Indiana Court of Appeals Applies McKenzie in Allowing Invasion of Privacy Claim for Public Disclosure of Private Facts to Proceed

In our last blog, we wrote about the Indiana Supreme Court’s decision earlier this year in Cmty. Health Network, Inc. v. McKenzie in which the Court recognized a tort claim for invasion of privacy based on the public disclosure of private facts. In the recent case of Z.D. v. Cmty. Health Network, Inc., the Indiana Court of Appeals, relying on McKenzie, allowed a public-disclosure-of-private-facts claim to proceed, as well as a negligence claim for pecuniary damages arising from a breach of medical confidentiality and privacy. In Z.D., Z.D., the patient/plaintiff, received treatment at a Community Health Network (Community) facility. After attempts were made to contact Z.D. by phone, an employee of Community wrote Z.D. a formal letter with her test results and proposed treatment. However, the employee addressed the envelope and mailed the letter to a third person, Jonae Kendrick (Kendrick), who was a classmate of Z.D.’s high-school-aged daughter. Kendrick posted the letter on Facebook where it was seen by multiple third parties.

Z.D. filed a lawsuit against Community for the “distribut[ion] [of her] extremely sensitive and private health information to unauthorized person(s) and the general public.” After the letter was posted to Facebook with Z.D.’s diagnosis, Z.D.’s fiancé broke up with her and “kicked her out of his house,” resulting in Z.D. having to rent her own apartment, Z.D.’s co-workers and supervisor at her warehouse job found out about Z.D.’s diagnosis, ultimately resulting in Z.D. leaving that job, Z.D. lost several hairdressing clients whose children attended high school with her daughter, and Z.D. suffered from depression and underwent counseling. In her lawsuit, Z.D. sought damages for loss of privacy, lost income, rent expenses, and emotional and mental distress.

Community filed a motion for summary judgment arguing Kendrick’s posting of the letter on Facebook was an unforeseeable criminal act that broke the chain of causation, Z.D. could not recover emotional distress damages under a negligence theory, and any claim for public disclosure of private facts fails because such is not recognized in Indiana (this was pre-McKenzie). The trial court granted summary judgment in favor of Community. The Court found the modified impact rule and the bystander rule barred Z.D.’s claim for emotional distress damages under a negligence theory, Z.D. could not recover damages for loss of privacy because she had not specifically pled an invasion of privacy claim, and Community’s actions were not the proximate cause of her damages.

On appeal, the Court of Appeals first addressed Z.D.’s public-disclosure-of-private-facts claim. In public-disclosure-of-private-facts claims under McKenzie and the Restatement (Second) of Torts § 652D, which McKenzie adopted, claimants must show (1) the information disclosed was private in nature (the information was both factually true and privately held), (2) the disclosure was made to the public (the information was communicated in a way that either reaches or is sure to reach the public in general or a large enough number of persons such that it is sure to become public knowledge),  (3) the disclosure was one that would be highly offensive to a reasonable person (the disclosure offends society’s accepted communal norms and social mores), and (4) the information disclosed was not of legitimate public concern (a lack of newsworthiness such that a reasonable member of the public would say that he had no concern with the information disclosed). Contrary to Community’s assertion and the trial court’s findings, the Court first found that Z.D.’s complaint appropriately pled a public-disclosure-of-private-facts claim under Indiana’s notice pleading, which requires only pleading the operative facts of a claim so as to place a defendant on notice as to the evidence to be presented at trial. The Court also found a genuine issue of material fact as to the publicity requirement, even though Community’s disclosure was only to one person, with the Court noting the focus of publicity is on the end result of a disclosure, not merely the initial act. The Court also noted there is no requirement the disclosure be intentional, and in any case, in this case, the letter with Z.D.’s diagnosis was intentionally addressed and sent to Kendrick. As such, the Court reversed and remanded the case for further proceedings on Z.D.’s invasion of privacy claim, noting she could seek damages for, among other things, her mental distress.

As to Z.D.’s negligence theory, the Court found that under Indiana’s current framework for the recovery of emotional distress damages, Z.D. could not recover such damages, as she did not satisfy either the modified-impact rule or the bystander rule because she did not sustain a physical impact or perceive a physical injury to a loved one. However, the Court found Z.D. could recover her pecuniary damages, that is, lost income and rent expenses, under a negligence theory. While the trial court found Community could not be held liable for Kendrick’s “intentional, criminal action,” the Court of Appeals noted Kendrick was the intended recipient of the letter, there was no showing as to what laws, if any, Kendrick broke, and the facts were not such that only one inference or conclusion could be drawn as to proximate cause and intervening cause, with the Court noting an intervening act does not break the causal chain when such act could reasonably have been foreseen. Accordingly, the Court reversed and remanded the case for further proceedings on Z.D.’s negligence claim for pecuniary damages.

You can read the full opinion here. The Supreme Court has since vacated the Court of Appeals opinion, although it summarily affirmed certain portions of it. You can read the Supreme Court’s full opinion here.

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