Shapiro Arato Appeal in Federal Drug Testing Case Raises Certified Questions of Law
On November 17, 2015, the U.S. Court of Appeals for the Second Circuit certified two questions of law to the New York Court of Appeals in our client’s case against two drug testing companies who administered a drug test to him. The certified questions are whether, under New York negligence law, a drug testing company owes a duty of care to the subject of a drug test based on federal regulations governing drug testing, and whether a fraud claim can be based on false representations made by a defendant to a third party whose reliance on the representations results in injury to the plaintiff.
Dr. Pasternack is a licensed pilot. In 2007, he was randomly selected for a mandated drug test, reported to the testing facility, and tested negative. However, a test administrator reported to the FAA that Pasternack had “refused” his test because he briefly left the facility, even though he had permission to do so. The FAA revoked his pilot’s licenses but after several years reinstated him. Pasternack brought civil negligence and fraud claims against the test administrators. The district court dismissed the case, holding that to allow a negligence claim in this unique circumstance “would represent a significant extension of precedent” and dismissed the fraud claim as legally insufficient.
In June 2015, partner Cynthia Arato argued before the U.S. Court of Appeals for the Second Circuit that under New York law, drug testing companies owe a broad duty of care to their drug test subjects and that such duty was breached by the defendants when they failed to adhere to the standard of care mandated by federal regulations and guidelines. The appeal also argued that, under New York law, the district court wrongly dismissed Dr. Pasternack’s fraud claims, which were based on misrepresentations made to a third party.
The Second Circuit certified the question of whether a fraud claim can be based on representations made to a third party, even though the Second Circuit has twice ruled that the third party reliance theory was not actionable in fraud.