Justia Construction Law Opinion Summaries

The "Big Dig" highway project, built largely with federal funds, has transformed vehicular travel in Boston. Defendant supplied concrete and, on occasion, secretly substituted substandard material for the concrete required by contract specifications. Certain employees, including plaintiff, learned of the deception and brought a sealed qui tam action under the False Claims Act, 31 U.S.C. 3729-3733. The federal government intervened, and settled the case for several million dollars. Plaintiff received a percentage of the settlement. A few days after he signed the settlement, defendant dismissed plaintiff, allegedly for his refusal to take a drug test. Plaintiff sued, asserting pretext and retaliation. The district court granted summary judgment in favor of the employer. The First Circuit vacated and remanded, applying a burden-shifting analysis and concluding that the circumstances of the firing are open to legitimate question and that the record, viewed as a whole and in the light most favorable to plaintiff, did not warrant the entry of summary judgment. View "Harrington v. Aggregate Indus., Inc." on Justia Law

The Pennsylvania Steel Products Procurement Act,73 Pa. Cons. Stat. 1881-1887, prohibits the use of temporary bridges made out of foreignsteel on public works projects. The district court rejected a claim that the law was preempted by the Buy America Act, 23 U.S.C. 313, and that it violated the Commerce Clause, Contract Clause, and Equal Protection Clause. The Third Circuit affirmed. The federal Act contemplates more restrictive state laws. The state law was authorized by Congress, is rational, and did not, at its enactment, impair plaintiff's existing contracts. View "Mabey Bridge & Shore, Inc. v. Schoch" on Justia Law

Two laws were challenged under the Buy American Act, 41 U.S.C. 8301, which requires that only materials mined, produced, or manufactured in the U.S. be employed for "public use" or used in construction, alteration, or repair of "any public building or public work. A 1985 Puerto Rican law required that local construction projects financed with federal or Commonwealth funds use only construction materials manufactured in Puerto Rico, with limited exceptions relating to price, quality, and available quantity, P.R. Laws Ann. tit. 3, 927-927h (Law 109). Cement is deemed "manufactured in Puerto Rico" only if composed entirely of raw materials from Puerto Rico. P.R. Laws Ann. tit. 10, 167e (Law 132), enacted in 2001, imposes labeling requirements on cement and required that foreign-manufactured cement carry a special label warning against its use in government-financed construction projects unless one of the exceptions contained in the BAA and Law 109 applies. The district court held that the local laws were preempted. The First Circuit upheld Law 109 as a permissible action taken by Puerto Rico as a market participant, but invalidated provisions of Law 132 that discriminate against sellers of foreign cement, leaving the remainder of the law intact. View "Antilles Cement Corp. v. Fortuno" on Justia Law

In 2002, Defendant David Egan, a business manager for Defendant Foxhollow Construction and Trucking, Inc. (Foxhollow), met with Wayne Johnson of Defendant L.N. Johnson Paving, LLC (Johnson) to discuss a bid for excavation and paving work for a new public high school. Foxhollow wanted to bid on the project but lacked the requisite public works license. Johnson thought its license could cover Foxhollow if the two companies submitted a bid in Johnson's name. Egan submitted a subcontract bid in Johnson’s name to Plaintiff Harris, the general contractor for the school project, and was the successful bidder. Over the course of the business relationship, a contract dispute arose. Harris brought this action, alleging that (1) Foxhollow, Johnson, and another subcontractor breached their subcontracts with Harris. Egan filed a counterclaim for indemnification from Harris. The district court dismissed Foxhollow as a party for lack of proof of notice because there was no indication that Foxhollow was ever served. After a bench trial, the court granted Harris’ motion for "directed verdict" as to Egan’s counterclaim. The court concluded however that Harris failed to prove any of its remaining claims against any of the defendants and therefore was not entitled to relief. The court also awarded fees and costs to Johnson. On appeal to the Supreme Court, Harris argued that the district court: (1) erred in concluding Harris failed to prove contract damages; (2) erred in concluding that no defendant was unjustly enriched; (3) erred in concluding that no defendant is liable for fraud; (4) erred in concluding that Harris was not entitled to indemnity; (5) abused its discretion in denying Harris’ motion to amend findings and conclusion; (6) abused its discretion in granting fees and costs to Johnson; and (7) abused its discretion in denying Harris’ motion for a new trial. Upon review, the Supreme Court affirmed the district court's judgment except for its attorney fee awards, which were vacated. View "Harris, Inc. v. Foxhollow Construction & Trucking, Inc. " on Justia Law

The issue before the Supreme Court in this appeal was the City of Lewiston's rejection of a bid for a public works project on the grounds that the lowest bidder lacked sufficient experience for the project. In 2009, the City of Lewiston (City) advertised for bids to replace the irrigation system at the City golf course. Hillside Landscape Construction, Inc. (Hillside) desired to bid on the project, but prior to doing so it sent a letter to City stating that if City insisted upon having qualifications other than a current Idaho public works license to bid on the project, the City must follow the Category B procedures set forth in the Idaho Code and pre-qualify the bidders. Hillside asked that the qualification of prior experience be removed. City’s attorney denied the request, stating that City’s specifications and bidding process complied with state law. Hillside and four others submitted bids for the project. City notified the bidders that Hillside Landscape Construction submitted the lowest bid but that the company lacked the required experience specified within the bid documents. City awarded the contract to Landscapes Unlimited, the next lowest bidder. Hillside filed a complaint seeking injunctive relief, declaratory relief, and damages. The district court held that City complied with the bidding statutes, vacated a temporary restraining order, denied the motion for an injunction then dismissed Hillside’s complaint. In its review, the Supreme Court found that because the City chose to follow the "Category A" procedures set forth in the Idaho Code rather than the Category B procedures, the district court erred in holding that City could reject the bid on that ground. The Court therefore vacated the judgment of the district court and remanded the case for further proceedings. View "Hillside Landscape Construction, Inc. v. City of Lewiston " on Justia Law

In 1999 plaintiff pled guilty to making false statements while working on a project funded by the Federal Highway Administration (18 U.S.C. 2, 1014, and 1020). The agreement prohibited plaintiff from participating in any FHWA-funded project for a year. Plaintiff challenged Puerto Rico agencies' subsequent actions. The parties negotiated settlements; plaintiff entered into an agreement allowing it to bid on FHWA projects. Puerto Rico then enacted Law 458, which prohibits award of government contracts to any party convicted of a crime constituting fraud, embezzlement, or misappropriation of public funds and requires rescission of any contract with a party convicted of a specified offense. The statute states that it does not apply retroactively. One agency cancelled plaintiff's successful bids, another withdrew its consent to the settlement. The district court rejected claims of violation of the federal Contracts Clause and breaches of contract under Puerto Rico law. The First Circuit affirmed with respect to the constitutional claim. Any breach of the settlement agreements did not violate the Contracts Clause, even if committed in an attempt to unlawfully enforce Law 458 retroactively; defendants have not impaired plaintiff's ability to obtain a remedy for a demonstrated breach. Given the stage of the litigation, the district court should have retained the breach of contract claims. View "Redondo Constr. Corp. v. Izquierdo" on Justia Law

This consolidated appeal arose from a contract dispute between Douglas Asphalt Company (Douglas) and the Georgia Department of Transportation (GDOT) where GDOT had awarded Douglas two paving contracts to mill and resurface certain stretches of interstate highway. GDOT subsequently retained QORE, Inc., an engineering and materials testing company, to remove asphalt samples from the first project site and conduct tests to determine the samples' lime content. QORE retained, at GDOT's direction, Applied Technical Services, Inc. (ATS), to perform a test that GDOT developed, called an atomic absorption test. QORE and ATS sent the data that those tests produced to GDOT for its analysis and consideration and GDOT concluded from those data that the asphalt that Douglas had laid did not contain enough hydrated lime; GDOT then relied, in part, on those test results to justify its decision to place Douglas in default on both highway contracts. Douglas responded by filing this action against QORE, ATS, and several individual GDOT officials. On appeal, Douglas contended that the district court erred by dismissing its Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968, claims and by granting summary judgment for QORE on its claims for defamation and negligence. ATS maintained that the district court erroneously failed to grant its motions for judgment as a matter of law on both the defamation and negligence claims. The court held that the district court did not err in dismissing Douglas's RICO claim and that QORE and ATS were entitled to judgment as a matter of law on both the defamation and negligence claims. Therefore, the court affirmed in part, reversed in part, vacated the judgment against ATS, and remanded for entry of judgment in favor of ATS. View "Douglas Asphalt Co., et al. v. QORE, Inc., et al." on Justia Law

In 2003, the company entered into contracts with the government for roof repairs of two government buildings. Due to delays the projects were not completed and accepted by the government until September and October 2005. At the time, Federal Acquisition Regulations required that a performance report be prepared for each construction contract for $550,000 or more, 48 C.F.R. § 36.201. The company received negative interim performance evaluations from the resident engineer for both projects in February, 2004. In March, 2006, the resident engineer issued proposed negative final performance evaluations for both projects. The company protested the proposed evaluations, asserting that subcontractors and other problems, beyond its control, caused the delays. In final performance evaluations, the engineer assigned an overall performance rating of unsatisfactory and assigned unsatisfactory ratings for each project in 15 individual categories. The contracting officer issued a final decision that the unsatisfactory performance appraisal was justified. The Claims Court rejected the company's suit. The Federal Circuit affirmed. A contractor is responsible for the unexcused performance failures of its subcontractors and the complaint did not allege facts that would excuse the delays. View "Todd Constr., L.P. v. United States" on Justia Law

A contractor, renovating military housing, obtained a performance bond under the Miller Act (40 U.S.C. 3131 (b)) and abandoned the project after completing 12 percent of the work. The government had paid 40 percent of the contract price. The surety contracted for completion, but the second contractor discovered code violations and incurred penalties for late completion. Costs were reimbursed by the surety, which filed suit under the Tucker Act, 28 U.S.C. 1491. The Federal Circuit held that the Claims Court lacked jurisdiction. The court previously held that the Claims Court has jurisdiction under the Act over sureties' claims based on a theory of equitable subrogation; this case does not involve equitable subrogation because the government made payments at issue before receiving notice of the contractor's default. The waiver of sovereign immunity under the Act does not extend to impairment of suretyship claims apart from the theory of equitable subrogation. The Contract Disputes Act, 41 U.S.C. 601, applies to a surety's claim against the government arising from a takeover agreement between the government and surety for completion of a bonded contract following the principal obligor’s default; the surety failed to satisfy CDA jurisdictional prerequisites. View "Lumbermens Mut. Cas. Co. v. United States" on Justia Law

The United States Army Corps of Engineers awarded the company a contract for construction of a government hospital at Fort Benning. Two rival bidders each filed a bid protest with the Government Accountability Office, which recommended that the contract be re-procured without the company's participation. The GAO found organizational conflict of interest, focusing on the potential for access to nonpublic information and had concluding that the company had access to special knowledge of the Army's requirements that would give unfair advantage. The Army announced that it would follow the GAO recommendation and terminated the contract. The Court of Claims ordered reinstatement and the Federal Circuit affirmed. The Claims Court applied the correct standard of review in concluding that the termination was unreasonable. Th GAO identified no facts to indicated that the company actually had access to specific, sensitive information. View "Turner Constr. Co., Inc. v. United States" on Justia Law