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John G. Miller, On Behalf of Himself and All Others Similarly Situated v. Redwood Toxicology Laboratory

August 23, 2012

JOHN G. MILLER, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED
PLAINTIFF - APPELLANT
v.
REDWOOD TOXICOLOGY LABORATORY, INC.
DEFENDANT - APPELLEE



Appeal from United States District Court for the District of Minnesota - Minneapolis

The opinion of the court was delivered by: Beam, Circuit Judge.

Submitted: May 17, 2012

Before LOKEN and BEAM, Circuit Judges, and PERRY,*fn1 District Judge.

John Miller appeals from the district court's*fn2 grant of Redwood Toxicology Laboratory's motion to dismiss with prejudice Miller's Minnesota state law claims raised in federal court under the court's diversity jurisdiction. Because Miller lacks Article III standing to raise the state statutory claims in federal court, and because his negligence claim likewise fails under Federal Rule of Civil Procedure 12(b)(6), we affirm the district court's dismissal.

I. BACKGROUND

As did the district court, we recite the following facts according to the allegations in the pleadings, including Miller's initial and amended complaints and the record created as a result of Miller's "motion for temporary restraining order, preliminary injunction, [and] expedited discovery," which Miller filed after Redwood filed the instant motion to dismiss. "When considering . . . a motion to dismiss under Fed. R. Civ. P. 12(b)(6)[], the court generally must ignore materials outside the pleadings, but it may consider some materials that are part of the public record or do not contradict the complaint, as well as materials that are necessarily embraced by the pleadings." Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (internal quotations omitted);*fn3 see also Illig v. Union Elec. Co., 652 F.3d 971, 976 (8th Cir. 2011).

Redwood is a corporation in the business of drug and alcohol screening. One test offered by Redwood is the Ethyl Glucuronide/Ethyl Sulfate (EtG/EtS) Test, often marketed to alcohol abstinence programs such as those of probation offices, as well as to professional license monitoring programs. Miller is a recovering alcoholic currently on supervised probation in Minnesota because of multiple state law criminal penalties incurred as a result of his drinking.

The test at issue screens urine samples for EtG/EtS, which are metabolites of ethanol, and can be found in urine up to three to four days after ethanol is ingested. In addition to beverage alcohol products, ethanol may also be derived from household and food items. EtG/EtS from these common sources are indicated by Redwood as "incidental exposure." To distinguish incidental exposure from intentional drinking in its testing, Redwood establishes a numerical cut-off. As alleged in the complaint, Redwood represents that any test results higher than a cutoff of 100 ng/mL of EtG coupled with 25 ng/mL of EtS, are positive for alcohol, over and above incidental exposure.

According to Miller's complaint, on June 15, 2010, Miller provided a urine sample for testing at Redwood's laboratory at the direction of his probation officer. The test results indicated that Miller's EtG/EtS levels were above a specified cut-off level, which cut-off had been established by the State of Minnesota just as do all agencies that contract with Redwood. Based on these test results, Miller's probation officer filed a violation against him and took Miller into custody. Miller insisted, then and now, that he did not drink alcohol but that his test results were positive because of incidental exposure to alcohol.

At the contested probation violation hearing, each party submitted competing evidence, by way of testimony from a toxicologist (State of Minnesota's expert) and a medical doctor (Miller's expert), as to whether Miller's test results could have been "positive" as a result of incidental exposure. The state court judge concluded that Miller had presented "credible testimony and evidence about his activities in the days leading up to the June 15, 2010[,] urine test," and that the State failed to meet its burden of proving by clear and convincing evidence that Miller had violated his probation. The court noted Miller's "significant incidental exposure" and ordered that Miller be released immediately-four and one half months after his June 2010 arrest.

Miller subsequently sued Redwood in federal court, initially alleging claims under Minnesota state law that Redwood violated the Minnesota Consumer Fraud Act ("CFA"), Minn. Stat. § 325F.69, subd. 1; as well as additional claims of common-law negligence, fraudulent and negligent misrepresentation, and products liability and breach of warranty claims. Miller alleged that he suffered similar injuries for each claim-that Redwood's alleged misrepresentations resulted in an erroneous probation violation report, detention, and lost income, lost employment, lost liberty and emotional harm. Miller then filed an amended complaint, adding a claim under the Minnesota False Statement in Advertising Act ("FSAA"), Minn. Stat. § 325F.67, and additionally retaining only the CFA and negligence claims. The amended complaint also sought class certification on behalf of Miller and others similarly situated, seeking to vindicate Miller's concern that others, too, had suffered similarly as a result of Redwood's alleged actions. On each claim in the amended complaint, the alleged injuries varied: on count I (false statements in advertising) Miller alleged that he "and countless others, have been harmed as a result"; on count II (consumer fraud act) Miller alleged no specific injury; and on count III (negligence) Miller alleged that he suffered damages including, but not limited to, lost income, lost employment, loss of liberty and emotional harm.

The district court dismissed Miller's amended complaint and his class claims, determining that Redwood's statements were either true or mere "puffery," and thus not actionable at law. The district court thus held that substantively, Miller's allegations failed. The court determined that certain of the challenged representations (that its test is "ideal" for certain situations and is the "most definitive" indicator) are simply expressions of opinion about the quality or superiority of Redwood's EtG/EtS test, which amounts to mere puffery and are thus not actionable under the Minnesota statutes. The court further held that the "highly accurate" claim by Redwood is not false or misleading. Third, the court noted that Redwood had in fact received the approval of the U.S. Department of Health and Human Services so that claim, too, is not false or misleading. Finally, as to Miller's claim for negligence, the court declined to impose a duty on Redwood beyond the duty to act with reasonable care in the collection and testing of specimens.

Very generally, on appeal, Miller claims that the issues determined by the court at dismissal are best suited for a jury and the court should have deferred to a jury on these issues. Miller additionally claims that the court erroneously applied federal law to two of the issues pending ...


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