Cole v. St. Joseph of Harahan, L.L.C.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

ANSANTA COLE CIVIL ACTION

VERSUS NO. 22-1540

ST. JOSEPH OF HARAHAN, LLC, ET SECTION “R” (3)

AL.

ORDER AND REASONS

Before the Court is plaintiff Ansanta Cole’s1 motion to remand.2

Defendants St. Joseph of Harahan, LLC, Highpoint Healthcare, LLC, and

Plantation Management Company, LLC, oppose the motion.3 For the

following reasons, the Court grants plaintiff’s motion, and remands this case

to state court.

I. BACKGROUND

This case arises from the alleged understaffing and underfunding of St.

Joseph of Harahan, LLC, a skilled care nursing facility (the “facility”). Cole,

as a representative of her father, who was a resident at St. Joseph of Harahan,

1 Cole filed this case as a representative of her father, Osborne Picou, Jr.,

and on behalf of all others similarly situated. R. Doc. 1-1 ¶ 17.

2 R. Doc. 6.

3 R. Doc. 12.

filed suit in Louisiana state court against the owners, operators, and

managers of the facility, alleging violations of Louisiana Civil Code article

2315, and the Louisiana Nursing Home Residents’ Bill of Rights, La. R.S. §

40:2010.8.4 In her petition, Cole asserts that defendants failed to

“adequately fund and staff their facility so as to meet and provide for, respect

and adhere[] to the rights set forth in the Louisiana Residents’ Bill of Rights,”

and associated Louisiana state regulations, La. Admin. Code tit. 48, Pt. I, §

9823(A).5 Cole also asserts that defendants made “intentional/fraudulent

misrepresentations” to residents that the facility would comply with the

Louisiana Residents’ Bill of Rights, and that the residents, including Mr.

Picou, and others similarly situated, justifiably relied on those affirmative

representations.6 The petition also cites to federal regulations promulgated

by the Centers for Medicare and Medicaid Services (“CMS”) that require

skilled nursing facilities to adequately fund and staff their facilities in order

to receive federal funds.7

In paragraph 15 of the petition, plaintiff lays out her “methodology” for

determining defendants’ violations of state law.8 She contends that based on

4 R. Doc. 1-1 ¶ 5.

5 Id. ¶¶ 7, 9.

6 Id. ¶¶ 8, 13.

7 Id. ¶¶ 10-11.

8 Id. ¶ 15.

reports filed by the defendants to CMS, the facility had 147,039 “Nursing

Hours” for the year, which results in an average “per patient day” (“PPD”)

ratio of nursing hours to residents of 3.00.9 Plaintiff then calculated the

“collective resident acuity and care needs” based on data from “(1) facility

assessments of the staffing resources needed to provide care; (2) data from

aggregated Minimum Data Set (“MDS” resident assessments); (3) Resource

Utilization Group (“RUG”) scores; (4) Centers for Medicare & Medicaid

Services (“CMS”) Form 672 summary of resident needs and costs reports; (5)

resident ADL summaries; and (6) the new Patient-Driven Payment Model

(“PDPM”) scores.”10 Based on this data, Cole asserts that the facility was

required to provide a PPD ratio of nurses to residents of at least 4.46.11

Accordingly, she concludes that there was “a negative 33% variance between”

nurses actually provided by the facility, and the staffing that what was

required by the facility’s residents.12

Based on the above calculations, plaintiff represents that as a result of

the defendants’ fraudulent misrepresentations that it would comply with the

Louisiana Residents’ Bill of Rights, and the justifiable reliance on those

9 Id. ¶ 16.

10 Id. ¶ 15.

11 Id. ¶ 16.

12 Id.

misrepresentations by residents, the facility deprived residents of 33 percent

of the nursing services promised, and therefore class members are entitled

to recover pecuniary damages totaling “33% of the amount of . . . money paid

to the [defendants] in the class period for resident care.”13 Plaintiff

additionally seeks a statutory penalty of $100 per day, general and special

damages, attorneys’ fees, and injunctive relief under the Louisiana

Residents’ Bill of Rights.14

On May 27, 2022, defendants removed the case to this Court on the

basis of federal-question jurisdiction and supplemental jurisdiction.15 In

their notice of removal, defendants assert that federal-question jurisdiction

is proper because plaintiff “alleges violations of federal law, in particular, 42

C.F.R. § 483.1, et. seq.”16 Plaintiff then moved to remand, arguing that her

claims sound solely in state law.17 The Court considers the parties’

arguments below.

13 Id. ¶ 13.

14 Id. ¶¶ 31-38.

15 R. Doc. 1 ¶ 6.

16 Id. ¶ 7.

17 R. Doc. 6.

II. LEGAL STANDARD

A defendant may remove a civil action filed in state court if a federal

court would have original jurisdiction over the suit. 28 U.S.C. § 1441(a). The

removing party bears the burden of showing that federal jurisdiction exists.

See Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995) (“[I]t is

well settled that the removing party bears the burden of establishing the facts

necessary to show that federal jurisdiction exists.” (citing Gaitor v.

Peninsular & Occidental S.S. Co., 287 F.2d 252, 253-54 (5th Cir. 1961))).

“Any ambiguities are construed against removal because the removal statute

should be strictly construed in favor of remand.” Manguno v. Prudential

Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

Federal courts have jurisdiction over cases “arising under the

Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.

Whether a claim arises federal law must be determined by referring to the

“well-pleaded complaint.” Merrell Dow Pharm., Inc. v. Thompson, 478 U.S.

804, 8808 (1986) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation

Trust, 463 U.S. 1, 9-10 (1983)); Howery v. Allstate Ins. Co., 243 F.3d 912,

916 (5th Cir. 2001). This means that the federal question must appear on the

face of the complaint. Torres v. S. Peru Copper Corp., 113 F.3d 540, 542 (5th

Cir. 1997). Because defendants may remove a case to federal court only if the

plaintiffs could have brought the action in federal court at the outset, “the

question for removal jurisdiction must also be determined by reference to

the ‘well-pleaded complaint.’” Merrell Dow, 478 U.S. at 808 (citation

omitted).

III. DISCUSSION

A. Federal-Question Jurisdiction Under Grable

Because it is uncontested that plaintiff does not assert any federally

created causes of action,18 federal-question jurisdiction exists only if an

exception to the well-pleaded complaint rule applies. Relying on Grable &

Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S.

308 (2005), defendants argue that removal was proper because plaintiff’s

claims are “substantially based on federal law.”19 They base this conclusion

on the argument that “federal law provides the applicable standard or duty

and Plaintiff seeks an injunction to enforce the requirements of federal

18 R. Doc. 6-1 at 9 (“[P]laintiff’s Petition does not present any federally

created causes of action.”); R. Doc. 12 at 13 (noting that defendants do

not contest that it is a “settled proposition that the federal regulations

at issue do not provide a private right or cause of action”); see also

Stewart v. Berstein, 769 F.2d 1088, 1089 (5th Cir. 1985) (holding that

Medicaid regulations do not create a private cause of action).

19 R. Doc. 12 at 5.

law.”20 In Grable, the Internal Revenue Service (“IRS”) had seized plaintiff’s

property to satisfy a tax delinquency and sold it to defendant. Id. at 310.

Plaintiff filed a quiet title action in Michigan state court alleging that the

defendant’s title to the property was invalid, and defendant removed. Id. A

Michigan court rule required the plaintiff to specify the facts establishing the

superiority of its claims, and plaintiff “premised its superior title claim on a

failure by the IRS to give [plaintiff] adequate notice [of the sale to defendant],

as defined by federal law.” Id. at 314. The Supreme Court found that whether

the plaintiff “was given notice within the meaning of the federal statute” was

“an essential element of its quiet title claim, and the meaning of the federal

statute [was] actually in dispute.” Id. In finding federal-question

jurisdiction, the Court observed that the meaning of the federal tax provision

was an important issue of federal law that belonged in federal court. Id. This

was especially true in light of the Government’s interest in the “prompt and

certain collection of delinquent taxes,” and the “IRS’s need for certainty in

notice requirements to provide buyers of seized property assurance that the

IRS has taken all steps required to convey good title.” Id. (quoting United

States v. Rodgers, 461 U.S. 677, 709 (1983)).

20 Id.

Following its decision in Grable, the Supreme Court has stated that

only a “slim category” of cases will satisfy the Grable paradigm. Empire

Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 701 (2006). This is

because the mere presence of a federal issue “does not automatically confer

federal-question jurisdiction.” Merrell Dow, 478 U.S. at 813; see also Gully

v. First Nat’l Bank, 299 U.S. 109, 115 (1936) (“Not every question of federal

law emerging in a suit is proof that a federal law is the basis of the suit.”).

Under Grable, federal-question jurisdiction exists only when (1) resolving a

federal issue is necessary to the resolution of the state-law claim; (2) the

federal issue is actually disputed; (3) the federal issue is substantial; and (4)

federal jurisdiction will not disturb the balance of federal and state judicial

responsibilities.” Singh v. Duane Morris LLP, 538 F.3d 334, 338 (5th Cir.

2008) (citing Grable, 545 U.S. at 314).

The Court finds that defendants have not met Grable’s requirements

to establish jurisdiction based on a substantial federal question. Plaintiff’s

complaint explicitly seeks relief exclusively under state law provisions,

including the Louisiana Nursing Home Residents’ Bill of Rights, Louisiana

tort law, and the Louisiana Department of Health and Hospital (“DHH”)

regulations. Specifically, plaintiff requests relief under the Louisiana

Nursing Home Residents’ Bill of Rights, which guarantees residents the

“right to receive adequate and appropriate health care and protective and

support services, including services consistent with the resident care plan,

with established and recognized practice standards within the community,

and with rules promulgated by the Department of Health and Hospitals.” La.

R.S. § 40:2010.8(A)(7). In turn, the DHH regulations relied on by plaintiff

require nursing facilities to “provide a sufficient number of nursing service

personnel consisting of registered nurses, licensed practical nurses,

medication attendants certified, and certified nurse aides to provide nursing

care to all residents in accordance with resident care plans 24 hours per day.”

La. Admin. Code tit. 48, pt. I, § 9823(A). The DHH regulations also require

nursing facilities to provide “2.35 hours of care per patient per day . . . [a]t a

minimum.” La. Admin. Code tit. 48, pt. I, § 9823(A)(1) (emphasis added).

Although plaintiff explicitly seeks state law relief, defendants assert

that the Court will be forced to resolve an important and disputed federal

issue for two reasons. First, defendants argue that plaintiff’s reference to a

federal regulation, 42 C.F.R. § 483.35, is an “explicit allegation[] about

federal law,” and that plaintiff “notably [is] accusing the Defendants of . . .

violating federal law.”21 But this argument misreads plaintiff’s complaint,

which states that “[t]his action is brought pursuant to Louisiana Civil Code

21 R. Doc. 12 at 13-14.

article 2315 and the Louisiana Residents’ Bill of Rights found in La. R.S.

40:2010.8.”22 Plaintiff’s reference to a federal regulation is not the same

thing as bringing a cause of action and seeking relief under that regulation.

See Howery v. Allstate Ins. Co., 243 F.3d 912, 917-18 (5th Cir. 2001) (stating

that plaintiff’s “mention of federal law merely served to describe [the] types

of conduct that violated the [state law], not to allege a separate cause of

action under the [federal law]”).

At most, plaintiff’s citation to the federal regulation is as evidence of a

state law violation. Under well-established precedent, a plaintiff’s citation to

a federal regulation “merely as further evidence of the right to recover under

state law” is insufficient to establish federal-question jurisdiction. See Till v.

Unifirst Fed. Savings & Loan Ass’n, 653 F.2d 152, 155 n.2 (5th Cir. 1981); see

also Lowe v. Gen. Motors Corp., 624 F.2d 1373, 1379 (5th Cir. 1980) (holding

that when “the only relationship the alleged violation of the [federal

regulation] had to th[e] case was simply as evidence of [defendant’s]

negligence,” this was insufficient to establish federal-question jurisdiction).

More specifically, courts have found that a plaintiff’s citation to 42 C.F.R. §

483.1, et seq., as part of a state negligence claim is insufficient to establish

jurisdiction under 28 U.S.C. § 1331. See Johnson v. Ara Grp., Inc., No. 94-

22 R. Doc. 1-1 ¶ 5.

2673, 1994 WL 903005, at *2 (S.D. Tex. Nov. 2, 1994) (noting that a

complaint that “refers to the violation of federal regulations codified at 42

C.F.R. §§ 483.1[,] et seq.[,] as evidence that the defendants violated their

state law standard of conduct” does not raise a federal question); Campbell

ex rel. Robinson v. Cottage Grove Nursing Home, L.P., 350 F. Supp. 2d 735,

737-38 (S.D. Miss. 2004) (“It appears to the court, however, that with respect

to these particular allegations [under 42 C.F.R. § 383.30], plaintiff has not

undertaken to allege a claim arising under federal law, but rather has

identified defendants’ alleged violation of federal regulations as a basis for

her state law claims of negligence.”). The Court thus finds that plaintiff’s

citation to 42 C.F.R. § 483.35 is insufficient to establish federal-question

jurisdiction.

Second, defendants assert that plaintiff seeks to hold them to a “higher

standard” of a ratio of 4.46 hours of patient care that is based on a “disputed”

reading of the federal regulation.23 Defendants contend that because the

relevant state regulation provides that “[a]t a minimum, the nursing facility

shall provide 2.35 hours of care per patient per day,” La. Admin. Code tit. 48,

pt. I, § 9823(A), a standard that by plaintiff’s own admission is met by

defendants, plaintiff’s request for an injunction that is based on 4.46 hours

23 R. Doc. 12 at 9 & n.10.

of care relies on a higher standard.24 Defendants further represent that this

4.46 figure is calculated based on a “strained interpretation of the

requirements of the federal regulations, not state law.”25 Then, citing Board

of Commissioners of Southwest Louisiana Flood Protection Authority—East

v. Tennessee Gas Pipeline Co., L.L.C., 850 F.3d 714 (5th Cir. 2017),

defendants conclude that because plaintiff seeks relief that is not required

under state law, her petition necessarily raises federal issues.26 See id. at 723

(holding that because plaintiff’s claims “cannot be resolved without a

determination whether multiple federal statutes create a duty of care that

does not otherwise exist under state law,” plaintiff’s claims arise under

federal law).

But defendants second argument similarly fails to satisfy their burden

to establish federal jurisdiction. The Louisiana regulation at issue requires

nursing facilities to provide “sufficient nursing staff to provide nursing and

related services that meet the needs of each resident,” which “at a minimum”

requires the nursing facility to provide 2.35 hours.” La. Admin. Code tit. 48,

pt. I, § 9823(A). Just because plaintiff concedes that defendants have

provided 3.00 nursing hours, which is above the minimum requirement

24 Id. at 3.

25 Id. at 3.

26 Id. at 7-8.

established by the regulation, does not mean that defendants have complied

with the regulation. See Broden v. Riverlands Home Grp., L.L.C., No. 22-

1573, 2022 WL 2315019, at *4 (E.D. La. June 28, 2022) (“The fact that

Louisiana law specifies a ‘minimum’ required number of nursing hours does

not necessarily signify that all nursing hours above that minimum are

‘sufficient.’”); cf. MacRae v. HCR Manor Care Servs., N0. 14-715, 2014 WL

12588464, at *5 (C.D. Cal. Oct. 30, 2014) (“Nothing in the text of the

regulations indicates that if a nursing home fulfills the minimum level of 3.2

nursing hours, it necessarily has ‘an adequate number’ of personnel to carry

out the functions of the facility.”). If that were the case, the regulation’s

requirements that facilities have “sufficient nursing staff to provide nursing

and related services that meet the needs of each resident” and to “assure that

each resident receives treatments, medications, diets and other health

services as prescribed and planned, all hours of each day” would be “mere

surplusage.” See Mellor v. Par. of Jefferson, No. 21-858, 2022 WL 884001,

at *2 (La. Mar. 25, 2022) (“[C]ourts are bound, if possible, to give effect to

all parts of a law and to construe no sentence, clause or word as meaningless

and surplusage . . . .”); State v. Bell, 947 So. 2d 774, 778 (La. App. 4 Cir. 2006)

(“The statutory and jurisprudential rules for statutory construction and

interpretation apply equally well to . . . regulations.”).

Accordingly, unlike in Board of Commissioners, plaintiff is seeking a

form of relief that is available under Louisiana law and is based on a duty

established by Louisiana regulations. See Par. v. Atl. Richfield Co., No. 16-

16294, 2017 WL 2875723, at *4 (E.D. La. July 6, 2017) (concluding that after

further briefing following the Fifth Circuit’s decision in Board of

Commissioners, federal-question jurisdiction did not exist in the case

because plaintiff’s claims “can be determined without referring to any federal

standards”). Relatedly, because plaintiff does not rely on federal law for her

claim that defendants failed to provide sufficient hours of patient care,

defendants’ assertion that there is a “serious dispute as to whether the federal

regulations at issue create . . . a duty [of 4.46 hours],”27 also falls flat.

Specifically, plaintiff does not purport to rely on a federal regulation in

calculating her proposed ratio of 4.46, and instead explicitly identifies the

various sources of data she consulted in reaching that ratio, none of which

establishes duties under federal regulations.28 The Court thus finds that

there is no dispute here, and that plaintiff’s use of CMS data to calculate her

proposed nurse-to-resident ratio is insufficient to establish federal-question

jurisdiction.

27 R. Doc. 12 at 9 n.10.

28 R. Doc. 1-1 ¶ 15.

In sum, the Court finds that plaintiff’s right to relief does not

necessarily depend on the resolution of a substantial question of federal law.

Defendants have not met their burden of establishing that each of the four

Grable prongs justifies removal, given that no federal right is an essential

element of plaintiff’s claims, and thus no federal law must be interpreted, let

alone a federal law that presents a substantial and disputed issue. And

defendants’ assertion that the federal government has a compelling interest

in the resolution of this case given its “longstanding presence . . . in the realm

of nursing home staffing and reimbursement,” is belied by the merely

tangential relationship of this case to a federal regulation for which Congress

did not create a private cause of action. See Singh, 538 F.3d at 339 (noting

that the Supreme Court in Merrell Dow “reasoned that because Congress had

established no private remedy for violations of the statute, it had no

substantial interest in seeing the statute applied in state tort cases”). The

Court thus finds this case does not fit within the “slim category” of cases that

satisfy the Grable paradigm, and therefore the Court lacks jurisdiction over

plaintiff’s claims under 42 U.S.C. § 1331. Empire Healthchoice, 547 U.S. at

701.

B. Qui Tam Action

Defendants alternatively argue that plaintiff’s damages request based

on “the amount of money paid”29 to defendants is a “vague qui tam” claim

that is grounded in relief that is available only under federal law.30

Defendants specifically assert that plaintiff is bringing a qui tam claim based

on the following language in plaintiff’s petition: “[a]s a result of the

[defendants’] knowing, intentional/fraudulent misrepresentations,

justifiable relied upon [by] residents, . . . the [facility] deprived residents,

including Mr. Picou, and others similarly situated, of 33% of the nursing

services promised such that the resulting damages total 33% of the amount

of money paid to the [facility] in the class period for resident care.”31

Defendants conclude that because there is “no authority for recoupment

damages under Louisiana law,” plaintiff is seeking a federal-law remedy that

is sufficient to establish federal-question jurisdiction.32

The Court rejects defendants’ qui tam argument for two reasons. First,

the qui tam provisions of the False Claims Act “allow[] a private citizen with

special knowledge of fraud against the government to commence suit in the

29 Id. ¶ 13.

30 R. Doc. 12 at 12-13.

31 R. Doc. 1-1 ¶ 13.

32 R. Doc. 12 at 12.

name of the government.” United States v. U.S. ex rel. Thornton, 207 F.3d

769, 771 (5th Cir. 2000). Here, there is nothing in Cole’s petition to suggest

that she is bringing her allegations on behalf of the government. Second,

plaintiff’s cause of action for fraudulent misrepresentations is brought in tort

under Louisiana Civil Code art. 2315, which permits her to “recover . . . actual

pecuniary losses . . . [and] non-pecuniary losses.” Haggerty v. March, 480

So. 2d 1064, 1068 (La. App. 5 Cir. 1985). Accordingly, plaintiff’s request that

class members receive damages based on their alleged pecuniary losses is an

available form of recovery under Louisiana law, and does not invoke a federal

cause of action.

C. Request for Attorneys’ Fees

In addition to moving to remand her case, plaintiff also requests

attorneys’ fees and costs.33 Under 28 U.S.C. § 1447(c), a federal court that

orders remand of an action to state court “may require payment of just costs

and any actual expenses, including attorney fees, incurred as a result of the

removal.” “There is no automatic entitlement to an award of attorney’s fees”

if the Court determines that the removal was legally improper; instead, the

33 R. Doc. 6-1 at 13-14.

decision to award attorneys’ fees is left to the discretion of the trial court.

Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 292 (5th Cir. 2000).

In order to determine whether an award of attorneys’ fees is

appropriate, the Court considers “whether the defendant had objectively

reasonably grounds to believe the removal was legally proper.” Id. at 293.

Here, plaintiff asserts that because caselaw “overwhelmingly demonstrates

there is no federal cause of action for violations of these Medicare/Medicaid

regulations,” and because plaintiff’s petition does not raise a substantial

federal issue under Grable, there was “no objective support” for removal.34

Defendants had an arguable basis to remove this case under Grable, based

on the authorities cited in their opposition to plaintiff’s motion to remand.

While defendants’ grounds for removal were without merit, defendants had

objectively reasonable grounds to believe that removal was proper. Cf. id. at

293 (declining to award attorneys’ fees to non-removing party even though

removal was legally improper, because removing party “could conclude from

th[e] case law that its position was not an unreasonable one”).

34 Id. at 14.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS plaintiffs motion to

remand. This case is REMANDED to the Twenty-Fourth Judicial District

Court for the Parish of Jefferson. The Court further DENIES plaintiffs

request for attorneys’ fees and costs.

New Orleans, Louisiana, this 12th day of July, 2022.

_bernk Vorer.

SARAH S. VANCE

UNITED STATES DISTRICT JUDGE

19