Navajo Health Found.—Sage Mem'l Hosp., Inc. v. Burwell

• Decision Date: 05 February 2015
• Docket Number: No. CIV 14–0958 JB/GBW.,CIV 14–0958 JB/GBW.
• Citation: Navajo Health Found.—Sage Mem'l Hosp., Inc. v. Burwell, 86 F.Supp.3d 1211 (D. N.M. 2015)
• Parties: NAVAJO HEALTH FOUNDATION—SAGE MEMORIAL HOSPITAL, INC., Plaintiff, v. Sylvia Mathews BURWELL, Secretary of the United States Department of Health and Human Services; Yvette Roubideaux, Acting Director of Indian Health Services; John Hubbard, Jr., Area Director, Navajo Area Indian Health Services ; and Frank Dayish, Contracting Officer, Navajo Area Indian Health Services, Defendants.
• Court: U.S. District Court — District of New Mexico

86 F.Supp.3d 1211

NAVAJO HEALTH FOUNDATION—SAGE MEMORIAL HOSPITAL, INC., Plaintiff

v.Sylvia Mathews BURWELL, Secretary of the United States Department of Health and Human Services; Yvette Roubideaux, Acting Director of Indian Health Services; John Hubbard, Jr., AreaDirector, Navajo Area Indian Health Services ; and Frank Dayish, ContractingOfficer, Navajo Area Indian Health Services, Defendants.

No. CIV 14–0958 JB/GBW.

United States District Court, D. New Mexico.

Filed Feb. 5, 2015.

Paul E. Frye, Frye Law Firm, Albuquerque, NM, for Plaintiff.

Damon P. Martinez, United States Attorney, Karen Grohman, Assistant United States Attorney, United States Attorney's Office, District of New Mexico, Albuquerque, NM, for Defendants.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Defendants' Motion to Dismiss UnderFed.R.Civ.P. 12(b)(3) or Motion to Transfer Under 28 U.S.C. § 1401(a),¹filedNovember 25, 2014(Doc. 8)(“Motion”).The Court held a hearing on January 27, 2015.The primary issues are: (i) whether the United States District Court for the District of New Mexico is a proper venue for this case under 28 U.S.C. § 1391(e)(1)(A);(ii) whether the District of New Mexico is a proper venue for this case under 28 U.S.C. § 1391(e)(1)(B); and (iii) whether the Court will transfer the case to the United States District Court for the District of Arizona under 28 U.S.C. § 1404(a).First, the Court concludes the District of New Mexico is a proper venue for this case under § 1391(e)(1)(A), because DefendantFrank Dayish is domiciled in New Mexico.Second, the Court holds that the District of New Mexico is not a proper venue for this case under § 1391(e)(1)(B), because a “substantial part of the events or omissions giving rise to the claim” did not occur in New Mexico.28 U.S.C. § 1391(e)(1)(B).Third, the Court will not transfer the case to the District of Arizona under § 1404(a), because Sage Hospital filed suit in the District of New Mexico, and because the District of New Mexico is a more convenient forum for the witnesses, the parties, and for obtaining the relevant documents than the District of Arizona is.Consequently, the Court will deny the Motion.

FACTUAL BACKGROUND

This case arises from the decision of the Indian Health Service (“IHS”)² not to renew its contract with PlaintiffNavajo Health Foundation—Sage Memorial Hospital, Inc. to provide healthcare to Navajo Indians on the Navajo Reservation under the Indian Self Determination and Education Assistance Act, 25 U.S.C. § 450(“ISDEA”).³The Court takes its facts from (i) the First Amended Complaint, filed November 24, 2014(Doc. 5)(“Complaint”);(ii) the documents attached to the Motion; (iii) the documents attached to the Plaintiff's Opposition to Motion to Dismiss or Transfer, filed December 11, 2014(Doc. 14)(“Response”); and (iv) the documents attached to the Defendants' Reply in Support of Their Motion to Dismiss, filed December 29, 2014(Doc. 18)(“Reply”).⁴

1.The Parties.

Sage Hospital is a private non-profit corporation that has owned and operated a healthcare facility in Ganado, Arizona—which lies within the Navajo Reservation—since 1974.SeeComplaint¶ 6, at 4.Sage Hospital sits approximately 192 miles from Albuquerque, New Mexico; 272 miles from Phoenix, Arizona; and two miles from the New Mexico border.SeeDeclaration of Christi El–Meligi¶ 11, at 9, filedDecember 11, 2014(Doc. 14–1)(“El–Meligi Declaration”).The Navajo Nation Council has designated Sage Hospital a “tribal organization” for the purpose of contracting with the Department of Health and Human Services(“HHS”).Complaint¶ 6, at 4.Sage Hospital provides healthcare services to Navajo Indians living in the Ganado, Linlichee, Klagetoh, Wide Ruins, Lower Greasewood Springs, Cornfields, Nazlini, and Steamboat chapters of the Navajo Nation—which are all located in Arizona.See History, Navajo Health Foundation—Sage Memorial Hospital, http://sagememorial.com/about-us/history (last visited Nov. 4, 2014).

DefendantSylvia Mathews Burwell is the HHS Secretary.Complaint¶ 7, at 4.As Secretary, Burwell is responsible for conducting all HHS duties, including contracting on the United States of America's behalf with tribal organizations to provide healthcare to Native Americans.SeeComplaint¶ 7, at 4.DefendantYvette Roubideaux is IHS' Acting Director.SeeComplaint¶ 8, at 4.Roubideaux is responsible for carrying out all IHS duties, including contracting with tribal organizations to provide healthcare to American Indians.SeeComplaint¶ 8, at 4.

DefendantJohn Hubbard, Jr., is the Area Director of the Navajo Area IHS—which is based in Window Rock, Arizona.SeeComplaint¶ 9, at 4–5;Declaration of John Hubbard¶ 1, at 1, filedNovember 25, 2014(Doc. 8–5)(“Hubbard Declaration”).Hubbard's personal residence is in Ganado, Arizona.SeeHubbard Declaration¶ 5, at 2.The Navajo Area IHS is responsible for healthcare services throughout the Navajo Nation.SeeHubbard Declaration¶ 1, at 1.The Navajo Area IHS office sits approximately 168 miles from Albuquerque and 282 miles from Phoenix.SeeEl–Meligi Declaration¶ 11, at 9.Hubbard directs all Navajo Area IHS programs and approximately 4,000 staff located at the Kayenta Health Center in Arizona, the Chinle Hospital in Arizona, the Shiprock Northern Navajo Medical Center in New Mexico, the Crownpoint PHS Hospital in New Mexico, and the Gallup Indian Medical Center in New Mexico.SeeHubbard Declaration¶ 1, at 2.Forty percent of the Navajo Area IHS user population resides in New Mexico, fifty-five percent resides in Arizona, and five percent resides in Utah.SeeHubbard Declaration¶ 4, at 2.The Navajo Nation's land base is larger in Arizona than in New Mexico or Utah.SeeHubbard Declaration¶ 4, at 2.None of Hubbard's official duties related to Sage Hospital or its IHS contract has any connection to New Mexico.SeeHubbard Declaration¶ 3, at 2.

DefendantFrank Dayish is the Contracting Officer for the Navajo Area IHS.SeeComplaint¶ 10, at 5.Dayish's personal residence is in Gallup, New Mexico.SeeDeclaration of Frank Dayish¶ 3, at 2, filedNovember 25, 2014(Doc. 8–4)(“Dayish Declaration”).Dayish is responsible for negotiating and maintaining IHS' contracts throughout the Navajo Reservation, including its contract with Sage Hospital.SeeComplaint¶ 10, at 5.Dayish has the authority to sign ISDEA contracts and funding agreements with Sage Hospital and to award funds under those agreements.SeeComplaint¶ 10, at 5.Dayish's official duty station is in Window Rock, and Window Rock is where he performs all of his official duties.SeeDayish Declaration¶ 3, at 1.

2.Sage Hospital's Tumultuous History.

From 1974 to 2007, Sage Hospital's facilities grew increasingly obsolete, and the quality of its healthcare services plummeted.SeeComplaint¶ 12, at 6.Consequently, by 2007, Sage Hospital was fighting multiple regulatory and financial battles to stay afloat.SeeComplaint¶ 12, at 6.The Centers for Medicare and Medicaid Services⁵ was in the process of terminating Sage Hospital's certification, the Arizona Department of Health Services was threatening to revoke Sage Hospital's Rural General Hospital Healthcare license, the federal Environmental Protection Agency had warned Sage Hospital about sanitary deficiencies with its water supplies, and Sage had already lost its accreditation from the Joint Commission on Accreditation of Health Care Organizations(“Joint Commission”)—an independent, non-profit organization that accredits hospitals throughout the United States.Complaint¶ 12, at 6;id.¶ 16, at 7–8.To make matters worse, Sage Hospital was virtually insolvent.SeeComplaint¶ 13, at 6.Consequently, it could not afford to keep high-quality healthcare professionals, and had to end its general surgery and obstetric practices.SeeComplaint¶ 13, at 6.

In October, 2007, Sage Hospital's Board of Directors rejected a plan to shutter the hospital, and instead hired M. Morgan & Associates to oversee Sage Hospital's financial and personnel management and make the necessary adjustments to turn around Sage Hospital's operations.SeeComplaint¶ 14, at 7.After Sage Hospital's former Chief Executive Officer—Lauren Bernally—resigned, the Board of Directors appointed Ahmad Razaghi to replace her.SeeComplaint¶ 15, at 7.From 2007 to 2009, Sage Hospital negotiated with the Centers for Medicare and Medicaid Services and the Arizona Department of Health Services to stay open without losing additional services, and implemented its plan to improve the quality of Sage Hospital's healthcare services.SeeComplaint¶ 17, at 8.

Sage Hospital's turnaround plan succeeded.SeeComplaint¶ 17, at 8.In September, 2009—for the first time in a decade—Sage Hospital received its unconditional Arizona Department of Health Services license, and Centers for Medicare and Medicaid Services certification.SeeComplaint¶ 17, at 8.On May 4, 2009, the Joint Commission awarded Sage Hospital its “Gold Seal of Approval,” signifying that Sage exemplified the highest quality of patient care.Complaint¶ 17, at 8(internal quotation marks omitted).In March, 2010, the United States Surgeon General, Vice Admiral Dr. Regina M. Benjamin, on behalf of HHS, awarded Razaghi the “Chief Executive Officer Managerial Excellence Award” for “leadership, successes and improvements which equate to improved and enhanced patient care.”Complaint¶ 17, at 8(internal quotation marks omitted).In a January 10, 2012, letter, the EPA told Sage Hospital that it had fulfilled the EPA's Administrative Order and thanked Sage Hospital for its cooperation in complying with the Federal Safe Drinking Water Act, 42 U.S.C. § 300f.SeeComplaint¶ 17, at 8.In June, 2012, Sage Hospital received the American Hospital Association Institute for Diversity's “Best in Class Hospital Award” for leadership in addressing health disparities and improving...