Padilla’s Boundary in the Third Circuit: No Sixth Amendment Duty to Warn of False Claims Act Civil Liability; Any Expansion Would Be Non‑Retroactive

Introduction

In a precedential decision issued on October 17, 2025, the United States Court of Appeals for the Third Circuit affirmed the denial of habeas relief to Nita Patel and Kirtish N. Patel, two healthcare providers who pleaded guilty to federal healthcare fraud and later faced a multimillion-dollar civil judgment under the False Claims Act (FCA). Writing for a unanimous panel, Judge Hardiman held that the Sixth Amendment does not obligate criminal defense counsel to advise clients about the collateral civil consequences of a guilty plea, specifically FCA liability and the collateral estoppel effect of plea admissions in a subsequent civil suit. The Court also ruled that even if such a duty were recognized today, it would constitute a new rule that does not apply retroactively on collateral review under Teague v. Lane and Chaidez v. United States.

The opinion squarely addresses two recurring issues at the intersection of criminal and civil enforcement: the scope of counsel’s constitutional duty to advise about plea consequences, and whether civil judgments anchored in criminal pleas can keep a habeas challenge live after the petitioner’s criminal sentence ends. The Court answered the first question in favor of the Government, confining Padilla v. Kentucky to immigration consequences, and the second in favor of the petitioner, holding that the FCA judgment is a collateral consequence sufficient to prevent mootness.

Background and Procedural History

Nita and Kirtish Patel operated Biosound Medical Services Inc. and Heart Solution P.C., which offered mobile diagnostic testing. To bill Medicare for neurological diagnostic testing, the companies needed a licensed subspecialist physician to supervise and interpret the tests. In 2006, Kirtish falsely represented to Medicare that a licensed neurologist would provide supervision, securing provider approval. Beginning in 2008, Kirtish—who had no medical license—authored diagnostic reports, while Nita affixed a forged physician signature. The scheme generated at least $4,386,133.75 in revenue, including $1,668,954.95 from Medicare.

In 2014, a former employee (“Jane Doe”) filed a sealed qui tam action in the District of New Jersey alleging FCA violations. Shortly thereafter, the Patels were charged criminally and each pleaded guilty in 2015 to one count of healthcare fraud (18 U.S.C. § 1347). They accepted restitution and forfeiture obligations, and their plea agreements explicitly stated they were reached “without regard to any civil or administrative matters that may be pending or commenced in the future,” and did not prohibit the Government or third parties from initiating civil or administrative proceedings.

The day after the pleas, the United States intervened in the qui tam case and moved for summary judgment on its FCA claims. Relying on the plea agreements and plea colloquies, the District Court held the Patels were collaterally estopped from contesting FCA liability. It awarded treble damages based on the Medicare loss ($1,688,954.95 trebled to $5,006,864.85) plus $2,750,000 in civil penalties, for a total judgment of $7,756,864.85. On appeal, the Third Circuit affirmed as to Nita’s FCA liability (United States ex rel. Doe v. Heart Solution, P.C., 923 F.3d 308 (3d Cir. 2019)).

In 2017 and 2018, respectively, Nita and Kirtish filed motions under 28 U.S.C. § 2255 to vacate their criminal judgments, arguing ineffective assistance of counsel (IAC) based on their lawyers’ failure to advise that their guilty pleas could have collateral estoppel effect in the FCA suit and expose them to substantial civil liability. The District Court denied relief, and later denied motions to alter or amend the judgment. The Third Circuit granted a certificate of appealability limited to the question whether counsel were ineffective for not advising that the pleas could have collateral estoppel consequences in the qui tam action. Nita completed supervised release in January 2025 (raising a mootness question), and Kirtish was set to complete supervised release in November 2025.

Summary of the Opinion

Mootness and collateral consequences: Nita’s appeal is not moot despite the completion of her sentence and supervised release. The FCA judgment—entered in reliance on plea admissions—constitutes a continuing collateral consequence redressable by vacatur of the criminal judgment, because it could support relief from the civil judgment under Rule 60(b)(5).
Core Sixth Amendment holding: The Court joins its sister circuits in holding that defense counsel’s constitutional duty runs only to advising about a guilty plea’s direct consequences, not collateral consequences. Padilla v. Kentucky is limited to immigration consequences (deportation) and does not extend to collateral civil exposure like FCA liability or the estoppel effect of plea admissions in a later civil suit.
Non-retroactivity: Even if the Court were to recognize a duty to warn about FCA consequences now, that would be a new rule not dictated by precedent at the time the Patels’ convictions became final. Under Teague and Chaidez, it would not apply retroactively on collateral review.
No evidentiary hearing: Because the Patels failed to state a colorable Strickland claim (no constitutional duty breached), the District Court did not err in denying an evidentiary hearing.

Detailed Analysis

1) Precedents and Authorities Driving the Decision

The Court’s framework draws on several strands of precedent:

Sixth Amendment and guilty pleas: The right to counsel extends to plea bargaining and plea entry (Lee v. United States, 582 U.S. 357 (2017)); counsel must advise on the advantages and disadvantages of a plea and the rights forfeited (Libretti v. United States, 516 U.S. 29 (1995)). IAC claims are assessed under Strickland v. Washington, 466 U.S. 668 (1984), as applied to pleas by Hill v. Lockhart, 474 U.S. 52 (1985).
Direct vs. collateral consequences: Before 2010, the prevailing view across federal and state courts was that the Sixth Amendment required advice about direct consequences, but not collateral ones (Chaidez v. United States, 568 U.S. 342, 350 & n.7 (2013)). Third Circuit cases reflect this taxonomy, e.g., Kincade v. United States, 559 F.2d 906 (3d Cir. 1977) (direct consequences concern sentence length/nature); United States v. Salmon, 944 F.2d 1106 (3d Cir. 1991) (maximum penalties); Meyers v. Gillis, 93 F.3d 1147 (3d Cir. 1996) (parole eligibility as collateral); United States v. Rengifo, 832 F.3d 220 (3d Cir. 2016) (later sentencing effects as collateral); United States v. Cariola, 323 F.2d 180 (3d Cir. 1963) (voting rights). Other circuits have treated employment benefits, driver’s license loss, and civil tax liability as collateral (e.g., Nicholson (4th Cir.), Moore (5th Cir.), King (9th Cir.)).
Padilla v. Kentucky (2010): The Supreme Court held that counsel must advise noncitizen clients whether a plea carries a risk of deportation. Critically, Padilla did not invalidate the direct/collateral framework across the board; it held that deportation is unique—“a particularly severe penalty” intimately linked to the criminal process—and therefore advice on deportation falls within the Sixth Amendment’s ambit without deciding the collateral/direct taxonomy globally.
Scope of Padilla: The Third Circuit aligned with the Seventh Circuit’s view in United States v. Reeves, 695 F.3d 637 (7th Cir. 2012), that Padilla is limited to deportation and does not broadly convert all collateral consequences into constitutional advisory duties. The Court also discussed the Second Circuit’s en banc decision in Farhane v. United States, 121 F.4th 353 (2d Cir. 2024), which extended Padilla to advice about denaturalization risk insofar as it leads to deportation—again confirming the immigration-centric boundary.
Non‑retroactivity: Teague v. Lane, 489 U.S. 288 (1989), Chaidez (holding Padilla announced a new, non‑retroactive rule), and Edwards v. Vannoy, 593 U.S. 255 (2021) (resolutely closing the door on retroactivity for new procedural/watershed rules), together foreclose retroactive application of any newly recognized advisory duty regarding FCA civil consequences.
Mootness and collateral consequences: Abreu v. Superintendent Smithfield SCI, 971 F.3d 403 (3d Cir. 2020), and Spencer v. Kemna, 523 U.S. 1 (1998), frame the requirement that a petitioner demonstrate a continuing collateral consequence likely to be redressed by a favorable decision. Rule 60(b)(5) of the Federal Rules of Civil Procedure offers a potential mechanism to reopen a civil judgment “based on an earlier judgment that has been reversed or vacated,” which made Nita Patel’s appeal live.

2) The Court’s Legal Reasoning

The Court’s reasoning proceeds in three principal moves:

Mootness resolved in petitioner’s favor: Although Nita’s term of supervised release had ended, her challenge was not moot. The FCA judgment was expressly built upon the admissions and stipulations from the criminal pleas. Because a successful IAC claim could lead to vacatur of the criminal judgment, it could potentially support relief from the civil judgment under Rule 60(b)(5). This satisfied Article III’s case-or-controversy requirement by establishing a concrete, continuing injury redressable by the Court.
Sixth Amendment duty limited to direct consequences; Padilla is immigration-specific: The Court “join[ed] [its] sister circuits” in holding that the Sixth Amendment requires advice only on direct consequences of a guilty plea. It expressly declined to extend Padilla beyond deportation-related advice. The Patels’ proposed test—keying constitutional advice to the severity and intertwinement of a consequence with the conviction—misread Padilla, which carefully confined its holding to deportation because of its unique severity and tight integration with the criminal process. By contrast, the risk of FCA liability and the collateral estoppel effect of plea admissions are classic collateral consequences: neither automatic, nor controlled by the criminal sentencing court, and contingent on subsequent civil enforcement by different actors. Accordingly, no constitutional deficiency can be premised on counsel’s failure to advise about FCA exposure or civil estoppel effects.
Teague non‑retroactivity as an independent bar: Even if the Court were inclined to recognize a novel Sixth Amendment duty regarding civil enforcement consequences, that duty would be a “new rule” not dictated by existing precedent at the time the Patels’ convictions became final. Under Teague and Chaidez, such a rule would not apply on collateral review. The Court analogized to Chaidez, where Padilla itself was held non‑retroactive; the proposed extension here is even further afield from established law. Thus, retroactivity doctrine independently precluded relief.

A footnoted observation underscored the Padilla limitation: even under the Patels’ most aggressive reading of Padilla, deportation remains an “integral” and “drastic” penalty akin to banishment (citing Fong Haw Tan v. Phelan), while civil FCA liability lacks the same constitutional salience, further counseling against any extension.

3) Impact and Significance

The decision will reverberate across plea practice and parallel civil enforcement in the Third Circuit:

Plea advisement boundaries clarified: Defense counsel’s constitutional minimum duties are now clearly confined to direct consequences of conviction and sentence. While immigration consequences remain within Padilla’s ambit, civil consequences—including FCA liability, tax assessments, professional discipline, debarment, employment disqualification, and collateral estoppel effects—are not constitutionally required topics of advice. This does not speak to best practices or professional norms—only to the Sixth Amendment floor.
Parallel civil enforcement strengthened: The Government’s strategy of leveraging guilty pleas (and plea admissions) to establish civil liability via collateral estoppel remains robust. FCA defendants should anticipate aggressive summary judgment motions based on plea colloquies and signed stipulations. The opinion reinforces that the lack of criminal counsel’s advisement on such collateral consequences will not undo civil judgments via habeas.
Retroactivity ceiling lowered: By emphasizing Teague/Chaidez/Edwards, the Third Circuit signals that any future attempt to expand counsel’s advisory duties beyond deportation will almost certainly be non‑retroactive. Defendants seeking to undo older pleas on the basis of collateral consequences face a high (often insurmountable) retroactivity barrier.
Habeas mootness doctrine refined: The Court’s recognition that a civil judgment predicated on the criminal plea is a continuing collateral consequence protects the justiciability of some post‑custody IAC claims. Petitioners who can trace a civil judgment to plea admissions may leverage Rule 60(b)(5) as a potential remedial avenue, preserving a live controversy.
Negotiation dynamics: Although not constitutionally required, the opinion highlights the importance of pursuing “global resolutions” that coordinate criminal and civil liability where feasible. The Patels’ plea agreements explicitly disclaimed any effect on civil matters—language the Court treated as meaningful evidence against their claim. Prosecutors and defense counsel should expect that similar disclaimers will foreclose later constitutional challenges premised on lack of advice.
Immigration exception preserved—but not expanded: The Court respectfully acknowledged the Second Circuit’s en banc decision in Farhane regarding denaturalization risk insofar as it leads to deportation, emphasizing that immigration remains the exceptional zone recognized by Padilla. The opinion resists attempts to analogize non‑immigration civil consequences to deportation.

Complex Concepts, Simplified

Direct vs. collateral consequences: Direct consequences are the immediate, court‑imposed results of a plea (e.g., imprisonment, fines, supervised release). Collateral consequences occur outside the criminal sentence, often administered by other agencies or courts (e.g., deportation, professional licensure sanctions, civil suits, tax liabilities). Counsel must constitutionally advise on direct consequences; collateral consequences generally fall outside the Sixth Amendment’s advisory duty, except deportation under Padilla.
Padilla v. Kentucky: A landmark decision requiring counsel to advise noncitizen clients about the risk of deportation from a guilty plea. The case does not require advice about every collateral consequence—only deportation, due to its unique severity and tie to the criminal process.
Strickland/Hill ineffective assistance test: To win, a petitioner must show deficient performance (below reasonable professional norms) and prejudice (a reasonable probability that, absent the error, the petitioner would have gone to trial rather than pleading guilty).
False Claims Act and qui tam: The FCA allows the Government (and whistleblowers suing on the Government’s behalf) to recover treble damages and per‑claim civil penalties for fraud on federal programs. Criminal pleas can supply admissions used to estop defendants from contesting liability in the FCA case.
Collateral estoppel (issue preclusion): Prevents relitigation of issues already decided or admitted. A criminal defendant’s plea admissions can preclude denial of the same facts in a civil FCA case.
Teague non‑retroactivity (with Chaidez and Edwards): New constitutional rules of criminal procedure typically do not apply to cases on collateral review. Chaidez held Padilla announced a new and non‑retroactive rule; Edwards further tightened retroactivity by eliminating the “watershed” exception. A novel duty to advise about FCA liability would be non‑retroactive on habeas.
Rule 60(b)(5): A civil litigant can seek relief from a judgment if it is based on an earlier judgment that has been reversed or vacated. Here, vacatur of a criminal judgment could potentially open the door to revisiting a civil FCA judgment that relied on the criminal plea’s admissions.
Mootness and collateral consequences: A case is not moot if a conviction’s collateral consequences persist and can be addressed by court action. Civil judgments flowing from criminal pleas can sustain a live controversy even after custody ends.

What the Court Did—and Did Not—Decide

Did decide: The Sixth Amendment does not require advice about the collateral consequence of FCA civil liability or the estoppel effect of plea admissions; Padilla is limited to deportation. Any expansion would be a new, non‑retroactive rule. A civil judgment relying on plea admissions can keep a habeas case live after custody ends.
Did not decide: The Court did not define the full contours of best practices or professional standards for defense counsel. It did not address the merits of any attempt to negotiate global settlements across criminal and civil divisions, nor did it suggest that the Constitution compels such arrangements.

Practical Takeaways

Defense counsel should continue to advise on direct consequences and, as a matter of prudent practice (even if not constitutionally required), consider counseling clients about foreseeable collateral consequences—especially significant ones like FCA exposure, professional licensure risks, and collateral estoppel effects.
Plea agreements that expressly disclaim any effect on civil or administrative matters will weigh heavily against later claims that a plea was involuntary due to lack of advice on collateral consequences.
Prosecutors can expect continued success in using criminal plea admissions to establish FCA liability via collateral estoppel; the absence of Sixth Amendment advisement on such civil exposure will not undo civil judgments on collateral review.
Petitioners who have completed custody may preserve a live habeas controversy if they can identify a civil judgment anchored to the criminal plea and seek potential relief via Rule 60(b)(5).
Attempts to extend Padilla beyond immigration consequences are unlikely to succeed in the Third Circuit; and even if recognized prospectively, such extensions will almost certainly be non‑retroactive under Teague/Chaidez/Edwards.

Conclusion

Patel v. United States (3d Cir. Oct. 17, 2025) draws a bright constitutional line: apart from deportation under Padilla, defense counsel’s Sixth Amendment duty to advise about plea consequences stops at direct, court‑imposed penalties. Civil exposure under the False Claims Act, including the potent collateral estoppel effects of plea admissions, remains a collateral consequence outside the Sixth Amendment’s advisory mandate. And even if courts were to expand counsel’s duties in this domain, Teague’s non‑retroactivity bar—reinforced by Chaidez and Edwards—would preclude relief on collateral review for past convictions.

At the same time, the Court’s mootness holding is a practical reminder that criminal convictions can cast long civil shadows: where a civil judgment rests on the criminal plea, the case remains live due to continuing collateral consequences and a potential route to relief under Rule 60(b)(5).

The decision thereby clarifies both the constitutional floor for plea advisement and the enduring procedural avenues available to litigants navigating the criminal‑civil enforcement continuum.