Court Opinion

ID: 213382
Source: CourtListenerOpinion
Date Created: 2011-03-28 16:53:41+00
Date Added: 2024-06-11T17:28:15.081413
License: Public Domain

NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT

                                     No. 09-4060

                                 SARA L DOOLIN,
                                         Appellant

                                           v.

                           JAMES KASIN;
        GOVERNOR JUAN F. LUIS HOSPITAL AND MEDICAL CENTER;
                     GREGORY MOORMAN MD

                        Appeal from the District Court of the
                         Virgin Islands, Division of St. Croix
                               (Civ. No. 1-07-cv-00079)
                        District Judge: Hon. Harvey Bartle, III

                             Argued: December 15, 2010

                Before: McKEE, Chief Judge, FUENTES and SMITH,
                                 Circuit Judges

                           (Opinion filed: March 28, 2011)

ALAN R. FEUERSTEIN, ESQ. (Argued)
Feuerstein & Smith, LLP
17 St. Louis Place
Buffalo, NY 14202
and
P.O. Box 502008
St. Thomas, USVI 00805
Attorneys for Appellant

JAMES L. HYMES, III, ESQ. (Argued)
Law Offices of James L. Hymes, III, P.C.
P.O. Box 990 (10 Norre Garde)
St. Thomas, USVI 00804
Attorney for Appellees

                                           1
                                         OPINION

McKEE, Chief Judge.

       Sara L. Doolin filed a medical malpractice complaint against James V. Kasin,

M.D., Gregory Moorman, M.D., and the Governor Juan F. Luis Hospital and Medical

Center. Upon the defendants‟ motion, the district court dismissed Doolin‟s complaint.

The court concluded that it lacked subject matter jurisdiction because Doolin had not

complied with the pre-filing requirements of the Virgin Islands statute governing medical

malpractice actions, 27 V.I.C. §166i. Doolin v. Kasin, 2009 WL 258738 at *2-3 (D.V.I.

Aug. 19, 2009).1 Doolin then filed this appeal. However, we need not address the merits

of the district court‟s jurisdictional holding. Instead, for the reasons that follow, we will

vacate the district court‟s order and will remand for the district court to determine

whether it had diversity jurisdiction pursuant to 28 U.S.C. § 1332.

                                          FACTS

       Doolin, a nurse and resident of the state of Florida, was recruited in June of 2005

to assist in the formation of an open heart surgery program at the Governor Juan F. Luis

Hospital and Medical Center in St. Croix, United States Virgin Islands (the “Hospital”).

While in St. Croix, she detected a small nodule on her right breast. On August 26, 2005,

Gregory Moorman, M.D., an obstetrician-gynecologist, performed a biopsy on the

nodule. Dr. Moorman sent the specimen to James V. Kasin, M.D., a pathologist, for a

determination of the nature of the specimen.

1
  Those requirements are discussed in the district court‟s opinion and need not be
repeated here. 2009 WL 2578738 at *2.

                                               2
          Kasin examined the specimen and prepared a pathology report in which he

concluded that Doolin had focal intraductal carcinoma accompanied by fibrocystic

changes, i.e., breast cancer. Kasin sent the report to Moorman who relayed the results to

Doolin. Drs. Moorman and Kasin are employees of the Hospital.

         On September 9, 2005, Doolin traveled to Owensboro, Kentucky, to consult with

a surgeon, Dr. Gerald Edds, about her diagnosis. Based on Kasin‟s report, Edds

scheduled Doolin for an immediate lumpectomy. Dr. George Gilliam performed the

lumpectomy at Owensboro Mercy Health System on or about September 9, 2005.

Neither the specimen removed during the lumpectomy, nor the post surgical

mammogram showed evidence of cancer. Nevertheless, Gilliam, in reliance on the Kasin

report, referred Doolin to an oncologist to receive precautionary treatment. The

oncologist to whom Doolin was referred performed tests on the original pathology slides

that Kasin had prepared and determined that Doolin had never had cancer and that Kasin

had misdiagnosed her.

                               PROCEDURAL HISTORY

         On June 15, 2007, Doolin filed a copy of her proposed complaint with the Medical

Malpractice Review Committee pursuant to 27 V.I.C. § 166i.2 On June 28, 2007, Doolin

filed the complaint in the district court, pursuant to 28 U.S.C. § 1332, against Kasin,

Moorman and the Hospital, seeking to be compensated for pain and suffering related to

her misdiagnosis and for having to undergo unnecessary treatments, including

medications and surgery.

2
    See n.1, supra.
                                             3
       Kasin, Moorman and the Hospital filed a motion for summary judgment

challenging the district court‟s jurisdiction on two grounds. First, they argued that

Doolin‟s failure to comply with the pre-filing requirements of the Virgin Islands statute

governing medical malpractice claims, 27 V.I.C. § 166i, deprived the district court of

subject matter jurisdiction. Second, they argued that diversity jurisdiction does not exist

because the Hospital is a part of the government of the Virgin Islands.

       The district court treated the motion for summary judgment as a motion to dismiss

because the motion contested the district court‟s subject matter jurisdiction and did not

ask for a decision on the merits of Doolin‟s action. 2009 WL 2578738 at *1, n.1. As

noted, the district court granted the motion to dismiss for lack of subject matter

jurisdiction because of Doolin‟s failure to comply with the pre-filing requirements of the

Virgin Islands statute. It did not address the defendants‟ argument that there is no

diversity jurisdiction.

       Based upon our concern that the district court may not have had diversity

jurisdiction, we directed the Clerk to send the following letter to counsel, and asked them

to address that issue:

              In 1990, the Virgin Islands enacted legislation divesting the
              District Court of the Virgin Islands of original jurisdiction for
              local civil matters by vesting that jurisdiction in territorial
              courts. See 4 V.I.C. § 76(a); see also Edwards v. Hovensa,
              LLC, 497 F.3d 355, 358 (3d Cir. 2007). Accordingly, the
              District Court‟s jurisdiction must be grounded in either
              diversity jurisdiction under 28 USC § 1332 or federal
              question jurisdiction under § 1331. See 48 USC § 1612(a).
              Although the defendants asserted in their motion for summary
              judgment that diversity jurisdiction was lacking, the District
              Court did not address the issue. If the District Court did not

                                             4
             have diversity jurisdiction, then we also lack jurisdiction.
             Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541
             (1986) (restating that “„if the record discloses that the lower
             court was without jurisdiction this court will notice the defect,
             although the parties make no contention concerning it. [When
             the lower federal court] lack[s] jurisdiction, we have
             jurisdiction on the appeal, not of the merits but merely for the
             purpose of correcting the error of the lower court in
             entertaining the suit.‟”) (quoting United States v. Corrick, 298
             U.S. 435, 440 (1936)); Bacon v. Sullivan, 969 F.2d 1517,
             1519 (3d Cir. 1992). In light of the above, the parties are
             directed to file supplemental letter briefs addressing whether
             the District Court had diversity jurisdiction. The letter briefs
             may not exceed seven pages and shall be filed on or before
             November 8, 2010.

Counsel have complied with our request.

                                      DISCUSSION

                             A. Did the district court have
                                diversity jurisdiction?3

      Section 1332 of Title 28 of the United States Code provides, in relevant part, as

follows:

             (a) The district courts shall have original jurisdiction of all
             civil actions where the matter in controversy exceeds the sum
             or value of $75,000, exclusive of interest and costs, and is
             between

             (1) citizens of different States;

****************

             (e) the word “States,” as used in this section, includes the
             Territories, the District of Columbia, and the Commonwealth
             of Puerto Rico.

3
 “We exercise plenary review in determining whether the district court was vested with
subject matter jurisdiction.” Brown v. Francis, 75 F.3d 860, 865 (3d Cir. 1996) (citation
omitted).
                                                 5
28 U.S.C. § 1332(a)(1), (e).

       As noted, Doolin is a citizen of Florida. Kasin and Moorman are citizens of St.

Croix, United States Virgin Islands. The Hospital is owned by the Government of the

Virgin Islands.

       “There is no question that a State is not a „citizen‟ for purposes of the diversity

jurisdiction.” Moor v. Alameda County, 411 U.S. 693, 717 (1973). “At the same time,

however, [the Supreme] Court has recognized that a political subdivision of a state,

unless it is simply „the arm or alter ego of the State,‟ is a citizen of the State for diversity

purposes.” Id. (footnote and citations omitted). The same rule applies to the territories,

including the Virgin Islands. Brown v. Francis, 75 F.3d 860, 865 (3d Cir. 1996); see also

28 U.S.C. § 1332(e).

       In determining whether alter ego status is appropriate, a court must perform the

same analysis as is required to determine Eleventh Amendment immunity. Blade v.

Kline, 612 F.2d 718, 726 & n.16 (3d Cir. 1979).       In Benn v. First Judicial District of

Pennsylvania, 426 F.3d 233 (3d Cir. 2005), we set forth the Eleventh Amendment

immunity analysis:

              [T]o determine whether a suit against an entity is actually a
              suit against the state itself, we must consider: (1) the source
              of the money that would pay the judgment (i.e., whether that
              source would be the state); (2) the status of the entity under
              state law; and (3) the degree of autonomy the entity has.

Id. at 239 (citation omitted). The three factors are co-equal and no one factor has

primacy. Id. at 239-40 (citations omitted).

                                                6
       In his responsive letter brief, Doolin‟s counsel contends that the Hospital is a

separate operating entity from the Government of the Virgin Islands for purposes of

subject matter jurisdiction and is, therefore, a “citizen” and a proper diverse party to this

litigation. He has attached an appendix to his letter brief that contains documents which

were produced by the Hospital in response to his interrogatories and document

production requests. Doolin‟s counsel believes these documents demonstrate that the

Hospital is organized as a separate entity and corporation run without interference or

operational oversight by the Government of the Virgin Islands, and he has included

numerous exhibits to support that contention including the Hospital‟s bylaws, and other

documents that he contends show that the hospital functions as a private entity. For all

of these reasons, Doolin‟s counsel contends that all records produced by the Hospital

show that it is financially independent without reliance on the government, pays its own

debts and generates its own revenues such that it would pay any judgment from its own

revenues.

       However, we do not believe that Doolin‟s counsel‟s submission demonstrates that

the Hospital is a citizen for diversity jurisdiction purposes. Significantly, although he

claims that the Hospital has the capacity to pay a judgment against it, he offers no

authority for that claim other than his own ipse dixit to that effect.

       Of course, the Hospital, Kasin and Moorman claim that the Hospital is owned by

the Government of the Virgin Islands without separate legal status and, therefore, it is not

a citizen for purposes of diversity jurisdiction. That claim is based on an unreported

district court case, Hospital Resource Management, L.C. v. Gov. Juan F. Luis Hospital

                                               7
and Medical Center and the Virgin Islands Hospital & Health Care Facilities Corp., No.

2003/0056 (D.V.I. June 7, 2004).

         It appears that Hospital Resources in the only case addressing the issue of whether

the Hospital can be a considered a citizen for diversity purposes. Based on that case, one

could conclude that a suit against the Hospital is a suit against the Government of the

Virgin Islands and/or that the Hospital is an alter ego or arm of the Government of the

Virgin Islands. Either way, the Hospital is not a citizen for diversity purposes.

         However, the court in Hospital Resources did not determine whether any

judgment against the Hospital would be paid by the Government of the Virgin Islands,

which is one of the factors in the Benn Eleventh Amendment immunity analysis.

Therefore, we do not believe that Hospital Resources is as authoritative as defendants

claim.    Accordingly, we must remand this case to the district court for it to apply the

Benn factors and determine whether the Hospital is a citizen for purposes of diversity

jurisdiction.

         Counsel for the Hospital, Kasin and Moorman contends that Doolin‟s action must

be dismissed in its entirety because the Hospital is not a citizen for purposes of diversity

jurisdiction. However, Kasin and Moorman are citizens of St. Croix and are diverse

parties as to Doolin, who, as noted, is a citizen of Florida. Therefore, should the district

court determine that the Hospital is not a citizen for diversity purposes, it must then

determine whether the Hospital can be dismissed pursuant to Fed.R.Civ.P. 21 so that the

action can continue against Kasin and Moorman or whether the Hospital is an

indispensable party under Fed.R.Civ.P. 19, in which case the action must be dismissed in

                                              8
its entirety.4 See Newman-Green Inc. v. Alfonzo-Larraine, 490 U.S. 826, 832 (1989).

                                      CONCLUSION

       For the above reasons, we will vacate the district court‟s order dismissing

Doolin‟s action because of her failure to comply with the pre-filing requirements of 27

V.I.C. § 166i, and will remand the matter for the district court for it to determine whether

it has diversity jurisdiction under 28 U.S.C. § 1332.5

4
  Under Rule 21, district courts have the authority to retain jurisdiction by dropping a
non-diverse party, provided that the party is not indispensable. Parties are indispensable
if “„in the circumstances of the case [they] must be before the court.‟” Steel Valley
Authority v. Union Switch and Signal Division, 809 F.2d 1006, 1011 (3d Cir. 1987)
(quoting 3A J. Moore, Moore’s Federal Practice ¶ 19.02). In other words, indispensable
parties are “„persons who not only have an interest in the controversy, but an interest of
such a nature that a final decree cannot be made without either affecting that interest, or
leaving the controversy in such a condition that its leaving may be wholly inconsistent
with equity and good conscience.‟” Id. (quoting Shields v. Barrow, 58 U.S. (17 How.)
130, 139 (1854)).
5
  As we stated at the outset, we have not addressed the merits of the district court‟s ruling
that it lacked subject matter jurisdiction because of Doolin‟s failure to comply with the
pre-filing requirements of 27 V.I.C. § 166i. Nonetheless, we note that neither of the
parties nor the district court analyzed the jurisdictional question regarding § 166i by
applying Kontrick v. Ryan, 540 U.S. 443 (2004), and its progeny, which have recognized
that statutory requirements may qualify as jurisdictional requirements, claims processing
rules, or time-related directives. In the event the district court concludes that diversity
jurisdiction exists, whether § 166i is jurisdictional in nature should be analyzed in light of
Kontrick and its progeny.
                                              9