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Acetris Health, LLC v. United States

United States Court of Appeals for the Federal Circuit

February 10, 2020, Decided

2018-2399

Opinion

 [*722]  Dyk, Circuit Judge.

This case concerns restrictions on the procurement of foreign-origin pharmaceutical products by the Department of Veterans Affairs ("VA"). The Trade Agreements Act of 1979 ("TAA") bars the VA from purchasing "products of" certain foreign [**2]  countries, such as India. The Federal Acquisition Regulation ("FAR") directs agencies to purchase "U.S.-made end products" before end products from certain foreign countries.

The VA interpreted the statute and regulation to define the country of origin of a pharmaceutical product to be the country in which the product's active ingredient is manufactured, here India. Acetris Health, LLC ("Acetris") challenged the VA's interpretation of the TAA and the FAR in a bid protest action at the United States Court of Federal Claims ("Claims Court"). The Claims Court granted Acetris declaratory and injunctive relief, holding that the VA misinterpreted the TAA and the FAR and enjoined the VA, in future procurements, from utilizing an erroneous interpretation. Acetris Health, LLC v. United States, 138 Fed. Cl. 579, 606-07 (2018). The government appeals.

We hold that this suit is justiciable and agree with the Claims Court on the result, but find the Claims Court's remedy to be imprecise in certain respects. Accordingly, we affirm-in-part, vacate-in-part, and remand for the entry of a declaratory judgment and injunction consistent with this opinion.

Background

Two statutes restrict the government's ability to procure foreign-origin products. The first of these statutes [**3]  to be enacted, the Buy American Act of 1933 ("BAA"), provides in relevant part that:

 [*723]  [O]nly manufactured articles, materials, and supplies that have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States, shall be acquired for public use unless the head of the department . . . determines . . . their cost to be unreasonable.

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949 F.3d 719 *; 2020 U.S. App. LEXIS 3892 **; 2020 WL 610487

ACETRIS HEALTH, LLC, Plaintiff-Appellee v. UNITED STATES, Defendant-Appellant

Prior History:  [**1] Appeal from the United States Court of Federal Claims in No. 1:18-cv-00433-MMS, Chief Judge Margaret M. Sweeney.

Acetris Health, LLC v. United States, 138 Fed. Cl. 579, 2018 U.S. Claims LEXIS 829 (July 10, 2018)

Disposition: AFFIRMED-IN-PART, VACATED-IN-PART, AND REMANDED.

CORE TERMS

products, procurement, manufactured, end product, transformed, tablets, foreign country, solicitation, bid, country-of-origin, trade agreement, instrumentality, contracts, determinations, ingredient, pharmaceutical product, contends, domestic, bidder, lowest, merits, oral argument, res judicata, pharmaceutical, challenges, excluding, protester, articles, suits, moot

Civil Procedure, Appeals, Standards of Review, De Novo Review, International Trade Law, Trade Agreements, Trade Agreements Act, Preliminary Considerations, Justiciability, Justiciability, Case & Controversy Requirements, Actual Controversy, Standing, Injury in Fact, Constitutional Law, Case or Controversy, Elements, Governments, Courts, Courts of Claims, Public Contracts Law, Bids & Formation, Judgments, Preclusion of Judgments, Res Judicata