Take the Fifth

Designated for publication

• U.S. ex rel. Gentry v. Encompass Health Rehabilitation Hospital of Pearland, L.L.C., 25-20093, appeal from S.D. Tex.
  • Higginbotham, J. (Higginbotham, Ho, Douglas) (no oral argument), Ho, J., concurring; False Claims Act, qui tam
  • Affirming dismissal of qui tam action under False Claims Act.
  • Inpatient-rehabilitation facilities (IRFs) provide intensive therapy to patients after hospital discharge and are reimbursed by Medicare per discharge, contingent on compliance with procedural rules such as a required preadmission screening by clinicians within 48 hours. Encompass Health Rehabilitation Hospital of Pearland employed sales representative Deidra Gentry, who was terminated after raising concerns about nonclinical staff participation in these screenings. Gentry filed a False Claims Act (FCA) suit alleging that Encompass submitted false Medicare claims by allowing sales staff to perform clinical screening tasks and by having physicians approve admissions without real evaluation. After several amendments and motions, the magistrate judge recommended dismissal for insufficient pleading under Rules 8(a) and 9(b) and denial of further amendment as futile. The district court adopted that recommendation, and Gentry appealed.
  • On appeal, the Fifth Circuit affirmed the dismissal. The court held that Gentry’s complaint failed to allege falsity or a connection between her role and any false Medicare claims. Her allegations that sales representatives drafted “misleading” narratives and physicians rubberstamped them were speculative and contradicted by CMS guidance allowing nonclinical staff to gather preadmission information so long as clinicians make final decisions. Gentry failed to identify any patient admitted without medical necessity or any false claim actually submitted. The court further upheld dismissal with prejudice, reasoning that even though the district court mistakenly applied Rule 16’s “good cause” standard instead of Rule 15’s more lenient one, the error was harmless because any amendment would be futile—Gentry had already amended twice without curing her factual deficiencies, suggesting the necessary facts simply did not exist.
  • Judge Ho concurs but writes separately to urge reconsideration of the constitutionality of the False Claims Act’s qui tam provisions, which allow private relators to litigate on behalf of the United States without presidential appointment or accountability. Drawing parallels to his prior criticism of the federal civil service system as an unconstitutional constraint on Article II executive power, Ho argues that qui tam relators similarly undermine presidential control over the execution of federal law. He notes that multiple jurists, including Justices Thomas and Kavanaugh, have voiced similar doubts, though the Fifth Circuit previously rejected such arguments in Riley v. St. Luke’s Episcopal Hospital (2001). Commending Judge Smith’s dissent in Riley as a model of principled judicial independence, Ho echoes Justice Scalia’s view of dissents as seeds for future change and joins Judge Duncan’s recent call for the en banc court to revisit Riley and the constitutional validity of qui tam enforcement.

• Arnold v. Barbers Hill Independent School District, 23-20256, appeal from S.D. Tex.
  • Engelhardt, J. (Higginson, Willett, Engelhardt) (oral argument), legislative privilege, standing, First Amendment, Title IX, Title VI
  • Dismissing appeal for lack of an appellant with standing on the underlying legislative privilege issue, in appeal from discovery and protective orders regarding discovery into changes in school district’s hair policy.
  • Barbers Hill Independent School District (“BHISD”) adopted a 2019 “Hair Policy” restricting the length of male students’ hair, which plaintiffs—former students and parents—claimed violated the First and Fourteenth Amendments, Title VI, Title IX, and Texas law. They alleged the district amended the Student Code of Conduct midyear to prohibit hairstyles extending below the ears or collar, including locs and cornrows, thereby discriminating based on race and sex and curbing expressive freedom. During discovery, plaintiffs sought to depose Superintendent Greg Poole and former Board President Fred Skinner. Although BHISD initially agreed, it moved for a protective order claiming legislative privilege. The district court declined to decide privilege issues preemptively, instead establishing an “assert-disclose-review” procedure whereby deponents would answer all questions, mark privileged answers as confidential, and allow later judicial review.
  • BHISD, the Board of Trustees, Poole, and Skinner appealed, arguing the order compelled disclosure of privileged legislative material. The district court refused to stay depositions; when BHISD declined to produce the deponents, plaintiffs sought sanctions. On appeal, the Fifth Circuit considered whether it had jurisdiction under the collateral order doctrine and whether the appellants had standing to assert legislative privilege. The court noted that legislative privilege is personal to individual legislators, not to government entities. Because neither Poole nor Skinner had yet invoked the privilege or participated in the discovery proceedings, and BHISD and the Board lacked authority to assert it for them, the court confronted serious prudential standing deficiencies.
  • Applying precedent from La Unión del Pueblo Entero v. Abbott (LUPE) and similar Eleventh Circuit decisions, the Fifth Circuit held that none of the appellants had standing to appeal. BHISD could not assert or appeal on behalf of legislators’ personal privileges; Poole and Skinner, as non-parties who had not reentered the case or asserted privilege, had not participated sufficiently to gain standing; and the Board, as a non-party, lacked any individual or derivative privilege to defend. Finding that “the cart precedes the horse,” the court concluded it lacked jurisdiction because no proper party with standing existed to challenge the discovery order. It therefore dismissed the appeal and declared the pending motion to stay moot.

• U.S. v. Trotter, 24-40049, appeal from E.D. Tex.
  • Dennis, J. (Smith, Dennis, Richman) (oral argument), Smith, J., dissenting; criminal, sentencing, prosecutorial misconduct, guilty plea
  • Vacating judgment of conviction and sentence on basis of prosecutor’s comments during sentencing, and remanding for defendant to either seek specific performance of plea agreement or rescind the agreement.
  • The Fifth Circuit vacated Darell Trotter’s sentence after finding that the prosecutor’s remarks at sentencing breached the plea agreement. Although the plea deal stipulated that Trotter would be sentenced within the applicable Guidelines range of 135–168 months, the prosecutor—while denying any formal request for an upward variance—urged the court to consider an above-Guidelines sentence by highlighting the death of an individual indirectly linked to Trotter’s drug activity, characterizing the Guidelines as insufficiently severe, and suggesting that laypeople would impose harsher penalties. These arguments, coupled with the introduction of victim-impact testimony implying Trotter’s culpability for the death, effectively undermined the plea’s terms. The district court ultimately imposed a sentence at the top of the Guidelines range without commenting on the prosecutor’s statements.
  • Applying plain-error review, the Fifth Circuit held that the Government’s conduct clearly breached the plea agreement and affected Trotter’s substantial rights because the record did not indicate that the district court would have imposed the same sentence absent the breach. Given that the Government’s plea-induced promise not to argue outside the Guidelines range was broken, the court found the breach to seriously affect the fairness and integrity of the proceedings. It rejected the Government’s arguments that Trotter’s plea was “generous” or that any defense breaches excused its conduct. The appellate court therefore vacated the sentence and remanded for Trotter to choose either to seek specific performance of the plea before a new judge or to withdraw from the agreement altogether.
  • Judge Smith dissented. The dissent criticizes the majority for finding a breach of Trotter’s plea agreement when, in the dissent’s view, none occurred. It argues that the prosecutor’s comments about the seriousness of the offense did not contradict the government’s promise to recommend a sentence within the guideline range—which it did—and that the district judge’s decision was unaffected by those remarks. The dissent emphasizes that Trotter received precisely the sentence he bargained for and thus failed to show any effect on his substantial rights under plain-error review. Granting resentencing before a different judge, the dissent contends, undermines judicial integrity by rewarding an unfounded challenge to an agreement voluntarily made and faithfully carried out.

Unpublished decisions

• U.S. v. Carlos-Ramos, 25-10474, appeal from N.D. Tex.
  • per curiam (Clement, Richman, Willett) (no oral argument), criminal, sentencing
  • Affirming sentence on conviction of illegal reentry.

• U.S. v. Smith, 25-20209, appeal from S.D. Tex.
  • per curiam (King, Haynes, Ho) (no oral argument), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• U.S. v. Kassem, 24-20355, appeal from S.D. Tex.
  • per curiam (Barksdale, Graves, Duncan) (no oral argument), criminal, ineffective assistance of counsel
  • Affirming 121-month sentence and conviction of attempted possession with intent to distribute one kilogram or more of heroin and attempted money laundering.

• Williams v. U.S., 25-30250, appeal from M.D. La.
  • per curiam (Dennis, Englehardt, Wilson) (no oral argument), Federal Tort Claims Act
  • Affirming dismissal of FTCA claims as modified, modifying dismissal to be without prejudice.

• U.S. ex rel. Fisher v. Ocwen Loan Servicing, L.L.C., 24-40580, c/w 24-40581, appeal from E.D. Tex.
  • per curiam (Smith, Dennis, Richman) (oral argument), discovery, protective orders
  • Reversing district court’s orders on discovery, holding that, where documents were produced to a party in a prior litigation between the parties under a protective order, that party was not barred from producing those documents back to the party that originally produced them in subsequent litigation, and order party to return all documents and destroy none.

• U.S. v. Feliciano-Hernandez, 25-50211, appeal from W.D. Tex.
  • per curiam (Richman, Southwick, Willett) (no oral argument), criminal, sentencing
  • Affirming 14-month sentence on conviction of illegal reentry.

• U.S. v. Spencer, 24-50318, appeal from W.D. Tex.
  • per curiam (Elrod, Clement, Haynes) (oral argument), criminal, sentencing, guilty plea
  • Vacating sentence and remanding for resentencing on basis that government breached its plea agreement by failing to file a motion for downward departure

• U.S. v. Ramirez, 24-50929, appeal from W.D. Tex.
  • per curiam (Barksdale, Graves, Duncan) (no oral argument), criminal, sentencing
  • Affirming conviction and sentence for illegal reentry.

• U.S. v. Ruiz-Roman, 24-50978, c/w U.S. v. Ruiz, 24-50979, appeal from W.D. Tex.
  • per curiam (Richman, Southwick, Willett) (no oral argument), criminal, sentencing
  • Affirming 40-month and 12-month sentences on conviction of illegal reentry and revocation of supervised release.