United States District Court, M.D. Alabama, Northern Division
PARKS PHARMACY, INC. and DEMETRIUS YVONNE PARKS, Plaintiffs,
CARDINAL HEALTH 110, LLC, et al., Defendants.
REPORT AND RECOMMENDATION
A. BAKER UNITED STATES MAGISTRATE JUDGE.
Park Pharmacy, Inc. and Demetrius Yvonne Parks, sue
Defendants, Cardinal Health 110, LLC; Cardinal Health 112,
LLC; and Leader Drug Stores, Inc., in a three-count amended
complaint alleging tortious interference with business
relationships, tortious interference with a contract, and
breach of contract. (Doc. 15). Defendants answered the
amended complaint, denying any wrongdoing. (Doc. 18). Before
the court is Defendants' motion for judgment on the
pleadings and memorandum of law in support. (Docs. 22, 23).
Plaintiffs filed a response in opposition to Defendants'
motion. (Doc. 34). For the reasons that follow, the
undersigned Magistrate Judge recommends Defendants'
Motion for Judgment on the Pleadings (Doc. 22) be
case was removed from state court by Defendants pursuant to
28 U.S.C. § 1441 on the basis of diversity of
citizenship under 28 U.S.C. § 1332(a). The parties do
not contest personal jurisdiction or venue, and the court
finds sufficient information of record to support both.
See 28 U.S.C. § 1391. On October 17, 2017, the
above-styled matter was referred to the undersigned for
recommendation on all pretrial matters by United States
District Judge Myron H. Thompson. (Doc. 33); see
also 28 U.S.C. § 636(b); Rule 72, Fed. R. Civ. P.;
United States v. Raddatz, 447 U.S. 667 (1980);
Jeffrey S. v. State Bd. of Educ. of State of Ga.,
896 F.2d 507 (11th Cir. 1990).
STANDARD OF REVIEW
on the pleadings is appropriate where there are no material
facts in dispute and the moving party is entitled to judgment
as a matter of law.” Perez v. Wells Fargo
N.A., 774 F.3d 1329, 1335 (11th Cir. 2014) (quoting
Cannon v. City of W. Palm Beach, 250 F.3d 1299, 1301
(11th Cir. 2001)). Under Rule 12(c), any party may move for
judgment on the pleadings “[a]fter the pleadings are
closed--but early enough not to delay trial.”
Fed.R.Civ.P. 12(c). The “pleadings” include both
the complaint and the answer, see Fed. R. Civ. P.
7(a), and “[a] copy of any written instrument which is
an exhibit to a pleading, ” Fed.R.Civ.P. 10(c). In
considering a motion for judgment on the pleadings, the court
shall “accept as true all material facts alleged in the
non-moving party's pleading, ” and view them
“in the light most favorable to the non-moving
party.” Perez, 774 F.3d at 1335.
PROCEDURAL AND FACTUAL BACKGROUND
Parks Pharmacy, Inc. and Demetrius Yvonne Parks, initiated
this lawsuit in circuit court for Montgomery County in June
2017 against Cardinal Health, Inc., and LeaderNET, the
business name of Cardinal Health, Inc. d/b/a LeaderNet. (Doc.
2-2). On July 26, 2017, Defendant Cardinal Health, Inc.
removed the case to this court. (Doc. 2). On September 1,
2017, Plaintiffs amended their complaint naming as
Defendants, Cardinal Health 110, LLC; Cardinal Health 112,
LLC; and Leader Drug Stores, Inc. (collectively
“Cardinal Health”). (Doc. 15). Plaintiffs allege
that in May 2014 representatives of Cardinal Health came to
Montgomery, Alabama to solicit business from the Plaintiffs.
Id., ¶ 4. Plaintiffs appreciated the benefits
to their business that Defendants' medications provided,
and they gave Defendants ample business. Id., ¶
5. Plaintiffs and Defendants entered into a pattern of
business which included certain agreements. Id.,
¶ 6. Plaintiffs' business became dependent upon
Defendants' provision of their medical products and
supplies. Id., ¶ 7.
allege they were portrayed in an untrue negative light due to
actions of competitor businesses which resulted in the
Alabama Board of Pharmacy seeking legal action against them
including penalties. Id., ¶ 8. Plaintiffs
appealed the ruling of the Alabama Board of Pharmacy to the
circuit court in Montgomery, and a stay of the adverse ruling
was issued. Id., ¶ 9.
October 2016, Montgomery resident, Sarah Tate, filed a
lawsuit against Defendants alleging violations of HIPAA laws,
medical malpractice laws, and other legal wrongdoings.
Id., ¶ 10. According to Plaintiffs, they
prevailed on summary judgment against Tate, and that action
was dismissed. Id. Notwithstanding the dismissal,
Defendants cited the alleged HIPAA violations and malpractice
as a basis for discontinuing business with Plaintiffs.
Id., ¶ 11. Plaintiffs made multiple attempts to
reinstate business relationships with Defendants.
Id., ¶¶ 12, 14. Defendants rejected
Plaintiffs' attempts to invoke the grievance procedure in
the contract because that aspect of the agreement did not
apply when Leadernet terminated the agreement. Id.,
¶ 13. Plaintiffs contend that Defendants' unilateral
termination of the contract caused them “great
damages” because Defendants interfered with
Plaintiffs' relationships with its customers and their
contractual relationships with insurance companies.
Id., ¶¶ 15-18.
sued Defendants for tortious interference with business
relationships (Count I), tortious interference with a
contract (Count II), and breach of contract (Count III).
Defendants answered, denying any wrongdoing (Doc. 18), and
now move for judgment on the pleadings (Doc. 22). Defendants
argue they are entitled to judgment on the pleadings because
Plaintiffs were found to be in violation of numerous Alabama
Board of Pharmacy regulations in October 2016, which
constituted a breach of their agreement with Defendants.
(Doc. 23 at 1). Additionally, Defendants argue that
Plaintiffs are unable to identify the contracts and relevant
provisions purportedly breached by Cardinal Health and
Plaintiffs cannot plead their own performance under the
contract due to their violations of state and federal
pharmacy laws. Id. at 2. Defendants attach to their
motion redacted versions of vendor and member pharmacy
agreements (Docs. 23-1, 23-2), the Leader Managed Care
Agreement (Doc. 23-3), the Alabama Board of Pharmacy's
Final Order dated October 6, 2016 (Doc. 23-4), and the
Alabama Court of Civil Appeals opinion dated June 9, 2017
respond to Defendants' motion by requesting a 90-day
window to conduct discovery. (Doc. 26). Plaintiffs further
argue that Defendants' motion is actually an untimely
motion to dismiss, and Defendants should not be permitted to
circumvent the discovery process provided for in the Federal
Rules of Civil Procedure. Id. Plaintiffs request the
opportunity to discover the full signed contracts at issue
and depose witnesses.
preliminary matter, the court observes that the Prime Vendor
Agreement, AAP Member Certification Agreement, and the Leader
Managed Care Participation Agreement contain choice-of-law
provisions that dictate disputes under the agreements are
governed by Ohio law. See (Docs. 23-1 at 23; 23-2 at
3; 23-3 at 7). “Federal courts sitting in diversity
apply the forum state's choice-of-law rules.”
Boardman Petroleum, Inc. v. Federated Mut. Ins. Co.,
135 F.3d 750, 752 (11th Cir. 1998). Pursuant to Alabama's
choice-of-law provisions and provided that the law is not
contrary to Alabama policy, “a contract is governed by
the laws of the state where it is made except where the
parties have legally contracted with reference to the laws of
another jurisdiction.” Benchmark Med. Holdings,
Inc. v. Rehab Sols., LLC, 307 F.Supp.2d 1249, 1259 ...