A Ninth Circuit panel affirmed the findings of a Montana federal court that dismissed a dispute over fees charged to individuals for the delivery of electronic medical records. Defendant Ciox Health LLC and several Montana health-care providers also named in the suit were accused of violating state law that bars certain entities from charging record delivery fees.
The health care providers are Bozeman Health Deaconess Hospital, Kalispell Regional Healthcare System Inc., RCHP Billings-Missoula LLC, SCL Health – Montana, and St. James Healthcare.
In Tuesday’s non-published opinion, the panel said that the fee limitations the plaintiffs pointed to did not apply to their circumstances. The opinion engaged in statutory interpretation to determine if either of the two Montana law provisions applied to the particular context of the case.
In their first cause of action, the plaintiffs argued that the defendants violated the reasonable fee limitation in Montana’s code “when they charged excessive fees for delivering Plaintiffs’ medical records upon Plaintiffs’ written request or for delivery to third parties (specifically, Plaintiffs’ attorneys or the attorneys’ agents or employees).” The panel ruled that the district court properly dismissed this claim because in view of the facts pleaded, the delivery of the plaintiffs’ records did not involve “compulsory process,” and as such, the fee limitations did not apply.
The appellate court also affirmed dismissal of two corollary claims for violation of the Montana Consumer Protection Act (MCPA) and the implied covenant of good faith and fair dealing. The opinion rejected the MCPA claim for the same underlying reason it rejected its fee limitation violation, concluding that because the defendants did not transgress the law, they did not act unfairly.
Similarly, the panel declined the breach of implied covenant claim, finding that the plaintiffs could not circumvent a legal conclusion with a theory of implied contract. Furthermore, the court held the plaintiffs failed to put forward facts establishing a relevant contract between themselves and either Ciox or the health care providers.
Finally, having shown no ability to cure the pleading deficiencies, the panel affirmed the lower court’s dismissal with prejudice.
The plaintiffs are represented by Western Justice Associates PLLC, Ciox by Kirkland & Ellis LLP, and the healthcare providers by Crowley Fleck PLLP.
