United Healthcare Services, Inc. v. AmerisourceBergen Corporation

Background

Plaintiff United Healthcare Services, Inc. (UHS) is a commercial health insurer. Defendants are AmerisourceBergen Corporation and its subsidiaries AmerisourceBergen Drug Corporation, AmerisourceBergen Specialty Group LLC (ABC Specialty), ASD Specialty Healthcare LLC doing business as Oncology Supply, and Medical Initiatives, Inc. (MII) doing business as Oncology Supply Pharmacy Services.

From 2001 to 2014, MII operated a facility in Dothan, Alabama, where it created pre-filled syringes (PFSs) of oncology drugs. MII drew medication from manufacturer vials into syringes, retained excess product (called 'overfill') to fill later prescriptions, and shipped the syringes to healthcare providers while billing as if the drugs came from original vials. UHS alleges MII employees left vials in non-sterile containers and that the program lacked required quality assurance, rendering the products adulterated and worthless. Providers purchased PFSs, administered them to patients, and submitted reimbursement claims to insurers. Some patients were covered under plans operated by UHS subsidiaries or affiliates. UHS paid those reimbursement claims.

The defendants faced earlier legal consequences for this conduct: ABC Specialty pleaded guilty in September 2017 to a strict-liability misdemeanor under the Federal Food, Drug, and Cosmetic Act (FDCA) for failing to register MII as a drug repackager, paying a $208 million criminal fine and $52 million forfeiture. In October 2018, defendants settled civil False Claims Act actions brought on behalf of the federal government and state Medicaid programs for $625 million.

UHS filed this lawsuit on September 19, 2023 — roughly nine years after the PFS program ended. In a prior April 2024 order, the court dismissed UHS's original complaint as time-barred and found UHS failed to adequately plead fraudulent concealment. The court later allowed UHS to file a First Amended Complaint (FAC) to cure those pleading deficiencies. Defendants then moved to dismiss the FAC.

Claims Alleged

The FAC asserted six claims: (1) common law fraud/fraudulent concealment; (2) Minnesota Consumer Fraud Act (Minn. Stat. § 325F.69); (3) Minnesota Unlawful Trade Practices Act (Minn. Stat. § 325D.13); (4) deceptive acts against senior citizens (Minn. Stat. § 325F.71); (5) Minnesota Unfair and Deceptive Trade Practices Act (Minn. Stat. § 325D.44); and (6) unjust enrichment/money had and received.

Legal Standards

The court applied the standard for dismissal under Federal Rule of Civil Procedure 12(b)(6), which requires a complaint to contain enough facts to state a plausible claim for relief. The court also applied Federal Rule of Civil Procedure 9(b), which requires fraud allegations to be pleaded with particularity — specifying the who, what, when, where, and how of the alleged fraud. This heightened pleading standard applies to all of UHS's claims because they are all premised on fraudulent conduct.

Fraud Claims — Statements Received by UHS

UHS pointed to specific statements it allegedly received from defendants, organized by year. These included 2011 statements about infection prevention in cancer care; 2016 compliance-oriented statements like 'follow the letter of the law' and 'err on the safe side'; and 2022 statements such as 'AmerisourceBergen's manufacturer operations team prioritizes patient safety' and 'You can rely on us.'

The court found these statements were non-actionable puffery — too vague and general to constitute actionable fraud under either common law or Minnesota consumer protection statutes. Relying on Bernstein v. Extendicare Health Services, Inc., 607 F. Supp. 2d 1027 (D. Minn. 2009), the court noted that statements about safety and legal compliance that do not reference any specific standard or make a specific promise are legally insufficient. None of the statements were shown to relate specifically to the PFS program.

Independently, the court found UHS failed to plead reliance and causation. Most of the cited statements were made after 2014, when the PFS program had already ended, and thus could not have caused UHS to reimburse claims for PFSs. Even applying the less demanding 'causal nexus' standard applicable to Minnesota statutory consumer fraud claims (which does not require proof of individual reliance), UHS failed to allege any connection between the statements and its damages. UHS's allegation that defendants' website was 'materially consistent' over time and that other statements from the relevant period existed was dismissed as too conclusory to satisfy Rule 9(b).

Fraud Claims — Statements to Third Parties (Providers and Regulators)

UHS also argued defendants committed fraud by making false statements to healthcare providers and regulators, specifically: (1) that the PFSs contained FDA-approved drugs; and (2) that MII was a pharmacy (based on statements in 2012 and 2013).

On the 'FDA-approved' claim: The court concluded the representation was not necessarily false. The FDCA defines a 'new drug' by reference to its composition. Because the composition of the drugs in the syringes came from FDA-approved vials, the court found the description of the PFSs as containing FDA-approved medication was a reasonable interpretation of the law and thus could not support a fraud claim.

On the 'pharmacy' claim: The court found defendants did not admit in the DOJ settlement that MII was not a pharmacy. The settlement acknowledged MII was not registered as a repackager and did not qualify for a registration exemption; however, per the plea agreement, MII held pharmacy licenses in multiple states during the relevant period. UHS did not sufficiently allege that calling MII a pharmacy was false.

Regardless of whether those statements were false, the court found UHS failed to adequately plead that it received or relied upon them. UHS alleged that defendants' statements 'caused providers to submit fraudulent claims' and that UHS 'relied on the information,' but the court held these were conclusory assertions insufficient under Rule 9(b). UHS did not specify what false information appeared in insurance claim submissions, whether that information reached UHS, or who at UHS relied on it.

UHS also alleged other misrepresentations to providers and regulators — that PFSs did not contain pooled overfill, were prepared aseptically, were properly billed, and met applicable safety standards. These failed for the same reasons: UHS did not allege that any such statements were passed on to UHS or that they caused UHS's damages.

UHS attempted to invoke a doctrine of 'indirect reliance,' citing Corp. Commission of Mille Lacs Band of Ojibwe Indians v. Money Centers of America, Inc., No. 12-cv-1015, 2012 WL 5439170 (D. Minn. Nov. 7, 2012), which allowed a fraud claim based on misrepresentations to a licensing authority where the effect of those misrepresentations was intended to flow to the plaintiff. The court distinguished that case, finding no sufficient allegation that the effect of defendants' statements to state pharmacy boards or physicians reached UHS.

Fraud Claims — Omissions

UHS alleged defendants fraudulently omitted material information about the PFS program. The court applied the Minnesota rule that nondisclosure is fraudulent only when the defendant has a legal or equitable duty to disclose to the plaintiff. Because defendants did not submit claims directly to UHS — payments flowed through providers — and there was no direct relationship between UHS and defendants, the court found no duty to disclose existed. The court also declined to extend to UHS the doctrine requiring disclosure of 'half-truths,' finding the cases UHS cited involved direct parties to a specific transaction, unlike this case. The court further noted that neither of the two supposedly incomplete statements (that MII was a pharmacy, or that PFSs contained FDA-approved drugs) were fraudulent in the first place.

Unjust Enrichment / Money Had and Received

UHS claimed defendants were unjustly enriched because UHS reimbursed claims for PFS products. The court rejected this claim because UHS never alleged that it paid money directly to defendants. Payments flowed from UHS to providers, pharmacies, or patients — not to defendants. Under Minnesota law, unjust enrichment requires showing that the defendant actually received a benefit at the plaintiff's expense. Because UHS failed to allege that its reimbursement payments made their way to defendants, the claim failed as a matter of law. The money-had-and-received theory failed for the same reason.

Timeliness

The court also reaffirmed that UHS's claims were time-barred. Public disclosures about the PFS program began as early as 2012, and defendants' SEC filings publicized federal investigations and potential charges well before UHS filed suit in September 2023. The court found the amended complaint's allegations created an internal inconsistency: UHS argued it could not have discovered the fraud before November 2016, yet simultaneously argued it was relying on defendants' statements made well before 2016. This inconsistency undermined UHS's fraudulent concealment theory, which would be needed to toll (pause) the running of the statutes of limitations. The court concluded UHS failed to adequately allege fraudulent concealment or that it could not have discovered its claims with reasonable diligence given the public disclosures beginning in 2012.

Disposition

The court granted defendants' motion to dismiss. All claims in the First Amended Complaint were dismissed with prejudice, meaning UHS may not refile these claims in this court. The court noted that while defendants engaged in significant misconduct — already addressed through criminal penalties and large civil settlements — UHS as a commercial insurer failed to adequately plead any cognizable claim for that same conduct.