The City of Boston v. OptumRx, Inc.

• Court: Court of Appeals for the First Circuit
• Decided: March 2, 2026
• Docket: 25-1265
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

Nos. 25-1258 25-1265

THE CITY OF BOSTON; THE BOSTON PUBLIC HEALTH COMMISSION; THE BOSTON HOUSING AUTHORITY,

Plaintiffs, Appellants/Cross-Appellees,

v.

OPTUMRX, INC.,

Defendant, Appellee/Cross-Appellant,

EXPRESS SCRIPTS, INC.; EXPRESS SCRIPTS ADMINISTRATORS, LLC, d/b/a Express Scripts, f/k/a Medco Health, LLC; MEDCO HEALTH SOLUTIONS, INC., f/k/a Merck-Medco Managed Care LLC; EXPRESS SCRIPTS PHARMACY, INC.; ESI MAIL ORDER PROCESSING, INC.; ESI MAIL PHARMACY SERVICE, INC.; OPTUMINSIGHT, INC.; OPTUMINSIGHT LIFE SCIENCES, INC.; UNITEDHEALTH GROUP INCORPORATED,

Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Patti B. Saris, U.S. District Judge]

Before

Gelpí, Lynch, and Howard, Circuit Judges.

Mimi Liu and Frederick C. Baker, with whom Elizabeth Smith, Michael J. Quirk, Motley Rice LLC, Adam Cederbaum, Corporation Counsel, City of Boston, Caesar P. Cardozo, General Counsel, Boston Housing Authority, Batool Raza, General Counsel, Boston Public Health Commission, Christopher C. Naumes, Robert T. Naumes Sr., and Naumes Law Group were on brief, for appellants.

Keith R. Blackwell, with whom Brian D. Boone, Matthew P. Hooker, Matthew P. McGuire, Andrew Hatchett, Grace Assaye, Alston & Bird LLP, Shamis Beckley, Dane R. Voris, and Cooley LLP were on brief, for OptumRx, Inc; OptumInsight, Inc.; OptumInsight Life Sciences, Inc.; UnitedHealth Group Incorporated.

Christopher G. Michel, with whom Michael Lyle, Jonathan G. Cooper, Patrick D. Curran, Alexander del Nido, and Quinn Emanuel Urquhart & Sullivan, LLP were on brief, for Express Scripts, Inc.; Express Scripts Administrators, LLC; Medco Health Solutions; Express Scripts Pharmacy, Inc.; ESI Mail Order Processing, Inc.; ESI Mail Pharmacy Service, Inc.

March 2, 2026 LYNCH, Circuit Judge. The City of Boston and its Public

Health Commission and Housing Authority ("the City") sued two

pharmacy benefit managers ("PBMs"), OptumRx and Express Scripts,

on January 12, 2024, in state court. The two defendants were

alleged to have violated Massachusetts public nuisance law by

colluding with opioid manufacturers to misrepresent the risks of

such drugs, leading to injury to the City. The City had brought

a similar suit in 2018 against those manufacturers, as well as

distributors and pharmacies. After this case was removed to

federal court, the PBMs moved to dismiss on grounds that the 2024

suit was brought well after the three-year state statute of

limitations period had run. The City opposed dismissal, arguing

that its complaint pled a plausible continuing nuisance theory.

It also argued that defendants had fraudulently concealed the cause

of action from it, and that the time before the discovery of the

City's cause of action had to be excluded in determining the time

limit for commencement of the action.

In a carefully reasoned opinion, the district court

granted the PBM's dismissal motion, finding the City knew or should

have known well before 2021 of its alleged injuries from

defendants' actions and yet had not filed suit before the three-

year statute of limitations had expired. City of Boston v. Express

- 3 - Scripts, Inc., 765 F. Supp. 3d 31, 38-39 (D. Mass. 2025).1 The

court found the City failed to plead a continuing nuisance under

Massachusetts law, which requires a plaintiff to plead "recurring

tortious or unlawful conduct" that occurs within the limitations

period and cannot be "established by the continuation of harm

caused by previous but terminated tortious or unlawful conduct."

Id. at 40 (emphasis added) (quoting Taygeta Corp. v. Varian

Assocs., 763 N.E.2d 1053, 1065 (Mass. 2002)). The court held that

the City's complaint did not plead a continuing nuisance, as it

included no "sufficiently specific recent act" by defendants that

was itself tortious or unlawful. Id. The City's "conclusory

statements" "labeling [untimely] allegations as 'ongoing'" did not

convert those statements "into [timely] 'factual allegations.'"

Id. Indeed, the court noted that "[t]he most recent actions

alleged" in the City's complaint were "remedial measures

[d]efendants took to address the opioid epidemic, not actionable

misconduct." Id.

The district court rejected the City's tolling argument

under Mass. Gen. Laws ch. 260, § 12 for fraudulent concealment,

holding that theory "does not apply when 'the plaintiff has actual

knowledge of the claim,'" which is imputed to a plaintiff who "had

1The district court also granted defendants' motion to dismiss the City's federal RICO claims on timeliness grounds. Id. at 39-46. The City does not appeal that ruling.

- 4 - the means to acquire [the] facts, in circumstances where the

probability of wrongdoing was so evident that possession of the

means was equivalent to actual knowledge." Id. at 42 (alteration

in original) (quoting Magliacane v. City of Gardner, 138 N.E.3d

347, 357-58 (Mass. 2020)). The court held that the City had actual

knowledge of its cause of action under this standard before 2021

based on a number of factors, including its knowledge of the opioid

epidemic, its access to the many public investigations by numerous

state agencies and litigation brought by cities, towns, and

counties, and its knowledge of the National Prescription Opiate

Multi-District Litigation ("MDL"), In re National Prescription

Opiate Litigation, No. 1:17-MD-2804 (N.D. Ohio), which included

PBM defendants as of 2018. Id. at 42-43. These and other things

"made the 'probability of wrongdoing . . . so evident' that

reasonable diligence [by the City] would have uncovered it." Id.

at 43 (omission in original) (quoting Magliacane, 138 N.E.3d at

358). The City has appealed from the dismissal order, arguing it

was in error.

The PBMs have cross-appealed from the court's denial of

their motion to disqualify Motley Rice, the law firm representing

the City in this case. Express Scripts, No. 1:24-CV-10525 (D.

Mass. Oct. 18, 2024), ECF No. 94. That firm between 2018 and 2021

had represented the City of Chicago, the District of Columbia, and

the State of Hawaii to investigate OptumRx. The court found

- 5 - persuasive the reasoning of the MDL court in denying a similar

motion to disqualify Motley Rice. In re Nat'l Prescription Opiate

Litig., No. 1:17-MD-2804, 2024 WL 3387288 (N.D. Ohio Mar. 18,

2024).

I.

As to OptumRx's cross-appeal, we affirm the denial of

the motion to disqualify Motley Rice from representing the City.

Our review is for abuse of discretion. United States v.

Alfonzo-Reyes, 592 F.3d 280, 293 (1st Cir. 2010). There was no

such abuse. There was no error of law, and the facts clearly

supported the court's determination. As the district court stated,

all documents previously produced in response to the three opioid

investigations have been deposited in the MDL repository, where

they are available to "all [p]laintiffs['] counsel." We also agree

with the reasoning of the MDL court's rejection of a motion to

disqualify Motley Rice, which "examine[d] the [disqualification]

motion with extreme caution" "given that disqualification is a

potent weapon that can be deployed strategically." In re Nat'l

Prescription Opiate Litig., 2024 WL 3387288, at *6 (internal

quotation marks omitted). We reject the PBMs' argument that the

district court misapplied the material disadvantage element and

hold that regardless, OptumRx cannot have suffered a disadvantage,

much less a material one.

- 6 - II.

As to the City's appeal, we affirm the dismissal of the

City's state law claim. The court committed no errors of law and

its determinations are well supported based on the City's own

pleadings and public records attached to its pleadings.

A.

We first address the City's argument that the district

court erred in finding the public nuisance claim was not tolled

under Mass. Gen. Laws ch. 260, § 12. That statute reads:

If a person liable to a personal action fraudulently conceals the cause of such action from the knowledge of the person entitled to bring it, the period prior to the discovery of his cause of action by the person so entitled shall be excluded in determining the time limited for the commencement of the action.

Mass. Gen. Laws ch. 260, § 12. For present purposes, we will

assume dubitante that the City has plausibly pled the prerequisites

for application of the statute.2 The district court was correct

in holding that statutory tolling is inapplicable due to the many

events before 2021 that at the very least put the City on notice

of a "probability of wrongdoing" by the PBMs and the fact that the

City "had the means to acquire [the] facts" to bring a timely claim

against the PBMs. Magliacane, 138 N.E.3d at 357-58 (quoting

2 The same reasons that support our holding under state law also dispose of the Federal Rule of Civil Procedure 9(b) issue.

- 7 - Demoulas v. Demoulas Super Mkts., Inc., 677 N.E.2d 159, 174 n.25

(Mass. 1997)).

To its credit, the City does not dispute that it knew of

the harms to it from the opioid epidemic long before 2021, as

indeed it began pursuing redress for those harms in September 2018

when it filed its lawsuit against opioid manufacturers. See

Compl., City of Boston v. Purdue Pharma L.P., No. 1884CV02860

(Mass. Super. Ct. Suffolk Cnty. Sept. 13, 2018).3 The City's lead

argument mischaracterizes the Massachusetts "actual knowledge"

standard under Mass. Gen. Laws ch. 260, § 12. The City asserts

that actual knowledge can only be imputed to plaintiffs when they

have no substantial doubt at all as to the existence of defendants'

wrongdoing and the resulting claim. The text of the fraudulent

concealment statute says no such thing and the Massachusetts

Supreme Judicial Court cases interpreting it contain no such

requirement. See, e.g., Magliacane, 138 N.E.3d at 357–58 ("Where

there is fraudulent concealment, 'we have only attributed

knowledge to a plaintiff who had actual knowledge of the facts, or

had the means to acquire such facts, in circumstances where the

probability of wrongdoing was so evident that possession of the

means was equivalent to actual knowledge.'" (quoting Demoulas, 677

3 That case remains pending in the Massachusetts Superior Court for Suffolk County, as the City has settled with some but not all defendants.

- 8 - N.E.2d at 174 n.25)); Lynch v. Signal Fin. Co. of Quincy, 327

N.E.2d 732, 735 (Mass. 1975) ("[T]here is no concealment by mere

failure to disclose if the aggrieved party has full means of

detecting the fraud."); Brackett v. Perry, 87 N.E. 903, 904 (Mass.

1909) ("Full means of detecting the fraud which had been practiced

upon the[] [plaintiffs] under circumstances which put them upon

inquiry, is equivalent to actual knowledge.").

The City bases its no-substantial-doubt standard on a

misunderstanding of dicta contained in a footnote in Demoulas, 677

N.E.2d at 175 n.27, a shareholders' derivative action where the

plaintiff alleged fraudulent concealment by a breach of fiduciary

relationship, which is evaluated under a different actual

knowledge standard, id. at 174-75. The footnote itself reinforced

that where there is no fiduciary relationship, actual knowledge is

imputed to a plaintiff where he is provided with means to ascertain

the facts, or as an equivalent, the full means of detecting the

fraud, not merely suspicion of facts and fraud. Id. at 175 n.27.

The City's statutory tolling argument is that it "did

not know" that "PBMs caused th[e] [opioid epidemic] harm" such

that it was not "on notice of its claims" against these defendants.

The pleadings and undisputed public documents properly considered

on the motion to dismiss show that the City had ample reason to

know of PBM wrongdoing and had ample means to discover the facts

- 9 - to support a claim against PBMs before 2021. We recount some of

the reasons.

First, from 2018 to 2019, at least seventy-four

lawsuits, all a matter of public record, were filed by other

cities, towns, and counties not just against opioid manufacturers

but also against the PBM defendants. Four suits filed against the

PBMs between 2018 and 2020, which became part of the federal MDL

litigation in February 2018, June 2019, October 2019, and February

2020, were designated as bellwether cases against the PBMs in the

MDL litigation on October 27, 2023. In re Nat'l Prescription

Opiate Litig., No. 17-MD-2804 (N.D. Ohio Oct. 27, 2023), Dkt.

No. 5231. It is not plausible that the City was not aware of these

prior litigations.

This conclusion is further bolstered by the fact that

Motley Rice, the City's counsel in its 2018 lawsuit against opioid

manufacturers, received a letter on January 26, 2018, from

plaintiff's counsel in County of Webb v. Purdue Pharma, L.P., which

had the previous day filed the first opioid suit against the PBM

defendants. Compl., County of Webb v. Purdue Pharma, L.P., No.

1:18-OP-45175, ECF No. 1 (N.D. Ohio Jan. 25, 2018) ("2018 Webb

County Complaint"). The letter to Motley Rice, which came almost

eight months before the City filed its complaint against the opioid

manufacturers, "inform[ed] [it] of . . . the introduction of PBMs

into [the MDL] litigation," stated that "opioids could not have

- 10 - reached the communities seeking redress here absent the PBMs" and

that the "PBMs' complicity in the scheme has not been inadvertent,"

and informed Boston's counsel that public pleadings "describe[d]

in detail the nature of PBMs' role in the scheme." That letter is

contained in the public record. See In re Nat'l Prescription

Opiate Litig., No. 1:17-MD-02804 (N.D. Ohio Sept. 14, 2018), ECF

No. 978-6, at 2.

The City's own complaint in this action alleges that PBM

business practices "have not gone unnoticed in Massachusetts"

(emphasis added) and cites a Massachusetts government report from

2019 titled "Cracking Open the Black Box of [PBMs]" in support.

Other of the complaint's allegations at ¶¶ 200 and 201, concerning

defendant Express Scripts' relationship with opioids, rely on a

publicly available article from 2016 that was also cited in the

complaint filed by Webb County on January 25, 2018 in its lawsuit

against the PBMs. 2018 Webb County Complaint at ¶ 255 n.102.

The City's counterarguments rely on three out-of-circuit

trial court decisions that have found lawsuits against PBM

defendants to be timely. See Alaska v. Express Scripts, Inc., 774

F. Supp. 3d 1150, 1164-67 (D. Alaska 2025); King County v. Express

Scripts, Inc., No. 24-CV-49, 2025 WL 1082130, at *3 (W.D. Wash.

Apr. 10, 2025); Ohio Cnty. Comm'n v. Express Scripts, Inc., No.

5:24-CV-142, 2024 WL 5701504, at *2-3 (N.D.W. Va. Dec. 23, 2024).

All three are distinguishable for a number of reasons, including

- 11 - that none apply the Massachusetts statutory scheme at issue here.

Further, Alaska applied the Ninth Circuit's "relaxed" standard for

pleading fraud under Rule 9(b). 774 F. Supp. 3d at 1164.

We see no need to replicate the district court's

thoughtful analysis and, unless otherwise noted above, we affirm

based on its cogent reasoning.

B.

The City also argues for the first time on appeal that

its state public nuisance claim is not subject to the three-year

statute of limitations under Massachusetts law because its

complaint alleged that "defendants' misconduct created an ongoing

condition that is of itself harmful." As a newly raised argument,

it is waived on appeal. See Rockwood v. SKF USA Inc., 687 F.3d 1,

9 (1st Cir. 2012) ("Our case law is clear that 'arguments not

raised in the district court cannot be raised for the first time

on appeal.'" (quoting Sierra Club v. Wagner, 555 F.3d 21, 26 (1st

Cir. 2009))).

In any event, the argument is wrong on the merits. The

City relies on Taygeta, but this case is not similar. In Taygeta,

the plaintiff's "nuisance claim [wa]s based on the continuing

seepage of pollutants that [wa]s still occurring within the statute

of limitations," and thus was not time-barred. 763 N.E.2d at 1065

(emphases added). The City's complaint alleges no such ongoing

- 12 - condition that is still occurring within the statute of limitations

period.

III.

The orders of the district court are affirmed.

- 13 -