Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

In 1980, Langkamp, then a toddler, suffered severe burn injuries on U.S. Army property. In a suit under the Federal Tort Claims Act, the parties entered into a Settlement Agreement. The government agreed to pay $239,425.45 upfront to cover attorney fees and costs, plus a structured settlement: $350.00 per month, 1985-1996; $3,100.00 per month, guaranteed for 15 years, beginning in 1996, and Lump Sum Payments of $15,000.00 in 1996, $50,000.00 in 2000, $100,000.00 in 2008, 250,000.00 in 2018, and $1,000,000.00 in 2028. The government issued a check for $239,425.45 to the parents and a check for $160,574.55 payable to JMW Settlements, an annuity broker. JMW purchased two single-premium annuity policies from ELNY to fund the monthly and periodic lump-sum payments. Until 2013, ELNY sent Langkamp the specified monthly and periodic lump-sum payments. Following ELNY’s insolvency and court-approved restructuring, Langkamp’s structured settlement payments were reduced to 40 percent of the original amount. The Claims Court rejected Langkamp’s argument that the government had continuing liability for the Settlement Agreement payments. The Federal Circuit reversed. The Settlement Agreement contains no reference to the purchase of an annuity from a third party but unambiguously obligates the government to ensure that all future monthly and periodic lump-sum payments are properly disbursed. The court noted that in 1984 it cost the government approximately $160,000 to obtain a promise from an insurance company to fund the future payments specified in the Settlement Agreement. View "Langkamp v. United States" on Justia Law

In 1983-1984, the Farmers Home Administration issued apartment owners (Appellants) 50-year loans to provide low-income housing under 42 U.S.C. 1485. A promissory note provided that prepayments “may be made at any time at the option of the Borrower.” The mortgage stated that the loan must be used in compliance with the statute and that Appellants must use the property for low-income housing for 20 years before they could prepay and exit the program. The documents were contemporaneously executed and cited each other. The Emergency Low Income Housing Preservation Act of 1987 and Housing and Community Development Act of 1992 provided that borrowers could no longer prepay after the 20-year period but must notify FmHA’s successor, which was to make “reasonable efforts" to extend the low-income use,” 42 U.S.C. 1472(c)(4)(A). If the agreement is not extended, the borrower must attempt to sell the property at fair market value to a nonprofit organization or a public agency. Appellants rejected incentive offers and, in 2009-2010, unsuccessfully marketed their properties for the required period. Facing foreclosure and low occupancy due to high unemployment, Appellants submitted deeds in lieu of foreclosure, then filed suit. The Federal Circuit reinstated certain claims. In transferring deeds to the government, Appellants did not assign away their accrued claims for breach of the prepayment right. The Claims Court properly dismissed a contract-based Fifth Amendment “takings” claim. In entering contracts, the government acts in its commercial capacity and remedies arise from the contracts themselves, rather than from constitutional protections. Appellants can succeed under a theory premised on their property interests in the land and buildings before entering the contracts. View "Callaway Manor Apartments v. United States" on Justia Law

Section 515 of the Housing Act of 1949, 42 U.S.C. 1485, authorizes the Department of Agriculture, Farmers Home Administration to loan money to nonprofit entities to provide rental housing for elderly and low- and moderate-income individuals and families. Sonoma, a limited partnership contracted with the government to construct low-income housing in exchange for a $1,261,080 Section 515 loan. In 2010, Sonoma submitted a written request to prepay the balance of its loan. The government denied the request. Sonoma sued for breach of contract, including a claim for a “tax neutralization payment” to offset the negative tax consequences of a lumpsum damages award. The Claims Court awarded Sonoma expectancy damages of $4,223,328 and a tax gross-up award of $3,171,990. The Federal Circuit vacated. The Claims Court clearly erred in using the income from a single tax year to predict the future rates at which each partner would pay taxes. While the government’s breach created the circumstances that require consideration of future income and tax rates, Sonoma is not absolved of its burden of showing an income-tax disparity and justifying any adjustment. View "Sonoma Apartment Associates v. United States" on Justia Law

The Federal Reserve Act of 1913 established a system that includes the Federal Reserve Board of Governors and 12 regional Reserve Banks. The Board exercises broad regulatory supervision over the Reserve Banks, which serve as banks to the U.S. government and to commercial banks who are members of the Federal Reserve System. The Act set the statutory rate for dividend payments on Federal Reserve Bank stock at six percent per year, which remained in effect until 2016, when an amendment (12 U.S.C. 289(a)(1)) effectively reduced the dividend rate for certain stockholder banks to a lower variable rate. Plaintiffs argued that banks that subscribed to Reserve Bank stock before the amendment are entitled to dividends at the six percent rate and that, by paying dividends at the amended rate, the government breached a contractual duty or effected a Fifth Amendment taking. The Federal Circuit affirmed the dismissal of the suit. There is no “clear indication” of the government’s intent to contract in either the language of the Federal Reserve Act or the circumstances of its passage. Plaintiffs did not allege a legally cognizable property interest arising from its “statutory rights” and the requirement that member banks subscribe to reserve bank stock under the Act does not constitute a regulatory taking. View "American Bankers Association v. United States" on Justia Law

The Moodys leased Pine Ridge Indian Reservation parcels for agriculture. The government has a trust responsibility for Indian agricultural lands, 25 U.S.C. 3701(2). The Secretary of the Interior is authorized to participate in the management of such lands, with the participation of the beneficial owners and has delegated some responsibilities to the Bureau of Indian Affairs (BIA). BIA regulations generally allow Indian landowners to enter into agricultural leases with BIA approval. Each Moody lease defined “the Indian or Indians” as the “LESSOR.” The Claims Court concluded that the Oglala Sioux Tribe signed the leases. Other lease provisions distinguished between the lease parties and the Secretary of the Interior/United States. Issues arose in 2012. The BIA sent letters canceling the leases, noting that the Moodys could appeal the decision to the Regional Director. Within the 30-day appeal period, the Moodys returned with a cashier’s check in the proper amount, which the BIA accepted. The BIA informed the Moodys that they need not appeal, could continue farming, and did not require written confirmation. Subsequently, the Moodys received trespass notices and were instructed to vacate, which they did. The Moodys did not appeal within the BIA but sued the government. The Federal Circuit affirmed the Claims Court’s dismissal of the written contract claims for lack of jurisdiction because the government was not a party to the leases, for failure to state a claim upon which relief could be granted because the Moodys did not have implied-in-fact contracts with the government, and for failure to raise a cognizable takings claim because their claim was based on the government’s alleged violation of applicable regulations. View "Moody v. United States" on Justia Law

From 1943-1990, the government produced plutonium for nuclear weapons at Washington’s Hanford Site, leaving behind 56 million gallons of nuclear waste in underground tanks. In 2000, Bechtel was awarded a cost-plus-incentive-fee contract by the Department of Energy (DOE) for the design, construction, and operation of a Hanford nuclear waste treatment plant, incorporating provisions of the Federal Acquisition Regulation (FAR). During the contract’s performance, two former Bechtel Hanford employees sued Bechtel under 42 U.S.C. 1981, alleging sexual and racial discrimination and retaliation. Bechtel settled these lawsuits and sought $500,000 in reimbursement from DOE for its defense costs. The settlement payments were covered by insurance. DOE provisionally approved Bechtel’s request and reimbursed Bechtel as requested. A contracting officer later disallowed the costs, citing Federal Circuit precedent, “Tecom” and stating that the government would offset the provisional reimbursement from future amounts owed to Bechtel. The Claims Court granted the government summary judgment, concluding that Tecom provided the proper standard. The Federal Circuit affirmed. The Bechtel contract incorporated FAR 31.201-2 and 52.222-26, the same provisions that barred reimbursement in Tecom. Under the Tecom standard, Bechtel’s defense costs related to the discrimination suits are only allowable if Bechtel can show that the former employees “had very little likelihood of success.” Bechtel did not challenge the contracting officer’s determination that the former employees’ claims had more than a very little likelihood of success. View "Bechtel National, Inc. v. United States" on Justia Law

In 2007, the VA sought to lease space for a Parma, Ohio VA clinic. A pre-solicitation memorandum stated that the building must comply with the Interagency Security Committee (ISC) Security Design Criteria. The subsequent Solicitation discussed the physical security requirements. Premier submitted a proposed design narrative that did not address those requirements. In 2008, Premier and the VA entered into a Lease. Premier was to provide a built-out space as described in the Solicitation. About 18 months later, the VA inquired about Premier’s first design submittal, advising Premier to obtain access to the ISC standards, because “the project needs to be designed according to the ISC.” The ISC denied Premier’s request, stating that the documents had to be requested by a federal contracting officer who has a “need to know.” The VA forwarded copies of three ISC documents. Some confusion ensued as to which standard applied. The VA then instructed Premier to disregard the ISC requirements and to incorporate the requirements from the latest VA Physical Security Guide. Months later, the VA changed position, stating that “[t]he ISC is the design standard.” Premier’s understanding was that only individual spaces listed in a Physical Security Table needed to comply with the ISC. The VA responded that the entire building must conform to the ISC at no additional cost. Premier constructed the building in accordance with the ISC standards then unsuccessfully requested $964,356.40 for additional costs. The Federal Circuit affirmed summary judgment in favor of the government. The contract unambiguously requires a facility conforming to ISC security requirements. View "Premier Office Complex of Parma, LLC v. United States" on Justia Law

The U.S. Department of Housing and Urban Development (HUD) administers the project-based Section 8 housing program using Housing Assistance Payments renewal contracts. The landlords own publicly-assisted housing in Yonkers and allege that the government breached the renewal contracts, resulting in money damages. The trial court determined that it had jurisdiction, found the government liable for breach of contract, and awarded $7.9 million in total damages. The Federal Circuit vacated, finding that the trial court lacked jurisdiction because the parties were not in privity of contract. The contracts at issue were executed in a two-tiered system. First, HUD contracted with a public housing agency (New York State Housing Trust Fund Corporation), which contracted with the Landlords. Neither contract explicitly named both the government and the Landlords as directly contracting parties. View "Park Properties Associates v. United States" on Justia Law

In 2009, the U.S. Department of Agriculture’s Natural Resources Conservation Service (NRCS) entered into a “Cooperative Agreement” with St. Bernard Parish under the Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6301–08. Under the Emergency Watershed Protection Program, NRCS was “authorized to assist [St. Bernard] in relieving hazards created by natural disasters that cause a sudden impairment of a watershed.” NRCS agreed to “provide 100 percent ($4,318,509.05) of the actual costs of the emergency watershed protection measures,” and to reimburse the Parish. St. Bernard contracted with Omni for removing sediment in Bayou Terre Aux Boeufs for $4,290,300.00, predicated on the removal of an estimated 119,580 cubic yards of sediment. Omni completed the project. Despite having removed only 49,888.69 cubic yards of sediment, Omni billed $4,642,580.58. NRCS determined that it would reimburse St. Bernard only $2,849,305.60. Omni and St. Bernard executed a change order that adjusted the contract price to $3,243,996.37. St. Bernard paid Omni then sought reimbursement from NRCS. NRCS reimbursed $355,866.21 less than St. Bernard claims it is due. The Federal Circuit affirmed the dismissal of the Parish’s lawsuit, filed under the Tucker Act, 28 U.S.C. 1491(a)(1), for failure to exhaust administrative remedies. In the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994, 7 U.S.C. 6991–99, Congress created a detailed, comprehensive scheme providing private parties with the right of administrative review of adverse decisions by particular agencies within the Department of Agriculture, including NRCS. View "St. Bernard Parish Government v. United States" on Justia Law

In 2003, Dobyns, then an ATF agent engaged in undercover work, infiltrated the Hells Angels and assisted in the indictment of 36 people for racketeering and murder. The disclosure of his identity during the prosecutions led to threats against Dobyns and his family. ATF’s alleged failure to appropriately respond to the threats and to adequately conceal Dobyns’ identity during an emergency relocation, led Dobyns to seek compensation. In 2007, ATF agreed to pay Dobyns a lump-sum. ATF withdrew Dobyns’ and his family’s fictitious identities in 2008 despite a 2007 threat assessment. A 2008, arson attack substantially damaged Dobyns’ home, but his family escaped without injury. ATF pursued Dobyns as a suspect. In 2013, ATF’s Internal Affairs Division concluded that there was no valid reason for the withdrawal of the fictitious identifies; that risks to the family had been ignored; and that the response to the arson had been mismanaged. Dobyns sued in 2008, alleging breach of the agreement. While the suit was pending, Dobyns’ book was released; Dobyns made frequent media appearances. In 2013, the Claims Court held that there was no breach of any express provision of the agreement but that there was a breach of the implied duty of good faith and fair dealing and that Dobyns was entitled to emotional distress damages of $173,000. Dobyns alleged misconduct by the Justice Department during the litigation; the court determined that none of the alleged misconduct warranted Rule 60 relief because, even if they occurred, there was no showing that these acts could have affected Dobyns’ case. The Federal Circuit reversed the judgment as to the breach of the implied duties and affirmed the Rule 60 decision. View "Dobyns v. United States" on Justia Law