United Healthcare Services, Inc. v. AmerisourceBergen Corporation

Background

United Healthcare Services, Inc. brought claims against AmerisourceBergen Corporation and the other defendants based on an alleged program involving the distribution and sale of adulterated oncology drugs between 2001 and 2014. The claims included common-law fraud, claims under Minnesota consumer-protection statutes, and unjust enrichment or money had and received.

In an April 24, 2024 order, the court concluded that the claims were barred by the statute of limitations. The court found that public documents, including Securities and Exchange Commission filings and a Wall Street Journal article, ended tolling of the limitations period. It also found that United Healthcare had not pleaded with enough detail that the defendants fraudulently concealed the alleged wrongdoing or that United Healthcare could not have discovered its claims through reasonable diligence before January 22, 2017. The court dismissed the complaint with prejudice and entered judgment.

Motion for Relief from Judgment

United Healthcare moved under Federal Rules of Civil Procedure 59(e) and 60(b). Rule 59(e) allows a court to alter or amend a recently entered judgment. Rule 60(b) allows relief from a final judgment in specified circumstances, including mistake, newly discovered evidence, fraud, or another reason that justifies relief.

United Healthcare argued that the prior ruling depended on unresolved factual questions, including whether it knew about the public disclosures, what those disclosures communicated, whether the Wall Street Journal article gave it notice, and whether it could have reasonably discovered the alleged fraud earlier. It also submitted a proposed amended complaint containing additional allegations about the defendants’ concealment, billing and coding practices, statements to doctors and regulators, United Healthcare’s investigative tools, and why the alleged wrongdoing could not reasonably have been discovered before January 22, 2017.

The defendants argued that the prior ruling correctly determined that public disclosures prevented fraudulent concealment or the discovery rule from extending the limitations period. They also argued that the proposed amended complaint was futile, untimely, and deficient for other reasons.

Court’s Analysis

The court concluded that both Rules 59(e) and 60(b) permitted a plaintiff to seek permission to amend a complaint after a dismissal with prejudice and without a trial. The court applied the principles governing amendment under Rule 15, under which leave to amend generally should be freely given when justice requires. The court explained that amendment should be denied as futile at this stage only when the proposed claims or defenses are clearly frivolous.

The court found that United Healthcare’s proposed amendment was not clearly frivolous and plausibly raised factual disputes about whether the claims were timely. The court emphasized the complex nature and length of the alleged fraud and the additional facts United Healthcare proposed to plead. It acknowledged the defendants’ strong objection and the burden of reopening the case but concluded that allowing amendment was the most equitable course and that the defendants would not be unduly prejudiced.

Disposition

The court granted United Healthcare’s Motion for Relief from Judgment Under Rule 59(e) and 60(b). It vacated the April 24, 2024 order and judgment, directed the Clerk of Court to reopen the case, and permitted United Healthcare to file an amended complaint within 30 days of the order.

The ruling did not decide whether United Healthcare’s claims were timely on the merits. The court stated that, after the amended complaint and anticipated motion practice, it would revisit whether United Healthcare could have filed the lawsuit with reasonable diligence before January 22, 2017.