United States District Court, D. New Mexico
PROPOSED FINDINGS AND RECOMMENDED
HONORABLE CARMEN E GARZA, CHIEF UNITED STATES MAGISTRATE
MATTER is before the Court on Defendants
UnitedHealth Group, Inc., and United Healthcare Insurance
Company's Motion to Amend Judgment (the
“Motion to Amend”), (Doc. 94), filed October 20,
2016; Plaintiff Karen Clark's Response to
Defendant's Motion to Amend Judgment, (Doc. 96),
filed October 31, 2016; the United States of America's
Opposition to Defendants' Motion to Amend
Judgment, (Doc. 98), filed November 3, 2016; the State
of New Mexico's Joinder in United States of
America's Motion in Opposition to Defendants' Motion
to Amend Judgment, (Doc. 99), filed November 3, 2016;
and Defendants' Reply in Support of Motion to Amend
Judgment, (Doc. 102), filed November 21, 2016. United
States District Judge Martha Vasquez referred this case to
Chief United States Magistrate Judge Carmen E. Garza for
proposed findings and a recommended disposition. (Doc. 116).
Having reviewed the record, the briefing, and the relevant
law, the Court RECOMMENDS that the Motion to
Amend be DENIED.
case arises from the termination of Plaintiff's
employment by Defendant UnitedHealth Group, Inc.
(“UHG”), a healthcare services provider. From
October 10, 2011, to April 9, 2012, UHG employed Plaintiff as
a Senior Investigator in a subdivision of UHG dedicated to
investigating allegations of fraud and abuse. (Doc. 1 at 2).
In her Complaint for Damages and Penalties (the
“First Complaint”), (Doc. 1), Plaintiff claimed
that, while she was employed by UHG, she repeatedly uncovered
evidence of fraud, abuse, and false claims, and reported her
findings to relevant authorities. Id. at 10-35.
Plaintiff's supervisors and other employees of Defendants
allegedly reprimanded Plaintiff for doing so and instructed
her to stop reporting her findings to authorities.
Id. Plaintiff persisted and claims she was fired in
retaliation for doing so. Id. at 48-49.
First Complaint brought three broad claims: first, violations
of the False Claims Act (the “FCA”), 31 U.S.C.
§ 3729; second, violations of the New Mexico Fraud
Against Taxpayers Act (the “FATA”), NMSA 1978,
§§ 44-9-1 to -14 (2007, as amended through 2015);
and finally, retaliatory discharge for whistleblowing. (Doc.
1 at 39-49). Plaintiff alleged that UHG violated the FCA and
FATA by knowingly accepting, processing, and paying improper
claims and falsely certifying that its subcontractors
complied with federal law. Id. at 39-48. Plaintiff
also alleged UHG violated the FATA by firing her in
retaliation for investigating and reporting suspected fraud.
Id. at 48-49.
the United States and New Mexico declined to intervene,
Defendants moved to dismiss the First Complaint. (Doc. 32).
Defendants sought dismissal because Plaintiff failed to
satisfy Federal Rule of Civil Procedure 9(b), which requires
a party to “state with particularity the circumstances
constituting fraud or mistake.” Id. at 2-12.
Because Plaintiff did not identify any specific fraudulent
claim or fraud by a specific defendant, Defendants insisted
the FCA and FATA claims must be dismissed. Id. at
2-9. Finally, according to Defendant, Plaintiff
insufficiently pled any protected activity or retaliation
under the FATA. Id. at 9-12.
September 22, 2016, Defendants' motion to dismiss was
granted. In short, Plaintiff failed to allege violations of
the FCA or FATA with sufficient particularity under Rule
9(b). (Doc. 91 at 10-16). Because Plaintiff's federal
claims were dismissed, Plaintiff's state claims were also
dismissed for lack of jurisdiction. Id. at 16-17.
Although Defendants requested Plaintiff's First Complaint
be dismissed with prejudice, Plaintiff's claims were
dismissed without prejudice and Plaintiff was granted leave
to amend her complaint. Id. at 1 n. 1. Accordingly,
a Judgment was filed dismissing Plaintiff's
claims without prejudice. (Doc. 92).
weeks later, Plaintiff filed her First Amended Complaint
for Violation of § 44-9-11 NMSA and Retaliatory
Discharge (the “Amended Complaint”), (Doc.
93). Again, Plaintiff alleged a pattern of investigating
reports of billing fraud, being told not to do so, and being
terminated in retaliation. (Doc. 93 at 5-25). Notably,
Plaintiff did not re-plead alleged violations of the FCA or
Plaintiff filed the Amended Complaint, Defendants moved to
amend the judgment under Fed. Rule Civ. P. 59(e). In
particular, Defendants ask the Court to change the
Judgment from “without prejudice” to
“with prejudice.” (Doc. 94 at 1). Defendants
argue it is well-settled that when a plaintiff's claims
are dismissed without prejudice, the plaintiff is given leave
to amend, and if the plaintiff does not amend or appeal, a
judgment entered without prejudice becomes one entered with
prejudice. Id. at 2. Because Plaintiff did not
re-plead violations of the FCA and FATA, Defendants state
those claims should be dismissed with prejudice.
denies that grounds exist to amend the judgment. Plaintiff
concedes that the judgment would have become final for
purposes of appeal if she did not appeal or amend her
complaint, but she disputes that the judgment should become
one with prejudice. (Doc. 96 at 2). Further, Plaintiff
contends that none of the three traditional grounds
warranting post-judgment relief are present in this case.
Id. at 1-2. Finally, Plaintiff argues dismissing her
claims with prejudice would be improper without the United
States' and New Mexico's consent. Id. at
Plaintiff's response, both the United States and New
Mexico opposed dismissing the FCA and FATA claims with
prejudice insofar as the dismissal with prejudice would apply
to them. The United States argues that it is inappropriate to
dismiss claims with prejudice as to the United States where,
as here, dismissal was unrelated to the merits. (Doc. 98 at
3-7). Similarly, New Mexico contends a dismissal with
prejudice would prevent future, potentially meritorious
litigation it could bring against Defendants. (Doc. 99 at
1-2). Defendants did not reply to these responses or
otherwise argue dismissal should be with prejudice as to the
United States or New Mexico.
reply to Plaintiff's response, Defendants insist the
Court has the authority to amend the judgment and should do
so. First, Defendants contend that Plaintiff's choice not
to re-plead her FCA and FATA constitutes new evidence
warranting reconsideration of the dismissal without
prejudice. (Doc. 102 at 1-2). Second, Defendants imply that
not amending the judgment would work a manifest injustice.
Id. at 3. Finally, Defendants point out that the
United States and New Mexico do not object to dismissing
Plaintiff's FCA and FATA claims with prejudice.
discussed, Defendants argue the Court should amend the
Judgment to be “with prejudice” rather
than “without prejudice.” Defendants insist it is
well-settled that if a plaintiff's claims are dismissed
without prejudice, the plaintiff is given leave to amend the
complaint, and the plaintiff does not do so, a dismissal
without prejudice becomes one with prejudice. (Doc. 94 at
1-3). This is the only argument Defendants raise in the
Motion to Amend. ...