MSP Recovery Claims, Series LLC et al v. Merchants Mutual Insurance Company et al

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Case 1:19-cv-00524-JLS-JJM Document123 Filed 08/01/24 Pagelof5

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

MSP RECOVERY CLAIMS, SERIES
LLC, a Delaware limited liability
company, SERIES 16-08-483, a
designated series of MSP Recovery
Claims, Series LLC, 19-cv-524 (JLS) (JJM)

Plaintiffs,

V.

MERCHANTS MUTUAL INSURANCE
CORPORATION, a Delaware
corporation, MERCHANTS NATIONAL
INSURANCE COMPANY, a New
Hampshire corporation, MERCHANTS
PREFERRED INSURANCE
COMPANY, a Delaware corporation,

Defendants.

DECISION AND ORDER

On May 2, 2024, this Court denied Defendants’ [77] motion to dismiss to the
extent that it challenged standing under Fed. R. Civ. P. 12(b)(1). See Dkt. 115, 116.
On June 6, 2024, Defendants moved for reconsideration of that order pursuant to Rule

59(e). Dkt. 118.1 For the following reasons, Defendants’ [118] motion is DENIED.

1 To the extent Defendants seek relief under Rule 59(e), their motion is untimely. See
Fed R. Civ. P. 59(e) (“A motion to alter or amend a judgment must be filed no later
than 28 days after the entry of the judgment”). The Court, however, will consider the
merits of the motion under Fed. R. Civ. P. 60(b). See Lora v. O’Heaney, 602 F.3d 106,
111 (2d Cir. 2010) (‘An untimely motion for reconsideration is treated as a Rule 60(b)
motion”). See also Sigmen v. Colvin, No. 13-0268, 2015 WL 5944254, *3 (E.D.N.Y. Oct.
13, 2015) (considering an untimely motion for reconsideration pursuant to Rule 59(e)
as a Rule 60(b) motion).

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Rule 60(b) of the Federal Rules of Civil Procedure provides that:

On motion and just terms, the court may relieve a party or its
legal representative from a final judgment, order, or
proceeding for the following reasons: (1) mistake,
inadvertence, surprise, or excusable neglect; (2) newly
discovered evidence that, with reasonable diligence, could not
have been discovered in time to move for a new trial under
Rule 59(b); (8) fraud (whether previously called intrinsic or
extrinsic), misrepresentation, or misconduct by an opposing
party; (4) the judgment is void; (5) the judgment has been
satisfied, released, or discharged; it is based on an earlier
judgment that has been reversed or vacated; or applying it
prospectively is no longer equitable; or (6) any other reason
that justifies relief.

The “Second Circuit has instructed that Rule 60(b) provides ‘extraordinary
judicial relief that may be granted ‘only upon a showing of exceptional
circumstances.” Harrison v. New York City Admin. for Children’s Serus., No. 02 CIV.
947 RCC RLE, 2005 WL 2033378, at *1 (S.D.N.Y. Aug. 23, 2005) (quoting Nemaizer v.
Baker, 798 F.2d 58, 61 (2d Cir. 1986)). The “burden is on the moving party to
demonstrate that it is entitled to relief, and courts ‘[g]enerally ... require that the
evidence in support of the motion to vacate a final judgment be highly convincing.”
Thai-Lao Lignite (Thailand) Co. v. Gov’t of Lao People’s Democratic Republic, 864 F.3d
172, 182 (2d Cir. 2017) (quoting Kotlicky v. U.S. Fid. & Guar. Co., 817 F.2d 6, 9 (2d
Cir. 1987)). A Rule 60(b) motion may not be used “to relitigate issues already decided.”
Maldonado v. Local 808 LB. of T. Health & Welfare Fund, 490 F. App’x 405, 406 (2d
Cir. 2018).

Here, Defendants argue that Plaintiffs lack standing in light of the Second

Circuit’s decision in MSP Recovery Claims, Series LLC v. Hereford Ins. Co., 66 F.4th

Case 1:19-cv-00524-JLS-JJM Document123 _ Filed 08/01/24 Page 3of5

77, 89 (2d Cir. 2023). See Dkt. 118. In Hereford, the Court affirmed dismissal of a

claim brought under the Medicare Secondary Payer Act for lack of standing because

“the plain language of Section 111 tells us that when a no-fault insurance provider

such as Hereford reports a claim pursuant to Section 111, it does not thereby admit

that it is liable for the claim.” Hereford, 66 F.4th at 89. According to Defendants,

“there is no difference with regard to the basis” of the operative Complaint in this case

and that in Hereford. See Dkt. 118-1 at 5.

This Court disagrees. Here, the Amended Complaint sets forth additional

alleged facts beyond the CMS reporting allegations. For example:

“Defendants settlement agreements with Enrollees show, at minimum,
that Defendants had constructive knowledge that they owed primary
payments’;

“Defendants’ knowledge that they owe primary payments is evidenced by
... the settlements reached between the Defendants and Plaintiffs’
assigned enrollees. By virtue of Defendants’ own actions, settlements,
and reporting, Defendants had actual and constructive knowledge of
their primary payer obligations to Plaintiffs Assignors, the Class
Members and the entire Medicare Advantage system”; and

“For every instance that Defendants settled with a Medicare beneficiary
enrolled in an MA plan administered by Plaintiffs’ assignors and the
Class Members, Defendants had constructive knowledge that they owed

primary payments to Plaintiffs Assignors and the Class Members.”

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See Dkt. 66 {{ 53, 62, 65.2

In accord with recent analogous cases, the Court remains satisfied that
Plaintiffs have standing. See, e.g., MSP Recovery Claims, Series 44 LLC v. Hanover
Ins. Grp. Inc., No. CV 22-40087-FDS, 2023 WL 6160457, at *8 (D. Mass. Sept. 21,
2023) (“By alleging that defendant provided settlement payments to A.D. and P.R., the
complaint sufficiently alleges that certain medical expenses, items, or services related
to the claims are reimbursable. That is sufficient—at least on a motion to dismiss for
lack of jurisdiction—to satisfy the second factor, that BCBSMA paid reimbursable
costs but did not receive reimbursement”); MSP Recovery Claims Series 44, LLC v.
Bunker Hill Ins. Co., 683 F. Supp. 3d 172, 179 (D. Mass. 20238) (“While the complaint
here does refer to Section 111 reporting, this is only a part of the method the
complaint alleges demonstrates knowledge and responsibility”).

For these reasons, Defendants’ [118] motion for reconsideration is DENIED.

The case is referred back to Judge McCarthy in accordance with the [50]
referral order. As stated on the record at the May 2, 2024 proceeding before this

Court, stand-alone briefing—on Fed. R. Civ. P. 12(b)(6) issues only—is required, and

2 Further, the parties advised in a joint status report that “the Hereford decision has a
minimal impact on the issues related to this lawsuit other than Section 111....
According to Plaintiffs, there still must be an existing settlement or contractual
obligation that demonstrates Defendants’ liability ... The Hereford decision does not
address other issues submitted to Your Honor by the parties.” Dkt. 111.

4

Case 1:19-cv-00524-JLS-JJM Document123 Filed 08/01/24 Page5of5

shall be submitted in accordance with a schedule to be set by Judge McCarthy.

SO ORDERED.
Dated: August 1, 2024 J
Buffalo, New York / ZZ (

JOHN i SINATRA, JR.
UNITED STATES DISTRICT JUDG!