MSP Recovery Dodged Ruling on What Attorneys Called Its Go-To Litigation Tactic
(l-r) Third DCA Chief Judge Ivan F. Fernandez, and Judges Bronwyn C. Miller and Alexander S. Bokor (Courtesy photos)
"Litigation should work as follows: sue first, discover second. MSP has a business model of discover first, sue second. That business model is no longer tenable in Florida," William Large, president of the Florida Justice Reform Institute, argued.
What You Need to Know
• An appellate court in Florida ruled against appellant on jurisdictional grounds.
• The appellate court avoided ruling on whether appellant correctly stated a cause of action for a pure bill of discovery.
Florida’s Third District Court of Appeal delivered a blow against a subsidiary of a public company in a Medicare reimbursement case that some attorneys said also revealed cracks in its multibillion-dollar business model.
William Large, the Florida Justice Reform Institute president, filed an amicus brief in support of defendant, Coloplast Corp., taking a position adverse to plaintiffs, including MSP Recovery Claims Series LLC. The Third DCA affirmed Miami-Dade Circuit Judge Mark Blumstein’s ruling to dismiss MSP’s second amended complaint and incorporated memorandum of law with prejudice.
And Large said the personal-jurisdiction ruling “was more of a threshold issue,” rather than whether the complaint correctly stated a cause of action for a pure bill of discovery.
Still, since the lower court ruling denied plaintiffs’ entitlement to a pure bill of discovery, that could be bad news for MSP, as attorneys claimed that the company heavily relied on that litigation tactic to win cases.
“While the Third DCA didn’t create precedent on the point, the trial court’s ruling still helps, and will likely be used as persuasive authority in future attempts to use a pure bill of discovery,” Large said in a statement. “Litigation should work as follows: Sue first, discover second. MSP has a business model of discover first, sue second. That business model is no longer tenable in Florida.”
‘Exclusive and Novel Case Approach’
However, Janpaul Portal, of counsel at the MSP Recovery Law Firm who represented MSP, said the Third DCA in Coloplast agreed, in part, with their position that the lower court exceeded its authority on the issue before it, by ruling on the pleading requirements to maintain a pure bill of discovery in this case.
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“While other issues revolving around jurisdiction are fact-specific to the defendants in the case, MSP established the necessary substantive elements of a pure bill complaint,” Portal said. “MSP’s exclusive and novel case approach of employing proprietary data analytics, continues to be successful. By harnessing this technology, we will continue to pursue just results for our clients and accountability by responsible parties.”
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The underlying case involved pelvic surgical mesh products that Coloplast designed, manufactured, and sold, which caused several Floridians to sustain personal injuries, according to court documents.
Meanwhile, MSP’s assignors are Medicare Advantage organizations and related Medicare entities that provided comprehensive healthcare coverage for their Medicare beneficiaries in the Sunshine State, per court documents. Medicare paid for medical care and treatment that the Florida enrollees received to treat injuries resulting from these mesh products.
When MSP filed its second amended complaint for a pure bill of discovery against Coloplast in which plaintiff sought reimbursement of the claims paid by Medicare, defendant successfully moved to dismiss based upon two claims. These claims were that the trial court lacked personal jurisdiction and that MSP was not entitled to a pure bill of discovery.
On appeal, MSP argued that the trial court had personal jurisdiction over Coloplast based on three provisions of the Florida long-arm statute: “section 48.193(1)(a)(6), Coloplast caused personal injury; section 48.193(1)(a)(2), Coloplast committed torts; and section 48.193(1)(a)(1), Coloplast engaged in a business or business venture.”
Now, MSP struck out on all three arguments before Third DCA Chief Judge Ivan F. Fernandez, and his colleagues on the bench, Judges Bronwyn C. Miller and Alexander S. Bokor.
The Third District Court of Appeal
Among the reasons the Third DCA provided was that “this case is a Medicare reimbursement case, not a personal injury action.”
The Third DCA found that MSP’s cause of action did not substantively connect to the personal injury suffered by Florida residents.
As a result, the appellate court concluded that the economic damages suffered by plaintiff did not fall within Florida’s long-arm statute.
And the Third DCA applied the same analysis to plaintiffs’ claim of torts that justified application of Florida’s long-arm statute, by concluding that Coloplast did not commit any torts against Medicare individually. Finally, MSP itself failed to provide any facts supporting its argument that personal jurisdiction over Coloplast was warranted based upon it engaging in a business in the Sunshine State, the panel found.
Meanwhile, the Third DCA avoided the circuit court ruling that MSP failed to state a cause of action. Still, Williams, the Florida Justice Reform president—joined in the amicus by the U.S. Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America—said in a brief that courts have lost patience with the alleged tactic.
Williams argued that MSP failed to abide by basic pre-filing diligence and pleading requirements necessary to substantiate the pure bill of discovery “for strategic business reasons,” which could limit future investor returns, if judges limit the tactic to its original intention, for “exceptional purposes.”
“This lawsuit mirrors scores like it filed in federal courts throughout the country that have all the earmarks of abusive litigation and indeed have drawn intense criticism from many a federal judge,” the U.S. Seventh Circuit Court of Appeals previously ruled against MSP, as cited in the brief. “The plaintiffs should think hard before risking a third strike within our circuit.”