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McComb v. Morgan Stanley & Co.

November 19, 2007


The opinion of the court was delivered by: Judge Nora Barry Fischer


I. Nature of the Lawsuit

On July 26, 2007 Plaintiff Richard B. McComb ("Plaintiff") filed a Complaint against Morgan Stanley & Co., Inc. ("Morgan Stanley") and Empire Healthchoice HMO, INC. ("Empire") (collectively "Defendants"). Specifically, as to Morgan Stanley, Plaintiff's Complaint alleged violations of the Family and Medical Leave Act of 1993, as amended, 29 U.S.C. §, et seq. ("FMLA")(Count I), for FMLA retaliation (Count II), intentional infliction of emotional distress (Count III), negligent infliction of emotional distress (Count IV), negligent violation of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") (Count V), invasion of privacy (Count VI), defamation (Count VII), and unfair competition (Count VIII). In addition, as to Empire, Plaintiff alleged claims for intentional and negligent infliction of emotional distress (Counts III and IV), violation of HIPAA (Count V), and invasion of privacy (Count IV).

Defendant Morgan Stanley filed a partial motion seeking dismissal of Counts III, IV, V, VI and VII of Plaintiff's complaint for failure to state a claim upon which relief can be granted. Defendant Empire filed a motion to dismiss Plaintiff's complaint regarding all claims Plaintiff asserts against Empire, specifically Counts III, IV, V, and VI. Plaintiff conceded that Counts IV and V should be dismissed as to both Empire and Morgan Stanley. Accordingly, in an order dated November 1, 2007, the Court dismissed Counts IV and V without prejudice. (Docket No. 27). The Court will now address Morgan Stanley's motion to dismiss Counts III, VI, and VII, and Empire's motion to dismiss Counts III and VI.

II. Plaintiff's Allegations

Plaintiff alleges that, until he was terminated on August 11, 2005, Defendant Morgan Stanley employed him as a financial advisor. (Docket No. 1, at ¶¶ 8, 10). In March 2005, Plaintiff sought treatment to alleviate his sleep apnea that was caused by a genetic anomaly in his neck and throat. Id. at ¶¶ 12-13. From around March 2005 through July 2005, Plaintiff inquired and submitted paperwork to Empire, the administrator of Morgan Stanley's health plan, on at least three occasions to ascertain whether a particular surgical procedure to help cure his sleep apnea would be covered. Id. at ¶¶ 16-18.

In July 2005, Plaintiff alleges that he spoke with an Empire customer representative and questioned the representative about Empire's failure to process his request ("July Telephone Call"). Id. at ¶ 19. Following the July Telephone Call, the Empire representative contacted the Human Resources Department of Morgan Stanley and complained about Plaintiff's demeanor during the call ("Empire's Complaint"). Id. at ¶20. Empire's Complaint was then referred to Michael Torre, the head of the Human Resources Department of Morgan Stanley. Id. at ¶ 21. The Empire representative also sent an email to Mr. Torre regarding Plaintiff's conduct during the July Telephone Call, and Mr. Torre sent an email to Matthew Maloney, Plaintiff's supervisor, regarding the same. Id. at ¶¶ 22-23. Plaintiff alleges that the emails from Mr. Torre to Mr. Maloney disclosed private medical information about Plaintiff's surgical procedure. Id. at ¶ 25.

On or around July 25, 2005, Plaintiff and Mr. Maloney had a conversation during which Mr. Maloney indicated that Plaintiff might have a problem relative to his employment with Morgan Stanley and referenced the email concerning Plaintiff's July Telephone Call. Id. at ¶28. Plaintiff further alleges that between July 29, 2005 and August 9, 2005, he expressed concerns to Mr. Maloney and Mr. Torre that Morgan Stanley and Empire had violated Morgan Stanley's Medical Privacy Policies and Procedures and the HIPAA privacy rules. Id. at ¶29.

Between August 11, 2005, the date of Plaintiff's termination, and December 5, 2005, Plaintiff alleges that he made several verbal and written requests to Morgan Stanley asking for the return of personal property, such as his personal computer. Id. at ¶ 31. On or around December 6, 2005, after a four month delay, Morgan Stanley returned Plaintiff's personal property, however, software had been uninstalled from his computer and client files had been deleted. Id. at ¶ 35.

After Plaintiff's employment was terminated, Plaintiff learned that Morgan Stanley personnel were making inaccurate and disparaging comments regarding his termination to his former clients which Plaintiff alleges constituted defamatory remarks. Id. ¶¶ 39-41. For example, Plaintiff alleges that Mr. Morningstar, a financial advisor with Morgan Stanley, called one of Plaintiff's clients and stated that he had to let Plaintiff go. Id. at ¶ 44. Further, while Plaintiff was still employed by Morgan Stanley, Mr. Maloney called one of Plaintiff's new clients and indicated that there were other Morgan Stanley brokers who could more appropriately handle the client's account. Id. at ¶ 45. On December 13, 2005, Plaintiff's counsel sent a letter to Mr. Maloney advising Morgan Stanley to cease and desist from making such defamatory remarks. Id. at ¶ 40.

Plaintiff alleges that the defamatory comments made by Morgan Stanley were untrue and damaging to Plaintiff's business and reputation, negatively impacting Plaintiff's ability to attract clients or to obtain employment at a comparable brokerage house. Id. at ¶¶ 48, 51. Plaintiff alleges that Morgan Stanley was aware of the falsity of the defamatory statements, and published the statements with malice and the intent to harm Plaintiff. Id. at ¶¶ 49-50.

Plaintiff seeks compensation from Morgan Stanley for any and all benefits he would have received, including loss of wages, salary, employment benefits, and other compensation. Id. at p. 16. In addition to actual damages, Plaintiff seeks emotional distress damages for the pain, suffering, and humiliation caused by Defendants' actions as well as punitive damages and liquidated damages. Id. Moreover, Plaintiff seeks the costs and expenses associated with this action and reasonable attorney fees, any other equitable or legal relief the Court deems proper, and access to his entire personnel file. Id.

III. Standard for Rule 12(b)(6)

A claim may be dismissed under Federal Rule of Civil Procedure 12(b)(6) for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). A 12(b)(6) motion requires the court to examine the sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45 (1957) (abrogated in other respects by Bell Atlantic Corporation v. Twombly, --- U.S. ---, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).*fn1 "In determining the sufficiency of the complaint the court must accept all of plaintiffs' well-pled material allegations as true and draw all reasonable inferences therefrom in favor of plaintiffs." McCliment v. Easton Area School Dist., Civil Action No. 07-0472, 2007 WL 2319768, at *1 (E.D. Pa. Aug. 10, 2007) (citing Graves v. Lowery, 117 F.3d 723, 726 (3d Cir. 1997)); see also Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir. 2005); In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1420 (3d Cir. 1997); Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). "The issue is not whether a [Plaintiff] will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." In re Burlington Coat Factory Sec. Litig., 114 F.3d at 1420 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, (1974)). Under this standard, a complaint will be deemed to have alleged sufficient facts if it adequately puts the plaintiff on notice of the essential elements of defendant's claims. Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). However, a court will not accept bald assertions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. See In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 215 (3d Cir. 2002); Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 n. 8 (3d Cir. 1997). Overall, "courts have an obligation . . . to view the complaint as a whole and to base rulings not upon the presence of mere words, but rather, upon the presence of a factual situation which is or is not justiciable. We do draw on the allegations of the complaint, but in a realistic, rather than a slavish, manner." Doug Grant, Inc. v. Great Bay Casino Corp., 232 F.3d 173, 184 (3d Cir. 2000) (quoting City of Pittsburgh v. West Penn Power Co., 147 F.3d 256, 263 (3d Cir. 1998)).

While a court's review of a motion to dismiss is ordinarily limited to the contents of the complaint, including any attached exhibits, a court may consider some evidence beyond a complaint on a motion to dismiss "including public records . . . , documents essential to plaintiff's claim which are attached to defendant's motion, and items appearing in the record of the case." Core Const. & Remediation, Inc. v. Village of Spring Valley, NY, No. Civ.A. 06-CV-1346, 2007 WL 2844870, at *2 (E.D. Pa. Sept. 27, 2007) (citing Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1380 n.1 and n.2 (3d Cir. 1995)) (internal citation omitted).

Finally, the defendant bears the burden to demonstrate that the complaint fails to state a claim. Gould Electronics, Inc. v. U.S., ...

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