Connecticut General Life Insurance Co. v. BioHealth Laboratories, Inc., No. 20-2312 (2d Cir. 2021)Annotate this Case
Plaintiffs filed suit against several laboratory testing companies, alleging that the companies violated federal and Connecticut law by submitting fraudulent or overstated claims for medical services purportedly provided to plaintiffs' plan members. The district court dismissed the complaint with prejudice after concluding that plaintiffs' claims are time-barred by Connecticut’s three-year statute of limitations applicable to tort claims.
The Second Circuit found, under Connecticut law, that 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. Therefore, the court vacated the district court's decision in part. However, the court nonetheless affirmed the district court's dismissal of the state law 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. The court explained that, although plaintiffs note that several 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, subject only to state law tolling rules, and provide no relief for plaintiffs.