Court Opinion

ID: 4019792
Source: CourtListenerOpinion
Date Created: 2016-07-28 16:00:58.56542+00
Date Added: 2024-06-11T14:33:55.551834
License: Public Domain

FILED
                                   NOT FOR PUBLICATION                           Jul 28, 2016
                                    File Name: 16a0427n.06                  DEBORAH S. HUNT, Clerk
                                        Case No. 15-5354

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

APPALACHIAN REGIONAL                                 )
HEALTHCARE, INC.,                                    )
                                                     )
       Plaintiff–Appellant,                          )       ON APPEAL FROM THE UNITED
                                                     )       STATES DISTRICT COURT FOR
v.                                                   )       THE EASTERN DISTRICT OF
                                                     )       KENTUCKY
U.S. NURSING CORPORATION,                            )
                                                     )
       Defendant–Appellee.                           )                      ORDER
                                                     )

Before: BOGGS, SILER, and BATCHELDER, Circuit Judges.

       PER CURIAM. This case arose out of a Kentucky state-court suit brought by Ralph

Edward Proffitt against Constance Foote, Appalachian Regional Healthcare, Inc. (“ARH”), and

United States Nursing Corp. (“USN”). Proffitt v. Corley Mfg. Co., Civil Action No. 08-CI-360

(Ky. Letcher Cir. Ct.). Proffitt claimed that Foote, a nurse, caused or exacerbated injuries he

experienced following a work accident, and he sought to hold ARH and USN vicariously liable

for her conduct. At the relevant time, Foote was working at ARH’s medical facility in

Whitesburg, Kentucky. Pursuant to a “Job Action Staffing Agreement” (“Agreement”), USN had

arranged for Foote and other individuals to work at the facility to satisfy a personnel shortage

caused by an ongoing labor dispute. USN agreed to “indemnify, defend, save, and hold harmless

[ARH] . . . from any and all liability or damage that ar[ose] from . . . the negligent or intentional
Case No. 15-5354
Appalachian Regional Healthcare, Inc. v. United States Nursing Corporation
act or omission of [USN], its employees or agents, including staff members assigned by [USN]

to [ARH] pursuant to th[e] . . . Agreement.” In 2012, USN moved for summary judgment,

arguing that it “loaned or hired” out Nurse Foote to ARH and was therefore not vicariously liable

for any injuries caused or exacerbated by her under Kentucky’s “borrowed-servant doctrine.”

       ARH then filed the present suit in federal court, claiming that USN breached the

Agreement by asserting the borrowed-servant defense in the Proffitt litigation; seeking injunctive

relief to prevent USN from its alleged ongoing breach of the Agreement; and requesting a

declaration (1) that USN was in breach, (2) determining the scope and meaning of USN’s

indemnification duties under the Agreement, and (3) determining whether USN’s insurance

policy met the requirements set forth in the Agreement. The state court then denied USN’s

pending motion for summary judgment, and USN filed a motion to dismiss in federal court,

arguing that the district court lacked subject-matter jurisdiction and that ARH had failed to state

a claim.

       The district court ultimately found that ARH lacked standing to bring suit because it only

complained of “hypothetical” or “speculative” injuries rather than the “concrete” injury

necessary to satisfy Article III’s case or controversy requirement. Additionally, the court

declined to exercise jurisdiction over ARH’s claim for declaratory relief, reasoning that

considering the claim would mean “toss[ing] federalism and comity to the wind and

interven[ing] directly in ongoing state court litigation by telling the parties which arguments they

may or may not raise.” ARH has appealed, seeking reversal of the district court’s dismissal of its

claims for breach of contract and declaratory relief.1

       After the case was briefed and argued on appeal, ARH filed a notice of supplemental

authority under Rule 28(j) of the Federal Rules of Appellate Procedure, informing the court that
       1
           ARH has not challenged the district court’s determination that its claim for injunctive relief is moot.

                                                         -2-
Case No. 15-5354
Appalachian Regional Healthcare, Inc. v. United States Nursing Corporation
ARH and USN have been dismissed from the Proffitt litigation pursuant to settlement

agreements. ARH claims that “[i]ndemnification and cost-of-defense issues are now squarely at

issue under the [Agreement]” and that federalism concerns have been obviated. It continues to

seek reversal and remand for further proceedings “because the case was justiciable when filed.”

In response, USN notes that ARH has now “demanded that USN reimburse it for (i) a settlement

payment that ARH . . . made to the state court plaintiffs to settle ARH’s liability and (ii) its cost

of defending those claims.” Although USN “strongly disputes the merits of [the] demand,” it

now agrees that a justiciable controversy exists and “does not oppose remand for further

proceedings.”

         Though standing must exist “at the time the complaint is filed,” Already, LLC v. Nike,

Inc., 133 S. Ct. 721, 726 (2013) (quoting Alvarez v. Smith, 558 U.S. 87, 92 (2009)), subsequent

events may, on occasion, demonstrate the validity of a party’s belief at filing that a concrete

injury was likely to occur in the imminent future, see Hargrave v. Vermont, 340 F.3d 27, 34 (2d

Cir. 2003). Given the recent developments in this case, we REMAND the case to the district

court.

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