Kelley

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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MICHAEL KELLEY, et al.,

Plaintiffs,

v.

UNITED CEREBRAL PALSY OF LONG

ISLAND, et al.,

Defendants. MEMORANDUM

---------------------------------------------------------------X AND ORDER

UNITED CEREBRAL PALSY OF LONG 25-CV-4800-SJB-ARL

ISLAND,

Third-Party Plaintiff,

v.

LONG ISLAND SELECT HEALTHCARE, INC.,

Third-Party Defendant.

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BULSARA, United States District Judge:

Before the Court is Defendant and Third-Party Plaintiff United Cerebral Palsy

Association of Long Island’s (“UCP”) motion to remand to state court its third-party

action for indemnification against Third-Party Defendant Long Island Select Healthcare,

Inc. (“LISH”) and the underlying medical malpractice action. The Government, on

behalf of LISH, removed this case pursuant to the Federally Supported Health Centers

Assistance Act (“FSHCAA”), 42 U.S.C. § 233, asserting that LISH is a federally funded

health care provider. (Notice of Removal dated Aug. 28, 2025, Dkt. No. 1 ¶¶ 8–9). For

the following reasons, the Court finds the removal improper and remands the action

back to state court.

BACKGROUND

Plaintiff Robert Kelley, individually and on behalf of deceased-Plaintiff Michael

Kelley as the administrator of his Estate, commenced this action on January 4, 2024 in

Nassau County Supreme Court against UCP (a residential facility), a separate medical

center, and several treating providers for alleged medical malpractice in the treatment

and care of decedent Michael Kelley in November of 2020. (Summons and Verified

Compl., attached to Notice of Removal as Ex. A, Dkt. No. 1-1). On May 8, 2025, UCP

filed a third-party summons and complaint against LISH alleging contributory

negligence and seeking indemnification for any damages liability. (Third-Party Compl.,

attached to Notice of Removal as Ex. C, Dkt. No. 1-3 ¶¶ 17–19). UCP alleges that while

Michael Kelley was housed in its facility, he was treated by LISH providers. (UCP’s

Mot. to Remand dated Sep. 29, 2025 (“UCP Mot.”), Dkt. No. 8 at 2).

On May 28, 2025, counsel for LISH notified UCP that LISH was eligible for

medical malpractice coverage under the Federal Tort Claims Act (“FTCA”) and that

LISH had submitted a tender to the Department of Health and Human Services

(“HHS”) for coverage. (LISH May 28, 2025 Email, attached to UCP Mot. as Ex. D, Dkt.

No. 8-4). On June 17, 2025, counsel for LISH informed the state court of the same.

(LISH Letter to State Court, attached to UCP Mot. as Ex. E, Dkt. No. 8-5). On August 28,

2025, the Government, acting on behalf of LISH, removed the case to this Court

pursuant to 42 U.S.C. § 233(c). (Notice of Removal ¶¶ 8–11).

On September 5, 2025, the Government filed a letter request for a premotion

conference (“PMC”) to move to dismiss the Third-Party Complaint against LISH,

(LISH’s PMC Req., Dkt. No. 5 at 1), which UCP opposed, arguing that removal was

improper, (UCP’s Resp. to LISH’s PMC Req. dated Sep. 12, 2025, Dkt. No. 6 at 2–3).

Denying the PMC, the Court instructed the parties to brief the threshold issue of

whether the case should be remanded to state court. (Order dated Sep. 15, 2025). The

parties completed briefing via letter on January 15, 2026. (UCP Mot.; LISH’s Resp. to

UCP Mot. dated Dec. 19, 2025 (“LISH Resp.”), Dkt. No. 13; UCP’s Reply dated Jan. 15,

2026 (“UCP Reply”), Dkt. No. 14).

LEGAL STANDARD

“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins.

Co. of Am., 511 U.S. 375, 377 (1994). “[O]ut of respect for the limited jurisdiction of the

federal courts and the rights of states,” removal statutes must be “strictly construed”

with any doubts resolved “against removability.” In re Methyl Tertiary Butyl Ether

(“MTBE”) Prods. Liab. Litig., 488 F.3d 112, 124 (2d Cir. 2007) (quotations omitted). The

removing party bears the burden of proving the requirements for removal have been

met. Abbo-Bradley v. City of Niagara Falls, 73 F.4th 143, 148 (2d Cir. 2023). Unless that

burden is met, the case must be remanded back to state court. See Herskovic v. Verizon

Wireless, No. 23-0648, 2024 WL 4212191, at *2 (2d Cir. Sep. 17, 2024).

DISCUSSION

I. Removal under § 233(c)

“The FSHCAA authorizes the Secretary of the Department of Health and Human

Services to deem certain health centers that receive federal funds, and their employees,

to be employees of the Public Health Service (‘PHS’) for the purposes of 42 U.S.C.

§ 233.” Agyin v. Razmzan, 986 F.3d 168, 172 (2d Cir. 2021). Under § 233(a), PHS

employees are entitled to the protections of the FTCA. See Kelley v. Richford Health Ctr.,

Inc., 115 F.4th 132, 136 (2d Cir. 2024) (“The FSHCAA . . . protects employees of the

Public Health Service from being subject to suit while performing medical and similar

functions by requiring that such lawsuits be brought against the United States instead.”

(quotation omitted)). Thus, the FSHCAA “essentially makes the U.S. government the

medical malpractice insurer for qualifying [ ] health centers[.]” Krandle v. Refauh Health

Ctr., Inc., No. 22-CV-4977, 2024 WL 1075359, at *6 (S.D.N.Y. Mar. 12, 2024) (quoting

Dedrick v. Youngblood, 200 F.3d 744, 745 (11th Cir. 2000)). The Government removed

pursuant to § 233(c) of the FSHCAA,1 which provides:

Upon a certification by the Attorney General that the defendant was acting

in the scope of his employment at the time of the incident out of which the

suit arose, any such civil action or proceeding commenced in a State court

shall be removed without bond at any time before trial by the Attorney

General[.]

42 U.S.C. § 233(c); see also Celestine v. Mount Vernon Neighborhood Health Ctr., 403 F.3d 76,

80–82 (2d Cir. 2005) (detailing the mechanics of certification and removal under 42

U.S.C. § 233(c)).

Although § 233 “is hardly a model of clarity,” Blumberger v. Tilley, 115 F.4th 1113,

1126 (9th Cir. 2024), cert denied, 145 S. Ct. 2818 (2025), it plainly states what the Attorney

General must tell a state court to effectuate removal. Removal is permissible only

1 While UCP contests the timelessness of removal because the Civil Cover Sheet

also cites 28 U.S.C. § 1442, (UCP Mot. at 6–7; see also Civil Cover Sheet, Dkt. No. 1-5), the

Government clarified that it only removed the case under 42 U.S.C. § 233(c), (LISH

Resp. at 2 n.1).

“[u]pon a certification by the Attorney General that the defendant was acting in the

scope of his employment at the time of the incident.” 42 U.S.C. § 233(c); see Celestine,

403 F.3d at 82 (holding that the plain text of § 233(c) requires pre-trial certification);

Carroll v. Trump, 148 F.4th 110, 118 (2d Cir. 2025) (“We held in Celestine that the plain

text of § 233(c) requires pre-trial certification.”).

Here, the Attorney General made no certification prior to removal; there was no

appearance by the Attorney General in the state action at all—it was LISH’s in-house

counsel that notified the state court of LISH’s designation. (LISH Letter to State Court

at 1 (informing that LISH had notified HHS of the suit)). The Government failed to

comply with the explicit requirements of the statute. E.g., Lee v. Jones, No. 14-CV-4162,

2015 WL 3891419, at *4 (D.S.C. June 23, 2015) (granting remand where defendant was

not certified as acting within the scope of his employment before removal). Its

arguments to the contrary are unpersuasive.

First, the Government argues that certification was not required because the

requirement does not apply to federal health facility entities, only commissioned officers

or employees of said entities. And here, the Third-Party Complaint names LISH, not

specific LISH employees, as a Defendant. (LISH Resp. at 2–3). But the Government

fails to provide any authority in support of this distinction. The statute creates no

distinction between entities and individuals, requiring in any case a certification that

“the defendant was acting in the scope of his employment.” 42 U.S.C. § 233 (emphasis

added). And courts have interpreted “defendant” to encompass all federal

“employees,” regardless of whether that employee is “an entity or an individual.”

Celestine v. Mount Vernon Neighborhood Health Ctr., 289 F. Supp. 2d 392, 398 (S.D.N.Y.

2003), aff’d, 403 F.3d 76 (2d Cir. 2005); see also O’Brien v. United States, 56 F.4th 139, 148

(1st Cir. 2022) (noting “a federally funded health center or any particular individual

associated with it” may be deemed an employee under § 233). The Government goes as

far as to argue that certification was “not even possible” given UCP’s failure to identify

any specific individual employee. (LISH Resp. at 3). But courts have regularly

considered the propriety of removal where the Attorney General certified an entity, and

not an individual, under § 233(c). E.g., Celestine, 289 F. Supp. at 394, 398 (finding the

U.S. Attorney’s certification of a health care facility, an entity defendant, as an employee

of the U.S. proper for purposes of removal under § 233(c)); R.C.L. Infant v. Bronx-Lebanon

Hosp. Ctr., No. 13-CV-6764, 2015 WL 1499745, at *3 (S.D.N.Y. Mar. 31, 2015) (accepting

the U.S. Attorney’s certification for Bronx-Lebanon Hospital Center); Rodriguez v. Bronx

Lebanon Hosp. Ctr., No. 09-CV-3208, 2010 WL 11712957, at *1–*2 (S.D.N.Y. Jan. 27, 2010)

(granting substitution where the AUSA had certified that a health center was acting

within the scope of its employment in removing under § 233(c)). The Court sees no

reason to adopt the proposed reading of § 233(c) offered by the Government.2

2 The Government relies on the surrounding provisions, §§ 233(a) and (b), to

argue that the statute is meant to cover only actions brought against individual officers

and employees. (LISH Resp. at 3 (quoting references to “commissioned officer or

employee” and “any person”)). But just as for § 233(c), courts have not imposed such

limitations in the application of § 233 writ large. See, e.g., Garcia-Ryan v. Cmty. Health

Project, Inc., No. 24-CV-7117, 2026 WL 507411, at *5–*6 (S.D.N.Y. Feb. 24, 2026) (finding

§ 233(a) substitution provisions applicable for claims against an entity), appeal docketed,

No. 26-864 (2d Cir. Apr. 6, 2026); Krandle, 2024 WL 1075359, at *1, *11 (same).

Second, the Government contends that even if certification were required,

removal is nonetheless proper because § 233(c) allows certification at any time before

trial. (LISH Resp. at 2). It is true that under § 233(c), removal is not time-limited; the

option may be exercised at any time before trial. See Celestine, 403 F.3d at 81; e.g., Zaiat

v. Laborde, No. 24-CV-6872, 2025 WL 1576258, at *4 (S.D.N.Y. June 4, 2025) (concluding

defendant’s removal was timely even where default judgment had been entered

because “neither a trial nor an assessment of damages had occurred”). But this

principle is inapplicable where the Government has already removed. That the state

court action below has not proceeded to trial is irrelevant since the issue here is not the

timing of removal, but the Government’s compliance with the condition precedent for

removal. The Government provides no authority for its contention that it can remedy

the certification deficiency post-removal and the Court finds none. Cf. Grupo Dataflux v.

Atlas Glob. Grp., L.P., 541 U.S. 567, 570 (2004) (noting the “hornbook” rule that “the

jurisdiction of the court depends upon the state of things at the time of the action

brought” (quotation omitted)).

Third, the Government argues that the Notice of Deeming Action (“NDA”)

satisfies the certification requirement. (LISH Resp. at 2). But in so doing it conflates

two separate requirements. To obtain “deemed federal” status, providers are required

to submit an application each year to HHS. See Agyin, 986 F.3d at 172. Here, the

Government provided a letter from Dr. Asad Bandealy of HHS, affirming that LISH

was deemed a health center eligible for FTCA coverage under the FSHCAA. (Decl. of

Asad Bandealy (“Bandealy Decl.”), attached to LISH Resp., Dkt. No. 13-1 ¶ 3; see also

Notice of Deeming Action, attached to Bandealy Decl. as Ex. 1, Dkt. No. 13-1 (deeming

LISH to be an employee of the PHS effective 1/1/2020 through 12/31/2020)). While

this determination generally deems LISH a federal employee for purposes of § 233, it

does not “conclusively establish PHSA and FTCA coverage with respect to a particular

lawsuit . . . [as] coverage hinges on the circumstances in which care has been provided.”

O’Brien, 56 F.4th at 148–49 (citing 42 U.S.C. § 233(g)(1)(B)–(C)); Blumberger, 115 F.4th at

1128 (“The division of labor that Congress has made between the Secretary (who

determines an entity’s deemed status) and the Attorney General (who determines an

employee’s coverage status) reflects the unique expertise of the two actors.”).3 Separate

and apart from the NDA, the statute charges the Attorney General, or his designee, with

making an initial determination of whether a given entity or employee was acting with

their scope of employment pursuant to the Secretary’s “deeming” determination—

which it failed to do here. Given that the Government has failed to show that removal

was proper under the statute, remand is granted.

3 In Blumberger, the Ninth Circuit distinguished between the Secretary’s deeming

decision, the “ex-ante determination” made before any litigation as to an employee’s

status, and the Attorney General’s determination of coverage, the “ex-post scope-of-

employment certification.” 115 F.4th at 1127–28. While the deeming determination

may be final and binding, it does not supplant the separate coverage determination

made after litigation has been initiated. Id. at 1128 (“Being deemed a PHS employee,

however, does not automatically entitle the employee to immunity from suit. Deemed

PHS employees—like regular PHS employees—receive immunity only from actions

that occurred ‘within the scope of [their] office or employment at the time of the

incident out of which the suit arose.’” (quoting 42 U.S.C. § 233(c))).

II. Request for Dismissal

Raising the derivative jurisdiction doctrine, the Government argues that because

the state court did not have jurisdiction before the action was removed—a “state court

cannot have jurisdiction over a federal agency,” (LISH Resp. at 4)—this Court must

dismiss the Third-Party Complaint. “Under this so-called ‘derivative jurisdiction’

principle, if the state court had no jurisdiction, the federal court acquired none by

removal because there was no validly pending state court action to remove. This

doctrine require[s] the district court to dismiss a removed action within federal, but not

within state, jurisdiction.” 14C Charles Alan Wright & Arthur R. Miller et al., Federal

Practice and Procedure § 3721.1 (4th ed. 2026); see also PT United Can Co. Ltd. v. Crown

Cork & Seal Co., Inc., 138 F.3d 65, 72–73 (2d Cir. 1998) (“[W]here a state court lacks

jurisdiction of the subject matter or of the parties, the federal District Court acquires

none on a removal of the case.” (quotation omitted)).

The argument is without merit. At the time of removal, the United States was

not yet a party to the action in state court, nor had the Government appeared in any

form. See, e.g., Zanghi v. Sisters of Charity Hosp. of Buffalo, N.Y., No. 12-CV-0765, 2013 WL

706241, at *3 (W.D.N.Y. Feb. 26, 2013) (finding the doctrine of derivative jurisdiction

inapplicable where the United States was not yet a party when the action was in state

court and, pursuant to § 233(c), the Government did not move for substitution until it

removed the case). In other words, the defect in state-court jurisdiction identified by

the Government that would require dismissal did not exist in state court when the case

was removed.4

CONCLUSION

For all of these reasons, UCP’s motion to remand is granted. The Clerk of Court

is directed to remand this case back to state court, and to send certified copies of this

Order and the docket sheet to the Nassau County Supreme Court.

SO ORDERED.

/s/ Sanket J. Bulsara

SANKET J. BULSARA

United States District Judge

Date: May 6, 2026

Central Islip, New York

4 Notably, in other contexts, there are statutes that provide for the dismissal of

actions in state court with prejudice if the action is properly removed. See, e.g., Cyan,

Inc. v. Beaver Cnty. Emps. Ret. Fund, 583 U.S. 416, 424 (2018) (noting that the Securities

Litigation Uniform Standards Act of 1998 (“SLUSA”) provides for removal of certain

cases to federal court “in contemplation not of further litigation over the merits of a

claim brought in state court, but of termination of the proceedings altogether”

(quotation omitted)); see also Ring v. AXA Fin., Inc., 483 F.3d 95, 98 (2d Cir. 2007) (“If a

state class action satisfies all the SLUSA criteria, the defendant may remove it to federal

district court and the district court must dismiss.” (citing 15 U.S.C. § 78bb(f)(2)). Section

233, in comparison, does not provide for automatic dismissal in federal court when a

case is removed.