Planned Parenthood will have to defend against a $1.8 billion Medicaid fraud lawsuit by Texas that the organization says could force it to shut down its operations in the state after a U.S. appeals court rejected its bid to escape the case on immunity grounds.
The full 5th U.S. Circuit Court of Appeals in New Orleans ruled unanimously on Wednesday that Planned Parenthood's appeal of the 2023 decision denying the national group immunity from the lawsuit was premature, paving the way for the case to continue after a nearly three-year pause.
Texas Attorney General Ken Paxton, a Republican, and the anonymous plaintiff who originally filed the 2021 lawsuit are seeking to force Planned Parenthood to return money it allegedly collected from Texas' and Louisiana's Medicaid programs after the states cut off its funding, plus heavy additional penalties.
Planned Parenthood has said it would be forced to shut down its operations in Texas if the state prevails in the lawsuit.
A three-judge panel last year had reversed the lower court and ruled that Planned Parenthood was immune from the claims because they were based entirely on the alleged actions of the national organization's lawyers, who advised local affiliates. The legal doctrine of attorney immunity generally shields lawyers from being sued for their role in directing legal strategy.
But the full 5th Circuit's 18 active judges on Wednesday said that attorney immunity, despite its name, is more of an affirmative defense than true immunity from being sued, meaning Planned Parenthood was not entitled to an immediate appeal.
"Resolving the immunity question would not conclusively determine a separable legal issue in a way that meaningfully advances the litigation," Circuit Judge Jennifer Walker Elrod wrote.
Elrod was joined in the opinion by Circuit Judge James Graves, who had been on the panel that ruled for Planned Parenthood last year. Graves and the two other judges on the panel did not explain why they had changed their minds.
Susan Baker Manning, Planned Parenthood's general counsel, in a statement said the group provides care to more than 2 million people each year and would continue to do so.
“This politically motivated and meritless case is one of many attacks on Planned Parenthood that all share the same goal: to shut down Planned Parenthood health centers because, where legal, they provide abortion care," she said.
Paxton's office and lawyers for the anonymous plaintiff did not immediately respond to requests for comment.
State and federal funds cannot be used to pay for abortion services, but Planned Parenthood is reimbursed by most states for other reproductive healthcare services it provides.
The anonymous plaintiff who brought the lawsuit in Amarillo, Texas, federal court has identified himself as the person who in 2015 released undercover video footage purporting to show Planned Parenthood staff discussing the sale of fetal tissue.
The videos led Texas and Louisiana to open investigations and later in 2015 terminate Planned Parenthood as a provider covered by their Medicaid programs, though that took years to finalize amid legal challenges.
The lawsuit accuses Planned Parenthood of violating the federal False Claims Act by having continued to bill and collect payments from the states' Medicaid programs after the initial termination decisions, and failing to repay what it received once the terminations eventually took effect. Texas joined in the case, while Louisiana did not.
Planned Parenthood has said that billing the states while their termination decisions were paused by courts was legal, and that it cannot be held liable because it was giving legal advice to affiliates.
U.S. District Judge Matthew Kacsmaryk in 2023 ruled that once appeals courts allowed the terminations to become final, Planned Parenthood was obligated to return the money it had received in the meantime.
Kacsmaryk, a former anti-abortion activist appointed to the bench by President Donald Trump, automatically hears all federal cases filed in Amarillo and his court has become a popular venue for litigation brought by conservative groups.
The case is United States ex rel Doe v. Planned Parenthood Federation of America, 5th U.S. Circuit Court of Appeals, No. 23-11184.
For the plaintiff: Heather Hacker and Andrew Stephens of Hacker Stephens
For Planned Parenthood: Anton Metlitsky, Danny Ashby and Leah Godesky of O'Melveny & Myers
For Texas: William Peterson of the Texas Attorney General's office
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