Rivell v. Private Health Care Systems, Inc.

• Citation: 520 F.3d 1308
• Decision Date: 24 March 2008
• Docket Number: No. 07-12387.,07-12387.
• Parties: William Andrew RIVELL, Alan B. Whitehouse, individually and on behalf of all other persons similarly situated, Plaintiffs-Appellants, v. PRIVATE HEALTH CARE SYSTEMS, INC., d.b.a. Care Entree, The Capella Group, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

520 F.3d 1308

William Andrew RIVELL, Alan B. Whitehouse, individually and on behalf of all other persons similarly situated, Plaintiffs-Appellants, v. PRIVATE HEALTH CARE SYSTEMS, INC., d.b.a. Care Entree, The Capella Group, Inc., Defendants-Appellees.

No. 07-12387.

United States Court of Appeals, Eleventh Circuit.

March 24, 2008.

Jay D. Brownstein, Brownstein, Nguyen & Little, LLP, Tucker, GA, Kevin S. Little, Brownstein, Nguyen & Little, LLP, Atlanta, GA, for Plaintiffs-Appellants.

Christopher E. Parker, Mozley, Finlayson & Loggins, LLP, Ronald J. Stay, Jr., Stites & Harbison, PLLC, Atlanta, GA, David E. Hudson, Hull, Towell, Norman, Barrett & Salley, PC, Augusta, GA, for Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Georgia.

Before ANDERSON, BLACK and HILL, Circuit Judges.

PER CURIAM:

Appellants Dr. William Andrew Rivell and Dr. Alan B. Whitehorse filed this action on behalf of themselves and similarly-situated Georgia physicians. Their amended complaint pleads equitable and legal claims against The Capella Group, Inc., d/b/a/ Care Entree ("Capella") and Private Health Care Systems ("PHCS") for appropriation of the doctors' names and identities to market and sell medical discount cards. On defendants' motions, the district court dismissed the complaint, holding that the doctors' sole remedy was on the contract they entered into with defendant PHCS. Because this holding is contrary to Georgia law, we shall reverse.

I.

Appellants are providers of medical care and services. They entered into a contract with PHCS, which is a preferred provider organization. As contractees with PHCS, appellants were participants in the PHCS network, which offers discounted rates on medical services. In exchange for appellants' discounting their fees, PHCS referred insured patients to them. Capella is a medical discount card company that has an agreement with PHCS that gives Capella "access" to the PHCS network, from which, it is alleged, Capella used appellants' names, professional identities and practice information to sell its medical discount cards. Appellants contend that PHCS and Capella appropriated their names, professional identities and practice information without their consent to sell the medical discount cards for commercial gain. They seek declaratory, injunctive and other equitable relief, as well as damages. Among other claims, the Amended Complaint pleads a claim against PHCS and Capella for the tort of appropriation.

Capella and PHCS filed motions to dismiss in which they argued that the doctors' claims arise under the contract between PHCS and the doctors and that the tort claim of appropriation should be dismissed. The district court agreed and dismissed this claim, as well as the remaining claims.¹ We review this dismissal de novo, applying the same standard as did the district court. Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir.2002). The allegations in the complaint are taken as true and construed in the light most favorable to the plaintiffs. Id. at 1225. However, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007); see also Watts v. Florida Int'l Univ., 495 F.3d 1289, 1295 (11th Cir.2007). "The Supreme Court's most recent formulation of the pleading specificity standard is that `stating such a claim requires a complaint with enough factual matter (taken as true) to suggest' the required element." Watts, 495 F.3d at 1295 (quoting Twombly, 127 S.Ct. at 1965). This rule does not "impose a probability requirement at the pleading stage." Twombly, 127 S.Ct. at 1965. Instead, the standard "simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence" of the required element. Id. "It is sufficient if the complaint succeeds in `identifying facts that are suggestive enough to render [the element] plausible.'" Watts, 495 F.3d at 1296 (quoting Twombly, 127 S.Ct. at 1965).

II.

The district court erred in dismissing appellants' appropriation and related claims. Georgia law is clear that the doctors' claim of misappropriation is not preempted by their contract with PHCS. See Whisper Wear, Inc. v. Morgan, 277 Ga.App. 607, 627 S.E.2d 178 (2006). In Whisper Wear, a photographer entered into an agreement with a model to take pictures of her. The model arrived with a voucher that the photographer signed, in which he agreed that the pictures would not be used for marketing without additional negotiations between the parties. The photographer arrived with a general release, which the model signed and in which she agreed that the pictures could be used in any lawful manner the photographer desired. The photographer sold the pictures to Whisper Wear, a company that used the pictures in its marketing. Subsequently, the model sued Whisper Wear for the tort of appropriation.²

Whisper Wear argued that the model's sole remedy was on her contract with the photographer for his alleged breach of the voucher's terms restricting his right to use the photographs. The Georgia court specifically rejected this argument, holding that the model's remedies were not limited to an action on her contract with the photographer. Thus, even though there was a contract governing the use of the photographs, the court held that so long as the plaintiff alleges that the defendant has used plaintiffs name and identity for a commercial purpose and without his authorization or consent, he has properly alleged the tort of appropriation. The court said that it was Whisper Wear's duty to ascertain what rights it possessed with regard to the model's photographs. Id. at 609, 627 S.E.2d 178. See also McQueen v. Wilson, 117 Ga.App. 488, 161 S.E.2d 63 (1968).

This rule is not, it appears, unique to Georgia. The courts of New York, California, Florida, Massachusetts, Connecticut, Ohio and Illinois have all recognized that a use outside the scope of the permission granted in a contract not only constitutes breach of contract, but also gives rise to an action by the licensor for invasion of privacy or infringement of the right of publicity. See Dzurenko v. Jordache, Inc., 59 N.Y.2d 788, 464 N.Y.S.2d 730, 451 N.E.2d 477 (1983) ("For a use beyond the granted consent [plaintiff] has an action under [New York privacy and publicity statute] ... and is not limited to an action sounding in contract"); Leavy v. Cooney, 214 Cal.App.2d 496, 501, 29 Cal.Rptr. 580 (1963) (use of outside agreement constitutes both breach of contract and tortious invasion of privacy); Zim v. Western Pub. Co., 573 F.2d...