Smith, et al. v. Triad of Alabama LLC

Filing 41

ORDERED as follows: (1) The 39 Recommendation is ADOPTED; (2) Dft's 40 objections are OVERRULED; (3) Dft's 26 motion to dismiss is GRANTED in part and Plfs' state-law claim for invasion of privacy is DISMISSED; and (4) Dft's 26 motion to dismiss is otherwise DENIED. Signed by Chief Judge William Keith Watkins on 9/29/2015. (Attachments: # 1 Civil Appeals Checklist) (wcl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
SOUTHERN DIVISION
BRADLEY S. SMITH, JULIE S.
McGEE, ADAM PARKER,
SANDRA W. HALL, and JACK
WHITTLE, individually and on
behalf of all others similarly
situated,
Plaintiffs,
v.
TRIAD OF ALABAMA, LLC,
d/b/a FLOWERS HOSPITAL,
Defendant.

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CASE NO. 1:14-CV-324-WKW
[WO]

ORDER
Five Plaintiffs bring this putative class action against Defendant Triad of
Alabama, LLC, alleging violations of the Fair Credit Reporting Act (“FCRA”), 15
U.S.C. §§ 1681–1681x, and state law claims for negligence, wantonness,
negligence per se, invasion of privacy, and breach of contract. Plaintiffs were
patients of Flowers Hospital, and their claims arise from a third party’s theft of
data, which was entrusted to Defendant and contained their personally identifiable
information and personal health information.

Defendant moved to dismiss the FCRA and state-law claims for lack of
standing. It also moved to dismiss three of the state-law claims (negligence per se,
invasion of privacy, and breach of contract) for failure to state a claim upon which
relief can be granted. Fed. R. Civ. P. 12(b)(1), (6). Pursuant to a referral under 28
U.S.C. § 636, the Magistrate Judge entered a Recommendation on the motion to
dismiss, finding that Plaintiffs have alleged Article III standing, that Plaintiffs have
stated a claim for negligence per se and breach of contract, but that Plaintiffs have
not stated a claim for invasion of privacy. Accordingly, the Magistrate Judge
recommends that the court grant Defendant’s motion to dismiss in part and deny it
in part. (Doc. # 39.)
Defendant

has

lodged

three

objections

to

the

findings

in

the

Recommendation, and the court has conducted an independent and de novo review
of those portions of the Recommendation to which objection is made. See 28
U.S.C. § 636(b).
Defendant initially argues that Plaintiffs are required to allege in nonconclusory terms that they have suffered “monetary damages” and that the Second
Amended Complaint’s allegations are insufficient to allege a cognizable injury for

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standing purposes. But the court finds that the Recommendation correctly applies
binding case law to find that Plaintiffs adequately have alleged standing.
“At the pleading stage, general factual allegations of injury resulting from
the defendant's conduct may suffice” because at the motion-to-dismiss stage, the
court must “presum[e] that general allegations embrace those specific facts that are
necessary to support the claim.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561
(1992). Of particular pertinence, in Resnick v. Avmed, Inc., 693 F. 3d 1317 (11th
Cir. 2012), the plaintiffs, whose social security numbers and other personal data
were obtained from unencrypted laptops stolen from their health care services
provider, “allege[d] that they ha[d] become victims of identity theft and ha[d]
suffered monetary damages as a result.” 693 F.3d at 1323. The Eleventh Circuit
held that those allegations “constitute[d] an injury in fact” for purposes of Article
III standing. Id.
Similarly, as explained in the Recommendation, Plaintiffs allege that they
have become the victims of actual identity theft in that their information has been
used for the filing of fraudulent tax returns, and they set out specific ways in which
they have suffered quantifiable monetary losses as a consequence of the identity
theft. (See Doc. # 39, at 14–16.) Defendant’s contention that more is required
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when the Complaint’s demonstration of standing is challenged does not find
support in either Lujan or Resnick.

The district court decisions upon which

Defendant relies do not convince the court that, on the facts that Plaintiffs allege, a
different result is required in this case. The Recommendation’s findings that the
injury is fairly traceable to Defendant’s action and that a judgment in Plaintiffs’
favor could redress the alleged injury also are well founded.

As the

Recommendation correctly concluded, this action “should proceed to discovery”
with the right of Defendant to reassert its standing challenge on the evidence, if
appropriate. (Doc. # 39, at 19.)
The remaining two Rule 12(b)(6) challenges to the state-law claims carefully
have been considered.

Those grounds do not warrant rejection of the

Recommendation, however. Those arguments may be reasserted at a later juncture
after discovery, if necessary.
Overall, having considered the objections, the court finds that the Magistrate
Judge recited the proper standards, accurately set out the facts, reached the
appropriate result on the legal issues, and correctly applied the law to the facts.
Accordingly, it is ORDERED as follows:

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(1)

The Recommendation (Doc. # 39) is ADOPTED;

(2)

Defendant’s objections (Doc. # 40) are OVERRULED;

(3)

Defendant’s motion to dismiss (Doc. # 26) is GRANTED in part and

Plaintiffs’ state-law claim for invasion of privacy is DISMISSED; and
(4)

Defendant’s motion to dismiss (Doc. # 26) is otherwise DENIED.

DONE this 29th day of September, 2015.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

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