Flute v. United States

• Decision Date: 24 July 2019
• Docket Number: 4:18-CV-04112-RAL
• Parties: EMIL FLUTE and PATRICIA FLUTE, Plaintiffs, v. UNITED STATES OF AMERICA, Defendant.
• Court: U.S. District Court — District of South Dakota

EMIL FLUTE and PATRICIA FLUTE, Plaintiffs, v. UNITED STATES OF AMERICA, Defendant.

4:18-CV-04112-RAL

UNITED STATES DISTRICT COURT DISTRICT OF SOUTH DAKOTA SOUTHERN DIVISION

July 24, 2019

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

Emil Flute and Patricia Flute (collectively Plaintiffs) have sued the United States under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671-2680, alleging that the negligence of the Podiatry Clinic at the Omaha-Winnebago Public Health Service Hospital (Winnebago Hospital), through its federal employees and agents, during its treatment of Emil, caused injuries to Emil, loss of consortium, and negligent infliction of emotional distress. Doc. 1. The United States filed an answer denying liability, Doc. 6, and then filed a motion to dismiss for lack of subject-matter jurisdiction under Federal Rules of Civil Procedure 12(b)(1) and 12(h)(3), Doc. 8. Plaintiffs oppose this motion, Doc. 16, and the United States submitted additional materials outside the pleadings. Docs. 9-10, 14, 24. For the reasons explained below, this Court grants in part and denies in part the United States' motion to dismiss.

I. Facts

The United States seeks to provide, administer, and oversee health services to members of federally recognized tribes through Indian Health Services (IHS), which is an agency within the Department of Health and Human Services (HHS). Doc. 1 at ¶ 4. The Winnebago Hospital is part of IHS with responsibility for providing health services to American Indians. Doc. 1 at ¶ 4.

IHS and AB Staffing Solutions, LLC (Staffing Solutions) entered into a contract for podiatry services at the Winnebago Hospital, in Winnebago, Nebraska, to begin April 1, 2017, until a date to be determined in the future. Doc. 9 at ¶ 2; Doc. 9-1 at 1. The contract's scope of work provides that "[t]he contractor is subject to the supervision and direction of the Clinical Director or Designee." Doc. 9 at ¶ 5; Doc. 9-2 at 1. The contract also incorporated Federal Acquisitions Regulations, including 48 C.F.R. § 52.237-7 titled "Indemnification and Medical Liability Insurance." Doc. 9-3 at 1. Section (a) of that regulation states:

It is expressly agreed and understood that this is a nonpersonal services contract, as defined in Federal Acquisition Regulation (FAR) 37.101, under which the professional services rendered by the Contractor are rendered in its capacity as an independent contractor. The Government may evaluate the quality of professional and administrative services provided, but retains no control over professional aspects of the services rendered, including by example, the Contractor's professional medical judgment, diagnosis, or specific medical treatments. The Contractor shall be solely liable for and expressly agrees to indemnify the Government with respect to any liability producing acts or omissions by it or by its employees or agents. The Contractor shall maintain during the term of this contract liability insurance issued by a responsible insurance carrier . . . .

48 C.F.R. § 52.237-7.

The podiatry services contract also contains a document titled "CONTRACTOR'S PERFORMANCE CONDITIONS 85 RESPONSIBILITIES." Doc. 9-4. The contract states that the contractor is responsible for reporting all taxes, providing his own transportation to work, his health and retirement benefits, maintaining satisfactory standards of competence, conduct, appearance, and integrity, and notifying the supervisor/director if he will be late, ill, or unable to work. Doc. 9-4. Additionally, the contract provides that the "Contractor earns no leave and is compensated only for hours actually worked at the agreed compensated rate." Doc. 9-4.

Emil received care at the Podiatry Clinic at the Winnebago Hospital between April 17, 2017 and June 2, 2017. Doc. 1 at ¶ 13; Doc. 1-5 at 1. According to the Plaintiffs, during this time frame, "a podiatry instrument was not properly sterilized between procedures, raising concerns of blood-borne diseases potentially being transferred from patient to patient . . . . The podiatrist responsible for the error has since been terminated . . . . [This was discovered when a] nurse noticed the physician had improperly sterilized the instrument."¹ Doc. 1-5 at 5-6. On or about August of 2017, Emil received a letter from HHS informing him that the medical instruments used during his visits may not have been properly sterilized and Emil may have been infected with diseases including Hepatitis B, Hepatitis C, or Human Immunodeficiency Virus. Doc. 1 at ¶ 15. Patricia, Emil's wife, learned that she too may be infected. Doc. 1 at 16.

Plaintiffs presented an administrative claim for their injuries, pain and suffering, and emotional distress to HHS in February 2018. Doc. 1 at ¶ 5. In May 2018, Plaintiffs' administrative claim was denied. Doc. 1 at ¶ 6. In September 2018, Plaintiffs filed this claim under the FTCA, requesting damages for Emil's alleged injuries, loss of consortium for Patricia, negligent infliction of emotional distress for both Plaintiffs, costs and attorney's fees, any and all other remedies provided pursuant to the FTCA, as well as any other relief this Court may order. Doc. 1. Plaintiffs attached to their complaint a HHS letter denying Plaintiffs' claims, certain medical records, a letter from HHS to Plaintiffs informing them that a podiatry instrument used on Emil may not have been properly sterilized, and news articles. Docs. 1-2, 1-3, 1-4, 1-5.

The United States answered the complaint, denying that its employees and agents failed to act with due care and diligence at all relevant times and denying that the United States proximately caused any injury to Plaintiffs. Doc. 6 at ¶¶ 42-43. Additionally, the United States asserted thatPlaintiffs' alleged injuries were caused solely by the negligence of a third party—Dr. John Horlebein—who was not a federal employee for purposes of FTCA liability, such that this Court does not have subject-matter jurisdiction over the Plaintiffs' complaint. Doc. 6 at ¶ 45. The United States then filed a motion to dismiss. Doc. 8.

With its motion to dismiss, the United States filed a Declaration of the Chief of the Contracting Office at IHS and attached various documents to provide information about the contract between IHS and Staffing Solutions for podiatry services. Doc. 9. The United States also filed a Declaration of the Clinical Director for the Lockport Service Unit at IHS and attached the Omaha-Winnebago Medical Staff Rules and Regulations of the Great Plains IHS. Doc. 10. Additionally, the United States filed some of Emil's medical records. Doc. 14. The Plaintiffs' response to the motion to dismiss argued that the complaint was based on the actions of "Winnebago Indian Health Services and All [sic] of its employees and supervisors who are in charge of properly sanitizing the hospital instruments," and not based on just one doctor's actions. Doc. 16 at 3. Plaintiffs argue that discovery is required to determine whose negligent acts are responsible for the alleged improper sanitation of podiatry instruments. Doc. 16 at 7. Additionally, Plaintiffs argue that if this Court relies upon materials outside the pleadings in ruling upon the United States' motion, it must convert this into a motion for summary judgment, upon which "[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Doc. 16 at 6 (quoting Fed. R. Civ. P. 12(d)). Lastly, Plaintiffs argue that the motion to dismiss was not timely filed. Doc. 16 at 7. The United States then filed a reply along with an additional supporting document. Docs. 23-24.

II. Motion to Dismiss Standards under Rule 12(b)(1) and Rule 12(h)(3)

The United States asserts lack of federal court subject-matter jurisdiction and has moved to dismiss under Rules 12(b)(1) and 12(h)(3) of the Federal Rules of Civil Procedure. Under Rule 12(h)(3),"[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3). Indeed, a federal court has the responsibility to consider the question of subject-matter jurisdiction sua sponte even if not raised by the parties and must dismiss any action where the court lacks jurisdiction. Hart v. United States, 630 F.3d 1085, 1089 (8th Cir. 2011).

A Rule 12(h)(3) motion to dismiss is analyzed under the same standards as a Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction. Gates v. Black Hills Health Care Sys. (BHHCS), 997 F. Supp. 2d 1024, 1029 (D.S.D. 2014) (citing Berkshire Fashions, Inc. v. M.V. Hakusan II, 954 F.2d 874, 879 n.3 (3d Cir. 1992)). A Rule 12(h)(3) motion differs from a Rule 12(b)(1) motion only in that it can be brought at any time, by any party or interested individual, or considered sua sponte by the court; a Rule 12(b)(1) motion by contrast must be made before any responsive pleading. See Fed. R. Civ. P. 12(b) ("A motion asserting any of these defenses must be made before pleading if a responsive pleading is allowed."); 5B Charles Alan Wright et al., Federal Practice & Procedure § 1350 (3d ed.).

A Rule 12(b)(1) challenge to subject-matter jurisdiction can be either facial or factual in nature. Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990). Regardless of whether the jurisdictional attack is facial or factual, the plaintiff has the burden of proving subject-matter jurisdiction. V S Ltd. P'ship v. Dep't of Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir. 2000). Under a facial attack, the "court restricts itself to the face of the pleadings, and the non-moving party receives the same protections as it would defending against a motion brought under Rule12(b)(6)." Jones v. United States, 727 F.3d 844, 846 (8th Cir. 2013) (quoting Osborn, 918 F.2d at 729 n.6). A facial challenge to federal jurisdiction limits the court; the court must view the allegations in the light most favorable to ...