Jose Gregorio Sandoval v. Disa, Inc. Disa Global Solutions, Inc. ( 2018 )

Opinion issued December 6, 2018
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-17-00846-CV
———————————
JOSE GREGORIO SANDOVAL, Appellant
V.
DISA, INC. & DISA GLOBAL SOLUTIONS, INC., Appellees
On Appeal from the 269th District Court
Harris County, Texas
Trial Court Case No. 2016-51272
MEMORANDUM OPINION
A quality control inspector in the industrial sector lost his job after his random
drug test yielded a positive result for cocaine. The inspector sued the third-party
administrator that managed aspects of his former employer’s drug-testing program,
among other defendants.
The third-party administrator, DISA Global Solutions, Inc., moved for
summary judgment against Jose Sandoval, the inspector.1 The trial court granted the
motion, and Sandoval appeals. Sandoval contends that the court erred in granting
summary judgment because (1) Sandoval raised genuine issues of material fact on
the elements of his negligence claim; (2) DISA did not conclusively prove its
affirmative defenses of legal justification and consent to defeat his defamation claim;
and (3) Sandoval demonstrated that he has standing under the DTPA.2 Finding no
error, we affirm the summary judgment.
BACKGROUND
Turner’s drug and alcohol policy
Sandoval was employed by Turner Industries Group. Turner is an industrial
contractor in the petrochemical industry. During Sandoval’s employment, Turner
had a drug, alcohol, and substance-abuse policy. It contracted with DISA to
administer its drug and alcohol screening programs. Turner’s policy required
employees to submit to drug testing at various stages of employment and at random.
1
Sandoval’s original petition names only “DISA, Inc.” as a defendant. In
answering for “DISA, Inc.,” DISA Global Solutions explained that “DISA,
Inc.” was not a proper name and identified itself as the proper defendant.
2
Marie Sandoval, Sandoval’s wife, brought a loss-of-consortium claim against
DISA, and the trial court disposed of that claim in the take-nothing summary
judgment. Marie is not a party to this appeal.
2
The policy also required Turner employees who were contracted to work at third-
party jobsites not owned or operated by Turner to comply with both Turner’s and
those third parties’ substance-abuse policies. Under Turner’s policy:
• An employee is subject to discipline or discharge if a test shows
“any detectable quantity of any illegal drug.”
• All testing is conducted by a licensed independent medical
laboratory.
• The testing lab must retain samples for retesting at the
employee’s request and expense.
• Employees have “the right to meet with the Company, to
explain” adverse test results.
The policy further provides that “[a]ll testing will be in accordance with all
applicable federal, state, and local drug and alcohol related laws and regulations”
and that “[d]rug tests not conducted under the supervision of the Company are not
recognized as approved.” In the event of a positive drug test, Turner has a
rehire/reinstatement policy, providing that it “will consider the applications of
candidates who formerly tested positive for drugs” if they can show evidence of
rehabilitation.
DISA’s role in substance-abuse screening
DISA is a third-party administrator of substance-abuse screening programs.
It houses a national Contractor Consortium program of over 12,000-member
companies, referred to as DCC. DCC provides consolidated Department of
3
Transportation [DOT] services that allow DCC members to comply with DOT
regulatory requirements by outsourcing employee substance-abuse screening and
reporting requirements to DISA.
DISA’s contractor consortium group for the Houston area is known as
DCCHA. DISA provides a menu of services to DCCHA members. It trains
members’ employees about drug-screening collection protocols that comply with
DOT regulations. It formulated a substance-abuse policy designed to comply with
DOT drug-screening regulations. DCCHA members may adopt DISA’s substance-
abuse screening policy to meet the DOT requirements of their own individual site
drug and alcohol screening policies. DISA also identifies qualified testing
laboratories and medical review officers (MROs) which are available to analyze the
specimens. DISA assists with routing specimens from the employer’s site to the lab,
and it will assist with routing if further analysis or retesting is required. To assist
with random testing, DISA also notifies the employer when it is required and
furnishes it with a list of randomly-selected employees.
DISA uses web-based management systems to provide these support services.
DISA maintains a proprietary online database management system that gives
members access to information about the test results of individual workers in their
industry who have been employed by other members in the region.
4
To collect this information, DISA obtains written consent to use testing results
from each member’s employees. Its “Universal Membership Application Form”
documents the member employee’s agreement to become an “employee member”
of its consortium, the North American Substance Abuse Program, or the DCC hair-
testing policies. By signing the form, the employee
agrees[s] . . . to abide by all DCC and/or NASAP and/or the Hair
Testing Substance Abuse Program policies, rules, and regulations. I
authorize the DCC to release my drug and/or alcohol test results to the
Company Member for which I worked at the time I was tested and/or
the Company Member which required me to take a post-offer of
employment drug and/or alcohol tests. I also authorize the [Consortium
to release DCC status, test results, and other program activity to the
Houston Area Contractors Safety Council through the NASAP with the
understanding that this data may affect my status in the NASAP and
that this status may be shared with those Companies participating in the
NASAP.
Member companies may consult the database for information about the drug-testing
status of their own employees or that of prospective employees who have worked
for other member companies. The database designates workers who are in
compliance with their employers’ substance-abuse policies as having an “active”
status; those who are not in compliance are designated as “inactive.” Active workers
are eligible to enter a participating jobsite, although they are not guaranteed access.
Inactive employees are prohibited from entering a participating company’s jobsite.
Member companies use the active/inactive designation to decide whether to hire
workers and to determine whether workers are authorized to enter a jobsite.
5
DISA’s contract with Turner
Under the “Master Services Agreement and Addendum” with Turner, DISA
agreed to:
• provide Turner with a list of approved specimen collection centers;
• arrange for drug and alcohol screening for job applicants;
• arrange for drug and alcohol testing on employees (1) based on
reasonable suspicion; (2) at random; (3) post-accident; (4) return to
duty; and (5) follow-up, as well as other owner-mandated
circumstances;
• forward specimen samples for testing at certified third-party
laboratories;
• send all positive or questionable test results for review by an authorized
Medical Review Officer (MRO) who is either under contract with or
employed by DISA; and
• enter test results in its online database, making them available to
Turner.
DISA did not collect specimens, conduct testing, or analyze testing results for
Turner.
The Agreement reserves to Turner the authority to make “all determinations
as to whether subject individuals should be tested on a “for reasonable cause” or
“post-accident” basis. It expressly states that it is intended for the “sole benefit” of
Turner and DISA and that “no third-party shall be deemed a ‘third-party beneficiary’
of this Agreement.”
6
Sandoval’s employment with Turner
Turner hired Sandoval in December 2014.3 In accepting employment with
Turner, Sandoval agreed to comply with Turner’s Drug, Alcohol, and Contraband
Policy. He received a copy of Turner’s employee handbook containing a description
of the policy. To satisfy another condition of employment with Turner, Sandoval
signed DISA’s Universal Membership Application form. Accompanying that form
was DISA’s substance abuse policy, which is incorporated by reference into the
membership contract.
Turner assigned Sandoval to work as a Quality Assurance/Quality Control
Inspector under its contract with LyondellBasell Chemical Company. Sandoval
performed this assignment at LyondellBasell’s facility in Corpus Christi, which is
primarily involved in producing and transporting ethylene, propylene, and other
petrochemical products. Among other duties, Sandoval inspected and evaluated
construction and repair work performed at the facility and on vessels that
LyondellBasell used for chemical transport to ensure compliance with codes and
other specifications. Sandoval was responsible for maintaining inspection records
and ensuring implementation of corrective measures where necessary.
3
Turner is not a party to this suit because Sandoval’s claims against it were subject
to arbitration.
7
When Sandoval accepted Turner’s Corpus Christi assignment, he signed an
authorization permitting
the DCC to release my drug or alcohol test results to the Company
Member for which I worked at the time I was tested and/or the
Company Member which required me to take a post-offer of
employment drug and/or alcohol tests. I also authorize the DCC to
release information about my status in the DCC to those companies on
whose premises I seek to work or am currently working. I also authorize
the DCC to release DCC status, test results, and other program activity
to the Houston Area Contractors Safety Council through the NASAP
with the understanding that this data may affect my status in the
NASAP and that this status may be shared with those companies
participating in the NASAP.
Sandoval’s random selection for testing
In September 2015, DISA notified Turner’s Medical Department Supervisor,
Carlos Osorio, that its random pool selection process had chosen several employees,
including Sandoval, for drug screening. Osorio informed Sandoval that he had been
selected for random screening and told him to report to Turner’s Corpus Christi
personnel office for specimen collection.
Medical Assistant/Technician D’Aldo Alaniz, a Turner employee, was
charged with collecting the urine specimen from Sandoval. Alaniz had received a
Certificate of Completion for training as a DOT Urine Specimen Collector in
February 2015.
Sandoval reported for testing and, under Alaniz’s supervision, provided a
urine specimen. Alaniz performed a preliminary test on the specimen showing that
8
no drug was present. Alaniz then prepared the specimen for delivery to the testing
lab. He filled two specimen bottles, labeled the bottles A and B, sealed them, had
Sandoval initial them on the seal, and put them into plastic bags.
Sandoval’s specimen was sent to Clinical Reference Laboratory in Kansas for
analysis. The lab informed DISA that the specimen tested positive for cocaine. The
specimen was forwarded to University Services, LLC for retesting. Benjamin
Gerson, an MRO with University Services, confirmed the positive result.
On September 21, 2015, DISA notified Turner, through Osorio, of the result
via an automatically generated email. Also on that day, DISA changed Sandoval’s
status in the DCC database from “active” to “inactive.”
Turner terminated Sandoval’s employment for violation of its substance-
abuse policy on September 22nd. The same day, Sandoval had a verification
interview with Dr. Gerson. In his interview, Sandoval confirmed that he was not on
any medications and was not a drug user. Dr. Gerson verified the test results and
sent the verification records to DISA.
Also on that day, Sandoval provided a lab that was unaffiliated with Turner
or DISA with a hair sample, and he paid for a 12-panel follicle test. On September
25th, that lab reported to Sandoval that his hair follicle tested negative for the
presence of any drug. Sandoval also paid for a retest of the urine specimen collected
by Turner.
9
University Services sent a letter to Clinical Reference Laboratory asking it to
ship either an aliquot or a split specimen to Quest Diagnostics for retesting. Quest’s
records indicate that Quest first received a specimen bottle labeled A, which had a
broken seal, instead of an aliquot of the specimen in bottle A. Quest alerted DISA
to the situation. Page 1018 of the clerk’s record shows that the following day, Quest
received bottle B of Sandoval’s September 2015 specimen, which Quest used for the
retest. Like the specimen in bottle A, the specimen in bottle B also tested positive
for cocaine. Randy Barnett, another MRO with University Services, confirmed
Quest’s result.4
Sandoval informed his former supervisors at Turner that he had submitted to
hair follicle testing and had obtained a negative result, contrary to the Kansas and
Quest results. Ultimately, Turner did not reinstate Sandoval, and the inactive-status
designation remained on DISA’s database.
Sandoval sued DISA, the testing laboratories, and a medical review officer,
claiming negligent sample collection and transport, negligent testing, defamatory
report of the positive test results to third parties, and violations of the Texas
4
The labs and University Services completed forms for Sandoval’s specimen
to document the chain of custody for each step of the testing and review
processes. At each step, these parties kept DISA apprised of the results and
DISA, in turn, provided the information to Turner, along with
recommendations for handling Sandoval’s employment in compliance with
applicable regulations.
10
Deceptive Trade Practices Act. The trial court granted the medical review officer’s
special appearance, and Sandoval nonsuited all remaining parties except for DISA.
The trial court granted DISA’s motion for summary judgment on traditional grounds,
and Sandoval brought this appeal.
DISCUSSION
A. Summary-judgment standard of review
Sandoval challenges the propriety of the trial court’s take-nothing summary
judgment on his negligence, defamation, and DTPA claims. We review summary
judgments de novo. City of Richardson v. Oncor Elec. Delivery Co., 539 S.W.3d
252, 258 (Tex. 2018). When the trial court grants summary judgment without
specifying the grounds for granting the motion, as it did in this case, we must affirm
its judgment if any of the grounds advanced by the movant supports the ruling.
Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525 S.W.3d 671, 680 (Tex. 2017).
DISA moved for summary judgment on both traditional and no-evidence
grounds. When reviewing the grounds for summary judgment, we take as true all
evidence favorable to Sandoval and indulge every reasonable inference and resolve
any doubts in Sandoval’s favor. Sommers for Ala. & Dunlavy, Ltd. v. Sandcastle
Homes, 521 S.W.3d 749, 754 (Tex. 2017).
As to the traditional grounds, DISA bore the burden of showing that no
genuine issue of material fact exists and that it is entitled to judgment as a matter of
11
law. TEX. R. CIV. P. 166a(c); Oncor Elec., 539 S.W.3d at 258–59. To meet this
burden, DISA was required to conclusively negate at least one essential element of
each of Sandoval’s causes of action or conclusively prove all the elements of an
affirmative defense. KCM Fin. v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015). “An
issue is conclusively established ‘if reasonable minds could not differ about the
conclusion to be drawn from the facts in the record.’” Cmty. Healthsys., 525 S.W.3d
at 681 (quoting Childs v. Haussecker, 974 S.W.2d 31, 44 (Tex. 1998)).
As to the no-evidence grounds, DISA had to identify one or more essential
elements of each of Sandoval’s causes of action for which there was no evidence.
TEX. R. CIV. P. 166a(i); Cmty. Healthsys., 525 S.W.3d at 695–96. To defeat the no-
evidence grounds, Sandoval had to adduce more than a scintilla of evidence raising
a genuine issue of material fact as to each challenged element. See Lightning Oil
Co. v. Anadarko E&P Onshore, 520 S.W.3d 39, 45 (Tex. 2017).
B. Legal duty
Sandoval contends that the summary-judgment evidence raises fact issues
showing that DISA assumed a legal duty to use reasonable care in ensuring accurate
drug-test results.
1. Applicable law
To overcome summary judgment on his negligence claim, Sandoval must
raise material facts showing that (1) DISA owed him a duty; (2) DISA breached its
12
duty; (3) DISA’s breach of that duty proximately caused his injuries; and (4)
damages resulted from that breach. See Mission Petrol. Carriers. v. Solomon, 106
S.W.3d 705, 710 (Tex. 2003).
Whether a duty exists is a question of law. Id. (citing SmithKline Beecham
Corp. v. Doe, 903 S.W.2d 347, 351 (Tex. 1995)). We consider various factors in
determining whether circumstances provide a basis for imposing a legal duty,
“including the risk, foreseeability, and likelihood of injury weighted against the
social utility of the actor’s conduct, the magnitude of the burden of guarding against
the injury, and the consequences of placing the burden on the defendant.” Greater
Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990), quoted in
Mission Petrol., 106 S.W.3d at 710; see also Nabors Drilling, USA v. Escoto, 288
S.W.3d 401, 404 (Tex. 2009) (explaining that liability in negligence is grounded in
public policy holding individual responsible for injuries caused by reasonably
foreseeable consequence of act or omission) (quoting El Chico Corp. v. Poole, 732
S.W.2d 306, 311 (Tex. 1987)).
Sandoval claims that DISA assumed a duty of care through its administration
of Turner’s drug-testing program and breached that duty by (1) reporting that
Sandoval’s specimen tested positive for the presence of cocaine; (2) failing to
exclude other possible causes for the positive test result; and (3) identifying his status
as inactive in its database. In addition, Sandoval claims that DISA committed
13
negligence per se by violating regulatory requirements of the Pipeline and
Hazardous Materials Safety Administration, which requires each operator to
“maintain and follow a written anti-drug plan that conforms to the requirements of
[Title 49, Part 199] and the DOT procedures.” See 49 C.F.R. §§ 199.101.
Sandoval casts his negligence issue as one of first impression, seeking to
distinguish the Texas Supreme Court’s decisions in Mission Petroleum, 106 S.W.3d
705, and SmithKline Beecham, 903 S.W.2d 347. Both Mission Petroleum and
SmithKline Beecham, however, address negligence claims arising from workplace
drug-testing and directly evaluate whether a third-party non-employer owes
an -employee a legal duty. Like the lab in SmithKline Beecham, the third-party
administrator in this case performs a specific, contracted-for function in the
employer’s drug-testing protocol. And, like the in-house employee drug and alcohol
testing in Mission Petroleum, the drug testing in this case, according to Sandoval, is
subject to a parallel regulatory framework.
In SmithKline Beecham, the plaintiff’s prospective employer contracted with
the lab to perform its drug testing. Id. at 348. After the plaintiff’s urine tested
positive for opiates, the company withdrew its job offer. Id. Later, the plaintiff
learned that consuming poppy seeds could lead to false-positive test results and
reapplied for the position, informing the company that she had taken one of her
roommate’s Vicodin and had eaten several poppy seed muffins in the days before
14
the test. Id. at 349. The company again refused to hire her, this time citing the
plaintiff’s failure to disclose that she had taken Vicodin without a prescription. Id.
The plaintiff sued the lab for negligence, claiming that it had breached a duty
to disclose that ingestion of certain substances could cause a positive test result. Id.
The Texas Supreme Court held that an independent drug-testing laboratory had no
duty to warn job applicants that ingestion of poppy seeds or other substances could
cause positive drug-test results. Id. at 353–54.
Sandoval relies on the intermediate court’s decision in that appeal, Doe v.
SmithKline Beecham Corp., to claim that DISA owed a duty to monitor
urine-collection procedures because failure to do so creates the danger that false
positive test results might be published to third parties. 855 S.W.2d 248 (Tex.
App.—Austin 1993). Sandoval fails to acknowledge, however, that in rejecting the
duty urged in that case, the Supreme Court also rejected the lower court’s rationale
for imposing it. See SmithKline Beecham, 903 S.W.2d at 356 (modifying court of
appeals’ judgment, which reversed trial court’s summary judgment in favor of lab
on Doe’s negligence claim, to affirm trial court’s ruling). Pointing to the written
contract between the company and the lab, the Court declared that “SmithKline
should be allowed to perform only the service it chose to offer, and [the prospective
employer] chose to procure—testing for the presence of drugs in the body.” Id. at
354. The Court thus concluded that the lab did not owe the test subject a duty to
15
advise the employer about possible, non-drug-related causes for a positive test result.
Id. at 353.
In Mission Petroleum, the Court confronted the issue of “whether an employer
owes a duty to an at-will employee to use reasonable care when collecting an
employee’s urine sample for drug testing pursuant to DOT regulations.” 106 S.W.3d
at 710. The Court rejected the appellant’s request to create a new common-law duty
on employers who conduct in-house drug testing based, in large part, on the
“significant avenues of redress” available under the federal regulations. Id. at 713.
These substance-abuse screening regulations, which, Sandoval acknowledges, apply
to him, redress the issues for which Sandoval seeks a common-law remedy: they
protect employees who refuse to sign consent forms, release forms, or custody and
control forms, as well as those who refuse to initial the seal on the specimen bottles
if the employer fails to follow specimen collection protocols. Id. (citing, inter alia,
49 C.F.R. § 40.33(a), (c)). Further, the regulations safeguard against faulty results;
they require an MRO to review positive test results, and authorize the officer to
examine the collection procedures, trace the chain of custody, and interview the
employee to determine whether factors other than drug use could have caused the
positive test result. Id. (citing, inter alia, 49 C.F.R. § 40.33).
16
Given the federal regulatory framework, the Court concluded that the risk of
harm from a false-positive drug test “is reduced by the protection the DOT
regulations afford to the employees.” Id. at 715. As a result, the Court “decline[d]
to impose a common-law duty on employers who conduct in-house urine specimen
collection under the DOT regulations.” Id. In this context, we turn to Sandoval’s
claims against DISA.
2. Analysis
Sandoval contends that DISA’s duty arises from a contractual or actual right
of control that it exercises over Turner’s drug-testing program, including when and
how to test employee members. The record, however, does not bear out this
contention. Like drug-testing companies, third-party administrators of a drug-
testing programs generally “have a direct relationship only with the employer and
not the employee.” Mission Petroleum, 106 S.W.3d at 710. DISA and Turner’s
contract confirms that exclusive relationship here: it expressly disclaims any third-
party beneficiary status, which forecloses any argument that DISA contractually
assumed a duty to Sandoval. See First Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex.
2017). Further, the contract specifies that Turner’s drug and alcohol policy would
apply—not DISA’s. This provision, coupled with Turner’s communications with
Sandoval about its own drug policy and its application to him, render inviable
Sandoval’s urged imposition of a legal duty on DISA.
17
The contract between DISA and Turner reserves all discretionary testing
decisions—such as selecting employees for testing based on reasonable suspicion or
in the aftermath of an accident—to Turner. It delegates only nondiscretionary
administrative functions to DISA, such as notifying Turner to test its employees at
junctures mandated by DOT regulations, including on hiring, return to duty, at
random, and for follow-up. The inclusion of Sandoval in a list of employees
generated by a randomized selection process does not raise a fact issue as to whether
DISA had a right of control over Turner’s random testing. Sandoval’s selection for
random testing lacks the causal link necessary to support his claim that DISA
exercised control over Sandoval’s drug test. See Gen. Elec. Co. v. Moritz, 257
S.W.3d 211, 214 (Tex. 2008) (explaining that plaintiff must show that defendant had
right to control “the specific wrongful acts that caused his injury”).
The gravamen of Sandoval’s negligence claim lies in the specimen collection
and testing procedures: he alleges that DISA had a duty to monitor them to ensure
accurate results. Contrary to Sandoval’s allegations, however, the undisputed
evidence shows that DISA did not assume any control over the collection or testing
procedures. Sandoval alleged “on information and belief” that DISA trained Alaniz,
who performed the collection for Turner. But DISA has no records that Alaniz
attended DISA’s training, nor does DISA’s name appear on Alaniz’s training
certificates. The specimen collection was carried out by a Turner employee on
18
Turner property, third-party laboratories tested the specimen, and a third-party MRO
analyzed and reconfirmed the positive test results.
Under the contract between DISA and Turner, DISA agreed to perform the
administrative functions to facilitate the implementation of Turner’s drug and
alcohol policy and comply with applicable DOT regulations. DISA agreed to
communicate test results to Turner and update its database to reflect the appropriate
status for Turner’s employees based on the results reported. As in SmithKline
Beecham, DISA “should be allowed to perform only the service it chose to offer,”
and Turner “chose to procure.” 903 S.W.2d at 354. By contracting to provide
administrative services to Turner, DISA did not assume a common-law duty to
monitor Turner’s collection protocols on Sandoval’s behalf to ensure the accuracy
of test results for Turner’s employees.
Sandoval further contends that DISA owed him a duty to ensure accurate
drug-test results because it assumed a right of control over Turner’s drug-testing
program through its own drug-testing policy. Sandoval points to his receipt of the
DCCHA policy along with the Universal Membership Application Form as evidence
that DISA’s policy took precedence over Turner’s policy. The undisputed evidence,
however, shows that when Turner hired Sandoval, it informed him that, as a Turner
employee, he was subject to Turner’s drug and alcohol policy. DISA performed
only the administrative duties specified in its contract with Turner; no evidence
19
suggests that DISA assumed an extracontractual duty to either Turner or Turner’s
employees. Accordingly, DISA’s conduct did not give rise to any duty to Turner’s
employees with respect to the implementation of Turner’s drug-testing policy.
Sandoval’s negligence per se claim stands on his allegation that DISA violated
“DOT regulations,” but Sandoval does not “reasonably identify” the regulation that
DISA purportedly violated. See Daugherty v. S. Pac. Transp. Co., 772 S.W.2d 81,
83 (Tex. 1989). Sandoval did not adduce facts supporting a claim that DISA
breached a legal duty arising out of the transportation and routing activities it had
contracted to perform. As the Mission Petroleum Court observed, employees subject
to federally-regulated drug testing may avail themselves of the “significant avenues
of redress” that the regulations provide. Consistent with that observation, we decline
to recognize the common-law duty that Sandoval seeks to impose in this case. See
Mission Petrol., 106 S.W.3d. at 713.
C. Defamation
Sandoval contends that DISA defamed him by reporting his positive drug-test
results to Turner and publishing his status as “inactive” on its database. A cause of
action for defamation requires proof that (1) the defendant published a false
statement of fact to a third party, (2) that was defamatory concerning the plaintiff,
(3) with the requisite degree of fault, and (4) damages, in some cases. ExxonMobil
Corp. v. Rincones, 520 S.W.3d 571, 579 (Tex. 2017) (quoting In re Lipsky, 460
20
S.W.3d 579, 593 (Tex. 2015)); Espinosa v. Aaron’s Rents, Inc., 484 S.W.3d 533,
543 (Tex. App.—Houston [1st Dist.] 2016, no pet.).
In its summary-judgment motion, DISA raised the defenses of qualified
privilege, truth, and consent. Because DISA conclusively proved that its
communications were privileged, we do not address the other defenses.
A qualified privilege justifies a communication made without actual malice,
Dun & Bradstreet, Inc. v. O’Neil, 456 S.W.2d 896, 899 (Tex. 1970). Whether a
qualified privilege exists is a question of law. Id. Employers and their agents have
a qualified privilege to investigate reports of employee wrongdoing. See Neely v.
Wilson, 418 S.W.3d 52, 62 (Tex. 2013); Randall’s Food Mkts., Inc. v. Johnson, 891
S.W.2d 640, 646 (Tex. 1995). This investigative privilege “remains intact as long as
communications pass only to persons having an interest or duty in the matter to
which the communications relate.” Johnson, 891 S.W.2d at 646; Henriquez v.
Cemex Mgmt., 177 S.W.3d 241, 253 (Tex. App.—Houston [1st Dist.] 2005, pet.
denied). The party seeking to defeat the assertion of a qualified privilege must prove
that the speaker knew the statement was false or acted with reckless disregard for its
truth. Forbes Inc. v. Granada Bioscis., Inc., 124 S.W.3d 167, 171 (Tex. 2003).
The privilege attaches to communications made in good faith on a subject in
which the author has an interest or with reference to which he has a duty to another
person having a corresponding interest or duty. Dixon v. Sw. Bell Tel. Co., 607
21
S.W.2d 240, 242 (Tex. 1980). As it is an affirmative defense, the defendant bears
the burden of proving the communication was privileged unless the plaintiff’s
petition affirmatively demonstrates that the privilege applies. Burbage v. Burbage,
447 S.W.3d 249, 254 (Tex. 2014).
DISA’s contract with Turner authorizes DISA to communicate to Turner its
employees’ drug-test results. It further authorizes DISA to publish the status of its
employees as active or inactive in DISA’s database consistent with those results.
Because of the safety concerns inherent in jobs that require drug and alcohol testing,
other consortium member companies have a common interest in knowing whether a
worker once employed by a fellow member company has inactive or inactive status.
Thus, the challenged communications fall within the privilege’s scope. See Johnson,
891 S.W.2d at 646; Henriquez, 177 S.W.3d at 253.
In response, Sandoval argues that DISA cannot rely on the privilege because
DISA showed “reckless disregard” for the truth. Reckless disregard requires proof
that a defendant “entertained serious doubts as to the truth” of a statement. Waste
Mgmt. of Tex., Inc. v. Tex. Disposal Sys. Landfill, Inc., 434 S.W.3d 142, 158 (Tex.
2014). A defendant may negate reckless disregard by showing that it had reasonable
grounds to believe that the challenged statements were true. See Johnson, 891
S.W.2d at 647; Espinosa, 484 S.W.3d at 543–44.
22
Two different certified labs reported that Sandoval’s urine specimen tested
positive for cocaine metabolite. An authorized medical review officer reviewed the
testing protocols and confirmed that result in each instance. Sandoval has not
adduced evidence that DISA knew about any alleged irregularities in the collection
and testing of Sandoval’s specimen. DISA reported the information it received from
the labs and the MROs to Turner and, based on that information, updated the DCC
database to reflect Sandoval’s status as “inactive.”
Sandoval suggests that the negative result of his post-employment hair-follicle
test raises a fact issue as to whether DISA acted with reckless disregard. That result
was not available when DISA reported the urine-test results to Turner and updated
its database. Thus, the later test does not raise a fact issue to defeat DISA’s privilege,
particularly in light of Turner’s policy that “[d]rug tests not conducted under the
supervision of the Company are not recognized as approved.” The evidence that
DISA received the same information concerning Sandoval’s test results from two
independent labs that were confirmed by medical review officers defeat Sandoval’s
allegation of “reckless disregard” as a matter of law. See Johnson, 891 S.W.2d at
647; Espinosa, 484 S.W.3d at 543–44.
Because DISA conclusively proved its entitlement to the asserted privilege,
we hold that the trial court did not err in granting DISA summary judgment on
Sandoval’s defamation claim.
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D. Sandoval’s DTPA claim fails as a matter of law because he is not a
“consumer” of DISA’s services.
Finally, Sandoval contends that the trial court erred in dismissing his DTPA
claim for failure to prove consumer status. Citing Crown Life Insurance Co. v.
Casteel, 22 S.W.3d 378 (Tex. 2000), Sandoval argues that he need not prove he is a
consumer to bring a claim under DTPA section 17.45(b)(12), which makes it a
violation to “represent[] that an agreement confers or involves rights, remedies, or
obligations which it does not have or involve, or which are prohibited by law.” TEX.
BUS. & COM. CODE § 17.46(b)(12).
Sandoval misreads Casteel. There, the plaintiff alleged a violation of section
17.46(b)(12) as part of his claim under the Texas Insurance Code, which allows a
policyholder to sue its insurer for unfair and deceptive practices. 22 S.W.3d at 381;
see TEX. INS. CODE § 541.151. Section 541.151 of the Insurance Code incorporates
part of the DTPA, including section 17.46(b)(12). Id. at 382–83. The Court
observed that the Insurance Code conferred standing if the plaintiff qualified as a
“person” as defined in section 541.002(2). 22 S.W.3d at 383. Some of the
incorporated DTPA provisions, the Court explained, also require the plaintiff to
show consumer status, because “they deal with the misrepresentation of ‘goods or
services.’” Id. at 387 (citing TEX. BUS. & COM. CODE § 17.46(b)(5), (7), & (9)). The
Court noted, however, that as incorporated into the Insurance Code, section
17.46(b)(12) does not require a plaintiff to prove consumer status because the
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violation it describes “neither arises out of a consumer transaction explicitly, nor
deals with the misrepresentation of ‘goods or services.’” Id. (citing Webb v. Int’l
Trucking, 909 S.W.2d 220, 228 (Tex. App.—San Antonio 1995, no writ)).
Sandoval’s claim does not arise under the Insurance Code. As a result,
Casteel does not relieve him from the requirement that he prove consumer status for
standing to sue under the DTPA. See TEX. BUS. & COM. CODE § 17.50; see Amstadt
v. U.S. Brass, 919 S.W.2d 644, 649 (Tex. 1996).
Sandoval also maintains that he qualifies for consumer status through his
relationship to DISA through the DISA Contractor’s Consortium Membership
contract. The DTPA defines “consumer” as a person “who seeks or acquires by
purchase or lease, any goods or services.” TEX. BUS. & COM. CODE § 17.45(4). The
membership application does not constitute evidence that Sandoval sought or
acquired any goods or services from DISA. We therefore hold that the trial court
did not err in granting summary judgment in favor of DISA on Sandoval’s DTPA
claim.
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CONCLUSION
We affirm the judgment of the trial court.
Jane Bland
Justice
Panel consists of Justices Keyes, Bland, and Lloyd.
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