Hall v. St. Jude Med. S.C., Inc.
326 F. Supp. 3d 770
D. Me.2018Background
- Hall, a Michigan resident, worked for St. Jude (Minnesota corp.) as a sales rep/clinical specialist in Michigan and signed a two-year employment agreement designating Minnesota law and an exclusive-Minnesota forum.
- Hall refused (1) to sponsor an office party (citing Physician Payments Sunshine Act and Anti‑Kickback concerns) and (2) to access Dr. Alawwa’s patient files when ordered (citing HIPAA); shortly thereafter he was excluded from training and then terminated.
- Hall sued in Michigan state court for retaliatory discharge in violation of public policy, alleging he was fired for refusing to violate federal laws; St. Jude removed to federal court, transfer to D. Minn. followed, and Hall amended pleading asserting Minnesota and Michigan law claims.
- St. Jude moved to dismiss under Rule 12(b)(6) arguing Hall failed to plead that the refused conduct would have actually violated law; court considered choice‑of‑law before the merits.
- The court held the agreement’s narrow governing‑law clause does not reach tort-based retaliation claims, applied Minnesota choice‑of‑law rules, concluded Michigan law governs the retaliation claim, and dismissed the amended complaint without prejudice for failure to state a claim.
Issues
| Issue | Plaintiff's Argument (Hall) | Defendant's Argument (St. Jude) | Held |
|---|---|---|---|
| Whether the contract's governing‑law clause makes Minnesota law apply to the retaliation tort claim | Governing‑law clause governs any dispute "relating to" employment; parties intended Minnesota law | Clause is narrow ("this Agreement will be governed by"), so it governs contract claims only, not tort retaliation | Clause is narrow and does not apply; use Minnesota choice‑of‑law rules |
| Which state's law (Minnesota or Michigan) governs the retaliation claim under Minnesota choice‑of‑law analysis | Agreement/fórum suggested Minnesota; Minnesota law should apply | Contacts favor Michigan (plaintiff resident, work in Michigan); choice‑of‑law factors favor Michigan | Michigan law governs (predictability, interstate order, forum interest favor Michigan; judicial‑task neutral) |
| Whether Hall pleaded a cognizable retaliatory‑discharge claim under Michigan law | Hall refused requests he reasonably believed violated PPSA, Anti‑Kickback Statute, and HIPAA; refusal led to termination | Hall did not allege the refused acts would actually violate law; Michigan requires the action would be illegal (good‑faith belief insufficient) | Dismissed: Hall failed to plead that any refused conduct would have been illegal under Michigan law |
| Whether access to patient records for a device recall would violate HIPAA | Hall contends accessing records could disclose unrelated PHI and thus violate HIPAA; he is not an FDA‑responsible person | HIPAA allows disclosures to persons with responsibility for FDA‑regulated product to enable recalls; Hall (employee of manufacturer) plausibly falls within that scope | Court finds no pleaded facts or authority showing the requested access would have violated HIPAA; claim fails |
Key Cases Cited
- Fla. State Bd. of Admin. v. Law Eng'g & Envtl. Servs., Inc., 262 F. Supp. 2d 1004 (D. Minn. 2003) (narrow governing‑law clause analysis)
- Inacom Corp. v. Sears, Roebuck & Co., 254 F.3d 683 (8th Cir. 2001) (distinguishing broad vs. narrow choice‑of‑law clauses)
- Nw. Airlines, Inc. v. Astraea Aviation Servs., Inc., 111 F.3d 1386 (8th Cir. 1997) (narrow clause not governing tort claims unless closely related)
- Holden Farms, Inc. v. Hog Slat, Inc., 347 F.3d 1055 (8th Cir. 2003) (tort claims requiring contract interpretation may fall within clause)
- Jepson v. Gen. Cas. Co. of Wis., 513 N.W.2d 467 (Minn. 1994) (Minnesota choice‑of‑law framework and five factors)
- Dukowitz v. Hannon Sec. Servs., 841 N.W.2d 147 (Minn. 2014) (elements of Minnesota retaliation/public‑policy claim)
- Kimmelman v. Heather Downs Mgmt. Ltd., 753 N.W.2d 265 (Mich. Ct. App. 2008) (Michigan retaliation/public‑policy framework)
- Piasecki v. City of Hamtramck, 640 N.W.2d 885 (Mich. Ct. App. 2001) (Michigan requires the refused action actually be illegal)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard for raising claim above speculative level)