Notorious Medicare Secondary Payer Plaintiffs Bounced Again

The MSP plaintiffs are at it again, and without success this time around.  In MSP Recovery Claims Series LLC v. Pfizer Inc., 2025 U.S. Dist. LEXIS 38647 (D.D.C. Mar. 4, 2025), the group of law firms formed to file lawsuits under the Medicare Secondary Payer Act (hence the “MSP” in the various plaintiffs’ names) sued a drug manufacturer and other defendants alleging vaguely that payers who assigned their rights to the plaintiffs were defrauded in the purchase of prescription drugs.  As will be seen, that was not sufficient to state a claim.

The MSP plaintiffs got their start by acquiring the rights of private Medicare Advantage payers to pursue reimbursement from primary payers under the Medicare Secondary Payer Act.  They focused initially on the Medicare Secondary Payer Act’s private right of action, but they have branched out since to RICO and other statutory claims.  We have brought you multiple examples, including here, here, here, and here. 

Their record lately is not good, and in the view of at least one district judge, they are wearing out their welcome in our federal courts.  According to this judge, these plaintiffs (essentially “assignee debt collectors”) have “little incentive on the front end” to evaluate their claims and instead “rush to file litigation” in the hope that something sticks.  MSP Recovery, at *2-*3.  This approach “is not sitting well with many judges . . . and has garnered harsh criticism from courts across the country,” where these plaintiffs are “consuming vast judicial resources . . . and imposing enormous burdens on the [judicial] system.”  Id. at *3. 

Gosh judge, why don’t you tell us how you really feel? 

With this warm up, we commend the court for its patience in allowing these plaintiffs three chances to plead valid claims.  But alas, even with that latitude, the plaintiffs could not do it.  The court previously dismissed the entire complaint for lack of standing and then dismissed RICO claims in the First Amended Complaint for failure to state a claim.  As a result, the Second Amended Complaint alleged only state-law consumer fraud, common law fraud, and unfair trade practices claims.  Id. at *3-*4. 

The district court dismissed those claims, too.  To start, the plaintiffs had no standing to bring claims against defendants with relationships only in Rhode Island and California because the plaintiffs did not allege that any of the subject drugs were purchased in Rhode Island or California.  As the court ruled, courts dispense standing to specific plaintiffs and specific claims, not to “groups of plaintiffs ‘in gross.’”  The court further held that the plaintiffs had no standing under Delaware’s laws because the plaintiffs did not allege that any of their assignors was injured in Delaware.  One assignor/payer had enrollees in Delaware, but the plaintiff did not allege that the assignor ever paid for the subject drugs in Delaware, or even that they were prescribed there.  No standing.  Id. at *7-*8. 

Where the plaintiffs did have standing, they failed to meet Rule 9(b)’s heightened pleading standard.  The plaintiffs’ claims clearly sounded in fraud:  The Second Amended Complaint focused on alleged false and fraudulent statements, and although the plaintiffs alleged that the defendants’ alleged conduct ran afoul of other public policy considerations, the underlying factual allegations always came back to alleged false and deceptive statements. 

The plaintiffs therefore had to plead their claims with particularity, which they did not accomplish:  “Although the amendments add length and recharacterize the same factual allegations to make them seem worse, they ‘are lengthy, [but] not specific.”  Id. at *11. 

“Lengthy, but not specific.”  In other words, the plaintiffs said a lot, but they did not provide the who, what, when, and where of the alleged fraudulent statements or conduct.  They emphasized certain more specific allegations of their Second Amended Complaint, but the court saw those paragraphs merely as conclusory assertions of knowledge and intent, without the facts to back them up. 

The court therefore dismissed all the remaining claims and did so with prejudice.  This was the plaintiffs’ third try at pleading and their second opportunity to amend.  Moreover, the “parties have undergone three rounds of briefing with hundreds of pages and tens of thousands of words spent on the motions to dismiss alone.  And as the Court has already outlined, this is not the plaintiffs’ ‘first rodeo.’”  Id. at *13-*14.  As they say in places where rodeos flourish, “This dog don’t hunt.”