Hudak v. Elmcroft of Sagamore Hills

• Decision Date: 23 January 2023
• Docket Number: 21-3836
• Citation: 58 F.4th 845
• Parties: Laura HUDAK, Executrix of the Estate of William P. Koballa, deceased, Plaintiff-Appellee, v. ELMCROFT OF SAGAMORE HILLS; Elmcroft by Eclipse Senior Living ; Eclipse Senior Living, Inc.; Eclipse Portfolio Operations, LLC; Eclipse Portfolio Operations II, LLC; Jamie Ashley Cohen, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

58 F.4th 845

Laura HUDAK, Executrix of the Estate of William P. Koballa, deceased, Plaintiff-Appellee,

v.ELMCROFT OF SAGAMORE HILLS; Elmcroft by Eclipse Senior Living ; Eclipse Senior Living, Inc.; Eclipse Portfolio Operations, LLC; Eclipse Portfolio Operations II, LLC; Jamie Ashley Cohen, Defendants-Appellants.

No. 21-3836

United States Court of Appeals, Sixth Circuit.

Argued: December 7, 2022

Decided and Filed: January 23, 2023

ARGUED: Teresa Pike Tomlinson, HALL BOOTH SMITH, P.C., Columbus, Georgia, for Appellants. Adam R. Pulver, PUBLIC CITIZEN LITIGATION GROUP, Washington, D.C., for Appellee. ON BRIEF: Teresa Pike Tomlinson, T. Andrew Graham, HALL BOOTH SMITH, P.C., Columbus, Georgia, Keith K. Hansbrough, MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN, Cleveland, Ohio, for Appellants. Adam R. Pulver, Allison M. Zieve, PUBLIC CITIZEN LITIGATION GROUP, Washington, D.C., Patrick T. Murphy, Christian D. Foisy, DWORKEN & BERNSTEIN CO., L.P.A., Cleveland, Ohio, for Appellee. Jeffrey S. Bucholtz, Alexander Kazam, KING & SPALDING LLP, Washington, D.C., Kyle A. Palazzolo, AMERICAN MEDICAL ASSOCIATION, Chicago, Illinois, for Amici Curiae.

Before: MOORE, GIBBONS, and LARSEN, Circuit Judges.

KAREN NELSON MOORE, Circuit Judge.

In May 2020, Laura Hudak's father, William P. Koballa, died of COVID-19. Hudak, acting as executrix of Koballa's estate, sued in state court, asserting negligence and related state-law claims against Elmcroft of Sagamore Hills, an assisted-living facility in Ohio, and several entities that own or operate the facility (collectively, "Elmcroft"), for their alleged failure to take care of her father. Elmcroft removed the case from state court to federal court pursuant to the general removal statute, 28 U.S.C. § 1441(a), and the federal-officer removal statute, 28 U.S.C. § 1442(a)(1), based on arguments it made under the Public Readiness and Emergency Preparedness Act ("PREP Act" or "Act"), 42 U.S.C. § 247d-6d. The district court found that the PREP Act did not provide grounds for removal under either removal statute and remanded the case to state court for lack of subject-matter jurisdiction. We AFFIRM .

I. BACKGROUND

A. Statutory Background

The PREP Act lies at the center of this appeal. "Congress enacted the PREP Act in 2005 ‘[t]o encourage the expeditious development and deployment of medical countermeasures during a public health emergency’ by allowing the [Health and Human Services, or HHS] Secretary ‘to limit legal liability for losses relating to the administration of medical countermeasures such as diagnostics, treatments, and vaccines.’ " Cannon v. Watermark Ret. Cmtys., Inc. , 45 F.4th 137, 139 (D.C. Cir. 2022) (quoting KEVIN J. HICKEY, CONG. RSCH. SERV ., LSB10443, THE PREP ACT AND COVID-19, PART 1: STATUTORY AUTHORITY TO LIMIT LIABILITY FOR MEDICAL COUNTERMEASURES 1 (Apr. 13, 2022)). The Act grants immunity from federal and state liability to "covered person[s] ... with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure" if the HHS Secretary has issued a declaration under the Act "with respect to such countermeasure." 42 U.S.C. § 247d-6d(a)(1).¹ The Secretary's declaration must identify, among other things, the threat to public health and the period during which the immunity is in effect. Id. § 247d-6d(b)(2).

The PREP Act limits both the reach and effect of its immunity provision. The Act provides immunity only from "any claim for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure[.]" Id. § 247d-6d(a)(2)(B). This includes "a causal relationship with the design, development, clinical testing or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing, or use of such countermeasure." Id. The Act also ensures that its grant of immunity does not foreclose all possible relief for harms caused by the administration or use of covered countermeasures by creating a "Covered Countermeasure Process Fund" and a corresponding administrative compensation scheme. Id. § 247d-6e(a).

The PREP Act creates one exception to its grant of immunity. The Act provides for "an exclusive Federal cause of action against a covered person for death or serious physical injury proximately caused by willful misconduct ... by such covered person." Id. § 247d-6d(d)(1). The Act defines willful misconduct as "an act or omission that is taken—(i) intentionally to achieve a wrongful purpose; (ii) knowingly without legal or factual justification; and (iii) in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit." Id. § 247d-6d(c)(1)(A). The Act dictates that this standard "shall be construed as establishing a standard for liability that is more stringent than a standard of negligence in any form or recklessness." Id. § 247d-6d(c)(1)(B). Beyond creating the cause of action and defining the applicable standard of liability, the Act provides that "[t]he substantive law for decision" for claims brought pursuant to the statute "shall be derived from the law ... of the State in which the alleged willful misconduct occurred." Id. § 247d-6d(e)(2). Lastly, the Act requires all claims asserted under it to be brought before a three-judge panel in the District Court for the District of Columbia and to meet certain special pleading standards. Id. § 247d-6d(e)(1)–(9).

In March 2020, the HHS Secretary declared COVID-19 a public-health emergency under the PREP Act. See Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19, 85 Fed. Reg. 15,198 (Mar. 17, 2020). The Secretary recommended "the manufacture, testing, development, distribution, administration, and use of the Covered Countermeasures[,]" which included "any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate COVID-19[.]" Id. at 15,201 –202. The Secretary stated that immunity under the Act would extend through October 1, 2024. Id. at 15,202. Since issuing that initial declaration, the Secretary has amended the declaration several times, including most recently in January 2022. See Tenth Amendment to Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19, 87 Fed. Reg. 982 (Jan. 7, 2022).

B. Factual and Procedural Background

As alleged in the complaint, Koballa resided with his wife in Elmcroft's assisted-care facility in Northfield, Ohio, prior to his death in May 2020. See R. 1-1 (Compl. ¶¶ 3, 12, 34) (Page ID #18–19, 22). In late April 2020, Elmcroft suspended family visitation, required its staff to wear masks and gloves, and instituted other policies in response to the developing COVID-19 pandemic. Id. ¶ 13 (Page ID #19–20). A few days later, on May 4, Koballa started to show signs of sickness. Id. ¶ 15 (Page ID #20). An Elmcroft employee sent an email to Hudak the following day stating that a nurse and a doctor had examined her father and that the doctor believed Koballa was suffering from allergies. Id. ¶¶ 17–18 (Page ID #20). Contrary to that email, however, Koballa had not been seen by either practitioner. Id. Koballa's condition continued to deteriorate, and by May 9 he was unable to walk or feed himself. Id. ¶¶ 19–24 (Page ID #20–21). Hudak and her sister, dissatisfied with Elmcroft's communications, went to see Koballa in person and "were shocked to observe the physical condition of their father and insisted that he be taken to the hospital." Id. ¶¶ 27–28 (Page ID #21). When medics arrived at the facility, they observed that Elmcroft employees were not wearing masks. Id. ¶ 29 (Page ID #22). The medics transported Koballa to a hospital, where he tested positive for COVID-19 and died several days later "from hypoxia

and COVID Pneumonia." Id. ¶ 34 (Page ID #22).

Hudak filed a lawsuit in Ohio state court in December 2020, asserting claims under state law for (1) negligence; (2) reckless, intentional, willful, and wanton misconduct; (3) survivorship; (4) wrongful death; and (5) violation of Ohio's nursing home patient's bill of rights. Id. ¶¶ 38–60 (Page ID #23–26). Beyond incorporating by reference the factual allegations discussed above, Hudak makes few additional allegations in connection with each claim. Hudak asserts with respect to her negligence claim, for example, that Elmcroft was negligent in caring for Koballa, assessing its ability to care for him, and in not transferring him to a hospital earlier. Id. ¶ 40 (Page ID #23). As to her claim of reckless, intentional, willful, and wanton misconduct, Hudak asserts that Elmcroft engaged in conduct "with heedless indifference to the consequences" and "disregarded substantial and unjustifiable risks" that its "conduct was likely to cause[ ] an unreasonable risk of injury, death, or loss to person or property to others, including ... Koballa." Id. ¶ 44 (Page ID #23–24). Hudak's other claims include similar recitations of the elements of her causes of action.

Shortly after Hudak filed her complaint in state court, Elmcroft removed the case to the District Court for the Northern District of Ohio pursuant to § 1441(a) and § 1442(a)(1). See R. 1 (Notice of Removal ¶ 16) (Page ID #6). Elmcroft argued in its notice of removal that removal was appropriate under § 1441(a) for two reasons: Hudak's claims were completely preempted by the PREP Act and the claims necessarily raised substantial federal issues. Id. ¶¶ 16–38 (Page ID #6–12). Elmcroft did not address § 1442(a)(1) in depth, but instead merely asserted that the case was removable under the statute. Id. ¶ 16 (Page ID #6). Hudak moved to remand the case back to state court for lack of subject-matter jurisdiction, R. 8 (Mot. to...