Opinion
Case No. 05-CV-1526 (FB)(LB).
January 31, 2006
KHALID KAMAL HASSAN, ESQ., M.D., Brooklyn, NY, For the Plaintiff.
DEBORAH SWINDELLS DONOVAN, ESQ., Gordon Rees LLP, New York, NY, For the Defendants.
MEMORANDUM AND ORDER
Khalid Hassan, M.D. ("Hassan"), sues Dr. Kenneth Spicer ("Spicer") and two corporations: the Intersocietal Accreditation Commission, and its subsidiary, the Intersocietal Commission for the Accreditation of Nuclear Medicine Laboratories (collectively, "IAC/ICANL"). Proceeding under a variety of legal theories, Hassan alleges that he was wrongfully denied accreditation by IAC/ICANL based on a negative report submitted by Spicer. Pursuant to Federal Rule of Civil Procedure 12(b)(6), all defendants move to dismiss the complaint for failure to state a claim upon which relief may be granted. For the following reasons, the motion is granted.
Hassan is a licensed attorney, but is appearing pro se.
I.
The following facts are taken from Hassan's Amended Complaint:
IAC/ICANL "purports to accredit nuclear cardiology laboratories." Am. Compl. ¶ 5. Many insurers and other third-party payors condition reimbursement for nuclear cardiology procedures on IAC/ICANL accreditation.
In 2003, Hassan applied for accreditation of his nuclear cardiology facility in Brooklyn. IAC/ICANL retained Spicer to perform a site inspection, which took place on December 20, 2003; he then submitted a "very unfavorable report speckled with editorializing" to IAC/ICANL. Id. ¶ 7.
Although a complete copy is not appended to, or incorporated by reference in, the Amended Complaint, Hassan quotes liberally from the report, which plainly forms the basis for his claims. "Even where a document is not incorporated by reference, the court may nevertheless consider it where the complaint `relies heavily upon its terms and effect," which renders the document `integral' to the complaint." Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (quoting International Audiotext Network, Inc. v. ATT, 62 F.3d 69, 72 (2d Cir. 1995)). The Court has therefore considered the complete copy of the report attached as Exhibit B to the Declaration of Deborah Swindells Donovan in Support of Defendants' Motion to Dismiss.
In a section of the report entitled "Deficiencies and suggested remediation," Spicer stated that "[t]his reviewer believes that Dr. Hassan would benefit significantly from additional [Continuing Medical Education] training in nuclear cardiology[.]" Donovan Decl., Ex. B, at 14. In support of that belief, Spicer made the following comments:
• I seriously doubt that Dr. Hassan has any idea of how much coronary disease he has missed during the past 11 years.
• Dr. Hassan's knowledge of radiopharmaceuticals, gamma cameras and the nuclear cardiology procedure itself are [sic] limited. We could not carry on even the most superficial discussion of his scan technique and possible alternatives.
• He had no idea what radiation exposure he is providing the gonads of his patients with the between 4 and 4.5 mCi radiothallium doses he routinely administers.Id.; see also Am. Compl. ¶ 9 (quoting these comments).
On April 2, 2004, IAC/ICANL sent Hassan a letter denying accreditation; a copy of Spicer's report was appended to the letter. On March 24, 2005, Hassan instituted the present action.
II.
In considering the defendants' motion to dismiss, the Court must "take as true all of the allegations contained in plaintiff's complaint and draw all inferences in favor of plaintiff." Weinstein v. Albright, 261 F.3d 127, 131 (2d Cir. 2001). "Dismissal is appropriate only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim[s] which would entitle him to relief." Id. (citations and internal quotation marks omitted). Hassan's Amended Complaint consists of nine counts, which the Court will address in turn.
Many of Hassan's claims are based on state law. Jurisdiction over these claims is predicated on diversity: Hassan is a New York resident, Spicer is a South Carolina resident, and IAC and ICANL are Maryland corporations.
In their motion to dismiss, the defendants cite to Maryland and New York law without taking a position on which state's law governs. "Federal courts sitting in diversity look to the choice-of-law rules of the forum state." IBM Corp. v. Liberty Mut. Ins. Co., 363 F.3d 137, 143 (2d Cir. 2004) (citing Curley v. AMR Corp., 153 F.3d 5 (2d Cir. 1998). Under New York law, a choice-of-law analysis is necessary only "[w]here the applicable law from each jurisdiction provides different substantive rules." Curley, 153 F.3d at 12. In the absence of any such conflict, "a New York court will dispense with choice of law analysis; and if New York law is among the relevant choices, New York courts are free to apply it." IBM, 363 F.3d at 143 (citing J. Aron Co. v. Chown, 647 N.Y.S.2d 8 (1st Dep't 1996)). The parties have not pointed out any differences between Maryland and New York law on the pertinent issues; therefore, to the extent Hassan's claims are based on state law, the Court will apply New York law.
A. Count I — Defamation
Hassan alleges that Spicer's report included false statements made with the intent to "defam[e] Plaintiff and injur[e] Plaintiff's reputation as a nuclear cardiologist." Am. Compl. ¶ 15. The elements of a defamation claim are "[1] a false statement, [2] published without privilege or authorization to a third party, [3] constituting fault as judged by, at a minimum, a negligence standard, and [4] either caus[ing] special harm or constitut[ing] defamation per se." Dillon v. City of New York, 704 N.Y.S.2d 1, 5 (1st Dep't 1999) (citing Restatement (Second) of Torts § 558 (1977)).
At least the first and second elements are absent. With respect to the first, the statement must be a false statement of fact: "[a]n expression of pure opinion is not actionable . . . no matter how vituperative or unreasonable it may be." Steinhilber v. Alphonse, 68 N.Y.2d 283, 289 (1986). To constitute "pure opinion," the statement must either include a "recitation of the facts upon which it is based," or at least "not imply that it is based upon undisclosed facts," id.; otherwise, the statement will be deemed a "mixed opinion," which is actionable based on "the implication that the speaker knows certain facts, unknown to his audience, which support his opinion and are detrimental to the person about whom he is speaking." Id. at 290. Whether a statement constitutes fact or opinion is a "[question] of law for the court and one which must be answered on the basis of what the average person hearing or reading the communication would take it to mean." Id.
The comments at issue here were all offered as part of Spicer's subjective review of Hassan's facility, and in support of his "belie[f]," Donovan Decl., Ex. B, at 14, that Hassan required additional training in nuclear cardiology; they also include their factual bases and carry no implication that they are based on additional undisclosed facts. The average person reading the comments would take them to be expressions of Spicer's opinions of Hassan's abilities. Thus, Spicer's comments constitute pure opinion and are not actionable. Cf. id. at 287 (statements that plaintiff was a "failure" and "lack[ing] . . . talent, ambition, and initiative" not actionable); Locke v. Aston, 767 N.Y.S.2d 23 (1st Dep't 2003) (statement that plaintiff's work was "substandard" not actionable).
With respect to the second element, "publication occurs when the [defamatory] words are read `by someone other than the person libeled and the person making the charges.'" Van-Go Transp. Co. v. New York City Bd. of Educ., 971 F. Supp. 90, 102 (E.D.N.Y. 1997) (quoting Fedrizzi v. Washingtonville Cent. Sch. Dist., 611 N.Y.S.2d 584, 585 (2d Dep't 1994)). The only such fact alleged in the Amended Complaint is that Spicer submitted his report to IAC/ICANL. While such communication may satisfy the definition of "publication," see Albert v. Loksen, 239 F.3d 256, 269 (2d Cir. 2001) ("In New York, this rule applies even to statements made by one employee to another."), court have long recognized a qualified privilege for communications between individuals — such as a principal and an agent — "upon a subject in which both have an interest." Liberman v. Gelstein, 80 N.Y.2d 429, 437 (1992) (citation and internal quotation marks omitted); see also Red Cap Valet, Ltd. v. Hotel Nikko (USA), Inc., 709 N.Y.S.2d 578, 579 (2d Dep't 2000). As Spicer was retained by IAC/ICANL to evaluate Hassan and his facility, the comments in his report to IAC/ICANL regarding the evaluation are plainly covered by this "common interest" privilege. Apart from insufficient conclusory allegations of malice, Hassan has alleged no facts which, if proven, would defeat the privilege. See Red Cap Valet, 709 N.Y.S.2d at 579 ("The plaintiff failed to allege any facts from which malice could be inferred and its conclusory allegations of malice were insufficient to overcome the privilege.").
Though not alleged in the Amended Complaint, Hassan claims that Spicer's comments were also "published" when Hassan's employees opened and read IAC/ICANL's denial letter. "[C]ommunication to the plaintiff's agent is a publication." Teichner v. Bellan, 181 N.Y.S.2d 842, 845 (4th Dep't 1959). To be liable for defamation, however, "the defendant must induce or cause publication in some fashion." Van-Go Transp. Co., 971 F. Supp. at 102. In other words, to be "published", the statement must be communicated to a third person "intentionally or by a negligent act." Restatement (Second) of Torts § 577(2) (1977). Hassan alleges no facts tending to show that Spicer either intended Hassan's employees to read his report, or knew or should have known that they would do so.
Count II — Professional Malpractice
Hassan alleges that Spicer "had a duty as a physician to meet a standard of professionalism," Am. Compl. ¶ 24, and that his report "deviated substantially from any professional and ethical standard." Id. ¶ 25. "Generally, a doctor only owes a duty of care to his or her patient," McNulty v. City of New York, 100 N.Y.2d 227, 232 (2003); in the few cases where the duty has been extended to non-patients, "the third party's injury resulted from the physician's performance of the duty of care owed to the patient." Id. at 233 (citing Tenuto v. Lederle Labs., 90 N.Y.2d 606 (1997), and Eiseman v. State of New York, 70 N.Y.2d 175 (1987)). Hassan was not Spicer's patient and does not claim any injury resulting from Spicer's treatment of a patient; therefore, he has no claim for professional malpractice against Spicer.
Count III — Intentional Infliction of Emotional Distress
Hassan alleges that the statements in Spicer's report were "extreme and outrageous and designed to inflict mental harm," Am. Compl. ¶ 26, and that he "suffered severe mental distress as a result of these statements." Id. ¶ 28. "One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress." Fischer v. Maloney, 43 N.Y.2d 553, 557 (1978) (quoting Restatement (Second) of Torts § 46 (1977)). The conduct complained of here, however, is the same conduct at issue in Hassan's defamation claim; "a cause of action alleging intentional infliction of emotional distress should be dismissed `where the conduct complained of falls well within the ambit of other traditional tort liability.'" Demas v. Levitsky, 738 N.Y.S.2d 402, 409 (2d Dep't 2002) (quoting Fischer, 43 N.Y.2d at 557).
Moreover, "intentional infliction of emotional distress predicates liability on the basis of extreme and outrageous conduct, which so transcends the bounds of decency as to be regarded as atrocious and intolerable in a civilized society." Freihofer v. Hearst Corp., 65 N.Y.2d 135, 143 (1985) (citing Fischer, 43 N.Y.2d at 557, and Murphy v. American Home Prods. Corp., 58 N.Y.2d 293 (1983)). Spicer's statements — which, as explained above, do not even give rise to a defamation claim — do not meet this standard.
Count IV — Respondeat Superior
Hassan alleges that IAC/ICANL employed Spicer and that, as a result, they are vicariously liable for his conduct "under the doctrine of Respondeat Superior." Am. Compl. ¶ 29. "The doctrine of respondeat superior renders an employer vicariously liable for torts committed by an employee acting within the scope of the employment[.]" Judith M. v. Sisters of Charity Hosp., 93 N.Y.2d 932, 934 (1999) (emphasis added). Because Spicer's conduct was not tortious, there can be no vicarious liability.
Count V — Negligent Hiring and Retention
Hassan alleges that IAC/ICANL "had a duty to exercise care in interviewing and selecting its site visitors," Am. Compl. ¶ 30, and "knew or in the exercise of ordinary case should have known that Kenneth Spicer was morally incompetent as a site visitor." Id. ¶ 31. Hassan titles this claim "negligent entrustment," but that theory of liability concerns dangerous instruments such as firearms, see, e.g., Hamilton v. Baretta U.S.A. Corp., 96 N.Y.2d 222, 236-37 (2001); the claim is more properly considered as one for negligent hiring and retention.
"An employer may be liable for the negligent hiring and retention of an employee when it knew or should have known of the employee's propensity to commit injury." T.W. v. City of New York, 729 N.Y.S.2d 96, 98 (1st Dep't 2001) (emphasis added). Since, as explained in the analysis of Counts I through III, the Amended Complaint fails to allege any cognizable injury caused by Spicer, Hassan cannot maintain a claim that IAC/ICANL was negligent in retaining him.
Count VI — Declaratory Judgment
Hassan asks the Court to "declare ICANL incompetent as an accreditation agency," Am. Compl. ¶ 32. The Declaratory Judgment Act, 28 U.S.C. § 2201, places an additional "remedial arrow in the district court's quiver," Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995); it is not, however, a "source of substantive rights." Dow Jones Co. v. Harrods, Ltd., 237 F. Supp. 2d 394, 431 (S.D.N.Y. 2002). As explained in the remainder of this Memorandum and Order, the Amended Complaint offers no substantive basis on which to make the requested declaration.
Count VII — Antitrust
Hassan alleges that IAC/ICANL's accreditation process violates § 1 of the Sherman Act, 15 U.S.C. § 1, because it is "anticompetitive and in restraint of trade." Am. Compl. ¶ 37. "[I]t is not intrinsically an antitrust violation for an organization to limit its endorsement to those who meet its published standards unless the standard itself is shown to be anticompetitive in purpose or effect." DM Research, Inc. v. College of Amer. Pathologists, 170 F.3d 53, 58 (1st Cir. 1999); see also Greater Rockford Energy Tech. Corp. v. Shell Oil Co., 998 F.2d 391, 396 (7th Cir. 1993) ("[T]he failure of a private, standard-setting body to certify a product is not, by itself, a violation of § 1."); Consolidated Metal Prods., Inc. v. American Petroleum Inst., 846 F.2d 284, 292 (5th Cir. 1988) ("A trade association that evaluates products and issues opinions, without constraining others to follow its recommendations, does not per se violate section 1 when, for whatever reason, it fails to evaluate a product favorably to the manufacturer.").
The standards at issue here bear no indicia of anticompetitive purpose or effect:
[I]n the cases that have condemned quality standards as anticompetitive . . ., the principal concern has been the use of standards setting as a predatory device by some competitors to injure others; normally there is a showing that the standard was deliberately distorted by competitors of the injured party, sometimes through lies, bribes, or other improper forms of influence, in addition to a further showing of market foreclosure.DM Research, 170 F.3d at 58 n. 3 (citing cases). IAC/ICANL does not compete with Hassan. Moreover, while Hassan alleges that many insurers and other third-party payors require accreditation, this requirement is the result of voluntary, unilateral action, not of a "conspiracy . . . in restraint of trade or commerce." 15 U.S.C. § 1.
Count VIII — False Advertising
Hassan alleges that IAC/ICANL accreditation violates § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), in that it amounts to false advertising because "IAC's faulty methods and its lack of resources could not in fact properly measure or assure quality." Am. Compl. ¶ 45. "[T]o have standing for a [Lanham Act] false advertising claim, the plaintiff must be a competitor of the defendant and allege a competitive injury," Telecom Int'l America, Ltd. v. ATT Corp., 280 F.3d 175, 197 (2d Cir. 2001) (quoting Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 873 (10th Cir. 1995)). As noted, IAC/ICANL does not compete with Hassan.
Count IX — Due Process
Hassan alleges that "IAC's methods intrude into the liberty interests this plaintiff has in his medical license and attempts [sic] to impose unwarranted and deleterious restrictions in its exercise with due process of the law." Am. Compl. ¶ 48. "A threshold requirement of [a due-process claim] is a demonstration that in denying plaintiff's constitutional rights, the defendant's conduct constituted state action." Desiderio v. NASD, 191 F.3d 198, 206 (2d Cir. 1999). When the defendant is not a governmental entity, "state action may be found if, though only if, there is such a `close nexus between the State and the challenged action' that seemingly private behavior `may be fairly treated as that of the State itself.'" Brentwood Acad. v. Tennessee Secondary School Athletic Ass'n, 531 U.S. 288, 295 (2001) (quoting Jackson v. Metropolitan Edison Co., 419 U.S. 345, 349 (1974)).
The alleged connection to state action here is that IAC/ICANL accreditation is a prerequisite to payment by many insurers and other third-party payors, "many of whom are carriers for the [M]edicare and Medicaid programs." Am. Compl. ¶ 48. This is not the sort of "close nexus" that transforms private conduct into state action. Cf. Blum v. Yaretsky, 457 U.S. 991, 1006 (1982) (holding that decision of private nursing homes to discharge and transfer Medicaid patients was not state action).
III.
"[A] court should not dismiss [a pro se] complaint without granting leave to amend at least once when a liberal reading of the complaint gives any indication that a valid claim might be stated." Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 1999). By contrast, leave to amend should be denied when repleading would be futile. See id.
The defects in the Amended Complaint are not merely the result of inartful pleading; rather, they indicate substantive obstacles to stating claims against the defendants. Leave to amend would be futile.
IV.
The defendants' motion to dismiss is granted.SO ORDERED.