An Alabama hospital denies it was negligent in protecting the sensitive personal information of two former patients who have brought a proposed class action alleging identity thieves stole their records that were left unattended and unsecured.
In a July 7 motion to dismiss, counsel for Flowers Hospital disputed the allegations of two former patients that the Dothan, Ala., facility was liable because a former employee stole records containing their medical and financial information from a room left unattended and unsecured in the facility.
In Smith and McGee v. Triad of Alabama, in U.S. District Court for the Middle District of Alabama, plaintiffs Bradley Smith and Julie McGee claim they learned since the theft—which occurred sometime between June 2013 and February—that they have been victims of IRS tax refund fraud, which they imply was a consequence of the records theft.
They allege that the stolen documents contained their Social Security numbers, medical diagnoses, physician identification and insurance information—all of which leave them vulnerable to a new and growing fraud involving false medical claims.
But the hospital argues that the plaintiffs do not have standing because they cannot show any actual economic or other harm from the security breach. Citing recent federal court decisions on security breach liability, the hospital argues that claims of an increased likelihood of harm do not meet that test. And, the hospital contends, the plaintiffs cannot show a direct link between the disappearance of their records and the alleged tax return fraud.
“Plaintiffs do not allege that they have lost the ability to receive a tax refund otherwise owed, nor are there allegations that Plaintiffs have been subjected to some unreimbursed fees or expenses as a result of the third-party filing fraudulent tax returns in their names,” the hospital’s motion argues.
The plaintiffs allege Flowers has violated the federal Fair Credit Reporting Act, and engaged in negligence and invasion of privacy by public disclosure of private facts. They seek injunctive relief and a variety of damages.
The complaint states former Flowers employee Kamarian Deshaun Millender was arrested and charged with trafficking in stolen identities. An unknown accomplice remains at large.
Counsel for the hospital are Richard Smith, Jonathan Macklem and J. Paul Zimmerman, of Christian & Small LLP. Plaintiffs are represented by M. Adam Jones and Jordan Davis, of M. Adam Jones & Associates, LLC; and James Terrell, of McCallum, Methvin & Terrell, P.C.
Lisa Hoffman contributes to law.com.