Preston v. Tenet Healthsystem Memorial Med. Center

• Decision Date: 25 April 2007
• Docket Number: No. 07-30160,No. 07-30132.,Summary Calendar.,07-30132.,07-30160
• Citation: 485 F.3d 804
• Parties: Elmira PRESTON; Howard Preston; Rose Lefrance Preston; Sheryl Preston; Deborah Mazie; et al., Plaintiffs-Appellees, v. TENET HEALTHSYSTEM MEMORIAL MEDICAL CENTER, INC., doing business as Memorial Medical Center, Defendant-Appellee, v. LifeCare Hospital of New Orleans LLC, doing business as LifeCare Hospital; LifeCare Management Services, L.L.C., Defendants-Appellants. Cheryl Weems, Individually and on behalf of her deceased mother, Veola Mosby, and on behalf of all others similarly situated, Plaintiff-Appellee, v. Touro Infirmary, Defendant-Appellee, SHONO, Inc., doing business as Specialty Hospital of New Orleans, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

485 F.3d 804

Elmira PRESTON; Howard Preston; Rose Lefrance Preston; Sheryl Preston; Deborah Mazie; et al., Plaintiffs-Appellees, v. TENET HEALTHSYSTEM MEMORIAL MEDICAL CENTER, INC., doing business as Memorial Medical Center, Defendant-Appellee, v. LifeCare Hospital of New Orleans LLC, doing business as LifeCare Hospital; LifeCare Management Services, L.L.C., Defendants-Appellants.

Cheryl Weems, Individually and on behalf of her deceased mother, Veola Mosby, and on behalf of all others similarly situated, Plaintiff-Appellee, v. Touro Infirmary, Defendant-Appellee, SHONO, Inc., doing business as Specialty Hospital of New Orleans, Defendant-Appellant.

No. 07-30132.

No. 07-30160

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

April 25, 2007.

Todd Robert Slack, Gauthier, Houghtaling & Williams, Metairie, LA, Tammie E. Holley, New Orleans, LA, Christopher James Bruno, Bruno & Bruno, Roderick Alvendia, New Orleans, LA, for Plaintiffs-Appellees in Docket No. 07-30132.

Sherman Vance Wittie, Wayne Brian Mason, Sedgwick, Detert, Moran & Arnold, Dallas, TX, Paul G. Preston, Scott Parker Yount, Pamela Joy Lormand, Darrin Louis Forte, The Preston Law Firm LLP, New Orleans, LA, for Lifecare Hosp. of New Orleans LLC and Lifecare Management Services LLC.

Kurt Stephen Blankenship, Blue Williams, Metairie, LA, for Tenet Healthsystem Memorial Medical Center, Inc.

On Petition for Permission to Appeal from the United States District Court for the Eastern District of Louisiana.

Before DeMOSS, STEWART and PRADO, Circuit Judges.

CARL E. STEWART, Circuit Judge:

Tenet Health Systems Memorial Medical Center d/b/a Memorial Medical Center ("Memorial") moved to remand this class action lawsuit to state court under the "local controversy" exception of the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d). The district court granted the motion to remand, and LifeCare Management Services, L.L.C., and LifeCare Hospitals of New Orleans, L.L.C. (collectively "LifeCare"), timely appealed the order. We affirm the district court's judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

Preston represents a putative class of patients and the relatives of deceased and allegedly injured patients hospitalized at Memorial when Hurricane Katrina made landfall in New Orleans, Louisiana. Memorial owned and operated the hospital, and LifeCare leased the seventh floor of the facility for an acute care center. On October 6, 2005, Preston brought suit against Memorial in the Civil District Court for the Parish of Orleans. Preston asserted claims for negligence and intentional misconduct, "reverse patient dumping" under the Emergency Medical Treatment and Active Labor Act, 42 U.S.C. § 1395dd, and involuntary euthanization. Preston alleged that Memorial failed to design and maintain the premises in a manner that avoided loss of power in the building. Preston further alleged that Memorial and LifeCare failed to develop and implement an evacuation plan for the patients. According to the petition, Memorial's and LifeCare's failure to maintain the premises and timely evacuate the facility resulted in the deaths and injuries of hospitalized patients. Preston named LifeCare in the Fifth Supplemental Amended Petition for Damages, seeking to certify the following class of persons:

All patients of Memorial and LifeCare who sustained injuries including death or personal injury as a result of the insufficient design, inspection and/or maintenance of LifeCare and/or Memorial's back-up electrical system, its failure to implement its evacuation plan and/or its emergency preparedness plan and/or its failure to have a plan which would have facilitated the safe transfer of patients out of harm's way, and its failure to have a plan of care for patients in the event of a power outage in the wake of Hurricane Katrina within the property owned by Memorial and leased and/or operated by LifeCare on or about the time period of August 26, 2005 through and including August 29, 2005 and thereafter, and all persons who sustained personal injury as a result of the deaths or personal injuries to patients of LifeCare and Memorial....

On June 26, 2006, LifeCare filed a timely notice of removal. Memorial never consented to removal from the state court. Shortly thereafter, LifeCare amended its removal notice to assert the following grounds: the Federal Officer Removal Statute, 28 U.S.C. § 1442(a)(1); the Multiparty, Multiforum Trial Jurisdiction Act, 28 U.S.C. § 1369; the Class Action Fairness Act of 2005, 28 U.S.C. § 1369; and federal question jurisdiction, 28 U.S.C. § 1331. Preston filed a motion to remand under the local controversy exception of CAFA. On August 22, 2006, the district court conducted a non-evidentiary hearing on the remand motion. The court declined to rule on the motion at the hearing but instead ordered the parties to present additional evidence regarding the citizenship of the class members. Preston withdrew the motion to remand prior to the deadline for submitting additional proof. Nevertheless, on November 13, 2006, Memorial filed a memorandum supporting remand and adopting Preston's withdrawn motion. As a result, Memorial effectively resurrected Preston's motion to remand. On November 21, 2006, the district court remanded the lawsuit to state court under the local controversy exception, home state exception and the discretionary jurisdiction provision. The district court also declined to exercise federal jurisdiction under the alternative grounds asserted in LifeCare's amended notice of removal. LifeCare filed a timely petition for appeal pursuant to 28 U.S.C. § 1453. On February 5, 2007, this court granted permission to appeal.¹ LifeCare only contests the district court's citizenship findings under CAFA's exceptions to federal jurisdiction.

II. STANDARD OF REVIEW

We review the district court's factual findings as to the citizenship of the parties for clear error. Acridge v. Evangelical Lutheran Good Samaritan Soc., 334 F.3d 444, 450 (5th Cir.2003) (The district court's "analysis of the facts and circumstances" relevant to determining domicile is reviewed under the clearly erroneous standard.); Coury v. Prot, 85 F.3d 244, 251 (5th Cir.1996) ("Nevertheless, in practice, the district court's determination of domicile is reviewed on appeal as a question of fact; it will be upheld unless `clearly erroneous.'"); Carrasco-Favela v. Immigration & Naturalization Serv., 563 F.2d 1220, 1222 (5th Cir.1977) ("Whether petitioner abandoned this domicile ... is mainly a question of fact turning on petitioner's intent to remain indefinitely ... or a lack of intent to make his home elsewhere."); Welsh v. Am. Surety Co. of N.Y., 186 F.2d 16, 18 (5th Cir.1951) ("The question is always one of compound fact and law ... [and] we are not warranted in setting aside his findings and conclusions unless clearly erroneous."). But see Evans v. Walter Indus., Inc. 449 F.3d 1159, 1161-62 (11th Cir.2006) (conducting a de novo review of the district court's citizenship determination under CAFA's local controversy exception). A finding of fact is clearly erroneous only when "although there may be evidence to support it, the reviewing court on the entire [record] is left with the definite and firm conviction that a mistake has been committed." Campos v. City of Baytown, Tex., 840 F.2d 1240, 1243 (5th Cir.1988) (citing Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)).

The standard of review for a district court's remand under the discretionary provision constitutes an issue of first impression. We review the district court's remand order for abuse of discretion. In determining the burden of proof to show citizenship under the local controversy exception, courts treating the question in the first instance looked to 28 U.S.C. § 1441(a), the general removal statute. Frazier v. Pioneer Ams. LLC, 455 F.3d 542 (5th Cir.2006) (determining that plaintiffs had the burden of proof to show citizenship based on analogy to the general removal statute); Hart v. FedEx Ground Package Sys., Inc., 457 F.3d 675 (7th Cir. 2006) (same); Evans v. Walter Indus., Inc., 449 F.3d 1159 (11th Cir.2006) (same).

In the traditional removal context, a district court "shall have original jurisdiction" over lawsuits involving a federal question or lawsuits satisfying statutory diversity and amount in controversy requirements. 28 U.S.C. §§ 1331 & 1332(a). On the other hand, the district courts "may decline to exercise supplemental jurisdiction" over a prescribed list of state and federal law claims in certain circumstances. 28 U.S.C. § 1367(c). In interpreting the discretionary language of supplemental jurisdiction, this court reviews an order to remand pursuant to § 1367(c) for abuse of discretion. Smith v. Amedisys, Inc., 298 F.3d 434 (5th Cir.2002) (upholding the district court's remand of case based on existence of novel and complex issues of state law); Welch v. Thompson, 20 F.3d 636 (5th Cir.1994) (upholding district court's remand of case after dismissal of federal claims); Kaplan v. Clear Lake City Water Auth., 794 F.2d 1059 (5th Cir. 1986) (same); Jones v. Fitch, 665 F.2d 586 (5th Cir.1982) (upholding district court's remand of case based on the presence of a substantial state law claim).

Similarly, the local controversy and home state exceptions read that the "district courts shall decline to exercise jurisdiction," while the discretionary provision provides that the district court "may in the interests of justice and looking at the totality of the circumstances" decline to exercise jurisdiction. Compare §§ 1332(2) & (4) with § 1332(3). LifeCare, cogently argues that the local controversy and home state exceptions should be construed narrowly and resolved in favor of federal jurisdiction based on the "shall decline to exercise jurisdiction" language, which represents the classic formulation for abstention. Under the discretionary...