Perez on behalf of Estate of Lozano v. Southeast SNF LLC
| Decision Date | 12 April 2021 |
| Docket Number | Case No. SA-21-CV-00090-JKP, Case No. SA-21-CV-00089-JKP,Case No. SA-21-CV-00088-JKP |
| Parties | Crystal PEREZ, ON BEHALF OF the ESTATE OF Ricardo LOZANO, deceased, Plaintiff, v. SOUTHEAST SNF LLC, et al., Defendants. Joe Salinas, individually and on behalf of Elodia Salinas, deceased, Plaintiff, v. Southeast SNF LLC, et al., Defendants. Robert T. Strait, individually and on behalf of Robert M. Strait, deceased, Plaintiff, v. Southeast SNF LLC, et al., Defendants. |
| Court | U.S. District Court — Western District of Texas |
Andrew Skemp, Elizabeth Sutherland Janicek, Janicek Law Firm, PC, San Antonio, TX, for Plaintiffs.
Cameron K. Wells, Tamara Marie Madden, Johnson Trent & Taylor LLP, Houston, TX, for Defendants.
Plaintiffs bring causes of action for the deaths of their loved ones in Texas nursing homes owned and operated by Defendants. They allege these COVID-19 deaths could have been prevented but for Defendants’ failures to take basic precautions like hand washing, checking for fevers, and maintaining an adequate number of staff. Additionally, even after an investigation and citations, Defendants failed to implement policies and procedures to prevent infection and comply with Texas Health and Human Services guidelines. Plaintiffs filed suit in Texas state courts. Defendants removed the cases to federal court on the basis of federal-question jurisdiction, contending that Plaintiffs’ claims are completely preempted under the Federal Public Readiness and Emergency Preparedness Act ("PREP Act"). Plaintiffs timely moved to remand their cases back to state court.
A party may move to remand a previously removed case. See 28 U.S.C. § 1447(c). "Because removal raises significant federalism concerns, the removal statute is strictly construed ‘and any doubt as to the propriety of removal should be resolved in favor of remand.’ " Gutierrez v. Flores , 543 F.3d 248, 251 (5th Cir. 2008) (quoting In re Hot-Hed, Inc. , 477 F.3d 320, 323 (5th Cir. 2007) ). "Any ambiguities are construed against removal and in favor of remand to state court." Mumfrey v. CVS Pharmacy, Inc. , 719 F.3d 392, 397 (5th Cir. 2013). The removing party has the burden to show "that federal jurisdiction exists and that removal was proper." Scarlott v. Nissan N. Am., Inc. , 771 F.3d 883, 887 (5th Cir. 2014) (quoting Mumfrey , 719 F.3d at 397 ).
Removal based on federal-question jurisdiction is reviewed under the well-pleaded complaint rule. Elam v. Kan. City S. Ry. , 635 F.3d 796, 803 (5th Cir. 2011) ; 28 U.S.C. §§ 1331, 1441. The "well-pleaded complaint rule" provides that federal jurisdiction exists "only if a federal question appears on the face of the plaintiff's well-pleaded complaint." Bernhard v. Whitney Nat'l Bank , 523 F.3d 546, 551 (5th Cir. 2008). Thus, as " ‘master of the complaint’ the plaintiff may ‘choose to have the cause heard in state court’ ‘by eschewing claims based on federal law.’ " Caterpillar, Inc. v. Williams , 482 U.S. 386, 399, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987).
"[C]omplete preemption is an exception to the well-pleaded complaint rule." Rio Grande Underwriters, Inc. v. Pitts Farms, Inc. , 276 F.3d 683, 685 (5th Cir. 2001) (citing Hart v. Bayer Corp. , 199 F.3d 239, 244 (5th Cir. 2000) ). The "complete preemption doctrine" provides that the preemptive force of a federal statute can be "so extraordinary" that it "converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Caterpillar , 482 U.S. at 393, 107 S.Ct. 2425. "If a federal cause of action completely pre-empts a state cause of action any complaint that comes within the scope of the federal cause of action necessarily ‘arises under’ federal law." Id. (quoting Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal. , 463 U.S. 1, 24, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) ); see also Ben. Nat'l Bank v. Anderson , 539 U.S. 1, 8, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003). Thus, "[i]f a federal law is found to completely preempt a field of state law, the state-law claims in the plaintiff's complaint will be recharacterized as stating a federal cause of action." Rio Grande , 276 F.3d at 685 (5th Cir. 2001) (quoting Hart , 199 F.3d at 244 ).
Defendants argue Plaintiffs’ claims are completely preempted by the PREP Act. This Court recently concluded the PREP Act does not completely preempt state law claims.1 The weight of authority supports that conclusion.2
Put simply, the PREP Act does not completely preempt state law negligence claims for COVID-19-related injuries. The Act does not create a Federal cause of action but provides immunity3 to "covered persons" for injuries "caused by, arising out of, relating to, or resulting from" the administration of a covered countermeasure to an individual or the use of a covered countermeasure by an individual."4 42 U.S.C. § 247d-6d(a). Thus, when the PREP Act is asserted as a defense, covered claims must be directed to the Covered Countermeasure Process Fund.5 Id. § 247d-6e.
Defendants also argue that removal is proper under the embedded-federal-question doctrine articulated in Grable. To establish federal-question jurisdiction under Grable , a state law claim must "necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg. , 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005). "That is, federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress." Gunn v. Minton , 568 U.S. 251, 258, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013). Only a "special and small category of cases" grounded in state law are found "to arise under federal law for purposes of federal question jurisdiction." Atl. Richfield Co. v. Christian , ––– U.S. ––––, 140 S. Ct. 1335, 1350 n.4, 206 L.Ed.2d 516 (2020) (quoting Gunn , 568 U. S. at 258, 133 S.Ct. 1059 ). "In the mine run of cases, ‘a suit arises under the law that creates the cause of action.’ " Id. 140 S. Ct. at 1350 (quoting American Well Works Co. v. Layne & Bowler Co. , 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916) ).
Defendants argue the PREP Act is "necessarily raised" because it both preempts Plaintiffs’ state court claims and provides immunity to Defendants. This argument fails on both accounts. First, it is well established among the Federal district courts that the PREP Act does not completely preempt state court claims.
Second, "a case may not be removed to federal court on the basis of a federal defense, ... even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case." Rivet v. Regions Bank , 522 U.S. 470, 475, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998) (quoting Franchise Tax Bd. , 463 U.S. at 14, 103 S.Ct. 2841 ). Any need to identify claims that must be presented to the Fund only arises if the PREP Act is asserted as a defense. Because PREP Act immunity is a defense that must be pled in an answer or asserted in a motion to dismiss, it is not necessarily raised as a claim or element in Plaintiffs’ negligence cases.
Defendants argue that the PREP Act is "actually disputed" because Plaintiffs make arguments about the PREP Act in their motions to remand. Notably, the referenced arguments are responsive to the removal papers. Additionally, Defendants look to the wrong source to determine whether a federal issue is actually disputed. Plaintiffs’ petitions bring only Texas negligence claims, which do not require interpretation of the PREP Act. In other words, the Court does not "see any necessity for a construction of the [PREP Act] in order to make a disposition of the case." Mays v. Kirk , 414 F.2d 131, 134 (5th Cir. 1969). As discussed above, the PREP Act is only implicated when it is asserted as a defense. When so asserted, courts will look to the facts alleged to determine whether an injury was caused by the administration or use of a covered countermeasure. The Supreme Court has stressed that federal question jurisdiction under Grable is appropriate when a case presents a "nearly pure issue of law," rather than a "fact-bound and situation specific" issue. Empire HealthChoice Assurance, Inc. v. McVeigh , 547 U.S. 677, 701, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006) ; accord Gunn , 568 U.S. at 263, 133 S.Ct. 1059.
Defendants argue the PREP Act issue is "substantial" because it could require dismissal of Plaintiffs’ state court claims. State claims do not "arise under" federal law "unless it appears that some substantial , disputed question of federal law is a necessary element of one of the well-pleaded state claims. " Franchise Tax Bd. , 463 U.S. at 13, 103 S.Ct. 2841 (emphasis added). Plaintiffs bring claims for negligence and gross negligence under Texas law, neither of which require the resolution of any federal law.6 See Gunn , 568 U.S. at 259, 133 S.Ct. 1059 ().
Even if the PREP Act as a defense infuses the state causes of action with a federal issue, the "mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction," Merrell Dow Pharms. Inc. v. Thompson , 478 U.S. 804, 813, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986), ...
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...a substitute federal cause of action for plaintiff's negligence claims but immunity for defendant); Perez ex rel. Lozano, v. Southeast SNF LLC , 533 F.Supp.3d 430, 435 (W.D. Tex. 2021) ("[I]t is well established among the Federal district courts that the PREP Act does not completely preempt......