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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LAURA FUJISAWA, et al.

Plaintiff(s),

v.

COMPASS VISION, INC., et

al.,

Defendant(s).

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No. C07-5642 BZ

Related Cases: C07-3431 BZ

 C08-4118 BZ

 C09-2016 BZ

ORDER DENYING DEFENDANTS

NATIONAL MEDICAL SERVICES’

AND COMPASS VISION’S MOTIONS

FOR SUMMARY JUDGMENT

Plaintiff Dr. Laura Fujisawa was a licensed California

pharmacist. As a result of substance abuse, she entered a

rehabilitation program in an effort to maintain her license. 

She was eventually terminated from the program, principally

because of the results of her tests for the presence of Ethyl

Glucuronide (EtG) in her system. She then sued Compass

Vision, Inc. (Compass) and National Medical Services, Inc.

(National or NMS), for negligently implementing and

administering EtG testing in California. They have now moved 

///

///

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1 National’s and Compass’s motions for summary judgment

are nearly identical and the overlapping arguments will be

addressed as such. 

2 The Court primarily relies on the Joint Statement of

Undisputed facts and other facts which are not reasonably in

dispute.

3 On its website, Maximus describes itself as a company

which for nearly 40 years “has partnered with federal, state,

and local governments to make public healthcare programs run

effectively.” 

4 On its website, Compass describes itself as “the top

provider of substance abuse testing solutions for healthcare

monitoring programs nationwide.”

2

for summary judgment.1

THE PHARMACY RECOVERY PROGRAM2

The Board of Pharmacy (“the Board”) under the

jurisdiction of the California Department of Consumer Affairs

operates the Pharmacy Recovery Program (Program) pursuant to

California Business and Professions Code § 4360 et. seq. to

rehabilitate pharmacists who have a history of drug or alcohol

abuse. On July 1, 2003 the Board contracted with Maximus,

Inc. to administer the Program.3 The contract required

Maximus to provide a variety of body fluid tests to Program

participants, but initially did not require Maximus to test

for EtG, a minor metabolite of alcohol. Maximus retained

Compass to administer the testing portion of the Program.4

ETG TESTING

On May 13, 2003, in a news release, National announced

that it had: “introduced the availability of testing for Ethyl 

Glucuronide (EtG), a unique marker found in urine for

///

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5 On its website, National describes itself as for more

than 35 years “setting the standard for excellence in clinical

toxicology and forensic testing.”

3

detection of alcohol consumption.”5 Dr. Anthony Costantino,

National’s Vice-President of Operations, stated that “EtG will

now be the state of the art technique for detecting alcohol in

the urine.” Thereafter, Kim McKown, President of Compass,

contacted National to learn more about the test. National

delivered a PowerPoint presentation to Compass on EtG testing. 

National set 250 ng/ml as the cutoff limit to indicate a

positive test, one that would provide a strong indication that

the person was recently drinking an alcoholic beverage and

detect relapse. National advised Compass that the cutoff

limit was “the administratively determined value at which an

action must be taken.” National also provided background and

technical materials to Compass to convince it that the EtG

test was the “state-of-the-art” test for detection of alcohol

and that 250 ng/ml was the appropriate cutoff level. 

Compass recommended, and the Board agreed, to require

Maximus to include EtG testing in the urine substance abuse

test. Participants in the Program were advised that a EtG

level of 250 ng/ml would be considered positive and might be

considered a relapse regardless of other factors. Initially,

Compass sent urine samples for EtG testing to Northwest

Toxicology. Sometime in 2004, Compass began sending urine

samples to National for testing. National provided the EtG

test results to Compass, which provided them to Maximus, which 

provided the results to the Board. 

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4

By 2005, doubts about the utility of EtG testing began to

appear. On August 15, 2005, Dr. Gregory Skipper, one of the

early proponents of EtG testing, issued an advisory memorandum

to “Regulatory Board Staff or Members” reminding them of the

limitations of EtG testing. Among other things, he advised

“whenever possible, to refrain from taking action against an

employee or licensee based on EtG testing alone.” In

September 2006, the U.S. Department of Health and Human

Services issue a lengthy “Substance Abuse Treatment Advisory”

which reviewed the pros and cons of EtG testing and warned

that:

Currently the use of an EtG test in determining

abstinence lacks sufficient proven specificity for use as

primary or solo evidence that an individual prohibited

from drinking in a criminal justice or a regulatory

compliance context, has truly been drinking. Legal or

disciplinary action based solely on a positive EtG, or

other test discussed in this Advisory, is inappropriate

and scientifically unsupportable at this time. These

tests should currently be considered as potential

valuable clinical tools but their use in forensic

settings is premature.

In response to this Advisory, National, Compass and

others co-authored an article, based largely on tests

conducted on 13 Compass employees who consumed controlled

amounts of alcohol. Significantly, none of the Compass

employees tested substances such as soy sauce or mouthwash,

which contain EtG. The article’s conclusion was to validate

EtG testing and to recommend establishing “250 ng/mL as the

cutoff levels for testing and the use of 500 ng/mL as a

guideline for intentional consumption of alcohol.” That

article was provided to Maximus. It is not clear whether it

was provided to the Board. Defendants and the Board continued

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to rely on EtG testing until January 1, 2009 when National

discontinued it.

DR. FUJISAWA

In May 2003, Dr. Fujisawa was terminated from her

employment for reasons related to her addiction to proscribed

substances other than alcohol. On April 7, 2004, the Board of

Pharmacy filed a formal Accusation against Dr. Fujisawa. 

Pursuant to a stipulated settlement, Dr. Fujisawa entered the

Pharmacist Recovery Program (“Program”) in December 2004.

On March 21, 2006 the Board placed Dr. Fujisawa on

probation for five years, subject to various terms and

conditions including successful completion of the Program. 

Specifically, Dr. Fujisawa had to successfully complete random

drug screening and abstain from drug and alcohol use. Dr.

Fujisawa eventually underwent 69 Random Body Fluid Tests. 

On September 26, 2006 Dr. Fujisawa tested positive for

EtG with a value of 1800 ng/ml. A pharmacist review

committee, consisting of two Board employees and one from

Maximus, reviewed Dr. Fujisawa’s file and determined that she

had relapsed. Dr. Fujisawa subsequently returned six

additional positive results between October 11, 2006 and March

14, 2007. Dr. Fujisawa was terminated from the Program on

March 13, 2007 and her license was suspended as a result of

her termination. A hearing on the Board’s petition to revoke

Dr. Fujisawa’s probation was held on July 23-24, 2008 before

Administrative Law Judge Karen Brandt. Throughout, Dr.

Fujisawa maintained that she never consumed alcohol, and that

any positive EtG tests were the result of incidental exposure

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to products, such as hand sanitizers or soy sauce, which can

cause positive EtG tests. The ALJ recommended revoking Dr.

Fujisawa’s license, but staying the revocation pending a one

year suspension and successful completion of five years of

probation. The Board did not adopt ALJ Brandt’s decision and

revoked plaintiff’s licence. The Board relied primarily on

Dr. Fujisawa’s positive EtG tests in determining her

suitability to practice pharmacy. Dr. Fujisawa did not seek

review of that decision pursuant to California Code of Civil

Procedure §§ 1094.5, 1094.6. This suit followed. 

In her amended complaint, Dr. Fujisawa alleges that

Compass and National were negligent in: 

promoting, advertising, marketing, selling, and/or

contracting with the licensing board, and/or designing,

implementing, and managing the EtG alcohol testing

program, and/or collecting the urine samples and/or

performing and/or interpreting the EtG testing and/or

utilizing the EtG test to allegedly establish that the

plaintiff consumed an alcoholic beverage, when it lacked

sufficient proven specificity for use as primary or sole

evidence that an individual prohibited from drinking, in

a regulatory compliance context, had truly been drinking.

First Amended Complaint (“complaint”) ¶ 82. She alleges that

EtG testing is not a reliable way to determine intentional

alcohol consumption. Dr. Fujisawa is one of many plaintiffs

around the country that have filed suit alleging that EtG

testing erroneously led to adverse employment actions. 

Currently, there are several similar actions pending in this

district, and others in the District of New Jersey, the

Southern District of California, and in state courts. 

Litigation Privilege

National and Compass first move for summary judgment on

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the grounds that any actions they undertook in relation to Dr.

Fujisawa were absolutely privileged under California Civil

Code § 47, which provides in part that:

A privileged publication or broadcast is one made: ... (b) in any (1) legislative proceeding, (2) judicial

proceeding, (3) in any other official proceeding

authorized by law, or (4) in the initiation or course of

any other proceeding authorized by law . . . .

National contends that its role was solely to provide

evidence in the form of EtG testing results to the Board for

its use in official proceedings authorized by law. National

likens its role to that of a witness providing testimony in an

administrative proceeding. National relies on several cases

which generally stand for the proposition that statements made

in the context of a judicial proceeding are privileged and not

actionable. National relies heavily on Silberg v. Anderson,

50 Cal. 3d 205 (1990), holding that allegedly false statements

made by an attorney in the context of a judicial proceeding

regarding the neutrality of a psychologist were privileged.

The issue in Silberg was whether there was an “interest of

justice” exception to § 47, not whether the statements might

not be a privileged communication. Silberg’s claim was that

“contrary to [Anderson’s] representation” the psychologist was

not neutral. Id at 210. Silberg’s claim was not based on the

sort of conduct present here. See also Harris v. King, 60

Cal. App. 4th 1185, 1188 (1998) (holding that allegedly false

statements in a medical report submitted to the State

Compensation Insurance Fund were privileged); People ex rel.

Gallegos v. Pacific Lumber Co., 158 Cal. App. 4th 950, 958-59

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(1998) (holding that statements made to government agencies

during a CEQA administrative proceeding were privileged). 

Plaintiff responds by arguing (1) that the litigation

privilege does not protect non-communicative acts and (2) that

she is suing National for two categories of negligent conduct

which are not privileged because they did not take place in

connection with or in preparation for any kind of judicial

proceeding. The first consists of non-case specific conduct

such as “communications by NMS about EtG testing made to the

general public or to the scientific community.” Doc. No. 232,

p. 13. This conduct took place before any proceedings were

instituted against Dr. Fujisawa and relates to the Board’s

initial decision to adopt EtG testing as a component of its

Program, in reliance on representations made by Compass and

National. The second category of conduct of which Dr.

Fujisawa complains is case-specific, such as using the

allegedly faulty EtG test to screen Dr. Fujisawa’s urine for

alcohol and reporting the test to Compass. 

I do not find National’s § 47 argument persuasive for

several reasons. As Judge Cavanaugh noted in Garlick v. Quest

Diagnostics, Inc., 2009 WL 5033949, *10 (D.N.J. 2009), in

rejecting a similar argument, plaintiff’s “claims are not

based exclusively” on statements made to the board in judicial

or quasi-judicial proceedings. Instead, plaintiff’s claims

are based on “defendants’ actions and statements associated

with the establishment and promotion of EtG testing that has

lead to false positives.” Id. Section 47 may provide

protection to National for any communications made in the

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6 Brown v. Lab One, Inc., 2007 WL 6199913 (D.Nev.

2007), cited by National, is readily distinguishable in that

the plaintiff’s suit was based solely on the communications

made by the defendant laboratory. Here, Dr. Fujisawa’s claims

are premised on conduct that reaches several years prior to Dr.

Fujisawa’s first negative test. 

9

administrative proceedings, but not for its conduct prior to

and leading up to those communications. None of the cases

cited by National apply to § 47 in the expansive way that

National suggests here.6

 Put another way, “[t]he principal

purpose of [the privilege] is to afford litigants and

witnesses the utmost freedom of access to the courts without

fear of being harassed subsequently by derivative tort

actions.” Action Apartment Assoc., Inc. v. City of Santa

Monica, 41 Cal.4th 1232, 1241 (2007) (internal citations

omitted). Plaintiff is not attempting to hinder defendants’

access to the courts; she is attempting to hinder their

ability to promote and implement an ineffective test which

harmed her. 

Second, none of the cases cited by National or Compass

hold that non-communicative conduct is privileged. See Action

Apartment Assoc., Inc. v. City of Santa Monica, 41 Cal.4th

1232, 1241 (2007). Their cases hold that communications made

during various stages of judicial and quasi-judicial

proceedings are privileged; none extended that privilege to

underlying, non-communicative conduct. Such a holding would

yield results the Legislature could not have intended, given

the purpose of §47. For example, it might immunize a party

who had defended her actions in an administrative or legal

proceeding from a subsequent malpractice action. Section 47

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is not nearly as broad as National argues. 

Collateral Estoppel

National and Compass argue that plaintiff should be

estopped from litigating the reliability and validity of EtG

testing because such issues were litigated in the proceeding

before ALJ Brandt. In the administrative proceeding, the ALJ

took evidence on the following two questions:

1. Should respondent’s [Dr. Fujisawa’s] probation be

terminated because she tested positive on six occasion

for Ethyl Glucuronide (EtG), a metabolite of alcohol?

2. Should respondent’s probation be terminated because

she failed to successfully complete the Pharmacists

Recovery Program (“Program”), a condition of her

probation?

This argument is unpersuasive for several reasons. 

First, National and Compass were not parties to that

proceeding. It is difficult to conceive how plaintiff would

have litigated any negligence against those parties in the

administrative proceeding, particularly her claims of

negligent marketing, advertising, and promotion of EtG

testing. Second, National cites no authority to support its

position that the doctrine of collateral estoppel would apply

in a situation like this. The only case National discussed

was Silberg v. Anderson, 50 Cal.3d 205 (1990), a case decided

on Code of Civil Procedure § 47 grounds. That opinion did not

discuss collateral estoppel and certainly does not stand for

the proposition that National suggests. In Castillo v. City

of Los Angeles, 92 Cal. App. 4th 477, 418 (2001) the complaint

was dismissed on collateral estoppel grounds because the

plaintiff sued the same entity (the City of Los Angeles) after

an adverse administrative decision and a subsequent denial of

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a writ of mandate to overturn the administrative decision. 

Here, Dr. Fujisawa is not suing the Board, the only other

entity represented in the administrative proceeding. 

The issue in this case is not whether Dr. Fujisawa

violated the terms of her probation. The issue in this case

is whether National or Compass committed a tort by promoting,

advertising, and selling EtG testing as a reliable means of

detecting alcohol consumption. 

Administrative Exhaustion

National and Compass contend that because plaintiff filed

this action a year and a half before the Board issued its

final decision that plaintiff failed to exhaust her

administrative remedies. National cited no authority, and the

Court is aware of none, that supports the proposition that a

plaintiff needs to exhaust her administrative remedies against

a state entity before being allowed to sue non-parties to the

administrative proceeding. Here, plaintiff did not sue the

Board, and does not seek review of the underlying decision to

revoke her license. Plaintiff seeks damages against two

parties that were not parties to, and would not have been

proper parties to, her administrative hearing. 

Judicial Exhaustion

National and Compass contend that if plaintiff was

unsatisfied with the Board’s decision to revoke her license,

she should have sought review by way of a writ of mandate. 

Plaintiff did not do so. However, as previously explained,

plaintiff does not seek review of the decision to revoke her

license in this action. Plaintiff’s cause of action

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transcends the issue whether plaintiff violated a term of her

probation. As a term of probation, plaintiff was prohibited

from testing at over 250 ng/ml. Plaintiff does not contest

that she tested above those limits. Instead, plaintiff argues

that those limits were prescribed as a result of defendants

negligence and were not accurate indicators of alcohol use and

relapse. Those issues were not necessarily determined in the

administrative proceeding. 

Duty

National and Compass raise the same arguments made in

their 12(b)(6) motions and argue that they have no duty toward

plaintiff. The Court is not inclined to repeat its analysis

of the issue. See Wilson v. Compass Vision, Inc., 2007 WL

4570613 (N.D.Cal. 2007). This Court as well as several others

have found that defendants National and Compass owed plaintiff

a duty of care. Cleveland v. Compass Vision, Inc., 2008 WL

576755 (N.D.Cal. 2008); Garlick v. Quest Diagnostics, Inc.,

2009 WL 5033949 (D.N.J. 2009); Quisenberry v. Compass Vision,

Inc., 618 F.Supp.2d 1223 (S.D.Cal. 2007). 

Damages

National’s and Compass’s contention that plaintiff cannot

establish causation of damages is without merit. The Board

decided to revoke plaintiff’s license because it found that

she had failed to abstain from alcohol use, as evidenced by

six EtG tests over 250 ng/mL. The board heavily relied on the

EtG tests to determine that plaintiff violated the terms of

her probation. Id. If plaintiff proves that National or

Compass negligently established the 250 ng/ml cutoff level, a

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jury may well determine that such conduct caused plaintiff

damages. 

National repeatedly argues that Dr. Fujisawa was only

disciplined based on an examination of a “complete clinical

picture.” Reply, p. 3. However, after reviewing the Board’s

decision (Beach Decl. Ex. W), it is clear that the Board

relied on the six positive EtG tests almost exclusively. The

Board found that Dr. Fujisawa’s “test results established that

[she] violated the terms of her probation by failing to

completely abstain from alcohol use.” Id. at 19. National

has not persuaded me that plaintiff cannot prove, as a matter

of law, damages resulting from the aggrieved of conduct.

11th Amendment Immunity

National and Compass summarily argue that they are immune

under the 11th Amendment as an agent of the state but

submitted no authority supporting that position. None of the

cases cited involve a broad grand of immunity for any state

contractors, let alone independent contractors of state

subcontractors. As the Ninth Circuit stated after analyzing

relevant Supreme Court and other Circuit precedent, “the law

makes clear that state sovereign immunity does not extend to

private entities,” merely because they act pursuant to a

contract with the state. Del Campo v. Kennedy, 517 F.3d 1070,

1080 -1081 (9th Cir. 2008).

First Amendment Immunity

Compass advances one argument that National does not -

that it is entitled to immunity under the First Amendment for

its statements regarding the effectiveness of EtG testing. 

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Compass did not cite any authority to support its position

that the First Amendment immunizes it for negligently

marketing and administering a faulty testing procedure that

had serious repercussions. 

Conclusion

For the foregoing reasons IT IS ORDERED THAT National’s

and Compass’s motions for summary judgment are DENIED. 

Dated: August 13, 2010 

 Bernard Zimmerman

 United States Magistrate Judge

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