Epic v. Health Gorilla: GuardDog Rolls Over
The first defendant settlement in Epic's fraud case produces admissions that could haunt the remaining defendants.
No rest for the wicked, I guess, as HIMSS week does not slow down. Wild update in the Epic v. Health Gorilla case today, as GuardDog Telehealth agreed to a stipulated judgment and permanent injunction.
GuardDog admitted in the filing that its entire business model was requesting, reviewing, and summarizing medical records and providing them to law firms, all while claiming a "treatment" purpose to pull those records through the Carequality interoperability framework. It admitted its predecessor entity (Critical Care Nurse Consulting) had been doing the same thing since 2022. And it admitted that Unit 387 and Meredith Manak told them this was all permissible.
Under the permanent injunction, GuardDog is now permanently banned from requesting records through TEFCA or Carequality, required to delete all patient health information obtained through those frameworks within one week, and permanently enjoined from any further use or dissemination of that data. GuardDog also waived all rights to appeal.
No monetary damages are changing hands, as each side bears its own costs, but that’s not the point. This is Epic (and its co-plaintiffs) potentially getting the smoking gun they wanted via precedent and the injunction on the record, not a payout. And the judgment explicitly preserves plaintiffs' claims against every other defendant, including Health Gorilla itself.
There’s a lot left to this case, but the remaining defendants are in a much tougher spot now. The GuardDog admissions, while certainly contestable, are on the record:
That Health Gorilla knew about GuardDog’s business activities
That Unit 387 and Meredith Manak were telling downstream actors it was fine to use Carequality for these purposes
That GuardDog obtained direct Carequality access through a contractual relationship with Health Gorilla.
Those admissions aren’t technically binding against the other defendants, but they’re now part of the court file and could be used as evidence. Health Gorilla, Unit 387, Meredith Manak, and the other named defendants will have to contend with the much tougher narrative this sets. Epic's playbook here seems clear now: a divide-and-conquer strategy focused on settling with the smaller players on favorable terms that yield useful admissions, then use that leverage to move up the ladder. Unit 387 in particular will be targeted next.
We now also have our answer to how Epic might handle the Health Gorilla and RavillaMed’s motions to dismiss that we discussed a few weeks ago, which posited that Epic should have used the mandatory dispute resolution processes baked into the CCA and Common Agreement before going to court. Now that GuardDog just agreed to a permanent injunction framed as addressing “immediate injunctive relief” for “irreparable harm,” that fits the exact exception to that process that both agreements provide. By getting a stipulated judgment that the court finds is “in the public interest” and that a violation would cause “immediate and irreparable injury,” Epic is building a record that this dispute was always injunction-worthy, somewhat countering the defendants’ argument.
The hearing on Health Gorilla's motion to dismiss is set for April 23. That's where we'll find out whether the court buys the procedural arguments or whether the GuardDog admissions have already changed the calculus. Either way, this case just got a lot harder to dismiss.
EDIT: Health Gorilla issued a statement about GuardDog:
