Davita v. Nephrology Associates, P.C.

Decision Date25 March 2003
Docket NumberNo. CV102-077.,CV102-077.
Citation253 F.Supp.2d 1370
PartiesDAVITA INC., a Delaware corporation; and Total Renal Care, Inc., a California corporation authorized to do v. NEPHROLOGY ASSOCIATES, P.C., a Georgia professional corporation; Nephrology Centers of America, LLC, a Georgia limited liability corporation; Donald Williamson, M.D., individually; Mark Smith, M.D., individually; and Clay Wilson, M.D., individually, Defendants.
CourtU.S. District Court — Southern District of Georgia

Percy J. Blount, Glover, Blount and Millians, Augusta, GA, and Paul E. Chronis, McDermott, Will & Emery, Chicago, IL, for Plaintiff.

Thomas W. Tucker, Benjamin H. Brewton, Tucker, Everitt, Long, Brewton & Lanier, Patrick J. Rice, George R. Hall, Hull, Towill, Norman, Barrett & Salley, Augusta, GA, and Brian A. Sher, Ross & Hardies, Chicago, IL, for Defendants.


BOWEN, Chief Judge.

Defendants move for partial dismissal of Plaintiffs' complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). For the following reasons, Defendants' motion (Doc. No. 32) is GRANTED IN PART and DENIED IN PART.


Plaintiff Total Renal Care, Inc. ("TRC") is a wholly owned subsidiary of Plaintiff DaVita, Inc. (Complaint 116.) TRC operates several outpatient kidney dialysis centers in Georgia, including two in Augusta, and one each in Louisville, Waynesboro, Vidalia, and Statesboro. (Id, f 5.)

Defendants Nephrology Associates and Nephrology Centers of America are owned in part by defendants Donald Williamson, Mark Smith, Alan Lavine, and Clay Wilson. (Id. 119.) The individual defendants are nephrologists and are licensed to practice medicine in Georgia. (Id, f f 8,9.)

At TRC's facilities, a nephrologist visits each dialysis patient once a month. (Id. If 12.) The nephrologist gives dialyzing orders and updates the patient's medication. (Id,) More frequently, TRC's "Patient Care" teams administer the dialysis to the patients. (Id.) A Patient Care team is comprised of nurses, patient care technicians, a dietician, and a social worker. (Id.) Each member of a Patient Care team meets with the patient during the patient's weekly dialysis session. (Id.)

TRC's facilities also employ Medical Directors. (Id, 1113.) A facility's Medical Director coordinates and oversees "the medical administration of renal dialysis by the facility's nephrologists." (Id.) Plaintiffs claim their facilities often contract with a single group of associated nephrologists to provide Medical Director services. (Id. 1114.) The nephrology group designates the individual Medical Director for a specific TRC facility. (Id.) The Medical Directors serve on the facility's medical staff. (Id, f 15.)

The individual defendants are former Medical Directors at TRC facilities. (Id. f 16.) According to Plaintiffs, the individual defendants entered into a written agreement (the "Medical Director Agreement") on or near July 1, 1999 for Nephrology Associates, P.C. ("Nephrology Associates") to provide Medical Directors for TRC facilities. (Id, 1118.) The Medical Director Agreement contained noncompetition clauses, which were in effect only "during the term of the Appointment." (Id. f 19.) Plaintiff states that the term of the appointment in the Medical Director Agreement lasted from July 1, 1999 to September 27, 2001. (Id, 1120.)

Williamson, Smith, LaVine, and Wilson were designated Medical Directors by Nephrology Associates, and they continued in those positions until September 27, 2001, "when their Medical Director Agreement with TRC [was] terminated." (Id, ¶ 16.) According to Plaintiffs, however, the individual defendants retained their privileges to treat dialysis patients at TRC's facilities. (Id. H 17.) Wilson, Williamson, and Smith all completed an "Application for Practice Privileges" ("the Application") on or near July 7, 1999 (Id. Ex. B), prior to their signing of the Medical Director Agreement; the Applications also reference TRC's "Rules for Practice Privileges" ("the Rules") (id,).

Following the termination of the Medical Director Agreement, the defendants opened or acquired an interest in various nephrology centers, some of which compete with TRC facilities. (Id, f f 7, 27-30, 33.) The competition between TRC and the defendants' facilities has spawned many of the claims. Plaintiffs, for instance, enumerate many instances of purportedly unethical solicitations and treatment of patients (see, e.g., id. ff 35-37) while also asserting that certain of the defendants' nephrology centers were improperly opened near TRC facilities (id. f 33). As a result, Plaintiffs have alleged claims of (1) tortious interference with business relations, (2) injurious falsehood, (3) defamation, (4) deceptive trade practices, (5) breach of a letter agreement, (6) breach of certain noncompetition agreements, and (7) breach of a purchase agreement. (Id. f f 38-66.)


Defendants move to dismiss portions of Plaintiffs' complaint for failure to state a claim under Rule 12(b)(6). "Before this Court can dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6), it must conclude that the plaintiff can prove no set of facts in support of the claim that would entitle it to relief." St. Joseph's Hosp., Inc. v. Hosp. Auth. of Am., 620 F.Supp. 814, 820 (S.D.Ga.1985), vacated on other grounds, 795 F.2d 948 (11th Cir.1986). "In evaluating the sufficiency of a complaint, a court must accept the well pleaded facts as true and resolve them in the light most favorable to the plaintiff." Beck v. Deloitte & Touche, 144 F.3d 732, 735 (11th Cir.1998) (internal quotations marks omitted). Furthermore, the Court should consider only the facts as alleged in the parties' pleadings; matters outside the pleadings may be considered only if the motion is converted to one for summary judgment. Fed. R.Civ.P. 12(b)(6),(c). Motions to dismiss are disfavored and are therefore seldom granted. See Int'l Erectors, Inc. v. Wilhoit Steel Erectors & Rental Serv., 400 F.2d 465, 471 (5th Cir.1968)1 ("Dismissal of a claim on the basis of barebone pleadings is a precarious disposition with a high mortality rate.").


Defendants assert that Plaintiffs' claims for injurious falsehood (Count II) and defamation (Count III) should be dismissed in toto. Defendants further assert that Plaintiffs' claim under Georgia's version of the Uniform Deceptive Trade Practices Act (Count IV) and their claim of breach of contract (Count VI) should be dismissed in part. (Doc. No. 32.)

A. Count II: Injurious Falsehood

Although Plaintiffs' complaint alleges a claim of injurious falsehood,2 Defendants claim that there is no recognizable cause of action for injurious falsehood in the State of Georgia. (Doc. No. 33 at 2.)

In Georgia Society of Plastic Surgeons, Inc. v. Anderson, 257 Ga. 710, 363 S.E.2d 140 (1987), the Georgia Supreme Court had the opportunity to address whether a cause of action exists in Georgia for injurious falsehood (also known as trade libel),3 and it explicitly refused to do so. Anderson, 257 Ga. at 714, 363 S.E.2d 140. Since the Anderson case was decided approximately 15 years ago, no Georgia court has expressly found a cause of action for "injurious falsehood" to exist in Georgia. Furthermore, one district court has determined that the claim could not be brought in federal court without more of an indication that the Georgia courts would recognize it. See Carolina Indus. Prods., Inc. v. Learjet, Inc., 189 F.Supp.2d 1147, 1167-68 (D.Kan.2001) (reviewing Georgia law and noting that "Georgia has not recognized the tort of `injurious falsehood' and that `[w]ithout a stronger indication that Georgia would recognize sections 626 and 623A of the Restatement [setting forth injurious falsehood], ... the court is unwilling to hold that the plaintiffs have stated a valid cause of action under Georgia law'"). I agree. Accordingly, Plaintiffs' claim for injurious falsehood (Count II) is DISMISSED.

B. Count III: Defamation

Defendants claim that (1) Plaintiffs have inadequately plead defamation and that (2) the alleged statements made by Defendants about Plaintiffs are unverifiable opinions and thus not actionable. (Doc. No. 33 at 3.)

1. Whether Plaintiffs' Complaint Satisfies the Pleading Standard

Under Georgia law, defamation requires proof that a statement was (1) false, (2) malicious, and (3) published. Info. Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1228 (11th Cir. 2002) (citing O.C.G.A. § 51-5-1). In addition, oral defamation may "consist in ... [m]aking charges against another in reference to [a person's] trade, office, or profession, calculated to injure him therein...." O.C.G.A. § 51-5-4.

In determining whether a claim is properly plead, federal courts utilize the standard set forth in Rule 8, which states that "[a] pleading ... shall contain ... a short and plain statement of the claim showing that the pleader is entitled to relief...." Fed.R.Civ.P. 8(a). As one district court in this circuit has explained, while "[s]ome courts have adopted a stringent approach and required defamatory remarks to be stated verbatim in the complaint, ... in the Eleventh Circuit the test remains whether the allegation gives the defendant fair notice of the plaintiffs claim and the ground upon which it rests." Banco Surinvest, S.A. v. SunTrust Bank, 78 F.Supp.2d 1366, 1370 (N.D.Ga.1999) (internal quotation marks omitted). Further, the Eleventh Circuit has explained that Rule 8(a)(2) does "not require that a plaintiff specifically plead every element of a cause of action." Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir.2001); see id. (stating that while a pleader need not "allege a specific fact to cover every element or allege with precision each element of a claim, it is still necessary that a complaint contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under...

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