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Olsavsky v. Express Scripts, Inc.

United States District Court, W.D. Pennsylvania

July 17, 2019

JOSEPH OLSAVSKY, individually and on behalf of all others similarly situated, Plaintiff,


          Patricia L. Dodge United States Magistrate Judge

         Plaintiff Joseph Olsavsky, individually and on behalf of all others similarly situated, commenced this action on September 25, 2018 in which he asserted claims for breach of contract and unjust enrichment against Defendant, Express Scripts, Inc. ("ESI"). Plaintiff alleges that ESI charges exorbitant and arbitrary fees when law firms, acting as authorized agents on behalf of injured parties, submit requests to ESI for pharmacy records.

         After ESI filed a motion to dismiss the original Complaint, Plaintiff filed a First Amended Complaint (ECF No. 15) ("Amended Complaint"). ESI now moves to dismiss the Amended Complaint (ECF No. 24). ESI's motion has been fully briefed by the parties and is ripe for disposition.[1]


         According to the Amended Complaint, ESI offers pharmacy benefit management services through a network of retail pharmacies, and also provides home-delivery pharmacy services to patients. (Am. Compl. ¶¶ 22, 23.) Plaintiff alleges that on April 20, 2018, he requested his pharmacy records from ESI through his authorized law firm agent. (Am. Compl. ¶ 22.) Plaintiff initiated this process by signing an ESI document titled "Authorization to Use and Disclose Health Information" requesting "Prescription Claims Information/Prescription History (PBM records). (Am. Compl. ¶42.)[2] Plaintiff alleges that, despite ESI's claim that it provides records at no charge if directly requested by the customer, "nowhere on its invoices or forms, or on its customer prescription cards, does it advise customers of this option." (Id. ¶ 47.) The form that Plaintiff signed includes the following language:

Prescription Claims Information is readily available for the previous ten years. Patients wanting prescription claim information sent to the address on file should call the number on the back of the prescription identification card.

(Id. Ex. 1 at 2) (emphasis in original.) Whatever ESI's intent or actual practice may be, this section of the form does not specifically state that customers may obtain their records without charge by calling the number on their prescription card. Directly underneath this language, the form states: "Please return completed form along with a check or money order for the nonrefundable processing fee of $90.00" to ESI. (Am. Compl. ¶ 44 & Ex. 1.)

         Plaintiff paid the processing fee of $90.00 and received six pages of medical records. (Am. Compl. ¶¶ 22-23.) The six pages of records received by Plaintiff through his agent reflect a mix of both retail pharmacy prescriptions and prescriptions directly filled by ESI. (Am. Compl. ¶ 24.) Plaintiff asserts that the cost of his medical records was, or will be, deducted from a settlement of his claims in a products liability lawsuit, which will come directly out of his net recovery. (Am. Compl. ¶¶ 24-25.)[3]

         Although Plaintiff, through his agent, paid the fee to ESI, he contends that the payment was not voluntary because ESI did not offer to waive or discount the fee if certain conditions were met. (Am. Compl. ¶ 30.). Further, Plaintiff notes that, among other things, the $90.00 charge was in excess of the cost of the handling, cost of copies and actual shipping. (Am. Compl. ¶22.)

         The Amended Complaint asserts that many third-party requests result in only two or three pages of records, and lawyers making third-party requests have no option but to pay the fee if they wish to further prosecute or investigate their clients' legal claims. (Am. Compl. ¶ 29.) According to the Amended Complaint, ESI charged all requestors the same non-refundable fee, regardless of various state law requirements related to fees that companies may charge for record requests. (Am. Compl. ¶ 28.) Other health providers in Pennsylvania, as well as national pharmacy chains that operate in Pennsylvania, routinely charge a fee based on applicable state laws or a reasonable fee of $1.00 per page or less. (Am. Compl. ¶ 37.)

         On or about April 1, 2018, ESI increased its third-party processing fee from $75.00 to $90.00, regardless of how many pages of records are provided. (Am. Compl. ¶ 29.) In raising the non-refundable fee to $90.00, ESI did not provide any explanation for how or why the cost increased, or whether it was reasonable. (Id.)

         Until recently, according to Plaintiff, ESI claimed that its fee is for "processing" and not for shipping. (Am. Compl. ¶ 26.) At some point in recent months, however, ESI changed the language in its authorization and removed the word "processing." (Id.) Plaintiff asserts that this is further evidence that ESI is aware of the unreasonable nature of its charges. (Id.) The Amended Complaint claims that no accounting is done by ESI to keep track of overhead costs for the processing of such records. (Am. Compl. ¶ 27.)[4]

         According to Plaintiff, the execution and submission of the authorization form and his non-refundable payment of the $90.00 fee for "processing" created a contract between Plaintiff and ESI and is a "classic contract of adhesion." (Id. ¶¶ 42, 46, 49.) Plaintiff represents that his sole contract claim is that ESI breached its express and implied contracts with Plaintiff and members of the class. (Am. Compl. ¶¶ 26-27.) Plaintiff also claims that ESI was unjustly enriched by charging exorbitant and unreasonable fees that bear no relationship to the cost of the requested records. (Am. Compl. ¶¶ 32-34.)

         Plaintiff proposes to represent a class defined as follows:

All individual citizens of the State [sic] of Pennsylvania who were charged excessive and unreasonable fees of either $75.00 or $90.00 for a copy of their health information and/or records from Express Scripts, following a request by a third-party law firm or records company on their behalf, from Jan. 1, 2008 to present.

(Am. Compl. ¶ ll.)[5] Plaintiff estimates that the class includes more than one thousand third-party requests from 2008 to the present. (Am. Compl. ¶ 12.)

         In its Motion to Dismiss, ESI contends that neither the breach of contract claim nor the unjust enrichment claim state a claim upon which relief may be granted. ESI's arguments will be addressed below.

         Standard of Review

         The United States Supreme Court has held that a complaint must include factual allegations that "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "[W]ithout some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only 'fair notice' but also the 'grounds' on which the claim rests." Phillips v. County of Allegheny, 515 F.3d 224, 232 (3d Cir. 2008). In determining whether a plaintiff has met this standard, a court must reject legal conclusions unsupported by factual allegations, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements;" "labels and conclusions;" and '"naked assertion[s]' devoid of further factual enhancement.'" Iqbal, 556 U.S. at 678 (citations omitted). Mere "possibilities" of misconduct are insufficient. Id. at 679. The United States Court of Appeals for the Third Circuit has summarized the inquiry as follows:

To determine the sufficiency of a complaint, a court must take three steps. First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1947, 173 L.Ed.2d 868 (2009). Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 1950. Third, "whe[n] there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." Id. This means that our inquiry is normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged.

Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

         Plaintiffs Breach ...

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