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

Darlene Devlin had been married for more than 40 years when her husband died, then a civilian federal employee for nearly six years, entitling Darlene to Basic Employee Death Benefits (BEDB), 5 U.S.C. 8442(b)(1)(A), 8466(b). However, Darlene died before she could sign or file an application for BEDB. Her son, Devlin, completed, signed, and filed an application for BEDB on her behalf. The Office of Personnel Management (OPM) denied the application, concluding that Darlene was not entitled to BEDB because she failed to submit an application for those benefits before her death. Devlin argued that his appointment as a co-administrator of his mother’s estate permitted him to sign and file the application for BEDB on her behalf. The e Merit Systems Protection Board and Federal Circuit affirmed the denial. View "Devlin v. Office of Pers. Mgmt." on Justia Law

In 1983, Central entered into a contract with the U.S. Bureau of Reclamation for an appropriation of water from the New Melones Reservoir in California’s San Joaquin Valley. Upon enactment of the Central Valley Project Improvement Act (CVPIA) in 1992, Reclamation made statements indicating that it would not be able to meet the quantity commitments in its contracts because of other demands for the water. In 1993, Central sued for breach of contract. After holding that breaches had occurred in certain years, the Federal Circuit reversed and remanded for determination of damages. The district court, on remand, awarded Central $149,950.00 in cost of cover damages, but denied any expectancy damages. The Federal Circuit reversed and remanded. The trial court erred by not properly considering the effect of Reclamation’s announced breaches on the amount of water that Central may have expected to need to meet demand. This caused the trial court to discount Central’s arguments regarding what would have happened in the non-breach world. View "Stockton E. Water Dist. v. United States" on Justia Law

The survivors of eight firefighters who died in 2003 sought survivors’ benefits under the Public Safety Officers’ Benefits Act, 42 U.S.C. 3796. The eight were employed by First Strike, a private company that works with governmental and private entities to help suppress wildfires, under agreements that characterized them as independent contractors. The Public Safety Officers’ Benefits Office denied the claims, and they requested redetermination by the Director of the Bureau of Justice Assistance (BJA), which also denied the claims. The Federal Circuit affirmed, finding that the BJA did not err in concluding that the firefighters were not public safety officers within the meaning of the Benefits Act. View "Moore v. Dep't of Justice" on Justia Law

Veridyne’s first contract to provide logistics services to the Maritime Administration (MARAD), was awarded pursuant to the Small Business Administration’s (SBA) 8(a) program for small, disadvantage businesses, 15 U.S.C. 637(a). To obtain extension of the contract without it being submitted to bidding, Veridyne estimated that the new contract would not exceed “$3,000,000 in the aggregate.” Veridyne and MARAD officials knew that the services to be provided under the extension would cost far more than $3,000,000. MARAD proposed that SBA approve the new contract without opening it to competition. MARAD, Veridyne, and the SBA executed the new contract. From 2001 to 2004, MARAD issued additional work orders to Veridyne and paid Veridyne $31,134,931.12. In part due to MARAD’s cost overruns, the Office of Inspector General investigated and concluded that Veridyne had obtained the extension through fraud. After a stop order issued, Veridyne continued to work for MARAD and submitted additional invoices. Veridyne sued to recover $2,267,163. The government entered a defense under the Fraudulent Claims statute, 28 U.S.C. 2514, and counterclaimed for penalties under the False Claims Act, 31 U.S.C. 3729, and the Contracts Disputes Act, 41 U.S.C. 7103. The Claims Court held that Veridyne’s contract claim was forfeited under the Fraudulent Claims Act, but awarded Veridyne partial recovery under a quantum meruit theory, while awarding penalties to the government under the False Claims Act and the Contract Disputes Act. The Federal Circuit reversed the quantum meruit award, but affirmed the award of penalties.View "Veridyne Corp. v. United States" on Justia Law

Following the 1941 attack on Pearl Harbor, each of the Oil Companies entered into contracts with the government to provide high-octane aviation gas (avgas) to fuel military aircraft. The production of avgas resulted in waste products such as spent alkylation acid and “acid sludge.” The Oil Companies contracted to have McColl, a former Shell engineer, dump the waste at property in Fullerton, California. More than 50 years later, California and the federal government obtained compensation from the Oil Companies under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601, for the cost of cleaning up the McColl site. The Oil Companies sued, arguing the avgas contracts require the government to indemnify them for the CERCLA costs. The Court of Federal Claims granted summary judgment in favor of the government. The Federal Circuit reversed with respect to breach of contract liability and remanded. As a concession to the Oil Companies, the avgas contracts required the government to reimburse the Oil Companies for their “charges.” The court particularly noted the immense regulatory power the government had over natural resources during the war and the low profit margin on the avgas contracts. View "Shell Oil Co. v. United States" on Justia Law

In 2006, the U.S. Army Contracting Agency solicited bids for repair, maintenance, and construction services at Fort Rucker, Alabama, with indefinite delivery and quantity terms. The mechanism for pricing such jobs involves identification of costs and multiplication by certain “coefficients” set in the contract. It was well known that construction costs in the region had increased after Hurricane Katrina, 15 months before the government solicited bids. The Army awarded the contract to Lakeshore in 2007. In 2008, Lakeshore began 78 construction projects at Fort Rucker. When the Army exercised its option to extend the contract, it increased payments based on the contract’s price-adjustment clause. Lakeshore began 74 more delivery orders. After two years under the contract, Lakeshore concluded that it had incurred higher costs than were covered by payments under the contract and requested an equitable adjustment. The government denied the request. Acting under the Contract Disputes Act, 41 U.S.C. 7101, the contracting officer denied a claim for recovery of $1,996,152.40. The Claims Court rejected claims of breach of contract, breach of the covenant of good faith and fair dealing, breach of implied warranty, and mistake on summary judgment, stating that the government was not obliged to provide accurate local prices or to bear “economic consequences if one or more prices in the guide proved inaccurate.” The Federal Circuit affirmed. View "Lakeshore Eng'g Servs., Inc. v. United States" on Justia Law

Cunningham worked for the U.S. Office of Personnel Management in 2004-2005. He appealed his termination to the Merit Systems Protection Board, alleging discrimination based on marital status. Cunningham agreed to withdraw his appeal; OPM agreed to pay him $50,000. The agreement designated the OPM’s director of human resources as the contact for reference inquiries and permitted disclosure of dates of service only. The termination letter was to be removed from the personnel file and both parties were prohibited from disclosing the agreement or the grievance. In 2006, Cunningham accepted a position with USIS, a private company that contracts with federal agencies to perform background investigations. A week after Cunningham began training USIS suspended him without pay at the direction of OPM's security office. OPM employees (not the Director of Human Resources) had discussed Cunningham’s termination. An administrative judge found that OPM had breached the agreement, but that MSPB could not award damages. Cunningham was only entitled to rescind the agreement, reinstate his appeal, and return the $50,000 payment. MSPB adopted the findings. Cunningham did not want his appeal reinstated and sought breach-of-contract damages. The Claims Court found that it had subject matter jurisdiction under the Tucker Act, but dismissed based on res judicata. The Federal Circuit vacated, agreeing that the court had jurisdiction, but holding that res judicata did not apply because jurisdictional limits on the MSPB did not permit him to seek damages in the prior matter.View "Cunningham v. United States" on Justia Law

In the early 2000s, Raytheon underwent a major reorganization, including the sale of several business segments, including AIS, Optical, and Aerospace (segments at issue). As part of each sale, Raytheon retained the assets and liabilities of defined-benefit pension plans associated with the segments. Raytheon also calculated segment closing adjustments as required by CFR Cost Accounting Standards (CAS). Raytheon determined that some of its segments had pension surpluses, but the segments at issue had deficits. Although Raytheon paid the government its share of the surpluses, the government refused to pay its share of the deficits. Raytheon submitted certified claims for recovery of the deficits under the Contract Disputes Act, 41 U.S.C. 7103 (2011). The contracting officer issued final decisions denying these claims, reasoning that the adjustments were subject to the Federal Acquisition Regulation’s timely funding requirement, 48 CFR 31.205-6(j)(2)(i), and the deficits were therefore unallowable because Raytheon failed to fund the full amount of the pension deficits in the same year as the closings and that Raytheon’s segment closing calculations “do[] not comply with CAS 413[.]” The Claims Court awarded Raytheon $59.209,967 and rejected a claim for recovery with respect to one segment, finding that Raytheon applied the wrong asset allocation method in its adjustment calculation. The Federal Circuit affirmed.View "Raytheon Co. v. United States" on Justia Law

The Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6301, states that an executive agency must use: “a procurement contract . . . when . . . the principal purpose … is to acquire … property or services for the direct benefit or use” of the government and must adhere to the Competition in Contracting Act and the Federal Acquisition Regulation However, an “agency shall use a cooperative agreement . . . when . . . the principal purpose … is to transfer a thing of value … to carry out a public purpose of support or stimulation … instead of acquiring . . . property or service” and can avoid procurement laws. Under Section 8 of the Housing Act, HUD provides rental assistance, including entering Housing Assistance Program (HAP) contracts and paying subsidies directly to private landlords. A 1974 amendment gave HUD the option of entering an Annual Contributions Contract (ACC) with a Public Housing Agency (PHA), which would enter into HAP contracts with owners and pay subsidies with HUD funds. In 1983, HUD’s authority was amended. HUD could administer existing HAP contracts, and enter into new HAP contracts for existing Section 8 dwellings by engaging a PHA if possible, 42 U.S.C. 1437f(b)(1). Later, HUD began outsourcing services and initiated a competition to award a performance-based ACC to a PHA in each state, with the PHA to assume “all contractual rights and responsibilities of HUD.” After making an award, HUD chose to re-compete, seeking greater savings, expressly referring to “cooperative agreements,” outside the scope of procurement law. The Government Accountability Office agreed with protestors that the awards were procurement contracts. HUD disregarded that recommendation. The Claims Court denied a request to set aside the award. The Federal Circuit reversed, finding that the awards are procurement contracts, not cooperative agreements.View "CMS Contract Mgmt. Servs. v. United States" on Justia Law

Biggers had been employed by the Navy for 29 years and in 2007 was Security Manager for the Naval Facilities Engineering Service Center. The position required him to maintain a top secret security clearance. In 2008, a duty officer found that an outer vault door of the Secret Internet Protocol Router Network room was left open. Biggers notified the Commanding Officer of the potential violation. After an investigation, the Command Evaluator recommended that all security personnel (including Biggers) have their access to classified material suspended because “the investigation revealed numerous systemic problems, violations and deficiencies.” Biggers’ security clearance was suspended pending a final determination by the Department of Navy Central Adjudication Facility (DONCAF) pursuant to 5 U.S.C. 7513. Ultimately, DONCAF concluded that the information provided by Biggers and the Center “sufficiently explained, mitigated, or provided extenuating circumstances,” and Biggers was found eligible for a Top Secret clearance and assignment to a sensitive position and returned to duty status.. His suspension had lasted nine months. The Navy did not provide back pay or treat him as employed for calculation of retirement benefits. Biggers alleged that the suspension was motivated by retaliatory animus arising from his participation in an EEOC proceeding. An AJ determined that the Merit Systems Protection Board may not review the merits of a security clearance revocation or suspension. The Federal Circuit affirmed, holding that Biggers was not entitled to back pay. View "Biggers v. Dep't of the Navy" on Justia Law