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- 2058 Fung Schwartz v. Cerner Corp.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT



### SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORD ER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 1 st day of April, two thousand twenty

.
PRESENT: D ENNIS J ACOBS , S USAN L. C ARNEY , J OSEPH F. B IANCO , Circuit Judges

.

_________________________________________ J ENNIFER F UNG S CHWARTZ , M.D., J ENNIFER F UNG

- S CHWARTZ , D.P.M., L.L.C.
, Plaintiffs

- Appell ants,

v. No. 19

- 2058

C ERNER C ORPORATION , C ERNER H EALTHCARE S OLUTIONS , I NC

. , Defendant s

-

Appell ee s

. *

_________________________________________
FOR PLAINTIFFS

- APPELLANT S : Elizabeth Shieldkret, Forest Hills, NY.

____________ * The Clerk of Court is respectfully request ed to amend the official caption as above.2 FOR DEFENDANTS

- APPELLEES : Patrick N. Fanning (Bethany M. Shelton, on the brief ), PEAK Litigation LLP, Kansas City, M O

Appeal from a n order of the United States Distri c t Court for the Southern District of New York ( Broderick
, J. ).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the order entered on June 7 , 2019, is AFF IRMED

.
Plaintiffs

- A ppellants Jennifer Fung

- Schwartz, M.D. and Jennifer Fung

Schwartz , D.P.M., L.L.C. ( “the practice” or “Plaintiffs” ) appeal from t he District Court’s order denying their motion for a preliminary injunction requiring
Defendants

- Appellees Ce rner Corporation and Cerner Healthcare Solutions, Inc. (colle ctively, “Cerner”) to maintain their access to Cerner software during the pendency of the underlying civil action filed by Plaintiffs. We assume the parties’ familiarity with the relevant facts, procedural history, and arguments on appeal, to which we refer only as necessary to explain our decision to affirm. Dr. Fung

- Schwartz operates a podiatry practice in Manhattan. In 2006, her practice began using Cerner’s electronic medical record (“EMR”) so ftware, which stores patient data in a Cerner

- controlled system. In December 2014, her practice
entered into a new five

- year agreement (the “Agreement”) with Cerner
, under which Cerner would provide both EMR services and electronic billing service s to administer the practice’s bill ing to both private insurer s and Medicare. In early 2016, having experience d difficulties with respect to Cerner’s billing services, Dr. Fung

- Schwartz
and Cerner resolved to terminate the A g reement as to billing services effective June 1,
2016
, but to continu e the practice’s use of Cerner’s EM R services

. During and after the negotiations that led to these decisions , the parties vigorously disputed their relative rights and responsibilities , p articularly with regard to fees owed

.3 Plaintiffs allege tha t, with these disputes still unresolved, o n October 13, 2016, without warning, the practice lost access to all of its records housed on Cerner platforms . These includ ed all of the practice’s patie nt medical records, contact information, and schedules dating back to 2006. Plaintiffs submit that Cerner deliberately and wrongfully deprived them of access in an attempt to force P laintiffs’
hand in the ongoing fee dispute

. Plaintiffs did not regain full EMR access unti l October 18, five days later. Then, i n early January 2017, Plaintiffs experienced a second, more minor interruption of service, limited to the software function that verifies patient insurance information. Cerner later explained that the v erification
function wa s operated by a third party
, and Cerner disclaimed responsibility for the interruption.

Plaintiffs then sued Cerner separately for each service interruption. This appeal a rises out of the second lawsuit
, filed in January 2017.
In July of that year , Plaintiffs sought a preliminary injunction primarily prohibiting Cerner from denying the practice access to its medical records

. In August 2017, the District Court denied Plaintiffs’ motion for failure to demo nstrate irreparable harm , observing that the challenged conduct occurred primarily in
October 2016 and the matter was thus “ stale.” App’x at 112. At the August 4 hearing
for Plaintiffs’ motion , however, the District Court stated that “ during the pendency

o f the motion to dismiss, the system should remain on

. ” Id . at 1 0 7

- 08 (emphasis added).

Plaintiffs timely notice d an interlocutory appeal of that denia l , and this Court
vacated the order and reman ded the cause for clarification of the “intended effect of the District Court’s various written and oral pronouncements regarding [the]
motion.” Fung

- Schwartz v. Cerner Corp. , 726 F. App’ x 97, 98 (2d Cir. 2018)

. On June 7, 2019, the District Court clarified that it denied t he requested preliminary injunction
because it found that “any claim of harm is not imminent and is speculative

. ” Fung

Schwartz v. Cerner Corp ., No. 17

- CV

- 233 (VSB), 2019 WL 4015259, at *1 (S.D.N.Y. June 7, 2019). P laintiffs now appeal t his denial , arguing that the District Court incorrectly determined that they failed to show irreparable harm.4 To obtain a preliminary injunction , the moving party must show

“ (1) irreparable harm; (2) either a likelihood of success on the merits or both serious questions on the merits and a balance of hardships decidedly favoring the moving party; and (3) that a preliminary injunction is in the public interest. ” N. Am. Soccer League, LLC v. U.S. Soccer Fed ’ n, Inc. , 883 F.3d 32, 37 (2d Cir. 2018) . We review a
dist rict court’s order denying a preliminary injunction for abuse of discretion. Id . at 36.
The District Court’s analysis of Plaintiffs’ preliminary injunction motion began and ended with the finding that Plaintiffs failed to demonstrate irreparable harm. In

t his, we identify no error. “ Irreparable harm is injury that is neither remote

nor speculative, but actual and imminent and that cannot be remedied by an award of monetary damages. ” New York ex rel. Schneiderman v. Actavis PLC , 787 F.3d 638, 660 (2d Cir. 20 15) (internal quotation marks omitted) . Here, Plaintiffs argue that they would suffer irreparable harm if Cerner unexpectedly cut off the practice’s access to patient medical records. Plaintiffs have offered no evidence that Cerner is likely to do

so , howe ver, much less that Cerner will do so imminently . Plaintiffs contend that “the only reason Cerner avers that [it stopped] using the kill switch is the risk of contempt for violating the August 4, 2017 Orders.” Appellants’ Br. at 34

. But they point to no

re cord evidence that Cerner has even threatened to block Plaintiffs’ EMR access. Indeed, Cerner represented to the District Court in July 2018 that it would take no action impeding Plaintiffs’ access wit hout first advising the District Court. App’x at
155

- 56

.
District courts commit no abuse of discretion when they deny requested preliminary injunctions and the evidence supporting a claim of imminent irreparable
harm consists only of the plaintiff s’ conjectur e that the defendant might take a harmful step at some point in the future. See, e.g.
, Faiveley Transp. Malmo AB v. Wabtec Corp. , 559 F.3d 110, 120 (2d Cir. 2009) (vacating preliminary injunction when record did not

“ support the conclusion that [plaintiff] would suffer irreparable h arm unless [defendant] was enjoined from doing what the evidence indicated it was unlikely to5 do in the absence of an injunction

— disseminate or otherw ise irreparably impair [plaintiff’s] trade secrets ”). Accordin gly, we conclude that the District Court did not

err in denying Plaintiffs’ motion for a preliminary injunction

.
* * *

We have considered Plaintiffs’ remaining arguments and conclude that they

are without merit. For the foregoing reasons, the District Court ’s order is
AFFIRMED

.
FOR THE COURT:

Catherine O ’ Hagan Wolfe