Justia Government & Administrative Law Opinion Summaries

A Louisiana pharmacy owned by a licensed pharmacist was investigated by the Drug Enforcement Administration after allegations arose that the pharmacy was filling prescriptions for itself and for patients with “red flags” indicating possible misuse or diversion of controlled substances. The DEA’s investigation focused on several prescriptions, including combinations of opioids and benzodiazepines for various patients, out-of-pocket payments for controlled substances, and a prescription filled by the pharmacist herself written by her physician father, which violated state law prohibiting physicians from prescribing controlled substances to immediate family.Following an agency hearing before an administrative law judge, the DEA’s Administrator adopted the ALJ’s recommendation and revoked the pharmacy’s federal registration to dispense controlled substances. The Administrator concluded that the pharmacy had violated federal regulations and Louisiana law by filling prescriptions without adequately resolving red flags and by filling a prescription written in violation of state law. The pharmacy petitioned for review in the United States Court of Appeals for the Fifth Circuit.The Fifth Circuit found that the DEA misinterpreted and misapplied its own regulations and state law. The court held that 21 C.F.R. § 1306.04(a) requires a pharmacist to “knowingly” fill an invalid prescription, which the DEA had not shown, and that a violation of the state-law standard of care is not, by itself, a violation of federal regulations. The court also held that the Louisiana law at issue did not apply to pharmacies. Because the DEA’s order rested on erroneous interpretations of governing regulations and state law, the Fifth Circuit vacated the deregistration order and remanded the matter for further proceedings. View "Neumann's Pharmacy v. Drug Enforcement Administration" on Justia Law

At a psychiatric hospital, employees were exposed to violent behavior from disturbed patients. Following a tip, the Occupational Safety and Health Administration (OSHA) investigated and cited the hospital for failing to implement measures that could have protected staff from workplace violence. These measures included reconfiguring nurses’ stations, providing communication devices, fully implementing existing safety programs, maintaining adequate staffing, securing patient belongings, hiring specialized security staff, and investigating each incident of workplace violence. The hospital did not contest the necessity of some measures but challenged the citation overall.An administrative law judge with the Occupational Safety and Health Review Commission conducted a hearing, upheld the citation, and imposed a fine. The judge’s decision became the final decision of the Review Commission when it declined further review. The hospital then petitioned the United States Court of Appeals for the Tenth Circuit for judicial review, arguing that another federal agency, the Centers for Medicare and Medicaid Services, had exclusive authority over hospital safety, that the Secretary of Labor should have deferred to other regulatory bodies, and that the Secretary’s methods and notice were insufficient.The United States Court of Appeals for the Tenth Circuit held that the Secretary of Labor had the authority to enforce the Occupational Safety and Health Act’s general duty clause in this context, as the cited agency did not actually regulate employee safety regarding workplace violence. The court found that the Secretary provided fair notice, acted within statutory authority, and permissibly used adjudication rather than rulemaking. The court also concluded that the abatement measures were feasible, supported by substantial evidence, and that the imposed sanctions for failure to preserve video evidence were appropriate. The Tenth Circuit denied the hospital’s petition for review, upholding the citation and penalty. View "Cedar Springs Hospital v. Occupational Health and Safety" on Justia Law

ARcare, Inc., a nonprofit community health center receiving federal funding, suffered a data breach in early 2022 when an unauthorized third party accessed confidential patient information, including names, social security numbers, and medical treatment details. After ARcare notified affected individuals, several patients filed lawsuits alleging that ARcare failed to adequately safeguard their information as required under federal law. Plaintiffs reported fraudulent invoices and that their information was found for sale on the dark web.The actions were removed to the United States District Court for the Eastern District of Arkansas, where six class actions were consolidated. ARcare sought to invoke absolute immunity under 42 U.S.C. § 233(a) of the Federally Supported Health Centers Assistance Act (FSHCAA), which provides immunity for damages resulting from the performance of “medical, surgical, dental, or related functions.” ARcare moved to substitute the United States as defendant under the Federal Tort Claims Act, arguing the data breach arose from a “related function.” The district court denied the motion, finding that protecting patient information from cyberattacks was not sufficiently linked to the provision of health care to qualify as a “related function” under the statute.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the statutory immunity issue de novo. The court affirmed the district court’s denial of immunity, holding that the FSHCAA’s language does not extend statutory immunity to claims arising from a health center’s data security practices. The court reasoned that “related functions” must be activities closely connected to the provision of health care, and data security is not such a function. Therefore, ARcare is not entitled to substitute the United States as defendant, and the denial of statutory immunity was affirmed. View "Hale v. ARcare, Inc" on Justia Law

Several pharmaceutical manufacturers and a trade association challenged a Louisiana statute, Act 358, which restricts drug manufacturers from interfering with the delivery of federally discounted drugs through contract pharmacies. The statute was passed in response to manufacturers’ efforts to limit the distribution of discounted drugs under the federal 340B Program, particularly through arrangements with contract pharmacies serving vulnerable populations. The plaintiffs argued that the Louisiana law was preempted by federal law and violated several constitutional provisions, including the Takings Clause, the Contracts Clause, and the Due Process Clause’s prohibition on vagueness.The United States District Court for the Western District of Louisiana considered three related cases together. It denied the manufacturers’ motions for summary judgment and instead granted summary judgment for the State of Louisiana and the Louisiana Primary Care Association (LPCA) on all claims. The district court also allowed LPCA to intervene in each case, over the objection of one plaintiff.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the case de novo. The court held that Act 358 is not preempted by federal law. It found that the federal 340B statute does not occupy the field of pharmacy regulation and does not conflict with or frustrate federal objectives, as it is silent on the use of contract pharmacies and leaves room for state regulation. The court also concluded that Act 358 does not effect a physical or regulatory taking, does not substantially impair contract rights under the Contracts Clause, and is not unconstitutionally vague. However, the Fifth Circuit reversed the district court’s order permitting LPCA to intervene in AbbVie’s case, finding that LPCA’s interests were adequately represented by the State and it did not show it would present a distinct defense. The court affirmed summary judgment for Louisiana on all claims. View "AstraZeneca v. Murrill" on Justia Law

Jackson County Heart ASC, LLC submitted an application to the Mississippi State Department of Health (MSDH) seeking a certificate of need (CON) to establish a joint venture cardiac ambulatory surgical facility (JV-CASF) in Gautier, Mississippi. The proposed facility would provide outpatient cardiac catheterization services and was to be jointly owned by an acute care hospital and licensed cardiologists, as defined by the Mississippi State Health Plan. The application included supporting affidavits from cardiologists and financial projections, indicating that this would be the only freestanding outpatient JV-CASF in the Gulf Coast service area.MSDH staff recommended approval of the application, finding substantial compliance with relevant criteria. Following Singing River Health System’s request for a hearing, a hearing officer considered testimony and evidence from both sides, including expert witnesses and financial analyses. Although one supporting physician withdrew his endorsement at the hearing, the hearing officer ultimately recommended approval based on the entirety of the evidence. MSDH’s state health officer adopted these findings and issued a final order approving the CON. Singing River appealed to the Hinds County Chancery Court, which affirmed the approval after oral argument. Singing River then appealed to the Supreme Court of Mississippi.On appeal, the Supreme Court of Mississippi reviewed arguments regarding the adequacy of the application, economic viability, and potential adverse impacts on Singing River’s services and charitable care. Applying a highly deferential standard, the Court found substantial evidence supporting MSDH’s decision. The Court held that the application met the requirements of the State Health Plan and CON Review Manual, satisfied economic viability, and would not have a significant adverse impact on Singing River or its ability to provide charitable care. The Supreme Court affirmed MSDH’s approval of the CON. View "Singing River Health System v. Mississippi State Department of Health" on Justia Law

Indiana amended its laws in 2022 to prohibit and criminalize the use of telehealth and telemedicine for abortions, requiring that abortion-inducing drugs be dispensed and consumed in person by a physician in a hospital or qualified surgical center. The Satanic Temple, a Massachusetts-based religious nonprofit, operates a telehealth abortion clinic serving only patients in New Mexico but seeks to extend these services to its Indiana members. It does not run, nor intends to operate, an in-person abortion clinic in Indiana or maintain ties to Indiana hospitals or surgical centers. The Temple filed suit against the Indiana Attorney General and Marion County Prosecutor, seeking to enjoin enforcement of the criminal statute (§ 16-34-2-7(a)) and to obtain declaratory relief under Indiana’s Religious Freedom Restoration Act.The United States District Court for the Southern District of Indiana reviewed the case and granted the defendants’ motion to dismiss for lack of standing. The court found that the Satanic Temple failed to identify any specific member who suffered an injury from the challenged law, thus lacking associational standing. It also held that the Temple itself lacked standing, as it could not show an injury in fact and could not demonstrate that favorable relief would redress its alleged harms due to other Indiana laws independently barring its intended conduct.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s dismissal. The Seventh Circuit held that the Satanic Temple lacked both associational and individual standing. The Temple failed to identify a specific injured member and relied only on statistical probabilities and generalized claims of stigmatic injury, which were insufficient. Additionally, the Temple did not present concrete plans to violate the law, and even if § 16-34-2-7(a) were enjoined, other statutes would independently prevent its telehealth abortion services in Indiana. Thus, the Seventh Circuit affirmed the dismissal for lack of subject matter jurisdiction. View "Satanic Temple, Inc. v Rokita" on Justia Law

A group of long-term care providers and their associated management company filed cost reports for 2015 with the Mississippi Division of Medicaid (DOM), reporting dividends received from three insurance companies as “other income” rather than offsetting them against insurance costs. This reporting practice had been consistently followed and accepted by DOM for over two decades. When DOM audited the 2015 cost reports around 2018, it changed its approach by offsetting these dividends against current insurance costs, thereby affecting reimbursement rates for services provided by the providers.After DOM made these adjustments, the providers sought reconsideration, but DOM upheld its decision. The providers then pursued an administrative appeal, where a hearing officer found DOM’s adjustments supported by substantial evidence and not arbitrary or capricious, recommending affirmation of DOM’s actions. DOM’s executive director adopted this recommendation. The providers appealed to the Hinds County Chancery Court, which affirmed DOM’s decision, concluding that the State Plan required reference to the Provider Reimbursement Manual (PRM) for guidance, and that DOM acted within its authority and did not violate any statutory or constitutional rights. The chancellor also found no evidence of a written internal policy regarding the treatment of such dividends.On appeal, the Supreme Court of Mississippi reviewed whether DOM’s actions were arbitrary and capricious, whether public notice of the change was required, and other issues. The Court held that DOM’s abrupt reversal of its long-standing unwritten internal policy, without reasonable explanation or public notice, was arbitrary and capricious. The Court further found that public notice was required under federal regulations for significant policy changes affecting payment rates. Accordingly, the Supreme Court of Mississippi reversed the decisions of DOM and the chancery court and rendered judgment in favor of the providers. View "Hattiesburg Medical Park Management Corp. v. Mississippi Division of Medicaid" on Justia Law

A hospital operating in Weston, West Virginia, sought to construct a new facility approximately four miles from its current location, at a cost of about $56 million. The hospital’s current site is about sixteen miles from another hospital in Buckhannon, which holds a critical access hospital (CAH) designation, allowing it to receive higher Medicare and Medicaid reimbursements. The Buckhannon hospital argued that the construction of the new facility within twelve mountainous miles of its own would jeopardize its CAH status and financial stability.Previously, the West Virginia Health Care Authority denied the Weston hospital’s application for a certificate of need, finding that the project would harm the Buckhannon hospital and was not a superior alternative under state law. The Intermediate Court of Appeals of West Virginia affirmed this denial. However, after legislative amendments in 2023 raised the capital expenditure threshold for certificate of need requirements to $100 million, the Weston hospital requested a determination from the Authority as to whether its new project required such a certificate. The Authority, applying an unwritten guideline, concluded that a certificate of need was unnecessary for the relocation of an existing facility within the same service area if the cost was below the new threshold. The Intermediate Court of Appeals affirmed this decision, finding the relevant statute ambiguous and deferring to the Authority’s interpretation.The Supreme Court of Appeals of West Virginia reviewed the case and held that the statutory language requiring a certificate of need for the “construction . . . of a health care facility” is clear and unambiguous. The court determined that the construction of a new hospital building, even as a relocation, falls within this requirement, regardless of the capital expenditure amount. The court reversed the decisions of the lower courts and remanded the case to the Authority for further proceedings consistent with its interpretation. View "St. Joseph's Hospital of Buckhannon v. Stonewall Jackson Memorial Hospital Co." on Justia Law

An inpatient rehabilitation facility employed a sales representative who raised concerns about the facility’s use of nonclinical personnel in the preadmission screening process required for Medicare reimbursement. The sales representative was terminated after five months of employment. Shortly thereafter, she filed a qui tam action under the False Claims Act, alleging that the facility presented false claims to Medicare, used false records to obtain payment, and conspired to submit false claims. She amended her complaint multiple times, and the government declined to intervene in the case.The United States District Court for the Southern District of Texas reviewed the second amended complaint after the defendant moved to dismiss under Rule 12(b)(6). The magistrate judge recommended dismissal of all claims, finding the complaint insufficiently plausible and lacking the particularity required by Rules 8(a) and 9(b). The magistrate judge also recommended denying leave to further amend the complaint as futile under Rule 16. The district court adopted these recommendations, entered final judgment, and dismissed the case with prejudice. The plaintiff timely appealed.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s dismissal de novo and the denial of leave to amend for abuse of discretion. The Fifth Circuit held that the complaint failed to plead sufficient facts to support the elements of a False Claims Act violation, specifically the falsity of the claims and the connection between the alleged conduct and the submission of false claims. The court also found that amendment would be futile, as the plaintiff had already amended her complaint twice without remedying the deficiencies. The Fifth Circuit affirmed the district court’s dismissal of the claims with prejudice. View "Gentry v. Encompass Health Rehabilitation Hospital of Pearland, L.L.C." on Justia Law

An Oregon nonprofit organization, whose board members are guided by sincerely held religious beliefs, challenged a state law requiring most employers to provide insurance coverage for abortion and contraceptive services. The organization’s governing documents and public statements reflect a commitment to traditional Judeo-Christian ethics, including opposition to abortion based on religious grounds. Although the law contains exemptions for certain religious employers, the organization does not qualify for any of these exceptions, a point not disputed by the state. The organization sought relief, arguing that being compelled to provide such coverage violates its rights under the First and Fourteenth Amendments.The United States District Court for the District of Oregon denied the organization’s request for a preliminary injunction and dismissed its complaint. The district court found there was doubt as to whether the organization’s opposition to abortion was genuinely religious in nature. It further concluded that the law was neutral and generally applicable, subject only to rational basis review, which it satisfied.On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s dismissal and vacated the denial of a preliminary injunction. The Ninth Circuit held that the organization’s beliefs are religious and sincerely held, and that the district court erred by not accepting these allegations as true at the motion to dismiss stage. The appellate court remanded the case for the district court to reconsider, in light of the Supreme Court’s decision in Catholic Charities Bureau, Inc. v. Wisconsin Labor & Industry Review Commission, whether the selective denial of a religious exemption to the organization violates the First Amendment. The Ninth Circuit expressed no opinion on the ultimate constitutional question, leaving it for the district court to address in the first instance. View "OREGON RIGHT TO LIFE V. STOLFI" on Justia Law