United States District Court, D. Maryland
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY., et al.
CAREFREE LAND CHIROPRACTIC, LLC, et al.
Catherine C. Blake United States District Judge
this court is State Farm's motion for reconsideration of
this court's order granting judgment of dismissal or, in
the alternative, for leave to file an amended complaint.
AND PROCEDURAL HISTORY
Farm Mutual Automobile Insurance Company and State Farm Fire
and Casualty Company ("State Farm") allege that
Carefree Land Chiropractic ("Carefree") has engaged
in a scheme to defraud State Farm by providing medically
unnecessary services and treatments to 550 patients and
submitting the claims for reimbursement to State
Farm. State Farm alleges that Carefree's
patient records submitted as part of its claims for
reimbursement are suspiciously similar to each other, and
that Carefree fabricated test results and diagnoses, and
subjected patients to a predetermined treatment plan not
uniquely tailored to each individual patient.
1, 2018, State Farm filed its complaint against Carefree
alleging fraud and unjust enrichment, as well as requesting
declaratory judgment. Carefree filed a motion to dismiss on
June 28, 2018, which this court granted on December 11, 2018,
holding that State Farm's complaint failed to satisfy
Rule 8(a)(2) as well as Rule 9(b)'s heightened pleading
requirements for fraud. ECF 50, at 4. In particular, the
court noted that Carefree failed to state which treatments
and specific documents it alleged were fraudulent, and which
physicians it alleged acted fraudulently. Id. at 5.
Rather, State Farm relied solely on its statistical analysis
regarding the similarity of the records to demonstrate that
they were fraudulent. Id. at 5-6.
Motion for Reconsideration
Rule 59(e), there are "three grounds for amending an
earlier judgment: (1) to accommodate an intervening change in
controlling law; (2) to account for new evidence not
available at trial; or (3) to correct a clear error of law or
prevent manifest injustice." Sloas v. CSX Tramp.
Inc., 616 F.3d 380, 385 n.2 (4th Cir. 2010) (quoting
Hutchinson v. Staton, 994 F.2d 1076, 1081 (4th
Cir.1993)). "The district court has considerable
discretion in deciding whether to modify or amend a
judgment." Gagliano v. Reliance Standard Life Ins.
Co., 547 F.3d 230, 241 n.8 (4th Cir. 2008). Generally,
however, it is a remedy that should be used sparingly.
Id (citing Pac. Ins. Co. v. Am. Nat'l Fire
Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)).
Motion for Leave to Amend
to amend should be freely granted under Rule 15(a), and
amendments are generally accepted absent futility, undue
prejudice, or bad faith. See Foman v. Davis, 371
U.S. 178, 182 (1962); Matrix Capital Mgmt. Fund, LP v.
Bearing Point, Inc., 576 F.3d 172, 193 (4th Cir. 2009)
(explaning that leave to amend, even post-judgment,
"should be denied only when the amendment would be
prejudicial to the opposing party, there has been bad faith
on the part of the moving party, or amendment would be
futile."). A court "may deny leave if amending the
complaint would be futile - that is, 'if the proposed
amended complaint fails to satisfy the requirements of the
federal rules.'" U.S. ex rel. Wilson v. Kellog
Brown and Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008)
(quoting United States ex rel. Fowler v. Caremark RX,
LLC, 496 F.3d 730, 740 (7th Cir. 2007)).
Motion for Reconsideration
Farm argues that this court should grant reconsideration
because (1) it committed an error of law in incorrectly
applying Nathan v. Takeda Pharmaceuticals North America,
Inc., 707 F.3d 451 (4th Cir. 2013), see ECF
52-1, at 7-10; ECF 54, at 3, and (2) a recent intervening
Fourth Circuit decision, United States ex rel. Grant v.
United Airlines Inc., 912 F.3d 190 (4th Cir. 2018)
clarifies Nathan's limited holding. ECF 54, at
3. In support of its motion, State Farm also provides other
examples of federal courts have rejecting motions to dismiss
in cases with similar allegations to this case. ECF 52-1, at
12. Carefree responds that State Farm fails to show a clear
error of law, an intervening change in controlling law, or
new evidence, and instead is merely asking for the court to
"change its mind." ECF 53-1, at 2. It also claims
that the examples cited by State Farm all "included
specific factual accusations" of fraud "over and
above" the alleged statistical similarities, making them
unlike this case. Id. at 6.
Farm has failed to show that this court committed a clear
error of law justifying reconsideration. Rather, State Farm
disagrees with how this court applied Nathan and
other Fourth Circuit precedent. This is not enough to justify
the "extraordinary remedy" of reconsideration after
judgment. Additionally, State Farm cites to examples of
federal courts rejecting motions to dismiss fraud complaints;
these opinions are from outside districts, are mostly
unpublished, and many are several ...