COI should have prevented protester from competing, it directs the Program Office to compensate protester's principal for services rendered to the agency for this procurement.
Protest of Hasler, Inc., ORDA No. 06-ODRA-00395, January 19, 2007. Bid protest. In an unusual case, ODRA directs award to the protester. The opinion concludes “For the reasons set forth above, the ODRA finds that the award to PB lacks a rational basis, was arbitrary and capricious, and an abuse of discretion and a directed award is the only appropriate remedy under these circumstances. Accordingly, the ODRA recommends that the Product Team be directed to terminate the Pitney Bowes PO and make the award to Hasler based on its Proposal, dated September 7, 2006. The ODRA also recommends that the Product Team's other acquisition actions be reviewed for compliance with the AMS and that remedial training be provided to the agency contracting personnel involved.”
Contests of Agency Tender Official James H. Washington and Kate Breen, As Agent for Majority of Directly Affected FAA Employees Pursuant to Solicitation DTFAAWAACA-76001, FAA Order No. ODRA-05-348, June 20, 2005. Order adopting the decision by the Special Master, Judge Neill of the GSBCA, finding that “... the performance decision ... had not been shown to lack a rational basis or otherwise to be arbitrary or capricious or an abuse of discretion.” [I understand that the parties are to submit proposed redactions to Judge Neill’s decision by July 27, 2005.-jaw]
ATO Files a Contest (Protest) of an FAA A-76 Performance Decision, March 11, 2005. This is the first reported contest by an ATO under the May 2003 revisions to OMB Circular A-76. The ATO is represented by private counsel, Cyrus E. Phillips, IV.
Protest of Raytheon Company, Docket No. 01-ODRA-00180, June 15, 2001. Pre-award protest of a proposed sole-source award. Sustained.
Protest of Universal Systems & Technology, Inc. Docket No. 01-ODRA-00179, May 31, 2001. Post award protest. Sustained.
Strand Hunt Construction, Inc.-Order, February 26, 2001. The case, Contract Dispute of Strand Hunt Construction, 99-ODRA-00142-Findings and Recommendations, involved a multi-million dollar claim on a contract for the construction of an air traffic control tower at Merrill Field, Anchorage, Alaska. Included were claims for delay, labor inefficiency loss, and constructive change.(PDF files)
NAICS APPEAL OF: LATVIAN CONNECTION LLC, SBA No. NAICS-5534, February 10, 2014. Appellant appeals the decision of the CO to not set-aside the procurement for small businesses. OHA denies the appeal noting that “‘OHA has no jurisdiction to review a contracting officer’s decision not to set aside a procurement for small business.’NAICS Appeal of McKissack & McKissack , SBA No. NAICS-5154, at 2-3 (2010); NAICS Appeal of Genome-Communications , SBA No. NAICS-4995, at 2 (2008) (‘OHA has no jurisdiction over a challenge to the CO's decision to set aside the procurement.’). Accordingly, this appeal is beyond OHA’s jurisdiction and must be dismissed.”
SIZE APPEAL OF: LUKOS-VATC JV, LLC, APPELLANT, SBA No. SIZ-5532, February 6, 2014. On June 10, 2013, a SBA business operations specialist informed appellant by telephone that its 8(a) mentor-protégé agreement had been approved. Appellant submitted its proposal on June 17, 2013. A size protest was filed and SBA found that appellant was not small when it submitted its proposal as the mentor-protégé agreement was not approved until June 19, 2013. Appellant appeals arguing that the protest should have been dismissed as it was not specific and, alternatively, that the government should be estopped from arguing that the mentor-protégé agreement was not approved on June 10, 2013.
OHA denies the appeal. Judge Holleman notes
“the protest was sufficiently specific. To be specific, a protest must give reasonable notice as to the size protest grounds and give some factual basis for the allegations. 13 C.F.R. § 121.1007(b). It is important to distinguish specificity from accuracy, however, because ‘there is no requirement that a protest be accurate.’ Size Appeal of Mission Solutions, Inc. , SBA No. SIZ-4828, at 7 (2006). Accurate protests are not required because much of the information necessary to prove a size protest is not publicly available. Jupiter Corp. , SBA No. SIZ-5110, at 5 (2010) (PFR). Here, ITA alleged that Appellant’s mentor-protégé agreement was not approved prior to Appellant’s submission of its proposal, and ITA included supporting evidence from Lukos’s and VATC’s websites. Appellant was on notice, therefore, that the date of approval on its mentorprotégé; agreement was under investigation. By focusing on the relevance of the website printouts, Appellant’s arguments may shed light on the accuracy of the protest; however, they fail to demonstrate a lack of specificity.”The opinion also rejects the estoppel argument as it
“fails because it is incomplete. Equitable estoppel against the Government requires a showing of affirmative misconduct, and ‘affirmative misconduct requires intentional behavior,’ meaning ‘the actor must know he is acting wrongfully.’ Size Appeal of Lance Bailey & Assocs., Inc. , SBA No. SIZ-4799, at 12 (2006). Indeed, Appellant faces a high burden and must cite clear and convincing evidence of proving personal animus, prejudice, or other irregular conduct. Size Appeal of Doyon Props., Inc. , SBA No. SIZ-4838, at 14 (2007); Faison Office Prods., LLC , SBA No. SIZ-4834, at 13 (2007). On this point, it is significant that Appellant does not argue—and the record contains no evidence—that SBA actors intentionally misled Appellant or acted in bad faith. Thus, Appellant falls far short of its evidentiary burden.”
SIZE APPEAL OF: TLS CONTRACTING, INC., APPELLANT, SBA No.
SIZ-5527, January 09, 2014. Appellant appeals the determination that it is other
than small when its receipts when combined with those of its affiliates exceed
the $14 million size standard. Appellant “takes issue with the calculation
of Appellant’s size. Appellant points out that SBA defines receipts as
‘total income’ plus ‘cost of goods sold,’ as those terms
are defined and reported on Internal Revenue Service (IRS) tax return forms. 13 C.F.R. §
121.104(a). Appellant then argues that, because the IRS treats ‘cost
of goods sold’ as a negative number, the Area Office should have
subtracted ‘cost of goods sold’ from ‘total income.’ Had
the Area Office done so, Appellant contends, the annual receipts of Appellant
and its affiliates would not exceed $14 million.”
OHA denies the appeal noting “ This argument is unpersuasive. Although 13 C.F.R. § 121.104(a) cites to IRS tax forms, OHA has held explicitly that SBA has not incorporated by reference IRS regulations, and IRS regulations ‘are inapposite to size cases.’ Size Appeal of Phillips Nat'l, Inc. , SBA No. SIZ- 4332, at 8 (1998). More specifically, OHA has held that deducting ‘cost of goods sold’ when determining annual receipts contradicts the definition of ‘annual receipts’ in the regulation.’Size Appeal of Virgil G. Simons , SBA No. SIZ-2636, at 3 (1987). This is because the size standard is based on revenue, and deducting ‘cost of goods sold’ from ‘total income’ would measure profitability, not revenue. Id. As OHA has explained, if ‘size were measured by profit alone, some very large firms could qualify as small.’ Size Appeal of Mid-Columbia Eng‘g, Inc. , SBA No. SIZ- 4134, at 5 (1996). Accordingly, Appellant’s argument that SBA should adopt the IRS's practice is unavailing, and I find no error in the calculation of Appellant’s size.”
[Let's see. I manufacture and sell widgets. My total income was $1,000,000. The cost of goods sold was $500,000. For SBA purposes my annual receipts would be $1,500,000. Is this right? Doesn't makes any sense to me.-jaw]
NAICS APPEAL OF: LATVIAN CONNECTION, LLC, APPELLANT, SBA No. NAICS-5525, January 08, 2014. Appellant filed a NAICS appeal of an Army Sources Sought notice. OHA dismisses the appeal noting that “Absent a formally issued solicitation, the instant appeal is premature, and OHA has no jurisdiction to consider it. Further, Appellant did not respond to OHA’s show cause order, and has not established any valid basis for the instant appeal.”
SIZE APPEAL OF: AMETEK SCP, INC., APPELLANT RE: SEACON PHOENIX, LLC, SBA No. SIZ-5518, December 4, 2013. Appellant filed a size protest stating
“ We have reason to believe Seacon Phoenix, LLC is not a small business under the size standard ... and request an investigation to confirm the Small Business status of Seacon Phoenix, LLC. If it is determined that Seacon Phoenix, LLC is a large business, we would like to request reissue of the solicitation so that only small businesses may be awarded line items that are set aside for small businesses.”The size standard for the procurement was 500 employees. The SBA area office dismissed the protest as non-specific. Appellant appeals and includes a magazine article stating that Seacon 800 employees. Judge Holleman affirms the dismissal and denies the appeal noting “ I find the Area Office properly dismissed Appellant's protest. The regulations provide:
A protest must include specific facts. A protest must be sufficiently specific to provide reasonable notice as to the grounds upon which the protested concern’s size is questioned. Some basis for the belief or allegation stated in the protest must be given. A protest merely alleging that the protested concern is not small or is affiliated with unnamed other concerns does not specify adequate grounds for the protest .13 C.F.R. § 121.1007(b) (emphasis added). The Area Office must dismiss protests that are not sufficiently specific. 13 C.F.R. § 121.1007(c). Here, the Appellant’s protest provides nothing beyond the bare allegation that Seacon, the protested concern, is not small. Appellant’s protest, therefore, is clearly within the regulatory definition of a nonspecific protest. See Size Appeal of Platinum Business Corporation , SBA No. SIZ-5198 (2011). Accordingly, the Area Office properly dismissed it./”
NAICS APPEAL OF: EVANHOE & ASSOCIATES, LLC, APPELLANT, SBA No. NAICS-5505, September 27, 2013. Appellant challenges the use of NAICS code 541712, Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology), Aircraft exception, by the Air Force for its ATEP II program. Appellant argues that 541511, Custom Computer Programming Services is the proper code. Two other firms intervene on the government’s behalf. Appellant argues that the SOW does not require research and development and that the aircraft exception is not proper as aircraft are not part of the solicitation. OHA denies the appeal. Regarding the aircraft exception arguement the opinion note “First, contrary to Appellant’s assertions, aircraft are integral to the services being sought here, because aircraft collection platforms/sensors are key contributors to the development of actionable GEOINT and MASINT. ATEP II data is collected from multiple Air Force aircraft platforms. These include Predator, Reaper, Global Hawk, and U2, all of which are primarily intelligence-gathering aircraft platforms. (PWS § 1.0 (Mission).) ATEP II directly contributes to improved Intelligence, Surveillance, and Reconnaissance (ISR) capabilities of these aircraft; thus ATEP II is primarily concerned with improving the capability these aircraft to perform their core function, to gather intelligence data.” After a full discussion of the issues OHA finds that appellant has failed to meet its burden of establishing clear error in the CO’s designation of the NAICS code.
SIZE APPEAL OF: AUDIOEYE, INC., SBA No. SIZ-5493, Petition for Reconsideration of SBA No. SIZ-5477, August 19, 2013. Appellant argues that SBA wrongfully failed to consider SEC filings of its affiliate rather than requiring tax returns. OHA denies the motion for reconsideration. The ALJ notes that SBA regulations at 13 C.F.R. § 121.104(a)(1) require that tax returns must be mused to determine size. The ALJ notes that appellant does not argue that tax returns were not available, possibly allowing the use other records to determine size.
IN THE MATTER OF: SPARCCOM & ASSOCIATES, PETITIONER [Business Development Plan], SBA No. BDPT-501, August 19, 2013. Petitioner appeals the decision of SBA to terminate him from the (8a) Business development program for failure to pursue competitive and commercial business or failure in other ways to make reasonable efforts to develop and achieve competitive viability. Records showed that petitioner had little or no revenue in 2010 and 2011. Petitioner argues that documents submitted during the appeal show it was actively pursuing business. The ALJ rejects this argument as these documents were not before SBA when it made the termination decision. The ALJ denies the appeal noting “The Administrative Record demonstrates that during 2010 and 2011 SPARCcom & Associates failed to pursue competitive and commercial business in accordance with its business plan, or failed in other ways to make reasonable efforts to develop and achieve competitive viability in violation of 13 C.F.R. § 124.303(a)(9).”
NAICS APPEAL OF: RHINOCORPS,
LTD., APPELLANT SBA No. NAICS-5481, July 01, 2013. Appellant argues that its
NAICS appeal should be considered and granted even though it was filed more than
calendar days after the RFP was issued. Appellant argues that it “relied
on the language of 13
C.F.R. § 121.1103(b)(1), which states that ‘[a]n appeal from a
contracting officer’s NAICS code or size standard designation must be
served and filed within 10 business days after ... ’” While other
provisions express the appeal period in calendar days, appellant argues that the
provision is not ambiguous and that it “should not suffer for SBA’s
failure, over the course of twenty-eight months, to amend 13 C.F.R. §
OHA denies the appeal. OHA states that has considered this issue before finding that the change to business days was undoubtedly a typographical error, citing NAICS Appeal of Cape Fox Govt. Servs., LLC, SBA No. NAICS-5422 (2012); NAICS Appeal of R. Christopher Goodwin & Assocs., Inc., SBA No. NAICS- 5382 (2012); NAICS Appeal of Eagle Home Med. Corp., SBA No. NAICS-5378 (2012).
IN THE MATTER OF: ALLCON, LLC, PETITIONER SBA No. BDPE-486 April 30, 2013. Allcon appeals a decision denying its admission into the 8(a) Business Development Program. On reconsideration SBA found that Allcon was barred from the Program because it had a contractual relationship with Arteaga Construction, Inc. a former 8(a) BD Program participant owned by Ms. Lopez’ brother, Anthony Arteaga. The appeal is denied. The opinion notes that it was reasonable for SBA to conclude that contractual relation existed. SBA noted that “a June, 2012, Aging of Accounts Receivable report indicating that Arteaga Construction owed Petitioner $20,583.75, and an Aging of Accounts Payable report from the same month showing a $217,721.33 debt from Petitioner to Arteaga Construction. It then surmised that the debts were related to unfulfilled contracts and thus represented an ongoing relationship, making a waiver of 13 C.F.R § 124.105(g) inappropriate.” [The opinion by the ALJ repeatedly refers to “this court ”- jaw]
NAICS APPEAL OF: CAPE FOX GOVERNMENT SERVICES, LLC, APPELLANT, SBA No. NAICS-5444, February 4, 2013. Coast Guard solicitation to
provide installation and logistics management services for Command Control Communications Computers Information
Technology (C4IT) systems, with a NAICS code 541330, Engineering Services, with a corresponding $14 million annual receipts size standard. Appellant doesn't challenge the code, but argues that the exception under the code for Military and Aerospace Equipment and Military
Weapons(MAE&MW) that raises the annual receipts level should have been exercised. OHA denies the appeal noting “ In this case, I find the Coast Guard did not err in designating the $14 million size standard and finding the MAE&MW exception
does not apply. The Coast Guard seeks a contractor for its agency-wide C4IT
system to perform installation and logistics management services aboard Coast
Guard vessels/cutters. The contractor will provide system documentation support,
install and remove equipment, and provide field and system management and
engineering facilities support. Thus, I conclude that this RFP does not seek to
procure military weapons, aerospace equipment, or engineering services to
support such equipment, and therefore does not qualify for the MAE&MW special
size standard. The work the contractor will perform is largely not connected
with weapons or weapons systems, nor with the design, engineering, or
maintenance of weapons. Significantly, the SOW does not mention weapons systems
or aerospace equipment. Thus, Appellant has not demonstrated that C4IT is
functionally a military weapons system.
Appellant's argument that the MAE&MW exception should apply to this procurement, because it applied to other procurements , is unpersuasive. The NAICS code designations for the predecessor procurement and those issued by the Navy have never been, and are not now, before OHA. In any event, OHA has held that “NAICS code designations for other procurements are not of great probative weight.”Davis-Paige , SBA No. NAICS-5055, at 5 (2009).
IN THE MATTER OF: NOVA TRAINING & TECHNOLOGY SOLUTIONS, LLC, PETITIONER Docket Nos. BDPT-2012-11-01-152, BDPT-464, February 1, 2013. NOVA, a subsidiary of an Alaskan Native Corporation, appeals the decision of SBA to remove it from the 8(a) Business Development Program. SBA had “determined Petitioner [f]ailed to maintain full-time day-to-day management and control by disadvantaged individuals and failed to disclose to SBA the extent to which non-disadvantaged persons or firms participated in NOVA’s management.” OHA denies the appeal noting “ The AR demonstrates that SBA considered all of the facts in the record, as well as the law and regulations that govern the decision-making process. The SBA made a reasonable conclusion that termination was warranted and followed the appropriate procedural mechanisms for such termination. SBA’s decision is supported by the evidence in the record because of substantiated concerns regarding the control of NOVA by non-disadvantaged persons and NOVA’s failure to disclose the same. Petitioner has failed to state why the determination was arbitrary, capricious or contrary to law. See 13 C.F.R. § 134.402.”
SIZE APPEAL OF: SAINT GEORGE INDUSTRIES, LLC, APPELLANT SBA No. SIZ-5440, January 30, 2013. Appellant appeals the SBA area office determination that Appellant was other than small due to affiliation with Point Blank Enterprises, Inc. (PBEI) under the newly organized concern rule, 13 C.F.R. § 121.103(g), and the ostensible subcontractor rule, 13 C.F.R. § 121.103(h)(4). OHA grants the appeal and remands to the area office noting “In this case, I must agree with Appellant that the Area Office’s analysis of the newly organized concern rule was flawed, or at least incomplete. In particular, it is not clear that the first element of the above test is met. Appellant contends that its founder, Mr. Stallings, was never an officer of PBEI, and could not exercise critical influence or substantive control of that company. Appellant’s argument is plausible, particularly given that Mr. Stallings worked at PBEI for only 90 days, and was then involuntarily dismissed. The Area Office apparently reasoned that Mr. Stallings could be considered an officer or key employee of PBEI because he held such positions at PBSI, which subsequently “became PBEI.” (Size Determination at 4.) Beyond simply reciting Mr. Stallings's job titles, however, the size determination reflects no substantive analysis of whether Mr. Stallings was ever an officer or key employee of PBSI. Cf., Size Appeal of Willow Envtl., Inc. , SBA No. SIZ-5403, at 6-7 (2012) (notwithstanding her job title, former Government Services Manager was not an officer or key employee, since actual authority rested with higherlevel officials). Nor is it evident that PBSI and PBEI can reasonably be treated as a unified entity for purposes of the newly organized concern rule. Appellant asserts that PBSI and PBEI are legally separate and distinct companies because, after PBSI filed for bankruptcy in late 2011, Sun purchased PBSI's assets and established PBEI. PBSI reportedly still exists (albeit in bankruptcy), and Appellant has business dealings only with PBEI, but not PBSI. The Area Office did not address the extent to which PBEI and PBSI share similar ownership or management. Thus, even assuming that Mr. Stallings was a former officer or key employee at PBSI, it does not necessarily follow that his role at PBSI can be imputed to PBEI. In short, the record does not demonstrate that the Area Office fully explored whether Mr. Stallings was an officer or key employee of PBEI. As a result, I am remanding this issue for further review and investigation.”
SIZE APPEAL OF INGENESIS, INC., SBA No. SIZ-5436. January 28, 2013. Appellant appeals the decision that is was not small under the ostensible subcontractor rule where its mentor under an approved protégé agreement, STGi, was the subcontractor. Judge Hyde grants the appeal concluding “Appellant is not a formal joint venture, and the instant procurement does not constitute assistance from a mentor to a protg, so Appellant cannot avail itself of the mentor-protégé and mentor-protégé joint venture exceptions to affiliation. Nevertheless, Appellant has persuasively shown that there is no violation of the ostensible subcontractor rule. Appellant will perform the primary and vital contract requirements, will manage the contract, and there no indication that Appellant is unusually reliant upon its subcontractor STGi to win or perform the instant contract. The Area Office determined that Appellant, by itself, is a small business, and that issue is not disputed on appeal. For these reasons, the appeal is GRANTED, and the size determination is REVERSED.”
IN THE MATTER OF: GOVERNMENT CONTRACTING SERVICES, LLC, APPELLANT RE: WASHINGTON PATRIOT CONSTRUCTION, LLC, SBA No. VET-230, November 30, 2012. This case involves the dismissal of a protest against Washington Patriot Construction, LLC (WPC). The U.S. Small Business Administration (SBA) and the protestor, Government Contracting Services, LLC (Appellant), jointly request that the matter be remanded to SBA's Director of Government Contracting (D/GC). WPC opposes the motion. OHA vacates the dismissal of the and remands to SBA. Judge Hyde notes “I find it appropriate to remand this matter to the D/GC. By offering to rescind the dismissal of Appellant’s protest, SBA is, in effect, acknowledging error. Therefore, ‘[a]s a matter of judicial economy, it is appropriate to give SBA the opportunity to reconsider its decision.’Size Appeal of A2Z Promo Zone, SBA No. SIZ-5365, at 1 (2012) (granting SBA’s motion to remand despite intervenor’s objection). When the D/GC reassesses the protest, WPS will have the opportunity to make any argument it chooses to the D/GC, and may appeal an adverse determination to OHA. Thus, remanding the case is not prejudicial to WPS. Id.”
SIZE APPEAL OF: BOSCO CONSTRUCTORS, INC., APPELLANT RE: ROUNDHOUSE PBN, LLC SBA No. SIZ-5412, October 31, 2012. This appeal involves a size determination of Roundhouse PBN, LLC (Roundhouse). Roundhouse is wholly owned by Tepa, LLC (Tepa), which in turn is owned by the Paskenta Band of Nomlaki Indians (Tribe), a Federally recognized Indian Tribe. In addition to Roundhouse, Tepa wholly owns seven other companies, including Tepa EC, LLC (Tepa EC), Komada, LLC (Komada), and Torix General Contractors, LLC (Torix). Appellant argues that Roundhouse does not have the capabilities or resources to perform and contracts and is unusually reliant on its sister companies. Appellant essentially argues that Roundhouse’s affiliation with it sister companies precludes the determinations of the area that Roundhouse is small. OHA denies the appeal finding that the area office properly relied on the exceptions accorded to tribal owned companies provided for in 13 C.F.R. § 121.103(b)(2).
SIZE APPEAL OF: PROFESSIONAL PROJECT SERVICES, INC., APPELLANT SBA No. SIZ-5411, October 26, 2012. Department of Energy procurement of security support services by task order under a FSS contract. The solicitation stated that the award would be a total set-aside for small businesses and would be under FSS schedules 84 or 871. No NAICS code was specified. After award to appellant a size protest was filed. In considering the protest the Area Office invoked 13 C.F.R. § 121.402(d), to determine the appropriate NAICS code which had not been specified in the solicitation. The area office first determined that NAICS code 541690 was most appropriate. However since that code was not contained in schedule 871 the area office selected code 541330, which was covered by the schedule. The area office then examined the various affiliates and determined that appellant was not small. OHA denied the appeal finding that the area office properly determined the NAICS code.
SIZE APPEAL OF: SIMMEC TRAINING SOLUTIONS, APPELLANT RE: TIER-ONE QUALITY SOLUTIONS CORP. SBA No. SIZ-5404, September 24, 2012. OHA denies the appeal. It rejects appellant’s request for new evidence finding that appellant has not shown good cause why the evidence could not have been submitted earlier. Appellant argues that because TQS did not reply to appellant’s it is entitled to summary judgment as 13 C.F.R. § 134.211 provides that a failure to reply is deemed as a consent to the relief sought. Judge Holleman rejects this argument noting “More important is what the regulation does not state. Contrary to Appellant’s argument, the regulation does not state the moving party is entitled to judgment as a matter of law when nonmoving parties fail to timely respond. That determination is within the judge's discretion, and I decline.” to make such a ruling.”
NAICS APPEAL OF: EDCOUNT, LLC, APPELLANT SBA No. NAICS-5396, August 31, 2012. Appellant appeals the Department of Education(ED) solicitation for a small business set aside which stated that NAICS codes of 541720 - Research and Development in the Social Sciences and Humanities and 611710 - Educational Support Services would be considered. Appellant argues that the FAR requires that only one code be specified, that the correct code is 611710 and that the size standard if $7 million in annual receipts. Intervenor, Synergy Enterprises, Inc., argues that neither of the specified codes is the proper one. ED now agrees with appellant. OHA grants the appeal. Judge Hyde notes that where only one product or service is being acquired, as here, that FAR 19.102(c) requires that a single NAICS code be specified. He also finds that intervenor has not shown that the CO clearly erred when he selected the 61170 code.
NAICS APPEAL OF:
R. Christopher Goodwin & Associates, Inc., SBA No. NAICS-5382, July 23, 2012. On July 05, 2012 appellant appealed the NAICS code of a Corps of Engineers solicitation issued on June 22, 2102. Responding to an order to show cause why the appeal should not be dismissed as untimely appellant argues that the CO waived the deadline for appeal and that an inconsistency between 13 C.F.R. § 121.11 03(b )(1 ),
which expresses the appeal deadline in business days, and 13 C.F.R. § 134.304(b), which
expresses the deadline in calendar days. Judge Hyde dismisses the appeal as untimely. He notes, “First, Appellant’s
assertion that the CO waived the NAICS appeal deadline is unavailaing. Contrary
to Appellant's contention, OHA has held that deliberations with a procuring
agency, which do not result in any change to the solicitation, do not extend the
appeal deadline. NAICS Appeal of Secure Network Systems, LLC, SBA No. NAICS-5236
Second, a review of the regulatory history indicates that the current language of 13 C.F.R. § 121.1103(b)(1), which expresses the appeal deadline in business days rather than calendar days, is in the nature of a clerical or administrative error. Prior to March 4, 2011, 13 C.F.R. § 121.1103(b)(1) provided for a deadline of 10 calendar days, consistent with both the corresponding OHA rule then at 13 C.F.R. § 134.304(a)(3) and the Federal Acquisition Regulation (FAR). SBA amended 13 C.F.R. § 121.1103(b)(l) in February 2011 to change calendar days to business days, but included no discussion of this change in the preamble. 76 Fed. Reg. 5680, 5681 (Feb. 2, 2011). Furthermore, in the proposed rule which eventually led to the current version of 13 C.F.R. § 121.1103(b)(1), the deadline was expressed in calendar days. 75 Fed. Reg. 9129, 9135 (Mar. 1, 2010).
Thus, the switch to business days in 13 C.F.R. § 121.1103(b)(l) was evidently inadvertent, not the result of any conscious intent by the agency to extend the deadline for NAICS code appeals. In a very recent decision, NAICS Appeal of Eagle Home Medical Corporation, SBA No. NAICS-5378 (2012), OHA reached the same conclusion, dismissing as untimely a NAICS code appeal that had been filed within 10 business days, but more than 10 calendar days, after issuance of a solicitation.”
NAICS APPEAL OF: EAGLE HOME MEDICAL CORPORATION, APPELLANT SBA No. NAICS-5378, July 18, 2012. VA procurement for home oxygen services. Appellant filed a the NAICS code appeal and the government moves to dismiss as untimely as the appeal was not filed with 10 calendar days. Appellant argues that the appeal was filed within 10 business days and that it should be entitled to a lenient interpretation of the timeliness rules because of a conflict in the regulations. OHA dismisses the appeal as untimely. Judge Hyde notes that the regulatory conflict appeared to be the result of a clerical or administrative error, not an intentional change to business days.
SIZE APPEAL OF: ALLIED TECHNICAL SERVICES GROUP, LLC, APPELLANT SBA No. SIZ-5373, July 3, 2012. Appellant appeals the determination of SBAs Office of Government Contracting which “found that Appellant’s 40% owner, Mr. Lawrence Doll, could exercise control over Appellant under 13 C.F.R. &SECT; 121.103(c)(2). The Area Office also found Appellant affiliated with four other companies controlled by Mr. Doll.” OHA denies the appeal and also rejects appellant’s offer of a new declaration. In rejecting the new declaration OHA finds that appellant has not shown good cause that the “declaration could not have been prepared much earlier in the review process.” OHA rejects the argument that Mr. Doll could not unilaterally control appellant except under remote circumstances. Judge Hyde notes, “This argument fails for two reasons. First, OHA has long held that ‘the mere fact that a minority shareholder cannot individually control a concern is not sufficient to overcome the presumption’ in 13 C.F.R. § 121.103(c)(2).[citations omitted] Indeed, ‘the very purpose of the [minority shareholder] rule is to address situations in which no single person or entity has actual affirmative or negative power to control a concern.’ Thus, supposing that Appellant were to demonstrate that Mr. Doll individually could not control Appellant, this alone would not suffice to rebut the presumption in 13 C.F.R. § 121.103(c)(2). Moreover, Appellant here has not shown that Mr. Doll lacks the power to unilaterally control Appellant. On the contrary, by arguing that Mr. Doll’s power to control Appellant is ‘remote,’ Appellant essentially concedes that Mr. Doll could potentially control Appellant under some circumstances.”
SIZE APPEAL OF: HARDIE’S FRUIT & VEGETABLE COMPANY SOUTH, LP, APPELLANT RE: M&S FOODS CO., LTD. SBA No. SIZ-5347, May 08, 2012. Appellant appeals the finding by the area office that M&S Foods was small for two DoD BPAs for fresh fruits and vegetables. Appellant argues, in part, that the area office wrongly determined that the exception to the nonmanufacturer rule applied under the simplified acquisition. Although each delivery order may be under $25,000 threshold appellant argues that the BPA will far exceed that threshold. OHA agrees, grants the appeal and remands the matter back to the area office to consider that issue and to identify the proper NAISC code and size standard that should apply. Judge Hyde notes “On remand, the Area Office should examine which NAICS code and size standard apply to the BPAs. Depending upon the applicable NAICS code, the Area Office should consider whether the nonmanufacturer rule applies. If the nonmanufacturer rule does apply, each BPA is a procurement exceeding $25,000; therefore, the Area Office should examine whether M&S complies with 13 C.F.R. § 121.406 and FAR 19.102(f), without utilizing the exception to the nonmanufacturer rule for simplified acquisitions that are less than $25,000. If the Area Office finds that the nonmanufacturer rule does not apply, the Area Office should then consider whether M&S is otherwise affiliated with Fresh Point, as alleged in Appellant’s protests.”
SIZE APPEAL OF: RGB GROUP, INC., APPELLANT SBA No. SIZ-5351, May 07, 2012. RGB appeals the Area Office determination that it is not small because Appellant is affiliated with RLM Services, Inc. (RLM), One Fountainhead Center, LLC (OFC), and Bragio, LLC (Bragio). OHA denies the appeal noting “ In seeking to overturn the size determination, Appellant emphasizes that it shares no common ownership or management with RLM. Appellant further contends that the ties between Mr. and Mrs. Bravo and their respective companies are insufficient to conclude that either firm has the power to control the other. Appellant's arguments reflect a misapprehension of 13 C.F.R. § 121.103(f). Under the regulation, a family relationship alone creates a presumption of identity of interest. The presumption arises ‘not from the degree of family members' involvement in each other’s business affairs, but from the family relationship itself.’Size Appeal of SP Techs., LLC, SBA No. SIZ-5319, at 5 (2012). Thus, in the instant case, Appellant and RLM are presumed affiliated, based on the identity of interest between Mr. and Mrs. Bravo. The presumption is rebuttable, but only if the challenged firm were to demonstrate a ‘clear line of fracture ’ between the family members. Accordingly, in order to find affiliation based on identity of interest, it is not necessary to find that either firm can control the other on alternate grounds beyond 13 C.F.R. § 121.103(f).”
SIZE APPEAL OF: WILLIAMS ADLEY & COMPANY DC, LLP, SBA No. SIZ-5341, April 18, 2012. Appellant was determined to be other than small based on its tax returns for 2008, 2009 and 2010. Appellant argues that the 2007, rather that the 2010 tax return, should be considered as the 2010 return had not yet been filed when appellant self-certified on May 26, 2011. OHA denies the appeal noting “In sum, the Area Office did not err in considering Appellant's 2010 return. Under 13 C.F.R. § 121.104(c)(1), the Area Office was required to examine the years 2008, 2009, and 2010, and was not at liberty to substitute a different year. Further, although Appellant’s 2010 tax return was filed after the date of self-certification, it was available at the time of the size review, and the Area Office was ‘permitted ... to base its calculation on the newly filed return.’Hal Hays, SBA No. SIZ-5234 .. ”
NAICS APPEAL OF: HUMMINGBIRD SOLUTIONS, APPELLANT SBA No. NAICS-5334, March 14, 2012. NAICS appeal dismissed as untimely because it was filed more than 10 days after solicitation was issued.
IN THE MATTER OF: RUSH-LINK ONE JOINT VENTURE, APPELLANT, SBA No. VET-228, March 16, 2012. OHA denies the appeal that the Director for Government Contracting (D/GC) wrongly determined that appellant did not qualify as a SDVO joint venture firm. Although finding that the president of the firm was a SDV, the D/GC found the joint venture to be an ineligible SDVO SBC due to the president’s lack of ownership and control.
IN THE MATTER OF:HX5, LLC
SBA No. SIZ-5331, March 12, 2012. Appellant appeals the decision that it was
affiliated with its subcontractor under the ostensible subcontractor rule and
is other than small. OHA reverses the Area Office decision and notes
“Nevertheless, while the Area Office was required to consider
TYBRIN’s status as incumbent, that in itself was not a determinative
factor. While it is true that the Area Office here did not rely upon the use
of the ‘team’ language in the Proposal or Appellant’s use of
incumbent personnel, these are not relevant here, neither is the type of
contract here. What is critical here is that the Area Office relied upon an
erroneous determination that Appellant’s PM was a TYBRIN employee,
erroneously relied upon Appellant’s discussion of its pending
mentor/protege agreement as indicia of undue reliance, and enoneously
evaluated Appellant’s past performance submission, ignoring the
RFP’s criteria and stepping into the CO’s shoes. These instances
of clear error outweigh the distinctions the Area Office sought to draw
between this case and Spiral[ Size
Appeal of Spiral Solutions and Technologies, Inc., SBA No. SIZ-5279
Further, Appellant and TYBRIN will be performing the same types of work here, providing SSRs to the Air National Guard, and Appellant will be performing the majority of the work. OHA has held that in this circumstance, Appellant must be held to be performing the primary and vital tasks of the contract Spiral, at 20. The Area Office clearly erred in finding Appellant unusually reliant upon TYBRIN, and therefore I must reverse this Size Determination, and grant the instant appeal.”
SIZE APPEAL OF: ADVENT ENVIRONMENTAL, INC., APPELLANT SBA No. SIZ-5325, March 2, 2012. Appellant appeals the decision of the area office that it was other than small. The area office found that appellant’s Mr. Otten controlled appellant and the other subsidiaries of its parent, Versar. The area office also found that Mr. Otten was a 25% owner and Treasurer of another firm IWT Holdings. The Area Office determined that because the four owners of IWT Holdings have interests that are equal in size to one another, there is a rebuttable presumption that each owner has the power to control IWT Holdings. 13 C.F.R. § 121.103(c)(2). When the employees of IWT Holdings are combined with those of Versar, the area office found that appellant is other than small. On appeal appellant argues that the area office erred when it found Mr. Otten has the power to control IWT Holdings. While acknowledging that Mr. Otten controls Versar and appellant it argues that Mr.Otten simply has a private investment in IWT Holdings and that others have day to day control of IWT Holdings. OHA denies the appeal finding that appellant has not met it burden to show that the determination of the area office was clearly erroneous.
SIZE APPEAL OF: TRIDENT LLC,
APPELLANT, SBA No. SIZ-5315, January 24,2012. Appellant appeals the
decision of the Area OFFICE that it was other than small. The area office
examined SBA-approved mentor-protégé joint venture agreement and
concluded that Trident Tech is bringing very little expertise and resources to
the joint venture and, therefore, Appellant is not in compliance with 13
C.F.R. § 124.513(a)(2). The area office also found that although the
contract was awarded on August 30, 2011, but the joint venture agreement was
not approved by SBA’s Alabama District Office until September 13, 2011.
The Navy subsequently suspended that award and reevaluated the proposals it
received in response to the RFP. Appellant, as a joint venture, was approved
by the SBA District Office on September 13, 2011. The Navy completed its
reevaluation and affirmed its award to Appellant on September 19, 2011.
The OHA overturns the decision of the area office and grants the appeal. After reving prior case law, OHA finds “Accordingly, based upon OHA case precedent and the updated joint venture regulations, I find the Area Office has no authority to review the substance of an 8(a) mentor-protg joint venture agreement in connection with a size protest. Whether an 8(a) mentor-protg joint venture agreement complies with § 124.513 and whether the agreement should be approved are matters solely within the discretion of the Office of Business Development. The Area Office cannot review those determinations. Therefore, the size determination at issue is based upon a clear error of law because the Area Office should not have examined Appellant's compliance with § 124.513.” Regarding whether the joint venture agreement was approved prior to award, OHA finds “that a contract cannot be considered awarded where source selection is ongoing and performance has not yet begun. Accordingly, the approval of Appellant's joint venture agreement was timely because it occurred before final award was made on September 19.”
IN THE MATTER OF: SP TECHNOLOGIES, LLC, APPELLANT, SBA No. SIZ-5319 January 20, 2012. Appellant appeals the SBA Area Office’s determination that it was other than small because of an identity of interest through a family relationship. Ms. Damani is appellant’s CEO and sole shareholder. Her husband, Mr. Damani is a minority shareholder in Technology Ventures, LLC (TVL). Mr. Damani had previously been a shareholder of appellant but transferred his entire interest to his wife in January 2009. Appellant did significant business with TVL in the past, but no longer does so. OHA reverses the Area Office determination concluding “Further, by Mr. Damani’s divesting himself of his stock in Appellant, and Appellant’s ending its business relationship with TVL, the Damanis created a clear fracture between their business interests. The Area Office clearly erred in considering Mr. Damani’s past ownership in Appellant as a factor supporting a lack of clear fracture, because Mr. Damani no longer owned any interest in Appellant at the time of its application, the date for determining its size. 13 C.F.R. § 121.404(b). Accordingly, Mr. Damani’s past interest in Appellant was no longer relevant, as Appellant’s size must be determined as of the date set by the regulation. Size Appeal of Innovative Construction & Management Services, LLC, SBA No. SIZ-5202, at 7-8 (2011).”
SIZE APPEALS OF: EXCALIBUR LAUNDRIES, INC., APPELLANT, RE: MARTIN EDWARDS & ASSOCIATES, INC., SBA No. SIZ-5317, January 12, 2012. Appellant argues that the Area Office did not properly consider the affiliations of Martin Edwards Associates(MEA). OHA denies the appeal and affirms finding of the Area Office that Martin Edwards was an eligible small business. Regarding a timeliness issue OHA notes “Because Appellant first raised the issue of MEA’s potential affiliation with TMB and/or Colleton after the protest deadline, the allegation was untimely, and it was within the Area Office’s discretion whether to investigate the claim. Here, there is evidence that the Area Office did explore the possibility of affiliation between those entities. The size determination does not conclusively address the matter, but any error is harmless, as the Area Office is not required to review or investigate untimely allegations.”
SIZE APPEAL OF: RIO VISTA MANAGEMENT, LLC, APPELLANT, SBA No. SIZ-5316, January 11, 2012. In a rather complicated case OHA sustains the appeal finding that the Area Office wrongly found that appellant was other than small as the size determination was based upon clear and material errors. OHA discusses the following issues: Date to Determine Size; Mentor-Protégé Agreement; Identity of Interest; Newly Organized Concern Rule; and Totality of the Circumstances.
SIZE APPEAL OF: THE ASSOCIATED CONSTRUCTION COMPANY, APPELLANT SBA No. SIZ-5314, December 28, 2011. OHA affirms the Area Office decision that appellant is other than small. OHA rejects the argument that interdivision labor charges should be excluded from the size determination because the field labor division is an affiliate. OHA notes that the field labor division does not meet the requirement of the SBA regs that an affiliate be a separate legal entity. OHA also rejects the argument that Area Office should not have relied on appellant’s tax returns as those returns were in error.
SIZE APPEAL OF: TPG Consulting, LLC, SBA No. SIZ~5306, December 13, 2011. Appellant appeals the decision of the SBA Area Office that it was economically dependent upon its largest customer, Information Systems Division of Toyota Motor Sales, USA, Inc. The Area Office relied on FAISON OFFICE PRODUCTS, LLC, APPELLANT, SBA No. SIZ-4834, 2007, January 26, 2007 in concluding “that when one firm relies on a second firm for 70% or more of its revenue, the first firm is economically dependent upon the second firm.” 13 C.F.R. §§ 121.103(f). OHA denies the appeal affirming the reasoning that a customer relationship of this magnitude is enough to determine economic dependency. [13 CFR 121.103(a) sets out the General Principles of Affiliation. “(1) Concerns and entities are affiliates of each other when one controls or has the power to control the other, .... It does not matter whether control is exercised, so long as the power to control exists.” There is no discussion of the control issue in this decision. Nor is there the circumstance as in Faison where the large firm spoke of its “strategic alliance” with appellant there. - jaw]
SIZE APPEAL:IN THE MATTER OF: GARCO CONSTRUCTION, INC., APPELLANT RE: THE ROSS GROUP CONSTRUCTION CORP. SBA No. SIZ-5308, December 09, 2011. Appellant appeals the Area Office’s dismissal of its size appeal as untimely. Appellant argues that it had no knowledge of the basis of the protest until it received a debriefing. OHA denies the appeal noting that “A debriefing does not stay the time for filing a protest.” OHA also notes that the protest was untimely even if the date of the debriefing triggered the five day period.
SIZE APPEAL OF: GPA TECHNOLOGIES, INC., APPELLANT SBA No. SIZ-5307, December 07, 2011. Appellant appeals the determination of the Area SBA Office that it was not small because of an identity of interest with SBAR, a firmed owned by the sister of the owner of appellant. OHA reverses the Area Office determination and finds appellant an eligible small business for the subject procurement. Good discussion of the identity of interest and “clear fracture” between the interests regulations and cases.
SIZE APEAL OF: CERES ENVIRONMENTAL SERVICES, INC., SBA No. SIZ-5299, November 08, 2011. Dismissing in part and remanding in part this size appeal. See footnote where Judge Holleman notes that stating that a firm is small in a cover letter to its proposal does not satisfy the self-certification requirement when appellant failed “to check the boxes for the Small Business Program Representations at Clause 52.219-1 and Offeror Representations and Certifications at Clause 52.212-3.”
IN THE MATTER OF: BENETECH, LLC, APPELLANT SBA No. VET-225 Solicitation No. W912WJ-11-R-0005 November 3, 2011. Appellant appeals the finding of the SBA that it is not a service-disabled veteran-owned small business concern (SDVO SBC). The SBA’s AD/GC had found that although the majority shareholder, William Bennett, was a service disabled veteran that it was not shown that he controlled the firm. The AD/GC noted that an eligible SDVO SBC must also be controlled by a service-disabled veteran and that in the case of a limited liability company such as Appellant, the service-disabled veteran must be the managing member of the firm. The AD/GC also noted that SBA generally goes beyond mere formalities to establish that the service-disabled veteran actually exercises control over the firm and that the control requirement has been interpreted to necessitate independent control over all the firm’s decisions. After reviewing the firm’s operating agreement and Louisiana LLC law the OHA denies the appeal finding that “The record supports the determination that William Bennett does not hold Appellant's highest officer position, is not Appellant's managing member, and does not exercise control over all of Appellant's decisions. Consequently, Appellant failed to prove the AD/GC committed any clear error of fact or law in its determination.”
IN THE MATTER OF: MISSION ESSENTIALS, LLC, APPELLANT RE: CLIVEDEN TECHNOLOGY SBA No. VET-222, October 20, 2011. Appeal of the dismissal for lack of specificity of a SDVSOB protest. The Office of Hearings and Appeals vacates the dismissal and remands to SBA’s Acting Director, Office of Government Contracting for a determination of SDVO SBC status of Cliveden Technology. OHA notes that the protest raised a specific issue as to Cliveden’s SDVO SBC status under 13 C.F.R. § 125.15(a)(4), that is, whether it complied with the joint venture regulation at 13 C.F.R. § 125.15(b) and that it was clear error not to address this issue.
SIZE APPEAL OF: EAGLE CONSULTING CORPORATION, PETITIONER SBA No. SIZ-5288, October 06, 2011. Eagle is an applicant of SBA’s 8(a) program. Eagle moves for reconsideration of its appeal upholding the decision of the area office that Eagle was economically dependent upon a large concern, BAE Systems, Inc. (BAE) and, therefore, shares an identity of interest with that firm. OHA denies the motion finding that Eagle ’s “arguments were fully considered and rejected in the prior decision, and Petitioner has identified no compelling grounds for reversal.” OHA rejects the several arguments and notes that because Eagle “relies upon BAE for revenue, its interests are closely aligned with those of BAE, and BAE can, in effect, control Petitioner.”
SIZE APPEAL OF: Spiral Solutions and Technologies, Inc., September 15, 2011. Appellant appeals the decision of the area office which had found it other than small and determined that Appellant violated the “ostensible subcontractor” rule, of 13 C.F.R. § 121.103(h)(4). The Office of Hearings and Appeals(OHA) grants the appeal and reverses the size determination. OHA finds that many of the items in the area office decision were matters of responsibility which are reserved to the Contracting Officer. Regarding the issue of hiring incumbent personnel the opinion notes insofar as “OHA may have previously suggested that the hiring of incumbent non-management personnel is indicative of undue reliance under the ostensible subcontractor rule, such an interpretation plainly is no longer sensible in light of Executive Order 13,495.”[Exec. Order No. 13,495, “Nondisplacement of Qualified Workers Under Service Contracts,” 74 Fed. Reg. 6103 (Feb. 4, 2009)]
SIZE APPEAL OF: COYOL INTERNATIONAL GROUP, APPELLANT, RE: AIRGAS NATIONAL WELDER SUPPLY, INC.. SBA No. SIZ-5261, July 20, 2011. Appellant argues that the awardee is not eligible for award under the solicitation because awardee does not meet the size standard associated with NAICS code 325120. OHA denies the appeal noting that the procurement was unrestricted and that the awardees did not represent itself as small. The OHA further notes that appellant’s “reliance on 13 C.F.R. § 124.504 is misplaced. 13 C.F.R. § 124.504 governs the SBA's ability to accept a procurement for award as an 8(a) BD contract. The contract at issue was not an 8(a) set-aside, and this regulation does not apply here.”
NAICS APPEAL OF: TECHNICA CORPORATION, APPELLANT, SBA No. NAICS-5248, June 20 2011. In a hotly contested appeal of the proper NAICS code and relevant size standard the OHA denies the appeal and finds that the CO’s original determination is correct. The OHA rejects the interim proposal by the CO to include two NAICS codes concluding “The CO’s original designation of NAICS code 541512 was proper, and the assignment of two NAICS codes for the same work is not allowable. Accordingly, this appeal is DENIED. NAICS code 541512 alone applies to the GSM-ETI solicitation. FAR 19.303(c)(5); Eagle Home Med. Corp., B-402387, March 29, 2010, 2010 CPD 82.”
SIZE APPEAL OF: MALOUF CONSTRUCTION, LLC, APPELLANT, SBA No. SIZ-5250, June 16, 2011. Appellant argues that payments of the Mississippi Material Purchase Certificate (MPC) tax should have been excluded its annual average receipts. Appellant argues that “the MPC tax constitutes a tax ‘collected for and remitted to a taxing authority’ within the meaning of 13 C.F.R. § 121.104(a).” The OHA denies the appeal noting “There is no suggestion in either the statute or the Mississippi Department of Revenue’s guidance that the tax is necessarily passed on to the prime contractor’s customers.”
NAICS APPEAL OF: NEXONE, APPELLANT SBA No. NAICS-5233, May 16, 2011. Appellant challenges the NAICS code in an Air Force presolicitation notice published on FedBizOpps. The appeal is dismissed an untimely. The opinion notes “OHA has held that publication of a presolicitation notice does not constitute a NAICS code designation within the meaning of the jurisdictional provision of 13 C.F.R. § 134.102(k) or the timeliness requirement of 13 C.F.R. § 134.304(b) and, therefore, an appeal of a presolicitation notice must be dismissed as premature.”
In the Matter of MEDS
Trends, Inc., SBA Vet No. 198, July 26, 2010. SDVO status case. Appellant
appeals the decision of SBA’s Director of Government Contracting(D/GC)
that sustained a protest and concluded that appellant’s Mr. Spivey does
not control Appellant. The Office of Hearing and Appeals reverses the decision
and characterizes the issues as: “May the D/GC disregard a signed
‘Declaration’ provided in response to a protest of SDVO status
that is not executed under ‘penalty of perjury’?”;
“Can an individual upon whom 8(a) eligibility is based, also qualify as the controlling principal of an SDVO SBC?;” and
“Did the Small Business Administration’s Director for Government Contracting make a clear error of fact or law in concluding Appellant’s management and day-to-day operations are not controlled by a Service-Disabled Veteran?” Finding for appellant on all issues, Administrative Judge Pender notes “The Record before the D/GC included a detailed "Declaration" executed by Mr. Spivey. While not sworn to under penalty of perjury, I find Mr. Spivey’s ‘Declaration’ is inherently reliable, for Mr. Spivey is still subject to prosecution under 15 U.S. C. § 645 and 18 U.S.C. § 100l in the event this document is found to contain any false utterances of material fact. I also specifically find that there is no evidence in the Record before the D/GC capable of rebutting the contents of Mr. Spivey’s Declaration. Hence, despite all of the arguments before me, almost all of which are irrelevant, I find the only thing that matters in this appeal is whether Mr. Spivey’s Declaration establishes he controlled Appellant’s daily operations and long-term decision making as of December 11,2009. Since Mr. Spivey’s Declaration establishes he did indeed control Appellant’s daily operations and long-term decision making as of December 11, 2009 the D/GC should have found Mr. Spivey controls Appellant. Thus. I must agree with Appellant and conclude the D/GC ignored Mr. Spivey’s Declaration.”
SIZE APPEAL OF: MOLTER CORPORATION, APPELLANT RE: SCOTT ALLIANCE, INC., A JOINT VENTURE, SBA No. SIZ-5107, January 5, 2010. Appeal of dismissal of a protest as untimely is dismissed as appeal was untimely.
SIZE APPEAL OF: ALUTIIQ INTERNATIONAL SOLUTIONS, LLC, APPELLANT, SBA No. SIZ-5098, December 10, 2009. Ostensible subcontractor issue. The OHA had previously vacated the Area Office’s ostensible subcontractor decision because of lack of notice that it was considering that issue. On remand the Area Office issued a second adverse decision finding that the relationship between appellant and its subcontractor IAP violated the ostensible subscontractor rule, which was again appealed. The OHA now finds clear error and reverses and vacates the AO’s second decision noting that “The Area Office failed to properly analyze all aspects of the relationship between IAP and Appellant. Its conclusions that IAP will perform the primary and vital contract requirements and that Appellant would be unduly reliant upon IAP in performing this contract were based upon clear errors of fact and law.”
SIZE APPEAL OF: C.E. GARBUTT CONSTRUCTION COMPANY, APPELLANT SBA No. SIZ-5083, November 02, 2009. The appeal that the size determination based on the ostensible subcontractor rule was erroneous is denied. Administrative Pender after noting that ostensible subcontract case are very fact dependent finds “Accordingly, I find it significant that: (1) Only Christman has an office in Grand Rapids and familiarity with qualified subcontractors; (2) Appellant did not attend the pre-bid walk-thru or request plans and specifications whereas Christman did; (3) Appellant's work experience as a prime is concentrated in Georgia; (4) Christman will perform the role of the on-site superintendent in Grand Rapids and share senior project management duties with Appellant; (5) Christman agreed to indemnify the Surety for the statutorily required (40 U.S.C. §§ 3131 to 3134) performance and payment bonds (Facts 6, 7, and 10.c., e., f., g.); and (6) Christman's average annual revenues exceed the $33.5 million size standard applicable to the IFB by many times and it has accomplished construction projects for dollar amounts much larger than Appellant's bid.”
SIZE APPEAL OF: ALUTIIQ INTERNATIONAL SOLUTIONS, LLC, APPELLANT SBA No. SIZ-5069, September 22, 2009. The Office of Hearing and Appeals vacates and remands the size determination of the area office. OHA notes that the record “contains no evidence the Area Office informed Appellant it was considering a violation of the ostensible subcontractor rule .... Instead, the Area Office requested information from Appellant without explaining why it wanted this information. Accordingly, the Area Office committed clear error in denying Appellant due process granted it by 13 C.F.R. § 121.1007(b) and (c).”
IN THE MATTER OF: DooleyMack Government Contracting, LLC, Appellant, SBA No. VET-IS9, September 11, 2009. SDVOSBC eligibility case. Appellant appeals the decision by the Acting Director of Government Contracting (AD/GC) that appellant was unable to demonstrate that a service-disabled veteran controls Appellant as mandated by 13 C.F.R. § 125.10. The Office of Hearings and appeals grants the appeal, reverses and vacates the decision by the AD/GC. As noted by appellant’s counsel and list member Cy Phillips, the decision makes makes an important distinction between “influence” and “control.” The decision notes “Section 125.10 requires an SDVO SBC’s management and daily business operations to be controlled by a service-disabled veteran. Control is defined as both the long-term decision making and the day-to-day management and administration of the business operations. 13 C.F.R. § 125.1O(a). Influence on business operations or managerial decisions does not amount to control. A prior work relationship, a landlord, a lease, a financial supporter, and a business support agreement may influence managerial decisions, in fact, as a minority member of Appellant DooleyMack Constructors, LLC, has a right to provide recommendations, but there is nothing in the record to demonstrate these facts amount to control under SBA’s SDVO SBC regulations.”
IN THE MATTER OF: Savant Services Corporation, SBA No.
VET-154, August 06, 2009. Appellant appeals the dismissal of its protest that
the award of a Service-Disabled Veteran-Owned Small Business Concerns
set-aside by DHS was improper because the awardee was not registered on the
Department of Veterans Affairs (VA) website for SDVO SBCs. In denying the
appeal, OHA notes “The VetBiz list is not, and is not meant to be, an
exhaustive list of SDVO SBCs. While being present on the VA's website register
is evidence that a firm is an eligible SDVO SBC, its absence from the list is
no evidence that it is ineligible, merely that it has registered on this
particular list. Therefore, Appellant's being unable to locate Teracore on the
list is not evidence that the firm is ineligible.
To find that Appellant's protest was sufficiently specific, based merely upon an allegation that Teracore was not registered on VetBiz, would be to in effect impose a new requirement not enumerated in the regulation, There is no authority to support this.”
SIZE APPEAL OF: EA Engineering, Science, and Technology,
Inc, SBA No. SIZ-4973, July 14, 2008. The OHA reversed a size
determination issued by an SBA Area Office, which found Appellant (EA
Engineering, Science, and Technology, Inc.) to be other than small based on
its alleged affiliation with a large business (Louis Berger Group, Inc.). The
Area Office's finding of affiliation was based largely on two facts: (i) the
large business owns 49.5% of the small business' stock; and (ii) the
Shareholder Agreement includes a "supermajority" provision that gives the
large business the power to block certain transactions that are outside the
ordinary course of business (i.e., amending the Charter or Bylaws, issuing
additional shares of stock, or entering into a new line of business). The
evidence otherwise suggested that the large business was a passive investor
and could not control the small business' day-to-day operations.
The OHA reversed the Area Office on all points. Most noteworthy is the finding that the "supermajority" provisions were crafted to protect the large business' investment and not to interfere with or control the company's daily operations. Thus, the OHA found that limited supermajority provisions of this type do not create the kind of "negative control" that would support a finding of affiliation. This is new law, as it represents the SBA's first express approval of supermajority provisions in this context.[synopsis by counsel for appellant.]
SIZE APPEAL OF: Ross Aviation, Inc. Appellant RE: USA Jet Airlines, Inc,, SIZ-4840, Docket No. SIZ-2006-10-10-58, March 07, 2007. Judge Pender overrules Spectrum, Size Appeal of Spectrum Landscape Services, Inc., SBA No. SIZ-4313 (1998), and declares that “Apart from contract-specific issues (e.g., ostensible subcontractor and non-manufacturer rule), OHA will no longer dismiss automatically an unsuccessful offeror’s appeal as moot after contract award. Instead, OHA will promote the integrity of the procurement process (reflected in the Small Business Act and SBA’s size, size protest, size determination, and size appeal regulations) by not dismissing an appeal as moot simply because of a contracting officer’s representation that he/she intends not to disturb award of the contract (including their intent to award options).”
FAISON OFFICE PRODUCTS, LLC, APPELLANT, SBA No. SIZ-4834, 2007, January 26, 2007. SBA affirms the decision that appellant was other than small for the following reasons-“a. Appellant is an other than small concern because it is economically dependent upon and thus has an identity of interest with Corporate Express; b. The relationship between Appellant and Corporate Express for the work required by the RFP constitutes a violation of the ostensible subcontractor rule; and c. Appellant is affiliated with Corporate Express under the totality of the circumstances.” Good discussion of those issues.
HELICOPTERS, INC. AND GCH SERVICES, LLC. D/B/A GOLD COAST HELICOPTERS,
APPELLANTS, SBA No. SIZ-4833, 2007, January 25, 2007..
DIGEST: An issue which an appellant has raised in its protest but has failed to raise in its appeal has been abandoned, and need not be considered in the adjudication of the size appeal.
This Office will not require an Appellant to explicitly and affirmatively abandon an issue on appeal that it raised in its protest in order to find unequivocal proof of abandonment. Rather, the failure to mention or refer to the issue in the appeal and the failure to attach or incorporate by reference the original protest is enough to constitute unequivocal proof of abandonment of the issue.
CYTEL SOFTWARE, INC.,
APPELLANT, SIZ-2006-10-12-60, November 20, 2006.
DIGEST: A large concern which holds a 44.07% block of stock in a challenged concern, which is large as compared to the next closest block of 24.75%, will be found to have the power to control the challenged concern, making the challenged concern ineligible for an SBIR award.
A large concern which has the power to deadlock the challenged firm’s Board of Directors through their power to appoint or approve four of the seven members of the Board, has the power to exert negative control over the challenged firm, and the firms are affiliated because of that control, making the challenged concern ineligible for an SBIR award.
OPTI-SERVE LENS LABORATORY, APPELLANT, NAICS-2006-11-08-66, November 16, 2006. A NAICS appeal was filed with the SBA has the result of a presolicitation notice in FedBizOpps. The appeal was dismissed for lack of jurisdiction because as the Administrative Judge stated-“Absent a formally issued solicitation, this appeal is premature, and this Office has no jurisdiction to consider it.”
THE ANALYSIS GROUP, L.L.C., APPELLANT, SBA No. SIZ-4814, October 17, 2006. DIGEST: 1.) A size appeal is not moot when the contracting officer has stopped performance on an awarded contract., 2) Where none of the proposed core personnel on a contract are employees of the challenged firm, and five of the six are current employees of the incumbent ostensible subcontractor, and there is no identification of the discrete tasks that each firm will perform, the challenged firm is unduly reliant upon its ostensible subcontractor for the primary and vital requirements of the contract.
DEPARTMENT OF THE AIR FORCE, APPELLANT RE: LB&B
ASSOCIATES, INC., SIZ-4720, August 2, 2005.
DIGEST: When a party files a size protest before the contracting officer notifies offerors of the identity of the apparent successful offeror, the protest is premature, and this Office must vacate any size determination issued in response to it.
SIZE Appeal Of: Systems
Resource Management Inc., SIZ-4640, June 7, 2004.
DIGEST: A procuring agency which issues an Indefinite Delivery/Indefinite Quantity Multiple Award Contract, awards the contract to four vendors who self-certify at the time the contract was issued, and subsequently the procuring agency issues a Task Order under the original contract, a timely protest must be filed at the time of the original award, not when the subsequent Task Order is awarded.
A business that is small at the time of self-certification under an Indefinite Delivery/Indefinite Quantity Multiple Award Contract remains eligible for award for a Task Order issued during the period of the contract, even though it has become other than small in the interim.
Federal Prison Industries a/k/a UNICOR, SBA Region 2, Case No. 2-2005-23 & 43, February 03, 2005. A regional office of the SBA determines that Federal Prison Industries is other than a small business concern for the procurement of services.
SIZE Appeal Of: Advanced
Management Technology, Inc., SIZ-4638, June 1, 2004.
DIGEST: A procuring agency which issues a Request for Quotations (RFQ) for award of an order against the successful offeror’s Federal Supply Schedule (FSS) contract, which RFQ explicitly states in the RFQ or the cover letter that the procurement is limited to "small business," offerors, has elected to conduct a procurement limited to small businesses.
Where a procuring agency issues a RFQ for award of an order against the successful offeror’s FSS contract, and where the RFQ or the cover letter explicitly states that the procurement is limited to "small business," any offeror that had certified that it is small when it submitted its original offer on the underlying FSS contract, renews its certification that it is small by submitting its response to the RFQ, even if it has not explicitly done so.
In a procurement restricted to small businesses on an FSS contract, an offeror’s size is determined as of the date it submits its quote in response to the RFQ.
SIGNAL CORPORATION v. KEANE FEDERAL SYSTEMS, INC. Supreme Court of Virginia, Record No. 020339. Jan. 10, 2003. John Tolle, attorney for Keane, offers this interesting arbitration decision and the affirmance by the Virginia Supreme Court. The arbitration decision awarded $7 million plus interest to Keane Federal Systems in a dispute between the prime and subcontractor under a contract with the Federal Highway Administration.
NAICS Appeal of SCI Consulting,SBA Office
of hearing and Appeals, No. NAICS-4488, June 12, 2002. (603 KB PDF file)
For a North American Industrial Classification (NAICS) code appeal to be justicable,this Office must have jurisdiction over its subject matter and the Appellant must have standing to file an appal with this office.
[Note: This case arose from a DOE RFQ to selected FSS contractors where the solicitation stated that only small business concerns would be eligible for award. Appellant and SBA, who had intervened, argued that the action was a small business set-aside that required the designation of a NAICS code or size standard. SBA’s Office of Hearings and Appeals disagreed.]
SIZE APPEALS OF: SETA Corporation,
FEMA, SBA Office of hearing and Appeals, No. 4477, March 01, 2002.
1. The Small Business Administration’s regulations governing the 8(a) program do not apply to a size determination issued in connection with a procurement that is not an 8(a) procurement.
2. A Request for Quotations issued under a Federal Supply Schedule or Multiple Award Schedule contract, with the intention of entering into a Blanket Purchase Agreement, which the procuring agency designates as a small business set-aside, is a new small business set-aside procurement.
3. In a small business set-aside procurement issued as Request for Quotations under a Federal Supply Schedule or Multiple Award Schedule contract, the size of a challenged firm is determined as of the date of its submission of its certification as an eligible small business, with its price quotation in response to the Request for Quotations.