Articles Posted in Government Contracts

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In 2009, Pfizer, settled claims that it had violated the False Claims Act (FCA), 31 U.S.C. 3729, and entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services. Months later, Booker and Hebron, former Pfizer sales representatives, brought a qui tam action, allegedly on behalf of the United States and several states, asserting that Pfizer had continued to violate the FCA and state analogues. They alleged that Pfizer had continued to knowingly induce third parties to file false claims for payment for Pfizer drugs with government programs like Medicaid by marketing the drug Geodon for off-label uses, in violation of 21 U.S.C. 301, and paying doctors kickbacks for prescribing the drugs Geodon and Pristiq, in violation of the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), (g). They also alleged that Pfizer had violated the FCA "reverse false claims" provision, 31 U.S.C. 3729(a)(1)(G), by failing to pay the government money owed it under Pfizer's Agreement with HHS, and that Pfizer had violated the FCA's anti-retaliation provision, by terminating Booker's employment. All of these claims were resolved against relators, one on a motion to dismiss and the rest on summary judgment. None of the sovereigns intervened. The First Circuit affirmed the merits decisions and found no error in its management of discovery. The court found relators’ data “woefully inadequate to support their FCA claim.” View "Booker v. Pfizer, Inc." on Justia Law

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The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), enacted in 2016 to address Puerto Rico’s financial crisis, provides for a temporary stay of debt-related litigation against the Puerto Rico government. The statute, however, allows creditors to move for relief from the stay and directs courts to grant such relief “after notice and a hearing…for cause shown.” Movant Peaje Investments LLC and various appellants in Altair Global Credit Opportunities Fund (A), LLC v. Garcia-Padilla (the Altair Movants) filed lift-stay motions. The First Circuit (1) affirmed the district court’s denial of the Peaje Movant’s motion, holding that Peaje failed to set forth a legally sufficient claim of “cause” to lift the PROMESA stay; and (2) the Altair Movants presented sufficient allegations to entitle them to a hearing. View "Peaje Investments LLC v. Garcia-Padilla" on Justia Law

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This case concerned a dispute relating to contracts for the construction of a municipal transportation terminal on land owned by a municipality (Municipality). Municipality awarded the construction project to OSSAM Construction Inc. (OSSAM). After disputes arose regarding payments for the work performed in connection with the construction contracts, Municipality notified OSSAM that the contract between the parties was being terminated. Municipality then took control of the construction site. OSSAM and related individuals (Plaintiffs) filed suit against Municipality and its officials, claiming, inter alia, that Defendants violated 42 U.S.C. 1983 when they acted under color of law to interfere with Plaintiffs' constitutional rights during the construction site takeover and that these actions consisted a breach of contract. The district court (1) dismissed Plaintiffs’ section 1983 claim, concluding that it lacked subject matter jurisdiction because the parties had failed to comply with the mediation/arbitration clause in their contract; and (2) declined to exercise supplemental jurisdiction over related state law claims. The First Circuit affirmed, albeit on different grounds, holding (1) the section 1983 claim should be dismissed for failure to state a claim; and (2) accordingly, there is no supplemental jurisdiction over the state law claims. View "Masso-Torrellas v. Municipality of Toa Alta" on Justia Law

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These interlocutory appeals were from a district court order that, inter alia, compelled a law firm (Mintz Levin) to produce documents relating to a fraud allegedly committed by David Gorski in his operation of Legion Construction, Inc. in order to qualify for and obtain government contracts. Gorski and Legion appealed the portion of the order that required attorney-client privileged documents connected with Mintz Levin’s representation of Legion to be produced under the crime-fraud exception. The government cross-appealed the portion of the district court decision to exclude communications between Gorski and his personal attorney from the production order. The First Circuit (1) dismissed Gorski’s appeal for want of appellate jurisdiction, holding that the Court did not have jurisdiction over Gorski’s appeal but did have jurisdiction over Legion’s appeal and the government’s cross-appeal; (2) affirmed the production order as to Mintz Levin, holding that a prima facie case for the crime-fraud exception had been made; and (3) vacated the district court’s decision to exclude Gorski’s communications with his personal attorney from the production order, holding that the district court employed incorrect legal reasoning with regard to these documents. View "United States v. Gorski" on Justia Law

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Rosaura Building Corp. (“Rosaura”) filed a lease contract petition form offering its building as property for Head Start classrooms. The Mayor of the Municipality of Mayguez rejected the contract. Rosaura brought a civil rights claim for equitable relief and damages pursuant to 42 U.S.C. 1983 against the Mayor and the municipal government (collectively, “Defendants”), claiming that Defendants’ rejection of the contract was solely motivated by Rosaura’s political beliefs. The district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that the district court (1) did not err in granting the dismissal of the claims against the Municipality, as there was no practical effect in dismissing the claims against the municipal government where a mayor’s “employment decisions ipso facto” constitute the official policy of the municipality; and (2) did not err in dismissing the claims against the Mayor in his official capacity, as Rosaura failed to state a First Amendment retaliation cause of action and failed to state an equal protection claim by not alleging what protected activity it exercised and was a substantial motivating factor in bringing about the Mayor’s purported retaliation. View "Rosaura Building Corp. v. Municipality of Mayaguez" on Justia Law

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Plaintiff filed suit under 42 U.S.C. 1983, alleging First and Fourteenth Amendment violations concerning the rescission of a bid award for a potential, but unexecuted, insurance brokerage contract with the Puerto Rico government. The court affirmed the district court's grant of summary judgment on plaintiff's Fourteenth Amendment due process claim where he had no constitutionally protected property interest in the initial bid award; reversed the grant of summary judgment on plaintiff's First Amendment claim for political discrimination where there is a genuine issue of material fact as to whether plaintiff's political affiliation was a substantial or motivating factor for the adverse action; and remanded for further proceedings.View "Garcia-Gonzalez v. Puig-Morales" on Justia Law

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The Massachusetts Registry of Motor Vehicles sought proposals from contractors to print and send registration renewal notices along with advertisements to raise revenue to defray costs. RMV would provide the contractor with information (name, address, date of birth, and license number) that was generally exempt from public disclosure under the Driver's Privacy Protection Act, 18 U.S.C. 2721-25, and Mass. Gen. Laws ch. 4, sect. 7, cl. 26(n), that the contractor would need to safeguard from unlawful public disclosure. Defendant's winning bid indicated that it understood and accepted the terms. The contract specified that Massachusetts would continue to exercise ownership over all personal data, and that a violation of the DPPA or the Massachusetts privacy law would cause the contract to terminate. Plaintiff, who received a registration renewal notice that included advertisements, filed a putative class action on behalf of himself and other drivers who, without providing consent, had received advertisements from defendant. The district court granted defendant judgment on the pleadings based on failure to join the Commonwealth as an indispensable party. The First Circuit affirmed, finding no violation of the DPPA. Defendant does not disclose the information it legitimately receives, as the state's contractor, to others. View "Downing v. Globe Direct LLC" on Justia Law

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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. View "Jones v. Brigham & Women's Hospital" on Justia Law

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The "Big Dig" highway project, built largely with federal funds, has transformed vehicular travel in Boston. Defendant supplied concrete and, on occasion, secretly substituted substandard material for the concrete required by contract specifications. Certain employees, including plaintiff, learned of the deception and brought a sealed qui tam action under the False Claims Act, 31 U.S.C. 3729-3733. The federal government intervened, and settled the case for several million dollars. Plaintiff received a percentage of the settlement. A few days after he signed the settlement, defendant dismissed plaintiff, allegedly for his refusal to take a drug test. Plaintiff sued, asserting pretext and retaliation. The district court granted summary judgment in favor of the employer. The First Circuit vacated and remanded, applying a burden-shifting analysis and concluding that the circumstances of the firing are open to legitimate question and that the record, viewed as a whole and in the light most favorable to plaintiff, did not warrant the entry of summary judgment.

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Two laws were challenged under the Buy American Act, 41 U.S.C. 8301, which requires that only materials mined, produced, or manufactured in the U.S. be employed for "public use" or used in construction, alteration, or repair of "any public building or public work. A 1985 Puerto Rican law required that local construction projects financed with federal or Commonwealth funds use only construction materials manufactured in Puerto Rico, with limited exceptions relating to price, quality, and available quantity, P.R. Laws Ann. tit. 3, 927-927h (Law 109). Cement is deemed "manufactured in Puerto Rico" only if composed entirely of raw materials from Puerto Rico. P.R. Laws Ann. tit. 10, 167e (Law 132), enacted in 2001, imposes labeling requirements on cement and required that foreign-manufactured cement carry a special label warning against its use in government-financed construction projects unless one of the exceptions contained in the BAA and Law 109 applies. The district court held that the local laws were preempted. The First Circuit upheld Law 109 as a permissible action taken by Puerto Rico as a market participant, but invalidated provisions of Law 132 that discriminate against sellers of foreign cement, leaving the remainder of the law intact.