Morrison v. Quest Diagnostics Inc.

Citations: 139 F. Supp. 3d 1182; 2015 U.S. Dist. LEXIS 133941Docket: Case No. 2:14-cv-01207-RFB-PAL

Court: District Court, D. Nevada; September 30, 2015; Federal District Court

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The Court, presided over by Judge Richard F. Boulware, II, addressed two Motions to Dismiss filed by Defendants: the Nevada State Athletic Commission, Marc Ratner, and Dr. Margaret Goodman (ECF No. 11), and Quest Diagnostics Inc. and John Hiatt (ECF No. 12). The Court partially granted and partially denied these motions, dismissing Plaintiff Patricia Harding Morrison’s Complaint with leave to amend to establish her standing. However, several claims were deemed futile and dismissed with prejudice.

The Complaint, filed pro se by Morrison on July 24, 2014, revolves around the alleged wrongful diagnosis of her late husband, Tommy David Morrison, a former heavyweight boxing champion. On February 10, 1996, Quest Diagnostics reported that Tommy Morrison tested positive for HIV, a finding subsequently accepted by the Nevada State Athletic Commission, which disqualified him from a boxing match and led to a significant financial loss. An employee of Quest, John Hiatt, confirmed the diagnosis, and Dr. Goodman later communicated this information publicly, asserting it was "ironclad and unequivocal."

Morrison contends that the diagnosis lacked support from any clinical examination and that Quest failed to obtain necessary consent for disclosing his medical information. Following his death in 2013, an autopsy revealed no evidence of HIV. The Complaint alleges multiple causes of action: 

1. **Negligence** - Defendants are accused of incompetently diagnosing Morrison with HIV despite disclaimers on the tests indicating they shouldn't be used as conclusive diagnoses.
2. **Defamation** - Hiatt and Goodman allegedly informed the media of the false HIV diagnosis, which was also reported to the Department of Health and Human Services.
3. **Fraud** - Quest is accused of misrepresenting its capability to diagnose Morrison's HIV status.
4. **HIPAA Violation** - Quest purportedly released Morrison's medical information without authorization, violating HIPAA regulations.
5. **Unauthorized Practice of Medicine** - The complaint asserts that the defendants’ actions constituted unauthorized medical practice, as they were not licensed or acting as Morrison's attending physician. 

Overall, the Court's order reflects a careful examination of Morrison's claims while allowing for the potential for amendment regarding standing.

The Athletic Commission, Marc Ratner, and Dr. Margaret Goodman (collectively, the "Athletic Commission Defendants") filed a Motion to Dismiss on October 3, 2014, followed by Quest and John Hiatt (the "Quest Defendants") also submitting a Motion to Dismiss on the same date. The Plaintiff filed several Motions for Partial Summary Judgment against Hiatt, Dr. Goodman, and Quest throughout 2015. A hearing was held on September 14, 2015, where the Court issued preliminary rulings on the Defendants' Motions.

To establish a claim for relief, the Court emphasized that a complaint must present a clear statement of the claim, supported by factual allegations that allow for a reasonable inference of liability against the defendant. The Defendants raised multiple arguments for dismissal, including lack of standing, statute of limitations, discretionary-act immunity for the Athletic Commission Defendants, and the economic loss doctrine barring the negligence claim by the Quest Defendants. They also contended that the remaining claims did not state actionable grounds.

The Court granted the Motions to the extent of dismissing the case for lack of standing, as the Plaintiff did not demonstrate that she was the administrator or executor of her late husband's estate, which is a requirement under Nevada law. However, the Court allowed the Plaintiff to amend her Complaint regarding her negligence, defamation, and fraud claims, suggesting that additional facts might survive dismissal. Conversely, the claims related to HIPAA violations and unauthorized practice of medicine were dismissed with prejudice, as they could not be rectified by amendment. The Court clarified that the Plaintiff’s claims were survival actions, necessitating that the estate administrator assert them.

A survival action in Nevada is separate from a wrongful death action, as outlined in Nevada law. According to N.R.S. 41.100, a survival action allows the executor or administrator of a deceased person's estate to maintain a cause of action, while N.R.S. 41.085 allows heirs and personal representatives to pursue wrongful death claims. The court emphasizes that only official representatives—executors or administrators—can bring survival actions, as supported by case law, specifically citing Moreland v. Las Vegas Metropolitan Police Dept. The plaintiff, identified as the widow, lacks the necessary standing because she has not claimed to be the executor or administrator of her husband’s estate, leading to the dismissal of her complaint.

Regarding leave to amend, the court notes that amendments should be allowed if they could remedy the issues raised, but not if it's clear that the complaint cannot be salvaged. The court decides to grant Ms. Morrison leave to amend her claims for negligence, defamation, and fraud, while her claims related to HIPAA violations and unauthorized practice of medicine are deemed incurable by amendment.

Plaintiff's claims for negligence, defamation, and fraud face challenges from Defendants based on the statute of limitations, discretionary-act immunity, and the economic loss doctrine. However, the Court indicates that these defenses do not outright bar Plaintiff's claims at this stage. 

Regarding the statute of limitations, events from 1996 and 2007 are likely past the limitations period; however, Plaintiff may argue that the statute should be tolled until the autopsy revealed her husband did not have HIV. The applicable statute of limitations is determined by state law, and under the discovery rule, the limitations period can be tolled until the injured party discovers relevant facts. The Court suggests that Plaintiff might present additional facts to support tolling, implying her claims could still proceed.

On the issue of discretionary-act immunity, the Athletic Commission Defendants cite N.R.S. 41.032, which protects state officials from lawsuits regarding discretionary functions unless the actions do not meet certain criteria. The Supreme Court of Nevada applies a two-part test to determine immunity: (1) whether the act involved individual judgment or choice, and (2) whether it was based on social, economic, or political policy considerations. While this immunity can extend to routine governmental decisions, it does not generally apply to medical professionals’ diagnostic and treatment decisions, which are not based on policy considerations.

Discretionary-act immunity does not completely prevent the Plaintiff from amending her Complaint against the Athletic Commission Defendants. The Plaintiff may present facts indicating that the Defendants' decisions were either non-discretionary or not policy-based, and she could argue that discretionary-act immunity does not apply to her claims. Intentional torts or bad-faith misconduct by government employees are not protected under N.R.S. 41.032, warranting the Court's decision to grant leave for the Plaintiff to amend her claims.

The Defendants contend that the Plaintiff’s negligence claim is barred by the economic loss doctrine, which limits tort claims for purely economic losses unless accompanied by personal injury or property damage. The doctrine aims to prevent unlimited liability for economic consequences of negligence and encourages reliance on contract law for commercial disputes. Exceptions exist for cases with significant risks of negligence that could deter commercial activity. The Court finds that the Plaintiff might be able to provide additional facts that could render the economic loss doctrine inapplicable, thus allowing her to amend her negligence claim.

The Defendants also argue that the Plaintiff failed to adequately allege her negligence, defamation, and fraud claims. After reviewing the arguments, the Court concludes that the Plaintiff could potentially salvage these claims with further factual allegations, allowing her the opportunity to amend.

Conversely, the Court denies leave to amend the Plaintiff's HIPAA claim, as it would be futile; HIPAA does not provide a private right of action, compelling the dismissal of this claim with prejudice.

Leave to amend the Plaintiff's claim for unauthorized practice of medicine under N.R.S. 630.400 is denied. This statute imposes criminal penalties for unlicensed medical practice and grants the Board of Medical Examiners enforcement authority, excluding private lawsuits. The claim is dismissed with prejudice as it pertains to N.R.S. 630.400, though the Plaintiff may amend if the claim is based on other legal grounds. 

The Court grants in part and denies in part the motions to dismiss from the Nevada State Athletic Commission and others, as well as from Quest Diagnostics and John Hiatt. The Plaintiff’s Complaint is dismissed without prejudice for negligence, defamation, and fraud claims, allowing for amendments, while the HIPAA and N.R.S. 630.400 claims are dismissed with prejudice. The Plaintiff has 30 days to file an Amended Complaint addressing identified deficiencies, with failure to do so possibly resulting in dismissal with prejudice. 

Motions for Partial Summary Judgment against specific Defendants are denied without prejudice, permitting refiling post-amendment of the Complaint. The Court clarifies definitions of "executor" and "administrator" in the context of the survival action statute, emphasizing consistency in statutory interpretation. While acknowledging documents presented by the Plaintiff regarding her status as her husband's estate representative, the Court's ruling is based solely on the motions' hearing outcomes, allowing for inclusion of standing-related facts in the Amended Complaint. The Court also notes deficiencies in negligence, defamation, and fraud claims as outlined in the motions to dismiss.