Justia Government & Administrative Law Opinion Summaries

Securiforce entered into a requirements contract with the government to deliver fuel to eight sites in Iraq. The government terminated the contract for convenience with respect to two sites because Securiforce intended to supply fuel from Kuwait, reasoning that delivery to those sites would violate the Trade Agreements Act, 19 U.S.C. 2501, and that obtaining a waiver would take too long. Weeks later, the government ordered small deliveries to two sites, to occur by October 24. Securiforce indicated that it could not deliver until November. The government notified Securiforce that it should offer justifiable excuses or risk termination. Securiforce responded that the late deliveries were excused by improper termination for convenience, failure to provide required security escorts, small orders, and other alleged irregularities. The government terminated the contract for default. Securiforce filed suit (Tucker Act, 28 U.S.C. 1491; Contract Disputes Act, 41 U.S.C. 7101-09). The Claims Court found that it had jurisdiction to review both terminations; that the Contracting Officer abused her discretion in partially terminating the contract for convenience; and that the termination for default was proper. The Federal Circuit affirmed in part. The court lacked jurisdiction over the termination for convenience; a contractor’s request for a declaratory judgment that the government materially breached a contract violates the rule that courts will not grant equitable relief when money damages are adequate. The government did not breach the contract by terminating for convenience or with respect to providing security. View "Securiforce International America, LLC v. United States" on Justia Law

Cincinnati ordinances provide guidelines for selecting the “lowest and best bidder” on Department of Sewers projects to “ensure efficient use of taxpayer dollars, minimize waste, and promote worker safety and fair treatment of workers” and for bids for “Greater Cincinnati Water Works and the stormwater management utility division,” to employ skilled contractors, committed to the city’s “safety, quality, time, and budgetary concerns.” Allied alleged that the Employee Retirement Income Security Act (ERISA) preempted: a requirement that the bidder certify whether it contributes to a health care plan for employees working on the project as part of the employee’s regular compensation; a requirement that the bidder similarly certify whether it contributes to an employee pension or retirement program; and imposition of an apprenticeship standard. Allied asserts that the only apprenticeship program that meets that requirement is the Union’s apprenticeship program, which is not available to non-Union contractors. The ordinances also require the winning contractor to pay $.10 per hour per worker into a city-managed pre-apprenticeship training fund, not to be taken from fringe benefits. The district court granted Allied summary judgment. The Sixth Circuit reversed. Where a state or municipality acts as a proprietor rather than a regulator, it is not subject to ERISA preemption. The city was a market participant here: the benefit-certification requirements and the apprenticeship requirements reflect its interests in the efficient procurement of goods and services. View "Allied Construction Industries v. City of Cincinnati" on Justia Law

In 1996, the Federal Communications Commission awarded spectrum licenses to Alpine, for use in the provision of wireless telecommunications services. Alpine bid approximately $8.9 million for one license and $17.3 million for the other. As a small business, Alpine was eligible to pay in installments over the 10-year term of the licenses. Alpine’s failure to make required payments in 2002 triggered automatic cancellation under FCC regulations. In addition to taking other steps in response, Alpine sought relief from the FCC and, on review under the Communications Act, 47 U.S.C. 402(b)(5), from the District of Columbia Circuit. In 2016, Alpine filed this action against the United States under the Tucker Act, 28 U.S.C. 1491(a)(1), arguing that the FCC breached contractual obligations in canceling the licenses and that the cancellation was a taking for which Alpine was entitled to just compensation. The Federal Circuit affirmed dismissal by the Claims Court for lack of jurisdiction under the Tucker Act. The Communications Act provides a comprehensive statutory scheme through which Alpine could raise its contract claims and could challenge the alleged taking and receive a remedy that could have provided just compensation in this case, foreclosing jurisdiction under the Tucker Act. View "Alpine PCS, Inc. v. United States" on Justia Law

In this redevelopment case, the city of Anaheim, acting in its capacity as successor to the former Anaheim Redevelopment Agency, sought approval from the California Department of Finance (the department) to obtain money from the Redevelopment Property Tax Trust Fund (the fund or, the RPTTF) to pay back the city of Anaheim for payments the City of Anaheim made to a construction company to complete certain real property improvements that the former Anaheim Redevelopment Agency was obligated to provide on a particular redevelopment project (the packing district project). The city and the city-as-successor characterized the transaction between themselves as a loan, but the department ultimately denied the claim for money from the fund because the city did not disburse the loan proceeds to the city-as-successor, but instead paid the construction company directly, and because the city-as-successor did not obtain prior approval for the “loan” agreement with the city from the oversight board. Around the same time, the city-as-successor sought approval from the department to obtain money from the fund to make payments to the Anaheim Housing Authority (the authority) under a cooperation agreement between the agency and the authority, the purpose of which was to provide funding for the Avon/Dakota revitalization project, which was being carried out by a private developer -- The Related Companies of California, LLC (Related) -- pursuant to a contract with the authority. The department denied that claim because the 2011 law that dissolved the former redevelopment agencies rendered agreements between a former redevelopment agency and the city that created that agency (or, a closely affiliated entity like the authority) unenforceable. The city, the city-as-successor, and the authority sought mandamus, declaratory, and injunctive relief on both issues in the superior court, but the trial court denied the writ petition and dismissed the complaint for declaratory and injunctive relief. The Court of Appeal reversed, finding: (1) with respect to the packing district project, the fact that the city contracted directly with the construction company to construct the improvements the agency was legally obligated to provide at that project, and the fact that the city paid the company directly for its work, did not mean the agreement between the city and the city-as-successor with respect to the transaction was not a loan, as the department and the trial court concluded, also, the fact that the city-as-successor did not obtain prior approval from the oversight board to enter into a loan agreement with the city did not give the department a valid reason to deny the city as successor’s request for money from the fund to pay off the loan; and (2) as for the money from the fund claimed for the Avon/Dakota revitalization project, enforcing the provision of the dissolution law that renders unenforceable an agreement between a former redevelopment agency and the city that created it (or an affiliated entity like the authority) would, in this case, unconstitutionally impair Related’s contractual rights under its agreement with the authority. View "City of Anaheim v. Cohen" on Justia Law

In a case arising out of the “Great Dissolution” of redevelopment agencies (RDAs) in California the City of Grass Valley (City) appealed a judgment denying in part its petition for writ of mandate. The City, which was also the successor agency for its former RDA, sought to compel the Department of Finance (Department) to recognize the enforceability of certain agreements involving that RDA. The Department cross-appealed a part of the judgment commanding it to consider whether certain expenditures fell under a “goods and services” provision, claiming the City’s failure to raise this issue in an administrative forum precludes the relief granted by the trial court. The Court of Appeal agreed with the Department on that point and reversed with directions to recall the writ granting the City partial relief. However, based on the retrospective application of postjudgment legislation, the Court directed the trial court to issue a new writ commanding the Department to consider the City’s claim regarding a highway project agreement. The Court otherwise affirmed the judgment. View "City of Grass Valley v. Cohen" on Justia Law

Caremark is a pharmacy benefit manager. In 2006, Caremark employees identified approximately 4,500 Prescription Drug Events (PPDEs) under Medicare Part D that had been authorized for payment by Caremark, but not yet submitted to the Centers for Medicare and Medicaid Services (CMS), due to the lack of a compatible Prescriber ID. Caremark then used a dummy Prescriber ID for those PDEs and programmed that dummy Prescriber ID into its system. Thereafter, when any claim with a missing or incorrectly formatted Prescriber ID was processed, the system would default to the dummy, which allowed Caremark to submit for payment PDEs without trigging CMS error codes. Spay, a pharmacy auditor, discovered the use of “dummy” Prescriber IDs while auditing a Caremark client. That client dropped all issues identified in the audit, collected no recovery from Caremark, and did not pay Spay. Spay filed a qui tam lawsuit, asserting violations of the False Claims Act because the inaccurate PDEs were used to support reimbursement requests. The government declined to intervene. The court granted Caremark summary judgment, finding that Caremark had established sufficient government knowledge to preclude finding the required element of scienter, noting that several courts have adopted the government knowledge inference doctrine. The Third Circuit affirmed, declining to adopt that doctrine but stating that the misrepresentations were not material to the government’s decision to pay the underlying claims. View "Spay v. CVS Caremark Corp" on Justia Law

TRICARE provides current and former members of the military and their dependents' medical and dental care. Hospitals that provide TRICARE services are reimbursed under Department of Defense (DoD) guidelines. TRICARE previously did not require, DoD to use Medicare reimbursement rules. A 2001 amendment, 10 U.S.C. 1079(j)(2), required TRICARE to use those rules to the extent practicable. DoD regulations noted the complexities of the transition process and the lack of comparable cost report data and stated “it is not practicable” to “adopt Medicare OPPS for hospital outpatient services at this time.” A study, conducted after hospitals complained, determined that DoD underpaid for outpatient radiology but correctly reimbursed other outpatient services. TRICARE created a process for review of radiology payments. Each plaintiff-hospital requested a discretionary payment, which required them to release “all claims . . . known or unknown” related to TRICARE payments. Several refused to sign the release and did not receive any payments. Although it discovered calculation errors with respect to hospitals represented by counsel, TRICARE did not recalculate payments for any hospitals that did not contest their discretionary payment offer. The Claims Court dismissed the hospitals’ suit. The Federal Circuit reversed in part, finding that they may bring a claim for breach of contract but may not bring money-mandating claims under 10 U.S.C. 1079(j)(2) and 32 C.F.R. 199.7(h)(2) because the government’s interpretation of the statute was reasonable. View "Ingham Regional Medical Center v. United States" on Justia Law

E. Kendrick Smith, an Atlanta lawyer, brought this action to compel a corporation, Northside Hospital, Inc. and its parent company, Northside Health Services, Inc., (collectively, “Northside”), to provide him with access to certain documents in response to his request under the Georgia Open Records Act (“the Act”). A government agency owns and operates a large and complex hospital as part of its mission to provide healthcare throughout Fulton County. The agency leased its assets (including the hospital) to the Northside for a 40-year term at a relatively minimal rent. All governmental powers were delegated to Northside with respect to running the hospital and other assets. Northside’s organizing documents reflected that its purpose aligned with the agency’s: to provide healthcare for the benefit of the public. Thirty years into the arrangement, the corporation became “massive,” and owned other assets in surrounding counties. In resisting Smith’s request for records, Northside argued it no didn’t really do anything on behalf of the agency (in part because the now nearly-nonexistent agency has no idea what the corporation is doing), and thus the corporation’s records of a series of healthcare-related acquisitions weren’t subject to public inspection. The Georgia Supreme Court surmised that if the corporation’s aggressive position were wholly correct, it would cast serious doubt on the legality of the whole arrangement between Northside and the agency. Smith argued everything Northside did was for the agency’s benefit and thus all of its records were public. The Supreme Court concluded both were wrong: Northside’s operation of the hospital and other leased facilities was a service it performed on behalf of the agency, so records related to that operation were public records. But whether the acquisition-related records sought here were also public records depended on how closely related the acquisition was to the operation of the leased facilities, a factual question for the trial court to determine on remand. View "Smith v. Northside Hospital, Inc." on Justia Law

Abilify is approved to treat schizophrenia, Bipolar Disorder, major depressive disorder and irritability associated with autism. There are no disapproved treatments for elderly patients, but the FDA has included a warning since 2007 that Abilify is associated with increased mortality in elderly patients with dementia-related psychosis. Relators, former BMS employees, alleged in a qui tam suit that BMS and Otsuka engaged in a scheme to encourage providers to prescribe Abilify for unapproved (off-label) uses and improperly induced providers to prescribe Abilify in violation of the Anti-Kickback Statute. Nearly identical allegations were leveled against the companies years earlier. In 2007-2008, the companies each entered into an Agreement as part of a settlement of qui tam actions concerning improper promotion of Abilify. Relators allege that, despite those agreements, the companies continued to promote Abilify off-label and offer kickbacks, causing claims for reimbursement for the drug to be submitted to the government, in violation of the False Claims Act (FCA), 31 U.S.C. 3729. The district court dismissed in part. The Sixth Circuit affirmed; the complaint did not satisfy Rule 9(b)’s requirement that relators adequately allege the entire chain to fairly show defendants caused false claims to be filed. As sales representatives, relators did not have personal knowledge of provider’s billing practices.The alleged plan was to increase Abilify prescriptions through improper promotion, which does not amount to conspiracy to violate the FCA. View "Ibanez v. Bristol-Myers Squibb Co." on Justia Law

Robbin Taylor filed a statement of charges seeking recall of Black Diamond City council member Patricia Pepper. In November 2015, Pepper defeated opponent Ron Taylor (husband of Robbin Taylor) in an election for Black Diamond City Council in King County. Beginning in January 2016, a chasm developed with Mayor Carol Benson and council members Tamie Deady and Janie Edelman on one side, and a majority of the city council - Pepper, Erika Morgan, and Brian Weber - on the other. After Pepper, Morgan, and Weber passed R-1069, they voted to fire city attorney Carol Morris. Upon passing R-1069, Pepper and a majority of the council made decisions to alter contracts regarding the Master Development Review Team (MDRT) contracts for two large development projects planned in Black Diamond that had been approved by Mayor Benson and former council members. Mayor Benson hired emergency interim city attorney Yvonne Ward. Ward submitted two memoranda to the council, concluding that R-1069 violated the Black Diamond Municipal Code (BDMC) and the Open Public Meetings Act (OPMA), chapter 42.30 RCW. The council had also received advice from prior city attorney Morris and from the city's risk management pool that the resolution could create liability for the city if council members violated the OPMA. Ultimately, the council's decision to enact R-1069 and revisit the MDRT contracts, among other actions, led to a lawsuit: MDRT contractor CCD Black Diamond Partners LLC (Oakpointe) filed suit against the city and council members Pepper, Morgan, and Weber, alleging violations of the OPMA, which has led to litigation and costs for the city. Pepper was a member of council standing committees; allegations were made that Pepper, Morgan, and Weber held secret council and standing committee meetings conducting city business in violation of the OPMA. After approximately a year and a half of tensions, Taylor filed a statement of charges with the King County Elections Division, requesting Pepper's recall. The superior court ruled that four of those charges were factually and legally sufficient to support a recall petition. Pepper appealed. After review, the Washington Supreme Court affirmed the trial court's decision with regard to the first three charges, but reversed with regard to the fourth charge. View "In re Recall of Pepper" on Justia Law