IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

USA HOSPITALS, )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 15-0332-WS-M

 )

DAVID KEMP, )

 )

Defendant. )

 ORDER

This matter is before the Court on the plaintiff’s motion to remand. (Doc. 

45). The parties have filed briefs in support of their respective positions, (Docs. 

47-49), and the motion is ripe for resolution.

The defendant removed on the basis of diversity of citizenship. When no 

foreign state or citizen of a foreign state is a party, diversity jurisdiction requires 

that the action be between “citizens of different States.” 28 U.S.C. § 1332(a). The 

plaintiff asserts that it is not a citizen of Alabama or of any state.

“[A] state is not a citizen of a state for the purpose of diversity jurisdiction 

under 28 U.S.C. § 1332.” University of South Alabama v. American Tobacco Co., 

168 F.3d 405, 412 (11th Cir. 1999) (“USA”). “A public entity or political 

subdivision of a state, unless simply an arm or alter ego of the State, however, is a 

citizen of the state for diversity purposes. ... Therefore, if a party is deemed to be 

an arm or alter ego of the State, then diversity jurisdiction must fail.” Id. (internal 

quotes omitted).

“Although the question of diversity jurisdiction is distinct from that of 

immunity, ... we have also held that the Eleventh Amendment immunity analysis 

is applicable to determinations of citizenship for the purpose of diversity 

jurisdiction.” USA, 168 F.3d at 412. The University of South Alabama and other 

state universities within Alabama have been held to be protected by Eleventh 

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Amendment immunity. Id. “Based on this unambiguous precedent, we conclude 

that the University [of South Alabama] is an instrumentality of the state, not a 

citizen of the state of Alabama, for the purpose of diversity jurisdiction.” Id.

The plaintiff is not the University of South Alabama (“the University”) but 

USA Hospitals. The question is whether USA Hospitals is a citizen of Alabama 

even though the University is not. “[T]he burden of establishing removal 

jurisdiction rests with the defendant seeking removal.” Scimone v. Carnival 

Corp., 720 F.3d 876, 882 (11th Cir. 2013). Moreover, “all doubts about 

jurisdiction should be resolved in favor of remand to state court.” USA, 168 F.3d 

at 411. 

“[T]he operation of a hospital by a state university falls within the realm of 

sovereign immunity.” Liberty National Life Insurance Co. v. University of 

Alabama Health Services Foundation, P.C., 881 So. 2d 1013, 1028 (Ala. 2003) 

(internal quotes omitted). State sovereign immunity has been extended to the 

University of South Alabama Medical Center. Sarradett v. University of South 

Alabama Medical Center, 484 So. 2d 426 (Ala. 1986). Although the parties do not 

precisely identify “USA Hospitals,” the defendant admits he is being sued to 

collect payment for services rendered at “USA Medical Center.” (Doc. 1 at 2). 

The Court therefore assumes that the plaintiff partakes of sovereign immunity 

under state law. Possession of sovereign immunity under state law is not 

dispositive of Eleventh Amendment immunity, but it is a relevant factor. E.g., 

Walker v. Jefferson County Board of Education, 771 F.3d 748, 754-55 (11th Cir. 

2014). 

The defendant argues that the plaintiff has the capacity to sue, contract, and 

hold funds in its own name. (Doc. 47 at 2). Since this is also true of the 

University, it is not clear how these circumstances advance the defendant’s 

position.

The defendant’s central argument is that, by creating and funding a limited 

liability company to conduct most of its “management, operations, and 

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employment affairs,” the plaintiff “changed its character as separate and distinct 

from the State and extended itself beyond its alter-ego status.” (Doc. 47 at 2; Doc. 

48 at 4-5). The only member of the LLC, however, is the University itself, (Doc. 

49-2), so its creation could not have divorced the plaintiff from the University.

It is unnecessary for the Court to definitively resolve whether the plaintiff 

partakes of Eleventh Amendment immunity and/or whether it is a citizen of 

Alabama, and the parties’ cursory presentation makes the Court hesitant to do so. 

The defendant, who bears the burden, has failed to carry it, and the Court’s 

considerable doubts about its jurisdiction are sufficient to require remand. 

For the reasons set forth above, the motion to remand is granted. This 

action is remanded to the Circuit Court of Mobile County.

DONE and ORDERED this 25th day of April, 2016. 

 s/ WILLIAM H. STEELE

CHIEF UNITED STATES DISTRICT JUDGE

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