386 F. Supp. 3d 89
D.D.C.2019Background
- Allscripts licenses de‑identified, patient‑level data to customers under a Master Data License Services Agreement with Decision Resources Group (DRG); licenses require HIPAA de‑identification certification by an independent statistician and impose confidentiality and limited disclosure terms.
- Allscripts obtained a statistician Certification (2014, renewed 2018) stating DRG may create and distribute aggregated derivative works but may not disclose patient‑level Allscripts data to clients or link derivatives to individuals.
- DRG explored acquiring Practice Fusion in 2017; Practice Fusion’s CEO Tom Langan negotiated with DRG but later joined Allscripts/Veradigm, a competitor; DRG alleges misappropriation of its confidential information by Langan/Veradigm.
- Allscripts audited DRG in 2018 after learning DRG may have licensed patient‑level Allscripts data to third parties; Allscripts thereafter sued (May 2019) alleging DTSA and Massachusetts trade secret claims, breach of contract, Chapter 93A, and fraud in the inducement; DRG counterclaimed and sought injunctive relief.
- The parties filed cross motions for preliminary injunctions; at the hearing Allscripts agreed not to terminate the Agreement pending litigation. The court took the cross motions under advisement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DRG breached the Agreement by disclosing patient‑level data | Allscripts: DRG lacked any contractual right to provide patient‑level data to clients; Certification limits disclosure | DRG: Certification was not negotiated into the Agreement for disclosure limits; any acceptance was limited to HIPAA purposes | Court: Plaintiff failed to show likelihood of success; disputed incorporation of Certification defeats preliminary showing |
| Whether Allscripts’ data was misappropriated (DTSA/Mass. law) | Allscripts: Data are trade secrets and DRG used/disclosed them beyond permitted uses | DRG: Uses fit within Agreement/Certification or were otherwise permitted; factual dispute on scope of permitted use | Court: No likelihood of success; misappropriation depends on incorporation and scope which are disputed |
| Whether Allscripts will suffer irreparable harm absent injunction | Allscripts: Unauthorized disclosures and reputational/competitive harm cannot be fully remedied by money damages | DRG: (implicit) monetary remedies adequate; dispute on scope of harm | Court: Injunctive relief not warranted—Allscripts repeatedly licenses similar data and harm appears monetary and compensable |
| Whether DRG is entitled to a preliminary injunction or declaratory relief to continue providing data | DRG: Needs declaration it did not breach and can continue data operations; sought TRO/PI | Allscripts: Opposed; asserted breaches and need to stop disclosures | Court: DRG’s motion denied as moot because Allscripts agreed not to terminate during litigation; no irreparable harm shown |
Key Cases Cited
- Jean v. Mass. State Police, 492 F.3d 24 (standards for preliminary injunction)
- Coquico, Inc. v. Rodriguez‑Miranda, 562 F.3d 62 (likelihood of success weighs heavily)
- Rohm & Haas Elec. Materials, LLC v. Elec. Circuits, 759 F. Supp. 2d 110 (court may accept well‑pleaded allegations at PI stage)
- Elrod v. Burns, 427 U.S. 347 (court may accept allegations for preliminary relief)
- Asseo v. Pan Am. Grain Co., Inc., 805 F.2d 23 (use of hearsay in PI proceedings)
- Peoples Fed. Sav. Bank v. People's United Bank, 672 F.3d 1 (PI is extraordinary remedy)
- Town of Cheswold v. Cent. Delaware Bus. Park, 188 A.3d 810 (incorporation of external instrument into contract)
- Terumo Americas Holding, Inc. v. Tureski, 251 F. Supp. 3d 317 (elements of breach of contract claim)
- Optos, Inc. v. Topcon Medical Sys., Inc., 777 F. Supp. 2d 217 (Massachusetts trade secret law standard)
- Allstate Ins. Co. v. OneBeacon Am. Ins. Co., 989 F. Supp. 2d 143 (irreparable harm analysis)
- Covidien LP v. Esch, 229 F. Supp. 3d 94 (confidentiality and breach context)
- TouchPoint Sols., Inc. v. Eastman Kodak Co., 345 F. Supp. 2d 23 (monetary remedies where party was willing to license trade secrets)