Justia Government & Administrative Law Opinion Summaries

Defendant Sandoz, Inc. appealed a judgment entered on a jury verdict in favor of the State of Alabama. The State alleged at trial that Sandoz, a manufacturer of generic pharmaceuticals, purposely reported inflated pricing information for generic drugs in third-party publications and that the State, using those published prices, overpaid certain reimbursements to providers of prescription drugs made pursuant to the Medicaid program. The State thus sued Sandoz seeking damages under various theories of fraud. Previously, in "AstraZeneca LP v. Alabama," (41 So. 3d 15 (Ala. 2009)), the State unsuccessfully sued manufacturers of brand-name pharmaceuticals under the same theories. Because in this case, as in "AstraZeneca," the State knew that the prices reported by Sandoz were not what the State claims they should have been, Alabama law does not allow the State to claim that its reliance on that information was reasonable. Further, the State's reimbursement decisions were not based on the allegedly false information provided by Sandoz; instead, its decisions were based on policy concerns and certain requirements of the federal Medicaid program. Thus, as was the case in "AstraZeneca," the State's claims should not have been submitted to the jury, and Sandoz was entitled to a judgment in its favor. Therefore, the Supreme Court reversed the trial court's judgment and rendered judgment in favor of Sandoz.

When Defendant Ralph Merrill sold millions of rounds of ammunition to the United States Army, he concealed that the ammunition was manufactured by a Communist Chinese military company because his contract with the Army prohibited the delivery of that kind of ammunition. Defendant had the ammunition repackaged which made it unsafe for later use. Defendant was convicted for conspiracy to commit false statements, major fraud, and wire fraud against the United States and for major fraud and wire fraud. On appeal, Defendant argued that the district court misinterpreted the regulation that prohibited the Department of Defense from acquiring munitions manufactured by a Communist Chinese military company, that the regulation did not apply to the ammunition he sold, and that he did not defraud the government because he did not misrepresent a material fact when he lied about the origin of the ammunition. Upon review, the Eleventh Circuit concluded Defendant's arguments failed because his interpretation of the applicable statutes was flawed and, "more fundamentally, is irrelevant to his misconduct." Because all of Defendant's arguments failed, the Court affirmed his convictions.

In 1983, the Nuclear Waste Policy Act, 42 U.S.C. 10101-10270, authorized the Department of Energy to contract with nuclear facilities for disposal of spent nuclear fuel and high level radioactive waste. The Standard Contract provided that rights and duties may be assignable with transfer of SNF title. Plaintiff entered into the Standard Contract in 1983 and sold its operation and SNF to ENVY in 2002, including assignment of the Standard Contract, except one payment obligation. Plaintiff transferred claims related to DOE defaults. As a result of DOE’s breach, ENVY built on-site dry-storage facilities. The Claims Court consolidated ENVY’s suit with plaintiff’s suit. The government admitted breach; the Claims Court awarded ENVY $34,895,467 (undisputed damages) and certain disputed damages. The Federal Circuit affirmed in part. Plaintiff validly assigned pre-existing claims; while partial assignment of rights and duties under the contract was not valid, the government waived objection. The assignment encompassed claims against the government. Legal and lobbying fees to secure Vermont approval for mitigation were foreseeable, but other expenses were not recoverable. ENVY failed to prove costs of disposing of contaminated material discovered due to the breach and its characterization of spent fuel moved to dry storage. ENVY is not entitled to recover cost of capital for funding mitigation, or Resource Code 19 payroll loader overhead costs, but may recover capital suspense loader overhead costs,.

In February, 2002, the Navy awarded GM&W a contract for floor coating at a military base. GM&W subcontracted with FloorPro, which completed the work on February 27, 2002 and billed GM&W. On March 8, the Navy informed GM&W that the work was completed satisfactorily. On April 17, FloorPro informed the Navy’s contracting officer that it had not been paid. GM&W had claims pending and was not sure whether funds that the Navy directly deposited would be available to FloorPro. In April 2002, the Navy and GM&W entered into contract modification providing for mailing to FloorPro of a check payable to GM&W and Floor-Pro. The Navy paid GM&W directly by electronic transfer and informed FloorPro that its recourse was to sue GM&W. In December 2002, FloorPro submitted a claim to the Navy’s contracting officer. On March 27, 2003, FloorPro filed at the Armed Services Board of Contract Appeals, which awarded $37,500. The Federal Circuit reversed, holding that under the Contract Disputes Act, 41 U.S.C. 7101, ASBCA has no jurisdiction over a claim by a subcontractor. In 2009, FloorPro filed in the Court of Claims, which ruled in favor of FloorPro. The Federal Circuit vacated, ordering dismissal under the six-year limitations period of 28 U.S.C. 2501.

In 2006,Jefferson County purchased securities through Capital Securities, Inc., Jerry Manning, and Adam Alves a purchase later determined unlawful under section 24-75-601.1, C.R.S. (2008). The county sued Capital Securities and, among other things, sought to disgorge the commissions earned by Capital Securities under a theory of common law restitution. Both the trial court and the court of appeals concluded that restitution was appropriate and ordered Capital Securities to disgorge their commissions. The Supreme Court granted certiorari to examine whether restitution is an appropriate remedy in this context. Upon review, the Court held that it was not, and reversed the court of appeals: "The statutory scheme adopted by the General Assembly expressly sets forth a number of remedies available to a public entity against a seller when . . .the public entity unlawfully purchases securities under section 24-75-601.1. These remedies include forcing the seller to repurchase the securities 'for the greater of the original purchase principal amount or the original face value, plus any and all accrued interest, within one business day of the demand.' . . . Further, the securities commissioner may, inter alia, suspend or revoke a seller's license or license exemption if he 'knew or should have known' the securities were unlawful under section 24-75-601.1. sec. 11-51-410(k), C.R.S. (2011); sec. 11-51-402(4)(a), C.R.S. (2011)."

The State of Illinois, facing a significant and unprecedented fiscal deficit, brokered a series of compensation agreements with the exclusive bargaining representative for 40,000 state employees. The parties trimmed several hundred million dollars in fiscal years 2011 and 2012 by deferring general wage increases and instituting a voluntary furlough program. Despite these measures, the fiscal year 2012 budget did not contain sufficient appropriations for deferred wage increases due employees of 14 state agencies. The state froze the pay of those employees, repudiating agreements with the union. The district court dismissed a suit that alleged violations of the Contracts Clause and the Equal Protection Clause and state law. The Seventh Circuit affirmed, finding the Contracts Clause claim barred by the Eleventh Amendment. The court noted that the state’s actions did not bar a breach of contract suit. There was a rational relationship between those actions and a legitimate governmental purpose, precluding an equal protection claim.

A doctor filed a qui tam action under the False Claims Act, 31 U.S.C. 3729, against Brigham and Women's Hospital, Massachusetts General Hospital and doctors, claiming violation of the Act by including false statements in a grant application, concerning neurodegenerative illness associated with aging, submitted to the National Institute on Aging in the National Institutes of Health, an agency of the U.S. Department of Health and Human Services, and that defendants, knowing of the falsity, failed to take corrective action. The district court granted defendants summary judgment. The First Circuit vacated. The district court abused its discretion by excluding or failing to consider certain expert testimony and erred by failing to consider statements of the parties and experts as required by the summary judgment standard. The dispute was not about which scientific protocol produces results that fall within an acceptable range of "accuracy" or whether re-measurements, the basis for preliminary scientific conclusions, were "accurate" insofar as they fall within a range of results accepted by qualified experts, but whether there was intentional falsification.

Plaintiff entered into a "Stipulation Agreement Regarding Damages," approved by the EEOC, to resolve her Title VII pregnancy discrimination claim against the U.S. Postal Service. She later filed suit in the Court of Federal Claims, alleging breached of that Agreement. The court held that it did not have jurisdiction because the Agreement was a consent decree, not a contract. In the federal system, when the United States is the defendant, whether the issue is enforcement of a court decree by the issuing forum or enforcement of a settlement contract in a separate suit determines which court can hear the case. The Federal Circuit reversed, stating that the "dispute is yet another example of the wastefulness of litigation over where to litigate." Consent decrees and settlement agreements are not necessarily mutually exclusive; a settlement agreement, even one embodied in a decree, is a contract within the meaning of the Tucker Act.

Roxco, Ltd., was hired as the general contractor for several public-construction projects for the State of Mississippi, including four building projects at the University of Mississippi, Jackson State University, and Alcorn State University. State law requires that a certain percentage of the cost of construction be retained to ensure completion. However, Mississippi Code Section 31-5-15 (Rev. 2010) allows the contractor to access that retainage by depositing with the State other acceptable security. Pursuant to Section 31-5-15, Roxco substituted securities valued at $1,055,000, deposited in a safekeeping account at Trustmark National Bank. Upon being notified of Roxco's default, the State instructed Trustmark to transfer the funds from the treasury bills into the state treasury account. By letter, Roxco directed Trustmark not to transfer the funds from the treasury bills to the State's account. Notwithstanding Roxco's letter, Trustmark deposited the funds into the State's account. Roxco filed suit against Trustmark for breach of contract and conversion. Trustmark argued that Section 31-5-15 permitted the release of the funds in the safekeeping account. A jury found in favor of Roxco and awarded $3,720,000 in damages. Aggrieved, Trustmark appealed. Finding that the trial court should have granted the motion for judgment notwithstanding the verdict, the Supreme Court reversed and remanded for further proceedings.

In this consolidated appeal, the court construed the payment obligations of municipalities participating in G.L.c. 41, section 108L, (Quinn Bill), a local statute establishing a career incentive pay program for police officers. The underlying case arose when the Commonwealth, facing budgetary constraints, substantially cut reimbursements. Plaintiffs subsequently contended that clauses in the collective bargaining agreements (CBA) impermissibly conflict with the statute, which they viewed as requiring the city to pay 100% of benefits irrespective of reimbursement. The court held that the CBAs did not conflict with the statute and were valid. Section 108L required only that municipalities pay one-half the amounts specified in the payment provision, plus any amount actually received from the Commonwealth. Municipalities could agree to pay more, but the statute did not require it. Therefore, the cases were remanded to the county court, where the single justice was directed to issue a declaration stating that, with respect to section 108L, the CBAs between the city and the various police unions were valid and enforceable.