Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Articles Posted in Government Contracts
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Dunbar, a Service Disabled Veteran Owned Small Business (SDVOSB), was awarded an Army Corps of Engineers ditch and tributary project in Arkansas. Dunbar then hired a subcontractor, Harding Enterprises, to work on the project. After Harding Enterprises defaulted, Dunbar made a demand on the bond guaranteed by Hanover, which Hanover denied. Hanover then filed suit seeking a declaration that it had no obligations under the bond and seeking to have the bond rescinded based on illegality of the subcontract.The Eighth Circuit reversed the district court's grant of summary judgment in favor of Hanover, holding that the district court erroneously concluded that the subcontract was undisputedly in violation of 13 C.F.R. 125.6(b)(2) because the percentage that Dunbar spent on contract performance relative to the prime contract price could not be conclusively ascertained until conclusion of performance of the prime contract. The court also held that the potential that Hanover may have liability under the False Claims Act if it were to perform under the bond does not justify discharging Hanover from its obligations and rescinding the contract. View "Hanover Insurance Co. v. Dunbar Mechanical Contractors, LLC" on Justia Law

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Relator filed a qui tam action against Trinity, alleging that Trinity violated the False Claims Act (FCA) by knowingly presenting a false or fraudulent claim to the government, making a false statement material to a false or fraudulent claim, and retaliating against him.The Eighth Circuit affirmed the district court's grant of Trinity's motion to dismiss for failure to state a claim, holding that the complaint failed to allege with particularity that defendant presented a false or fraudulent claim to the government or that it had made, used or caused to be used a false record or statement. In this case, relator's general allegations that Trinity's compensation scheme most likely resulted in the presentment of claims for payment or approval are insufficient; while there is no "presentment" requirement for a 31 U.S.C. 3729(a)(1)(B) claim, the plaintiff must plead a connection between the alleged fraud and the actual claim made payable to the government; because relator failed to allege with particularity that Trinity submitted a claim for payment to the government, he cannot establish that Trinity's allegedly false statements were "material" to any claim that was actually submitted; and relator's allegations are insufficient to establish that Trinity knew he was engaged in a protected activity. View "United States ex rel. Benaissa v. Trinity Health" on Justia Law

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Relators filed a quit am action against the Hospital for violations of the False Claims Act. Relators also filed suit against the Hospital and its CEO, alleging violation of the Act's anti-retaliation provision. The Eighth Circuit affirmed the district court's grant of the Hospital's motion to dismiss all counts of the complaint and grant of summary judgment as to the retaliation claim. The court held that the complaint alleged a fraudulent scheme without representative examples with the required specificity. Furthermore, the complaint lacked the sufficient indicia of reliability leading to a strong inference that claims were actually submitted.The court also held that claims alleging that defendants made false records or statements were properly dismissed because they failed to connect the false records or statements to any claim made to the government; claims that the Hospital conspired to violate the Anti-Kickback Statute were properly dismissed because the complaint did not include any details about an agreement and relators failed to plead the conspiracy with particularity; claims against the CEO were properly dismissed because the Act did not impose individual liability; and the district court properly granted summary judgment for the Hospital on the remaining claims. View "United States ex rel. Strubbe v. Crawford County Memorial Hospital" on Justia Law

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As long as the relator had direct knowledge of the true state of the facts, she can be an original source even though her knowledge of the misrepresentation was not first-hand. In this case, the Eighth Circuit reversed the district court's dismissal of relator's qui tam action under the False Claims Act, 31 U.S.C. 3729-3733. The district court reasoned that information underlying relator's allegations had been previously disclosed. The court held that the district court misapplied circuit precedent on the meaning of "original source" because relator did not have to have direct and independent knowledge of Bayer's allegedly false communications to the Department of Defense. The district court did not reach other arguments raised by Bayer. Therefore, the court remanded for the district court to address these matters in the first instance. View "Simpson v. Bayer Healthcare" on Justia Law

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The Eighth Circuit affirmed the dismissal of relator's False Claims Act (FCA), 31 U.S.C. 3729 et seq., suit based on the public disclosure bar. Relator alleged that defendants sought reimbursement from Medicare and Medicaid for ineligible drugs. The Eighth Circuit concluded that the amended public disclosure bar was appropriately resolved on a motion to dismiss, even assuming that it no longer poses a jurisdictional question; relator's complaint was insufficient to plausibly state that she qualified as an original source; the district court did not abuse its discretion in denying leave to amend; and the district court did not abuse its discretion by allowing Paddock and Perrigo to jointly file a motion to dismiss the second amended complaint. View "United States ex rel. Ambrosecchia v. Paddock Laboratories" on Justia Law

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Relator filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729-33, alleging that his former employer, AAKC, violated the FCA by submitting claims for Medicare reimbursement of anesthesia services at the “Medical Direction” rate. Relator alleged that, because AAKC anesthesiologists were not present in the operating room during patients’ “emergence” from anesthesia, and therefore AAKC did not comply with the Medicare conditions of payment for submitting such claims. The district court granted AAKC summary judgment. The court granted the United States leave to appear as amicus curiae supporting neither party. The court concluded that, because the agency had not clarified an obvious ambiguity in its Step Three regulation for decades, AAKC’s failure to obtain a legal opinion or prior CMS approval cannot support a finding of recklessness. The court also concluded that the district court did not abuse its discretion in refusing to consider a new theory first articulated in relator's summary judgment papers. Finally, the court rejected relator's claim that AAKC violated 42 C.F.R. 415.110(b). Accordingly, the court affirmed the judgment. View "Donegan v. Anesthesia Assoc." on Justia Law

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Plaintiff filed a qui tam suit under the Minnesota False Claims Act (MFCA), Minnesota Statutes Annotated 15C.01 et seq., and the federal False Claims Acts (FCA), 31 U.S.C. 3729 et seq., against UMMC, alleging that UMMC fraudulently induced MDHS to overreimburse it for services provided to Medical Assistance (MA) patients. The district court granted UMMC's motion to dismiss and denied plaintiff's motion for leave to amend the complaint for a third time. Plaintiff alleges that UMMC's false or fraudulent claim is that it's children's unit was a "children's hospital." The court concluded that, in the absence of a statutory definition of "children's hospital," it was reasonable for UMMC to inquire about the proper classification of its children's unit. A reasonable interpretation of ambiguous statutory language does not give rise to a FCA claim. The court also concluded that the district court did not incorrectly hold plaintiff to Rule 9(b)'s heightened pleading standard; plaintiff's second amended complaint fails to demonstrate that UMMC violated section 3729(a)(1)(G); and the court found no violation of section 3729(a)(1)(C). Finally, the court concluded that plaintiff's proposed amendments would be futile. Accordingly, the court affirmed the judgment. View "Olson v. Fairview Health Serv." on Justia Law

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Relator filed a qui tam action alleging that Bi-State and Eager Road made false claims to receive federal public-transit funds through the Department of Transportation and the Federal Transit Administration. The district court denied Bi-State’s motion for summary judgment. The court dismissed the appeal for lack of jurisdiction. The court concluded that the issue of Bi-State's immunity is not properly before the court. At no point during the proceedings before the district court did Bi-State claim that it was entitled to sovereign immunity. Bi-State’s motion for summary judgment argued only that it is not a “person” under the False Claims Act (FCA), 31 U.S.C. 3729-3733, and the district court’s denial of summary judgement addressed only that question. View "United States ex rel Fields v. Bi-State Dev. Agency" on Justia Law

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Relators filed related qui tam actions, alleging that government contractors, including Cisco, committed fraud against the government by means of a kickback and defective pricing schemes in violation of the False Claims Act (FCA), 31 U.S.C. 3729-3733 and the Anti-Kickback Act, 41 U.S.C. 51-52. The government intervened against Cisco, adopted the complaint, and settled the action. The government objected to relators’ claim to a percentage of the settlement on the ground that the relators’ complaint did not plead the conduct that formed the basis of the claims that the government ultimately settled; that the relators’ claims based on an alleged kickback scheme lacked merit; and that the settlement covered a separate defective pricing scheme. The district court awarded relators over eight million dollars. The Eighth Circuit initially affirmed. On rehearing, en banc, the Eighth Circuit vacated and remanded, concluding that the relator may recover only from the proceeds of the settlement of the claim that he brought. The district court’s order did not clearly apply that legal standard or make factual findings necessary to resolve the case under that standard. View "Rille v. United States" on Justia Law

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Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" on Justia Law