Wilson v. Big Sandy Healthcare, Inc.

• Citation: 553 F.Supp.2d 825
• Decision Date: 02 April 2008
• Docket Number: Civil No. 07-152-GFVT.
• Parties: Melissa WILSON, Josh Wilson, and Estate of Nicholas Hunter Wilson, Plaintiffs, v. BIG SANDY HEALTHCARE, INC., Angela K. Maggard, M.D., Joanna Santiesteban, M.D., and Unknown Defendants, Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

553 F.Supp.2d 825

Melissa WILSON, Josh Wilson, and Estate of Nicholas Hunter Wilson, Plaintiffs, v. BIG SANDY HEALTHCARE, INC., Angela K. Maggard, M.D., Joanna Santiesteban, M.D., and Unknown Defendants, Defendants.

Civil No. 07-152-GFVT.

United States District Court, E.D. Kentucky, Southern Division, Pikeville.

April 2, 2008.

COPYRIGHT MATERIAL OMITTED

H. Michael Lucas, Miller Kent Carter & Michael Lucas, PLLC, Pikeville, KY, for Plaintiffs.

Thomas Lee Gentry, U.S. Attorney's Office, Lexington, KY, for Defendants.

MEMORANDUM OPINION

GREGORY F. VAN TATENHOVE, District Judge.

That the citizens may not sue the king is a principle as old as the common law. By the time of Bracton (1268) it was settled doctrine that the King could not be sued eo nomine in his own courts. Jaffe, Louis L., Suits Against Governments and Officers: Sovereign Immunity, 77 Harv. L.Rev. 1, 2 (1963). For us, rejection of a monarch, did not include rejection of this protection. United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941). And while the sovereign may waive this immunity, it does so on its own terms. United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976). Hence, tort actions may be brought against federal employees but only after an administrative process is exhausted and only in the context of a bench trial. See 28 U.S.C. §§ 2671-2680 (known as the Federal Tort Claims Act ("FTCA")).

But what about suits brought against private parties that are part of a federally-supported program? May they be deemed "federal" and shielded from litigation except to the extent waived by the sovereign? And, if so, must plaintiffs be put on notice that this is the case? Those are the questions presented here. Because the Court answers the first two yes, and the third no, this matter will be dismissed.

I. BACKGROUND

This controversy began in the Floyd Circuit Court in the spring of 2007 when the Plaintiffs, Melissa Wilson ("Melissa"), Josh Wilson ("Josh") and the Estate of Nicholas Hunter Wilson (the "Estate") (collectively the "Wilsons") filed suit against Big Sandy Healthcare, Inc. ("BSH") and two of its employees, Angela K. Maggard, M.D. ("Dr.Maggard"), and Joanna Santiesteban, M.D. ("Dr.Santiesteban"). [R. 1, Attach. 1]. In their Complaint, styled as Melissa Wilson, et at v. Big Sandy Healthcare, Inc., et aL, Floyd Civil Action 07-CI-765, the Wilsons allege that the clinic and doctors committed certain common law torts during the scope of their employment. [Id.]. Melissa was a patient at BSH during her pregnancy with Nicholas, and received treatment from Drs. Maggard and Santiesteban. Sadly, her son suffered from a severe birth defect, alobar holoprosencephaly, which resulted in his death shortly after he was born. Among other things, the Wilsons claim that the medical care providers were negligent and committed the tort of outrage by failing to diagnose this defect in the infant before he was born.

On July 10, 2007, the United States filed a Notice of Removal¹ invoking this Court's original jurisdiction pursuant to 42 U.S.C. §§ 233(c) and 2679 which provides for federal court jurisdiction of such actions in which the United States is a party. [R. 1]. Along with its Notice, the United States tendered the requisite certification from the United States Attorney that the named defendants were acting within the scope of their federal employment at the time the alleged torts occurred. [Id., Attach 2; R. 4, Attach. 1].

The next day, the United States filed its Motion to Dismiss arguing that the Wilsons failed to exhaust their administrative remedies, as required by 28 U.S.C. § 2675(a) and 39 C.F.R. § 912.5 to successfully pursue a civil action under the FTCA. [R. 3]. In support, the United States tendered an affidavit of Richard G. Bergeron noting that no record of an administrative tort claim by the Wilsons existed. [Id., Attach. 2].

The United States also provided the written notices from the Attorney General and Secretary of Health and Human Services to BSH which "deem" it an employee of the federal government for purposes of the Federally Supported Health Centers Assistance Act of 1992 ("FSHCAA"), 42 U.S.C. 233. [Id., Attach. 5; R. 7, Attach. 1]. Those documents also "deem" the BSH employees who are providing healthcare services within the scope of the Act to be federal employees. [Id.]. Finally, these letters inform BSH of the malpractice coverage afforded to it based on its status as a federal employee. [Id.]. The Bergeron affidavit also certifies that official agency records reflect that Drs. Maggard and Santiesteban were employees of BSH during the relevant time period as alleged in the Wilsons' complaint. [R. 3, Attach. 2]. Thus, all named defendants have "federal employee" status as Public Health Service employees under the FSHCAA.

Given the invocation of this statute, the United States also filed a Motion to Substitute Party, the United States, for the named defendants herein pursuant to 42 U.S.C. § 233(a). This provision provides that an action against the United States is the exclusive remedy when the healthcare providers are deemed federal employees pursuant to the FSHCAA. [R. 4].

With respect to the Motions, the Wilsons do not dispute that they failed to pursue an administrative tort claim as required by the applicable statute. [R. 5]. Rather, they contend that the FSHCAA is unconstitutional as applied to them. They argue this is so because they did not receive the notice they believe is required by 42 U.S.C. § 233(o). First, they believe they should have been informed that the medical providers named herein were federal employees. Second, they argue that they should have been informed that by allowing them to perform services they were forfeiting certain legal rights including the right to trial by jury. [Id.]. The Wilsons maintain that the failure to provide this notice violates their common law Seventh Amendment right to a jury trial because the FTCA is the exclusive remedy for torts against the United States and allows only bench trials. [Id.]. Although they do not articulate how, they make a blanket statement that enforcement of the FTCA against them (i.e., by making it their exclusive remedy via 42 U.S.C. § 233) violates their Fifth and Fourteenth Amendment rights as well. [Id.]. In fact, they state that the existence of the right alone "should be sufficient without other citation of authority." [R.5,8-9].

Next, the Wilsons filed a Motion to Remand based on lack of subject matter jurisdiction. [R. 8-9]. In this Motion, the Wilsons raise no new arguments other than those made in response to the government's Motion to Dismiss and Substitute parties. Rather, they repeat verbatim their earlier statements regarding the unconstitutionality of the FTCA as applied to them because they did not receive the "required" notice of the healthcare providers' status as federal employees. [Id.]. In support, the Wilsons attach an affidavit of Melissa Wilson affirming that she did not receive affirmative notice of these named defendants' federal employee status, as well as the returned civil summons from the state court action. [Id., Attach. 2-5]. In addition, the Wilsons reference a paragraph in their state court complaint where they claim to be unaware they were forgoing any jural rights by utilizing the services with the named defendants. [R. 9].

Finally, Anthem has filed a Motion to Intervene. [R. 13]. It believes it should be allowed to do so, having paid claims on behalf of the Wilsons for the care they received at BSH.

II. DISCUSSION

A.

In response to concerns about the shortage of healthcare services available to what it considered medically underserved areas,² Congress enacted the FSHCAA. Statutorily, the FSHCAA amends former Section 224 of the Public Health Services Act. See 42 U.S.C. § 233. Essentially, by application to the Secretary, an entity becomes "deemed" a Public Health Services employee—a federal employee. Id. at § 233(g)(1)(A), (D). Notably, this determination rests exclusively with the Secretary and is "final and binding upon the Secretary and the Attorney General and other parties to any civil action or proceeding." Id. at § 233(g)(1)(F). In exchange, the deemed, qualifying healthcare facilities and certain employees forgo obtaining private insurance in favor of the United States becoming the malpractice insurer. Id. at § 233(g)(1)(A), (4). The monies saved on private malpractice coverage are then available to provide additional health care services.

As part of this process, the entity is relieved of liability for any tort claims and the United States becomes the only defendant with the Attorney General obligated to defend the claim. Id. at § 233(a)-(b); 28 U.S.C. § 2679. As a classic example of the waiver of sovereign immunity, and to effectuate its goals, the PHSA provides that the remedy authorized by the FTCA is "exclusive of any other civil proceeding by reason of the same subject-matter" for those acts covered by the PHS employee's scope of employment. See 42 U.S.C. § 233(a); 28 U.S.C. §§ 1346(b), 2401, 2672. Those acts include the performance of medical functions like those raised by the Wilsons here. Id. at § 233(a). The Attorney General must provide a certification that the acts complained of arose out of the scope of the federal employment. This certification has been delegated to the Attorney General by virtue of 28 C.F.R. § 15.4, and is conclusive as to this determination. 28 U.S.C. § 2679(d)(2) ("This certification of the Attorney General shall conclusively establish scope of office or employment for purposes of removal."). The practical effect is that when a deemed entity is sued for these medical torts, they are dismissed and the United States is substituted as the sole defendant. See 28 U.S.C. § 2679(d)(2).

The instant action represents the most common implementation of the aforementioned statutory framework. For almost 35 years, BSH has...