United States District Court, S.D. West Virginia, Charleston
THOMAS M. WILSON SR., and DANIEL HALSEY as ADMINISRATOR of the ESTATE OF TAMARA HALSEY, and JASON GRAZUTIES, and SANDRA SHEPPARD, and ROBERT BRADLEY, and ARVADA MARTIN, Individually and on behalf of all others similarly situated, Plaintiffs,
MRO CORPORATION, a Pennsylvania Corporation, and CIOX HEALTH, LLC, a Georgia Corporation, and MEDI-COPY SERVICES, INC., a Tennessee Corporation, Defendants.
MEMORANDUM OPINION AND ORDER
T. Copenhaver, Jr. United States District Judge.
is a motion to dismiss the amended complaint, filed by
defendant Medi-Copy Services, Inc. (“Medi-Copy”)
on November 11, 2016.
Thomas M. Wilson, Sr., Daniel Halsey as Administrator of the
Estate of Tamara Halsey, and Jason Grazuties, individually
and on behalf of all others similarly situated, instituted
this action against Medi-Copy, MRO and CIOX Health, LLC
(“CIOX”) by filing a complaint in the Circuit
Court of Kanawha County, West Virginia on April 28, 2016.
With the consent of CIOX and MRO, Medi-Copy removed the
action on June 10, 2016 on the basis of diversity
jurisdiction and the Class Action Fairness Act of 2005.
filed a motion to amend the complaint to add Sandra Sheppard,
Robert Bradley, and Arvada Martin as additional class
representatives on September 23, 2016, which the court
granted on October 7, 2016. Medi-Copy thereafter filed the
pending motion to dismiss.
amended complaint alleges that defendants, who are providers
of patient health care records, charge patients more for
their heath care records than is permitted under West
Virginia law. Amended Compl. at ¶¶ 1-3.
Specifically, plaintiffs allege that defendants improperly
billed and produced paper copies of their medical records
when the records were stored electronically and when
plaintiffs requested copies of the records in electronic form
and that they charge far in excess of “the actual cost
of labor, supplies, and postage involved in providing copies
of medical records to patients, including Plaintiffs and
others.” Id. at ¶¶ 3, 26.
case arises under the Health Care Records Statute, contained
in W.Va. Code §§ 16-29-1 and 16-29-2, which
prescribes that “[a]ny licensed . . . health care
provider . . . shall, upon the written request of a patient,
his or her authorized agent or authorized representative,
within a reasonable time, furnish a copy . . . of all or a
portion of the patient's record to the patient, his or
her authorized agent or authorized representative. . .
.” W.Va. Code § 16-29-1(a). Section 16-29-1(d)
states that [t]he provisions of this article may be enforced
by a patient, authorized agent or authorized representative.
. . .” W.Va. Code § 16-29-1(d).
state that MRO, Medi-Copy and CIOX have entered into
contracts with hospitals and other healthcare providers in
West Virginia in order to provide medical records to patients
and others on behalf of patients. Id. at ¶ 14.
Pertaining to Medi-Copy, the amended complaint alleges that
on September 30, 2014, Jason Grazuties, “though his
representatives, ” requested his medical records in
electronic form from the hospital, Logan Regional Medical
Center. Id. at ¶ 31. His counsel received an
invoice from Medi-Copy dated October 3, 2014, which included
charges that exceeded those permitted by law. Id. On
November 23, 2015, Arvada Martin, “through her
representatives, ” requested her medical records in
electronic form from the health care provider, Valley
Health.Id. at ¶ 32. Her counsel
received an invoice from Medi-Copy dated December 4, 2015,
which included charges that exceeded those permitted by law.
Id. Plaintiffs allege that Medi-Copy failed to
comply with requests for electronic records. Id. at
¶ 33. The amended complaint further alleges that
defendant has overcharged other patients as well.
Id. at ¶ 35.
bring this case as a class action on behalf of those
“who are patients of health care providers, or
designated representatives of patients of health care
providers, who Defendants charged an amount in excess of that
allowed by law for copies of medical records when they
requested electronic medical records be produced on
electronic media, individually or through another person
acting on their behalf, from West Virginia hospitals and
other health care providers that contract with Defendants to
produce medical records.” Id. Plaintiffs
allege that the class may consist of thousands of people,
making joinder impracticable, and that there are common
questions of law and fact applicable to all class members.
Id. at ¶ 37. They further allege that their
claims are typical and that they are adequate representatives
of the class. Id. at ¶¶ 38-39.
one alleges that defendants violated the West Virginia
Consumer Credit and Protection Act (“WVCCPA”),
W.Va. Code § 46A-6-101 et seq., by charging fees in
excess of a reasonable fee for the production of medical
records in electronic form. Id. at ¶¶
42-44. Specifically, it states that defendants' policies
and practices of charging “per page rates and other
charges for copies of medical records [that] exceed the labor
and supply cost of responding to requests for copies violates
the WVCCPA as an unfair or deceptive act or practice pursuant
to W.Va. Code §§ 46A-6-104 and 46A-6-102.”
Id. at ¶ 45. In addition, plaintiffs state that
defendants' policy of charging some people higher amounts
for copies of medical records than they may charge others is
an unfair or deceptive act or practice. Id. at
¶ 46. Plaintiffs also allege that defendants'
failure to inform consumers that they are entitled to receive
electronic medical records at a lower cost constitutes
“a failure to state a material fact that misleads the
public.” Id. at ¶ 47. Plaintiffs state
that “[t]he charges posed by the Defendants violate the
WVCCPA and, further, violate the limitations on charges for
medical records as set forth in HIPPA, the HITECH Act, West
Virginia statute and related state and federal
regulations.” Id. at ¶ 48.
two alleges that defendants violated the Health Care Records
Statute, W.Va. Code § 16-29-2, by charging plaintiffs
and others in excess of their labor and supply costs for
their electronic medical records, resulting in fees that are
not reasonable. Id. at ¶¶ 50, 53. In
addition, defendants did not inform consumers or their
representatives that they are entitled to an electronic copy
of their medical records at a lower cost, which plaintiffs
allege constitutes “a failure to state a material fact
that intends to mislead and violates West Virginia
statute.” Id. at ¶ 54.
ask for this matter to be certified as a class action, award
judgment in their favor, including injunctive relief that
prohibits excessive and unlawful charges, equitable relief
that includes restitution and disgorgement of moneys obtained
from overcharges, recovery of excess charges, civil penalties
for violations of the WVCCPA, pre-judgment and post-judgment
interest, costs, attorneys fees, statutory interest, punitive
damages, and all other relief the court deems appropriate.
Id. at p. 12.
motion to dismiss the amended complaint, Medi-Copy concedes
that it is “a company that specializes in providing
health information management services.”
Medi-Copy's Memo. in Supp. of Mot. to Dismiss Amended
Compl. at 3. According to Medi-Copy, it “fulfilled
request for medical records made to Logan Regional Medical
Center at the time Mr. Grazuties records were requested. . .
. [and] also fulfilled requests for medical records made to
Valley Health at the time Ms. Martin's records were
requested.” Id. Despite this, Medi-Copy argues
that plaintiffs have failed to plead a cognizable injury in
fact and additionally contends that the WVCCPA and Health
Care Records Statute do not cover plaintiffs' claims so
that they therefore lack standing to bring their claims,
pursuant to Fed.R.Civ.P. 12(b)(1). Id. at 4, 7-9.
The court will address each of these arguments in turn.
district courts are courts of limited subject matter
jurisdiction, possessing “only the jurisdiction
authorized them by the United States Constitution and by
federal statute.” United States ex. rel. Vuyyuru v.
Jadhav, 555 F.3d 337, 347 (4th Cir. 2008). As such,
“there is no presumption that the court has
jurisdiction.” Pinkley, Inc. v. City of
Frederick, 191 F.3d 394, 399 (4th Cir. 1999) (citing
Lehigh Mining & Mfg. Co. v. Kelly, 160 U.S. 327,
327 (1895)). Indeed, when the existence of subject matter
jurisdiction is challenged under Rule 12(b)(1), “[t]he
plaintiff has the burden of proving that subject matter
jurisdiction exists.” Evans v. B.F. Perkins
Co., 166 F.3d 642, 647 (4th Cir. 1999); see also
Richmond, Fredericksburg, & Potomac R .R. Co. v.
United States, 945 F.2d 765, 768 (4th Cir. 1991). If
subject matter jurisdiction is lacking, the claim must be
dismissed. See Arbaugh v. Y & H Corp., 546 U.S.
500, 506 (2006).
matter jurisdiction may be attacked by a defendant with
either a facial or a factual challenge. Kerns v. United
States, 585 F.3d 188, 192 (4th Cir. 2009). In a facial
challenge, the defendant is asserting that the allegations
contained in the complaint fail to sufficiently establish the
existence of subject matter jurisdiction. Id. In a
facial attack, the plaintiff is “afforded the same
procedural protection as she would receive under a Rule
12(b)(6) consideration, ” so that “facts alleged
in the complaint are taken as true, ” and the
defendant's motion “must be denied if the complaint
alleges sufficient facts to invoke subject matter
jurisdiction.” Id. In a factual challenge, a
defendant may argue “that the jurisdictional
allegations of the complaint [are] not true.”
Id. This permits a trial court to consider extrinsic
evidence or hold an evidentiary hearing to “determine
if there are facts to support the jurisdictional
argues that plaintiffs lack standing to bring their claims
for two reasons. First, it contends that because the law firm
Tiano O'Dell PLLC requested and paid for plaintiffs'
medical records, it is Tiano O'Dell, not plaintiffs
themselves, who suffered an injury from any alleged
overbilling by them. Medi-Copy's Memo. in Supp. of Mot.
to Dismiss Amended Compl. at 5-6. Second, Medi-Copy states
that the West Virginia Consumer Credit and Protection Act
(“WVCCPA”) and the Health Care Records Statute do
not govern the transactions alleged in the amended complaint.
Id. at 7-9. As these are facial and not factual
challenges to plaintiffs' standing, the court will ...