Wells v. Enter. Leasing Co. of Norfolk/Richmond, LLC

500 F.Supp.3d 478

Christopher WELLS, Plaintiff,

v.ENTERPRISE LEASING CO. OF NORFOLK/RICHMOND, LLC, Defendants.

CIVIL ACTION NO. 2:20-cv-305

United States District Court, E.D. Virginia, Norfolk Division.

Signed November 12, 2020

Wayne Barry Montgomery, Kalbaugh Pfund & Messersmith PC, Richmond, VA, for Plaintiff.

Scott Andrew Siegner, Alexander Tevis Marshall, Ogletree Deakins Nash Smoak & Stewart PC, Richmond, VA, for Defendants.

MEMORANDUM OPINION AND ORDER

RAYMOND A. JACKSON, United States District Judge Before the Court is Defendant's Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6). ECF No. 6. The Court finds that a hearing is not necessary. Having reviewed the parties' filings, this matter is ripe for judicial determination. For the following reasons, Defendant's Motion to Dismiss is GRANTED.

I. FACTUAL AND PROCEDURAL HISTORY

The following facts taken from Christopher Well's ("Wells" or "Plaintiff") Complaint are considered true and cast in the light most favorable to Wells. ECF No. 1 at Exhibit 4; see also, Adams v. Bain , 697 F.2d 1213, 1219 (4th Cir. 1982).

Wells was employed by Enterprise Leasing Co. of Norfolk/Richmond, LLC ("Enterprise" or "Defendant"). On March 28, 2020, Andrea Mann ("Mann"), the Group Human Resource Manager at Enterprise, called Wells and advised him that she had been informed by an anonymous complaint that Wells had been exposed to a family member who had tested positive for COVID-19. ECF No. 1 at Exhibit 4 at ¶ 6. During the same phone conversation, Wells advised Mann that he planned to see a doctor the following week while he was not scheduled to work. Id. at ¶ 7. On the call, Mann asked Wells to keep Enterprise informed about his medical results and the medical test results for his family member. Id. at ¶ 8. Wells' family member is not an employee at Enterprise. Wells "refused to provide the medical test results of his family member nor would he provide Enterprise with information regarding his family member's medical status." Id. at ¶ 9. On April 2, 2020, Enterprise fired Wells. Mann and Enterprise advised Wells that "his refusal to get tested and refusal to provide Enterprise with medical tests results and medical information related to his family member was ‘gross insubordination’ and that his insubordination was the grounds for the termination of his employment." Id. at ¶ 11.

On May 11, 2020, Wells initiated a suit seeking $250,000 in compensatory damages and $200,000 in punitive damages in the Circuit Court for the City of Norfolk. Id.; see also, Christopher Wells v. Enterprise Leasing Co. of Norfolk/Richmond, LLC and Andrea Mann , Case No. 20-4595. Count I alleges Wrongful Termination in violation of Virginia common law, pursuant to Mitchem v. Counts , 259 Va. 179, 523 S.E.2d 246 (2000). Id. at ¶ 18. On June 18, 2020, Enterprise removed the case to the United States District Court for the Eastern District of Virginia, Norfolk Division. ECF No. 1. On June 25, 2020, Enterprise filed a Motion to Dismiss Wells' Complaint for failure to state a claim. ECF Nos. 6, 7. Wells opposed the motion on July 9, 2020. ECF No. 8. On July 15, 2020, Enterprise filed a reply. ECF No. 9.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of actions that fail to state a claim upon which relief can be granted. The United States Supreme Court has stated that in order "[t]o survive a motion to dismiss, 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) ). Specifically, "[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." Id. at 678, 129 S.Ct. 1937. Moreover, at the motion to dismiss stage, the court is bound to accept all of the factual allegations in the complaint as true. Id. However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Assessing the claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937. In considering a Rule 12(b)(6) motion to dismiss, the Court cannot consider "matters outside the pleadings" without converting the motion to a summary judgment. Fed. R. Civ. P. 12(d). Nonetheless, the Court may still "consider documents attached to the complaint ... as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Sec'y of State for Defence v. Trimble Navigation Ltd. , 484 F.3d 700, 705 (4th Cir. 2007) ; see also Fed. R. Civ. P. 10(c).

III. DISCUSSION

A. Subject Matter Jurisdiction and Choice of Law

As an initial matter, the Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332. Wells alleges wrongful termination based on Virginia Law. ECF No. 1 at Exhibit 1 at ¶ 12-20. However, Wells wrongful termination claim is that Wells allegedly refused to engage in a criminal violation of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). Accordingly, Wells wrongful termination claim necessarily turns on the Court's construction and interpretation of HIPAA. The law is well-established that "[r]egardless of the allegations of a state law claim, ‘where the vindication of a right under state law necessarily turn[s] on some construction of federal law,’ the claim arises under federal law and thus supports federal question jurisdiction under 28 U.S.C. § 1331." North Carolina v. Alcoa Power Generating, Inc. , 853 F.3d 140, 146 (4th Cir. 2017) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation Tr. for S. Cal. , 463 U.S. 1, 9, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983) ). Therefore, the Court has sufficient basis for federal question jurisdiction.

Additionally, there is diversity jurisdiction under 28 U.S.C. § 1332. Enterprise is a Delaware limited liability company that is licensed to conduct business in the Commonwealth of Virginia. ECF No. 1 at Exhibit 1 at ¶ 4. No member of Enterprise is a citizen of the Commonwealth of Virginia. Id. at ¶ 5-6. Wells is citizen of the Commonwealth of Virginia with residence in Virginia Beach, Virginia. The amount in controversy exceeds $75,000. Id. Exhibit 4 at ¶ 11. In a diversity action, district courts apply federal procedural law and state substantive law. See Gasperini v. Ctr. for Humanities, Inc. , 518 U.S. 415, 427, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996). Federal courts sitting in diversity jurisdiction apply the choice of law rules in the state in which it sits. Klaxon v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) (noting that forum state's choice of law rules is substantive).

Here, Federal Law is applicable to Count I in the Complaint as it pertains to HIPAA and State Law is applicable as it pertains to Wells' allegation that he was wrongly terminated.

B. Plaintiff Would Not Face Direct or Indirect Criminal Liability Under HIPAA

1. Covered Entities are Liable

First, Plaintiff alleges a cause of action under HIPAA.

42 U.S.C. § 1320d-6 (2018). Specifically, Plaintiff alleges that HIPAA makes it a criminal act for the plaintiff to disclose "it is a federal crime to disclose individually identifiable health information of another." ECF No. at Exhibit 1 at ¶ 15.

Section 1320d-6(a) provides as follows:

(a) A person¹ who knowingly and in violation of this part—

(1) uses or causes to be used a unique health identifier;

(2) obtains individually identifiable health information² relating to an individual; or

(3) discloses individually identifiable health information to another person, shall be punished as provided in subsection (b) of this section [setting forth criminal penalties].³ For purposes of the previous sentence, a person (including an employee or other individual) shall be considered to have obtained or disclosed individually identifiable health information in violation of this part if the information is maintained by a covered entity (as defined in the HIPAA privacy regulation described in section 1320d–9(b)(3) of this title) and the individual obtained or disclosed such information without authorization.

42 U.S.C. § 1320d-6 (2018). As a general matter, "HIPAA governs the confidentiality of medical records and regulates how and under what circumstances ‘covered entities’ may use or disclose ‘protected health information’ about an individual." United States v. Elliott , 676 F. Supp. 2d 431, 436 (D. Md. 2009) (emphasis added ); see also, Miesegaes v. Allenby , 2020 WL 2542064, at *4, 2020 U.S. Dist. LEXIS 89806, at *11 (C. D Cal. March 13, 2020) ("HIPAA prohibits disclosure of identifiable protected health information by ‘covered entities,’ including health care providers, except as specifically permitted or required by HIPAA.") (emphasis added ). The term "covered entities" is narrowly defined to include health care plans, health care clearinghouses, and health care providers. See 42 U.S.C. § 1320d1(a)(1)-(3) ("Any standard adopted under this part [ 42 U.S.C. §§ 1320d, et seq. ] shall apply, in whole or in part, to the following persons: (1) a health plan; (2) a health clearing house; (3) a health care provider who transmits any information in electronic form in connection with a transaction referred to in section 1173(a)(1)"); see also, Richard v. Tallant , 2020 WL 3035223, at *3, 2020 U.S. Dist. LEXIS 98981, at *6 (4th Cir. June 5, 2020) (holding that HIPAA only extends to "covered entities ," such as health plans, health clearing house, or healthcare provider, and cannot be "validly asserted" against individuals.) (emphasis added ).

Stated simply, if a health plan, health clearing house, or a healthcare provider disclose identifiable...