The City of Albuquerque (“the City”) provided public-bus services to Albuquerque residents. The City hired Soto Enterprises, Inc., d/b/a Miracle Delivery Armored Services (“Soto”) to count the cash fares received money, transport it by armored car to the City’s bank for deposit, and verify the daily deposit amount with the City. In the second half of 2014, the City noticed irregularities between the amount of fare money that it internally recorded and the amount Soto deposited. After investigating these irregularities, the City sued Soto in New Mexico state court, alleging contract and tort claims. Though the City had not yet served process on Soto, Soto filed three documents in state court in response to the complaint. Then Soto filed an answer to the complaint, including a notice of removal to federal district court. In federal court, the City moved for a remand to state court, arguing that Soto had waived its right to remove the case to federal court after participating in the state court by filing the motion to dismiss. The district court agreed with the City’s position and remanded the case. The district court remanded this case after concluding that the defendant had waived its right to remove by filing a motion to dismiss in state court. Finding no reversible error with that decision, the Tenth Circuit affirmed. View "City of Albuquerque v. Soto Enterprises" on Justia Law
Former FBI agent Robert Lustyik wanted to help his friend and business partner, Michael Taylor, in return for payment. Taylor owned American International Security Corporation (AISC), a company that offered security and defense contracting services. The Department of Defense awarded AISC a contract in 2007 to provide training and related services to Afghan Special Forces. In mid-2010, the United States began investigating AISC regarding fraud and money laundering in connection with the 2007 contract. In September 2011, the United States filed a civil forfeiture action against assets owned by Taylor and AISC, which resulted in the seizure of more than $5 million dollars from AISC’s bank account. Lustyik used his status as an FBI agent to impair the government’s investigation of Taylor, including attempting to establish Taylor as a confidential source. Lustyik was indicted on charges related to the obstruction of justice. Prior to trial, Lustyik pleaded guilty to all charges in the indictment without a plea agreement. After his plea, his lead counsel withdrew and Lustyik obtained new counsel. On the eve of sentencing, counsel sought an order allowing him to obtain security clearance to review classified material he believed might be relevant for sentencing. The district court, having previously reviewed the documents, deemed them irrelevant to the sentencing issues, denied the motion, and subsequently sentenced Lustyik to 120 months’ imprisonment. Lustyik argued on appeal that the district court’s order denying his counsel access to the classified materials violated his Sixth Amendment rights at sentencing. Finding that the district court’s decision was not presumptively prejudicial to Lustyik’s advocacy at sentencing, nor did the district court abuse its discretion in concluding the documents were not relevant for sentencing, the Tenth Circuit affirmed. View "United States v. Lustyik" on Justia Law
Posted in: Civil Procedure, Constitutional Law, Criminal Law, Government Contracts, White Collar Crime
At the heart of this appeal were The Boeing Company’s alleged violations of FAA regulations arising from aircraft Boeing sold or leased to the government. Three former employees of Boeing (referred to as relators) in this qui tam action, brought suit under the False Claims Act (FCA) against Boeing and one of its suppliers, Ducommun, Inc. The relators claimed Boeing falsely certified that several aircraft it sold to the government complied with all applicable Federal Aviation Administration (FAA) regulations, even though it knew parts manufactured by Ducommun and incorporated into the aircraft didn’t conform to FAA-approved designs. The district court granted Boeing’s and Ducommun’s respective motions for summary judgment on the relators’ FCA claims, finding no genuine dispute of material fact as to the falsity, scienter, and materiality elements of those claims. The district court also denied the relators’ motion to strike two FAA investigative reports, which the court then relied on in granting the motions for summary judgment. The relators then appealed. After review, the Tenth Circuit concluded the district court properly admitted the FAA reports under the Federal Rules of Evidence and the relators failed to establish the scienter element of their FCA claims. View "Smith v. Boeing Company" on Justia Law
Defendants-Appellants David Banks, Kendrick Barnes, Demetrius Harper, Clinton Stewart, Gary Walker, and David Zirpolo were convicted following a jury trial on multiple counts of mail fraud and wire fraud, and conspiracy to commit mail fraud and wire fraud. Defendants contacted numerous staffing agencies to “assist in providing temporary services. Witnesses from multiple staffing companies testified that a Defendant (or someone acting as Defendants’ agent) approached them and expressed the desire for "payrolling" services. The staffing-company witnesses testified that they were induced into believing that Defendants’ companies were either doing business with major law-enforcement agencies or were on the verge of selling a specialized software to these agencies. These witnesses testified that Defendants (or Defendants’ agents) assured them that this alleged law-enforcement business would enable Defendants’ companies to pay the staffing companies’ invoices, and, critically, that they relied on these representations in choosing to do business with Defendants. Trial testimony from representatives of the law-enforcement agencies with whom Defendants claimed to be doing business revealed the falsity of Defendants’ representations to the staffing companies. When questioned about their failure to pay the staffing companies’ invoices, Defendants gave false assurances that payment would be forthcoming, and they continued to imply that they were doing business with large government law enforcement agencies. In the end, forty-two different staffing companies were left with outstanding invoices totaling in excess of $5,000,000, which could not be submitted to the government agencies, which had no business relationship with Defendants’ companies. Defendants were sentenced to terms of imprisonment ranging from 87 to 135 months. Defendants argued on appeal to the Tenth Circuit: (1) their right to a speedy trial was violated when the district court granted multiple continuances of the trial date (at Defendants’ request); (2) the district court compelled co-Defendant Barnes to testify in violation of his Fifth Amendment privilege against self-incrimination and failed to give a proper curative instruction; (3) the district court abused its discretion in excluding the testimony of two witnesses Defendants sought to call at trial; and (4) the cumulative effect of the district court’s otherwise harmless errors prejudiced them and required reversal. Finding no reversible error, the Tenth Circuit affirmed. View "United States v. Banks" on Justia Law
MMS Construction & Paving, L.L.C. entered into a subcontract with Head, Inc. to pave asphalt runway shoulders at Altus Air Force Base in Oklahoma. The project was delayed and MMS, expressing concern that Head had not been making agreed payments, quit the job. MMS also complained that completing the job would be more expensive than it originally believed because certain requirements were being imposed that Head said would be waived. After MMS quit, Head finished the job, relying on other subcontractors. MMS sued Head on state-law claims of breach of contract, tortious breach of contract, quantum meruit, and misrepresentation, and brought a claim under the federal Miller Act on Head’s surety bond for the project. Head filed a counterclaim, alleging that MMS breached the contract. After a jury trial, MMS was awarded damages and attorney fees. Head filed a motion for judgment as a matter of law or for a new trial, both of which the district court denied. Head appealed, arguing: (1) the evidence at trial was insufficient to show that Head breached the contract; (2) if there was a breach, it was not material; (3) an Oklahoma statute limited MMS’s breach-of-contract damages to the amount unpaid plus interest; (4) the evidence was not sufficient to establish MMS’s alleged lost-profits damages for breach of contract; (5) MMS did not present sufficient evidence to prove misrepresentation or any damages from misrepresentation, MMS waived the misrepresentation claim, and the award of misrepresentation damages duplicated the award of damages for breach of contract; and (6) MMS was not entitled to attorney fees from Head because the Miller Act does not allow recovery of those fees. Upon careful consideration of the district court record, the Tenth Circuit reversed damages award based on the misrepresentation claim because the jury’s award was not supported by any evidence at trial. On all other issues, the Court affirmed. View "MMS Construction & Paving v. Head, Inc., et al" on Justia Law
Former New Mexico state treasurer Defendant-Appellee Robert Vigil and his former deputy, co-Defendant Ann Marie Gallegos allegedly hatched a plan to find work for his political rival's wife so that the rival couldn't challenge him in the next election. According to the complaint, Defendants solicited bids for a state contract and insisted that any interested contractor hire Samantha Sais (the wife) on any terms she wished. Plaintiff SECSYS agreed to the plan in principle, but ultimately could not come to terms with Ms. Sais. When negotiations broke down, Defendants allegedly chose another contractor who agreed to Ms. Sais' terms. Mr. Vigil was ultimately indicted, convicted, and sentenced to prison for his role in this scheme. Plaintiff sought damages from Mr. Vigil and Ms. Gallegos in their individual capacities for violating its Fourteenth Amendment right to equal protection for discriminating against the company when it refused to acquiesce to Ms. Sais' demands: "So that leaves SECSYS with the remarkable argument that it was discriminated against in violation of the federal Constitution not because it was unwilling to pay, but because it was willing to pay only some of an allegedly extortionate demand." Upon review, the Tenth Circuit found no evidence that Defendants enforced Ms. Sais' demands with the purpose of discriminating against those who failed to meet them: "every indication in the record before [the Court] suggest[ed] the defendants would have been just as happy if SECSYS had met its full demand as it was when another bidder eventually did so." The Court affirmed the district court's grant of summary judgment to Defendants. View "SECSYS, LLC v. Vigil" on Justia Law
Plaintiffs Michael Maestas, Thomas May, Juanito Marquez and Jahmaal Gregory were all officers in a private security force that protects Los Alamos National Laboratory. They contended that their employer, Day & Zimmerman, LLC and SOC, LLC, (collectively, SOC) improperly classified them as exempt employees under the Fair Labor Standards Act (FSLA). The district court found that Plaintiffs were exempt executive employees and granted summary judgment to SOC. The parties disagreed over which of Plaintiffs' job duties was "primary." Upon review, the Tenth Circuit held that such a dispute presented a question of fact rather than an issue of law. Furthermore, the Court held that an employee who supervises subordinates while also conducting front-line law enforcement work performs a non-managerial task. Because there remained a genuine dispute as to whether three of the Plaintiffs had this task as their primary duty, summary judgment was proper only against Plaintiff Thomas May and improper as to the others. Accordingly, the Court partly reversed, partly affirmed the district court's decision and remanded the case for further proceedings. View "Maestas v. Day & Zimmerman, LLC" on Justia Law
The City of Hugo, Oklahoma, and the Hugo Municipal Authority, a public water trust, (collectively "Hugo") contracted with the City of Irving, Texas, ("Irving") for the sale of water Hugo has been allocated or sought to be allocated under permits issued by the Oklahoma Water Resources Board ("Board"). Hugo and Irving brought suit against the nine members of the Board for a declaration that certain Oklahoma laws governing the Board’s water allocation decisions were unconstitutional under the dormant Commerce Clause and an injunction prohibiting their enforcement. The district court granted summary judgment for the Board, and Hugo and Irving appealed. Upon review, the Tenth Circuit concluded that Hugo, as a political subdivision of Oklahoma, lacked standing to sue the Board under the dormant Commerce Clause. Irving, whose injury was solely premised on a contract it entered into with Hugo, likewise could not demonstrate standing because any injury to Irving cannot be redressed. Concluding no plaintiff had the necessary standing, the Court vacated the district court’s order and remanded the case back the district court to dismiss for lack of federal jurisdiction.
Posted in: Constitutional Law, Environmental Law, Government & Administrative Law, Government Contracts, U.S. 10th Circuit Court of Appeals, Zoning, Planning & Land Use
Tarrant Regional Water District ("Tarrant"), a Texas state agency, applied to the Oklahoma Water Resources Board ("the OWRB") for permits to appropriate water at three locations in Oklahoma for use in Texas. Just before filing its applications, Tarrant sued the nine members of the Oklahoma Water Resources Board in the district court for the Western District of Oklahoma and sought a declaratory judgment to invalidate certain Oklahoma statutes that govern the appropriation and use of water and an injunction preventing OWRB from enforcing them. Tarrant alleged that the Oklahoma statutes restricted interstate commerce in water and thereby violated the dormant Commerce Clause as discriminatory or unduly burdensome. Tarrant further alleged that Congress did not authorize Oklahoma through the Red River Compact ("Compact") to enact such laws. OWRB responded that Congress did authorize Oklahoma to adopt these statutes by consenting to the Compact. Tarrant also claimed that the Compact preempted the Oklahoma statutes insofar as the Compact applied to Tarrant’s application to appropriate water located in the Red River Basin. The district court granted summary judgment for OWRB on both the dormant Commerce Clause and Supremacy Clause claims. After that decision, Tarrant took steps to export to Texas Oklahoma water that was not subject to the Compact. Tarrant negotiated a contract with property owners in Stephens County, Oklahoma to export groundwater to Texas and also entered a memorandum of understanding (MOU) with the Apache Tribe concerning the Tribe’s potential water rights. In court Tarrant then reasserted its dormant Commerce Clause challenge based on these transactions. The district court dismissed the Stephens County matter for lack of standing and the Apache Tribe matter as not ripe. Upon review, the Tenth Circuit affirmed the grants of summary judgment on the dormant Commerce Clause and preemption issues, and the dismissals based on standing and ripeness: [w]e hold that the Red River Compact insulates Oklahoma water statutes from dormant Commerce Clause challenge insofar as they apply to surface water subject to the Compact."
Posted in: Constitutional Law, Environmental Law, Government & Administrative Law, Government Contracts, U.S. 10th Circuit Court of Appeals, Zoning, Planning & Land Use
Plaintiff-Appellant Dawn Bunch brought suit under 42 U.S.C. 1983 alleging that Defendant Independent School District No. I-050 of Osage County (Prue Public Schools) violated her First and Fourteenth Amendment rights. She appealed a district court's grant of summary judgment in favor of the District in which the court concluded Plaintiff had no protected property interest in her employment and failed to show her speech was a motivating factor for her termination. An internal investigation found that Plaintiff “either [. . .] wasn’t properly trained or she was not doing her job as required.” The School Board in an open session, but without holding a due-process hearing, terminated Plaintiff's employment. Plaintiff's complaint claimed a property interest in her employment contract entitled her to a hearing before her employment was terminated. She also alleged the termination was in retaliation for her exercise of free speech rights because, earlier that fall, she had signed a state-court petition calling for a grand jury investigation into the activities of Board members, and she had complained to friends and family about the Board. Upon review of the trial court's record and the applicable authority, the Tenth Circuit found that Plaintiff's proffered evidence of discrimination did not amount to the requisite proof that her civil and constitutional rights were violated. The Court affirmed the lower court's grant of summary judgement in favor of the District.
Posted in: Constitutional Law, Contracts, Government Contracts, Labor & Employment Law, U.S. 10th Circuit Court of Appeals