Passmore v. Baylor Health Care System, 051916 FED5, 15-10358

Docket Nº:15-10358
Opinion Judge:JAMES L. DENNIS, Circuit Judge:
Party Name:ROBERT LEROY PASSMORE, III, Individually and as Next Friend of M. P. and A. P., minors; KELLY PASSMORE, Plaintiffs - Appellants v. BAYLOR HEALTH CARE SYSTEM, doing business as Baylor Medical Center of Plano; BAYLOR REGIONAL MEDICAL CENTER OF PLANO; KIMBERLY MORGAN, APN, Defendants-Appellees
Judge Panel:Before DAVIS, BARKSDALE, and DENNIS, Circuit Judges.
Case Date:May 19, 2016
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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ROBERT LEROY PASSMORE, III, Individually and as Next Friend of M. P. and A. P., minors; KELLY PASSMORE, Plaintiffs - Appellants

v.

BAYLOR HEALTH CARE SYSTEM, doing business as Baylor Medical Center of Plano; BAYLOR REGIONAL MEDICAL CENTER OF PLANO; KIMBERLY MORGAN, APN, Defendants-Appellees

No. 15-10358

United States Court of Appeals, Fifth Circuit

May 19, 2016

         Appeal from the United States District Court for the Northern District of Texas

          Before DAVIS, BARKSDALE, and DENNIS, Circuit Judges.

          JAMES L. DENNIS, Circuit Judge:

         Section 74.351 of the Texas Civil Practice and Remedies Code requires plaintiffs in health care liability cases to serve an expert report within 120 days after the filing of a defendant's original answer. Robert Passmore and his wife brought this health care liability suit against Baylor Health Care System, Baylor Regional Medical Center of Plano, and nurse Kimberly Morgan to recover damages for injuries that Mr. Passmore suffered as a result of undergoing two back surgeries at Baylor Regional Medical Center. The Passmores filed their suit in federal court under the court's bankruptcy jurisdiction. Following limited discovery, the defendants moved to dismiss because the Passmores had failed to serve an expert report in accordance with section 74.351's requirements, and the district court ultimately accepted their position and dismissed the case with prejudice. The main issue on appeal is whether section 74.351 applies in federal court. We hold that it does not and therefore reverse and remand.

         I

         A

         Section 74.351 of the Texas Civil Practice and Remedies Code requires a plaintiff who has brought a "health care liability claim" to serve on each defendant "not later than the 120th day after the date each defendant's original answer is filed . . . one or more expert reports, with a curriculum vitae of each expert listed in the report for each physician or health care provider against whom a liability claim is asserted."1 Tex. Civ. Prac. & Rem. Code § 74.351(a).

         According to the Supreme Court of Texas, a section 74.351 threshold expert report serves two functions: (1) to "inform the defendant of the specific conduct the plaintiff has called into question"; and (2) to "provide a basis for the trial court to conclude that the claims have merit." Certified EMS, Inc. v. Potts, 392 S.W.3d 625, 630 (Tex. 2013) (citation and internal quotation marks omitted). Two additional provisions of the Texas statute allow defendants to enforce its expert report requirement and to avoid incurring litigation costs in connection with frivolous claims. First, the statute mandates the stay of most discovery in the case pending the filing of the required expert report. § 74.351(s), (u).2 Second, upon a defendant's motion, if the plaintiff fails to timely serve the required expert report, the statute instructs courts to dismiss the claim with prejudice and award attorney's fees and costs to the defendant. § 74.351(b).

         No binding precedent deals with section 74.351's applicability in a federal court applying substantive state law. In one, unpublished opinion, this court has applied section 74.351 as an alternative ground for affirming the district court's dismissal of a medical malpractice suit, but the court did not analyze whether the statute applies in federal court. See Chapman v. United States, 353 F.App'x 911, 913-14 (5th Cir. 2009). Of the numerous district courts in this circuit to have considered this issue, an overwhelming majority has held that section 74.351 is procedural state law that does not apply in federal court.3 These courts have generally found that section 74.351 conflicts with Federal Rules of Civil Procedure 26 and 37 because its application would interfere with the federal discovery scheme and deprive the courts of discretion in their control of timing and sanctions for noncompliance. See, e.g., Bunch v. Mollabashy, No. 3:13-CV-1075-G BH, 2015 WL 1378698, at *9 (N.D. Tex. Mar. 26, 2015); Beam v. Nexion Health Mgmt., Inc., No. 206 CV 231, 2006 WL 2844907, at *1-3 (E.D. Tex. Oct. 2, 2006).

         B

         In late 2011 and early 2012, Robert Passmore underwent two back surgeries at Baylor Regional Medical Center in Plano, Texas. The Passmores contend that the two surgeries caused permanent damage to Mr. Passmore's spine, rendering him completely disabled.

         The Passmores sued the Baylor entities and Morgan in federal district court under theories of direct negligence and vicarious liability. Christopher Duntsch, the doctor who performed the two surgeries, had filed for bankruptcy protection and was not made a party to the suit.4 The Passmores asserted that the outcome of the suit may affect the resolution of Duntsch's bankruptcy proceeding and thus that the district court had "related-to" bankruptcy jurisdiction pursuant to 28 U.S.C. § 1334(b).

         On January 23, 2014, the defendants filed their answers, and the parties subsequently engaged in limited discovery. On June 17, 2014, 145 days after they had filed their answers, the defendants filed motions to dismiss, claiming that the Passmores failed to serve an expert report within 120 days after the defendants' answers and therefore failed to comply with section 74.351.

         The Passmores objected to the application of section 74.351 in federal court, asserting that it directly collides with the Federal Rules of Civil Procedure, but the district court rejected their objection, held that section 74.351 is substantive state law that applies in federal court, and dismissed the suit with prejudice. This appeal followed.

         II

         Before we reach the main issue on appeal, we must satisfy ourselves that that the district court had jurisdiction to decide the case and that this court has jurisdiction to consider the appeal. See Union Planters Bank Nat'l Ass'n v. Salih, 369 F.3d 457, 460 (5th Cir. 2004) ("[F]ederal courts are duty-bound to examine the basis of subject matter jurisdiction sua sponte, even on appeal."). 28 U.S.C. § 1334(b) grants district courts jurisdiction to decide cases that are "related to" a case under Title 11 of the United States Code, ...

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