Estate of Joseph Maglioli v. Alliance HC Holdings, LLC

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

Nos. 20-2833

____________

ESTATE OF JOSEPH MAGLIOLI; BERNARD

MAGLIOLI; DANTE MAGLIOLI; ESTATE OF DALE

PETRY; CHRISTOPHER PETRY

v.

ALLIANCE HC HOLDINGS LLC, d/b/a Andover Subacute

& Rehabilitation I; ALLIANCE HC II LLC, d/b/a Andover

Subacute & Rehabilitation II (Alliance Healthcare being

improperly pleaded by name and as a separate entity);

CHAIM SCHEINBAUM; LOUIS SCHWARTZ; JOHN AND

JANE DOES 1-10; ABC AND XYZ CORPORATIONS 1-10

Alliance HC Holdings, LLC, d/b/a Andover

Subacute & Rehabilitation I; Alliance HC II

LLC, d/b/a Andover Subacute & Rehabilitation

II (Alliance Healthcare being improperly

pleaded by name and as a separate entity);

Chaim “Mutty” Scheinbaum; Louis Schwartz,

Appellants

____________

No. 20-2834

ESTATE OF WANDA KAEGI; VICTOR KAEGI; ESTATE

OF STEPHEN BLAINE; SHARON FARRELL

v.

ALLIANCE HC HOLDINGS LLC, d/b/a Andover Subacute

& Rehabilitation I; ALLIANCE HC II LLC, d/b/a Andover

Subacute & Rehabilitation II (Alliance Healthcare being

improperly pleaded by name and as a separate entity);

CHAIM “MUTTY” SCHEINBAUM; LOUIS SCHWARTZ;

JOHN and JANE DOES 1-10; ABC and XYZ CORPS 1-10

Alliance HC Holdings, LLC, d/b/a Andover

Subacute & Rehabilitation I; Alliance HC II

LLC, d/b/a Andover Subacute & Rehabilitation

II (Alliance Healthcare being improperly

pleaded by name and as a separate entity);

Chaim “Mutty” Scheinbaum; Louis Schwartz,

Appellants

____________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil Nos. 2-20-cv-06605 and 2-20-cv-06985)

District Judge: Honorable Kevin McNulty



The Clerk of the Court is directed to amend the official

caption to conform to the listing of parties above.

2

____________

Argued: June 23, 2021

Before: CHAGARES, PORTER, and ROTH,

Circuit Judges.

(Filed: October 20, 2021)

____________

Salvatore C. Martino

Malinda A. Miller

Lewis Brisbois Bisgaard & Smith LLP

One Riverfront Plaza, Suite 800

Newark, New Jersey 07102

Jeffry A. Miller

Lann G. McIntyre [ARGUED]

Lewis Brisbois Bisgaard & Smith LLP

550 West C Street, Suite 1700

San Diego, California 92101

Counsel for Appellants Alliance HC Holdings LLC,

Alliance HC II LLC, Chaim Scheinbaum, and Louis

Schwartz

Andrew Kim

William M. Jay

Goodwin Procter LLP

1900 N Street, N.W.

Washington, D.C. 20036

Counsel for Amicus Appellant DRI, Inc.

3

Russell L. Hewit

Ryan A. Notarangelo

Dughi, Hewit & Domalewski, P.C.

340 North Avenue

Cranford, NJ 07016

Counsel for Amicus Appellant Hackensack Meridian

Health

Melissa A. Murphy-Petros

Wilson Elser Moskowitz Edelman & Dicker LLP

55 West Monroe Street, Suite 3800

Chicago, Illinois 60603

Lori Rosen Semlies

Wilson Elser Moskowitz Edelman & Dicker LLP

1133 Westchester Avenue

White Plains, New York 10604

Daniel E. Tranen

Wilson Elser Moskowitz Edelman & Dicker LLP

7751 Carondelet Avenue, Suite 203

Clayton, Missouri 63105

Counsel for Amici Appellants Cambridge

Rehabilitation & Healthcare Center, Oakland

Rehabilitation & Healthcare Center, and Willow

Springs Rehabilitation & Healthcare Center

4

William M. Kelleher

Neil R. Lapinski [ARGUED]

Phillip A. Giordano

Gordon, Fournaris & Mammarella, P.A.

1925 Lovering Avenue

Wilmington, DE 19806

Daniel G.P. Marchese

The Marchese Law Firm, LLC

93 Spring Street, Suite 300

Newton, NJ 07860

Counsel for Appellees Estate of Wanda Kaegi, Victor

Kaegi, Estate of Stephen Blaine, Sharon Farrell,

Estate of Joseph Maglioli, Bernard Maglioli, Dante

Maglioli, Estate of Dale Petry, and Christopher Petry

Adam R. Pulver

Allison M. Zieve

Scott L. Nelson

Public Citizen Litigation Group

1600 20th Street NW

Washington, DC 20009

Counsel for Amicus Appellee Public Citizen Inc.

____________

OPINION OF THE COURT

____________

PORTER, Circuit Judge.

5

Our Constitution divides powers between the national

government and the states. Powers not delegated to the national

government remain with the people in the states. See Bond v.

United States, 564 U.S. 211, 221 (2011); The Federalist No. 45

(James Madison). The pandemic has tested our federal system,

but this case confirms its resilience. The defendants invite us

to assert the “judicial Power of the United States” over a matter

that belongs to the states. U.S. Const. art. III. We decline that

invitation. We will not exercise power that the Constitution and

Congress have not given us. There is no COVID-19 exception

to federalism.

Joseph Maglioli, Dale Petry, Wanda Kaegi, and Stephen

Blaine were residents of two different New Jersey nursing

homes. Tragically, they died from COVID-19. Their estates

claim that the nursing homes acted negligently in handling the

COVID-19 pandemic, causing the residents’ deaths. The

estates commenced negligence and wrongful-death lawsuits

against the nursing homes in state court on behalf of

themselves, the family members of the deceased, and residents

similarly situated. The nursing homes removed to federal

court, but the District Court dismissed the cases for lack of

subject-matter jurisdiction and remanded them to state court.

The nursing homes appealed, arguing that the District Court

has three independent grounds for federal jurisdiction: federal-

officer removal, complete preemption of state law, and the

presence of a substantial federal issue. We disagree. The

estates have not invoked the power of the federal courts, and

Congress has not given us power to take this case from the state

court. So we will affirm the District Court’s order dismissing

the cases for lack of jurisdiction.

6

I

A

We begin with some background on the applicable law.

In 2005, Congress passed the Public Readiness and Emergency

Preparedness Act (“PREP Act”), 42 U.S.C. §§ 247d-6d, 247d-

6e. The PREP Act protects certain covered individuals—such

as pharmacies and drug manufacturers—from lawsuits during

a public-health emergency. The Act lies dormant until invoked

by the Secretary of the Department of Health and Human

Services (“HHS”). If the Secretary deems a health threat a

public-health emergency, he may publish a declaration in the

Federal Register recommending certain “covered

countermeasures.” Id. § 247d-6d(b)(1). When the Secretary

makes such a declaration, the covered individuals become

immune from suit and liability from claims related to the

administration of a covered countermeasure. Id. § 247d-

6d(a)(1).

In March 2020, the Secretary issued a declaration under

the PREP Act, declaring that COVID-19 is a public-health

emergency. See Declaration Under the PREP Act for Medical

Countermeasures Against COVID-19, 85 Fed. Reg. 15,198,

15,201 (Mar. 17, 2020). The Secretary recommended a series

of covered countermeasures that includes drugs, devices, and

products “used to treat, diagnose, cure, prevent, or mitigate

COVID-19,” subject to the PREP Act’s definitions. Id. at

15,202. The Secretary has since amended the declaration seven

times. See Seventh Amendment to Declaration Under the

PREP Act for Medical Countermeasures Against COVID-19,

86 Fed. Reg. 14,462 (Mar. 16, 2021). HHS has also issued

7

advisory opinions and guidance letters on various issues

related to the declaration.1

The Secretary controls the scope of immunity through

the declaration and amendments, within the confines of the

PREP Act. A covered person enjoys immunity from all claims

arising under federal or state law that relate to the use of a

covered countermeasure. 42 U.S.C. § 247d-6d(a)(1). Covered

persons include manufacturers, distributors, program planners,

and qualified persons, as well as their officials, agents, and

employees. 85 Fed. Reg. at 15,201.

The scope of immunity is broad. Covered persons are

immune from “any claim for loss that has a causal relationship

with the administration to or use by an individual of a covered

countermeasure.” 42 U.S.C. § 247d-6d(a)(2)(B). That includes

claims relating to “the design, development, clinical testing or

investigation, manufacture, labeling, distribution, formulation,

packaging, marketing, promotion, sale, purchase, donation,

dispensing, prescribing, administration, licensing, or use of

such countermeasure.” Id.

What happens to the claims blocked by PREP Act

immunity? Congress did not leave those injured by covered

countermeasures without recourse. The Act establishes a fund

to compensate “eligible individuals for covered injuries

directly caused by the administration or use of a covered

countermeasure.” Id. § 247d-6e(a). The Secretary has broad

authority to issue regulations determining who and what types

1

See Public Readiness and Emergency Preparedness Act,

Public Health Emergency (July 8, 2021),

https://perma.cc/S576-NXRX.

8

of injuries qualify for compensation under the fund. Id. § 247d-

6e(b)(4)–(5).

There is one exception to this statutory immunity. The

PREP Act provides “an exclusive Federal cause of action

against a covered person for death or serious physical injury

proximately caused by willful misconduct.” Id. § 247d-

6d(d)(1). “Willful misconduct” is in turn defined as “an act or

omission that is taken—(i) intentionally to achieve a wrongful

purpose; (ii) knowingly without legal or factual justification;

and (iii) in disregard of a known or obvious risk that is so great

as to make it highly probable that the harm will outweigh the

benefit.” Id. § 247d-6d(c)(1)(A). The Act clarifies that willful

misconduct “shall be construed as establishing a standard for

liability that is more stringent than a standard of negligence in

any form or recklessness.” Id. § 247d-6d(c)(1)(B).

Notwithstanding the statutory definition, the Secretary may

issue regulations that further restrict what acts or omissions

qualify as willful misconduct. Id. § 247d-6d(c)(2)(A).

B

These wrongful-death actions arise from the treatment

of residents at two nursing homes in New Jersey. The

plaintiffs’ two complaints state the same five claims:

(1) negligence—wrongful death as to the named defendants;

(2) negligence—wrongful death as to unnamed defendants;

(3) negligence—ordinary negligence as to unnamed non-

medical employees of the nursing homes and medical

malpractice as to all unknown medical professionals;

(4) negligence as proximate cause of the residents’ injuries;

and (5) punitive damages.

9

The estates allege that the residents’ deaths “were a

direct result of [the nursing homes’] failures to take measures

to protect them at the facilities from the deadly Covid-19 virus,

and/or medical malpractice.” App. 119, 176. For example, the

estates claim the nursing homes acted negligently by failing to

monitor food preparation, failing to provide personal

protective equipment, failing to timely diagnose and properly

treat the disease, and permitting visitors and employees to enter

the facilities without taking their temperatures or requiring

them to wear masks.

Nursing homes across the country face similar lawsuits.

The story in all of these cases is essentially the same. Estates

of deceased nursing-home residents sue the nursing homes in

state court, alleging that the nursing homes negligently handled

COVID-19. The nursing homes remove to federal court on the

basis of a combination of federal-officer removal, complete

preemption, and a substantial federal issue. Nearly every

federal district court to confront these cases has dismissed for

10

lack of jurisdiction and remanded to the state court.2 We appear

to be the first circuit court to decide these issues.

II

The issue here is whether the District Court had subject-

matter jurisdiction under 28 U.S.C. §§ 1331 and 1442. Because

the nursing homes appeal the issue of federal-officer removal,

we may also review the parts of the District Court’s order

rejecting removal based on complete preemption and a

substantial federal issue. See 28 U.S.C. § 1447(d); BP P. L. C.

v. Mayor of Balt., 141 S. Ct. 1532, 1538 (2021). We review

issues of subject-matter jurisdiction de novo, “including a

court’s decision to remand for a lack of jurisdiction.” Papp v.

Fore-Kast Sales Co., 842 F.3d 805, 810 (3d Cir. 2016).

III

A preliminary issue in this case is deference to HHS

interpretations of the PREP Act under Chevron, U.S.A., Inc. v.

Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

The nursing homes urge us to defer to the agency’s

interpretations, which generally favor removal in this case. We

decline to do so.

HHS has interpreted the PREP Act in the Secretary’s

amended declaration and in advisory opinions from the general

counsel. For example, the fifth amendment to the declaration

claims that “[t]he plain language of the PREP Act makes clear

that there is complete preemption of state law.” Fifth

Amendment to Declaration Under the Public Readiness and

Emergency Preparedness Act, 86 Fed. Reg. 7,872, 7,874 (Feb.

2, 2021). Similarly, the fourth amendment to the declaration

asserts that the PREP Act raises “substantial federal legal and

11

2

See, e.g., Martinez v. Spruce Holdings, LLC, No. 21-CV-0739

AWI SAB, 2021 WL 3883704 (E.D. Cal. Aug. 31, 2021);

Dorsett v. Highlands Lake Ctr., LLC, No. 21-CV-0910-KKM-

AEP, 2021 WL 3879231 (M.D. Fla. Aug. 31, 2021); David

Jones v. Legacy Mgmt. Grp. of La. LLC, No. 21-CV-00838,

2021 WL 3416993 (W.D. La. July 7, 2021); Acra v. Cal.

Magnolia Convalescent Hosp., Inc., No. EDCV 21-898, 2021

WL 2769041 (C.D. Cal. July 1, 2021); Gwilt v. Harvard

Square Ret. & Assisted Living, No. 21-CV-0472, 2021 WL

2373768 (D. Colo. June 30, 2021); Elliot v. Care Inn of Edna

LLC, No. 20-CV-3185, 2021 WL 2688600 (N.D. Tex. June 30,

2021); Brannon v. J. Ori, LLC, Nos. 21-CV-00058, 21-CV-

00065, 2021 WL 2339196 (E.D. Tex. June 8, 2021); Rae ex

rel. Montisano v. Anza Healthcare Inc., No. 21-CV-287, 2021

WL 2290776 (S.D. Cal. June 4, 2021); Shapnik v. Hebrew

Home for Aged at Riverdale, No. 20-CV-6774, 2021 WL

1614818 (S.D.N.Y. Apr. 26, 2021); Bolton v. Gallatin Ctr. for

Rehab. & Healing, LLC, No. 20-CV-00683, 2021 WL 1561306

(M.D. Tenn. Apr. 21, 2021); Perez ex rel. Est. of Lozano v. Se.

SNF LLC, Nos. SA-21-CV-00088, SA-21-CV-00089, SA-21-

CV-00090, 2021 WL 1381232 (W.D. Tex. Apr. 12, 2021);

Lopez v. Advanced HCS, LLC, No. 21-CV-00470, 2021 WL

1259302 (N.D. Tex. Apr. 5, 2021); Est. of Cowan v. LP

Columbia KY, LLC, No. 20-CV-00118, 2021 WL 1225965

(W.D. Ky. Mar. 31, 2021); Wright v. Encompass Health

Rehab. Hosp. of Columbia, Inc., No. 20-02636, 2021 WL

1177440 (D.S.C. Mar. 29, 2021); Lopez v. Life Care Ctrs. of

Am., Inc., No. 20-0958, 2021 WL 1121034 (D.N.M. Mar. 24,

2021); Est. of Jones ex rel. Brown v. St. Jude Operating Co.,

LLC, No. 20-CV-1088, 2021 WL 886217 (D. Or. Mar. 8,

2021); Saunders v. Big Blue Healthcare, Inc., No. 20-CV-

02608, 2021 WL 764567 (D. Kan. Feb. 26, 2021); Dupervil v.

12

policy interests within the meaning of Grable & Sons Metal

Products, Inc. v. Darue Eng’g. & Mf’g., 545 U.S. 308 (2005).”

Fourth Amendment to the Declaration Under the Public

Readiness and Emergency Preparedness Act, 85 Fed. Reg.

79,190, 79,197 (Dec. 9, 2020). These views are lightly

developed in some of the advisory opinions.3

Deference is not owed to these interpretations for the

simple reason that HHS is not delegated authority under the

PREP Act to interpret the scope of federal courts’ jurisdiction.

To the extent the PREP Act delegates authority to the

Secretary, it “does not empower the Secretary to regulate the

scope of the judicial power vested by the statute.” Adams Fruit

Co. v. Barrett, 494 U.S. 638, 650 (1990). The Secretary cites

§ 247d-6d(b)(7), claiming that “Congress delegated to [the

Secretary] the authority to strike the appropriate Federal-state

balance.” 85 Fed. Reg. at 79,198. However, § 247d-6d(b)(7)

merely strips courts of jurisdiction to review the Secretary’s

determinations under the PREP Act. The Act does not grant the

Secretary authority to opine on the scope of federal

All. Health Operations, LCC, No. 20-CV-4042, 2021 WL

355137 (E.D.N.Y. Feb. 2, 2021); Est. of Smith ex rel. Smith v.

Bristol at Tampa Rehab. & Nursing Ctr., LLC, No. 20-CV-

2798-T-60SPF, 2021 WL 100376 (M.D. Fla. Jan. 12, 2021);

Sherod v. Comprehensive Healthcare Mgmt. Servs., LLC, No.

20-CV-1198, 2020 WL 6140474 (W.D. Pa. Oct. 16, 2020). But

see Garcia v. Welltower OpCo Grp. LLC, No. SACV 20-

02250, 2021 WL 492581 (C.D. Cal. Feb. 10, 2021) (retaining

jurisdiction and denying a motion to remand).

3

See U.S. Dep’t of Health and Human Servs., Advisory

Opinion on the PREP Act (Apr. 17, 2020) (modified May 19,

2020), https://perma.cc/A73S-3DY6.

13

jurisdiction. The Secretary’s position on the jurisdiction of the

federal courts is not entitled to deference under Chevron. See

In re Kaiser Aluminum Corp., 456 F.3d 328, 344 (3d Cir.

2006).

The nursing homes have cited no decisions in which a

federal court of appeals deferred to an agency’s interpretation

of federal-court jurisdiction, and we are aware of none. Rather,

“[t]he scope of judicial review . . . is hardly the kind of question

that [we] presume[] that Congress implicitly delegated to an

agency.” Smith v. Berryhill, 139 S. Ct. 1765, 1778 (2019). “[I]t

is fundamental ‘that an agency may not bootstrap itself into an

area in which it has no jurisdiction,’” such as “the scope of the

judicial power vested by the statute.” Id. (internal quotation

marks omitted) (quoting Adams Fruit, 494 U.S. at 650).

Federal courts routinely conclude that no deference is owed

such interpretations. See, e.g., Texas v. EPA, 829 F.3d 405, 417

(5th Cir. 2016) (“Because ‘the determination of our jurisdiction

is exclusively for the court to decide,’ we do not defer to the

agency’s interpretation of this section.” (quoting Lopez–Elias

v. Reno, 209 F.3d 788, 791 (5th Cir. 2000))); Our Children’s

Earth Found. v. EPA, 527 F.3d 842, 846 n.3 (9th Cir. 2008)

(“The Agency’s position on jurisdiction is not entitled to

deference under Chevron . . . .”); Allegheny Def. Project v.

FERC, 964 F.3d 1, 11 (D.C. Cir. 2020) (“Federal agencies do

not administer and have no relevant expertise in enforcing the

boundaries of the courts’ jurisdiction.”).

Nor are the agency’s interpretations entitled to respect

under Skidmore v. Swift & Co., 323 U.S. 134 (1944). Again,

the scope of federal courts’ jurisdiction is a legal issue that is

the province of the courts, not agencies. See In re Kaiser, 456

F.3d at 344. Even if HHS has something valuable to say on the

matter, we do not find it in these statements. The fourth and

14

fifth amendments do not interpret the statutory text, cite any

case law (besides Grable), or provide any legal reasoning. The

general counsel’s advisory opinions are likewise unpersuasive.

The Secretary’s conclusory assertions on the scope of our

jurisdiction thus lack the “power to persuade.” Skidmore, 323

U.S. at 140. We now turn to the discussion of jurisdiction in

this case, unclouded by HHS’s views.

IV

The federal-officer-removal statute permits certain

officers of the United States to remove actions to federal court.

28 U.S.C. § 1442(a)(1). To remove a case under § 1442(a)(1),

a defendant must meet four requirements: (1) the defendant

must be a “person” within the meaning of the statute; (2) the

plaintiff’s claims must be based upon the defendant “acting

under” the United States, its agencies, or its officers; (3) the

plaintiff’s claims against the defendant must be “for or relating

to” an act under color of federal office; and (4) the defendant

must raise a colorable federal defense to the plaintiff’s claims.

Id.; see also Papp, 842 F.3d at 812. The estates acknowledge

that the nursing homes meet the first requirement, as they are

“persons” within the meaning of § 1442(a)(1). The disputed

issue is the second, “acting under” requirement. The District

Court ruled that the nursing homes were not “acting under” the

United States, its agencies, or its officers. Moreover, the court

said that, even assuming the first two requirements were met,

the estates’ claims were not “for, or relating to” the nursing

homes’ acts under color of federal office. We need not reach

that issue. We will affirm because the nursing homes were not

“acting under” the United States, its agencies, or its officers.

The nursing homes are private parties, not federal

actors. They may nevertheless invoke federal-officer removal

15

if they show they were “acting under” federal officers. See

Watson v. Philip Morris Cos., 551 U.S. 142, 147 (2007). The

phrase “acting under” is broad, and we construe it liberally. Id.

But the phrase is not boundless. Merely complying with federal

laws and regulations is not “acting under” a federal officer for

purposes of federal-officer removal. Id. at 153. Even a firm

subject to detailed regulations and whose “activities are highly

supervised and monitored” is not “acting under” a federal

officer. Id. The nursing homes must demonstrate something

beyond regulation or compliance. They must show that their

actions “involve an effort to assist, or to help carry out, the

duties or tasks of the federal superior.” Id. at 152.

Government contractors are a classic example. A

private contractor acts under a federal officer when it “help[s]

the Government to produce an item that it needs.” Id. at 153;

see also Papp, 842 F.3d at 812–13. Similarly, a nonprofit

community defender acts under a federal officer by

representing indigent federal defendants. In re

Commonwealth’s Motion to Appoint Couns. Against or

Directed to Def. Ass’n of Phila., 790 F.3d 457, 469 (3d Cir.

2015). The community defender does more than follow federal

law. Id. It is delegated authority to represent defendants under

the Criminal Justice Act and 18 U.S.C. § 3599. Id. It must

adopt bylaws and codes of conduct consistent with federal

public-defender organizations. Id. It must follow detailed

financial guidelines as a condition of receiving federal grant

money, and it must return unspent funds to the federal

government. Id. Its employees cannot practice law outside of

their official duties without the federal government’s

permission. Id. at 469–70. And, by representing indigent

federal defendants, the community defender “provides a

16

service the federal government would itself otherwise have to

provide.” Id. at 469.

The nursing homes here do not assist or help carry out

the duties of a federal superior. They are not government

contractors. See Papp, 842 F.3d at 812–13. They do not have

the close relationship with the federal government that we

recognized in the nonprofit community defenders. They are not

delegated federal authority, nor do they provide a service that

the federal government would otherwise provide. See Def.

Ass’n of Phila., 790 F.3d at 469. The nursing homes argue that

they are heavily regulated, pointing to publications from the

Centers for Medicare & Medicaid Services (“CMS”) and the

Centers for Disease Control and Prevention (“CDC”). The

nursing homes call those publications “comprehensive

directives,” but they are more aptly described as guidance.

Appellants’ Br. 29 (emphasis omitted). In its February 6, 2020

publication, “CMS strongly urge[d] the review of CDC’s

guidance and encourages facilities to review their own

infection prevention and control policies and practices to

prevent the spread of infection.”4 The CDC publication from

March 17, 2020, states a similar purpose: “This document

offers a series of strategies or options to optimize supplies of

eye protection in healthcare settings when there is limited

supply.”5 The publications that the nursing homes rely on

4

Ctrs. for Medicare & Medicaid Servs., Information for

Healthcare Facilities Concerning 2019 Novel Coronavirus

Illness (2019-nCoV) (Feb. 6, 2020), https://perma.cc/8H4R-

ZBZL.

5

Ctrs. for Disease Control and Prevention, Strategies for

Optimizing the Supply of Eye Protection (Mar. 17, 2020),

https://perma.cc/QQ7K-3TK7.

17

contain verbiage denoting guidance, not control. The nursing

homes thus have not shown that they have “an unusually close”

relationship with CMS or CDC. Watson, 551 U.S. at 153.

Even assuming the nursing homes are subject to intense

regulation, that alone does not mean they were “acting under”

federal officers. In Watson, cigarette-manufacturer Philip

Morris was subject to far more intense regulation than the

nursing homes experience here. See id. at 154–56. The Federal

Trade Commission set detailed rules concerning Philip

Morris’s manufacturing, testing, labeling, and advertising of

cigarettes. Id. at 155–56. The Supreme Court said even the

close regulation, without more, did not bring Philip Morris

under the scope of the federal-officer-removal statute. Id. at

157.

The nursing homes invite us to apply a “regulation plus”

doctrine. They argue that “a more specific level of regulation”

may permit removal even though “mere regulation” does not.

Appellants’ Br. 25. We cannot reconcile that notion with

Watson. A “more specific level of regulation” is simply a

difference in the degree of regulatory detail. Appellants’ Br.

25. And the Supreme Court said that “differences in the degree

of regulatory detail or supervision cannot by themselves

transform . . . regulatory compliance into the kind of assistance

that might bring the [agency] within the scope of the statutory

phrase ‘acting under’ a federal ‘officer.’” Watson, 551 U.S. at

157 (quoting 28 U.S.C. § 1442(a)(1)). Even if “regulation

plus” were a proper heuristic, the “plus” cannot merely be more

regulation. See id. The best evidence the nursing homes muster

showing something beyond regulation is that the Cybersecurity

& Infrastructure Security Agency designated nursing homes as

18

essential critical infrastructure.6 But that is also true of doctors,

weather forecasters, clergy, farmers, bus drivers, plumbers, dry

cleaners, and many other workers.7 Congress did not deputize

all of these private-sector workers as federal officers.

V

The nursing homes next argue that complete federal

preemption of the estates’ claims warrants removal to federal

court. They argue that the PREP Act is so pervasive that the

estates’ state-law negligence claims are really federal claims

under the PREP Act, and are thus removable to federal court.

We disagree.

Under 28 U.S.C. § 1441(a), a defendant may remove a

civil action to federal court only if the plaintiff could have

originally filed the action in federal court. If the parties are not

diverse, the complaint must satisfy federal-question

jurisdiction. Caterpillar Inc. v. Williams, 482 U.S. 386, 392

(1987). Under the well-pleaded-complaint rule, “federal

jurisdiction exists only when a federal question is presented on

the face of the plaintiff’s properly pleaded complaint.” Id. A

federal defense “ordinarily does not appear on the face of the

well-pleaded complaint, and, therefore, usually is insufficient

to warrant removal to federal court.” Dukes v. U.S. Healthcare,

Inc., 57 F.3d 350, 353 (3d Cir. 1995). By relying exclusively

6

Cybersecurity & Infrastructure Sec. Agency, Advisory

Memorandum on Ensuring Essential Critical Infrastructure

Workers’ Ability to Work During the Covid-19 Response 7

(Dec. 16, 2020), https://perma.cc/B5GP-9LJK.

7

Id. at 7, 10, 17, 19, 23.

19

on state law, a plaintiff may typically avoid federal court.

Caterpillar, 482 U.S. at 392.

Federal preemption is a defense to state-law claims. We

derive the preemption doctrine from the Supremacy Clause,

which provides that federal laws made pursuant to the U.S.

Constitution “shall be the supreme Law of the Land . . . any

Thing in the Constitution or Laws of any state to the Contrary

notwithstanding.” U.S. Const. art. VI. Where federal law

displaces state law, courts must apply federal law. See Arizona

v. United States, 567 U.S. 387, 398–99 (2012). Federal law

may displace state law in a variety of ways, but we need not

discuss them here.8 What matters in this case is that the nursing

homes raise federal preemption as a defense to state law. They

argue that the PREP Act displaces the estates’ state-law claims,

and thus courts must apply the PREP Act rather than New

Jersey law. Perhaps, but it is not for us to decide. The issue is

whether making that preemption argument gets the nursing

homes into federal court. “The fact that a defendant might

ultimately prove that a plaintiff’s claims are pre-empted . . .

8

This is not an ordinary preemption case. Because “complete

preemption is a distinct concept from ordinary preemption,”

we do not engage in an ordinary preemption analysis. Ry. Lab.

Execs. Ass’n v. Pittsburgh & Lake Erie R.R., 858 F.2d 936, 941

(3d Cir. 1988). Instead, our task is to determine whether the

District Court has removal jurisdiction over the action.

Complete preemption is thus best understood as a

jurisdictional doctrine rather than an ordinary preemption

doctrine. It fits under the heading of removal jurisdiction as a

“corollary of the well-pleaded complaint rule.” Metro. Life Ins.

Co. v. Taylor, 481 U.S. 58, 63 (1987).

20

does not establish that they are removable to federal court.”

Caterpillar, 482 U.S. at 398.

This is where complete preemption comes in.

Ordinarily, a defense of federal preemption does not provide a

basis for removal because it does not appear on the face of the

well-pleaded complaint. See id. at 392–93. The complete-

preemption doctrine provides that a federal question does

appear on the face of the complaint when Congress “so

completely pre-empt[s] a particular area that any civil

complaint raising [the] select group of claims is necessarily

federal in character.” Metro. Life Ins. Co. v. Taylor, 481 U.S.

58, 63–64 (1987). In other words, a federal statute’s

preemptive force can be so great that we treat a displaced state-

law claim as if it were a federal claim. So, although a garden-

variety preemption defense would not satisfy the well-pleaded-

complaint rule, a completely preempted state-law claim does.

See Dukes, 57 F.3d at 354.

Removal is proper only if the federal statute “wholly

displaces the state-law cause of action through complete pre-

emption.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8

(2003). A statute is completely preemptive if it “provide[s] the

exclusive cause of action for the claim asserted and also set[s]

forth procedures and remedies governing that cause of action.”

Id. As applied to this case, we ask whether the PREP Act

“provide[s] the exclusive cause of action” for negligence

claims against the nursing homes.9 Id. at 9. We can break this

9

Before the Supreme Court decided Beneficial National Bank,

our Court required a second step in the analysis. If one of the

defendant’s claims fell within an exclusive federal cause of

action, we would then ask “whether there [was] a clear

indication of a Congressional intention to permit removal

21

question into two parts: (1) Does the PREP Act create an

exclusive federal cause of action? If it does, (2) do any of the

estates’ claims fall within the scope of that cause of action? If

they do, the estates’ claims are completely preempted and

removable to federal court. Here, the PREP Act creates an

exclusive cause of action for willful misconduct. But the

estates allege only negligence, not willful misconduct. The

estates’ negligence claims thus do not fall within scope of the

exclusive federal cause of action. They are not completely

preempted, so they belong in state court.

A

Complete preemption is rare. The Supreme Court has

recognized only three completely preemptive statutes: the

Employee Retirement Income Security Act (“ERISA”), the

Labor Management Relations Act (“LMRA”), and the

National Bank Act. Each of those statutes contains an

exclusive federal cause of action. But the causes of action in

those three statutes were not explicitly exclusive—the Court

despite the plaintiff’s exclusive reliance on state law.” Ry. Lab.

Execs. Ass’n, 858 F.2d at 942. Both parties invite us to apply

that second step, but Beneficial National Bank severed that part

of the analysis. “[T]he proper inquiry focuses on whether

Congress intended the federal cause of action to be exclusive

rather than on whether Congress intended that the cause of

action be removable.” Beneficial Nat. Bank v. Anderson, 539

U.S. 1, 9 n.5 (2003) (emphasis added). We thus focus on

whether the PREP Act provides the exclusive cause of action

for negligence against the nursing homes. See id. at 9. “If so,

then the cause of action necessarily arises under federal law

and the case is removable. If not, then the complaint does not

arise under federal law and is not removable.” Id.

22

inferred exclusivity. Here, our job is easier. The PREP Act

explicitly creates “an exclusive Federal cause of action” for

willful misconduct. 42 U.S.C. § 247d-6d(d)(1). The statute’s

plain language cuts through the dense analysis that we would

otherwise employ to determine whether Congress intended to

create an exclusive cause of action. To demonstrate the

importance of the statutory language in this case, we begin with

the Supreme Court’s cases applying complete preemption.

The Supreme Court first recognized complete

preemption in Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557

(1968). Avco concerned § 301 of the LMRA, which creates a

cause of action for breach of contract between an employer and

a union. Id. at 560–61. Section 301 says that “[s]uits for

violation of contracts between an employer and a labor

organization . . . may be brought in any district court of the

United States having jurisdiction of the parties, without respect

to the amount in controversy or without regard to the

citizenship of the parties.” 29 U.S.C. § 185(a). In Avco, an

employer sued in a state court to enjoin a union from striking,

claiming that the union was violating the “no-strike” clause in

their collective-bargaining contract. Avco Corp., 390 U.S. at

558. The Court held that the employer’s claim was “controlled

by federal substantive law even though it [was] brought in a

state court.” Id. at 560. Because the breach-of-contract claim

was effectively a § 301 claim under the LMRA, the complaint

stated a federal question and was removable to federal court.

Id. at 560–61.

The Court next applied complete preemption in

Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987).

Section 502(a)(1)(B) of ERISA creates a cause of action for

employees to recover benefits under a covered plan. See 29

U.S.C. § 1132(a)(1)(B). The Court held that § 502(a)(1)(B)

23

creates an exclusive federal cause of action for resolution of

such disputes. See Metro. Life Ins., 481 U.S. at 62–63. The

Court reasoned that ERISA’s language closely parallels that of

the LMRA, so Congress must have intended the laws to have

similar preemptive power.10 Id. at 65. The Court was also

persuaded by legislative history indicating ERISA should be

regarded as similarly preemptive to § 301 of the LMRA. Id. at

65–66. The state claim, which fell under the scope of

§ 502(a)(1)(B) of ERISA, was thus “necessarily federal in

character” and removable to federal court. Id. at 67.

In Beneficial National Bank v. Anderson, 539 U.S. 1

(2003), the Court extended complete preemption to a third

10

Section 301(a) of the LMRA provides:

Suits for violation of contracts between an

employer and a labor organization . . . may be

brought in any district court of the United States

having jurisdiction of the parties, without respect

to the amount in controversy or without regard to

the citizenship of the parties.

29 U.S.C. § 185(a). Compare § 301(a) of the LMRA to

§ 501(a)(1)(B) of ERISA:

A civil action may be brought . . . by a participant

or beneficiary . . . to recover benefits due to him

under the terms of his plan, to enforce his rights

under the terms of the plan, or to clarify his rights

to future benefits under the terms of the plan . . . .

29 U.S.C. § 1132(a)(1)(B).

24

statute, the National Bank Act. Section 85 of the National Bank

Act governs the rate of interest that a national bank may

lawfully charge, and § 86 provides an exclusive remedy

against a national bank charging excessive interest. See 12

U.S.C. §§ 85, 86. Section 86 says, “In case the greater rate of

interest has been paid, the person by whom it has been paid, or

his legal representatives, may recover back, in an action in the

nature of an action of debt, twice the amount of the interest thus

paid . . . .” Id. § 86. The Court framed the issue narrowly:

“Only if Congress intended § 86 to provide the exclusive cause

of action for usury claims against national banks would the

statute be comparable to the provisions that we construed in the

Avco and Metropolitan Life cases.” Beneficial Nat’l Bank, 539

U.S. at 9. The Court relied on a long line of precedent holding

that § 86 created an exclusive federal cause of action. See id. at

10. The Court also determined that “the special nature of

federally chartered banks” required a uniform rule. Id. at 10–

11 (citing McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 431

(1819)). Thus, a state-law claim for usury against a national

bank actually states a federal claim under §§ 85 and 86 and

may be removed to federal court. Id. at 11.

In all three cases, the Court inferred that the cause of

action was exclusive. The three statutes unambiguously

created causes of action. But they did not unambiguously make

them exclusive. Rather, the Court reasoned that the significant

preemptive force of the statutes indicated congressional intent

to create an exclusive federal cause of action. See Beneficial

Nat. Bank, 539 U.S. at 11; Franchise Tax Bd. v. Constr.

Laborers Vacation Tr. for S. Cal., 463 U.S. 1, 23 (1983). The

PREP Act is different.

The PREP Act unambiguously creates an exclusive

federal cause of action. For nearly all injuries caused by

25

covered countermeasures falling under the Act, the Secretary

has the sole authority to administer and provide compensation

from the designated fund. See 42 U.S.C. § 247d-6e(a)–(b).

Congress carved out a narrow exception “for an exclusive

Federal cause of action against a covered person for death or

serious physical injury proximately caused by willful

misconduct.” Id. § 247d-6d(d)(1). A plaintiff asserting a

willful-misconduct claim must first exhaust administrative

remedies, and may then bring the claim only in the U.S. District

Court for the District of Columbia. Id. §§ 247d-6e(d)(1), 247d-

6d(e)(1). A plaintiff may choose to accept compensation from

the fund instead of filing suit in federal court. Id. § 247d-

6e(d)(5). If the plaintiff chooses to file suit, he must “plead

with particularity each element of [his] claim.” Id. § 247d-

6d(e)(3).

The PREP Act’s language easily satisfies the standard

for complete preemption of particular causes of action. It

provides an “exclusive cause of action . . . and also set[s] forth

procedures and remedies governing that cause of action.”

Beneficial Nat’l Bank, 539 U.S. at 8. The estates admit as

much. Where the PREP Act creates a cause of action, the

estates say “that claim would be one for willful misconduct on

the part of a covered person” that meets the statutory elements.

Appellees’ Br. 42. The Supreme Court has relied on the

complete preemptive force of a statute to infer congressional

intent to create an exclusive federal cause of action. Here, we

have a better source of congressional intent: the words of

Congress. Again, our analysis is straightforward. Congress

said the cause of action for willful misconduct is exclusive, so

it is.

26

B

Just because the PREP Act creates an exclusive federal

cause of action does not mean it completely preempts the

estates’ state-law claims. To remove to federal court, the

nursing homes also must show that the state-law claims fall

within the scope of the exclusive federal cause of action. In

other words, we must determine whether the estates could have

brought their claims under the PREP Act’s cause of action for

willful misconduct.11 See Aetna Health Inc. v. Davila, 542 U.S.

200, 210 (2004).

A claim for willful misconduct under the PREP Act has

several elements. The plaintiff must show (1) “an act or

omission,” that is taken (2) “intentionally to achieve a

wrongful purpose,” (3) “knowingly without legal or factual

justification,” and (4) “in disregard of a known or obvious risk

that is so great as to make it highly probable that the harm will

11

In the ERISA context, whether a state-law claims fall within

the scope of the exclusive federal cause of action is itself a two-

part question. See Aetna Health Inc. v. Davila, 542 U.S. 200,

210 (2004). “[A] claim is completely preempted . . . under

ERISA § 502(a) only if: (1) the plaintiff could have brought

the claim under § 502(a); and (2) no other independent legal

duty supports the plaintiff’s claim.” N.J. Carpenters & the

Trustees Thereof v. Tishman Const. Corp. of N.J., 760 F.3d

297, 303 (3d Cir. 2014). Some courts have extended that two-

part test to statutes other than ERISA. See, e.g., Hawaii ex rel.

Louie v. HSBC Bank Nevada, N.A., 761 F.3d 1027, 1037–38

(9th Cir. 2014). Because we conclude that the estates could not

have brought their claims under the PREP Act’s willful-

misconduct section, we need not determine whether an

independent legal duty supports their claims.

27

outweigh the benefit.” 42 U.S.C. § 247d-6d(c)(1)(A).

Moreover, the action must be (5) “against a covered person,”

(6) “for death or serious physical injury” that is

(7) “proximately caused by [the covered person’s] willful

misconduct.” Id. § 247d-6d(d)(1). The plaintiff must prove

these elements by “clear and convincing evidence.” Id. § 247d-

6d(c)(3). The PREP Act also provides a rule of construction:

the willful-misconduct requirement “shall be construed as

establishing a standard for liability that is more stringent than

a standard of negligence in any form or recklessness.” Id.

§ 247d-6d(c)(1)(B). Congress’s meticulous definition guides

our analysis.

The estates allege negligence, not willful misconduct.

The two complaints each assert four counts of negligence, plus

a claim for punitive damages. A claim for negligence under

New Jersey law requires the familiar elements of duty, breach,

causation, and damages. Townsend v. Pierre, 110 A.3d 52, 61

(N.J. 2015). In contrast, a claim for willful misconduct under

the PREP Act requires wrongful intent, knowledge that the act

lacked legal or factual justification, and disregard of a “known

or obvious risk that is so great as to make it highly probable

that the harm will outweigh the benefit.” 42 U.S.C. § 247d-

6d(c)(1)(A). The rule of construction removes any doubt: The

PREP Act’s cause of action for willful misconduct

“establish[es] a standard for liability that is more stringent than

a standard of negligence in any form or recklessness.” Id.

§ 247d-6d(c)(1)(B).

Willful misconduct is a separate cause of action from

negligence. The elements of the state cause of action need not

“precisely duplicate” the elements of the federal cause of

action for complete preemption to apply. Davila, 542 U.S. at

216. But complete preemption does not apply when federal law

28

creates an entirely different cause of action from the state

claims in the complaint. See DiFelice v. Aetna U.S.

Healthcare, 346 F.3d 442, 452–53 (3d Cir. 2003). Congress

could have created a cause of action for negligence or general

tort liability. It did not. Just as intentional torts, strict liability,

and negligence are independent causes of action, so too willful

misconduct under the PREP Act is an independent cause of

action. See Restatement (Second) of Torts § 519 cmt. d (Am.

L. Inst. 1977).

Nevertheless, we must look beyond the estates’ claims.

The question is whether the estates’ allegations fall within the

scope of the PREP Act’s cause of action—“that is, whether the

claims could have been brought under that section.” DiFelice,

346 F.3d at 446 (emphasis added). But nowhere in their

complaints do the estates allege or imply that the nursing

homes acted “intentionally to achieve a wrongful purpose.” 42

U.S.C. § 247d-6d(c)(1)(A)(i). Neither do they claim that the

nursing homes acted “knowingly without legal or factual

justification.” Id. § 247d-6d(c)(1)(A)(ii). The closest the

estates come to a willful-misconduct allegation is their request

29

for punitive damages.12 Employing standard language for a

punitive-damages request, the estates allege the nursing homes

engaged in “conduct that was grossly reckless, willful, and

wanton.” App. 120; App. 176. But we cannot infer from that

fleeting statement that the estates allege the nursing homes

acted with intent “to achieve a wrongful purpose,” or with

knowledge that their actions lacked “legal or factual

justification.” 42 U.S.C. § 247d-6d(c)(1)(A). Thus, the estates

could not have brought their claims under § 247d-6d(d)(1) of

the PREP Act. See DiFelice, 346 F.3d at 446.

C

We address one more argument concerning complete

preemption. The nursing homes argue that the PREP Act’s

compensation fund—not just the willful-misconduct cause of

action—completely preempts the estates’ negligence claims.

That argument is even less plausible.

12

Under New Jersey law, an independent count for punitive

damages may not be cognizable. See N.J. Stat. Ann. § 2A:15-

5.13 (1995); In re Est. of Stockdale, 953 A.2d 454, 473 (N.J.

2008); Giordano v. Solvay Specialty Polymers USA, LLC, No.

19-cv-21573, 2021 WL 754044, at *9 (D.N.J. Feb. 26, 2021).

The PREP Act conveys exclusive jurisdiction over “cause[s]

of action” based on willful misconduct. 42 U.S.C. § 247d-

6d(d)(1). We are thus skeptical that allegations in support of a

request for punitive damages can fall under the PREP Act’s

exclusive jurisdiction. Even assuming they could, our decision

here rests on our conclusion that the estates’ allegations in

support of punitive damages do not amount to a claim of willful

misconduct under the PREP Act.

30

The compensation fund is not a cause of action. The

nursing homes argue that the compensation fund is nonetheless

a civil-enforcement provision “exclusive of any other civil

action or proceeding.” 42 U.S.C. § 247d-6e(d)(4). To be sure,

the Supreme Court has occasionally asked whether Congress

created an exclusive civil-enforcement provision that displaces

the state-law claims. Compare Metro. Life Ins., 481 U.S. at 66,

with Beneficial Nat’l Bank, 539 U.S. at 10. Arguably, the

compensation fund could be a civil-enforcement provision

even if it is not a cause of action. But here we need not ponder

the differences between a civil-enforcement provision and a

cause of action. For our purposes, it is enough that neither the

Supreme Court nor any circuit court has extended complete

preemption to a statute because it created a compensation fund.

The three completely preemptive statutes recognized by the

Supreme Court all create civil causes of action that may be

pursued in any federal court. See 12 U.S.C. § 86; 29 U.S.C.

§§ 185(a), 1132(a)(1)(B). We will not presume that Congress,

in creating an administrative remedy, intended to make state-

law negligence claims removable to federal court.

The Second Circuit confronted a similar case. In 2001,

Congress passed the Air Transportation Safety and System

Stabilization Act (“ATSSSA”), 49 U.S.C. § 40101 note.

ATSSSA created a compensation fund for claims resulting

from the terrorist attacks of September 11, 2011. Id. (ATSSSA

§ 405). It also created a federal cause of action for damages

arising out of the attacks. Id. (ATSSSA § 408(b)). The Second

Circuit held that the cause of action completely preempted

state-law claims arising out of the attacks. In re WTC Disaster

Site, 414 F.3d 352, 380 (2d Cir. 2005). The court found the

statutory language unambiguous: “There shall exist a Federal

cause of action for damages arising out of the hijacking and

31

subsequent crashes of [the September 11 flights] . . . [and] this

cause of action shall be the exclusive remedy for damages

arising out of the hijacking and subsequent crashes of such

flights.” 49 U.S.C. § 40101 note (ATSSSA § 408(b)(1))

(emphasis added); see WTC Disaster Site, 414 F.3d at 375–76.

The court distinguished the cause of action from the

compensation fund, in part because of the breadth of the cause

of action. See WTC Disaster Site, 414 F.3d at 375–76.

The Second Circuit’s opinion is instructive here for

several reasons. First, both the PREP Act and ATSSSA

explicitly create an “exclusive” federal cause of action. 42

U.S.C. § 247d-6d(d)(1); 49 U.S.C. § 40101 note (ATSSSA

§ 408(b)(1)). Congress’s clear language in “establishing an

exclusive federal remedy undeniably bespeak[s] an intent to

displace state-law remedies entirely for such damages claims.”

WTC Disaster Site, 414 F.3d at 375. Second, like the Second

Circuit, we see a clear difference between the preemptive effect

of an exclusive cause of action and the preemptive effect of a

compensation fund. See id. at 375–76. The key distinction

between our case and the Second Circuit case is in the third

point. Unlike the PREP Act, ATSSSA creates a general

“remedy for damages.” 49 U.S.C. § 40101 note (ATSSSA

§ 408(b)(1)). The PREP Act, in contrast, enumerates the

elements of a specific cause action for willful misconduct.

Naturally, a cause of action for “damages” will envelop far

more state-law claims than will a narrow, specific cause of

action for willful misconduct. Given the narrowness of the

PREP Act’s cause of action, it is unsurprising that we reach a

different conclusion applying the PREP Act than the Second

Circuit reached applying ATSSSA.

We conclude this section with a note on the limits of our

holding. We do not hold that all state-law causes of action are

32

invulnerable to complete preemption under the PREP Act.

Conceivably, some state-law claims could fall within

Congress’s narrow cause of action for willful misconduct. We

also do not address whether the PREP Act preempts the

estates’ claims under ordinary preemption rules. That is for the

state court to determine on remand. We hold only that (1) the

estates’ negligence claims based on New Jersey law do not fall

under the PREP Act’s narrow cause of action for willful

misconduct, and (2) the PREP Act’s compensation fund is not

an exclusive federal cause of action triggering removal

jurisdiction.

VI

Finally, the nursing homes argue that the estates’ claims

raise a substantial federal issue that permits removal under 28

U.S.C. § 1441(a). Like complete preemption, this argument

relies on the jurisdiction of federal courts to decide federal

questions. To remove a case under federal-question

jurisdiction, a defendant must show that the case “aris[es]

under” federal law. 28 U.S.C. § 1331; see also id. § 1441(a).

Typically, “a case arises under federal law when federal law

creates the cause of action asserted.” Gunn v. Minton, 568 U.S.

251, 257 (2013). As we have discussed, the estates do not assert

a federal cause of action. Nevertheless, a small number of state

claims may arise under federal law if they raise “significant

federal issues.” Grable & Sons Metal Prod., Inc. v. Darue

Eng’g & Mfg., 545 U.S. 308, 312 (2005).

The Grable test has four parts. The federal issue must

be “(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. If the federal issue meets

33

all four requirements, federal jurisdiction is proper. Id. The

nursing homes argue that PREP Act immunity is a significant

federal issue that passes the Grable test. But a PREP Act

preemption defense is not “necessarily raised” by a well-

pleaded state-law negligence complaint, so their argument fails

at Grable’s first step.

“Federal preemption is ordinarily a federal defense to

the plaintiff’s suit. As a defense, it does not appear on the face

of a well-pleaded complaint, and, therefore, does not authorize

removal to federal court.” Metro. Life Ins. Co., 481 U.S. at 63.

Here, the nursing homes “would at best be entitled to a

preemption defense” under the PREP Act. Manning v. Merrill

Lynch Pierce Fenner & Smith, Inc., 772 F.3d 158, 165 (3d Cir.

2014), aff’d, 578 U.S. 901 (2016). The estates would properly

plead their state-law negligence claims without mentioning the

PREP Act, so the PREP Act is not “an essential element of the

plaintiff[s’] state law claim.” Id. at 163. We therefore lack

federal-question jurisdiction under Grable.

* * *

Federal courts have limited jurisdiction. We may decide

only cases or controversies that the Constitution and Congress

say we may decide. Here, the estates of the deceased filed

wrongful-death lawsuits against the nursing homes. They filed

in state court and asserted only garden-variety state-law claims,

so state court is where these cases belong. We will affirm the

order of the District Court.

34