X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Pharmacies may have a fiduciary duty to preserve the confidentiality of their customers’ medical history and prescription records, a Manhattan Supreme Court justice has ruled. The ruling by Justice Charles Edward Ramos came in a class action brought by a New Yorker who says that an independent drug store violated a duty of confidentiality when it sold customer information to one of the nation’s largest drug store chains, CVS. The decision on a pharmacy’s fiduciary duty of confidentiality was one of first impression in New York. Justice Ramos also said that selling the information without first telling patients may amount to a deceptive business practice on the part of the buyer of the records. Justice Ramos dismissed some of the plaintiff’s claims, ruling that New York state and city laws did not apply to pharmacies as they did to doctors. According to the lead plaintiff’s counsel, Richard F. Lubarsky of Levi Lubarsky & Feigenbaum, at least “tens of thousands” of New Yorkers may have had their medical and prescription information sold without their consent. The plaintiff has asked that the lawsuit be certified as a class action. The lawsuit, Anonymous v. CVS Corp., 604804/99, stems from a decision by an independent drug store, Trio Drugs, to sell customer information when it closed its doors in August 1999. Handing over customer records to a large chain like CVS, the plaintiff averred, exposed sensitive health and treatment information to literally thousands of drug store employees and to all of the health care plans that contract with CVS. The plaintiff, who was not identified, was diagnosed with HIV in 1986, and three years later diagnosed with AIDS. He had his prescriptions filled at Trio Drugs until it went out of business when its owner retired in 1999. The plaintiff said he chose to do business with the independent store based upon an expectation of privacy. He also said he believed that the store would not release medical and prescription information without his prior consent. Only when he went to Trio Drugs in August 1999 did he find that information about his medical history and prescription records had been transferred to CVS, the plaintiff said. The sale of information was executed under CVS’ “File Buy Program,” in which the chain pays for the customer records of independent pharmacies that cease to do business. Justice Ramos said that in 1998, CVS bought the files of 350 pharmacies in the United States. The CVS chain does roughly 10 percent of its business in New York state. According to the plaintiff, the File Buy Program forbids the independent store from telling its customers of the records transfer. “Although no New York court apparently has addressed the issue of whether or not pharmacists and pharmacies owe a fiduciary duty of confidentiality, it is well-settled in New York that a fiduciary duty arises, even in a commercial transaction, where one party reposed trust and confidence in another who exercises discretionary functions for the party’s benefit or possesses superior expertise on which the party relied,” wrote Justice Ramos. The key factor in determining whether Trio Drugs owed a duty not to transfer its customers’ health and prescription records was the reliance of the plaintiff in the drug store’s superior expertise and knowledge in handling the information, the court ruled. The fiduciary duty may be implied from the circumstances of the relationship between the pharmacy and its customer, Justice Ramos said. Customers generally “rely on pharmacists for drug advice” and pharmacists are required under state regulations to offer counseling to customers on possible side effects and drug interactions. Even though there is not the same kind of dependency in a pharmacist-customer relationship as there is in a doctor-patient relationship, there can be a fiduciary duty in the former, the judge said. “Because pharmacists have a certain amount of discretion, and an obligation to collect otherwise confidential medical information, the court must find that customers can reasonably expect that the information will remain confidential,” Justice Ramos wrote. DECEPTIVE PRACTICE? Under General Business Law �349, CVS may have participated in a deceptive business practice in insisting that Trio Drugs’ customers not be notified of the information transfer. Plaintiff’s theory is that the lack of notification “was intended to lull” the independent store’s customers into refilling prescriptions at CVS, where their records now reside. Justice Ramos said that the theory deserved to be tested at trial. “[T]he practice of intentionally declining to give customers notice of an impending transfer of their critical prescription information in order to increase the value of that inform appears deceptive,” he wrote. By not allowing the plaintiff to prevent the disclosure from occurring or otherwise control his own medical and prescription information, CVS may have been unjustly enriched by gaining access to it, Justice Ramos said. Justice Ramos, however, dismissed four counts of the plaintiff’s complaint. Public Health Law �18(6) forbids health care providers from disclosing patient information to third parties without first getting the patient’s consent or reporting the disclosure in the patient’s file. Justice Ramos said that the confidentiality guarantees of Public Health Law �18(6) do not apply to pharmacies, even as third-party recipients of information from medical service providers. Three other counts were similarly dismissed as the relevant statutes did not contemplate liability for the transfer of prescription and medical information between pharmacies, Justice Ramos ruled. Lubarsky, the plaintiff’s lead counsel, said that a decision on class certification is expected soon. Howard B. Levi of the firm is also an attorney for the plaintiff. Paul McTiernan of Barry, McTiernan & Moore, represented the defense.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.