In this edition of Litigation Roundup, mootness ends Surfside Beach property owners’ dispute with the Texas General Land Office in a 2-1 ruling from the Fifth Circuit, a challenge to the Inflation Recovery Act’s medication pricing controls keeps rolling and a conservative activist sues Lt. Gov. Dan Patrick over an impeachment-related gag order.
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Southern District of Texas
Lt. Gov.’s Gag Order Draws Constitutional Challenge
A gag order implemented by Texas Lt. Gov. Dan Patrick July 17 that purported to ban all state senators and representatives, as well as attorneys and parties from both sides, from discussing the impending impeachment trial of suspended Attorney General Ken Paxton has drawn a lawsuit from Dr. Steven Hotze, a GOP megadonor who frequently files lawsuits.
The lawsuit has been assigned to U.S. District Judge Nelva Gonzales Ramos, who set an initial scheduling conference for Nov. 27 — more than two months after the Sept. 5 impeachment trial is scheduled to begin.
The Aug. 3 lawsuit alleges Patrick has perpetrated “unprecedented interference with constitutional rights and representative government” with his gag order.
“The gag provisions violate the First Amendment by preventing Texans from timely hearing and learning the positions about this proceeding from their senators and state representatives or their agents,” Hotze told the court. “These senate rules further infringe on the First Amendment by impeding the right of Texans to petition or communicate with their senators or state representatives prior to their voting on this important matter.”
Hotze is represented by Jared Woodfill of Houston.
The defendants — Texas, Patrick and Sergeant-at-Arms Austin Osbourne — had not retained counsel as of Monday.
The case number is 6:23-cv-00036.
Western District of Texas
Briefing Schedule Set in Challenge to Inflation Reduction Act
U.S. District Judge Robert Pitman issued an order Aug. 2 setting deadlines for motions for summary judgment in a lawsuit where three biopharmaceutical and medical industry groups are alleging the federal government ran afoul of the Administrative Procedure Act when it enacted the Inflation Reduction Act of 2022.
The groups — Pharmaceutical Research and Manufacturers of America, Global Colon Cancer Association and the National Infusion Center Association — filed suit June 21, alleging the price controls on medications contained in the act “upends” the “time-tested, market-based system for encouraging innovation.”
“With so much at stake — both practically and politically — the natural and prudent course would have been for Congress to carefully choose the mechanism for setting drug prices,” the plaintiffs allege. “But Congress opted for a very different course in the IRA. It adopted a novel, Byzantine structure that, at every turn, attempts to obscure the process by which prices are imposed. The resulting scheme eliminates transparency, avoids accountability, and attempts to foreclose judicial review. It is a sham.”
Those entities have until Aug. 10 to file a motion for summary judgment and the government has until Sept. 29 to file its motion for summary judgment, according to the order.
Pharmaceutical Research and Manufacturers of America is represented by Allon Kedem, Jeffrey L. Handwerker, John P. Elwood, William C. Perdue and Allissa Pollard of Arnold & Porter.
Global Colon Cancer Association is represented by Megan Thibert-Ind and Michael Strauss Kolber of Manatt, Phelps & Phillips and Allissa Pollard of Arnold & Porter.
National Infusion Center Association is represented by Ibituroko-Emi Lawson, McKenzie Noelle Edwards and Timothy Cleveland of Cleveland Krist and Allissa Pollard of Arnold & Porter.
The government is represented by Stephen Pezzi and Christine L. Coogle of the U.S. Department of Justice in D.C.
The case number is 1:23-cv-00707.
Quinn Emanuel Hired for Challenge to Texas’ ‘Anti-Pornography’ Law
On Friday a group of companies that includes providers of adult content filed a lawsuit challenging a recently passed state law, H.B. 1181, that they argue violates their First and Fourteenth Amendment rights as well as the supremacy clause.
The law, which is slated to go into effect Sept. 1, imposes liability on entities that allow minors to access pornographic material online. It requires age verification for visitors to certain websites and requires those websites display a “health warning” from the Texas Department of Health and Human Services.
The plaintiffs, including the Free Speech Coalition, allege the act “joins a long tradition of unconstitutional — and ultimately failed — governmental attempts to regulate and censor free speech on the internet.”
“The Act in effect requires plaintiffs to block access to their websites in Texas wholesale, unless they implement a system that requires all visitors to transmit their personal information to verify that they are at least eighteen years old,” the lawsuit alleges, calling the health warning the websites are mandated to display “controversial, and factually false.”
“Both of the Act’s requirements are enforceable by the Texas Attorney General. Both requirements are unconstitutional,” the plaintiffs allege in seeking an injunction that would bar enforcement.
The case has been assigned to U.S. District Judge Robert Pitman.
The plaintiffs are represented by Scott L. Cole of Quinn Emanuel Urquhart & Sullivan.
Counsel for Texas had not yet filed an appearance as of Monday.
The case number is 1:23-cv-00924.
Northern District of Texas
OAG Touts $5M Restitution in Orthopedic Supplies Fraud Case
The former owner of a Frisco-based medical equipment company has been sentenced to 49 months in prison and ordered to pay $5.1 million in restitution for his role in what the government called a medical equipment fraud scheme.
Kenric Wakeen Griffin was co-owner of New Horizons Durable Medical Equipment when he was indicted in September 2021 on charges of conspiracy to pay and receive healthcare kickbacks and payment and receipt of kickbacks.
The government alleged Griffin was paying marketers kickbacks to bring him clients but disguised those payments to appear they were for marketing and business services. A jury convicted him on seven counts of paying and receiving kickbacks and the conspiracy charge.
The Texas attorney general’s office issued a news release touting the sentencing July 31, crediting the outcome to an investigation conducted by its Texas Medicaid Fraud Control Unit, noting that in the last fiscal year the unit has recovered about $236 million on behalf of taxpayers.
The case was assigned to U.S. District Judge Brantley Starr.
The government is represented by Department of Justice attorneys Darren Halverson in D.C. and Carlos Antonio Lopez in Dallas.
Griffin is represented by Brady T. Wyatt III of Dallas.
The case number is 3:19-cr-00439.
U.S. Court of Appeals for the Fifth Circuit
Panel Says Texas City’s 5G Opposition is Preempted
The Houston-area city of Pasadena was dealt a blow Friday when a panel sided with Crown Castle Fiber in a dispute over the installation of 5G wireless technology, clearing the way for a rollout.
Pasadena had argued its rules and aesthetic design standards mandated the technology be underground, while Crown Castle argued that flooding and overheating concerns in the city made undergrounding “technologically impossible.”
The panel held that the city’s ordinances are preempted by the Federal Telecommunications Act and also held that Crown Castle would “suffer irreparable harm if it cannot build its network under its contract with T-Mobile.”
“Its harm outweighs whatever disadvantage the city will suffer in response,” the court held. “Finally, the weight of the FCC’s Order and the importance of building out our nation’s telecommunications network demonstrate that the injunction is in the public interest.”
U.S. District Judge David Hittner had entered final judgment in favor of Crown Castle in August 2022.
Pasadena is represented by William S. Helfand of Lewis, Brisbois, Bisgaard & Smith.
Judges Jerry E. Smith, Don R. Willett and Stephen A. Higginson sat on the panel.
The case number is 22-20454.
Panel Sides with GLO 2-1 in Fight with Surfside Property Owners
A group of Texas gulf coast property owners who argued that a temporary order from the state’s General Land Office that enlarged the public beach in Surfside — following a 2020 tropical storm that battered the region — was unconstitutional lost their appeal recently on mootness grounds.
The property owners had argued the order, creating a new 200-foot public beach area, encompasses all or part of their properties, which infringes on their rights, and constitutes an illegal taking. The group sued the state in May 2021. After U.S. District Judge Jeffrey Brown denied their motion for a preliminary injunction, they appealed to the Fifth Circuit in June 2022.
But then in August 2022, the commissioner of the GLO rescinded the temporary order. The majority determined that mooted this appeal and tossed the case.
The July 31 ruling against the landowners wasn’t unanimous. Judge James C. Ho dissented, writing that “respect for private property leads me to conclude that we should reverse and remand.” Judge Ho wrote that the timing of the recission of the temporary order “is suspicious.”
“The Commissioner did not rescind the challenged order until shortly before her brief in this appeal was due. Moreover, this timing was not pre-ordained — in fact, it contradicted the original terms of the order,” he wrote. “So I have real doubts as to whether the government’s actions mooting this case were sincere or strategic — a question we must ask under a faithful application of the doctrine of voluntary cessation. The majority would presume the Commissioner’s good faith. I understand and wish I could agree with my distinguished colleagues. But the circumstances give me pause.”
Judges James E. Graves and Stuart Kyle Duncan also sat on the panel.
The property owners are represented by J. David Breemer of Pacific Legal Foundation in Sacramento.
The state is represented by Michael Abrams, Jessica Ahmed and Beth Klusmann of the attorney general’s office.
The case number is 22-40350.