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

A group of associations representing infusion centers, cancer patients, and pharmaceutical manufacturers challenged the constitutionality of a program created by the Inflation Reduction Act of 2022, which directs the Secretary of Health and Human Services (HHS), through the Centers for Medicare and Medicaid Services (CMS), to negotiate prices for high-expenditure prescription drugs under Medicare Parts B and D. The program allows HHS to select drugs based on certain criteria, negotiate a “maximum fair price” with manufacturers, and impose an excise tax on manufacturers who refuse to negotiate. The tax is calculated as a high percentage of sales reimbursed by Medicare. Manufacturers may avoid the program by withdrawing from Medicare and Medicaid participation. The statutory scheme also limits administrative and judicial review of key program decisions and allows HHS to implement early cycles of the program through guidance rather than notice-and-comment rulemaking.The United States District Court for the Western District of Texas initially dismissed the case for lack of subject-matter jurisdiction and improper venue. On appeal, the United States Court of Appeals for the Fifth Circuit reversed and remanded, finding that at least one plaintiff had standing and venue was proper. On remand, the district court granted summary judgment for the government, holding that the program did not violate the nondelegation doctrine, that the Anti-Injunction Act barred the plaintiffs’ Eighth Amendment claim, and that the plaintiffs lacked a protected property interest to support their due process claim.Upon further appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s judgment. The court held that the statute provided an “intelligible principle” sufficient to withstand a nondelegation challenge, that the Anti-Injunction Act did not bar the Eighth Amendment claim but the excise tax did not constitute a punitive fine, and that neither manufacturers, providers, nor patients possessed a protected property or liberty interest implicated by the program. The government’s summary judgment was affirmed in full. View "Natl Infusion Center v. Kennedy" on Justia Law

A laboratory testing company, Boston Heart Diagnostics (BHD), and two rural Texas hospitals, Little River Health Care and Integrity Transitional Hospital, entered into arrangements where affiliated physicians referred blood tests to the hospitals, which then billed payors, including Medicare, at advantageous rates. The hospitals used Management Service Organizations (MSOs) as intermediaries to recruit and pay physicians, and BHD’s sales team—including several defendants—facilitated these relationships. Evidence at trial showed MSOs were used to provide kickbacks to physicians based on referral volume, disguised through sham contracts, resulting in unusually high revenues for BHD. The defendants included BHD’s CEO, vice president of sales, and sales representatives, who were involved in managing and growing these partnerships.A federal grand jury indicted eighteen individuals for conspiracy to commit illegal remunerations in violation of the Anti-Kickback Statute (AKS) and 18 U.S.C. § 371. Five defendants proceeded to a joint jury trial in the United States District Court for the Eastern District of Texas. The government presented testimony from co-conspirators and documentary evidence to show the existence of the scheme and the defendants’ knowledge and participation. The jury found all five guilty of conspiracy. The court denied post-trial motions for acquittal or a new trial, sentenced the defendants, and four of them appealed.The United States Court of Appeals for the Fifth Circuit reviewed the sufficiency of the evidence de novo and other claims under deferential standards. The court affirmed all convictions, holding that a rational jury could find beyond a reasonable doubt that the defendants knowingly and willfully joined a conspiracy to pay illegal kickbacks to induce referrals for federally insured patients. The court also held there was sufficient evidence of a federal nexus and no error in the district court’s handling of jury notes or instructional refusals. The convictions and sentences were affirmed. View "USA v. Theiler" on Justia Law

Several pharmaceutical manufacturers and a trade association challenged a Louisiana statute enacted in 2023, which prohibits drug manufacturers and distributors from interfering with the acquisition or delivery of discounted drugs—purchased under the federal Section 340B Drug Pricing Program—to pharmacies contracted by certain healthcare providers. The 340B Program requires drug manufacturers participating in Medicaid and Medicare to provide discounted outpatient drugs to designated healthcare providers serving low-income and rural populations. Many of these providers lack in-house pharmacies and use external contract pharmacies. In response to manufacturer-imposed limits on contract pharmacy use, Louisiana enacted Act 358 to preserve covered entities’ ability to use such pharmacies.The plaintiffs, including AbbVie, AstraZeneca, and the Pharmaceutical Research and Manufacturers of America, filed separate lawsuits in the United States District Court for the Western District of Louisiana against the Louisiana Attorney General, arguing that Act 358 is preempted by federal law, constitutes an unconstitutional taking, impairs contracts in violation of the Contracts Clause, and is unconstitutionally vague. The district court consolidated the cases, granted summary judgment for Louisiana and the Louisiana Primary Care Association (an intervenor), and rejected all of the manufacturers’ claims.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s judgment. The Fifth Circuit held that Act 358 is not preempted by federal law, as the federal 340B Program does not regulate drug distribution logistics or the use of contract pharmacies, and thus leaves room for state regulation. The court further concluded that Act 358 does not effect a taking under the Fifth Amendment, does not substantially impair contractual obligations under the Contracts Clause, and is not unconstitutionally vague under the Due Process Clause. The Fifth Circuit thus upheld summary judgment for Louisiana on all claims. View "AbbVie v. Murrill" on Justia Law

Texas Tobacco Barn operated a laboratory and retail shop in Lubbock, Texas, manufacturing and selling e-liquids and vape products. After applying for authorization to sell over 2,200 vape products, including Barn Brewed Beetle Juice e-liquids, the FDA denied approval and warned that these products were considered “adulterated” and “misbranded.” Despite assurances from Texas Tobacco Barn that it would cease sales, a subsequent FDA inspection revealed continued sale of unauthorized products. The FDA initiated proceedings seeking a civil penalty of $19,192 for violations.The enforcement action began with an administrative hearing before an HHS administrative law judge (ALJ), who reviewed evidence including inspection photos and testimony from an FDA inspector. Texas Tobacco Barn admitted that the e-liquids lacked FDA authorization but disputed the inspector’s findings and challenged the FDA’s regulatory authority. The ALJ concluded that the FDA proved its case by a preponderance of the evidence and imposed the civil penalty. On appeal, the HHS Departmental Appeals Board affirmed the ALJ’s ruling, agreeing the ALJ lacked jurisdiction to address constitutional challenges but offering advisory comments on those defenses.Reviewing the agency’s final decision, the United States Court of Appeals for the Fifth Circuit considered Texas Tobacco Barn’s statutory and constitutional arguments. The court rejected the nondelegation challenge, citing its own precedent and Supreme Court guidance clarifying FDA’s explicit authority to regulate vape products. However, the Fifth Circuit held that the administrative process violated Texas Tobacco Barn’s Seventh Amendment right to a jury trial. The court determined that civil penalties for FDCA violations are legal in nature and do not fall under the public-rights exception that would permit agency adjudication without a jury. As a result, the Fifth Circuit granted the petition and vacated the agency’s decision. View "Texas Tobacco Barn v. HHS" on Justia Law

A company that manufactures menthol-flavored e-cigarette products applied to the United States Food & Drug Administration (FDA) for marketing authorization, as required under the Family Smoking Prevention and Tobacco Control Act (TCA). The FDA, concerned about the appeal of non-tobacco-flavored e-cigarettes to minors, especially menthol varieties, evaluated whether the benefits of these products for adult smokers outweighed the risks to youth. After reviewing the evidence and applying its “comparative-efficacy standard,” which requires proof that non-tobacco-flavored e-cigarettes encourage more adult smokers to switch or quit compared to tobacco-flavored versions, the FDA denied the application.The petitioners challenged the FDA’s denial through a petition for review to the United States Court of Appeals for the Fifth Circuit. They raised four main arguments: that the FDA’s authority under the TCA violated the major questions and nondelegation doctrines; that the TCA’s “appropriate for the protection of the public health” (APPH) standard is unconstitutionally vague; that the FDA’s comparative-efficacy standard was an unlawfully adopted tobacco product standard; and that the FDA’s application of the APPH standard to their application was arbitrary and capricious. The petitioners also argued that the FDA improperly disregarded recent data and failed to consider their proposed marketing plan.The United States Court of Appeals for the Fifth Circuit reviewed the FDA’s decision under the Administrative Procedure Act’s arbitrary and capricious standard. The court held that Congress’s delegation of authority to the FDA was constitutional, the APPH standard was not unconstitutionally vague, and the comparative-efficacy standard was not a tobacco product standard requiring notice-and-comment rulemaking. The court further found that the FDA reasonably explained its decision and did not act arbitrarily or capriciously in denying the application. The petition for review was denied. View "VDX Distro v. FDA" on Justia Law

Mark and Courtney Wightman, who own a dental clinic in Louisiana, entered into an agreement with DenteMax, a preferred provider organization (PPO), allowing DenteMax to offer their services at discounted rates to its network subscribers in exchange for access to more patients. Unbeknownst to the Wightmans, DenteMax also entered into a separate agreement with Ameritas Life Insurance Corporation, which permitted Ameritas to pay DenteMax’s network providers, including the Wightmans, at the same discounted rates. The Wightmans only became aware of this arrangement when Ameritas reimbursed them at the discounted rates rather than their standard rates for services rendered to Ameritas-insured patients.The Wightmans filed suit in the United States District Court for the Eastern District of Louisiana against Ameritas and DenteMax, alleging breach of contract, violations of Louisiana’s Preferred Provider Organization Act (PPO Act), and unjust enrichment. The district court initially dismissed several claims, partly on the ground that the suit was prescribed (time-barred). On appeal, the United States Court of Appeals for the Fifth Circuit certified a question to the Louisiana Supreme Court, which held that PPO Act claims are contractual for prescriptive purposes, making the claims timely. The Fifth Circuit reversed the district court’s prior dismissal. DenteMax settled, and on remand, the district court granted summary judgment to Ameritas, concluding that dental services are not “healthcare services” under the PPO Act, and that the Wightmans had abandoned their non-PPO Act claims.On further appeal, the United States Court of Appeals for the Fifth Circuit held that dental services are “healthcare” under the PPO Act, reversing the district court’s grant of summary judgment on those claims. The court also found error in the district court’s treatment of the abandonment of non-PPO Act claims and remanded for further proceedings. The denial of leave to amend was affirmed. View "Wightman v. Ameritas Life Ins" on Justia Law

A physician who owned and operated a hospice company in Louisiana was convicted by a jury of twenty-three counts of health care fraud. The company, under his direction, systematically billed Medicare at higher reimbursement rates than were warranted, particularly by utilizing the General Inpatient Care (GIP) rate for patients who did not qualify, and by billing for additional services already included in hospice per diem rates. Despite being notified by Medicare auditors multiple times that the company’s billing was improper and lacked sufficient documentation, the physician failed to disclose these findings to his staff or to change the company’s billing practices. The fraudulent activity resulted in the company billing Medicare for more than $84 million and receiving over $42 million in payments.Earlier, the United States District Court for the Eastern District of Louisiana presided over the trial. The defendant attempted to introduce an expert witness on Medicare billing and coding, but the court only permitted the witness to testify regarding clinical decision-making, not billing practices, due to insufficient qualifications. After the jury found the defendant guilty on all counts, the district court sentenced him to 240 months in prison—an upward variance from the Sentencing Guidelines—and ordered restitution. The court justified the increased sentence based on the defendant’s lack of remorse, repeated violations of court orders, and the need to deter similar conduct.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed whether the district court erred in excluding expert testimony, whether the evidence was sufficient to support the convictions, and whether the sentence was unconstitutionally excessive or substantively unreasonable. The Fifth Circuit held that any error in excluding the expert testimony was harmless, found the evidence sufficient to support the convictions, and concluded that the sentence was neither grossly disproportionate nor substantively unreasonable. The court affirmed the judgment of the district court. View "USA v. Akula" on Justia Law

After the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization returned abortion regulation to the states, the Food and Drug Administration (FDA) changed its rules to allow the abortion drug mifepristone to be prescribed online and sent by mail, eliminating the prior requirement for in-person doctor visits. The State of Louisiana, joined by an individual plaintiff, challenged this 2023 regulation (the “2023 REMS”) under the Administrative Procedure Act (APA), arguing that the FDA’s decision was not supported by sufficient data and resulted in illegal abortions and increased Medicaid costs within the state.The United States District Court for the Western District of Louisiana found that Louisiana had standing, was likely to succeed on the merits, and was suffering irreparable harm. However, the district court declined to stay the regulation, reasoning that the balance of equities and public interest favored denying immediate relief. Instead, the district court stayed the litigation to allow the FDA to complete its ongoing review of mifepristone’s safety protocols, which the FDA admitted had previously lacked adequate consideration.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed whether a stay of the 2023 REMS pending appeal was warranted under 5 U.S.C. § 705. The Fifth Circuit concluded that Louisiana was strongly likely to succeed on the merits because the FDA’s removal of the in-person dispensing requirement was arbitrary and capricious, relied on insufficient data, and was inadequately explained. The court further found that Louisiana faced ongoing irreparable harm to its sovereign interests and financial losses. The appellate court determined that neither the FDA’s nor the manufacturers’ interests outweighed Louisiana’s injuries or the public interest, and that a stay of the regulation was appropriate. The court therefore granted Louisiana’s motion for a stay pending appeal. View "Louisiana v. FDA" on Justia Law

A class of inmates at the Louisiana State Penitentiary alleged that the prison’s medical care was constitutionally inadequate and that the facility failed to comply with the Americans with Disabilities Act and the Rehabilitation Act. The lawsuit began in 2015, and evidence was introduced at trial in 2018. In 2021, the United States District Court for the Middle District of Louisiana issued a lengthy opinion finding systemic Eighth Amendment violations and ADA/RA noncompliance. While prison officials began making improvements ahead of a scheduled remedial trial, the district court later issued a Remedial Opinion and Order, prescribing detailed institutional changes and appointing special masters to oversee compliance.The district court’s Remedial Order required the state to bear the costs of three special masters, directed broad institutional reforms, and did not expressly adhere to the limitations imposed by the Prison Litigation Reform Act (PLRA). The court entered final judgment in favor of the plaintiffs, retaining jurisdiction only for compliance procedures. After entry of judgment, the defendants appealed. During the appeal, a panel of the United States Court of Appeals for the Fifth Circuit stayed the Remedial Order. The Fifth Circuit, sitting en banc, subsequently reviewed whether it had appellate jurisdiction and the validity of the district court’s orders.The United States Court of Appeals for the Fifth Circuit held that it had appellate jurisdiction under 28 U.S.C. § 1291 or, alternatively, § 1292(a)(1). The Fifth Circuit found that the district court’s Remedial Order violated the PLRA by failing to apply the statutory needs-narrowness-intrusiveness standard, improperly appointing multiple special masters, and requiring the state to pay their fees. The Fifth Circuit also concluded that the district court erred by disregarding ongoing improvements to prison medical care and by misapplying the standards for injunctive relief under the Eighth Amendment and the ADA/RA. The court vacated the district court’s judgment and remanded for further proceedings. View "Parker v. Hooper" on Justia Law

Michael Hickson, who had become severely disabled following cardiac arrest and anoxic brain injury in 2017, was hospitalized multiple times for recurring infections but recovered from several serious episodes. In June 2020, while hospitalized for pneumonia, sepsis, and suspected COVID-19, his doctors at St. David’s Healthcare assessed him as having a 70% chance of survival. Despite this, he was placed on hospice care and a do-not-resuscitate order was issued, with medical staff indicating that his inability to walk or talk equated to a poor quality of life. Life-sustaining treatment, including food and fluids, was withdrawn, even as his condition temporarily improved. Michael’s family, led by his wife Melissa Hickson, sought answers and attempted to visit him, but were repeatedly denied access and information. Michael ultimately passed away, and subsequent public statements by the hospital disclosed protected health information and cast aspersions on Melissa’s fitness as a guardian.The United States District Court for the Western District of Texas dismissed or granted summary judgment in favor of the defendants on all claims, including disability discrimination under § 504 of the Rehabilitation Act and § 1557 of the ACA, § 1983 claims, state-law medical negligence, informed consent, wrongful death, and intentional infliction of emotional distress. The plaintiffs objected to the recommendations for dismissal of the disability discrimination and § 1983 claims; the district court overruled these objections and dismissed those claims with prejudice. The remaining state-law claims were later resolved on summary judgment.Upon de novo review, the United States Court of Appeals for the Fifth Circuit held that disability discrimination claims based on alleged denial of medical treatment solely due to disability are cognizable and may proceed. The court also vacated and remanded the dismissals of the informed consent and intentional infliction of emotional distress claims, but affirmed dismissal of the § 1983 claims and other state-law claims. View "Hickson v. St. David's Healthcare Partnership" on Justia Law