June 5, 2025, opinions

Posted on by tadbartlett

Designated for publication

  • U.S. v. Cockerell, 24-10687, appeal from N.D. Tex.
    • Stewart, J. (Stewart, Clement, Willett), criminal, sufficiency of evidence, restitution
    • Affirming conviction of operator of compound pharmacy for receiving illegal kickbacks as part of a conspiracy to induce physicians to prescribe highly lucrative prescriptions, and affirming restitution award.
    • Xpress Compounding was a pharmacy focused on maximizing profits through pain cream prescriptions billed to federal programs like TRICARE. Quintan Cockerell, a top marketer at Xpress, played a key role in cultivating physician relationships, formulating high-cost creams, and managing a commission-based marketing structure. He concealed kickback payments by routing them through his then-wife and incentivized doctors through lavish gifts and financial arrangements. One such arrangement led to a prescription by Dr. Ince for which Cockerell received a $1,723 override. He was convicted of violating the Anti-Kickback Statute, conspiracy, and money laundering, and sentenced to 29 months in prison and ordered to pay nearly $60 million in restitution. On appeal, he challenged the sufficiency of the evidence, government statements at trial, and the restitution order.
    • The Fifth Circuit found sufficient evidence to support all of Cockerell’s convictions. Although there was no direct proof that he influenced Dr. Ince, the court held that the government adequately demonstrated his role in a broader kickback scheme, including managing sub-reps, orchestrating commission structures, and indirectly benefiting from prescriptions linked to illegal inducements. The court distinguished Cockerell’s conduct from more benign marketing practices, noting that evidence of luxury perks, preloaded prescription pads, and investment schemes clearly showed improper influence. His convictions for conspiracy and money laundering were upheld as they were grounded in the same conduct and did not require direct proof beyond his involvement in the unlawful arrangement.
    • Cockerell’s claim that the government misstated the law during closing arguments was rejected; the court found the remarks either accurate or sufficiently mitigated by jury instructions. As for the restitution order, the Fifth Circuit upheld the $59 million award, explaining that under the Mandatory Victims Restitution Act, conspirators can be jointly liable for foreseeable losses. The court found the fraud so pervasive that distinguishing legitimate prescriptions was impractical, and since Cockerell failed to offer any credible evidence to show that some prescriptions were legitimate, the government’s loss estimate stood. Overall, the court affirmed the conviction, sentence, and restitution order in full.
  • Zyla Life Sciences, L.L.C. v. Wells Pharma of Houston, L.L.C., 23-20533, appeal from S.D. Tex.
    • Oldham, J. (Ho, Duncan, Oldham), preemption, unfair trade practices
    • Revering dismissal of unfair competition claims, holding that Texas law that incorporated federal law could not be in conflict with that federal law and therefore was not preempted.
    • The Supremacy Clause is the constitutional source of all federal preemption, which occurs when state law conflicts with federal law. The Supreme Court recognizes various forms of preemption, including express and implied preemption. Implied preemption includes field preemption and conflict preemption—the latter divided into impossibility preemption and obstacle preemption, the latter being the focus here. The relevant federal statutes come from the Federal Food, Drug, and Cosmetic Act (FDCA), enacted in 1938 in response to public health disasters like the Elixir Sulfanilamide tragedy. Over time, Congress expanded the FDA’s authority, converting a notification system into a premarket approval system for new drugs and establishing enforcement authority while preserving a limited state role in compounding regulation.
    • Although originally outside the FDCA’s scope, pharmaceutical compounding—tailoring medications for individual patients—came under federal regulation due to abuse by some compounders. Congress responded by exempting certain compounding activities from premarket approval under narrowly defined conditions in statutes like § 353b. Nonetheless, many states enacted laws that mirrored the FDCA by prohibiting the sale of unapproved drugs. In the present case, Zyla Life Sciences, which sells FDA-approved indomethacin suppositories, sued Wells Pharma for unfair competition under six states’ laws that mirror § 505 of the FDCA. Wells Pharma moved to dismiss, claiming the state laws were preempted by federal law, and the district court agreed. Zyla appealed.
    • The Fifth Circuit reversed, holding that these parallel state laws were not preempted. Relying on Zook v. Texas, the court emphasized that mirroring federal law does not create a conflict that triggers preemption. Rather, it reflects state recognition of federal supremacy and does not interfere with federal objectives. The court rejected Wells Pharma’s claim that allowing state enforcement of parallel laws undermines federal enforcement discretion. Such reasoning, it warned, harkens back to outdated and discredited preemption theories like those in Houston v. Moore, and would lead to the absurd result of invalidating a vast range of state tort, criminal, and regulatory laws that happen to overlap with federal ones.
    • The court also rejected Wells Pharma’s reliance on Buckman v. Plaintiffs’ Legal Committee, which barred state tort suits based on “fraud-on-the-FDA” claims. Buckman involved uniquely federal interests—specifically, fraud against a federal agency—whereas Zyla’s suit involves a state interest in fair competition and drug safety. The Fifth Circuit emphasized that Buckman does not apply to state laws mirroring federal drug approval standards. Furthermore, later cases like Wyeth v. Levine confirmed that the FDCA permits concurrent state regulation of drug safety, even when such regulation imposes different standards. The court concluded that preemption does not apply to the state laws in question, reaffirming the states’ sovereign authority to enforce parallel drug safety standards.

Unpublished decisions

  • Weslease 2018 Operating, L.P. v. Behan, 24-10246, c/w 24-10366, c/w 24-10822, c/w 24-10898, c/w 24-10460, appeal from N.D. Tex.
    • per curiam (Elrod, King, Graves), receivership, mootness
    • Dismissing as moot various appeals from orders regarding satisfying a judgment, on finding that the later appointment of a receiver mooted those issues.
  • U.S. v. Caballero-Renteria, 24-10780, appeal from N.D. Tex.
    • per curiam (Graves, Willett, Wilson), criminal
    • Granting Anders motion to withdraw, and dismissing appeal.
  • Dick v. ASI Lloyds, 23-40719, c/w 24-40020, appeal from S.D. Tex.
    • per curiam (Wiener, Douglas, Ramirez), insurance, sanctions
    • Affirming dismissal of homeowner’s claims against insurance company, denial of motion to compel appraisal, and imposition of sanctions (in the form of attorneys’ fees) against homeowner; vacating denial of insurer’s motion for additional sanctions; and remanding for further proceedings.
  • U.S. v. Black, 24-40345, appeal from E.D. Tex.
    • per curiam (Wiener, Douglas, Ramirez), criminal
    • Affirming conviction, rejecting Sixth Amendment and ineffective assistance of counsel claims.
  • Natour v. Hamdan, 24-40484, appeal from E.D. Tex.
    • per curiam (Elrod, King, Graves), appellate jurisdiction
    • Dismissing for lack of appellate jurisdiction appeal from garnishment order.
  • U.S. v. Arredondo, 24-50456, appeal from W.D. Tex.
    • per curiam (Barksdale, Stewart, Ramirez), criminal, sentencing
    • Affirming 97-month sentence on conviction of possession of material containing child pornography.
  • U.S. v. Melendrez-Machado, 23-50506, appeal from W.D. Tex.
    • per curiam (Stewart, Dennis, Haynes), criminal
    • Affirming conviction of possession of a firearm by a felon.
  • Smith v. Bexar County, 24-50724, appeal from W.D. Tex.
    • per curiam (Elrod, Engelhardt, Guidry, by designation), civil
    • Affirming judgment for defendant, with no description of claim or appeal issues.
  • U.S. v. Roberson, 24-50970, appeal from W.D. Tex.
    • per curiam (Stewart, Dennis, Haynes), criminal, sentencing
    • Affirming 37-month sentence on conviction of aiming a laser pointer at an aircraft.
  • Arana v. Bondi, 24-60527, petition for review of BIA order
    • per curiam (Richman, Douglas, Ramirez), immigration
    • Dismissing in part and denying in part Mexican citizen’s petition for review of BIA order affirming an order of an immigration judge (IJ) denying his application for cancellation of removal.
  • Diome v. Bondi, 24-60534, petition for review of BIA order
    • per curiam (Elrod, Haynes, Duncan), immigration
    • Denying Senegalese citizen’s petition for review of BIA order denying his motion for reconsideration of his motion to accept his late-filed appellate brief and dismissal of his appeal.