Hospital BAC disclosure prompts tort privacy claims

Photo by Marco Verch (CC BY 2.0)

The federal district court in Montana in December refused to dismiss an informational privacy claim against police, highlighting the space for state law to effect personal privacy protection in the United States.

Plaintiff Harrington was hospitalized after police found her unresponsive in her parked car. In the complaint, she alleged that sheriff's deputies "joked about her incapacitated condition and played along when nurses asked them to guess her blood alcohol content" (BAC). A nurse thereby disclosed Harrington's BAC, and, the complaint alleged, deputies then coaxed the record from a doctor. Harrington was charged with driving under the influence.

Subsequently, Harrington sued county officials and Madison Valley Hospital, the latter on theories of state statutory information privacy and common law invasion of privacy, negligence, and negligent infliction of emotional distress. The hospital sought dismissal on grounds that the federal Health Insurance Portability and Accountability Act (HIPAA), cited by the plaintiff in the complaint, affords no private right of action.  The federal district court, per Chief Judge Brian Morris, denied the motion to dismiss, recognizing that while HIPAA does not itself authorize private enforcement, it also does not preclude state law from providing greater privacy protection.

The case caught my attention because its facts point to something for which I've advocated, the use of tort law to fill gaps in informational privacy protection in the United States.  The law has not kept up with Americans' expectations of privacy, much less the norms of the world, but the common law should be sufficiently dynamic to reflect the evolving social contract.  I see drift in this direction in the expansion of medical fiduciary duty in emerging precedents in the states, such as Connecticut's Byrne v. Avery Center for Obstetrics & Gynecology, P.C., in 2018.

A theory as tenuous as negligent infliction of emotional distress, "NIED," can't usually stand on its own.  And tortious invasion of privacy has a poor track record in protecting personal information that is already in limited circulation.  However, paired with a medical provider's fiduciary duty and bolstered by a privacy violation recognized in regulation, either tort theory might be ripe for redefinition.

The case is Harrington v. Madison County, No. 2:21-cv-00015 (D. Mont. Dec. 6, 2021).  Hat tip to Linn Foster Freedman at Robinson+Cole's Data Privacy + Cybersecurity Insider.

Sovereign immunity shields Texas power overseer from liability for now: not so privatized after all

NASA satellite image of Houston with area blackouts, Feb. 16

The cold-induced electric-power disaster in Texas is raising questions about the accountability of "ERCOT," the Electric Reliability Council of Texas.

ERCOT is responsible for about 90% of the Texas electricity market.  During the storm and record cold of last week, Texans experienced rolling outages and some prolonged blackouts.  Deaths and injuries, from hypothermia and carbon monoxide poisoning, are attributed to the cold and blackouts, as well as billions of dollars in property damage.  Governor Greg Abbott has blamed ERCOT for failure to prepare the state's electrical system for a foreseeable winter weather event and promised an investigation.

National Weather Service Tower Cam, Midland, Feb. 20

Naturally, many Texans are wondering about legal liability for ERCOT.  I noticed a tweet from Houston Chronicle business reporter Gwendolyn Wu, who said that ERCOT has "sovereign immunity."  I found that hard to believe.  Wu cited a Chronicle story (subscription), from the bygone innocent age of fall 2019, in which business writer L.M. Sixel said just that.  As it turns out, the problem of ERCOT immunity is sitting, undecided, in the Texas Supreme Court at this very moment.

Legally, ERCOT is a nonprofit corporation formed in 1970 to oversee electric power distribution in Texas.  Because Texas has its own grid that doesn't cross state lines, the power system is not regulated by the federal government.  ERCOT has been at the heart of Texas's love affair with deregulation and privatization, a push that began in earnest in 1999 and found no bounds at the threshold of critical infrastructure.  State legislation in 1999 called on the Texas Public Utility Commission (PUC) to designate an exclusive "independent system operator" to oversee the Texas power grid, and ERCOT easily got the job that it more or less already had.

Yet ERCOT is neither wholly private nor a success story.  Its near monopoly control of Texas power comes with PUC oversight.  Despite that oversight, ERCOT has posted a remarkable record of abuse and failure.  As Sixel recounted in the Chronicle, executives went to prison in the 20-aughts for a financial fraud aggravated by lack of transparency and exposed by whistleblowers.  About the same time, Texans saw rolling blackouts, even while their deregulated electricity prices shot 30% over the national average.  Then, in 2011, a winter storm with single-digit temperatures caused blackouts across Texas.  It was that event that led federal regulators to recommend that ERCOT and the PUC winterize the system, a recommendation that was never heeded.

Frmr. Gov. Rick Perry tours ERCOT on March 14, 2012.

(photo by Gov. Rick PerryCC BY-NC-ND 2.0)

Apparently, an embarrassing record has not dampened the mood at ERCOT.  The "nonprofit," which is run by a board majority comprising power industry heavyweights, brought in $232m in revenue in 2018, Sixel reported in 2019, and chief executive Bill Magness took home $750,000 in 2017.  Sixel described ERCOT HQ (pictured below) near real-estate-red-hot Austin: "Its sprawling, modern glass and metal building has plush interiors with on-site fitness facilities that include a gym and sport court for volleyball, basketball and pickleball."  In contrast, the PUC "operates from two floors of crammed cubicles in ... a dilapidated structure close to the campus of the University of Texas at Austin.  DeAnn Walker, the commission chairman, earns $189,500 a year."

It was also in 2011 that ERCOT set out toward the immunity question now pending.  After the rolling outages of the 20-aughts, ERCOT wanted to see new sources of power added to the system.  Enter Panda Power, which invested $2.2bn to construct three power plants.  Alas, Panda later alleged in court, ERCOT had deliberately inflated market projections to incentivize investments; the power plants delivered only a fraction of the anticipated returns.  Panda sued ERCOT for $2.7bn in damages on theories including fraud and breach of fiduciary duty.

After almost a year of defending the case, ERCOT devised a new theory of sovereign immunity in Texas common law.  ERCOT performs exclusively governmental, not private, functions, it alleged, and works wholly under the control of the PUC.  Despite its statutory role as an "independent system operator," ERCOT insisted that it is not an independent contractor.  Rather, ERCOT styled itself as "a quasi-governmental regulator, performing an essential public service."  Panda argued that ERCOT is not entitled to sovereign immunity because it is "a non-governmental, non-profit corporation that receives no taxpayer dollars and retains discretion," particularly, Panda exhorted, when it furnishes false market data to power providers. 

In April 2018, reversing the district court, the Texas Court of Appeals agreed with ERCOT.  In a functionalist analysis, the intermediate appellate court grounded its decision in the legislative delegation of ultimate fiscal authority over ERCOT in the PUC.  The court wrote (citations omitted):

[A]s to separation-of-powers principles, [the statute] shows the legislature intended that determinations respecting system administration fees and ERCOT's fiscal matters, as well as any potential disciplinary matters or decertification, should be made by the PUC rather than the courts. Further, as the certified [independent service operator] provided for in [the statute], ERCOT is a necessary component of the legislature's electric utility industry regulatory scheme. A substantial judgment in this case could necessitate a potentially disruptive diversion of ERCOT's resources or a decertification of ERCOT not otherwise intended by the PUC.

According to Sixel, that decision rendered ERCOT "the only grid manager in the nation with sovereign immunity."

Pixabay image by Clker-Free-Vector-Images

Panda appealed to the Texas Supreme Court, which heard oral argument (MP3, PDF) on September 15, 2020, but has not ruled.

Meanwhile, a curious procedural imbroglio arose in the lower courts to gum up the works.  While Panda was busy lodging its appeal with the Texas Supreme Court, it didn't head off the intermediate appellate court's mandamus order to the district court to dismiss the case, which it did.  Panda then appealed that dismissal on a separate track, and the intermediate appellate court stayed oral argument on that second appeal, waiting to see what the Supreme Court would do with the first appeal.

One month after the Supreme Court heard oral argument, it ordered the parties to file supplemental briefs, which they did in November 2020 (ERCOT, Panda), to answer whether the district court's dismissal mooted the case in the Supreme Court.  Panda insisted that there is a live controversy still before the court.  ERCOT wrote that Panda should have asked for a stay of dismissal in the lower court, and it didn't.  Bad Panda.

House chamber in the Texas Capitol (picryl)

It looks to my outsider eyes like the Supreme Court badly wants not to decide the case.  And that was before the winter storm of 2021.  If the court does kick the case, the intermediate appellate court's ruling for sovereign immunity will stand, and any 2021 complainants will be out of luck.  ERCOT's supplemental brief read anyway with a good deal of confidence about how things would go in the Supreme Court, so maybe it's only a question of which appellate court will bear the people's ire.  While the courts dithered, Panda Energy, a division of Panda Power Funds, folded, and Texas froze.

The best answer to the people's woes lies in their state legislature.  Maybe Texas legislators can be made to understand that privatization is not really privatization when the reins, along with sovereign immunity and a market monopoly, are simply handed over to a nominally independent and hardly nonprofit oligarchy.

Or maybe legislators are on their way to Cancún and points warmer.

The case is In re Panda Power Infrastructure Fund, LLC, No. 18-0792 (now pending), appealing Panda Power Generation Infrastructure Fund, LLC v. Electric Reliability Council of Texas, Inc., No. 05-17-00872-CV (Tex. Ct. App. 5th Dist. Dallas Apr. 16, 2018), reversing No. CV-16-0401 (Tex. Dist. Ct. 15th Grayson County 2017).  The latter appeal is Electric Reliability Council of Texas v. Panda Power Generation Infrastructure Fund, LLC, No. 05-18-00611-CV (oral argument stayed Aug. 20, 2019).

[UPDATE, April 3, 2021.] The Texas Supreme Court ducked the immunity issue in ERCOT v. Panda with a "hotly contested" "non-decision."  DLA Piper has the story (Mar. 29, 2021).

Mary Trump sues President, family, alleges three decades' fraud in oversight of her father's estate

Author of Too Much and Never Enough (2020), Mary L. Trump on Thursday sued her uncle, the President, and her aunt, retired federal judge Maryanne Trump Barry, for ongoing fraud and breach of fiduciary duty in oversight of the estate of Mary's father, Fred Trump, Jr., since his death in 1981.

The case comes just two months after a failed bid by presidential brother Robert S. Trump to enjoin publication of Mary's book, and one month after Mary's release of audio recordings in which her aunt condemned the President. Considering the First Amendment and the futility of last-minute injunction, the court in the earlier case refused to enforce the confidentiality provisions of a family agreement that settled litigation arising from the deaths of Robert, Maryanne, and the President's parents, Mary's grandparents, Fred and Mary Anne, in 1999 and 2000. Robert S. Trump died on August 15, 2020. Try to keep up.

To navigate the statute of limitations, Mary Trump alleges that she only became aware of the fraud upon the publication of investigative journalism by The New York Times in 2018 (pay wall; about).  Links to the dockets, the complaint in the latest Mary L. Trump case, and the court decision denying injunction in the Robert S. Trump case are now posted at the Trump Litigation Seminar blogsite, a project of The Savory Tort. HT @ TLS students Spencer K. Schneider and Richard Grace. 

Appeals court reviews fundamentals of multiple liabilities in remanding business tort case

A Massachusetts Appeals Court decision Friday reaffirmed the rule against double recovery, the finality of settlement, and other fundamentals in a business case of joint tortfeasors.  The case is a good refresher for law students and lawyers on multiple liabilities in tort.


A company sued its former secretary-treasurer and a tax consultant for breaches of fiduciary duty through fraudulent concealment, resulting in financial loss in excess of about $288,000.  The company president, a husband, and the former principal, a wife, were recently divorced, and the latter’s separation on both counts was settled upon a $50,000 payment.  The couple furthermore stipulated an allocation of about $40,000 for the purchase of the wife’s company shares.

The company prevailed against the tax consultant on default judgment.  However, the court determined that the terms of the settlement, and specifically the allocated share purchase, inclusively credited the company with the $288,000 of the wife’s liability.

Under widely accepted state doctrine of joint tortfeasor liability in American law, a joint tortfeasor at judgment is credited with the plaintiff’s past settlement against a departed joint tortfeasor.  The rule encourages settlement by encouraging a well bargaining defendant to settle out, while deterring needless litigation by respecting the common law maxim that “a party can have but one satisfaction for the same injury.”

In accordance with the doctrine, then, the trial court ruled that the plaintiff had been made whole, so would collect nothing more from the tax consultant, however negligent.

That was an error on the merits, the Appeals Court ruled.  “Settlements are motivated by a wide range of factors, some non-monetary, and may involve significant payments or no payment at all,” the court wrote.

Justice Desmond

[T]here are many reasons [the husband] could have agreed on behalf of [the company] to dismiss the complaint against [the wife].  To name just one, having in-depth knowledge of [her] financial status, [he] may well have concluded that [she] would be unable to pay any judgment against her.  In any event, it was clearly erroneous to conclude that the plaintiff had been made whole based on no more than (i) the mere existence of a settlement [on] multiple legal claims and (ii) hearsay assertions that a discount had been given.

The court remanded for the trial court to reassess the actual measure of credit against liability represented by the share allocation, thus the remaining liability owed to the plaintiff by the tax-consultant defendant.

The case is Custom Kits Co. v. Tessier, No. 19-P-503 (Mass. App. Ct. May 1, 2020).  Associate Justice Kenneth V. Desmond Jr. wrote for a unanimous panel with Justices Wendlandt and McDonough.

First Circuit dismisses Mount Ida student class action, incidentally limits emerging data protection theory

Holbrook Hall, Mount Ida College, Newton, Mass. John Phelan CC BY 3.0

An angle in a recent First Circuit decision deserves a mention in U.S. data protection circles.  I hadn't been aware of this angle of the case, so hat tip to attorney Melanie A. Conroy at Pierce Atwood in Boston for analyzing the case carefully in the The National Law Review.

The First Circuit affirmed dismissal in the ugly and unfortunate matter of Mount Ida College students' class action against the school after its abrupt closure and sale to the University of Massachusetts system.  Conroy's rundown on the case is thorough.  I want only to highlight one important point: the court refused to recognize, in Massachusetts law, a fiduciary duty owed by university to student.

The decision comports with multistate norms, but is nonetheless important in limiting an emerging doctrine of data protection in U.S. common law tort.  State courts that have recognized something like a data protection right in civil cases have used fiduciary duty to bootstrap their way there.

American common law invasion of privacy is too stringent to get the job done, that is, to articulate a data protection right, for various reasons.  One reason is its incorporation of what Professor Daniel Solove termed "the secrecy paradigm": information must be kept secret to remain secret.  Thus, I cannot complain when my bank tells someone about my financial transactions, because I already let my bank know about them.  My resort must be to banking privacy law, by statute.  And there arises the second problem for privacy plaintiffs: statutes are too stringent to get the job done.  I might be unhappy if my employer divulges information about my psychiatric condition to my insurer, but neither one of them is a healthcare provider covered by the federal patient privacy law ("HIPAA"), which does not (directly) provide for a cause of action anyway.

In 2018, the Connecticut Supreme Court bridged the common law gap from statutory insufficiency to actionable privacy claim by relying on the physician-patient duty of confidentiality.  In short, the court held, HIPAA + duty of confidentiality = protectible common law interest.  The court thereby allowed a woman to sue her ObGyn provider upon an allegation of breached confidentiality.  That duty of confidentiality is a form of fiduciary duty.  So a theory emerged of how U.S. common law might stumble its way to recognition of what the rest of the world, especially Europe, calls "data protection."

There are a lot of ways for us to start catching up with the rest of the world in recognizing people's right to personal data integrity; this is just one.  And it remains.  But it is limited by the scope of duties that might stand in for that second piece of the equation.  The Mount Ida case shows correctly that it will be harder for a plaintiff to get there against a business defendant that is not a professional, and the data held are financial information tangential to the nature of the relationship, here, educational.

The First Circuit aptly instructed Mount Ida students that if they wanted better protection for their personal information in state law, their remedy was with the state legislature.  The same can be said for Americans, data protection, and our torpid Congress.

The case is Squeri v. Mount Ida College, No. 19-1624 (1st Cir. Mar. 25, 2020).  U.S. Circuit Judge Lynch wrote for the panel, which also included Stahl and Kayatta, JJ.

Teachable moment in Torts:'Complaint alleges mom with dementia dumped outside Long Beach healthcare facility'

National media this week picked up this story from CBS Los Angeles about a woman suffering from dementia who wound up on the street after what looks like a botched transfer between a hospital and her residential facility.  The victim's daughter filed a complaint with regulatory authorities, but so far has said she will not file suit.  As advanced or two-semester classes in U.S. tort law wade into the deep end of the pool this spring, this story invites analysis on a number of fronts.  Here are some questions to get the discussion going.



1. Does the victim, through her daughter, have any cause of action in common law tort?  Can the injury requirement be met for the general negligence tort? for recklessness?

2. Is there a breach of duty here that can support a business tort?  Are there damages recoverable in business torts?

3. Could this be actionable "negligent infliction of emotional distress" (NIED)? in some states?  Can you demonstrate balance in the elements of negligence to persuade a court that NIED here will not open the floodgates?

4. How does the victim's dementia affect the torts case?  Is she an eggshell plaintiff?  Could she have been contributorily negligent?  Can she have been both at the same time?

5. Could the outcome of the regulatory investigation affect proof or liability in a tort case?

6. Does any tort theory rest in the daughter as plaintiff on her own behalf?  Is there any way to plaintiff-bystander liability?

7. Low temperatures in Los Angeles in the last week were only in the 50s (F), but northern cities have been in the grip of below-zero record lows.  Suppose the victim had been outside in Chicago and suffered frostbite.  How does that change the disposition of her tort claims? her daughter's?

8. Further entertaining the idea that the victim suffered physical injury, can the defendant make dispositive arguments on duty? on causation?  What's the difference?  Could there be a "scope of liability" problem in the terms of the Third Restatement?

9. There are two healthcare facilities involved.  Could both be defendants?  Would both be liable?  Would liability be joint or several? apportioned? to what effect?

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🌠 Coming this June from Carolina Academic Press!

The Media Method:
Teaching Law with Popular Culture
Edited by LSU Law Prof. Christine A. Corcos, @LpcProf, Media Law Prof Blog
With contribution on torts by yours truly

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