Court Opinion

ID: 6328985
Source: CourtListenerOpinion
Date Created: 2022-04-01 00:00:37.089572+00
Date Added: 2024-06-11T09:22:46.515224
License: Public Domain

Case: 21-50399   Document: 00516262590       Page: 1   Date Filed: 03/31/2022

          United States Court of Appeals
               for the Fifth Circuit
                                                                  United States Court of Appeals
                                                                           Fifth Circuit

                                                                         FILED
                                                                   March 31, 2022
                              No. 21-50399                          Lyle W. Cayce
                                                                         Clerk

   Crystal Perez, on behalf of The Estate of Ricardo Lozano,
   deceased,

                                                       Plaintiff—Appellee,

                                 versus

   Southeast SNF, L.L.C., doing business as Southeast Nursing;
   Rehabilitation Center; Texas Operations Management,
   L.L.C., doing business as Southeast Nursing; Rehabilitation
   Center; Advanced HCS, L.L.C., doing business as Advanced
   Healthcare Solutions, doing business as Southeast Nursing;
   Rehabilitation Center,

                                                  Defendants—Appellants,

                         consolidated with
                           _____________

                             No. 21-50412
                           _____________

   Robert T. Strait, individually and on behalf of The Estate of
   Robert M. Strait, deceased,

                                                       Plaintiff—Appellee,

                                 versus
Case: 21-50399      Document: 00516262590         Page: 2      Date Filed: 03/31/2022

                                   No. 21-50399
                            c/w Nos. 21-50412 & 21-50413

   Southeast SNF, L.L.C., doing business as Southeast Nursing;
   Rehabilitation Center; Texas Operations Management,
   L.L.C., doing business as Southeast Nursing; Rehabilitation
   Center; Advanced HCS, L.L.C., doing business as Advanced
   Healthcare Solutions, doing business as Southeast Nursing;
   Rehabilitation Center,

                                                           Defendants—Appellants,

                            consolidated with
                              _____________

                                 No. 21-50413
                               _____________

   Joe Salinas, individually and on behalf of The Estate of Elodia
   Salinas, deceased,

                                                               Plaintiff—Appellee,

                                      versus

   Southeast SNF, L.L.C., doing business as Southeast Nursing;
   Rehabilitation Center; Advanced HCS, L.L.C., doing
   business as Advanced Healthcare Solutions, doing business as
   Southeast Nursing; Rehabilitation Center; Texas
   Operations Management, L.L.C., doing business as Southeast
   Nursing; Rehabilitation Center,

                                                           Defendants—Appellants.

                  Appeals from the United States District Court
                       for the Western District of Texas
                 USDC Nos: 5:21-CV-88; 5:21-CV-90; 5:21-CV-89

   Before Higginbotham, Stewart, and Wilson, Circuit Judges.

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Case: 21-50399        Document: 00516262590             Page: 3      Date Filed: 03/31/2022

                                       No. 21-50399
                                c/w Nos. 21-50412 & 21-50413

   Per Curiam:*
           Ricardo Lozano, Robert M. Strait, and Elodia Salinas were residents
   of Southeast SNF, L.L.C.’s nursing homes who tragically died after they
   contracted COVID-19. Their family members filed these lawsuits in state
   court on behalf of their estates and individually as heirs and next of kin.
   Southeast removed the cases to federal court, alleging federal jurisdiction
   based on (1) federal-officer removal, (2) complete preemption, and (3) the
   Grable doctrine. The district court remanded the cases to state court, a ruling
   Southeast now challenges on appeal. As this court recently held in Mitchell
   v. Advanced HCS, L.L.C., No. 21-10477, --- F.4th----, 2022 WL 714888 (5th
   Cir. Mar. 10, 2022), these are not cases of federal jurisdiction. We affirm the
   district court’s remand orders.
                                              I.
           Lozano, Strait, and Salinas were residents in Southeast nursing
   facilities. Each of them died during the COVID-19 pandemic at least in part
   due to contracting COVID-19. Crystal Perez (Lozano’s niece), Robert T.
   Strait (Strait’s son), and Joe Salinas (Salinas’s son) are the Plaintiffs in this
   consolidated appeal. They each brought an action in Bexar County, Texas,
   alleging that Southeast SNF, L.L.C., Texas Operations Management,
   L.L.C., and Advanced HCS, L.L.C. (collectively, Southeast, or Defendants)
   violated standards of care and caused injury to their deceased family
   members.
           The virtually identical complaints included claims of negligence and
   gross negligence. 1 According to the allegations,

           *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
           1
          Plaintiffs were represented by the same attorney. Plaintiffs also seek Declaratory
   Judgment pursuant to Texas Civil Practice and Remedy Code Chapter 37.

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Case: 21-50399      Document: 00516262590           Page: 4     Date Filed: 03/31/2022

                                    No. 21-50399
                             c/w Nos. 21-50412 & 21-50413

          Defendants did not wash their hands, did not screen staff
          entering the facility, did not check for fever of staff, and did not
          maintain an infection prevention and control program to
          prevent the spread of COVID-19. Further, the Defendants
          failed to put into place proper policies to ensure that the
          residents were provided standard infection prevention care and
          failed to ensure that the HHS Rules were complied with by the
          staff. Defendants were notified that there were blatant
          violations of these requirements and regulations by staff
          members, including the failure of the staff to protect residents
          from infection with COVID-19.

   Plaintiffs also alleged that Southeast was “systematically understaffed in
   March and April of 2020 in an effort to maximize profits” and that Southeast
   “committed certain acts and/or omissions in the medical/nursing care and
   treatment of the Plaintiff[s], . . . which constituted negligence.” Finally,
   Plaintiffs asserted that Southeast breached “nondelegable duties by failing to
   provide rules regarding COVID-19 minimization, failing to provide a
   reasonably safe nursing home, and failing to hire competent employees.”
          Southeast removed the cases to federal court, alleging federal officer
   jurisdiction and federal question jurisdiction. See 28 U.S.C. § 1442(a)(1)
   (federal officer removal); id. § 1331 (federal question jurisdiction).
   According to Southeast, (1) Plaintiffs’ claims are based upon Southeast’s
   conduct “acting under” the United States (i.e., Southeast’s conduct as a
   “person acting under” a federal officer); (2) the Public Readiness and
   Emergency Preparedness (PREP) Act completely preempts Plaintiffs’ state
   law claims; and (3) there is a substantial federal question embedded in
   Plaintiffs’ claims pursuant to Grable & Sons Metal Products v. Darue
   Engineering & Manufacturing, 545 U.S. 308 (2005). Southeast then moved to
   dismiss each action under Rules 12(b)(1) and 12(b)(6), asserting that
   “Plaintiff[s’] claims are completely preempted by the PREP Act, which

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                                    No. 21-50399
                             c/w Nos. 21-50412 & 21-50413

   grants Defendants immunity to liability and suit.” Plaintiffs moved to
   remand, contending that Southeast’s removal was improper for lack of
   subject matter jurisdiction. The district court consolidated the motions and
   ordered that the cases be remanded. It likewise denied Southeast’s motions
   to dismiss as moot. Southeast timely appealed.
                                         II.
          “Although an order remanding a case to state court is not generally
   reviewable, ‘an order remanding a case to the State court from which it was
   removed pursuant to section 1442 . . . of [title 28] shall be reviewable by
   appeal or otherwise.’” Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286, 290
   (5th Cir. 2020) (en banc) (quoting 28 U.S.C. § 1447(d)). “We review the
   district court’s remand order de novo, without a thumb on the remand side
   of the scale.” Id. (internal quotation marks and citation omitted).
                                        III.
          “Federal courts have limited jurisdiction. We may only adjudicate
   cases and controversies to which the federal ‘judicial Power’ extends.”
   Mitchell, 2022 WL 714888, at *1 (quoting U.S. Const. art. III; citing Owen
   Equip. & Erection Co. v. Kroger, 437 U.S. 365, 372 (1978)). Southeast offers
   three grounds by which federal jurisdiction could attach: federal officer
   removal, complete preemption of state law claims by the PREP Act, and the
   Grable doctrine. Each of these grounds was similarly raised, and rejected, in
   Mitchell. Indeed, Mitchell is on all fours with this case, dictating the same
   result here.
          First, Southeast suggests federal officer removal applies. To remove
   a case to federal court on this basis requires that a defendant show: “(1) it
   has asserted a colorable federal defense, (2) it is a ‘person’ within the
   meaning of the statute, (3) that has acted pursuant to a federal officer’s
   directions, and (4) the charged conduct is connected or associated with an

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                                    No. 21-50399
                             c/w Nos. 21-50412 & 21-50413

   act pursuant to a federal officer’s directions.” Latiolais, 951 F.3d at 296; see
   28 U.S.C. § 1442(a)(1).
          The primary point of contention here is the third element—whether
   Southeast acted under or pursuant to a federal officer’s direction. Contrary
   to Southeast’s contentions, that requires more than receiving “permissive
   guidance, publishing of best practices, helpful suggestions, or a combination
   thereof” from the Centers for Disease Control and Prevention, the Centers
   for Medicare and Medicaid Services, and the Department of Health and
   Human Services. Mitchell, 2022 WL 714888, at *6. Though Southeast makes
   much ado about “operating under extraordinary conditions and guidance,”
   it fails to convince us that such conditions and guidance were more than a
   “difference in the degree of regulatory detail.” Estate of Maglioli v. All. HC
   Holdings, LLC, 16 F.4th 393, 406 (3d Cir. 2021) (internal quotation marks
   omitted) (quoting Watson v. Philip Morris Cos., 551 U.S. 142, 157 (2007)).
   The mere fact of federal regulation, even to a high degree of specificity,
   cannot meet this element. Mitchell, 2022 WL 714888, at *7.
          Next, Southeast contends the PREP Act fully preempts any state law
   claims. As a general rule, “[o]nly state-court actions that originally could
   have been filed in federal court may be removed to federal court by the
   defendant.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Where a
   federal law “completely preempt[s] a field of state law, the state-law claims
   in the plaintiff’s complaint will be recharacterized as stating a federal cause
   of action.” Rio Grande Underwriters, Inc. v. Pitts Farms, Inc., 276 F.3d 683,
   685 (5th Cir. 2001) (internal quotation marks omitted) (quoting Hart v. Bayer
   Corp., 199 F.3d 239, 244 (5th Cir. 2000)). But this court determined in
   Mitchell that the PREP Act “does not completely preempt . . . state-law
   negligence claims.” Mitchell, 2022 WL 714888, at *3. The PREP Act only
   creates a cause of action for willful misconduct. Id. (citing 42 U.S.C.
   § 247d-6e(d)(1)). Additionally, the compensation fund created by the PREP

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                                    No. 21-50399
                             c/w Nos. 21-50412 & 21-50413

   Act, contrary to Southeast’s assertions, “is not completely preemptive under
   this court’s precedents.” Id. The compensation fund provides no cause of
   action to supersede state law claims. Id. This proffered basis for federal
   jurisdiction is thus also unavailing.
          Finally, Southeast avers that “[e]ven in the absence of complete
   preemption, jurisdiction exists because a substantial federal question is
   embedded.” Under the Grable doctrine, “a federal court [is] able to hear
   claims recognized under state law that nonetheless turn on substantial
   questions of federal law, and thus justify resort to the experience, solicitude,
   and hope of uniformity that a federal forum offers on federal issues.” Grable,
   545 U.S. at 312. That is to say, “federal jurisdiction over a state law claim
   will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3)
   substantial, and (4) capable of resolution in federal court without disrupting
   the federal-state balance approved by Congress.” Gunn v. Minton, 568 U.S.
   251, 258 (2013).
          In addition to reiterating its arguments related to complete
   preemption under the PREP Act, Southeast also argues that the PREP Act’s
   “broad grant of immunity, its exclusive remedial scheme, and agency
   guidance documents create a significant federal issue in the context of the
   COVID-19 pandemic.” Mitchell, 2022 WL 714888, at *5. But, as this court
   has noted, “the relevance of the Act’s immunity provisions is defensive, as
   is its preemptive effect.” Id. This means that Southeast could potentially
   assert a preemption defense, but that has nothing to do with whether “federal
   issues are . . . raised [or] disputed” by the Plaintiffs. Id. Therefore, the
   Grable doctrine does not apply in this context. Id.
                                   *       *      *
          For the reasons stated herein, the district court’s remand orders are
                                                                    AFFIRMED.

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