Elliot v. Care Inn of Edna LLC

United States District Court

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

JAMES ELLIOT, individually and as a §

representative of the Estate of Christine §

Elliot §

§ CIVIL ACTION NO. 3:20-CV-3185-S

V. §

§

CARE INN OF EDNA LLC, et al. §

MEMORANDUM OPINION AND ORDER

This Order addresses Plaintiff’s Motion to Remand (“Motion to Remand”) [ECF No. 12].

For the following reasons, the Court GRANTS Plaintiffs Motion to Remand.

I. BACKGROUND

This case concerns the death of Christine Elliot, who died after contracting COVID-19

while residing in a rehabilitation care facility. See Pl.’s Original Pet. and Req. for Disclosure

(“Original Petition”) [ECF No. 1] Ex. 2 at J] 30-31. At the time of her death, Mrs. Elliot was

under the care of Defendants Care Inn of Edna LLC d/b/a Edgewood Rehabilitation & Care Center

and THI of Texas LLC (together, “Edgewood”), receiving rehabilitative care for a pressure ulcer

she had developed while under the care of Town East Healthcare Inc., Keystone Care LLC, and

Ensign Services Inc. (together, “Willowbend”). fd. Jf 13, 21, 23, 30-31. Plaintiff James Elliot,

individually and as a representative of the Estate of Christine Elliot, (“Plaintiff”) filed suit in the

298th District Court, Dallas County, Texas, asserting claims for medical negligence, corporate

negligence, and gross negligence against both Edgewood and Willowbend. See id. {J 33-70.

Defendant Care Inn of Edna LLC (“Care Inn”) filed a Notice of Removal [ECF No. 1],

asserting three independent grounds for removal. See Notice of Removal; Defendant’s Opposition

to Plaintiff's Motion to Remand (“Opp.”) [ECF No. 19]. Willowbend consented to removal,

noting it “agrees with the notice of removal.” See ECF No. 5 at 1.

First, Defendants assert that this case is removable under 28 U.S.C. § 1441(a) because it

“arises under” federal law within the meaning of 28 U.S.C. § 1331. Notice of Removal ff] 11-23.

Specifically, Defendants argue that Plaintiff's claims are “completely preempted” by the Public

Readiness and Emergency Preparedness (“PREP”) Act, 42 U.S.C. § 247d-6d, even though the

Original Petition asserts only state law claims. Jd. ff] 18-23.

Second, Defendants contend this case is removable under 28 U.S.C. § 1442(a)(1) because

Defendants are federal officers or the equivalent. Jd. 24-39. Defendants claim Care Inn “was

acting hand-in-hand with, and at the specific instruction and oversight of the federal government—

specifically the Department of Health and Human Services, the Centers for Medicare and Medicaid

Services, and the Centers for Disease Control—in responding to the federal government’s

interventions, efforts, and mandates, to address the on-going national state of emergency and

achieve a task that furthered the federal government’s end-goal in response to the [COVID-19]

pandemic.” /d. at {35. This, according to Defendants, meant they were “acting specifically at the

direction and under the supervision of the United State[s] government with respect to various

countermeasures implemented to prevent and treat the COVID-19 virus.” fd.

Third, Defendants argue that federal question jurisdiction lies over this case because,

although Plaintiff asserts state law claims, they “implicate significant federal issues” under the

Grable doctrine. Opp. J] 10-20; see also Grable & Sons Metal Prods., Inc. v. Darue Eng’g &

Mfz., 545 U.S. 308, 314 (2005). Specifically, Defendants argue that the question of whether the

PREP Act preempts Plaintiff's state law claims and/or provides Defendants immunity in this case

is a substantial issue of federal law that should be decided by a federal court. Opp. ff 13-16.

Plaintiff timely moved to remand. See Motion to Remand [ECF No. 12].

Il. THE “PREP” ACT

The PREP Act authorizes the Secretary of the Department of Health and Human Services

(the “Secretary”) to issue a declaration providing immunity for ail claims for loss directly caused

by the administration or use of “covered countermeasures.” 42 U.S.C. § 247d-6d(a)(1), In March

2020, the Secretary issued a PREP Act declaration regarding the COVID-19 pandemic. 85 Fed.

Reg. 15, 198 (Mar. 17, 2020) {the “March 2020 Declaration”), The March 2020 Declaration

designates as a “covered countermeasure” “any antiviral, any other drug, any biologic, any

diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate

COVID-19....” Jd at 202. The March 2020 Declaration also provides that “administration” of

covered countermeasures “means physical provision of the countermeasures to recipients, or

activities and decisions directly relating to public and private delivery, distribution and dispensing

of the countermeasures to recipients, management and operation of countermeasure programs, or

management and operation of locations for purpose of distributing and dispensing

countermeasures.” Id.

The Secretary’s declaration has been amended several times as the response to the COVID-

19 pandemic evolved, In December 2020, for example, the Secretary amended the declaration “to

make explicit that there can be situations where not administering a covered countermeasure to a

particular individual can fall within the PREP Act” and the liability protections it affords. 85 Fed.

Reg. 79, 194 (Dec. 3, 2020) (the “December 2020 Amendment”). Accordingly, “[w]here there are

limited Covered Countermeasures, not administering a Covered Countermeasure to one individual

in order to administer it to another individual can constitute ‘relating to . . . the administration

to...an individual’ under [the PREP Act].” Jd. at 197. In other words, “[p]rioritization or

purposeful allocation of a Covered Countermeasure, particularly if done in accordance with a

public health authority’s directive, can fall within the PREP Act” and its liability protections. /d.

;

When the PREP Act applies, it provides broad immunity “from suit and liability under

Federal and State law.” 42 U.S.C. § 247d-6d(a)(1). Claims for covered injuries “directly caused

by the administration or use of a covered countermeasure” must be pursued through a “Covered

Countermeasure Process Fund” (the “Process Fund”). Jd. § 247d-6e. Suits alleging willful

misconduct may only be brought in the United States District Court for the District of Columbia

after exhausting administrative remedies. Id. § 247d-6d(e).

Hi. LEGAL STANDARD

Any civil action brought in a state court over which the federal courts have subject matter

jurisdiction may be removed to the district court embracing the place where such action is pending.

28 U.S.C. § 1441(a). Federal courts are courts of limited jurisdiction, possessing only power

authorized by the Constitution or statute. Gunn v. Minton, 568 U.S. 251, 256 (2013) (citation

omitted). A federal court must presume that a cause of action lies outside its limited jurisdiction,

and the party asserting jurisdiction bears the burden of establishing the contrary. Energy Mgmt.

Servs., LLC y. City of Alexandria, 739 F.3d 255, 258-59 (Sth Cir. 2014) (citation omitted); see also

Scarlott v. Nissan N. Am. Inc., 771 F.3d 883, 887 (Sth Cir. 2014) (the removing party has the

burden to show “that federal jurisdiction exists and that removal was proper”). Because removal

raises significant federalism concerns, removal is strictly construed and any doubt about the

propriety of removal jurisdiction is resolved in favor of remand. See Gasch v. Hartford Acc. &

Indem. Co., 491 F.3d 278, 281-82 (Sth Cir. 2007) (citations omitted); see also Mumfrey v. CVS

Pharmacy, Inc., 719 F.3d 392, 397 (Sth Cir, 2013) (“Any ambiguities are construed against

removal and in favor of remand to state court.”).

The two principal bases upon which a district court may exercise removal jurisdiction are:

(1) the existence of a federal question, see 28 U.S.C. § 1331; and (2) complete diversity of

citizenship among the parties, see 28 U.S.C. § 1332, Removal based on federal question

jurisdiction is reviewed under the well-pleaded complaint rule. Elam v. Kan. City S. Ry., 635 F.3d

796, 803 (Sth Cir. 2011). The “well-pleaded complaint rule” provides that federal jurisdiction

exists “only if a federal question appears on the face of the plaintiffs well-pleaded complaint.”

Bernhard v. Whitney Nat’l Bank, 523 F.3d 546, 551 (Sth Cir. 2008). Thus, as “master of the

complaint the plaintiff may choose to have the cause heard in state court by eschewing claims

based on federal law.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 399 (1987) (citations and

internal quotations omitted).

IV. ANALYSIS

A. Complete Preemption

“fC]omplete preemption is an exception to the well-pleaded complaint rule.” Rio Grande

Underwriters, Inc. v. Pitts Farms, Inc., 276 F.3d 683, 685 (5th Cir. 2001) (citing Hart v. Bayer

Corp., 199 F.3d 239, 244 (Sth Cir, 2000)). The “complete preemption doctrine” provides that the

preemptive force of a federal statute can be “so extraordinary” that it “converts an ordinary state

common law complaint into one stating a federal claim for purposes of the well-pleaded complaint

rule.” Caterpillar, 482 U.S. at 393. “If a federal cause of action completely pre-empts a state

cause of action any complaint that comes within the scope of the federal cause of action necessarily

‘arises under’ federal law.” Jd. (quoting Franchise Tax Bd. of Cal. v. Construction Laborers

Vacation Trust for S. Cal., 463 U.S. 1, 24 (1983)); see also Ben. Nat’l Bank v. Anderson, 539 U.S.

1, 8 (2003). Thus, “[i]fa federal law is found to completely preempt 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, 276 F.3d at 685 (quoting Hart, 199 F.3d at 244).

To establish complete preemption in the Fifth Circuit, “the defendant must show that: (1)

the statute contains a civil enforcement provision that creates a cause of action that both replaces

and protects the analogous area of state law; (2) there is a specific jurisdictional grant to the federal

courts for enforcement of the right; and (3) there is a clear Congressional intent that claims brought

under the federal law be removable.” Gutierrez v. Flores, 543 F.3d 248, 252 (Sth Cir. 2008)

(quoting Johnson v. Baylor Univ., 214 F.3d 630, 632 (Sth Cir, 2000)).

The Supreme Court has recognized only three statutory provisions as having such

extraordinary preemptive force: “(1) Section 301 of the Labor-Management Relations Act, 29

U.S.C. § 185; (2) Section 502(a) of the Employee Retirement Income Security Act, 29 U.S.C.

§ 1132(a); and (3) Sections 85 and 86 of the National Bank Act, 12 U.S.C. §§ 85-86.” Schuster v.

Percheron Healthcare Inc., 493 F. Supp. 3d 533, 536 (N.D. Tex. 2021) (citing Sullivan v. Am.

Airlines, Inc., 424 F.3d 267, 272 (2d Cir. 2005)). “As a general matter, complete preemption is

less common and more extraordinary than defensive or ordinary preemption.” Elam, 635 F.3d at

803.

The PREP Act does not completely preempt state law negligence claims for COVID-19-

related injuries, as it fails to satisfy all three prongs of the Fifth Circuit's test for complete

preemption. As such, Plaintiff's negligence claims asserted in state court are not completely

preempted by the PREP Act, and removal on that basis was improper.

Defendants cannot point to any civil enforcement provision within the PREP Act that

“creates a cause of action that both replaces and protects the analogous area of state law.” Johnson,

214 F.3d at 632. The PREP Act is, at its core, an immunity statute. It does not create a federal

cause of action or any rights, duties, or obligations. Rather, it provides immunity for injuries

“caused by, arising out of, relating to, or resulting from the administration of a covered

countermeasure to an individual... .” 42 U.S.C. § 247d-6d(a). Accordingly, Defendants cannot

satisfy the first element of the three-part complete preemption test and have failed to establish that

this case is removable on the basis that the PREP Act completely preempts Plaintiff's claims.

Nor does the PREP Act provide “a specific jurisdictional grant to the federal courts for

enforcement of fany] right.” Gutierrez, 543 F.3d at 252. The civil enforcement provision in the

PREP Act does not provide that a// claims resulting from or relating to the COVID-19 pandemic

must be brought exclusively to a federal court or to the Process Fund; only claims caused by the

administration or use of a “covered countermeasure.” The PREP Act confers jurisdiction over

these claims not to the federal courts but to the Secretary, who has the sole authority to administer

the Process Fund. See 42 U.S.C. §§ 247d-6e(a), 247d-6e(b). Even for claims alleging “willful

misconduct,” which may be brought exclusively in the United States District Court for the District

of Columbia, the plaintiff must first exhaust administrative remedies, and may elect to accept

compensation from the Process Fund instead of filing suit in federal court. 42 U.S.C. §§ 247d-

6e(d)(1), 247d-6e(d)(5); see also 42 U.S.C. §§ 247d-6d(d)(1), 247d-6d(e)(1). Thus, except for one

narrow exception, PREP Act claims cannot be brought in federal court. Defendants therefore

cannot satisfy the second clement of the three-part complete preemption test.

Finally, there is little evidence that “Congress intended the federal cause of action to be

exclusive.” Bernhard, 523 F.3d at 553. As explained above, the PREP Act does not create a

federal cause of action, nor does it provide that all claims resulting from or relating to the COVID-

19 pandemic are to be brought exclusively to a federal court or to the Process Fund. Instead, the

PREP Act provides for immunity against certain claims, the applicability of which can be readily

be assessed by state courts according to the facts of a particular case.

Defendants point to a January 8, 2021 Advisory Opinion the Health and Human Services’

Office of the General Counsel, which opines that the PREP Act “is a ‘complete preemption’

statute” because it establishes “a federal cause of action, administrative or judicial, as the only

viable claim.” Advisory Opinion 21-01 (the “Advisory Opinion”) [ECF No. 17] Ex. E at 2.

,

The Advisory Opinion does not change the analysis above. It explicitly acknowledges that

it “does not have the force or effect of law.” Advisory Opinion 5. The Advisory Opinion was not

formally “promulgated in the exercise of [the Secretary or HHS’s Office of the General Counsel’s]

authority;” therefore it is not entitled to Chevron deference. Christensen v. Harris County, 529

U.S. 576, 587 (2000) (“{Ajn interpretation contained in an opinion letter, not one arrived at after,

for example, a formal adjudication or notice-and-comment rulemaking . . . lack[s] the force of law

[and] do[es] not warrant Chevron-style deference.”); see also United States v. Mead Corp., 533

U.S. 218, 226-27 (2001) (no Chevron deference due where an agency’s rule or opinion was not

“promulgated in the exercise of” an agency’s delegated congressional authority); see generally

Chevron U.S.A,, Inc. v. Nat. Res. Def: Council, Inc., 467 U.S. 837 (1984) (affording deference to

reasonable agency interpretation of ambiguous statutory provisions).

Moreover, the Administrative Opinion’s interpretation lacks the “power to

persuade.” Christensen, 529 U.S, at 587 (“interpretations contained in formats such as opinion

letters are ‘entitled to respect’ under our decision in Skidmore v. Swift & Co., 323 U.S. 134, 140

(1944), but only to the extent that those interpretations have the ‘power to persuade.’”). The

Advisory Opinion cites no cases for its proposition that an exclusive federal administrative remedy

is sufficient for complete preemption. See Advisory Opinion at 2.

The Court notes that it is not alone in its determination that the PREP Act does not

completely preempt state law and joins the large and growing number of district courts in Texas

and across the country that have held likewise.!

! See, e.g., Schuster, 493 F. Supp. 3d at 536-38; Brannon v. J. Ori, LLC, 2:21-CV-00058-IRG-

RSP, 2021 WL 2339196, at *2 (E.D. Tex. June 8, 2021); Gibbs on behalf of Estate of Velasquez

vy, Se. SNF LLC, SA-20-CV-01333-JKP-RBF, 2021 WL 1186626, at *3 (W.D. Tex. Mar. 30,

2021); Dupervil v. All. Health Operations, LLC, No. 20-cv-4042-PKC-PK, 2021 WL 355137, at

*12 (E.D. N.Y. Feb. 2, 2021); Anson v. HCP Prairie Vill. KS OpCo LLC, No. 20-CV-2346 (DDC)

B. Federal Officer Removal

Under the federal officer removal statute, 28 U.S.C. § 1442(a)(1), “[flederal officers may

remove cases to federal court that ordinary federal question removal would not reach.” Latiolais

v. Huntington Ingalls, Inc., 951 F.3d 286, 290 (Sth Cir. 2020). To remove a state action to federal

court under § 1442(a)(1), “a defendant must 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 [related to a federal directive].” Jd. at 296; Si, Charles

Surgical Hosp., L..C. v. La. Health Serv. & Indem. Co., (St. Charles If), 990 F.3d 447, 452 (Sth

Cir, 2021) (citing Latiolais, 951 F.3d at 291, 296).

Even “a highly regulated firm cannot find a statutory basis for removal in the fact of federal

regulation alone.” Watson v. Philip Morris Cos., 551 U.S. 142, 153 (2007). Rather, a “special

relationship” must exist between the federal and private entities. Jd. at 157, “This relationship

typically involves subjection, guidance, or control, [and] must involve an effort to assist, or to help

carry out, the duties or tasks of the federal superior.” St Charles Surgical Hosp., L.L.C. v. La.

Health Serv. & Indem. Co., (St. Charles 1), 935 F.3d 352, 356 (Sth Cir. 2019) (citations and internal

quotations omitted). “A private firm’s compliance (or noncompliance) with federal laws, rules,

and regulations does not by itself fall within the scope of the statutory phrase ‘acting under’ a

federal ‘official,’ even if the regulation is highly detailed and the private firm’s activities are highly

supervised and monitored.” Watson, 551 U.S. at 153.

(IPO), 2021 WL 308156, at *9-11 (D. Kan. Jan. 29, 2021); Estate of Smith ex rel. Smith v. The

Bristol at Tampa Bay Rehab, & Nursing Ctr., No. 20-CV-2798 (T), 2021 WL 100376, at *1-2

(M.D. Fla. Jan. 12, 2021); Sherod v. Comprehensive Healthcare Mgmt. Servs., LLC, No. 20-CV-

1198, 2020 WL 6140474, at *7-8 (W.D. Pa. Oct. 16, 2020); Saldana v. Glenhaven Healthcare

LLC, No. 20-CV-5631 (FMO) (MAA), 2020 WL 6713995, at *2 (C.D. Cal. Oct. 14, 2020); Estate

of Maglioli v. Andover Subacute Rehab. Cir. [, 478 F. Supp. 3d. 518, 528-33 (D.N.J. 2020).

Defendants fail to establish that their alleged conduct was “pursuant to a federal officer’s

directions.” Latiolais, 951 F.3d at 296. Defendants’ assertions they were “acting hand-in-hand

with, and at the specific instruction and oversight of the federal government . . . in responding to

the federal government’s interventions, efforts, and mandates, to address the on-going national

state of emergency,” Notice of Removal § 35, do not demonstrate a “special relationship” with the

federal government or show that Defendants were anything more than a “highly regulated” entity.

Watson, 551 U.S. at 153; St. Charles I, 990 F.3d at 452. Accordingly, removal under 28 U.S.C.

§ 1442 was improper.

C, The Grable Doctrine

To establish federal question jurisdiction under the Grable Doctrine, a state law claim must

raise a federal issue that 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, 568 U.S. at 258 (citing Grable, 545 U.S. at 314). “[FJederal jurisdiction

demands not only a contested federal issue, but a substantial one, indicating a serious federal

interest in claiming the advantages thought to be inherent in a federal forum,” Grable, 345 U.S. at

313. A federal issue is more likely to qualify as substantial if the case presents a nearly pure issue

of law, the resolution of which “would be controlling in numerous other cases,” as opposed to a

fact-bound issue; the federal government itself (rather than the individual parties) has an important

interest in the issue; or the determination of the issue will be dispositive of the entire case, Empire

HealthChoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 700-01 (2006).

Defendants argue that two questions concerning the PREP Act are “necessarily raised” and

“actually disputed” in this case: first, whether the PREP Act preempts Plaintiff's state court claims;

and second, whether the PREP Act provides immunity to Defendants.

10

Neither of these questions are “necessarily raised” in this case. With respect to the first

question, it is well established that the PREP Act does not completely preempt state law claims.

See Section IV(A), supra. As to the second question, “a case may not be removed to federal court

on the basis of a federal defense, .. . even if the defense is anticipated in the plaintiff's complaint,

and even if both parties admit that the defense is the only question truly at issue in the case.” Rivet

v. Regions Bank, 522 U.S. 470, 475 (1998) (quoting Franchise Tax Bd., 463 U.S. at 14). Because

PREP Act immunity is a defense, it is not necessarily raised as an element of Plaintiff's claims.

Furthermore, the meaning of the PREP Act is not “actually disputed” in this case.

Piaintiff’s Original Petition brings only state law claims, which do not require interpretation of the

PREP Act. In short, there is no “necessity for a construction of the [PREP Act] in order to make

a disposition of the case.” Mays v. Kirk, 414 F.2d 131, 134 (Sth Cir. 1969). The PREP Act can

only be raised as a defense, and its applicability will depend on whether the facts alleged

demonstrate that an injury was caused by the administration or use of a “covered countermeasure.”

Federal question jurisdiction under the Grab/e Doctrine is not appropriate when a case presents a

“fact-bound and situation specific” issue, as opposed to a “pure issue of law.” Empire, 547 U.S.

at 701; accord Gunn, 568 U.S. at 263.

Finally, the PREP Act issue is not “substantial” within the meaning of the Grable doctrine.

Even if the anticipated assertion of the PREP Act as a defense infuses Plaintiff's state law claims

with a federal issue, the “mere presence of a federal issue in a state cause of action does not

automatically confer federal-question jurisdiction,” Merrell Dow Pharms. Inc. v. Thompson, 478

U.S. 804, 813 (1986); see also Gunn, 568 U.S. at 259 (resolution of a federal patent question was

not substantial because its resolution was significant only to the parties in the immediate suit and

not to the federal system writ large). As noted above, the disposition of a claim for which PREP

11

Act immunity is asserted will turn on the facts alleged. Thus, determination in one case will not

necessarily bear on other cases.

Defendants point to the December 2020 Amendment to bolster their argument that removal

is proper under the Grable Doctrine. See Opp. [§ 18. The December 2020 Amendment asserts

“there are substantial federal legal and policy issues, and substantial federal legal and policy interests

within the meaning of [Grable] in having a uniform interpretation of the PREP Act.” 85 Fed. Reg. at

79, 197, But this interpretation of what constitutes a “substantial” federal issue misconstrues

Grable. The plaintiff in Grable “premised its superior title claim [i.e., its well-pleaded state law

claim] on a failure by the IRS to give it adequate notice, as defined by federal law.” Grable, 545

U.S, at 314-15. The Grable Court therefore concluded that “[w]hether Grable was given notice

within the meaning of the federal statute is thus an essential element of its quiet title claim[.]” Jd.

at 315. By contrast, the PREP Act would only afford immunity if it applies in this case. An

interpretation of the PREP Act is not an essential element of any of Plaintiffs claims, and the

question of whether immunity applies in a given case can readily be decided by a state court judge.

Accordingly, removal under 28 U.S.C. § 1442 was improper.

Vv. CONCLUSION

For the reasons discussed above, the Court GRANTS Plaintiff's Motion for Remand. This

case is REMANDED to the 298th District Court, Dallas County, Texas for further proceedings.

All other pending motions are TERMINATED as moot.

SO ORDERED.

SIGNED June 30, 2021.

UNITED STATES DISTRICT JUDGE

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