United States District Court, W.D. New York
MARISSA CARTER, EVELYN GRYS, BRUCE CURRIER, SHARON KONING, SUE BEEHLER, MARSHA MANCUSO, JACLYN CUTHBERTSON, as individuals and as representatives of the classes, Plaintiffs,
CIOX HEALTH, LLC, f/k/a HealthPort Technologies, LLC, ROCHESTER GENERAL HOSPITAL, UNITY HOSPITAL OF ROCHESTER, F.F. THOMPSON HOSPITAL, INC., Defendants.
DECISION AND ORDER
FRANK P. GERACI, JR. Chief Judge.
Carter, Evelyn Grys, Bruce Currier, Sharon Koning, Sue
Beehler, Marsha Mancuso, and Jaclyn Cuthbertson
(“Plaintiffs”) brought this putative class action
lawsuit on behalf of individuals in the State of New York who
requested copies of their medical records from CIOX Health,
LLC, Rochester General Hospital, Unity Hospital of Rochester,
and F.F. Thompson Hospital, Inc. (“Defendants”).
ECF No. 48. Plaintiffs allege that Defendants overcharged
them for copies of medical records in violation of New York
Public Health Law (“NYPHL”) § 18 and New
York General Business Law (“NYGBL”) § 349.
Id. Plaintiffs also allege unjust enrichment.
Id. Plaintiffs assert that this Court has
jurisdiction over these claims under the Class Action
Fairness Act (“CAFA”), 28 U.S.C. § 1332(d).
have moved to dismiss Plaintiffs' Amended Complaint. ECF
No. 52. First, Defendants argue that the Court lacks
jurisdiction because this case falls into an exception to
CAFA jurisdiction. See ECF No. 52-1 at 4-8. Second,
Defendants argue that Plaintiffs lack standing to seek
injunctive relief. See Id. at 10. Third, Defendants
argue that a three-year statute of limitations applies to
Plaintiffs' claims and any claim stemming from a
transaction that occurred more than three years before
Plaintiffs initiated this case must be dismissed. See
Id. at 15. Finally, Defendants argue that
Plaintiffs' claims should be dismissed under the
voluntary payment doctrine. For the reasons discussed below,
the Court grants Defendants' Motion to Dismiss in part
and denies it in part.
Rochester General Hospital, Unity Hospital of Rochester, and
F.F. Thompson Hospital are New York healthcare providers.
Id. at ¶¶18-20. Defendant CIOX
Healthcontracted with these and other healthcare
providers to obtain, copy, and distribute patient medical
records. Id. at ¶ 27. New York Public Health
Law requires healthcare providers to provide their patients
with copies of their medical records in exchange for an
amount not exceeding the costs of producing the documents.
See N.Y. Pub. Health Law § 18 (McKinney 2010).
The law also requires that the costs not exceed $0.75 per
page. Id. Plaintiffs allege that Defendants charged
them “artificially inflated amounts” that
exceeded both the cost of producing the records and $0.75 per
page. See ECF No. 48 at ¶ 3.
October 12, 2012 and April 14, 2014, each named Plaintiff
requested medical records from one of the Defendant
healthcare providers. Id. at ¶¶ 36-93. In
doing so, each Plaintiff wrote to their healthcare provider
and offered to “promptly reimburse [them] for any
copying expense not exceeding 75 cents per page.” ECF
No. 20-3. Following each request, Defendant CIOX Health sent
each Plaintiff an invoice indicating that each Plaintiff
would be charged $0.75 per page plus a $2.00 delivery fee for
the production of the records. ECF No. 48 at ¶¶
36-93. Each Plaintiff paid the amount requested, and
Defendant CIOX Health produced the records. Id.
Plaintiffs allege that, in each case, the amount charged
exceeded the cost to produce the documents and, with the
$2.00 delivery fee, exceeded $0.75 per page. Id.
allege that Defendants charged these excessive amounts
systematically. Although the actual cost of providing the
medical records was far below $0.75 per page, Plaintiffs
allege, Defendants charged $0.75 per page and an additional
$2.00 per request in order to generate revenue for both
Defendant CIOX and the Defendant healthcare providers.
Id. at ¶¶ 27-32. Plaintiffs allege that
Defendant CIOX Health calculated these charges to include an
amount to “kick back” to the Defendant healthcare
providers. Id. Indeed, Plaintiffs allege that the
contracts between the Defendants included a provision that
required Defendant CIOX Health to pass a portion of the
excess revenue that it received back to the Defendant
healthcare providers. Id. On that basis, in addition
to asserting violations of NYPHL § 18, Plaintiffs claim
Defendants' practices were deceptive in violation of
NYGBL § 349 and that Defendants were unjustly enriched
by this scheme. Id. at ¶¶ 106-38.
have moved to dismiss Plaintiffs' Amended Complaint under
Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).
See ECF No. 52-1 at 1. Where a motion to dismiss is
made under Rule 12(b)(1) on the ground that the court lacks
subject matter jurisdiction, the court should consider the
Rule 12(b)(1) challenge before considering any accompanying
objections or defenses. See Rhulen Agency, Inc. v.
Alabama Ins. Guar. Ass'n, 896 F.2d 674, 678 (2d Cir.
1990) (quoting Charles Alan Wright et al., Federal Practice
and Procedure § 1350 (3d ed. 2013) (“[W]hen the
motion [to dismiss] is based on more than one ground, the
cases are legion stating that the district court should
consider the Rule 12(b)(1) challenge first because if it must
dismiss the complaint for lack of subject matter
jurisdiction, the accompanying defenses and objections become
moot and do not need to be determined by the judge.”)).
succeed on a motion to dismiss brought under Rule 12(b)(6),
the defendant must show that the complaint contains
insufficient facts to state a claim for relief that is
plausible on its face. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555-56 (2007). A complaint is plausible when
the plaintiff pleads sufficient facts that allow the Court to
draw reasonable inferences that the defendant is liable for
the alleged conduct. Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). Plausibility “is not akin to a
probability requirement, ” rather plausibility requires
“more than a sheer possibility that a defendant has
acted unlawfully.” Id. (internal quotation
marks omitted). “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. (internal
quotation marks and citation omitted). A pleading that
consists of “labels and conclusions” or “a
formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555. Nor
does a complaint suffice if it tenders “naked
assertion[s]” devoid of “further factual
enhancement.” Id. at 557.
considering the plausibility of a claim, the Court must
accept factual allegations as true and draw all reasonable
inferences in the plaintiff's favor. Faber v. Metro.
Life Ins. Co., 648 F.3d 98, 104 (2d Cir. 2011). At the
same time, the Court is not required to accord “[l]egal
conclusions, deductions, or opinions couched as factual
allegations . . . a presumption of truthfulness.”
In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95
(2d Cir. 2007) (internal quotation marks omitted).
Local Controversy Exception to Class Action Fairness Act
argue that the Court must dismiss this case because it falls
into a mandatory exception to the Class Action Fairness Act
(“CAFA”). See ECF No. 52-1 at 5. CAFA
provides the federal district courts with original
jurisdiction over a class action if “the class has more
than 100 members, the parties are minimally diverse, and the
matter in controversy exceeds the sum or value of $5, 000,
000.” Standard Fire Ins. Co. v. Knowles, 133
S.Ct. 1345, 1348 (2013) (internal quotation marks omitted).
Under certain circumstances, however, CAFA directs district
courts to decline to exercise jurisdiction over an otherwise
eligible case. See 28 U.S.C.A. § 1332(d)(4).
One such set of circumstances is articulated in the local
controversy exception. Id. at § 1332(d)(4)(A).
local controversy exception is “designed to draw a
delicate balance between making a federal forum available to
genuinely national litigation and allowing the state courts
to retain cases when the controversy is strongly linked to
that state.” Hart v. Rick's NY Cabaret
Int'l, Inc., 967 F.Supp.2d 955, 962 (S.D.N.Y. 2014)
(citation omitted). In other words, the local controversy
exception is “intended to keep purely local matters and
issues of particular state concern in the state
courts.” Id. (citation omitted). To
that end, the local controversy exception requires a district
court to decline to exercise CAFA jurisdiction
(i) over a class action in which-
(I) greater than two-thirds of the members of all proposed
plaintiff classes in the aggregate are citizens of the State
in which the action was originally filed;
(II) at least 1 defendant is a defendant-
(aa) from whom significant relief is sought by members of the