Limitations - Statutory/Contractual

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In Connecticut General Life Ins. Co. v. BioHealth Labs., Inc., No. 20-2312-CV,  — F.3d –, 2021 WL 476111 (2d Cir. Feb. 10, 2021), Cigna, as administrator of employee health plans, sued six  out-of-network lab companies for various fraudulent billing schemes, including fee forgiveness (not charging the patient for co-insurance, co-pays, etc.), unnecessary testing, and unbundling (separately billing for services that should be combined at a lower rate). In all, Cigna sought to recover $17 million in fraudulent or improper charges.

Cigna had completed its investigation that uncovered the alleged fraud in 2015, and began to deny payment of claims submitted by the labs. Two of the labs sued Cigna in Florida, but that action was dismissed and closed in 2017 for failure to exhaust administrative remedies. Cigna then sued the labs in Connecticut District Court in 2019, asserting “a variety of Connecticut state-law and federal claims,” all of which, according to Cigna, would have been compulsory counterclaims in the Florida action, had it not been dismissed. The district court dismissed the Connecticut complaint on the ground that all claims were time-barred under Connecticut’s three-year statute of limitations for tort claims.

The Second Circuit affirmed in part and reversed in part.
Continue Reading Second Circuit Addresses Limitations Periods Governing Fraudulent Billing Claims Against Non-Participating Providers

As discussed in an earlier post on this blog, in Intel Corporation Investment Policy Committee et al. v. Sulyma, No. 18-1116 (Feb. 26, 2020), the U.S. Supreme Court addressed the statute of limitations for breach of fiduciary duty lawsuits under ERISA.  In general, fiduciary breach claims are covered by the 6-year statute of limitations in 29 U.S.C. § 1113(1).  However, there is a 3-year statute of limitations if the plaintiff had “actual knowledge” of the breach.  29 U.S.C. § 1113(2).  Writing for a unanimous Court, Justice Alito held that “actual knowledge” “does in fact mean what it says.”  According to the Justice, under this standard a plaintiff must be actually aware of the fiduciary breach – not merely have information from which he or she could have become aware of the violation – for the 3-year statute of limitations to start running.

The allegations in Sulyma may help plan sponsors, administrators, and other plan fiduciaries understand the impacts of Justice Alito’s opinion.
Continue Reading Supreme Court’s Sulyma Decision May Complicate Plan Administrators’ Consideration of the DOL’s New Proposed Electronic Safe Harbor Disclosure Rule

Believe it or not, the Supreme Court of the United States just decided whether “to have ‘actual knowledge’ of a piece of information, one must in fact be aware of it.” The Court said “yes,” and it was unanimous. Most non-lawyers (and even some lawyers) would probably be surprised that this issue was even being debated. But it was a question that had divided the lower courts, with the Sixth Circuit ruling that “actual knowledge” did not require actually seeing or reading a document that was provided. The Supreme Court agreed with the six other circuits that had concluded that “actual knowledge” means what it says. The Court’s opinion potentially holds a silver lining for defendants though when it comes to class certification.
Continue Reading Supreme Court Decision on ERISA Statute of Limitations May Help Defendants Defeat Class Certification

Deciding an issue of first impression, the U.S. Court of Appeals for the Second Circuit recently held that a plaintiff’s claim under ERISA § 502(c)(1) was barred by Connecticut’s one-year statute of limitations for an action seeking to collect a statutorily-imposed civil penalty. Brown v. Rawlings Fin. Servs. LLC, (2d. Cir., 8/22/17) (Jacobs, Leval, Raggi, Js.).

Plaintiff, a plan participant, had filed suit against Rawlings, Aetna, and the William W. Backus Hospital claiming that they had failed to timely respond to her request for documents concerning her healthcare benefit plan. The defendants moved to dismiss her complaint on the ground that the suit was not timely filed, and the District Court granted the motion. Plaintiff thereafter appealed to the Second Circuit, arguing that the District Court had applied the incorrect limitations period.
Continue Reading ERISA § 502(c)(1) Claim for Statutory Penalties is Barred by One-Year Statute of Limitations, Second Circuit Holds