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Gearhart v. Express Scripts, Inc.

United States District Court, E.D. Kentucky, Northern Division

February 22, 2019

EDWARD P. GEARHART, Individually and On Behalf of Others Similarly Situated, PLAINTIFF,


          Henry R. Wilhoit, Jr., United States District Judge.

         This matter is before the Court upon Defendant's Partial Motion to Dismiss [Docket No. 28]. The motion has been fully briefed by the parties [Docket Nos. 29 and 30]. For the reasons set forth herein, the Court will sustain the motion.


         Plaintiff Edward Gearhart filed this putative class action against Express Scripts claiming that Express Scripts charged him in excess of the statutory limit for a copy of his prescription records. In his Third Amended Complaint, Plaintiff alleges as follows: Express Scripts is a "pharmacy benefit management company." [Docket No. 27, Third Amended Complaint, ¶ 26]. A pharmacy benefit manager is a third-party administrator of prescription drug programs that acts as an intermediary between retail pharmacies and health benefits providers. Id. ¶¶ 23-24. Plaintiff, a Kentucky resident, alleges that he "requested his medical records, through his agent, Jones Ward PLC, from Express Scripts." Id. ¶¶ 7, 22. In May 2014, as part of a products liability case in which Gearhart was a plaintiff, Jones Ward requested a copy of his prescription claims data from Express Scripts in its capacity as the pharmacy benefit manager for Plaintiffs health plan. Id. ¶¶ 22-24. In exchange for a $75 fee, Express Scripts compiled information from its database of claims it maintains for a "network of retail pharmacies" and provided Jones Ward with a report listing Plaintiffs various prescription claims. Id. Jones Ward, understanding that Express Scripts charged $75 for "processing" the detailed information from various pharmacies included in the report, paid the fee. Id. ¶¶ 22, 26. Plaintiff did not pay Express Scripts or Jones Ward for this statement of prescription pharmacy claims. Id. ¶¶ 22, 25.

         Plaintiff then filed this lawsuit against Express Scripts, on behalf of a purported class of Kentucky citizens, for Express Scripts' alleged practice of overcharging customers who authorize a third party to request a copy of their prescription claims data on his or her behalf. The third iteration of his complaint alleges claims for violation of the Kentucky Consumer Protection Act, KRS § 367.170, et seq. (Count I), fraud (Count II), unjust enrichment (Count III), violation of Kentucky Health Records Law, KRS § 422.317(1) (Count IV), fraud under the Health Insurance Portal and Accountability Act ("HIPAA"), 45 C.F.R. § 160.103 (Count V), breach of contract (Count VI).[1]

         Defendant seeks dismissal of Counts V and VI.


         In scrutinizing a complaint under Rule 12(b)(6), the Court is required to "accept all well-pleaded factual allegations of the complaint as true and construe the complaint in the light most favorable to the plaintiff." Dubay v. Wells, 506 F.3d 422, 426 (6th Cir.2007). It must allege more than "a formulaic recitation of the elements of a cause of action." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A complaint will withstand a motion to dismiss if it "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). A complaint has "facial plausibility" if the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir.2009) (quoting Iqbal, 129 S.Ct. at 1949). The "complaint must contain either direct or inferential allegations respecting all material elements to sustain a recovery under some viable legal theory." Bishop v. Lucent Technologies, Inc., 520 F.3d 516, 519 (6th Cir. 2008) (internal citation omitted).


         A. Count V fails to state a claim upon which relief can be granted.

         In Count V, Plaintiff asserts a fraud claim based exclusively on an alleged HIPAA violation. However, HIPAA does not confer a private right of action on an individual. See Young v. Carran, 289 S.W.3d 586, 588 (Ky. App. 2008) (noting that "federal courts have uniformly held that HIPAA does not create a private cause of action"). Nor can Plaintiff circumvent well settled federal law by using HIPAA as a basis for a state law claim, which is precisely what Plaintiff attempts to achieve in Count V. Id. (citations omitted).

         Plaintiff does not, and cannot, defend his claim. Although he tries to cast it as one intertwined with his allegations of violations of certain Kentucky statutes, it is clear that the fraud alleged in Count V relies solely upon an alleged violation of HIPAA. Therefore, there is no viable legal claim alleged in Count V and it must be dismissed.

         B. Count VI fails to state a claim upon which ...

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