ACS State Healthcare v. Heineman et al

Filing 216

MEMORANDUM AND ORDER - FourThought's motion to strike portions of the Second Amended Complaint 181 is granted to the extent it is in accordance with this memorandum and is denied in all other respects. ACS's motion for leave to file inst anter a sur-reply to FourThought's motion to strike 200 is granted. ACS's motion for a hearing on unresolved objections to deposition subpoenas 202 is denied. ACS shall have until May 29, 2009, to file a Third Amended Complaint. Ordered by Senior Judge Lyle E. Strom. (KBJ)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA ACS STATE HEALTHCARE, LLC, a Delaware Limited Liability Company, ) ) ) ) Plaintiff, ) ) v. ) ) FOURTHOUGHT GROUP, INC., ) ) Defendant-Intervenor. ) ___________________________________)

4:08CV3021

MEMORANDUM AND ORDER

This matter is before the Court on FourThought Group, Inc.'s ("FourThought") motion to strike portions of the Second Amended Complaint (Filing No. 181), ACS State Healthcare, LLC's ("ACS") motion for leave to file instanter a sur-reply brief to FourThought's motion to strike (Filing No. 200), and ACS's motion for a hearing on unresolved objections to deposition subpoenas (Filing No. 202). Upon review of the motions, the Court finds

FourThought's motion to strike portions of the Second Amended Complaint should be granted to the extent it is in accordance with this memorandum, ACS's motion to file instanter a sur-reply brief to FourThought's motion to strike should be granted, and ACS's motion for a hearing on the unresolved objections to deposition subpoenas should be denied. Background On May 2, 2007, the Nebraska Department of Administrative Services ("DAS") issued Request for Proposal ("RFP") 2017Z1, which described the State of Nebraska's ("State") intention to develop and implement a new Medicaid Management

Information Systems ("MMIS") for the State. ACS submitted bids in response to RFP 2017Z1.

Both FourThought and On November 21,

2007, DAS posted its intent to award the MMIS Contract to FourThought, and ACS subsequently filed a formal protest based in part on allegations that FourThought had a disqualifying conflict of interest. DAS denied the protest.

On February 1, 2008, ACS filed this action against the State Defendants,1 seeking inter alia, a declaration that the State Defendants' award of the MMIS Contract to FourThought would violate federal procurement regulations in part because the State Defendants did not exclude FourThought from bidding on RFP 2017Z1 and an order enjoining the State Defendants from awarding the MMIS contract to FourThought. Thereafter, FourThought moved to

intervene, which the Court granted. ACS filed a Second Amended Complaint on April 2, 2008 (Filing No. 101). The Second Amended Complaint asserted three

claims against FourThought: (1) misappropriation of trade secrets, (2) tortious interference, and (3) unfair competition. ACS's claims for tortious interference and unfair competition were based in part on allegations that FourThought had a

"State Defendants" is the collective term for David Heineman, in his official capacity as Governor of the State of Nebraska, Jon Bruning, in his official capacity as Attorney General of the State of Nebraska, Carlos Castillo, in his official capacity as Director of the Nebraska Department of Administrative Services, Christine Peterson, who is the former CEO of the Nebraska Department of Health & Human Services, and Steve Sulek, in his official capacity as Acting Material Division Administrator (Filing No. 182 at 1). -2-

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disqualifying conflict of interest when it submitted a bid for RFP 2017Z1 in violation of state and federal procurement laws. On May 30, 2008, DAS awarded the MMIS Contract to FourThought. Subsequently, ACS moved to dismiss the State

Defendants without prejudice, which the Court granted. Discussion 1. Motion to Strike FourThought moves to strike several allegations in the Second Amended Complaint on the ground that such allegations affect the interests of the dismissed State Defendants.2 In

particular, FourThought moves to strike all allegations that FourThought had a disqualifying conflict of interest when it submitted a bid for RFP 2017Z1. ACS filed a motion for leave to The Court will

file a sur-reply brief to FourThought's motion.

grant ACS's motion, and the brief attached to the motion has been reviewed accordingly. The Court finds that the Second Amended Complaint contains several allegations that are not relevant to ACS's claims against FourThought and can no longer be asserted since the State Defendants have been dismissed from the lawsuit. ACS

is directed to file a Third Amended Complaint that eliminates claims against the State Defendants, allegations pertaining to the State Defendants that are not relevant to FourThought, and

The specific portions FourThought moves to strike are identified in Filing No. 198. -3-

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allegations that FourThought had a conflict of interest when it submitted a bid for RFP 2017Z1. Accordingly, FourThought's motion to strike will be granted to the extent it is in accordance with the foregoing, and it will be denied in all other respects. 2. Motion for a hearing on unresolved objections to deposition subpoenas ACS moves for a hearing on unresolved objections to deposition subpoenas. According to ACS, FourThought has objected

to ACS issuing certain subpoenas to conduct depositions on the ground that the depositions should not be taken if FourThought's motion to strike is granted. ACS's motion for a hearing will be

denied, but ACS may file a motion to compel if appropriate. Accordingly, IT IS ORDERED: 1) FourThought's motion to strike portions of the Second Amended Complaint (Filing No. 181) is granted to the extent it is in accordance with this memorandum and is denied in all other respects. 2) ACS's motion for leave to file instanter a sur-reply to FourThought's motion to strike (Filing No. 200) is granted. 3) ACS's motion for a hearing on unresolved objections to deposition subpoenas (Filing No. 202) is denied.

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4) ACS shall have until May 29, 2009, to file a Third Amended Complaint. DATED this 14th day of May, 2009. BY THE COURT: /s/ Lyle E. Strom ____________________________ LYLE E. STROM, Senior Judge United States District Court

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