Strait v. Southeast SNF ( 2022 )

Case: 21-50399 Document: 00516262590 Page: 1 Date Filed: 03/31/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
March 31, 2022
No. 21-50399 Lyle W. Cayce
Clerk
Crystal Perez, on behalf of The Estate of Ricardo Lozano,
deceased,
Plaintiff—Appellee,
versus
Southeast SNF, L.L.C., doing business as Southeast Nursing;
Rehabilitation Center; Texas Operations Management,
L.L.C., doing business as Southeast Nursing; Rehabilitation
Center; Advanced HCS, L.L.C., doing business as Advanced
Healthcare Solutions, doing business as Southeast Nursing;
Rehabilitation Center,
Defendants—Appellants,
consolidated with
_____________
No. 21-50412
_____________
Robert T. Strait, individually and on behalf of The Estate of
Robert M. Strait, deceased,
Plaintiff—Appellee,
versus
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No. 21-50399
c/w Nos. 21-50412 & 21-50413
Southeast SNF, L.L.C., doing business as Southeast Nursing;
Rehabilitation Center; Texas Operations Management,
L.L.C., doing business as Southeast Nursing; Rehabilitation
Center; Advanced HCS, L.L.C., doing business as Advanced
Healthcare Solutions, doing business as Southeast Nursing;
Rehabilitation Center,
Defendants—Appellants,
consolidated with
_____________
No. 21-50413
_____________
Joe Salinas, individually and on behalf of The Estate of Elodia
Salinas, deceased,
Plaintiff—Appellee,
versus
Southeast SNF, L.L.C., doing business as Southeast Nursing;
Rehabilitation Center; Advanced HCS, L.L.C., doing
business as Advanced Healthcare Solutions, doing business as
Southeast Nursing; Rehabilitation Center; Texas
Operations Management, L.L.C., doing business as Southeast
Nursing; Rehabilitation Center,
Defendants—Appellants.
Appeals from the United States District Court
for the Western District of Texas
USDC Nos: 5:21-CV-88; 5:21-CV-90; 5:21-CV-89
Before Higginbotham, Stewart, and Wilson, Circuit Judges.
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No. 21-50399
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Per Curiam:*
Ricardo Lozano, Robert M. Strait, and Elodia Salinas were residents
of Southeast SNF, L.L.C.’s nursing homes who tragically died after they
contracted COVID-19. Their family members filed these lawsuits in state
court on behalf of their estates and individually as heirs and next of kin.
Southeast removed the cases to federal court, alleging federal jurisdiction
based on (1) federal-officer removal, (2) complete preemption, and (3) the
Grable doctrine. The district court remanded the cases to state court, a ruling
Southeast now challenges on appeal. As this court recently held in Mitchell
v. Advanced HCS, L.L.C., No. 21-10477, --- F.4th----, 2022 WL 714888 (5th
Cir. Mar. 10, 2022), these are not cases of federal jurisdiction. We affirm the
district court’s remand orders.
I.
Lozano, Strait, and Salinas were residents in Southeast nursing
facilities. Each of them died during the COVID-19 pandemic at least in part
due to contracting COVID-19. Crystal Perez (Lozano’s niece), Robert T.
Strait (Strait’s son), and Joe Salinas (Salinas’s son) are the Plaintiffs in this
consolidated appeal. They each brought an action in Bexar County, Texas,
alleging that Southeast SNF, L.L.C., Texas Operations Management,
L.L.C., and Advanced HCS, L.L.C. (collectively, Southeast, or Defendants)
violated standards of care and caused injury to their deceased family
members.
The virtually identical complaints included claims of negligence and
gross negligence. 1 According to the allegations,
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
1
Plaintiffs were represented by the same attorney. Plaintiffs also seek Declaratory
Judgment pursuant to Texas Civil Practice and Remedy Code Chapter 37.
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Defendants did not wash their hands, did not screen staff
entering the facility, did not check for fever of staff, and did not
maintain an infection prevention and control program to
prevent the spread of COVID-19. Further, the Defendants
failed to put into place proper policies to ensure that the
residents were provided standard infection prevention care and
failed to ensure that the HHS Rules were complied with by the
staff. Defendants were notified that there were blatant
violations of these requirements and regulations by staff
members, including the failure of the staff to protect residents
from infection with COVID-19.
Plaintiffs also alleged that Southeast was “systematically understaffed in
March and April of 2020 in an effort to maximize profits” and that Southeast
“committed certain acts and/or omissions in the medical/nursing care and
treatment of the Plaintiff[s], . . . which constituted negligence.” Finally,
Plaintiffs asserted that Southeast breached “nondelegable duties by failing to
provide rules regarding COVID-19 minimization, failing to provide a
reasonably safe nursing home, and failing to hire competent employees.”
Southeast removed the cases to federal court, alleging federal officer
jurisdiction and federal question jurisdiction. See 28 U.S.C. § 1442(a)(1)
(federal officer removal); id. § 1331 (federal question jurisdiction).
According to Southeast, (1) Plaintiffs’ claims are based upon Southeast’s
conduct “acting under” the United States (i.e., Southeast’s conduct as a
“person acting under” a federal officer); (2) the Public Readiness and
Emergency Preparedness (PREP) Act completely preempts Plaintiffs’ state
law claims; and (3) there is a substantial federal question embedded in
Plaintiffs’ claims pursuant to Grable & Sons Metal Products v. Darue
Engineering & Manufacturing, 545 U.S. 308 (2005). Southeast then moved to
dismiss each action under Rules 12(b)(1) and 12(b)(6), asserting that
“Plaintiff[s’] claims are completely preempted by the PREP Act, which
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grants Defendants immunity to liability and suit.” Plaintiffs moved to
remand, contending that Southeast’s removal was improper for lack of
subject matter jurisdiction. The district court consolidated the motions and
ordered that the cases be remanded. It likewise denied Southeast’s motions
to dismiss as moot. Southeast timely appealed.
II.
“Although an order remanding a case to state court is not generally
reviewable, ‘an order remanding a case to the State court from which it was
removed pursuant to section 1442 . . . of [title 28] shall be reviewable by
appeal or otherwise.’” Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286, 290
(5th Cir. 2020) (en banc) (quoting 28 U.S.C. § 1447(d)). “We review the
district court’s remand order de novo, without a thumb on the remand side
of the scale.” Id. (internal quotation marks and citation omitted).
III.
“Federal courts have limited jurisdiction. We may only adjudicate
cases and controversies to which the federal ‘judicial Power’ extends.”
Mitchell, 2022 WL 714888, at *1 (quoting U.S. Const. art. III; citing Owen
Equip. & Erection Co. v. Kroger, 437 U.S. 365, 372 (1978)). Southeast offers
three grounds by which federal jurisdiction could attach: federal officer
removal, complete preemption of state law claims by the PREP Act, and the
Grable doctrine. Each of these grounds was similarly raised, and rejected, in
Mitchell. Indeed, Mitchell is on all fours with this case, dictating the same
result here.
First, Southeast suggests federal officer removal applies. To remove
a case to federal court on this basis requires that a defendant show: “(1) it
has asserted a colorable federal defense, (2) it is a ‘person’ within the
meaning of the statute, (3) that has acted pursuant to a federal officer’s
directions, and (4) the charged conduct is connected or associated with an
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act pursuant to a federal officer’s directions.” Latiolais, 951 F.3d at 296; see
28 U.S.C. § 1442(a)(1).
The primary point of contention here is the third element—whether
Southeast acted under or pursuant to a federal officer’s direction. Contrary
to Southeast’s contentions, that requires more than receiving “permissive
guidance, publishing of best practices, helpful suggestions, or a combination
thereof” from the Centers for Disease Control and Prevention, the Centers
for Medicare and Medicaid Services, and the Department of Health and
Human Services. Mitchell, 2022 WL 714888, at *6. Though Southeast makes
much ado about “operating under extraordinary conditions and guidance,”
it fails to convince us that such conditions and guidance were more than a
“difference in the degree of regulatory detail.” Estate of Maglioli v. All. HC
Holdings, LLC, 16 F.4th 393, 406 (3d Cir. 2021) (internal quotation marks
omitted) (quoting Watson v. Philip Morris Cos., 551 U.S. 142, 157 (2007)).
The mere fact of federal regulation, even to a high degree of specificity,
cannot meet this element. Mitchell, 2022 WL 714888, at *7.
Next, Southeast contends the PREP Act fully preempts any state law
claims. As a general rule, “[o]nly state-court actions that originally could
have been filed in federal court may be removed to federal court by the
defendant.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Where a
federal law “completely preempt[s] 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 Underwriters, Inc. v. Pitts Farms, Inc., 276 F.3d 683,
685 (5th Cir. 2001) (internal quotation marks omitted) (quoting Hart v. Bayer
Corp., 199 F.3d 239, 244 (5th Cir. 2000)). But this court determined in
Mitchell that the PREP Act “does not completely preempt . . . state-law
negligence claims.” Mitchell, 2022 WL 714888, at *3. The PREP Act only
creates a cause of action for willful misconduct. Id. (citing 42 U.S.C.
§ 247d-6e(d)(1)). Additionally, the compensation fund created by the PREP
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Act, contrary to Southeast’s assertions, “is not completely preemptive under
this court’s precedents.” Id. The compensation fund provides no cause of
action to supersede state law claims. Id. This proffered basis for federal
jurisdiction is thus also unavailing.
Finally, Southeast avers that “[e]ven in the absence of complete
preemption, jurisdiction exists because a substantial federal question is
embedded.” Under the Grable doctrine, “a federal court [is] able to hear
claims recognized under state law that nonetheless turn on substantial
questions of federal law, and thus justify resort to the experience, solicitude,
and hope of uniformity that a federal forum offers on federal issues.” Grable,
545 U.S. at 312. That is to say, “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 (2013).
In addition to reiterating its arguments related to complete
preemption under the PREP Act, Southeast also argues that the PREP Act’s
“broad grant of immunity, its exclusive remedial scheme, and agency
guidance documents create a significant federal issue in the context of the
COVID-19 pandemic.” Mitchell, 2022 WL 714888, at *5. But, as this court
has noted, “the relevance of the Act’s immunity provisions is defensive, as
is its preemptive effect.” Id. This means that Southeast could potentially
assert a preemption defense, but that has nothing to do with whether “federal
issues are . . . raised [or] disputed” by the Plaintiffs. Id. Therefore, the
Grable doctrine does not apply in this context. Id.* * *
For the reasons stated herein, the district court’s remand orders are
AFFIRMED.
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