Court Opinion

ID: 4659110
Source: CourtListenerOpinion
Date Created: 2021-02-10 16:00:21.883589+00
Date Added: 2024-06-11T08:01:57.508742
License: Public Domain

20-2312-cv
Conn. Gen. Life Ins. Co. v. BioHealth Labs., Inc.

                          United States Court of Appeals
                             For the Second Circuit

                                             August Term 2020

                                      Argued: February 1, 2021
                                      Decided: February 10, 2021

                                                No. 20-2312-cv

                             CONNECTICUT GENERAL LIFE INSURANCE
                              COMPANY, CIGNA HEALTH AND LIFE
                                   INSURANCE COMPANY,

                                            Plaintiffs-Appellants,

                                                      v.

                               BIOHEALTH LABORATORIES, INC., PB
                            LABORATORIES, LLC, EPIC REFERENCE LABS,
                               INC., EPINEX DIAGNOSTICS, INC., NJ
                            REFERENCE LABORATORIES, INC., ALETHEA
                                       LABORATORIES, INC.,

                                            Defendants-Appellees.

                          Appeal from the United States District Court
                                for the District of Connecticut
                             No. 19-cv-1324, Janet C. Hall, Judge.
          Before:        JACOBS, SULLIVAN, Circuit Judges, and BROWN, District Judge. *

       Plaintiffs – managers of various employee health and wellness plans – sued
several laboratory testing companies, alleging that those companies violated
federal and Connecticut law by submitting fraudulent or overstated claims for
medical services purportedly provided to Plaintiffs’ plan members. The district
court (Hall, J.) dismissed the complaint with prejudice, concluding that all of
Plaintiffs’ claims were time-barred by Connecticut’s three-year statute of
limitations applicable to tort claims.
       We vacate that decision in part, finding that under Connecticut law
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. We
nevertheless affirm the district court’s dismissal of Plaintiffs’ state-law legal
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. Although Plaintiffs note that several of our 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 and so
are subject only to state-law tolling rules, which provide no relief for Plaintiffs.

          VACATED IN PART, AFFIRMED IN PART, AND REMANDED.

                                              EDWARD T. KANG (Emily S. Costin, on the
                                              brief), Alston & Bird LLP, Washington, DC, for
                                              Plaintiffs-Appellants.

                                              SCOTT M. HARE (Todd M. Brooks, Whiteford,
                                              Taylor & Preston LLP, Baltimore, MD, on the
                                              brief), Whiteford, Taylor & Preston LLP,
                                              Pittsburgh, PA, for Defendants-Appellees.

*   Judge Gary R. Brown, District Judge for the Eastern District of New York, sitting by designation.

                                                   2
RICHARD J. SULLIVAN, Circuit Judge:

      Plaintiffs Connecticut General Life Insurance Company and Cigna Health

and Life Insurance Company (together, “Cigna”) appeal the judgment of the

district court (Hall, J.) dismissing their claims against several laboratory testing

companies (the “Labs”) as time-barred under Federal Rule of Civil

Procedure 12(b)(6).    Cigna’s complaint, which asserts various federal and

Connecticut state-law claims, alleges that the Labs submitted fraudulent or

overstated charges for medical testing services that the Labs purportedly provided

to patients covered by benefits plans overseen by Cigna.

      On appeal, we are confronted with three issues. First, we must determine

what state-law claim is most analogous to Cigna’s claims under the Employee

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., and the

Declaratory Judgment Act, 28 U.S.C. § 2201, since those federal claims lack their

own statutory limitations period.      Second, we must decide whether, under

Connecticut law, equitable claims are subject to the same statute of limitations that

governs analogous legal claims that were asserted based on the same facts. Third,

we must resolve whether the limitations period applicable to Cigna’s claims was

tolled during the pendency of a prior federal action between the parties since

                                         3
Cigna argues that its current claims were all compulsory counterclaims in that

prior case.

                                        I.    Background

       Cigna is a managed-care company that insures and administers

employee health and welfare benefit plans. 1 In that role, Cigna serves as claims

administrator, meaning that it exercises discretionary authority and fiduciary

responsibility over the administration of those plans.                         One of Cigna’s

responsibilities is to control the cost of healthcare for its members. To do so, Cigna

enters into agreements with certain healthcare providers that establish fixed rates

for those providers’ services. While Cigna permits its plan members to use

providers that do not enter into these agreements – so-called “out-of-network

providers” – plan members are required to pay a higher percentage of the charges

from out-of-network providers. In this way, Cigna sensitizes its plan members to

cost control issues and gives them a financial incentive to seek out cost-effective

services.

1Because this appeal arrives before us at the pleading stage, we draw these facts from Cigna’s
complaint and accept them to be true. See Iowa Pub. Emps.’ Ret. Sys. v. MF Glob., Ltd., 620 F.3d 137,
139 n.1 (2d Cir. 2010).

                                                 4
      The defendant Labs in this case are various laboratory testing companies

that are all wholly owned by the same parent company. The Labs are out-of-

network providers under Cigna’s plans.

      Cigna’s anti-fraud unit became aware that some of the Labs were engaged

in a potentially fraudulent billing scheme and opened an investigation. That

investigation, which was completed sometime before August 17, 2015, uncovered

three types of fraudulent or improper conduct:         fee forgiveness, billing for

unnecessary testing, and unbundling.

      Fee forgiveness occurs when an out-of-network healthcare provider does

not bill a patient for the portion of its services not covered by the patient’s

insurance company. While this might sound like a good outcome for patients –

after all, it means that they receive medical services more cheaply – it causes

problems by removing the financial incentive for patients to visit in-network

providers. In other words, fee forgiveness benefits patients in the short term, but

ultimately may result in increased plan costs as insurers pay more for services.

Billing for medically unnecessary testing is just what it sounds like and is largely

self-explanatory. “Unbundling,” however, is the practice of healthcare providers

                                         5
separately billing for individual services that should otherwise be billed together

at a reduced price.

      In light of its investigation, Cigna determined that the Labs had improperly

collected over $17 million in fraudulent or overbilled charges.           To prevent

additional losses, Cigna began to flag and deny outstanding charges from the Labs

that Cigna had yet to pay.

      In August 2015, two of the Labs sued Cigna in federal court in the Southern

District of Florida, alleging that Cigna improperly denied, delayed processing, or

failed to process claims for certain testing services (the “Florida Action”). See

generally Complaint, BioHealth Med. Lab’y, Inc. v. Conn. Gen. Life Ins. Co., No. 15-cv-

23075 (KMM) (S.D. Fla. Aug. 17, 2015), ECF No. 1. Six months later, the district

court dismissed the complaint without prejudice for, among other reasons, failure

to exhaust available administrative remedies. See generally BioHealth Med. Lab’y,

Inc. v. Conn. Gen. Life Ins. Co., No. 15-cv-23075 (KMM), 2016 WL 375012 (S.D. Fla.

Feb. 1, 2016). The Eleventh Circuit later vacated portions of that order, but left

intact the district court’s decision to dismiss the complaint on exhaustion grounds.

See generally BioHealth Med. Lab’y, Inc. v. Cigna Health & Life Ins. Co., 706 F. App’x

                                          6
521 (11th Cir. 2017). The Labs never filed an amended complaint following that

decision, effectively ending the Florida Action.

      In August 2019, approximately two years after the Eleventh Circuit affirmed

the district court’s decision to dismiss the Labs’ complaint, Cigna filed the instant

action in Connecticut federal court. Cigna asserted a variety of Connecticut state-

law and federal claims, seeking to recover the allegedly fraudulent or overbilled

charges it paid to the Labs. According to Cigna, all these claims were compulsory

counterclaims in the Florida Action, but, because that case was dismissed at the

pleading stage, Cigna never interposed them.

      In June 2020, the Connecticut district court dismissed Cigna’s complaint

with prejudice and entered judgment in favor of the Labs, finding that all of

Cigna’s claims were time-barred under Connecticut’s three-year statute of

limitations applicable to tort claims. Cigna timely appealed that decision.

                              II.   Standard of Review

      We review a district court’s decision to dismiss a complaint under

Rule 12(b)(6) de novo. See Yamashita v. Scholastic Inc., 936 F.3d 98, 103 (2d Cir. 2019),

cert. denied, 140 S. Ct. 2670 (2020). In doing so, we “accept[] all of the complaint’s

factual allegations as true and draw[] all reasonable inferences in [Cigna’s] favor.”

                                           7
Id. (internal quotation marks omitted). “Although the statute of limitations is

ordinarily an affirmative defense that must be raised in the answer, a statute of

limitations defense may be decided on a Rule 12(b)(6) motion if the defense

appears on the face of the complaint.” Thea v. Kleinhandler, 807 F.3d 492, 501 (2d

Cir. 2015) (internal quotation marks omitted); see also Sewell v. Bernardin, 795 F.3d

338, 339 (2d Cir. 2015) (same).

                                  III.   Discussion

      Cigna’s complaint includes various state and federal claims against the

Labs, which can be organized into three different groups for time-bar purposes.

First, Cigna brings a handful of state-law tort claims, specifically, fraud, negligent

misrepresentation, conversion, and civil statutory theft (collectively, the “Legal

Claims”). Second, Cigna asserts a state-law unjust enrichment claim, which, under

Connecticut law, is based in equity. See Reclaimant Corp. v. Deutsch, 211 A.3d 976,

982–83, 990 (Conn. 2019). Third, Cigna brings federal law claims under ERISA

§ 502(a)(3), which is codified at 29 U.S.C. § 1132(a)(3), and the Declaratory

Judgment Act, 28 U.S.C. § 2201.

      Connecticut has a three-year statute of limitations that covers all tort claims.

See Conn. Gen. Stat. § 52-577. Because Cigna admittedly filed its complaint more

                                          8
than three years after the date on which it alleges to have discovered the Labs’

wrongful conduct, any claims subject to that limitations period would appear to

be untimely. 2 While the parties agree that this three-year limitations period

applies to Cigna’s Legal Claims, that’s where their agreement ends.

       The Labs take the position that this three-year limitations period is also

applicable to Cigna’s unjust enrichment and federal claims because those claims

are based on the same factual allegations as Cigna’s Legal Claims. Cigna counters

that its unjust enrichment and federal claims are based in equity and, as a result,

are exempt from statutory limitations periods altogether.                     Separately, Cigna

asserts that its claims in this case were all compulsory counterclaims in the Florida

Action and that, under federal law, any applicable limitations periods were

therefore tolled while Cigna’s motion to dismiss the Florida Action was pending

in the district court and on appeal.

2 Connecticut’s statute of limitations begins to run from when the tort occurred, not when it was
discovered. See Piteo v. Gottier, 963 A.2d 83, 86 (Conn. App. Ct. 2009). Although only the date of
the latter is identified on the face of Cigna’s complaint, even that date is more than three years
before the complaint was filed in this case. Relatedly, it bears noting that because this limitations
period runs from the occurrence of the tort in question, it functions more like a statute of repose
than a statute of limitations. See Barrett v. Montesano, 849 A.2d 839, 845 (Conn. 2004); Farnsworth
v. O’Doherty, 856 A.2d 518, 520 (Conn. App. Ct. 2004). But since Connecticut courts often use
those terms interchangeably, Barrett, 849 A.2d at 845–46, we have adopted the “statute of
limitations” label as that is what the parties and district court have used.

                                                 9
       We address each argument in turn. But, before doing so, we must first

determine what limitations rules apply to Cigna’s federal claims.

A.     Time-Bar Rules Applicable to Cigna’s Federal Claims

       Federal law supplies no limitations period for either Cigna’s ERISA

§ 502(a)(3) claim or Declaratory Judgment Act claim. 3 See Miles v. N.Y. Teamsters

Conf. Pension & Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir. 1983);

118 E. 60th Owners, Inc. v. Bonner Props., Inc., 677 F.2d 200, 202 (2d Cir. 1982). In

this case, those claims adopt the limitations period of the Connecticut state-law

cause of action to which they are most analogous. Sandberg v. KPMG Peat Marwick,

L.L.P., 111 F.3d 331, 333 (2d Cir. 1997); 118 E. 60th Owners, 677 F.2d at 202. This

adopted limitations period also ordinarily incorporates the state-law rules for

applying the statute of limitations, such as rules of tolling. See Bd. of Regents of

Univ. of N.Y. v. Tomanio, 446 U.S. 478, 485 (1980) (explaining that state tolling rules

govern “except when inconsistent with the federal policy underlying the cause of

action under consideration” (internal quotation marks omitted)); cf. Muto v. CBS

Corp., 668 F.3d 53, 59 (2d Cir. 2012) (acknowledging that Congress’s “silence on

3Of course, ERISA does provide a limitations period for breach of fiduciary duty claims. See
Frommert v. Conkright, 433 F.3d 254, 272–73 (2d Cir. 2006); see also 29 U.S.C. § 1113. But the Labs
are not fiduciaries to Cigna and, as a result, Cigna is not seeking to rectify a breach of such a duty.

                                                  10
limitations under § 1132 . . . permitted (and perhaps even invited) the judicial

development of various state-law based limitations periods for these actions”).

      In a nutshell, both of Cigna’s federal claims assert that the Labs received

reimbursement for testing services in contravention of the governing benefit plans

and seek to recover those overpayments. Based on the complaint and the parties’

briefing, we agree with Cigna that these claims most closely resemble a

Connecticut unjust enrichment claim.

      Although the presence of an express contract ordinarily requires a plaintiff

to bring a claim for breach of contract, not unjust enrichment, see Meaney v. Conn.

Hosp. Ass’n, Inc., 735 A.2d 813, 823 (Conn. 1999), there is an exception where the

contract “does not fully address [the] subject” of the claim in question, Town of

New Hartford v. Conn. Res. Recovery Auth., 970 A.2d 592, 612 (Conn. 2009) (internal

quotation marks omitted). In addition, an express contract must be “between the

parties” to the litigation to preclude an unjust enrichment claim. Town of New

Hartford, 970 A.2d at 611 (quoting Meaney, 735 A.2d at 823). Here, not only is there

no indication that the benefit plans at issue address what happens when a testing

vendor receives payment for services not covered by the plans’ terms, but the Labs

are “out-of-network” providers, J. App’x at 19, so it is not necessarily the case that

                                         11
they have entered into contracts with Cigna.

      Separately, although Cigna’s allegations suggest that the Labs’ conduct was

fraudulent, we agree with Cigna that its federal claims do not resemble a state-law

fraud action. While a showing that the Labs engaged in fraud would no doubt be

sufficient to prove Cigna’s ERISA claim, it is by no means necessary. See Laurent

v. PricewaterhouseCoopers LLP, 945 F.3d 739, 748 (2d Cir. 2019) (holding that ERISA

§ 502(a)(3) “authorizes district courts to grant equitable relief . . . even in the

absence of . . . fraud”). In other words, Cigna need not prove that the Labs’

submissions were fraudulent to be entitled to relief under ERISA or to win a

declaratory judgment that the governing plans prohibited the Labs from being

reimbursed for the services in question.

      Accordingly, we agree with Cigna that its federal claims are most analogous

to a state-law unjust enrichment claim. Indeed, other courts have reached the same

conclusion on similar facts. See, e.g., N. Cypress Med. Ctr. Operating Co. v. Cigna

Healthcare, 781 F.3d 182, 204–05 (5th Cir. 2015); Conn. Gen. Life Ins. Co. v. Elite Ctr.

for Minimally Invasive Surgery LLC, No. 16-cv-571 (KPE), 2017 WL 607130, at *9 (S.D.

Tex. Feb. 15, 2017), as amended, 2017 WL 1807681 (S.D. Tex. May 5, 2017). As a

result, Cigna’s federal claims are subject to the same limitations rules as its

                                           12
equitable claim for unjust enrichment.         We therefore refer to these claims

collectively as the “Equitable Claims.”

B.    Cigna’s Equitable Claims Are Subject to No Statutory Limitations Period
      Under Connecticut Law

      Ordinarily, equitable claims, like those for unjust enrichment, are exempt

from statutory limitations periods under Connecticut law and are instead subject

only to the equitable doctrine of laches. See Reclaimant, 211 A.3d at 990; Rossman

v. Morasco, 974 A.2d 1, 17 (Conn. App. Ct. 2009). And because laches turns on

factual issues, it is ordinarily not a proper defense at the pleading stage. See

Reclaimant, 211 A.3d at 991; see also Lynwood Place, LLC v. Sandy Hook Hydro, LLC,

92 A.3d 996, 1002 (Conn. App. Ct. 2014). The district court disregarded this general

rule, however, and concluded that Cigna’s Equitable Claims are governed by the

same limitations period applicable to its Legal Claims because all of Cigna’s claims

are premised on the same factual allegations.

      The district court’s reasoning was primarily driven by the Connecticut

Supreme Court’s decision in Certain Underwriters at Lloyd’s, London v. Cooperman,

in which the Supreme Court held that the plaintiff’s equitable claims were subject

to dismissal on time-bar grounds because they were “based on the same facts” as

other untimely legal claims. 957 A.2d 836, 852 (Conn. 2008). Both the district court

                                          13
and the Labs interpret Certain Underwriters as standing for the proposition that an

equitable claim is automatically time-barred if it is premised on allegations that

could also support a legal claim that is itself untimely. While that may be a fair

reading of Certain Underwriters in a vacuum, the Connecticut Supreme Court has

since rejected that interpretation in Reclaimant, 211 A.3d at 990–91.

       Specifically, Reclaimant held that equitable claims are “not subject to a

statute of limitations” and are instead governed only by “the equitable doctrine of

laches.”    Id. at 990.     The court went on to cite Certain Underwriters for the

proposition that courts in equitable proceedings may – not must – “look by analogy

to the statute of limitations to determine whether, in the interest of justice, a

particular [equitable] action should be heard.” Id. at 991 (internal quotation marks

omitted) (citing Certain Underwriters, 957 A.3d at 852). 4 Reclaimant therefore recast

Certain Underwriters as having turned on a prudential rule designed to aid courts

in applying the doctrine of laches.             Indeed, by not considering whether the

allegations underlying the plaintiff’s equitable claim could have also supported a

4 Reclaimant did not limit this proposition merely to cases addressing only equitable claims.
Rather, the proposition applies to any individual equitable claim, regardless of whether the
plaintiff also brings legal claims in the same suit. Indeed, as the court further observed, “when
the plaintiff’s claim sounds only in equity, not in law or in both law and equity[,] the plaintiff’s
claim is not subject to any statute of limitations.” Reclaimant, 211 A.3d at 990 (emphasis added)
(internal alterations and quotation marks omitted).

                                                14
legal claim, the Reclaimant court implicitly confirmed that Certain Underwriters

should not be read to announce a categorical rule that equitable claims are subject

to the limitations periods applicable to analogous legal claims. 5

       Consequently, Cigna’s Equitable Claims are subject only to the doctrine of

laches, and the district court thus erred by dismissing them as automatically

barred by the three-year statute of limitations for tort claims. On remand, then,

the district court should deny the Labs’ motion to dismiss with respect to Cigna’s

Equitable Claims unless the district court concludes that a meritorious laches

defense is available from the face of Cigna’s complaint. In making that assessment,

the district court may consider the limitations period applicable to Cigna’s

analogous legal claims, but it should treat that period as simply one non-

dispositive factor among many relevant to its ultimate decision.

5 Of course, as indicated above, certain causes of action permit both legal and equitable remedies,
in which case the applicable statutory limitations period would seem to apply across the board
no matter the remedy sought. See Certain Underwriters, 957 A.2d at 850 (noting that “[w]here a
party seeks equitable relief pursuant to a cause of action that also would allow that party to seek
legal relief, concurrent legal and equitable jurisdiction exists, and the statute of limitations that
would be applicable to bar the legal claim also applies to bar the equitable claim” (quoting
Dowling v. Finley Assocs., Inc., 714 A.2d 694, 697 (Conn. App. Ct. 1998), rev’d on other grounds, 727
A.2d 1245 (1999))). For example, a breach of contract claim seeking specific performance is based
in equity, see Hill v. Rafone, 930 A.2d 788, 791–92 (Conn. App. Ct. 2007), but would likely still be
subject to the statutory limitations period governing breach of contract claims – which is six years,
see Conn. Gen. Stat. § 52-576 – because the cause of action can supply either a legal or equitable
remedy. By contrast, unjust enrichment under Connecticut law is a purely equitable claim. See
Reclaimant, 211 A.3d at 982–83, 990.

                                                 15
C.    The Florida Action Did Not Toll the Limitations Period Applicable to
      Cigna’s Legal Claims

      Having concluded that the district court erred by dismissing Cigna’s

Equitable Claims, that leaves only Cigna’s Legal Claims. Although those claims

would appear to be barred by the applicable three-year limitations period, Cigna

argues that this statutory clock was tolled while its motion to dismiss the Florida

Action was pending in the district court and on appeal.

      Cigna premises its position on the rule, adopted by several of our sister

circuits, that “the institution of [a] suit tolls or suspends the running of the statute

of limitations governing a compulsory counterclaim.” 6 Charles Alan Wright &

Arthur R. Miller, Federal Practice & Procedure § 1419 (3d ed. 1998) (hereinafter,

“Wright & Miller”); see, e.g., N. Cnty. Commc’ns Corp. v. Sprint Commc’ns Co., 691 F.

App’x 466, 467–68 (9th Cir. 2017); Emps. Ins. of Wausau v. United States, 764 F.2d

1572, 1576 (Fed. Cir. 1985); Burlington Indus., Inc. v. Milliken & Co., 690 F.2d 380, 389

(4th Cir. 1982); Hartford v. Gibbons & Reed Co., 617 F.2d 567, 570 (10th Cir. 1980).

The foundation for this rule is somewhat uncertain. Indeed, as Cigna admits, it

cannot be found in the text of Federal Rule of Civil Procedure 13(a), which governs

compulsory counterclaims. See Fed. R. Civ. P. 13(a); see also Fed. Deposit Ins. Corp.

v. Palermo, 815 F.2d 1329, 1340 (10th Cir. 1987) (explaining that Rule 13(a) “reflects

                                           16
no federal policy” on the tolling of counterclaims); Wright & Miller § 1419 (noting

that “[t]he text of Rule 13(a) itself does not offer any solution to the problem of

whether the institution of an action tolls the running of the limitations period on

compulsory counterclaims or reflect any federal policy on the question”). Instead,

courts appear to have crafted the rule as a matter of federal common law,

presenting it as sound policy and necessary to prohibit clever litigation strategies

aimed at denying defendants the chance to assert valid counterclaims. 6 See Wright

& Miller § 1419. Moreover, a plaintiff can hardly be said to suffer prejudice from

such tolling in these circumstances, “since [she] presumably has notice at the time

the action is commenced of any counterclaim arising out of the same transaction

as the main claim.” Id.

          We ultimately need not decide whether to adopt this rule, however, because

even if we did, it would make no difference here. 7 Cigna’s Legal Claims are all

6   Plainly, no such concerns are present here.
7 It is unclear whether the tolling rule of our sister circuits extends to affirmative claims that are
filed in a separate lawsuit and that would have been compulsory counterclaims in a prior action
if not for pre-answer dismissal, which presents another impediment to Cigna’s argument. See J.
App’x at 114 (noting that “there are no counterclaims before the Court” as “Cigna has brought
affirmative claims, in a separate lawsuit, against the Labs, not counterclaims in the previous suit
in Florida” (internal quotation marks omitted)). Moreover, even if such tolling were available
here, only two of the Labs were parties to the Florida Action, meaning that tolling would likely
be limited to those two defendants.

                                                  17
brought under state law, which means that the timeliness of those claims is also a

matter of state law. See Guar. Tr. Co. of N.Y. v. York, 326 U.S. 99, 110 (1945); Casey

v. Merck & Co., 653 F.3d 95, 99–100 (2d Cir. 2011); Personis v. Oiler, 889 F.2d 424, 426

(2d Cir. 1989). The Florida Action therefore tolled the limitations period applicable

to Cigna’s Legal Claims only if Connecticut law would provide for such tolling –

federal law on the subject is irrelevant.

       Indeed, even the circuits that have adopted this federal tolling rule have, by

and large, recognized that it does not displace state tolling law. For instance, the

Fourth, Ninth, and Tenth Circuits all tolled the limitations period applicable to

state-law counterclaims only after concluding that such tolling was consistent with

the applicable state law. See N. Cnty. Commc’ns, 691 F. App’x at 467 (citing Trindade

v. Super. Ct., 29 Cal. Rptr. 48, 49–50 (Cal. Ct. App. 1973)); Kirkpatrick v. Lenoir Cnty.

Bd. of Educ., 216 F.3d 380, 388 n.8 (4th Cir. 2000) (discussing North Carolina law) 8;

Palermo, 815 F.2d at 1340 (relying on Oklahoma state tolling rules because

“Fed.R.Civ.P. 13(a) . . . reflects no federal policy on this issue”); Hartford, 617 F.2d

8Although Kirkpatrick concerned the federal Individuals with Disabilities Education Act (the
“IDEA”), until 2005, the IDEA had no limitations period of its own. See Somoza v. N.Y.C. Dep’t of
Educ., 538 F.3d 106, 114 n.7 (2d Cir. 2008). So, for cases brought before that date, the IDEA
borrowed the limitations period from analogous state provisions. See M.D. v. Southington Bd. of
Educ., 334 F.3d 217, 221–23 (2d Cir. 2003).

                                               18
at 569–70 (looking to New Mexico law). Likewise, the D.C. Circuit has explained

that although “there is considerable law (and sensible policy)” on the side of this

federal rule, the question is ultimately left to state law where state-law claims are

involved. Hartford Acc. & Indem. Co. v. Pro-Football, Inc., 127 F.3d 1111, 1118 (D.C.

Cir. 1997).

      Nearly all of Cigna’s supporting precedent is distinguishable on this basis,

as they concern federal claims. See Emps. Ins. of Wausau, 764 F.2d at 1576 (federal

contract); Burlington Indus., 690 F.2d at 389 (antitrust); Oracle Am., Inc. v. Terix

Comput. Co., No. 13-cv-3385 (PSG), 2014 WL 5847532, at *6–7 (N.D. Cal. Nov. 7,

2014) (same); Seitz v. Beeter, No. 11-c-4803 (JHL), 2013 WL 409428, at *1–2 (N.D. Ill.

Jan. 31, 2013) (Federal Wire Tap Act and Stored Communications Act); Silva Run

Worldwide Ltd. v. Gaming Lottery Corp., No. 96-cv-3231 (RPP), 2003 WL 22358805, at

*1 (S.D.N.Y. Oct. 15, 2003) (RICO); Aramony v. United Way of Am., 969 F. Supp. 226,

231 (S.D.N.Y. 1997) (same); UST Cap. Corp. v. Charter Nat’l Life Ins. Co., 684 F. Supp.

757, 758–59 (D. Mass. 1986) (same). And those that do concern state claims (or

federal claims that borrow state limitations periods) simply fail to address this

issue. See Giordano v. Claudio, 714 F. Supp. 2d 508, 522 (E.D. Pa. 2010); Yates v.

Washoe Cnty. Sch. Dist., No. 08-cv-200 (LRH), 2007 WL 3256576, at *2 (D. Nev. Oct.

                                          19
31, 2007); Andre v. Schenectady County, No. 95-cv-573, 1997 WL 135910, at *2

(N.D.N.Y. Mar. 13, 1997).

      To dodge the conclusion that state law governs this issue, Cigna attempts to

draw a distinction between cases where the state-law claims are before the federal

court purely as a matter of diversity jurisdiction and cases, like this one, where the

state-law claims are before the federal court alongside federal claims as a matter

of supplemental jurisdiction. But this distinction finds no support in law. After

all, it is beyond cavil that federal courts apply state limitations rules to state-law

claims regardless of the jurisdictional circumstances. See, e.g., Kroshnyi v. U.S. Pack

Courier Servs., Inc., 771 F.3d 93, 102–03 (2d Cir. 2014) (applying a state statute of

limitations to state-law claims over which the court had supplemental

jurisdiction); Castagna v. Luceno, 744 F.3d 254, 256–59 (2d Cir. 2014) (same). Cigna’s

proposed distinction is therefore baseless.

      As a result, whether the Florida Action tolled the limitations period

applicable to Cigna’s Legal Claims is a question of Connecticut law. And on that

issue, Connecticut law is clear: the timeliness of counterclaims is measured from

the date on which they are interposed, not the date the complaint was filed See

Pacelli Bros. Transp., Inc. v. Pacelli, 456 A.2d 325, 331 (Conn. 1983) (explaining that,

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“[f]or the purpose of the statute of limitations, an action upon the subject of a

counterclaim is deemed to have begun when it is filed”); see also Consol. Motor

Lines, Inc. v. M & M Transp. Co., 20 A.2d 621, 622 (Conn. 1941) (noting that “the

filing of the answer is the commencement of the action set upon in the

counterclaim”); ARMOUR Cap. Mgmt. LP v. SS&C Techs., Inc., No. 17-cv-790, 2019

WL 688308, at *3 (D. Conn. Feb. 19, 2019) (same). Here, because Cigna never

actually interposed counterclaims in the Florida Action, the three-year limitations

period was not tolled during the previous lawsuit, and Cigna’s Legal Claims are

time-barred as a result. 9

                                       IV.     Conclusion

       For the foregoing reasons, we AFFIRM IN PART and VACATE IN PART

the judgment of the district court, and we REMAND the case for further

proceedings, consistent with this decision, on Cigna’s unjust enrichment, ERISA,

and Declaratory Judgment Act claims.

9 Of course, this could put defendants who want to assert a soon-to-expire Connecticut law
counterclaim in a tough spot if they also want to move to dismiss a complaint. But such
defendants are not without options. One possibility is to seek a tolling agreement from the
plaintiff. Another is to serve an answer and counterclaim alongside the motion to dismiss. See,
e.g., Peekskill City Sch. Dist. v. Colonial Sur. Co., 595 F. App’x 91, 92 (2d Cir. 2015); ARMOUR, 2019
WL 688308, at *3; see also Fed. R. Civ. P. 12(h)(2)(A) (acknowledging that a motion to dismiss based
on Rule 12(b)(6) may be raised alongside a responsive pleading).

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