Court Erred in Directing Final Judgment Without Fact Finding in Case About Adding Sales Tax to Invoices for Medical Records Requested for Legal Action

A woman requested her medical records from her medical care provider. A private company had a contract with the medical care provider to fulfill requests for medical records. The private company obtained and sold copies of the requested medical records to the woman. The private company sent the woman invoices related to the production of the medical records and reflected that the private company charged the woman sales tax for the records. The woman paid the invoices in full.


The woman, individually and on behalf of other Arkansans similarly situated, filed a class-action complaint, alleging the private company violated the Arkansas Deceptive Trade Practices Act (ADTPA) when it illegally collected sales tax on charges for services rendered in retrieving and copying medical records. The private company impleaded the Arkansas Department of Finance and Administration and its director in his official capacity seeking declaratory judgment on whether A.C.A. § 16-46-106, regarding access to medical records in relation to legal proceedings, requires the collection of sales tax on labor and copy charges associated with the production of medical records.


The Pope County Circuit Court granted the defendants’ motion for partial summary judgment. Specifically, the circuit court found that sales tax did apply to the sale of copies of medical records, pursuant to A.C.A. § 16-46-106. Moreover, the circuit court found that ruling in the defendants’ favor rendered the remainder of the woman’s claims moot and attached a Rule 54(b) certificate.


The Supreme Court of Arkansas dismissed the appeal without prejudice for lack of a proper 54(b) certificate. The court explained that a circuit court may certify an otherwise nonfinal order for an immediate appeal by executing a certificate pursuant to Rule 54(b) of the Arkansas Rules of Civil Procedure. Rule 54(b) provides in part that the circuit court may direct the entry of a final judgment “only upon an express determination supported by specific factual findings, that there is no just reason for delay and upon an express direction for the entry of judgment.” Further, the rule provides that, if such a determination is made, the court must execute a certificate “which shall set forth the factual findings upon which the determination to enter the judgment as final is based.” The court held that Rule 54(b) requires the order to include specific findings of any danger of hardship or injustice that could be alleviated by an immediate appeal and to set out the factual underpinnings that establish such hardship or injustice.


The court found that in this case the circuit court's Rule 54(b) certificate merely stated a conclusion that the granting of the motions for partial summary judgment renders every other claim by the plaintiff moot, effectively ending the litigation. This one-sentence explanation did not contain any specific factual findings of any danger of hardship or injustice that could be alleviated by an immediate appeal.


See: Holbrook v. Healthport, Inc., 2013 Ark. 87, 2013 WL 776240 (Ark., February 28, 2013) (not designated for publication).


See also Medical Law Perspectives, November 2012 Report: Liability for Electronic and Other Medical Record Information Disclosure.