Border Area Mental Health, Inc. et al v. United Behavioral Health, Inc. et al

Filing 68

MEMORANDUM OPINION AND ORDER by District Judge Martha Vazquez; IT IS ORDERED that Plaintiffs' Motion for Rule 54(b) Certification 53 is GRANTED as follows: a final judgment will be entered dismissing this action as to PCG. (mjr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO

BORDER AREA MENTAL HEALTH, INC.,
COUNSELING ASSOCIATES, INC., EASTER
SEALS EL MIRADOR, FAMILIES & YOUTH, INC.,
HOGARES, INC., SOUTHWEST COUNSELING
CENTER, INC., SOUTHERN NEW MEXICO
HUMAN DEVELOPMENT, INC., TEAMBUILDERS
COUNSELING SERVICES, INC., THE
COUNSELING CENTER, INC., and VALENCIA
COUNSELING, INC.,
Plaintiffs,
v.

CV 16-1213 MV/SCY

UNITED BEHAVIORAL HEALTH, INC. and
UNITED HEALTHCARE INSURANCE COMPANY,
INC., d/b/a OPTUMHEALTH NEW MEXICO,
PUBLIC CONSULTING GROUP, INC., ELIZABETH
A. MARTIN, ANDREW SEKEL, TIMOTHY S.
MILLER, and JOHN DOES 1-10,
Defendants.

MEMORANDUM OPINION AND ORDER
THIS MATTER comes before the Court on Plaintiffs’ Motion for Rule 54(b)
Certification [Doc. 53]. The Court, having considered the motion, briefs, and relevant law, and
being otherwise fully informed, finds that the Motion is well-taken and will be granted.
BACKGROUND
On June 23, 2016, Plaintiffs commenced this action in the First Judicial District Court of
New Mexico, Santa Fe County, against United Behavioral Health, Inc. and United Healthcare
Insurance Company, Inc., Elizabeth Martin, Andrew Sekel, and Timothy S. Miller (collectively,
the “United Defendants”), and Public Consulting Group, Inc. (“PCG”). Doc. 1-1. On November

3, 2016, United Defendants removed the action to this Court. Doc. 1. In their Complaint,
Plaintiffs alleged claims against all Defendants for tortious interference with contractual relations
(Count I), prima facie tort (Count II), and civil conspiracy (Count III). Doc. 1-1. Plaintiffs also
alleged violations of the New Mexico Unfair Practices Act (“UPA”) against United Defendants
(Count IV), and PCG (Count V). Id. On July 18, 2017, the Court entered a Stipulated Order
dismissing with prejudice Plaintiffs’ UPA claim against PCG, which left remaining against PCG
claims of tortious interference, prima facie tort, and civil conspiracy. [Doc. 44].
On November 18, 2016, United Defendants filed a motion to compel Plaintiffs to
arbitrate the claims alleged against them. Doc. 6. In support of their motion, United Defendants
argued that agreements into which each Plaintiff had entered contained valid and binding
arbitration provisions, and that Plaintiffs’ claims fell directly within the scope of those
provisions. Id. Plaintiffs did not dispute that they entered into valid arbitration agreements, but
opposed United Defendants’ motion to compel on the basis that their claims did not bear a
reasonable relationship to the subject matter of the arbitration agreements and thus did not fall
within the scope of those agreements. Doc. 29 at 4-10; Doc. 30 at 3-10.
In a Memorandum Opinion and Order entered March 28, 2018, the Court granted United
Defendants’ motion to compel, explaining that, by incorporating the AAA Rules into the
arbitration provisions set forth in the relevant agreements, Plaintiffs and United Defendants
clearly and unmistakably agreed to arbitrate arbitrability. Doc. 46. Accordingly, the Court
further explained, all questions of arbitrability – including the questions Plaintiffs raised as to
whether their claims reasonably relate to the subject matter of the parties’ agreements to arbitrate
– must be resolved by an arbitrator. Id. Under controlling Tenth Circuit precedent, the Court
found that it had no discretion to decide whether Plaintiffs’ claims were outside the scope of the

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arbitration provisions in the relevant agreements, but rather was obligated to defer that
determination to the arbitrator. Id. Accordingly, the Court found no basis to deny United
Defendants’ motion compelling arbitration of Plaintiffs’ claims against it. Id. Neither United
Defendants nor Plaintiffs sought dismissal of Plaintiffs’ claims against United Defendants, and
accordingly, the Court did not entertain whether dismissal was warranted.
On November 18, 2018, PCG filed a motion to dismiss Plaintiffs’ claims against it
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doc. 7. In its supporting
brief, PCG argued that Plaintiffs’ claims against it should be dismissed because (1) the
Complaint failed to state a claim against PCG for intentional interference with contractual
relations; (2) Plaintiffs’ prima facie tort claim failed to allege that PCG acted lawfully and with
specific intent to harm Plaintiffs; and (3) Plaintiffs’ claim for civil conspiracy was not actionable.
Doc. 8. The Court agreed with PCG, and in a Memorandum Opinion and Order entered August
2, 2018 (the “August 2, 2018 Order”), granted PCG’s motion, dismissing Plaintiffs’ claims as to
PCG in their entirety. Doc. 47. The Court, however, did not enter a final judgment.
Thereafter, on August 30, 2018, Plaintiffs filed a Notice of Appeal to appeal this Court’s
dismissal of their claims against PCG. Doc. 48. After determining that the August 2, 2018
Order was not a final decision, Plaintiffs moved in the Tenth Circuit to dismiss, without
prejudice, their appeal. On October 2, 2018, the Tenth Circuit denied Plaintiffs’ motion without
prejudice to renewal, stating that the Court could not dismiss an appeal without prejudice.
Plaintiffs then filed the instant motion, asking this Court to certify its adjudication of
Plaintiffs’ claims against PCG as final pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure. Doc. 53. The Tenth Circuit abated Plaintiffs’ appeal pending this Court’s disposition
of Plaintiffs’ Rule 54(b) motion. PCG opposes Plaintiffs’ request for Rule 54(b) certification.

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STANDARD
Rule 54(b) provides in relevant part that, “[w]hen multiple parties are involved [in an
action], the court may direct entry of a final judgment as to one or more, but fewer than all, . . .
parties only if the court expressly determines that there is no just reason for delay.” Fed. R. Civ.
P. 54(b). “Certification under Rule 54(b) is a two-step process.” McKibben v. Chubb, 840 F.2d
1525, 1528 (10th Cir. 1988). First, the court “must determine that the judgment is final.” Id. In
other words, the judgment must be “an ultimate disposition of an individual claim entered in the
course of a multiple claims action.” Id. (citation omitted). Next, the court “must determine that
there is no cause for delay.” Id. In making this second determination, the court must weigh
“Rule 54’s policy of preventing piecemeal appeals against the hardship or injustice that might be
inflicted on a litigant because of the delay.” Id. (citation omitted). “The Supreme Court has
suggested that the district court should consider such factors as whether the claims under review
were separable from the others remaining to be adjudicated and whether the nature of the claims
already determined was such that no appellate court would have to decide the same issues more
than once even if there were subsequent appeals.” Id. (citation omitted). In entering a Rule
54(b) certification, district courts are counseled to “clearly articulate their reasons and make
careful statements based on the record supporting their determination of ‘finality’ and ‘no just
reason for delay.’” Stockton’s Water Co., LLC v. Vaca Partners, L.P., 425 F.3d 1263, 1265
(10th Cir. 2005).
DISCUSSION
Plaintiffs request that the Court certify its dismissal of Plaintiffs’ claims against PCG as
final pursuant to Rule 54(b). In support of their request, Plaintiffs argue that both relevant
factors, namely finality and just reason for delay, weigh in favor of certification. PCG opposes
Plaintiffs’ request, arguing that the factors weigh against certification and that the motion is
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untimely. As set forth herein, after carefully examining the factors relevant to certification, the
Court finds that Rule 54(b) certification is proper.
I.

Finality
For purposes of Rule 54(b), a judgment is final if it is “an ultimate disposition of an

individual claim entered in the course of a multiple claims action.” McKibben, 840 F.2d at 1528.
The August 2, 2018 Order dismissed Plaintiffs’ claims as to PCG in their entirety, and thus “fully
resolved all issues between” Plaintiffs and PCG. McKissick v. Gemstar-TV Guide Intern., Inc.,
No. 04-262, 2007 WL 2436299, at *4 (N.D. Okla. Aug. 22, 2007). Because PCG’s “rights and
liabilities in this action have been finally decided,” the August 2, 2018 Order was “an ultimate
disposition” of Plaintiffs’ claims against PCG, and “the finality requirement of Rule 54(b) has
been satisfied.” Id. Indeed, if the only claims in this action had been Plaintiffs’ claims against
PCG, the Court would have entered a final judgment dismissing the instant case based on its
August 2, 2018 Order. While PCG purports to contest the finality of the August 2, 2018 Order,
nowhere in its opposition does it dispute that the August 2, 2018 Order fully resolved all of
Plaintiffs’ claims against PCG. Accordingly, the Court determines that the August 2, 2018 Order
is final for purposes of Rule 54(b) certification.
II.

No Just Reason for Delay
Next, the Court must determine whether there is any just cause to delay entry of a final

judgment. In making this determination, the Court considers whether Plaintiffs’ claims against
PCG are “separable” from those against United Defendants, and whether “the nature of the
claims” against PCG “are such that no appellate court would have to decide the same issues more
than once even if there were subsequent appeals.” McKibben, 840 F.3d at 1528. According to
PCG, Plaintiffs’ claims against PCG are not separable from their claims against United
Defendants because the claims against all Defendants are identical and arise out of the same
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facts. PCG is correct that Plaintiffs alleged causes of action against both United Defendants and
PCG for tortious interference with contractual relations, prima facie tort, and civil conspiracy,
based on a common set of facts. PCG’s argument, however, misses the mark, because it ignores
the fact that the merits of Plaintiffs’ claims against United Defendants have been submitted to
arbitration for a decision by the arbitrator, while the merits of Plaintiffs’ claims against PCG
were decided by this Court.
As the Tenth Circuit has made clear, the “interrelationship of the claims” at issue is
scrutinized by the Court for the purpose of “prevent[ing] piecemeal appeals.” Id. at 1529. Here,
because Plaintiffs’ claims against United Defendants have been submitted to arbitration pursuant
to agreements to which PCG was not bound, while Plaintiffs’ claims against PCG were decided
on the merits by this Court, the Tenth Circuit would not be confronted with the same issues
twice, even if there were subsequent appeals in this case. Specifically, on Plaintiffs’ appeal of
this Court’s dismissal of its claims against PCG, the merits of those claims – namely, whether
Plaintiff has stated a claim upon which relief can be granted as to its claims of tortious
interference with contractual relations, prima facie tort, and civil conspiracy – will be squarely
before the Tenth Circuit. Further, the Tenth Circuit will apply a de novo standard in reviewing
this Court’s decision to dismiss Plaintiffs’ claims. Sacchi v. IHC Health Servs., Inc., No. 184027, 2019 WL 1349467, at *2 (10th Cir. Mar. 26, 2019).
In contrast, any potential appeal involving Plaintiffs’ claims against United Defendants
would be limited to the discrete and distinct issues of whether this Court properly compelled
arbitration and the propriety of the arbitrator’s decisions. “Judicial review of arbitration . . .
decisions is extremely limited; indeed, it has been described as ‘among the narrowest known to
law.’” Dominion Video Satellite, Inc. v. Echostar Satellite L.L.C., 430 F.3d 1269, 1275 (10th Cir.

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2005) (quoting Bowen v. Amoco Pipeline Co., 254 F.3d 925, 932 (10th Cir. 2001)). Specifically,
“review of an arbitration award is limited to those circumstances expressly provided in § 10 of
the Federal Arbitration Act . . . which circumstances concern the conduct of the arbitrator and the
circumstances under which the award [was] obtained, not the merits of the arbitrator’s decision.”
Fitigues, Inc., LRV v. Varat Enters., Inc., 813 F. Supp. 1336, 1338-39 (N.D. Ill. 1992); see also
Dominion Video, 430 F.3d at 1275 (“Under § 10 of the Federal Arbitration Act, a court may
vacate an arbitration award “in certain instances of fraud or corruption, arbitrator misconduct, or
‘where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual,
final, definite award upon the subject matter submitted was not made.’”) (quoting 9 U.S.C. §
10(a)(4)). Indeed, “[i]t has been the rule for some time that courts do not vacate an arbitration
award based on the merits of a party’s claim.” Hamel-Schwulst v. Country Place Mort. Ltd., 406
F. App’x 906, 914 (5th Cir. 2010) (citing United Paperworks Int’l Union v. Misco, Inc., 484 U.S.
29, 38-39 (1987) (“Courts . . . do not sit to hear claims of factual or legal error by an arbitrator as
an appellate court does in reviewing decisions of lower courts.”)).
In short, the issues that necessarily will be addressed by the Tenth Circuit on Plaintiffs’
appeal of this Court’s dismissal of their claims against PCG are wholly distinct from those that
would be addressed in the event of an appeal involving the arbitrator’s decisions regarding
Plaintiffs’ claims against United Defendants. Accordingly, the nature of the claims here is not
such that allowing Plaintiffs to immediately appeal the dismissal of their claims against PCG
would cause the Tenth Circuit to decide the same issues more than once. It follows that granting
certification does not run afoul of Rule 54(b)’s policy of preventing piecemeal appeals. There
thus is no cause for delaying entry of final judgment on Plaintiffs’ claims against PCG.

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On the other side of the scale, Plaintiffs have explained in detail how delaying final
judgment until resolution of their claims against United Defendants would result in significant
hardship to them. Specifically, they note that the arbitration process, including any appeals of
that process, could be timely, and that they are “behavioral health providers who have suffered
millions of dollars in damages,” “many of whom have been put out of business,” and that the
current litigation “has been pending for over two years now.” Doc. 58 at 6.
Because Plaintiffs’ claims against PCG are separable from their claims against United
Defendants, and because Plaintiffs have established that they would suffer hardship if final
judgment were delayed, the resulting equities weigh in favor of finality. Other courts have
reached a similar conclusion where, as here, some of the claims at issue had been submitted to
arbitration and others had been or remained to be resolved by the court. See 2002 Irrevocable
Trust for Hvizdak v. Shenzhen Devel. Bank, Co., No. 08-556, 2010 WL 11512370, at *2 (M.D.
Fl. Aug. 5, 2010) (granting motion to certify order granting summary judgment in favor of
defendant Shenzhen Development Bank (“SDB”) where SDB was not a party to contracts
between plaintiffs and defendant Foshan Poly Marine that obligated them to arbitrate their
dispute, and where a delay of the appeal could pose hardship by subjecting it to an unnecessary
delay); Haliburton Energy Servs. v. NL Indus., Nos. 05-4160, 06-3504, 2008 WL 2697345 at *7
(S.D. Tex. July 2, 2008) (finding that, because the defendants were not all parties to the
arbitration and because the issue on appeal of the arbitration award would be the propriety of
confirming the award and not the underlying merits of the parties’ claims, the claims pending
before the court did not “significantly overlap with the clams adjudicated in the arbitration” and
thus “[t]he relationship of the pending claims to the resolved claims weigh[ed] in favor of
granting certification under Rule 54(b)”); Forest Elec. Corp. v. HCB Contractors, Nos. 91-1732,

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91-5350, 1995 WL 429141, at *2 (E. D. Pa. July 20, 1995) (holding that the “unarbitrated
claims,” which were “not determined within the context of the arbitration,” were “distinct
matters that [did] not affect the ability of the Court of Appeals to determine whether to affirm or
reverse the confirmation of the Award,” and thus that Rule 54(b) certification was appropriate);
Fitigues, 813 F. Supp. at 1338-39 (finding that issue decided through arbitration and issue
remaining before court could not “be deemed a single claim for relief under Rule 54(b)”).
III.

Timeliness
PCG makes the additional argument that Plaintiffs’ motion for Rule 54(b) certification is

untimely. As PCG concedes, however, “Rule 54(b) does not provide a deadline or time by
which a party may seek an entry of final judgment.” Miami Tribe of Okla. v. United States, No.
03-2220, 2006 WL 3848949, at *4 (D. Kan. Dec. 29, 2006). In Miami Tribe, the district court
found that a motion for Rule 54(b) certification filed ten months after entry of the adjudication to
which it related was “too long of a delay,” which further justified its determination, based on the
two factors relevant to Rule 54(b), that the motion should be denied. Id. In contrast, here, even
according to PCG, Plaintiffs filed the instant motion approximately “70 days after the Court
entered its Order.” Doc. 56 at 6. The Court finds that Plaintiffs have provided a valid
explanation for their timeline, namely that “they inadvertently believed the judgment was final
due to the procedural nature of the case [and] the fact that the case had been [mistakenly]
closed,” and due to the fact that there were no remaining defendants to prosecute this lawsuit
against.” Doc. 58 at 4. In light of the fact that the relevant factors weigh in favor of finality and
against delay of final judgment, Plaintiffs’ filing of their motion approximately 70 days after
entry of the August 2, 2018 Order does not provide a sufficient basis to deny Rule 54(b)
certification.

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CONCLUSION
As set forth herein, the Court has considered the factors of finality and just cause for
delay and has “weighed the resulting equities in favor of finality.” McKibben, 840 F.2d at 1528.
IT IS THEREFORE ORDERED that Plaintiffs’ Motion for Rule 54(b) Certification
[Doc. 53] is GRANTED as follows: a final judgment will be entered dismissing this action as to
PCG.

DATED this 18th day of April 2019.

MARTHA VÁZQUEZ
United States District Judge

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