Take the Fifth

Designated for publication

• United States v. Dongxin Ma; Ma Acupuncture Center, P.C., 25-50067, appeal from W.D. Tex.
  • Higginson, J. (King, Higginson, Wilson) (no oral argument), False Claims Act, settlement agreement
  • Affirming district court’s judgment enforcing oral settlement agreement reached at mediation of False Claims Act claim.
  • The United States sued Dr. Dongxin Ma and Ma Acupuncture PC under the False Claims Act for allegedly submitting approximately $1.3 million in inflated reimbursement claims for acupuncture services provided to veterans through the VA. The government sought roughly $3.8 million in treble damages and nearly $20 million in civil penalties. At a court-ordered mediation in September 2023, the parties’ attorneys reached agreement on core terms: $2.3 million paid over 42 months, a $100,000 initial payment, dismissal and release of civil claims, reasonable efforts to sell property, and the government’s right to place liens. The parties shook hands and the mediator filed a form confirming settlement. However, the defendants later refused to sign a written agreement, with Dr. Ma claiming through new counsel that he never authorized his attorney to settle above $1 million.
  • At issue on appeal were (1) whether the district court abused its discretion in concluding the parties reached a final, binding oral agreement on all material terms at mediation; (2) whether additional “standard” terms in the government’s subsequent written agreement were material or immaterial; (3) whether defendants’ counsel had authority to settle; and (4) whether the government anticipatorily repudiated the oral agreement by later proposing additional terms.
  • The court found that the defendants forfeited their argument regarding counsel’s authority to settle by raising it only in a reply brief, not in their opening brief on appeal. Citing Indigenous Peoples of Coastal Bend v. U.S. Army Corps of Eng’rs, the court reaffirmed that “[a]ny issue not raised in appellant’s opening brief is forfeited.”
  • On the material-terms question, the court held that the oral agreement covered all essential elements—the settlement amount, payment schedule, initial payment, method of satisfaction, enforcement mechanism, and release of claims. It found the additional written provisions (effective-date clause, reservation of criminal/tax claims, waiver of defenses, bankruptcy language) were immaterial, particularly given that defendants’ own counsel “considered them ‘the standard and customary terms of settlement agreements.'” The court emphasized: “Our precedent dictates that there is agreement on ‘all the material terms of settlement where the parties have agreed upon the monetary amount of the settlement payment and the fact that plaintiffs will release specific claims.'”
  • The court concluded the oral agreement was final and binding under the “default rule” that silence indicates a settlement is binding absent an explicit provision requiring a written agreement, noting: “An oral settlement ‘is a valid and enforceable agreement even if it contemplates the parties signing a release at a later date unless the parties explicitly provide that a valid contract will not be formed until the parties execute a formal, finalized agreement.'” The defendants’ post-mediation silence—filing no objection to the notice of settlement for two months—further supported the district court’s finding. The court also found the anticipatory repudiation argument forfeited because it was raised for the first time in a post-judgment Rule 59(e) motion.

Unpublished decisions

• United States v. Ragsdale, 25-11304, appeal from N.D. Tex.
  • per curiam (Richman, Southwick, Willett) (no oral argument), criminal, sentencing
  • Affirming 10-month sentence on revocation of supervised release.
  • Defendant Xzavion Dayshaun Ragsdale appealed the 10-month sentence imposed upon revocation of his supervised release, arguing for the first time on appeal that the district court plainly erred by considering his breach of trust when setting the revocation sentence.
  • The Fifth Circuit rejected Ragsdale’s arguments, holding that because revocation was mandatory under 18 U.S.C. § 3583(g)(1), his challenge failed. The court denied the Government’s motion for summary affirmance because Ragsdale did not concede that the issues were foreclosed by circuit precedent, but dispensed with further briefing and denied the Government’s alternative motion for an extension of time.

• United States v. Munoz-Cornelio, 24-10949, appeal from N.D. Tex.
  • per curiam (Clement, Southwick, Engelhardt) (oral argument withdrawn), criminal, sentencing, guilty plea
  • Dismissing appeal of sentence, on basis of appeal-waiver in plea agreement.
  • Defendant Omar Munoz-Cornelio was sentenced to imprisonment followed by supervised release and challenged certain conditions of supervised release on the ground that they were not orally pronounced at sentencing. The threshold question was whether an appeal waiver signed as part of his guilty plea barred the challenge.
  • The court did not reach the merits because Munoz-Cornelio had signed an appeal waiver relinquishing his right “to appeal [his] sentence.” Under United States v. Higgins, 739 F.3d 733 (5th Cir. 2014), such a waiver covers arguments that the oral pronouncement omitted certain supervised-release conditions, unless the unpronounced conditions amount to punishment exceeding the statutory maximum—an exception not argued here. The court noted in a footnote that because Munoz-Cornelio did not address the waiver in his brief, it did not consider whether United States v. Diggles, 957 F.3d 551 (5th Cir. 2020) (en banc), modified Higgins on this point.

• McDaniel v. Hazlehurst City School District, 25-60482, appeal from S.D. Miss.
  • per curiam (Clement, Southwick, Engelhardt) (no oral argument), § 1983, due process, employment
  • Affirming judgment awarding school district employee lost wages, back pay, emotional distress damages, and attorneys’ fees, arising from elimination of employee’s position.
  • Todd McDaniel, a longtime school employee who held various administrative and coaching roles, was employed as Director of Operations at Hazlehurst High School for the 2017–18 school year on a form contract designated for licensed employees. When the school district eliminated the position and offered McDaniel an at-will, hourly facilities role instead, it refused his request for a hearing under Mississippi’s non-renewal statutes (Miss. Code Ann. §§ 37-9-103, 105, 109). McDaniel brought a 42 U.S.C. § 1983 claim alleging the district violated his procedural due process rights by denying him the written notice and hearing required before non-renewal of a licensed employee’s contract. The district court, after a seven-day bench trial, found a due process violation and awarded lost wages, back pay, emotional distress damages, and attorneys’ fees. On appeal, the school district argued (1) that McDaniel’s position did not require a license and thus did not trigger the statutory protections, and (2) that his contract was invalid because it was not properly “spread across the minutes” of a school board meeting as Mississippi law requires for public contracts.
  • On the licensure question, the court found no ambiguity in the contract, which was executed on the state-prescribed form for “assistant superintendent, principal[,] and licensed employee,” and McDaniel was paid on the administrator salary scale rather than an hourly wage. Because the contract’s plain terms indicated a position requiring a license, the district court did not clearly err in concluding that McDaniel was entitled to non-renewal protections under state law. On the minutes-rule argument, the court held that sufficient terms—including McDaniel’s job title and salary—appeared in the school board’s meeting minutes, and the organizational chart adopted by the board acknowledged his position. Applying the principle that “the entire contract need not be placed on the minutes” and that “strictness of verbiage … should also not be required,” the court found the minutes adequate to support a valid, renewable contract. The court also affirmed the attorneys’ fees award and denied all pending motions. The school district’s challenge to the damages award was deemed forfeited for failure to raise it in its opening brief.