products from plaintiff's Vix drugstores.
To state a claim for tortious interference with current or
prospective business relations, a plaintiff must allege: (1)
business relations with a third party; (2) the defendant's
interference with those business relations; (3) that the
defendant acted with the sole purpose of harming the plaintiff or
used dishonest, unfair, or improper means; and (4) injury to the
business relationship. Nadel v. Play-By-Play Toys & Novelties,
Inc., 208 F.3d 368, 382 (2d Cir. 2000) (citing Purgess v.
Sharrock, 33 F.3d 134, 141 (2d Cir. 1994)). Here, plaintiff's
tortious interference claim against defendants fails as plaintiff
is unable to establish that a current or prospective business
relationship existed between Drug Emporium and the customers of
its Vix drugstores.
In Kartell v. Blue Shield of Massachusetts, Inc.,
749 F.2d 922 (1st Cir. 1984), the court confronted circumstances nearly
identical to those brought before this court by Drug Emporium.
The plaintiff in Kartell argued that Blue Cross was interfering
with a buyer/seller relationship between physicians and their
patients when the physicians were excluded from Blue Cross's
medical provider network. The First Circuit Court of Appeals
disagreed, holding that any validity to the buyer/seller
characterization "disappears . . . once one looks at Blue Shield,
not as an inhibitory `third force' but as itself the purchaser of
[healthcare providers'] services." Id. at 924.
Although the present case involves drugstores and not
physicians, the legal reasoning remains the same. Moreover,
outside of the difference between providing pharmaceuticals and
providing medical treatment, the facts of the present case are
analogous to Kartell and other cases involving physicians who
were excluded from the provider networks. See Barry v. Blue
Cross of California, 805 F.2d 866 (9th Cir. 1986); see also
Doctor's Hosp. of Jefferson, Inc. v. Southeast Medical Alliance,
Inc., 123 F.3d 301, 308 (5th Cir. 1997); Klamath-Lake
Pharmaceutical Ass'n v. Klamath Med. Serv. Bureau,
701 F.2d 1276, 1292 (9th Cir. 1983), cert. denied, 464 U.S. 822, 104
S.Ct. 88, 78 L.Ed.2d 96 (1983); Capital Imaging Assocs., P.C. v.
Mohawk Valley Medical Assocs., Inc., 996 F.2d 537, 544 (2d Cir.
In each of these cases, the courts held that the drugstores and
the physicians provide a medical service to consumers which can
be altered based on the actions of health insurance companies in
which an individual consumer chooses to enroll. Essentially, the
courts in each of the physician cases determined that the
insurers are the buyers of the medical services, not the
While this conclusion has arisen principally in the antitrust
context, the rationale is equally applicable to claims of
tortious interference with a business relationship. Bohtiuk v.
Delaware Chiropractic Servs. Network, L.L.C., 1997 Del.Super.
LEXIS 215 (April 11, 1997), includes the most extensive analysis
of a claim of tortious interference related to the implementation
of a restricted healthcare network. There, the court concluded
that the insurer was privileged to reimburse whichever doctors it
sought for its patients. As the entity that paid the bill, the
decision to continue the reimbursement of services performed by
healthcare providers for insureds belonged to the insurers, not
to the healthcare providers. See id. at 12.
The court finds that there is little difference between the
plight of plaintiff Drug Emporium and the plight of physicians
excluded from healthcare provider networks. Indeed, it is the
insurer's right as buyer and payer of the services to choose whom
it buys its products and services from. Accordingly, as a matter
of law, no business relationship existed between plaintiff and
Vix customers; and thus, plaintiff's claim that the creation of
the network constituted tortious interference with business
relations is dismissed.
2. Tort Claims Against Tops and Rite Aid
In its complaint, plaintiff alleges that defendants Tops and
Rite Aid tortiously interfered with the business relationship
between plaintiff and defendant Blue Cross.*fn5 As indicated
above, to state a claim for tortious interference with current or
prospective business relations, plaintiff must allege: (1)
business relations with a third party; (2) defendants'
interference with those business relations; (3) that defendants
acted with the sole purpose of harming the plaintiff or, where
defendants acted to advance their own competing interests, that
the defendants used dishonest, unfair, or improper means, such as
criminal or fraudulent conduct; and (4) injury to the
relationship. Nadel, 208 F.3d at 382 (2d Cir. 2000).
Here, plaintiff alleges that prior to the creation of the
network, plaintiff enjoyed an ongoing, mutually beneficial
business relationship with Blue Cross. Item 1, ¶ 26. Plaintiff
further claims that defendants Tops and Rite Aid knew or had
reason to know of plaintiff's relationship with Blue Cross and
intentionally interfered with that relationship. Item 1, ¶ 66.
Specifically, plaintiff claims that the creation and proposed
implementation of the exclusive pharmacy network not only
violated antitrust law but also placed undue economic pressure on
Blue Cross to terminate its relationship with plaintiff's Vix
drugstores. Id. Plaintiff further claims that it was injured as
a result of defendants' intentional interference, and that it
will continue to suffer severe losses in revenue due to the
creation of the exclusive network.
Setting aside the analysis of the antitrust claims, which at
this time the court must, the issue becomes whether the
allegations of economic pressure are sufficient to withstand
defendants' motion to dismiss. On a motion to dismiss, the court
is required to read the complaint with great generosity, Cosmas
v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989), and it is well
settled that some degree of economic pressure may constitute
wrongful means under the tortious interference analysis. See
Italian and French Wine Co. v. Negociants U.S.A., 842 F. Supp. 693,
702 (W.D.N.Y. 1993). Based on these standards, plaintiff's
allegations that Tops and Rite Aid used economic pressure to
force Blue Cross to terminate its relationship with plaintiff are
sufficient to defeat defendants' motion to dismiss.
While defendants argue that in order to survive a motion to
dismiss, plaintiff must distinguish the economic pressure "from
the mere `persuasion'" that is inherent in the "competitive
market," the court does not agree that such a showing is
required. Item 37 at p. 13. Whether plaintiff's allegations of
economic pressure are of the degree necessary to sustain an
action is a question of fact best answered upon summary judgment
or at trial. Accordingly, defendants' motion to dismiss
plaintiff's tortious interference action against Tops and Rite
Aid (Count IV) is denied.
For the reasons set forth herein, defendants' motion to dismiss
is granted as to Count One and Three, but denied as to Count
Four. The motion to dismiss Count Two of the antitrust claims is
converted to a motion for summary judgment. A telephone
conference will be held on Monday, July 10, 2000, at 2 p.m. to
discuss a scheduling order. Buffalo counsel shall attend in