Nagata v. Quest Diagnostics Inc.
2004 U.S. Dist. LEXIS 2568, 303 F. Supp. 2d 1121, 2004 WL 343522 (2004)
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Rule of Law:
A defendant's reckless, two-year delay in disclosing a known testing error that caused a plaintiff's job loss can constitute outrageous conduct sufficient to support a claim for Intentional Infliction of Emotional Distress (IIED).
Facts:
- On January 19, 1999, Nathan Nagata provided a urine sample to his employer, Garden Isle Telecommunications, as required by its drug-testing policy.
- Quest Diagnostics Clinical Laboratories, Inc. ('Quest') tested the sample and reported to Garden Isle's Medical Review Officer, Dr. Lam, that the sample was inconsistent with human urine.
- Based on Quest's report, Garden Isle terminated Nagata's employment on January 25, 1999.
- Nagata's request for a retest was denied by Dr. Lam, who cited Department of Transportation (DOT) regulations.
- Quest later discovered that between January 4 and February 2, 1999, it had not been measuring creatinine concentrations to the required precision to determine if a sample was substituted.
- On January 10, 2001, nearly two years after the initial test, Quest informed Dr. Lam of the testing error and officially canceled Nagata's test result.
- On January 25, 2001, Nagata was notified of the error and offered his job back by Garden Isle.
Procedural Posture:
- Nathan Nagata filed suit against Quest Diagnostics Clinical Laboratories, Inc. in the U.S. District Court for the District of Hawaii.
- Quest previously filed a motion for summary judgment based on the statute of limitations.
- On June 5, 2003, the court granted that motion in part, dismissing Nagata's negligence and defamation claims as time-barred but allowing his claim for Intentional Infliction of Emotional Distress (IIED) to proceed.
- Quest then filed the current Motion for Summary Judgment, arguing that the undisputed facts do not support the essential elements of Nagata's IIED claim.
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Issue:
Does a testing laboratory's two-year delay in disclosing a testing error that led to an employee's termination create a genuine issue of material fact for a claim of Intentional Infliction of Emotional Distress under Hawaii law?
Opinions:
Majority - David Alan Ezra
Yes. A genuine issue of material fact exists as to whether the laboratory's two-year delay in disclosing its error constitutes Intentional Infliction of Emotional Distress. The court analyzed the claim under Hawaii's four-part test for IIED. First, a reasonable jury could find Quest's conduct was reckless because it knew or had reason to know that its delay in disclosure created a high degree of risk of serious harm to the affected individual and disregarded that risk. Second, while the standard for outrageousness is high, a jury could find that a two-year failure to correct information that resulted in job loss and depression goes 'beyond all possible bounds of decency' and is 'utterly intolerable in a civilized community.' Third, genuine issues of material fact exist as to whether Quest's withholding of information was the cause of Nagata's continued unemployment and resulting emotional distress, including depression and suicidal thoughts. Finally, Nagata's alleged symptoms—depression, substance abuse, and contemplation of suicide—are sufficient for a trier of fact to conclude he suffered extreme emotional distress as defined by Hawaii law.
Analysis:
This case clarifies the application of the 'reckless' and 'outrageous' conduct elements for an IIED claim in the context of a third-party service provider's post-error obligations. The decision establishes that liability for IIED can arise not only from an initial wrongful act but also from a subsequent, prolonged, and reckless failure to mitigate the harm caused by that act. It broadens the scope of what a jury might consider 'outrageous' beyond direct harassment or employer-employee disputes, signaling that a knowing failure to correct a devastating error can be legally atrocious. This precedent will likely influence future cases involving professional negligence where a party's inaction exacerbates the resulting harm.
