Justia U.S. 9th Circuit Court of Appeals Opinion SummariesArticles Posted in Government Contracts
United States ex rel Godecke v. Kinetic Concepts, Inc.
The Ninth Circuit reversed the district court's dismissal of relator's qui tam action under the False Claims Act (FCA) against KCI, alleging that the company submitted false claims to Medicare. The panel held that relator sufficiently alleged that KCI violated the Act by adequately alleging a fraudulent scheme to submit false claims and reliable data that led to a strong inference that false claims were actually submitted. The panel also held that relator sufficiently alleged that KCI acted with the requisite scienter under the Act, and KCI's false claims were material to the government's payment decision. View "United States ex rel Godecke v. Kinetic Concepts, Inc." on Justia Law
Global Linguist Solutions, LLC v. Abdelmeged
Petitions for review of compensation orders arising under the Defense Base Act should be filed in the circuit where the relevant district director is located. The Ninth Circuit denied a petition for review challenging the Benefits Review Board's decision concluding that a linguist who supported the military in Iraq was entitled to workers' compensation under the Defense Base Act. The panel held that substantial evidence supported the ALJ's determination that claimant met both the medical and the economic aspect of disability as defined by the statute; the ALJ applied the correct legal standard when considering the evidence in this case; and the ALJ correctly concluded that claimant met his burden to show that he was disabled. View "Global Linguist Solutions, LLC v. Abdelmeged" on Justia Law
Solis v. Millenium Pharmaceuticals, Inc.
Solis alleged that his former employers violated the federal False Claims Act (FCA) by promoting dangerous off-label uses of a cardiovascular drug, Integrilin, and by paying physicians kickbacks to prescribe Integrilin and an antibiotic drug, Avelox. The district court found that Solis’s FCA claims were foreclosed by the public disclosure bar, which deprives federal courts of subject matter jurisdiction over FCA suits when the alleged fraud has already been publicly disclosed unless the relator is deemed an original source. The Ninth Circuit affirmed in part, holding that Solis’s Integrilin claims were substantially similar to those in prior public disclosures, and were close enough in kind and degree to have put the government on notice to investigate the alleged fraud before Solis filed his complaint. The court vacated the dismissal of Solis’s Integrilin claims and remanded for a determination of whether Solis qualified for the “original source” exception, 31 U.S.C. 3730(e)(4). Concerning Solis’s Avelox claims, the court held that the district court clearly erred in finding that the Avelox claims were publicly disclosed based on court complaints that never mentioned Avelox but affirmed the dismissal of Solis’s Avelox claims on the alternative ground of failure to plead with particularity as required by Fed.R.Civ.P. 9(b). View "Solis v. Millenium Pharmaceuticals, Inc." on Justia Law
United States ex rel. Bennett v. Biotronik, Inc.
The government-action bar, 31 U.S.C. 3730(e)(3), applies even when the Government is no longer an active participant in an ongoing qui tam lawsuit. The existence of multiple claims—some of which the Government settles—has no bearing on the Government's relationship to the entire action. The Ninth Circuit affirmed the dismissal of a qui tam action brought under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., alleging that a medical device supplier, Biotronik, engaged in a series of wrongful acts. The panel held that the Government remained a party to suits that have been settled, and the Government could not be said "partially" to have intervened in a prior qui tam suit. Therefore, relator was barred by section 3730(e)(3). View "United States ex rel. Bennett v. Biotronik, Inc." on Justia Law
TDY Holdings v. United States
TDY filed a complaint under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), 42 U.S.C. 9613(f)(1), seeking contribution from the government for its equitable share of the cleanup costs. The Ninth Circuit reversed the district court's grant of judgment in favor of the United States, which allocated 100 percent of past and future CERCLA costs to TDY. The panel agreed with the district court that some deviation from the allocation affirmed in Shell Oil Co., 294 F.3d at 1049, and Cadillac Fairview, 299 F.3d at 1022–23, was warranted by distinguishing facts. However, the panel held that encumbering a military contractor with 100 percent of CERCLA cleanup costs that were largely incurred during war-effort production was a 180 degree departure from the panel's prior case law, and the out-of-circuit authority that the district court relied upon did not warrant such a sharp deviation. In this case, the district court did not adequately consider the parties' lengthy course of dealings and the government's requirement that TDY use two of the hazardous chemicals at issue. Accordingly, the court remanded for additional proceedings. View "TDY Holdings v. United States" on Justia Law
United States ex rel. Campie v. Gilead Sciences, Inc.
Relators filed suit under the False Claims Act (FCA), 31 U.S.C. 3729-33, alleging that Gilead made false statements about its compliance with FDA regulations regarding certain HIV drugs. The Ninth Circuit reversed the district court's dismissal of relators' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The panel held that relators stated a plausible claim by alleging factually false certification, implied false certification, and promissory fraud. Furthermore, relators adequately plead scienter, materiality, and that Gilead submitted false claims. The panel reversed the dismissal of the retaliation claim, holding that the Second Amended Complaint sufficiently alleged facts showing that Relator Jeff Campie had an objectively reasonable, good faith belief that Gilead was possibly committing fraud against the government; sufficient facts to show Gilead knew of Campie's protected activity; and causation. View "United States ex rel. Campie v. Gilead Sciences, Inc." on Justia Law
United States v. Sprint Communications
The court affirmed the denial of a motion to intervene in a False Claims Act (FCA), 31 U.S.C. 3729-3733, suit brought by the Government against Sprint because the movant did not meet the requirements in the four-part test set out in Sw. Ctr. for Biological Diversity v. Berg. John C. Prather had filed an earlier qui tam suit against Sprint and others, alleging the companies were defrauding federal and state governments. The Government elected not to intervene and the district court later dismissed Prather's suit for lack of jurisdiction. The Government then filed its own FCA suit against Sprint and the district court denied Prather's motion to intervene based on lack of standing. As a preliminary matter, the court agreed with the Fourth Circuit that the parties' settlement and dismissal of a case after the denial of a motion to intervene does not as a rule moot a putative-intervenor's appeal. Here, the Government's settlement agreement with Sprint and the dismissal of the underlying action did not moot this appeal. On the merits, Prather lacked a significantly protectable interest in this case, the statute's qui tam recovery provisions in section 3730(d) did not apply to relators jurisdictionally barred under section 3730(e)(4); and Prather cannot obtain a monetary bounty under the FCA on his jurisdictionally barred claims. View "United States v. Sprint Communications" on Justia Law
Prather v. AT&T
Plaintiff, a state government attorney for over thirty years, filed a qui tam suit under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging that the largest telecom companies in the United States were fraudulently overcharging the federal government for surveillance services. The district court dismissed the suit pursuant to the FCA's public disclosure bar. The court concluded that the 2010 Amendments to the FCA, which transformed the public disclosure bar from a jurisdictional bar to an affirmative defense, do not apply to plaintiff's suit brought in 2009 because substantive changes, which impact the substantive rights of parties, are not applied retroactively; plaintiff did not have direct knowledge of fraud sufficient to qualify as an "original source;" and plaintiff's submissions to the FCC were not "voluntarily provided" as required by the statute. Furthermore, the court concluded that the district court properly determined that it did not have discretion to exercise supplemental jurisdiction over plaintiff's state law claims without jurisdiction over the federal claims. Accordingly, the court affirmed the judgment. View "Prather v. AT&T" on Justia Law
United States ex rel. Kelly v. Serco
Relator filed a qui tam suit against his former employer, Serco, under the False Claims Act (FCA), 31 U.S.C. 3729-3733, alleging, inter alia, that the company submitted fraudulent claims for payment to the United States for work done under a government contract. The district court granted summary judgment for Serco. In Universal Health Servs., Inc. v. United States ex rel. Escobar, the Supreme Court rejected the contention that a government contract or regulation must expressly designate a requirement as a condition of payment in order to trigger liability under the theory of implied certification. The court affirmed the district court's grant of summary judgment on relator's FCA claim for submitting false or fraudulent claims for payment under an implied false certification theory of liability. In this case, relator has failed to establish a genuine issue of material fact regarding the materiality of Serco’s obligations to comply with ANSI-748 or provide valid EVM reports. The court concluded that no reasonable jury could return a verdict for relator given the demanding standard required for materiality under the FCA, the government’s acceptance of Serco’s reports despite their non-compliance with ANSI-748, and the government’s payment of Serco’s public vouchers for its work under Delivery Orders 49 and 54. The court also concluded that relator failed to raise a genuine issue of material fact regarding the submission of a false or fraudulent claim. Finally, the court rejected relator's conspiracy claim, FCA claim for wrongful retention of overpayments; and Tameny claim for wrongful termination. View "United States ex rel. Kelly v. Serco" on Justia Law
Caltex Plastics v. Lockheed Martin
Caltex filed suit for breach of contract and unfair competition against Lockheed, arguing that some contracts between Lockheed and the United States government require Lockheed to use certain materials that only Caltex is authorized to supply, and that Caltex is therefore the intended third-party beneficiary of those contracts. Caltex also claims that Lockheed’s failure to use such materials is an unfair or unlawful business practice under California law. The district court dismissed Caltex’s complaint for failure to state a claim. The court held that the uniquely federal interest in the liability of defense contractors to third parties is sufficiently dominant to demand a uniform, federal rule. Thus, whether Caltex may sue Lockheed based upon Lockheed’s contracts with the federal government is governed by federal common law. In this case, Caltex has not sufficiently alleged that it is an intended third-party beneficiary of the contracts between Lockheed and the federal government. Caltex's allegations do not expressly state, nor even suggest, that Lockheed or the federal government intended to grant Caltex enforceable rights under their contracts. They also do not suggest that either party had Caltex in mind when drafting their contracts. The court held that, under federal common law, an incidental third-party beneficiary of a contract, such as Caltex, has no enforceable rights under that contract. Finally, Caltex has failed to state a plausible unlawful or unfair competition claim. The court affirmed the judgment. View "Caltex Plastics v. Lockheed Martin" on Justia Law