ERNEST L. BONNER, JR., M.D., v. RITE AID CORPORATION, and DOES 1 through 50
No. 2:19-cv-00674-MCE-JDP
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
May 24, 2023
On April 22, 2019, Plaintiff Ernest L. Bonner, Jr., M.D. (“Plaintiff“) initiated the present action against Defendant Thrifty Payless, Inc., doing business as Rite Aid (erroneously sued as Rite Aid Corporation) (“Defendant” or “Rite Aid“), pursuant to this Court‘s diversity jurisdiction under
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A. Factual Background2
1. Defendant‘s Policies and Procedures
In March 2013, Defendant‘s Regulatory Compliance Department created a panel as part of an investigation/review program to ensure compliance with the U.S. Drug Enforcement Administration (“DEA“), title 21 of the Code of Federal Regulations, and the Federal Controlled Substances Act, “wherein pharmacies are required to monitor the dispensing of controlled substances, reduce the potential risk of abuse, and minimize dependence liability.” Hart Decl., ECF No. 66-4 ¶ 5. As such, the panel “reviews investigation files and determines whеther any remedial measures need to be taken.” Id. In addition, Defendant also provides its own policies and guidelines to its employees regarding similar concerns. Id. ¶ 6. Among these policies are Defendant‘s “Procedures for Validation and Dispensing of High Alert Controlled Substances,” and “NexGen Automated Red Flag Documentation Process for High Alert Controlled Substances,” both of which require pharmacists to perform their due diligence in validating the legitimacy of prescriptions for controlled substances. See Exs. A–B, Hart Decl., ECF No. 66-4, at 8–22.
Defendant provides a six-step procedure for validating and dispensing controlled substances, and if a prescription cannot be filled, pharmacists are instructed to “relay this information to the patient” which “MUST be done in a respectful manner, [and the pharmacist must] never accuse the patient or make unnecessary comments.” See Hart Decl., ECF Nо. 66-4 ¶¶ 8–9 (alterations in original). If there is suspicious activity, Defendant‘s policies instruct pharmacists to fill out a “Service Now ticket,” in which “they enter their five (5) digit store number, where the issue occurred, and a description
Defendant‘s investigation/review program consists of the following four steps:
- Step 1: A “suspicious subscriber ticket” is submitted by a pharmacist at а Rite Aid location;
- Step 2: The ticket, along with analytics (e.g. data received from a compilation of various pharmacies nationwide) is reviewed according to Rite Aid‘s policies;
- Step 3: If there is evidence of possible suspicious activity, then clinical protocol will be initiated, and an investigation of the prescriber will proceed.
- Step 4: The analytics and results from the investigation will then be reviewed by an investigation/review рanel.
Id. ¶ 11. “If a decision is made to discontinue filling controlled substance prescriptions from a particular prescriber, the prescriber will be given written notice of the decision.” Id. ¶ 12. According to Defendant, such a decision is not permanent, and the “prescriber may contact Rite Aid and request that their case be revisited. Rite Aid will then continue to monitor the prescriber and may reinstate the prescriber as early as 6 months to 1 year.” Id. ¶ 13.
2. Defendant‘s Actions Toward Plaintiff
On Januаry 22, 2019, a suspicious subscriber ticket was opened by one of Defendant‘s pharmacists at a Rite Aid store located in Sacramento, California. The subscriber ticket provided the following description:
Received a[] [prescription] written from [Plaintiff]. Prescriber notes state[] Walgreens does not accept this provider. Upon further investigation, the prescriber[‘]s phone number is listed under different patient profiles. [Phone numbers omitted] When we cаlled the first number there was no answering machine or prompts. The person just answers it as “hello“. When asked to verify a[] [prescription] they said no one was in the office until Thursday. The patient wanted to ring [Plaintiff‘s] cell phone which we could not accept. Is this [doctor] acceptable to fill for? Unable to verify the [doctor‘s] info[.]
Ex. C, Hart Decl., ECF No. 66-4, at 24. This subscriber ticket was given to Janet Hart, Defendant‘s Director of the Government Affairs and Regulatory Affаirs divisions, who
[t]he analytics for [Plaintiff] showed that his prescriptions from all pharmacies (e.g. Rite Aid, Walgreens, CVS) for non-controlled substances had decreased from 45% in 2016 to 21% in 2019 (i.e. prescriptions for controlled substances increased from 55% to 79%) . . . Oxycodone (a semi-synthetic opioid drug prescribed for pain), in particular, comprised of 41.5% of his overall prеscribed medications [between December 2018 and February 2019].
Id. ¶ 16; see also Ex. D, Hart Decl., ECF No. 66-4, at 26–27 (analytics for Plaintiff); but see Pl.‘s Opp‘n, at 11 (“Those charts confirm[] that Plaintiff[‘s] patient load had increased significantly by March, 2018. . . . Defendant‘s charts confirm a 35% reduction of the opiate Pain medication, a 49% reduction of Benzodiazepines (i.e. Alprazolam, Diazepam), and also 52% reduction of non-scheduled medication between March 2018 and February 2019.“). Based on a review of the analytics and the subscriber ticket, Defendant initiated clinic protocol and commenced an investigation of Plaintiff. Hart Decl., ECF No. 66-4 ¶ 16.
On March 29, 2019, the investigation/review panel, which Ms. Hart is a part of, reviewed a number of prescribers and unanimously decided to discontinue filling prescriptions for controlled substances written by thirteen prescribers, including Plaintiff. But see Pl.‘s Statement of Disputed Facts, ECF No. 69-2, at 5 ¶ 17 (disputing on grounds that “there is no evidence provided as to whom the 13 prescribers were or whether there were 12 other prescriber[s] that were Black listed by Rite Aid.“). According to Ms. Hart, the decision to discontinue filling Plaintiff‘s prescriptions for controlled substances was based, in part, on Plaintiff‘s high and increased number of prescriptions for controlled substances, and that 41.5% of Plaintiff‘s overall prescriptions were for Oxycodone. See Hart Decl., ECF No. 66-4 ¶ 18.
On April 1, 2019, Defendant sent Plaintiff a lеtter which stated the following:
This is to notify you that our pharmacy locations will no longer fill prescriptions from your office for Schedule II, III, IV and V controlled substances effective April 15, 2019. Rite Aid has
taken this action because of our concern about increased reports of controlled substance prescription drug abuse, especially Oxycodone. Rite Aid and our pharmacists have a responsibility to take appropriate steps to reduce the potential that drugs we dispense are not diverted or abused. We regret any inconvenience that this action may cause. However, Rite Aid is committed to reducing the potential for diversion and abuse of controlled substances and finds it necessary to take this action at this time. If you have any questions regarding this matter, you may direct those questions to Janet Hart, Government Affairs at [contact information omitted.]
Ex. J, Hart Decl., ECF No. 66-4, at 52. Ms. Hart states in her declaration that to date, Plaintiff “has never made a request regarding his case reevaluation or revisitation.” Hart Decl., ECF No. 66-4 ¶ 22. However, Plaintiff states that he “was never informed that he could challenge[]” this decision or that this decision was not permanent. See Pl.‘s Statement of Disputed Facts, ECF No. 69-2, at 7 ¶¶ 27–28.
3. Effect on Plaintiff‘s Patients
In response to Defendant‘s Special Interrogatories, Set One, Plaintiff identified, in part, four patients as witnesses and they were subsequently deposed. See Ex. G, Maxwell Decl., ECF No. 66-5, at 81–87. The Court will recount their deposition testimonies below.
a. Cecelia Burke
In 2019, Ms. Burke attempted to fill her Oxycodone prescription written by Plaintiff at one of Defendant‘s pharmacies in Castro Valley, California. See Ex. H, Burke Dep., ECF No. 66-5, at 91–92. However, Ms. Burke was told that Defendant “can‘t fill this prescription, and [she] said okay.” Id. at 92–93 (unable to remember who she spoke to). She could not recall any one at the phаrmacy giving her a specific reason behind the refusal, only that the conversation was very brief and she did not ask any follow-up questions. Id. at 93. Ms. Burke was able to fill the prescription at another pharmacy. Id.
Additionally, Ms. Burke testified that she was no longer Plaintiff‘s patient but confirmed that Defendant‘s refusal to fill her prescription was not a reason behind her
b. Margaret Fenton
On April 12, 2019, Defendant filled Ms. Fenton‘s prescription for Buprenorphine, which was written by Plaintiff. See Ex. I, Fenton Dep., ECF No. 66-5, at 102. A few days later, on April 17, 2019, Ms. Fenton dropped off another prescription written by Plaintiff at one of Defendant‘s pharmacies. Id. at 103. Ms. Fenton subsequently received a phone call, possibly from a pharmacy technician, informing her that Defendant was unable to fill thе prescription “because their company policy was to not fill prescriptions from” Plaintiff. Id. at 103–04. When Ms. Fenton asked why this happened, the employee said that “she didn‘t know” and “could only tell [her] it was company policy to no longer fill any prescriptions from” Plaintiff. Id. at 104–05. Ms. Fenton then tried to have the prescription filled at CVS Pharmacy, who also refused to fill it but did not give a reason. Id. at 107–08. In the end, Ms. Fenton was able to get the prescription filled аt Walgreen‘s. Id. at 106. At the time of her deposition, Ms. Fenton was still Plaintiff‘s patient. Id. at 111.
c. Reginald Smith
On February 28, 2019, Mr. Smith attempted to fill an Oxycodone prescription written by Plaintiff at one of Defendant‘s pharmacies located in Sacramento, California. See Ex. J, Smith Dep., ECF No. 66-5, at 114–15. According to Mr. Smith, the pharmacist told Plaintiff over the phone that Mr. Smith “should be on a higher dosage and more expensive medications,” that “the prescription wasn‘t written correctly and professiоnally,” and that “Mr. Smith [was] paying with cash, [which] was a red flag.”
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The following day, on March 1, 2019, Mr. Smith tried to have the same prescription filled at another one of Defendant‘s pharmacies in Vallejo, California. See id. at 118. However, that pharmacy also refused to fill the prescription, indicating that the dosage amount was incorrect. See id. at 119 (testifying that the pharmacist tоld him “[t]hat if [Plaintiff] would write it for a higher amount, he would fill it.“). Mr. Smith eventually had the prescription filled at a CVS Pharmacy. Id. at 120. At the time of his deposition, Mr. Smith was still a patient of Plaintiff. Id. at 114.
d. Waheed Guirgis
Sometime in 2018 or 2019, Mr. Guirgis tried to have an Oxycodone prescription written by Plaintiff filled at one of Defendant‘s pharmacies in Sacramento, California. See Ex. K, Guirgis Dep., ECF No. 66-5, at 123–24. However, a pharmacy technician told him that Plaintiff “has been flagged in [their] system and [they are] no longer filling prescriptiоns for him.” Id. at 124. No further details were given, and Mr. Guirgis did not ask any follow-up questions. See id. at 125–26. Mr. Guirgis informed Plaintiff of what happened, and Plaintiff told him to “find another pharmacy.” Id. at 127. Ultimately, Mr. Guirgis was able to have his prescription (and subsequent prescriptions written by Plaintiff) filled at other pharmacies. See id. at 127, 131. At the time of his deposition, Mr. Guirgis was still Plaintiff‘s patient. Id. at 132.
B. Procedural History
Plaintiff filed his original Complaint in this Court on April 22, 2019, which asserted the following causes of action against Defendant: (1) Unfair Competition in violation of
Plaintiff filed the operative Second Amended Complaint (“SAC“) on March 9, 2020. ECF No. 23. Defendant again moved to dismiss the IIED and § 1981 causes of action and moved to dismiss and strike the requests for restitution and punitive damages. ECF Nos. 24, 25. On June 1, 2020, the Court granted Defendant‘s motion to dismiss in its entirety without leave to amend, denied the motion to strike as moot, and stated that the case shall proceed on the UCL, IIPEA, NIPEA, and Defamation causes of action. See ECF No. 44. Defendant subsequently filed its Answer on June 5, 2020. ECF No. 45.
STANDARD3
The
In a summary judgment motion, the moving party always bears the initial responsibility of informing the court of the basis for the motion and identifying the portions in the record “which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323. If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986); First Nat‘l Bank v. Cities Serv. Co., 391 U.S. 253, 288–89 (1968).
In attempting to establish the existence or non-existence of a genuine factual dispute, the party must support its assertion by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits[,] or declarations . . . or other materials; or showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.”
As the Supreme Court explained, “[w]hen the moving party has carried its burden under
In resolving a summary judgment motion, the evidence of the opposing party is to be believed, and all reasonable inferences that may be drawn from the facts placed before the court must be drawn in favоr of the opposing party. Anderson, 477 U.S. at 255. Nevertheless, inferences are not drawn out of the air, and it is the opposing party‘s obligation to produce a factual predicate from which the inference may be drawn. Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244–45 (E.D. Cal. 1985), aff‘d, 810 F.2d 898 (9th Cir. 1987).
ANALYSIS
A. First Claim for Relief: Unfair Competition
The UCL defines “unfair competition” as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising . . .”
In his declaration, Plaintiff states that he has “suffered emotional and financial harm at the hands of [Defendant‘s] pharmacies because [he] chose to reduce the amount of all medications prescribed by [him] to the minimal effective dose of medicine for the treatment of [his] patients.” Pl.‘s Decl., ECF No. 69-1 ¶ 27. However, he does not specify what financial harm he suffered.
Indeed, Plaintiff claims only that “he has had patients leave his practice and it is untold how many patients have failed to come to his practice because of the taint on his reputation because of Defendant‘s actions.” Pl.‘s Opp‘n, at 15. However, four witnesses testified at their depositions that they were eventually able to fill their prescriptions despite Defendant‘s refusal and three witnesses were still patients of Plaintiff. See Ex. I, Fenton Dep., ECF No. 66-5, at 111; Ex. J, Smith Dep., id., at 114; Ex. K, Guirgis Dep., id., at 132. The one witness, Ms. Burke, who testified that she was no longer Plaintiff‘s patient, did not say or suggest that she left Plaintiff‘s practice because of Defendant‘s actions; in fact, she confirmed that Defendant‘s refusal to fill her prescription was not the reason for leaving Plaintiff. See Ex. H, Burke Dep., id., at 94, 96–97. Accordingly, there is nothing in the present evidеntiary record to show that Plaintiff suffered any economic injury as a result of Defendant‘s refusal to fill prescriptions written by Plaintiff. Instead of providing any evidence to the contrary, Plaintiff simply states that “[f]urther discovery will disclose what patients have left [] Plaintiff‘s practice to go to other physicians whom Defendant Rite Aid will fill the prescriptions for,” and “what patients have left [] Plaintiff‘s practice since April 1, 2019.” Pl.‘s Statement of Disputed Facts, ECF No. 69-2,
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Because Plaintiff cannot demonstrate that he suffered an injury-in-fact, he does not have standing to pursue his UCL claim. Therefore, Defendant‘s Motion is GRANTED as to this claim.
B. Second and Third Claims for Relief: IIPEA and NIPEA
To make a prima facie case of IIPEA, a plaintiff must demonstrate:
(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant‘s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.
Youst v. Longo, 43 Cal. 3d 64, 71 n.6 (1987). The tort of NIPEA differs in that the defendant‘s conduct does not need to be intentional. Venhaus v. Shultz, 155 Cal. App. 4th 1072, 1078 (2007).
Like his UCL claim above, Plaintiff cannot show that he has suffered economic harm. Plaintiff again asserts that he has lost patients resulting from Defendant‘s actions, including Ms. Burke. See Pl.‘s Opp‘n, at 16; Pl.‘s Statement of Disputed Facts, ECF No. 69-2, at 12 ¶ 10, 14 ¶ 4. But as previously discussed, Ms. Burke confirmed that Defendant was not the reason she left Plaintiff. Aside from reiterating that further discovery will disclose which patients left his practice, Plaintiff has not provided any supporting evidence, especially since four witnesses testified in their depositions that they were able to fill their prescriptions at other pharmacies and that none of them left Plaintiff‘s practice because of Defendant‘s actions.
Because Plaintiff cannot satisfy the economic harm element, his claims for IIPEA and NIPEA cannot survive. Defendant‘s Motion is thus GRANTED as to both claims.
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Under California law, the elements of a defamation claim are “(a) a publication that is (b) false, (c) defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure or that causes special damage.” Taus v. Loftus, 40 Cal. 4th 683, 720 (2007). A publication is communication of the allegedly defamatory statement “to a third person who understands its defamatory meaning as applied to the plaintiff.” Shively v. Bozanich, 31 Cal. 4th 1230, 1242 (2003). The statement need not be published to the “public at large; communication to a single individual is sufficient.” Smith v. Maldonado, 72 Cal. App. 4th 637, 645 (1999). Nor must the statement be intentionally communicated to a third person. Haley v. Casa Del Rey Homeowners Ass‘n, 153 Cal. App. 4th 863, 877–78 (2007). On the contrary, a defamatory statement negligently communicated to a third party will suffice. Id. A statement is negligently communicated “[i]f a reasonable person would recognize that an act creates an unreasonable risk that the defamatory matter will be communicated to a third person.” Id. at 878–79.
Plaintiff alleges that Defendant‘s employees made the following statements to his patients: (1) Plaintiff lost his license to practice medicine; (2) Plaintiff‘s license was “revoked“; (3) Plаintiff is under investigation by the DEA and/or the Food and Drug Administration; (4) Plaintiff is “being investigated” and is “under review” for writing too many prescriptions; (5) Plaintiff and his medical office were creating “fake” and “fraudulent” pill prescriptions; and (6) Defendant sent a letter to Plaintiff stating that they would no longer fill any prescription written by him. See SAC, ECF No. 23 ¶ 2; Ex. G, Maxwell Decl., ECF No. 66-5, at 82 (Plaintiff‘s response to Defendant‘s interrogatory asking for “each and every statement and/or other information that [Plaintiff] cоntend[s] was defamatory and/or falsely made about [him] by any RITE AID employee“).
However, all four of Plaintiff‘s patients testified at their depositions that none of Defendant‘s employees made any of these statements to them. See Ex. H, Burke Dep., id., at 94–96; Ex. I, Fenton Dep., id., at 109–10; Ex. J, Smith Dep., id., at 116–17; Ex. K, Guirgis Dep., id., at 128–30. As such, Plaintiff cannot show that defamatory statements
CONCLUSION
For the foregoing reasons, Defendant‘s Motion for Summary Judgment, ECF No. 66, is GRANTED. The Clerk of Court is directed to enter judgment in favor of Defendant and to close the case.
IT IS SO ORDERED.
Dated: May 23, 2023
MORRISON C. ENGLAND, JR.
SENIOR UNITED STATES DISTRICT JUDGE