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Prime Aid Pharmacy Corp. v. Express Scripts, Inc.

United States District Court, E.D. Missouri, Eastern Division

May 12, 2017

PRIME AID PHARMACY CORP., Plaintiff,
v.
EXPRESS SCRIPTS, INC., Defendant.

          MEMORANDUM AND ORDER

          CAROL E. JACKSON UNITED STATES DISTRICT JUDGE

         This matter is before the Court on plaintiff's motion to dismiss defendant's counterclaims, pursuant to Fed.R.Civ.P. 12(b)(6). Defendant has filed a response in opposition and the issues are fully briefed.

         I. Background

         Plaintiff Prime Aid Pharmacy Corp. (Prime Aid) is a licensed pharmacy located in New Jersey that provides retail and specialty medications. Defendant Express Scripts, Inc., (ESI) is a pharmacy benefits manager that contracts with insurers and health plan administrators to facilitate the delivery of prescription drugs to health plan members. On June 25, 2011, [1] the parties executed the provider agreement that is the subject of this dispute.[2] The agreement had an initial term of three years, after which it was automatically renewed for successive one-year terms unless either party provided written notice of its intent not to renew. First Am. Counterclaim at ¶ 19 [Doc. # 85].

         In its amended counterclaims, ESI alleges that Prime Aid failed to timely reverse claims for reimbursement when prescriptions were not delivered to patients. According to the counterclaim, after filling a prescription, Prime Aid submitted an electronic claim for reimbursement. Within seconds, ESI responded with a message stating whether the submitted claim was approved and setting forth the amount of the copayment that Prime Aid was required to collect from the member. If the prescription was not picked up within ten days after Prime Aid submitted the claim, Prime Aid had an additional three days to reverse the claim. Every two weeks, ESI paid Prime Aid and provided a statement that identified the prescription number, the date of service, the drug, and the amount paid for each claim. Id. at ¶¶ 27, 39-41.

         ESI alleges that, in 2014, Prime Aid's claims submissions began to display unusual patterns.[3] Id. at ¶ 43. After investigating, ESI determined that Prime Aid submitted claims for seven prescriptions that were never provided to the ESI member.[4] Id. at ¶¶ 49-72. For example, in May 2014, Prime Aid submitted a claim for prescription # 687335 for ESI member SK. Two weeks later, ESI paid Prime Aid $1, 132.17 for this claim. In June 2014, Prime Aid submitted a claim for refilling the prescription, which ESI again paid. On July 21, 2014, SK's health plan contacted Prime Aid after it submitted a claim for another refill. At that point, Prime Aid acknowledged that the prescriptions had never been dispensed and, on July 22, 2014, it reversed the three claims for prescription # 687335. Id. at ¶ 50. Similarly, in June 2014, Prime Aid submitted claims for prescriptions # 704126 and # 704127 for ESI member JM. ESI timely paid Prime Aid $46, 692.30 for the two claims. In July 2014, Prime Aid submitted claims for refilling the prescriptions, which ESI again timely paid. Once again, the medications were not actually dispensed to the patient. After ESI asked for confirmation that the prescriptions were delivered, Prime Aid reversed the claims.[5] Id. at ¶ 70. On August 22, 2014, ESI terminated Prime Aid from the network, citing violations of the provider agreement, including its failure to timely reverse the seven reimbursement claims detailed in the counterclaim.

         ESI asserts counterclaims for fraudulent inducement, breach of contract, and unjust enrichment, based on allegations that Prime Aid accepted payment for prescriptions that were not actually dispensed to patients. Prime Aid moves to dismiss all three counterclaims for failure to state a claim upon which relief can be granted.

         II. Legal Standard

         The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the complaint. Fed.R.Civ.P. 12(b)(6). The factual allegations of a complaint are assumed true and construed in favor of the plaintiff, “even if it strikes a savvy judge that actual proof of those facts is improbable.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319, 327 (1989) (“Rule 12(b)(6) does not countenance . . . dismissals based on a judge's disbelief of a complaint's factual allegations.”); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) (stating that a well-pleaded complaint may proceed even if it appears “that a recovery is very remote and unlikely”). The issue is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence in support of his claim. Scheuer, 416 U.S. at 236. A viable complaint must include “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see id. at 563 (stating that the “no set of facts” language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), “has earned its retirement”); see also Ashcroft v. Iqbal, 556 U.S. 662, 678-84 (2009) (holding that the pleading standard set forth in Twombly applies to all civil actions). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555.

         ESI's fraudulent inducement counterclaim is also subject to the requirements of Rule 9(b), which requires that a party alleging fraud “must state with particularity the circumstances constituting the fraud . . . Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” The Eighth Circuit has held that the requirements of Rule 9(b) must be interpreted

in harmony with the principles of notice pleading. The special nature of fraud does not necessitate anything other than notice of the claim; it simply necessitates a higher degree of notice, enabling the defendant to respond specifically, at an early stage of the case, to potentially damaging allegations of immoral and criminal conduct. Thus, a plaintiff must specifically allege the circumstances constituting fraud, including such matters as the time, place and contents of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby.

Abels v. Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001) (quotations and citations omitted). “In other words, Rule 9(b) requires plaintiffs to plead the who, what, when, where, and how: the first paragraph of any newspaper story.” Summerhill v. Terminix, Inc., 637 F.3d 877, 880 (8th Cir. 2011). However, “[s]cienter . . . may be pleaded in conclusory fashion with the caveat that the party pleading fraud must set forth specific facts that make it reasonable to believe that defendant knew that a statement was materially false or misleading.” Nuss v. Cent. Iowa Binding Corp., 284 F.Supp.2d 1187, 1194 (S.D. Iowa 2003) (citations omitted).

         III. Discussion

         A. Count I - Fraudulent inducement

         Prime Aid argues that the fraudulent inducement counterclaim must be dismissed because ESI has failed to plead that it acted with the requisite intent. Prime Aid additionally argues ...


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