Take the Fifth

Designated for publication

• United States ex rel. Palmer v. Tata Consulting Services, Ltd., 25-40368, appeal from E.D. Tex.
  • Wilson, J. (Willett, Duncan, Wilson) (oral argument), qui tam, False Claims Act
  • Affirming dismissal of False Claims Act qui tam suit.
  • Jack Palmer, hired by Comcast in 2016 to audit Tata Consulting Services’ immigration practices, filed a qui tam action under the False Claims Act (FCA). Tata employs roughly 30,000 workers in the United States, about 75% of whom require H-1B, L-1A, or B-1 visas. Palmer alleged that Tata committed visa fraud by applying for cheaper L-1A and B-1 visas for workers who should have received H-1B visas, retroactively editing personnel files to conceal the scheme, and systematically underpaying H-1B workers relative to domestic employees. The United States declined to intervene in August 2022, and Palmer continued the action on his own behalf.
  • At issue on appeal was whether Palmer stated actionable “reverse” false claims under 31 U.S.C. § 3729(a)(1)(G)—i.e., whether Tata had an “established duty” to transmit money to the federal government—under two theories: (1) that Tata was obligated to pay higher fees for H-1B visas it never applied for, and (2) that Tata’s underpayment of visa-dependent workers caused it to withhold less in federal payroll taxes than required.
  • The Fifth Circuit affirmed the district court’s dismissal of Palmer’s complaint for failure to state a claim, holding that Palmer failed to allege any “obligation” of Tata to transmit money to the government sufficient to support a reverse false claim.
  • On the visa-fee theory, the court held that the relevant labor and immigration regulations only require employers to pay fees corresponding to the visas they actually apply for; they create “no freestanding obligation to pay fees for a specific visa type.” Payment for H-1B visas was contingent on Tata applying for and winning those visas through the lottery—something Tata never did—making the alleged obligation merely “potential or contingent,” which is legally insufficient under the FCA. The court noted that “every circuit court to address this question has held” the same, citing the D.C. Circuit’s decision in Kini v. Tata Consultancy Services (involving the same defendant), the Second Circuit’s Billington v. HCL Technologies, and the Ninth Circuit’s Lesnik v. ISM Vuzem. It dismissed the sole contrary authority, the district court decision in Franchitti v. Cognizant Technology Solutions, as “roundly rejected by every court to contemplate it.”
  • On the tax-withholding theory, the court concluded that the wage regulations Palmer cited (20 C.F.R. § 655.731) obligate employers to pay wages to employees, not to transmit money to the government. Without paying higher wages, Tata had no obligation to withhold more in taxes, because tax withholding under the Internal Revenue Code is calculated on wages actually paid. The court quoted the D.C. Circuit’s observation that the relevant provisions “compel[] an employer to pay H-1B employees specified wages” but “[do] not force an employer to pay or transmit money or property to the [G]overnment.” The court warned that “[h]olding otherwise would transform every failure to pay employees the wages required by federal law into a reverse false claim under the FCA,” contradicting the statute’s text, the Supreme Court’s limits on the FCA’s reach, and the FCA’s tax bar. Palmer’s approach was characterized as “a clever bank shot theory of liability” that lacked any regulatory, statutory, or precedential support.
  • The court summarized: “The pertinent labor regulations did not obligate Tata to pay for visas for which the company never applied, nor to withhold taxes on wages that were never paid.” Because there was no “established duty” immediately due, there was no actionable reverse false claim.

Unpublished decisions

• United States v. Caldera, 25-40280, appeal from S.D. Tex.
  • per curiam (Stewart, Graves, Oldham) (no oral argument), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• Saltkill v. Cavender Toyota, 25-50688, appeal from W.D. Tex.
  • per curiam (Davis, Wilson, Douglas) (no oral argument), civil, frivolous
  • Affirming dismissal of suit as frivolous.
  • Pro se plaintiff Desiree Lee Saltkill appealed the dismissal of her complaint under Rule 12(b)(6). She had attempted to satisfy a vehicle debt by tendering a personally created “bill of exchange,” which the district court determined was not a legitimate form of payment.
  • The Fifth Circuit found the suit “patently frivolous,” and warned Saltkill that further frivolous or abusive filings could result in sanctions, including filing restrictions.

• In re Okorie, 25-60490, appeal from S.D. Miss.
  • per curiam (Elrod, Ho, Ramirez) (no oral argument), bankruptcy
  • Affirming denial of debtor’s motions to void trustee’s sale of properties.
  • Ikechukwu Okorie, a Chapter 7 debtor, appealed the denial of his motions under 11 U.S.C. § 363(n) and Federal Rule of Civil Procedure 60(b) to void the trustee’s sales of four properties. He alleged undervaluation, due-process violations, and fraud by the trustee. The central question was whether Okorie had bankruptcy standing—i.e., whether he was a “person aggrieved” who was “directly, adversely, and financially impacted” by the challenged orders.
  • The court held that Okorie lacked standing. He did not allege that a successful challenge would create a surplus for the estate or that the orders affected his discharge. His claims of undervaluation were conclusory, and his argument that creditors were shortchanged improperly relied on third-party rights. The court also rejected Okorie’s claim that § 363(n) gave him standing, noting the statute’s plain text authorizes only the trustee to avoid a sale.

• Ghazi v. Blanche, 25-60268, petition for review of BIA order
  • per curiam (Stewart, Engelhardt, Douglas) (no oral argument), immigration
  • Dismissing in part and denying in part Moroccan citizen’s petition for review of BIA order upholding the Immigration Judge’s (1) adverse credibility finding, which supported the denial of a good-faith waiver of the joint-filing requirement for his I-751 petition under 8 U.S.C. §§ 1186a(c)(4)(A) and (B), and (2) denial of cancellation of removal under 8 U.S.C. § 1229b(a).
  • The IJ found that Ghazi had not entered into his marriage to a U.S. citizen in good faith, based on numerous inconsistencies between his testimony and documentary evidence. Ghazi also argued that the phrase “has been” in § 1229b(a)(1) should allow a person who once held lawful permanent resident status—even if later terminated—to qualify for cancellation.
  • The court held it lacked jurisdiction to review the adverse credibility finding because it was a purely factual determination made in a discretionary-relief proceeding, barred by 8 U.S.C. § 1252(a)(2)(B)(ii). Arguments regarding the good-faith and hardship waivers were deemed forfeited for failure to adequately brief them. On the cancellation-of-removal issue, the court denied the petition, holding that under the plain text of § 1229b(a)(1) and the statutory definition of “lawfully admitted for permanent residence” (requiring the status “not having changed”), Ghazi was ineligible because his conditional permanent resident status had been terminated. Circuit precedent (Matter of Longstaff) and decisions from the First and Ninth Circuits supported this reading.

• United States v. Diaz-Ortiz, 25-11130, appeal from N.D. Tex.
  • per curiam (Stewart, Graves, Oldham) (no oral argument), criminal
  • Granting Anders motion to withdraw, and dismissing appeal.

• Jackson v. University of Texas Southwestern Medical Center, 25-10942, appeal from N.D. Tex.
  • per curiam (Stewart, Engelhardt, Douglas) (no oral argument), Americans with Disabilities Act, Title VI
  • Affirming summary judgment of medical student’s race- and disability-discrimination claims against medical school.
  • Penny Jackson, a Black woman and veteran who was dismissed from medical school after failing multiple courses, brought claims of (1) race discrimination under Title VI, (2) disability discrimination under the ADA and Rehabilitation Act, and (3) failure to accommodate.
  • Regarding her race discrimination claims, Jackson argued she was qualified because she had been admitted with a full scholarship and later succeeded in business school. She also alleged that a curve was not applied equitably and that a classmate received different grading on a lab exam. The court found she failed to show she was qualified to continue in the program after failing five courses and could not identify a similarly situated comparator outside her protected class treated more favorably.
  • Regarding her disability discrimination claim, the court held that Jackson could not demonstrate she was a “qualified individual” because she failed her Respiratory final exam even with accommodations in place.
  • Regarding her claim of failure to accommodate, Jackson argued UTSMC had notice of her disability before she formally requested accommodations in January 2022, pointing to her disclosure of VA disability benefits and a letter mentioning her anxiety. The court held that these disclosures were insufficient to provide UTSMC with “actual knowledge that an accommodation is necessary,” and that UTSMC’s timeline—granting accommodations in April 2022 after receiving complete paperwork in March 2022—was reasonable.