124 F. Supp. 3d 550
W.D. Pa.2015Background
- Action removed from state court to federal court under CAFA and referred to a magistrate for pretrial proceedings.
- Plaintiff alleges identity theft and unauthorized use of protected health information to obtain controlled substances at multiple pharmacies, including Giant Eagle and CVS.
- Third Amended Complaint asserts numerous causes of action including negligent security, negligent failure to act, identity theft, fraud, unjust enrichment, UTPCPL violations, invasion of privacy, and conversion.
- Defendants move to dismiss for failure to state a claim; the magistrate recommends granting the motions in full with prejudice.
- R&R relies on Twombly and Iqbal pleading standards and treats attached exhibits as part of the pleadings for purposes of 12(b)(6) review.
- Court adopts the R&R, grants the motions to dismiss, and dismisses the complaint with prejudice; case is closed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty and negligence viability | Giant Eagle/CVS owed a duty to safeguard information and prevent fraud. | Pharmacy practice is tightly regulated; no duty to prevent third-party identity theft beyond statutes/regulations. | Counts I and II dismissed; no duty recognized beyond statutory framework. |
| Identity theft claim viability | Defendants used Plaintiff's information to facilitate theft of identity and fraudulent prescriptions. | Identity theft by a third party; defendants did not unlawfully possess or steal Plaintiff's information. | Count III dismissed for failure to state a claim. |
| Standing and insurance fraud claim | Standing to pursue insurance fraud based on fraudulent claims related to Plaintiff's account. | Standing lacking; damages and reliance not shown by Plaintiff personally. | Count IV dismissed for lack of standing. |
| Unjust enrichment claim viability | Defendants were unjustly enriched by accepting payments tied to fraudulent activity. | Plaintiff did not confer benefits or show unjust enrichment; insurer payments complicate standing. | Count V dismissed; no plausible unjust enrichment claim. |
| UTPCPL claim viability | Defendants engaged in unfair or deceptive practices by submitting fraudulent insurance claims. | No justifiable reliance, no ascertainable loss, and Plaintiff lacks standing to sue for private UTPCPL remedy. | Count VI dismissed for failure to state a claim. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard; more than mere speculation required)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (two-part test; plead facts showing plausible claim)
- Hunt v. U.S. Tobacco Co., 538 F.3d 217 (3d Cir. 2008) (standing and justifiable reliance; fiduciary-relations exception discussed)
- Sovereign Bank v. BJ’s Wholesale Club, Inc., 533 F.3d 162 (3d Cir. 2008) (unjust enrichment elements and the focus on enrichment and fairness)
- Rolla v. Westmoreland Health System, 651 A.2d 160 (Pa. Super. 1994) (emotional distress/embarrassment not compensable absent physical injury)
- Delahanty v. First Pennsylvania Bank, N.A., 464 A.2d 1243 (Pa. Super. 1983) (elements of fraud and injury required for private action)