The City of Boston, along with its Public Health Commission and Housing Authority, sued two major pharmacy benefit managers, OptumRx and Express Scripts, in January 2024. The City alleged that these defendants violated Massachusetts public nuisance law by colluding with opioid manufacturers to misrepresent drug risks, causing injury to the City. This suit followed a 2018 lawsuit the City filed against opioid manufacturers, distributors, and pharmacies. After the case was removed to federal court, the defendants moved to dismiss, arguing the 2024 filing occurred well after the three-year statute of limitations had expired. The City opposed dismissal, arguing that the complaint alleged a plausible continuing nuisance theory and that the defendants had fraudulently concealed the cause of action, which should have tolled the limitations period. The district court granted the motion to dismiss, finding the City knew or should have known of its injuries well before 2021 and that the complaint failed to plead specific recent tortious acts required for a continuing nuisance claim.
The First Circuit, in an opinion by Circuit Judge Lynch, affirmed the district court's dismissal on two primary grounds. First, regarding the fraudulent concealment tolling argument under Massachusetts General Laws chapter 260, section 12, the court clarified the standard for imputed knowledge. The City argued that actual knowledge required the plaintiff to have no substantial doubt about the wrongdoing. The court rejected this, citing Massachusetts precedent which holds that knowledge is imputed when a plaintiff has the means to acquire facts and the probability of wrongdoing is so evident that possessing those means is equivalent to actual knowledge. The court found that by 2021, the City had ample reason to know of PBM wrongdoing. This included knowledge of the opioid epidemic, access to numerous public investigations, and awareness of the National Prescription Opiate Multi-District Litigation (MDL) which included PBM defendants as of 2018. The court noted that the City's own counsel received a letter in January 2018 informing them that PBMs were integral to the scheme and that public pleadings described their role in detail. Consequently, the City could not claim it lacked actual knowledge to trigger the tolling statute. Second, the court addressed the City's argument that its complaint alleged a continuing nuisance. Under Massachusetts law, a continuing nuisance requires pleading 'recurring tortious or unlawful conduct' that occurs within the limitations period. The court explained that a claim cannot be established merely by the 'continuation of harm caused by previous but terminated tortious or unlawful conduct.' The City's complaint lacked 'sufficiently specific recent act' by the defendants that was itself tortious. The court noted that the most recent actions alleged were remedial measures taken by the defendants to address the epidemic, not actionable misconduct. The City's 'conclusory statements' labeling allegations as 'ongoing' did not convert them into timely factual allegations. The court also noted that the City waived an argument that the misconduct created an ongoing harmful condition because it was not raised in the district court.
The dismissal of the City of Boston's public nuisance lawsuit against pharmacy benefit managers stands, effectively barring this specific claim due to the statute of limitations. The decision reinforces that in Massachusetts, the statute of limitations for public nuisance claims is strict regarding the timing of the alleged tortious conduct, not just the duration of the harm. It clarifies that the fraudulent concealment doctrine does not toll the limitations period when a plaintiff has the means to discover the facts and the probability of wrongdoing is evident from public records and prior litigation. The case is closed on the merits of the state law claim, though the City's separate 2018 suit against manufacturers remains pending. The ruling may influence other municipalities attempting to sue PBMs, requiring them to file suits sooner or plead specific, recent acts of misconduct rather than relying on the continuation of harm.
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