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Endobiogenics, Inc. v. Chahine

United States District Court, D. Idaho

September 23, 2019

ENDOBIOGENICS, INC., Plaintiff,
v.
ABI CHAHINE, Defendant.

          MEMORANDUM DECISION AND ORDER

          B. LYNN WINMILL U.S. DISTRICT COURT JUDGE.

         INTRODUCTION

         On July 3, 2019, Endobiogenics, Inc. filed a Motion for Default Judgment. Dkt. 11. On July 1, 2019, the Clerk issued an Entry of Default. Since that time, Abi Chahine has failed to appear and file a responsive pleading. Plaintiff renewed the motion for default judgment on August 30, 2019. Dkt. 14. For the following reasons, the Court will grant Plaintiff’s first motion and vacate the second as moot.

         FACTUAL BACKGROUND

         “Endobiogeny” is a healthcare approach whereby physicians use biological information about their patients’ endocrine and autonomic nervous systems to provide holistic solutions to health problems. Dkt. 1 at 2-3. According to the Complaint, a French doctor, Jean-Claude Lapraz, co-created the practice of endobiogeny in the 1970s and 1980s with another doctor, Christian Duraffourd. Id. at 2. In or around 1990, Dr. Lapraz began conducting training seminars on endobiogeny throughout the United States. Id. at 3. These seminars were made possible through the support of a Pocatello, Idaho pharmacist, Anne M. Buhler. Id.

         From 2004 to 2007, Dr. Lapraz practiced herbal medicine in Pocatello. Id. In addition to his own practice, Dr. Lapraz created an online diagnostic tool to assist physicians “in diagnosing and prescribing care using the endobiogeny method.” Id. at 4. Dr. Lapraz’s “EMA System” analyzes the biological functions of a patient and returns a “Biology of Functions” report that diagnoses the patient –from an endobiogenic standpoint– and provides a recommended course of treatment. Id. According to the Complaint, the EMA System reports are printed onto “Endobiogenics”[1] letterhead “to identify the source of the information and to preserve the intellectual property of the data.” Id.

         Physicians who use the EMA System must enter into a written user agreement with Endobiogenics. Id. In November 2012, Abi Chahine[2] entered into a user agreement with Endobiogenics. Id. at 6. Among other things, the agreement requires physician users to pay fees. Id. at 5. The agreement also contains a provision stating that “if payment is not received by the 7th of the month the account will be cancelled on the 7th day of the month.” Id. at 6.

         According to the Complaint, Defendant stopped making monthly payments in July 2014. Id. Endobiogenics did not cut off Defendant’s access to the EMA System, but did alert him that he needed to bring his account current. Id. In September 2015, Defendant paid all of his past due monthly balances, with the exception of payment for one month. Id. From that point forward to November 2017, Defendant paid his monthly bill, but never paid for the one month that was in arrears. Id.

         In October 2015, Endobiogenics updated its user agreement. Id. Defendant never signed the updated user agreement. Id. Beginning in November 2017, Defendant again stopped paying his monthly user fees. Id. at 7. However, Defendant also continued to submit patient biology data to the EMA System for analysis. Id. Endobiogenics claims he submitted more patient biology profiles than were allowed by the user agreement. Id. Endobiogenics changed Defendant’s system access level in November 2017. Id. By making the change, Endobiogenics halted Defendant’s ability to submit new patient biological profiles. Id. However, Defendant retained the ability to download results of past biology profile analyses. Id. In February 2018, Endobiogenics terminated Defendant’s account access altogether.

         According to Endobiogenics, Defendant “hacked” into the EMA System in February 2018 and continued to use it to produce full biological patient profiles until around May 2018-a duration of 3 or 4 months. Id. at 8. During that time, Endobiogenics alleges Defendant ran more than 600 sets of biological data through the EMA System. Id. Defendant allegedly obtained access by using the login credentials of another physician. Id.

         Upon this discovery, Endobiogenics contacted the physician whose account had been compromised by Defendant’s use. Id. Endobiogenics requested that the physician change the login credentials. Id. When the login credentials were changed, the data submissions ceased. Id.

         Endobiogenics alleges further that Defendant did not obtain patient consent, as required by the EMA System user agreement, to submit patient biological data to the EMA System. Id. at 9. Additionally, Endobiogenics asserts that Defendant encouraged other physicians to use the system without authorization, that he spread false statements about Endobiogenics’s systems and goods, and interfered with its business. Id.

         These allegations include the fact that, in September 2017, Defendant sent an attorney-drafted letter to Endobiogenics asserting that Endobiogenics terminated his subscription because he did not immediately sign the new user agreement.[3] Id. at 9-10. Defendant claimed the agreement contained “unacceptable clauses” and by terminating his subscription for his failure to sign the agreement, Endobiogenics put Defendant’s patients at risk of harm. Id. In addition to sending the letter to Endobiogenics, Defendant also sent it to 60 or so other EMA System customers. Id. at 9. In response, Endobiogenics asserts it did not terminate Defendant’s access because of his refusal to sign the new user agreement and thus Defendant knew the statements in September 2017 letter were false. Id.

         In January 2019, Defendant filed a complaint against Dr. Lapraz with the Departmental Council of the City of Paris of the Order of Doctors (the Paris Board of Medicine). Id. at 10. The complaint makes allegations similar to those detailed in the September 2017 letter. Specifically, the complaint alleges that Endobiogenics abruptly cut Defendant’s “access to EMA while [he] was in full payment...directly harming [his] professional practice, and denying [him] access to the medical data of most of [his] cancer patients without giving [him] the opportunity to retrieve this private data, ” and that doing so “put the health of [his]patients at risk.” Id. at 10-11. Endobiogenics asserts the complaint was retaliatory and that the serious criminal accusations are again based on facts Defendant knows to be false. Id.

         Endobiogenics further claims that Defendant has engaged in unfair competition by forming the Belgian Institute of Endobiogeny- an endobiogeny educational institute that directly competes with similar programs offered by Endobiogenics for physician-users of its EMA System. Id. at 12. Endobiogenics asserts Defendant’s institute spreads false information about Endobiogenics, and has attempted also to set up a system similar to the EMA System, and is providing courses on Dr. Lapraz’s “Biology of Functions” without proper attribution. Id.

         Based on these facts, Endobiogenics’s Complaint asserts the following five claims against Defendant: breach of contract; breach of the implied covenant of good faith and fair dealing; defamation per se; intentional interference with prospective economic advantage; and violation of the Computer Fraud and Abuse Act (18 U.S.C. § 1030). Id. at 13-16.

         PROCEDURAL BACKGROUND

         Endobiogenics filed its Complaint on March 22, 2019. Dkt. 1. The case was originally assigned to United States Magistrate Judge Ronald E. Bush. On July 3, 2019, Plaintiff filed a motion for default judgment. Dkt. 11. Because a motion for default judgment is dispositive, the case was reassigned to United States District Judge B. Lynn Winmill on July 29, 2019. Dkt. 13. See Williams v. King, 875 ...


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