Opinion
2367/13
05-26-2016
Denise R. Abdale, HELENE BUTLER, PAULETTE SCHRAMM, CHARLEEN SOLOMON, LENA VETERE, CHARLES BILLUPS, DIANE PETERMAN, M.D., KATHERINE CROSS, LINDA KIEHL, ELIZABETH CAPORASO, RICHARD ERTEL AND JARRET AKINS, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, Plaintiffs, v. North Shore-long Island Jewish Health System, Inc., NORTH SHORE-LONG ISLAND JEWISH MEDICAL CARE, PLLC, NORTH SHORE-LIJ NETWORK, INC. AND NORTH SHORE UNIVERSITY HOSPITAL, Defendants.
Plaintiffs commenced the within action on behalf of themselves and others similarly situated on February 5, 2013 to recover damages for, among other things, defendants' "failure to adequately protect the confidential personal and medical information of their current and former patients, conduct that ultimately resulted in identity and medical identity data breaches". Plaintiffs are thirteen patients, or relatives of patients, who allegedly received medical services at medical facilities owned or operated by defendants North Shore-Long Island Jewish Health System, Inc., North Shore-Long Island Jewish Medical Care, PLLC,, North Shore-LIJ Network, Inc. and North Shore University Hospital.
The complaint alleged eleven causes of action for (1) negligence per se based upon violations of General Business Law §899-aa; (2) negligence per se based on violations of Public Health Law §18; (3) negligence per se based upon violations of General Business Law §399-dd(4); (4) negligence pe se based on violations of the Health Insurance Portability and Accountability Act of 1996 (HIPPA), Pub. L. No. 104-191, 110 Stat. 1936 (1996 ); (5) negligence per se based on violations of the Health Information Technology for Economic and Clinical Health Act (HITECH), 42 USC §17921-53; (6) violations of General Business Law §349; (7) breach of contract; (8) breach of fiduciary duty; (9) negligence; (10) breach of the implied covenant of good faith and fair dealing; and (11) misrepresentation.
Defendants, prior to serving an answer, filed a notice of removal on March 8, 2013, which removed this action to the United States District Court for the Eastern District of New York (District Court), asserting that a federal jurisdiction question existed and that removal was appropriate under the Class Action Fairness Act of 2005(CAFA). On April 16, 2013, the defendants filed a motion in District Court to dismiss the complaint and on June 10, 2013, plaintiffs filed a motion to remand the matter to this court. The District Court, in an order dated June 14, 2014, denied the plaintiffs' motion to remand with leave to renew 30 days after the conclusion of expedited discovery pertaining to CAFA exceptions, and reserved judgment on the defendants' motion to dismiss (Abdale, et al. v North Shore-Long Island Jewish Health System, Inc., et al., 2014 US Dist Lexis 88881 [EDNY 2014]). The parties were unable to formulate a joint discovery plan as directed by the court, and the matter was assigned to a magistrate. A status conference was held on October 2, 2014, at which time the magistrate made certain rulings pertaining to discovery. However, no discovery was had and defendants conceded that the matter should be remanded to this court, as the 268 individuals they sent letters to regarding the alleged subject data breach were all New York State citizens. On November 13, 2014, the District Court remanded the matter back to this court, without any limit as to the size of the class.
This court, in an order dated August 14, 2015, granted the defendants pre-answer motion to the extent that the first, second, third, fourth, sixth, seventh, eighth, tenth and eleventh causes of action were dismissed in their entirety as to all defendants. The ninth cause of action for common law negligence was dismissed as to defendants North Shore- Long Island Jewish Medical Care, PLLC,, North Shore-LIJ Network, Inc., and was denied as to defendants North Shore-Long Island Jewish Health System, Inc. and North Shore University Hospital (collectively North Shore).
This court, in an order dated February 25, 2016, denied North Shore's motion for reargument with respect to the remaining ninth cause of action for common law negligence.
Plaintiffs now move for an order granting class action certification pursuant to CPLR 901 and 902, on behalf of plaintiffs and all others similarly situated, and for pre-certification discovery.
CPLR 901 and 902 specify the factors which a court must consider before permitting class action certification (see Negrin v Norwest Mortgage, Inc., 293 AD2d 726, 741[2d Dept 2002]; Ackerman v Price Waterhouse, 252 AD2d 179 [1st Dept 1998]). "A class action may be maintained in New York only after the following five prerequisites of CPLR 901(a) have been met: (1) the class is so numerous that joinder of all members is impracticable; (2) common questions of law or fact predominate over any questions affecting only individual members; (3) the claims of the representative parties are typical of the class as a whole; (4) the representative parties will fairly and adequately protect the interests of the class; and (5) the class action is superior to other available methods for the fair and efficient adjudication of the controversy.... Once these prerequisites are satisfied, the court must consider the factors set out in CPLR 902, to wit, the possible interest of class members in maintaining separate actions and the feasibility thereof, the existence of pending litigation regarding the same controversy, the desirability of the proposed class forum and the difficulties likely to be encountered in the management of a class action..."(Ackerman v Price Waterhouse, 252 AD2d at 191; Cooper v Sleepy's, LLC, 120 AD3d 742 [2d Dept 2014]).
CPLR 902 provides that the court may permit a class action to be maintained only if it finds that all of the prerequisites under CPLR 901 have been satisfied (see Cooper v Sleepy's, LLC, supra). The plaintiff bears the burden of showing that the criteria of CPLR 901 and 902 have been satisfied and the determination as to whether to certify a class is ultimately vested within the sound discretion of the trial court (see Cooper v Sleepy's, LLC, supra; Globe Surgical Supply v. GEICO Ins. Co., 59 AD3d 129 [2d Dept 2008]; Bettan v Geico General Ins. Co., 296 AD2d 469 [2d Dept 2002]; Liechtung v Tower Air, Inc., 269 AD2d 363 [2d Dept 2000] Ackerman v Price Waterhouse, supra).
Class Definition
On a motion for class certification, the court must be convinced that the proposed class is capable of being identified (see Colbert v Rank Am., 1 AD3d 393, 394-395 [2d Dept 2003]; Lichtman v Mount Judah Cemetery, 269 AD2d 319, 320-321 [1st Dept 2000]). Here, the class has been defined as "all patients of defendants whose Sensitive Protected Information was stolen and/or misappropriated from defendants during 2010 and continuing at least through 2012." Plaintiffs identify the members of the proposed class the approximately 300 recipients of the letters sent by the defendants. Plaintiffs, however, do not state that all of the members of the proposed class sustained damages as a result of the alleged theft or misappropriation of their personal information, a necessary element of the sole remaining claim of negligence. Plaintiffs, thus, have not properly identified the members of the proposed class.
Numerosity
CPLR 901 (a) provides that a class action may be maintained if, among other things, "1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable." The statute does not specify a minimum number of class members needed to satisfy the numerosity requirement, and there is no mechanical test to determine whether the members of a putative class are sufficiently numerous (see Globe Surgical Supply v GEICO Ins. Co., supra; Friar v Vanguard Holding Corp., 78 AD2d 83 [2dDept 1980]). "Each case depends upon the particular circumstances surrounding the proposed class and the court should consider the reasonable inferences and common sense assumptions from the facts before it" ( Friar v Vanguard Holding Corp., 78 AD2d at 96). As the Court of Appeals has explained, "the legislature contemplated classes involving as few as 18 members (Mem of St Consumer Protection Bd at 8 n 11, Bill Jacket, L 1975, ch 207) where the members would have difficulty communicating with each other, such as where barriers of distance, cost, language, income, education or lack of information prevent those who are aware of their rights from communicating with others similarly situated.' (Mem of St Consumer Protection Bd at 3. Bill Jacket, L 1975, ch 207)." Borden v 400 East 55th Street Associates, L.P., 24 NY3d 382, 389 [2014]). There is also no requirement that the exact number of class members be immediately known (see Smith v Atlas International Tours, 80 AD2d 762 [1st Dept 1981]).
"It is settled law in New York that the numerosity requirement can only be met by a proposed class of individuals who have been aggrieved by the conduct forming the basis of the complaint..." (Alix v Wal-Mart Stores, Inc., 16 Misc 3d 844, 848 [Sup Ct, Albany County 2007], affirmed, Alix v Wal-Mart Stores, Inc., 57 AD3d 1044[3rd Dept 2008]). "Although the court may make common sense assumptions to support a finding of numerosity, it cannot do so on the basis of pure speculation without any factual support" (Jeffries v Pension Trust Fund of Pension, Hospitalization and Benefit Plan of Electrical Industry, 172 FSupp2d 389, 394 [SDNY 2001] [internal quotation marks and citation omitted] ).
Here, plaintiffs assert that the putative class is comprised of at least 300 individuals who received notification letters from the defendants in 2011 and 2012, and may range in the tens of thousands. It is undisputed that in 2011 and 2012, defendants sent notification letters to 36 patients and 11 guarantors whose personal information appeared on certain hospital documents that were recovered by law enforcement authorities in four different states that were in the possession of persons arrested in connection with identity theft. In 2011 and 2012, defendants also sent letters to a total of 221 persons whose names either appeared on a list supplied by law enforcement authorities regarding criminal attempts to obtain false credit card accounts at major department and chain stores, or who had self-reported to the defendants that they had been the victims of some form of identity theft. All of the letters explained that the recipients' personal information may have been compromised, and offered free credit monitoring for one year.
This court finds that the numerosity requirement, has been satisfied, as plaintiffs have identified, at a minimum, a group of 36 persons and 11 guarantors whose confidential information was stolen from the defendants and found in the possession of suspected identity thieves, and may have sustained damages.
Common Questions of Law and Fact
The second prerequisite of CPLR 901 concerns "questions of law or fact common to the class which predominate over any questions affecting only individual members" (CPLR 901 [a][2]; see Karlin v IVF America, Inc., 239 AD2d 562 [2d Dept 1997]). A party seeking class certification must establish more than that issues exist which are common to the entire class and that they are substantial and significant; the party must show that these common issues predominate over unique circumstances that may pertain to each individual's situation. (Alix v Wal-Mart Stores, Inc. 57 AD3d 1044, supra). Class action certification is not warranted where the "proceeding would inevitably splinter into individual trials, and would not achieve economics of time, effort, and expense, and promote uniformity of division [sic: decision] as to persons similarly situated..." (Kleinberg v Frankel, 89 AD2d 556, 557-558 [2dDept 1982], appeal dismissed, 57 NY2d 955 [1982] [internal quotation marks and citations omitted]). Yet, "commonality cannot be determined by any mechanical test' and ...the fact that questions peculiar to each individual may remain after resolution of the common questions is not fatal to the class action. Rather, it is predominance, not identity or unanimity, that is the linchpin of commonality..."(City of New York v Maul, 14 NY3d at 514).
In the case at bar, common issues do not predominate over the issues that are unique to each putative class member. Plaintiffs' sole surviving claim is for common law negligence claim. This claims does not involve a single instance of the theft of data. Rather the alleged data breach occurred in 2010, 2011 and 2012. Each individual plaintiff would necessarily have to establish, prima facie, that his or her personal data was stolen from the defendants due to the alleged negligent acts or omissions of the defendants, and that each individual sustained physical or emotional damages, or financial loss, as a result of said theft or misappropriation. Contrary to plaintiffs' assertions, this is not a simply a matter of calculating the amount of damages. Rather, inevitably, each plaintiff's claim would devolve into a myriad of mini trials. This court therefore finds that plaintiffs have not established common questions of law or fact predominate.
Typicality
CPLR 901 (a) (3) provides that the "claims or defenses of the representative parties are typical of the claims or defenses of the class". Typical claims are those that arise from the same facts and circumstances as the claims of the class members (see Ackerman v Price Waterhouse, 252 AD2d at 201 [claims "arose out of the same course of conduct and are based on the same theories as the other class members, they are plainly typical of the entire class"]; Pruitt v Rockefeller Ctr. Props., 167 AD2d 14, 22 [1st Dept 1991]; Friar v Vanguard Holding Corp., 78 AD2d at 99). Here, plaintiffs have established typicality, as the plaintiffs' claims for negligence arises out of the same course of conduct— the alleged failure to properly maintain and safeguard patients' confidential information, and the theft or misappropriation of that information, resulting in damages—and are based on the same theory of negligence as the other proposed class members.
Adequacy of Representation
The three essential factors to consider in determining adequacy of representation are potential conflicts of interest between the representative and the class members, personal characteristics of the proposed class representative (e.g. familiarity with the lawsuit and his or her financial resources), and the quality of the class counsel (see generally Cooper v Sleepy's, LLC, 120 AD3d at 743-744; Ackerman v Price Waterhouse, 252 AD2d at 179 [1998]; Pruitt v Rockefeller Ctr. Props., 167 AD2d at 25-26). In order to be found adequate in representing the interests of the class, class counsel should have some experience in prosecuting class actions (see Globe Surgical Supply v GEICO Ins. Co., 59 AD3d 129, 135-147 [2d Dept 2008]).
Plaintiffs submit affidavits from nine of the thirteen named plaintiffs, who state in part and in identical terms that: "[a]s a named plaintiff, I will act fairly and adequately protect the interests of the members of the Class in the litigation, and be represented by counsel who has adequate financial resources to undertake our representation and has the professional qualifications to undertake this Class Action litigation". Plaintiffs counsel states in her affirmation, that there can be no conflict of interest between patients who separately obtained medical care from the defendants, and that she has advised "all that she is willing to undertake the financial obligations necessary to pursue this litigation and has the expertise of almost 40 years of litigation experience both as a civil rights attorney and as a personal injury attorney".
Plaintiffs, however, offer no explanation as to why nine class representatives are needed, and have not provided any information with respect to the financial resources of the proposed class representatives. Furthermore, counsel in her affirmation does not state whether she has had any experience in prosecuting class actions. Under the circumstances presented herein, this court finds that plaintiffs have not established adequacy of representation.
Superiority
CPLR 901(a)(5) provides that a class may be certified only if "a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Plaintiffs assert that a class action is superior here, since the relatively insignificant amount of damages suffered by many members of the class makes individual actions cost prohibitive" (Pruitt v Rockefeller Center Properties, Inc., 167 AD2d at 24). Plaintiff's counsel claims that all of the members of the proposed class were victims of some type of credit card fraud and sustained damages, as defendants notification letters offered each individual free credit card monitoring services for a year. Plaintiffs' counsel thus suggests that the class members "could receive a reimbursement for credit card charges and loss of interest from delayed receipt of funds among other losses", and be compensated for their time and efforts to straighten out their credit card accounts and ratings, and their income tax returns and refunds.
It is noted that the nature of injuries allegedly sustained by the named plaintiffs are extremely varied and personal in nature, ranging from tax fraud, to credit card fraud, to emotional distress. Plaintiffs claim that members of the proposed class were all victims of credit card fraud, and that they sustained identical damages, is purely speculative. Furthermore, plaintiff's counsel's assertions that the proposed class numbers in the "hundreds of thousands" is purely speculative. This court therefore finds that the plaintiffs have not demonstrated the superiority of a class action.
Conclusion
This court need not consider the factors set forth in CPLR 902, as plaintiffs have not satisfied all of the prerequisites set forth in CPLR 901. Accordingly, plaintiffs' motion for class action certification pursuant to CPLR 901 and 902, on behalf of plaintiffs and all others similarly situated, and for pre-certification discovery with respect to the putative class, is denied.
Dated: Long Island City, New York May 26, 2016 ______________________________ ROBERT J. McDONALD