Judge: Round 1 redo was breach of contract

Thursday, July 3, 2014

WASHINGTON – It took nearly six years, but CardioSom has prevailed in its lawsuit against the government.

A U.S. Court of Federal Claims judge ruled June 30 that the government was in breach of contract when it rescinded contracts in the original Round 1 of competitive bidding.

“It’s been a long time coming,” said attorney Jerry Stouck, a shareholder with Greenberg Traurig, the law firm representing CardioSom. “The (court says) that CardioSom is entitled to damages.”

CardioSom filed its lawsuit in 2008 after Congress delayed the bidding program for 18 months, rescinding its contracts and those of approximately 300 other providers.

Chief Judge Patricia Campbell-Smith’s ruling came just days before the six-year statute of limitations for the lawsuit expired on July 14. Although the ruling could apply to other providers that had their contracts rescinded, they would have to act fast, says Stouck.

“Any other company that wants to take advantage of this has to file a lawsuit prior to the expiration of the statue of limitations,” he said. “I would suspect that there are companies out there that don’t know they have the right to legal recourse. On the other hand, they might be perfectly content and have moved on to other things. Six years is a long time.”

Stouck says the next step is for CardioSom to seek damages. Damages could include expenses like rent and utility costs that CardioSom incurred as a result of ramping up its business to fulfill its contracts, and any profits it would have earned from the three-year contracts.

“The numbers I’ve seen are big numbers,” he said.

In April, Campbell-Smith ruled that the court did indeed have jurisdiction to review the lawsuit.