260 F. Supp. 3d 277
W.D.N.Y.2017Background
- Plaintiffs (seven named individuals) sued CIOX Health and three New York hospitals alleging they were charged amounts for medical records that exceeded production costs and the $0.75-per-page statutory cap under N.Y. Pub. Health Law § 18; claims also asserted under N.Y. Gen. Bus. Law § 349 and unjust enrichment.
- Each named plaintiff requested records between Oct. 2012 and Apr. 2014; CIOX invoiced $0.75/page plus a $2.00 delivery fee; plaintiffs paid and received records.
- Plaintiffs allege a systematic scheme: CIOX charged $0.75 plus fees, kept excess revenue and rebated portions to the hospitals under contract.
- Defendants moved to dismiss on CAFA local-controversy grounds, for lack of standing to seek injunctive relief, as time-barred for older claims, and under the voluntary payment doctrine.
- Court denied remand under CAFA (found a prior Spiro action against HealthPort/CIOX constituted an “other class action” within 3 years, so local-controversy exception not met), dismissed injunctive relief for lack of Article III standing, applied a 3-year limitations period to monetary claims, and rejected dismissal under the voluntary payment doctrine.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA local-controversy exception — "no other class action" within 3 years | Spiro-Ruzhinskaya is the same or similar class action and therefore prevents remand | Spiro differs (class-certification issues, regional differences) and does not count | Court holds Spiro counts as an "other class action"; local-controversy exception not met; federal jurisdiction retained |
| Standing for injunctive relief | Plaintiffs contend injunctive relief is available under NYGBL § 349 and because defendants’ practice is ongoing | Defendants argue no real or immediate threat of future injury from plaintiffs’ perspective | Court finds plaintiffs failed to plausibly allege likelihood of future harm; injunctive relief dismissed for lack of Article III standing |
| Statute of limitations for claims | Plaintiffs sought equitable relief (arguing unjust enrichment) | Defendants argued shorter limitations period applies to monetary claims | Because injunction dismissed, unjust enrichment and statutory claims are monetary and governed by 3-year limitations; claims before May 20, 2011 are time-barred |
| Voluntary payment doctrine | Plaintiffs: payments were made without knowledge excess charges exceeded cost, so doctrine inapplicable | Defendants: plaintiffs voluntarily offered to pay $0.75 and thus cannot recover | Court denies dismissal under voluntary payment doctrine because plaintiffs plausibly allege lack of full knowledge that charges exceeded cost |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (courts accept well-pleaded facts but not legal conclusions)
- Rhulen Agency, Inc. v. Alabama Ins. Guar. Ass'n, 896 F.2d 674 (2d Cir.) (Rule 12(b)(1) challenge considered before other defenses)
- City of Los Angeles v. Lyons, 461 U.S. 95 (injunctive relief requires real and immediate threat of future injury)
- Deshawn E. ex rel. Charlotte E. v. Safir, 156 F.3d 340 (2d Cir.) (standing for injunction where conduct is official policy and plaintiff likely to be subject to it)
- Gold v. New York Life Ins. Co., 730 F.3d 137 (2d Cir.) (CAFA exceptions direct courts to decline to exercise jurisdiction; they do not strip jurisdiction)