Hackensack Univ. Med. Ctr. v. Becerra

• Decision Date: 30 September 2021
• Docket Number: Civil ACTION 21-12233 (ES) (MAH)
• Parties: HACKENSACK UNIVERSITY MEDICAL CENTER, et al., Plaintiffs, v. XAVIER BECERRA, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.
• Court: U.S. District Court — District of New Jersey

HACKENSACK UNIVERSITY MEDICAL CENTER, et al., Plaintiffs,
v.
XAVIER BECERRA, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Civil ACTION No. 21-12233 (ES) (MAH)

United States District Court, D. New Jersey

September 30, 2021

OPINION

Michael A. Hammer UNITED STATES MAGISTRATE JUDGE

I. INTRODUCTION

This matter comes before the Court on Defendant Xavier Becerra's motion to transfer this action to the District of Columbia. Def.'s Mot. to Transfer, June 23, 2021, D.E. 8. Defendant has also moved for a stay of this case pending the Court's resolution of the instant application. Id. The Court has considered the parties' submissions and, pursuant to Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1, has decided this motion without oral argument. For the reasons set forth below, the Court will deny the motion to transfer and will deny as moot the motion to stay.

II. BACKGROUND

Plaintiffs are eight New Jersey non-profit hospitals that participate in the federal Medicare program. Compl., June 7, 2021, D.E. 1, at ¶ 1. As such, they occasionally receive outlier payments, which are disbursements for treating “patients in need of serious medical care” where the treatment costs exceed the standard Medicare program payment. Id. at ¶ 2. Outlier payment eligibility is contingent upon several factors, including the “fixed-loss threshold

1

applicable at the time of the patient's discharge.”^[1] Id. at ¶ 24. The Department of Health and Human Services (“the Department”) administers the outlier payment program and sets the fixed-loss threshold annually. 42 C.F.R. § 412.80. Id. at ¶ 28; see also Id. at ¶¶ 2, 7-8, 17, 20-24.

On June 7, 2021, Plaintiffs initiated this matter by filing a Complaint against Defendant in his official capacity as the secretary of the Department. Id. at ¶ 5. According to the Complaint, the Department arbitrarily set the fixed-loss thresholds for fiscal years 2006 through 2013. Id. at ¶¶ 3, 68-75. As a result, certain of Plaintiffs' patient-cases were deemed ineligible for outlier status, and some of Plaintiffs' qualifying cases generated lower than anticipated reimbursements. Id. at ¶ 72. Among other things, Plaintiffs seek an order (1) vacating the thresholds for the fiscal years at issue; and (2) remanding Plaintiffs' appeals for reconsideration. Id. at p. 34, ¶ 2.

On June 23, 2021, Defendant moved to transfer this case to the District of Columbia, where four of the plaintiffs in this matter - Ocean Medical Center, Jersey Shore University Medical Center, Bayshore Community Hospital, and Southern Ocean Medical Center - are plaintiffs in a separate action filed against the Department's secretary. See Univ. of Colo. Health v. Burwell, Civ. No. 14-1220 (filed July 18, 2014) (“the D.C. Action”). Def.'s Notice of Mot.,

2

June 23, 2021, D.E. 8, at p. 1; Def.'s Br., D.E. 8-1, at pp. 1-2, 6. In that case, the overlapping plaintiffs also challenge the Department's outlier payment determinations, albeit for different fiscal years. See D.C. Action Second Amended Compl., Feb. 25, 2019, D.E. 114, at ¶ 6.

Defendant asserts both 28 U.S.C. § 1404(a) and the first-filed rule favor transfer. Def.'s Br., D.E. 8-1, at pp. 1-2. Plaintiffs oppose the motion. Pls.' Br. in Opp., July 6, 2021, D.E. 12, at p. 22.

III. DISCUSSION

A. Transfer Pursuant to 28 U.S.C. § 1404(a)

The Court has the discretion to “transfer any civil action to any other district or division where it might have been brought or to any district or division to which all the parties have consented” under § 1404(a). Because Plaintiffs have laid a proper venue, Defendant bears the burden of establishing transfer is appropriate and warranted. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995).

Transfer may be appropriate under § 1404(a) if a defendant satisfies two factors: (i) that venue is proper in the transferee district, and (ii) that the transferee district can exercise personal jurisdiction over all the parties. Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir. 1970). 28 U.S.C. § 1391 determines proper venue in all civil cases. Under § 1391(b), a civil action may be brought in:

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located

(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or

(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect

3

to such action.

Plaintiffs do not dispute that the District of Columbia is a proper venue, and they do not challenge that court's ability to exercise personal jurisdiction over the parties. See Pls.' Br., D.E. 12, at p. 27; see also 42 U.S.C. § 1395oo(f)(1) (outlining appropriate venues for judicial appeal from Provider Reimbursement Review Board and Department decisions). Therefore, it appears that venue and personal jurisdiction are not obstacles to the transfer of this action.

The Court next considers whether Defendant has established transfer is warranted. That determination requires a balancing of the private and public interest factors espoused by the Third Circuit in Jumara v. State Farm Ins. Co., 55 F.3d at 879. The private interest factors include: (a) Plaintiffs' choice of forum; (b) Defendant's preference; (c) where the claims arose; (d) the parties' convenience as indicated by their relative physical and financial condition; (e) the convenience of witnesses; and (f) the location of books and records. Id.

“In the Third Circuit, a plaintiff's choice of forum is a ‘paramount concern' in deciding a motion to transfer venue.” Wm. H. McGee & Co., Inc. v. United Arab Shipping Co., 6 F.Supp.2d 283, 289 (D.N.J. 1997). Courts generally “assign the plaintiff's choice of forum significant weight.” Job Haines Home for the Aged v. Young, 936 F.Supp. 223, 227 (D.N.J. 1996) (citation omitted). “The choice is ‘entitled to greater deference'” where, as here, “a plaintiff chooses its home forum.” Wm. H. McGee, 6 F.Supp.2d at 289 (quoting Ricoh Co., Ltd. v. Honeywell, Inc., 817 F.Supp. 473, 480 (D.N.J. 1993)).

In certain circumstances, however, a plaintiff's choice of forum is accorded less weight. Tischio v. Bontex, Inc., 16 F.Supp.2d 511, 521 (D.N.J. 1998). The deference may be reduced, for example, “where the choice of forum by a plaintiff has little connection with the operative facts of the lawsuit, ” id., or where the plaintiff has engaged in forum shopping, see, e.g., Yang v.

4

Odom, 409 F.Supp.2d 599, 606 (D.N.J. 2006) (giving plaintiffs' preference less weight because they “only pursued their case [in this District] after their options in Georgia effectively ran out”). “Under those circumstances, a court may consider the place with significant contacts to the claim to be an appropriate forum.” Kaye v. Shdeed & Hartmann, Civ. No. 91-1103, 1991 WL 87584, at *2 (D.N.J. May 22, 1991) (citation omitted).

In this matter, the Court finds substantial deference is owed to Plaintiffs' decision to litigate in their home forum, notwithstanding Defendant's arguments to the contrary. Defendant opines that Plaintiffs' forum choice is “sharply undermined” by (1) their decision to file the D.C. Action and (2) their participation in “forum shopping” and “tactical maneuvering.” Def.'s Br., D.E. 8-1, at pp. 19-20. In making his first argument, Defendant overlooks the fact that only four of the eight plaintiffs in this matter are parties in the D.C. Action, and he offers no case law justifying the attribution of four of the plaintiffs' actions to all eight. Id.; see also Def.'s Reply Br., July 12, 2021, D.E. 14, at p. 1. Plaintiffs are not, as Defendant suggests, “the same” merely because they are under the common ownership of Hackensack Meridian Health. Def.'s Reply Br., D.E. 14, at p. 3. “Subsidiaries and parent corporations are distinct legal entities, ” and the actions of one entity, whether parent or sibling, cannot be imputed to another absent compelling, extraordinary circumstances which are not present here. Honeywell, 817 F.Supp. at 481; Poasada v. Big Lots, Inc., Civ. No. 10-5693, 2011 WL 4550158, at *3 (D.N.J. Sept. 29, 2011).

Defendant has also failed to substantiate his allegations that Plaintiffs are engaged in tactical maneuvering and forum shopping. Def.'s Br., D.E. 8-1, at p. 19. “Forum shopping is ‘[t]he practice of choosing the most favorable jurisdiction or...