MEMORANDUM OPINION
This action was initially brought in the Court of Common Pleas of. Allegheny County on April 22, 2014, and was removed to this Court on July 21, 2014 pursuant to the Class Action Fairness Act of 2005, P.L. 109-2 as codified at 28 U.S.C. §§ 1332(d), 1453 (“CAFA”). The case was referred to a United States Magistrate Judge for pretrial proceedings in accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), and Rules 72.C and 72.D of the Local Rules of Court for Magistrate Judges. Plaintiff Andrew M. Gabriel (“plaintiff’) brings this action on behalf of himself and other individuals whose identity protected health information was used in a. fraudulent and unauthorized manner to create fraudulent,prescriptions in. order to obtain controlled substances at the pharmacies of defendants Giant Eagle, Inc., Marckisotto Markets, Inc., Shakespeare Street Associates GP LLC, and CVS Pharmacy, Inc. (collectively, “defendants”). Defendants filed motions to dis
On July 9, 2015, the magistrate judge issued a report and recommendation (“R & R”) in which she recommended that defendants’ motions to dismiss the third amended complaint be granted in their entirety with prejudice. (ECF No. 44). On July 23, 2015, plaintiff filed timely objections to the R & R. (ECF No. 45). Defendants filed responses to plaintiffs objections on August 6, 2015. (ECF Nos. 46, 47). Accordingly, the matter is fully briefed and ripe for disposition. For the reasons that follow, the R & R will be adopted as the opinion of this court, and defendants’ motions to dismiss will be granted.
When objections to an R & R are filed under 28 U.S.C. § 636(b)(1), the court must make a de novo determination of those portions of the report to which objections are made. See Sample v. Diecks,
The court carefully reviewed the R & R", applicable case law, the allegations as set forth in the third amended complaint, as well as the submissions of the parties. Plaintiffs objections reiterate his arguments made in connection with his original opposition to the motions to dismiss. The objections contain no additional substantive arguments that the R & R did not address. The magistrate judge considered all of plaintiffs arguments in. connection with his position, and correctly concluded that plaintiff failed to set forth factual allegations in the complaint sufficient for this court to infer that there is a plausible prima facie case with respect to the claims alleged, or lacked standing to do so. Pennsylvania law does not support any of the asserted claims,.- which plaintiff alleges would impose liability on a pharmacy for filling a prescription where a third party allegedly commits identity theft against a plaintiff.. Pennsylvania law does not impose a per se duty on pharmacists to have procedures in place to prevent third parties from obtaining prescription drugs by furnishing false information to the pharmacist. A pharmacist’s duties cannot be expanded beyond those imposed by the appropriate legislature and regulatory agencies. Plaintiff also failed to allege any compensable injury or damages, and the alleged harm, was neither compensable nor proximately caused by defendants.
The court will adopt the R & R as the opinion of this court.
An appropriate order follows.
ORDER
AND NOW, this 19th day of August, 2015, it is hereby ORDERED, ADJUDGED AND DECREED that for the reasons set forth in "the accompanying memorandum opinion, defendants’ motions to dismiss the Third Amended Complaint (ECF Nos. 30, 34) are GRANTED and plaintiffs objections to the report and recommendation (ECF No. 45) are OVERRULED. It is further ORDERED, ADJUDGED AND DECREED that the complaint filed' by Andrew M. Gabriel is dismissed with prejudice.
It is further ORDERED that, the report and recommendation (ECF No. 44) as supplemented by the accompanying memorandum opinion is ADOPTED as the opinion of the court.
It is further ORDERED that the Clerk of Court mark this case CLOSED; and
It is further ORDERED that pursuant to Rule 4(a)(1) of the Federal Rules of Appellate Procedure; Plaintiff - has thirty (30) days to file a notice of appeal as
REPORT AND RECOMMENDATION
I. RECOMMENDATION
For the reasons set forth below, it is respectfully recommended that the motion to dismiss filed on behalf of Defendant CVS. Pharmacy, Inc. (“CVS”) [ECF No. 30] be granted in full. It is further recommended that the motion to dismiss filed on behalf of Defendant Giant Eagle, Inc. (“Giant Eagle”) [ECF No..34] be granted in full.
II. REPORT
A. Background
This action was initially brought in the Court of Common Pleas of Allegheny County on April 22, 2014, and was removed to this Court on July 21, 2014 under the Class Action Fairness Act of 2005, P.L. 109-2 as. codified at 28 U.S.C. §§ 1332(d), 1453 (“CAFA”). The case was referred to this United States Magistrate Judge for pretrial proceedings in accordance with the Magistrate Judges Act, 28 U.S.C. §. 636(b)(1) and Rules 72.1.3 and 72.1.4 of the Local Rules for Magistrate Judges. The Third Amended Complaint (“TAC”) was filed on June 20, 2014 [ECF No. 1-9], The Court denied Plaintiffs Motion to Remand on December 12, 2014 [ECF Nos. 27, 28].
This action involves a dispute over the use of Plaintiffs identity by an unnamed Perpetrator to create fraudulent prescriptions in order to obtain controlled substances at Defendants’ pharmacies located throughout the Pittsburgh area. Plaintiff brings this action on behalf of himself and other individuals whose identity and/or protected health information was used in a similarly fraudulent and unauthorized manner. [TAC at ¶¶ 8, 135]. Defendants have moved to dismiss the TAC, arguing as to certain claims that the Plaintiff does not have standing and therefore, the Court lacks subject-matter jurisdiction over those certain claims, or alternatively, that Plaintiff has failed to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure.
B. Allegations of the Complaint
Plaintiff is a resident of Allegheny County, Pennsylvania. [TAC at ¶ 124]. Defendant Giant Eagle is a Pennsylvania corporation that operates retail pharmacies in its grocery stores in Allegheny County. [TAC at ¶ 125]. Defendant CVS is a corporation incorporated under the laws of the state of Rhode Island and operates retail pharmacies in Allegheny County, Pennsylvania. [TAC at ¶ 127]. Plaintiff is an existing customer of CVS as well as Giant Eagle pharmacy. [TAC at ¶ 56].
Plaintiff alleges that an unidentified Perpetrator obtained from Defendants Plaintiffs private medical information without his -authorization. [TAC ¶ 49], The Perpetrator then allegedly used Plaintiffs identity to create fraudulent prescriptions, in order to obtain oxycodone and other controlled substances from Defendants’ pharmacies. [TAC at ¶¶ 1, 48].
Specifically, the Plaintiff alleges that on or about April 28, 2012, an unnamed individual provided two medical prescriptions for drugs at the Edgewood Giant Eagle pharmacy location, one of which was for 60 caplets of 10 mg Hydrocodone-acetaminophen. [TAC at ¶ 168]. The' Perpetrator presented the prescriptions—which named Plaintiff as the patient—“using Plaintiffs identity without .Plaintiffs permission or authorization.” [TAC at- ¶ 168]. An unnamed pharmacist at the Edgewood Giant
On or about May 2, 2012, the Perpetrator presented a medical prescription— identifying Plaintiff as the patient—at the Shakespeare Street Giant Eagle pharmacy location using Plaintiffs personal identifying information. The prescription was for 60 tablets of 15 mg Oxycodone. [TAC at ¶ 184]. An unnamed pharmacist at the Shakespeare Street pharmacy location filled the prescription and submitted an insurance claim using Plaintiffs identity and health insurance information. [TAC at ¶¶ 178-79,183,187].
On or about May 12, 2012, the Perpetrator again entered the Shakespeare Street Giant Eagle pharmacy and presented a medical prescription naming Plaintiff as the patient for 75 tablets of 15 mg Oxycodone. The Perpetrator used Plaintiffs identifying information to obtain the drug. An unnamed pharmacist filled the prescription and Giant Eagle submitted an insurance claim using Plaintiffs identity and health insurance information. [TAC at ¶¶ 184-86,189].
Plaintiff contends that Giant Eagle should have discovered the fraud because “the amounts listed in the purported prescriptions and the timing thereof, both filled by Defendant Giant Eagle at the same pharmacy location, ie., 60 tablets of 15 mg Oxycodone and 75 tablets of 15 mg Oxycodone within 10 days, clearly indicated that the purported prescriptions were not for a legitimate medical purpose or at least required further inquiry.” [TAC <at ¶ 187] (emphasis is original).
Plaintiff alleges that Giant Eagle “submitted false insurance claims using Plaintiffs identity and health insurance information on the basis [sic] this purported prescription without Plaintiffs authorization.” [TAC at ¶¶ 183,189]
On or about May 14, 2012, Plaintiff first became aware of that the Perpetrator obtained his information when a Pittsburgh police detective contacted Plaintiff and alerted ,him that his identity had been stolen. [TAC at ¶¶ 67-68]. The detective contacted Plaintiff at his place of business and one of .Plaintiffs co-workers was “made aware” of the police contact, thereby causing “great embarrassment” for the Plaintiff,”. [TAC at ¶¶ 69-70],
On June 3, 2012 a CVS pharmacy store located in Swissvale, Pennsylvania telephoned Plaintiff to inquire about re-filling a prescription. [TAC at ¶77]. Plaintiff did not recognize the prescription and, because of this, “inferred” that CVS had already filled a prescription by someone fraudulently using Plaintiffs identity. [TAC at ¶¶ 78-79]. After Plaintiff notified CVS of the fraudulent prescription issue, he was placed on hold, and then CVS acknowledged that it had already been contacted by the police, had records seized and apologized to Plaintiff. [TAC at ¶¶ 80-82]. “Plaintiff was shocked and outraged that Defendant CVS had, given the circumstances, attempted to sell him controlled substances.” [TAC at ¶ 83]. There is no allegation that Defendant CVS submitted any false insurance claims.
Plaintiff alleges that at no time did Defendants attempt to verify the identity of the individual presenting the purported prescriptions to determine if the name on the prescription matched the name of the person presenting the prescription to the
Plaintiff asserts that he has been left'to deal with the “fall out of Defendants’ behavior with respect to filling fraudulent prescriptions, unauthorized use of confidential protected health information, and/or submission of fraudulent insurance claims.” [TAC at ¶ 104], His alleged resultant damages are “time lost and money lost dealing with this medical identity theft” including “incorporation of incorrect information onto Plaintiffs electronic or other health record(s).” [TAC at ¶¶ 105, ■106].
In .addition to his own individual claims, Plaintiff seeks to represent a class action, consisting of: ...
1.. “[a]ll individuals whose identity and/or protected health information was used by Defendants during the period beginning at least as early as April 28, 2012 to present where: (i) said individual’s identity and/or protected health information was used by Defendants to fill a purported prescription for a federally controlled substance; and (ii) the controlled substance that was the subject of the purported prescription was known by Defendants to be commonly abused by drug addicts (‘Class 1’)”; and
2. “[a]ll individuals whose identity and/or protected health-information was used in an unauthorized way by Defendants during the period beginning at least as early as April 28, 2012 to present where: (i) said individual’s identity and/or protected health information was used by Defendants to fill a purported prescription for a federally controlled substance; and (ii) the controlled substance that was the subject of the purported prescription was known by Defendants to be commonly abused by drug addicts (‘Class 2’)” -
[TAC at ¶ 135]. (emphasis added).
Plaintiff frames the allegations of the TAC within the broader context of the nation’s prescription drug addiction problem. For example, Plaintiff alleges that the Pennsylvania State Board of Pharmacy web site reports that “over 6 million Americans use prescription drugs such as pain relievers, tranquilizers, and stimulants non-medically.” [TAC at ¶ 11] (emphasis in original). Plaintiff also alleges that the Center for Disease Control and Prevention web site reports that drug overdose death rates in the United States have more than tripled since 1990 and that in 2008, more than 36,000 people died from drug overdoses, and most of these deaths were caused by prescription drugs. [TAC at ¶¶ 12, 13]. Plaintiff alleges that “[i]t. is generally understood that pharmacists act as a “gatekeeper”, uniquely positioned to stop fraud -at the point of drug salé and
The Plaintiff alleges the following causes of action as to Defendant Giant Eagle: negligent security of personal information (Count I) [TAC at ¶¶ 148-227]; negligent failure to act (Count II) [TAC at ¶¶ 293-341]; identity theft (Count III) [TAC at ¶¶ 386-391]; fraud (Count IV) [TAC at ¶¶ 396-409]; unjust enrichment (Count V) [TAC at ¶¶ 410-424]; unfair trade practices (Count VI) [TAC at ¶¶ 442-452]; invasion of privacy (Count VII) [TAC ’ at ¶¶ 453^461]; and conversion (Count VIII) [TAC at ¶¶ 471-480].
The Plaintiff alleges the following causes of action against Defendant CVS: negligent security of personal information (Count I) [TAC at ¶¶ 228-292]; negligent failure to act (Count II) [TAC at ¶¶ 342-385]; identity theft (Count III) [TAC at ¶¶ 392-395]; unjust enrichment (Count V) [TAC at ¶¶ 425-441]; invasion of privacy (Count VII) [TAC at ¶¶ 462-470]; and conversion (Count VIII) [TAC at ¶¶ 481-485],
In his prayer for relief, Plaintiff seeks compensatory damages, statutory damages, an accounting of all profits gained by Defendants due to said unlawful activity, disgorgement of Defendants’ profits as equity deems proper, restitution, punitive damages, pre-judgment interest, an injunction enjoining and precluding Defendants from dispensing drugs within the. Commonwealth of Pennsylvania, specifically controlled substances, without first taking steps deemed necessary by this Court, to confirm the purported prescription is for a legitimate medical purpose and validly presented, and an injunction enjoining and precluding Defendants from using identity and protected health information of any individual without first taking steps deemed necessary by this court to ensure the use of such information is authorized under applicable standards, legal fees, and treble damages. [TAC at pp. 80-81].
C. Standard of Review
Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the Plaintiff has not stated a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); see also Hedges v. United States,
In the subsequent case of Ashcroft v. Iqbal,
The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with”' a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’ ”
Id. at 678,
We note Plaintiff has attached Exhibits to his Third Amended Complaint. [ECF No 1-9 at 85-297]. “Although a district court may not consider matters extraneous to the pleadings, ‘a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment.’ ” U.S. Express Lines, Ltd. v. Higgins,
With this standard of review in mind, we now turn to the allegations of the Third Amended Complaint and whether the Plaintiff has stated a claim under the various causes of action alleged.
D. Discussion
Whether the Plaintiff has stated a claim under negligent security of personal information and negligent failure to act
Count I alleges that Defendants have a duty to safeguard his identity and personal health information and breached that duty by failing to take reasonable precautions to protect Plaintiff from injuries caused by a third party. [TAC ¶¶ 151-153, 230-233]. Similarly, in Count II, Plaintiff alleges that Defendants are liable for negligent failure to act, insofar as they had a duty to take affirmative steps to reasonably safeguard Plaintiffs medical identity and failed to take reasonable precautions to protect Plaintiff from injuries caused by a third party. [TAC ¶¶ 294-295, 343-344].
Count I alleges that “Defendant Giant Eagle has sacrificed the well-being of its existing patients and customers in favor of profits by dispensing drugs to individuals that do not have a valid prescription and use Plaintiffs identity” and “by making unauthorized uses of Plaintiffs protected health information” and further, “by submitting fraudulent insurance claims using Plaintiffs protected health information and health insurance benefits.” [TAC ¶¶ 155-157]. The allegations against CVS are nearly identical. [TAC at ¶¶235, 244] (without alleging insurance claims made). Plaintiff alleges that “[i]n so doing, Defendant Giant Eagle does not attempt to verify that purported prescriptions for drugs are for a legitimate medical purpose, e.g., by inquiring with the prescribing physician or verifying the identity of the individual attempting to fill the purported prescription.” [TAC ¶ 158; see also TAC at ¶ 237 as to CVS].
To state a claim under negligence in Pennsylvania, Plaintiff must aver that the defendants 1) owed him a duty of care, 2) breached that duty, 3) the breach resulted in injury to Plaintiff, and 4) he suffered an actual loss or damage. Martin v. Evans,
Duty
Defendants argue that they do not owe Plaintiff a professional duty to discover that the prescriptions submitted by the Perpetrator were fraudulent and to refuse to fill the fraudulent prescriptions because no laws, rules or regulations enacted by the relevant governing bodies require such a duty. The first element in an action sounding in negligence is “a duty or obligation recognized by the law, requiring the actor to conform to a certain standard of conduct.” Morena v. South Hills Health System,
In Atcovitz, a patron suffered a heart attack while playing tennis at a sports club. The patron survived, but suffered permanent injuries to his nervous system. In his subsequent lawsuit, the patron alleged that the club was negligent in faffing to maintain an automated external defibrillator (AED) on the premises. The court rejected that a duty existed based on the overall public interest of the proposed solution (factor five of common law duty of care analysis) because the subject matter (the maintenance of an AED) was already highly regulated under Pennsylvania law.
Defendants argue that the practice of pharmacy is similarly regulated in Pennsylvania by the Pennsylvania Pharmacy Act, 63 P.S. §§ 390-1 et seq. (“Pharmacy Act”). The Pharmacy Act governs the practice of pharmacy by its rules and regulations and its establishment of the State Board of Pharmacy, which is charged with regulating the practice of pharmacy, licensing pharmacists, investigating all violations of the Pharmacy Act, and prosecuting violations where appropriate. 63 P.S. §§ 390-6(1), (3), (5), and (8). Defendant CVS argues that it is notable that there are no rules or regulations that create a duty “even remotely consistent with any of Plaintiffs allegations, and certainly no rule or regulation that requires pharmacists to protect a pharmacy patient from criminal activity perpetrated by a third party.” [ECF No. 31 at 7]. Giant Eagle has made an identical argument. [ECF No. 35 at 9]. Giant Eagle aptly notes that “[t]his is not surprising since pharmacists are trained in the practice of pharmacy, not law enforcements [ECF No, 35 at 9].
The Pharmacy Act does, however, require pharmacists to use their professional skills in engaging in the “practice of pharmacy,” which is defined as
The provision of health care services by a pharmacists, which includes the interpretation, evaluation and implementation of medical orders- for the provision of pharmacy services or prescription drug orders; the delivery, dispensing or distribution of prescription drugs; participation in drug and device selection; drug administration; drug regimen review; drug therapy management, ,.. drug or drug-related research; compounding; proper and safe storage of drugs and devices; management of drug therapy pursuant to section 9.3, ... maintaining proper records; patient counseling; and such acts, services, operations or transactions necessary or incident to the provision, of these health care services....
63 P.S. § 390-2(11).
Pennsylvania courts have specifically limited the duty a pharmacist owes its customers to filling prescriptions in a safe manner, and “have rejected arguments seeking to expand the duties imposed by law beyond this narrow scope,” citing Forish v. Paul, 2 Pa. D. & C. 4th 413, 416-17 (Erie Cty., Feb 9, 1989) and Makripodis v. Merrell-Dow Pharms.,
Indeed, the holding in Forish is particularly instructive; the court recognized that a pharmacist’s duties to its customers fall into two broad categories in which they are specifically trained:
First, liability may flow from a pharmacist’s failure to remedy inadequacies on the face of a physician’s prescriptions. These might include failure to correct improper dosage directions; failure to check on illegible prescriptions; and failure to notice a potentially lethal interaction between drugs on the face of a prescription. Under these circumstances, the courts have determined that a pharmacist lias a duty to alert the physician and make proper adjustments. See generally Riff v: Morgan Pharmacy. The s,econd category involves negligence oh the part of a pharmacist in the actual process of preparing and dispénsing a medication pursuant to the orders of the physician. Into this area fall misreading a prescription; mislabeling; improper compounding; incorrect dosage (in strength or quantity); use of ímpropér methods ■for dispensing; failure to- ensure that the drug is pure and unadulterated in form upon sale; and failure to attach the proper contraindication warnings as per the doctor’s instructions. These particular responsibilities involve that which a pharmacist is specifically trained to practice. As such, they must be carried out with the degree of skill and care expected of the pharmaceutical profession as a whole. .
Forish v. Paul, 2 Pa. D. & C. 4th at 416-17 (italics in original) (bold added). Giant Eagle argues that a pharmacist “has a duty to its customers to (1) correct any obvious errors in a written prescription that a pharmacist—-because of his or her professional training—should recognize as causing a danger to the customer, and (ii) to prepare and dispense the prescribed medication in accordance with the prescription.” [ECF No. 35 at 11]. In the
Defendants further correctly note 'that the State Board of Pharmacy, the Pennsylvania agency charged with regulating the practice of pharmacists and interpreting the Pharmacy Act, has declined to impose any duty on pharmacists to protect pharmacy patients from criminal identity theft perpetrated by a third party. The standards of conduct and duties owed by Pennsylvania pharmacists can be found in the Board’s “Standards of Practice,” 49 Pa. Code § 27.18, which is silent as to regulations requiring a pharmacist to protect its patients from identity theft. We agree with Defendants that Plaintiff cannot ask this Court to impose a duty that neither the legislature nor the State Board of Pharmacy have imposed.
The Standards of Practice regulations state:
A pharmacist may decline to fill or refill a prescription if the pharmacist knows or has reason to know that it is false, fraudulent or unlawful, or that it is tendered by a patient served by a public or private third-party payor who will not reimburse the pharmacist for that prescription. A pharmacist may not knowingly fill or refill a prescription for a controlled substance or nonproprietary drug or device if the pharmacist knows or has reason to know it is for use by a person other than the one for whom the prescription was written, or will be otherwise diverted, abused or misused. In addition, a pharmacist may decline to fill or refill a prescription if, in the pharmacist’s professional judgment exercised in the interest of the safety of the patient, the pharmacist believes the prescription should not be filled or refilled. The pharmacist shall explain the decision to the patient. If necessary the pharmacist shall attempt to discuss the decision with the prescriber.
49 Pa.Code § 27.18(c). These “gatekeeper” responsibilities—a different breed than those proposed by the Plaintiff—are owed to the Commonwealth, not the customer, are regulated and enforced by the Board of Pharmacy and the enforcement agencies of the Commonwealth, rather than by private individuals, and are designed and intended to combat the illegal distribution of controlled substances, not to stop identity theft.
Moreover, Defendants argue that because the alleged injury in the case at bar was suffered by one not within the scope of a duty, the Plaintiff cannot recover because there has been no breach of a duty with regard to him. Merrit by Southeast Nat’l Bank v. City of Chester,
Causation
Even if the Plaintiff had alleged sufficient, plausible facts to support a claim that a duty was owed to him, Plaintiffs negligence allegations fail with respect to causation. Proximate cause is a question of law that must be established before the question of actual cause may be put to the jury. Novak v. Jennette Dist. Mem. Hosp.,
In the end, based upon Plaintiffs own allegations, we find that the Counts alleging negligence should be dismissed because the Perpetrator’s identity theft that caused the alleged harm.
Harm
Additionally, Defendants argue that Plaintiff fails to state a claim sounding in negligence because he has not alleged any compensable injury or harm. We note that Plaintiff seeks damages for his alleged “embarrassment when his co-worker was made aware of the fact that Plaintiff had been contacted by police, and that he has “time lost and money lost dealing with this medical identity theft.” [TAC at ¶¶70, 105]. In terms of alleged actual loss or damages, Plaintiff alleges that he and others in his class “suffer lost time in dealing with the fall out of identity theft, including time lost contacting health care providers, time lost contacting health insurance providers, time lost coordinating with ongoing law enforcement investigations, money lost due to fraudulent insurance claims made and/or other claims made using the Plaintiffs identity, as well as suffering emotional distress attendant to such victimization.” [TAC ¶ 161]; see also [TAC at ¶ 288-91].
Under Pennsylvania law, mere embarrassment is not compensable in a negligence action, absent physical injury, citing Rolla v. Westmoreland Health System,
We agree. Plaintiffs negligence claims fail as a matter of law because he has not alleged any facts in support of his entitle
In conclusion, for all the above reasons, we recommend that Counts I and II be dismissed for failure to state a claim.
Whether Plaintiff has stated a claim for identity theft
Defendants also move to dismiss Count III. which alleges identity theft, 42 Pa.C.S.A. '§ 8315. Plaintiff alleges that the Defendants stole- his identity by using identifying information to further the “unlawful”’ sale of prescription drugs and as to Defendant Giant Eagle, insurance fraud. [TAC ¶¶ 387, 389, 393]. Defendants argue that they did not steal Plaintiffs identity, the Perpetrator did, and he or she did so before ever entering their pharmacies. In Pennsylvania, the crime of identity theft occurs when one “possesses or uses, through any means, identifying information
Plaintiff further alleges that defendants possessed his identifying information without' his consent “while deliberately ignoring a questionable prescription when there was reason to believe it was not issued for a legitimate medical purpose.” [TAC ¶ 390, 394], Plaintiff has not cited to any legal authority to support the proposition that Defendant’s alleged failure to discover that the Perpetrator had stolen his identity makes them equally liable for the identity theft. His reliance on Clinton Plumbing and Heating of Trenton, Inc. v. Ciaccio,
After a careful review of the TAC, we find the Defendants’ arguments to be compelling, and we recommend that the Court dismiss Count III for failure to state a claim. Plaintiff has not alleged sufficient factual support to support a claim that the defendants used his personal health inforr mation or identity to further an unlawful purpose.
Whether Plaintiff has standing, and if so, has stated a claim under insurance fraud
Count IV alleges that the Defendant Giant Eagle committed insurance fraud. Giant Eagle argues that Plaintiff lacks standing pursuant to Fed.R.Civ.P, 12(b)(1), or, in the alternative, that he has failed to state a claim pursuant to Fed.R.Civ.P. 12(b)(6).
Plaintiff fails to directly address Defendant Giant Eagle’s legal argument that he lacks standing. Rather Plaintiff explains his allegations, arguing that Giant Eagle made direct misrepresentations when it submitted “fraudulent charges, with complete disregard as to their validity, to Plaintiffs account.... [H]e and the insurance carriers justifiably relied on the misrepresentation and suffered damage thereby, i.e. Defendant actually collected Plaintiffs insurance benefits ... [which] builds extra costs into the health insurance system. These costs are passed onto Plaintiff in the form of higher premium payments and reduced benefit availability.” -[ECF Doc. 37 at 14].
A motion to dismiss under' Rule 12(b)(1) challenges whether the court has the jurisdiction to hear, the Plaintiffs claim; a 12(b)(6) motion questions whether the Plaintiff has stated a cognizable legal claim. When presented with a motion pursuant to both rules, the court must consider the arguments under Rule 12(b)(1) first because “[w]hether the complaint states a cause of action on which relief could be granted is a question of law ... [that] must be decided after and not before the court has assumed jurisdiction over the controversy.” Bell v. Hood,
The constitutionally mandated minimum requirement of standing includes the following elements: 1) Plaintiff must have suffered an “injury in fact”, defined as an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical; 2) a causal connection between the injury and the conduct complained of; and 3) it must be likely, rather than merely speculative, that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife,
Assuming arguendo that the submission of insurance claims' by Giant Eagle was fraudulent, Giant Eagle contends that any such cause of action would belong to the insurance carrier, not to Plaintiff, citing Lal v. Ameriquest Mortg. Co.,
In order to state a claim for fraud, Plaintiff must prove that he was the recipient of a fraudulent statement, that he justifiably relied on the fraudulent statement, and that he suffered “actual loss” as a result. Delahanty v. First Pennsylvania Bank, N.A.
After a .careful review of the allegations. in the TAC, we agree with Defendant Giant Eagle that the plaintiff lacks standing, and therefore recommend that Count IV be dismissed in its entirety.
Whether Plaintiff has stated a claim under unjust enrichment
Defendants argue that Count V should be dismissed because Plaintiff has no standing
The United States Court of Appeals has observed:
The elements of unjust enrichment under Pennsylvania law have been defined as follows: (1)' benefits conferred on defendant by Plaintiff; (2) appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under such, circumstances that it would be inequitable for defendant to retain the benefit without payment of value.
Sovereign Bank v. BJ’s Wholesale Club, Inc.,
In this case any benefits allegedly conferred on Defendants were payments allegedly made by a health insurer (or by the Perpetrator), not by the Plaintiff, for the fraudulent prescriptions; this does not state a claim under Pennsylvania jurisprudence. Plaintiff has not alleged factual support for the notion that he himself conferred any benefits on Defendants. In addition, Plaintiff has failed to allege specific facts to support the notion that the retention of such benefits by the Defendants would be unjust under the circumstances. Plaintiffs cause of action should be dismissed.
Parenthetically, to the extent that Plaintiff argues benefits were conferred on Defendants in the form of payments made by a health insurer, even if a party, said insurer could not bring a claim for unjust enrichment because it had a contractual relationship with Giant Eagle. A claim for unjust enrichment, wherein the law implies a quasi-contract which requires the defendant to pay to Plaintiff the value of the benefit conferred, does not exist where there is a written contract between the parties. Mitchell v. Moore,
After a careful review of the allegations in the TAC, we conclude that the Defendants’ motion to dismiss Count V should be granted on the grounds that Plaintiff has failed to state a claim.
Whether Plaintiff has stated a claim under Unfair Trade Practices and Consumer Protection as to Defendant Giant Eagle
In Count VI, Plaintiff alleges that Giant Eagle’s submission of allegedly fraudulent insurance claims to a health insurer violates the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. 201-1 et seq. (the “UTPCPL”). This statute is intended to protect the public from fraud and unfair or deceptive business practices. Fazio v. Guardian Life Ins. Co. of America,
In Fazio, the court held that only an individual “who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, can bring an action under
Nor are there sufficient plausible facts in the TAC which suggest the nature of Plaintiffs loss; or to support the notion that Plaintiffs alleged purchase of a good or service is any way related to the alleged “deceptive”, practices. Plaintiff alleges that Giant Eagle submits insurance claims to. insurance carriers for benefit payments relating to prescription drug sales that it knew or should have known were fraudulent,- and by doing so, causes a likelihood of confusion and “knowingly misrepresents that services' are needed when they are not needed.” [TAC ¶¶ 44346]. There is no plausible factual allegation that Plaintiff knew of or relied upon any wrongful conduct or representation.
The case law is instructive. In Weinberg v. Sun Co., Inc.,
Plaintiff argues that he is a direct purchaser of the insurance prescription drug benefit that was fraudulently charged by Giant Eagle, and that he has standing under the UTPCPL, relying on the holding in Sheet Metal Workers Local 441 Health & Welfare Plan v. GlaxoSmithKline, PLC,
Moreover, we note that despite Plaintiffs stated concern with the problem of prescription drug addiction and overuse of oxycodone, his private right of action is misplaced in this context. In Hunt v. U.S. Tobacco Co., the court held that the UTPCPL’s standing provision exists “to separate private Plaintiffs (who may sue for harm they actually suffered as a result of the defendant’s deception) from the Attorney General (who may sue to protect the public from conduct that is likely to mislead).”
Finally, Plaintiff has not only failed to adequately pled justifiable reliance, he has not shown that he is entitled to a presumption of reliance under the “narrow” exception of a fiduciary relationship between himself and Defendant. Hunt,
For these reasons we recommend that Count VI be dismissed for failure to state a elaim.
Whether Plaintiff has stated a claim under invasion of privacy
In Count VII, Plaintiff alleges that the Defendants invaded his privacy under two theories,- namely by 1) “intentionally intruded upon the solitude or seclusion of Plaintiff by accessing and using Plaintiffs identity and protected health information without Plaintiffs permission or authorization” and 2) “intentionally appropriated to its own use or benefit Plaintiffs name.” [TAC ¶¶ 454-455, 463-64.] Under Pennsylvania law, invasion of privacy involves four separate' torts: (1) unreasonable intrusion upon the seclusion of another; (2) appropriation of another’s name or likeness for commercial purposes; (3) publicity given to another’s private life; and 4) publicity that' unreasonably places another in a false light' before the public. Doe v. Wyoming Valley Health Care Sys., Inc.,
Although the Pennsylvania Supreme Court has not expressly adopted the Restatement (Second) of Torts definition of intrusion upon seclusion, Pennsylvania courts rely upon its definition to parse such claims. See Tagouma v. Investigative Consultant Svcs., Inc., 4 A.3d 170, 174 (Pa.Super.2010). To establish a claim for intrusion upon seclusion in Pennsylvania, Plaintiff must prove that defendants invaded his privacy: “(1) by physical intru
We find that Plaintiff has failed to allege facts supporting this claim. Again, the actor who may be subject to such a claim was the Perpetrator. There is no allegation of physical invasion or that defendants oversaw or overheard Plaintiffs private affairs. Nor does Plaintiff allege that defendants conducted an investigation or examination into Plaintiffs private concerns, and in fact, he alleges they failed to conduct such an investigation when they had an alleged duty to do so. Indeed, where private information alleged to have been intruded upon was legitimately obtained, there is no cause of action. Burger v. Blair Medical Associates, Inc.,
Plaintiff must allege that the conducted amounted to an “intentional intrusion upon the seclusion of his private affairs which was substantial and highly offensive to a reasonable person.” Muhammad v. United States,
As to the allegation that the defendants appropriated to their own use or benefit Plaintiffs name, the defendants’ motion to dismiss will be granted as well. To adequately such a claim Plaintiff must allege that defendant “appropriated to his own use or benefit the reputation, prestige, social or commercial standing, public interest or other values of the Plaintiffs name or likeness.... Until the value of the name has in some way been appropriated, there is no tort.” AFL Philadelphia LLC v. Krause,
For these reasons, we recommend that Plaintiffs invasion of privacy claims at Count VII be dismissed in their entirety as to both Defendants.
Whether Plaintiff has stated a claim for conversion
In Count VIII, Plaintiff alleges conversion as to both defendants. As to Giant Eagle, he asserts that by submitting allegedly fraudulent insurance claims to the insurance carrier, Giant Eagle deprived him of “use, control and possession of Plaintiffs money and property.” [TAC ¶474], As to Defendant CVS, Plaintiff alleges that in fraudulently selling prescription drugs, it “exercised unauthorized control over Plaintiffs money and property, i.e. Plaintiffs identity and protected health information.” [TAC ¶¶ 482-83].
Conversion is defined as “the deprivation of another’s right of property in, or use or possession of, a chattel, without the owner’s consent and without lawful justification.” Leonard A. Feinberg, Inc. v. Cent. Asia Capital Corp., Ltd.,
While courts in other states have expanded the tort of conversion to apply to intangible property, in Pennsylvania this expansion is limited “to the kind of intangible rights that are customarily merged in, or identified with, a particular document (for example, a deed or a stock certificate).” Apparel Bus. Sys., LLC v. Tom James Co., Civ. A. No. 06-1092,
Plaintiff makes a conclusory allegation that he has been deprived of the use and possession of his money and property, but has alleged no factual basis to support this legal conclusion. Plaintiff does not allege specific facts to support the allegation of conversion, i.e. that he paid any money for the fraudulent prescriptions, that his insurance premiums went up, or that any submission of insurance claims has caused him to lose any money or property.
For all of these reasons, it is therefore recommended that Count VIII be dismissed as to both defendants.
Leave to Amend
Furthermore, we must conclude under the circumstances that any amendment of the TAC would be futile. As currently amended, the factual allegations of the TAC, fail to state a claim, and Plaintiff has not pro
III. CONCLUSION
For the reasons set forth above, it is recommended that the Motion to Dismiss filed on behalf of Defendant CVS Pharmacy, Inc. (“CVS”) [ECF No. 30] be granted, the Motion to Dismiss filed on behalf of Defendant Giant Eagle, Inc. '(“Giant Ea"gle”) [ECF No. '34] be granted, and the Third Amended Complaint be dismissed in its entirety with prejudice.
In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1)(B) and (C), and Rule 72.D.2 of the Local Rules for Magistrate Judges, any Objections to this Report. and Recommendation are to be filed no. later than July 23, 2015. Failure to file Objections will waive the right to appeal. Brightwell v. Lehman,
Filed July 9,2015.
Notes
. The United States Court of Appeals for the Third Circuit has explicated the Twombly/Iqbal standard on several occasions. See, e.g., Argueta v. U.S. Immigration & Customs Enforcement,
To determine ‘whether a complaint meets the pleading standard, our analysis unfolds in three steps. First, we outline the elements a plaintiff must plead to a state a claim for relief. Next, we peel away those allegations that are no more than conclusions and thus not entitled to the assumption of truth. Finally, we look for well-pled factual allegations, assume their veracity, and then "determine whether they plausibly give rise to an entitlement to relief.” This last step is "a context-specific task that requires the reviewing court to draw on its judiciál experience and common sense.”
Bistrian v. Levi,
. Exhibit A: Prehearing Statement on Behalf of the Government before an ALJ in the Matters of Walgreen Co, USDOJ, DEA Docket Nos. 13-9, 13-10, 13-11; Exhibit B: Prehearing Statement on Behalf of the Government in Matter of Walgreen USDOJ, DEA No. 13-10; Exhibit C: Government's Prehearing Statement In Matter of Walgreen USDOJ, DEA Docket No. 13-11; Exhibit D: Supplemental Prehearing Statement on Behalf of the Government In the Matters of Walgreen Co., US-DOJ, DEA No. 13-1, 13-9, 13-10, and 13011, Exhibit E: Government’s Prehearing Statement for Walgreens In the Matter of Walgreens USDOJ, DEA No. 13-1, 13-9, 13-10, 13-11, 13-16, 13-18, 13-20; Exhibit F: Government's Prehearing Statement for Walgreens In the Matter of Walgreens USDOJ, DEA No. 1.3-1, 13-9, 13-10, 13-11, 13-16, 13-18, 13-20; Government's Consolidated Supplemental Prehearing Statement In the Matter of Walgreens USDOJ, DEA No. 13-1, 13-9, 13-10, 13-11, 13-16, 13-18, 13-20; Exhibit H: ALJ's Recommended Decision, DOJ, DEA Holiday CVS, Nos. 12-37 and 12-38, 77 Fed Reg. 198 (October 12, 2012); Exhibit I: National Target Drug Good Faith Dispensing Checklist and Policy; Exhibit J: Coventry
. The court identified two pieces of relevant legislation, the Emergency Medical Services Act, Pa. Stat. Ann. Titl. 35, §§ 6921-6938 (“EMS Act”) and 42 Pa. Cons.Stat. § 8331.2 ("AED Good Samaritan Act”). The EMS Act is a comprehensive piece of legislation, the Atcovitz court explained, the stated intent of which is "to assure readily available and coordinated emergency medical services of the highest quality to the people of Pennsylvania.” To achieve this goal, the EMS Act and its implementing regulations explicitly classify and identify the capacities, training requirements, and qualifications of individuals who are authorized to deliver emergency medical service including the use of AEDs
. "Identifying information'' is defined as "[a]ny document, photographic, pictorial or computer image of another person, or any fact uséd to establish identity, including, but not limited to, a name, birth date, Social Security number, driver’s license number, nondriver governmental identification number, telephone number, checking account number, savings account number, student identification number, employee or payroll number or electronic signature.” Id. at § 4120(f).
. Nor has Plaintiff alleged or shown legal authority • to support his theory that Giant Eagle’s .submission of insurance claims was unlawful where, as Plaintiff admits, it was believed at the time that the patient presenting the prescription was indeed the Plaintiff.
. Defendant CVS is not named in Count VI.
. Defendant CVS, citing to Lujan, argues that there is no allegation of injury in fact as a result of CVS’s alleged conduct, apparently invoking Fed.R.Civ.P. 12(b)(1) without outright sighting to that rule. CVS points out that Plaintiff has not alleged facts supporting that he was financially harmed, or that his insurance premium was raised. Defendant Giant Eagle similarly questions whether Plaintiff has standing. [ECF No. 35 at 19]. We find defendants' arguments as to standing compelling for the reasons previously stated, Plaintiff’s allegations as to harm being vague and conclusory, but out of an abundance of caution, we focus attention on the standard in Fed.R.Civ.P, 12(b)(6).
. Defendant Giant Eagle, in their Brief-in Support of the Motion to Dismiss, notes that ' Plaintiff has not alléged any causal connection between his purchase of a “prescription drug” and Giant Eagle’s alleged deceptive practices. Giant Eagle notes that he does not claim he paid more for the “prescription drug” than he should have, that it was not what Giant Eagle told him that it was, or that Giant Eagle engaged in any false advertising or other deceptive practice with respect to the sale of the prescription drag. [ECF No, 35 at 22]. We find that Giant Eagle has erred in its reading of the TAC; Plaintiff alleges the purchase of “one insurance prescription drag benefit ” i.e. an insurance policy at an inflated price, not a prescription drag itself., [TAC at ¶¶.448, 451]. Giant Eagle appears to have cleared up its confusion when crafting their reply. [ECF No. 40 at p. 3]. Even so, the TAC fails to show how Giant Eagle has deceived Plaintiff himself.