Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Dr. Ron Elfenbein, who runs an urgent-care clinic in Maryland, was charged with healthcare fraud for allegedly overbilling insurers by using high-level codes for simple COVID-19 tests and submitting false medical records. The clinic, which shifted to primarily COVID-19 testing during the pandemic, billed five patient visits at level four, which is typically reserved for more complex medical decision-making.In the United States District Court for the District of Maryland, a jury found Elfenbein guilty on all charges after an 11-day trial. However, the district court acquitted him, reasoning that the evidence was insufficient to support the jury's verdict. The court also conditionally granted a new trial, citing the close nature of the case and the significant evidence that came from Elfenbein's own witnesses.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court found that the jury had enough evidence to convict Elfenbein, as the government presented sufficient testimony and documentation to support the charges of overbilling and submitting false records. The court noted that the jury could reasonably conclude that the level-four codes were inappropriate for the simple COVID-19 tests and that the medical records were materially false.However, the Fourth Circuit also affirmed the district court's decision to grant a new trial. The appellate court acknowledged that the district court did not abuse its discretion in ordering a new trial, given the weaknesses in the government's case-in-chief and the significant evidence that came from the defense. The case was remanded for a new trial. View "United States v. Elfenbein" on Justia Law

The case involves Medical Staffing of America, LLC, doing business as Steadfast Medical Staffing, and its owner, Lisa Ann Pitts, who were found to have violated the Fair Labor Standards Act (FLSA) by misclassifying approximately 1100 nurses as independent contractors instead of employees. This misclassification led to the nurses not receiving proper overtime compensation, resulting in nearly five million dollars in unpaid wages and an equal amount in liquidated damages.The United States District Court for the Eastern District of Virginia conducted a bench trial in 2021, where it found that Steadfast exercised significant control over the nurses, including setting their pay rates, controlling their schedules, and enforcing workplace policies. The court concluded that the nurses were employees under the FLSA and awarded the Secretary of Labor unpaid overtime compensation and liquidated damages. Steadfast's defense, claiming they acted in good faith based on legal advice, was rejected as the court found their reliance on incomplete legal advice unreasonable.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court's judgment. The appellate court agreed with the lower court's findings that the nurses were employees based on the economic realities of their relationship with Steadfast. The court also upheld the district court's rejection of Steadfast's good faith defense and its adoption of the damages computations presented by the Secretary of Labor. The final judgment included over nine million dollars in unpaid overtime compensation and liquidated damages, along with an injunction against further FLSA violations by Steadfast. View "Chavez-DeRemer v. Medical Staffing of America, LLC" on Justia Law

The case involves a class action lawsuit against Matt Martorello for violating civil provisions of the Racketeering Influenced and Corrupt Organizations Act (RICO). The plaintiffs, a group of Virginia citizens, alleged that Martorello orchestrated a "Rent-A-Tribe" scheme with the Lac Vieux Desert Band of Chippewa Indians to issue high-interest loans that circumvented state usury laws by claiming tribal immunity. The loans were made through tribal entities, Red Rock Tribal Lending, LLC, Big Picture Loans, LLC, and Ascension Technologies. The plaintiffs sought damages under federal civil RICO law.The U.S. District Court for the Eastern District of Virginia dismissed the tribal entities from the case due to sovereign immunity but allowed the claims against Martorello to proceed. The court found that Martorello had made material misrepresentations about the lending operations and granted class certification. Martorello's subsequent interlocutory appeals were denied, and the district court eventually granted summary judgment in favor of the plaintiffs, awarding them over $43 million in damages.The United States Court of Appeals for the Fourth Circuit reviewed the case. Martorello challenged three district court rulings: the denial of his motion to dismiss for failure to join necessary and indispensable parties, the application of Virginia law instead of tribal law, and the rejection of his "mistake of law" defense. The Fourth Circuit affirmed the district court's judgment. It held that the tribal entities were not indispensable parties due to their settlement agreement, Virginia law applied to the off-reservation lending activities, and a mistake-of-law defense was irrelevant to the civil RICO claims, which did not require proof of specific mens rea beyond the predicate acts. The court concluded that the district court did not abuse its discretion in any of its rulings. View "Williams v. Martorello" on Justia Law

KeraLink International, Inc. operates a network of eyebanks and purchased surgical packs containing eyewash from Stradis Healthcare, LLC. The eyewash, supplied by Geri-Care Pharmaceuticals Corporation, was contaminated, rendering corneal tissue unusable. KeraLink sued Stradis and Geri-Care for strict products liability, and both were held jointly and severally liable for $606,415.49 plus prejudgment interest. Stradis sought indemnification from Geri-Care, claiming Geri-Care's primary culpability as the apparent manufacturer of the eyewash.The United States District Court for the District of Maryland awarded summary judgment to KeraLink on its strict products liability claim against both Stradis and Geri-Care. The court rejected the sealed container defense asserted by both defendants. Stradis then sought implied indemnification from Geri-Care, arguing that its liability was secondary. The district court agreed, granting Stradis summary judgment for indemnification but denied Stradis' request for attorneys' fees incurred in defending against KeraLink's suit.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court held that the district court did not err in awarding Stradis implied indemnification against Geri-Care. The court found that Geri-Care's conduct as the apparent manufacturer of the contaminated eyewash was primarily culpable, while Stradis' conduct was secondary. The court also upheld the district court's denial of Stradis' request for attorneys' fees, citing the American Rule, which generally precludes the recovery of attorneys' fees as compensatory damages unless authorized by statute, rule, or contract. The Fourth Circuit affirmed the district court's judgment in all respects. View "Geri-Care Pharmaceuticals Corp. v. Stradis Healthcare, LLC" on Justia Law

Craig Lussi, a homeowner on Gibson Island, Maryland, sought to build an assisted living facility for elderly people with disabilities. The Gibson Island Corporation, a homeowners association, opposed the project, citing a restrictive covenant prohibiting business use of homes without approval. Lussi requested an exemption as a reasonable accommodation under the Fair Housing Act (FHA) and Maryland law, but the Corporation imposed four conditions, which Lussi found unreasonable. Negotiations failed, leading to litigation.The United States District Court for the District of Maryland granted summary judgment to the Corporation, finding that Lussi could not show the requested accommodation was necessary for providing equal housing opportunities. The court also dismissed Lussi's retaliation and discrimination claims, concluding there was no evidence of adverse actions or discriminatory intent by the Corporation.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court found that the district court erred in its analysis of the necessity element by focusing on the removal of the Corporation's conditions rather than the requested exemption itself. The appellate court held that the exemption was necessary to provide equal housing opportunities for disabled individuals on Gibson Island. The court also found genuine disputes of material fact regarding the reasonableness of the Corporation's conditions, which should be resolved by a jury.Additionally, the appellate court determined that Lussi's retaliation and discrimination claims presented jury questions. The court noted evidence suggesting the Corporation's stated reasons for opposing the project might be pretextual and that community hostility towards disabled residents could imply discriminatory intent.The Fourth Circuit vacated the district court's summary judgment in favor of the Corporation and remanded the case for further proceedings. View "Group Home on Gibson Island, LLC v. Gibson Island Corp." on Justia Law

GenBioPro, Inc., a manufacturer of generic mifepristone, filed a complaint against West Virginia officials, arguing that the state's law prohibiting most abortions was preempted by federal law. The company claimed that the FDA Amendments Act of 2007 (FDAAA), which regulates the distribution of high-risk drugs like mifepristone, preempted the state law. GenBioPro contended that the FDAAA established a comprehensive scheme for regulating REMS drugs with safe-use elements, leaving no room for state regulation.The U.S. District Court for the Southern District of West Virginia dismissed GenBioPro's complaint, finding no preemption. The court held that abortion regulation is a matter of health and safety traditionally occupied by the states. It determined that Congress had not expressed an intent to occupy the field of drugs subject to a REMS in a manner that would preempt West Virginia's abortion restrictions. The court also found that the FDAAA's requirement to consider patient access was a limitation on the FDA's own restrictions, not a command to ensure access for all patients.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The Fourth Circuit held that the FDAAA did not preempt West Virginia's abortion law. The court emphasized the presumption against preemption in areas of traditional state regulation, such as health and safety. It found that the FDAAA did not demonstrate a clear intention to displace the state's historic and sovereign right to regulate abortion. The court concluded that the FDAAA's focus on drug safety did not create a right to access specific high-risk drugs, and the statute did not preempt state laws regulating the incidence of abortion. View "GenBioPro, Inc. v. Raynes" on Justia Law

Brian and Susan Fernaays own a house on lot 31 in Brewers Creek Subdivision, Isle of Wight County, Virginia. A 20-foot drainage easement, shared with lot 32, contains an underground stormwater drainage pipe that has deteriorated over time, causing significant erosion. The Fernaayses estimate the repair cost at $150,000 and sued Isle of Wight County, claiming the County owns the easement and is responsible for maintaining the pipe. They argued that the County's failure to maintain the pipe resulted in an unconstitutional taking of their property under both the Virginia and U.S. Constitutions.The United States District Court for the Eastern District of Virginia reviewed the subdivision plat and the Declaration of Covenants and Restrictions. The court found that the easement was not dedicated to the County, meaning the County had no duty to maintain the drainage pipe. Consequently, the court granted summary judgment in favor of the County.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The appellate court concluded that the Brewers Creek Partnership did not unequivocally dedicate the drainage easement to the County. The court noted that the plat and the Declaration of Covenants and Restrictions did not manifest an intent to dedicate the easement or the pipe to the County. The language in the documents suggested that the easements were for the benefit of the lot owners and that the County was only permitted to use them, not obligated to maintain them. Therefore, the County was not responsible for the damage, and the Fernaayses, as property owners, would have to bear the maintenance costs. The judgment of the district court was affirmed. View "Fernaays v. Isle of Wight County" on Justia Law

Marilyn Mosby, the former Baltimore City State’s Attorney, was convicted of mortgage fraud and perjury in separate jury trials. She appealed her perjury convictions, arguing that the question on the form she completed to withdraw funds from her retirement account was fundamentally ambiguous. She also contended that the district court improperly admitted evidence regarding her use of the withdrawn funds. For her mortgage fraud conviction, she argued that the district court gave an erroneous venue instruction, the evidence did not support the jury’s finding on venue, and the court improperly allowed cross-examination about her perjury convictions. Additionally, she challenged the district court’s forfeiture order as unauthorized and excessive.The United States District Court for the District of Maryland denied Mosby’s motion to dismiss the perjury counts, finding the term “adverse financial consequences” on the form was not fundamentally ambiguous. The court also allowed evidence of how Mosby used the withdrawn funds, deeming it relevant to whether she experienced adverse financial consequences due to COVID-19. Mosby was convicted on both perjury counts. In her mortgage fraud trial, the court permitted cross-examination about her perjury convictions and gave a jury instruction on venue that Mosby argued was improper. She was convicted of mortgage fraud based on a false gift letter used to purchase a property in Florida.The United States Court of Appeals for the Fourth Circuit affirmed Mosby’s perjury convictions, finding no error in the district court’s rulings. However, the appellate court vacated her mortgage fraud conviction, agreeing that the district court’s jury instruction on venue was erroneous and could have led the jury to base its decision on preparatory acts rather than essential conduct elements. Consequently, the court also vacated the related forfeiture order and remanded the case for further proceedings. View "United States v. Mosby" on Justia Law

Wudi Industrial (Shanghai) Co., Ltd. (Wudi) and Wai L. Wong, along with Wong’s business entity GT Omega Racing, Ltd. (collectively Wong), were involved in a trademark dispute over the use of the "GTRACING" and "GT OMEGA RACING" marks. Wudi registered the "GTRACING" trademark in 2017, and Wong initiated cancellation proceedings, claiming prior use of a similar mark. The Trademark Trial and Appeal Board ruled in favor of Wong in 2020. Wudi sought review in the Eastern District of Virginia, leading to a settlement agreement in 2021, which included geographic and product-based restrictions on Wudi’s use of the "GTRACING" mark, particularly in Europe.The district court granted a stay pending compliance with the settlement agreement. Wong later alleged that Wudi breached the agreement by violating social media restrictions within the European Carve-Out. The district court found Wudi in violation and ordered specific performance. Wudi appealed, and the Fourth Circuit remanded for further proceedings, requiring the district court to comply with procedural requirements for injunctive relief.On remand, the district court issued an injunction, finding that Wudi breached the settlement agreement by using prohibited terms on social media within the European Carve-Out. The court applied the eBay factors, concluding that Wong suffered irreparable harm, monetary damages were inadequate, the balance of hardships favored Wong, and the public interest supported enforcing the agreement.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court’s injunction. The court held that the district court had the authority to enforce the settlement agreement, the eBay factors were properly applied, and Wudi’s contentions regarding extraterritoriality, parol evidence, unclean hands, and attorney’s fees were without merit. The injunction was upheld, requiring Wudi to comply with the settlement agreement’s terms. View "Wudi Industrial (Shanghai) Co., Ltd. v. Wong" on Justia Law

Plaintiffs-Appellants Thomas Sheppheard, Tyler Randall, and Adam Perry, on behalf of minor child J.P., filed a class action lawsuit against the Governor of West Virginia and the Acting Cabinet Secretary of the West Virginia Department of Homeland Security. They sought relief under the Eighth and Fourteenth Amendments, alleging unconstitutional conditions of overcrowding, understaffing, and deferred maintenance in West Virginia's prisons, jails, and juvenile centers. They claimed these conditions amounted to deliberate indifference to their health and safety.The United States District Court for the Southern District of West Virginia dismissed the case for lack of standing. The court found that the plaintiffs failed to establish that their injuries were traceable to the actions of the Governor or the Secretary, or that their injuries would be redressed by a favorable decision. The court noted that the issues were largely due to funding decisions by the West Virginia legislature, which was not a party to the suit. The court also highlighted that the Commissioner of the West Virginia Division of Corrections and Rehabilitation, not the Governor or the Secretary, had the authority to address the conditions in the facilities.The United States Court of Appeals for the Fourth Circuit affirmed the district court's dismissal. The appellate court agreed that the plaintiffs lacked standing because they could not show that their injuries were caused by the Governor's or the Secretary's actions. The court also found that the requested relief, such as appropriations and policy changes, could not be granted by the court as it lacked the power to compel the Governor or the Secretary to take such actions. The court emphasized that the plaintiffs' injuries were not redressable through the requested judicial intervention. View "Sheppheard v. Morrisey" on Justia Law