Sweet v. BJC Health System

Decision Date29 June 2021
Docket Number3:20-CV-00947-NJR
PartiesLEAHA SWEET and BRADLEY DEAN TAYLOR, on behalf of themselves and all others similarly situated, Plaintiffs, v. BJC HEALTH SYSTEM, d/b/a BJC HEALTHCARE, and BJC COLLABORATIVE, LLC, Defendants.
CourtUnited States District Courts. 7th Circuit. Southern District of Illinois

Pending before the Court is a Motion to Dismiss (Doc. 34) filed by Defendant BJC Healthcare (BJC), a Motion to Dismiss (Doc. 35) filed by Defendant BJC Collaborative, LLC (Collaborative), and a Motion to Strike (Doc 45) by Plaintiffs. For the reasons set forth below, the Court denies in part and grants in part the Motions to Dismiss and denies the Motion to Strike.

Factual & Procedural Background

This action stems from a data security incident which occurred in March 2020 (the “Incident”) in which unauthorized individuals temporarily gained access to the employee email accounts of three employees of BJC. Plaintiffs Leaha Sweet and Bradley Dean Taylor allege that among the documents accessed by the unauthorized intruders were some that included the names of BJC patients and their Social Security numbers, driver's license numbers, dates of birth medical record or patient account numbers, and treatment and/or clinical information (such personal health information, “PHI”) (Doc. 30 at 1-2). Plaintiffs state that they were among a group of BJC patients who received notice that their PHI had been exposed. Plaintiffs concede that the relevant BJC employees were based in Missouri at the time of this incident, and that the computers and servers involved were based in Missouri (Id. at 8). Collaborative, Plaintiffs allege, is a subsidiary of BJC to which BJC delegated responsibility for maintaining cybersecurity and safeguarding the PHI of BJC patients (Id. at 4).

Sweet originally filed this action in September 2020 against BJC (Doc. 1), and Taylor joined the action with the filing of the First Amended Complaint on December 14, 2020, which added Collaborative as a defendant (Doc. 18). Sweet and Taylor both indicate that they are citizens of Illinois and that their PHI was exposed in the Incident (Doc. 30 at 2). Plaintiffs indicate that Taylor was a patient at BJC facilities in Illinois (Id. at 4), while Sweet was treated only at BJC facilities in Missouri (Doc. 42 at 6). BJC is a Missouri nonprofit corporation with its principal place of business in Missouri, and Collaborative is a Missouri LLC with one or more members that are citizens of Illinois (Doc. 30 at 3). Plaintiffs indicate that they are part of a class of Illinois plaintiffs whose PHI was exposed in the Incident and that the damages of Plaintiffs and the proposed class exceed $5, 000 000, exclusive of interest and costs (Id. at 2-3). Subject matter jurisdiction is predicated on 28 U.S.C. § 1332(d), which grants district courts jurisdiction over class actions where the amount in controversy is over $5, 000, 000 and any member of the plaintiff class is diverse from any defendant.

As for personal jurisdiction over Defendants, Plaintiffs represented that the Court has general and specific jurisdiction, as Defendants have continuous and systematic general business contacts with Illinois.” Plaintiffs stated that Collaborative is a citizen of Illinois, while BJC operates hospitals in the state (Id. at 3-4).

In their Second Amended Complaint of February 24, 2021 Plaintiffs listed ten counts against Defendants, as follows:

Count I: Unjust Enrichment
Count II: Breach of Contract
Count III: Negligence
Count IV: Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”)
Count V: Negligence Per Se
Count VI: Breach of Covenant of Good Faith and Fair Dealing
Count VII: Invasion of Privacy
Count VIII: Vicarious Liability
Count IX: Bailment
Count X: Missouri Merchandising Practicing Act (“MMPA”)

(Doc. 30).

After Plaintiffs filed their Second Amended Complaint, Defendants filed separate Motions to Dismiss (Doc. 34, 35). Defendants argue that this Court lacks personal jurisdiction over BJC that Plaintiffs fail to allege an injury sufficient to confer standing, that Plaintiffs' complaint should be dismissed in its entirety for failure to state a claim, and in the alternative, that various individual counts should be dismissed for failure to state a claim.

I. Personal Jurisdiction

Defendants move to dismiss claims pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. Where a defendant seeks to dismiss based on a lack of personal jurisdiction, the plaintiff bears the burden of establishing such jurisdiction. E.g., Kipp v. Ski Enter. Corp. of Wis., 783 F.3d 695, 697 (7th Cir. 2015).

In diversity actions, a federal court will look to the law of personal jurisdiction of the forum state. E.g., Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). The long-arm statute of Illinois authorizes personal jurisdiction co-extensive with federal due process, and the Seventh Circuit has suggested that there is no operative difference between Illinois and federal due process limits on personal jurisdiction. 735 Ill. Comp. Stat. 5/2-209(c); Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2002).

Under federal law, a court can have personal jurisdiction over a defendant where the defendant has “certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945) (quotations omitted). Courts have recognized two categories of personal jurisdiction: general and specific. E.g., Poletti v. Syngenta AG (In re Syngenta Mass. Tort Actions), 272 F.Supp.3d 1074, 1082 (S.D. Ill. 2017).

A defendant will be subject to general jurisdiction in a forum where it is “essentially at home[.] E.g. Daimler A.G. v. Bauman, 571 U.S. 117, 119 (2014). A corporation is generally “at home” only in its state of incorporation and principal place of business, absent an “exceptional case[.] Id. at 138. To date, the only such “exceptional case” delineated by the Supreme Court appears to have been Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952), which involved a corporation temporarily displaced by war.

Here, Plaintiffs seek to argue that this Court should have general jurisdiction because BJC's contacts with Illinois are “continuous and systematic[.] Before Daimler, that might have been sufficient. Since that case, however, it has become apparent that general jurisdiction will very rarely be found where an entity is not incorporated and does not have its principal place of business. Here, BJC is incorporated in Missouri and has its principal place of business there, so the Court could only find general jurisdiction if it identified this as an “exceptional case.” As discussed, exceptional cases are exceedingly rare. One prior situation identified as an exceptional case by this Court is described in Borders v. Wal-Mart Stores, Inc., 2018 U.S. Dist. LEXIS 138830 (S.D. Ill.) (Reagan, J.). In that action, the Court noted that Wal-Mart, though incorporated in Delaware and based in Arkansas, was the largest private employer in Illinois and “does more business and hires more workers in Illinois than it does in almost every other state in the country[.] The undersigned is not convinced that she would have reached the same conclusion as to whether Wal-Mart presented an exceptional case-regardless, the situation is clearly different here, where Defendants indicate that only slightly over 10% of BJC's employees and revenue are related to Illinois operations (Doc. 34 at 18). This simply is not an exceptional case, and there is no general jurisdiction here.

Specific jurisdiction, on the other hand, is established where a defendant has “certain minimum contacts” with the forum. Int'l Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945). A defendant must have established such contacts by “purposefully avail[ing] itself” of the law of the forum state and the privilege of conducting activities therein, Hanson v. Denckla, 357 U.S. 235, 253 (1953), to the extent that it “should reasonably anticipate being haled into court there[.] World-Wide Volkswagen Corp. v. Woodson, 444 U.S 286, 297 (1980). Furthermore, the litigation must result from injuries that “arise out of or relate to” defendants' contacts with the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984). In Bristol-Myers Squibb v. Superior Court of Calif., 137 S.Ct. 1773, 1780 (2017), the Supreme Court emphasized the importance of “an affiliation between the forum and the underlying controversy, principally, [an] activity or occurrence that takes place in the forum State and is therefore subject to the State's regulation.” This does not mean, however, that there must be a causal relationship between the defendant's activities in the forum state and the controversy. Most recently, in Ford Motor Co. v. Montana Eighth Judicial Dist. Court, the Supreme Court stated that a “causation-only approach finds no support in this Court's requirement of a ‘connection' between a plaintiff's suit” and the underlying controversy.” 141 S.Ct. 1017, 1026 (2021). In that case, the plaintiffs sued for products liability arising out of car accidents in their respective states, though car design and manufacture occurred elsewhere. Noting that the defendant had marketed and sold its products in the forum states for many years, the Court found that specific jurisdiction applied where a company regularly served a market and the action arose out of that service of the market, regardless of specific causality.

Here there is no dispute as to the fact that BJC has purposefully availed itself of the law of Illinois. The...

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