Premier Health Ctr., P.C. v. Curemd.Com, Inc., No. 17 CV 1861-LTS

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Writing for the Court: LAURA TAYLOR SWAIN United States District Judge
• Parties: PREMIER HEALTH CENTER, P.C., Plaintiff, v. CUREMD.COM, INC. et al., Defendants.
• Decision Date: 28 March 2018
• Docket Number: No. 17 CV 1861-LTS

PREMIER HEALTH CENTER, P.C., Plaintiff,
v.
CUREMD.COM, INC. et al., Defendants.

No. 17 CV 1861-LTS

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

March 28, 2018

MEMORANDUM OPINION AND ORDER

Plaintiff Premier Health Center, P.C. ("Premier") brought this action against Defendant CureMD.com, Inc. ("CureMD") seeking declaratory and injunctive relief in connection with the alleged improper dissemination of protected health information ("PHI"). On May 8, 2017, CureMD moved to dismiss Premier's Complaint. (Docket entry no. 12.) Instead of filing opposition papers, Premier filed a First Amended Complaint on June 9, 2017. (Docket entry no. 18.) On June 14, 2017, the Court granted CureMD's motion to dismiss the initial Complaint as unopposed, and struck Premier's First Amended Complaint for failure to comply with Federal Rule of Civil Procedure 15(a). (See docket entry no. 30.) The Court also granted Premier permission to file a motion for leave to amend its Complaint in light of the dismissal. (Id.)

Premier now moves for leave to file an Amended Complaint (docket entry no. 40-1, the Amended Complaint ("AC")), which asserts two new causes of action and adds the following named defendants: Precision Billing LLC, Perry Bonomo, Madison Spine, Dpro Technologies India Private Limited, Annexmed Private Limited, Curemd Pakistan (Pvt.)

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Limited, Dpro Technologies India Private Limited, Thomas E. Price,¹ Secretary of the Department of Health and Human Services (the "HHS Secretary"), and Roger Severino, Director of the Office for Civil Rights at the Department of Health and Human Services (the "HHS Director"). (See docket entry no. 38, the "Motion.") The Court has considered carefully the parties' submissions and, for the reasons that follow, Premier's motion for leave to amend is denied.

BACKGROUND

The following factual summary is drawn from Premier's Amended Complaint, and is taken as true for purposes of this motion practice.

Premier is a New Jersey professional corporation that provides healthcare services. (AC ¶ 10.) On April 7, 2007, Premier entered into an agreement with Precision Billing, a New Jersey third-party billing service provider, under which Precision Billing would prepare, submit, process, and follow-up on insurance claims on Premier's behalf. (AC ¶¶ 13, 38, 39; docket entry no. 40-2, the "April 2007 Agreement," ¶ 2.3.) The April 2007 Agreement specified that Precision Billing was to "maintain the security and confidentiality" of all patient PHI in compliance with the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). (AC ¶ 38; April 2007 Agreement ¶ 1.) Between April 7, 2007, and December 17, 2015, Precision Billing entered into various "business associate agreements" through which Precision Billing outsourced its billing and collection work for Premier. (AC ¶¶ 45, 49, 55.)

On December 17, 2015, Premier and Precision Billing terminated the April 2007 Agreement. (AC ¶ 62; docket entry no. 40-9, the "Termination Letter.") A Termination Letter

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specified that Precision Billing was to cease all billing and collection work by March 17, 2016, and complete any collections upon previous billings by July 17, 2016. (AC ¶ 62; Termination Letter.) Despite the termination of Precision Billing's services, Premier alleges that it received notice on multiple occasions from patients and insurance companies after July 17, 2016, about the continued disclosure of patient PHI entrusted to Precision Billing. (AC ¶¶ 66, 69-70.) Premier alleges that these disclosures were unauthorized and that Defendants have "failed to reasonably safeguard [Premier's] patient PHI in accordance with HIPAA standards." (AC ¶¶ 66, 74.) Premier also alleges that Precision Billing made unauthorized disclosures of patient PHI to Defendants Perry Bonomo and Madison Spine. (AC ¶¶ 42, 75.)

On August 27, 2016, Premier filed a complaint against Precision Billing with the Office for Civil Rights ("OCR") at the Department of Health and Human Services ("HHS"). (AC ¶ 76.) On April 6, 2017, OCR issued a responsive letter detailing certain "corrective actions" necessary to bring Precision Billing into compliance with HIPAA. (AC ¶ 76; docket entry no. 40-12, the "OCR Letter.") The OCR Letter stated that OCR was "closing th[e] case without further action, effective the date of this letter." (AC ¶ 76; OCR Letter.)

DISCUSSION

Federal Rule of Civil Procedure 15 provides that the court may give leave to a party to amend its pleading when justice so requires. Fed. R. Civ. P. 15(a)(2). Such leave may be denied on grounds of futility, however, if the proposed amended pleading could not withstand a motion to dismiss, such as a motion under Rule 12(b)(1) asserting lack of subject matter jurisdiction, or one under Rule 12(b)(6) for failure to state a claim. Griffith-Fenton v. Coldwell Banker Mortg., No. 13 CV 7449, 2014 WL 6642715, at *1 (S.D.N.Y. Oct. 17, 2014); Oneida Indian Nation of N.Y. v. City of Sherrill, 337 F.3d 139, 168 (2d Cir. 2003) (citation omitted).

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The party opposing the motion to amend bears the burden of establishing that the amendment would be futile. Ballard v. Parkstone Energy, LLC, No. 06 CV 13099, 2008 WL 4298572, at *3 (S.D.N.Y. Sep. 19, 2008).

Under Rule 12(b)(1), a claim may be dismissed for lack of subject matter jurisdiction "when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). When subject matter jurisdiction is challenged under Rule 12(b)(1), the court "must accept as true all material factual allegations in the complaint, but [may not] draw inferences from the complaint favorable to plaintiffs." J.S. v. Attica Central Schools, 386 F.3d 107, 110 (2d Cir. 2004). The plaintiff has the burden of proving, by a preponderance of the evidence, that subject matter jurisdiction exists. Makarova, 201 F.3d at 113. The Court also has an independent duty under Rule 12(h)(3) to dismiss an action if it lacks subject matter jurisdiction.

In adjudicating a motion brought pursuant to Rule 12(b)(6), the Court accepts as true the non-conclusory factual allegations in the complaint, and draws all reasonable inferences in the plaintiff's favor. Roth v. Jennings, 489 F.3d 499, 501 (2d Cir. 2007). To survive a motion to dismiss for failure to...