Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Articles Posted in Drugs & Biotech
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A nurse practitioner, Lisa Hofschulz, and her ex-husband, Robert Hofschulz, were convicted of conspiracy and multiple counts of distributing drugs in an unauthorized manner, including one count resulting in a patient's death. The charges stemmed from their operation of a "pain clinic" that functioned as a front for an opioid mill, dispensing opioid prescriptions for cash-only payments. Robert Hofschulz was also convicted for his role in assisting Lisa Hofschulz in running the opioid mill.The Hofschulzes were initially tried in the United States District Court for the Eastern District of Wisconsin. They were found guilty on all counts, with Lisa Hofschulz receiving a minimum 20-year prison term for the count of unlawful distribution resulting in death, and Robert Hofschulz receiving concurrent terms of 36 months in prison on each of his five convictions. The Hofschulzes appealed their convictions on three grounds: they claimed the jury instructions were inconsistent with a Supreme Court decision, that the judge wrongly permitted the government’s medical expert to testify about the standard of care, and that the evidence was insufficient to support their convictions.The case was then reviewed by the United States Court of Appeals for the Seventh Circuit. The court found no instructional error, stating that the district judge had correctly instructed the jury that the government must prove beyond a reasonable doubt that the Hofschulzes intended to distribute controlled substances and intended to do so in an unauthorized manner. The court also found that the judge had correctly permitted the government’s medical expert to testify about the standard of care in the usual course of professional pain management. Lastly, the court dismissed the Hofschulzes' challenge to the sufficiency of the evidence, deeming it frivolous. The court affirmed the convictions of the Hofschulzes. View "United States v. Hofschulz" on Justia Law

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The case involves Roland Black, who was convicted of attempting to possess with intent to distribute a controlled substance, specifically furanyl fentanyl. Law enforcement intercepted a package addressed to Black, believing it contained narcotics. After obtaining a warrant, they found the substance, replaced it with sham narcotics, and delivered the package to Black's residence. Black was arrested after the package was opened and he was found with luminescent powder from the sham narcotics on his hands.Prior to his trial, Black had unsuccessfully moved to dismiss the indictment and suppress all evidence derived from the seizure of the package. He argued that the officers lacked reasonable suspicion to seize the package and requested an evidentiary hearing to resolve related factual disputes. The district court denied these motions, ruling that the totality of the circumstances supported the officers' reasonable suspicion determination.In the United States Court of Appeals for the Seventh Circuit, Black appealed his conviction, raising four arguments. He contended that the officers lacked reasonable suspicion to seize the package, the jury instruction about his requisite mens rea was erroneous, the jury’s verdict was not supported by sufficient evidence, and the court erred in denying his motion to dismiss based on the court’s treatment of furanyl fentanyl as an analogue of fentanyl.The Court of Appeals affirmed the lower court's decision. It found that the officers had reasonable suspicion to seize the package, the jury instruction accurately stated the law, the jury’s verdict was supported by more than sufficient evidence, and Black's motion to dismiss argument was foreclosed by precedent. View "USA v. Black" on Justia Law

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The case involves two defendants, Christopher Yates and Shawn Connelly, who were convicted for conspiring to distribute methamphetamine. The conspiracy operated out of Macomb, Illinois, and lasted thirteen months, from January 2019 to February 2020. Yates supplied the methamphetamine, initially purchasing the drugs from an unknown source in Joliet, Illinois, with alleged Mexican cartel connections. After the arrest of that supplier, Yates sought out a new source. Connelly was among the distributors.The United States District Court for the Central District of Illinois sentenced both defendants. Yates argued that the government failed to prove the purity of all the methamphetamine involved in the conspiracy, having only tested a small, unrepresentative amount. Connelly argued that the court should not have relied on his coconspirators’ statements to calculate the total drug weight, and that the full weight was not reasonably foreseeable to him. The district court rejected both arguments and sentenced Yates to 168 months in prison and Connelly to 188 months’ imprisonment.On appeal, the United States Court of Appeals for the Seventh Circuit vacated Yates’s sentence and remanded the case. The court found that the government did not provide reliable evidence to support the district court's finding that the conspiracy involved at least 737.1 grams of “ice” methamphetamine. Therefore, Yates was entitled to resentencing. However, the court affirmed Connelly’s sentence, finding that the district court did not err in its calculation of the total drug weight attributable to him. View "United States v. Connelly" on Justia Law

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Hoping to minimize her risk of suffering serious complications from future blood clots, Johnson underwent surgery to implant a retrievable intravascular filter–a medical device that is placed in the inferior vena cava to prevent blood clots that develop in the lower body from flowing into the heart and lungs. Johnson’s doctor selected the Meridian filter, which was supposed to be temporary and easily removable. Johnson’s filter migrated and fractured, leaving shards embedded in the wall of her heart and elsewhere. Her surgeon was unable to remove the device safely and fully. As a result, Johnson faces an ongoing risk of infection, pain, and other complications.Johnson sued the manufacturers of the Meridian filter (Bard), claiming that they defectively designed the Meridian filter and failed to warn medical providers about the device’s risks, in violation of Wisconsin law. A jury rejected most of Johnson’s theories but returned a $3.3 million verdict in her favor on her strict liability failure-to-warn count. The Seventh Circuit affirmed, stating that its decision “should not be misinterpreted as our endorsement of some of Johnson’s counsel’s trial tactics.” There was no reversible error in instructing the jury or in permitting certain testimony, in alleged violation of expert witness disclosure requirements. View "Johnson v. C. R. Bard, Inc." on Justia Law

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The 2005 Medicare amendment, launching prescription drug coverage, raised concerns that patient assistance plans could violate the Anti-Kickback Statute, 42 U.S.C. 1320a-7b, and the False Claims Act, 31 U.S.C. 3729, by effectively rewarding doctors and patients for choosing particular drugs. Astellas subsequently launched Xtandi, used to treat metastatic prostate cancer. Priced at $7,800 per month, Xtandi prescriptions were covered by Medicare up to about $6,000 per month. Astellas made contributions to two patient assistance plans. An Astellas marketing executive encouraged both plans to create special funds to provide co-pay assistance for only androgen receptor inhibitors like Xtandi and a few other medications. Astellas donated to the new funds but stopped after contributing about $27 million. Astellas continued contributing to broader prostate cancer funds.The Department of Justice began investigating; the Astellas marketing executive acknowledged that he had “hoped” and “expected” that the contributions would produce financial benefits for Astellas but that Astellas had made no efforts to calculate “a return on investment.” Astellas settled with the government for $100 million--$50 million for “restitution” to the government. Astellas sought indemnification from liability insurers, including Federal, which denied coverage.The Seventh Circuit affirmed summary judgment for Astellas. Under Illinois law, a party may not obtain liability insurance for genuine restitution it owes the victim of its intentional wrongdoing, but a party may obtain insurance for compensatory damages. In cases of ambiguity, Illinois favors settlements and freedom of contract. Federal wrote its insurance policy to try to extend coverage to the limit of what Illinois law would allow. Federal did not carry its burden of showing that the portion of the settlement payment for which Astellas seeks coverage is uninsurable restitution. View "Astellas US Holding, Inc. v. Federal Insurance Co." on Justia Law

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Bridges and Cunningham filed a putative class action, alleging that Blackstone (the owner of Ancestry.com) violated Section 30 of Illinois’s 1998 Genetic Information Privacy Act, which provides that no person or company “may disclose or be compelled to disclose the identity of any person upon whom a genetic test is performed or the results of a genetic test in a manner that permits identification of the subject of the test,” 410 ILCS 513/30(a). Both plaintiffs had purchased DNA testing products from Ancestry and submitted saliva samples for genetic sequencing years earlier. Blackstone subsequently purchased Ancestry in a “control acquisition”— an all-stock transaction. Because Ancestry had allegedly paired the plaintiffs’ genetic tests with personally identifiable information—including names, emails, and home addresses—Bridges and Cunningham maintained that Blackstone, as part of acquiring Ancestry, had compelled the disclosure of their genetic identities in violation of Section 30.The Seventh Circuit affirmed the dismissal of the suit for failure to state a claim. The complaint focusing exclusively on Blackstone’s acquisition of Ancestry did not adequately allege any compulsory disclosure. View "Bridges v. Blackstone, Inc." on Justia Law

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Gripum manufactures and distributes flavored liquids for use in e-cigarette devices. Gripum submitted a “premarket tobacco product application” to the federal Food and Drug Administration (FDA) in 2021. The agency denied the application, reasoning that Gripum had failed to demonstrate public-health benefits as required by the Family Smoking Prevention and Tobacco Control Act, 21 U.S.C. 387j. The 2016 “Deeming Rule,” promulgated under the Act requires denial of an application to market a new tobacco product if the manufacturer fails to show that the product would be “appropriate for the protection of public health,” considering the risks and benefits to the population as a whole, including users and non-users, the “increased or decreased likelihood that existing users of tobacco products will stop using such products and those who do not use tobacco products will start using such products.The Seventh Circuit upheld the denial. The FDA required Gripum to show that its flavored e-cigarette products were relatively better at reducing rates of tobacco use than products already on the market. It properly applied the comparative standard mandated by the statute. Gripum failed to provide evidence specific to its products; its studies of other products did not even compare tobacco-flavored e-cigarette products to flavored products resembling Gripum’s products. View "Gripum, LLC v. United States Food and Drug Administration" on Justia Law

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To treat her endometriosis, Paulsen received Lupron injections in 2004 from her physician in Georgia. Shortly afterward she began experiencing health problems, including severe bone and joint pain, memory loss, and fevers. In April 2010, Paulsen filed a personal injury suit. Paulsen voluntarily dismissed her claims in 2014. In 2015, Paulsen filed a second lawsuit asserting product liability, negligence, breach of warranty, and misrepresentation. After several amended complaints and the addition of a defendant, two claims remained: a strict liability failure-to-warn claim against AbbVie and Abbott; and a negligent misrepresentation claim against Abbott. Limited discovery was permitted.The district court subsequently applied Illinois procedural law and Georgia substantive law, reasoning that Paulsen’s injury occurred in Georgia, and Illinois lacked a stronger relationship to the action, then granted the defendants summary judgment. The court ruled that Paulsen’s strict liability failure-to-warn claim was time-barred by Georgia’s 10-year statute of repose. Georgia does not recognize a stand-alone misrepresentation claim in product liability cases. Even if this cause of action did exist, the court reasoned, Paulsen’s misrepresentation claim would fail because “the undisputed evidence show[ed] that Abbott did not make any representations regarding Lupron.” The Seventh Circuit affirmed. The court noted extensive evidence that Paulsen’s claims accrued before April 2008 and are barred by the Illinois two-year statute of limitations for personal injuries. View "Terry Paulsen v. Abbott Laboratories" on Justia Law

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Donaldson sought treatment for stress urinary incontinence and anterior pelvic organ prolapse. In 2010, to remedy these conditions, Dr. Schultheis surgically implanted in Donaldson two transvaginal polypropylene mesh medical devices. Both were manufactured by a subsidiary of Johnson & Johnson. In 2014, Donaldson sought treatment for injuries resulting from erosion of the mesh into her bladder, vagina, and adjacent tissues, causing scarring, bladder stones, and abdominal pain, among other problems. Information sheets packaged with the devices warned of the risks of erosion but Donaldson never saw the warnings and contends that Dr. Schultheis did not inform her of these risks. Dr. Schultheis testified that he was aware of the possible complications and that he believed that the benefits of the devices outweighed the risks. He also testified that, in implanting the devices, he followed all of the manufacturer’s instructions.The Seventh Circuit affirmed summary judgment in favor of the manufacturers. Although there is no doubt that Donaldson suffered severe and painful complications after the devices were implanted, she failed to produce sufficient evidence to avoid summary judgment in her case for non-specific defects under Illinois product liability law. There was no evidence eliminating abnormal use or secondary causes, or that the device failed to perform as expected. View "Donaldson v. Johnson & Johnson" on Justia Law

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Elmer owned and operated multiple healthcare-related companies including Pharmakon, a compounding pharmacy that mixes and distributes drugs—including potent opioids like morphine and fentanyl—to hospitals across the U.S.. Pharmakon conducted its own internal potency testing and contracted with a third party to perform additional testing to evaluate whether its compounded drugs had too little of the active ingredient (under-potent) or too much (over-potent). In 2014-2016, testing showed 134 instances of under- or over-potent drugs being distributed to customers. Elmer knew the drugs were dangerous. Rather than halting manufacturing or recalling past shipments, sales continued and led to the near-death of an infant. Elmer and Pharmakon lied to the FDA.Elmer was charged with conspiracy to defraud the FDA (18 U.S.C. 371); introducing adulterated drugs into interstate commerce (21 U.S.C. 331(a), 333(a)(1) & 351); and adulterating drugs being held for sale in interstate commerce (21 U.S.C. 331(k), 331(a)(1) & 351). Pharmakon employees, FDA inspectors, and Community Health Network medical staff testified that Elmer was aware of and directed the efforts to conceal out-of-specification test results from the FDA. The district court sentenced Elmer to 33 months’ imprisonment. The Seventh Circuit affirmed, rejecting challenges to rulings related to the evidence admitted at trial and Elmer’s sentence. The evidence before the jury overwhelmingly proved Elmer’s guilt. The sentence was more than reasonable given the gravity of Elmer’s crimes. View "United States v. Elmer" on Justia Law