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Kadambi v. Express Scripts, Inc.

United States District Court, N.D. Indiana, Fort Wayne Division

February 5, 2015

ASHOK KADAMBI, M.D., et al., Plaintiffs,
v.
EXPRESS SCRIPTS, INC., et al., Defendants

For Ashok Kadambi, M.D., Linda Hinant, Nancy Hunt, Sharon Yost, Plaintiffs: Mark W Baeverstad, LEAD ATTORNEY, Rothberg Logan & Warsco LLP - FW/IN, Fort Wayne, IN.

For Express Scripts Inc, formerly known as Precision RX, doing business as Curascripts, Accredo Health Group Inc, Express Scripts Holding Company, Medco Health Solutions Inc, doing business as Accredo Health Group Inc, Defendants: Jeremy N Gayed, Robert T Keen, Jr, LEAD ATTORNEYS, Barrett & McNagny LLP, Fort Wayne, IN; Matthew D Knepper PHV, Michael P Nolan PHV, LEAD ATTORNEYS, PRO HAC VICE, Husch Blackwell LLP - SL/MO, Saint Louis, MO.

Page 901

OPINION AND ORDER

JON E. DEGUILIO, United States District Judge.

This case arises from a dispute regarding the fulfillment of prescriptions for HGH, written by plaintiff Dr. Ashok Kadambi. The other plaintiffs are eight of his patients, for whom the prescriptions were written. The plaintiffs claim that the defendants--several mail-order pharmacies--are liable for failing to fulfill the prescriptions as written. Plaintiffs' currently operative Amended Complaint [DE 58] alleges three claims: Breach of Duty to Honor Prescription (Count 1); Defamation (Count II); and Breach of Settlement

Page 902

Agreement (Count III). Now before the Court are two motions in which the defendants seek to have each of the claims dismissed: (1) Defendants' Motion for Judgment on the Pleadings as to Count I [DE 62] and (2) Defendants' Motion to Dismiss Defamation Claims (Counts II and III) Pursuant to Indiana's Anti-SLAPP Act [DE 64].[1]

For the reasons stated below, the Motion for Judgment on the Pleadings as to Count I is GRANTED [DE 62] and the Motion to Dismiss Defamation Claims (Counts II and III) Pursuant to Indiana's Anti-SLAPP Act is GRANTED IN PART and DENIED IN PART [DE 64].

I. Factual Background

Dr. Kadambi is a physician specializing in Endocrinology in Fort Wayne, Indiana. For at least eight of his patients, who are plaintiffs in this lawsuit, Dr. Kadambi prescribed human growth hormone (" HGH" ). The plaintiffs allege that the prescriptions were " independently evaluated and determined to be medically necessary for each patient" and that the prescriptions were approved by the insurance companies of the patients. However, starting in 2010, the defendant pharmacies began refusing to honor the HGH prescriptions from Dr. Kadambi. Plaintiffs also claim that representatives from defendant Accredo made defamatory statements to several of the plaintiffs regarding Dr. Kadambi.

Defendants contend that their refusal to honor the prescriptions was based on concern with potential violations of federal law. 21 U.S.C. § 333(e) makes it a crime to knowingly distribute HGH for use in humans " other than the treatment of a disease or other recognized medical condition, where such use has been authorized by the Secretary of Health and Human Services under section 355 of [Title 21] and pursuant to the order of a physician." They state that another of Express Scripts's affiliated pharmacies--Specialty Distribution Services--previously entered into a deferred prosecution agreement (" DPA" ) related to the distribution of HGH and that the protocols employed in this case were developed in light of that DPA in order to shield their pharmacists from potential criminal liability. They further claim that through information obtained during their due diligence, the pharmacies formed a good faith belief that Dr. Kadambi prescribed HGH for non-medically acceptable reasons, or was at the very least associated with organizations that advocate for off-label uses of HGH. Accordingly, they declined to honor the prescriptions as written and explained that decision to the patients in telephone conversations. This suit followed.

Dr. Kadambi has previously brought a similar lawsuit regarding the fulfillment of HGH prescriptions, which was also assigned to the undersigned judge. Kadambi v. Express Scripts, Inc., No. 3:12-cv-44. In that suit, Dr. Kadambi sued Express Scripts as the only defendant, and alleged claims of defamation, intentional interference with a business relationship, and intentional interference with a contractual relationship. That suit was resolved through a settlement agreement between Dr. Kadambi and Express Scripts. [DE 71 at 15-18.] One term of that agreement states " Express Scripts shall not issue any defamatory statements about [Dr. Kadambi] or his practice group, Fort Wayne Endocrinology, and Express Scripts reserves all rights, claims and defenses to any claim based on any alleged defamatory statement." [ Id. at 15-16.]

Page 903

II. Motion for Judgment on the Pleadings

Defendants first move for judgment on the pleadings as to Count I. They argue that the statute on which Plaintiffs base Count I (Indiana Code section 25-26-13-16) does not provide for a private right of action and, accordingly, the claim should be dismissed.

A. Standard of Review

A Rule 12(c) motion for judgment on the pleadings permits a party to move for judgment after the pleadings are closed. Fed.R.Civ.P. 12(c). A motion for judgment on the pleadings under Rule 12(c) is subject to the same standard of review as a motion to dismiss under Rule 12(b)(6). Buchanan-Moore v. Cnty. of Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009). Therefore, the court must take the facts alleged in the complaint as true and draw all reasonable inferences in favor of the non-moving party. Matrix IV, Inc. v. Am. Nat'l Bank and Trust Co. of Chi., 649 F.3d 539, 547 (7th Cir. 2011). To survive the motion, the complaint must contain enough facts to state a claim for relief that is plausible on its face. Brooks v. Ross, 578 F.3d 574, 580-81 (7th Cir. 2009) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) and Bell A. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); see McCauley v. City of Chi., 671 F.3d 611, 615 (7th Cir. 2011) (explaining that " [a] claim has facial plausibility when the plaintiff pleads factual content that allows ...


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