Haywood v. Novartis Pharm. Corp.
Haywood v. Novartis Pharm. Corp.
Opinion of the Court
This matter is before the Court on the Defendant's Motion to Dismiss Plaintiff's First Amended Complaint, filed by the defendant, Novartis Pharmaceuticals Corporation, on December 27, 2016. (DE # 35.) For the reasons set forth below, the motion to dismiss is GRANTED . The clerk is DIRECTED to close this case.
BACKGROUND
Plaintiff, Michelle Haywood ("Haywood"), filed her complaint in state court on August 13, 2015. (DE # 4.) The complaint brought claims for negligence, negligent training and supervision, and public disclosure of private facts; it also listed "punitive damages" as a separate count. (Id. ) The defendant, Novartis Pharmaceuticals Corporation ("Novartis"), removed the matter to this Court on the basis of diversity jurisdiction on September 28, 2015. (DE # 1.) On November 2, 2015, Novartis filed a motion to dismiss the complaint. (DE # 14.) On September 27, 2016, the Court granted the motion, dismissed the complaint without prejudice, and granted Haywood thirty days to file an amended complaint. (DE # 28.) The first amended complaint was filed by Haywood on October 25, 2016. (DE # 30.) In Count one of her complaint, Haywood alleges that Novartis acted negligently when it disclosed personal information to her co-workers and supervisors via facsimile transmission which violated duties it owed to her under its privacy policy, under Indiana Code 25-26-13-15(b), and under the Health Insurance Portability and Accountability *1184Act ("HIPPA"). In Count Two, Haywood alleges that Novartis was negligent in its training and supervision of its employees regarding the protection of customer privacy and confidentiality. Finally, in Count Three, Haywood alleges that she is entitled to punitive damages because Novartis acted with reckless indifference when it disclosed her protected information despite being told, in writing, not to do so. Novartis filed the instant motion to dismiss on December 27, 2016. (DE # 35.) Haywood filed her response on January 9, 2017. (DE # 37.) Novartis filed its reply on January 17, 2017. (DE # 38.) The motion is ripe for adjudication.
DISCUSSION
Facts
Novartis Patient Assistance NOW Oncology, a division of Novartis, administers the GLEEVEC Co-Pay Assistance Program (the "Program") in which eligible patients are given a GLEEVEC Co-Pay Card by Novartis to help offset the costs of their prescription medication. (DE # 30, p. 1.) Haywood applied for the Program, and on May 19, 2015, she sent Novartis a written statement requesting that no information regarding her application be sent to her place of employment. (Id. at 2.) On July 8, 2015, Novartis disclosed the following via facsimile transmission to Haywood's co-workers and supervisors: her social security number, her date of birth, her income, her Medicare number, and information about her disease, treatment, and medical providers. (Id. )
According to the amended complaint, the website for the Program includes a privacy notice that states:
Novartis Pharmaceuticals Corporation and Novartis Group of Companies understand your personal and health information is private.
The personal information we collect from you, including your card or voucher usage, will be used to bring you information about products, programs, support, and services, to conduct market research, as required by federal regulations. Please be assured that although we share your personal information with our business partners who work with us on these activities, we do not permit them to use your personal information for their own marketing purposes. You may unsubscribe from our programs and services at any time by calling 1-888-669-6682. For more information about our privacy practices, please visit our website at www.usprivacy.novartis.com.
("Privacy Notice"). (Id. at 3.) Additionally, the amended complaint cites to the following privacy statement
... This Privacy Statement tells you how we protect the privacy of personal information that you may provide to us.
As part of our commitment to privacy, Novartis has voluntarily certified to the U.S.-EU Safe Harbor Framework and the U.S.-Swiss Safe Harbor Framework as set forth by the U.S. Department of Commerce....
The purpose of this privacy statement is to explain what Novartis does with personally identifiable information that you provide to us, such as your name, address, age, and information relating to your medical conditions. We want you to know how your personally identifiable information will be protected, who we may share it with, and for what purposes.
*1185... The type of information collected from you will be based on the specific program that you register for, as indicated at the time of your registration. The information that we may ask you to provide may include your first and last name, your mailing address, your age, birth date, gender, e-mail address, and information about your medical conditions. Novartis limits the collection and processing of personal information to what is necessary to fulfill the purposes for which it is to be used.
... Many of our customers register for more than one Novartis program or service, through our websites, by calling Novartis, or through a third-party such as their healthcare provider. When you register with us more than once, we may combine your personally identifiable information as well as any anonymous computer information collected (see below) and store it collectively. This helps us keep track of all of your preferences in one organized place, and helps us provide information to you based on a more informed review of your requests and medical conditions of interest.
... We request your consent to collect your personally identifiable information when you seek to register for a Novartis program or service. In doing so, we also explain, for that program or service, what you are registering to receive and how we plan to use your personal information. We also offer you the option of discontinuing your consent ('opting out' or 'unsubscribing') if you later decide that you no longer want to participate in that program or receive additional information from us. If we wish to use this information for purposes incompatible from those for which the data was initially collected, we will offer an effective way to opt out of the secondary use.
... When you provide personally identifiable information to Novartis, it will be accessible to some of Novartis' business partners, such as companies we retain to fulfill requests for information, answer telephone calls from consumers, or provide assistance to us on specific programs or projects such as newsletters.... Novartis requires third-parties to whom it discloses personal data to protect personal information using substantially similar standards to those required by Novartis.
... Other departments within the Novartis group, and other Novartis companies that may receive your information will abide by substantially similar privacy requirements relating to your personally identifiable information.
... This Privacy Statement becomes effective on November 28, 2012. Novartis may update this Statement from time to time. We encourage you to review our Privacy Statement periodically.
("Privacy Statement"). (Id. at 3-4) (footnote omitted.) Haywood alleges that, when it disclosed her personal information to her co-workers and supervisors via facsimile, Novartis breached duties owed to her under the Privacy Notice and Privacy Statement, under Indiana Code 25-26-13-15(b), and under HIPPA. (Id. at 3-5.)
Analysis
In evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court must accept all facts alleged in the complaint as true and draw all reasonable inferences in the light most favorable to the plaintiff. Johnson v. Rivera ,
*1186Bell Atlantic Corp. v. Twombly ,
Negligence and Negligent Training and Supervision
Novartis argues that Counts One and Two fail as a matter of law because Haywood has not properly alleged that Novartis owed her a legal duty or that any such duty, even if it existed, was breached. In response, Haywood asserts that Novartis owed her "multiple duties" based on its own policies, based on Indiana statutory law, and based on HIPPA.
In Indiana, "the tort of negligence is comprised of three elements: (1) a duty on the part of defendant in relation to the plaintiff; (2) the defendant's breach of that duty; and (3) an injury to the plaintiff resulting from that failure." Kolozsvari v. Doe ,
Here, Haywood's amended complaint alleges that Novartis breached explicit duties of privacy that it owed to her as a customer pursuant to the representations on its websites. In her response brief, Haywood argues that she relied on those representations to ensure that her information would remain private when applying for the program. However, as Novartis points out, the assurances in the Privacy Notice relate to the dissemination of information to its business partners who are prohibited from using customers' personal data for marketing purposes.
Haywood also argues that Novartis owed her a statutory duty to protect her personal information pursuant to Indiana Code 25-26-13-15(b). It is true that, under Indiana law, violating statutory duties constitutes negligence per se. See Kho v. Pennington ,
If a statute is clear and unambiguous, courts are directed to take words and phrases in "their plain, ordinary, and usual sense" when analyzing their applicability. City of N. Vernon v. JenningsN.W. Regl. Utilities ,
Title 25 of the Indiana Code is entitled "Professions and Occupations," and Article 26 within that title deals specifically with the regulation of "Pharmacists, Pharmacies, and Drug Stores." Chapter 13, entitled "Regulation of Pharmacists and Pharmacies-Creation of Board," declares that the "practice of pharmacy" is a matter of public interest and concern that must be subjected to certain regulations and controls. I.C. 25-26-13-1. Section 2 provides the definitions that apply to Chapter 13, and the "practice of pharmacy" is defined as:
a patient oriented health care profession in which pharmacists interact with and counsel patients and with other health care professionals concerning drugs and devices used to enhance patients' wellness, prevent illness, and optimize the outcome of a drug or device, by accepting responsibility for performing or supervising a pharmacist intern or an unlicensed person under section 18.5 of this chapter to do the following acts, services, and operations:
(1) The offering of or performing of those acts, service operations, or transactions incidental to the interpretation, evaluation, and implementation of prescriptions or drug orders.
(2) The compounding, labeling, administering, dispensing, or selling of drugs and devices, including radioactive substances, whether dispensed under a practitioner's prescription or drug order or sold or given directly to the ultimate consumer.
(3) The proper and safe storage and distribution of drugs and devices.
(4) The maintenance of proper records of the receipt, storage, sale, and dispensing of drugs and devices.
(5) Counseling, advising, and educating patients, patients' caregivers, and health care providers and professionals, as necessary, as to the contents, therapeutic values, uses, significant problems, risks, and appropriate manner of use of drugs and devices.
(6) Assessing, recording, and reporting events related to the use of drugs or devices.
(7) Provision of the professional acts, professional decisions, and professional services necessary to maintain all areas of a patient's pharmacy related care as specifically authorized to a pharmacist under this article.
(8) Provision of medication therapy management.
I.C. 25-26-13-2. A "pharmacist" is defined as "a person licensed under this chapter," and a "person" is "any individual, partnership, copartnership, firm, company, corporation, association, joint stock company, trust, estate, or municipality, or a legal representative or agent, unless this chapter expressly provides otherwise."
any facility, department, or other place where prescriptions are filled or compounded and are sold, dispensed, offered, or displayed for sale and which has as its principal purpose the dispensing of drug and health supplies intended for the general health, welfare, and safety of the public, without placing any other activity on a more important level than the practice of pharmacy.
*1189(a) A pharmacist shall hold in strictest confidence all prescriptions, drug orders, records, and patient information. He may divulge such information only when it is in the best interest of the patient or when requested by the board or its representatives or by a law enforcement officer charged with the enforcement of laws pertaining to drugs or devices or the practice of pharmacy.
(b) A person who has knowledge by virtue of his office of any prescription drug order, record, or patient information may not divulge such information except in connection with a criminal prosecution or proceeding or a proceeding before the board, to which the person to whom the information relates is a party.
(c) A pharmacist or pharmacy is immune from civil liability for any action based on its good faith release of information under this section.
I.C. 25-26-13-15.
While Haywood argues that subsection (b) clearly and unambiguously pertains to "any person with patient information," the Court agrees with Novartis that such a reading would produce an unjust result. See City of N. Vernon v. Jennings N.W. Regl. Utilities ,
The amended complaint describes Novartis as a "Pharmaceutical Corporation," with a division that administers the Program, and also as a "provider of pharmaceuticals." Haywood does not properly allege, nor is it reasonable to infer, that Novartis falls within the definition of a *1190pharmacy, that Novartis filled or dispensed any prescriptions to Haywood, that the person who sent Haywood's information to her place of employment was a pharmacist, intern, or other unlicensed person working within a pharmacy, or that Novartis or the Program performs acts consistent with the practice of pharmacy as described above.
Haywood also claims that Novartis owed her a duty, under a negligence theory, for violating HIPPA standards. Novartis responds by pointing out that HIPPA provides no private cause of action and insists that Haywood's alleged HIPPA claims may not be shoehorned into a negligence action. As this Court has noted previously:
'When a civil tort action is premised upon violation of a duty imposed by statute, the initial question to be determined by the court is whether the statute in question confers a private right of action.' Right Reason Publ'ns v. Silva ,691 N.E.2d 1347 , 1352 (Ind. Ct. App. 1998) (quotation omitted); see also Dawson by Dawson v. Long ,546 N.E.2d 1265 , 1268 (Ind. Ct. App. 1989) (holding in order for the violation of a statute or ordinance to be negligence per se , the trier of fact must first determine whether the statute is applicable).
Chappey v. Ineos USA LLC , No. 2:08-CV-271,
*1191does not provide a private right of action. See e.g. Carpenter v. Phillips ,
Finally, Haywood cites to no Indiana case, nor can the Court find any, that would suggest that a pharmaceutical corporation has a general duty to safeguard an individual's personal information from disclosure to her employer. In cases where a duty has not been established, Indiana courts look to the relationship between the parties, the reasonable foreseeability of harm, and public policy concerns to determine whether a duty should be imposed at common law. See Neal v. IAB Fin. Bank ,
As to foreseeability, courts must look to the broad type of plaintiff and broad type of harm at issue and focus on "the general class of persons of which the plaintiff was a member and whether the harm suffered was of a kind normally to be expected-without addressing the specific facts of the occurrence." Neal ,
because almost any outcome is possible and can be foreseen, the mere fact that a particular outcome is sufficiently likely is not enough to give rise to a duty. Instead, for purposes of determining whether an act is foreseeable in the context of duty we assess whether there is some probability or likelihood of harm that is serious enough to induce a reasonable person to take precautions to avoid it.
Goodwin v. Yeakle's Sports B. and Grill, Inc. ,
Turing to public policy concerns, the Indiana Court of Appeals has noted that, "[s]imply because an action may have some degree of foreseeability does not make it sound public policy to impose a duty." Williams v. Cingular Wireless ,
After balancing the relevant factors, the Court concludes that the general, non-specialized nature of the relationship between the parties and the fact that actionable harm is not reasonably foreseeable from the type of disclosure at issue outweighs the public policy considerations suggesting that potential customers may be entitled to protection of their personal data during an application process. Ultimately, "[w]hen given a choice between an interpretation of [state] law which reasonably restricts liability, and one which greatly expands liability, we should choose the narrower and more reasonable path (at least until the [state] Supreme Court tells us differently)." Pisciotta ,
Because Haywood has failed to allege a viable negligence claim, her claims for negligent training and supervision and punitive damages must also fail. See Hinchy ,
CONCLUSION
For the aforementioned reasons, the motion to dismiss filed by Novartis (DE # 35) is GRANTED . The clerk is DIRECTED to close this case.
The amended complaint cites to the version of the privacy statement that was revised as of November 28, 2012.
"Please be assured that although we share your personal information with our business partners who work with us on these activities, we do not permit them to use your personal information for their own marketing purposes." (DE # 30, p. 3.)
The amended complaint includes a footnote that cites to the following provision of the Privacy Statement: "Novartis takes reasonable precautions to protect EU and Swiss personal information in its possession from loss, misuse, unauthorized access, disclosure, alteration and destruction." (DE # 30, p. 3, n. 3) (emphasis by Haywood in original). However, the relevance of this provision is not clear, as Haywood has not alleged that she or the personal information disclosed by Novartis was in any way related to the EU or Switzerland.
Indeed, as is pointed out by Novartis, it simply "researches, manufactures, markets, and sells pharmaceuticals," and "[u]nder federal regulations, it is prohibited from selling its prescription drugs directly to patients." In re Novartis Wage and Hour Litig. ,
Haywood also cites to several out-of-state opinions to support her position. In one such case, the North Carolina court of appeals found that the plaintiff had not stated a cause of action under HIPPA, but it recognized that HIPPA was applicable to the extent that it "provid[ed] evidence of the duty of care owed by [the defendant] with regards to the privacy of plaintiff's medical records." Acosta v. Byrum ,
Because jurisdiction in this case is premised on diversity, the Court must apply the substantive law of Indiana and attempt to predict how the Indiana Supreme Court would decide a novel question of state law. "Where the state supreme court has not ruled on an issue, decisions of the state appellate courts control, unless there are persuasive indications that the state supreme court would decide the issue differently." See Lexington Ins. Co. v. Rugg & Knopp, Inc. ,
Moreover, while not relevant to the analysis of foreseeability, the Court notes that Haywood's amended complaint fails to adequately allege an injury beyond the disclosure itself. While she states generally that she "suffered damages to her employment, emotional distress, and physical health," she has not provided any details regarding such injuries and has not responded to Novartis' lack of damages argument in any meaningful way.
Reference
- Full Case Name
- Michelle HAYWOOD v. NOVARTIS PHARMACEUTICALS CORP.
- Status
- Published