[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
FILED
_____________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 07-12387 March 24, 2008
_____________ THOMAS K. KAHN
CLERK
D.C. Docket No. 06-00176-CV-LGW
WILLIAM ANDREW RIVELL,
ALAN B. WHITEHOUSE, individually and on
behalf of all other persons similarly situated,
Plaintiffs-Appellants,
versus
PRIVATE HEALTH CARE SYSTEMS, INC.,
d.b.a. Care Entree,
THE CAPELLA GROUP, INC.,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Southern District of Georgia
____________
(March 24, 2008)
Before ANDERSON, BLACK and HILL, Circuit Judges.
PER CURIAM:
Appellants Dr. William Andrew Rivell and Dr. Alan B. Whitehorse filed
this action on behalf of themselves and similarly-situated Georgia physicians.
Their amended complaint pleads equitable and legal claims against The Capella
Group, Inc., d/b/a/ Care Entree (“Capella”) and Private Health Care Systems
(“PHCS”) for appropriation of the doctors’ names and identities to market and sell
medical discount cards. On defendants’ motions, the district court dismissed the
complaint, holding that the doctors’ sole remedy was on the contract they entered
into with defendant PHCS. Because this holding is contrary to Georgia law, we
shall reverse.
I.
Appellants are providers of medical care and services. They entered into a
contract with PHCS, which is a preferred provider organization. As contractees
with PHCS, appellants were participants in the PHCS network, which offers
discounted rates on medical services. In exchange for appellants’ discounting
their fees, PHCS referred insured patients to them. Capella is a medical discount
card company that has an agreement with PHCS that gives Capella “access” to the
PHCS network, from which, it is alleged, Capella used appellants’ names,
professional identities and practice information to sell its medical discount cards.
2
Appellants contend that PHCS and Capella appropriated their names, professional
identities and practice information without their consent to sell the medical
discount cards for commercial gain. They seek declaratory, injunctive and other
equitable relief, as well as damages. Among other claims, the Amended
Complaint pleads a claim against PHCS and Capella for the tort of appropriation.
Capella and PHCS filed motions to dismiss in which they argued that the
doctors’ claims arise under the contract between PHCS and the doctors and that
the tort claim of appropriation should be dismissed. The district court agreed and
dismissed this claim, as well as the remaining claims.1 We review this dismissal
de novo, applying the same standard as did the district court. Hoffman-Pugh v.
1
Although the district court purported to dismiss all appellants’ claims against
defendants, there appears to have been only one real claim at issue in this lawsuit. The amended
complaint is divided into seven “counts,” titled as follows:
Count I: Declaratory Relief
Count II: Injunctive Relief
Count III: Unjust Enrichment,; Imposition of Constructive Trust
Count IV: Unauthorized Lease or Sale of Plaintiffs’ Network Agreements and
Provider Information by PHCS
Count V: Appropriation of Plaintiffs’ Names for Financial Gain
Count VI: Punitive Damages
Count VII: Attorneys’ Fees
“Counts” One, Two, Three, Six and Seven are requests for relief in various forms, not
freestanding legal claims. Count Four appears to be a claim against PHCS for breach of contract;
however, appellants specifically disavowed any such claim at the hearing on appellees’ motions
to dismiss and in their briefs. That leaves only Count Five, a claim for appropriation against both
PHCS and Capella.
3
Ramsey, 312 F.3d 1222, 1225 (11th Cir. 2002). The allegations in the complaint
are taken as true and construed in the light most favorable to the plaintiffs. Id. at
1225. However, the complaint’s “[f]actual allegations must be enough to raise a
right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, __
U.S. __, 127 S. Ct. 1955, 1965 (2007); see also Watts v. Florida Int’l Univ., 495
F.3d 1289, 1295 (11th Cir. 2007). “The Supreme Court’s most recent formulation
of the pleading specificity standard is that ‘stating such a claim requires a
complaint with enough factual matter (taken as true) to suggest’ the required
element.” Watts, 495 F.3d at 1295 (quoting Twombly, 127 S. Ct. at 1965). This
rule does not “impose a probability requirement at the pleading stage.” Twombly,
127 S. Ct. at 1965. Instead, the standard “simply calls for enough fact to raise a
reasonable expectation that discovery will reveal evidence” of the required
element. Id. “It is sufficient if the complaint succeeds in ‘identifying facts that are
suggestive enough to render [the element] plausible.’” Watts, 495 F.3d at 1296
(quoting Twombly, 127 S. Ct. at 1965).
II.
The district court erred in dismissing appellants’ appropriation and related
claims. Georgia law is clear that the doctors’ claim of misappropriation is not
4
preempted by their contract with PHCS. See Whisper Wear, Inc. v. Morgan, 277
Ga. App. 607 (2006). In Whisper Wear, a photographer entered into an agreement
with a model to take pictures of her. The model arrived with a voucher that the
photographer signed, in which he agreed that the pictures would not be used for
marketing without additional negotiations between the parties. The photographer
arrived with a general release, which the model signed and in which she agreed
that the pictures could be used in any lawful manner the photographer desired.
The photographer sold the pictures to Whisper Wear, a company that used the
pictures in its marketing. Subsequently, the model sued Whisper Wear for the tort
of appropriation.2
Whisper Wear argued that the model’s sole remedy was on her contract with
the photographer for his alleged breach of the voucher’s terms restricting his right
to use the photographs. The Georgia court specifically rejected this argument,
holding that the model’s remedies were not limited to an action on her contract
with the photographer. Thus, even though there was a contract governing the use
of the photographs, the court held that so long as the plaintiff alleges that the
defendant has used plaintiff’s name and identity for a commercial purpose and
without his authorization or consent, he has properly alleged the tort of
2
She settled prior to trial with the photographer.
5
appropriation. The court said that it was Whisper Wear’s duty to ascertain what
rights it possessed with regard to the model’s photographs. Id. at 609. See also
McQueen v. Wilson, 117 Ga.App. 488 (1968).
This rule is not, it appears, unique to Georgia. The courts of New York,
California, Florida, Massachusetts, Connecticut, Ohio and Illinois have all
recognized that a use outside the scope of the permission granted in a contract not
only constitutes breach of contract, but also gives rise to an action by the licensor
for invasion of privacy or infringement of the right of publicity. See Dzurenko v.
Jordache, Inc., 59 N.Y.2d 788 (1983) (“For a use beyond the granted consent
[plaintiff] has an action under [New York privacy and publicity statute] . . . and is
not limited to an action sounding in contract); Leavy v. Cooney, 214 Cal. App. 2d
496, 501 (2d Dist. 1963) (use of outside agreement constitutes both breach of
contract and tortious invasion of privacy); Aim v. Wester Pub. Co., 573 F.2d 1318,
1327 (5th Cir. 1978) (use of author’s name outside of use permitted in publishing
contract is tortious, interpreting Florida law); Donoghue v. IBC USA
(Publications) Inc., 70 F.3d 206 (1st Cir. 1995) (use in advertising that is not
authorized by the license between the parties constitutes violation of
Massachusetts’ privacy/publicity statute); Seifer v. PHE, Inc., 196 F. Supp. 2d
622, 631 (S.D. Ohio 2002) (grant of sub-license was not authorized by the license
6
and triggered a claim for infringement).
The district court held to the contrary in this case largely because of the
dependence of all parties upon the Network Agreements in their arguments over
whether PHCS was entitled under the Agreements to sub-license the doctors’
names and other information to Capella. The Network Agreements, however, are
merely some evidence of consent or lack thereof, which is the affirmative defense
to the tort of appropriation. Similarly, in Whisper Wear, the jury was permitted to
hear and consider the contract evidence of consent – found in the conflicting
voucher and the general release.3 Deciding that the voucher controlled, the jury
found that the model had not consented to the use of her photos made by Whisper
Wear and awarded her damages for its tortious use. Similarly, in this case, the
Network Agreements will be some evidence of whether Capella’s use of the
doctors’ names and identities was with consent.
3
At oral argument, defense counsel attempted to distinguish Whisper Wear on the grounds
that there was no disagreement in that case over whether Whisper Wear’s use of the photographs
was permitted. This is not so. The court merely said that it was “undisputed that Whisper Wear
used the photographs in a manner that was not authorized under the voucher signed by [the
photographer].” 277 Ga. App. at 608. (emphasis added). The jury resolved the contested issue
of whether the voucher trumped the general release signed by the model, finding that it did. Id.
at 609-10.
7
III.
Accordingly, for the foregoing reasons, the judgment of dismissal by the
district court is hereby VACATED and the case is remanded for further
proceedings not inconsistent with this opinion.
VACATED and REMANDED.
8