Take the Fifth

Designated for publication

• Jones v. New Orleans Regional Physician Hospital Organization, Inc., 19-31027, appeal from E.D. La.
  • Jones, J. (Higginbotham, Jones, Higginson), Fair Labor Standards Act
  • Affirming summary judgment in favor of defendant employer, dismissing white-collar employees’ claims for violation of the FLSA.
  • The Court rejected plaintiffs’ argument that their job duties did not fall within an administrative employee exemption to the statute.
  • The Court found that the district court did not err in finding that the employees were salaried employees. The Court then held that the employees’ positions satisfied the element that their job duties as contracting specialists, operations specialists, and pharmacy part D specialists directly related to the management or general business operations of the employer or its customers. And the Court held that the district court did not err in finding the employees exercised sufficient discretion and independent judgment in the conduct of their jobs.

• Estate of Bonilla v. Orange County, Tex., 19-41039, appeal from E.D. Tex.
  • Jones, J. (Higginbotham, Jones, Higginson), § 1983, qualified immunity
  • Affirming district court’s dismissal of plaintiffs’ claims arising from the death of a woman who committed suicide while in custody, holding that her constitutional rights were not violated.
  • The Court held that there was no evidence of deliberate indifference to the inmate’s suicidal behavior, as the intake officer noted red flags in her answers to questions and continued to ask follow-up questions and to observe the inmate for extra time in a waiting room before completing the booking into a holding cell, satisfied that there was no risk of suicidal behavior. “The common thread [of the Court’s deliberate indifference cases] is a reluctance to hold that generalized evidence of an inmate’s mental illness invariably indicates a substantial risk of selfharm. Yet, that is essentially what Plaintiffs argue here. Apart from lacking support in the case law, the proposition lacks logical force, given the varied, individualized nature of mental illness.”
  • The Court also held that, even if the inmate’s constitutional rights had been impinged, the individual defendants would have been entitled to qualified immunity. “As an inmate, Bonilla had a clearly established right to be protected from her known suicidal tendencies. But Plaintiffs have failed to offer any evidence that Bonilla’s tendencies were known to anyone—let alone Defendants; even Bonilla’s mother denied that her daughter had ever attempted or expressed thoughts of suicide. Bonilla also had a clearly established right not to have [her] serious medical needs met with deliberate indifference on the part of the confining officials. But, as discussed above, Defendants did not treat Bonilla’s medical needs with indifference. After Bonilla disclosed her drug use and mental health issues, Shafer made further inquiries into Bonilla’s psychological wellbeing. Dickerson sent the required mental health referral and initiated verification of Bonilla’s claimed prescriptions. These actions do not evidence indifference.” The Court held that there was no clearly established right to suicide screening by a medical professional; nor to the distribution of prescription narcotics within hours of intake with no demonstrated physical or mental distress.
  • The Court then turned to the claims against the County itself, and held that there was no evidence to support that the County engaged in pervasive policy of allowing inmates to self-classify their risk of self-harm, as the intake officer did not rely on the inmate’s responses as presumptive as to the truth of her statements but as part of her assessment of the inmate’s risk. The Court then held that the delay in verifying the inmate’s prescriptions was not indicative of a policy of unreasonably withholding prescriptions from inmates.

• U.S. v. Dubin, 19-50891, appeal from W.D. Tex.
  • Barksdale, J. (Barksdale, Elrod, Ho), Elrod, J., concurring; criminal, fraud, sufficiency of evidence, timeliness, restitution, sentencing
  • Affirming conviction and sentence for defendants’ charged scheme to defraud Texas’s Medicaid program. The defendants, a father who was a licensed psychologist, and his son, who ran the business side of the clinic, provided psychological evaluations for children in Texas’s emergency-shelter system. They were charged with billing Texas’s program for evaluations at the rate charged for a licensed psychologist when the evaluations were conducted by other personnel, and for charging for time that was not actually spent in evaluating the children. They were also charged with providing kickbacks to the operator of an emergency-shelter in exchange for sending the shelter’s business to their clinic.
  • The defendants argued that the superseding indictment had sufficiently altered the charged crime such that it could not relate back to the original indictment and the statute of limitations therefore barred the new indictments, but the Court held that defendants had waived this argument by not raising it until a post-trial motion.
  • The Court held that the defendants’ use of the patients’ Medicaid identification number to seek Medicaid reimbursement for hours not spent and for evaluation by a licensed psychologist rather than by a non-licensed clinician, the defendant “used” the patient’s identity without authority for purposes of the identity-theft element of the charged crimes. The Court otherwise engaged in a review of the evidence to find that there was sufficient evidence to convict the defendants on the fraud and kickback charges.
  • As to restitution and forfeiture amounts, the Court held that there was no error because the defendants’ poor record-keeping made it impossible to parse out legitimate Medicaid charges from illegitimate charges.
  • Judge Elrod concurred, opining that the panel’s affirmance of the aggravated identity theft statute was required by Circuit precedent, but that she believed that approach of the Sixth Circuit in “United States v. Medlock, 792 F.3d 700 (6th Cir. 2015) better interprets the statute at issue, 18 U.S.C. § 1028A.”

• El Paso County v. Trump, 19-5114, appeal from W.D. Tex.
  • Owen, C.J. (Owen, Dennis, Haynes), Dennis, J., dissenting; government appropriations, injunctive relief, immigration, Administrative Procedures Act
  • Affirming the denial of an injunction under 10 U.S.C. § 284, reversing the grant of an injunction under 10 U.S.C. § 2808, and remanding plaintiffs’ claims challenging the use of funds to build a wall on the southern border. The funds subject to § 284 were DoD funds for counterdrug activities that had been “reprogrammed,” and the § 2808 funds were DoD funds reallocated from military construction projects by the declaration of a national emergency.
  • The Court held that neither the plaintiff County nor the plaintiff community organization had standing to raise their challenges as to either the § 284 or § 2808 funds.
  • The Court held that the County did not have a cognizable injury from the transfer of $20 million from a road construction project on Fort Bliss, within the County, because “a county’s loss of general tax revenues as an indirect result of federal policy is not a cognizable injury in fact. … A direct link, such as the loss of a specific tax revenue, is necessary to demonstrate standing.” The Court acknowledged that its holding was in direct conflict with a holding in the Ninth Circuit regarding standing as to another challenge to § 2808 diversion of funds to border-wall construction. The Court also held that there was no guarantee that the $20 million at issue would actually be used for the Fort Bliss project instead of the border wall if the injunction were granted, as it was part of a lump-sum construction appropriation that left discretion as to what projects to spend it on.
  • The Court also held that any reputational injury to the County from the President’s declaration of an emergency from crime on the border was separate from the determination seven months later by the military to divert the funds to the wall construction.
  • The community organization “contend[ed] that it has standing because the organization was forced to divert time and resources to help its members deal with the harmful effects of border wall construction. … However, an organization does not automatically suffer a cognizable injury in fact by diverting resources in response to a defendant’s conduct.” The Court observed, “[T]he only concrete diversion of resources identified by BNHR is that the organization is giving significantly more ‘Know Your Rights’ presentations to the local community. This diversion is not caused by the § 2808 expenditures. The declaration admits that BNHR gave more presentations due to fear caused by the President’s proclamation, not due to any concern over the impacts of construction.”
  • The Court held that there was no basis to treat the standing inquiry differently for the § 284 challenge, and held that the County and the community organization did not have standing under the provision, either.
  • Judge Dennis wrote a detailed dissent. While the majority had brushed aside the County’s arguments of specific harm from the appropriations process for the wall construction, Judge Dennis noted that, “[a]ccording to affidavits from El Paso County officials, tourists and investors have already declined to spend money in the county due to its unwanted association with the construction, citing both their distaste for the politically controversial undertaking and fears over the practical consequences of doing business in close proximity to a massive construction project. The officials aver that the loss of this outside money will cause a decline in the county’s tax revenue. The second set of projects repurposed funds that had been committed to a $20-million defense access road project that, but for the redirection, would have been constructed at Fort Bliss within El Paso County. The El Paso County officials state that the cancellation of the access road project will likewise result in a significant decline in the county’s tax revenue.”
  • On this factual understanding, Judge Dennis opined, “Far from being the type of nebulous injury that any municipality might assert as a result of changes in government policy, the cancellation of the Fort Bliss access roads project injured El Paso in a discrete, tangible way that is distinct from any injury suffered by other localities. Indeed, one is hard pressed to imagine any plaintiff that would be capable of challenging the border-wall construction and the funding transfers that facilitated it under the majority’s unduly onerous standard, which is unfortunate given that multiple courts have concluded they are unlawful on several different grounds.”
  • Examining cases from other Circuits involving municipalities’ standing based on effects from adjacent government construction projects, and cases from the Fifth Circuit regarding individuals’ standing from adjacent construction projects, Judge Dennis noted that “[t]ogether, these cases stand for the basic proposition that a party in close proximity to government construction will have standing when ‘the concrete and particularized injury which has occurred or is imminent [is] due to geographic proximity to the action challenged.'” He then found that El Paso’s asserted damages were sufficient injury-in-fact, and that the Court should not, at the Rule 12 stage, weigh the credibility and question the veracity of those attestations. He then noted that the County’s alleged impacts were already incurred, not speculative projections into the future; and that, even if caused by third parties’ decisions, still had the requisite link to the government action on which to base standing if the County’s injuries were a predictable result of the government’s actions on the third parties’ decisionmaking. He also noted that an “identifiable trifle,” under Fifth Circuit precedent, is enough effect on which to ground standing. “Thus, even if only one individual has chosen not to do business with El Paso County as a direct result of the construction, it is sufficient to show an actual or imminent injury in fact with a causal linkage to the construction.”
  • After addressing standing, Judge Dennis turned to the distinct question of the existence of a cause of action–specifically, whether the County was in the zone of interests of the APA. He first observed that, contrary to the plaintiffs’ arguments, the zone-of-interests test for the APA applied, that the equitable relief of an injunction was still subject to the statutory bounds of the APA. Nevertheless, he found that, “at minimum,” the County was within the zone of interests to challenge the § 284 action as violative of the Consolidated Appropriations Act of 2019, which prohibited transfers of funds among different DoD appropriations accounts absent certain conditions being met. “[T]he CAA established a detailed consultation process in which DHS was required to submit a plan for border wall construction to Congress that would include ‘[a] plan to consult State and local elected officials on the eminent domain and construction process relating to physical barriers.’ The clear import of the requirement that DHS submit such a plan, viewed in conjunction with the CAA’s appropriation of funds for border wall construction only in one specific area and Section 739’s restriction on altering the budget appropriated to a requested project, is that Congress was not prepared to authorize construction of a border wall in other areas without consultation with state and local officials.” Judge Dennis then found that the same CAA analysis underlay a cause of action within the zone of interests for § 2808 purposes, as well.
  • After finding standing and the existence of a cause of action, Judge Dennis then turned to the merits of the district court’s injunction orders. He found that redirection of the § 284 funds violated the CAA because Congress’s appropriation of $1.375 billion for border barrier construction precluded the use of other funds for that project. He then held that the redirection of § 2808 funds was not authorized in § 2808. Finally, Judge Dennis opined that the permanent injunction was an appropriate remedy. He concluded: “The Supreme Court has repeatedly reaffirmed that, under our Constitution, Congress’s ‘power of the purse’ is an important check on the Executive branch. The founders vested in the legislature the power to control appropriations in order that it would serve as a ‘continuing monitor[] of the wisdom and soundness of Executive action.’ The President’s misuse of emergency powers and creative accounting techniques to openly defy the spending limits set by Congress flies in the face of that vision, and the majority’s decision today goes a long way toward sanctioning this blatant subversion of the constitutional design. Indeed, between the artificially high bar the majority erects for standing and the Supreme Court’s apparent strict application of the zone-of-interests requirement in this context, it is difficult to imagine a plaintiff that could challenge transfers like the ones at issue here, no matter how unlawful. Because both these dynamics—the flouting by the Executive of limitations imposed by the legislature and the insulation of unauthorized Executive action from judicial review–are at odds with the separation of powers that is the foundation of our constitutional system, I dissent.”

• Ahders v. SEI Private Trust Company, 20-30186, appeal from M.D. La.
  • Owen, C.J. (Owen, King, Engelhardt), securities law
  • Affirming the district court’s dismissal of plaintiff’s claims, holding that defendant was not a “control person” under the Louisiana Securities Law. The case is one of many arising from the fallout of the Stanford Ponzi scheme.
  • The defendant, SEI, provides ‘asset management, investment processing, and investment operation solutions’ for wealth-management companies. Under the contract, SEI was responsible for, among other functions, sending account statements to clients, reporting income and other details to the IRS, and providing a platform and operations for the IRAs. The contract specified that the ‘legal relationship” of SEI to [the Stanford Trust Corporation, which held individual retirement accounts for plaintiffs, who owned CDs issued by another Stanford entity] was ‘intended to be that of an independent contractor.'” While SEI was responsible for providing statements to the plaintiffs, STC was solely responsible under the contract. for providing accurate information for use in those statements. The statements identified STC, and did not identify SEI as responsible for the statements’ creation.
  • Under the Louisiana Securities Law, “SEI is liable for the alleged primary violations of STC if SEI directly or indirectly controlled STC.” The Court noted that SEI had no role in the sale or valuation of the CDs. Just because STC used SEI’s platform to commit its violations, such that SEI could have denied the platform to STC, “[t]he control-person provision requires more than the power to stop a primary violation for an entity to be liable. The investors must establish that SEI directly or indirectly had ‘the power to direct . . . the management and policies’ of STC.”

Unpublished

• Guarascio v. Wilson, 19-10784, appeal from N.D. Tex.
  • per curiam (Higginbotham, Jones, Costa), habeas corpus
  • Affirming dismissal of § 2241 petition alleging actual innocence.

• U.S. v. Serrano-Perez, 19-11179, appeal from N.D. Tex.
  • per curiam (Clement, Higginson, Engelhardt), criminal, sentencing
  • Affirming sentence within Guidelines range.

• Nelson v. Texas Sugars, Inc., 19-20567, appeal from S.D. Tex.
  • per curiam (Owen, King, Engelhardt), Fair Labor Standards Act
  • Affirming dismissal of FLSA claim by dancers at exotic club, holding they were not employees within the meaning of the FLSA.

• Puderer v. Cain, 19-30809, appeal from M.D. La.
  • per curiam (Willett, Ho, Duncan), prisoner suit, timeliness, frivolous
  • Dismissing as frivolous appeal of dismissal of § 1983 claim as time-barred, denying IFP status, and issuing sanctions warning.

• Jalbert v. Wessel, GMBH, 19-31009, appeal from W.D. La.
  • per curiam (Higginbotham, Elrod, Haynes), Haynes, J., concurring. in part and dissenting in part; bankruptcy, fraud
  • Affirming denial of request to avoid certain transactions.

• Thompson v. GEO Group, Inc., 19-31022, appeal from W.D. La.
  • per curiam (Owen, King, Engelhardt), prisoner suit, negligence
  • Affirming award of $15,000 to prisoner on claim for injury from ceiling tile falling from prison ceiling.

• U.S. v. Melendez-Davila, 19-50987, appeal from W.D. Tex.
  • per curiam (Clement, Ho, Duncan), criminal, sentencing
  • Affirming sentence imposed for illegal reentry.

• Estrada-Hernandez v. Barr, 19-60418, petition for review of BIA order
  • per curiam (Clement, Higginson, Engelhardt), immigration
  • Dismissing in part and denying in part petition to review BIA order denying motion to reopen.

• Cruz-De Hernandez v. Barr, 19-60429, petition for review of BIA order
  • per curiam (Jones, Barksdale, Stewart), immigration
  • Dismissing in part and denying in part petition to review BIA order dismissing appeal of IJ order denying application for asylum and withholding of removal.

• Valencia v. Davis, 20-10080, appeal from N.D. Tex.
  • per curiam (Owen, King, Engelhardt), excessive force, qualified immunity
  • Affirming summary judgment dismissing excessive force claim on basis of qualified immunity, and affirming motion to strike expert report opining on reasonableness of force used.

• Roe v. U.S., 20-10329, appeal from N.D. Tex.
  • per curiam (Higginbotham, Smith, Dennis), Federal Tort Claims Act, timeliness
  • Affirming in part, reversing in part, and remanding dismissal of pro se FTCA claim as time-barred and as failing to state a claim.

• U.S. v. Brown, 20-30099, appeal from W.D. La.
  • per curiam (Clement, Higginson, Engelhardt), criminal, sentencing, First Step Act
  • Affirming denial of sentencing relief under First Step Act.

• Olson v. Schnauder, 20-30232, appeal from W.D. La.
  • per curiam (Clement, Ho, Duncan), Louisiana Medical Malpractice Act
  • Affirming denial of claim for excess damages under the Louisiana Medical Malpractice Act for failure to state a claim.

• Accordant Communications, L.L.C. v. Sayers Construction, L.L.C., 20-50169, appeal from W.D. Tex.
  • per curiam (Higginbotham, Smith, Dennis), jurisdiction
  • Remanding matter to district court for determination of complete diversity after parties failed to properly allege citizenship of LLCs.

• Stingley v. Watson Quality Ford, 20-60264, appeal from S.D. Miss.
  • per curiam (Clement, Ho, Duncan), Ho, J., concurring in judgment and joining portions of per curiam opinion; Title VII, employment discrimination
  • Affirming summary judgment dismissal of Title VII and discrimination claims by employee.