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

Articles Posted in Government Contracts

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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

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BP built and maintained the Atlantis Platform, a semi-submersible floating oil production facility located in the Gulf of Mexico. Plaintiff Keith Abbott, employed by BP in the Atlantis administrative offices, filed suit under the False Claims Act (FCA), 31 U.S.C. 3730(b)(2), claiming that BP falsely certified compliance with various regulatory requirements. While DOI was investigating Atlantis, Abbott amended his complaint to add Food & Water Watch as a plaintiff and included additional claims for violations of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et seq. On appeal, plaintiffs challenged the district court's grant of summary judgment for BP on all claims. In this case, plaintiffs' FCA claims centered on whether engineers approved the various stages of construction of Atlantis. The court explained that these facts failed to create an issue of fact as to materiality given the particular circumstances in plaintiffs' case. In light of Universal Health Servs., Inc. v. United States ex rel. Escobar, when the DOI decided to allow Atlantis to continue drilling after a substantial investigation into plaintiffs' allegations, that decision represented "strong evidence" that the requirements in those regulations were not material. In regard to plaintiffs' OCSLA claims, the court concluded that plaintiffs lack standing because they failed to plead individualized injuries. Accordingly, the court affirmed the judgment. View "Abbott v. BP Exploration & Production" on Justia Law

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The Government alleged, in this civil enforcement action, that KBR was liable for kickbacks knowingly accepted by two of its employees. On remand, the district court held KBR liable under Section 8706(a)(1) of the Anti-Kickback Act, 41 U.S.C. 8701-07. The court held that the proper test for imputing knowledge under Section 8706(a)(1) is that corporations are liable only for the knowing violations of those employees whose authority, responsibility, or managerial role within the corporation is such that their knowledge is imputable to the corporation. In this case, the district court did not clearly err by finding that Robert Bennett possessed sufficient authority and responsibility to impute his knowledge to KBR. The court also concluded that the district court did not err in holding KBR liable for kickbacks by Robert, nor in determining that the Government's claims related to the relators' qui tam complaint. However, the district court clearly erred in finding that James Bennett's limited authority was sufficient to impute his knowledge to KBR. Accordingly, the court affirmed in part, reversed in part, and remanded. View "United States v. Kellogg Brown & Root, Inc." on Justia Law

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Plaintiff filed suit in state court against Crane and 24 other defendants to recover injuries allegedly caused by exposure to asbestos. After removal to federal district court, the district court remanded to state court. The court concluded that the military specifications and affidavits at issue provide a not-insubstantial and non-frivolous basis upon which Crane may assert government-contractor immunity. The court concluded, under 28 U.S.C. 1442(a)(1), that the facts in the record before it are sufficient to establish that Crane was “acting under” the Navy. In this case, Crane has established the requisite causal nexus between the charged conduct and its official authority. The court explained that Crane’s relationship with Zeringue derives solely from its official authority to provide parts to the Navy, and that official authority relates to Crane’s allegedly improper actions, namely its use of asbestos in those parts. Because Crane has established the right to remove the suit pursuant to section 1442, the court need not determine whether Crane independently established the right to remove Zeringue’s failure to warn claim. Accordingly, the court reversed and remanded. View "Zeringue v. Allis-Chalmers Corp." on Justia Law