20-2312-cv Conn. Gen. Life Ins. Co. v. BioHealth Labs., Inc.
United States Court of Appeals For the Second Circuit
August Term 2020
Argued: February 1, 2021 Decided: February 10, 2021
No. 20-2312-cv
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, CIGNA HEALTH AND LIFE INSURANCE COMPANY,
Plaintiffs-Appellants,
v.
BIOHEALTH LABORATORIES, INC., PB LABORATORIES, LLC, EPIC REFERENCE LABS, INC., EPINEX DIAGNOSTICS, INC., NJ REFERENCE LABORATORIES, INC., ALETHEA LABORATORIES, INC.,
Defendants-Appellees.
Appeal from the United States District Court for the District of Connecticut No. 19-cv-1324, Janet C. Hall, Judge. Before: JACOBS, SULLIVAN, Circuit Judges, and BROWN, District Judge. *
Plaintiffs – managers of various employee health and wellness plans – sued several laboratory testing companies, alleging that those companies violated federal and Connecticut law by submitting fraudulent or overstated claims for medical services purportedly provided to Plaintiffs’ plan members. The district court (Hall, J.) dismissed the complaint with prejudice, concluding that all of Plaintiffs’ claims were time-barred by Connecticut’s three-year statute of limitations applicable to tort claims. We vacate that decision in part, finding that under Connecticut law Plaintiffs’ equitable claims, which include their federal claims, are subject to no statute of limitations and are instead governed only by the doctrine of laches. We nevertheless affirm the district court’s dismissal of Plaintiffs’ state-law legal claims, and specifically reject Plaintiffs’ argument that the limitations period applicable to those claims was tolled during the pendency of a prior action between the parties. Although Plaintiffs note that several of our sister circuits have tolled limitations periods applicable to compulsory counterclaims as a matter of federal law, the legal claims at issue here are all brought under state law and so are subject only to state-law tolling rules, which provide no relief for Plaintiffs.
VACATED IN PART, AFFIRMED IN PART, AND REMANDED.
EDWARD T. KANG (Emily S. Costin, on the brief), Alston & Bird LLP, Washington, DC, for Plaintiffs-Appellants.
SCOTT M. HARE (Todd M. Brooks, Whiteford, Taylor & Preston LLP, Baltimore, MD, on the brief), Whiteford, Taylor & Preston LLP, Pittsburgh, PA, for Defendants-Appellees.
* Judge Gary R. Brown, District Judge for the Eastern District of New York, sitting by designation.
2 RICHARD J. SULLIVAN, Circuit Judge:
Plaintiffs Connecticut General Life Insurance Company and Cigna Health
and Life Insurance Company (together, “Cigna”) appeal the judgment of the
district court (Hall, J.) dismissing their claims against several laboratory testing
companies (the “Labs”) as time-barred under Federal Rule of Civil
Procedure 12(b)(6). Cigna’s complaint, which asserts various federal and
Connecticut state-law claims, alleges that the Labs submitted fraudulent or
overstated charges for medical testing services that the Labs purportedly provided
to patients covered by benefits plans overseen by Cigna.
On appeal, we are confronted with three issues. First, we must determine
what state-law claim is most analogous to Cigna’s claims under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., and the
Declaratory Judgment Act, 28 U.S.C. § 2201, since those federal claims lack their
own statutory limitations period. Second, we must decide whether, under
Connecticut law, equitable claims are subject to the same statute of limitations that
governs analogous legal claims that were asserted based on the same facts. Third,
we must resolve whether the limitations period applicable to Cigna’s claims was
tolled during the pendency of a prior federal action between the parties since
3 Cigna argues that its current claims were all compulsory counterclaims in that
prior case.
I. Background
Cigna is a managed-care company that insures and administers
employee health and welfare benefit plans. 1 In that role, Cigna serves as claims
administrator, meaning that it exercises discretionary authority and fiduciary
responsibility over the administration of those plans. One of Cigna’s
responsibilities is to control the cost of healthcare for its members. To do so, Cigna
enters into agreements with certain healthcare providers that establish fixed rates
for those providers’ services. While Cigna permits its plan members to use
providers that do not enter into these agreements – so-called “out-of-network
providers” – plan members are required to pay a higher percentage of the charges
from out-of-network providers. In this way, Cigna sensitizes its plan members to
cost control issues and gives them a financial incentive to seek out cost-effective
services.
1Because this appeal arrives before us at the pleading stage, we draw these facts from Cigna’s complaint and accept them to be true. See Iowa Pub. Emps.’ Ret. Sys. v. MF Glob., Ltd., 620 F.3d 137, 139 n.1 (2d Cir. 2010).
4 The defendant Labs in this case are various laboratory testing companies
that are all wholly owned by the same parent company. The Labs are out-of-
network providers under Cigna’s plans.
Cigna’s anti-fraud unit became aware that some of the Labs were engaged
in a potentially fraudulent billing scheme and opened an investigation. That
investigation, which was completed sometime before August 17, 2015, uncovered
three types of fraudulent or improper conduct: fee forgiveness, billing for
unnecessary testing, and unbundling.
Fee forgiveness occurs when an out-of-network healthcare provider does
not bill a patient for the portion of its services not covered by the patient’s
insurance company. While this might sound like a good outcome for patients –
after all, it means that they receive medical services more cheaply – it causes
problems by removing the financial incentive for patients to visit in-network
providers. In other words, fee forgiveness benefits patients in the short term, but
ultimately may result in increased plan costs as insurers pay more for services.
Billing for medically unnecessary testing is just what it sounds like and is largely
self-explanatory. “Unbundling,” however, is the practice of healthcare providers
5 separately billing for individual services that should otherwise be billed together
at a reduced price.
In light of its investigation, Cigna determined that the Labs had improperly
collected over $17 million in fraudulent or overbilled charges. To prevent
additional losses, Cigna began to flag and deny outstanding charges from the Labs
that Cigna had yet to pay.
In August 2015, two of the Labs sued Cigna in federal court in the Southern
District of Florida, alleging that Cigna improperly denied, delayed processing, or
failed to process claims for certain testing services (the “Florida Action”). See
generally Complaint, BioHealth Med. Lab’y, Inc. v. Conn. Gen. Life Ins. Co., No. 15-cv-
23075 (KMM) (S.D. Fla. Aug. 17, 2015), ECF No. 1. Six months later, the district
court dismissed the complaint without prejudice for, among other reasons, failure
to exhaust available administrative remedies. See generally BioHealth Med. Lab’y,
Inc. v. Conn. Gen. Life Ins. Co., No. 15-cv-23075 (KMM), 2016 WL 375012 (S.D. Fla.
Feb. 1, 2016). The Eleventh Circuit later vacated portions of that order, but left
intact the district court’s decision to dismiss the complaint on exhaustion grounds.
See generally BioHealth Med. Lab’y, Inc. v. Cigna Health & Life Ins. Co., 706 F. App’x
6 521 (11th Cir. 2017). The Labs never filed an amended complaint following that
decision, effectively ending the Florida Action.
In August 2019, approximately two years after the Eleventh Circuit affirmed
the district court’s decision to dismiss the Labs’ complaint, Cigna filed the instant
action in Connecticut federal court. Cigna asserted a variety of Connecticut state-
law and federal claims, seeking to recover the allegedly fraudulent or overbilled
charges it paid to the Labs. According to Cigna, all these claims were compulsory
counterclaims in the Florida Action, but, because that case was dismissed at the
pleading stage, Cigna never interposed them.
In June 2020, the Connecticut district court dismissed Cigna’s complaint
with prejudice and entered judgment in favor of the Labs, finding that all of
Cigna’s claims were time-barred under Connecticut’s three-year statute of
limitations applicable to tort claims. Cigna timely appealed that decision.
II. Standard of Review
We review a district court’s decision to dismiss a complaint under
Rule 12(b)(6) de novo. See Yamashita v. Scholastic Inc., 936 F.3d 98, 103 (2d Cir. 2019),
cert. denied, 140 S. Ct. 2670 (2020). In doing so, we “accept[] all of the complaint’s
factual allegations as true and draw[] all reasonable inferences in [Cigna’s] favor.”
7 Id. (internal quotation marks omitted). “Although the statute of limitations is
ordinarily an affirmative defense that must be raised in the answer, a statute of
limitations defense may be decided on a Rule 12(b)(6) motion if the defense
appears on the face of the complaint.” Thea v. Kleinhandler, 807 F.3d 492, 501 (2d
Cir. 2015) (internal quotation marks omitted); see also Sewell v. Bernardin, 795 F.3d
338, 339 (2d Cir. 2015) (same).
III. Discussion
Cigna’s complaint includes various state and federal claims against the
Labs, which can be organized into three different groups for time-bar purposes.
First, Cigna brings a handful of state-law tort claims, specifically, fraud, negligent
misrepresentation, conversion, and civil statutory theft (collectively, the “Legal
Claims”). Second, Cigna asserts a state-law unjust enrichment claim, which, under
Connecticut law, is based in equity. See Reclaimant Corp. v. Deutsch, 211 A.3d 976,
982–83, 990 (Conn. 2019). Third, Cigna brings federal law claims under ERISA
§ 502(a)(3), which is codified at 29 U.S.C. § 1132(a)(3), and the Declaratory
Judgment Act, 28 U.S.C. § 2201.
Connecticut has a three-year statute of limitations that covers all tort claims.
See Conn. Gen. Stat. § 52-577. Because Cigna admittedly filed its complaint more
8 than three years after the date on which it alleges to have discovered the Labs’
wrongful conduct, any claims subject to that limitations period would appear to
be untimely. 2 While the parties agree that this three-year limitations period
applies to Cigna’s Legal Claims, that’s where their agreement ends.
The Labs take the position that this three-year limitations period is also
applicable to Cigna’s unjust enrichment and federal claims because those claims
are based on the same factual allegations as Cigna’s Legal Claims. Cigna counters
that its unjust enrichment and federal claims are based in equity and, as a result,
are exempt from statutory limitations periods altogether. Separately, Cigna
asserts that its claims in this case were all compulsory counterclaims in the Florida
Action and that, under federal law, any applicable limitations periods were
therefore tolled while Cigna’s motion to dismiss the Florida Action was pending
in the district court and on appeal.
2 Connecticut’s statute of limitations begins to run from when the tort occurred, not when it was discovered. See Piteo v. Gottier, 963 A.2d 83, 86 (Conn. App. Ct. 2009). Although only the date of the latter is identified on the face of Cigna’s complaint, even that date is more than three years before the complaint was filed in this case. Relatedly, it bears noting that because this limitations period runs from the occurrence of the tort in question, it functions more like a statute of repose than a statute of limitations. See Barrett v. Montesano, 849 A.2d 839, 845 (Conn. 2004); Farnsworth v. O’Doherty, 856 A.2d 518, 520 (Conn. App. Ct. 2004). But since Connecticut courts often use those terms interchangeably, Barrett, 849 A.2d at 845–46, we have adopted the “statute of limitations” label as that is what the parties and district court have used.
9 We address each argument in turn. But, before doing so, we must first
determine what limitations rules apply to Cigna’s federal claims.
A. Time-Bar Rules Applicable to Cigna’s Federal Claims
Federal law supplies no limitations period for either Cigna’s ERISA
§ 502(a)(3) claim or Declaratory Judgment Act claim. 3 See Miles v. N.Y. Teamsters
Conf. Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir. 1983);
118 E. 60th Owners, Inc. v. Bonner Props., Inc., 677 F.2d 200, 202 (2d Cir. 1982). In
this case, those claims adopt the limitations period of the Connecticut state-law
cause of action to which they are most analogous. Sandberg v. KPMG Peat Marwick,
L.L.P., 111 F.3d 331, 333 (2d Cir. 1997); 118 E. 60th Owners, 677 F.2d at 202. This
adopted limitations period also ordinarily incorporates the state-law rules for
applying the statute of limitations, such as rules of tolling. See Bd. of Regents of
Univ. of N.Y. v. Tomanio, 446 U.S. 478, 485 (1980) (explaining that state tolling rules
govern “except when inconsistent with the federal policy underlying the cause of
action under consideration” (internal quotation marks omitted)); cf. Muto v. CBS
Corp., 668 F.3d 53, 59 (2d Cir. 2012) (acknowledging that Congress’s “silence on
3Of course, ERISA does provide a limitations period for breach of fiduciary duty claims. See Frommert v. Conkright, 433 F.3d 254, 272–73 (2d Cir. 2006); see also 29 U.S.C. § 1113. But the Labs are not fiduciaries to Cigna and, as a result, Cigna is not seeking to rectify a breach of such a duty.
10 limitations under § 1132 . . . permitted (and perhaps even invited) the judicial
development of various state-law based limitations periods for these actions”).
In a nutshell, both of Cigna’s federal claims assert that the Labs received
reimbursement for testing services in contravention of the governing benefit plans
and seek to recover those overpayments. Based on the complaint and the parties’
briefing, we agree with Cigna that these claims most closely resemble a
Connecticut unjust enrichment claim.
Although the presence of an express contract ordinarily requires a plaintiff
to bring a claim for breach of contract, not unjust enrichment, see Meaney v. Conn.
Hosp. Ass’n, Inc., 735 A.2d 813, 823 (Conn. 1999), there is an exception where the
contract “does not fully address [the] subject” of the claim in question, Town of
New Hartford v. Conn. Res. Recovery Auth., 970 A.2d 592, 612 (Conn. 2009) (internal
quotation marks omitted). In addition, an express contract must be “between the
parties” to the litigation to preclude an unjust enrichment claim. Town of New
Hartford, 970 A.2d at 611 (quoting Meaney, 735 A.2d at 823). Here, not only is there
no indication that the benefit plans at issue address what happens when a testing
vendor receives payment for services not covered by the plans’ terms, but the Labs
are “out-of-network” providers, J. App’x at 19, so it is not necessarily the case that
11 they have entered into contracts with Cigna.
Separately, although Cigna’s allegations suggest that the Labs’ conduct was
fraudulent, we agree with Cigna that its federal claims do not resemble a state-law
fraud action. While a showing that the Labs engaged in fraud would no doubt be
sufficient to prove Cigna’s ERISA claim, it is by no means necessary. See Laurent
v. PricewaterhouseCoopers LLP, 945 F.3d 739, 748 (2d Cir. 2019) (holding that ERISA
§ 502(a)(3) “authorizes district courts to grant equitable relief . . . even in the
absence of . . . fraud”). In other words, Cigna need not prove that the Labs’
submissions were fraudulent to be entitled to relief under ERISA or to win a
declaratory judgment that the governing plans prohibited the Labs from being
reimbursed for the services in question.
Accordingly, we agree with Cigna that its federal claims are most analogous
to a state-law unjust enrichment claim. Indeed, other courts have reached the same
conclusion on similar facts. See, e.g., N. Cypress Med. Ctr. Operating Co. v. Cigna
Healthcare, 781 F.3d 182, 204–05 (5th Cir. 2015); Conn. Gen. Life Ins. Co. v. Elite Ctr.
for Minimally Invasive Surgery LLC, No. 16-cv-571 (KPE), 2017 WL 607130, at *9 (S.D.
Tex. Feb. 15, 2017), as amended, 2017 WL 1807681 (S.D. Tex. May 5, 2017). As a
result, Cigna’s federal claims are subject to the same limitations rules as its
12 equitable claim for unjust enrichment. We therefore refer to these claims
collectively as the “Equitable Claims.”
B. Cigna’s Equitable Claims Are Subject to No Statutory Limitations Period Under Connecticut Law
Ordinarily, equitable claims, like those for unjust enrichment, are exempt
from statutory limitations periods under Connecticut law and are instead subject
only to the equitable doctrine of laches. See Reclaimant, 211 A.3d at 990; Rossman
v. Morasco, 974 A.2d 1, 17 (Conn. App. Ct. 2009). And because laches turns on
factual issues, it is ordinarily not a proper defense at the pleading stage. See
Reclaimant, 211 A.3d at 991; see also Lynwood Place, LLC v. Sandy Hook Hydro, LLC,
92 A.3d 996, 1002 (Conn. App. Ct. 2014). The district court disregarded this general
rule, however, and concluded that Cigna’s Equitable Claims are governed by the
same limitations period applicable to its Legal Claims because all of Cigna’s claims
are premised on the same factual allegations.
The district court’s reasoning was primarily driven by the Connecticut
Supreme Court’s decision in Certain Underwriters at Lloyd’s, London v. Cooperman,
in which the Supreme Court held that the plaintiff’s equitable claims were subject
to dismissal on time-bar grounds because they were “based on the same facts” as
other untimely legal claims. 957 A.2d 836, 852 (Conn. 2008). Both the district court
13 and the Labs interpret Certain Underwriters as standing for the proposition that an
equitable claim is automatically time-barred if it is premised on allegations that
could also support a legal claim that is itself untimely. While that may be a fair
reading of Certain Underwriters in a vacuum, the Connecticut Supreme Court has
since rejected that interpretation in Reclaimant, 211 A.3d at 990–91.
Specifically, Reclaimant held that equitable claims are “not subject to a
statute of limitations” and are instead governed only by “the equitable doctrine of
laches.” Id. at 990. The court went on to cite Certain Underwriters for the
proposition that courts in equitable proceedings may – not must – “look by analogy
to the statute of limitations to determine whether, in the interest of justice, a
particular [equitable] action should be heard.” Id. at 991 (internal quotation marks
omitted) (citing Certain Underwriters, 957 A.3d at 852). 4 Reclaimant therefore recast
Certain Underwriters as having turned on a prudential rule designed to aid courts
in applying the doctrine of laches. Indeed, by not considering whether the
allegations underlying the plaintiff’s equitable claim could have also supported a
4 Reclaimant did not limit this proposition merely to cases addressing only equitable claims. Rather, the proposition applies to any individual equitable claim, regardless of whether the plaintiff also brings legal claims in the same suit. Indeed, as the court further observed, “when the plaintiff’s claim sounds only in equity, not in law or in both law and equity[,] the plaintiff’s claim is not subject to any statute of limitations.” Reclaimant, 211 A.3d at 990 (emphasis added) (internal alterations and quotation marks omitted).
14 legal claim, the Reclaimant court implicitly confirmed that Certain Underwriters
should not be read to announce a categorical rule that equitable claims are subject
to the limitations periods applicable to analogous legal claims. 5
Consequently, Cigna’s Equitable Claims are subject only to the doctrine of
laches, and the district court thus erred by dismissing them as automatically
barred by the three-year statute of limitations for tort claims. On remand, then,
the district court should deny the Labs’ motion to dismiss with respect to Cigna’s
Equitable Claims unless the district court concludes that a meritorious laches
defense is available from the face of Cigna’s complaint. In making that assessment,
the district court may consider the limitations period applicable to Cigna’s
analogous legal claims, but it should treat that period as simply one non-
dispositive factor among many relevant to its ultimate decision.
5 Of course, as indicated above, certain causes of action permit both legal and equitable remedies, in which case the applicable statutory limitations period would seem to apply across the board no matter the remedy sought. See Certain Underwriters, 957 A.2d at 850 (noting that “[w]here a party seeks equitable relief pursuant to a cause of action that also would allow that party to seek legal relief, concurrent legal and equitable jurisdiction exists, and the statute of limitations that would be applicable to bar the legal claim also applies to bar the equitable claim” (quoting Dowling v. Finley Assocs., Inc., 714 A.2d 694, 697 (Conn. App. Ct. 1998), rev’d on other grounds, 727 A.2d 1245 (1999))). For example, a breach of contract claim seeking specific performance is based in equity, see Hill v. Rafone, 930 A.2d 788, 791–92 (Conn. App. Ct. 2007), but would likely still be subject to the statutory limitations period governing breach of contract claims – which is six years, see Conn. Gen. Stat. § 52-576 – because the cause of action can supply either a legal or equitable remedy. By contrast, unjust enrichment under Connecticut law is a purely equitable claim. See Reclaimant, 211 A.3d at 982–83, 990.
15 C. The Florida Action Did Not Toll the Limitations Period Applicable to Cigna’s Legal Claims
Having concluded that the district court erred by dismissing Cigna’s
Equitable Claims, that leaves only Cigna’s Legal Claims. Although those claims
would appear to be barred by the applicable three-year limitations period, Cigna
argues that this statutory clock was tolled while its motion to dismiss the Florida
Action was pending in the district court and on appeal.
Cigna premises its position on the rule, adopted by several of our sister
circuits, that “the institution of [a] suit tolls or suspends the running of the statute
of limitations governing a compulsory counterclaim.” 6 Charles Alan Wright &
Arthur R. Miller, Federal Practice & Procedure § 1419 (3d ed. 1998) (hereinafter,
“Wright & Miller”); see, e.g., N. Cnty. Commc’ns Corp. v. Sprint Commc’ns Co., 691 F.
App’x 466, 467–68 (9th Cir. 2017); Emps. Ins. of Wausau v. United States, 764 F.2d
1572, 1576 (Fed. Cir. 1985); Burlington Indus., Inc. v. Milliken & Co., 690 F.2d 380, 389
(4th Cir. 1982); Hartford v. Gibbons & Reed Co., 617 F.2d 567, 570 (10th Cir. 1980).
The foundation for this rule is somewhat uncertain. Indeed, as Cigna admits, it
cannot be found in the text of Federal Rule of Civil Procedure 13(a), which governs
compulsory counterclaims. See Fed. R. Civ. P. 13(a); see also Fed. Deposit Ins. Corp.
v. Palermo, 815 F.2d 1329, 1340 (10th Cir. 1987) (explaining that Rule 13(a) “reflects
16 no federal policy” on the tolling of counterclaims); Wright & Miller § 1419 (noting
that “[t]he text of Rule 13(a) itself does not offer any solution to the problem of
whether the institution of an action tolls the running of the limitations period on
compulsory counterclaims or reflect any federal policy on the question”). Instead,
courts appear to have crafted the rule as a matter of federal common law,
presenting it as sound policy and necessary to prohibit clever litigation strategies
aimed at denying defendants the chance to assert valid counterclaims. 6 See Wright
& Miller § 1419. Moreover, a plaintiff can hardly be said to suffer prejudice from
such tolling in these circumstances, “since [she] presumably has notice at the time
the action is commenced of any counterclaim arising out of the same transaction
as the main claim.” Id.
We ultimately need not decide whether to adopt this rule, however, because
even if we did, it would make no difference here. 7 Cigna’s Legal Claims are all
6 Plainly, no such concerns are present here. 7 It is unclear whether the tolling rule of our sister circuits extends to affirmative claims that are filed in a separate lawsuit and that would have been compulsory counterclaims in a prior action if not for pre-answer dismissal, which presents another impediment to Cigna’s argument. See J. App’x at 114 (noting that “there are no counterclaims before the Court” as “Cigna has brought affirmative claims, in a separate lawsuit, against the Labs, not counterclaims in the previous suit in Florida” (internal quotation marks omitted)). Moreover, even if such tolling were available here, only two of the Labs were parties to the Florida Action, meaning that tolling would likely be limited to those two defendants.
17 brought under state law, which means that the timeliness of those claims is also a
matter of state law. See Guar. Tr. Co. of N.Y. v. York, 326 U.S. 99, 110 (1945); Casey
v. Merck & Co., 653 F.3d 95, 99–100 (2d Cir. 2011); Personis v. Oiler, 889 F.2d 424, 426
(2d Cir. 1989). The Florida Action therefore tolled the limitations period applicable
to Cigna’s Legal Claims only if Connecticut law would provide for such tolling –
federal law on the subject is irrelevant.
Indeed, even the circuits that have adopted this federal tolling rule have, by
and large, recognized that it does not displace state tolling law. For instance, the
Fourth, Ninth, and Tenth Circuits all tolled the limitations period applicable to
state-law counterclaims only after concluding that such tolling was consistent with
the applicable state law. See N. Cnty. Commc’ns, 691 F. App’x at 467 (citing Trindade
v. Super. Ct., 29 Cal. Rptr. 48, 49–50 (Cal. Ct. App. 1973)); Kirkpatrick v. Lenoir Cnty.
Bd. of Educ., 216 F.3d 380, 388 n.8 (4th Cir. 2000) (discussing North Carolina law) 8;
Palermo, 815 F.2d at 1340 (relying on Oklahoma state tolling rules because
“Fed.R.Civ.P. 13(a) . . . reflects no federal policy on this issue”); Hartford, 617 F.2d
8Although Kirkpatrick concerned the federal Individuals with Disabilities Education Act (the “IDEA”), until 2005, the IDEA had no limitations period of its own. See Somoza v. N.Y.C. Dep’t of Educ., 538 F.3d 106, 114 n.7 (2d Cir. 2008). So, for cases brought before that date, the IDEA borrowed the limitations period from analogous state provisions. See M.D. v. Southington Bd. of Educ., 334 F.3d 217, 221–23 (2d Cir. 2003).
18 at 569–70 (looking to New Mexico law). Likewise, the D.C. Circuit has explained
that although “there is considerable law (and sensible policy)” on the side of this
federal rule, the question is ultimately left to state law where state-law claims are
involved. Hartford Acc. & Indem. Co. v. Pro-Football, Inc., 127 F.3d 1111, 1118 (D.C.
Cir. 1997).
Nearly all of Cigna’s supporting precedent is distinguishable on this basis,
as they concern federal claims. See Emps. Ins. of Wausau, 764 F.2d at 1576 (federal
contract); Burlington Indus., 690 F.2d at 389 (antitrust); Oracle Am., Inc. v. Terix
Comput. Co., No. 13-cv-3385 (PSG), 2014 WL 5847532, at *6–7 (N.D. Cal. Nov. 7,
2014) (same); Seitz v. Beeter, No. 11-c-4803 (JHL), 2013 WL 409428, at *1–2 (N.D. Ill.
Jan. 31, 2013) (Federal Wire Tap Act and Stored Communications Act); Silva Run
Worldwide Ltd. v. Gaming Lottery Corp., No. 96-cv-3231 (RPP), 2003 WL 22358805, at
*1 (S.D.N.Y. Oct. 15, 2003) (RICO); Aramony v. United Way of Am., 969 F. Supp. 226,
231 (S.D.N.Y. 1997) (same); UST Cap. Corp. v. Charter Nat’l Life Ins. Co., 684 F. Supp.
757, 758–59 (D. Mass. 1986) (same). And those that do concern state claims (or
federal claims that borrow state limitations periods) simply fail to address this
issue. See Giordano v. Claudio, 714 F. Supp. 2d 508, 522 (E.D. Pa. 2010); Yates v.
Washoe Cnty. Sch. Dist., No. 08-cv-200 (LRH), 2007 WL 3256576, at *2 (D. Nev. Oct.
19 31, 2007); Andre v. Schenectady County, No. 95-cv-573, 1997 WL 135910, at *2
(N.D.N.Y. Mar. 13, 1997).
To dodge the conclusion that state law governs this issue, Cigna attempts to
draw a distinction between cases where the state-law claims are before the federal
court purely as a matter of diversity jurisdiction and cases, like this one, where the
state-law claims are before the federal court alongside federal claims as a matter
of supplemental jurisdiction. But this distinction finds no support in law. After
all, it is beyond cavil that federal courts apply state limitations rules to state-law
claims regardless of the jurisdictional circumstances. See, e.g., Kroshnyi v. U.S. Pack
Courier Servs., Inc., 771 F.3d 93, 102–03 (2d Cir. 2014) (applying a state statute of
limitations to state-law claims over which the court had supplemental
jurisdiction); Castagna v. Luceno, 744 F.3d 254, 256–59 (2d Cir. 2014) (same). Cigna’s
proposed distinction is therefore baseless.
As a result, whether the Florida Action tolled the limitations period
applicable to Cigna’s Legal Claims is a question of Connecticut law. And on that
issue, Connecticut law is clear: the timeliness of counterclaims is measured from
the date on which they are interposed, not the date the complaint was filed See
Pacelli Bros. Transp., Inc. v. Pacelli, 456 A.2d 325, 331 (Conn. 1983) (explaining that,
20 “[f]or the purpose of the statute of limitations, an action upon the subject of a
counterclaim is deemed to have begun when it is filed”); see also Consol. Motor
Lines, Inc. v. M & M Transp. Co., 20 A.2d 621, 622 (Conn. 1941) (noting that “the
filing of the answer is the commencement of the action set upon in the
counterclaim”); ARMOUR Cap. Mgmt. LP v. SS&C Techs., Inc., No. 17-cv-790, 2019
WL 688308, at *3 (D. Conn. Feb. 19, 2019) (same). Here, because Cigna never
actually interposed counterclaims in the Florida Action, the three-year limitations
period was not tolled during the previous lawsuit, and Cigna’s Legal Claims are
time-barred as a result. 9
IV. Conclusion
For the foregoing reasons, we AFFIRM IN PART and VACATE IN PART
the judgment of the district court, and we REMAND the case for further
proceedings, consistent with this decision, on Cigna’s unjust enrichment, ERISA,
and Declaratory Judgment Act claims.
9 Of course, this could put defendants who want to assert a soon-to-expire Connecticut law counterclaim in a tough spot if they also want to move to dismiss a complaint. But such defendants are not without options. One possibility is to seek a tolling agreement from the plaintiff. Another is to serve an answer and counterclaim alongside the motion to dismiss. See, e.g., Peekskill City Sch. Dist. v. Colonial Sur. Co., 595 F. App’x 91, 92 (2d Cir. 2015); ARMOUR, 2019 WL 688308, at *3; see also Fed. R. Civ. P. 12(h)(2)(A) (acknowledging that a motion to dismiss based on Rule 12(b)(6) may be raised alongside a responsive pleading).