Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

A Louisiana pharmacy owned by a licensed pharmacist was investigated by the Drug Enforcement Administration after allegations arose that the pharmacy was filling prescriptions for itself and for patients with “red flags” indicating possible misuse or diversion of controlled substances. The DEA’s investigation focused on several prescriptions, including combinations of opioids and benzodiazepines for various patients, out-of-pocket payments for controlled substances, and a prescription filled by the pharmacist herself written by her physician father, which violated state law prohibiting physicians from prescribing controlled substances to immediate family.Following an agency hearing before an administrative law judge, the DEA’s Administrator adopted the ALJ’s recommendation and revoked the pharmacy’s federal registration to dispense controlled substances. The Administrator concluded that the pharmacy had violated federal regulations and Louisiana law by filling prescriptions without adequately resolving red flags and by filling a prescription written in violation of state law. The pharmacy petitioned for review in the United States Court of Appeals for the Fifth Circuit.The Fifth Circuit found that the DEA misinterpreted and misapplied its own regulations and state law. The court held that 21 C.F.R. § 1306.04(a) requires a pharmacist to “knowingly” fill an invalid prescription, which the DEA had not shown, and that a violation of the state-law standard of care is not, by itself, a violation of federal regulations. The court also held that the Louisiana law at issue did not apply to pharmacies. Because the DEA’s order rested on erroneous interpretations of governing regulations and state law, the Fifth Circuit vacated the deregistration order and remanded the matter for further proceedings. View "Neumann's Pharmacy v. Drug Enforcement Administration" on Justia Law

Several pharmaceutical manufacturers and a trade association challenged a Louisiana statute, Act 358, which restricts drug manufacturers from interfering with the delivery of federally discounted drugs through contract pharmacies. The statute was passed in response to manufacturers’ efforts to limit the distribution of discounted drugs under the federal 340B Program, particularly through arrangements with contract pharmacies serving vulnerable populations. The plaintiffs argued that the Louisiana law was preempted by federal law and violated several constitutional provisions, including the Takings Clause, the Contracts Clause, and the Due Process Clause’s prohibition on vagueness.The United States District Court for the Western District of Louisiana considered three related cases together. It denied the manufacturers’ motions for summary judgment and instead granted summary judgment for the State of Louisiana and the Louisiana Primary Care Association (LPCA) on all claims. The district court also allowed LPCA to intervene in each case, over the objection of one plaintiff.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court held that Act 358 is not preempted by federal law. It found that the federal 340B statute does not occupy the field of pharmacy regulation and does not conflict with or frustrate federal objectives, as it is silent on the use of contract pharmacies and leaves room for state regulation. The court also concluded that Act 358 does not effect a physical or regulatory taking, does not substantially impair contract rights under the Contracts Clause, and is not unconstitutionally vague. However, the Fifth Circuit reversed the district court’s order permitting LPCA to intervene in AbbVie’s case, finding that LPCA’s interests were adequately represented by the State and it did not show it would present a distinct defense. The court affirmed summary judgment for Louisiana on all claims. View "AstraZeneca v. Murrill" on Justia Law

A Texas nonprofit health center, CentroMed, experienced a data breach in 2024 that exposed the personal information of its patients. Arturo Gonzalez, representing himself and others affected, filed a class action in Bexar County, Texas, alleging that CentroMed failed to adequately protect their private information. CentroMed, which receives federal funding and has occasionally been deemed a Public Health Service (PHS) employee under federal law, sought to remove the case to federal court, claiming removal was proper under 42 U.S.C. § 233 and 28 U.S.C. § 1442.After CentroMed was served, it notified the Department of Health and Human Services (HHS) and the United States Attorney, seeking confirmation that the data breach claims fell within the scope of PHS employee immunity. The United States Attorney appeared in state court within the required 15 days, ultimately informing the court that CentroMed was not deemed a PHS employee for the acts at issue because the claims did not arise from medical or related functions. Despite this, CentroMed removed the case to the United States District Court for the Western District of Texas 37 days after service. The district court granted Gonzalez’s motion to remand, concluding that removal was improper under both statutes: the Attorney General had timely appeared, precluding removal under § 233, and removal under § 1442 was untimely.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s remand. The Fifth Circuit held that CentroMed could not remove under § 233 because the Attorney General had timely appeared and made a case-specific negative determination. The court further held that removal under § 1442 was untimely, as CentroMed did not remove within 30 days of receiving the initial pleading. Thus, the remand to state court was affirmed. View "Gonzalez v. El Centro Del Barrio" on Justia Law

The case centers on Kristal Glover-Wing, who founded and operated Angel Care Hospice (ACH) in Louisiana, a Medicare-certified hospice provider. ACH’s business model involved recruiting local physicians as medical directors who referred patients and certified them as terminally ill, even when evidence showed many patients maintained active lifestyles inconsistent with terminal illness. Glover-Wing instructed staff to emphasize patients’ worst conditions in records and resisted discharging patients who no longer qualified, sometimes directing staff to falsify records or reenroll patients after hospitalizations. An investigation revealed that, for at least twenty-four patients, hospice services were provided and Medicare reimbursed ACH over $1.5 million, despite the patients not meeting eligibility criteria.Following a whistleblower complaint and investigation, a federal grand jury in the United States District Court for the Western District of Louisiana indicted Glover-Wing and two physicians for conspiracy to commit healthcare fraud and three counts of healthcare fraud. During trial, the jury asked if the conspiracy charge could include ACH employees as coconspirators, leading to a dispute over jury instructions. Glover-Wing requested judicial estoppel to prevent the government from expanding the conspiracy beyond named defendants, arguing she relied on prior government representations. The district court denied her requests, and the jury convicted Glover-Wing on all counts while acquitting the physicians. Post-trial, the district court denied Glover-Wing’s motions for acquittal and a new trial.The United States Court of Appeals for the Fifth Circuit reviewed Glover-Wing’s sufficiency-of-evidence and judicial estoppel claims. The court held that sufficient evidence supported all convictions, as a rational jury could find Glover-Wing knowingly participated in fraud and conspiracy. It further held that judicial estoppel did not apply because the government’s positions were not plainly inconsistent, nor accepted by the court, and Glover-Wing failed to show unfair detriment. The Fifth Circuit affirmed the district court’s judgment. View "United States v. Glover-Wing" on Justia Law

A group of Texas hospitals challenged a 2023 regulation issued by the Secretary of Health and Human Services. The regulation excluded certain patients, who received benefits under Texas’s uncompensated care pool demonstration project, from the Medicaid fraction calculation for Disproportionate Share Hospital (DSH) payments. This change threatened to reduce the hospitals’ Medicare DSH payments and make some hospitals ineligible for the 340B drug discount program, which relies on the DSH percentage.The hospitals initially sought a hearing before the Provider Reimbursement Review Board (PRRB), arguing the new regulation was unlawful. The PRRB determined it lacked jurisdiction because there was no “final determination” regarding a specific hospital’s payment amount, as required for PRRB review. The hospitals then filed suit in the United States District Court for the Northern District of Texas, which reached the merits, granted summary judgment for the hospitals, and vacated the regulation. The Secretary of Health and Human Services appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and concluded that the district court lacked subject-matter jurisdiction. The Fifth Circuit held that claims arising under the Medicare statute must first be presented to the agency for a “final decision” before judicial review is available, consistent with 42 U.S.C. § 405(g). Because the hospitals had not presented their claims through the required administrative process—specifically, by submitting cost reports and receiving a final reimbursement determination—they failed to satisfy the nonwaivable presentment requirement. The court also rejected the argument that the channeling requirement did not apply or that it amounted to a complete preclusion of judicial review. Accordingly, the Fifth Circuit reversed the district court’s judgment and remanded the case. View "Baylor All Saints Med Ctr v. Kennedy" on Justia Law

An inpatient rehabilitation facility employed a sales representative who raised concerns about the facility’s use of nonclinical personnel in the preadmission screening process required for Medicare reimbursement. The sales representative was terminated after five months of employment. Shortly thereafter, she filed a qui tam action under the False Claims Act, alleging that the facility presented false claims to Medicare, used false records to obtain payment, and conspired to submit false claims. She amended her complaint multiple times, and the government declined to intervene in the case.The United States District Court for the Southern District of Texas reviewed the second amended complaint after the defendant moved to dismiss under Rule 12(b)(6). The magistrate judge recommended dismissal of all claims, finding the complaint insufficiently plausible and lacking the particularity required by Rules 8(a) and 9(b). The magistrate judge also recommended denying leave to further amend the complaint as futile under Rule 16. The district court adopted these recommendations, entered final judgment, and dismissed the case with prejudice. The plaintiff timely appealed.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s dismissal de novo and the denial of leave to amend for abuse of discretion. The Fifth Circuit held that the complaint failed to plead sufficient facts to support the elements of a False Claims Act violation, specifically the falsity of the claims and the connection between the alleged conduct and the submission of false claims. The court also found that amendment would be futile, as the plaintiff had already amended her complaint twice without remedying the deficiencies. The Fifth Circuit affirmed the district court’s dismissal of the claims with prejudice. View "Gentry v. Encompass Health Rehabilitation Hospital of Pearland, L.L.C." on Justia Law

Fifty-six Texas emergency-medicine physician groups provided out-of-network emergency care to patients insured by twenty-four Blue Cross Blue Shield-affiliated plans from outside Texas. The physician groups sought reimbursement for their services, relying on assignments of benefits obtained from patients during hospital registration. The Blue Plans paid only part of the billed amounts, and the physician groups pursued appeals through the provider appeals process, but often received generic or no responses. After partial payments and unsuccessful appeals, the physician groups filed suit, alleging underpayment for 290,000 claims. Following a settlement, most claims were dismissed, and the district court selected 182 representative bellwether claims for summary judgment.The United States District Court for the Northern District of Texas granted summary judgment for the Blue Plans on all bellwether claims. The court found that the physician groups lacked standing due to issues with the assignments, such as ambiguous language, lack of written evidence for some claims, and anti-assignment provisions in the underlying plans. The court also held that the physician groups failed to exhaust administrative remedies, as they did not use the member appeals process specified in the plans, and dismissed some claims as time-barred. Final judgment was entered for the Blue Plans, and the physician groups appealed.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s decision de novo. The Fifth Circuit affirmed summary judgment only for claims where no written assignment was produced, finding the physician groups’ evidence insufficient. For the remaining claims, the Fifth Circuit vacated summary judgment and remanded for further proceedings. The court held that ambiguities in assignment language created factual disputes, that assignments of “all rights” could include the right to sue, and that the district court applied the wrong legal standard to estoppel regarding anti-assignment clauses and exhaustion of administrative remedies. The case was remanded for further evidentiary determinations. View "Angelina Emergency Medicine Associates PA v. Blue Cross" on Justia Law

An advanced practice registered nurse in Texas, who maintained an active nursing license and a Prescriptive Authority Number, did not have a current prescriptive-authority agreement with a physician, as required by Texas law to prescribe drugs. She was not accused of any misconduct but was attending an educational program to transition careers. Because she lacked a prescriptive-authority agreement, the Drug Enforcement Administration (DEA) initiated proceedings to revoke her federal Certificate of Registration, which allows her to handle controlled substances.An administrative law judge within the DEA recommended revocation, finding that she was “without state authority to handle controlled substances.” The Administrator of the DEA adopted this recommendation and revoked her registration. The nurse then petitioned for review directly to the United States Court of Appeals for the Fifth Circuit, as permitted by statute.The United States Court of Appeals for the Fifth Circuit reviewed the DEA’s action and concluded that the agency exceeded its statutory authority under 21 U.S.C. § 824(a)(3). The court held that the statute requires both the loss of a state license or registration and the lack of state authorization to handle controlled substances before the DEA may revoke a registration. Because the nurse still held all relevant state licenses and registrations, the court determined that the DEA lacked authority to revoke her registration solely due to the absence of a prescriptive-authority agreement. The court granted the petition for review, vacated the DEA’s revocation order, and remanded the case to the agency for further proceedings consistent with its opinion. View "DeWitt v. Drug Enforcement Administration" on Justia Law

A group of drug manufacturers that participate in the federal Section 340B program challenged a Mississippi law, H.B. 728, which prohibits manufacturers from interfering with healthcare providers’ use of contract pharmacies to distribute discounted drugs to low-income and uninsured patients. The manufacturers argued that the law compels them to transfer drugs at a discount to private, for-profit pharmacies and expands their obligations under federal law, potentially enabling improper resale of discounted drugs. They sought a preliminary injunction to prevent the law from taking effect, claiming it constituted an unconstitutional taking and was preempted by federal law.The United States District Court for the Southern District of Mississippi denied the manufacturers’ motion for a preliminary injunction. The court found that the manufacturers had not demonstrated a substantial likelihood of success on the merits of their takings or preemption claims, and thus were not entitled to preliminary injunctive relief. The manufacturers appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s denial of a preliminary injunction for abuse of discretion, applying clear error review to factual findings and de novo review to legal conclusions. The Fifth Circuit affirmed the district court’s decision, holding that the manufacturers had not shown a substantial likelihood of success on their claims. The court concluded that H.B. 728 did not effectuate a physical or regulatory taking, nor was it preempted by federal law under either field or conflict preemption theories. The court emphasized that, on the record presented, the manufacturers had not met their burden to justify the extraordinary remedy of a preliminary injunction. The district court’s denial of injunctive relief was therefore affirmed. View "AbbVie v. Fitch" on Justia Law

A Chinese manufacturer of electronic nicotine delivery systems (ENDS) sought authorization from the Food and Drug Administration (FDA) to market its refillable e-cigarette device in the United States. The device, sold without e-liquid, allows consumers to use a wide range of nicotine concentrations. The manufacturer submitted a premarket tobacco product application (PMTA) in August 2020, asserting that its product was appropriate for the protection of public health. After a preliminary assessment, the FDA identified deficiencies in the application and issued a deficiency letter in March 2023, requesting additional information. The manufacturer responded to some, but not all, of the deficiencies and requested an extension, which the FDA later denied. In January 2024, the FDA issued a final order denying the application, citing insufficient data to evaluate the product’s risks and benefits.The United States Court of Appeals for the Fifth Circuit reviewed the case after the manufacturer and a retailer based in Texas, who was also affected by the denial, petitioned for review. The court determined that venue was proper because the retailer had its principal place of business in the circuit. The petitioners argued that the FDA’s denial was arbitrary and capricious, claiming the agency failed to weigh the public health benefits of the product and improperly limited applicants to a single deficiency letter.The Fifth Circuit held that the FDA’s decision was reasonable and reasonably explained. The court found that the FDA had considered the potential benefits and risks of the product, explained the deficiencies in the application, and did not impose new evidentiary requirements without notice. The court also concluded that the FDA’s policy of issuing only one deficiency letter was adequately justified and not arbitrary. The petition for review was denied. View "Shenzhen Youme v. FDA" on Justia Law