Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Defendant, once a practicing psychiatrist, defrauded Medicare by receiving funds he was not entitled to receive and then fled the country to live as a fugitive in the Philippines. There, defendant created the website www.liver4you.org, fraudulently promising to provide critically ill patients liver or kidney transplants for certain sums of money. Defendant was subsequently convicted of one count of health care fraud and five counts of wire fraud. Defendant appealed, arguing that the district court committed four procedural errors in calculating defendant's offense level and imposed a substantively unreasonable sentence. The government argued that the court should not consider the four procedural errors because at sentencing the district court stated it would impose "the same sentence" even without some of the alleged errors. The court rejected this contention and emphasized that such predictions were only rarely appropriate. Defendant argued that his website was not mass-marketing pursuant to U.S.S.G. 2B1.1(b)(2)(A)(ii) because he did not initiate contact with his victims where they found his website, which was publicly available online, and emailed him at an address listed on the website. The court rejected defendant's distinction and held that he committed fraud by using the internet to solicit a large number of persons to buy his organ transplant services. Therefore, the court held that the enhancement applied even if defendant did not use the most active marketing method possible. Accordingly, the court affirmed the judgment of the district court.

Defendants appealed from preliminary injunctions enjoining defendants from enforcing 22 U.S.C. 7631(f), a provision of the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (Act), 22 U.S.C. 7601 et seq., against plaintiffs, non-governmental organizations (NGOs) engaged in the international fight against HIV/AIDS that received funding under the Act. Section 7631(f), construed and implemented by defendants, required NGOs, as a condition of receiving Act funds, to adopt a policy explicitly opposing prostitution, and prohibiting recipients from engaging in any activities that were "inconsistent" with an anti-prostitution stance. The court held that section 7631(f) fell well beyond what the Supreme Court and the court have upheld as permissible conditions on the receipt of government funds where section 7631(f) did not merely require recipients of the Act's funds to refrain from certain conduct, but went substantially further and compelled recipients to espouse the government's viewpoint. Consequently, the court agreed with the district court that plaintiffs have demonstrated a likelihood of success on the merits and found no abuse of discretion by the district court.

A non-profit hospital ("plaintiff") that provided medical services to beneficiaries of Local 272 Welfare Fund ("Fund"), an employee benefit plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1101, filed a complaint against defendants seeking payment for over $1 million in medical services provided to beneficiaries that the Fund had allegedly failed to reimburse. At issue was whether a healthcare provider's breach of contract and quasi-contract claims against an ERISA benefit plan were completely preempted by federal law under the two-pronged test for ERISA preemption established in Aetna Health Inc. v. Davila. The court held that an "in-network" healthcare provider may receive a valid assignment of rights from an ERISA plan beneficiary pursuant to ERISA section 502(a)(1)(B); where a provider's claims involved the right to payment and not simply the amount or execution of payment when the claim implicated coverage and benefit determinations as set forth by the terms of the ERISA benefit plan, that claim constituted a colorable claim for benefits pursuant to ERISA section 502(a)(1)(B); and in the instant case, at least some of plaintiff's claims for reimbursement were completely preempted by federal law. The court also held that the remaining state law claims were properly subject to the district court's supplemental jurisdiction.