(CN) — An Arizona Supreme Court ruling Monday sends a case stemming from a pharmacy worker’s erectile dysfunction joke back to the drawing board.
Greg Shepherd’s lawsuit against Costco over an employee’s joke with his ex-wife was dismissed in Maricopa County Superior Court, based on presumed good faith of the pharmacy worker. But Shepherd never got a chance to prove the joke was not in good faith, so Judge Aimee L. Anderson dismissed the case in error, the justices ruled.
In remanding the case to Anderson, the justices noted that Shepherd will still have to prove bad faith in his negligence claim.
“Shepherd must still rebut by clear and convincing evidence the statutory presumption that Costco acted in good faith. If he cannot, Costco will be immune from liability for damages due to any negligent disclosure of medical information,” Justice William G. Montgomery wrote in a 12-page ruling.
The case started when Shepherd went to his doctor for a check-up and to refill a regular prescription. His doctor also gave him an erectile dysfunction medication sample.
When Shepherd went to Costco to get his refilled prescription, the pharmacy said the erectile dysfunction medication — which he hadn’t asked for — was also ready, according to Shepherd’s lawsuit.
He rejected the erectile dysfunction medication. This happened two months in a row, and on the third month Shepherd sent his ex-wife, with whom he had been reconciling, to pick up his regular prescription. When she saw the erectile dysfunction medication, which was again filled, she joked about it with a pharmacy employee.
She then broke things off with Shepherd because she thought he was taking the medication, Shepherd claims in his lawsuit.
In court, Costco acknowledged the pharmacist’s joke violated the Health Insurance Portability and Accountability Act, commonly called HIPAA. But while only the state attorney general or the U.S. Department of Health and Human Services can bring a claim under HIPAA, the Arizona high court noted Shepherd’s case isn’t solely based on HIPAA as Costco has argued.
“Shepherd’s reference to Costco’s company policies thus provides an additional source to inform the standard of care beyond the sole provisions of HIPAA, as does his reference to regulations governing pharmacies,” Montgomery wrote for the high court.
Costco argued that without any claim of bad faith, Shepherd can’t show negligence. But Shepherd didn’t have to make a claim of bad faith because he didn’t know Costco would claim immunity under state law, Montgomery wrote.
Shepherd’s attorney Joshua Carden said the case was never solely a HIPAA case. Rather, he noted it’s a guide to determine whether the pharmacy’s actions were within the scope of its role.
As for evidence of bad faith, Carden said that came after Shepherd told the pharmacy he didn’t want the medication, Carden said.
“I believe all I have to do is prove that they knew that he didn’t want the prescription,” he said.
As for why Costco seemed so intent on filling the prescription, Carden offered a reason.
“Costco gives managers bonuses based on sales,” Carden said, adding that financial pressure to fill the unwanted prescription will be a part of his case going forward.
Karen Stafford of the Phoenix firm Cavanaugh Law represented Costco. She did not return a request for comment by press time.
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