Opinion
Civil Action 19-5751
07-26-2022
NEUROSURGICAL CARE, LLC v. DOC SOLUTIONS LLC et al.
MEMORANDUM
JOHN MILTON YOUNGE JUDGE
Plaintiff Neurosurgical Care, LLC (“Plaintiff”) alleges multiple parties orchestrated a scheme to sell Stivax, a battery-powered electrical nerve stimulator, as Medicare reimbursable while knowing at all times it was not. Plaintiff alleges multiple parties violated the Racketeering Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-1, et seq., as well as other provisions of state law. (Amended Complaint, ECF No. 22.) Specifically, Plaintiff alleges Defendant Solace Advancement, LLC, and its owner, Defendant John Carpenter (collectively, “Defendants”), were members of this scheme, which Plaintiff terms the “Stivax enterprise.” Currently before this Court is Defendants' Motion to Dismiss Plaintiff's First Amended Complaint. (Memorandum in Support of Motion to Dismiss Plaintiff's First Amended Complaint (“Memorandum”), ECF No.47.) For the foregoing reasons, we grant Defendants' Motion based on Plaintiff's insufficiency, and dismiss all pending claims without prejudice.
Along with Plaintiff's insufficiency, Defendant John Carpenter also asserts that this Court lacks personal jurisdiction because the Amended Complaint does not allege any suit-related contacts with this forum. (Memorandum at 8-9.) However, because Plaintiff's claims fail for the reasons stated herein, the Court need not address personal jurisdiction over Defendant Carpenter. See, e.g., 4 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1067.6 (4th ed. 2020) (“Alternatively, when the jurisdictional question is complex or difficult, a court simply may avoid the issue by resolving the suit on the merits when they clearly must be decided in favor of the party challenging jurisdiction, thereby obviating any need to decide the question; that approach is possible even when the jurisdictional issue lacks complexity.”); In re Enter. Rent-A-Car Wage & Hour Emp't Practices Litig., 735 F.Supp.2d 277, 329 (W.D. Pa. 2010) (“To streamline the decision making, courts, in situations where complex issues of personal jurisdiction exist and there is a pending motion which would be dispositive in favor of the party over whom jurisdiction is disputed, may defer ruling on the motion to dismiss and proceed to resolve the dispositive motion.”); see also Georgine v. Amchem Products, Inc., 83 F.3d 610, 623 (3d Cir. 1996) (“A court need not reach difficult questions of jurisdiction when the case can be resolved on some other ground in favor of the same party.”)
We glean the following information from Plaintiff's Complaint, unless otherwise noted.
Defendant Biegler GmbH (“Biegler”) is an Austrian manufacturer of medical devices. (Id. ¶ 20-25.) Biegler manufactures P-STIM, a miniaturized, battery-powered, transcutaneous electrical nerve stimulator and alleged predecessor to the device at issue in this dispute. (Id. ¶ 44.) P-STIM is intended for use as an electro-acupuncture device to stimulate certain acupuncture points. (Id. at ¶ 44.) Biegler entered into a distribution and licensing arrangement with Eagle Advancement Institute to distribute P-STIM in the United States. (Id. ¶ 49.)
Defendant John Carpenter owned Eagle Advancement Institute. (Id. ¶ 62, 63.)
In 2014, Biegler, applied to the Centers for Medicare and Medicaid Services (“CMS”) seeking the creation of a billing code within the Healthcare Common Procedure Coding System (“HCPCS”) for the P-STIM system. (Id. ¶ 51.) No code previously existed for the P-STIM system.(Id.) Specifically, it requested to “establish a new level II HCPCS code to identify an auricular point stimulation (electro-acupuncture stimulator) device, trade name: P-STIM.” (Id.) On May 28, 2014, CMS determined that “based on our preliminary benefit category analysis, we believe that there would be no Medicare payment for this item.” (Id.) Biegler was allegedly notified of CMS's final decision that no Medicare payment was available for the P-STIM system in November 2014. (Id. ¶ 54, 67.) In October 2015, the Durable Medical Equipment Medicare Administrative Contractors issued a “Joint DME MAC Publication” about the P-STIM device, stating that the item was not reimbursable by Medicare. (Id. ¶ 55.)
Biegler had previously wrote to CMS to request the withdrawal of a pending request for a billing code within the HPCPS, which was granted. (Id. ¶ 64.)
Plaintiff alleges that as of this date, Eagle Advancement Institute had notice that P-STIM was not reimbursable by Medicare. (Id. ¶ 52.)
Soon after it was publicly announced that P-STIM was unequivocally not Medicare reimbursable, Biegler sought approval from the FDA to market the Stivax System as the substantial equivalent to the P-STIM System. (Id. ¶ 58.) In 2016, the FDA granted Biegler's request to market the Stivax System as the substantial equivalent of the P-STIM System. (Id. ¶ 59.) Biegler engaged Defendant Solace Advancement as the U.S. distributor for the Stivax system. (Id. ¶ 60, 72.) Solace contracted with distributors such as Doc Solutions, LLC (“Doc Solutions,” additional defendants in this case) to sell the Stivax System. (Id. ¶ 60.) Plaintiff alleges these parties constitute the “Stivax Enterprise” (“the enterprise”). (Id. ¶ 5.)
Doc Solutions is owned by Mark Kaiser (“Kaiser”) and Liz O'Neill, who are also parties in this matter. (Id. ¶ 33.)
Plaintiff Neurosurgical Care was founded by Dr. Sagi Kuznits, a practicing neurosurgeon. (Id. ¶ 7, 8.) Dr. Kuznits performs spinal surgeries, and in addition provides alternatives to surgeries in order to improve the management of severe, chronic pain, including neurostimulation. (Id. ¶ 10, 12.)
On March 14, 2017, Defendant Mark Kaiser, on behalf of Stivax distributor Doc Solutions, visited Neurosurgical Care to market, promote, and sell Stivax. (Id. ¶ 76.) Thereafter, Plaintiff was allegedly supplied with information regarding the ability to receive Medicare reimbursement. During the initial meeting between Dr. Kuznits and Kaiser, Dr. Kuznits inquired whether Stivax was Medicare reimbursable under code L8679. (Id. ¶ 77.) Kaiser responded by sending the information of a purported compliance officer working with Doc Solutions. (Id. ¶ 78.)
Kaiser connected Dr. Kuznits with two doctors regarding Stivax compliance matters. (Id. ¶ 79, 80; Exhibit G.) On March 15, 2017, Kaiser connected Dr. Kuznits with Dr. Tim Warren of Titan Medical Compliance (“Titan”) regarding compliance matters. (Id. ¶ 79; Exhibit F.) On March 17, 2017, Kaiser connected Dr. Kuznits with Dr. Alex Landfield, another physician using Stivax. (Id. ¶ 80.) Dr. Landfield represented that “we have been billing as recommended by [Kaiser and Doc Solutions] and have not had problems.” (Id.) On March 24, 2017, Kaiser and Doc Solutions provided Medicare billing codes for Stivax. (Id. ¶ 81, Exhibit H.) Dr. Kuznits requested confirmation from Titan that Stivax was reimbursable. (Id.)
In April 2017, Plaintiff began purchasing Stivax from Doc Solutions. (Id. ¶ 87.) Upon purchasing Stivax, Plaintiff received an email from a representative of Solace welcoming it to Stivax. (Id. ¶ 82.) Plaintiff began billing Medicare for Stivax and Stivax procedures. (Id. ¶ 90.) On December 13, 2017, Kaiser sent an email regarding Stivax coding, stating “[a]fter working with our compliance team over the past few weeks we are happy to announce a new coding set that is to be used effective immediately.” (Id. ¶ 83, Exhibit I.) The information included the use of the L8679 code for Medicare. (Id. ¶ 83.) Relying on the information it received, Plaintiff billed code L8679 for roughly 58 claims for applying Stivax for a total of roughly $396,973.58. (Id. ¶ 90.)
Plaintiff alleges that contrary to the representations it received, L8679 was not a valid reimbursement code for use with Stivax and Stivax was not reimbursable by Medicare, just as P-STIM was not Medicare reimbursable. (Id. ¶ 88.) On July 12, 2018, a contractor for CMS conducted an audit of Plaintiff and concluded Stivax procedures submitted under code L8679 were not reimbursable by Medicare. (Id. ¶ 91.) Immediately after, Plaintiff stopped billing the L8679 code after becoming aware of the potential error in using the code. (Id. ¶ 94.)
In December 2018, Plaintiff received a civil investigative demand from the United States Attorney's Office for the Eastern District of Pennsylvania regarding its billing practices. (Id. ¶ 95.) Specifically, Plaintiff has been subjected to an investigation relating to their billing of Stivax under the code L8679. (Id. ¶ 95.) As a result, Plaintiff alleges to have spend significant funds in connection with defending itself against the investigation. (Id. ¶ 96.)
Plaintiff filed suit on December 6, 2019 against Doc Solutions and Kaiser. (ECF No. 1.) Plaintiff revised its Complaint to include several new parties, including Defendants and Biegler.In its Complaint, Plaintiff alleges seven counts sounding in fraud and conspiracy. It alleges two RICO counts, claiming Defendants' actions as part of the enterprise amounted to a violation of § 1962(c) as well as § 1962(d). (Amended Complaint, ¶¶ 109-125, 126-137.) Plaintiff also argues Defendants violated the UTPCPL, claiming Defendants' concealment and suppression of information resulted in a deceptive marketing scheme. (Id. ¶ 138-151.) Plaintiff also includes claims of unjust enrichment, fraudulent misrepresentation, negligent misrepresentation, and negligence. (Id. ¶¶ 152-161, 162-168, 169-173, 174-179.) Plaintiff brings its claims on behalf of a putative class of members similarly situated. (Id. ¶¶ 98-108.)
Doc Solutions, LLC and Kaiser filed an Answer to Plaintiff's Amended Complaint on February 27, 2020, and included crossclaims against Defendants. (“Crossclaims,” ECF No. 26.)
Defendants filed a Motion to Dismiss all of Plaintiff's allegations on April 6, 2020. It argues first that Plaintiff fails to establish personal jurisdiction over Carpenter, and that Plaintiff fails to adequately allege facts to pierce the corporate veil. (Memorandum, at 8-12.) In regards to Defendant Solace Advancement, it argues Plaintiff lacks standing under the RICO statute because Plaintiff does not allege a cognizable loss to a business or property. (Id. at 16-18.) Further, it claims Plaintiff's RICO causes of action must be dismissed because Plaintiff fails to allege that Defendants knew of or participated in any racketeering activities, or conspiracy to commit as much. (Id.) Solace and Carpenter move to dismiss the remaining allegations pending against them, arguing the state law claims are either inapplicable or insufficiently pled because Plaintiff fails to state sufficient information necessary to meet the standard required by Federal Rule of Civil Procedure 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.”)
II. LEGAL STANDARD
To survive a Rule 12(b) motion, “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, 678 (2009) (quoting Bell Atl. Corp. v. Tombly, 550 U.S. 544, 570 (2007)). A claim is plausible when the plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Conclusory recitation of the elements of a cause of action is not sufficient. Phillips v. Cty of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Rather, the plaintiff must allege facts necessary to make out each element. Id. (quoting Twombly, 550 U.S. at 563 n. 8). In other words, the complaint must contain facts which, if proven later, support a conclusion that a cause of action can be established.
In considering a motion to dismiss under Rule 12(b)(6), we first separate the factual and legal elements of a claim, accepting the well-pleaded facts as true and disregarding legal conclusions. Then, we determine whether the alleged facts make out a plausible claim for relief. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (quoting Igbal, 556 U.S. at 679). All well-pleaded allegations in the complaint must be accepted as true and interpreted in the light most favorable to the plaintiffs, and all inferences must be drawn in the plaintiffs' favor. See McTernan v. City of York, 577 F. 521, 526 (3d. Cir. 2009). In deciding a motion to dismiss, courts generally consider only the allegations of the complaint, exhibits attached to the complaint and matters of public record. Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993), cert. denied, 510 U.S. 1042 (1994). Courts may consider documents incorporated by reference in the complaint. California Pub. Employees' Ret. Sys. V. Chubb Corp., 394 F.3d 126, 134 (3d Cir. 2004).
III. DISCUSSION
A. RICO
Plaintiff alleges Defendants participated in the Stivax enterprise in violation of 18 U.S.C. § 1962(c). (Amended Complaint, ¶ 109-125.) By participating in a pattern of racketeering activity, Plaintiff argues Solace and Carpenter “deliberately misrepresent[ed] that Stivax was Medicare reimbursable so that Plaintiff paid for Stivax based on the ability to submit valid claims to Medicare for reimbursement.” (Id. ¶¶ 110, 116.) Plaintiff argues the enterprise is an association in-fact which acted to enable all defendants to fraudulently market Stivax. (Id. ¶ 111.) Defendants allegedly “created and maintained systematic links for a common purpose to aid marketing Stivax.” (Id. ¶ 112.) Such actions of the enterprise allegedly induced Plaintiff and other class members to purchase Stivax, thus delivering substantial revenue. (Id.) Plaintiff contends Solace and Carpenter exerted control over the enterprise by conducting and participating in the affairs of the enterprise through racketeering activities like mail and wire fraud. (Id. ¶ 115.) Through the defendants' actions, Plaintiff argues it and putative members of the class have been injured by being forced to pay “hundreds of millions of dollars” for Stivax that they would not have paid had defendants not engaged in this pattern of racketeering activity. (Id. ¶ 121.)
In addition to alleging Defendants' participation in the enterprise, Plaintiffs allege Defendants conspired to violated § 1962(c), which itself constitutes a violation of the RICO statute under 18 U.S.C. § 1962(d). (Id. ¶ 128.) Plaintiffs allege the object of the conspiracy has been to conduct or participate in, directly or indirectly, the conduct of the enterprise. (Id.) Plaintiff alleges Solace and Carpenter, along with other named defendants, conspired to promote Stivax and suppress information about the enterprise's false representations that Stivax was Medicare reimbursable. (Id.) Plaintiff claims Solace and Carpenter's co-conspirators have engaged in numerous other fraudulent racketeering acts in furtherance of the conspiracy. (Id. ¶ 129.) Such actions, Plaintiff alleges, gives rise to the inference that Solace agreed to the objective of the conspiracy, in addition to their awareness that their acts were part of an overall pattern of racketeering activity. (Id. ¶ 130.)
In its Motion to Dismiss, Defendants argue the insufficiency of Plaintiff's Section 1962(c) pleading. (Memorandum, at 17.) Defendants claim that Plaintiff must plead its allegations with particularity yet fail to do so. Defendants point out that in the Complaint, Plaintiff describes just two innocuous interactions with Solace. (Id. at 17.) Defendants argue that Plaintiff's Section 1962(c) claim hinges entirely on Solace's role as the American distributor of Stivax, and as a result shared a contractual relationship with Doc Solutions. (Id.) However, Defendants argue a closer inquiry into its actual action in its role as part of the alleged RICO scheme renders any claims against it insufficient. (Id.)
Regarding Plaintiff's Section 1962(d) claim, Defendants again claim Plaintiff's insufficiency. (Id. at 18.) Defendants argue Plaintiff fails to demonstrate its individual or specific knowledge of any fraudulent activities alleged. (Id.) Instead, Defendants state the only knowledge Plaintiff alleges are conclusory allegations that Defendant was aware Stivax was not reimbursable under Medicare, and not that they knew about the alleged misrepresentations or fraudulent activity. (Id.)
Section 1962(c) prohibits “any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). Section 1962(d), in turn, renders it “unlawful for any person to conspire to violate” subsection (c). 18 U.S.C. § 1962(d); see also Zavala v. Wal Mart Stores, Inc., 691 F.3d 527, 539 (3d Cir. 2012) (“RICO conspiracy is not mere conspiracy to commit the underlying predicate acts. It is a conspiracy to violate RICO-that is, to conduct or participate in the activities of a corrupt enterprise.”). Because a Section 1962(d) conspiracy claim “necessarily must fail if the substantive [§ 1962(c)] claims are themselves deficient,” see Kolar v. Preferred Real Estate Investments, Inc., 361 Fed.Appx. 354, 366 (3d Cir. 2010), we first focus on Plaintiff's claim under Section 1962(c).
In order to satisfy Section 1962(c), Plaintiffs must plead “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity, plus an injury to ‘business or property.'” In re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 269 (3d Cir. 2009) (citations omitted). “For the purposes of RICO, an enterprise is defined to include ‘any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.'” Macauley v. Estate of Nicholas, 7 F.Supp.3d 468, 481 (E.D. Pa. 2014). “‘An association-in-fact enterprise is a group of persons associated together for a common purpose of engaging in a course of conduct.'” Macauley, 7 F.Supp.3d at 482 (quoting United States v. Turkette, 452 U.S. 576, 583 (1981)). The existence of the enterprise may be inferred “from the evidence showing that persons associated with the enterprise engaged in a pattern of racketeering activity.” Boyle v. United States, 556 U.S. 938, 947 (2009).
To establish mail or wire fraud, the plaintiff must prove: “‘(1) the existence of a scheme to defraud; (2) the participation by the defendant in the particular scheme with the specific intent to defraud; and (3) the use of the United States mail or of wire communications in furtherance of the fraudulent scheme.'” Sunlight Elec. Contracting Co. v. Turchi, 918 F.Supp.2d 392, 402 (E.D. Pa. 2013) (quoting United States v. Syme, 276 F.3d 131, 142 n.3 (3d Cir. 2002)). Both offenses “require[ ] proof of specific intent.” Id. at 402. Specific intent “may be found from a material misstatement of fact made with reckless disregard for the truth.” Id.; see also United States v. Pearlstein, 576 F.2d 531, 535 (3d Cir. 1978) (“[The scheme] must involve some sort of fraudulent misrepresentations or omissions reasonably calculated to deceive persons of ordinary prudence and comprehension.”). Since the RICO claims are predicated on fraud, Plaintiff must plead its allegation with specificity pursuant to Federal Rule of Civil Procedure 9(b). Lum v. Bank of America, 361 F.3d 217, 223-24 (3d Cir. 2004). Plaintiff must then plead the “circumstances” of the alleged fraud such as the “date, place or time,” or “alternative means of injecting precision and some measure of substantiation into their allegations of fraud,” and lastly, “who made [the] misrepresentation to whom and the general content of the misrepresentation.” Id. at 224.
We agree with Defendants that Plaintiff fails to state a viable cause of action under the RICO statute. Plaintiff fails to specifically allege that Defendants actually knew about or participated in the fraudulent activity underpinning Plaintiff's racketeering accusations. Plaintiff does not set forth the necessary information needed to allege a cause of action against Defendants; rather, it focuses on the fraudulent actions of additional defendants Doc Solutions and Kaiser.
In its Complaint, Plaintiff alleges that on multiple occasions, it inquired as to the status of Medicare reimbursement for Stivax. It claims it “emailed Kaiser to determine whether it was appropriate to bill for Stivax under Medicare reimbursement code L8679.” (Amended Complaint, ¶ 77.) Through Kaiser, it also requested and received confirmation from a medical compliance group that Stivax was Medicare reimbursable. (Id. ¶ 81.) Plaintiff also claims Kaiser connected it with another physician who claims to be billing as Kaiser recommended without problems. (Id. ¶ 80.)
In contrast, Plaintiff does not allege it received any fraudulent information from the instant Defendants. As Defendants point out, Plaintiff mentions just two direct interactions: one arranging the purchase of the system, and later, an email welcoming Plaintiff to Stivax. (Memorandum, p. 17 (citing Amended Complaint, ¶ 61, 82).) Of course, such actions do not amount to any fraudulent activity, let alone support Plaintiff's charge that Defendants participated in any association-in-fact. Rather, Plaintiff's accusations towards Defendants stem from its purported dealings with Doc Solutions and Kaiser. Plaintiff states on many occasions that it directed Doc Solutions to supply incorrect information in order to market Stivax, and urged Doc Solutions to tell its prospective clients that Stivax was Medicare reimbursable. Unfortunately for Plaintiff, none of these accusations amount to a fraud it experienced directly. To the extent Plaintiff urges us to look at the interactions between Defendants and Doc Solutions, Plaintiff fails to provide any specificity as to the information Doc Solutions was provided, and when. Thus, none of Plaintiff's accusations regarding the relationship between Defendants and Doc Solutions meets the requisite level of specificity.
Similarly, Plaintiff's conspiracy claim cannot advance. Plaintiff argues Defendants conspired to violate Section 1962(c) in order to conduct the affairs of the enterprise by engaging with co-conspirators who carried out the “conduct of the affairs of the Stivax Enterprise.” (Amended Complaint, ¶ 128.) Again, Plaintiff does not allege who knew what, and when. Plaintiff simply states a vague connection between the information it received from Doc Solutions, which it in turn allegedly received from Defendants. However, Plaintiff does not allege in any specific way that Defendants specifically possessed any knowledge of the fraudulent activity, or knowingly participated in those activities. Plaintiff points to events which transpired regarding P-STIM as evidence that Defendants must have known Stivax was not Medicare reimbursable. While circumstantial, such information does not indicate the type of scheme Plaintiff alleges to the level necessary under the rules of civil procedure.
Plaintiff urges us to consider Doc Solutions' crossclaims, insisting that we are entitled to review items of record that “‘are attached to or submitted with the complaint, and any matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, and items appearing in the record of the case.'” (Plaintiff's Notice of Supplemental Authority Supporting Denial of Defendant [Solace and Carpenter's] Motion to Dismiss (“Supp. Auth.”), ECF No. 85 (citing Elnaggar v. Allard, No. 19-cv-3734-JMY, 2021 WL 1224062, at *5 (E.D. Pa. Apr. 1, 2021).) Even if this Court were inclined to stray outside of Plaintiff's pleading, the crossclaims pending against Defendants provide no further clarity. In Doc Solutions' crossclaims, it predictably points the finger at Defendants, (Crossclaim, ¶ 4-14), yet does not do so with any more specificity than Plaintiff. Doc Solutions alleges Defendants regularly advised Doc Solutions and provided information regarding billing code. (Id. ¶ 6, 8, 10, 11.) However, insofar as Plaintiff's case is concerned, these allegations fail to provide specific dates and times along with supporting documentation necessary to support a claim for fraud. Plaintiff also urges us to consider the settlement agreement Defendants entered into with the United States regarding its conduct, some of which Plaintiff alleges in its Complaint. (Supp. Auth. at 5-6, Exhibit A.) However, the agreement is not an admission of liability in any sense, and thus does not support Plaintiff's allegations in any concrete way to the level prescribed by FRCP 9(b). (Id., Exhibit A at ¶ G (“This Settlement Agreement is neither an admission of liability by the Carpenter Parties nor a concession by the United States that its claims are not well founded. The Carpenter Parties dispute the United States' allegations regarding the Covered Conduct.”).)
As stated above, Plaintiff cannot substantiate its RICO claims against Defendant Solace Advancement. It sets forth little information substantiating any accusation of wrongdoing on behalf of Solace Advancement, and thus cannot meet the high standard needed to support a claim based on fraudulent dealings. Since Plaintiff cannot sustain its claims against Defendant Solace Advancement, it thus cannot sustain any claim against its owner Defendant Carpenter. Supporting our decision is the complete lack of information directed towards piercing Solace's corporate veil, which this Court does not undertake lightly. Accordingly, we conclude Plaintiff's RICO claims are insufficient to proceed.
B. State Claims
Having dismissed the sole federal claims, Plaintiff is left with pending state law claims against Defendants. Where a district court dismisses all claims over which it has original jurisdiction, it may decline to exercise supplemental jurisdiction. 28 U.S.C. 1367(c)(3). “A district court's decision whether to exercise that jurisdiction after dismissing every claim over which it had original jurisdiction is purely discretionary.” Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 639 (2009). Without deciding whether this Court may or may not exercise supplemental jurisdiction, we conclude Plaintiff's remaining state law claims are insufficient to proceed.
Plaintiff argues Defendants violated the UTPCPL by “engag[ing] in unfair methods of competition and unfair or deceptive acts.” (Amended Complaint, ¶ 140 (citing 73 P.S. § 201-1).) Specifically, Plaintiff alleges Defendants misrepresented the reimbursable nature of Stivax, and voluntarily accepted payments with full knowledge of their wrongdoing. (Id. ¶ 145-149.)
The UTPCPL provides that “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce as defined by . . . this act . . . are hereby declared unlawful.” 73 P.S. § 201-3. The statute “is designed to protect the public from fraud and deceptive business practices.” Pirozzi v. Penskie Olds-Cadillac-GMC, Inc., 413 Pa.Super. 308, 605 A.2d 373, 375 (1992). To maintain a private right of action under the UTPCPL, “a plaintiff must show that he justifiably relied on the defendant's wrongful conduct or representation and that he suffered harm as a result of that reliance.” Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 438 (2004); see also Hunt v. U.S. Tobacco Co., 538 F.3d 217, 221 (3d Cir. 2008).
Plaintiff's claims cannot proceed as it fails to demonstrate any instance where it relied on Defendant's wrongful conduct or representation. Rather, Plaintiff relies largely on the actions of other parties in crafting its Complaint. As stated above, Plaintiff largely focuses on the actions and representations of Doc Solutions, rather than those of Defendants. Defendants appear in only two instances in the body of Plaintiff's pleading, and in no way does its alleged actions constitute any type of fraud.
Plaintiff's remaining claims fail for a similar reason. Plaintiff alleges Defendants engaged in fraudulent misrepresentation, (Amended Complaint, ¶¶ 162-168), and negligent misrepresentation, (id. ¶¶ 169-173), and as a result was able to unjustly enrich itself, (id. ¶¶ 152161). Plaintiff cannot bridge the gap between its injury and Defendants' actions, at least not with the information it currently alleges, as it is focused again on Doc Solutions' wrongdoing. (See, e.g., id. ¶ 163 (“Defendants represented to Plaintiff on multiple occasions that billing code L8679 for Stivax procedures was appropriate for reimbursement from Medicare”); id. ¶ 170 (“Defendants negligently misrepresented to Plaintiff and the Classes that billing code L8679 for Stivax procedures was appropriate for reimbursement by Medicare.”).) Without further information, Plaintiff cannot substantiate its claims in its current iteration.
Lastly, Plaintiff includes a claim for negligence, alleging Defendants owed it a duty to provide accurate information, (Amended Complaint, ¶ 177), and breached this duty by providing materially false information for Stivax buyers, (id. ¶ 178). Plaintiff's pleading does not provide even a cursory explanation regarding Defendants' duty to Plaintiff; rather, it simply states as much in a conclusory fashion. We question whether Plaintiff is able to substantiate that Defendant's owed such a duty to Plaintiff given the dearth of information. Further, we question how this claim differs from Plaintiff's misrepresentation claims. See, e.g., Giordano v. Claudio, 714 F.Supp.2d 508 (E.D. Pa. 2010) (noting that Pennsylvania courts do not distinguish between causes of action for fraud and fraudulent misrepresentation). Thus, we dismiss Plaintiff's state law claims.
III. CONCLUSION
For the foregoing reasons, we grant Defendant Solace Advancement, LLC's and Defendant John Carpenter's Motion to Dismiss without prejudice. An appropriate order follows.