Steele-Warrick v. Microgenics Corp.

677 F.Supp.3d 107

Nadezda STEELE-WARRICK and Darryl Schultz,individually and on behalf of all others similarly situated, Plaintiffs, v. MICROGENICS CORPORATION, Thermo Fisher Scientific, Inc.,Anthony Annucci, James O'Gorman, Charles Kelly, Richard Finnegan,Donald Venettozzi, Anthony Rodriguez, Corey Bedard, and Jennifer Booth, Defendants.

Case No. 19-cv-6558

United States District Court, E.D. New York

Signed June 12, 2023

For the Plaintiffs: MATTHEW D. BRINCKERHOFF, Emery Celli Brinckerhoff, 600 Fifth Avenue, 10th Floor, New York, NY 10020, KAREN L. MURTAGH, Prisoners' Legal Services of New York, 41 State Street, Suite M112, Albany, NY 12207.

For Defendants Microgenics Corporation and Thermo Fisher Scientific, Inc.: ERICA MEKLES, Bowman and Brooke LLP, 317 George Street, Suite 320, New Brunswick, NJ 08901.

MEMORANDUM AND ORDER

BLOCK, Senior District Judge:

Plaintiffs Nadezda Steele-Warrick ("Steele-Warrick") and Darryl Schultz ("Schultz"), individually and on behalf of a putative class (collectively "Plaintiffs"), brought this action against Defendants Microgenics Corporation, Thermo Fisher Scientific, Inc. (collectively "Microgenics Defendants"), and current and former employees of the New York State Department of Corrections and Community Supervision ("DOCCS"). Plaintiffs allege that they were disciplined on the basis of false-positive drug test results produced by Microgenics Defendants' testing system while in DOCCS's custody.

By an Order dated March 22, 2021 (the "2021 Order"), Steele-Warrick v. Microgenics Corp., No. 19 CIV. 6558 (VMS), 2021 WL 1109052, (E.D.N.Y. Mar. 22, 2021), this Court denied Microgenics Defendants' motion to dismiss Plaintiffs' negligence claim. Since then, Plaintiffs have amended their complaint to add constitutional and state business law claims against Microgenics Defendants. Microgenics Defendants now move to dismiss Plaintiffs' new constitutional claims and renew their request to dismiss Plaintiffs' negligence claim and strike Plaintiffs' class allegations.¹ For the following reasons, these motions are denied except as to Plaintiffs' Eighth Amendment claim.

I. ALLEGATIONS AGAINST MICROGENICS DEFENDANTS

The Court assumes the parties' familiarity with the allegations and recounts only those pertinent to resolving the instant motions. The allegations against Microgenics Defendants from the First Amended Complaint are detailed in the 2021 Order. Id. at *1-9.² Since the 2021 Order, Plaintiffs have amended their Complaint to include additional allegations against Microgenics Defendants. Relevant portions of the Plaintiffs' allegations, taken as true, are briefly outlined below. See Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007).³

Microgenics Defendants manufactured a system for urinalysis drug testing ("Indiko Plus") and contracted with DOCCS for its use in New York State correctional facilities. Plaintiffs allege that Microgenics Defendants redrafted DOCCS's internal policy and procedures governing drug testing (the "Directive") to accommodate for Indiko Plus's use, installed and maintained testing machines at 52 DOCCS facilities, trained DOCCS personnel to use Indiko Plus, testified at inmate disciplinary proceedings regarding Indiko Plus's reliability, and answered questions from DOCCS administrators regarding its performance. Plaintiffs allege that throughout this relationship, Microgenics Defendants misled DOCCS as to Indiko Plus's reliability and proper use. Plaintiffs claim that they failed to make clear that Indiko Plus "should be used as an initial screen only, and confirmatory testing is required to verify any positive result," supporting its use to discipline inmates despite knowing that DOCCS was not using confirmatory testing pursuant to Indiko Plus's standards. TAC ¶ 48-49.

Plaintiffs allege that DOCCS lacked the capability to understand risk factors for false-positive test results, including cross-reactivity with non-illicit medications and proper cutoff levels for substances contained in urine samples. DOCCS had instead relied on its testing suppliers to provide this expertise, a dependence of which Microgenics Defendants were aware. Plaintiffs also allege that Microgenics Defendants reassured DOCCS of Indiko Plus's reliability after DOCCS personnel raised concerns about testing irregularities, at one point failing to inform DOCCS that certain inmate urine samples had been confirmed to be false positives.

II. LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Courts may consider the complaint and materials attached thereto in making this determination. Kalyanaram v. Am. Ass'n of Univ. Professors at New York Inst. of Tech., Inc., 742 F.3d 42, 44 n.1 (2d Cir. 2014). A claim is facially plausible when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft, 556 U.S. at 678, 129 S.Ct. 1937. While "detailed factual allegations," are not necessary, "provid[ing] the grounds of . . . entitlement to relief requires more than labels and conclusions." Bell Atl. Corp., 550 U.S. at 555, 127 S.Ct. 1955.

III. DISCUSSION

a. Plaintiffs' Negligence Claim

Microgenics Defendants again ask this Court to dismiss Plaintiffs' negligence claim on the basis that they owed Plaintiffs no duty of care, after this argument was rejected in the 2021 Order. In support, they point to findings in the since-released IG report that DOCCS ignored instructions included in test packages calling for confirmatory testing. Plaintiffs allege that Microgenics Defendants owed them a duty "to ensure that the Indiko Plus urinalysis analyzers were used in accordance with applicable standards and produced accurate and reliable test results." TAC ¶ 341.

Claims for negligence in New York require that a plaintiff plead "(1) a duty owed by the defendant to the plaintiff, (2) a breach thereof, and (3) injury proximately resulting therefrom." Pasternack v. Lab. Corp. of Am. Holdings, 27 N.Y.3d 817, 825, 37 N.Y.S.3d 750, 59 N.E.3d 485 (2016) (internal quotation omitted). "In the absence of a duty, as a matter of law, there can be no liability." Id. The existence and scope of a duty is a question of law. Id. "[A] contractual relationship by itself generally is not a source of tort liability to third parties," unless "the contracting party, in failing to exercise reasonable care in the performance of its duties, launches a force or instrument of harm." Landon v. Kroll Lab. Specialists, Inc., 22 N.Y.3d 1, 6, 977 N.Y.S.2d 676, 999 N.E.2d 1121 (2013) (cleaned up). This inquiry is grounded in "logic, science, weighty competing socioeconomic policies and sometimes contractual assumptions of responsibility" with the aim of dividing "societal risks" and loss "on a fair, prudent basis." Palka v. Servicemaster Mgmt. Servs. Corp., 83 N.Y.2d 579, 585, 611 N.Y.S.2d 817, 634 N.E.2d 189 (1994).

In Landon, the New York Court of Appeals held that a laboratory that processed a prison inmate's urine sample owed him a duty to "keep[ ] with relevant professional standards," where the laboratory was in "the best position to prevent false positive results." Landon, 22 N.Y.3d at 6-7, 977 N.Y.S.2d 676, 999 N.E.2d 1121. The Court elaborated in Pasternack that a testing program administrator or laboratory can owe a duty to testing subjects when they fail "to adhere to professionally accepted scientific testing standards," or standards that "implicate the scientific integrity of the testing process." 27 N.Y.3d 817 at 826-27, 37 N.Y.S.3d 750, 59 N.E.3d 485. Aside from the 2021 Order, no court has addressed whether a test manufacturer owes a similar duty.

The 2021 Order found that Plaintiffs "plausibly allege[d] that Defendants were in the best position to prevent false positive results" under Landon because DOCCS relied on Microgenics' "warranties that [Indiko Plus] would be provided consistent with relevant professional standards" and exercised "significant authority" over testing. Steele-Warrick, 2021 WL 1109052, at *10. It highlighted Microgenics Defendants' contractual agreement "to hold [New York] and DOCCS harmless with respect to all liabilities arising out of any third-party claim in any way connected with [Microgenics Defendants'] performance of the Contract 'including negligence, active or passive or improper conduct of the Contractor, its officers, agents . . . or employees.' " Id. at *6 (emphasis added). It also noted that Microgenics Defendants were "to abide by applicable drug testing standards" to "ensure that the testing was accurate and reliable." Id. at *11; TAC ¶ 43.

Microgenics Defendants now argue that the IG Report shows that they are neither a program administrator nor a laboratory, and therefore cannot owe a duty under Landon and Pasternack. They also contest that they were in "the best position to prevent false positive results." Landon, 977 N.Y.S.2d 676, 999 N.E.2d at 1124.

First, Microgenics Defendants' formulistic argument regarding Landon and Pasternack is misguided. Pasternack does not restrict the universe of third-party liability to laboratories and program administrators, neither of which it defines. It merely clarifies when laboratories and program administrators owe a duty, explaining that liability "does not encompass every step of the testing process" and that violating federal testing regulations "unrelated to the actual performance of scientific testing" is not alone sufficient to create liability. Pasternack, 27 N.Y.3d at 820, 826-27, 37 N.Y.S.3d 750, 59 N.E.3d 485. Even if Pasternack did limit liability to laboratories and administrators, Plaintiffs plausibly allege...