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UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION

C.A. No. 3:16-cv-00972-MBS

AMY ELIZABETH WILLIAMS as the
PERSONAL REPRESENTATIVE of the
ESTATE FOR CHRISTIAN JACOB
MILLARE, and AMY ELIZABETH
WILLIAMS individually,
Plaintiff,

MEMORANDUM OF LAW IN SUPPORT OF
DEFENDANTS’ MOTION TO DISMISS

vs.
QUEST DIAGNOSTICS, INC.,
ATHENA DIAGNOSTICS, INC., and
ADI HOLDINGS, INC.
Defendants.

Defendants Quest Diagnostics Incorporated, Athena Diagnostics, Inc., and ADI Holding
Company, Inc., respectfully submit this memorandum in support of their motion to dismiss the
Complaint for failure to state a claim upon which relief can be granted and failure to plead fraud
with particularity.
SUMMARY
Accepting the allegations of the Complaint as true, a tragedy occurred more than eight
years ago when a two-year-old child died from a seizure. The child’s mother now brings this
lawsuit alleging that the Defendants committed diagnostic testing errors nine years ago that
contributed to the child’s death. For the entire nine years preceding this lawsuit, and for months
preceding the child’s death, the mother has been on explicit written notice from the Defendant
testing laboratory that it needed samples from her and from the child’s father in order to resolve
the test’s uncertainty. Neither the mother nor the father submitted to such tests. Instead, she

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brings this lawsuit almost a decade later and attempts to plead around the statute of limitations
and statute of repose. Despite the tragedy of what has occurred, this lawsuit should not be
allowed to proceed forward at this late date.
Amy Williams, individually and as personal representative of the estate of her deceased
son, has sued Quest Diagnostics Incorporated, Athena Diagnostics, Inc., and ADI Holding
Company, Inc., on various causes of action arising from the death of her son. In essence,
Williams alleges that her son experienced frequent seizures as a result of a genetic condition
known as Severe Myoclonic Epilepsy of Infancy (SMEI) or Dravet Syndrome. Plaintiff
contends that Athena Diagnostics, a DNA sequencing laboratory, mis-diagnosed the mutation in
the decedent’s DNA, and that this error was set forth in a 2007 report provided by Athena
Diagnostics to the treating physician who requested the test. Plaintiff asserts that, relying on the
allegedly erroneous 2007 report, the child’s doctors prescribed medications that were not
appropriate or effective for his condition and that exacerbated his seizures, eventually resulting
in the child’s death following a traumatic seizure on January 5, 2008.
The Plaintiff did not file suit until February 24, 2016, over eight years after the child’s
death and almost nine years after the 2007 report.
The 2007 report is attached to an affidavit that is an exhibit to the Complaint and is
incorporated in the Complaint, and the 2007 report explicitly and conspicuously states as
follows:


“Testing of the biological parents is strongly recommended to resolve the
uncertainty of these test results.” (emphasis added)



“[T]hese types of sequence variants are similar to those observed in both diseaseassociated mutations … and in benign polymorphisms ….”



“[T]he results of this analysis cannot be definitively interpreted ….” (emphasis
added)

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

“Affected with SMEI” is identified as a “possible outcome.”



“Testing of the biological parents is strongly recommended (for no additional
charge) to help resolve the uncertainty of this sequent variant’s pathogenicity and
the uncertainty of the predicted phenotype.” (emphasis added)



“Missense mutations causing the severe phenotypes associated with SCN1A
mutations (SMEI or SMEB) are usually (>90%) de novo, meaning that the
mutation arose in the affected individual, and is not detected in the biological
parents.”



“Athena recommends genetic counseling for this individual and his or her family
members, and consideration of parental testing.” (emphasis added)



“Most mutations that cause SMEI are de novo, or sporadic (arise in the affected
individual rather than being inherited) an inheritance pattern that can be
confirmed by testing of parents.” (emphasis added)



“In order to provide a more comprehensive interpretation of this patient’s SCN1A
results, Athena Diagnostics is requesting samples from the biological parents of
this patient. Athena will perform a target analysis on these samples for variant(s)
identified in gene SCN1A only and use the findings to help interpret the patient’s
SCN1A result(s) at no additional charge.” (emphasis added)

Notwithstanding the repeated, emphatic warnings in the 2007 report that the test results
were inconclusive, that SMEI was a possible outcome, and that genetic testing of the biological
parents was “strongly recommended” in order to confirm or disprove the existence of SMEI,
neither the Plaintiff nor her son’s doctors requested genetic testing of the parents. Instead,
according to the Complaint, the decedent’s doctors continued to treat him as if he did not have
SMEI; the treatment was ineffective; and the child died following a seizure in early 2008.
The Complaint alleges the following causes of action:


Negligence and wrongful death, as to Athena Diagnostics only.



Negligence and survival action, as to Athena Diagnostics only.



Two counts of negligent misrepresentation “and/or constructive fraud,” as to all
Defendants.



Civil conspiracy, as to all Defendants.



Violation of the South Carolina Unfair Trade Practices Act, as to all Defendants.

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These causes of action must be dismissed for the following reasons:
First, all claims are barred by the applicable statutes of limitation because the Plaintiff
had constructive notice of her potential claims as a matter of law more than three years before
bringing suit.
Second, the wrongful death and survival actions must be dismissed under the six-year
statute of repose for medical malpractice claims set forth in S.C. Code § 15-3-545(A).
Third, the Plaintiff’s claims for negligent misrepresentation and constructive fraud must
be dismissed for failure to plead any false statement of fact on which Plaintiff relied to her
detriment, and for failure to plead fraud with particularity as required by Rule 9(b).
Fourth, the claim for civil conspiracy must be dismissed because it merely realleges the
other acts complained of and does not set forth any additional facts or special damages caused
uniquely by the alleged conspiracy.
Fifth, the Unfair Trade Practices Act claim must be dismissed for failure to plead
adequately that the Defendants’ allegedly wrongful acts affect the public interest.
Plaintiff’s loss of her son to a tragic illness is heart-breaking, and no one could help but
sympathize with her, but she does not have a claim against the Defendants upon which relief can
be granted. The purpose of Rule 12(b)(6) is to prevent claims of this nature from going forward
at considerable costs to the Court and to the parties, and the purpose of Rule 9(b) is to prevent
scurrilous allegations of fraud from being made where the plaintiff has no factual basis to make
such a serious charge. For these reasons, this action should be dismissed now, with prejudice.

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ALLEGATIONS OF THE COMPLAINT
The Defendants vehemently dispute the material allegations of the Complaint, and in
particular the contentions that Athena Diagnostics was negligent in its initial diagnosis of the
decedent’s condition and that the Defendants subsequently attempted to cover up the supposed
error in the 2007 report.1 Nevertheless, Defendants recognize that in the context of a motion to
dismiss, the well-pleaded allegations of the Complaint must be accepted as true and viewed in
the light most favorable to the Plaintiff. Viewed in this light, the Complaint makes the following
allegations.2
Defendant Quest Diagnostics Incorporated (“Quest”) owns all of the shares of stock of
ADI Holding Company, Inc. (“ADI”) through an acquisition that occurred in 2011. ADI, in turn,
owns all of the shares of stock of Athena Diagnostics, Inc. (“Athena”). (Compl. ¶ 6) Athena
performs clinical diagnostics genetic testing and operates a licensed genetics diagnostic
laboratory. (Compl. ¶¶ 10, 15, 19)
Plaintiff’s son was born in 2005 and, when he was four months old, began experiencing
seizures which increased in frequency over time. (Compl. ¶ 12) His treating neurologist
prescribed sodium blocking channel medications, which are often used to treat frequently
occurring seizures. These medications, however, “proved ineffective at treating [the child’s]
condition.” (Compl. ¶ 13) Accordingly, at the direction of two treating clinical geneticists, a
blood sample was taken from the child from which his DNA was extracted. The DNA extract
was provided to Athena for a SCN1A DNA Sequencing Clinical Diagnostic Test “for the
1

Defendants are not aware of any evidence whatsoever to support this reckless and unfounded
accusation, which Plaintiff alleges – in direct contravention of Rule 9(b) – “on information and
belief.” Further, it is nonsensical to accuse the Defendants of a cover-up when it was Athena
itself that reclassified the decedent’s mutation in the revised report issued in 2015.

2

The Defendants set forth this summary of the Complaint’s allegations only for purposes of this
motion, and otherwise deny them.

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purpose of ‘diagnosing or detecting an existing disease, illness, impairment, symptom or
disorder.’” (Compl. ¶¶ 14-15)
According to the Complaint, on June 30, 2007, Athena issued a “SCN1A DNA
Sequencing Test Diagnostic Service Report” which diagnosed the decedent’s condition as a
DNA mutation in the SCN1A gene classified as a “Variant of unknown significance.” (Compl. ¶
17) Plaintiff alleges that this diagnosis was incorrect and that Athena “breached the standards of
care set by [the] Clinical Laboratory Improvement Amendments (‘CLIA’) – a federal
certification process for laboratories that perform clinical diagnostic tests on human specimens in
the United States – for a certified diagnostic laboratory performing high-complexity genetic
testing, through Athena’s negligent failure to correctly diagnose the DNA missense mutation in
the decedent’s SCN1A gene.” (Compl. ¶ 19 (emphasis added)) Plaintiff contends that the
classification was wrong because her son’s mutation had been reported in patients suffering from
Dravet Syndrome, also known as Severe Myoclonic Epilepsy of Infancy (SMEI), and that
Athena’s Chief CLIA Laboratory Director knew or should have known that the 2007 report was
in error. (Compl. ¶¶ 21-24)
Plaintiff alleges that because of the mis-diagnosis in the 2007 report, her son’s doctors
continued to treat him using sodium channel blocking medications, which is standard for
seizures not caused by SMEI but which worsens seizures in patients with SMEI. (Compl. ¶¶ 3133) The Plaintiff asserts that “[a]s a proximate result of Athena’s negligent laboratory practices
and failure to accurately diagnose and advise for the selection of appropriate therapy,” her son
died on January 5, 2008, after a traumatic seizure. (Compl. ¶ 34 (emphasis added))
Plaintiff further alleges that, in September 2014, she and a doctor and a genetic counselor
requested a copy of the 2007 report and, in January 2015, were provided with a revised report
that correctly reclassified the decedent’s condition as a “Known disease-associated mutation.”

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(Compl. ¶ 26) Plaintiff contends that the 2015 report violates CLIA regulations by failing to cite
new publication references supporting the reclassification and by including the names of two
Athena personnel – Dr. Nagan and Dr. Zhu – who were involved in the testing used for the 2007
report but who had left Athena’s employment by the time of the 2015 report. (Compl. ¶¶ 27-28)
Plaintiff alleges that Athena was negligent for failure to meet the standard of care by misdiagnosing her son’s condition in the 2007 report, and asserts a cause of action under South
Carolina’s wrongful death statute on behalf of the statutory beneficiaries. (Compl. ¶¶ 40-47)
Plaintiff also alleges that Athena’s failure to meet the standard of care caused her son to suffer
before he died, and asserts a survival action on behalf of his estate. (Compl. ¶¶ 49-51)
In addition, Plaintiff pleads two counts of negligent misrepresentation “and/or
constructive fraud” in her third and fourth causes of action. The third cause of action alleges that
the Defendants made a conscious decision to conceal the child’s actual condition “once the
obvious mistake in the 2007 Report was discovered,” which the Plaintiff asserts occurred
sometime between 2007 and 2015. (Compl. ¶ 53) The Complaint claims that the error in the
2007 report and Defendants’ “intentional omission once their mistake was known” constitutes
negligent misrepresentation or fraud. (Compl. ¶ 55)
The fourth cause of action alleges that the 2015 report falsely purports to be a “new” test
and falsely states that Drs. Nagan and Zhu authorized and signed off on the report, and that these
acts constitute negligent misrepresentation or fraud. (Compl. ¶¶ 62, 65)
Plaintiff’s fifth cause of action reiterates her claim that the Defendants conspired with
each other to cover up the mistake in the 2007 report “as reflected by the [correct information in]
the 2015 Report,” causing the death and suffering of the Plaintiff’s son. (Compl. ¶ 68)
Finally, Plaintiff’s sixth cause of action alleges that the Defendants’ deceitful conduct
and cover-up violated the South Carolina Unfair Trade Practices Act. Plaintiff asserts that these

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acts “are capable of repetition given the nature of the Corporate Defendants’ business and the
vast number of people who depend on the numerous diagnostic tests performed by these
Corporate Defendants each year. As such, these acts have an effect on the public and do concern
the public interest.” (Compl. ¶ 75)
As noted above, the 2007 report and the 2015 report are attached to affidavits included as
exhibits to the Complaint and incorporated in the Complaint by reference. As noted above, the
2007 report warns repeatedly and explicitly that the test performed was inconclusive, that SMEI
could be the cause of the patient’s seizures, and that genetic testing of the biological parents is
“strongly recommended” in order to resolve the uncertainty of the test results.
STANDARD OF REVIEW
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The
Fourth Circuit has explained: “Iqbal and Twombly articulated a new requirement that a
complaint must allege a plausible claim for relief, thus rejecting a standard that would allow a
complaint to survive ... whenever the pleadings left open the possibility that a plaintiff might
later establish some set of [undisclosed] facts to support recovery.” McCleary-Evans v.
Maryland Dep’t of Transp., 780 F.3d 582, 587 (4th Cir. 2015) (emphasis and alteration in
original, internal quotation marks omitted); see also Walters v. McMahen, 684 F.3d 435, 439
(4th Cir. 2012) (stating that “those decisions require that complaints in civil actions be alleged
with greater specificity than previously was required”).
The court accepts well-pleaded factual allegations as true, but should disregard all
conclusory allegations. Iqbal, 556 U.S. at 678. “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged.” Id. Dismissal is warranted whenever the factual
allegations do not “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555.
ARGUMENT
I.

All claims should be dismissed because of Plaintiff’s failure to bring
suit within three years of constructive notice.

Enforcing a statute of limitations often results in harsh consequences for the plaintiff. In
the South Carolina case of Moates v. Bobb, 322 S.C. 172, 470 S.E.2d 402 (Ct. App. 1996), the
plaintiff, Moates, became a paraplegic after a car crash with the defendant, Bobb. The court
noted that “[w]e sympathize with the Moateses as they have suffered a terrible tragedy. As a
reviewing court in an equity matter, however, we hold it would be highly unfair to expose Bobb
now to the immense potential liability of this claim after the Moateses ‘slept on their rights.’” Id.
at 176, 470 S.E.2d at 404. The court went on to hold that “statutes of limitations are not simply
technicalities. On the contrary, they have long been respected as fundamental to a well-ordered
judicial system.” Id., 470 S.E.2d at 404 (citing 54 C.J.S. Limitations of Actions § 2, at 16-17
(1989)).
Similarly, the court explained that “[o]ne purpose of a statute of limitations is to relieve
the courts ‘of the burden of trying stale claims when a plaintiff has slept on his rights.’” Id., 470
S.E.2d at 404 (quoting Burnett v. New York Cent. R.R., 380 U.S. 424, 428, 85 S. Ct. 1050, 1054
(1965)). This concern is particularly acute given the scientific context of the instant case –
genetics and genetic screening, fields in which quantum leaps have been made in knowledge and
technology during the past 5-10 years.
As set forth in detail above, Athena’s 2007 report emphasized over and over that the test
results were inconclusive, that further testing was strongly recommended, and that a conclusive
diagnosis could be reached only by additional testing. Athena offered to perform the testing of

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the biological parents at no additional charge. Yet Plaintiff elected – for almost nine years – not
to pursue the follow-up testing.
South Carolina Code section 15-3-530 includes a blanket three-year statute of limitations
for most types of claims, including claims for injury to the person or rights of another, for death
by wrongful act, and for fraud. Similarly, Code section 15-3-545 contains a three-year statute of
limitations for suits alleging medical malpractice, and section 39-5-150 sets forth a three-year
statute of limitations for claims under the Unfair Trade Practices Act. Collectively, all of
Plaintiff’s causes of action are subject to these three-year statutory limitations periods.
While a cause of action generally accrues at the moment a defendant breaches a duty
owed to the plaintiff, South Carolina law recognizes a discovery rule that tolls the statute of
limitations until the plaintiff “knew or by the exercise of reasonable diligence should have
known that he had a cause of action.” S.C. Code Ann. § 15-3-535. Interpreting the phrase
“reasonable diligence,” the Supreme Court has explained that
The exercise of reasonable diligence means simply that an injured party must act
with some promptness where the facts and circumstances of an injury would put a
person of common knowledge and experience on notice that some right of his has
been invaded or that some claim against another party might exist. The statute of
limitations begins to run from this point and not when advice of counsel is sought
or a full-blown theory of recovery developed.
Snell v. Columbia Gun Exch., Inc., 276 S.C. 301, 303, 278 S.E.2d 333, 334 (1981).
The related legal principle of “constructive notice” is based upon the same foundation:
Constructive notice is a legal inference which substitutes for actual notice. It is
notice imputed to a person whose knowledge of the facts is sufficient to put him
on inquiry; if these facts were pursued with due diligence, they would lead to
other undisclosed facts.
Strother v. Lexington Cnty. Recreation Comm’n, 332 S.C. 54, 64, 504, S.E.2d 117, 122 (1998).
Put differently, “if there are circumstances sufficient to put the party upon inquiry, he is held to
have notice of everything which that inquiry, properly conducted, would certainly disclose.”

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City of Greenville v. Washington Am. League Baseball Club, 205 S.C. 495, 509, 32 S.E.2d 777,
782 (1945).
The 2007 report is replete with statements that would have put a reasonable person on
notice that its tentative conclusion could be incorrect, and that additional testing was needed to
confirm or disprove that tentative conclusion. Had Plaintiff taken the actions recommended in
the 2007 report – including the free parental testing offered and strongly recommended – the
uncertainty of the decedent’s test results would have been clarified. By not submitting to the
additional recommended testing, Plaintiff failed as a matter of law to exercise reasonable
diligence.
Numerous courts have held that a plaintiff’s failure to submit to additional recommended
medical testing constitutes a failure to exercise the required reasonable diligence, and that a
plaintiff could be held to have constructive notice of those facts that the additional testing would
have revealed. See, e.g., Vitalo v. Cabot Corp., 399 F.3d 536, 543-545 (3rd Cir. 2005) (statute of
limitations for plant worker’s claim for beryllium poisoning ran from the time he received x-ray
results showing scarring that may be caused by beryllium and further testing was offered free of
charge to confirm beryllium disease instead of asbestosis); Betts v. Manville Pers. Injury
Settlement Trust, 588 N.E.2d 1193, 1203 (Ill. App. Ct. 1992) (statute of limitations on asbestosis
claim ran from point that doctor recommended and patient refused lung biopsy to confirm
diagnosis); Sowell v. Dresser Indus., Inc., 866 S.W.2d 803, 806-07 (Tex. Ct. App. 1993) (statute
of limitations on silicosis claim ran from the time patient was advised by physician to submit to
CT scan, blood work, and additional testing, but patient refused to do so).
The same principle applies in this case. Because more than three years have elapsed
since the 2007 report gave notice to Plaintiff that additional testing was required, all claims are
barred by the three-year statutes of limitations.

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Plaintiff’s wrongful death and survival claims should be dismissed for
failure to bring suit within six years of the alleged malpractice.

The essence of Plaintiff’s case is an allegation that an act of medical malpractice
occurring nearly nine years ago led to the misdiagnosis and mistreatment of Plaintiff’s infant
son. Though Plaintiff artfully pleads her first two causes of action as “Negligence/Gross
Negligence Resulting in Wrongful Death” and “Survivorship Action,” both claims in reality
sound in medical malpractice, and as such, they are subject to the six-year statute of repose for
medical malpractice found at South Carolina Code section 15-3-545: “[A]ny action ... to recover
damages for injury to the person arising out of any medical ... treatment, omission, or operation
... must be commenced within ... three years from date of discovery or when it reasonably ought
to have been discovered, not to exceed six years from date of occurrence.” S.C. Code Ann. § 153-545(A) (emphasis added). As this case was filed nearly 9 years after the occurrence of the
alleged negligence, Plaintiff’s first two causes of action exceed the 6-year repose period by
nearly 3 years and must be dismissed as a matter of law.
The allegations in Plaintiff’s own Complaint demonstrate that the first two claims amount
to allegations of medical malpractice. Plaintiff asserts that when her son began suffering from
certain “febrile focal motor seizures” she “sought treatment for [decedent’s] condition from a
variety of service providers.” (Compl. ¶ 12 (emphasis added)) In January 2007, “[i]n an attempt
to more accurately diagnose the exact nature of [decedent’s] condition,” a whole blood sample
was taken from him and his DNA was extracted from the sample. (Compl. ¶ 14) This sample
was taken “at the direction” of two physicians employed by “Horizon Molecular Medicine” of
Atlanta, Georgia, as “treating clinical geneticists.” (Compl. ¶ 14) The extracted DNA was then
provided to Athena’s laboratory for an “SCNIA DNA Sequencing Diagnostic Test ... for the
purpose of ‘diagnosing or detecting an existing disease, illness, impairment, symptom, or

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disorder.’” (Compl. ¶ 15 (emphasis added)) According to Plaintiff, Athena then issued a
“Sequencing Clinical Diagnostic Report” that was in error. (Compl. ¶¶ 17, 18)
Allegedly relying on this report, attending physicians to Plaintiff’s son, including the
physicians at Horizon Molecular Medicine who had directed that the blood sample be taken,
rejected a diagnosis of Dravet Syndrome or SMEI, and continued to treat him with a regimen of
sodium channel blocking medications. (Compl. ¶ 31) Plaintiff allege these medications worsen
seizures in persons with Dravet Syndrome, and that “[a]s a proximate result of Athena’s ...
failure to accurately diagnose and advise for the selection of appropriate therapy,” the child lost
his life following a seizure in January 2008, over eight years ago. (Compl. ¶¶ 33, 34 (emphasis
added))
Plaintiff supports the allegations in her Complaint with the affidavits of Dr. Robert CookDeegan and Dr. Max Wiznitzer. Both affiants are doctors of medicine. Dr. Cook-Deegan holds
an appointment in internal medicine in the Duke University School of Medicine, and Dr.
Wiznitzer serves as a “pediatric neurologist” at “Rainbow Babies and Children’s Hospital” and
is “board certified by the American Board of Pediatrics in Pediatrics and board-certified by the
American Board of Psychiatry and Neurology both in Neurology, with special qualification in
Child Neurology, and in Neurodevelopmental Disabilities.” (Compl. ¶¶ 11, 34)
The particular allegations in Plaintiff’s causes of action further indicate that this is a
medical malpractice case. Plaintiff alleges in the first cause of action3 that Athena had a duty to
meet a particular standard of care in the course of providing federally licensed “high complexity
clinical diagnostic genetic testing” and that Athena breached this standard of care by, among
other things, “fail[ing] to provide accurate genetic confirmation of Dravet Syndrome (SMEI),”

3

Plaintiff’s second cause of action, for survivorship, Compl. ¶¶ 48-51, is premised on essentially
the same factual allegations as the first cause of action.

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“fail[ing] to identify anticonvulsant treatments necessary to avoid in patients with a SMEI
diagnosis,” and various infractions of the federal Clinical Laboratory Improvement
Amendments. (Compl. ¶ 41) Plaintiff further alleges that Athena “had a duty to correctly
inform [Plaintiff’s son] of his SMEI condition” and a duty to “aid [him] in obtaining treatment to
correct the condition,” and that Athena’s alleged failure to comply with its duties “prevented
[him] from discovering more appropriate treatments to mitigate [his] condition.” (Compl. ¶ 44)
Plaintiff also alleges that Athena “knew or should have known” that the results of its testing
“would have direct impact on a patient’s treatment and clinical management.” (Compl. ¶ 45)
South Carolina law establishes a six-year statute of repose for actions for medical
malpractice. S.C. Code Ann. § 15-3-545(A). The statute provides that
In any action ... to recover damages for injury to the person arising out of any
medical, surgical, or dental treatment, omission, or operation by any licensed
health care provider ... acting within the scope of his profession must be
commenced within three years from the date of the treatment, omission, or
operation giving rise to the cause of action or three years from date of discovery
or when it reasonably ought to have been discovered, not to exceed six years from
date of occurrence ….
Id. (emphasis added). The corresponding definition of “licensed health care provider” covers all
manner of persons and entities that provide a wide variety of health care services:
“Licensed health care providers” means physicians and surgeons; directors,
officers, and trustees of hospitals; nurses; oral surgeons; dentists; pharmacists;
chiropractors; optometrists; podiatrists; hospitals; nursing homes; or any similar
category of licensed health care providers.
S.C. Code Ann. § 38-79-410 (emphasis added).
The South Carolina Supreme Court has recognized that this statute of repose operates
without regard to any discovery rule or period and “constitutes an outer limit beyond which a
medical malpractice claim is barred, regardless of whether it has or should have been
discovered.” Hoffman v. Powell, 298 S.C. 338, 339-40, 380 S.E.2d 821, 821 (1989). The court

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has also rejected challenges to the statute’s constitutionality, recognizing that “it bears a rational
relationship to a legitimate legislative objective: reduction of liability exposure and, thereby,
fostering the delivery of quality health care services.” Id. at 340, 380 S.E.2d at 822. Quoting a
decision of the Supreme Court of Illinois upholding an even shorter (4-year) statute of repose,
the South Carolina Supreme Court further explained that while barring a cause of action before
its discovery may seem unfair,
the reasonableness of the statute must be judged in light of the circumstances
confronting the legislature and the end which it sought to accomplish. We have
noted above that various reports, commissions, and authors recommended that the
‘long tail’ exposure to malpractice claims brought about by the discovery rule
must be curtailed by placing an outer limit within which a malpractice claim must
be commenced.
Id. at 341, 380 S.E.2d at 822 (quoting Anderson v. Wagner, 402 N.E.2d 560, 568 (1979)).
The South Carolina legislature has defined “licensed health care providers” broadly, to
include “any similar category of licensed health care providers” like those that are enumerated.
In interpreting the phrase “any similar category of licensed health care providers,” the Supreme
Court has explained that the key requirement is that “an institution or person must provide health
care to patients.” Swanigan v. American Nat’l Red Cross, 313 S.C. 416, 419, 438 S.E.2d 251,
252 (1993).
By any analysis Athena is a “licensed health care provider” under South Carolina law.
With respect to licensing, Plaintiff’s own allegations point out that Athena is licensed and
regulated pursuant to federal “CLIA” standards. As for whether Athena provides “health care,”
the basic definition in the dictionary is instructive in the absence of any statutory definition. See
Lee v. Thermal Eng’g Corp., 352 S.C. 81, 91-92, 572 S.E.2d 298, 303 (Ct. App. 2002)
(recognizing that “[w]here a word is not defined in a statute, our appellate courts have looked to
the usual dictionary meaning to supply its meaning”). “Health care” is generally defined as “any

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field or enterprise concerned with supplying services, equipment, information, etc., for the
maintenance or restoration of health.” Webster’s College Dictionary, 2d ed., p. 599 (1997).
“Health,” in turn, is “soundness of body or mind; freedom from disease or ailment.” Id. Using
these definitions, Athena’s services of genetic screening and testing are quite plainly intended to
aid in the “restoration of health” and the freeing of the body “from disease or ailment.” Plaintiff
herself alleges that she and her son’s doctors relied on Athena’s services for “diagnosing and
detecting an existing disease,” (Compl. ¶ 15), and that Athena’s “failure to accurately diagnose
and advise for the selection of appropriate therapy,” (id. ¶ 34), led to faulty treatments that
caused the child’s death.
Courts confronted with similar statutes of limitation and repose have determined that
entities providing health care services analogous to Defendants’ genetic screening services did
fall under the protections of the statutes. For example, in Khadim v. Laboratory Corp. of Am.,
838 F. Supp. 2d 448 (W.D. Va. 2011), the federal district court held that a laboratory corporation
that had provided erroneous “prenatal genetic testing results” fell under the definition of “health
care provider” in the applicable Virginia statute. In particular, the court concluded that the
statute’s inclusion of “a corporation, partnership, limited liability company or any other entity ...
which employs or engages a licensed health care provider and which primarily renders health
care services” included the defendant LabCorp. 838 F. Supp. 2d at 461, 467 (quoting Va. Code
§ 8.01-581.1); see also Johnson v. Superior Court, 124 Cal. Rptr. 2d 650, 662 (Cal. Ct. App.
2002) (rejecting argument that physicians providing genetic screening services at tissue bank
were not acting as health care providers).
Similarly, the Texas Court of Appeals held that a pathology lab that had failed to detect
the presence of a melanoma in a lesion removed from a patient’s skin and submitted to the lab
for analysis was protected by a statute of limitations governing “health care liability” claims

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against “health care providers.” Hogue v. Propath Laboratory, 192 S.W.3d 641, 644-45 (Tex.
Ct. App. 2006). In Calvin v. Schlossman, 74 A.D.2d 265 (N.Y. App. Div. 1980), the New York
court concluded a private medical lab that had misdiagnosed a patient’s pap smear was subject to
the state’s mandatory medical malpractice statutory scheme. In so doing, the court recognized
that the statutory definitions of “hospitals” and “clinical labs” in the New York code “bespeak of
medical doctors and laboratories as allies for the prevention and treatment of disease.” Id. at
635. The court continued,
Although the services of a medical doctor and a laboratory are divisible, they act
as collaborators, not antagonists. Their work is interrelated, and ... the analysis
performed by a laboratory is supplemental to and bears directly upon the course
of medical treatment to be provided. A proper diagnosis can facilitate recovery
while an incorrect analysis can spell prolonged affliction.
Id. at 269. This interdependent relationship between physicians and health care service
providers like Defendants is also recognized by the Plaintiff in her own allegations, which
accuse Athena of a “failure to accurately diagnose and advise for the selection of appropriate
therapy.” (Compl. ¶ 34)
Bolstering the conclusion that Athena is a licensed health care provider and that
Plaintiff’s claims properly sound in medical malpractice are the discussions of a number of
courts in distinguishing between claims for mere negligence and those for medical malpractice.
The South Carolina Supreme Court recently explained that the distinction is often made “by
determining whether expert testimony is necessary to aid in the jury’s determination of fault,
particularly with respect to the ‘duty’ and ‘causation’ elements of the claim.” Dawkins v. Union
Hosp. Dist., 408 S.C. 171, 177, 758 S.E.2d 501, 504 (2014). “In general,” the court continued,
“if the patient receives allegedly negligent professional medical care, then expert testimony as to
the standard of that type of care is necessary, and the action sounds in medical malpractice.” Id.,
758 S.E.2d at 504 (citing various decisions from other jurisdictions). Here, of course, the

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Plaintiff has offered the affidavits of two medical doctors to support her claims that a standard of
care applicable to Athena was breached.
New York courts have further held that “conduct may be deemed malpractice, rather than
negligence, when it constitutes medical treatment or bears a substantial relationship to the
rendition of medical treatment by a licensed physician,” Scott v. Uljanov, 541 N.E.2d 398, 370
(N.Y. App. Div. 1989) (emphasis added), and applying this rationale have reasoned that
“laboratory services ... performed at the direction of a physician are an integral part of the
process of rendering medical treatment” and that therefore “a claim stemming from the rendition
of such services is a medical malpractice claim.” Annunziata v. Quest Diagnostics Inc., 127
A.D.3d 630, 631 (N.Y. App. Div. 2015). Plaintiff’s own allegations again make clear that
Athena’s DNA testing services were sought by attending physicians “for the purpose of
‘diagnosing or detecting an existing disease, illness, impairment, symptom, or disorder.’”
(Compl. ¶ 15)
Finally, Plaintiff’s characterizing the causes of action as “Negligence” and
“Survivorship” are unavailing in an attempt to escape the medical malpractice statute of repose.
As the Supreme Court has recognized, the statute of limitations and repose in section 15-3-545
covers “any action to recover damages for injury to the person arising out of any medical ...
treatment,” however the claim is framed or pleaded. Smith v. Smith, 291 S.C. 420, 426, 354
S.E.2d 36, 40 (1987) (affirming judgment for defendants on claims for breach of contract for
alleged negligent medical treatment) (emphasis in original).
Based on the foregoing, Athena is properly classified as a “licensed health care provider”
and is therefore entitled to the protections afforded such providers in section 15-3-545. For this
reason, Plaintiff’s first two causes of action come three years too late, and must be dismissed as a
matter of law.

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Plaintiff’s negligent misrepresentation and constructive fraud claims
should be dismissed for failure to allege a false statement of fact on
which the Plaintiff relied to her detriment and failure to plead fraud
with the particularity required by Rule 9(b).

The elements of negligent misrepresentation and fraud both require a false representation
of fact. “To establish fraud, there must first be a false representation.” Osborn v. University
Medical Assocs. of the Medical Univ. of S.C., 278 F. Supp. 2d 720, 733 (D.S.C. 2003) (quoting
Winburn v. Insurance Co. of North Am., 287 S.C. 435, 339 S.E.2d 142, 145 (Ct. App. 1985)).
Likewise, “[n]egligent misrepresentation requires … a false representation.” Id. at 735.
“Recovery in negligent misrepresentation cases is based upon negligent conduct and predicated
upon a negligently made false statement where a party suffers either injury or loss as a
consequence of relying upon the misrepresentation.” Gruber v. Santee Frozen Foods, Inc., 309
S.C. 13, 20, 419 S.E.2d 795, 799 (Ct. App. 1992) (emphasis added). “The key difference
between fraud and negligent misrepresentation is that fraud requires the conveyance of a known
falsity, while negligent misrepresentation is predicated upon transmission of a negligently made
false statement.” Armstrong v. Collins, 366 S.C. 204, 219-20, 621 S.E.2d 368, 375-76 (Ct. App.
2005) (internal quotations and citations omitted).4
Further, because of the gravely serious nature of the allegations, fraud-based claims are
held to an extremely high standard of pleading specificity. See Rule 9(b), FRCP (“In alleging
fraud or mistake, a party must state with particularity the circumstances constituting fraud or
mistake.”) (emphasis added); Pitten v. Jacobs, 903 F. Supp. 937, 951 (D.S.C. 1995) (Rule 9(b)
applies to “all cases where the gravamen of the claim is fraud even though the theory supporting
the claim is not technically termed fraud”). As this Court recently explained, “[t]he

4

Constructive fraud differs from actual fraud only in that intent to deceive is not an element of
constructive fraud. E.g., Cheney Bros. Inc. v. Batesville Casket Co., 47 F.3d 111, 114 (4th Cir.
1995).

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circumstances required to be pled with particularity under Rule 9(b) are the time, place and
contents of the false representations, as well as the identity of the person making the
misrepresentation and what he obtained thereby.” Preferred Home Inspections, Inc. v. BellSouth
Telecommunications, LLC, 2014 WL 4793824, at *8 (D.S.C. Sept. 25, 2014) (Seymour, J.)
(quoting McCauley v. Home Loan Inv. Bank, F.S.B., 710 F. 3d 551, 559 (4th Cir. 2013)).
In addition, in a multi-defendant lawsuit such as this one, Rule 9(b) mandates such
specificity with respect to each separate defendant. See, e.g., Maryland Staffing Servs., Inc. v.
Manpower, Inc., 936 F. Supp. 1494, 1500 (E.D. Wis. 1996) (where there are multiple
defendants, “Rule 9(b) prohibits ‘lumping together’ all the defendants under a general accusation
that they were participants in a scheme to defraud. Rather, the rule requires that the complaint
inform each defendant of the nature of his alleged participation in the fraud and specify which
defendants were involved in what activity.”); accord Jepson, Inc. v. Makita Corp., 34 F.3d 1321,
1328 (7th Cir. 1994).
Rule 9(b)’s particularized pleading requirement serves to protect defendants by ensuring
they have sufficient information to formulate a defense by putting them on notice of the conduct
complained of, by discouraging frivolous suits where “all the facts are learned after discovery,”
and by preventing “harm to their goodwill and reputation.” Harrison v. Westinghouse Savannah
River Co., 176 F.3d 776, 784 (4th Cir. 1999). If a plaintiff’s allegations lack this level of
specificity, a motion to dismiss must be granted. Gentry v. Yonce, 337 S.C. 1, 7, 522 S.E.2d 137,
140 (S.C. 1999) (explaining that Rule 9(b)’s particularity requirement “is a means for courts to
summarily dispose of frivolous lawsuits based on fraud”).
Viewing the Complaint with the above principles of law in mind, it is readily apparent
that the Plaintiff has not pleaded a viable claim for either negligent misrepresentation or fraud.

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A. Third Cause of Action
(“First Count of Negligent Misrepresentation and/or Constructive Fraud”)
In pleading her third cause of action, the Plaintiff has completely ignored the mandates of
Rule 9(b). Virtually every factual allegation that the Plaintiff makes in this cause of action is
based “upon information and belief,” makes no effort to distinguish among the Defendants, fails
to set forth the circumstances of the alleged fraud with particularity, and as explained below,
fails to identify a single false statement of fact on which the Plaintiff relied to her detriment.
To the extent that the third cause of action is predicated upon the alleged error in the
2007 report, it is merely another way of pleading the medical malpractice on which the first two
causes of action are based, and is therefore barred by the statute of limitations and statute of
repose for medical malpractice, as set forth above. To the extent that the claim is based on the
alleged cover-up of the error after it was discovered, there is no allegation of any false statement
made by the Defendants to the Plaintiff on which the Plaintiff relied. At most, the Plaintiff
contends that the Defendants intentionally decided not to correct the alleged mistake in the 2007
report after they realized, sometime prior to 2015, that the report was erroneous. Such a
hypothesized “cover up,” however, does not amount to an affirmative representation of fact.5
The Complaint asserts vaguely that the Defendants “fraudulently and/or negligently
misrepresented facts to effectuate the [cover-up]” (Compl. ¶ 56), but there is absolutely no
5

While some circumstances may give rise to a duty to speak and render a party liable for failure
to disclose a material fact during a transaction between the parties, there is no ongoing duty to
correct a prior mis-statement of which a party learns after the parties’ dealings have come to an
end. See, e.g., Restatement (Second) of Torts, § 551(2) (liability for nondisclosure applies to
failure to speak “before the transaction is consummated”); Bergeron v. DuPont, 359 A.2d 627,
629 (N.H. 1976) (“[O]ne who makes a representation believing it to be true and does not
discover its falsity until after the transaction has been consummated has committed no fraud.”);
In re Hurst, 337 B.R. 125, 133 (N.D. Tex. Bankr. 2005) (a party to a transaction who is aware
of the truth of certain facts and the other party’s mistaken impression as to those facts is under
a duty to correct the mistaken impression only “prior to the consummation of the transaction”
(citing Restatement (Second) of Torts § 551(2)).

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allegation of any such fact, much less the time, place, and manner in which the misrepresentation
was made. The Complaint’s conclusory allegation clearly does not satisfy the requirement of
pleading fraud with particularity under Rule 9(b).
B. Fourth Cause of Action
(“Second Count of Negligent Misrepresentation and/or Constructive Fraud”)
As to the fourth cause of action, the only alleged misrepresentations are Plaintiff’s claim
that the 2015 report was based on a “new” test and that it shows Drs. Nagan and Zhu as having
authorized the report when they had (at that time) left Athena’s employment. The Complaint
alleges in conclusory fashion that the Plaintiff relied on these false statements and that her
reliance caused harm to her son and to her, but this is obviously impossible. Plaintiff’s son, of
course, was already deceased when the 2015 report was issued; there is no way that any
misrepresentations in it could have caused his suffering and death in 2007 and 2008.
As to Plaintiff’s own asserted injury, it defies logic to claim that she somehow relied to
her detriment on the alleged misrepresentations made in 2015. Nowhere does the Complaint say
how the Plaintiff relied on the supposed representation that the 2015 report was a “new” test, or
how the Plaintiff was harmed by the listing of Drs. Nagan and Zhu in the report, or even
specifically that the Plaintiff did rely detrimentally on those alleged misrepresentations. Instead,
the Complaint merely pleads reliance and proximate cause in a wholly conclusory manner.
Again, such a pleading fails to meet Plaintiff’s burden of “stat[ing] with particularity the
circumstances constituting fraud,” Rule 9(b), Fed. R. Civ. P., and fails to satisfy the pleading
standard of Iqbal, see 556 U.S. at 678.
Finally, a review of the 2015 report itself, which is attached to the Complaint, reveals that
there is nothing in it that purports to be based on any “new” test. It simply reports a
reclassification of the decedent’s genetic mutation via a “Revised Report.”

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For all of the above reasons, Plaintiff’s negligent misrepresentation and constructive
fraud causes of action fail as a matter of law.
IV.

Plaintiff’s civil conspiracy claim must be dismissed for failure to
allege additional facts or special damages unique to the conspiracy.

Plaintiff’s count for civil conspiracy is fatally defective because it does what the South
Carolina appellate courts have repeatedly held is not sufficient to plead a valid cause of action
for conspiracy: The Complaint alleges nothing more than a combination to do the other
wrongful acts complained of, and fails to make any allegations of particular harm or special
damages resulting from the conspiracy itself apart from the other alleged wrongful actions.
The Supreme Court of South Carolina has held that where the particular acts alleged as a
conspiracy are the same as those relied on as other tortious acts alleged in the complaint, the
plaintiff cannot recover damages for such acts and also on the conspiracy to do the act. Todd v.
South Carolina Farm Bureau Mut. Ins. Co., 276 S.C. 284, 293, 278 S.E.2d 607, 611 (1981).
Likewise, in Kuznik v. Bees Ferry Associates, 342 S.C. 579, 538 S.E.2d 15 (Ct. App. 2000), the
Court of Appeals held that a pleading of civil conspiracy should be dismissed as a matter of law
when the plaintiff “merely reallege[s] the prior acts complained of in his other causes of action
as [his] conspiracy action but fail[s] to plead additional acts in furtherance of the conspiracy.”
Id. at 611, 538 S.E.2d at 31.
This is exactly what the Plaintiff’s conspiracy allegations attempt to do here. The
Plaintiff does not allege any “additional acts in furtherance of the conspiracy” over and above
those included in the other causes of action. Instead, the Complaint merely states that the
Defendants conspired to carry out the wrongful acts alleged as the grounds of the preceding
causes of action. (Compl. ¶ 68)
Furthermore, to prevail on a civil conspiracy claim, the Plaintiff must prove special

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damages that are not duplicative of the damages claimed as a result of other alleged wrongdoing.
Hackworth v. Greywood at Hammett, LLC, 385 S.C. 110, 117, 682 S.E.2d 871, 875 (Ct. App.
2009). Here again, the Complaint does not allege any special damages that are in any way
different from or in addition to the other damages sought by the Plaintiff. The damages allegedly
caused by the conspiracy consist of the “death, pain and suffering on the part of [Plaintiff’s son],
increased medical expenses, additional mental anguish caused by the delay in notification of [the
decedent’s] actual diagnosis and loss of child bearing years on the part of [the Plaintiff], as well
as the resulting incurred medical expenses for the treatment of her severe emotional distress.”
(Compl. ¶ 68) All of these elements of the alleged damages from the conspiracy are asserted as
damages from other causes of action pleaded in the Complaint. See Compl. ¶¶ 46 (decedent’s
death), 50 (decedent’s pain and suffering), 57 (medical expenses and emotional distress of the
Plaintiff), 58 (injury and death of decedent, Plaintiff’s loss of companionship of her son, loss of
child bearing years, and medical expenses for treatment of Plaintiff’s emotional distress), 66
(same).
For these reasons, the civil conspiracy count fails as a matter of law.
V.

Plaintiff’s UTPA claim must be dismissed for failure to plead
adequately any effect on the public interest.

Plaintiff’s sixth cause of action asserts that Defendants violated the South Carolina
Unfair Trade Practices Act (“UTPA”). This count fails to state a claim because the UTPA
applies only to acts or practices that have an impact on the public interest, York v. Conway Ford,
Inc., 325 S.C. 170, 173, 480 S.E.2d 726, 728 (1997), and “South Carolina courts have left no
doubt that an ‘unfair or deceptive act or practice that affects only the parties to a trade or
commercial transaction is beyond the act’s embrace.’” Omni Outdoor Adver., Inc. v. Columbia
Outdoor Adver., Inc., 974 F.2d 502, 507 (4th Cir. 1992) (citation omitted). The factual

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allegations in the Complaint show that the challenged conduct took place exclusively within the
confines of conduct affecting only the parties to this litigation. Count Six should therefore be
dismissed.
The UTPA applies only to unfair or deceptive practices that affect the public: “To
sustain a cause of action under the SCUTPA, the plaintiffs must establish, by specific facts, that
members of the public were adversely affected by [the defendant’s actions].” Preferred Home
Inspections, Inc. v. BellSouth Telecomms., LLC, 2014 WL 4793824 (D.S.C. Sept. 25, 2014)
(Seymour, J.) (granting rule 12(b)(6) motion to dismiss). Because of the broad remedies
available under the UTPA, plaintiffs have repeatedly attempted to apply it beyond its intended
scope. But the courts have consistently rejected those attempts, holding that the Act does not
reach alleged wrongful conduct affecting only the parties to the litigation. See, e.g., Uhlig LLC
v. Shirley, No. 08-1208, 2011 WL 1119548, at *8 (D.S.C. Mar. 25, 2011) (granting summary
judgment where the UTPA claim related to “a private dispute between two commercial parties”).
Were the rule otherwise, every dispute “would become a candidate for the extraordinary
remedies provided by the [act]”—something the legislature did not intend. Omni Outdoor, 974
F.2d at 508.
Plaintiff’s allegations against the Defendants are based entirely on claims that the
Defendants engaged in actions that affected only the Plaintiff and her son. Plaintiff makes the
generic allegation that “[t]he Corporate Defendants’ unfair or deceptive acts are capable of
repetition given the nature of Corporate Defendants’ business and the vast number of people who
depend on the numerous diagnostic tests performed by the Corporate Defendants each year. As
such, these acts have an effect on the public and do concern the public interest.” (Compl. ¶ 75)
But courts routinely dismiss UTPA claims that rest on similarly threadbare assertions. E.g.,
Ameristone Tile, LLC v. Ceramic Consulting Corp., Inc., 966 F. Supp. 2d 604, 621 (D.S.C. 2013)

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(dismissing claim where plaintiffs alleged that “Defendants’ acts have the potential for harmful
effects to the public interest because they are capable of repetition”); Ethox Chem., LLC v. CocaCola Co., No. 12-1682, 2013 WL 41001, at *3 (D.S.C. Jan. 3, 2013) (same where plaintiff “fails
to allege any specific procedures or business practices that create the potential for repetition”);
Norman Pulliam & Patriot’s Plantation II, LLC v. Clark, No. 11-3047, 2012 WL 1835717, at *6
(D.S.C. May 21, 2012) (same where plaintiff alleged that the “acts and practices are capable of
repetition because [defendant] continues to be actively engaged in the banking business in the
State of South Carolina” (internal quotations omitted)). What is missing from the Complaint is
any allegation of concrete facts showing that the alleged conduct here adversely affected other
members of the public or that it has any credible possibility of repetition with respect to other
members of the public.
Accordingly, Plaintiff’s UTPA claim does not adequately allege that the Defendants’
actions are capable of repetition or otherwise affect the public interest, and therefore should be
dismissed.
CONCLUSION
It is clear that Plaintiff does not have a viable claim for relief against the Defendants
eight years following her son’s tragic death. It is not in the Plaintiff’s interest, the Defendants’
interest, or the Court’s interest, for this case to be dragged out when it is a foregone conclusion
that it must be dismissed as a matter of law.
For the reasons stated above, Defendants respectfully move the Court to dismiss this
action with prejudice, and to enter such other relief as the Court considers appropriate.

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Respectfully submitted,

s/ John C. Moylan
John C. Moylan, III (D.S.C. Id. No. 5431)
Alice W. Parham Casey (D.S.C. Id. No. 9431)
WYCHE, P.A.
801 Gervais St., Suite B
Columbia, South Carolina 29201
Telephone: (803) 254-6542
Facsimile: (803) 254-6544
Email: jmoylan@wyche.com; tcasey@wyche.com

Wallace K. Lightsey (D.S.C. Id. No. 1037)
Wade S. Kolb III (D.S.C. Id. No. 11485)
WYCHE, P.A.
44 East Camperdown Way
Post Office Box 728
Greenville, South Carolina 29602-0728
Telephone: (864) 242-8200
Facsimile: (864) 235-8900
Email: wlightsey@wyche.com
April 4, 2016

Attorneys for Defendants

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