MENDEZ v. UNITED STATES OF AMERICA, 1:14-cv-07778

Background

Plaintiff Mary Mendez sued for medical malpractice after the death of her newborn, naming Dr. Eric Chang (an employee of CAMcare) among defendants; the United States was substituted under the FTCA for Dr. Chang.
CAMcare is a federally qualified health center (FQHC) and a public charity providing primary and preventive care 24/7, with no inpatient or emergency-room facilities; majority of patients were Medicaid recipients and total revenue ~ $19.9 million.
The United States moved to dismiss for lack of subject-matter jurisdiction (invoking NJCIA absolute immunity) or, alternatively, sought partial summary judgment limiting damages under the NJCIA cap to $250,000.
Key statutory provisions at issue are N.J.S.A. § 2A:53A-7 (charitable immunity exception for compensated health-care employees) and § 2A:53A-8 (liability cap for nonprofits organized exclusively for hospital purposes).
The court treated the absolute-immunity contention as a factual challenge under Rule 12(b)(1) and analyzed whether CAMcare is organized exclusively for charitable purposes or exclusively for hospital purposes under NJCIA.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the NJCIA absolute-immunity provision bars suit against Dr. Chang (i.e., CAMcare is "organized exclusively for charitable purposes")	CAMcare is a charitable FQHC but because Dr. Chang was a compensated employee, the FTCA's waiver should not apply and NJCIA absolute immunity should bar suit.	The United States argued CAMcare qualifies as organized exclusively for charitable purposes and thus may assert NJCIA defenses under Lomando.	Court rejected absolute immunity; adopted reasoning in Young and Dupont that CAMcare is not organized exclusively for charitable purposes.
Whether CAMcare is "organized exclusively for hospital purposes" such that the NJCIA $250,000 damages cap applies	CAMcare is a primary-care facility with no inpatient care and thus is not a "hospital" for purposes of § 8, so the cap should not apply.	United States argued the statutory phrase "hospital purposes" is broad; modern hospital functions include many outpatient and preventive services, so CAMcare can be organized exclusively for hospital purposes.	Court held CAMcare qualifies as organized exclusively for hospital purposes under Kuchera’s expansive construction, so the § 8 $250,000 cap applies.
Jurisdictional effect of the NJCIA holdings	If absolute immunity applied, the FTCA waiver would be lacking and the court would lack subject-matter jurisdiction.	If only the damages cap applied, the FTCA waiver remains and the court retains jurisdiction but liability is capped.	Because absolute immunity was rejected and the damages cap applied, the court denied the 12(b)(1) motion and granted partial summary judgment capping liability at $250,000.

Key Cases Cited

Lomando v. United States, 667 F.3d 363 (3d Cir. 2011) (FTCA allows federally supported health center employees to assert NJCIA defenses)
Kuchera v. Jersey Shore Family Health Ctr., 221 N.J. 239 (N.J. 2015) (interpreting "hospital purposes" broadly to encompass modern health-related pursuits)
Dupont v. United States, 197 F. Supp. 3d 678 (D.N.J. 2016) (district court holding CAMcare not organized exclusively for charitable purposes)
Young v. United States, 152 F. Supp. 3d 337 (D.N.J. 2015) (district court holding CAMcare not organized exclusively for charitable purposes)