Articles Posted in US Court of Appeals for the Federal Circuit

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Under 42 U.S.C. 1485, the USDA's Rural Housing Service (RHS) makes loans for construction of affordable rental housing. From 1972-1982, each of 10 limited partnerships (with a common general partner, Olsen) entered into a 50-year loan agreement that stated that each borrower could pay off the loan and convert its properties to conventional housing after 15 or 20 years. The 1987 Emergency Low Income Housing Preservation Act, 42 U.S.C. 1472(c)), provided that before accepting prepayment, the USDA must attempt to enter into an agreement with the borrower. In 2002, Olsen was negotiating to sell to a nonprofit organization. He notified the RHS of “intent . . . to convert [some] units into conventional housing” and sought approval to pay off the mortgages. RHS responded with a checklist. Olsen did not proceed; the potential acquirer decided against purchasing the properties. In 2011, Olsen submitted more definite prepayment requests. RHS responded with an incentive offer concerning four properties, which Olsen accepted, remaining in the program. For three other properties, RHS informed Olsen that prepayment was not an option. Olsen purportedly believed that pursuing prepayment on any properties was futile. He did not submit additional applications. In 2013, the partnerships sued, alleging that the government, through the 1987 enactment or the 2011 correspondence, violated their prepayment rights. The Federal Circuit reversed the Claims Court's dismissal. The 2002 correspondence did not trigger the RHS’s duty to accept prepayment; RHS did not take any steps inconsistent with prepayment. The government did not breach its contractual obligation in 2002. Because the alleged breaches occurred no earlier than 2011, the contract claims are not barred by the six-year limitations period. The Claims Court implicitly premised the dismissal of takings claims on the same erroneous rationale. View "Airport Road Associates, Ltd. v. United States" on Justia Law

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LFD operates a Lake Cumberland, Kentucky marina under a lease from the Army Corps of Engineers, covering approximately 130 acres of water and 36 acres of land. The Lease states: The right is reserved to the United States ... to enter upon the premises at any time and for any purpose necessary or convenient ... to flood the premises; to manipulate the level of the lake or pool in any manner whatsoever; and/or to make any other use of the lands as may be necessary in connection with project purposes, and the Lessee shall have no claim for damages. By 2007, Wolf Creek Dam, which created the lake, was at a high risk of failure; the Corps began lowering the lake's water level. The Corps returned the lake to its previous levels in 2014, when restoration was complete. LFD submitted a certified claim to the District Engineer, asserting $4,000,000 in damages. The Federal Circuit affirmed rejection of the claim. While the Lease is a contract for “the disposal of personal property” under 41 U.S.C. 7102(a)(4), giving the court jurisdiction, LFD did not properly present its reformation claim to the District Engineer. Rejecting a breach of contract claim, the court stated the Lease granted the Corps the right to manipulate the level of the lake in any manner whatsoever. View "Lee's Ford Dock, Inc. v. Secretary of the Army" on Justia Law

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In 2009, RNB and GAF entered into an agreement under which GAF would promote RNB’s “Roof N Box” product, a three-dimensional roofing model, to building construction contractors affiliated with GAF. The agreement required the parties to submit disputes “arising under” the agreement to arbitration. GAF terminated the agreement after about a year. In 2016, RNB, together with its founder and president, Evans, brought suit against GAF based on GAF’s activities in marketing its own product that competes with the Roof N Box. The complaint alleged design patent infringement, trade dress infringement, and unfair competition. GAF moved to dismiss or stay the action pending arbitration. The district court denied that motion. The Federal Circuit affirmed, stating that GAF’s assertion that the arbitration provision covers the claims stated in the complaint is “wholly groundless.” The complaint challenges actions whose wrongfulness is independent of the 2009 agreement’s existence. View "Evans v. Building Materials Corp." on Justia Law