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Chemist Corner, Inc. v. Epic Pharmacy Network, Inc.

United States District Court, D. Maryland

September 27, 2019

CHEMIST CORNER, INC., et. al, Plaintiffs,
v.
EPIC PHARMACY NETWORK, INC., Defendant.

          MEMORANDUM OPINION

          STEPHANIE A. GALLAGHER, UNITED STATES DISTRICT JUDGE

         Plaintiffs Chemist Corner, Inc. d/b/a Medex Medicine Express (“MedEx”), Monsey Family Drug Store, LLC d/b/a Maple Pharmacy (“Maple”), Maple Rx, LLC d/b/a Westgate Pharmacy (“Westgate”), Madison Rx LLC d/b/a Madison Pharmacy (“Madison”), and Refuah Rx LLC d/b/a Refuah Pharmacy (“Refuah”) (collectively “Plaintiffs”) filed a First Amended Complaint against Defendant Epic Pharmacy Network Inc. (“Epic”), alleging six claims including conversion, negligent breach of fiduciary duty, breach of contract, and violations of the Maryland and New York consumer protection statutes. ECF 17. Epic has filed a Motion to Dismiss Counts Five and Six, ECF 20, along with a supporting memorandum of law (collectively, the “Motion”). ECF 20-1. Plaintiffs filed an opposition (“Opposition”), ECF 26, and Epic filed a reply (“Reply”), ECF 31. I have considered all of the filings, and find that no hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons set forth below, Epic's Motion will be granted.

         I. FACTUAL BACKGROUND[1]

         Plaintiffs are independent community retail pharmacies located in New York and New Jersey. ECF 17, ¶¶ 17-26. As a Pharmacy Services Administration Organization (“PSAO”), Epic enrolls independent pharmacies into its pharmacy network. Id. ¶¶ 27-28. The members of Epic's network are permitted to participate in various pharmacy benefit plans offered by health insurers and sometimes managed by pharmacy benefit managers ("PBMs"). Id. ¶ 28. The members register with Epic, or other PSAOs, to gain access to participation with the PBMs and to streamline the application process to participate in the PBMs' networks. Id. ¶ 35. Epic enters into contracts with the PBMs, on behalf of all of the pharmacies in its network, to allow the pharmacies to serve individuals whose pharmacy benefits are administered by the PBMs. Id. ¶ 29. The PBMs pay Epic directly for the pharmacy services rendered by its members, and Epic remits the payments to its members. Id. ¶ 30. Each of the Plaintiffs signed contracts to become members of Epic's network. Id. ¶ 33. Those contracts describe Epic as Plaintiffs' "Attorney-in-Fact," meaning that Epic serves as Plaintiffs' fiduciary when it contracts with PBMs and third-party payors. Id. ¶¶ 33-34.

         The instant dispute centers around a January 1, 2018 contract, and a May 10, 2018 addendum to the contract (“the Addendum”), between Epic and Caremark, one of the nation's largest PBMs. Id. ¶¶ 32, 36, 39. Essentially, Plaintiffs allege that Epic breached its fiduciary duty to them, and its contracts with them, by entering into the Addendum, which contained terms unfavorable to Plaintiffs, and by withholding payments due and owing to Plaintiffs. ECF 17.

         II. LEGAL STANDARD

         In this Motion, Epic seeks dismissal of Counts Five (Violation of Maryland Consumer Protection Act) and Six (Violation of New York Consumer Protection Law). Under Rule 12(b)(6), a defendant may test the legal sufficiency of a complaint by way of a motion to dismiss. See In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom., McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law “to state a claim upon which relief can be granted.”

         Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). That rule provides that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to provide the defendants with “fair notice” of the claims and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (citation omitted) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' . . .”); see also Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). However, a plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Further, federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of Shelby, Miss., 574 U.S. 10, 135 S.Ct. 346, 346 (2014) (per curiam).

         Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action, ” it is insufficient. Twombly, 550 U.S. at 555. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely.” Twombly, 550 U.S. at 556 (internal quotation marks omitted).

         In reviewing a Rule 12(b)(6) motion, a court “must accept as true all of the factual allegations contained in the complaint” and must “draw all reasonable inferences [from those facts] in favor of the plaintiff.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. MTA, 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). However, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). “A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to the legal remedy sought. A Society Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937 (2012).

         III. ANALYSIS

         Plaintiffs' attempt to employ consumer protection laws in this dispute tries to fit a square peg into a round hole. Initially, Plaintiffs fail to allege the elements of either state consumer protection statute. As to Count Five and the Maryland Consumer Protection Act (“MCPA”), Plaintiffs allege the following:

115. Maryland's Consumer Protection Act contains a prohibition on certain unfair or deceptive practices, which is ...

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