Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Articles Posted in Government Contracts
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The Commission alleged that the Army violated the Randolph-Sheppard Act by failing to give priority to blind vendors in the bidding process for a vending facility services contract at an Army base cafeteria. After the arbitration panel found in favor of the Army, the Commission appealed the panel's decision.The Fifth Circuit affirmed the district court's grant of summary judgment in favor of the Commission. The court held that the statutory language is ambiguous; applied the presumption against ineffectiveness; supported a broader interpretation of "operate" in the context in which it is used within the Act; and held that the district court did not err in holding that the Act may apply to Dining Facility Attendant (DFA) contracts generally. In this case, the DFA contract at issue is subject to the Act and the Army violated the Act by not giving the Commission priority in the bidding process. View "Texas Workforce Commission v. United States Department of Education" on Justia Law

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Upon reconsideration of the scope of the revised Federal Officer Removal Statute, the en banc court held that Avondale was entitled to remove this negligence case filed by a former Navy machinist because of his exposure to asbestos while the Navy's ship was being repaired at the Avondale shipyard under a federal contract.The en banc court aligned with its sister circuits and relied on the plain language of the Removal Clarification Act of 2011, holding that, to remove under 28 U.S.C. 1442(a), a defendant must show (1) it has asserted a colorable federal defense, (2) it is a "person" within the meaning of the statute, (3) that has acted pursuant to a federal officer's directions, and (4) the charged conduct is connected or associated with an act pursuant to a federal officer's directions. In this case, the pleadings satisfied the "connection" condition of removal. Accordingly, the en banc court vacated and remanded for further proceedings. View "Latiolais v. Huntington Ingalls, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's grant of summary judgment to the United States in a False Claims Act (FCA) suit alleging that BestCare obtained millions of dollars in reimbursements from Medicare for miles that its technicians never traveled. The court held that the district court did not err in granting the Government's motions for summary judgment where BestCare violated the Medicare statute's limitations on travel reimbursements. Furthermore, the court rejected BestCare's alternative argument that their good-faith reliance on the CMS Manual created a genuine dispute about whether they had the requisite mental state to violate the FCA. Because the court affirmed the $30.6 million award under the FCA, defendant's challenge to the $10.6 million award was moot. Finally, the district court did not err in holding Defendant Maghareh jointly and severally liable, and defendants' claim that the district court should be recused under 28 U.S.C. 455 lacked merit. View "United States ex rel. Drummond v. BestCare Laboratory Services, LLC" on Justia Law

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Mississippi requires that a public board speak and act only through its minutes, and Mississippi courts will not give legal effect to a contract with a public board unless the board's approval of the contract is reflected in its minutes. In this case, the Medical Center filed suit against Horne, alleging accounting malpractice. Horne claimed that the action must fail because there can be no accounting malpractice claim without proof of a professional relationship, and there was no record evidence on the minutes that the Medical Center ever entered into a professional relationship with Horne.The Fifth Circuit affirmed the district court's judgment in favor of Horne, holding that, by virtue of the minutes rule, the Medical Center never formed a contract with Horne to perform the four audits conducted from 2010 to 2013. The court held that the district court correctly concluded that the Medical Center failed to offer any competent evidence that it was in privity with Horne. View "Lefoldt v. Rentfro" on Justia Law

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After a jury found that Allied Corporation was liable under the False Claims Act (FCA) for misrepresentations about its compliance with the Federal Housing Act underwriting guidelines, the jury awarded over $85.6 million in damages and found Defendant Hodge and Allied Capital liable under the FCA for misrepresentation. The jury awarded more damages and also found all three defendants were liable under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).The Fifth Circuit affirmed, holding that the evidence was sufficient to convict defendants. The court rejected defendants' claims of error regarding the admission of expert testimony, and held that the district court did not err by dismissing a juror shortly before the remaining jurors reached their verdict based mainly on the juror's lack of candor and his threatening behavior. View "United States v. Hodge" on Justia Law

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Qui tam relators appealed the district court's dismissal of their False Claims Act (FCA) suit against several hospice organizations owned and operated by Walter Crowder, the president and director of Nurses to Go.The Fifth Circuit considered the materiality factors in Universal Health Services, Inc. v. United States ex rel. Escobar, and held that relators' alleged violations were material. In this case, defendants' alleged fraudulent certifications of compliance with statutory and regulatory requirements violated conditions of payment under 42 U.S.C. 1395(a)(7), and relators' allegations were sufficient to state a claim that the Government would deny payment if it knew of defendants' false certifications. The court reversed and remanded for further proceedings to allow the district court to conduct a Rule 9(b) particularity analysis consistent with United States ex rel. Grubbs v. Kanneganti. View "United States ex rel Lemon v. Nurses To Go, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's holding that it lacked jurisdiction over relator's claims based on the public disclosure bar of the False Claims Act (FCA). Relator filed suit against his employer Northrop Grumman and against Lockheed Martin for making false claims against the government. The court held that it lacked jurisdiction to hear relator's claims because he failed to demonstrate that he was the original source of the Systems Design and Development contract. In this case, the record made clear that relator derived his knowledge about the connection between cost performance and award fees from portions of the contract that were publicly disclosed before he filed his complaint. View "Solomon v. Lockheed Martin Corp." on Justia Law

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The Fifth Circuit reversed and rendered judgment as a matter of law for Trinity, the manufacturers of the ET-Plus guardrail system under an exclusive licensing agreement with Texas A&M University. Relator filed suit under the False Claims Act, alleging that Trinity failed to disclose fabrication changes to the ET-Plus beyond the change from five- to four-inch guide channel. The district court denied Trinity's motion for judgment as a matter of law and entered final judgment for relator and the United States. However, the court held that it need not consider the issue of post-judgment relief under Federal Rule of Civil Procedure 60(b) because Trinity was entitled to judgment as a matter of law on the issue of materiality. In this case, given FHWA's unwavering position that the ET-Plus was and remains eligible for federal reimbursement, Trinity's alleged misstatements were not material to its payment decisions. View "Harman v. Trinity Industries, Inc." on Justia Law

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Relator filed suit under the False Claims Act (FCA), alleging that his former employer, Abbott, violated the FCA by submitting to Medicare claims by medical providers engaged in the off-label use of Abbott's medical stents. The district court dismissed in part and the jury found against relator in part. The Fifth Circuit held that relator failed to allege details of an Anti-Kickback scheme with sufficient particularity; relator's false inducement claim was properly dismissed under the public disclosure bar; the district court did not err in limiting the time frame of the false presentment theory presented to the jury; the court rejected relator's evidentiary challenges; and the district court did not abuse its discretion in rejecting relator's proposed jury instructions. Accordingly, the court affirmed the judgment. View "United States v. Abbott Laboratories" on Justia Law

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KPCC filed suit against KBR, a general contractor supporting the Government's military operations in Iraq, alleging claims for breach of contract, fraud, and promissory estoppel. At issue was a 2010 contract for, inter alia, KBR's leasing, with an option to purchase, a dining facility constructed by KPCC in Iraq. The district court dismissed the complaint, concluding that the political-question doctrine rendered nonjusticiable the contract dispute at issue. Applying de novo review, under the discriminating inquiry required by Baker v. Carr, the court concluded that the claims presented required resolution of contractual disputes for which there existed judicially manageable standards. Therefore, there was no justiciable political question. The court disposed of KBR's remaining claims regarding the act-of-state doctrine and regarding a contractor's defense from its strict execution of a constitutionally authorized government order. Accordingly, the court vacated the district court's judgment and remanded. View "Kuwait Pearls Catering Co. WLL v. Kellogg Brown & Root Services, Inc." on Justia Law