Schaefer v. Healthport Technologies LLC

Filing 38

ORDER denying 24 Motion to Dismiss for Failure to State a Claim. Signed by Judge David R. Herndon on 3/16/16. (lmp)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
STEFANIE GENTLES, individually and on
behalf of all others similarly situated, et al.,
Plaintiffs,
v.
HEALTHPORT TECHNOLOGIES LLC,
Defendant.

No. 15-cv-69-DRH-DGW
MEMORANDUM and ORDER

HERNDON, District Judge:
I.

Introduction

Now before the Court is defendant Healthport Technologies, LLC’s (hereinafter
“Healthport”) motion to dismiss plaintiff’s first amended complaint (Doc. 24)
pursuant to FEDERAL RULES

OF

CIVIL PROCEDURE 12(b)(6). Plaintiff opposes the

motion on grounds that the pleading requirements of 12(b)(6) are satisfied and
the voluntary payment doctrine is not a defense to either a violation of the Illinois
Consumer Fraud and Deceptive Business Practices Act (“ICFA”) or a per se
violation of the Illinois Examination of Health Care Records Act (“EHCRA”) (Doc.
32). For the reasons explained below, the Court DENIES defendant’s motion to
dismiss (Doc 24).
II.

Background

Defendant Healthport is the nation’s largest provider of release-ofPage 1 of 6

information services and audit management tracking technology (Doc. 16). As
part of its business, Healthport works with hospitals, healthcare organizations,
physician practices and clinics to process and fulfill requests for medical records
(Id.).
On January 22, 2015, defendants removed this case from the Circuit Court
of St. Clair County, Illinois asserting this Court has diversity jurisdiction under
the Class Action Fairness Act (“CAFA”). See 28 U.S.C. 1332(d) (Doc. 2). Following
removal, defendants filed a motion to dismiss plaintiff’s complaint (Doc. 8).
Thereafter, plaintiffs sought leave to file their first amended complaint (Doc. 13).
The Court granted the request, and on March 27, 2015, plaintiffs Stephen
Schaefer, Stefanie Gentles, Richard Messerly, Gregg Brown, and David Bair on
behalf of themselves and others similarly situated, filed a two-count amended
complaint (Doc. 16).
In Count I of their amended complaint, plaintiffs allege that Healthport
violated section 8-2001(d) of the EHCRA, by delivering electronic records via its
web-based HealthPortConnect, a web-based medical record request portal where
requesters go to retrieve their requested medical records, while Healthport still
charged the plaintiffs and prospective class members the price for paper copies of
the same records; in Count II of the amended complaint, plaintiffs allege that
Healthport knowingly made false or misleading representation on its invoices in
violation of the ICFA, 815 ILCS 505/2. Thereafter, Schaefer’s claims were
voluntary dismissed without prejudice (Doc. 17).

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In the amended complaint, Gentles alleges that HealthPort charged her and
her attorneys unlawful fees for electronic copies of her medical records that were
ordered for use in her workers’ compensation action in 2012 in violation of 735
ILCS 5/8-2001(d). Messerly alleges that HealthPort charged him and his attorneys
unlawful fees for electronic copies of her medical records that were ordered for
use in his workers’ compensation action in 2012 in violation of 735 ILCS 5/82001(d). Plaintiffs Brown and Bair allege similar facts related to their requests for
medical records in 2012 and 2013, respectively. In addition to their individual
claims, plaintiffs seek to represent a nationwide class of individuals with similar
claims under the EHCRA and ICFA.
Healthport now moves pursuant to Rule 12(b)(6) to dismiss both counts
contained in plaintiff’s first amended complaint (Doc. 24).
III.

Motion to Dismiss

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)
challenges the sufficiency of the complaint for failure to state a claim upon which
relief may be granted. Gen. Hallinan v. Fraternal Order of Police Chicago Lodge
No. 7, 570 F.3d 811, 820 (7th Cir. 2009). The Supreme Court explained in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007), that Rule 12(b)(6)
dismissal is warranted if the complaint fails to set forth “enough facts to state a
claim to relief that is plausible on its face.” Thus to survive a motion to dismiss,
the allegations of the complaint must be sufficient “to raise a right to relief above
the speculative level.” Twombly, 550 U.S. at 555.

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Despite Twombly and Ashcroft v. Iqbal, 556 U.S. 662 (2009) retooling
federal pleading standards, notice pleading remains all that is required in a
complaint. “A plaintiff still must provide only ‘enough detail to give the defendant
fair notice of what the claim is and the grounds upon which it rests and, through
his allegations, show that it is plausible, rather than merely speculative, that he is
entitled to relief.’” Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir. 2008)
(citation omitted). In making this assessment, the district court accepts as true all
well-pleaded factual allegations and draws all reasonable inferences in the
plaintiff’s favor. See Rujawitz v. Martin, 561 F.3d 685, 688 (7th Cir. 2009); St.
John’s United Church of Christ v. City of Chi., 502 F.3d 616, 625 (7th Cir.
2007).
The Seventh Circuit offers further guidance on what a complaint must do to
withstand 12(b)(6) dismissal. The Court in Pugh v. Tribune Co., 521 F.3d 686,
699 (7th Cir. 2008), reiterated the standard: “surviving a Rule 12(b)(6) motion
requires more than labels and conclusions;” the complaint’s allegations must
“raise a right to relief above the speculative level.” A plaintiff’s claim “must be
plausible on its face,” that is, “the complaint must establish a non-negligible
probability that the claim is valid.” Smith v. Medical Benefit Administrators
Group, Inc., 639 F.3d 277, 281 (7th Cir. 2011). With this in mind, the Court
turns to plaintiff’s two-count complaint.

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IV.

Analysis

Defendant argues that plaintiffs’ claims fail as a matter of law and are
barred by the Illinois voluntary payment doctrine.

Under Illinois’ voluntary

payment doctrine, “a plaintiff who voluntarily pays money in reply to an incorrect
or illegal claim of right cannot recover that payment unless he can show fraud,
coercion, or mistake of fact.” Randazzo v. Harris Bank Palatine, N.A., 262 F.3d
663, 667 (7th Cir.2001). See also Synfuel Techs., Inc. v. DHL Express (USA),
Inc., 463 F.3d 646, 653 (7th Cir.2006).
For the purposes of this motion to dismiss, as mentioned above, the Court
accepts the factual allegations put forth by the plaintiff as truth.

Plaintiff

sufficiently alleges in their amended complaint that “Healthport violated the
EHCRA and the ICFA by charging and collecting the Paper Copy Price” for their
records because Healthport refused to release the records without first receiving
full payment. (Doc. 16). Each plaintiff alleges that “Healthport is the exclusive
provider of medical records for [plaintiffs’] medical service provider, thus [each
plaintiff] has no way of securing [his or her] medical records other than through
Healthport.” (Id.) Therefore, plaintiffs were “coerced and compelled to pay
[Healthport] the invoice in full and had no adequate opportunity to effectively
resist the demand for payment” because Healthport refused to release the records
without first receiving full payment (Id.).
Plaintiffs allege that the payments to Healthport were not in fact voluntary
but were coerced, because each plaintiff had a pending workers’ compensation

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claim that required those medical records. In this instance, the voluntary payment
doctrine, as an affirmative defense, is not a timely doctrine to rely on for
dismissal of this case. Moreover, the undersigned has previously held that the
voluntary payment doctrine is an affirmative defense not to be addressed on a
motion to dismiss. See Rench v. TD Bank, N.A., No. 3:13–cv–00922–DRH–PMF,
2014 WL 3893279, at *5 (S.D. Ill. Aug. 8, 2014) (Herndon, J.). A determination
as to the payment doctrine’s applicability “will require the presentation of
evidence so that the court or fact finder can determine whether a payment was
voluntarily made without protest and without fraud or mistake.” Crain v. Lucent
Techs., Inc., 317 Ill.App.3d 486, 250 Ill.Dec. 876, 739 N.E.2d 639, 644
(Ill.App.Ct.2000). Therefore, the Court finds that dismissal is not warranted.
V.

Conclusion

Accordingly, the Court DENIES defendant Healthport’s motion to dismiss
(Doc. 24).
IT IS SO ORDERED.
Signed this 16th day of March, 2016.

Digitally signed by
Judge David R.
Herndon
Date: 2016.03.16
14:35:18 -05'00'
United States District Judge

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