Sagraves v. Lab One , 316 F. App'x 366 ( 2008 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 08a0049n.06
Filed: January 15, 2008
No. 06-4554
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
KENNETH MICHAEL SAGRAVES )
)
Plaintiff-Appellant, )
v. )
) ON APPEAL FROM THE
LAB ONE, INC. ) UNITED STATES DISTRICT
) COURT FOR THE SOUTHERN
Defendant -Appellee. ) DISTRICT OF OHIO, EASTERN
) DIVISION
)
)
)
)
)
BEFORE: KEITH and CLAY, Circuit Judges; and STEEH, District Judge*
DAMON J. KEITH, Circuit Judge. Appellant Kenneth Michael Sagraves appeals from
the October 30, 2006 summary judgment ruling of the United States District Court for the Southern
District of Ohio denying his negligence claim against drug testing company Lab One. For the reasons
stated below, we AFFIRM.
I. BACKGROUND
Appellant Kenneth Michael Sagraves (“Plaintiff”) was employed as a maintenance worker
at United Church Homes, Inc. (“United”) between November 2001 and May 2003. During
*
The Honorable George Caram Steeh, United States District Judge for the Eastern
District of Michigan, sitting by designation.
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Sagraves’s tenure at United, the company implemented a random drug testing policy. United
contracted with Nationwide Drug Testing Services, Inc. (“Nationwide”) to provide occupational drug
testing services. Nationwide contracted with Defendant Lab One to provide laboratory drug testing
services for its clients.
On April 28, 2003, Plaintiff submitted to a random drug test. The oral test was conducted
by his supervisor and another co-worker and was witnessed by a supervisor from United’s corporate
office. The supervisor conducting the test used a Lab One drug testing kit containing a test tube vial
with blue preservative liquid, a plastic collection wand with a sponge-like swab at the end, and
various sealing and shipping labels.
The supervisor conducted the test by inserting the wand into Plaintiff’s mouth, where he held
the swab between his check and gum for approximately two to five minutes. Per the instructions,
the supervisor then broke the wand in half in order to fit it inside the test tube vial containing the
blue preservative liquid, sealed the vial, and enclosed it in a shipping package to send to Lab One.
Plaintiff alleges that during the test, more than half of the preservative fluid spilled out of the vial.
Testing of Plaintiff’s specimen revealed the presence of benzoylecgonine, a cocaine
metabolite, above designated cut-off levels. Lab One reported the test results to United on April 30,
2003. Plaintiff then requested a retest of his specimen at an independent laboratory. The second test,
conducted by Clinical Reference Laboratory, Inc. (CRL”), confirmed Lab One’s findings.
On May 15, 2003, Plaintiff signed a “Last Chance” agreement with United, stipulating that
his continued employment with United would be conditioned on his completion of a substance abuse
assistance program, and stating that failure to complete the program would result in his termination.
United placed Plaintiff on leave pending his completion of the program. As a part of the drug
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counseling program, Plaintiff submitted a urine sample that tested negative for cocaine. Sagraves
failed to complete the program and was terminated on May 28, 2003.
II. DISCUSSION
A. Grant of summary judgment on Plaintiff’s negligence claim.
This Court reviews de novo the district court’s grant of summary judgment. Ciminillo v.
Streicher, 434 F.3d 461, 464 (6th Cir. 2006). Summary judgment is proper when “the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” FED R. CIV . P. 56(c). A genuine issue of material fact exists when,
assuming the truth of the non-moving party’s evidence and construing all inferences from that
evidence in the light most favorable to the non-moving party, there is sufficient evidence for a trier
of fact to find for that party. Id. “Summary judgment is appropriate if a party who has the burden of
proof at trial fails to make a showing sufficient to establish the existence of an element that is
essential to that party’s case.” Beecham v. Henderson County, 422 F.3d 372, 374 (6th Cir. 2005)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
In order to establish a claim of negligence and avoid summary judgment, Plaintiff must
establish a genuine issue of material fact as to each element of his claims. He must therefore show
that (1) Lab One owed a duty of care to him; (2) Lab One breached this duty; and (3) that the breach
of duty was the proximate cause of the injury suffered. Nye v. CSX Transp., Inc., 437 F.3d 556, 563
(6th Cir. 2006) (citing Texler v. D.O. Summers Cleaners & Shirt Laundry Co., 81 Ohio St. 3d 677,
693 N.E.2d 271, 27 (Ohio 1998)). Here, Plaintiff is unable to show that he was owed a duty by Lab
One, that Lab One breached this duty, or that the breach of the duty was the proximate cause of his
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termination.
1. Duty of Care
Although there is no case law in Ohio concerning the duty owed to employees by drug testing
companies, in negligence cases, Ohio courts have generally applied the economic-loss rule, “denying
recovery in negligence for purely economic loss.” Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins.
Co., 42 Ohio St. 3d 40, 45, 537 N.E.2d 624, 630-31 (Ohio 1989). In Floor Craft Floor Covering v.
Parma Cmty Gen. Hosp. Assn., 54 Ohio St. 3d 1, 3, 560 N.E.2d 206, 208 (Ohio 1990), the Ohio
Supreme Court found that “there is no . . . duty to exercise reasonable care to avoid intangible
economic loss or losses to others that do not arise from tangible physical harm to persons and
tangible things.”
Plaintiff incorrectly argues that the application of this rule would result in “the twisted logic”
by barring “the recovery of damages to a motor vehicle in a traffic accident when there is only
property damage” and “recovery against a tortfeasor for fire damage to a building.” (App. Reply Br.
at 8). The economic-loss rule only bars recovery in negligence when loss does not arise from any
physical damage. Both examples the Plaintiff cites involve physical damage – to a motorcycle in
one and to a building in the other. Here, there is no allegation by Sagraves of any physical damage
by Lab One. Plaintiff therefore fails to satisfy the requisite duty of care necessary to establish his
negligence claim.
2. Breach of Duty
Even if Plaintiff were to establish that a duty of care existed, he is unable to demonstrate that
Lab One violated such a duty. Because understanding the standard of care for oral fluid drug testing
requires more than common knowledge and experience, under Ohio law, a plaintiff must establish
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the applicable standard of care through expert testimony. Simon v. Drake Construction Co., 87 Ohio
App.3d 23, 26, 621 N.E.2d 837, 839 (Ohio Ct. App. 1993) (“Expert testimony is required to establish
the standard of care, unless the lack of skill or care of the professional is so apparent as to be within
the comprehension of a layperson and requires only common knowledge and experience to
understand it.”).
At trial, Plaintiff failed to call a witness to establish the applicable standard of care. The only
such evidence was proffered by Lab One’s expert, Dr. Cone, who testified that Lab One acted in
accordance with the applicable standard of care. Moreover, Plaintiff’s specimen was retested by
CRL, whose examination also yielded a positive result for cocaine metabolite.
Without establishing a standard of care, Plaintiff asserts that Lab One breached its duty of
care for a number of reasons: (1) the test conductor spilled half the preservative when placing the
plastic testing device in the vial; (2) Lab One’s machinery was not functioning properly when the
test was conducted; (3) a urine test conducted while Plaintiff was in drug treatment yielded a
negative result; (4) a hair test conducted by Quest seventy-seven days after the Lab One test yielded
a negative result; (5) a Delta Airlines employee successfully brought suit against Lab One for a false
urine test in another jurisdiction; (6) a federal court has found that GC/MS/MS testing (also used by
Lab One) has been deemed insufficient by the U.S. Army in military proceedings; and (7) the
Plaintiff signed an affidavit stating that he had never used illegal drugs.
First, there is no evidence in the record to suggest the spillage invalidated the test. Expert
Lance Presley testified that the test Lab One conducted requires approximately 300 microliters of
the blue liquid to conduct the test. When asked whether spillage of “any of the liquid” contained in
the vile would “affect validity of the test,” Presley responded, “Would not affect the validity, no.”
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Plaintiff alleges that over half of the 700 microliters spilled during testing, but he presented no
evidence that Lab One lacked the minimum level needed to conduct the test, or that testing on a
smaller amount would invalidate the test. Furthermore, the liquid in the vial was not spilled by Lab
One, but by a United employee supervising the test. Plaintiff has not presented evidence indicating
that Lab One failed to follow the applicable standard of care by testing the specimen that they
received.
Second, Plaintiff alleges that Lab One’s machinery was not functioning properly at the time
of the test. Plaintiff points to a “2” under a column entitled “fail” in one row of a multi-row Lab One
GC/MS/MS Autotune Review Checklist. Dr. Presley testified that the “2” was a stray mark, and
Plaintiff has not provided any evidence indicating that the mark or even any mechanical significance
associated with the mark affected the validity of the test.
Third, Plaintiff suggests that the negative urine test demonstrates that Lab One’s oral test was
incorrect. There is no evidence, however, to suggest that the urine test, which was conducted while
Plaintiff was in drug treatment, invalidates Lab One’s earlier test. The urine test does not
demonstrate that Lab One failed to adhere to the proper standard of care when conducting its test.
Fourth, Plaintiff argues that the negative hair test also demonstrates that Lab One breached
its duty of care. There is no evidence to demonstrate, however, that the hair test, that was
administered seventy-seven days after Lab One’s test, invalidates Lab One’s oral test. Both
Plaintiff’s and Defendant’s expert witnesses testified that the results of the hair test are not
inconsistent with the Lab One Test. The hair test demonstrated only that cocaine was not present
in Plaintiff’s system above a certain cut-off level. When Plaintiff’s hair test expert, Dr. Bourland,
was asked whether after “reviewing the hair test” there was any evidence that “Lab One did anything
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incorrectly in the oral fluids specimen that was collected seventy-seven days prior,” he responded,
“No.” When asked whether the two tests had “inconsistent results,” he responded, “No. Not at all.”
Plaintiff further argues that his own expert witness is now biased because several months
after his deposition, Quest, his laboratory, purchased Defendant’s expert laboratory. Despite this
acquisition, there is nothing in the record that indicates that Dr. Bourland testified untruthfully or that
his hair test demonstrates that Lab One was negligent in conducting its test.
Fifth, Plaintiff cites a lawsuit by a Delta Airlines employee against Lab One for a false urine
test. Ishikawa v. Delta Airlines, Inc., 343 F.3d 1129 (9th Cir. 2003). The evidence in that case,
however, does not establish that Lab One breached a duty of care in administering an oral test to the
Plaintiff.
Sixth, Plaintiff alleges that the United States military has deemed part of Lab One’s testing
procedure as unreliable. The U.S. Army, however, did not find that using the GC/MS/MS test was
negligent or violated a standard of care. Rather, it deemed the testing insufficient for use in military
proceedings to demonstrate guilt beyond a reasonable doubt. United States v. Campbell, 50 M.J.
154 (C.A.A.F. 1999).
Finally, the Plaintiff cites his signed affidavit, stating that he has never used cocaine. This
affidavit, however, is merely an assertion, not competent evidence demonstrating that Lab One
violated a duty of care.
None of this evidence established that Lab One breached its duty of care. Although summary
judgment evidence must be viewed in the light most favorable to the plaintiff in evaluating a
summary judgment motion, the plaintiff “may not rest upon [] mere allegations . . . but . . . must set
forth specific facts showing there is a legitimate issue for trial.” Because Plaintiff has failed to set
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forth such facts specifying a violation of the applicable standard of care, he has failed to establish
the requisite breach of duty element of his negligence claim.
3. Proximate Cause
Plaintiff has not addressed the district court’s determination that Lab One’s test was not the
proximate cause of his termination. Plaintiff was terminated only after (1) the positive test was
confirmed independently by another laboratory, CRL, and (2) the Plaintiff failed to finish the drug
treatment program he agreed to complete in his “Last Chance” agreement with United. Both of these
factors demonstrate that Lab One was not the proximate cause of Plaintiff’s termination.
B. Summary judgment on Plaintiff’s third party contract claim.
Plaintiff argues that the district court improperly found that he was not a third party
beneficiary to any contract and erred when it granted summary judgment on his third-party
beneficiary claim against Lab One.
Under Ohio law, a third party beneficiary is: (1) a creditor beneficiary; (2) a donee
beneficiary; or (3) an incidental beneficiary. Visintine & Co. v. N.Y., Chi. & St. Louis RR. Co. 169
Ohio St. 505, 507, 160 N.E.2d 311, 313 (Ohio 1959). The Ohio Supreme Court has also held that
only intended third-party beneficiaries may assert rights to contracts to which they are not party.
TRINOVA Corp. v. Pilkington Bros., P.L.C., 70 Ohio St. 3d 271, 277-78, 638 N.E.2d. 572, 577
(Ohio 1994). Incidental beneficiaries are not permitted to assert claims. Id. Third-parties that are not
intended beneficiaries are merely incidental beneficiaries
In this case, no contract exists between United and Lab One. The only contracts here are
between United and Nationwide and Nationwide and Lab One. Even if Plaintiff is able to show that
he is a third-party beneficiary to the contract between Nationwide and Lab One and that he relied on
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that contract, he is not an intended beneficiary. When applying Ohio law, this Circuit applies an
“intent to benefit” test to determine whether a third-party is an intended beneficiary. Norfolk &
Western Co. v. Greyhound Lines, Inc., 641 F.2d 1201, 1208 (6th Cir. 1980). Nothing in the record
indicates that the laboratory service agreement between Nationwide and Lab One was intended to
benefit Plaintiff.
C. Award of attorney’s fees to Lab One.
This Court reviews a district court’s decision to award attorney’s fees for abuse of discretion.
Hadix v. Johnson, 65 F.3d 532, 534 (6th. Cir 1995). Plaintiff argues that the district court abused
its discretion by awarding attorney’s fees incurred by Defendant in filing a motion to compel
Plaintiff to disclose all witnesses and accompanying documents.
On February 7, 2004, Lab One requested that Plaintiff produce all witnesses and documents
he planned to rely on at trial. In the original state court action, the deadline for Plaintiff Sagraves
to produce these materials was June 29, 2004, but after the case was removed to federal court, the
deadline was extended to March 23, 2005. On April 9, 2005, after the deadline had passed, Plaintiff
informed Lab One that he “currently has no documents in his possession which would respond to
the request of said Defendant.” (Pl.’s Resp. to Req. to Produce Docs.)
On July 30, 2004, in response to Lab One’s motion for summary judgment, Plaintiff
identified his expert witness, Dr. James Bourland, and Dr. Bourland’s affidavit regarding the results
of the hair test. On August 9, Lab One faxed Plaintiff’s counsel, requesting the production of all
documents it had previously requested, including documents mentioned in Dr. Bourland’s affidavit.
The letter informed Plaintiff’s counsel that if Lab One did not receive the documents by the end of
that business day, Lab One would inform the court.
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Plaintiff’s counsel responded by informing Defendant that he had been on vacation for ten
days and would send all of the documents and reports when they received them. Defendant filed its
motion to compel the next day.
Magistrate Judge Mark R. Abel of the district court ordered Plaintiff to make the necessary
Rule 26(2) disclosures by producing the requested documents within ten days and to produce Dr.
Bourland for a deposition within thirty days. The court also ordered Plaintiff to pay Defendant the
cost of filing the motion.
The district court does not appear to have abused its discretion in awarding attorney’s fees
for the costs of the motion to compel. Plaintiff had missed the discovery deadline for disclosing his
expert witness and failed to produce all relevant documents at the time the disclosure was eventually
made. The court allowed the hair test and the expert testimony to be submitted, even though the
deadline had passed.
After Plaintiff appealed Magistrate Judge Abel’s decision to award attorney’s fees, Judge
Watson reviewed the itemized fees and found them reasonable. In considering whether the Plaintiff
had the ability to pay, he held that the Plaintiff did not submit “sufficient documentation”
demonstrating that his financial need was tenuous. Wilson v. Upjohn Co., 808 F. Supp. 1321, 1325
(S.D. Ohio 1992). See also Legair v. Circuit City Stores, Inc., 213 Fed. Appx. 436, 440 (6th Cir.
2007). Instead, Plaintiff relied on his counsel’s “personal knowledge” of his financial situation.
Because Plaintiff missed the discovery deadline for disclosing his expert and documents
related to the expert report, and because Plaintiff failed to properly document his financial status, the
district court did not abuse its discretion in awarding attorney’s fees.
D. Failure to extend discovery and allowing Plaintiff to depose Defendant’s expert witness
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after discovery period.
This Court reviews discovery orders for abuse of discretion, Sierra Club v. Slater, 120 F.3d
623, 638 (6th. Cir 1997), reversing only when the decision results in substantial prejudice. Scales
v. J.C. Bradford, 925 F.2d 901, 906 (6th. Cir 1991).
Plaintiff argues that the district court abused its discretion by refusing to extend the discovery
deadline while Plaintiff sought to compel the deposition of Defendant’s expert witness at a cost of
less than $350 per hour. Review of the record below does not reveal any abuse of discretion of the
trial court.
On February 2, 2005, Lab One offered its expert witness, Dr. Cone, for deposition to the
Plaintiff prior to the March 4, 2005, discovery deadline. On February 24, 2005, Plaintiff filed a
motion to compel production of Dr. Cone at no charge, or at a cost less than his rate of $350, and to
extend the discovery deadline until August 1, 2005.
Magistrate Judge Abel denied the request for a rate reduction, finding that neither side
presented evidence of customary expert rates, that Plaintiff could reduce the expense by taking the
deposition by phone, and that Plaintiff failed to provide evidence that he was unable to pay the fee.
Judge Abel also denied the extension, noting that discovery deadlines had already been extended
many times in the case. He gave Plaintiff an additional eleven days from the date of his ruling,
however, to schedule the deposition.
Plaintiff missed this deadline and instead challenged the order on June 6, 2005. He failed,
however, to request a stay of Judge Abel’s order. The district court upheld Judge Abel’s decision,
citing Plaintiff’s failure to present evidence regarding customary expert costs and the multiple prior
discovery extensions in the case. Relying on Local Rule 72.3 of the Southern District of Ohio, the
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district court also found that Plaintiff’s failure to request a stay of the order while his appeal was
pending caused the discovery deadline to remain in effect. The Court therefore refused to extend
the discovery deadline and allow deposition of Dr. Cone.
As the review of the record demonstrates, the district court did not abuse its discretion in
refusing to extend the deadline or order a reduction in the cost of deposing Dr. Cone. Plaintiff failed
to present evidence of customary expert costs, only noting that the cost of his own expert was $150
per hour. As the district court found, however, Plaintiff’s expert was much less experienced and was
expert only in the area of hair testing. Plaintiff also failed to present evidence of his inability to pay.
As the record shows, because the deadline had been extended on multiple other occasions and
Plaintiff failed to request a stay of Judge Abel’s order while appealing, the discovery period lapsed
and the trial court did not abuse its discretion by failing to extend the deadline.
Finally, Plaintiff was unable to meet any of the elements of his negligence claim or
overcome the significant legal obstacles preventing his third party contract claims, and there is no
evidence in the record demonstrating that deposing Dr. Cone would have cured these deficiencies
in Plaintiff’s case. The failure to depose Dr. Cone therefore did not result in substantial prejudice to
Plaintiff.
For the foregoing reasons, we AFFIRM the district court’s judgment.
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