Shattuck Pharmacy Management PC v. Prime Therapeutics LLC

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF OKLAHOMA

SHATTUCK PHARMACY )

MANAGEMENT, P.C. d/b/a MEDIC )

PHARMACY AND GIFTS, a )

Domestic For-Profit Corporation, )

individually, and on behalf of itself )

and all others similarly situated; and )

KYLENE REHDER, on behalf of )

herself and all others similarly )

situated, )

)

Plaintiffs, )

)

-vs- ) Case No. CIV-21-0221-F

)

PRIME THERAPEUTICS, LLC, a )

Foreign Limited Liability Company; )

HEALTH CARE SERVICE )

CORPORATION, a Mutual Reserve )

Company; and BLUE CROSS AND )

BLUE SHIELD OF OKAHOMA, a )

Division of Health Care Service )

Corporation, )

)

Defendants. )

ORDER

This action primarily brings claims for declaratory and injunctive relief under

the (Oklahoma) Pharmacy Audit Integrity Act, 59 O.S. 2011 & Supp. 2020 §§ 356

et seq., and the (Oklahoma) Patient’s Right to Pharmacy Choice Act, 36 O.S. Supp.

2020 §§ 6958 et seq. There is also a claim for tortious interference with business

relations, seeking damages.1

I. The Motions

A motion to remand and two motions to dismiss are before the court.

Doc. no. 30. Plaintiffs Shattuck Pharmacy Management, P.C. d/b/a Medic

Pharmacy and Gifts (Medic) and Kylene Rehder (Rehder) move for remand.

Defendants Prime Therapeutics, LLC (Prime), Health Care Service Corporation

(HCSC), and Blue Cross and Blue Shield of Oklahoma (BCBSOK), have responded,

objecting to remand. Doc. no. 38. Plaintiffs filed a reply brief. Doc. no. 39.

Defendants filed a sur-reply brief. Doc. no. 44.

Doc. no. 33. HCSC and BCBSOK move for dismissal. Plaintiffs responded,

objecting to dismissal. Doc. no. 42. Movants filed a reply brief. Doc. no. 45.

Doc. no. 35. Prime moves for dismissal. Plaintiffs responded, objecting to

dismissal. Doc. no. 41. Prime filed a reply brief. Doc. no. 46.

For the reasons stated below, the motion to remand will be denied, and the

motions to dismiss will be granted.

II. The Complaint2

The complaint alleges as follows.

1 At times, the complaint references “Oklahoma law,” however, no statutes other than the

Pharmacy Audit Integrity Act and the Patient’s Right to Pharmacy Choice Act, and no torts other

than tortious interference with business relations, are identified in the complaint. Plaintiffs concur

with the court’s interpretation of the complaint as alleging only these claims. See, doc. no. 42, p.

10 of 17 and n. 3.

2 This order refers to the “Class Action Petition” (doc. no. 1-4) as “the complaint.”

Plaintiff Medic is a pharmacy operating in the town of Shattuck, located in

Ellis County, Oklahoma. Doc. no. 1-4, ¶1. Plaintiff Rehder is a resident of Shattuck

and Ellis County. Rehder carries BCBSOK health insurance and is a patient

(customer) of Medic. Id. at ¶ 2. Medic and Rehder bring certain claims on their own

behalf and other claims as the purported class representative of the Medic Class or

the Rehder Class, respectively.

Defendants include HCSC, a mutual reserve company, and BCBSOK, a

division of HCSC. HCSC and BCBSOK do business as health insurers. The other

defendant is Prime, which operates as a pharmacy benefit management company

(PBM) on behalf of HCSC and BCBSOK. Id. at ¶¶ 3-5, 8. PBMs are hired by

insurance companies to administer the prescription drug portion of health insurance

plans; they act as a middleman between the insurance company and the pharmacy.

Id. at ¶ 9. The complaint alleges HCSC and BCBSOK should be held accountable

for Prime’s wrongful conduct because Prime has apparent authority to act as a PBM

on their behalf. Id. at ¶¶ 104-110.

The complaint alleges that Prime failed to comply with the Pharmacy Audit

Integrity Act and the Patient’s Right to Pharmacy Choice Act in various ways, such

as: by conducting an audit of Medic in a manner which violated the Pharmacy Audit

Integrity Act;3 and by giving notice, in violation of the Patient’s Right to Pharmacy

3 The audit allegedly resulted in a November 24, 2020 termination notice indicating that Prime

would terminate Medic from insurance networks managed by Prime, including BCSC and

BCBSOK, due to claims phishing and missing documentation. The complaint alleges that Prime

failed to establish an electronic claim inquiry processing system as required by the Patient’s Right

to Pharmacy Choice Act, with the result that Medic had no way to verify its patients’ insurance

coverage without submitting an actual claim to Prime. The complaint alleges that Medic appealed

the termination notice per the procedure set out in § 356.3 of the Pharmacy Audit Integrity Act but

that Prime has not resolved issues raised in the appeal.

Choice Act, that Prime intended to terminate Medic from Prime’s network despite

the fact that Prime, as a PBM, is allegedly required to have a retail pharmacy

participating in Prime’s network within fifteen miles of seventy per cent of the

covered individuals residing in Shattuck, Oklahoma, and in Ellis County,

Oklahoma.4 The complaint alleges population statistics for Shattuck and Ellis

County and alleges that other than Medic, the nearest pharmacies are thirty miles

from Shattuck.

The complaint seeks declaratory relief based on defendants’ alleged violations

of the Pharmacy Audit Integrity Act and the Patient’s Right to Pharmacy Choice

Act. For example, plaintiffs seek declarations that Medic did not engage in claims

phishing, that Medic had adequate and proper documentation at the time of the audit,

that Prime has not complied with the Pharmacy Audit Integrity Act or the Patient’s

Right to Pharmacy Choice Act, and that Prime cannot terminate Medic from Prime’s

networks. See, e.g., id., prayer at ¶ iv. Claims for declaratory relief are brought by

Medic on its own behalf (id. at ¶¶ 61-63), by the Medic Class (id. at ¶¶ 83-85), and

by the Rehder Class (id. at ¶¶ 94-97).

The complaint brings claims for injunctive relief seeking to prohibit Prime

and its alleged agents, HCSC and BCBSOK, from terminating Medic from Prime’s

networks pending final disposition of this action. See, e.g., id., prayer at ¶ v. Claims

4 The termination notice allegedly advised Rehder and others that Medic’s termination would be

effective on February 27, 2021. Medic was not terminated on that date because the state court

entered a temporary restraining order on February 24, 2021, preserving the status quo. After

removal, the parties submitted an agreed order to this court, which this court entered. That order

(doc. no. 28) dissolved the state court’s restraining order and put certain conditions in place,

including a requirement that defendants give sixty-days notice of intent to terminate.

for injunctive relief are brought by Medic on its own behalf (id. at ¶¶ 64-68) and by

the Rehder Class (id. at ¶¶ 98-102).

In addition, Medic, on its own behalf, alleges that Prime, acting for itself and

HCSC and BCBSOK, tortiously interfered with Medic’s business relations between

Medic and its patients (customers) who carry BCBSOK insurance and who live

around Shattuck and in Ellis County. Id. at ¶¶ 69-74. The complaint alleges that

due to Prime’s interference, Medic has sustained financial losses in excess of

$10,000.00. Id. at ¶ 74.

III. The Motion to Remand

A. Standards

Prime, as the removing party, bears the burden to show removal is

proper. Cousina v. Massachusetts Mutual Life Insurance Co., 2012 WL 6726453 at

*2 (N.D. Okla. Dec. 27, 2012), citing Laughlin v. Kmart Corp., 50 F.3d 871, 873

(10th Cir. 1995).5 In ruling on a motion to remand, a court should determine its

jurisdiction over the case based on plaintiffs’ pleadings at time of removal,

supplemented by any affidavits or deposition transcripts filed by parties. Id., citing

Guillory v. PPG Industries, Inc., 434 F.3d 303 (5th Cir. 2005); Davis ex rel. Estate

of Davis v. General Motors Corp., 353 F. Supp. 2d 1203 (M.D. Ala. 2005). Just as

with any jurisdictional question, the court may go outside the pleadings to determine

matters such as citizenship. See generally, E.E.O.C. v. Unit Drilling Co., 4 F. Supp.

3d 1257, 1261 (N.D. Okla. 2013) (“court has wide discretion to allow affidavits,

other documents, and a limited evidentiary hearing to resolve disputed jurisdictional

facts under Rule 12(b)(1).”).

5 Laughlin has been abrogated on other grounds.

B. Discussion

Plaintiffs argue that Prime erroneously relied on 28 U.S.C. § 1332(a) and 28

U.S.C. § 1441, which plaintiffs argue apply to removal of a single civil action and

not to the removal of a class action. Plaintiffs argue that because this action is a

class action, the applicable removal provisions are found in the Class Action

Fairness Act (CAFA), 28 U.S.C. § 1332(d) and 28 U.S.C. § 1453. Plaintiffs argue

the requirements for removal under CAFA are not met. Specifically, they argue that

§ 1332(d)(2) is not satisfied because the amount in controversy does not exceed five

million dollars, that diversity of citizenship has not been established under

§1332(d)(10) because BCBSOK is an Oklahoma citizen, and that 28 U.S.C.

§1332(d)(4)(A) prohibits removal.

These arguments obviously depend upon plaintiffs’ contention that this action

was required to be removed under CAFA. CAFA, however, does not displace a

party’s ability to remove under traditional diversity principles. See, e.g., Lowrimore

v. Severn Trent Environmental Servs., Inc., 2016 WL 799127 at *1, n.3 (E.D. Okla.

Feb. 29, 2016) (CAFA does not displace conventional diversity class action rules

but rather augments them, so that federal subject matter jurisdiction may be premised

on either); Stell v. Gibco Motor Express, LLC, 2016 WL 2620178 at *2 (S.D. Ill.

May 9, 2016) (“CAFA does not replace the basic diversity requirements; it

supplements them. That means that a class action case not arising under federal law

can be lodged in federal court if it meets either the basic diversity requirements or

CAFA’s requirements,” quoting 2 W. Rubenstein, Newberg on Class Actions § 6:6,

5th ed., emphasis in Rubenstein).

This action was expressly removed based on 28 U.S.C. § 1332(a), that is,

based on traditional diversity jurisdiction. Doc. no. 1, ¶ 14. As shown by the

authorities cited above, this is permitted even when the action is a class action.

Accordingly, the court rejects plaintiffs’ arguments for remand which are advanced

under CAFA.

That is not the end of the remand issue because plaintiffs’ reply brief argues

that traditional diversity of citizenship is not satisfied.6 It is undisputed that Medic

and Rehder are citizens of Oklahoma for diversity purposes.7 Id. at ¶¶ 15-17 (notice

of removal, citing complaint). Plaintiffs argue that the defendants are also citizens

of Oklahoma, defeating diversity. Accordingly, the court addresses the citizenship

of each of the defendants.

HCSC. Defendants argue that HCSC is a mutual legal reserve company

organized and existing under the laws of the State of Illinois, with its principal place

of business in Chicago, so that HCSC is a citizen of Illinois for diversity purposes.

Id. at ¶ 19. Plaintiffs argue: that because HCSC has not filed articles of

incorporation with the Secretary of State of Illinois, “there is no legal way HCSC is

a corporation” (doc. no. 39, p. 5 of 13); that because HCSC is not a corporation,

HCSC “has to be” an unincorporated association (id. at p. 6 of 13), which Illinois

law would define as a joint venture or partnership, making HCSC’s citizenship

determined by that of its members; that HCSC claims on its website (see, doc. no.

39-4, p. 3 of 4) to be owned by customers or policyholders; and that BCBSOK, a

6 The fact that plaintiffs did not raise this argument in their moving brief is of no moment because

the court has a duty to determine its jurisdiction at any stage.

7 The citizenship of the named representatives is considered, not that of the class members. See,

Ullman v. Safeway Insurance Co., 995 F. Supp. 2d 1196, 1246-47 (D. N. Mex. 2013) (conventional

diversity invoked rather than diversity under CAFA; only the citizenship of the named

representatives of the class are considered, citing Wright, Miller & Kane, Federal Practice and

Procedure, § 1755 at 70 (3d ed. 2008)).

division of HCSC, has policyholders in Oklahoma (such as Rehder), making HCSC

a citizen of Oklahoma.

Plaintiffs’ argument regarding the citizenship of HCSC is rejected. HCSC has

submitted documents showing that, as a mutual legal reserve company, it is

registered with the Illinois Department of Insurance and is therefore considered

incorporated under the Illinois Insurance Code and thus an Illinois corporation. Doc.

no. 44-1, attaching documents. Based on Illinois Insurance Code, 215 Ill. Comp.

Stat. §§ 5/1 et seq., defendants have shown that at the time the complaint was filed

and at the time of removal, HCSC was (and is) considered to be an Illinois

corporation, making HCSC a citizen of Illinois for purposes of diversity. See,

Cousina v. Massachusetts Mutual Life Ins. Co., 2012 WL 6726453 at *1 (N.D. Okla.

Dec. 27, 2012) (quoting 16 Couch on Insurance §229:22: “In accordance

with…well-settled principles, ‘[w]hen the appropriate regulatory agency has

recognized that an entity has been properly incorporated pursuant to state law, no

further inquiry is appropriate in determining whether that entity is a corporation for

diversity purposes; hence, mutual insurance companies that are incorporated under

state law are treated as corporations for diversity purposes.’”); Thorne v. State Farm

Mutual Automobile Insurance Co., 2015 WL 809530 at *3 (M.D. Fla. Feb. 25, 2015)

(under Illinois law, State Farm Mutual Auto Insurance Company, an Illinois mutual

insurance company, is treated as a corporation; it had sufficiently alleged its

citizenship in Illinois for the purpose of diversity jurisdiction).

BCBSOK. Plaintiffs argue that BCBSOK is a citizen of Oklahoma based on

“common sense” and their contention that BCBSOK “was incorporated 81 years ago

in Oklahoma….” Doc. no. 39, p. 8. None of the documents provided by plaintiffs

establish that BCBSOK is an incorporated entity, much less that it is incorporated in

Oklahoma. On the other hand, as shown by documents submitted by defendants

with their motion to dismiss, BCBSOK has been an unincorporated division of

HCSC since November 1, 2005 and continues to operate as such. Doc. no. 33-1,

¶¶ 3-4. As an unincorporated division of HCSC, the citizenship of BCBSOK is the

same as the citizenship of HCSC. The court has found that HCSC’s citizenship is

Illinois. Accordingly, BCBSOK is deemed a citizen of Illinois. See, Equifax

Services, Inc. v. Hitz, 905 F.2d 1355, 1358, n.2 (10th Cir. 1990) (as White & White

had merged into Equifax and operated as an unincorporated division, its citizenship

was the same as that of Equifax, the corporation of which it was a part).

Prime. Plaintiffs argue that Prime, a limited liability company, is a citizen of

Oklahoma because HCSC and BCBSOK are members of Prime and citizens of

Oklahoma. The court has rejected the premise that HCSC and BCBSOK are citizens

of Oklahoma. Moreover, Prime has filed a disclosure statement listing its members

and their citizenship. Doc. no. 3. According to the disclosure statement, Prime’s

members are citizens of Alabama, Kansas, Nebraska, Rhode Island, Wyoming,

Pennsylvania, Illinois, North Dakota, Florida, North Carolina, Oregon and

Minnesota. Id. Prime is deemed a citizen of these states but not Oklahoma.

The court rejects plaintiffs’ argument that the citizenship requirements for

traditional diversity jurisdiction are not met.

The other requirement for traditional diversity jurisdiction is that the amount

in controversy must exceed $75,000.00. 28 U.S.C. § 1332(a). (Plaintiffs do not

argue that this requirement is not met.8 Regardless, to assure itself of jurisdiction,

8 Plaintiffs challenged the $5 million requirement of 28 U.S.C. § 1332(d)(2) but did not challenge

the $75,000.00 requirement of § 1332(a).

the court addresses this issue.) This action seeks to enjoin Prime’s termination of

Medic from Prime’s network of providers; accordingly, Medic’s continued operation

as a for-profit pharmacy is at stake. This action also seeks damages, including

punitive damages (doc. no. 1-4, prayer, ¶ ix), for tortious interference with Medic’s

business relations, based on notices Prime allegedly sent to Medic’s patients

advising them of Medic’s then-upcoming termination. The notice of removal

includes an affidavit from the Director of Special Investigations Unit at Prime,

stating the total amount Medic received in reimbursements from Prime for submitted

prescriptions during the period of October 2020 through March 14, 2021(a five-and-

one-half-month period) is $139,003.54. Doc. no. 1-2, ¶ 8. The amount in

controversy requirement is satisfied.

The court has jurisdiction, and the motion to remand will be denied.

IV. HCSC and BCBSOK’s Motion to Dismiss

HCSC and BCBSOK move for dismissal from this action under Rule

12(b)(6).9

A. Rule 12(b)(6 Standards

The inquiry under Rule 12(b)(6) is whether the complaint contains enough

facts to state a claim for relief that is plausible on its face. Ridge at Red Hawk,

L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir., 2007), quoting Bell Atlantic

Corp. v. Twombly, 550 U.S. 544, 547 (2007). To survive a motion to dismiss, a

plaintiff must nudge his claims across the line from conceivable to plausible. Id.

9 The court declines to address the service issues raised by HCSC and BCBSOK under Rule

12(b)(5). It does so because it concludes these defendants are entitled to dismissal under Rule

12(b)(6). See, Jordan v. Morris, 2015 WL 3449867, *3, n. 2 (D. Kan. May 29, 2015) (court need

not address service issues where claims fail under Rule 12(b)(6), collecting authorities).

The mere metaphysical possibility that some plaintiff could prove some set of facts

in support of the pleaded claims is insufficient; the complaint must give the court

reason to believe that this plaintiff has a reasonable likelihood of mustering factual

support for these claims. Ridge at Red Hawk, 493 F.3d at 1177. In conducting its

review, the court assumes the truth of the plaintiff’s well-pleaded factual allegations

and views them in the light most favorable to the plaintiff. Id. Pleadings that are no

more than legal conclusions are not entitled to the assumption of truth; while legal

conclusions can provide the framework of a complaint, they must be supported by

factual allegations. Ashcroft v. Iqbal, 556 U.S.662, 664 (2009).

When there are well-pleaded factual allegations, a court should assume their

veracity and then determine whether they plausibly give rise to an entitlement to

relief. Id. The court will disregard mere “labels and conclusions” and “[t]hreadbare

recitals of the elements of a cause of action” to determine if what remains meets the

standard of plausibility. Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 678.

“Determining whether a complaint states a plausible claim for relief will … be a

context-specific task that requires the reviewing court to draw on its judicial

experience and common sense.” Id. at 679.

B. Prime’s Apparent Authority to Act for HCSC and BCBSOK

HCSC and BCBSOK contend the allegations regarding Prime’s apparent

authority to act on their behalf are conclusory. Although the alleged facts pertinent

to this theory of liability are thin, the complaint includes facts which plausibly allege

that Prime, when acting vis-à-vis Medic, had apparent authority to act for HCSC and

BCBSOK. For example, the complaint alleges that based on various agreements and

assignments, Prime has served as a pharmacy benefit management company for

HCSC and BCBSOK. Doc. no. 1-4, ¶¶ 11-13. The complaint alleges that as a PBM,

Prime is hired by insurance companies “to administer the prescription drug portion

of health insurance…plans,” and that it “acts as a middleman between the insurance

companies and the pharmacies.” Id. at ¶¶ 2, 8-9. These and other allegations are

incorporated in the portion of the complaint that specifically addresses apparent

authority. Although it is a close call, this argument for dismissal is rejected.

C. Adoption of Prime’s Arguments for Dismissal

HCSC and BCBSOK adopt the arguments for dismissal made by Prime. Doc.

no. 33, p. 2, n. 2. The court addresses Prime’s arguments next, after which it will

address the impact of those rulings on HCSC and BCBSOK.

V. Prime’s Motion to Dismiss

Prime moves for dismissal from this action under Rule 12(b)(6).

A. Statute-Based Claims for Declaratory or Injunctive Relief

Prime argues the claims for declaratory or injunctive relief fail because the

statutes upon which they are premised—the Pharmacy Audit Integrity Act and the

Patient’s Right to Pharmacy Choice Act—do not create a private cause of action.

1. The Pharmacy Audit Integrity Act

It is undisputed that no private right of action is expressly created by the

Pharmacy Audit Integrity Act, 59 O.S. §§ 356 et seq. Plaintiffs’ ability to allege

claims founded on this Act therefore depends on whether a private cause of action

should be implied despite the legislature’s silence on that issue.

Under Oklahoma law, a private right of action may be implied from a

regulatory (public-law) state statute only if: 1) plaintiff is one of the class for whose

especial benefit the statute was enacted (this factor is narrowly construed); 2) there

is some indication of legislative intent, explicit or implicit, suggesting the legislature

wanted to create a private remedy and not deny one; and 3) the court finds that

implying a remedy for the plaintiff would be consistent with the underlying purposes

of the legislative scheme. Holbert v. Echeverria, 744 P.2d 960, 963 (Okla. 1987)

(emphasis in original);10 Elliot Plaza Pharmacy, LLC v. Aetna U.S. Healthcare, Inc.,

2009 WL 702837 at *2 (N.D. Okla. Mar. 16, 2009) (citing Holbert).

Medic argues the first Holbert requirement is met because the Pharmacy Audit

Integrity Act is for the “especial benefit” of pharmacies. The court disagrees. The

Act’s purpose is “to establish minimum and uniform standards and criteria for the

audit of pharmacy records by or on behalf of certain entities.” 59 O.S. § 356.1(B).

Uniformity of standards benefits not only pharmacies but also the public and entities

that conduct pharmacy audits. The Act is not for the “especial benefit” of

pharmacies.

The second requirement, which Hobert notes the United States Supreme Court

has placed special emphasis on,11 is whether there is any indication of legislative

intent, explicit or implicit, to create or deny a private remedy. Neither the Pharmacy

Audit Act nor the broader Oklahoma Pharmacy Act12 includes a civil penalty.

Furthermore, the Oklahoma Pharmacy Act provides that “violation of any provision

of the Oklahoma Pharmacy Act for which no penalty is specifically provided shall

be punishable as a misdemeanor.” 59 O.S. § 353.25(A). In general, a statutory

scheme which says nothing about a civil penalty but provides a criminal penalty

indicates the legislature did not intend to create a private right of action to enforce

10 Holbert’s holding that the Oklahoma Consumer Protection Act did not provide a private right of

action has been superseded by statute.

11 Holbert, 744 P.2d 960, 964. The Holbert test was adopted from Cort v. Ash, 422 U.S. 66 (1975).

12The Oklahoma Pharmacy Act, first enacted in 1993, is at 59 O.S. §§ 353-66. See, 59 O.S.

§ 353(A).

the statute. See, Engels v. Kirkes, 2013 WL 3367254, *3 (E.D. Okla. July 3, 2013)

(statute did not provide private remedy because, in part, violation of statute was

punishable as a misdemeanor).

In addition, Oklahoma’s regulatory scheme gives authority to the State Board

of Pharmacy to enforce the Oklahoma Pharmacy Act. 59 O.S. § 353.7. The Board

is empowered to investigate complaints, subpoena witnesses and records, initiate

prosecution, hold hearings and perform other duties as enforcement of the Oklahoma

Pharmacy Act may require. 59 O.S. § 353.7(10), (18).

Section 356.3 of the Pharmacy Audit Integrity Act sets out procedures for the

appeal of an audit report to be lodged with the entity that conducted the audit. The

Act provides that following the appeal, any final audit report that includes findings

of fraud or willful misrepresentation shall be referred to the district attorney with

jurisdiction or the Attorney General of the State of Oklahoma. 59 O.S. § 356.3(C).

There is nothing in Oklahoma’s regulatory scheme which suggests the

legislature intended the Pharmacy Audit Integrity Act to create a private cause of

action. In fact, the regulatory scheme suggests the opposite. The basic thrust of this

legislation is to establish an administrative and regulatory framework for pharmacy

audits. A fair reading of the language enacted by the legislature does not lead to the

conclusion that the legislature intended (expressly or by implication) to create a

private right of action.

The third Holbert requirement is that implying a private cause of action must

be consistent with the express purposes of the Act. The purpose of the Pharmacy

Audit Integrity Act is to establish uniform and minimum standards for the audit of

pharmacy records—a purpose which does not necessarily square with the creation

of a private cause of action.

None of the three Holbert requirements are satisfied by the Pharmacy Audit

Integrity Act. The third requirement is fairly debatable, but the court readily reaches

its conclusions as to the first two.

2. The Patient’s Right to Pharmacy Choice Act

The analysis of the Patient’s Right to Pharmacy Choice Act, 36 O.S. §§ 6958

et seq., is similar because no language within this Act explicitly provides a private

cause of action to enforce it.

As for the first Holbert requirement, the stated purpose of the Patient’s Right

to Pharmacy Choice Act is “to establish minimum and uniform access to a provider

and standards and prohibitions on restrictions of a patient’s right to choose a

pharmacy provider.” 36 O.S. § 6959. This purpose benefits both pharmacies and

the public. Plaintiffs’ own arguments reflect this fact, as plaintiffs argue the Act is

“intended to benefit all pharmacies operating in Oklahoma and all patients residing

and using pharmacies in Oklahoma.” Doc. no. 41, pp. 15-16. The Act is not for the

“especial benefit” of any group.

The second requirement also is not met. The Patient’s Right to Pharmacy

Choice Act requires the Insurance Commissioner to provide a process for receiving

complaints about violations of the Act. 36 O.S. § 6966(A). It also requires the

Commissioner to establish a Patient’s Right to Pharmacy Choice Advisory

Committee to review complaints, hold hearings, levy fines, etc., regarding a PBM’s

violation of the Act. Id. at § 6966(B). These provisions do not suggest the legislature

intended to create a private cause of action to enforce the Act; instead, they suggest

the opposite.

Third, the Act’s purpose, which is to establish uniform access to a provider

and uniform standards and prohibitions on restrictions of a patient’s right to choose

a pharmacy provider, is arguably at odds with the creation of a private cause of

action. As was the case with the court’s analysis under the Pharmacy Audit Integrity

Act, this third point is fairly debatable, but, given the court’s conclusions as to the

first two, that is immaterial to the result the court reaches here.

None of the three Holbert requirements are satisfied by the Patient’s Right to

Pharmacy Choice Act.

3. Impact on the Statute-Based Claims

For Declaratory or Injunctive Relief

Based on the above analysis, neither the Pharmacy Audit Integrity Act nor the

Patient’s Right to Pharmacy Choice Act creates a private cause of action.13

The complaint’s claims for declaratory or injunctive relief are founded on

these Acts. Without a private cause of action created by either Act, these claims are

improper requests for fact-findings not tethered to any underlying law.

Consequently, the requests for declaratory and injunctive relief fail to state a

plausible claim for relief. See, Terry v. Health Care Service Corp., 344 F. Supp. 3d

1314, 1323-24 (W.D. Okla. 2018) (the Affordable Care Act does not create an

explicit cause of action; as a result, the Declaratory Judgment Act does not create a

private cause of action to enforce the ACA; dismissing claim seeking declaratory

judgment, for failure to state a claim); Glanville v. Dupar, Inc., 727 F. Supp. 2d 596,

602 (S. D. Tex. 2010) (“plaintiffs cannot recast their claims of FICA [Federal

Insurance Contribution Act] and FUTA [Federal Unemployment Tax Act]

13 Plaintiffs rely on Rabin v. Bartlesville Redevelopment Trust Auth., 308 P.3d 191 (Okla. Civ.

App. 2013) to argue otherwise. The court is not persuaded. Rabin involved the Oklahoma Open

Meeting Act and is distinguishable in important respects. It is not precedential and does not control

here.

violations, for which there is no private right of action, as one for declaratory

judgment and injunctive relief. Because there is no private cause of action, the claim

for declaratory and injunctive relief fails as a matter of law.”).

Prime is entitled to dismissal from the claims for declaratory or injunctive

relief as these claims are premised on statutes which do not provide a private cause

of action.

B. Tortious Interference with Business Relations

This leaves for consideration the tort claim alleged by Medic on its own behalf

(not on behalf of a class). Medic alleges tortious interference with business relations

against Prime (and against the other defendants, on whose behalf Prime allegedly

acted with apparent authority). The allegations most pertinent to this claim are

summarized below.

The complaint alleges that at times relevant to this action, Medic has been

engaged in the business of serving as the pharmacy for patients in or around

Shattuck, Oklahoma, and in Ellis County, who carry BCBSOK insurance, and that

Prime was aware of this business relationship. Doc. no. 1-4, ¶¶ 70-71.

The complaint alleges “Prime tortuously [sic] interfered with the business

relationship between Medic and their patients living in or around Shattuck,

Oklahoma and Ellis County, Oklahoma who carry BCBSOK insurance, without

Medic’s authorization or approval and in breach of 36 O.S. § 6961(D) and 36 O.S.

§ 6962(B)(1) [provisions in the Patient’s Right to Pharmacy Choice Act].” Id. at

¶ 72.

The complaint alleges that “[o]n or about February 2, 2021, Prime mailed to

Rehder, and numerous other similarly situated patients of Medic, letter

correspondence … purporting to provide Rehder notice Medic would be terminated

from insurance networks managed by Prime on the Termination Date.” Id. at ¶ 46.

The complaint alleges that “Prime’s tortious interference was malicious,

wrongful and intentional, and was neither justified, privileged, nor excusable.” Id.

at ¶ 73.

The complaint alleges that due to Prime’s tortious interference with Medic’s

business relations, Medic has sustained financial losses in excess of $10,000.00. Id.

at ¶ 74.

As stated in Wilspec Technologies, Inc. v. Dunan Holding Group, Co., Ltd.,

204 P.3d 69 (Okla. 2009):

Oklahoma recognizes a tortious interference claim with a contractual

or business relationship if the plaintiff can prove (1) the interference

was with an existing contractual or business right; (2) such interference

was malicious and wrongful; (3) the interference was neither justified,

privileged nor excusable; and (4) the interference proximately caused

damage.

Id. at 74 (emphasis added, citations omitted).

As applied here, the first element requires plausible allegations that Prime

interfered with an existing business right. The only conceivable business right which

Medic could try to rely on in the context of this action is a purported right of Medic,

a pharmacy, to transact business with its patients (customers). No such right has

been alleged, nor could it be, as customers are free to go elsewhere to fill their

prescriptions. Accordingly, the patient (or customer) relationship upon which Medic

necessarily relies is not founded on a business right in the sense required for this

type of tort claim. See generally, Cohlmia v. St. John Medical Center, 693 F.3d

1269, 1285-86 and n.9 (10th Cir. 2012) (addressing Oklahoma’s cause of action for

tortious interference with business or contractual relations; plaintiff-doctor argued

that when medical center suspended his privileges, he and his patients were forced

to leave the Tulsa market; court of appeals noted the relationship between a doctor

and patient is at-will, although it ultimately upheld summary judgment on the ground

that there was no proof of damages); Bradshaw v. Uber Technologies, Inc., 2017

WL 2455151, *3 (W.D. Okla. June 6, 2017) (granting judgment on the pleadings on

claim of tortious interference with business relations; plaintiff argued Uber had

interfered with the continuing business relationship between drivers and their fares,

alleging riders would have paid a gratuity to drivers absent Uber’s interference; court

found “Plaintiff has failed to allege any facts to establish a business or contractual

right vis-à-vis the riders with which Defendants interfered” (emphasis in original).14

Medic has not alleged, and cannot allege, facts to satisfy the first element of a

claim for tortious interference with business relations. Prime will be dismissed from

this claim.

C. Summary of Conclusions with Respect to Prime’s Motion

The court has found no private cause of action is created by the Pharmacy

Audit Integrity Act or the Patient’s Right to Pharmacy Choice Act. As a result,

Prime is entitled to dismissal from plaintiffs’ claims for declaratory and injunctive

relief as these claims are premised on statutes which do not create private rights of

action.

The only other claim alleged in this action is Medic’s damages claim for

tortious interference with business relations. This claim fails given the nature of the

14 The court noted the claim of tortious interference with prospective economic advantage might

have been a better fit, but plaintiff had not asserted such a claim. 2017 WL 2455151 at *3, n.1.

relationship between Medic and its patients (customers). Accordingly, Prime is

entitled to dismissal from this claim as well.

VI. Impact on HCSC and BCBSOK

The court’s rulings regarding the insufficiency of the claims alleged against

Prime apply equally to the claims alleged against HCSC and BCBSOK. These

defendants are entitled to dismissal from the claims alleged against them in the

complaint.

VII. Conclusion

After careful consideration, plaintiffs’ motion to remand is DENIED. Doc.

no. 30.

The motion to dismiss filed by Health Care Service Corporation and Blue

Cross and Blue Shield of Oklahoma, a division of Health Care Service Corporation,

is GRANTED. Doc. no. 33. The motion to dismiss filed by Prime Therapeutics,

LLC, is also GRANTED. Doc. no. 35.

The claims for declaratory and injunctive relief are DISMISSED with

prejudice because they are based on Acts which create no private cause of action.

The tort claim, as currently alleged, is DISMISSED without prejudice. All

dismissals are under Rule 12(b)(6), Fed. R. Civ. P.

Without need of a motion, Medic is hereby GRANTED leave to file, if it so

desires, an amended complaint asserting, on its own behalf only, a claim for tortious

interference with prospective economic advantage.15 The claims that are, by this

order, dismissed, may be–for record purposes only–incorporated by reference into

15 The court notes but does not address defendants’ argument, which is hypothetical at this stage,

that a claim for tortious interference with prospective economic advantage would also fail. Doc.

no. 35, p. 18, n.9.

an amended complaint. When this action proceeds to entry of final judgment, those

claims will be treated as dismissed.

If Medic (or Rehder) desire to file an amended complaint attempting to assert

any claims other than (or in addition to) a claim, by Medic, for tortious interference

with prospective economic advantage, leave of court to do so must be sought by

motion filed within fourteen days from the date of entry of this order. If such a

motion is not filed, then any amended complaint asserting a claim (by Medic) for

tortious interference with prospective economic advantage must be filed within

fourteen days from the date of entry of this order. If such a motion is filed, a due

date for any amended complaint permitted by the court will be established by

separate order.

Absent (i) a timely-filed amended complaint asserting a claim (by Medic) for

tortious interference with prospective economic advantage, or (11) a timely-filed

motion for leave to file an amended complaint attempting to assert other claims (as

set forth above, with or without a claim by Medic for tortious interference with

prospective economic advantage), this action will then be dismissed and judgment

entered.

IT IS SO ORDERED this 29" day of June, 2021.

AE Lunt

STEPHENP.FRIOT” = =—s—S™S

UNITED STATES DISTRICT JUDGE

21-0221p008.docx

21