McCracken et al v. Verisma Systems, Inc. et al

Filing 264

DECISION AND ORDER: Summary judgment pursuant to Federal Rule of Civil Procedure 56(f) is GRANTED in favor of Defendants on Plaintiffs' PHL § 18 claims; the sole remaining claims in this action. The Clerk of Court is directed to enter judgment in Defendants' favor and close this case. SO ORDERED. Signed by Hon. Frank P. Geraci, Jr. on 10/3/2022. (SFR)Clerk to Follow up

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
___________________________________
ANN McCRACKEN, et al.,
Plaintiffs,
v.

Case # 6:14-CV-6248-FPG-MJP
DECISION AND ORDER

VERISMA SYSTEMS, INC., et al.,
Defendants.
____________________________________

INTRODCUTION
The Court assumes the parties’ 1 familiarity with the underlying facts, which were set out
in the Court’s August 18, 2022 Decision and Order, ECF No. 262, and the full record of prior
proceedings in this matter. In that Decision and Order, the Court, inter alia, granted Defendants’
motion for judgment on the pleadings with respect to Plaintiffs’ New York General Business Law
(“GBL”) § 349 claim, and New York common law claim for unjust enrichment See ECF No. 262
at 6-12.
The Court’s Decision and Order also found that Plaintiffs’ claims under New York Public
Health Law (“PHL”) § 18 were not properly before the Court at that time. Id. at 6. That ruling
was based upon a prior stipulation entered into by the parties and the Defendants’ indication in
their briefing that they had “agreed to defer seeking court approval for [the PHL § 18 claims’]
dismissal until the Court determines whether the holding in [Ortiz v. Ciox Health LLC, 37 N.Y.3d
353, 364 (2021)] requires the dismissal of Plaintiffs’ remaining causes of action”—i.e., the GBL
The plaintiffs in this case are Ann McCracken, Joan Farrell, Sara Stilson, Kevin McCloskey, Christopher Trapatsos,
Kimberly Bailey, and the class they represent (collectively, “Plaintiffs”). They brought claims against the University
of Rochester, Strong Memorial Hospital, Highland Hospital (collectively, “University Defendants”) and Verisma
Systems, Inc. (“Verisma”) (together with University Defendants, “Defendants”)

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§ 349 and unjust enrichment claims. Id. at 5-6. Having ruled on those claims, the Court directed
the parties “to provide a joint status report no later than August 31, 2022, regarding Plaintiffs’
remaining individual claim and class claim under PHL § 18 and indicate to the Court how they
plan to proceed with any required notice to the class in order to effectuate dismissal of those
claims.” Id. at 12.
On August 31, 2022, Plaintiffs’ counsel filed a joint status report “on behalf of all parties.”
ECF No. 263 at 1. In that report, counsel indicated that “[t]here is no dispute” that the PHL § 18
claims fail on the merits under the New York Court of Appeals’ recent decision in Ortiz v. Ciox
Health LLC, 37 N.Y.3d353 (2021), which held that PHL § 18 does not contain a private right of
action. Id. Moreover, the parties noted in their filing their position “that class notice is required
only if the claims are dismissed as a result of a settlement, compromise, or voluntary dismissal and
no actual judgment is entered.” Id. at 2.
For the following reasons, Plaintiffs’ remaining claims under PHL § 18 are DISMISSED
pursuant to Federal Rule of Civil Procedure 56(f).
LEGAL STANDARD
Summary judgment is appropriate when the record shows that there is “no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Disputes concerning material
facts are genuine where the evidence is such that a reasonable jury could return a verdict for the
non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding
whether genuine issues of material fact exist, the court construes all facts in a light most favorable
to the non-moving party and draws all reasonable inferences in the non-moving party's favor. See
Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005). However, the non-moving party

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“may not rely on conclusory allegations or unsubstantiated speculation.” F.D.I.C. v. Great Am.
Ins. Co., 607 F.3d 288, 292 (2d Cir. 2010) (quotation omitted).
DISCUSSION
Under Federal of Civil Procedure 56(f), this Court has the discretion to sua sponte “grant
summary judgment for a nonmovant” so long as it gives “notice and a reasonable time to respond.”
Fed. R. Civ. P. 56(f)(1). In the Court’s August 18, 2022 Decision and Order, the Court provided
such notice and a reasonable time to respond. See ECF No. 262 at 12.
PHL § 18(2)(e) states that health care providers “may impose a reasonable charge for all
inspections and copies [of medical records], not exceeding the costs incurred by such provider”
and “not exceed[ing] seventy-five cents per page.” N.Y. Pub. Health L. § 18(2)(e). The New York
Court of Appeals, in answering a certified question from the Second Circuit, concluded in Ortiz v.
Ciox Health LLC, 37 N.Y.3d 353, 364 (2021), that there is no private right of action for violations
of PHL § 18(2)(e). Based on the Court’s familiarity with the prior proceedings in this matter and
its review of Ortiz, the Court finds that there is no genuine dispute as to any material fact with
respect to the PHL § 18 claims and that Defendants are entitled to judgment as a matter of law.
See Carter v. CIOX Health, LLC, No. 6:14-CV-6275, 2022 WL 3499683, at *2.
The Court’s finding that Defendants are entitled to judgment as a matter of law on the PHL
§ 18 claims applies to the following class and sub-classes who have not opted out of the litigation.
ECF No. 263 at 1-2.
The Class includes:
All persons who (1) requested copies of medical records (either by
themselves or through a lawyer, personal representative, or other qualified
person acting on their behalf) from a health care facility owned and/or
operated by the University of Rochester, (2) were charged by or through
Verisma Systems, Inc. for copies of such records in accordance with
Verisma’s “NY Fee Schedule PHL 18,” and (3) paid such charges (either
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directly or through the person making the request on their behalf) and had
their records released by or through Verisma on or after May 14, 2011,
excluding any principals or employees of Defendants (“the Class” or “the
URMC Medical Records Class”).
The Highland Sub-Class includes:
All persons in the URMC Medical Records Class who requested copies of
medical records from Highland Hospital and whose records were released
through Verisma on or after May 14, 2011.
The Strong Memorial Sub-Class includes:
All persons in the URMC Medical Records Class who requested copies of
medical records from Strong Memorial Hospital and whose records were
released through Verisma on or after May 14, 2011.
See ECF No. 263 at 1-2.
“Notice to potential class members is not required, absent special circumstances, when an
action brought on behalf of a class is dismissed on the merits.” Manes v. Goldin, 400 F. Supp. 23,
31 (E.D.N.Y. 1975). Here, because the Court’s dismissal of the PHL § 18 is on the merits, rather
than the product of a settlement or compromise, “there is no possibility that the named plaintiffs
or their counsel could ‘sell out’ the class for their own benefit.” See Austin v. Pennsylvania Dept.
of Corrections, 876 F. Supp. 1437, 1455 (E.D. Pa. 1995) (“Although Rule 23(e) states without
exception that ‘notice of the proposed dismissal or compromise shall be given,’ courts have
consistently held that notice to class members is required only when consistent with the rule’s
purpose—the protection of absent class members.”) (citing 7B Charles A. Wright et al., Federal
Practice and Procedure § 1797, at 345 (1986)). Thus, the Court finds that notice to the class and
subclasses above is not required as the Court’s ruling via Rule 56(f) is on the merits based upon
Ortiz v. Ciox Health LLC, 37 N.Y.3d 353, 364 (2021).

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Accordingly, summary judgment on Plaintiffs’ PHL § 18 claims is granted pursuant to
Rule 56(f) on both the individual and class claims and such claims are dismissed.
CONCLUSION
For the foregoing reasons, summary judgment is granted in favor of Defendants on
Plaintiffs’ PHL § 18 claims—the sole remaining claims in this action. The Clerk of Court is
directed to enter judgment in Defendants’ favor and close this case.
IT IS SO ORDERED.
Dated: October 3, 2022
Rochester, New York

FRANK P. GERACI, JR.
UNITED STATES DISTRICT JUDGE
WESTERN DISTRICT OF NEW YORK

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