Heartland Medical, LLC v. Express Scripts, Inc.

Filing 50

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant Express Scripts, Inc.'s Motion to Dismiss Count IV of Plaintiff Heartland Medical, LLC's Complaint (Doc. 18 ), is GRANTED. Signed by District Judge John A. Ross on 9/5/2018. (CLO)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

HEARTLAND MEDICAL, LLC,
Plaintiff,
vs.

EXPRESS SCRIPTS, INC.,
Defendants.

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Case No. 4:17-CV-02873 JAR

MEMORANDUM AND ORDER
This matter is before the Court on Defendant Express Scripts, Inc.’s (“ESI”) Motion to
Dismiss Count IV of Heartland Medical, LLC’s (“Heartland”) Complaint. (Doc. 18.) Heartland
has responded in opposition (Doc. 20), and ESI has replied (Doc. 22).
BACKGROUND
Heartland alleges the following: 1 Heartland is an independent pharmacy that supplies
over-the-counter diabetic testing supplies that it purchases from wholesalers. ESI is a “pharmacy
benefits manager” that works with providers of employer-sponsored and third-party health
insurance plans. ESI manages a network of pharmacies that provide prescription medication and
medical supplies to plan members.

ESI’s network also includes its own pharmacy and

distribution services.
Beginning in March 2015, Heartland contracted with ESI to provide testing supplies to
customers in ESI’s network. Heartland kept meticulous records, over and above what was
required by ESI and federal law. In June 2016, ESI notified Heartland that it was conducting an
investigative review of the pharmacy’s transactions and demanded documentation regarding

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Heartland’s purchases of medications and supplies from wholesalers. Heartland provided the
information as requested. Nevertheless, ESI rejected much of the documentation and asserted
that Heartland had purchased inventory from non-authorized wholesalers.

Although the

contract’s description of authorized wholesalers was ambiguous and adopted after the timeframe
at issue in the investigation, Heartland agreed to provide additional records as requested by ESI.
Once again, ESI rejected the documentation.
On February 10, 2017, ESI notified Heartland that it would terminate their contract two
weeks later and that it would retain $1,310,413.18 in payments owed to Heartland on the ground
that the payments were for claims involving unauthorized wholesalers. In the interim, ESI sent
letters to Heartland’s customers notifying them of the impending termination and informing them
that ESI’s own mail-order pharmacy was available to service their on-going needs.
Heartland filed suit in December 2017, alleging breach of contract, unjust enrichment,
breach of the implied covenant of good faith and fair dealing, tortious interference with business
relations, and declaratory judgment. (Doc. 1 at 24-31.) ESI now moves to dismiss Heartland’s
tortious-interference claim, arguing that it is barred by the economic loss doctrine. (Doc. 19.)
Heartland responds that the economic loss doctrine does not apply to tortious interference claims
and that, even if it does, ESI’s interference represents misconduct separate and apart from its
breach of the parties’ contract. (Doc. 20.)
LEGAL STANDARD
To survive a motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 768 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the
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All factual allegations are taken from Heartland’s Complaint. (Doc. 1.)
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court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Id.
“The economic loss doctrine prohibits a plaintiff from seeking to recover in tort for
economic losses that are contractual in nature.”

Self v. Equilon Enterprises, LLC, No.

4:00CV1903TA, 2005 WL 3763533, at *8 (E.D. Mo. Mar. 30, 2005). Diversity cases such as
this one are governed by the laws of the forum state. Erie R. Co. v. Tompkins, 304 U.S. 64, 78
(1938). “Missouri prohibits a cause of action in tort where the losses are purely economic[; . . .
r]ecovery in tort is limited to cases in which there has been ‘personal injury, or property damage
either to property other than the property sold, or to the property sold when it [i]s rendered
useless by some violent occurrence.’” Rockport Pharmacy, Inc. v. Digital Simplistics, Inc., 53
F.3d 195, 198 (8th Cir. 1995) (quoting R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d
818, 828-29 (8th Cir. 1983)).
However, courts have been hesitant to apply the economic loss doctrine to claims of
tortious interference with business relations, especially when the interference can be
distinguished from the parties’ contractual obligations. See Hogan Logistics, Inc. v. Davis
Transfer Co., Inc., No. 4:16-CV-1541 (CEJ), 2017 WL 1508603, at *5 (E.D. Mo. Apr. 27, 2017)
(citing Hanover Ins. Co. v. Hermosa Const. Grp., LLC, 57 F. Supp. 3d 1389, 1396 (N.D. Ga.
2014) (holding that claims based on an independent duty not to interfere with another’s business
are outside the contractual relationship and not barred by the economic loss doctrine); see also
Zoltek Corp. v. Structural Polymer Grp., Ltd., No. 4:08-CV-460 (CEJ), 2008 WL 4921611, at *4
(E.D. Mo. Nov. 13, 2008), aff’d sub nom. Zoltek Corp. v. Structural Polymer Grp., 592 F.3d 893
(8th Cir. 2010) (declining to apply the economic loss doctrine to claims that the defendant’s
interference was “collateral to the parties’ contract) (citing Adbar Co. v. PCCA Missouri,
LLC, No. 4:06–CV–1689JCH, 2008 WL68858 (E.D. Mo. Jan. 4, 2008) (finding claims for unfair
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competition and tortious interference arose from duties arising outside the parties’ lease
agreement and thus were not barred by the economic loss doctrine).
In addition, district courts in Missouri have noted that the economic loss doctrine
originated in cases arising under the Uniform Commercial Code (“UCC”), making it inapplicable
to contracts for services like the one at issue in this case. Mea Fin. Enterprises, LLC v. Fiserv
Sols., Inc., No. 13-05041-CV-SW-BP, 2013 WL 12155467, at *3 (W.D. Mo. Oct. 16, 2013); see
also Trademark Med., LLC v. Birchwood Labs., Inc., 22 F. Supp. 3d 998, 1002 (E.D. Mo. 2014)
(quoting Self, 2005 WL 3763533) (“The doctrine was judicially created to protect the integrity of
the UCC bargaining process; it prevents tort law from altering the allocation of costs and risks
negotiated by the parties.”). Indeed, the Eighth Circuit has recognized that the origins of the
economic loss doctrine are rooted in the UCC. See Dannix Painting, LLC v. Sherwin-Williams
Co., 732 F.3d 902, 909 (8th Cir. 2013) (quoting Marvin Lumber & Cedar Co. v. PPG Indus.,
Inc., 223 F.3d 873, 885 (8th Cir. 2000)) (“allowing the buyer to resurrect time-barred warranty
claims in ‘tort would be precisely the kind of subversion of the U.C.C . that
the economic loss doctrine is intended to prevent.’”) (emphasis added).
ANALYSIS
The Court begins by noting that Heartland appears to describe a separate and distinct act
by ESI—writing to Heartland’s ESI-network customers in the wake of its termination of the
contract to recruit them to ESI’s own pharmacy—which violated an independent duty outside the
contract. In that regard, at least, the Court agrees with the numerous cases Plaintiff cites that the
economic loss doctrine would not bar recovery for injuries caused by such conduct. However,
the Court concludes that Heartland does not identify any injury caused by ESI’s letter which is
separate and distinct from the injury caused by the allegedly wrongful termination of its contract
by ESI; Heartland’s loss of access to these customers was a necessary result of ESI’s termination
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of the contract. The alleged injury caused by the tortious interference was actually caused by the
contract termination—once ESI terminated its contract with Heartland, there was no future
business relationship with which ESI could interfere. Thus, the loss of access to ESI-network
customers was a result of terminating the contract, not the letters. The Court therefore concludes
that Heartland’s tortious interference claim seeks to recover damages that are contractual in
nature and is barred by the economic loss doctrine. Self, 2005 WL 3763533, at *8.
This conclusion is in accord with other decisions from the Eastern District, most notably
HHCS Pharm., Inc. v. Express Scripts, Inc., No. 4:16-CV-1169 (CEJ), 2016 WL 7324968, at *5
(E.D. Mo. Dec. 16, 2016), and Cystic Fibrosis Pharm., Inc. v. Express Scripts, Inc., No. 4:16CV-1167 (CEJ), 2016 WL 7242163, at *5 (E.D. Mo. Dec. 15, 2016). In those cases, both similar
to this one, independent pharmacies sued ESI for wrongful termination and alleged tortious
interference with business relationship claims. HHCS Pharm., 2016 WL 7324968, at *5; Cystic
Fibrosis Pharm, 2016 WL 7242163, at *5. In both suits, the court rejected those tort claims as
barred by the economic loss doctrine, finding that the plaintiff’s injuries all stemmed from the
termination of their contracts with ESI.

HHCS Pharm., 2016 WL 7324968, at *5; Cystic

Fibrosis Pharm, 2016 WL 7242163, at *5. While it is true that neither HHCS Pharm. nor Cystic
Fibrosis Pharm. involved an invitation to former customers to join ESI’s in-house pharmacy, the
determination that terminating access to ESI-network patients was a contractual injury bolsters
the Court’s conclusion in this case.
CONCLUSION
The Court concludes that Heartland failed to demonstrate that ESI’s letter to Heartland’s
ESI-network customers caused separate, distinct, additional injury. Therefore, the Court finds
that all of Heartland’s alleged injuries are contractual in nature and that its claim for tortious

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interference with business relations is barred by the economic loss doctrine. As such, Heartland
cannot state a facially plausible tortious-interference claim. Iqbal, 556 U.S. at 768.
Accordingly,
IT IS HEREBY ORDERED that Defendant Express Scripts, Inc.’s Motion to
Dismiss Count IV of Plaintiff Heartland Medical, LLC’s Complaint (Doc. 18), is GRANTED.

Dated this 5th day of September, 2018.

JOHN A. ROSS
UNITED STATES DISTRICT JUDGE

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