Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-04261/USCOURTS-ca8-05-04261-0/pdf.json

Parties Involved:
Arizant
Appellee
Associated Provider Services
Appellant
Augustine Medical
Appellee
Genesis Medical
Appellant
Innovative Medical Systems
Appellant
SC Medical
Appellant

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-4261 

___________

Innovative Medical Systems, Inc., *

a Missouri corporation; Genesis *

Medical, Inc., an Indiana *

corporation; SC Medical, LLC, *

a Louisiana corporation; Associated *

Provider Services, Inc., a Georgia *

corporation, *

*

Appellants, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

Augustine Medical, a subsidiary of *

Arizant, Inc., also known as AMI; * [UNPUBLISHED] 

Arizant, Inc., *

* 

Appellees. *

___________

Submitted: September 25, 2006

Filed: October 4, 2006

___________

Before ARNOLD, BYE, and MELLOY, Circuit Judges.

___________

PER CURIAM.

Innovative Medical Systems, Inc., Genesis Medical, Inc., SC Medical, LLC,

and Associated Provider Services, Inc. (collectively the distributors) appeal the denial

of their motion for relief from judgment brought under Fed. R. Civ. P. 60(b). The

Appellate Case: 05-4261 Page: 1 Date Filed: 10/04/2006 Entry ID: 2096139
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 The Honorable Michael J. Davis, United States District Judge, District of

Minnesota.

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district court1

 determined the distributors had not shown exceptional circumstances

warranting relief from judgment. We affirm.

Between 1997 and 2001, each of the distributors purchased the right to market

and distribute a medical device manufactured by Augustine Medical. After

Augustine pleaded guilty to federal fraud charges arising out of a Medicare

reimbursement scheme involving the device, the distributors filed this action alleging

Augustine violated provisions of the Racketeer Influenced and Corrupt Organizations

(RICO) Act, 18 U.S.C. §§ 1961-1968, by conspiring to defraud the distributors

through the reimbursement scheme.

The district court granted a motion for judgment on the pleadings brought by

Augustine, concluding the distributors failed to plead their RICO claims with the

particularity required by Fed. R. Civ. P. 9(b). In doing so, the district court rejected

the distributors’ contention that they could not plead their RICO claims with more

specificity because their records had been seized by the Federal Bureau of

Investigation (FBI) as part of its investigation against Augustine, stating: "As the

alleged misrepresentations were made to [the distributors], however, it stands to

reason that [the distributors] would be able to provide the specifics noted above."

J.A. at 157.

The distributors filed a motion for relief under Rule 60(b), as well as a motion

to amend the complaint by adding factual allegations they concede were derived from

the criminal indictment against Augustine or the subsequent plea agreements. The

district court denied the motion because the distributors did not specify under which

prong of Rule 60(b) they sought relief, or explain why they failed to "to plead

information that has been within [their] knowledge at all times." Id. at 277. The

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district court determined the distributors had "not plead[ed] any exceptional

circumstances sufficient to trigger the extreme relief that Rule 60(b) provides." Id.

The distributors filed a timely appeal.

The only issue properly before us is whether the distributors presented

evidence of exceptional circumstances such that the district court's denial of Rule

60(b) relief constituted an abuse of discretion, because "[a]n appeal from the denial

of a Rule 60(b) motion does not raise the underlying judgment for our review but only

the question of whether the district court abused its discretion in ruling on the Rule

60(b) motion." Noah v. Bond Cold Storage, 408 F.3d 1043, 1045 (8th Cir. 2005).

"We will find an abuse of discretion only when the district court's judgment was

based on clearly erroneous fact-findings or erroneous conclusions of law." Id.

The record shows the distributors sought to reopen the district court's judgment

by repleading their fraud claims to include information available to them prior to the

filing of their federal lawsuit. Under these circumstances, the district court did not

abuse its discretion in determining the distributors had not demonstrated the

exceptional circumstances requisite to reopening a judgment under Rule 60(b).

Accordingly, we affirm the district court’s judgment.

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Appellate Case: 05-4261 Page: 3 Date Filed: 10/04/2006 Entry ID: 2096139