Smith et al v. Laboratory Corporation of America, Inc. et al, No. 2:2009cv01662 - Document 155 (W.D. Wash. 2011)
Court Description: ORDER denying 110 Plaintiffs' Motion for Partial Summary Judgment; denying 130 Defendant LabCorp's cross Motion for Summary Judgment; denying 137 Defendants' Motion for Reconsideration ; denying 138 Defendants' Motion for certification to appeal by Judge John C Coughenour.(MD, cc to Lynn-CCA Clerk)
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Smith et al v. Laboratory Corporation of America, Inc. et al 1 Doc. 155 THE HONORABLE JOHN C. COUGHENOUR 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 BRAD L. SMITH and TAMMIE SMITH, husband and wife, 10 11 12 13 14 Plaintiff, v. LABORATORY CORPORATION OF AMERICA, INC., a Delaware corporation; PACIFIC NORTHWEST PATHOLOGY ASSOCIATES, a Washington Professional Limited Liability Corporation; and JANE J. YIN, M.D.,, CASE NO. C09-1662 ORDER 15 Defendant. 16 17 This matter comes before the Court on Plaintiffs Brad Smith (“Smith”) and Tammie 18 Smith’s motion for partial summary judgment on Idaho claims (Dkt. No. 110), Defendant Pacific 19 Northwest Pathology Associates (“PNPA”)’s response (Dkt. No. 124), Defendant Laboratory 20 Corporation of America (“LabCorp”)’s response (Dkt. No. 129) and cross motion for summary 21 judgment (Dkt. No. 130), and Plaintiffs’ reply. (Dkt. No. 145.) The Court also considers 22 Defendants PNPA and Dr. Jane Yin’s motions for reconsideration (Dkt. No. 137) and motion to 23 certify for interlocutory appeal. (Dkt. No. 138.) Having thoroughly considered the parties’ 24 ORDER - C09-1662 PAGE - 1 Dockets.Justia.com 1 briefing and the relevant record, the Court finds oral argument unnecessary and hereby rules as 2 follows. 3 I. BACKGROUND 4 The facts of this case were discussed in a previous order and need not be discussed here. 5 (Dkt. No. 119.) Plaintiffs now move for summary judgment and ask the Court to find that under 6 Idaho law, a) PNPA was either acting in concert with or acting as an agent of LabCorp, and b) 7 Dr. Yin was acting with the apparent authority of LabCorp when she diagnosed Smith. 8 II. APPLICABLE LAW 9 Federal Rule of Civil Procedure 56(c) mandates that a motion for summary judgment be 10 granted when “the pleadings, the discovery and disclosure materials on file, and any affidavits 11 show that there is no genuine issue as to any material fact and that the movant is entitled to 12 judgment as a matter of law.” FED. R. CIV. P. 56(c). There exists a genuine issue as to a particular 13 fact—and hence that fact “can be resolved only by a finder of fact” at trial—when “[it] may 14 reasonably be resolved in favor of either party”; conversely, there exists no genuine issue when 15 reasonable minds could not differ as to the import of the evidence. Anderson v. Liberty Lobby, 16 Inc., 477 U.S. 242, 250–52 (1986). Whether a particular fact is material, in turn, is determined by 17 the substantive law of the case: “Only disputes over facts that might affect the outcome of the 18 suit under the governing law will properly preclude the entry of summary judgment. Factual 19 disputes that are irrelevant or unnecessary will not be counted.” Id. at 248. Summary judgment, 20 then, demands an inquiry into “whether the evidence presents a sufficient disagreement to 21 require submission to a jury or whether it is so one-sided that one party must prevail as a matter 22 of law”: if applying the relevant law to those facts about which no two reasonable fact-finders 23 24 ORDER - C09-1662 PAGE - 2 1 could disagree dictates that the moving party must prevail, then a motion for summary judgment 2 must be granted. Id. at 250–52. 3 III. DISCUSSION 4 A. 5 Plaintiffs argue that when Dr. Yin provided pathology services for PNPA, PNPA was Concerted Action 6 acting in concert with LabCorp. Under Idaho law, Plaintiffs argue, this concerted action makes 7 PNPA and LabCorp jointly and severally liable to Plaintiffs. The Idaho statute on joint and 8 several liability states: 9 10 11 A party shall be jointly and severally liable for the fault of another person or entity or for payment of the proportionate share of another party where they were acting in concert or when a person was acting as an agent or servant of another party. As used in this section, “acting in concert” means pursuing a common plan or design which results in the commission of an intentional or reckless tortious act. 12 Idaho Code § 6-803(5). Plaintiffs fail to show that Defendants’ conduct meets this standard. 13 Plaintiffs do not even argue for the existence of a common plan, but rather arrive—absent 14 authority or analysis—at the conclusion that “LabCorp and PNPA were pursuing a ‘common 15 plan’ to diagnose the patients of LabCorp’s physician clients in Idaho[.]” (Mot. 16 (Dkt. No. 16 110).) A bare assertion such as this falls well short of Plaintiffs required showing that there is no 17 genuine issue of material fact. 18 Plaintiffs attempt to salvage their concerted-action claim with the contention that the 19 “common plan” definition is incomplete. Despite the explicit language of Idaho Code § 8-603(5), 20 Plaintiffs argue that the true definition of concerted action lies in Price v. Aztec, Ltd., 701 P.2d 21 294, 297–98 (Idaho Ct. App. 1985), in which the Court of Appeals adopted the broader language 22 of the Restatement (Second) of Torts § 876. (Mot. 15 (Dkt. No. 110).) This is incorrect. Price 23 predates the statute by five years, which suggests that the Idaho Legislature overturned Price and 24 ORDER - C09-1662 PAGE - 3 1 adopted a narrower definition of concerted action when they drafted § 8-603. Plaintiffs rebuttal 2 that “the legislature is presumed not to intend to overturn long established principles of law” is 3 unavailing. (Reply 2 (Dkt. No. 145) (citing St. Luke’s Reg’l Med. Ctr., Ltd. v. Bd. of Comm’rs (In 4 re O’Brien), 203 P.3d 683, 688 (Idaho 2009).) Plaintiffs have not demonstrated that a definition 5 from a single Court of Appeals case, which has apparently never been cited in a subsequent 6 opinion, is a long established principle of law. 7 B. 8 Plaintiffs next argue that LabCorp is liable for PNPA’s conduct because PNPA was Joint Venture 9 acting as an agent of a “joint venture” formed between LabCorp and PNPA. Under Idaho Law, 10 “Whether a relation of joint adventures exists is primarily a question of fact[.]” Rhodes v. 11 Sunshine Mining Co., 742 P.2d 417, 421 (Idaho 1987). That said, the Idaho Supreme Court goes 12 on to identify several possible hallmarks of a joint venture: 1) a combination—whether equal or 13 not—of property, money, efforts, skill or knowledge in some common undertaking; 2) a contract 14 of joint adventure; and 3) a provision for sharing profits or losses. Id. The only mandatory 15 element in a joint venture is an agreement to enter into an undertaking between parties having a 16 unity of interest in the objects or purposes of the agreement, and a common purpose in its 17 performance. Id.1 The court also held that the intention of parties controls. Id. 18 Plaintiffs list several facts that, they claim, prove the existence of a joint venture. First, 19 PNPA and LabCorp had a contract in which PNPA agreed to provide pathology services and 20 LabCorp agreed to provide supplies. (Hearn Decl. 80–94 (Dkt. No. 111).) Second, Dr. Roger 21 1 Counsel for LabCorp writes: “As an initial matter, it bears repeating that the Idaho Supreme Court states that the factors listed above ‘must be met in order to create a joint venture.’ 23 Rhodes, 742 P.2d at 420–21.” This quotation appears nowhere in the opinion, and appears to be completely fabricated. Counsel for LabCorp continues to find new ways to test this Court’s 24 patience. 22 ORDER - C09-1662 PAGE - 4 1 Graham, the sole member of PNPA, served as LabCorp’s Medical Director. (Id. at 80.) Third, 2 LabCorp retained control over which slides PNPA and Dr. Yin would review. (Id. at 55–56.) 3 Fourth, Plaintiffs provide examples showing that LabCorp and PNPA jointly shared the duty of 4 ensuring that pathologists were properly licensed. (Mot. 20–21 (Dkt. No. 110).) This evidence 5 falls short of the required threshold for summary judgment. 6 The problem with Plaintiffs’ facts is that while they show that PNPA and LabCorp indeed 7 conducted business together, they fail to show that the arrangement was a joint venture, rather 8 than some other business arrangement. There is no evidence that LabCorp and PNPA agreed to 9 share profits or losses. Both LabCorp and PNPA argue that PNPA was merely an independent 10 contractor (LabCorp Resp. 2 (Dkt. No. 129); PNPA Resp. 2 (Dkt. No. 124).) The very first 11 sentence in the agreement between the parties states that it is a “consulting agreement.” (Hearn 12 Decl. 80 (Dkt. No. 111).) Nothing indicates that the parties had any intent to form a joint venture. 13 Further, issues of material fact abound. LabCorp and PNPA dispute Plaintiffs’ 14 characterizations of the relationship between the parties, Dr. Graham’s role as medical director, 15 and parties’ respective roles in ensuring compliance with Idaho law. 16 Plaintiffs have failed to demonstrate that there is no genuine issue of material fact as to 17 the existence of a joint venture. 18 C. 19 Plaintiffs’ final argument is that LabCorp is vicariously liable for PNPA’s actions under a Apparent Authority 20 theory of apparent authority. A principal is liable for the conduct of an agent if a plaintiff can 21 show: 1) conduct by the principal that would lead a person to reasonably believe that another 22 person acts on the principal’s behalf, i.e., conduct by the principal “holding out” that person as 23 its agent; and 2) acceptance of the agent’s service by one who reasonably believes it is rendered 24 ORDER - C09-1662 PAGE - 5 1 on behalf of the principal. Jones v. HealthSouth Treasure Valley Hosp., 206 P.3d 473, 480 2 (Idaho 2009). 3 The most significant problem with Plaintiffs’ argument is that they do not allege that 4 Brad Smith believed Dr. Yin was acting on behalf of LabCorp. Plaintiffs write that LabCorp 5 “clothed [Yin] with the trappings of authority” (Mot. 23 (Dkt. No. 110)) and “‘voluntarily placed 6 [both PNPA and Yin] in such a position’ that Brad Smith would be justified in believing that 7 whoever read his biopsy as noncancerous was acting pursuant to LabCorp authority” (Reply 8 8 (Dkt. No. 145) (citing Bailey v. Ness, 708 P.2d 900, 902 (Idaho 1985)), but these arguments only 9 address the first element of the Jones standard. To satisfy the second part of the standard, 10 plaintiff must allege actual belief in a defendant’s authority, not merely that such belief would be 11 reasonable or justified. The Bailey case confirms this point. There, the court laid out the 12 definition quoted by the Plaintiffs and went on to apply the rules to the facts of the case. The 13 court cited an affidavit in which the plaintiff stated: “Based upon the representations in the letter 14 and the brochures I believed that Mr. Ness was the agent of Defendant Mix-Mill Manufacturing 15 Company[.]” 708 P.2d at 903. This Court is not prescribing a specific form that an affidavit or a 16 motion for summary judgment must take; but some fact to show that Plaintiffs’ belief was actual 17 rather than hypothetical is necessary. Plaintiffs have provided no such facts. 18 Defendant LabCorp also moves for summary judgment on the same claims. As discussed 19 above, however, the Court has identified several issues of material fact with respect to these 20 claims and concludes that summary judgment is inappropriate for either party. 21 D. Motion for Reconsideration and Motion to Stay 22 23 24 ORDER - C09-1662 PAGE - 6 1 Defendants PNPA and Dr. Yin move for reconsideration of the Court’s December 30, 2 2010 order denying their motions for partial summary judgment. (Dkt. No. 119.) Western 3 District of Washington CR 7(h)(1) provides the standard for motions for reconsideration: 4 5 Motions for reconsideration are disfavored. The court will ordinarily deny such motions in the absence of a showing of manifest error in the prior ruling or a showing of new facts or legal authority which could not have been brought to its attention earlier with reasonable diligence. 6 Defendants do not present new facts or legal authority. Rather, they argue that the Court 7 erred in holding that Dr. Yin could face criminal and civil liability under Idaho law for acts that 8 were lawful where they occurred, in Washington. The Court declines to reconsider its opinion for 9 two reasons. 10 With respect to criminal liability, Defendants are simply mistaken that Dr. Yin is subject 11 to criminal penalties under Idaho Code § 54-1804(2). No defendant faces criminal prosecution, 12 and the Court makes no statement as to Dr. Yin’s criminal culpability. 13 With respect to civil liability, Defendants assume the truth of the same arguments that the 14 Court considered and rejected in its prior order. Defendants state: “However, the Court did not 15 determine whether extending Idaho Code § 54-1804(2) over a person outside Idaho’s borders for 16 an act that occurred entirely outside the state of Idaho gives the statute an unconstitutional reach 17 to a physician who was properly practicing medicine within a state where she held a medical 18 license.” (Mot. for Reconsideration 3–4 (Dkt. No. 137) (emphasis added).) As the Court has 19 already held, the action did not occur entirely outside the state of Idaho. A diagnosis is not 20 merely an intellectual exercise existing in a laboratory in isolation. It is necessarily connected to 21 the person a) whose body is being examined, b) who is being told whether they are healthy or 22 sick, and c) who could base critical life decisions on that diagnosis. 23 24 ORDER - C09-1662 PAGE - 7 1 Defendants’ motion to stay fails for the same reason. In order for a district court to certify 2 an order for interlocutory appeal, the requirements are: (1) that there be a controlling question of 3 law, (2) that there be substantial grounds for difference of opinion, and (3) that an immediate 4 appeal may materially advance the ultimate termination of the litigation. In re Cement Antitrust 5 Litigation, 673 F.2d 1020, 1026 (9th Cir. 1982). 6 Defendants argue that there is substantial authority for the proposition that a state may 7 not impose sanctions for lawful conduct in other states. (Mot. to stay 7 (Dkt. No. 138).) Again, 8 this mischaracterizes the facts. For the reasons stated above, the Court has determined that Dr. 9 Yin’s diagnosis was not entirely outside the state of Idaho. Defendants fail to present any 10 difference of opinion on this issue. Accordingly, the Court declines to certify any issue for 11 interlocutory appeal. 12 IV. CONCLUSION 13 For the foregoing reasons, Plaintiffs’ motion is DENIED. (Dkt. No. 110.) Defendant 14 LabCorp’s cross motion for summary judgment on vicarious liability is DENIED. (Dkt. No. 15 130.) Defendants’ motion for reconsideration is DENIED. (Dkt. No. 137.) Defendants’ motion 16 for certification to appeal is DENIED. (Dkt. No. 138.) 17 DATED this 2nd day of February 2011. A 18 19 20 John C. Coughenour UNITED STATES DISTRICT JUDGE 21 22 23 24 ORDER - C09-1662 PAGE - 8
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