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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-11214
Non-Argument Calendar
________________________
D.C. Docket No. 1:13-cv-02217-SCJ
BENJAMIN BURGESS,
RHONDA BURGESS,
HEIDI HOWARD,
JOYCE MARTIN,
BETH KARAMPELAS,
TERRI DACY,
MICHAEL DACY,
individually and on behalf of all others similarly situated,
Plaintiffs-Appellants,
versus
RELIGIOUS TECHNOLOGY CENTER, INC.,
ASSOCIATION FOR BETTER LIVING AND EDUCATION
INTERNATIONAL,
NARCONON INTERNATIONAL,
NARCONON OF GEORGIA, INC.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(January 26, 2015)

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Before WILSON, ROSENBAUM and KRAVITCH, Circuit Judges.

PER CURIAM:
Benjamin and Rhonda Burgess, Heidi Howard, Joyce Martin, Beth
Karampelas, and Terri and Michael Dacy (collectively the plaintiffs) appeal from
the district courts dismissal of the class action suit against Religious Technology
Center (RTC), Association for Better Living and Education (ABLE), Narconon
International (NI), and Narconon of Georgia (NNGA) (collectively the
defendants). For the reasons that follow, we affirm.
I.
The plaintiffs filed a class-action complaint in Gwinnett County state court
on behalf of themselves and others similarly situated who had paid money to
obtain drug and alcohol rehabilitation services at NNGA. The defendants removed
the case to federal court under the Class Action Fairness Act, 28 U.S.C. 1332(d).
In the complaint, the plaintiffs alleged that the defendants used misrepresentations
to induce people to enroll in their drug and alcohol rehabilitation program.
According to the plaintiffs, the defendants overstated their success rate; identified
the program as a cure for addiction; hid the defendants connection to
Scientology; misrepresented the staffs credentials; operated a unlicensed
residential facility; failed to monitor the housing conditions; paid commissions for
referrals to their program; and failed to comply with the licensing requirements.
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The complaint listed ten claims against the defendants: (1) fraudulent
misrepresentation; (2) breach of contract; (3) unjust enrichment; (4) detrimental
reliance; (5) negligence per se; and (6) civil RICO claims of (a) theft by deception;
(b) mail and wire fraud; (c) false statements to a government agency; (d) credit
card fraud; and (e) identity theft.
ABLE, NI, and NNGA moved to dismiss for failure to state a claim under
Fed. R. Civ. P. (Rule) 12(b)(6) and failure to plead fraud with specificity under
Rule 9(b). RTC moved to dismiss for lack of personal jurisdiction under Rule
12(b)(2). The district court granted the motions. This is the plaintiffs appeal.
II.
The plaintiffs first argue that the district court erred by dismissing RTC for
lack of personal jurisdiction because the court misapplied Georgias Long Arm
statute and failed to properly analyze whether RTC could be subject to the courts
jurisdiction under agency principles. Alternatively, the plaintiffs contend that the
court should have granted discovery on the jurisdictional issue to establish RTCs
minimum contacts with Georgia.
We review de novo whether the district court had personal jurisdiction over
a nonresident defendant, accepting as true the allegations in the complaint. Louis
Vuiton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1350 (11th Cir. 2013). If the

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district court makes any findings of fact in reaching its personal jurisdiction
conclusion, we review those findings for clear error. Id.
A plaintiff seeking to establish personal jurisdiction over a nonresident
defendant bears the initial burden of alleging in the complaint sufficient facts to
make out a prima facie case of jurisdiction. United Techs. Corp. v. Mazer, 556
F.3d 1260, 1274 (11th Cir. 2009). When a defendant challenges personal
jurisdiction by submitting affidavit evidence in support of its position, the burden
traditionally shifts back to the plaintiff to produce evidence supporting
jurisdiction. Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990) (internal
quotation marks omitted).
To determine whether the district court had personal jurisdiction over RTC,
we consider two issues: (1) whether personal jurisdiction exists under the Georgia
Long-Arm Statute, and (2) if so, whether the exercise of the courts jurisdiction
would violate the Fourteenth Amendments Due Process Clause. Louis Vuitton
Malletier, 736 F.3d at 1350. When a federal court uses a state long-arm statute,
because the extent of the statute is governed by state law, the federal court is
required to construe it as would the states supreme court. Lockard v. Equifax,
Inc., 163 F.3d 1259, 1265 (11th Cir. 1998). Therefore, we will interpret and apply
Georgias long-arm statute in the same way as would the Georgia Supreme Court.
Where the Georgia Supreme Court has not ruled on an issue of state law, we are
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bound by decisions of a states intermediate appellate courts unless there is

persuasive evidence that the highest state court would rule otherwise. Pendergast
v. Sprint Nextel Corp., 592 F.3d 1119, 1133 (11th Cir. 2010) (internal citations and
quotation marks omitted).
Georgias Long-Arm Statute provides for personal jurisdiction over a
nonresident defendant if, relevant to this appeal,
in person or through an agent, he or she: (1) Transacts any business
within this state; (2) Commits a tortious act or omission within this
state . . . ; [or] (3) Commits a tortious injury in this state caused by an
act or omission outside this state if the tort-feasor regularly does or
solicits business, or engages in any other persistent course of conduct,
or derives substantial revenue from goods used or consumed or
services rendered in this state . . . .
O.C.G.A. 9-10-91(1)-(3) (2011).
The plaintiffs allege that personal jurisdiction exists over RTC under all
three prongs. But to satisfy each prong, the plaintiffs rely on an agency
relationship between RTC and ABLE, NI, and NNGA. Attached to its motion to
dismiss, RTC submitted an affidavit of RTC President Warren McShane disputing
any such relationship. According to McShanes declaration, RTC holds the
licenses to religious trademarks associated with Scientology, but secular
trademarks, such as Narconon, belong to ABLE. Moreover, McShane stated that
RTC is not the parent company of ABLE, has no license or contract with ABLE,
and has not received any money from ABLE, NI, or NNGA. In response, the
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plaintiffs have submitted several affidavits trying to link RTC to ABLE, as well as
numerous documents about the various Scientology groups. They contend that the
RTC documents reference and discuss ABLEs programs, such as NI, and thus
show the agency relationship.
We agree with the district court that none of the plaintiffs evidence
establishes an agency relationship between RTC and ABLE, NI, and NNGA.
Under Georgia law, an agency relationship can arise in three distinct ways:
expressly, by implication, or through subsequent ratification by the principal of the
agents conduct. O.C.G.A. 1061; Beckworth v. Beckworth, 336 S.E.2d 782,
785 (Ga. 1985). Express agency arises when the principal expressly grants the
agent the authority to act on its behalf. Absent express authority, the court may
look to whether agency is implied by the circumstances. NAACP v. Overstreet,
142 S.E.2d 816, 826 (Ga. 1965), overruled on other grounds by NAACP v.
Claiborne Hardware Co., 458 U.S. 886 (1982).
There can be little dispute that there is no express agency relationship here.
McShanes affidavit specifically rejects any such relationship, and the plaintiffs
have offered nothing to show an express agency relationship. Nor is there any
implied agency relationship. Nothing in plaintiffs evidence showed any action by
RTC with respect to the management of ABLE, NI, or NNGA centers. And there
is no evidence showing that RTC ratified any conduct by NI or NNGA.
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Finally, under Georgia law, there is no agency relationship between an

organization and its parent company simply because the parent may exercise some
level of control over its subsidiary. See, e.g., Schlotzkys, Inc. v. Hyde, 538 S.E.2d
561, 561-63 (Ga. Ct. App. 2000) (explaining that franchisee was not an agent and
franchisor was not liable for acts of franchisee in absence of agreement to be liable
even though franchisor may set detailed and strict standards for its product).
Therefore, in the absence of an agency relationship between RTC and ABLE, NI,
and NNGA, the district court properly concluded that the Georgia Long-Arm
Statute did not confer on the court personal jurisdiction over RTC. 1
Moreover, the district court did not abuse its discretion by denying discovery
on the jurisdictional issue. White v. CocaCola Co., 542 F.3d 848, 853 (11th Cir.
2008) (reviewing discovery request for abuse of discretion). Generally, the
plaintiff should be given the opportunity to discover facts that would support his
allegations of jurisdiction. MajdPour v. Georgiana Cmty. Hosp., Inc., 724 F.2d
901, 903 (11th Cir. 1984). But a district court does not abuse its discretion in
dismissing the plaintiffs action for lack of personal jurisdiction, even before
jurisdictional discovery occurs, when the plaintiff has not diligently pursued such
discovery despite the opportunity to do so. See United Techs. Corp., 556 F.3d at
1280-81 (affirming the district courts dismissal of plaintiffs claims for lack of
1

Because we reach this conclusion, we need not address whether RTC had sufficient minimum
contacts to satisfy due process.
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personal jurisdiction before the plaintiff conducted jurisdictional discovery). Here,

the plaintiffs never served any discovery to RTC, never filed a motion for leave to
conduct discovery, and did not even include a proposal for discovery in the Joint
Preliminary Report and Discovery Plan. Under these facts, we cannot say that the
plaintiffs acted with due diligence to pursue discovery, and further discovery on
the jurisdictional issue was not warranted. Accordingly, we affirm the district
courts dismissal of RTC.
III.
The plaintiffs next argue that the district court erred by dismissing their
claims against ABLE, NI, and NNGA.
We review de novo the district courts grant of a motion to dismiss under
Rule 12(b)(6) for failure to state a claim, accepting the allegations in the complaint
as true and construing them in the light most favorable to the plaintiff. Butler v.
Sheriff of Palm Beach Cnty., 685 F.3d 1261, 1265 (11th Cir. 2012) (citation
omitted). To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must
present factual allegations enough to raise a right to relief above the speculative
level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Once a claim has
been sufficiently stated, it may be supported by showing any set of facts
consistent with the allegations in the complaint. Id. at 563. A pleading that
offers labels and conclusions or a formulaic recitation of the elements of a cause of
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action will not do. Nor does a complaint suffice if it tenders naked assertions
devoid of further factual enhancement. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quotations, alteration, and citation omitted). Because courts under CAFA
are based on diversity jurisdiction, we apply substantive state law to determine if
the plaintiffs allegations state a claim for relief. See, e.g., Audler v. CBC Innovis,
Inc., 519 F.3d 239, 248 (5th Cir. 2008). Like other diversity cases, we apply
federal procedural rules. Id.
A. Fraud and Georgia Civil RICO claims
The plaintiffs argue that they sufficiently pleaded their fraud claims with
specificity by identifying the time period of the alleged misrepresentations and the
specific fraudulent statements the defendants made. They further contend that the
RICO claims alleging theft by deception, mail and wire fraud, and false statements
to a government agency were not subject to Rule 9s specificity requirements
because those claims do not arise from fraud.
Under Georgia law, to state a claim for fraud, the plaintiffs must show five
elements: (1) false representation by defendant; (2) with scienter, or knowledge of
falsity; (3) with intent to deceive plaintiff or to induce plaintiff into acting or
refraining from acting; (4) on which plaintiff justifiably relied; (5) with proximate
cause of damages to plaintiff. Worsham v. Provident Cos., Inc., 249 F. Supp. 2d
1325, 1331 (N.D. Ga.2002); see also O.C.G.A. 23252, 5162(a).
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In pleading a claim for fraud, the plaintiffs must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other
conditions of a persons mind may be alleged generally. Fed. R. Civ. P. 9(b).
Rule 9 thus requires plaintiffs to allege
(1) precisely what statements or omissions were made in which
documents or oral representations; (2) the time and place of each
such statement and the person responsible for making (or, in the
case of omissions, not making) them; (3) the content of such
statements and the manner in which they misled the plaintiff; and
(4) what the defendant obtained as a consequence of the fraud.
Findwhat Investor Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011).
Specificity under Rule 9(b) does not, however, eliminate the concept of
notice pleading. Ziemba v. Cascade Intl, Inc., 256 F.3d 1194, 1202 (11th Cir.
2001) (internal quotation marks omitted). Allegations of date, time or place
satisfy the Rule 9(b) requirement that the circumstances of the alleged fraud must
be pleaded with particularity, but alternative means are also available to satisfy the
rule. Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1512 (11th Cir. 1988). The
particularity requirement may be relaxed for allegations of prolonged multi-act
schemes. U.S. ex rel. Clausen v. Lab. Corp. of Am., Inc., 290 F.3d 1301, 1314
n.25 (11th Cir. 2002). The relaxed standard permits a plaintiff to plead the overall
nature of the fraud and then to allege with particularity one or more illustrative
instances of the fraud. See id. Even under the relaxed requirement, however, a

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plaintiff is still required to allege at least some particular examples of fraudulent

conduct to lay a foundation for the rest of the allegations of fraud. See id.
Under the Georgia civil RICO statute, [i]t is unlawful for any person,
through a pattern of racketeering activity or proceeds derived therefrom, to acquire
or maintain, directly or indirectly, any interest in or control of any enterprise, real
property, or personal property of any nature, including money. O.C.G.A. 1614-4(a). The statute does not require proof of an enterprise. Cobb Cnty. v. Jones
Group, P.L.C., 460 S.E.2d 516, 520-21 (Ga. Ct. App. 1995). Rather, under the
Georgia civil RICO statute, the plaintiffs need only establish racketeering activity;
that is, a plaintiff must show that the defendant committed predicate offenses (set
forth in O.C.G.A. 16-14-3(9)) at least twice. Id. at 521 (quotation marks and
citation omitted). Nevertheless, like any other fraud action, a RICO claim based
on fraud must be pleaded with specificity. See Fed. R. Civ. P. 9(b); O.C.G.A. 911-9(b).
The district court properly concluded that the plaintiffs failed to state their
claims for fraudulent misrepresentation and civil RICO violations because the
plaintiffs failed to plead these claims with specificity under Rule 9(b). Here, the
plaintiffs identified eleven different misrepresentations, but none of the allegations
indicated the date, time, or place of any misrepresentation. Nor did the plaintiffs

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identify which of the many defendants was responsible for the specific statement.
For example, in paragraphs 2 and 3 of the complaint, the plaintiffs alleged:
[i]n 2011, Mr. Burgess and Ms. Burgess sought the services of an inpatient drug and alcohol rehabilitation center . . . . The Burgesses
found NNGA through an internet search, and . . . . spoke with one or
more employees of NNGA and/or International, and/or were provided
with marketing materials regarding NNGAs program. The Burgesses
relied upon the following representations made by NNGA and/or
International . . . .
These allegations fall short of the heightened pleading requirement in that
they fail to specify which defendant was involved, what employee they spoke with
and for whom the employee worked, when they conducted the internet search,
where the misrepresentation appeared, and whether and what marketing materials
they were given and by whom. And, in paragraph 111, the plaintiffs list the eleven
misrepresentations, but again they do so only in generalities.
In fact, the allegations in the complaint fail to meet even the relaxed
standard; plaintiffs failed to identify any specific examples to illustrate the fraud
while pleading the overall nature of the fraud generally. 2 See Clauson, 290 F.3d at
1314. Moreover, the plaintiffs lump all the defendants together as the sources of
the misrepresentations, and they pleaded the who, what, and when elements of
their fraud in the alternative. This court has repeatedly held that lumping multiple

Although at times the plaintiffs identified the specific misrepresentation, such as NNGA had
a success rate of over 70%, the plaintiffs failed to specify who made the statement or what
material it appeared in, or when they misrepresentation was made.
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defendants together in such generalities is insufficient under Rule 9(b). See, e.g.,
Ambrosia Coal & Constr. Co. v. Pages Morales, 482 F.3d 1309, 1317 (11th Cir.
2007) ([I]n a case involving multiple defendants . . . the complaint should inform
each defendant of the nature of his alleged participation in the fraud. (internal
citation omitted)). Accordingly, we agree with the district court that the plaintiffs
fraud claim failed to meet the heightened pleading requirement of Rule 9(b).
The plaintiffs civil RICO claims fail for the same lack of specificity. And
although the plaintiffs argue to the contrary, a review of the complaint shows that
the same misrepresentations alleged as fraudulent form the basis for the RICO
claims. For example, in paragraph 142 setting out the claim for mail and wire
fraud, the plaintiffs alleged that Defendants distributed the following false
statements and/or representations . . . through the mail, telephone wire facilities,
and/or Internet. They then list nine allegedly false statements. And although
some of the alleged misrepresentations are specific, such as NNGA offered a
complete cure for addiction, the plaintiffs failed to specify which defendant made
the alleged misrepresentation, when that defendant made it, and through what
medium. Thus, the district court properly dismissed the RICO claims as well.
B. Breach of contract
The plaintiffs argue that they established the existence of a valid contract
and sufficiently alleged a breach based on the misrepresentations NI and NNGA
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made regarding the rehabilitation program. They assert that the court improperly
declined to address NNGAs failure to act in good faith under the contract for
rehabilitation services and state that they identified specific contractual provisions
in their responses to the motion to dismiss.
We first note that this count applied only to NNGA, as only NNGA was a
party to the contract. See Kaesemeyer v. Angiogenix, Inc., 629 S.E.2d 22, 25 (Ga.
Ct. App. 2006) (explaining that only the parties to a contract are bound by its
terms). Thus, the district court correctly dismissed this count against ABLE and
NI.
Under Georgia law the plaintiffs must show a breach of a valid contract and
damages to the party who has the right to complain about the breach. Budget
RentaCar of Atlanta, Inc. v. Webb, 469 S.E.2d 712, 713 (Ga. Ct. App. 1996).
Here, the plaintiffs failed to attach a copy of the contract to the complaint,
and failed to identify the specific contractual provisions that the defendants
breached.3 In their complaint, the plaintiffs made vague references to a breach, but
they never identified the contract provision that formed the basis of their claims.
As the plaintiffs later conceded, there were multiple contracts at issue, including
the Financial Policy, the Admission and Services Agreement, the Student Rules of
3

The defendants attached copies of the various contracts to their motions to dismiss. Thus, we,
like the district court, can review those documents. See SFM Holdings, Ltd. v. Banc of Am. Sec.,
LLC, 600 F.3d 1334, 1337 (11th Cir. 2010) (In ruling upon a motion to dismiss, the district
court may consider an extrinsic document if it is (1) central to the plaintiffs claim, and (2) its
authenticity is not challenged.).
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Conduct, the Confidentiality Agreement, and various Consent forms. Some of

these were signed only by the patients and others by the plaintiffs and the patients.
Thus, the plaintiffs list of alleged misrepresentations, not tied to any specific
contract or contractual provision, was insufficient to set forth a breach-of-contract
claim.
Moreover, in the absence of an express breach, there can be no claim for
breach of the implied covenant of good faith. See Morrell v. Wellstar Health Sys.,
Inc., 633 S.E.2d 68, 72 (Ga. Ct. App. 2006) (there is no independent cause of
action for violation of the covenant apart from breach of an express term of the
contract (internal citation omitted)). Accordingly, the district court properly
dismissed the breach-of-contract claim against NNGA.
C. Unjust enrichment
The plaintiffs next argue that the court erred by dismissing at this
preliminary stage its alternate pleading of unjust enrichment.
In the absence of an enforceable contract, a plaintiff may be able to recover
under a theory of unjust enrichment, claiming a benefit conferred on the defendant
for which the plaintiff received no corresponding return. Ga. Tile Distribs., Inc. v.
Zumpano Enters., Inc., 422 S.E.2d 906, 908 (Ga. Ct. App. 1992). Because there
was a contract in this case, there could be no claim for unjust enrichment against
NNGA. See Williams v. Mohawk, Indust., Inc., 465 F.3d 1277, 1295 (11th Cir.
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2006). Thus, we will consider the unjust enrichment claim as it pertains to ABLE
and NI.
[U]nder Georgia law, an unjust enrichment claim requires the plaintiff to
establish the following: (1) that the plaintiff conferred a benefit on the defendant
and (2) that equity requires the defendant to compensate the plaintiff for this
benefit. ChemNuclear Sys., Inc. v. Arivec Chems., Inc., 978 F. Supp. 1105, 1110
(N.D. Ga. 1997); accord O.C.G.A. 927. The plaintiffs, however, failed to
allege any benefit conferred on ABLE and NI. Thus, there is no requirement that
ABLE and NI compensate the plaintiffs. See Brown v. Cooper, 514 S.E.2d 857,
860 (Ga. Ct. App. 1999). Accordingly, the district court properly dismissed this
count of the complaint.
D. Detrimental reliance and Leave to amend
As the plaintiffs conceded, there is no such cause of action under Georgia
law. Rather, the plaintiffs contend, this count should be considered as a claim for
promissory estoppel.
The district court did not abuse its discretion by failing to allow the plaintiffs
to amend their complaint to address the detrimental-reliance claim or any other
deficiencies. We repeatedly have held that plaintiffs cannot amend their complaint
through a response to a motion to dismiss. Rosenberg v. Gould, 554 F.3d 962, 967
(11th Cir. 2009). In Rosenberg, we confirmed that a request for leave submitted in
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a footnote in a memo opposing a motion to dismiss was insufficient to require the

court to grant leave to amend. We further noted that Rule 7(b) required the
plaintiff to submit a copy of the proposed amendment or to describe the proposed
amendment when requesting leave. Id. (citing Fed. R. Civ. P. 7(b)(1)). Thus, our
precedent is clear: the proper method to request leave to amend is through filing a
motion, and such motion for leave to amend should either set forth the substance of
the proposed amendment or attach a copy of the proposed amendment. Long, 181
F.3d at 1279.
In this case, the plaintiffs did not file a motion for leave to amend but instead
included the request for leave to amend in the memorandum they filed in
opposition to the motion to dismiss. Furthermore, they failed to attach the
amendment or set forth the substance of the proposed amendment. Moreover, they
could have but did not seek relief from judgment under 59(e), or 60(b)(6) in
order to seek such leave. See DiMaio v. Democratic Natl Comm., 520 F.3d 1299,
1303 (11th Cir. 2008) (discussing failure to seek leave under Rules 15, 59, or 60)
(citing United States ex rel. Atkins v. McInteer, 470 F.3d 1350, 1361, 1362 n.22
(11th Cir. 2006). Thus, we conclude that the district court did not abuse its
discretion.

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E. Negligence per se
Addressing the negligence per se claim, the plaintiffs contend that NNGAs
failure to comply with state licensing regulations caused a harm that the
regulations were designed to prevent.
Georgia law allows the adoption of a statute as a standard of conduct so
that its violation becomes negligence per se. Cent. Anesthesia Assoc. v. Worthy,
325 S.E.2d 819, 823 (Ga. Ct. App. 1984), affd, 333 S.E.2d 829 (Ga. 1985). In
determining whether the violation of a statute or ordinance is negligence per se as
to a particular person, it is necessary to examine the purposes of the legislation and
decide (1) whether the injured person falls within the class of persons it was
intended to protect and (2) whether the harm complained of was the harm it was
intended to guard against. Id. Further, for a violation of a statute to be negligence
per se, the violation must be capable of having a causal connection between it and
the damage or injury inflicted upon the other person, which refers not to the
proximate cause element of the negligence action [], but rather to the character of
the legal duty involved. Id.
Here, the plaintiffs alleged that NNGA violated O.C.G.A. 26-5-3, which
defines terms applicable to the regulation of drug treatment programs, and Ga.

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Comp. R. & Regs. 290-4-2.4 As the district court correctly found, 26-5-3 merely
sets forth definitions and thus provides no basis for a negligence per se claim.
With respect to Regulation 290-4-2, the Georgia Department of Human
Services established rules and regulations for drug and alcohol rehabilitation
programs. But these regulations were intended for licensing and inspection
purposes and not for the creation of a standard of conduct to protect individuals.
See, e.g., Doe v. Fulton-Dekalb Hosp. Auth., 628 F.3d 1325, 1339 (11th Cir. 2010)
(discussing negligence per se as it pertains to Regulation 290-9-12, which is nearly
identical to 290-4-2). Thus, the district court properly determined that the
regulations could not form the basis of a negligence per se claim.
IV.
For the foregoing reasons, we conclude that the district court properly
dismissed RTC for lack of personal jurisdiction and the claims against ABLE, NI,
and NNGA for failure to state a claim.
AFFIRMED.

As the district court noted, this regulation has since been repealed.
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