Patterson v. Rite Aid Corp. Hdqtrs.

• Decision Date: 22 September 2010
• Docket Number: Case No. 1:10 CV 589.
• Citation: 752 F.Supp.2d 811
• Parties: Stephen G. PATTERSON, et al., Plaintiffs,v.RITE AID CORP HDQTRS., Defendant.
• Court: U.S. District Court — Northern District of Ohio

752 F.Supp.2d 811

Stephen G. PATTERSON, et al., Plaintiffs,

v.RITE AID CORP HDQTRS., Defendant.

Case No. 1:10 CV 589.

United States District Court, N.D. Ohio, Eastern Division.

Sept. 22, 2010.

David H. Krause, James A. Deroche, Seaman Garson, David L. Meyerson, Stuart I. Garson, Garson & Associates, Cleveland, OH, Patrick J. Perotti, Dworken & Bernstein, Painesville, OH, for Plaintiffs.John J. Schriner, Jr., Donald S. Scherzer, Roetzel & Andress, Cleveland, OH, Thomas A. Schmutz, W. Bradley Nes, Morgan, Lewis & Bockius, Washington, DC, for Defendant.

MEMORANDUM OPINION

DONALD C. NUGENT, District Judge.

This matter is before the Court on Defendant's Motion to Dismiss the Bilateral Class Action Complaint pursuant to Fed.R.Civ.P. 12(b)(6). (ECF # 11). For the reasons that follow, Defendant's Motion is granted.

PROCEDURAL AND FACTUAL BACKGROUND

Plaintiffs Stephen Patterson and Hyatt Rhine bring this “bilateral class action complaint” against Defendant Rite Aid Hdgqtrs. Corp.¹ (“Rite Aid”) on behalf of themselves and all others similarly situated.² (Complaint at 1.) Both Mr. Patterson and Mr. Rhine filed claims with the Ohio Bureau of Workers' Compensation (“BWC”) for work related injuries. Mr. Patterson filed his claim on March 20, 1987 and Mr. Rhine filed his claim on November 8, 2002. ( Id. at ¶¶ 20, 30). Between April, 2007 and February, 2009, Mr. Patterson purchased prescription drugs from Rite Aid in connection with his BWC claim. ( Id. at ¶ 21). Mr. Rhine purchased prescription drugs from Rite Aid in connection with his BWC claim between April and August, 2006. ( Id. at ¶ 31) The BWC through its pharmacy benefit manager (“PBM”) initially failed to approve Plaintiffs' purchase of prescription drugs through the on-line point of sale adjudication system. ( Id. at ¶¶ 21–22, 31–32).³ As a result of the initial denial, Plaintiffs purchased the prescription drugs from Rite Aid as point of sale cash customers, paying amounts in excess of the BWC approved charges. ( Id. at ¶¶ 23, 33)

In August, 2009, the BWC/PBM reimbursed Mr. Patterson for some of the prescription drugs he had purchased from Rite Aid between April, 2007 and March, 2009 in the amount allowed under BWC's fee schedule, which was less than the amount Mr. Patterson paid Rite Aid for the drugs. The difference between the amount reimbursed by the BWC and the amount charged by Rite Aid was $659.16. ( Id. at ¶¶ 34–36).

In November, 2007, the BWC/PBM reimbursed Mr. Rhine for some of the prescription drugs he purchased from Rite Aid between April and August, 2006 in the amount allowed under BWC's fee schedule which was less than the amount Mr. Rhine paid Rite Aid for the drugs. The difference between the amount reimbursed by the BWC and the amount charged by Rite Aid was $595.73. ( Id. at ¶¶ 34–36).

Both Plaintiffs requested that Defendant refund the difference between the cash price they paid to Defendant and the BWC scheduled price. In both cases, Defendant refused the refund requests. ( Id. at ¶¶ 27–28, 37–38).

The Complaint sets forth six causes of action: violation of Ohio Rev.Code § 4121.44(K) (Count One); breach of contract (Count Two); unjust enrichment (Count Three); violation of Ohio's Consumer Sales Practices Act, Ohio Rev.Code § 1345.01 et seq. (Count Four); money had and received (Count Five); and declaratory and injunctive relief (Count Six).

Defendant has moved to dismiss the complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Plaintiffs have filed a brief in opposition and Defendant has filed a reply brief in support. The motion is now fully briefed and ready for decision.

STANDARD OF REVIEW

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) allows a defendant to test the legal sufficiency of a complaint without being subject to discovery. See Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 566 (6th Cir.2003). In evaluating a motion to dismiss, the court must construe the complaint in the light most favorable to the plaintiff, accept its factual allegations as true, and draw reasonable inferences in favor of the plaintiff. See Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.2007). However, “the tenet that a court must accept a complaint's allegations as true is inapplicable to threadbare recitations of a cause of action's elements, supported by mere conclusory statements.” Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009). See also Gregory v. Shelby County, 220 F.3d 433, 446 (6th Cir.2000) (court will not accept conclusions of law or unwarranted inferences cast in the form of factual allegations.)

In order to survive a motion to dismiss, a complaint must provide the grounds of the entitlement to relief, which requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That is, “[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. (internal citation omitted); see Association of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir.2007) (recognizing that the Supreme Court “disavowed the oft-quoted Rule 12(b)(6) standard of Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)”). Accordingly, the claims set forth in a complaint must be plausible, rather than conceivable. See Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

On a motion brought under Rule 12(b)(6), the court's inquiry is limited to the content of the complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint may also be taken into account. See Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir.2008) ; Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir.2001).

DISCUSSION

Defendant asserts that each of Plaintiffs' purported claims fails to state a claim upon which relief may be granted. The Court will address each claim in turn.

1. Violation of Ohio Rev. Code § 4121.44(K)

Plaintiffs allege that Defendant is a health care provider under O.A.C. § 4123–6–01(G) and is prohibited under Ohio Rev.Code § 4121.44(K) and O.A.C. § 4123–6–07 from collecting or assessing from Ohio workers' compensation claimants any amount for covered services in excess of the amount allowed and paid by the BWC. Further, Plaintiffs allege that Rite Aid is not permitted to retain funds for prescription drugs that are in excess of the allowed amount paid by the BWC. (Complaint, ¶¶ 65–66) Rite Aid's acts allegedly constitute “unlawful balance billing” in violation of § 4121.44(K). ( Id. at ¶ 67).

Rite Aid argues that Plaintiffs' claim under § 4121.44(K) must be dismissed because § 4121.44(K) does not require a health care provider, such as Rite Aid, to make reimbursements and because § 4121.44(K) does not provide a private cause of action. § 4121.44(K) states:

No health care provider, whether certified or not, shall charge, assess, or otherwise attempt to collect from an employee, employer, a managed care organization, or the bureau any amount for covered services or supplies that is in excess of the allowed amount paid by a managed care organization, the bureau or a qualified health plan.

Rite Aid contends that § 4121.44(K) only applies to “covered services”. In this case, Rite Aid sold the prescription drugs to both Plaintiffs as cash customers after the PBM refused to approve the purchases. Thus, at the time of purchase, the prescription drugs were not “covered services” within the meaning of § 4121.44(K). Because Plaintiffs' prescription drugs were not covered, Rite Aid and Plaintiffs were free to enter into an express contract for the sale of outpatient medications at the retail price that all other non-covered customers pay. As such, Rite Aid argues, the sale of these prescription drugs did not fall under § 4121.44(K). Rite Aid notes that Plaintiffs do not dispute that Rite Aid did not violate § 4121.44(K) when the Plaintiffs initially purchased the prescriptions at issue at retail price. It was only when Rite Aid refused to refund the difference between the price paid and the BWC schedule amount after the coverage determination was changed that Plaintiffs allege that § 4121.44(K) was violated. However, Defendant stresses that § 4121.44(K) does not mandate any such reimbursement, as the terms “reimburse” or “refund” do not appear in the provision. Moreover, to find a reimbursement mandate in the provision the Court would have to read words and an entire statutory program into the statute that does not exist. Defendants point out that under Plaintiffs' proposed statutory scheme, there are numerous unanswered questions and issues such as whether it would be a provider's obligation to track all denied claims and initiate reimbursement if the coverage decision changes or whether it would be a claimant's responsibility to request a refund and under what time frame?

Plaintiffs argue that Rite Aid cannot rely on the initial point of service decision that a particular prescription is not covered because the final decision on a claim lies with the Industrial Commission. Thus, Plaintiffs contend that § 4121.44(K) would require a provider to reimburse a plaintiff if the plaintiff's coverage determination is changed. Plaintiffs further note that the statute does not require that a “covered services” determination be made at point of sale. Plaintiffs argue that Rite Aid's interpretation of § 4121.44(K) would lead to undesirable results in that providers would be free to “balance bill” injured workers where the worker is adjudicating a disallowed workers' compensation claim. Since the Workers' Compensation Act expressly declares that the worker compensation laws be must liberally construed in favor of employees and the dependents of...