Case: 21-30534 Document: 00516491629 Page: 1 Date Filed: 09/30/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
September 30, 2022
No. 21-30534 Lyle W. Cayce
Clerk
Randy Denning,
Plaintiff—Appellant,
versus
Bond Pharmacy, Incorporated, doing business as Advanced
Infusion Care, doing business as Advanced Infusion
Solutions, doing business as AIS Healthcare,
Defendant—Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:21-CV-774
Before Stewart, Clement, and Elrod, Circuit Judges.
Carl E. Stewart, Circuit Judge:
In 2019, Randy Denning began receiving prescription medication
administered through a pain pump and filled by AIS Healthcare (“AIS”). In
2021, she discovered that AIS was billing her insurer at a rate of $120 per day
for allegedly unauthorized services. Denning filed suit in state court, seeking
damages for contract, tort, and unjust enrichment claims. AIS removed to
federal court and moved to dismiss the case on grounds that Denning lacked
standing to sue because she had suffered no injury. Noting that “a breach of
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No. 21-30534
contract alone is an insufficient injury in fact,” the district court concluded
that Denning could not satisfy standing’s redressability element for the
claims asserted and dismissed them with prejudice under Rule 12(b)(1). See
FED. R. CIV. P. 12(b)(1). For the following reasons, we affirm the district
court’s judgment dismissing Denning’s claims for lack of standing, however,
we modify the judgment to make it without prejudice and affirm as modified.
I. FACTUAL & PROCEDURAL BACKGROUND
In October 2019, Denning began receiving outpatient care for chronic
pain with medication administered through an intrathecal pain pump. This
pump is implanted under the skin and filled with a customized medication
that it delivers through a catheter directly to the spinal cord. It can deliver
medication at scheduled intervals for several months before requiring a refill,
enabling a patient to receive day-to-day pain treatment outside of an inpatient healthcare facility.
According to Denning, her physician prescribed medication to be
filled by AIS which is a national compounding pharmacy that provides
specialized home infusion therapy using pain pumps. Denning signed two
agreements with AIS in October 2019. The first authorized AIS to provide
services to Denning pursuant to the orders of her physician. The second
assigned to AIS insurance benefits payable for products or services provided
by the pharmacy.
In February 2021, Denning discovered that AIS had billed her insurer
at a daily rate of $120 for services that she alleges neither she nor her
physician had authorized. The following month, Denning filed a petition in
Louisiana state court seeking compensatory and punitive damages, and
alternatively, restitution. Denning’s petition included state law claims for
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breach of contract, unjust enrichment, and fraudulent misrepresentation. 1
She asserted her claims individually and on behalf of a class of hundreds of
similarly situated Louisiana patients billed by AIS over the last decade.
AIS removed the suit to federal district court and filed a motion to
dismiss the petition or strike the class action allegations. In doing so, AIS
argued that (1) the case should be dismissed under Rule 12(b)(1) for lack of
standing; (2) the claims for unjust enrichment and fraudulent
misrepresentation should otherwise be dismissed under 12(b)(6) for failure
to state a claim; and (3) if claims remain, Denning’s class action allegations
should be stricken for failure to show a predominance of common issues
among a proposed class. See FED. R. CIV. P. 12(b)(1), (6). According to
AIS, Denning lacked standing to assert her claims because she suffered no
injury. AIS reasoned that Denning had not alleged that she paid any of the
billed amounts or that AIS had threatened collection proceedings against her.
Rather, she had alleged only that her insurer wrongfully paid for billed
services. Thus, AIS argued, Denning had suffered no financial loss and
allegedly could not show an injury for standing purposes. 2
In her opposition to AIS’s motion, Denning conceded that she
suffered no financial loss but averred that the alleged billing practices
nevertheless resulted in a redressable injury. According to Denning, “[a]
party to a contract undoubtedly has standing to file a suit for breach of that
1
In Denning’s opening brief, she refers to both “intentional misrepresentation”
and “negligent misrepresentation.” Because Denning did not raise negligent
misrepresentation in her petition, however, it is “not properly before the court” and we
decline to address it. Fisher v. Metro. Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir. 1990).
2
Although AIS did not file an answer before Denning’s claims were dismissed, it
stated in its motion and in oral argument before this court that it disputes her allegation
that the charges were unauthorized.
3
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contract,” and several violations of Louisiana law arising from AIS’s billing
activities could serve as a basis for standing.
In August 2021, the district court granted AIS’s Rule 12(b)(1) motion
to dismiss on grounds that Denning had failed to establish standing for her
claims. In its reasons, the district court observed that “[c]ourts in other
circuits are wrestling with the question of whether a breach of contract alone,
without any further harm or injury, constitutes an injury in fact for standing
purposes.” After noting that the Fifth Circuit has not directly addressed this
question, the district court concluded that “[i]t appears . . . Article III
standing requires a concrete injury to plaintiff such that a breach of contract
alone is an insufficient injury in fact.” In support, the district court cited the
Supreme Court’s reasoning in Spokeo, Inc. v. Robins that standing requires a
concrete injury, “even in the context of a statutory violation.” 578 U.S. 330,
341 (2016). However, the district court did not rest its disposition on an
injury in fact analysis and ultimately held that Denning could not satisfy
standing’s redressability element. The district court reasoned that “if
Plaintiff has not suffered any concrete losses . . . there is nothing to
compensate.” It explained that the disgorgement of funds paid by Denning’s
insurer would only redress the insurer’s injury, not hers. The district court
then dismissed Denning’s claims with prejudice. This appeal followed.
II. STANDARD OF REVIEW
“Standing is a question of law that we review de novo.” Rivera v.
Wyeth-Ayerst Lab’ys, 283 F.3d 315, 319 (5th Cir. 2002). “We review for clear
error all facts expressly or impliedly found by the district court.” Id. “[W]hen
ruling on a defendant’s motion to dismiss, a judge must accept as true all of
the factual allegations contained in the complaint.” Erickson v. Pardus,
551 U.S. 89, 94 (2007) (citing Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555–
56 (2007)). “Since they are not mere pleading requirements, but rather an
indispensable part of the plaintiff[’]s case, each element of standing must be
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supported in the same way as any other matter on which the plaintiff bears
the burden of proof[.]” In re Deepwater Horizon, 739 F.3d 790, 799 (5th Cir.
2014) (quoting Lewis v. Casey,
518 U.S. 343, 358 (1996)). “At the pleading
stage, general factual allegations of injury resulting from the defendant’s
conduct may suffice, for on a motion to dismiss we presume that general
allegations embrace those specific facts that are necessary to support the
claim.”
Id. “[O]ur review is limited to whether the complaint is sufficient to
allege the jurisdiction.” Paterson v. Weinberger,
644 F.2d 521, 523 (5th Cir.
1981).
III. DISCUSSION
On appeal, Denning argues that the district court erred in holding that
she had failed to demonstrate a sufficient injury to support Article III
standing. 3 She also advances an unjust enrichment claim for the amounts
improperly collected from her insurer by AIS. 4 Last, she contends that the
district court erred in dismissing her case with prejudice. We address each
argument in turn.
3
Denning points to other theories of injury for her contract and tort claims in her
briefing before this court, however, because she did not adequately plead these alternative
theories to the district court, we cannot consider them on appeal. See Lone Star Fund V
(U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010) (noting that our review
“is limited to the complaint, any documents attached to the complaint, and any documents
attached to the motion to dismiss that are central to the claim and referenced by the
complaint”).
4
Because this is an appeal from a motion to dismiss, the court, as part of its standing
analysis, investigates all the causes of action raised in the complaint.
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A. Standing
We first examine whether the breach as alleged in Denning’s contract
and tort claims is an injury for standing purposes. 5 We conclude that it is.
Article III of the Constitution extends the judicial power of the United States
only to “Cases” and “Controversies.” Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 102 (1998) (quoting U.S. Const. art. III, § 2). “Standing to
sue is part of the common understanding of what it takes to make a justiciable
case.” Id. (citing Whitmore v. Arkansas,
495 U.S. 149, 155 (1990)). To
establish standing, “[t]he plaintiff must have (1) suffered an injury in fact, (2)
that is fairly traceable to the challenged conduct of the defendant, and (3) that
is likely to be redressed by a favorable judicial decision.” Spokeo,
578 U.S. at
338; see also Uzuegbunam v. Preczewski,
141 S. Ct. 792, 796 (2021).
“To establish injury in fact, a plaintiff must show that he or she
suffered ‘an invasion of a legally protected interest’ that is ‘concrete and
particularized’ and ‘actual or imminent, not conjectural or hypothetical.’”
Spokeo, 578 U.S. at 339 (quoting Lujan v. Defs. of Wildlife,
504 U.S. 555, 560
(1992)). “Central to assessing concreteness is whether the asserted harm has
a ‘close relationship’ to a harm traditionally recognized as providing a basis
for a lawsuit in American courts[.]” TransUnion LLC v. Ramirez,
141 S. Ct.
2190, 2200 (2021) (quoting Spokeo, 578 U.S. at 340–41). “To show
traceability, a plaintiff must allege that his injury is ‘connect[ed] with the
conduct about which he complains.’” Glen v. Am. Airlines, Inc.,
7 F.4th 331,
335 (5th Cir. 2021) (alteration in original) (quoting Trump v. Hawaii, 138 S.
5
In the context of her breach of contract claim, Denning asserts that AIS
“breached” by billing for unauthorized services. In the context of her tort claim for
fraudulent misrepresentation, she contends that AIS “fail[ed] to perform” its obligations
as set out in the agreements. But both claims as pled are predicated on the same injury:
contractual breach. Accordingly, we analyze Denning’s fraudulent misrepresentation claim
under the penumbra of her breach of contract claim.
6
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Ct. 2392, 2416 (2018)). Meanwhile, to establish redressability, a plaintiff
must show a “substantial likelihood” that the requested relief will remedy
the alleged injury in fact. Vermont Agency of Nat. Res. v. U.S. ex rel. Stevens,
529 U.S. 765, 771 (2000) (quoting Simon v. E. Ky. Welfare Rts. Org.,
426 U.S.
26, 45 (1976)).
The Supreme Court has long recognized “that where there is a legal
right, there is also a legal remedy by suit or action at law, whenever that right
is invaded.” Marbury v. Madison, 5 U.S. 137, 163 (1803) (quoting 3 WILLIAM
BLACKSTONE, COMMENTARIES ON THE LAWS OF ENGLAND 23
(1765)). More recently, the Court reemphasized in Uzuegbunam, that “every
violation [of a right] imports damage.” 141 S. Ct. at 802 (alteration in
original) (quoting Webb v. Portland Mfg. Co.,
29 F. Cas. 506, 509 (C.C.D. Me.
1838)). Likewise, this court has held that “it is sufficient for standing
purposes that the plaintiffs seek recovery for an economic harm that they
allege they have suffered.” Cole v. Gen. Motors Corp.,
484 F.3d 717, 723 (5th
Cir. 2007). Moreover, in a similar case to this one, we held that both a
hospital provider and its patients had suffered an injury in fact due to the
insurance company’s failure to make payments in accordance with the policy
terms. See N. Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare,
781
F.3d 182, 192 (5th Cir. 2015) (“[The insurer] argues that its refusal to pay
based on the full charges [the hospital provider] reported did not cause
patients any injury because they were never at imminent risk of out-of-pocket
expenses . . . We cannot agree.”). In other words, traditional and recent
precedent arising from both the Fifth Circuit and the Supreme Court reflect
that a breach of contract is a sufficient injury for standing purposes.
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In light of this applicable precedent, we hold that Denning has shown
an injury in fact through her breach of contract claims. 6 But our analysis does
not end there. Although Denning has established injury in fact, she cannot
get past the redressability prong required to establish standing. This is
because her injury, as she alleges it, is not redressable by the compensatory
and punitive damages that she seeks. See Uzuegbunam, 141 S. Ct. at 796. 7 Put
another way, rendering an award of damages in favor of Denning does not
redress her insurer’s injury of being subjected to AIS’s unauthorized billing
practices. See North Cypress,
781 F.3d at 195 (observing that a favorable
decision awarding the medical provider, not the patients, “is likely to redress
the injury.” (emphasis added)).
For these reasons, we conclude that the district court erred in holding
that Denning failed to show an injury in fact through her associated breach of
contract and tort claims. However, because we agree with the district court
that Denning’s claims are not redressable by the damages she seeks, we
affirm its dismissal of her claims for lack of standing. See Uzuegbunam, 141 S.
Ct. at 796 (“To demonstrate standing, the plaintiff must . . . seek a remedy
that redresses that injury.”).
6
AIS relies on Wendt v. 24 Hour Fitness USA, Inc., 821 F.3d 547 (5th Cir. 2016) for
the proposition that this court has “squarely rejected” the breach of contract argument
that Denning advances here. But Wendt is distinguishable because the plaintiffs there only
sought damages for injuries they claimed to have directly suffered.
Id. at 550–51. They were
not, as Denning is here, alleging injuries that a third party has suffered.
Id.
7
We also note that the Uzuegbunam plaintiffs only sought nominal damages to
redress their past injury which is distinguishable from the relief that Denning seeks here.
141 S. Ct. at 796, 801–02 (“[W]e conclude that a request for nominal damages satisfies the
redressability element of standing where a plaintiff’s claim is based on a completed
violation of a legal right.”).
8
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B. Loss of Patrimony
Next, we turn to whether Denning’s loss of patrimony as alleged in
her unjust enrichment claim is an injury for standing purposes. Denning
argues that, as a consequence of AIS’s unauthorized billing for services not
rendered, the amount of insurance coverage available to her for a particular
term was improperly depleted. In making this argument, she primarily relies
on Louisiana Civil Code article 2299, which sets out a cause of action for
obligation to restore payment or a thing not owed.
For purposes of our analysis here, we assume without deciding that
Denning has sufficiently pled an injury in fact for standing purposes through
her unjust enrichment claim. Again, however, she cannot establish
redressability. The text of Article 2299 provides that “[a] person who has
received a payment or a thing not owed to him is bound to restore it to the
person from whom he received it.” La. Civ. Code Ann. art. 2299 (emphasis
added). Both parties acknowledge that AIS received payment that it was
allegedly not owed from Denning’s insurer, not from Denning. Thus, even if
Denning prevailed on this claim and received restitution from AIS, it would
not restore her depleted insurance coverage. Accordingly, Denning cannot
show a “substantial likelihood” that the restitution she seeks would remedy
the injury she alleges. Vermont Agency, 529 U.S. at 771 (quoting Simon,
426 U.S. at 45).
Because Denning has failed to satisfy the redressability element of her
unjust enrichment claim, we affirm the district court’s dismissal of this claim
for lack of standing.
C. Prejudice
Finally, Denning argues that the district court erred when it dismissed
her claims with prejudice instead of without prejudice. Here, we agree.
“Ordinarily, when a complaint is dismissed for lack of jurisdiction, including
lack of standing, it should be without prejudice.” Green Valley Special Util.
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Dist. v. City of Schertz, 969 F.3d 460, 468 (5th Cir. 2020) (quoting Williams
v. Morris,
614 F. App’x 773, 774 (5th Cir. 2015) (per curiam)). As AIS
observes, the district court’s dismissal with prejudice appears to be a
“scrivener’s” error. We thus modify the district court’s judgment
dismissing Denning’s claims with prejudice to make it without prejudice and
affirm the judgment as modified. Id. at 468-69. 8
IV. CONCLUSION
For the foregoing reasons, we MODIFY the district court’s
judgment dismissing Denning’s claims for lack of standing to make it without
prejudice and AFFIRM as modified.
8
Denning also contends that the district court’s dismissal of her claims was
premature because her motions for class certification and for leave to amend her complaint
to add two additional class representative plaintiffs were still pending at the time of
dismissal. However, as we have held infra, Denning has failed to allege a redressable injury
and therefore lacks standing to assert her claims. This defect could not have been cured by
allowing her to certify a class or add additional plaintiffs to her suit. See Ortiz v. Am.
Airlines, Inc., 5 F.4th 622, 628 (5th Cir. 2021) (“A plaintiff must demonstrate standing for
himself or herself, not just for others he or she professes to represent.”); TransUnion,
141 S. Ct. at 2208 (“Every class member must have Article III standing in order to recover
individual damages. Article III does not give federal courts the power to order relief to any
uninjured plaintiff, class action or not.”) (internal quotation marks and citation omitted).
10
