Justia U.S. 5th Circuit Court of Appeals Opinion SummariesArticles Posted in Government Contracts
Abbott v. BP Exploration & Production
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
United States v. Kellogg Brown & Root, Inc.
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
Zeringue v. Allis-Chalmers Corp.
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
Simoneaux v. E. I. DuPont de Nemours & Co.
Relator-appellee Jeffrey Simoneaux brought a qui tam action against his former employer, E.I. duPont de Nemours & Company ("duPont"), under the False Claims Act ("FCA"). He contended that duPont had violated the reverse-false-claims provision by concealing an obligation to pay the United States a penalty arising from alleged violations of the Toxic Sub-stances Control Act ("TSCA"). He also averred that duPont had retaliated against him in violation of the FCA. DuPont unsuccessfully moved for summary judgment on both claims, and the Fifth Circuit permitted an interlocutory appeal. Because duPont had no “obligation” to pay the United States, the Court reversed and remanded the denial of summary judgment on the reverse false claim. With respect to the retaliation claim, the Court dismissed the appeal for lack of jurisdiction. View "Simoneaux v. E. I. DuPont de Nemours & Co." on Justia Law
New Orleans City v. AMBAC Assurance Corp.
This appeal arose from the City's contract with Ambac to provide municipal bond insurance. The City filed suit against Ambac alleging that Ambac breached an agreement to provide a credit enhancement, that there was error in the principal cause, that Ambac acted in bad faith, and that the City had detrimentally relied on Ambac’s representations and assurances regarding the value of its credit enhancement product. The district court granted Ambac's motion to dismiss. The court concluded that the district court did not err in dismissing the City's breach of contract claim because the district court properly interpreted the Policy and because the City’s argument that it created a written and oral contract with Ambac for credit enhancement is not plausible based on the facts alleged. The court also concluded that any error about what the City was purchasing when it paid Ambac in excess of six million dollars was a unilateral error by the City because of the clear language of the Policy, and any unilateral error by the City about what it was purchasing from Ambac was not reasonable or excusable. Because the City’s proffered error is unreasonable, it does not vitiate consent. Because the City has failed to establish the existence of a larger credit enhancement agreement between it and Ambac, the City’s bad faith claim concerning this purported agreement necessarily fails. Finally, the court affirmed the district court's dismissal of the City's detrimental reliance claim where the City and Ambac are sophisticated parties that engaged in arm’s length negotiations with respect to this bond offering. Accordingly, the court affirmed the judgment. View "New Orleans City v. AMBAC Assurance Corp." on Justia Law
Rigsby v. State Farm Fire & Casualty Co.
Plaintiffs filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., claiming that State Farm submitted false claims to the government for payment on flood policies arising out of damage caused by Hurricane Katrina. On appeal, plaintiffs primarily challenged the district court's discovery ruling and State Farm principally challenged the jury verdict. The court concluded that the district court's denial of plaintiffs' request for additional discovery after the verdict in their favor was an abuse of discretion because it affected plaintiffs' substantial rights and therefore, the court reversed the district court’s decision. However, the court affirmed the district court’s decisions with respect to the seal violations, subject matter jurisdiction, and State Farm’s motion for judgment as a matter of law. The court remanded for further proceedings. View "Rigsby v. State Farm Fire & Casualty Co." on Justia Law
United States v. Bollinger Shipyards, Inc.
The United States filed suit under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., alleging that Bollinger knowingly submitted false statements and false claims for payment to the government in relation to a government contract under which Bollinger was to modify eight vessels owned by the Coast Guard. The district court granted Bollinger's motion to dismiss under Rule 12(b)(6) and the United States appealed. The court concluded that the United States alleged sufficient facts in its complaint to allow a factfinder to infer that Bollinger either knew that their statements were false or had a reckless disregard of their truth or falsity. Accordingly, the court reversed and remanded for further proceedings. View "United States v. Bollinger Shipyards, Inc." on Justia Law
Shupe v. Cisco Systems, Inc., et al.
Relator filed a qui tam action on behalf of the United States alleging that defendant telecommunication companies violated the False Claims Act (FCA), 31 U.S.C. 3729, while bidding for and being awarded contracts to install and operate communications networks for school districts and libraries throughout South Texas. Defendant filed an interlocutory appeal of the denial of a motion to dismiss for failure to state a claim under the FCA. This case decides when the Government "provides any portion of" requested money, as to trigger the protection of the False Claims Act, a statute that shadows every aspect of the administrative state. Because there are no federal funds involved in the program, and USAC is not itself a government entity, the court agreed that the Government does not provide any portion of the requested money under the FCA. Accordingly, the court reversed and remanded for further proceedings.View "Shupe v. Cisco Systems, Inc., et al." on Justia Law
Westbrook Navigator L.L.C., et al v. Navistar, Inc., et al.
These appeals concerned a suit filed under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., and two bankruptcy proceedings. The district court concluded that the bankruptcy trustee had exclusive standing to assert the FCA claims at issue because those claims belonged to the bankruptcy estate. The court agreed with the district court that only the trustee had standing to prosecute the FCA lawsuit; affirmed the district court's dismissal under Rule 12(b)(6); and concluded that the district court did not abuse its discretion in denying the motion for reconsideration. View "Westbrook Navigator L.L.C., et al v. Navistar, Inc., et al." on Justia Law
Energy Mgmt. Servs. v. City of Alexandria
EMS appealed the district court's order denying its motion to remand its suit against the City to the state court from which it was removed. The court concluded that removal was improper because none of the claims in EMS's state court civil action satisfied either the federal question or diversity requirements of original jurisdiction; the district court's prior jurisdiction over the claims asserted in City v. CLECO, which were now dismissed, did not vest the district court with jurisdiction over EMS's claims; regardless of how factually intertwined with EMS's suit, the district court's retention of jurisdiction over the post-settlement matters could not substitute for original jurisdiction for the purpose of supplemental jurisdiction under 28 U.S.C. 1367 or removal under section 1441, given that EMS's claims were not asserted in the same proceeding as the claims in City v. CLECO; and, if Baccus v. Parrish retained any precedential value, it was distinguishable and inapposite in this instance. Accordingly, the court reversed and remanded. View "Energy Mgmt. Servs. v. City of Alexandria" on Justia Law