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Williams v. Quest Diagnostics, Inc.

United States District Court, D. South Carolina, Columbia Division

October 18, 2018



          Margaret B. Seymour Senior United States District Judge.

         Plaintiff 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.

         This 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.


         Decedent 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.

         The 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.

         In 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.

         At all 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.


         Following the removal of this action to federal court, Plaintiff filed an amended complaint with the consent of Defendants. ECF No. 19, 24.[1] 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.

         On June 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.


         A Rule 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 action”).

         The 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)).[2]


         Plaintiff 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).

         The 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.

         A. S.C. Code Ann. § 15-3-545

         Plaintiff's 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[3] set forth in section 15-3-545.[4] 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.

         The 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 (citations omitted).

         Defendants 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.

         The 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 ΒΆ 31. As Defendants note, Plaintiff offers the affidavits of Drs. Cook-Deegan and Wiznitzer to ...

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