Justia U.S. 4th Circuit Court of Appeals Opinion SummariesArticles Posted in Government Contracts
Systems Application & Technologies, Inc. v. United States
Employees of a Navy services contractor, SA-TECH, sued the contractor in California state court for violations of the state’s labor laws. Before and during that suit, SA-TECH sought guidance from the Navy as to whether California’s labor laws applied to it and its subcontractors, given the federal nature of its service contract. Those requests went unanswered. SA-TECH’s claim with its contracting officer under the Contract Disputes Act was denied. SA-TECH then sought declaratory relief on the questions: whether the modified understanding of California labor laws would control SA-TECH’s operations on Navy and Navy-chartered ships; whether SA-TECH would be permitted or required by the Navy, under its contracts, to pay any sleep-time over-time; and whether costs incurred by SA-TECH in settling the state-court litigation would be allowable costs under its current contract.The district court dismissed the complaint, citing lack of subject matter jurisdiction pursuant to the Contract Disputes Act’s exhaustion requirements, 41 U.S.C. 7103(a)(1)–(3). The Fourth Circuit affirmed. SA-TECH did not specifically assert any legal or contractual grounds entitling it to the Navy’s opinion on its agency status. Its other issues are monetary claims for which SA-TECH did not present a requested sum certain, as required to exhaust its remedies. View "Systems Application & Technologies, Inc. v. United States" on Justia Law
Posted in: Civil Procedure, Contracts, Government Contracts
Southern Power Co. v. Cleveland County
Southern Power and Cleveland County, North Carolina executed an “Incentive Development Agreement” in July 2007, providing that if Southern built and operated a natural gas plant — a decision left to Southern’s sole discretion — the county would make substantial cash payments to Southern. The North Carolina legislature enacted a new law (Subsection H) 37 days later, imposing more stringent requirements on such agreements, including a mandate that they include a recapture provision allowing a municipality to recover cash incentives already paid if the private entity breaches the agreement. In November-December 2008, Southern secured contracts to supply utility companies with electricity produced at the plant. Southern then asked the county to reaffirm its commitment to the Agreement. Cleveland County adopted a resolution at its January 6, 2009, meeting stating that it was committed to the incentive grants. Southern broke ground on the plant in October 2009 and began commercial operations in December 2012. Cleveland County, however, refused to pay Southern any cash incentives, arguing that the Agreement failed to comply with Subsection H.The district court dismissed the case as barred by North Carolina governmental immunity. The Fourth Circuit affirmed. Cleveland county never waived its governmental immunity from suit. View "Southern Power Co. v. Cleveland County" on Justia Law
Posted in: Contracts, Government & Administrative Law, Government Contracts
East Coast Repair & Fabrication, LLC v. United States
EC contracted to repair the Navy ships Thunderbolt, Tempest, and Hurricane. The Navy claimed $474,600 in liquidated damages under the Tempest contract because of late delivery. Having already paid for the Tempest work, it withheld $473,600 under the Hurricane contract. EC claimed the Navy caused the delay and, after the contracting officer denied its claim, sued under the Tempest contract, referring specifically to the $473,600 setoff. While the litigation proceeded, EC sought additional compensation under the Hurricane contract for unexpected work on that ship and appealed to the Armed Services Board of Contract Appeals, seeking payment of the $473,600 “withheld from payments due under [the Hurricane] contract.”The parties settled the Tempest suit: EC released the government “from any and all actions, claims, . . . and liabilities of any type, whether known or unknown, suspected or unsuspected, foreseen or unforeseen, or open or hidden, which have existed, presently exist, or may exist in the future, arising out of or in any way relating to the [Tempest] Contract.” The government released EC from “any and all” claims “arising out of or in any way relating to the issues that were raised ... or could have been raised in the pleadings.”In 2019, EC asserted a right to the same $473,600 in a third request to the contracting officer, then filed suit. The Fourth Circuit affirmed summary judgment in favor of the government. The settlement agreement barred EC’s claims. View "East Coast Repair & Fabrication, LLC v. United States" on Justia Law
Posted in: Contracts, Government Contracts
Smith v. CSRA, Inc.
In 2013, Smith began working with DEA as a subcontractor in the geospatial intelligence program. Smith has a disability that adversely affects her mobility; she was granted accommodations. In 2015, Smith was authorized to work remotely 50 percent of the time. Through 2017, Smith received positive performance reviews. Smith’s position did not change in 2016 when CRSA became the prime contractor. In 2017, Quinn, DEA’s Acting Deputy Assistant Administrator became dissatisfied when Smith was unable to answer questions about the Program. Quinn directed that Smith begin reporting to DEA headquarters. Smith lobbied to maintain her remote work arrangement. DEA officials did not respond to Smith’s request but, because of parking and transportation problems, Smith intermittently continued to work remotely despite notification that she was not authorized to do so. DEA concluded it could not grant the request; the CSRA contract did not expressly provide for remote work and DEA’s building lease limited the issuance of parking passes to employees. DEA alleges that it developed concerns about Smith’s technical skills and performance.DEA officials retrieved the equipment that supported Smith’s remote access and revoked Smith’s security clearance. CSRA terminated the Consultant Agreement. Smith sued, alleging disability discrimination and retaliation under the Rehabilitation Act, 29 U.S.C. 791, against DEA, and violations of the Rehabilitation Act and the ADA, 42 U.S.C. 12101, against CSRA. The district court rejected the claims on summary judgment.The Fourth Circuit affirmed as to Smith’s disability discrimination claim but vacated as to her retaliation claim. Smith was an independent contractor and not a CSRA employee. DEA was not required to offer Smith a remote work accommodation and its failure to do so was not a refusal to accommodate but Smith established a prima facie case of retaliation. View "Smith v. CSRA, Inc." on Justia Law
Posted in: Government Contracts, Labor & Employment Law
United States ex rel. Citynet, LLC v. Gianato
Citynet filed a qui tam action against West Virginia officials, alleging that defendants defrauded the United States when obtaining federal funding for a program to improve broadband connectivity for West Virginia residents, in violation of the False Claims Act (FCA). Specifically, Citynet alleged that Defendants Gianato and Given, respectively the Director of the West Virginia Division of Homeland Security and Emergency Management and the State Technology Officer, along with other defendants, knowingly submitted false statements and records to the United States as part of their application for funding under the federal Broadband Technology Opportunities Program and, once the funding was obtained, made false claims in drawing down funds under the Program.The Fourth Circuit vacated the district court's immunity ruling and remanded with instructions to deny Gianato and Given's claim of qualified immunity. Because the district court's ruling was contingent on the answer to the threshold legal question of whether qualified immunity may be invoked as a defense to FCA claims, the court exercised appellate jurisdiction and held that qualified immunity does not apply to protect government officials from claims against them for fraud under the Act. View "United States ex rel. Citynet, LLC v. Gianato" on Justia Law
ACA Financial Guaranty v. City of Buena Vista, Virginia
In this case arising from a bond transaction involving a municipal golf course in the City of Buena Vista, Virginia (the City), the Fourth Circuit affirmed the district court’s motion to dismiss a ten-count complaint filed by ACA Financial Guaranty Corporation (ACA) and SunTrust Bank (Bank) against the City and the Public Recreational Facilities Authority (Authority), holding that the complaint failed to allege claims for which relief could be granted.In an effort to refinance a loan that the Authority took out to finance the construction of the golf course, the Authority issued over $9 million in bonds. The Authority and the Bank entered into a trust agreement regarding the bonds. To repay the bonds, the Authority leased the golf course to the City. The City and the Authority then issued deeds of trust to the Bank pledging certain property as security. The City later failed to pay the rent due on the golf course lease, and the Authority could not repay the bonds. ACA, which provided insurance on the bonds, and the Bank sued. The district court dismissed the complaint. The Fourth Circuit affirmed, holding that the City’s obligation to make rent payments was not legally enforceable when the obligation was expressly subject to the city’s annual decision to appropriate funds. View "ACA Financial Guaranty v. City of Buena Vista, Virginia" on Justia Law
Posted in: Contracts, Government Contracts
Cunningham v. General Dynamics Information Technology, Inc.
The Yearsley doctrine applies to claims arising under federal law. The Fourth Circuit affirmed the district court's grant of GDIT's motion to dismiss, for lack of subject matter jurisdiction, an action alleging that GDIT violated the Telephone Consumer Protection Act (TCPA). The court held that GDIT was immune from suit under the Yearsley doctrine, which immunizes government contractors from suit when the government authorized the contractor's actions and the government validly conferred that authorization. The court found nothing in Yearsley or its progeny that limited its application solely to state law liability. The court held that the district court did not err in treating Yearsley applicability as a jurisdictional bar to suit and granting GDIT's motion to dismiss. View "Cunningham v. General Dynamics Information Technology, Inc." on Justia Law
BAE Systems Technology v. Republic of Korea’s Defense Acquisition Program Admin.
In a contract dispute between BAE and Korea, BAE sought a declaratory judgment that it had not breached any contractual obligation to Korea and a permanent injunction barring Korea from prosecuting its suit against BAE in Korean courts. The Fourth Circuit affirmed the district court's grant of BAE's requested declaration, but refused to issue a permanent injunction. The court held that the BAE-Korea agreement's permissive forum selection clause provided no basis for dismissing this action; Korea was not immune from suit under the Foreign Sovereign Immunities Act; the Foreign Military Sales (FMS) structure shields a U.S. contractor, such as BAE, from liability; enforcement of the BAE-Korea agreement would undermine the control the United States retained in all FMS transactions over price; because the U.S. government retained control over price in an FMS transaction, a foreign state generally has no cause of action — against anyone — if the price demanded by the U.S. government increases over time; and the district court did not abuse its discretion in denying BAE's petition for a permanent anti-suit injunction. Accordingly, the court affirmed the judgment. View "BAE Systems Technology v. Republic of Korea's Defense Acquisition Program Admin." on Justia Law
Posted in: Government Contracts, Military Law
US ex rel. Carter v. Halliburton Co.
The Fourth Circuit held that the first-to-file rule of the False Claim Act mandates dismissal of a relator's action brought while related actions were pending, even after the related actions have been dismissed and the relator's complaint has been amended, albeit without mention of the related actions. In this case, because the Carter Action violated the first-to-file rule in a manner not cured by subsequent developments, the action must be dismissed. Accordingly, the court affirmed the district court's judgments. View "US ex rel. Carter v. Halliburton Co." on Justia Law
United States ex rel. Badr v. Triple Canopy
On remand from the United States Supreme Court, the Fourth Circuit held that the Government stated a claim under the False Claims Act (FCA), 31 U.S.C. 3729(a), against Triple Canopy. The Fourth Circuit reconsidered its earlier panel decision in light of Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016), and held that the Government properly alleged an FCA claim -- that Triple Canopy knowingly presented false claims -- under section 3729(a)(1)(A). In this case, the Government sufficiently alleged falsity, and nothing in Universal Health undermines the Fourth Circuit's earlier conclusion that Triple Canopy's falsity was material. The Fourth Circuit reinstated those portions of its opinion that were not impacted by Universal Health, and remanded for further proceedings. View "United States ex rel. Badr v. Triple Canopy" on Justia Law