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Border Area Mental Health, Inc. v. United Behavioral Health, Inc.

United States District Court, D. New Mexico

January 7, 2020

BORDER AREA MENTAL HEALTH, INC., COUNSELING ASSOCIATES, INC., EASTER SEALS EL MIRADOR, FAMILIES & YOUTH, INC., HOGARES, INC., SOUTHWEST COUNSELING CENTER, INC., SOUTHERN NEW MEXICO HUMAN DEVELOPMENT, INC., TEAMBUILDERS COUNSELING SERVICES, INC., THE COUNSELING CENTER, INC., and VALENCIA COUNSELING, INC., Plaintiffs,
v.
UNITED BEHAVIORAL HEALTH, INC. and UNITED HEALTHCARE INSURANCE COMPANY, INC., d/b/a OPTUMHEALTH NEW MEXICO, PUBLIC CONSULTING GROUP, INC., ELIZABETH A. MARTIN, ANDREW SEKEL, TIMOTHY S. MILLER, and JOHN DOES 1-10, Defendants.

          MEMORANDUM OPINION AND ORDER

          Martha Vázquez United States District Judge.

         THIS MATTER comes before the Court on Plaintiffs' Motion to Reconsider [Doc. 72]. The Court, having considered the motion, briefs, and relevant law, and being otherwise fully informed, finds that the Motion is not well-taken and will be denied.

         BACKGROUND

         OptumHealth New Mexico “(“OHNM”) is a joint venture that was formed by United Behaviorial Health, Inc. and United Healthcare Insurance Company, Inc. Doc. 6-1 at ¶ 3. In 2009, OHNM entered into a “Statewide Contract” with the New Mexico Inter-Agency Behavioral Health Purchasing Collaborative (the “Collaborative”) to manage New Mexico's Medicaid and state-funded programs. Id. at ¶ 4. Pursuant to the Statewide Contract, from 2009 through December 31, 2013, OHNM served as the “Statewide Entity” to administer the delivery of behavioral health services to individuals enrolled in and eligible to receive services under the Collaborative's agency programs. Id.

         In turn, in its capacity as the Statewide Entity, OHNM entered into contracts with numerous healthcare providers, including Plaintiffs, to provide the necessary behavioral health and/or substance abuse health care services to the individual enrollees. Id. at ¶ 5. Each of the “Provider Agreements” and “Facility Participation Agreements” between Plaintiffs and OHNM includes an arbitration provision, which states in relevant part that, in the event the parties were unable to resolve “any disputes about their business relationship, ” those disputes would be “submitted to binding arbitration in accordance with the rules of the American Arbitration Association (“AAA”). Doc. 61, Ex. 1 at Art. 30; Doc. 6-1, Ex. 2 at Section 8.

         Plaintiffs allege that OHNM mismanaged its Statewide Contract and, in order to cover up its mismanagement, accused its healthcare providers, including Plaintiffs, of engaging in institutional fraud. Doc. 1-1 at ¶¶ 36, 43. Plaintiffs further allege that OHNM audited Plaintiffs with the predetermined outcome of finding “credible allegations of fraud, ” in order to trigger the suspension of payments to Plaintiffs for the healthcare services that they had provided pursuant to their contracts with OHNM. Id. at ¶¶ 52-55. As a result, Plaintiffs allege, they are owed payments totaling $11.5 million. Id. at ¶ 62.

         Based on these allegations, Plaintiffs commenced the instant action in the First Judicial District Court of New Mexico, Santa Fe County, on June 23, 2016, against United Behavioral Health and United Healthcare Insurance Company, doing business as OHNM, Elizabeth Martin, Chief Executive Officer of OHNM, Andrew Sekel, Chief Executive Officer of OptumHealth Behavioral Solutions, and Timothy S. Miller, regional manager for OHNM, collectively referred to as the “United Defendants, ” in addition to the Public Consulting Group, the entity that was hired to conduct the audits of Plaintiffs. Doc. 1-1. On November 3, 2016, United Defendants removed the action to this Court. Doc. 1. In their Complaint, Plaintiffs allege claims against United Defendants for interference with contractual relations, prima facie tort, civil conspiracy to commit interference with contractual relations and prima facie tort, and violations of the New Mexico Unfair Practices Act. Doc. 1-1 at ¶¶ 67-89.

         On November 18, 2016, United Defendants filed a motion to compel Plaintiffs to arbitrate the claims alleged against them. Doc. 6. In support of their motion, United Defendants argued that the agreements into which each Plaintiff had entered contained valid and binding arbitration provisions, and that Plaintiffs' claims fell directly within the scope of those provisions. Id. Plaintiffs did not dispute that they entered into valid arbitration agreements, but opposed United Defendants' motion to compel on the basis that their claims did not bear a reasonable relationship to the subject matter of the arbitration agreements and thus did not fall within the scope of those agreements. Doc. 29 at 4-10; Doc. 30 at 3-10.

         In a Memorandum Opinion and Order entered March 28, 2018 (“March 2018 Opinion”), the Court granted United Defendants' motion to compel, explaining that, by incorporating the AAA Rules into the arbitration provisions set forth in the relevant agreements, Plaintiffs and United Defendants “clearly and unmistakably” agreed to arbitrate arbitrability. Doc. 46. Accordingly, the Court further explained, all questions of arbitrability - including the questions Plaintiffs raised as to whether their claims reasonably relate to the subject matter of the parties' agreements to arbitrate - must be resolved by an arbitrator. Id. Under controlling Tenth Circuit precedent, the Court found that it had no discretion to decide whether Plaintiffs' claims were outside the scope of the arbitration provisions in the relevant agreements, but rather was obligated to defer that determination to the arbitrator. Id. Accordingly, the Court found no basis to deny United Defendants' motion compelling arbitration of Plaintiffs' claims against it. Id.

         On June 11, 2018, Plaintiffs initiated an arbitration proceeding with the AAA, and requested that the Arbitrator declare that their claims against United Defendants are not subject to arbitration. The Arbitrator, Judge Bruce. D. Black (Retired), ordered the parties to submit briefing on the threshold issue of arbitrability. Thereafter, on December 5, 2018, the Arbitrator issued his Opinion on Arbitrability. Doc. 60-4. The Arbitrator determined that the claims asserted by Plaintiffs against United Defendants fall within the scope of the arbitration provision in the relevant agreements, and thus must be pursued solely through binding arbitration. Id.

         Thereafter, Plaintiffs filed a Motion to Set Aside the Opinion of the Arbitrator [Doc. 60], requesting that this Court “vacate the Arbitrator's decision and allow the parties to litigate, in this Court, ” Plaintiffs' claims against United Defendants. Doc. 60 at 3. In a Memorandum Opinion and Order entered on May 28, 2019 (“May 2019 Opinion”) [Doc. 70], the Court denied Plaintiffs' motion, explaining that Plaintiffs provided no valid basis for this Court to set aside the Arbitrator's determination that Plaintiffs' claims are subject to arbitration. Doc. 70 at 11. Because no claims were left before this Court, and because none of the parties had requested a stay of this matter, the Court further determined that dismissal of Plaintiffs' claims against United Defendants was proper. Id. Accordingly, the Court dismissed Plaintiffs' claims against United Defendants. Id. In a Judgment entered contemporaneously with the May 2019 Opinion (the “Judgment”) [Doc. 71], the Court ordered that this action is dismissed as to, inter alia, the United Defendants. Doc. 71.

         On the instant motion, Plaintiffs ask this Court to reconsider its dismissal of Plaintiffs claims against United Defendants and request that the Court stay this action. Doc. 72. United Defendants oppose the motion. Doc. 73.

         DISCUSSION

         Plaintiffs characterize their motion as one for reconsideration pursuant to Rule 59 of the Federal Rules of Civil Procedure. Generally, if a motion for reconsideration is filed within twenty-eight days after entry of judgment, “it is treated as a motion to alter or amend the judgment under Rule 59(e).” Computerized Thermal Imaging, Inc. v. Bloomberg, LP, 312 F.3d 1292, 1296 n. 3 (10th Cir. 2002). “Grounds warranting a motion to reconsider include (1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice.” Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). ‚ÄúThus, a motion for reconsideration is appropriate where the court has misapprehended the facts, a party's ...


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