Federal Civil Practice

Dist. Ct. did not err in entering judgment for defendant in plaintiffs’ False Claims Act (FCA) claim, alleging that defendant knowingly filed false reports of its pharmacies’ “usual and customary" (U&C) drug prices when it sought reimbursement under Medicare and Medicaid. Specifically, defendant listed its higher cash prices as its U&C drug prices, rather than lower price-matched amount that it charged to qualifying customers under its discount program. Medicaid regulations, though, defined “usual and customary” as prices charged to general public, and although Dist. Ct. found that defendant should have reported its discount prices, it properly found that plaintiffs did not establish scienter prong of FCA that included reckless disregard and other scienter terms, where: (1) objective scienter standard established in Safeco, 551 U.S. 47, applied to claims made under FCA; (2) defendant’s understanding of definition of U&C was not made with reckless disregard, but rather was objectively reasonable, where state and federal regulations defining U&C price did not preclude defendant’s interpretation, and relevant manuals were silent about appropriate treatment for price-matching programs used by defendant so as to give warning to defendant that its price-matching program fell within definition of U&C prices; and (3) plaintiffs’ failure to establish objective scienter standard precluded finding that defendant acted “knowingly” in submitting any wrong reports. (Dissent filed.)

Dist. Ct. did not err in denying defendant’s motion to compel arbitration of plaintiff’s action under Illinois Biometric Information Privacy Act that alleged that defendant’s technology contained in TruYou feature in marketplace application OfferUp improperly used facial recognition technology to collect plaintiff’s biometric identifiers without his consent. Instant arbitration clause was contained in Terms of Service contract between plaintiff and OfferUP to which defendant was not signatory, and plaintiff failed to establish any exception to general rule that non-signatory to contract containing arbitration clause cannot enforce said clause. Moreover, Dist. Ct. properly used Illinois law to resolve instant dispute, even though Terms of Sale contract contained choice of law provision naming State of Washington as applicable law to be enforced, since defendant was unable to identify any outcome determinative difference between Washington and Illinois law, and thus Dist. Ct. was required to use Illinois law as law of forum state. Also, Ct. rejected defendant’s contention that even though it was not signatory to Terms of Service contract, it could nevertheless enforce arbitration clause, where, according to defendant: (1) it was third-party beneficiary of Terms of Service contract; or (2) it could enforce arbitration provision either as agent of OfferUp or on equitable estoppel grounds.

Dist. Ct. erred in dismissing plaintiff’s action under Telephone Consumer Protection Act, alleging vicarious liability theory that defendants’ agents generated unauthorized robocalls, under circumstances, where one defendant contracted with second defendant to sell first defendant’s insurance products, and where: (1) second defendant hired lead generators to effectuate telemarketing; and (3) lead generators made instant unauthorized robocalls. While Dist. Ct. found that plaintiff failed to plausibly allege agency relationship, Ct. of Appeals found that plaintiff adequately pleaded that lead generators acted with first and second defendants’ actual authority, where plaintiff alleged that: (1) first defendant gave second defendant and its lead generators authority to use its trade name, approved scripts and proprietary pricing and product information; (2) second defendant then provided said scripts to lead generators and participated in calls directly by pairing lead generators with customers and emailing insurance quotes to call recipients; and (3) both first and second defendants accepted benefits from lead generators’ calls. Ct. rejected defendants’ contention that plaintiff failed to meet pleading standards, where complaint lacked allegations that defendants controlled timing, quantity and geographic location of lead generators’ robocalls. Ct. also found that actions of agents may be attributable to second defendant for purposes of establishing personal jurisdiction over second defendant.

Dist. Ct. did not err in granting summary judgment motion filed by defendants-prison social worker and correctional officer, as well as entity that supplied mental health services to inmates, where plaintiff-deceased prisoner alleged that defendants were deliberately indifferent to his mental health needs, that entity failed to provide continuity of care during plaintiff’s transfer between prison facilities, and that defendants’ actions resulted in plaintiff’s suicide. While plaintiff’s representative argued that defendant social worker exhibited deliberate indifference when she failed to contact appropriate medical staff after she read two letters written by plaintiff, record showed that social worker construed both letters in positive way as examples of plaintiff’s successful articulation of anger and desire for advocacy, as well as plaintiff’s statement about efficacy of his medications. As such, plaintiff failed to show that social worker, which was not otherwise responsible for plaintiff’s mental health treatment, thought that plaintiff was at risk of suicide, Also, plaintiff did not show that defendant-correctional officer was aware that plaintiff was experiencing mental distress on night of his death. As to defendant-entity, plaintiff could not establish viable 8th Amendment claim, where plaintiff failed to present evidence that there were systemic and gross deficiencies in entity’s transfer procedures or lack thereof.

Dist. Ct. erred in denying defendants-correctional officers' motion to dismiss as untimely plaintiff-prisoner’s section 1983 action under circumstances, where plaintiff timely filed original complaint that named each defendant as “John Doe” as nominal placeholder, but filed amended complaint with actual named defendants outside applicable two-year limitations period. While Dist. Ct. found that suing “John Doe” defendants constituted “mistake” under Rule 15(c)(1)(C)(ii) that allowed plaintiff to relate his amended complaint back to date of original complaint, Ct. of Appeals found that naming “John Doe” defendants was not mistake under Rule 15(c)(1)(C)(ii), where plaintiff simply lacked knowledge of proper names of instant defendants. Moreover, Ct. of Appeals further noted that naming defendants as “John Doe” was not based on error, misconception, misunderstanding or erroneous belief, but rather was conscious choice by plaintiff. Also, Ct. of Appeals remanded matter back to Dist. Ct. for consideration of plaintiff’s equitable tolling claim.

Dist. Ct. did not err in dismissing plaintiffs’ lawsuit, alleging that defendant played role in assisting Nazi regime during World War II in stealing possessions of individuals being sent to death camps. Dist. Ct. based dismissal on finding that comity-based abstention applied because plaintiffs should have filed instant lawsuit with French Administrative claims system, even though plaintiffs relied on expropriation exception to Foreign Sovereign Immunities Act (FSIA) to provide jurisdiction for instant lawsuit. However, Ct. of Appeals found that dismissal was proper in instant triple-foreign lawsuit, i.e., plaintiffs alleged that nationals of country other than U.S. were injured by foreign entity in foreign nation, since: (1) Supreme Ct. decision in Nestle USA, Inc., 141 S.Ct. 1931, found that Alien Tort Statute, 28 USC section 1350, does not provide remedy for triple-foreign event and does not apply where wrongful acts are unconnected to U.S. or its citizens; (2) plaintiffs could not base their substantive claims on expropriation exception to FSIA; and (3) plaintiff failed to identify any other basis for their substantive claims. Ct. further noted that had plaintiffs articulated legitimate basis for their substantive claims, then abstention doctrine would have been appropriate basis to dismiss plaintiffs’ claims.

Ct. of Appeals denied plaintiffs-students’ request for injunction pending their appeal of Dist. Ct.’s denial of their request for issuance of preliminary injunction to prevent defendant-University from implementing its policy requiring that all students be vaccinated against COVID-19, or, if students qualified for exemption from vaccination due to either religious or medical concerns, said students would be subject to mask and testing requirements. While plaintiffs, who mostly qualified for vaccination exemption, argued that masking and testing requirements violated their due process rights, case law actually supported defendant’s right to impose on its students vaccine requirement and conditions for exemptions to said requirements to help students remain safe while learning. Ct. further noted that each university may decide what is necessary to keep other students safe in congregate setting.

Dist. Ct. erred in granting plaintiff’s motion for summary judgment in its action alleging that Indiana Senate Enrolled Act No. 340 (Act), which requires physicians to report to State any of 25 specified adverse physical or psychological conditions arising from induction or performance of abortion, was unconstitutionally vague. While Ct. of Appeals agreed that certain aspects of Act were not clear with respect to extent to which complications must be caused by abortion itself, and that Act lacked mens rea requirement despite carrying term of imprisonment, it nevertheless found that Act had discernable core that precluded Dist. Ct. from granting plaintiff’s motion for summary judgment and issuing injunction with respect to enforcement of Act, where State agency had not yet issued guidance on Act's application and no state court had attempted to interpret it. Ct. further noted that core of listed abortion complications satisfied void-for-vagueness test applicable to instant facial, pre-enforcement challenge, since Act was understandable by persons of ordinary intelligence and not subject to arbitrary enforcement. Ct. also observed that future, as-applied vagueness challenge to instant Act may have different outcome. (Dissent filed.)

Dist. Ct. lacked subject-matter jurisdiction to consider plaintiffs’ class action claim, alleging that defendant retailer violated Magnuson-Moss Warranty Act by giving customers who purchased extended warranty plan gift card as sole remedy, where defendant could not repair television purchased from defendant, and where said Act required that consumer be given choice between replacement of television or refund of purchase price less depreciation based on actual use. Dist. Ct. lacked federal-question jurisdiction under 28 USC section 1331, since: (1) Magnuson-Moss Act required that plaintiffs show amount-in-controversy of at least $50,000 in alleged damages and plaintiffs had only $5,000 in damages; and (2) plaintiffs failed to name any additional plaintiffs for purposes of aggregating their claims to meet amount-in-controversy threshold. Also, plaintiffs failed to plausibly allege amount-in-controversy that would satisfy Class Action Fairness Act jurisdiction requirement, where plaintiffs failed to make any factual allegations that class action contained at least $5 million in claims. Too, plaintiffs could not establish any diversity jurisdiction under 28 USC section 1332, where plaintiffs’ issues with its $3,000 television could not establish more than $75,000 in controversy between them and manufacturer of television.

Dist. Ct. erred in dismissing for failure to state viable cause of action plaintiff-nursing home resident’s section 1983 action, alleging that defendant-state-run nursing care facility violated Federal Nursing Home Reform Act (FNHRA) by failing to keep plaintiff (who has dementia) free from chemical restraints imposed for purposes of discipline or convenience rather than treatment and discharging plaintiff to different facility without meeting certain criteria for doing so. While Dist. Ct. found that FNHRA does not provide plaintiff with private right of action that could be addressed via section 1983 action, Ct. of Appeals found that both provisions of FNHRA at issue in instant case conferred privately enforceable rights upon nursing home residents that were addressable via section 1983 action. Ct. rejected defendant’s claim that FNHRA impliedly foreclosed any section 1983 claim because FNHRA provided federal and state enforcement schemes in addition to individualized mechanisms for recourse other than section 1983.