United States District Court, D. South Carolina, Columbia Division
AMY ELIZABETH WILLIAMS as the PERSONAL REPRESENTATIVE of the ESTATE FOR XXXXX, and AMY ELIZABETH WILLIAMS, individually, Plaintiffs,
QUEST DIAGNOSTICS, INC., ATHENA DIAGNOSTICS, INC., and ADI HOLDINGS INC., Defendants.
OPINION AND ORDER
Margaret B. Seymour Senior United States District Judge.
Amy Elizabeth Williams, as both Personal Representative of
the Estate of XXXXX Christian Jacob
Millare and individually, (hereinafter collectively,
“Plaintiff”), brought the within action against
Defendants Quest Diagnostics, Inc. (“Quest”);
Athena Diagnostics, Inc. (“Athena”); and ADI
Holdings Inc. (“ADI”) (hereinafter collectively,
“Defendants”) in the Court of Common Pleas for
Richland County, South Carolina. The action was removed to
this court on March 28, 2016. Plaintiff alleges that
Defendants negligently performed diagnostic testing on her
son (“Decedent”), and that the negligent acts or
omissions give rise to claims for wrongful death, a
survivorship action, negligent misrepresentation,
constructive fraud, civil conspiracy, and violation of South
Carolina's Unfair Trade Practices Act.
matter is before the court on Defendants' motion to
dismiss pursuant to Fed.R.Civ.P. 12(b)(6) filed on June 24,
2016, ECF No. 25. Plaintiff filed an opposition to
Defendants' motion on July 25, 2016, ECF No. 28, to which
Defendants filed a reply on August 11, 2016. ECF No. 31.
was born on August 23, 2005. When he was four months old, he
began suffering from febrile focal motor seizures.
Decedent's treating clinical geneticists, John McKinley
Shoffner, M.D. and Frances Dougherty Kendall, M.D., diagnosed
him with probable mitochondrial encephalomyopathy. ECF No. 24
at ¶ 15. Decedent's physicians extracted
Deoxyribonucleic acid (“DNA”) from a blood sample
and provided the DNA to Athena's lab for a SCN1A DNA
Sequencing Clinical Diagnostic Test so as to confirm or deny
the diagnosis. Id. at ¶ 17. Athena issued a
SCN1A DNA Sequencing Clinical Diagnostic Report on June 30,
2007 (the “2007 Report”), which indicated
Decedent possessed a DNA mutation in the SCN1A gene
classified as a “variant of unknown
significance.” Id. at ¶ 19. The glossary
included in the 2007 Report defined variant of unknown
significance as, “DNA sequence variants that are
detected reproducibly, but have not been correlated with
clinical presentation and/or pathology in the current
literature, nor do they result in a readily predictable
effect upon protein structure and function.”
Id. at ¶ 21. In a section entitled
“Interpretation, ” the 2007 Report provided the
following information: “This individual possesses a DNA
sequence variant or combination of variants in the SCN1A gene
whose significance is unknown (missense variant of unknown
significance). Testing of the biological parents is strongly
recommended to resolve the uncertainty of these test
results.” ECF No. 24-1 at 7. In a section entitled
“Comments, ” the 2007 Report further stated:
“[T]he results of this analysis cannot be definitively
interpreted … ”; “Testing of the
biological parents is strongly recommended (for no additional
charge) to help resolve the uncertainty of this sequent
variant's pathogenicity and the uncertainty of the
predicted phenotype”; “Most mutations that cause
SMEI are de novo, or sporadic (arise in the affected
individual rather than being inherited) an inheritance
pattern that can be confirmed by testing of parents”;
“In order to provide a more comprehensive
interpretation of this patient's SCN1A results, Athena
Diagnostics is requesting samples from the biological parents
of this patient”; and “Athena will perform a
target analysis on these samples for variant(s) identified in
gene SCN1A only and use the findings to help interpret the
patient's SCN1A result(s) at no additional charge.”
Id. at 7, 8, 12. Drs. Shoffner and Kendall and
Decedent's treating neurologist, Timothy Scott
Livingston, M.D., relied on the classification to administer
treatment to Decedent appropriate for epileptic seizures not
caused by Dravet Syndrome. ECF No. 24 at ¶ 34.
mutation in Decedent's SCN1A gene “possessed the
characteristics expected of a disease causing alteration,
” and had been reported and studied as a mutation
associated with Dravet Syndrome. ECF No. 24 at ¶ 22. The
2007 Report correctly identified “the transversion in
question located on the correct SCN1A gene, ” but
Athena had “simply  mislabeled” the mutation.
Id. at ¶ 24. Decedent subsequently passed away
on January 5, 2008.
September 2014, at the request of Plaintiff, Decedent's
physicians contacted Athena and Quest to ask for a copy of
the 2007 Report. ECF No. 24 at ¶ 43. Before that time
Plaintiff had not seen or read the 2007 Report. Id.
at ¶ 20. On January 30, 2015, Quest and Athena jointly
produced a Revised Report (“2015 Report”).
Id. at ¶ 43. The 2015 Report classified
Decedent's DNA mutation correctly as a “known
disease associated mutation” consistent with Dravet
Syndrome. Id. Plaintiff alleges that, because of the
error in the 2007 Report, Decedent was not provided with
proper medication and treatment, and, in fact, the treatment
he received exacerbated his seizures. Plaintiff alleges that
Decedent lost his life as a proximate result of Athena's
negligent laboratory practices.
times relevant to this lawsuit, Athena employed Narasimhan
Naga, Ph.D. and Hui Zhu, Ph.D. as Directors of Genetics and
Sat Dev Batish, Ph.D. as Chief Director of Genetics. ECF No.
24 at ¶¶ 7-9. The 2007 Report lists these
individuals as those who reviewed the laboratory results and
submitted the clinical information. ECF No. 24-1 at 17.
Plaintiff alleges that at the time the 2007 Report was
issued, Athena employed Joseph J. Higgins, M.D. as the
Clinical Laboratory Improvement Amendments
(“CLIA”) Laboratory Director and license holder,
and that Dr. Higgins signed the Report in that capacity. ECF
No. 24 at ¶ 10. See ECF No. 24-1 at 17. CLIA
refers to a “federal certification process for
laboratories that perform clinical diagnostic tests on human
specimens in the United States.” ECF No. 24 at ¶
27. ADI owns all outstanding shares of Athena. Id.
at ¶ 6. In 2011, Quest purchased ADI and acquired all of
that company's outstanding shares. Id.
the removal of this action to federal court, Plaintiff filed
an amended complaint with the consent of Defendants. ECF No.
19, 24. Defendants thereafter filed a motion to
dismiss, arguing inter alia that the amended
complaint is barred by the six-year statute of repose
applicable to actions brought against licensed health care
providers, and that Athena qualifies as a “licensed
health care provider, ” as described by S.C. Code Ann.
§ 38-79-410. ECF Nos. 25-1 at 18-22, 28 at 16-19.
Plaintiff filed a Response, ECF No. 28, to which Defendants
filed a reply, ECF No. 31. On January 4, 2017, the court
heard oral argument on the motion and took the matter under
advisement. ECF No. 34. The court subsequently indicated its
inclination to certify to the South Carolina Supreme Court
the question of whether diagnostic laboratories are
considered health care providers pursuant to S.C. Code §
38-79-410, and heard limited argument from the parties on the
topic during a telephone conference held March 2, 2017. ECF
No. 36, 39. The court thereafter certified the following
question to the South Carolina Supreme Court:
Is a federally licensed genetic testing laboratory acting as
a “licensed health care provider” as defined by
S.C. Code. Ann. § 38-79-410 when, at the request of a
patient's treating physician, the laboratory performs
genetic testing to detect an existing disease or disorder?
ECF No. 40.
27, 2018, the South Carolina Supreme Court issued an opinion
answering the certified question in the affirmative. ECF No.
59. The Court held that genetic testing laboratories such as
Athena that perform testing at the request of a patient's
treating physician for the purpose of assisting the treating
physician in detecting an existing disease or disorder
constitute licensed health care providers as contemplated by
section 38-79-410. Id. The court thereafter granted
the parties leave to file supplemental briefs addressing
whether the amended complaint alleges medical malpractice or
ordinary negligence. Plaintiff and Defendants filed their
briefs on August 17 and August 24, 2018, respectively. ECF
No. 58, 61.
12(b)(6) motion to dismiss for failure to state a claim upon
which relief can be granted tests the legal sufficiency of a
complaint. Schatz v. Rosenberg, 943 F.2d 455, 489
(4th Cir. 1991). While the complaint need not be minutely
detailed, it must provide enough factual details to put the
opposing party on fair notice of the claim and the grounds
upon which it rests. Bell Atl. Corp. v. Twombly, 550
U.S 544, 555 (2007) (citing Conley v. Gibson, 355
U.S. 41, 47 (1957)). Additionally, a complaint must contain
factual content that allows the court to reasonably infer the
defendant is liable for the alleged misconduct. Ashcroft
v. Iqbal, 556 U.S 662, 678 (2009) (“A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”).
“Facts that are ‘merely consistent with'
liability do not establish a plausible claim to
relief.” United States ex rel. Nathan v. Takeda
Pharms. N. Am., Inc., 707 F.3d 451, 455 (4th Cir. 2013)
(quoting Iqbal, 556 U.S. at 678). See 5 C.
Wright & A. Miller, Federal Practice and Procedure §
1216, pp. 235- 236 (3d ed. 2004) (“[T]he pleading must
contain something more ... than ... a statement of facts that
merely creates a suspicion [of] a legally cognizable right of
court must accept the allegations in the complaint as true,
and draw all reasonable factual inferences in favor of the
party opposing the motion. Iqbal, 556 U.S. at 679.
However, the court will not accept “legal conclusions
couched as facts or unwarranted inferences, unreasonable
conclusions, or arguments.” Nathan, 707 F.3d
at 455 (quoting Wag More Dogs, LLC v. Cozart, 680
F.3d 359, 365 (4th Cir. 2012)). To determine plausibility, a
court is to “draw on its judicial experience and common
sense”; and if the court determines that the factual
allegations can “plausibly give rise to an entitlement
to relief, ” dismissal is not warranted.
Iqbal, 556 U.S. at 679. “But where the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has
alleged-but it has not ‘show[n]'-‘that the
pleader is entitled to relief.'” Id.
(citing Fed.R.Civ.P. 8(a)(2)).
alleges negligence resulting in wrongful death and giving
rise to a survivorship action as to Athena only, and claims
negligent misrepresentation, constructive fraud, civil
conspiracy, and violation of the Unfair Trade Practices Act
(“UTPA”) as to all Defendants. Defendants assert
five grounds for dismissing the amended complaint. First,
they argue that the applicable statutes of limitation operate
to bar each claim because Plaintiff had constructive notice
of her potential claims from warnings and recommendations
included in the 2007 Report. Second, Defendants argue that
the wrongful death and survivorship actions and claims for
negligent misrepresentation and constructive fraud are
predicated on the alleged misdiagnosis of Decedent's
medical condition in 2007, and are subject to the six-year
statute of repose for medical malpractice claims as set forth
in S.C. Code Ann. § 15-3-545(A), regardless of when
Plaintiff had constructive notice. Third, they contend that
the claims for negligent misrepresentation and constructive
fraud fail to sufficiently allege justifiable reliance on the
alleged false statement. Fourth, they contend that by virtue
of their unitary ownership they are incapable as a matter of
law of conspiring with themselves; and the conspiracy claim
does not set forth additional facts or special damages unique
to the alleged conspiracy. Finally, Defendants argue
Plaintiff fails to adequately plead that Defendants'
wrongful acts affect the public interest so as to state a
claim under the Unfair Trade Practices Act. ECF No. 25-1 at
4. The court exercises subject matter jurisdiction pursuant
to 28 U.S.C. § 1332, and therefore applies the
substantive law of South Carolina. See Felder v.
Casey, 487 U.S. 131, 151 (1988); Hanna v.
Plumer, 380 U.S. 460, 465 (1965).
issue of whether the statute of repose set forth in S.C. Code
Ann. § 15-3-545 applies to Plaintiff's allegations
of negligence impacts the court's treatment of the
predominance of Plaintiff's claims, and thus the court
addresses this issue first.
S.C. Code Ann. § 15-3-545
claims for wrongful death, survivorship, negligent
misrepresentation, and constructive fraud arise from the
misclassification of Decedent's mutation in the 2007
Report as one of “unknown significance.” ECF No.
28 at 23. Defendants argue that medical malpractice is
“the fundamental nature” of Plaintiff's
allegations of negligence surrounding the misclassification,
and, as such, these claims are barred by the six-year statute
of repose set forth in section
15-3-545. ECF No. 25-1 at 15. Plaintiff asserts in
response that the negligence she describes in the amended
complaint is “of a nonmedical, administrative, or
ministerial, type, ” and results “from a lack of
routine care surrounding the publishing of test
results.” ECF No. 28 at 23-24. Therefore, the remaining
issue dispositive of Defendants' argument under section
15-3-545 is whether Plaintiff's allegations sound in
ordinary negligence, or medical malpractice.
South Carolina Code of Laws defines medical malpractice as
“doing that which the reasonably prudent health care
provider or health care institution would not do or not doing
that which the reasonably prudent health care provider or
health care institution would do in the same or similar
circumstances.” S.C. Code Ann. § 15-79-110(6).
Medical malpractice is a category of negligence, and,
therefore, “the distinction between medical malpractice
and negligence claims is subtle; there is no rigid analytical
line separating the two causes of action.” Dawkins
v. Union Hosp. Dist., 758 S.E.2d 501, 503-04 (S.C. 2014)
(quoting Estate of French v. Stratford House, 333
S.W.3d 546, 555 (Tenn. 2011)). “Rather, differentiating
between the two types of claims ‘depends heavily on the
facts of each individual case.'” Id.
(quoting Estate of French, 333 S.W.3d at 556). In
Dawkins, cited by both Plaintiff and Defendants, the
South Carolina Supreme Court examined the distinct qualities
of the two types of claims and offered guidance for
determining when an action implicates one rather than the
other. Of particular relevance, the Court observed that the
medical professional must at all times “exercise
ordinary and reasonable care to insure that no unnecessary
harm [befalls] the patient.” Id. at 178
(quoting Papa v. Brunswick Gen. Hosp., 132 A.D.2d
601, 517 N.Y.S.2d 762, 763-64 (1987)). The Court further
advised that the statutory definition of medical malpractice
“does not impact medical providers' ordinary
obligation to reasonably care for patients with respect to
nonmedical, administrative, ministerial, or routine care,
” and “[t]hus, medical providers are still
subject to claims sounding in ordinary negligence.”
Id. at 178. By contrast, a medical professional acts
in a professional capacity when he or she provides medical
services to a patient; and, in so doing, the medical
professional must meet the professional standard of care.
Id. In such instances, “expert testimony is
required to establish both the duty owed to the patient and
the breach of that duty.” Id. at 176
argue that the amended complaint asserts allegations of
negligence that implicate the provision of professional
services and thereby require the proffer of expert testimony.
See ECF No. 25-1 at 16. Indeed, Defendants assert,
Plaintiff attaches to the amended complaint the affidavits of
two of Decedent's treating physicians, who each opine as
to Athena's duty and breach of care with respect to the
misclassification of the mutation. Plaintiff contends in
response that Defendants' failure to accurately classify
the mutation “may have resulted from a routine
scrivener's error, whereby a laboratory technician simply
failed to select, or write in, the correct category after
reviewing correct results.” ECF No. 28 at 23.
She further posits:
[a]nother possibility might simply be that Athena did not
update its database used to compare mutations with other
known disease associations or even that Athena's database
may have had corrupted information or information that was
entered into the database in such a way as to make the
ensuing comparative search ineffective.
Id. at 23-24. Finally, Plaintiff asserts, and
Defendants do not appear to contest, that “[t]he
reason(s) Defendants failed to select and promulgate the
correct classification is not known with certainty.”
Id. at 23.
court finds that Plaintiff's claims for wrongful death,
survivorship, negligent misrepresentation, and constructive
fraud are comprised of allegations sounding in both medical
malpractice and ordinary negligence. Plaintiff alleges that
Decedent's physicians extracted his DNA and provided it
to Athena to perform the SCN1A test “for the very
limited purpose of ‘detecting an existing disease,
illness, impairment, symptom or disorder' on the
particular gene where a connection to Dravet would likely be
found.” ECF No. 24 at ¶ 17. The amended complaint
raises allegations that support different theories as to why
the mutation was misclassified. First, Plaintiff asserts
allegations that appear to implicate the provision of medical
services. For example, Plaintiff alleges, “[b]y not
providing [Decedent's] doctors with the definitive answer
that the mutation was known to be associated with Dravet
Syndrome, which was the main reason for conducting the test
in question, Defendants breached a duty of care owed to
[Plaintiff] by misleading the child's doctors.” ECF
No. 24 at ¶ 24. Plaintiff also alleges the following:
the 2007 Report indicates that . . . [Dr.] Batish, reviewed
the laboratory results and submitted the erroneous clinical
information of [Decedent]. Moreover, Batish is one of the
authors of the Harkin et al., 2007 publication . . ., which
identifies [Decedent's] mutation as one associated with
Dravet. This scholarly paper was submitted and published
prior to Athena's issuance of the 2007 Report. As such,
Batish clearly knew, or should have known, that a mistake was
apparent on the 2007 Report.
ECF No. 24 at ¶ 31. As Defendants note, Plaintiff offers
the affidavits of Drs. Cook-Deegan and Wiznitzer to ...