United States District Court, N.D. Illinois, Eastern Division
MARK A. SHANK, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
HEALTH CARE SERVICE CORPORATION, BLUECROSS BLUESHIELD OF ILLINOIS, and PRIME THERAPEUTICS LLC, Defendants.
D. Leinenweber, Judge United States District Court
the Court is Defendant Prime Therapeutics LLC's Motion to
Dismiss [ECF No. 32] pursuant to Federal Rule of Civil
Procedure 12(b)(6). For the reasons stated herein, the Motion
Mark A. Shank (“Shank”) filed this putative class
action lawsuit, alleging that the Defendants, Health Care
Service Corporation (“HCSC”), BlueCross
BlueShield of Illinois (a division of HCSC), and Prime
Therapeutics LLC (“Prime”), unlawfully refused to
provide insurance coverage for the drug Harvoni, a treatment
for Hepatitis C. The only relevant claim for purposes of this
Motion is Count I, a claim for breach of contract. Shank was
party to a contract for health insurance coverage with HCSC.
He alleges that the insurance policy required, through
implied or express terms, prescription coverage for Harvoni,
which HCSC denied.
Prime is a pharmacy benefit management company that acts as a
third-party administrator of prescription drug benefits for
various health insurance plans, including the plan at issue
here. Prime has moved to dismiss Shank's Complaint
against it for breach of contract, arguing that it was never
a party to the health insurance policy Shank had with HCSC.
In considering Prime's Motion to Dismiss, the Court
accepts Shank's allegations as true. Meriwether v.
Faulkner, 821 F.2d 408, 410 (7th Cir. 1987).
argues that because it was not a party to the insurance
contract, no liability can attach to it for another
party's breach. That is a correct statement of the
general rule. See, E.E.O.C. v. Waffle House, Inc.,
534 U.S. 279, 294 (2002) (“[A] contract cannot bind a
nonparty.”). Shank responds that Prime may still be
liable as a non-party because of its special relationship to
HCSC, the party directly responsible for the breach. For
support, Shank cites cases in which courts have
“pierced the corporate veil, ” holding
individuals legally responsible for the actions of a related
relevance of the doctrine of veil-piercing is not immediately
obvious, because Shank is not attempting to reach an
individual shareholder in his claim against Prime. Construing
his Complaint liberally, however, he appears to assert an
agency theory, arguing that Prime was bound by the insurance
policy as a non-signatory because it acted as an agent (or
“alter-ego” in Shank's words) of HCSC.
Cf. Zurich Am. Ins. v. Watts Industries, 417 F.3d
682, 687 (7th Cir. 2005) (discussing the concept in
determining whether a non-signatory was bound by an
points to two conclusory statements in the Complaint that
supposedly establish Prime is an agent of HCSC: (1)
“Prime acts as an agent on behalf of HCSC in its role
as PBM [pharmacy benefits manager] under the HCSC
Policies”; and (2) HCSC “has the ability to
control and exercises control over Prime, and Prime assents
to HCSC's control.” See, Pl.'s Am.
Compl. ¶ 27. But the Seventh Circuit has held that
“mere conclusory statements are insufficient to survive
a motion to dismiss.” Doe v. Village of Arlington
Heights, 782 F.3d 911, 914-15 (7th Cir. 2015). That is
all that Shank has provided here, and he thus fails to state
a plausible breach of contract claim against Prime.
establishing Prime's status as an agent wouldn't get
Shank very far: the question here is not whether HCSC is
responsible for Prime's breach, but whether Prime can be
held responsible for the actions of HCSC. “[W]here the
principal [HCSC] is disclosed . . . the agent is not liable
for the principal's alleged breach of contract.”
Innkeepers' Telemanagement and Equipment v. Hummert
Management Group, 841 F.Supp. 241, 245 (N.D. Ill. 1993).
The Court therefore is left puzzled as to how Shank's
allegation that “Prime acts as an agent of HCSC”
would establish any liability on Prime's behalf.
extent Shank intends to argue separately that Prime acts as
the alter ego of HCSC, the Complaint is still short on
necessary allegations. To state an alter ego theory, Shank
must suggest “such unity of interest and ownership that
the separate personalities of the corporation and the
individual [or in this case, the second corporation] no
longer exist; and second, circumstances must be such that an
adherence to the fiction of separate corporate existence
would sanction a fraud or promote injustice.”
Lumpkin v. Envirodyne Industries, 933 F.2d 449, 462
(7th Cir. 1991). Again, Shank has failed to allege any facts
that would satisfy these elements; the only relevant
allegations are the same ones that were insufficient to
suggest an agency relationship.
bottom line is that Shank has failed to make a coherent case
for why Prime should be named as a defendant. The Court is
left wondering, even after reading through the Complaint and
Shank's response to the Motion to Dismiss, what role he
believes Prime played in the underlying conduct. As a
pharmacy benefit manager, Prime appears to be an intermediary
between patients like Shank and health insurers. It would be
strange to assume that Prime had any authority to deny Shank
or any other HCSC beneficiary coverage for Harvoni under an
insurance policy to which it is not a party; indeed, the
actual letters Shank received denying coverage were from
BlueCross BlueShield. See, Pl.'s Am. Compl.
¶¶ 72, 76, 79. Without more, the Court is left with
a party that seems to have no relation to the alleged harm in
these reasons, the Court grants Defendant's Motion to
Dismiss [ECF No. 32], dismissing Shank's ...