331 F. Supp. 3d 767
W.D. Tenn.2018Background
- Defendant Ciox Health (d/b/a Healthport) is a large medical-records vendor under contract with hospitals to fulfill records requests; it routinely charged per-page and other fees and did not track actual per-request costs.
- Plaintiffs Richard Faber and Jennifer Monroe (and a proposed Tennessee class) are individuals whose attorneys requested records; invoices showed per-page, basic, and electronic-delivery fees, some charged despite electronic delivery.
- From 2010–2017 Ciox collected ~$19.45 million from Tennessee requests; ~$3.66 million of that came from per-page charges on electronically delivered records.
- Plaintiffs sued asserting negligence/negligence per se (based on HIPAA/HITECH), breach of fiduciary/confidential relationship, implied contract and breach of good faith, unjust enrichment, injunctive relief, and Tennessee Consumer Protection Act claims; parties moved for cross-summary judgment.
- The court concluded (1) HIPAA/HITECH do not create a private right of action under Tennessee law and thus do not support negligence per se here, (2) no fiduciary/confidential relationship existed, (3) no enforceable implied-in-fact contract terms were shown and unjust enrichment was not proven, and (4) TCPA claims failed. Summary judgment for Defendant; Plaintiffs’ complaint dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HIPAA/HITECH violations can support negligence per se or an independent tort under Tennessee law | HIPAA/HITECH violations (overcharging) supply a statutory duty and negligence per se basis | HIPAA/HITECH provide no private right of action; Tennessee law does not create an independent remedy for HIPAA violations | Court: No — HIPAA/HITECH do not create a private cause of action or independent duty under Tennessee law; negligence/negligence per se dismissed |
| Breach of fiduciary duty / confidential relationship | Ciox controlled patients’ records and thus owed a fiduciary/confidential duty | Relationships were arm’s-length (hospitals, vendors, attorneys); no domination or special trust giving rise to fiduciary duty | Court: No confidential/fiduciary relationship; claim dismissed |
| Implied contract / breach of covenant of good faith | Ciox’s public representations (HIPAA compliance, timely service) implied contractual terms requiring reasonable lawfully priced and timely provision of records | No definite mutual assent or specific contract terms (price/timeliness); no enforceable agreement with plaintiffs | Court: No sufficiently definite implied-in-fact contract; covenant/good-faith claims dismissed |
| Unjust enrichment / quasi-contract | Ciox was unjustly enriched by retaining excessive fees charged to patients/attorneys | Plaintiffs didn’t show fees were unauthorized or unjust under applicable law; voluntary payment/exhaustion issues asserted | Court: Plaintiffs failed to show retention was unjust; unjust enrichment dismissed |
| Tennessee Consumer Protection Act (TCPA) claims | Failure to disclose that charges were predetermined per‑page rates rather than cost‑based violated TCPA subsection alleged | Plaintiffs raised new TCPA theories at summary judgment; underlying argument relies on HIPAA (no private right) | Court: TCPA claims fail (Plaintiffs limited to subsection pleaded; HIPAA-based theory inapplicable); claim dismissed |
Key Cases Cited
- Roell v. Hamilton Cty., 870 F.3d 471 (6th Cir. 2017) (summary-judgment standards and inferences)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (summary judgment standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (burden-shifting on summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (standard for genuine issue of material fact)
- West v. East Tenn. Pioneer Oil Co., 172 S.W.3d 545 (Tenn. 2005) (elements of negligence under Tennessee law)
- Bellamy v. Federal Express Corp., 749 S.W.2d 31 (Tenn. 1988) (discussion of negligence per se and statutory violations)
- Estate of French v. Stratford House, 333 S.W.3d 546 (Tenn. 2011) (use of federal regulations as evidence on negligence but limits on negligence per se)