Acdmy of Allergy v. Quest ( 2021 )

Case: 20-50179 Document: 00515867156 Page: 1 Date Filed: 05/18/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
May 18, 2021
No. 20-50179 Lyle W. Cayce
Clerk
Academy of Allergy & Asthma in Primary Care; United
Biologics, L.L.C., doing business as United Allergy
Services,
Plaintiffs—Appellants,
versus
Quest Diagnostics, Incorporated,
Defendant—Appellee.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:17-CV-1295
Before Stewart, Higginson, and Wilson, Circuit Judges.
Carl E. Stewart, Circuit Judge:
Plaintiffs-Appellants Academy of Allergy & Asthma in Primary Care
(“AAAPC”) and United Allergy Services (“UAS”) sued Quest Diagnostics
(“Quest”) for conspiring to force them out of the market of providing allergy
and asthma testing. The district court dismissed Plaintiffs’ claims under Rule
12(b)(6). We AFFIRM in part and REVERSE and REMAND in part.
Case: 20-50179 Document: 00515867156 Page: 2 Date Filed: 05/18/2021
No. 20-50179
I. FACTUAL AND PROCEDURAL HISTORY
A. Factual Background
In 2009, UAS began providing allergy testing and treatment services
in Texas. UAS’s services allowed primary care physicians to treat allergies,
disrupting the standard practice that required doctors to refer patients to
allergists for treatment. Quest is one of the leading laboratories that receive
patient referrals. Phadia is an allergy test producer and a defendant in
Plaintiffs’ 2014 suit.1
According to Plaintiffs’ complaint, Quest and Phadia began discussing
ways to curtail competition posed by UAS in 2011. The two businesses
created a “talking points letter” to be distributed by their employees to
discourage doctors from working with UAS. The letter fabricated warnings
about patient safety, medical and legal liability, and the risks of fraudulent
billing associated with UAS’s testing products.
Unaware that Quest and Phadia were working to push UAS out of the
market, UAS began negotiating with Quest to provide alternative methods of
allergy testing. Phadia instructed Quest not to work with UAS, and Quest
passed along confidential information about UAS to Phadia. Notably, Quest
shared UAS’s customer list with Phadia in 2012. Phadia then targeted those
customers and tried to convince them to cease their relationships with UAS.
Quest and Phadia also used a misleading opinion from the Office of the
Inspector General of Health and Human Services (“OIG”) that cautioned
against businesses like UAS.2 Through 2014, Quest and Phadia trained their
1
Plaintiffs’ 2014 suit will be discussed infra Section B.1.
2
James Wallen, an associate and alleged co-conspirator of Phadia and Quest, put
together a company called Universal Allergy Labs, LLC, not to be confused with Plaintiffs’
United Allergy Labs (the predecessor to UAS). The Office of the Inspector General
Opinion referred to UAL and expressed serious concerns about businesses providing
2
Case: 20-50179 Document: 00515867156 Page: 3 Date Filed: 05/18/2021
No. 20-50179
employees to tell physicians and providers about the opinion and to spread
misinformation about UAS.
From 2014 to 2016, Quest and Phadia continued to disparage UAS
and to conspire to remove it from the market. In September 2014, Phadia and
Quest used a Superior Health Plan policy change (that was announced in June
2014 and enacted in August 2014) to convince primary care physicians to
stop working with UAS.
As a result of Quest and Phadia’s actions, competition declined and
the two entities now account for more than 70% of the local market share in
allergy testing and immunotherapy.
B. Procedural History
1. The 2014 Lawsuit
In January 2014, UAS began tracking which customers were targeted
with disinformation about its testing products. Unaware that Phadia or Quest
were involved in spreading the disinformation, UAS filed both state and
federal antitrust claims against several physicians. Acad. of Allergy & Asthma
in Primary Care v. Am. Acad. of Allergy, No. SA−14−CV−35−OLG, 2014 WL
12497080, at *2 (W.D. Tex. Sep. 8, 2014). As the lawsuit progressed through
discovery, Plaintiffs learned of Phadia’s role and amended their complaint to
add Phadia as a defendant in 2015.
Plaintiffs soon sought discovery from Phadia, and they began to
suspect that Quest might have knowledge of Phadia’s conduct. Plaintiffs
subpoenaed Quest’s corporate representative and requested document
allergy tests being run by a single person with no healthcare experience. Plaintiffs argue that
Wallen intentionally “sandbagged” the review process to get an unfavorable decision so
that it could be used to falsely equate Wallen’s company with Plaintiffs.
3
Case: 20-50179 Document: 00515867156 Page: 4 Date Filed: 05/18/2021
No. 20-50179
production in December 2015. Quest responded in January 2016 with several
objections. Quest provided a representative in May 2016, and only then did
Plaintiffs learn of Quest’s involvement.
The physicians and Phadia settled Plaintiffs’ 2014 suit. The remaining
defendants (Allergy Asthma Network/Mothers of Asthmatics, Inc.
(“AANMA”) and Tonya Winders, Phadia’s former market development
leader and new CEO of AANMA) went to trial, and a jury found them not
liable.
2. The Current Suit
The deadline for Plaintiffs to add Quest to their 2014 suit occurred
before Quest responded to Plaintiffs’ subpoenas. Once Plaintiffs learned of
Quest’s involvement, they filed this suit against Quest on December 28,
2017.
Quest moved to dismiss on March 9, 2018. The district court granted
Quest’s motion on February 22, 2019. The district court dismissed Plaintiffs’
antitrust claims as time-barred, concluding that Plaintiffs had not alleged that
Quest committed overt acts within the four-year statute of limitations. The
court dismissed Plaintiffs’ state law tortious interference and civil conspiracy
claims as time-barred by Texas’s two-year statute of limitations. The court
also dismissed Plaintiffs’ misappropriation of trade secrets claim as time-
barred because it was not filed within three years of when Plaintiffs
discovered or could have discovered the misappropriation through ordinary
diligence.
Plaintiffs requested leave to amend, and the district court denied their
request. Plaintiffs then submitted a Rule 59(e) motion, and the district court
denied it because it failed to raise new arguments. This appeal followed.
4
Case: 20-50179 Document: 00515867156 Page: 5 Date Filed: 05/18/2021
No. 20-50179
II. STANDARD OF REVIEW
This court reviews de novo a district court’s grant of a Rule 12(b)(6)
motion to dismiss. Gregson v. Zurich Am. Ins. Co., 322 F.3d 883, 885 (5th Cir.
2003). We construe all allegations in favor of the plaintiff. Id.“[D]ismissal for failure to state a claim based on the statute of
limitations defense should be granted only when the plaintiff’s potential
rejoinder to the affirmative defense was foreclosed by the allegations in the
complaint.” Jaso v. The Coca Cola Co., 435 F. App’x 346, 352 (5th Cir. 2011)
(internal quotation marks omitted).
III. DISCUSSION
Plaintiffs appeal the district court’s dismissal of the following seven
claims against Quest: (1) Sherman Act § 1, (2) Sherman Act § 2, (3) Texas
antitrust, (4) Texas misappropriation of trade secrets, (5) Texas tortious
interference with contracts, (6) Texas tortious interference with existing and
prospective business, and (7) Texas civil conspiracy.
A. Dismissal of Plaintiffs’ Federal and State Antitrust Claims
Plaintiffs alleged that Quest violated §§ 1 & 2 of the Sherman Act and
Texas antitrust law. The district court dismissed these claims under Rule
12(b)(6), concluding that they were time-barred. We disagree.
Section 1 of the Sherman Act prohibits “[e]very contract,
combination in the form of trust or otherwise, or conspiracy, in restraint of
trade or commerce among the several States.” 15 U.S.C. § 1. Texas law also
prohibits restraints on trade. See TEX. BUS. & COM. CODE § 15.05(a) (“Every
contract, combination, or conspiracy in restraint of trade or commerce is
unlawful.”). Section 2 of the Sherman Act prohibits persons from
“monopoliz[ing], attempt[ing] to monopolize, or combin[ing] or
5
Case: 20-50179 Document: 00515867156 Page: 6 Date Filed: 05/18/2021
No. 20-50179
conspir[ing] . . . to monopolize any part of the trade or commerce among the
several States . . . .” 15 U.S.C. § 2.
Both federal and Texas law have four-year statutes of limitations for
antitrust claims. See 15 U.S.C. § 15(b); TEX. BUS. & COM. CODE § 15.25.
“Generally, a cause of action accrues and the statute begins to run when a
defendant commits an act that injures a plaintiff’s business.” Zenith Radio
Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971).
Under the general rule, Plaintiffs had four years to bring their claims
against Quest from the date of Quest’s latest overt act. The district court
determined that the last overt act was Quest’s August 2013 meeting with
Phadia about UAS’s insurance reimbursement. Plaintiffs filed suit on
December 28, 2017. Because Plaintiffs’ claims were not brought by August
2017, the district court dismissed them as time barred.
In concluding that Quest’s latest overt act occurred in August 2013,
the district court disregarded several of Plaintiffs’ allegations that described
later overt acts. The district court determined that these allegations were
insufficient because they lacked specificity, described mere “aftershocks” of
earlier overt acts, or only described Phadia’s actions as a potential co-
conspirator (and not Quest’s actions). We agree that many of the allegations
lacked specificity or described aftershocks of earlier acts, but we disagree as
to the allegations of Phadia’s role as a potential co-conspirator.
1. Lack of Specificity in Allegations of Later Acts
Plaintiffs point to their allegations that Quest continued to injure their
businesses in 2014 and 2015. They argue that those allegations sufficiently
describe later overt acts and that the statute of limitations should reset based
on those overt acts. We disagree.
6
Case: 20-50179 Document: 00515867156 Page: 7 Date Filed: 05/18/2021
No. 20-50179
Plaintiffs alleged before the district court that “Phadia and Quest
continued to approach individual providers and payors in 2014 and 2015
regarding the negative impact UAS was having on their ImmunoCAP sales.
Quest and Phadia continued to work with other co-conspirators to minimize
the competitive threat.” The district court discounted this allegation from
Plaintiffs as insufficiently specific to restart the statute of limitations. The
district court cited Poster Exchange Incorporated v. National Screen Service
Corporation, 517 F.2d 117 (5th Cir. 1975). In Poster Exchange Inc., we
remanded an antitrust case to determine whether there was a specific act or
word of refusal contributing to the antitrust conspiracy during the limitations
period. Id. at 128−29.
Later, we decided Rx.com v. Medco Health Solutions, Inc., 322 F. App’x
394 (5th Cir. 2009). In Rx.com, we did not allow the plaintiffs to toll the
statute of limitations by merely alleging that the defendants continued their
earlier violations of antitrust law. Id. at 397. We reiterated the Supreme
Court’s rule that “each time a plaintiff is injured by an act of the defendants
a cause of action accrues to him to recover the damages caused by that act
and . . . the statute of limitations runs from the commission of the act.” Id.
(quoting Zenith Radio Corp., 401 U.S. at 338).
Plaintiffs’ allegations about Phadia and Quest’s continued meetings
with providers and payors mirror the allegations we rejected in Rx.com. These
allegations do not restart the statute of limitations because they did not
describe a specific act or word contributing to the conspiracy. See Poster Exch.
Inc., 517 F.2d at 128−29.
2. Allegations of “Aftershocks” of Earlier Events
Plaintiffs next argue that the district court erred by concluding that a
policy change that took effect in June 2014 was not an overt act that would
reset the statute of limitations. Plaintiffs alleged that a June 2014 policy
7
Case: 20-50179 Document: 00515867156 Page: 8 Date Filed: 05/18/2021
No. 20-50179
change that discouraged providers from working with UAS was a timely overt
act. The district court disagreed, concluding that the overt act associated
with the policy change occurred in August 2013. We agree with the district
court.
“Aftershocks” are lingering effects of earlier overt acts in an antitrust
conspiracy. They are not events that restart the statute of limitations because
“a newly accruing claim for damages must be based on some injurious act
actually occurring during the limitations period, not merely the abatable but
unabated inertial consequences of some pre-limitations action.” Poster Exch.
Inc., 517 F.2d at 128.
Here, the district court determined that the overt act occurred in
August 2013 when Quest and Phadia lobbied for the policy change. It follows
that the policy’s implementation was an aftershock of Quest and Phadia’s
earlier lobbying rather than an independent action. Phadia and Quest did not
continue to act after they lobbied for the new policy, so the policy’s
implementation was merely a delayed result of their earlier actions. This
allegation does not suffice to restart the clock for Plaintiffs’ claims.
Accordingly, the district court properly concluded that Plaintiffs’
allegation regarding the June 2014 policy change does not suffice to restart
the statute of limitations.
3. Allegations of Phadia’s Involvement
Next, Plaintiffs argue that the district court erred by concluding that
their allegations as to Phadia’s conduct could not restart the statute of
limitations. We agree.
The district court disregarded Plaintiffs’ allegations of Phadia’s post-
2013 overt acts because they were “actions taken wholly by Phadia.”
Plaintiffs alleged that in May 2014, Phadia’s Dallas district manager emailed
8
Case: 20-50179 Document: 00515867156 Page: 9 Date Filed: 05/18/2021
No. 20-50179
Quest’s directors about their collaboration to discourage providers from
working with UAS. The manager indicated that he had recently met with
Timothy McDaniel (another Quest employee), and the manager sent out a
list of several providers that they should further target.
Plaintiffs argue that Phadia’s manager’s meeting with McDaniel was
an overt act by a co-conspirator that occurred within four years of Plaintiffs’
suit. They rely on United States v. Therm-All, Inc., 373 F.3d 625 (5th Cir.
2004). In Therm-All, Inc., various corporations and their presidents were
indicted for conspiring to fix prices. Id. at 628. Though five companies were
involved in the price fixing, only two of them were parties to the underlying
dispute in Therm-All, Inc. Id. at 629−32. The defendants argued that the
government’s claims against them were barred because the government
failed to introduce evidence that the illegal actions occurred within the
statute of limitations. Id. at 631. However, testimony of non-party co-
conspirators was introduced as evidence that the conspiracy continued into
the limitations period. See id. at 636 (“Rhodes (of Mizell Co.) testified that
the conspiracy continued through June 1995. The testimony is direct
evidence that the participants were involved in conspiratorial acts . . . .”).
Here, the district court ruled that Phadia’s actions were insufficient
to restart the statute of limitations, even if its actions were in furtherance of
the conspiracy. The district court’s view is inconsistent with our precedent
in Therm-All, Inc.
Moreover, Quest’s argument that Phadia cannot be a co-conspirator
here because it was a defendant in the 2014 lawsuit is incorrect. Phadia settled
in the 2014 suit, but no court ever determined its liability as a co-conspirator.
Collateral estoppel would bar Plaintiffs from arguing that Phadia is a co-
conspirator only if Phadia’s liability was “actually litigated in the prior
action” and was determined as “a necessary part of the judgment in that
9
Case: 20-50179 Document: 00515867156 Page: 10 Date Filed: 05/18/2021
No. 20-50179
action.” See Petro-Hunt, L.L.C. v. United States, 365 F.3d 385, 397 (5th Cir.
2004).
Phadia cites Discon Inc. v. Nynex Corp., where a district court held that
a plaintiff was collaterally estopped from asserting a conspiracy claim against
a second co-conspirator after a jury determined that the first co-conspirator
was not liable. 86 F. Supp. 2d 154, 167 (W.D.N.Y. 2000). The alleged
conspiracy involved only two co-conspirators. Id. An acquittal of one co-
conspirator meant that there was no conspiracy as between the two of them,
and the district court concluded that the second suit was barred. Id.Here, the conspiracy involved many actors, including allergists,
Tonya Winders, AANMA, Phadia, and now Quest. The jury determined that
Winders and AANMA were not liable, but it did not determine Phadia’s
liability. Collateral estoppel does not bar Plaintiffs from asserting that Phadia
is a co-conspirator. Plaintiffs may use the allegations of co-conspirators (and
the timing of those actions) in future suits. See Therm-All, Inc., 373 F.3d at
636.
At this stage of litigation, Plaintiffs have sufficiently alleged that
Phadia and Quest were involved in the alleged conspiracy and that the
allegation regarding Phadia’s May 2014 email reset the statute of limitations.
We therefore disagree with the district court and reverse its dismissal of
Plaintiffs’ state and federal antitrust claims.
B. Dismissal of Plaintiffs’ Tort Claims
The district court also dismissed Plaintiffs’ claims for
misappropriation of trade secrets, civil conspiracy, and tortious interference.
We reverse the dismissal of Plaintiffs’ misappropriation of trade secrets
claim. We affirm the dismissal of the civil conspiracy and tortious
interference claims.
10
Case: 20-50179 Document: 00515867156 Page: 11 Date Filed: 05/18/2021
No. 20-50179
1. Misappropriation of Trade Secrets Claim
Plaintiffs filed a misappropriation of trade secrets claim against Quest,
arguing that Quest misappropriated UAS’s client list. UAS shared its client
list with Quest when the two were discussing doing business together, and
Quest sent the list to Phadia in February 2012 (more than five years before
Plaintiffs filed suit against Quest). Under Texas law, “[a] person must bring
suit for misappropriation of trade secrets not later than three years after the
misappropriation is discovered or by the exercise of reasonable diligence
should have been discovered.” TEX. CIV. PRAC. & REM. CODE ANN. §
16.010(a).
The district court dismissed Plaintiffs’ trade secrets claim because
“UAS and AAAPC fail[ed] to explain why they could not have discovered
the misappropriation through ordinary diligence in the months following
February 2012.”
Plaintiffs argue that they did not know that Quest shared their
customer list with Phadia in 2012. They only knew that Quest declined to
move forward with Plaintiffs’ deal to provide allergy testing. They learned of
Quest’s involvement in May 2016 when Quest produced discovery during
the 2014 lawsuit. Because they did not discover Quest’s involvement until
May 2016, Plaintiffs argue that the statute of limitations should be tolled until
that time.
The discovery rule “defers accrual . . . until the plaintiff knew, or
exercising reasonable diligence, should have known of the wrongful act
causing injury.” N. Tex. Opportunity Fund v. Hammerman & Gainer Int’l.,
Inc., 107 F. Supp. 3d 620, 635−36 (N.D. Tex. 2015) (quoting Jackson v. W.
Telemarketing Corp. Outbound, 245 F.3d 518, 523–24 (5th Cir. 2001)). The
fact that Plaintiffs did not actually know of Quest’s involvement until 2016
will not preserve their claim unless they also could not have discovered their
11
Case: 20-50179 Document: 00515867156 Page: 12 Date Filed: 05/18/2021
No. 20-50179
misappropriation injury using ordinary diligence. The discovery rule does not
apply “simply because a claimant does not know ‘the specific cause of the
injury,’ ‘the party responsible for it,’ ‘the full extent of it,’ or ‘the chances
of avoiding it.’” USPPS, Ltd. v. Avery Dennison Corp., 326 F. App’x 842, 847
(5th Cir. 2009) (quoting PPG Indus. Inc. v. JMB/Hous. Ctrs. Partners Ltd.,
146 S.W.3d 79, 93−94 (Tex. 2004)).
The discovery rule is a limited exception to statutes of limitation and
will only be applied “when the nature of the plaintiff’s injury is both
inherently undiscoverable and objectively verifiable.” Wagner & Brown, Ltd.
v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001). “Texas courts have set the
inherently undiscoverable bar high, to the extent that the discovery rule will
apply only where it is nearly impossible for the plaintiff to be aware of his
injury at the time he is injured.” Sisoian v. Int’l Bus. Machs. Corp., No. A-14-
CA-565-SS, 2014 WL 4161577, at *4 (W.D. Tex. Aug. 18, 2014) (quoting
Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667, 675 (5th Cir. 2013)).
In considering the applicability of the discovery rule at the motion to
dismiss stage, our inquiry is whether, accepting all well-pleaded facts as true,
Plaintiffs’ alleged injury, “by its nature, is unlikely to be discovered within
the prescribed limitations period despite due diligence.” Beavers v. Metro.
Life Ins. Co., 566 F.3d 436, 440 (5th Cir. 2009) (quoting Wagner, 58 S.W.3d
at 734–35). Defendants bear the burden of proof on the statute of limitations
defense. Jaso, 435 F.App’x at 351. “With respect to the statute of limitations
defense, dismissal at the 12(b)(6) stage is proper only ‘where it is evident
from the [complaint] that the action is barred and the [complaint] fail[s] to
raise some basis for tolling.’” Id. (quoting Jones v. Alcoa Inc., 339 F.3d 359,
366 (5th Cir. 2003) (alterations in original)).
The district court rejected Plaintiffs’ allegations and suggested that
Plaintiffs could have learned that Quest misappropriated their client list.
12
Case: 20-50179 Document: 00515867156 Page: 13 Date Filed: 05/18/2021
No. 20-50179
Reasonable diligence requires parties to make general inquiries to
knowledgeable parties. See Target Strike, Inc. v. Marston & Marston Inc., 524
F. App’x 939, 945 (5th Cir. 2013). On appeal, Plaintiffs assert that even if
they learned which customers stopped working with UAS, they would not
have learned that Quest shared their customer list with Phadia.
We agree that even if Plaintiffs had exercised due diligence by
inquiring with their customers, it is unlikely that they would have learned that
Quest shared UAS’s proprietary billing information and business records.
Plaintiffs’ trade secret injury was unlikely to be discovered given the nature
of Plaintiffs’ trade secret3—a client list. While the misappropriation of other
proprietary information like computer codes 4 or product designs5 may be
readily discoverable once the information appears in the marketplace,
Plaintiffs could not have discovered their misappropriation injury as easily.
We therefore find it unlikely that they could have discovered the
distinct injury to their trade secret caused by Quest. We conclude that
Plaintiffs’ trade secret injury, by its nature, was unlikely to have been
discovered within the limitations period even if Plaintiffs had exercised due
diligence. See Beavers, 566 F.3d at 440.
Plaintiffs have sufficiently pled they could not have discovered their
misappropriation injury using reasonable diligence. Moreover, nothing in the
complaint forecloses Plaintiffs’ potential rejoinder to the statute of
limitations defense. See Jaso, 435 F. App’x at 351. We thus disagree with the
3
“A trade secret is any formula, pattern, device or compilation of information
which is used in one’s business and presents an opportunity to obtain an advantage over
competitors who do not know or use it.” Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.2d
453, 455 (Tex. 1996).
4
See Altai, Inc., 918 S.W.2d at 457.
5
See Seatrax, Inc. v. Sonbeck Int’l, Inc., 200 F.3d 358, 365–66 (5th Cir. 2000).
13
Case: 20-50179 Document: 00515867156 Page: 14 Date Filed: 05/18/2021
No. 20-50179
district court’s dismissal of Plaintiffs’ misappropriation of trade secrets claim
and reverse.
2. Civil Conspiracy Claim
The district court dismissed Plaintiffs’ civil conspiracy claim as time-
barred. Plaintiffs argue that their civil conspiracy claim is also subject to the
discovery rule and therefore timely. Here, we disagree.
Plaintiffs’ conspiracy claim is based on Quest and Phadia’s actions
dissuading providers from using UAS’s services. Civil conspiracy claims are
generally subject to a two-year statute of limitations. Navarro v. Grant
Thornton, LLP, 316 S.W. 3d 715, 719 (Tex. App.—Houston [14th Dist.] 2010,
no pet.). Like their misappropriation of trade secrets argument, Plaintiffs
argue that this information could not have been discovered within the initial
statute of limitations. See Sisoian, 2014 WL 416157, at *4.
We are unpersuaded by Plaintiffs’ argument that they could not
discover the injuries caused by Quest and Phadia’s alleged civil conspiracy.
Unlike their trade secrets injury, the only injuries Plaintiffs alleged here relate
to their businesses and ability to compete in the marketplace. We fail to see
how those injuries are inherently undiscoverable, particularly since these
injuries were litigated in Plaintiffs’ 2014 suit against Phadia.6
Our analysis is unaltered by the argument that Quest’s role in the
conspiracy might have been inherently undiscoverable during the limitations
period. The discovery rule analysis turns on whether an injury is inherently
undiscoverable, not on whether particular actions or causes are
undiscoverable. See Beavers, 566 F.3d at 440. Unlike Plaintiffs’
6
Plaintiffs’ misappropriation of trade secrets claim was not litigated in the 2014
suit, probably because Plaintiffs did not yet know of Quest’s involvement or that Quest
shared the customer list with Phadia.
14
Case: 20-50179 Document: 00515867156 Page: 15 Date Filed: 05/18/2021
No. 20-50179
misappropriation claim, there is no inherently undiscoverable injury that
stems from the civil conspiracy.
Plaintiffs also argue that Quest’s fraudulent concealment of its alleged
wrongdoing may toll the statute of limitations. We disagree.
Fraudulent concealment tolls the statute of limitations only until “the
fraud is discovered or could have been discovered with reasonable
diligence.” Shell Oil Co. v. Ross, 356 S.W.3d 924, 927 (Tex. 2011) (quoting
BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 67 (Tex. 2011)). As we
previously discussed, Plaintiffs failed to plead that they used diligence in
trying to discover Quest and Phadia’s civil conspiracy. We thus affirm the
district court’s dismissal of Plaintiffs’ civil conspiracy claim.
3. Tortious Interference Claims
The district court also dismissed Plaintiffs’ tortious interference claim
as time barred. Plaintiffs argue that this claim is subject to the discovery rule.
We disagree.
Tortious interference claims are subject to a two-year statute of
limitations under Texas law. See First Nat’l Bank of Eagle Pass v. Levine, 721
S.W.2d 287, 289 (Tex. 1986). Plaintiffs allege that Quest and Phadia’s work
convincing UAS’s customers to stop using UAS interfered with its existing
and future business.
Plaintiffs alleged injuries of lost revenue and lost business
relationships. The lost revenue injury is not inherently undiscoverable as
discussed above. While the loss of prospective business relationships might
be the kind of injury that is inherently undiscoverable, Plaintiffs fail to
adequately plead tortious interference with a prospective business
relationship. Their complaint does not adequately allege that there was a
reasonable probability that UAS and third parties would enter into future
15
Case: 20-50179 Document: 00515867156 Page: 16 Date Filed: 05/18/2021
No. 20-50179
relationships. See Apani Sw., Inc. v. Coca-Cola Enters., Inc., 300 F.3d 620, 634
(5th Cir. 2002). Though the complaint says that there was a reasonable
probability that AAPC would have entered into additional relationships with
third parties, the statement is conclusory. Plaintiffs did not plead adequate
factual support for their claim, so we dismiss the claim under Rule 12(b)(6).
Accordingly, we affirm the district court’s dismissal of Plaintiffs’
tortious interference claim.
C. Leave to Amend Complaint
After the district court dismissed their first complaint, Plaintiffs filed
a motion for leave to amend their complaint. The district court denied
Plaintiffs’ request, and they now argue that the district court erred. We
disagree.
Rule 15(a)(2) constrains the district court’s discretion in deciding
whether to allow parties leave to amend. See Dussouy v. Gulf Coast Inv. Corp.,
660 F.2d 594, 597–98 (5th Cir. 1981). Rule 15 favors granting leave to amend,
but denying leave is justified when the movant unduly delays or acts with bad
faith or dilatory motive. Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th
Cir. 2003).
Here, Quest filed its Rule 12(b)(6) motion to dismiss on March 9,
2018. The district court granted Quest’s motion on February 22, 2019. In the
eleven months that Quest’s motion was pending, Plaintiffs did not seek leave
to amend their complaint. However, Plaintiffs did timely move for leave to
file an amended complaint after the district court issued its order granting
dismissal. Their motion did not attach an amended complaint but attached
additional evidence instead.
The facts of this case resemble Whitaker v. City of Houston, 963 F.2d
831 (5th Cir. 1992). When parties delay seeking leave to amend for several
16
Case: 20-50179 Document: 00515867156 Page: 17 Date Filed: 05/18/2021
No. 20-50179
months after a motion to dismiss is filed, we have held that district courts do
not abuse their discretion in denying the request for leave. See id. at 837(affirming district court’s denial of Rule 15(a) request to amend for undue
delay when the plaintiff did not seek leave to amend for eleven months while
motion to dismiss was pending).
Plaintiffs rely on Dussouy, where we held that a court can abuse its
discretion by denying a request for leave that occurs within a reasonable time
after the entry of dismissal. Dussouy, 660 F.2d at 599. Though Plaintiffs’
request was within thirty days of the district court’s entry of dismissal, we
cannot conclude that the court abused its discretion because Plaintiffs did not
seek to amend during the eleven months that Quest’s motion was pending or
provide an amended complaint once they did move for leave to amend.
We thus affirm the district court’s denial of Plaintiffs’ request for
leave to amend their complaint.
IV. CONCLUSION
For the aforementioned reasons, we AFFIRM in part and
REVERSE and REMAND in part.
17