IN justices asked to ditch modified impact rule for medical privacy breach cases after patient’s info was posted to Facebook

IL file photo

A woman whose medical information was sent to the wrong person and then shared on social media is asking the Indiana Supreme Court to do away with the modified impact rule for negligence-based medical privacy breaches.

Fishers attorney Neal Eggeson, representing the woman identified in court documents as Z.D., argued before the justices Thursday morning that Indiana is one of only three states still applying the rule and that it is “closing the doors” on such cases.

But Ice Miller attorney Jenny Buchheit, representing Community Health Network, argued that getting rid of the modified impact rule — which requires that “the plaintiff personally sustained a physical impact” — would make any type of mishandling of medical information eligible for action.

The case — Z.D. v. Community Health Network Inc., 23S-CT-00116 — dates back to January 2020, when Z.D. filed a three-count complaint against Community Health Network after an employee sent a letter with information about a diagnosis and suggested treatment to a 16-year-old who attended high school with Z.D.’s daughter in Indianapolis.

The student posted the letter on Facebook, and Z.D. paid $100 in exchange for the letter, which was removed from Facebook.

The lawsuit alleged Community was liable under the doctrine of respondeat superior for the distribution of Z.D.’s health records; that Community was negligent in training, supervising and retaining its employees; and that Community breached its duties of confidentiality and privacy.

The Marion Superior Court granted Community’s motion for summary judgment, in part ruling that the modified impact rule barred Z.D. from recovering emotional distress damages under a negligence theory.

In a partial reversal, the Court of Appeals of Indiana held that Z.D. sufficiently pleaded the tort of public disclosure of private facts without alleging intent, established the element of publicity, and could seek emotional distress and special damages for that claim.

But the appellate court also ruled Z.D. couldn’t seek emotional distress damages for her negligence claim without satisfying the modified impact rule.

In a footnote, the appellate panel urged the Indiana Supreme Court to “revisit the modified impact rule and the bystander rule and the rationale for their continued existence.”

In taking up that request, Indiana Chief Justice Loretta Rush asked Eggeson why there would be a disclosure tort if the high court adopted his position. Eggeson said that tort would no longer be necessary.

Ditching the modified impact rule, he argued, would simplify things because there wouldn’t need to be a back-and-forth about the degree of publicity under the disclosure tort.

Conceding that what happened to Z.D. was “completely unfortunate,” Buchheit argued the damages Z.D. cited stemmed from the student posting the letter to Facebook, not from Community sending the letter to the wrong person.

She compared the situation to a set of train tracks, where a switchman — the student in this example — pulls a lever and sends the train in a different direction.

But Rush opined it was perhaps Community that set the proverbial train off in a different direction.

“Maybe the lever was pulled earlier,” she said.

Buchheit also argued the Supreme Court should provide clarity regarding superseding acts of unaffiliated third parties.

The student knew she wasn’t the intended recipient of the letter, Buchheit said, and should have returned it to the post office or Community.

And while it might be foreseeable that the student would open the misaddressed letter, Buchheit argued it wasn’t foreseeable that she would post the letter to Facebook.

The full oral arguments can be watched online.