United States ex rel. Kuriyan v. Molina Healthcare of N.M.

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UNITED STATES OF AMERICA and STATE OF NEW MEXICO ex rel. JACOB KURIYAN, Plaintiffs, v. MOLINA HEALTHCARE OF NEW MEXICO, INC.; PRESBYTERIAN HEALTH PLAN, INC.; UNITEDHEALTHCARE OF NEW MEXICO, INC., and HCSC INSURANCE SERVICES CO. dba BLUE CROSS & BLUE SHIELD OF NEW MEXICO, Defendants.

No. CIV 16-1148 JB/KK

United States District Court, D. New Mexico

August 30, 2024

Alan Grayson, Alan Grayson, Esq., Indialantic, Florida Attorney for the Plaintiff/Relator

Michael R. Hoernlein, Alston & Bird LLP, Charlotte, North Carolina and Matthew E. Jackson, Robert E. Hanson, Peifer Hanson, Mullins, & Baker P.A. Albuquerque, New Mexico Attorneys for Defendant UnitedHealthcare of New Mexico, Inc.

Tina M. Gooch, Sutin, Thayer & Browne, Albuquerque, New Mexico and Jarrad Lucian Wood, Reed Smith LLP Los Angeles California and Steven Hamilton, Jason T. Mayer, Reed Smith LLP Chicago, Illinois, Attorneys for Defendant HCSC Insurance Services Co.

Julia L. Allen, Steven Ragland, Keker, Van Nest & Peters LLP San Francisco, California and Gregory Marshall, Jeanne Y. Sohn, Snell & Wilmer LLP, Albuquerque, New Mexico, Attorneys for Defendant Molina Healthcare of New Mexico, Inc.

Winston Y. Chan, Charles J. Stevens, Gibson, Dunn & Crutcher LLP, San Francisco, California and Charles K. Purcell, Rodey, Dickason, Sloan, Akin & Robb, P.A, Albuquerque, New Mexico, Attorneys for Defendant Presbyterian Health Plan, Inc.

Alexander M. M. Uballez, United States Attorney, Ruth Fuess Keegan, Assistant United States Attorney United States Attorney's Office, Albuquerque, New Mexico and David W. Tyler, Carol Wallack, Civil Division United States Department of Justice Washington, District of Columbia, Attorneys for Interested Party the United States of America

Zachary Asher Shandler, New Mexico Office of the Attorney General Santa Fe, New Mexico, Attorneys for Interested Party the State of New Mexico

MEMORANDUM OPINION AND ORDER ADOPTING THE MAGISTRATE JUDGE'S PROPOSED FINDINGS AND RECOMMENDED DISPOSITION

THIS MATTER comes before the Court on: (i) the Magistrate Judge's Proposed Findings and Recommended Disposition, filed August 28, 2023 (Doc. 409)(“PFRD”); (ii) Relator Jacob Kuriyan's Corrected Objections to Magistrate Judge's Proposed Findings and Recommended Disposition, filed September 11, 2023 (Doc. 414)(“Relator's Objections”); (iii) the United States' and State of New Mexico's Objections/Response to the Magistrate Judge's Proposed Findings of Fact and Recommended Disposition, filed on September 11, 2023 (Doc. 413)(“Governments' Objections”); and (iv) the Joint Statement Regarding the United States' Response to the Magistrate Judge's Proposed Findings and Recommended Disposition, filed on September 25, 2023, by Defendants HCSC Insurance Services Company, Molina Healthcare of New Mexico, Inc., Presbyterian Health Plan, Inc., and United HealthCare of New Mexico, Inc. (Doc. 417)(“MCOs' Request”). The issues are whether: (i) the Court should adopt the results that the Honorable Kirtan Khalsa, United States Magistrate Judge for the United States District Court for the District of New Mexico, recommends in the PFRD that the Court grant the Motion for Summary Judgment on Relator's Demand for an Alternate Remedy, filed July 7, 2022 (Doc. 305)(“Alternate Remedy Motion”); and (ii) whether the Court should adopt the PFRD's recommendation that the Court grant the United States', the State of New Mexico's and New Mexico Human Services Department's Motion to Dismiss Relator's Qui Tam Action Under the Public Disclosure Bar, filed July 7, 2022 (Doc. 303)(“Public Disclosure Motion”). The Court concludes: (i) the Court will adopt the PFRD's recommendation that the Court grant the Alternate Remedy Motion; but (ii) it will not adopt the PFRD's recommendation on the Public Disclosure Motion, and instead the Court will grant in part and deny in part the Public Disclosure Motion. Accordingly, the Court will overrule the Relator's Objections in part and sustain them in part, sustain in part and deny in part the Governments' Objections, and deny the MCOs' Request. Accordingly, the Court will adopt the PFRD in part, grant the Alternate Remedy Motion, and grant in part and deny in part the Public Disclosure Motion. Because Kuriyan has represented that he only actively pursues an alternate remedy claim under 31 U.S.C. § 3730(b)(5), a claim which the Court here dismisses with prejudice, the Court will enter Final Judgment.

LAW REGARDING OBJECTIONS TO PROPOSED FINDINGS AND RECOMMENDATIONS

District courts may refer dispositive motions to a Magistrate Judge for a recommended disposition. See Fed.R.Civ.P 72(b)(1) (“A magistrate judge must promptly conduct the required proceedings when assigned, without the parties' consent, to hear a pretrial matter dispositive of a claim or defense or a prisoner petition challenging the conditions of confinement.”). “Within 14 days after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations.” Fed.R.Civ.P. 72(b)(2). When resolving objections to a Magistrate Judge's proposal, “[t]he district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to. The district judge may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions.” Fed.R.Civ.P. 72(b)(3). Similarly, 28 U.S.C. § 636 provides:

A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge may also receive further evidence or recommit the matter to the magistrate judge with instructions.

28 U.S.C. § 636(b)(1)(C).^[1]

As the United States Court of Appeals for the Tenth Circuit has noted, “the filing of objections advances the interests that underlie the Magistrate's Act, including judicial efficiency.” United States v. One Parcel of Real Property, With Buildings, Appurtenances, Improvements, and Contents, Known As: 2121 East 30th Street, Tulsa Okla., 73 F.3d 1057, 1059 (10th Cir. 1996) (“One Parcel”)(citing Niehaus v. Kansas Bar Ass'n, 793 F.2d 1159, 1165 (10th Cir. 1986); United States v. Walters, 638 F.2d 947, 950 (6th Cir. 1981)). A party's “objections to a magistrate's report enable[] the district judge to focus attention on those issues -- factual and legal -- that are at the heart of the parties' dispute.” One Parcel, 73 F.3d at 1059 (quoting Thomas v. Arn, 474 U.S. 140, 147 (1985)(“Thomas”)).

“To further advance the policies behind the Magistrate's Act, [the Tenth Circuit], like numerous other circuits, ha[s] adopted ‘a firm waiver rule' that ‘provides that the failure to make timely objections to the magistrate's findings or recommendations waives appellate review of both factual and legal questions.'” One Parcel, 73 F.3d at 1059 (quoting Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991)(“Moore”)). In One Parcel, the Tenth Circuit, in accord with other Courts of Appeals, expanded the waiver rule to cover objections that are timely but too general. See One Parcel, 73 F.3d at 1060 (“[O]nly an objection that is sufficiently specific to focus the district court's attention on the factual and legal issues that are truly in dispute will advance the policies behind the Magistrate's Act ....”). Thus, a “party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” One Parcel, 73 F.3d at 1060.

In addition to requiring specificity in objections, the Tenth Circuit has stated that “[i]ssues raised for the first time in objections to the magistrate judge's recommendation are deemed waived.” Marshall v. Chater, 75 F.3d 1421, 1426 (10th Cir. 1996). See United States v. Garfinkle, 261 F.3d 1030, 1031 (10th Cir. 2001)(“In this circuit, theories raised for the first time in objections to the magistrate judge's report are deemed waived.”); Pevehouse v. Scibana, 229 Fed.Appx. 795, 796 (10th Cir. 2007)(unpublished)(“[T]he district court correctly held that [a plaintiff] had waived [an] argument by failing to raise it before the magistrate.”).^[2]

The Supreme Court of the United States -- in the course of approving the United States Court of Appeals for the Sixth Circuit's use of the waiver rule -- has noted:

It does not appear that Congress intended to require district court review of a magistrate's factual or legal conclusions, under a de novo or any other standard, when neither party objects to those findings. The House and Senate Reports accompanying the 1976 amendments do not expressly consider what sort of review the district court should perform when no party objects to the magistrate's report. See S. Rep. No. 94-625, pp. 9-10 (1976)(hereinafter Senate Report); H.R. Rep. No. 94-1609, p. 11 (1976), U.S. Code Cong. & Admin. News 1976, p. 6162 (hereinafter House Report). There is nothing in those Reports, however, that demonstrates an intent to require the district court to give any more consideration to the magistrate's report than the court considers appropriate. Moreover, the Subcommittee that drafted and held hearings on the 1976 amendments had before it the guidelines of the Administrative Office of the United States Courts concerning the efficient use of magistrates. Those guidelines recommended to the district courts that “[w]here a magistrate makes a finding or ruling on a motion or an issue, his determination should become that of the district court,

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