NOT FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE NINTH CIRCUIT
`
`
`FILED
`
`
`MAR 1 2022
`
`MOLLY C. DWYER, CLERK
`U.S. COURT OF APPEALS
`
`
`
`
`No. 20-35744
`
`D.C. No. 9:20-cv-00016-DWM
`
`
`MEMORANDUM*
`
`
`
`
`
`
`
` Plaintiffs-Appellants,
`
`RYAN DEMING; BRIANA FRAISER;
`MICHAEL MCFARLAND; LUCAS
`GRISWOLD, individually and on behalf of
`all others similarly situated,
`
`
`
` v.
`
`CIOX HEALTH, LLC; ST. JAMES
`HEALTHCARE; SCL HEALTH -
`MONTANA, DBA St. Vincent Healthcare;
`BOZEMAN HEALTH DEACONESS
`HOSPITAL; KALISPELL REGIONAL
`HEALTHCARE SYSTEM, INC.; RCHP
`BILLINGS-MISSOULA, LLC, DBA
`Community Medical Center,
`
`
`
`
`
`
`
`
`
` Defendants-Appellees.
`
`
`
`Appeal from the United States District Court
`for the District of Montana
`Donald W. Molloy, District Judge, Presiding
`
`Argued and Submitted June 9, 2021
`Seattle, Washington
`
`Before: W. FLETCHER, WATFORD, and COLLINS, Circuit Judges.
`
`
`Invoking diversity jurisdiction under the Class Action Fairness Act, 28
`
`U.S.C. § 1332(d), Plaintiffs brought this putative class action challenging, under
`
`
`* This disposition is not appropriate for publication and is not precedent except as
`provided by Ninth Circuit Rule 36-3.
`
`
`
`
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE NINTH CIRCUIT
`
`
`FILED
`
`
`MAR 1 2022
`
`MOLLY C. DWYER, CLERK
`U.S. COURT OF APPEALS
`
`
`
`
`No. 20-35744
`
`D.C. No. 9:20-cv-00016-DWM
`
`
`MEMORANDUM*
`
`
`
`
`
`
`
` Plaintiffs-Appellants,
`
`RYAN DEMING; BRIANA FRAISER;
`MICHAEL MCFARLAND; LUCAS
`GRISWOLD, individually and on behalf of
`all others similarly situated,
`
`
`
` v.
`
`CIOX HEALTH, LLC; ST. JAMES
`HEALTHCARE; SCL HEALTH -
`MONTANA, DBA St. Vincent Healthcare;
`BOZEMAN HEALTH DEACONESS
`HOSPITAL; KALISPELL REGIONAL
`HEALTHCARE SYSTEM, INC.; RCHP
`BILLINGS-MISSOULA, LLC, DBA
`Community Medical Center,
`
`
`
`
`
`
`
`
`
` Defendants-Appellees.
`
`
`
`Appeal from the United States District Court
`for the District of Montana
`Donald W. Molloy, District Judge, Presiding
`
`Argued and Submitted June 9, 2021
`Seattle, Washington
`
`Before: W. FLETCHER, WATFORD, and COLLINS, Circuit Judges.
`
`
`Invoking diversity jurisdiction under the Class Action Fairness Act, 28
`
`U.S.C. § 1332(d), Plaintiffs brought this putative class action challenging, under
`
`
`* This disposition is not appropriate for publication and is not precedent except as
`provided by Ninth Circuit Rule 36-3.
`
`
`
`
`
`Montana law, the charges that Defendant Ciox Health, LLC (“Ciox”) imposed for
`
`delivering electronic medical records pursuant to its contracts with several
`
`Montana health-care providers, who were also named as Defendants. The district
`
`court dismissed the operative second amended complaint, without leave to amend,
`
`for failure to state a claim. See FED. R. CIV. P. 12(b)(6). Plaintiffs timely appealed,
`
`and we have jurisdiction under 28 U.S.C. § 1291. Reviewing de novo, Hicks v.
`
`PGA Tour, Inc., 897 F.3d 1109, 1117 (9th Cir. 2018), we affirm.
`
`1. Plaintiffs’ first cause of action alleges that the charges imposed by Ciox
`
`violated Montana Code Annotated § 50-16-816. We agree with the district court
`
`that § 50-16-816 does not apply to the challenged charges.
`
`The relevant chapter of the Montana Code contains two separate parts that
`
`address the provision of health care information, namely, “Part 5” and “Part 8.”
`
`Part 5 was enacted prior to Part 8 and, in its current form, it applies to health care
`
`providers that are not subject to the privacy provisions of the federal Health
`
`Insurance Portability and Accountability Act (“HIPAA”). See MONT. CODE ANN.
`
`§ 50-16-505. Part 8, by contrast, applies “only to health care providers subject to”
`
`HIPAA’s privacy protections. See id. § 50-16-802.
`
`Part 5 authorizes, in four specific contexts, the imposition of “a reasonable
`
`fee” for the delivery of medical records, which fee may not exceed “the fee
`
`provided for in [§] 50-16-540”: (1) where the provider is “required to disclose
`
`2
`
`
`
`health care information pursuant to compulsory process,” MONT. CODE ANN. § 50-
`
`16-536(5); (2) where a patient has authorized the provider to provide a copy of the
`
`medical record to a third party, id. § 50-16-526; (3) where a patient has made a
`
`written request for the medical record, id. § 50-16-541; and (4) where a provider is
`
`required to provide copies of a corrected or amended medical record, “unless the
`
`provider’s error necessitated the correction or amendment,” id. § 50-16-545. The
`
`“fee provided for” in § 50-16-540 is as follows:
`
`A reasonable fee for providing health care information may
`not exceed 50 cents for each page for a paper copy or
`photocopy. A reasonable fee may include an administrative
`fee that may not exceed $15 for searching and handling
`recorded health care information.
`
`Id. § 50-16-540.
`
`Part 8 follows a parallel structure with respect to HIPAA-covered providers,
`
`but it authorizes imposition of “a reasonable fee, not to exceed the fee provided for
`
`in [§] 50-16-816,” only in one of the four contexts mentioned in Part 5.
`
`Specifically, § 50-16-812(5) states that health care providers that are “required to
`
`disclose health care information pursuant to compulsory process may charge a
`
`reasonable fee, not to exceed the fee provided for in [§] 50-16-816.” MONT. CODE
`
`ANN. § 50-16-812(5). The omission of the other three circumstances mentioned in
`
`Part 5 is perhaps not surprising, because the federal regulations applicable to
`
`HIPAA providers impose their own disclosure and fee rules with respect to certain
`
`3
`
`
`
`of those contexts. See 45 C.F.R. § 164.524. Part 8’s “reasonable fee” limitation in
`
`§ 50-16-816 is substantively identical to that contained in Part 5’s § 50-16-540,
`
`except that it includes, at the very beginning, the specification that its limitation
`
`applies “[u]nless prohibited by federal law.”1
`
`Plaintiffs’ first cause of action contends that Defendants violated the
`
`reasonable fee limitation in § 50-16-816 when they charged excessive fees for
`
`delivering Plaintiffs’ medical records upon Plaintiffs’ written request or for
`
`delivery to third parties (specifically, Plaintiffs’ attorneys or the attorneys’ agents
`
`or employees). Thus, even though Part 8—unlike Part 5—does not contain
`
`provisions specifically authorizing a “reasonable fee,” not to exceed the specified
`
`limits, when such records are (1) requested by the patient or (2) authorized to be
`
`delivered to a third party, Plaintiffs contend that those specified limits on fees
`
`should be deemed to apply anyway.
`
`This argument ignores the text, structure, and context of the relevant
`
`statutory provisions, and it would improperly rewrite Part 8 by reading into it the
`
`
`1 The full text of § 50-16-816 states:
`
`Unless prohibited by federal law, a reasonable fee for
`providing copies of health care information may not exceed 50
`cents for each page for a paper copy or photocopy. A
`reasonable fee may include an administrative fee that may not
`exceed $15 for searching and handling recorded health care
`information.
`
`MONT. CODE ANN. § 50-16-816.
`
`4
`
`
`
`directly analogous provisions of Part 5 that the Montana Legislature conspicuously
`
`omitted. See Aye v. Fix, 626 P.2d 1259, 1262 (Mont. 1981) (stating that a Montana
`
`statute “must be read in the context of the chapter in which it appears”). In
`
`contrast to Part 5, which does authorize a “reasonable fee” subject to the specified
`
`limits when a non-HIPAA provider delivers records in response to a patient request
`
`or an authorization to disclose to a third-party, Part 8 only does so with respect to
`
`delivery of medical records by a HIPAA provider pursuant to compulsory process.
`
`Indeed, if the Montana Legislature had wanted the “reasonable fee” provisions of
`
`Part 5 to continue to apply to HIPAA-regulated providers despite HIPAA’s
`
`disclosure requirements, the Legislature simply could have left Part 5 in place
`
`(with any appropriate amendments in light of HIPAA) and would not have needed
`
`to enact Part 8.
`
`Plaintiffs assert that, by adding the phrase “[u]nless prohibited by federal
`
`law” to the specified fee limitations in § 50-16-816, the Montana Legislature
`
`signaled its intention that that limit would apply to the fullest extent permitted by
`
`federal law. But that phrase is more naturally read as simply a conforming
`
`amendment acknowledging that, in copying Part 5’s fee limitations from § 50-16-
`
`540 into Part 8’s § 50-16-816, the Montana Legislature did not purport to override
`
`any applicable federal law. The phrase cannot reasonably be read as instead
`
`5
`
`
`
`undoing the careful distinctions that the Legislature made in crafting the directly
`
`analogous provisions of Part 5 and Part 8.
`
`Accordingly, the district court correctly held that the limitations of § 50-16-
`
`816 only apply in the context of a subpoena for patient records as described in
`
`§ 50-16-812(5). Because, under the facts as pleaded, the delivery of Plaintiffs’
`
`records did not involve compulsory process, the fee limitations in § 50-16-816 do
`
`not apply. The first cause of action was therefore properly dismissed.
`
`2. The district court did not err in dismissing Plaintiffs’ related claims that
`
`Defendants violated the Montana Consumer Protection Act (“MCPA”), MONT.
`
`CODE ANN. § 30-14-101 et seq., and the implied covenant of good faith and fair
`
`dealing.
`
`a. An “unfair act or practice” in violation of the MCPA “is one which
`
`offends established public policy and which is either immoral, unethical,
`
`oppressive, unscrupulous or substantially injurious to consumers.” Rohrer v.
`
`Knudson, 203 P.3d 759, 764 (Mont. 2009). Given that the Montana Legislature
`
`specifically declined to apply the statutory “reasonable fee” limitations to
`
`Plaintiffs’ circumstances, Plaintiffs have failed to establish any plausible basis for
`
`concluding that requiring HIPAA-regulated health care providers to charge
`
`“reasonable fees” for medical records is an “established public policy” in Montana
`
`6
`
`
`
`or that Defendants acted unfairly. Plaintiffs have failed to plead a violation of the
`
`MCPA.
`
`b. Plaintiffs also allege that Ciox’s charges violated Montana Code
`
`Annotated § 28-1-211, which provides that “the implied covenant of good faith and
`
`fair dealing [requires] honesty in fact and the observance of reasonable commercial
`
`standards of fair dealing in the trade.” MONT. CODE ANN. § 28-1-211. Under
`
`Montana law, every contract contains this implied covenant. Puryer v. HSBC Bank
`
`USA, 419 P.3d 105, 112 (Mont. 2018). We affirm the district court’s dismissal of
`
`this claim because Plaintiffs cannot “circumvent [a] statute”—namely, the
`
`carefully drawn provisions of Part 8—“through a theory of implied contract and
`
`implied covenant of good faith and fair dealing.” Reiter v. Yellowstone Cnty., 627
`
`P.2d 845, 849 (Mont. 1981). Moreover, Plaintiffs do not allege sufficient facts to
`
`establish that there was a relevant contract between Plaintiffs and the providers or
`
`between Plaintiffs and Ciox.
`
`Because Plaintiffs have failed to provide any plausible basis for curing these
`
`various deficiencies, the district court properly dismissed the operative complaint
`
`without leave to amend. See Schreiber Distrib. Co. v. Serv-Well Furniture Co.,
`
`806 F.2d 1393, 1401–02 (9th Cir. 1986).
`
`AFFIRMED.
`
`7
`
`
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