Goncalves ex rel. Goncalves v. Rady Children's Hosp. San Diego

• Decision Date: 03 December 2014
• Docket Number: Case No. 3:14–cv–1774–GPC–BGS.
• Court: U.S. District Court — Southern District of California
• Parties: Lucas GONCALVES, a minor, by and through his Guardian Ad Litem Tony GONCALVES, Plaintiff, v. RADY CHILDREN'S HOSPITAL SAN DIEGO and Does 1 through 30, Inclusive, Defendants.

65 F.Supp.3d 985

Lucas GONCALVES, a minor, by and through his Guardian Ad Litem Tony GONCALVES, Plaintiff

v.RADY CHILDREN'S HOSPITAL SAN DIEGO and Does 1 through 30, Inclusive, Defendants.

Case No. 3:14–cv–1774–GPC–BGS.

United States District Court, S.D. California.

Signed Dec. 3, 2014.

Filed Dec. 4, 2014.

Cynthia R. Chihak, Cynthia R. Chihak and Associates, San Diego, CA, Donald Mitchell De Camara, Law Offices of Donald M. De Camara, Carlsbad, CA, for Plaintiff.

Anthony F. Shelley, Miller & Chevalier, Washington, DC, John M. LeBlanc, Manatt, Phelps & Phillips, LLP, Los Angeles, CA, for Defendant.

ORDER:

(1) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO REMAND TO STATE COURT;

(2) GRANTING PLAINTIFF'S EX PARTE MOTION FOR LEAVE TO FILE SUBMISSION OF SUPPLEMENTAL AUTHORITY

GONZALO P. CURIEL, District Judge.

I. INTRODUCTION

Before the Court is Plaintiff Lucas Goncalves's, a minor by and through his Guardian Ad Litem Tony Goncalves, (“Plaintiff”) Motion to Remand to State Court. (ECF No. 6.) Blue Cross and Blue Shield of Massachusetts (“BCBS–MA”), Anthem Blue Cross Blue Shield of New Hampshire (“BCBS–NH”), and Blue Cross of California (“BC–CA”) (collectively, the “Blues”) opposed. (ECF No. 15.) Plaintiff responded to the Blues' opposition. (ECF No. 16.) A hearing was held on November 7, 2014. (ECF No. 22.)

The parties have fully briefed the motion. (ECF Nos. 6, 15, 16.) Upon review of the moving papers, admissible evidence, oral argument, and applicable law, the Court finds that the probate exception applies to this case and GRANTS Plaintiff's Motion to Remand to State Court.

II. PROCEDURAL HISTORY

On February 2, 2011, Plaintiff filed a complaint in San Diego Superior Court alleging medical malpractice against Rady Children's Hospital San Diego (“RCHSD”) and Does 1 through 30 (the “State Court Case”). (See ECF No. 1–1, Ex. A–1, at 2.¹ ) In the State Court Case, on July 14, 2014, Plaintiff filed a Motion for an Order Expunging Blue Cross/Blue Shield's Lien. (Id. ) On July 28, 2014, the Blues removed this action to the United States District Court for the Southern District of California. (ECF No. 1.)

On August 26, 2014, Plaintiff filed a motion to remand this case to state court. (ECF No. 6.) On October 3, 2014, the Blues filed an opposition to Plaintiff's motion. (ECF No. 15.) On October 17, 2014, Plaintiff filed a response to the Blues' opposition. (ECF No. 16.)

On November 3, 2014, Plaintiff filed an ex parte motion for leave to file submission of supplemental authority. (ECF No. 19.) On November 4, 2014, the Blues opposed Plaintiff's ex parte motion. (ECF No. 20.) Good cause appearing, the Court GRANTS Plaintiff's ex parte motion and considers the arguments raised in both the ex parte motion and its opposition.

III. FACTUAL BACKGROUND

On October 2, 2007, Plaintiff was born at Pioneer Memorial Hospital in Brawley, California and was subsequently transferred to Rady Children's Hospital of San Diego (“RCHSD”) in San Diego, California.

(ECF No. 6–1, at 5.) While being treated at RCHSD, Plaintiff suffered internal injuries that he alleges are a result of medical negligence. (ECF No. 1–1, Ex. A–1, at 2–3.) On May 12, 2008, Plaintiff was transferred to Children's Hospital Boston in Boston, Massachusetts. (Id. at 3.) On February 2, 2011, Plaintiff filed the State Court Case alleging medical malpractice. (Id. at 2.)

At the time of Plaintiff's birth, his father was a federal employee enrolled in a Federal Employee Health Benefit Act (“FEHBA”) health insurance plan (the “Plan”) maintained by the Blues. (ECF No. 1–1, Ex. A–1, at 2.) Pursuant to the Plan, the Blues paid Plaintiff $459,483.57 for the medical treatment Plaintiff received in connection with his injuries at RCHSD. (Id. )

The Plan states that:

(a) The Carrier's subrogation rights, procedures and policies, including recovery rights, shall be in accordance with the provisions of the agreed upon brochure text [i.e., the Statement of Benefits], which is incorporated in this Contract in Appendix A. As the member is obligated ... to comply with the terms of this Contract, the Carrier, in its discretion, shall have the right to file suit in federal court in order to enforce those rights....

(d) The Carrier may also recover directly from the Member all amounts received by the Member by suit, settlement, or otherwise from any third party or its insurer ..., for benefits which have also been paid under this contract.

(ECF No. 1–3, Ex. B–1, at 187; ECF No. 1–8, Ex. C–1, at 533.)

The Plan further states that: (1) the Blues must “mak[e] reasonable effort to seek recovery of amounts to which it is entitled to recover in cases which are brought to its attention”; (2) “[t]he Member shall take such action, furnish such information and assistance, and execute such papers as the Carrier or its representative believes are necessary to facilitate enforcement of its rights, and shall take no action which would prejudice the interests of the Carrier to subrogation”; and (3) all Blue Cross and Blue Shield entities administering the Plan “shall subrogate under a single, nation-wide policy to ensure equitable and consistent treatment for all Members under the contract.” (ECF No. 1–8, at 533.)

On July 10, 2014, in the State Court Case, Plaintiff filed a motion to expunge the Blues' lien. (ECF No. 1–1, Ex. A–1.) On July 28, 2014, the Blues removed this action to the United States District Court for the Southern District of California. (ECF No. 1.)

IV. DISCUSSION

28 U.S.C. § 1442(a)(1) allows removal to a federal district court any “civil action ... commenced in a State court and that is against or directed to” the “United States or any agency thereof or any officer (or any person acting under that officer) of the United States or any agency thereof ... for or relating to any act under color of such office.” 28 U.S.C. § 1442. 28 U.S.C. § 1442(d)(1) defines “civil action” to include “any proceeding (whether or not ancillary to another proceeding) to the extent that in such proceeding a judicial order, including a subpoena for testimony or documents, is sought or issued.” Id. A party must meet three requirements to invoke § 1442(a)(1) : (1) “it is a ‘person’ within the meaning of the statute,” (2) “there is a causal nexus between its actions, taken pursuant to a federal officer's directions, and plaintiff's claims,” and (3) “it can assert a ‘colorable federal defense.’ ” Durham v. Lockheed Martin Corp.,

445 F.3d 1247, 1251 (9th Cir.2006) (citations omitted). Once a party properly removes pursuant to § 1442(a)(1), the federal district court has jurisdiction over the matter. Ely Valley Mines, Inc. v. Hartford Acc. and Indem. Co., 644 F.2d 1310, 1314 (9th Cir.1981) ; see also Niagara Mohawk Power Corp. v. Bankers Trust Co. of Albany, N.A., U.S. (“Niagara”), 791 F.2d 242, 244 (2d Cir.1986) (“The removal statute used by the government in this case, 28 U.S.C. § 1442(a)(1), confers jurisdiction as well as the right of removal.”).

Plaintiff argues five reasons why removal is improper: (1) the Blues are not parties to the State Court Case and thus lack standing to remove; (2) Empire HealthChoice Assurance, Inc. v. McVeigh (“Empire”), 547 U.S. 677, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006), bars jurisdiction in this case; (3) the Blues are not acting under a federal agency's direction because whether to seek reimbursement is discretionary; (4) Empire bars the Blues from asserting a colorable federal defense; and (5) the probate exception prevents federal jurisdiction. (ECF No. 6–1, at 7–12.)

A. Federal Officer Removal

1. Person and Non–Party Removal

The Blues assert, and Plaintiff does not dispute, that they are “persons” within the meaning of § 1442. See Durham, 445 F.3d at 1251. As the Blues are corporations, they are “persons.” See Leite v. Crane Co., 749 F.3d 1117, 1122 n. 4 (9th Cir.2014) (citations omitted). However, Plaintiff does argue that the Blues, as non-parties, do not have standing to remove under § 1442(a)(1). (ECF No. 6–1, at 7–8.)

In 2011, Congress passed the Removal Clarification Act of 2011 (the “RCA”). See H.R. Rep. No. 112–17(I) (2011), reprinted in 2011 U.S.C.C.A.N. 420. In pertinent part, the RCA added § 1442(d)(1), defining the term “civil action,” to the federal officer removal statute. Id. at 6. The RCA's legislative history shows that Congress was concerned primarily with the disparate application of the federal officer removal statute to discovery requests directed towards federal officers prior to any lawsuit being filed. Id. at 3–4. The purpose of the RCA was to make clear that even if a claim had not been filed against a federal officer, that officer could still properly remove under § 1442. Id. However, while Congress appeared to be explicitly concerned with state pre-suit discovery statutes, see id. at 6, the language of § 1442(d)(1) is much broader. § 1442(d)(1) not only includes “a subpoena for testimony or documents” within the definition of “civil action”—Congress's primary concern in the RCA—but goes further and includes “any proceeding (whether or not ancillary to another proceeding) to the extent that in such a proceeding a judicial order ... is sought or issued.” See 28 U.S.C. § 1442. While the Court notes that there is both a lack of pre-RCA non-subpoena cases as well as a lack of post-RCA cases interpreting § 1442(d)(1), see In re Crowley, No. 1:11–cv–1323, 2012 WL 4038445, at *3 (W.D.Mich. Sept. 13, 2012), the plain language of the statute is far broader than the pre-suit discovery cases discussed in the legislative history.

Plaintiff argues that the RCA intended to clarify the federal officer removal statute's purpose. (See ECF No. 16, at 3 (citing that purpose as preventing state courts from holding federal officers civilly or criminally liable)). The Court disagrees. The legislative record does not show that Congress was concerned with clarifying § 1442's purpose, rather the legislative record clearly shows that Congress was concerned with § 1442's inconsistent application by...