Premier Medicine L L C v. U S Dept of Justice

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

SHREVEPORT DIVISION

PREMIER MEDICINE LLC, ET AL. CIVIL ACTION NO. 19-1352

VERSUS JUDGE ELIZABETH E. FOOTE

UNITED STATES DEPARTMENT OF MAGISTRATE JUDGE HAYES

JUSTICE, ET AL.

MEMORANDUM RULING

Before the Court is Defendants’ motion to dismiss and Plaintiffs’ motion to amend

their complaint. Record Documents 16 and 18. Plaintiffs opposed Defendants’ motion to

dismiss and Defendants replied. Record Documents 19 and 25. Defendants opposed

Plaintiffs’ motion to amend their complaint on the grounds that the amendment is futile.

Record Document 23. Both motions are ripe for review and, because they are interrelated,

the Court will consider them together. For the reasons stated herein, Plaintiffs’ motion to

amend [Record Document 18] is GRANTED and Defendants’ motion to dismiss [Record

Document 16] is also GRANTED.

I. Background

Plaintiffs, Premier Medicine, LLC (“Premier”) and Patrick H. Deere, M.D. (“Deere”),

filed suit in Louisiana state court against Defendants, Theresa A. Bass (“Bass”), Bradford

Byerly (“Byerly”), the United States Department of Justice, Drug Enforcement Agency

(“DEA”), and the Louisiana State Board of Medical Examiners (“Board”). Record Document

6-1 at 3. In their complaint, Plaintiffs state that Premier owns a medical facility called

Ketamine IV Infusion and Nutrient IV Drop Medical Clinic and that Deere is the clinic’s

lead physician.

They allege that prior to opening the clinic, they contacted the Board and were

informed that a licensed physician was not required to be on the premises while

administering Ketamine treatment to patients. at 4. Plaintiffs do not allege that they

were given written documentation of this advice. They do allege that they attempted to

confirm that the clinic was in compliance with all state and federal regulations for

administering Ketamine by contacting Bass, a Diversion Investigator for the DEA. After

several weeks, nobody at the DEA had responded to Plaintiffs’ inquiries, and they opened

the clinic believing they were in full compliance with the law. at 5.

Plaintiffs state that on August 19, 2019, Bass—acting at all times in the scope and

course of her employment at the DEA and under the direction of Byerly, a Special Agent

in Charge for the DEA—came to the clinic, presented Plaintiffs with a “Stop Operations

Order,” instructed them to immediately cease all infusions, and seized forty-eight vials of

unopened Ketamine and twenty-five vials of Midazolam. These medications belonged

to Deere and were “issued under his Physician Profile Card #FD8313645” (“Physician

Profile Card”) for use at the clinic. . Plaintiffs contend that Bass informed them that a

doctor was required to be on site during all Ketamine treatments and “pressured” Deere

to sign a “ of his Physician Profile

Card.” at 5-6.

Plaintiffs filed suit in state court alleging that Deere’s Physician Profile Card was

unjustly taken under false pretenses and without being provided any documentation of

their alleged violations or formal charges that they violated any rules, regulations, or

guidelines. at 6. They also allege that Defendants violated their due process rights

under Article I, Section 2 of the Louisiana Constitution. at 14. Plaintiffs seek monetary

damages for their lost revenue while the clinic is unable to administer treatment and an

injunction ordering that Deere’s Physician Profile Card be returned and that the clinic be

allowed to resume treatments. at 6-9.

The DEA, Bass, and Byerly removed the case to federal court. Record Document

1. Subsequent to this, the Board was dismissed from the suit, leaving only the DEA, Bass,

and Byerly as Defendants. Record Document 14. Defendants then filed the motion to

dismiss currently pending before the Court. Record Document 16. They argue that the

Court lacks subject matter jurisdiction over Plaintiffs’ claims for a variety of reasons,

including that this Court lacks jurisdiction because the state court lacked jurisdiction, that

the United States has not waived sovereign immunity for these claims, and that Plaintiffs

failed to exhaust administrative remedies. Record Document 16-1. They also contend that

in the event the Court finds that it has jurisdiction over some or all of Plaintiffs’ claims,

Plaintiffs have failed to state a due process claim because they did not allege any facts

to support their contention that Deere involuntarily signed a waiver of his due process

rights. Record Document 16-1 at 23-25.

In response, Plaintiffs sought leave to amend their complaint. Record Document

18. The proposed second amended complaint brings suit against Bass and Byerly in their

official and individual capacities, alleges that their suit is authorized by the Federal Tort

Claims Act, and alleges that Plaintiffs’ federal constitutional due process rights were

violated in addition to their state due process rights. Record Document 18-1. Plaintiffs

oppose Defendant’s motion to dismiss by arguing that their second amended complaint

now identifies a statute under which the United States has waived its sovereign immunity,

that administrative exhaustion is not necessary as they bring suit against Bass and Byerly

in their individual capacities, and that their due process claim cannot be dismissed at this

time because whether Deere voluntarily waived his rights “is a substantive and fact-

dependent question.” Record Document 19. Defendants oppose Plaintiffs’ motion to

amend on the ground that the amended complaint is futile because, even as amended,

it is subject to dismissal. Record Document 23.

II. Plaintiffs’ Motion to Amend

As set forth above, in response to Defendants’ motion to dismiss, Plaintiffs filed a

motion to amend their complaint. Record Document 18. Plaintiffs state that the motion

was filed “out of an abundance of caution” because, while Plaintiffs had not amended

their complaint in federal court, they had supplemented their complaint once in state

court prior to removal. at 2.

Federal Rule of Civil Procedure 81(c)(1) provides that the Federal Rules of Civil

Procedure “apply to a civil action after it is removed from a state court.” Under Rule 15,

a plaintiff is entitled to amend his or her complaint “once as a matter of course” under

several circumstances, including within “21 days after service of a motion under Rule

12(b).” Fed. R. Civ. P. 15(a)(1)(B). Thus, Plaintiffs are allowed to amend their complaint

once as a matter of course within twenty-one days of Defendant’s motion to dismiss being

filed. They did so, though by motion to ensure that they complied with procedural rules.

Because the Court finds that Plaintiffs had the right to amend their complaint without

leave of court, the motion to amend is GRANTED.

III. Defendants’ Motion to Dismiss

Generally, when a plaintiff files an amended complaint, any pending motions to

dismiss become moot. , No. EP-16-CV-41-DB, 2016

WL 8674378, at *1 (W.D. Tex. June 16, 2016) (collecting cases). In this case, however,

Defendants contend that Plaintiffs’ second amended complaint failed to remedy the

jurisdictional defects identified in their motion to dismiss. Because the subject matter

jurisdiction challenge persists and courts are obligated to address such issues, even

at times, the Court will consider this issue. , 243 F.3d

912, 919 (5th Cir. 2001) (“[F]deral courts must address jurisdictional questions whenever

they are raised and must consider jurisdiction if not raised by the parties.”).

Further, Defendants’ motion to dismiss challenged whether Plaintiffs’ complaint stated

sufficient facts to support a due process claim. Plaintiffs’ amended complaint alleges that

Bass and Byerly committed the due process violation in their individual and official

capacities, but adds no additional facts to support the claim that would affect the Court’s

review of whether Plaintiffs have alleged sufficient facts to state a due process claim.

Therefore, the Court will also address this issue.

A. Subject Matter Jurisdiction

Motions filed under Federal Rule of Civil Procedure 12(b)(1) allow a defendant to

challenge the subject matter jurisdiction of the court to hear a case.

, 281 F.3d 158, 161 (5th Cir. 2001). A district court may “find that subject matter

jurisdiction is lacking based on ‘(1) the complaint alone; (2) the complaint supplemented

by undisputed facts evidenced in the record; or (3) the complaint supplemented by

undisputed facts plus the court’s resolution of disputed facts.’” , 635

F.3d 757, 762 (5th Cir. 2011) (quoting , 281 F.3d at 161). If such jurisdiction is

lacking, the case is properly dismissed.

, 143 F.3d 1006, 1010 (5th Cir. 1998). As the party asserting jurisdiction, the

plaintiff bears the burden of proving that jurisdiction exists. , 281 F.3d at 161.

If a Rule 12(b)(1) motion is filed with other Rule 12 motions, a court should first consider

the Rule 12(b)(1) challenge before addressing any challenges based on the merits.

1. Derivative Jurisdiction

Defendants first argue that the Court lacks subject matter jurisdiction over

Plaintiffs’ claims because the state court lacked subject matter jurisdiction over the claims.

Record Document 16-1 at 13-14. Defendants base this argument on the doctrine of

derivative jurisdiction, which provides that when a state court lacked jurisdiction over a

claim that is removed to federal court, the federal court also lacks jurisdiction over that

claim, even if the federal court would have jurisdiction had the claim been filed originally

in federal court. at 14. Defendants concede that this doctrine does not apply to claims

removed pursuant to 28 U.S.C. § 14411 because § 1441(f) abrogated the doctrine’s

application to cases removed pursuant to § 1441. They argue that the doctrine is

1 28 U.S.C. § 1441 is the general removal statute which permits a defendant to

remove to federal court a civil action filed in state court which could have originally been

filed in federal court.

applicable to cases removed under 28 U.S.C. § 1442,2 however, and bars the Court’s

exercise of jurisdiction in this matter. 749 F.3d 347, 350

(5th Cir. 2014). Plaintiffs respond to this only by arguing that their second amended

complaint provides a sound jurisdictional basis for this Court to exercise jurisdiction.

Record Document 19 at 1-2.

The Court must begin by determining on what basis Defendants removed the

instant case because the derivative jurisdiction doctrine is not applicable to all bases of

removal. Defendants’ notice of removal begins by stating that the removal is based on

28 U.S.C. §§ 13463 and 1441(a). Record Document 1 at 1. They state that Plaintiffs have

sued the DEA and two DEA employees in their official capacity as agents of the DEA and

that Plaintiffs seek an injunction and monetary relief. at 2. Defendants assert that the

interests of the United States are implicated in the action and conclude by requesting

removal pursuant to 28 U.S.C. §§ 1441(a) and 1442. at 3. Because Defendants have

identified two sources of authority for removal—one which allows application of the

derivative jurisdiction doctrine and one which does not—Defendants’ derivative

jurisdiction argument fails. Even if the Court were to conclude that the derivative

jurisdiction doctrine bars its exercise of jurisdiction pursuant to § 1442, the Court would

not be prevented from exercising jurisdiction under § 1441. Thus, the Court must consider

2 28 U.S.C. § 1442 permits the United States, federal agencies, and federal officers

to remove to federal court claims originally filed in state court under the circumstances

prescribed in § 1442.

3 28 U.S.C. § 1346, in relevant part, confers jurisdiction upon federal district courts

to hear certain categories of claims for monetary damages against the United States.

whether it has jurisdiction in this matter without reference to whether the state court had

jurisdiction over Plaintiffs’ claims.

2. Sovereign Immunity

Defendants contend that the Court lacks jurisdiction in this matter because they

are entitled to sovereign immunity. The doctrine of sovereign immunity dictates that the

United States cannot be sued without the consent of Congress.

, 556 F.3d 307, 316 (5th Cir. 2009). Sovereign

immunity is jurisdictional, and a court lacks jurisdiction to hear a claim against the United

States unless the plaintiff identifies a statute in which Congress has unequivocally

expressed a waiver of sovereign immunity in statutory text. , 518 U.S. 187,

192 (1996); , 510 U.S. 471, 475 (1994). This immunity extends to federal

agencies and to federal government agents sued in their official capacities.

, 137 S. Ct. 1285, 1290 (2017).

As amended, Plaintiffs’ complaint states that their suit is against Bass and Byerly

in both their official and individual capacities. Record Document 18-1 at 2-3. Plaintiffs

allege that Bass and Byerly “negligently and intentionally deprived” them of their due

process rights under the Fifth Amendment. at ¶ 17a. Plaintiffs contend that the DEA

negligently hired, trained, and supervised Bass and Byerly. at ¶ 17b. They identify the

Federal Tort Claims Act (“FTCA”) as the statute in which the United States waived

sovereign immunity and consented to suit “on all alleged negligent torts.” at ¶ 17c.

Plaintiffs also allege that Bass, Byerly, and the DEA “intentionally and negligently deprived

Plaintiffs of due process owed under Article I, Section 2 of the Constitution of Louisiana.”

at ¶ 17d. They state that this is “remediable under state law; and that pendent

jurisdiction is possessed by this Court.” In their opposition to Defendants’ motion to

dismiss, Plaintiffs cite to the aforementioned paragraphs regarding the FTCA and the

Louisiana state constitution and assert that their complaint “as supplemented now

unmistakably alleges statutes under which the United States has consented to suit.”

Record Document 19 at 2, n.4.

Defendants contend that the FTCA does not confer subject matter jurisdiction on

the Court because the FTCA requires compliance with statutory prerequisites to suit that

Plaintiffs do not allege they have completed. Record Document 25 at 3. Additionally, the

FTCA does not allow suit against the DEA or its officers in their official capacity for a

constitutional tort. They posit that Plaintiffs may have intended to assert

403 U.S. 388 (1971), as a source

of jurisdiction, but argue that the Court lacks jurisdiction under to hear Plaintiffs’

federal constitutional tort claims against the Bass and Byerly in their official capacities

because a action may only be maintained against a federal officer in his or her

individual capacity. Record Document 23 at 4-5.

a. Federal Tort Claims Act

28 U.S.C. § 1346 gives federal district courts:

[E]xclusive jurisdiction of civil actions on claims against the United States,

for money damages . . . for injury or loss of property, or personal injury or

death caused by the negligent or wrongful act or omission of any employee

of the Government while acting within the scope of his office or

employment, under circumstances where the United States, if a private

person, would be liable to the claimant in accordance with the law of the

place where the act or omission occurred.

28 U.S.C. § 1346(b)(1). Importantly, this is “subject to the provisions of chapter 171 of”

Title 28. Claims brought under Chapter 171 must be presented to the appropriate

federal agency before initiating suit. 28 U.S.C. § 2675(a). The presentment “requirement

is a prerequisite to suit under the FTCA” and a court lacks jurisdiction over a claim that

has not been administratively exhausted. , 650 F.3d

1026, 1030 (5th Cir. 2011); , 553 F.

App’x 386, 388 (5th Cir. 2014). Additionally, an FTCA claim “may be brought only against

the ‘United States,’ and not the agencies or employees of the United States.”

, 409 F. App’x 782, 783 (5th Cir. 2011) (citing

, 860 F.2d 181, 183 (5th Cir. 1988)). The FTCA does not waive sovereign immunity

for constitutional torts. , 613 F.3d 559, 569 n.7 (5th Cir. 2010)

(“[A] constitutional violation does not provide a proper predicate for an FTCA claim.”).

Here, Plaintiffs’ attempt at using the FTCA as the jurisdictional basis for their claims

fails for several reasons. First, Plaintiffs have not named the United States as a defendant.

Second, the complaint fails to plead that they presented their claims to any federal agency

before filing suit and, thus, they have not satisfied the presentment prerequisite

necessary for the Court to exercise subject matter jurisdiction over any claim filed under

the FTCA. Third, even if Plaintiffs had properly exhausted their claims and named the

correct defendant, the FTCA does not waive sovereign immunity for constitutional torts,

and so it still would not provide a jurisdictional basis for Plaintiffs’ claim regarding the

alleged violation of their due process rights. Finally, the statutes Plaintiffs cite only waive

sovereign immunity for civil claims for money damages, so Plaintiffs cannot rely on the

FTCA as the source authorizing their suit for equitable relief. 28 U.S.C. § 1346(b). Hence,

the FTCA does not waive sovereign immunity and provide a jurisdictional basis for any

claims against any Defendant in any capacity in this suit, so Plaintiffs’ FTCA claims are

DISMISSED without prejudice for lack of subject matter jurisdiction.

b. Claim

Plaintiffs allege that Bass and Byerly, while acting in the course and scope of their

employment with the DEA, “negligently and intentionally deprived Plaintiffs of due process

owed under the Fifth Amendment.” Record Document 18-1 at ¶ 17a. Because Plaintiffs

allege a constitutional tort, the Court will consider whether it has jurisdiction under

.

In and its progeny, “the Supreme Court recognized an implied cause of

action for damages against federal officers for violating” the Fourth, Fifth, and Eighth

amendments. , 950 F.3d 299, 305 (5th Cir. 2020). does

not authorize a court to hear claims against a federal agency or federal agents in their

official capacity. , 121 F. App’x 549, 551 (5th Cir. 2004)

(citing , 534 U.S. 61, 71-72 (2001); , 502 U.S.

21, 25 (1991)). Consequently, does not waive sovereign immunity and give the

Court jurisdiction over Plaintiffs’ claim that the DEA, Bass in her official capacity, or Byerly

in his official capacity violated their Fifth Amendment rights and these claims are

DISMISSED without prejudice. Sovereign immunity does not preclude the Court from

exercising jurisdiction over a claim for money damages against Bass and Byerly in their

individual capacities for violation of a constitutional right pursuant to however.

Thus, the Court will first determine whether it has jurisdiction over the remainder of

Plaintiffs’ claims. Then, the Court will address whether Plaintiffs have successfully stated

a claim.

c. Louisiana Constitution

Finally, Plaintiffs also allege that “all defendants” intentionally and negligently

violated their due process rights under Article 1, Section 2 of the Louisiana Constitution.

Record Document 18-1 at ¶ 17d. They state that the “injury is remediable under state

law” and assert that the Court has pendent jurisdiction over the claim. Plaintiffs do

not identify a statute in which the United States waived sovereign immunity and

consented to suit for violations of a state constitutional right. For the reasons previously

explained, the FTCA does not permit this claim. Thus, Plaintiffs’ Louisiana constitutional

due process claims against the DEA, Bass in her official capacity, and Byerly in his official

capacity are DISMISSED without prejudice for lack of jurisdiction.

Plaintiffs also failed to identify a statute which authorizes filing suit against a

federal official acting in his or her individual capacity for violation of a Louisiana

constitutional right. As previously explained, and its progeny only create a cause

of action for violation of certain federal constitutional rights, and thus does not provide

the Court with a jurisdictional basis to consider an alleged state constitutional violation.

Therefore, Plaintiffs’ Louisiana constitutional due process claims against Bass and Bylerly

in their individual capacities are DISMISSED without prejudice for lack of subject

matter jurisdiction.

B. Failure to State a Claim Under

Because the Court has concluded that it has jurisdiction over the Fifth Amendment

due process claims against Bass and Byerly in their individual capacities, it will consider

whether Plaintiffs have alleged a due process violation that could serve as the foundation

for a action. , 137 S. Ct. 2003, 2007 (2017) (noting that in

many cases it is appropriate to address whether a plaintiff has alleged a constitutional

violation before deciding whether a remedy exists for the alleged constitutional

violation).

1. Rule 12(b)(6) Standard

In order to survive a motion to dismiss brought under Rule 12(b)(6), a plaintiff

must “state a claim to relief that is plausible on its face.” , 556 U.S. 662,

678 (2009) (quoting , 550 U.S. 544, 570 (2007)). “A claim

has facial plausibility when the plaintiff pleads factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.”

“Threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice.” (quoting , 550 U.S. at 555). A court

must accept as true all of the factual allegations in the complaint in determining whether

plaintiff has stated a plausible claim. , 550 U.S. at 555;

, 495 F.3d 191, 205 (5th Cir. 2007). However, a court is “not bound to

accept as true a legal conclusion couched as a factual allegation.” , 478

U.S. 265, 286 (1986). If a complaint cannot meet this standard, it may be dismissed for

failure to state a claim upon which relief can be granted. , 556 U.S. at 678–79. A

court does not evaluate a plaintiff’s likelihood for success, but instead determines whether

a plaintiff has pleaded a legally cognizable claim

, 355 F.3d 370, 376 (5th Cir. 2004). A dismissal under 12(b)(6) ends the case “at

the point of minimum expenditure of time and money by the parties and the court.”

, 550 U.S. at 558. A court may consider “the complaint, its proper attachments,

‘documents incorporated into the complaint by reference, and matters of which a court

may take judicial notice.’” , 635 F.3d at 763 (quoting

, 540 F.3d 333, 338 (5th Cir. 2008)).

2. Plaintiffs’ Due Process Claim

As amended, Plaintiffs’ complaint alleges that Bass, acting under the direction of

Byerly, arrived at the clinic and “presented a ‘Stop Operations’ Order to plaintiff’s

employees and instructed them to cease all infusion treatments immediately.” Record

Document 6-1 at 5. They state that Bass “pressured” Deere to “sign a

of his Physician Profile Card.” at 6. Plaintiffs conclude

that these acts demonstrate that Bass and Byerly “negligently and intentionally deprived

Plaintiffs of due process owed under the Fifth Amendment” of the United States

constitution. Record Document 18-1 at ¶ 17a.

Defendants assert that the above allegations do not successfully state a due

process claim. First, they dispute whether Deere has a constitutionally protected property

interest in the Physician Profile Card.4 Record Document 16-1 at 23. Second, they contend

that even if he does have a property interest, Deere voluntarily waived his due process

rights by signing the Surrender for Cause of DEA Certificate of Registration form, and this

waiver is valid as long as the waiver is voluntary and the individual is aware of the

significance of the waiver. at 23- 24. Defendants argue that Deere does not claim that

he was unaware that signing the form constituted a waiver of his rights and that he has

failed to present any facts to support his claim that he was “pressured” into signing the

form such that the waiver was involuntary. at 24. Plaintiffs respond that whether his

wavier was informed and voluntary “is a substantive and fact-dependent question that

cannot be resolved in a motion to dismiss.” Record Document 19 at 2.

The due process clause of the Fifth Amendment states in relevant part that no

person shall be “deprived of life, liberty, or property, without due process of law.” U.S.

Const. amend. V. This includes the right to notice and an opportunity to be heard “at a

meaningful time and in a meaningful manner.” , 407 U.S. 67, 80 (1972)

(quoting , 380 U.S. 545, 552 (1965)). These rights can be waived,

however, as long as the waiver is made knowingly and voluntarily. ,

555 F.3d 459, 462 (5th Cir. 2009) (citing , 993 F.2d 75, 79 (5th Cir.

1993)).

4 Plaintiffs’ complaint does not specify which Plaintiff is bringing the due process

claim. Defendants contend that Deere is the only Plaintiff who can properly assert this

claim because “to the extent that there is any legally protected property interest in a DEA

registration, it would belong to the registrant, Dr. Deere, not Premier Medicine.” Record

Document 16-1 at 14-15. Because the Court ultimately concludes that Plaintiffs have

failed to state a due process claim, it does not address whether Premier could properly

bring a due process claim in this case.

In this case, assuming arguendo that Deere has a constitutionally protected

property interest in his Physician Profile Card, Plaintiffs have still failed to state a claim

because their complaint does not allege that Deere was unaware that he was waiving his

rights to contest the revocation of his Physician Profile Card by signing the Surrender for

Cause of DEA Certificate of Registration form and the complaint states no facts to support

an allegation that he involuntarily signed the form.5 Plaintiffs merely state that Deere was

“pressured” into signing the form. Despite their attempt to amend their complaint, they

still provide no details regarding the nature or extent of the alleged pressure. This

conclusory statement is insufficient to support a claim that Deere’s waiver of due process

was involuntary, and Plaintiffs’ due process claim is DISMISSED with prejudice.

IV. Conclusion

For the aforementioned reasons, Plaintiffs’ motion to amend [Record Document

18] is GRANTED. Defendants’ motion to dismiss [Record Document 16] is also

GRANTED. Even as amended, Plaintiffs’ claims against the DEA, Bass in her official

capacity and Byerly in his official capacity are DISMISSED without prejudice for lack

of subject matter jurisdiction. Plaintiffs’ Louisiana constitutional due process claims are

DISMISSED without prejudice for lack of subject matter jurisdiction. To the extent

that Plaintiffs intended to bring claims against Bass and Byerly in their individual capacities

5 Plaintiffs’ complaint does allege that the Physician Profile Card was taken under

“false pretenses.” However, this allegation relates to Plaintiffs’ contention that they were

operating in full compliance with all laws and regulations, not to a claim that Deere was

somehow uniformed or misinformed about the consequences of signing the Surrender for

Cause of DEA Certificate of Registration form. Record Document 6-1 at 6, ¶ 12.

pursuant to Bivens, these are DISMISSED with prejudice for failure to state a claim.

A judgment consistent with this ruling will issue herewith.

THUS DONE AND SIGNED this 20th day of January, 2021.

ELIZABGPTE. FOOZE OX 7A

UNITED{S DISTRICT JUBE

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