Peacock v. AARP, Inc., Civil Action No. 3:13-cv-00459

Decision Date12 February 2016
Docket NumberCivil Action No. 3:13-cv-00459
Citation181 F.Supp.3d 430
Parties Dr. John Milton Peacock and Ms. Robbie Cowan, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. AARP, Inc., AARP Services Inc., AARP Insurance Plan, Unitedhealth Group, Inc. and Unitedhealthcare Insurance Company, Defendants.
CourtU.S. District Court — Southern District of Texas

Frank J. Janecek, Jr., Christopher Collins, Pro Hac, Vice, Robbins Geller Rudman & Dowd LLP, San Diego, CA, Jeffrey L. Raizner, Amy Bailey Hargis, Raizner Slania LLP, Jeffrey I. Avery, Houston, TX, Sean K. Collins, Sean K. Collins, Boston, MA, Christopher Chagas Martins, Janine D. Arno, Mark Jeffrey Dearman, Stuart Andrew Davidson, Robbins Geller Rudman & Dowd LLP, Boca Raton, FL, for Plaintiffs.

Alec W. Farr, Heather S. Goldman, Bryan Cave LLP, Brian D. Boyle, Jeffrey W. Kilduff, Meaghan Vergow, O'Melveny and Myers LLP, Washington, DC, Darci F. Madden, Jeffrey S. Russell, Bryan Cave LLP, St. Louis, MO, Gregory John Sachnik, Bryan Cave LLP, Andrew G. Jubinsky, Figari Davenport et al, Dallas, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

GEORGE C. HANKS, JR., UNITED STATES DISTRICT JUDGE

On December 23, 2013, Plaintiffs filed their original complaint alleging that they represent a class of senior citizens and disabled individuals in the State of Texas who were "forced into paying an illegal allowance fee for services relating to group Medicare supplemental health insurance." Dkt. 1. Defendants moved to dismiss that original complaint under Federal Rule of Civil Procedure 12(b)(6). Dkt. 26. The motion to dismiss was granted by United States District Judge Keith P. Ellison, but Plaintiffs were given leave to amend. Dkt. 64.

Plaintiffs have now filed their First Amended Complaint—58 pages long with 370 pages of exhibits. Dkt. 66. Defendants have moved again to dismiss this Amended Complaint under Federal Rule of Civil Procedure 12(b)(6). Dkt. 71.

ANALYSIS
A. Plaintiffs' First Amended Complaint

At the heart of Plaintiffs' suit is a commercial relationship between AARP and the UnitedHealth Care Defendants, and Plaintiffs allege that Defendants entered into a joint to create a group health insurance plan that (1) illegally charges an improper monthly fee to its group plan members, and (2) fails to truthfully disclose this fee to governmental authorities and members of the insurance plan. Accordingly, Plaintiffs allege that Defendants have violated several provisions of the Texas Insurance Code as well as the Texas Deceptive Trade Practices-Consumer Protection Act ("DTPA").1

There are two named plaintiffs in the case. The first, Dr. John Milton Peacock, is a Texas resident who purchased the insurance at issue in 2007 and then made monthly payments through December 2012, when he allowed the insurance to cease. The second, Robbie Cowan, is also a Texas resident who purchased the insurance at issue in 2002, and who continues to be a group plan member, making monthly payments. Plaintiffs allege that the monthly fee charged by AARP and the UnitedHealth Defendants has varied over time, beginning at 3.25% in 2003 and increasing to 4.90% in 2014.

B. Applicable Standards
a. Dismissal Under Rule 12(b)(6)

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure is viewed with disfavor and is rarely granted. Leal v. McHugh, 731 F.3d 405, 410 (5th Cir.2013) (citing Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir.2011) ). In deciding such a motion, the court must "accept all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff." In re Katrina Canal Breaches Litig., 495 F.3d 191, 205–06 (5th Cir.2007). To state a claim upon which relief may be granted, plaintiff must plead "enough facts to state a claim to relief that is plausible on its face," Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and must plead those facts with enough specificity "to raise a right to relief above the speculative level," id. at 555, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. "A claim for relief is implausible on its face when ‘the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct.’ " Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 796 (5th Cir.2011) (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ).

While, under Federal Rule of Civil Procedure 8(a)(2), a complaint need not contain detailed factual allegations, the plaintiff must allege more than labels and conclusions, and, while a court must accept all of the plaintiff's allegations as true, it is " ‘not bound to accept as true a legal conclusion couched as a factual allegation.’ " Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ). A threadbare or formulaic recitation of the elements of a cause of action, supported by mere conclusory statements, will not suffice. See id. But, "to survive a motion to dismiss" under Twombly and Iqbal, a plaintiff need only "plead facts sufficient to show" that the claims asserted have "substantive plausibility" by stating "simply, concisely, and directly events" that Plaintiff contends entitle him or her to relief. Johnson v. City of Shelby, Miss., 574 U.S. ––––, 135 S.Ct. 346, 347, 190 L.Ed.2d 309 (2014) (per curiam) (citing FED. R. CIV. P. 8(a)(2)(3), (d)(1), (e) ).

b. Scope of Review

A court cannot look beyond the pleadings in deciding a Rule 12(b)(6) motion. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.1999). Pleadings in the Rule 12(b)(6) context include attachments to the complaint. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.2007). Documents "attache[d] to a motion to dismiss are considered to be part of the pleadings, if they are referred to in the plaintiff's complaint and are central to her claim." Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th Cir.2000) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993) ). "Although the [United States Court of Appeals for the] Fifth Circuit has not articulated a test for determining when a document is central to a plaintiffs claims, the case law suggests that documents are central when they are necessary to establish an element of one of the plaintiff's claims. Thus, when a plaintiff's claim is based on the terms of a contract, the documents constituting the contract are central to the plaintiff's claim." Kaye v. Lone Star Fund V (U.S.), L.P. , 453 B.R. 645, 662 (N.D.Tex.2011). "However, if a document referenced in the plaintiff's complaint is merely evidence of an element of the plaintiff's claim, then the court may not incorporate it into the complaint." Id. Additionally, "it is clearly proper in deciding a 12(b)(6) motion to take judicial notice of matters of public record." Norris v. Hearst Trust, 500 F.3d 454, 461 n. 9 (5th Cir.2007) ; accord Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (directing courts to "consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice").

c. Pleading Statutes of Limitations under Rule 12(b)(6)

A statute of limitations may support dismissal pursuant to Rule 12(b)(6) when it is evident from a plaintiff's pleadings that the action is time-barred and the pleadings fail to set forth or raise some basis for tolling the statute. Jones v. Alcoa, Inc. , 339 F.3d 359, 366 (5th Cir.2003) (citations omitted). An out-of-time claim raised by an amended complaint can, however, "relate back" to a prior, original complaint if allowed by "applicable" law, or if the claim arises out of the "conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading." FED. R. CIV. P. 15(c)(1)(a), (b). If the amended complaint does not relate back, the "amendment [is] futile." Baker v. Carter, No. 4:12–CV–478, 2013 WL 1196106, at *4 (E.D.Tex. Mar. 22, 2013) (citing The Cadle Co. v. Riggert (In re Riggert), 399 B.R. 453, 459–62 (Bankr.N.D.Tex.2009) (finding failure of amended complaint to relate back to timely original complaint rendered the new complaint futile)). If the late-filed claims of an amended complaint do properly relate back, dismissal is inappropriate. See Matter of Bercier, 934 F.2d 689, 693 n. 7 (5th Cir.1991) ; see also Baker , 2013 WL 1196106, at *4 ("If ... the second amended complaint relates back to the original complaint, it would be timely and, therefore, amendment would not be futile.").

Courts apply the statute of limitations strictly, dismissing suits filed even a few days after the limitations date. See Cochran v. Astrue, No. 3:11–CV–1257–D, 2011 WL 5604024, at *1 (N.D.Tex. Nov. 17, 2011) (Fitzwater, Chief J.) (dismissing, on a Rule 12(b)(6) motion to dismiss, a suit filed ten days after the statute of limitations expired); Williamson v. New Times, Inc., 980 S.W.2d 706, 710 (Tex.App.–Fort Worth 1998, no pet.) (affirming trial court's grant of summary judgment barring libel claim filed four days after one-year statute of limitations expired); Lowe v. Rivera, 60 S.W.3d 366, 370–71 (Tex.App.–Dallas 2001, no pet.) (barring plaintiff's claim filed one day after statute of limitations expired, where court was closed day the statute of limitations expired and plaintiff tried and failed to file petition on date of closure).

d. Pleading Fraud or Misrepresentation Under Rule 9...

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