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

When a Colorado court ordered Colorado Health Insurance Cooperative into liquidation, the government owed Colorado Health $24,489,799 for reinsurance debts under the Patient Protection and Affordable Care Act (ACA), 42 U.S.C. 18061. The reinsurance program, which only lasted three years, collected yearly payments from all insurers and made payments to insurers of particularly costly individuals that year. Colorado Health owed the Department of Health and Human Services $42,000,000 for debts under ACA’s risk adjustment program, which charges insurers of individuals who had below-average actuarial risk and pays insurers of individuals who had above-average actuarial risk. The government attempted to leapfrog other insolvency creditors through offset, rather than paying its debt and making a claim against Colorado Health’s estate as an insolvency creditor.The Federal Circuit affirmed the Claims Court in ordering the government to pay. Neither state nor federal law affords the government a right to offset. Colorado law concerning the liquidation of insurance companies is limited to offsetting debts and credits in contractual obligations. ACA does not preempt Colorado insolvency law; a “Netting Regulation” is directed to an ancillary issue, payment convenience. The government has not shown a “significant conflict between an identifiable federal policy or interest and the operation of state law.” View "Conway v. United States" on Justia Law

In 2011, the Navy published a job announcement for an Event Forum Project Chief, a full-time, permanent, GS-13/14-grade position. Two candidates—Beck and Wible—were certified as qualified for the position. Captain Payton selected Wible. Beck, had been in active Navy service from 1984 until his retirement in 2005 and had been promoted through a series of jobs relevant to the posted position. In 2001, Beck earned a bachelor’s degree in business with a GPA of 3.91; he earned a master’s degree in Human Resource Management and Development in 2002. In 2006, Beck rejoined the Navy workforce as a civilian Special-Events Planning Officer (SEPO), a GS-13-1 grade position. Beck had trained Wible. Payton had apparently first shown animosity toward Beck during a meeting in 2010.Beck filed a formal EEO action alleging discrimination based on race, gender, age, and disability, which engendered a retaliatory and hostile work environment. Beck resigned and unsuccessfully eventually sought corrective action from the Merit Systems Protection Board under the Uniformed Services Employment and Reemployment Rights Act of 1994.The Federal Circuit reversed in part. Preselection of the successful candidate can buttress an agency’s personnel decision to hire a less qualified candidate only when the preselection is not tainted by an unlawful discriminatory intent. The Board erred in finding that Beck’s non-selection would have occurred regardless of his prior military service as required under 38 U.S.C. 4311(c)(1). View "Beck v. Department of the Navy" on Justia Law

New Vision sued SG in the federal district court in Nevada. SG then filed Patent Trial and Appeal Board petitions. The Board declined to respect the forum selection agreement in the parties’ license agreement, which referred to “exclusive” jurisdiction in the appropriate federal or state court in the state of Nevada, and proceeded to a final decision, finding the claims at issue as well as proposed substitute claims, patent-ineligible under 35 U.S.C. 101.The Federal Circuit vacated and remanded the Board’s decisions for consideration of the forum selection clause in light of its 2019 “Arthrex” decision. Because Arthrex issued after the Board’s final-written decisions and after New Vision sought Board rehearing, New Vision has not waived its Arthrex challenge by raising it for the first time in its opening brief. The Board’s rejection of the parties’ choice of forum is subject to judicial review; section 324(e) does not bar review of Board decisions “separate . . . to the in[stitu]tion decision.” View "New Vision Gaming & Development, Inc. v. SG Gaming, Inc." on Justia Law

Morse served in the Navy, 1970-1972; including six months in Da Nang, Vietnam. In 1999, Morse filed a claim for compensation, listing several disabilities, including PTSD. A VA regional office granted him a nonservice-connected pension in 2001, based on joint disease. He later obtained Social Security disability benefits. In 2002, the regional office denied Morse’s claim of service connection for PTSD, finding "no credible evidence of verification of the claimed stressors.” In 2004, Morse sought to reopen his PTSD claim. The regional office received service department records in 2005, showing that in 1972 a psychiatrist reported that Morse appeared “moderately depressed” about personal problems. An examiner concluded that Morse was unable to provide convincingly relate symptoms to his reported military exposure. The Board of Veterans’ Appeals affirmed.In 2009, Morse sought to reopen his claim. A VA examiner diagnosed Morse as suffering from PTSD. The Joint Services Records Research Center (JSRRC) coordinator's memo noted that the events “reported by the veteran" are "consistent" with the conditions of service "even though we were unable to locate official records of the specific occurrence.” Morse was granted service connection for PTSD, effective in 2009. The Board in 2016 affirmed; because no additional service records had been obtained since the Board’s 2008 decision, the VA was not required to conduct another reconsideration. In 2018, the Board found that the 2010 JSRRC memorandum did not constitute an “official service department record”; Morse was “essentially attacking the merits of" the 2008 Board decision, "which is final.”The Veterans Court and Federal Circuit affirmed; the “VA’s obligation to reconsider the PTSD claim upon receipt of new service department records was exhausted in 2008.” The 2010 JSRRC memorandum did not constitute a service department record that triggered a renewed obligation to reconsider Morse’s claim. View "Morse v. McDonough" on Justia Law

The Housing Act, 42 U.S.C. 1437g, provides funds for public housing. The Department of Housing and Urban Development (HUD) allocates amounts in the fund to eligible public housing agencies (PHAs). Each of the 553 plaintiff-PHAs executed an Annual Contributions Contract (ACC) with HUD, which requires HUD to “provide annual contributions to the [PHA] in accordance with all applicable statutes, executive orders, regulations, and this ACC” and requires the PHA to develop and operate covered projects in compliance with the ACC and all applicable statutes, executive orders, and regulations. The standard form ACC incorporates 24 C.F.R. 990.210(c), which provides HUD with “discretion to revise, on a pro-rata basis, the amounts of operating subsidy to be paid to PHAs” where “insufficient funds are available.”In 2012, Congress funded only 80% of the total operating subsidies and directed HUD to “take into account" PHA excess operating fund reserves in determining their 2012 operating subsidy. HUD considered the excess reserves and did not prorate the available funding under 24 C.F.R. 990.210(c) and the ACCs. Some PHAs received more funding than they would have if HUD prorated the available funding. The plaintiffs received less than they would have and brought suit under the Tucker Act, 28 U.S.C. 1491(a)(1). The Federal Circuit affirmed summary judgment for the PHAs. Their claim was contract-based and the “strings-attached” nature of the operating subsidy did not preclude the court from exercising Tucker Act jurisdiction over the claim. The PHAs sought compensatory damages for their losses from the government’s failure to meet a past-due obligation and not equitable relief to enforce a regulatory obligation; their claim is based on a breach of contract and not a statute. View "Boaz Housing Authority v. United States" on Justia Law

The Communications Act, 47 U.S.C. 151, requires the FCC to advance universal service. The FCC's Universal Service Fund (USF), administered by USAC, allows carriers that serve high-cost areas to recover reasonable costs “for the provision, maintenance, and upgrading of facilities and services.” High-cost area carriers may also receive support from the National Exchange Carrier Association (NECA) pool.SIC was designated as an eligible telecommunications carrier to provide service to the Hawaiian homelands and began receiving high-cost support funds and participating in the NECA pool. SIC subsequently leased a "massive and expensive" cable from a related entity. In 2010, the FCC allowed 50 percent of SIC’s lease expenses. In 2016, the FCC determined that projected growth never materialized and limited SIC to $1.9 million per year from the NECA pool. The D.C. Circuit denied an appeal.In 2011, the FCC put a $250 per-line, per-month cap on USF support; SIC had received $14,000 per line per year. In 2015, SIC's manager was convicted of tax crimes; the company had paid $4,063,294.39 of his personal expenses, which he improperly designated as business expenses. The FCC suspended SIC's ‘high-cost funding. An audit revealed that SIC improperly received millions of dollars of USF funds. The Hawaii Public Utilities Commission refused to certify SIC. The D.C. Circuit declined to order reinstatement of USF support and upheld a 2016 FCC order requiring repayment of $27,270,390.SIC filed suit in the Claims Court, alleging that the reductions in SIC’s subsidies resulted in a taking of property without just compensation, seeking $200 million in damages. The Federal Circuit affirmed the dismissal of the suit. The court’s Tucker Act jurisdiction is preempted by the Communication Act's comprehensive remedial scheme. SIC’s claims seek review of FCC decisions, which are within the exclusive jurisdiction of the courts of appeals. View "Sandwich Isles Communications, Inc. v. United States" on Justia Law

The Greens opened a Union Bank of Switzerland (UBS) account around 1980, with their daughter, Kimble, as a joint owner. Kimble directed UBS to maintain the account as a numbered account and to retain all correspondence at the bank. Kimble married an investment analyst who agreed to preserve the secrecy of the account. The couple’s joint federal tax returns did not report any income derived from the UBS account nor disclose the existence of the foreign account. After the couple divorced, Kimble's tax returns were prepared by a CPA, who never asked whether she had a foreign bank account. In 2003-2008, Kimble’s tax forms, signed under penalty of perjury, represented that she did not have a foreign bank account.In 2008, Kimble learned of the Treasury Department’s investigation into UBS for abetting tax fraud; she retained counsel. UBS entered into a deferred prosecution agreement that required UBS to unmask numbered accounts held by U.S. citizens. Kimble was accepted into the Offshore Voluntary Disclosure Program (OVDP) and agreed to pay a $377,309 penalty. Kimble withdrew from the OVDP without paying the penalty.The IRS determined that Kimble’s failure to report the UBS account was willful and assessed a penalty of $697,299, 50% of the account. Kimble paid the penalty but sought a refund. The Federal Circuit affirmed summary judgment against Kimble, finding that she violated 31 U.S.C. 5314 and that her conduct was “willful” under section 5321(a)(5). The IRS did not abuse its discretion in setting a 50% penalty. View "Kimble v. United States" on Justia Law

Pentagon Force Protection Agency officers filed claims for overtime compensation under the Fair Labor Standards Act, 29 U.S.C. 207(a)(1). Officers worked 8.5-hour shifts, with two 35-minute breaks, and were compensated for their entire shift except for one 30-minute meal period. Plaintiffs argue that they did not receive a bona fide meal period because they were required to work during breaks; they were not allowed to leave the Pentagon or remove their uniforms, nor to congregate in public or publicly engage in leisure activities. While on break, they had to remain ready to respond to emergencies, which occurred frequently. If an officer responded to an emergency during both break periods (unable to take a bona fide meal break), an overtime request was granted for one break period. Officers were to constantly monitor their radios and respond to questions from other employees or members of the public, which occurred frequently but could be avoided by going to a break room. They often used breaks for processing paperwork, completing mandatory training courses online, and refueling Pentagon vehicles.The Federal Circuit affirmed summary judgment in favor of the government. The Claims Court properly used the predominant benefit test and considered whether the employees were required to perform any “substantial duties” or give up a “substantial measure” of time and effort during a meal break, correctly focusing on “actual obligations,” rather than witness characterization. In the totality of the circumstances, Plaintiffs were the primary beneficiaries of their meal breaks. View "Akpeneye v. United States" on Justia Law

In 2008, severe storms hit Indiana. Columbus Hospital sustained significant damage. President Bush authorized FEMA assistance through disaster grants under the Stafford Act, 42 U.S.C. 5121–5206. The state agreed to be the grantee for all grant assistance, with the exception of assistance to individuals and households. FEMA reserved the right to recover assistance funds if they were spent inappropriately or distributed through error, misrepresentation, or fraud. Columbus apparently submitted its request directly to FEMA, instead of through the state. FEMA approved Columbus projects, totaling approximately $94 million. Funds were transmitted to Columbus through the state. In 2013, the DHS Inspector General issued an audit report finding that Columbus had committed procurement violations and recommended that FEMA recover $10.9 million. FEMA reduced that amount to $9,612,831.19 and denied Columbus’s appeal. Columbus did not seek judicial review. FEMA recovered the disputed costs from Columbus in 2014.In 2018, Columbus filed suit, alleging four counts of contract breach and illegal exaction. The Claims Court dismissed Columbus’s illegal exaction claim, holding that Columbus did not have a property interest in the disputed funds and that FEMA’s appeal process protected Columbus’s rights to due process, and dismissed Columbus’s contract-based claims, finding that Columbus had no rights against FEMA under that contract or otherwise. The Seventh Circuit affirmed the dismissal of the illegal exaction and express and implied contract claims. The court vacated the dismissal of the third-party beneficiary contract claim. View "Columbus Regional Hospital v. United States" on Justia Law

In 1992, Brenner joined the VA as an attorney. In 2015, he suffered an accident that resulted in the amputation of his lower leg. He missed approximately six months of work and was reassigned to the Collections National Practice Group (CNPG). He received an overall “unacceptable” rating for 2017. Brenner unsuccessfully challenged the rating. In 2018, his supervisor proposed Brenner’s removal under 38 U.S.C. 714, listing 31 instances in which Brenner failed to meet deadlines and other errors. Brenner challenged the charges, citing his assignment to the CNPG and the “discrimination, retaliation, hostile work environment[,] and abuse of authority he has endured since.” Brenner also asserted that he had previously engaged in protected EEO and whistleblowing activity and attached copies of his complaints filed with the Office of Special Counsel (OSC) and Office of Accountability and Whistleblower Protection (OAWP). He argued that the deciding official, Hipolit, was required to recuse himself, given his prior involvement in Brenner’s complaints and discipline.Following the conclusion of Brenner's OSC and OAWP cases, Hipolit upheld the proposed removal as supported by substantial evidence. The Merit Systems Protection Board affirmed, finding that Brenner had not proven his affirmative defenses. The Federal Circuit vacated. The MSPB erred when it concluded that the Accountability and Whistleblower Protection Act of 2017, 38 U.S.C. 714, precluded, rather than required, review of the penalty imposed on Brenner and erred in applying the Act retroactively. View "Brenner v. Department of Veterans Affairs" on Justia Law