Acad. of Allergy & Asthma in Primary Care v. La. Health Serv. & Indem. Co.

599 F.Supp.3d 413

ACADEMY OF ALLERGY & ASTHMA IN PRIMARY CARE, et al.

v.LOUISIANA HEALTH SERVICE AND INDEMNITY COMPANY, et al.

CIVIL ACTION No. 18-399

United States District Court, E.D. Louisiana.

Signed April 25, 2022

Patrick S. Ottinger, James Michael Fussell, Jr., William H.L. Kaufman, Ottinger Hebert, LLC, Lafayette, LA, Casey Low, Pro Hac Vice, Dillon Ferguson, Pro Hac Vice, Elizabeth Marcum, Pro Hac Vice, Pillsbury, Winthrop, Shaw, Pittman, LLP, Austin, TX, Jeffrey D. Wexler, Pro Hac Vice, Pillsbury Winthrop Shaw Pittman LLP, Los Angeles, CA, for Academy of Allergy & Asthma in Primary Care, et al.

Michael C. Drew, Allison Breen Kingsmill, Christopher Kirt Ulfers, Mark Aaron Cunningham, Jones Walker, New Orleans, LA, for Louisiana Health Service and Indemnity Company, Allmed Healthcare Management, Inc.

Christopher K. Ralston, Arthur Raymond Kraatz, Lindsay J. Calhoun, Phelps Dunbar, LLP, New Orleans, LA, Astor Henry Lloyd Heaven, Pro Hac Vice, Crowell & Moring, LLP, Washington, DC, Jonathan Greengarden, Pro Hac Vice, Shari Ross Lahlou, Pro Hac Vice, Dechert LLP, Washington, DC, Nicholas Andrew Passaro, Pro Hac Vice, Dechert LLP, New York, NY, Thomas James Miller, Pro Hac Vice, Dechert LLP, Philadelphia, PA, for Humana, Inc.

Mary Lenore Feeney, Ryan K. French, Taylor, Porter, Brooks & Phillips LLP, Baton Rouge, LA, Brian Phelps, Pro Hac Vice, Jennifer B. Cook, Pro Hac Vice, Daniel John Hofmeister, Jr., Pro Hac Vice, Douglass G. Hewitt, Pro Hac Vice, Kevin Dale Tessier, Pro Hac Vice, Reed Smith, LLP, Chicago, IL, Conor M. Shaffer, Pro Hac Vice, Debra H. Dermody, Pro Hac Vice, Reed Smith, LLP, Pittsburgh, PA, Lawrence S. Sher, Pro Hac Vice, Reed Smith, LLP, Washington, DC, for Blue Cross and Blue Shield of Kansas, Inc.

SECTION: "J"(2)

ORDER & REASONS

CARL J. BARBIER, UNITED STATES DISTRICT JUDGE

Before the Court are two Motions for Partial Summary Judgment (Rec. Docs. 212, 213) filed by Defendants, Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana ("BCBSLA"), Humana, Inc. ("Humana"), and AllMed Healthcare Management, Inc. ("AllMed") (collectively, "Defendants"); an opposition (Rec. Doc. 230) filed by Plaintiffs, Academy of Allergy & Asthma in Primary Care ("AAAPC") and United Biologics, LLC d/b/a United Allergy Services ("UAS") (collectively, "Plaintiffs"); and two replies (Rec. Docs. 240, 241) filed by Defendants. Having considered the motion and legal memoranda, the record, and the applicable law, the Court finds that both motions for partial summary judgment should be granted in part.

FACTS AND PROCEDURAL BACKGROUND

This suit arises out of an alleged conspiracy to restrict competition in a multi-state market for allergy testing and allergen immunotherapy (hereinafter "allergy care market").

In late 2013, UAS hired counsel to investigate BCBSLA's sudden denials of all allergy care claims by UAS-contracted physicians after years of paying for these services. (Rec. Doc. 57, at 2). During this earlier dispute, Plaintiffs appealed the denied claims to an alleged "independent reviewer" who upheld all of the denials as not medically necessary. (Id. at 3–4). Subsequently, during the corporate deposition of BCBSLA on June 7, 2016, Plaintiffs discovered that the appeals were actually routed to AllMed, who had an agreement with BCBSLA to uphold all denials as "medically unnecessary," instead of an independent reviewer. (Id. ).

In addition to this alleged conspiracy between BCBSLA and AllMed, Plaintiffs allege that Humana threatened numerous physicians’ offices across multiple states to terminate their contracts with UAS or discourage them from entering a contract with UAS. (Rec. Doc. 145, at 26). By 2015, Plaintiffs allege that they were forced to withdraw from Louisiana due to Defendants’ tampering with business relationships and denying coverage of their claims. (Id. at 7).

Plaintiffs initially filed suit in this Court on January 12, 2018. After two subsequent amendments, the Second Amended Complaint (Rec. Doc. 145), filed on January 17, 2019, became the operative complaint. Now, all Defendants move for partial summary judgment on Count Three ("the tortious interference claim"), and BCBSLA and AllMed move for partial summary judgment on Count Four ("the fraud claim"),¹ arguing that both claims are time-barred.

PARTIES’ ARGUMENTS

First, as to the tortious interference with existing contracts claim, UAS alleges that Humana intentionally encouraged physicians to terminate existing contracts with UAS.² UAS cites twenty-one contracts that Humana allegedly interfered with. (Rec. Doc. 267, at 39–40).³ These contracts allegedly relate to physicians throughout several states including Kansas, Kentucky, Arkansas, and Texas. See generally (Rec. Doc. 230).

Humana argues that Texas law, which has a two-year statute of limitations, applies to the tortious interference claim. (Rec. Doc. 213-1, at 5). Under Texas law, because UAS knew of the alleged injury as early as 2014, or not later than 2015, Humana contends that all of the contracts were time barred when this suit was filed on January 12, 2018. (Id. at 7). In opposition, UAS contends that the Court should apply the law of the state of each tortiously interfered contract, including each state's respective statute of limitations. (Rec. Doc. 230, at 16).

Second, as to the fraud claim, Plaintiffs’ allegation centers on BCBSLA and AllMed's alleged policy to blanket deny claims by UAS-contracted physicians. (Rec. Doc. 145, at 65–66). The claim alleges that BCBSLA intentionally misinformed Plaintiffs that there was an independent review system, when, in fact, there was an agreement with AllMed to conduct the reviews and uniformly uphold the denials as "not medically necessary." (Id. ).

Defendants maintain that Louisiana's one-year prescriptive period applies. (Rec. Doc. 212-1, at 11–12). They argue that Plaintiffs had discovered all necessary facts not later than the corporate deposition of BCBSLA on June 7, 2016, and thus, the fraud claim was untimely as of the January 12, 2018 filing date. (Id. at 3). In opposition, Plaintiffs argue that Texas's four-year statute of limitations should apply because one of the Plaintiffs, UAS, is domiciled in Texas. (Rec. Doc. 230, at 29). Under Texas law, the fraud claim would be timely.

LEGAL STANDARD

Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citing FED. R. CIV. P. 56 ); see Little v. Liquid Air Corp. , 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a dispute as to any material fact exists, a court considers "all of the evidence in the record but refrains from making credibility determinations or weighing the evidence." Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but a party cannot defeat summary judgment with conclusory allegations or unsubstantiated assertions. Little , 37 F.3d at 1075. A court ultimately must be satisfied that "a reasonable jury could not return a verdict for the nonmoving party." Delta , 530 F.3d at 399.

If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex , 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548. The nonmovant may not rest upon the pleadings but must identify specific facts that establish a genuine issue for trial. See id. at 325, 106 S.Ct. 2548 ; Little , 37 F.3d at 1075.

DISCUSSION

These motions turn on the same over-arching issue: choice of law. To begin, a federal court sitting in diversity jurisdiction applies the choice of law rules of the forum state. Abbasid, Inc. v. Bank of Am., N.A. , 463 F. App'x 317, 318 (5th Cir. 2012). Accordingly, this Court applies Louisiana's choice of law rules. For each of counts three and four, two choice of law questions are before the Court: (1) which state's (or states’) law applies to the merits of each count; and (2) which state's (or states’) law applies to the prescriptive period of each count.⁴

First, in determining which state's law applies to the merits of each count, Louisiana Civil Code article 3542 governs the analysis. Article 3542 sets forth the general choice-of-law analysis for tort claims. Under Louisiana law, tort suits are "governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue." La. Civ. Code art. 3542. In other words, courts apply the law of the state that would bear the most serious consequences legally, socially, and economically if not applied. Marchesani v. Pellerin-Milnor Corp. , 269 F.3d 481, 488 (5th Cir. 2001). To make this determination, the Court must:

(1) examine the pertinent contacts of each state with respect to "the particular issue as to which there exists an actual conflict of laws" (so as to determine the "relationship of each state to the parties and the dispute"),

(2) identify the various state policies that might be implicated in the choice of law, and then

(3) evaluate the "strength and pertinence" of these policies in light of "the relationship of each state to the parties and the dispute," and in light of "the policies and needs of the interstate and international systems" (so as to resolve the ultimate question of which state's policies would be "most seriously impaired if its law were not applied to that issue").

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