John Doe, a Septa Employee v. Southeastern Pennsylvania Transportation Authority (Septa), and Judith Pierce, Individually and in Her Official Capacity

72 F.3d 1133, 11 I.E.R. Cas. (BNA) 417, 19 Employee Benefits Cas. (BNA) 2721, 1995 U.S. App. LEXIS 36983, 1995 WL 762891
CourtCourt of Appeals for the Third Circuit
DecidedDecember 28, 1995
Docket95-1559
StatusPublished
Cited by66 cases

This text of 72 F.3d 1133 (John Doe, a Septa Employee v. Southeastern Pennsylvania Transportation Authority (Septa), and Judith Pierce, Individually and in Her Official Capacity) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
John Doe, a Septa Employee v. Southeastern Pennsylvania Transportation Authority (Septa), and Judith Pierce, Individually and in Her Official Capacity, 72 F.3d 1133, 11 I.E.R. Cas. (BNA) 417, 19 Employee Benefits Cas. (BNA) 2721, 1995 U.S. App. LEXIS 36983, 1995 WL 762891 (3d Cir. 1995).

Opinions

OPINION OF THE COURT

ROSENN, Circuit Judge.

This appeal requires that we probe the depth and breadth of an employee’s conditional right to privacy in his prescription drug records. John Doe, an employee of the Southeastern Pennsylvania Transportation Authority (SEPTA),1 initiated this action under 42 U.S.C. § 1983 against his self-insured [1135]*1135employer, alleging that the defendants violated his right to privacy. Plaintiff claims that, in monitoring the prescription drug program put in place by SEPTA for fraud, drug abuse and excessive costs, the Chief Administrative Officer, Judith Pierce, and the Director of Benefits, Jacob Aufschauer, learned that John Doe had contracted Acquired Immunodeficiency Syndrome (AIDS). This, he alleges, invaded his right to privacy.

A jury found for the plaintiff and awarded him $125,000 in compensatory damages for his emotional distress. The trial court denied defendants’ motion under Rule 50 for judgment as a matter of law, or alternatively for a new trial. The court also denied defendants’ motion for a reduction in damages. The defendants timely appealed. We reverse.

I.

We set forth the facts as the jury could have found them in support of its verdict. Accordingly, all evidence and inferences therefrom must be taken in the light most favorable to the verdict winner. See Parkway Garage, Inc. v. City of Philadelphia, 5 F.3d 685, 691-92 (3d Cir.1993) (as amended on petition for rehearing). In 1990, Judith Pierce became the Chief Administrative Officer for SEPTA. Her responsibilities included containing the costs of SEPTA’s self-insured health program. In 1992, a bargaining agreement with Local Union 234 required SEPTA to provide, inter aha, prescription drugs for the employees. SEPTA entered into a contract with Rite-Aid Drug Store to be the sole provider for all of SEPTA’s prescription drug programs. As part of this contract, Rite-Aid provided SEPTA with an estimate of the yearly costs of this program. If, at the end of the year, the actual cost to Rite-Aid amounted to over 115% of that estimate, SEPTA would have to pay substantial penalties; however, if the actual cost was 90% or less of that estimate, SEPTA would be entitled to rebates. Pierce was responsible for monitoring those costs.

John Doe is a SEPTA employee. At all times relevant to this appeal, Doe was HIV-positive, and had contracted AIDS by the time of trial. In 1991, Doe began to take Retrovir for his condition. Retrovir is a prescription drug used solely to treat HIV. Before filling his prescription, Doe asked Dr. Richard Press, the head of SEPTA’s Medical Department and Doe’s direct supervisor, if he or anyone else reviewed employee names in association with the drugs the employees were taking. Doe wished to keep his condition a secret from his co-workers. Dr. Press assured Doe that he had only been asked to review names on prescriptions in cases of suspected narcotics abuse and knew of no other review that included names. After receiving this information, Doe filled his prescription through the employer’s health insurance. He continued to do so after SEPTA switched to Rite-Aid; he was never informed that this change might alter his confidentiality status.

In November of 1992, Pierce requested and received utilization reports from Rite-Aid. These reports were part of the contract between Rite-Aid and SEPTA. Pierce did not request the names of SEPTA employees in the reports, and Rite-Aid sent the reports in their standard format. They included statistics on the number of employees with five or more prescriptions dispensed in a one-month period, the top 25% by cost of drugs bought by SEPTA employees, and the report at issue here. ' This report listed employees who were filling prescriptions at a cost of $100 or more per employee in the past month. Each fine of the report included the name of an employee or dependent, a code to identify the prescribing doctor, the dispense date of the prescription, the name of the drug, the number of days supplied, and the total cost. Pierce called Aufschauer into her office, and the two of them reviewed the report. It was immediately apparent to Pierce that the reports would reveal employees’ medications; however, she reviewed them in the format as submitted. She did not at that time request Rite-Aid to redesign SEPTA’s reports to encode employees’ names.

Pierce stated that her purpose in reviewing the reports with Aufschauer was several-fold. First, she wanted to look for signs of fraud and drug abuse. She testified that in the past, some employees would purchase [1136]*1136prescription drugs under the SEPTA health plan in order to give them to an ill friend or relative who was not covered by SEPTA’s benefit package. Second, Pierce wanted to determine if Rite-Aid was fulfilling its promise to use generic rather than brand name drugs whenever possible. Third, although they were both covered in the Rite-Aid contract, Pierce wanted to determine the cost to SEPTA of fertility drugs and medications to help employees stop smoking, such as nicotine patches. Finally, Pierce wanted to determine whether the reports were in a summary form and whether they would permit an audit. Her review, however, focused almost entirely on the current report, which included employees’ names. She also testified that people who had seen this report, she, Aufsehauer, and Dr. Press “were very careful to maintain the confidentiality of the people.”

Pierce and Aufsehauer scanned the reports. When they came across a drug name neither one recognized, they would look it up in a Physician’s Desk Reference (PDR) that Pierce had. Pierce then called Dr. Louis Van de Beek, a SEPTA staff physician, and inquired about the drugs not listed in the PDR. She asked the doctor for what Retro-vir was used. When Dr. Van de Beek told her it was used in the treatment of AIDS, she inquired whether there was any other use for it. He told her no. She then asked about the three other medications that Doe was taking, and was informed that they were all AIDS medications as well. Pierce discreetly never mentioned Doe by name; however, Dr. Van de Beek was aware of Doe’s condition and Doe’s medications because Doe himself had disclosed this information to him. Therefore, Dr. Van de Beek deduced that Pierce was asking about Doe. He told her that if she were trying to diagnose employees’ conditions through prescriptions, he felt this was improper and possibly illegal. Pierce immediately ended the conversation and told him not to speak of the conversation to anyone.

Pierce then took the report to Dr. Press. She asked him if he would be able to perform an audit using the information in the report. Press noted that Pierce had highlighted certain lines on the report, including employees’ names and the drugs that each of those highlighted employees were taking. Press testified that the drugs highlighted were all HIV or AIDS-related. Pierce asked Press if he knew whether any of the people whose names were highlighted were HIV-positive. Press said that he was aware of Doe’s condition.. He then told Pierce that he was uncomfortable with the presence of the names on the report. He also told her that he had neither the expertise nor the resources to perform an audit.

Dr. Press then approached James Kilcur, the General Counsel of SEPTA, and expressed his concern about the names on the report.

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72 F.3d 1133, 11 I.E.R. Cas. (BNA) 417, 19 Employee Benefits Cas. (BNA) 2721, 1995 U.S. App. LEXIS 36983, 1995 WL 762891, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-doe-a-septa-employee-v-southeastern-pennsylvania-transportation-ca3-1995.