health benefits plan. In essence, plaintiff asks this court to
find a new, implied right of private action for violations of
Section 300e-9 which would enable plaintiff, and, presumably,
other health maintenance organizations, to bypass the sole
enforcement mechanism provided in the statute.
In the present case, the questions concerning standing and an
implied right of action are inseparable. The Supreme Court had
established, early on in Cort v. Ash, 422 U.S. 66, 95 S.Ct.
2080, 45 L.Ed.2d 26 (1975), a four pronged test to determine
whether a court may infer a private right of action from a
federal statute.*fn1 However, two years later, the Court
decided that the Cort factors were merely relevant rather than
determinative, emphasizing, instead, the court's probe into
congressional intent, Cort's second prong. Piper v. Chris-Craft
Indus., 430 U.S. 1, 37-41, 97 S.Ct. 926, 947-49, 51 L.Ed.2d 124
Writing for the majority after another two years, Justice
Rehnquist stated unequivocally that "[t]he question of the
existence of a statutory cause of action is, of course, one of
statutory construction." Touche Ross & Co. v. Redington,
442 U.S. 560, 568, 99 S.Ct. 2479, 2485, 61 L.Ed.2d 82 (1979).
Importantly, the Court had come to see its task "limited solely
to determining whether Congress intended to create the private
right of action" asserted by the plaintiff. Id., see also
Karahalios v. Nat'l Fed'n of Fed. Employees, Local 1263,
489 U.S. 527, 532, 109 S.Ct. 1282, 1286, 103 L.Ed.2d 539 (1989).
Moreover, while Justice Rehnquist reasoned that the mere fact
that the plaintiffs in Touche Ross were intended beneficiaries
of the statute at issue, he held that they had no private right
of enforcement and concluded that "in a series of cases since
[J.I. Case Co. v.] Borak [, 377 U.S. 426, 84 S.Ct. 1555, 12
L.Ed.2d 423 (1964)] we have adhered to a stricter standard for
the implication of private causes of action, and we follow that
stricter standard today." Id. at 578, 99 S.Ct. at 2490.
Though, the Touche Ross plaintiff had implored the Court to
consider the Cort factors, the Court instructed that "[t]he
central inquiry remains whether Congress intended to create,
either expressly or by implication, a private cause of action."
Id. at 575, 99 S.Ct. at 2489. As Justice Rehnquist explained,
"[t]he ultimate question is one of congressional intent, not
one of whether this Court thinks that it can improve upon the
statutory scheme that Congress enacted into law." Id. at 578,
99 S.Ct. at 2490.
Turning now to the instant action, plaintiff HCP urges this
court to consider the four Cort factors. Plaintiff refers to a
footnote in a recent case which apparently maintains the
efficacy of the Cort test. Wilder v. Virginia Hospital Ass'n,
___ U.S. ___, 110 S.Ct. 2510, 2517 n. 9, 110 L.Ed.2d 455
(1990). The footnote in question, though, also calls the
reader's attention to the Touche Ross case with its "stricter
standard." As noted above, the Supreme Court has narrowed the
Cort factors in a subsequent series of cases. As a result, the
four factors are no longer entitled to equal weight. Touche
Ross, 442 U.S. at 575-76, 99 S.Ct. at 2489; see also Anthony J.
Waters, The Property in the Promise, 98 Harv.L.Rev. 1109, 1175
As far as the Cort factors now go, the inquiry into
congressional intent is of paramount importance in determining
implied rights of action from federal statutes. See Touche
Ross, 442 U.S. at 568, 99 S.Ct. at 2485. Any such inquiry must
necessarily begin with the language of the statute. First,
while plaintiff may, to some degree, enjoy some protection
under the HMO law, any right it seeks to assert under this
legislation must comport with the legislative scheme of the
program. Moreover, the mere fact that Section 300e-9 may have
been designed to provide protection for an HMO does not imply
the right to a private action. See id. at 578, 99 S.Ct. at
2490. Second, after reviewing Section 300e-9 and its
legislative history, this court can find no basis for finding
that Congress intended to create an express or implied private
right of action to enforce its provisions.*fn2 In fact, the
section contemplates administrative rather than judicial
enforcement of the section's requirements. Section 300e-9(e)
provides for the assessment by the Secretary of civil penalties
for each thirty day period that noncompliance with the statute
continues. Third, neither does this court consider the creation
of a private remedy to be consistent with the underlying
purposes of the legislative scheme. By its terms, Section
300e-9 allows the Secretary to punish a wrongdoing employer
through imposition of repeated fines until compliance is
achieved. An implied right of action would only act to
circumvent the explicit responsibility of the Secretary to
enforce compliance with the statute through the assessment of
penalties and transfer the primary obligation in such cases
from the administrative personnel intended to bear it to the
federal courts. Finally, whether or not the instant cause of
action is one traditionally relegated to state law cannot by
itself, nor in conjunction with plaintiff's status as a mere
beneficiary under the section, be the basis for implying a
right of action.
Upon consideration of these factors in the light of recent
Supreme Court pronouncements, this court concludes that no
implied right of private action should be judicially created.
Only the United States has express standing to enforce Section
300-9. Therefore, the plaintiff has no standing to maintain its
current suit for a preliminary injunction or damages.
The claim for preliminary injunction and damages is therefore
denied. Judgment is entered for the defendant. The court
refuses to entertain pendent jurisdiction over the state law
cause of action and it is dismissed.