DWAN BRAY and AARON BRAY, individually and as parents, natural guardians, and next friends on behalf of N. B., Plaintiffs-Appellants, v. BON SECOURS MERCY HEALTH, INC., et al., Defendants, UNITED STATES OF AMERICA, Defendant-Appellee.
No. 23-3357
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
March 29, 2024
RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 24a0069p.06. Argued: January 24, 2024. Decided and Filed: March 29, 2024. Before: GIBBONS, WHITE, and THAPAR, Circuit Judges.
COUNSEL
ARGUED: Paul W. Flowers, FLOWERS & GRUBE, Cleveland, Ohio, for Appellants. Kevin J. Kennedy, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Paul W. Flowers, Louis E. Grube, Kendra N. Davitt, FLOWERS & GRUBE, Cleveland, Ohio, Daniel N. Moore, THE MOORE LAW FIRM, Cincinnati, Ohio, Myles J. Poster, WAIS, VOGELSTEIN, FORMAN, KOCH & NORMAN, LLC, Baltimore, Maryland, for Appellants. Kevin J. Kennedy, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
GIBBONS, J., delivered the opinion of the court in which WHITE and THAPAR, JJ., joined. THAPAR, J. (pp. 20–24), delivered a separate concurring opinion.
OPINION
JULIA SMITH GIBBONS, Circuit Judge. Dwan and Aaron Bray (collectively, “plaintiffs“) brought this medical malpractice suit in state court individually and on behalf of their minor child, N.B., against Dr. Timothy J. Thress and various medical entities and actors (collectively, “defendants“). Plaintiffs sought damages stemming from defendants’ negligence as to Dwan Bray‘s pre-natal care and subsequent birth of baby N.B. But unbeknownst to plaintiffs, Thress was employed by a federally funded health center during his treatment of Bray. In line with the Federally Supported Health Centers Assistance Act (“FSHCAA“),
The government then moved for dismissal, arguing that plaintiffs failed to satisfy the FTCA‘s administrative exhaustion requirement. Plaintiffs, in turn, moved first to remand the action to state court, arguing that the FSHCAA did not apply, and later to amend their complaint to demonstrate compliance with the FTCA‘s exhaustion requirement. The district court denied both of plaintiffs’ motions, finding the FSHCAA applicable and any attempt to amend plaintiffs’ complaint futile. Accordingly, the district court dismissed plaintiffs’ FTCA claim without prejudice and remanded plaintiffs’ claims against the remaining defendants to state court. Plaintiffs appeal the district court‘s denial of their motion to remand and its dismissal of their FTCA claim. Because the district court was correct in both respects, we affirm.
I.
A. The FSHCAA and the FTCA
The Public Health Service (“PHS“) Act makes the FTCA the exclusive remedy against the United States in actions for damages for personal injury or death resulting from the performance of medical, surgical, dental, or related functions by an employee or officer of the PHS while acting within the scope of his or her employment. See
The FSHCAA, as amended, allows for certain health care entities to apply for federal funds under § 330 of the PHS Act, and, in turn, for the officers, board members, employees, and certain contractors of these entities to be “deemed” employees of the PHS for the purposes of obtaining the same medical malpractice liability protection.
Employees of § 330-funded entities seeking coverage under the FSHCAA must comport with specific requirements laid out in § 233(g) and accompanying Department of Health and Human Services (“HHS“) regulations. See, e.g.,
Here, the parties’ dispute centers on: (1) whether Thress acted within the scope of his employment in his treatment of Bray; (2) whether Thress‘s treatment of Bray related to federal grant-supported activities; and (3) whether Thress‘s treatment of Bray— a non-entity patient— fell within the situation covered by
B. Factual Background
On November 11, 2015, Dwan Bray—then thirty-seven weeks pregnant—was admitted to Mercy Health – Anderson Hospital (“Mercy“) for health complications including headaches, hypertension, light sensitivity, and blurred vision. Thress, an obstetrician at Mercy, evaluated Bray. Despite the fact that Bray‘s symptoms were consistent with preeclampsia, Thress made no diagnosis and Mercy discharged Bray that night. Nine days later, Bray gave birth to N.B., who required immediate neonatal resuscitation and was soon diagnosed with hypoxic-ischemic encephalopathy. Since birth, N.B. “continues to suffer from the sequela of hypoxic-ischemic encephalopathy including epilepsy, hypertonia, catastrophic brain damage, cerebral palsy, and other permanent injuries and damages.” DE 13, Am. Compl., Page ID 272.
Physician will participate in hospital and/or emergency room on-call rotations for hospital care and/or emergency coverage furnished to HealthSource and non-HealthSource patients in accordance with all requirements of applicable on-call agreements executed by HealthSource with hospitals or as otherwise directed by HealthSource. Physician will deliver hospital-based in-patient and emergency room services to non-HealthSource patients when: (a) the services are required by any hospital as a requirement for medical staff membership, credentials and privileges; (b) the services are required as a result of Physician providing on-call coverage or cross coverage for a provider with whom HealthSource has a written agreement, or (c) the services are requested by hospital staff or physicians in response to emergency situations occurring at the hospital.
Id.
Several months before Thress‘s employment with HealthSource, HealthSource had contracted with Mercy, a local hospital, to account for Mercy‘s lack of obstetricians to cover nights and weekends. Under the agreement, “HealthSource obstetricians would provide call coverage overnight and on weekends in exchange for Mercy Anderson paying [HealthSource] a flat rate for the physician‘s time.” DE 34-1, Patton Dec., Page ID 733; DE 20-2, Pro. Servs. Agreement, Page ID 347. Starting in 2013, pursuant to this agreement, Thress also provided OB-GYN services at Mercy.
The agreement between HealthSource and Mercy also required physicians like Thress to obtain membership on Mercy‘s medical staff and comply with all applicable bylaws for obtaining clinical privileges before providing any services at Mercy. Mercy‘s bylaws, in turn, provided that medical staff members “may admit patients . . . within the scope of granted Clinical Privileges.”1 DE 35-1, Mercy Bylaws, Page ID 749–50. Under Mercy‘s rules, medical staff members who hold such “privileges must take inpatient call.” Id.; DE 35-2, Mercy Rules & Reguls., Page ID 794.
The parties agree that HealthSource was a covered community health center under the FSHCAA at all relevant times. HealthSource‘s grant application laid out the health center‘s activities that would be within the scope of the federal funding and how those activities addressed the grant‘s objectives. In its grant application, HealthSource described its obstetrician/gynecologist positions within the “Major Service
approved HealthSource‘s application for funding under § 330 of the PHSA and in turn, deemed HealthSource and its employees to be employees of PHS for the duration of 2015.
B. Procedural Background
On April 30, 2020, plaintiffs sued Thress, Mercy, and other health care entities and providers in an Ohio state court for their conduct related to Bray‘s pre-natal care and delivery of N.B. On September 8, 2020, the case was removed to federal court. The government certified Thress as a “deemed” PHS employee acting within the scope of his employment while treating Bray and substituted itself as the appropriate defendant. After removal, plaintiffs filed an administrative complaint with HHS on September 18, 2020. In the federal suit, plaintiffs then moved to remand the case to state court, arguing that the FSHCAA did not apply to Thress‘s conduct. Before the district court ruled on the remand issue, the government moved to dismiss in light of plaintiffs’ failure to exhaust their administrative remedies as required by the FTCA.
The district court ruled against plaintiffs on both accounts. First, the district court found Thress‘s conduct covered by the FSHCAA, thus deeming the United States the appropriate defendant and denying plaintiffs’ motion to remand. Second, the district court granted the government‘s motion to dismiss based on plaintiffs’ failure to exhaust their administrative remedies. While plaintiffs requested leave to amend their complaint to demonstrate their satisfaction of the FTCA‘s exhaustion requirement, the district court found that such amendment would be futile. The district court thus dismissed plaintiffs’ claim against the United States without prejudice. Plaintiffs filed a timely notice of appeal.
II.
This court reviews a district court‘s denial of a motion to remand de novo. Village of Oakwood v. State Bank & Tr. Co., 539 F.3d 373, 377 (6th Cir. 2008). The party that removed the case to federal court “bears the burden of establishing federal subject matter jurisdiction.” Id.; Heyman v. Lincoln Nat‘l Life Ins. Co., 781 F. App‘x 463, 468 (6th Cir. 2019) (citing Eastman v. Marine Mech. Corp., 438 F.3d 544, 549 (6th Cir. 2006)). A district court has “wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts.” Ohio Nat. Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990).
But “[a]ll doubts as to the propriety of removal are resolved in favor of remand.” Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999).
Likewise, we review de novo a district court‘s denial of a motion to amend a complaint based on a finding that “the amendment would be futile.” Baaghil v. Miller, 1 F.4th 427, 432 (6th Cir. 2021). “A proposed amendment is futile if the amendment could not withstand a Rule 12(b)(6) motion to dismiss.” Riverview Health Institute LLC v. Med. Mutual of Ohio, 601 F.3d 505, 512 (6th Cir. 2010) (quoting Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000)).
III.
A.
Scope of Employment. The FSHCAA only covers an individual for conduct within the scope of his or her employment. Here, the district court looked to state law to determine whether Thress was within the scope of his HealthSource employment in treating Bray and found that he was. The district court applied state law to the inquiry pursuant to our unpublished decision in Davey v. St. John Health, 297 F. App‘x 466 (6th Cir. 2008). Now, plaintiffs argue that the district court erred in using state law as the appropriate metric. Instead, plaintiffs contend, the FSHCAA
and accompanying regulations provide their own considerations governing the scope of employment determination.
We need not decide this issue today, as the substantive law underlying the scope of employment determination is not outcome-determinative. Here, in addition to analyzing Thress‘s conduct under state law, the district court conducted the very inquiry plaintiffs urge this court to adopt. That is, the district court, like some of our sister circuits that have addressed this statutory and regulatory scheme, addressed whether Thress‘s treatment of Bray related to grant-supported activities and whether the activity fit squarely within an enumerated exception to the Secretary‘s particularized deeming requirement. See O‘Brien v. United States, 56 F.4th 139, 147–51 (1st Cir. 2022); Friedenberg v. Lane Cnty., 68 F.4th 1113, 1130–31 (9th Cir. 2023). And the district court concluded that Thress met each of the FSHCAA‘s requirements. Accordingly, we need not delve further into this inquiry.
B.
Related to Grant-Supported Activity. Section 6.6(d) provides FSHCAA coverage only for “acts and omissions related to the grant-supported activity of [covered] entities.”
Plaintiffs first argue that in the case of the provision of care to non-entity patients, the relatedness determination belongs solely with the Secretary of HHS. Here, plaintiffs argue that because the Secretary had not made a particularized deeming decision as to the coverage of the Mercy
(d) Only acts and omissions related to the grant-supported activity of entities are covered. Acts and omissions related to services provided to individuals who are not patients of a covered entity will be covered only if the Secretary determines that:
(1) The provision of the services to such individuals benefits patients of the entity and general populations that could be served by the entity through community-wide intervention efforts within the communities served by such entity;
(2) The provision of the services to such individuals facilitates the provision of services to patients of the entity; or
(3) Such services are otherwise required to be provided to such individuals under an employment contract or similar arrangement between the entity and the covered individual.
(e) Examples. The following are examples of situations within the scope of paragraph (d) of this section:
* * *
(4) For the specific activities described in this paragraph (e)(4), when carried out by an entity (and its eligible personnel) that has been covered under paragraph (c) of this section, the Department has determined that coverage is provided under paragraph (d) of this section, without the need for specific application for an additional coverage determination under paragraph (d) of this section, if the activity or arrangement in question fits squarely within these descriptions; otherwise, the health center should seek a particularized determination of coverage.
* * *
(ii) Hospital-Related Activities. Periodic hospital call or hospital emergency room coverage is required by the hospital as a condition for obtaining hospital admitting privileges. There must also be documentation for the particular health care provider that this coverage is a condition of employment at the health center.
Plaintiffs argue that the framework laid out in
requirement remains distinct from the § 6.6(e) inquiry and can be decided by district courts in the first instance. See Smith v. Harbison, No. 4:19-CV-152, 2020 WL 6216758, at *2–3 (M.D. Ga. Oct. 22, 2020) (addressing whether physician‘s treatment of non-entity patient related to grant-supported activity).
Second, plaintiffs argue that since Thress‘s conduct at Mercy was completely
But that Thress was not compensated with grant funds for his Mercy coverage does not mean that his coverage falls outside the scope of the FSHCAA. In providing coverage for conduct “related to” grant-supported activity,
required.“). Similarly, Friedenberg considered the jail diversion program related to grant-funded activity even though the program was not explicitly named in the grant application. See id. Although the specific program was not named, the “expressed purposes of the program and the federally funded activities [we]re similar, [so] the acts and omissions in this case at least ‘relate to’ Lane County‘s grant-supported activity.” Id.
While not binding, Friedenberg‘s reasoning is applicable here. HealthSource did not list “Mercy” or “House Officer” in its application. But its application detailed the conduct that physicians like Thress would engage in at hospitals: the grant application described gynecological, pre-natal, labor and delivery, and post-partum services as “required” services and specified that HealthSource physicians would provide on-call and admitting services at hospitals. DE 24-1, Health Res. and Serv. Admin. Grant Application, Page ID 460–61; cf. Harbison, 2020 WL 6216758, at *3 (determining whether language in grant application contemplated the provision of OB-GYN services at third-party hospital). To be sure, Friedenberg is not identical to this case, as the location of the jail diversion program was specified in the grant application, while the location of Thress‘s services here—Mercy—was not. Friedenberg, 68 F.4th at 1119, 1131 (citing HRSA guidance indicating that service locations
And critically, contrary to plaintiffs’ contention, Thress‘s provision of services at Mercy did further HealthSource‘s grant objectives and the provision of care to HealthSource patients. This remains true even though this suit concerns services provided to Bray, a non-patient. HealthSource applied to become a federally qualified health center to “provide[] primary care to people who are either uninsured, underinsured or in need of care in a community.” DE 32-1, Patton Dep., Page ID 607. Thress‘s weekend and night obstetrician coverage furthered this goal by filling a gap in needed services to both HealthSource and non-HealthSource patients alike, as Mercy otherwise lacked the capability to provide weekend and overnight services to individuals that came in. Although Bray happened to be a separately insured non-HealthSource patient, Thress‘s provision of OB-GYN services at Mercy made these grant-specified services accessible to HealthSource patients coming into the hospital. See Harbison, 2020 WL 6216758, at *5
(provision of OB-GYN services at third-party hospital “expanded obstetric options for [the entity‘s] patients, which is consistent with [the entity‘s grant] mission of providing medical services to the underserved,” even though the specific service was provided to a non-entity patient); see also
Accordingly, this is not a case where application of coverage to Thress‘s conduct at Mercy would immunize conduct divorced from any grant-supported activity and “stretch [the] FSHCAA beyond its breaking point.” CA6 R. 22, Appellants’ Br., at 34. Rather, Thress‘s coverage at Mercy related to grant-supported activity, and furthered the goals of HealthSource‘s grant project and the provision of grant-specified services to HealthSource patients.
C.
Deeming Regulation. All agree that this case primarily turns on whether Thress‘s activities at Mercy fall “squarely within” the circumstances laid out in
As described above,
Thress‘s provision of services to Bray at Mercy falls
(ii) Hospital-Related Activities. Periodic hospital call or hospital emergency room coverage is required by the hospital as a condition for obtaining hospital admitting privileges. There must also be documentation for the particular health care provider that this coverage is a condition of employment at the health center.
The district court found that it did. Addressing the first requirement, the district court found that Mercy required Thress to provide “periodic, on-call coverage” “[a]s a condition of obtaining hospital admitting privileges” at Mercy. DE 38, Order & Op., Page ID 843 (citing DE 35-2, Mercy Rules & Reguls., Page ID 794). Further, the district court found that “Thress obtained and maintained hospital privileges at Mercy,” and treated Bray during the performance of one of his “required on-call shift[s].” Id. at Page ID 833, 840. As to the second requirement, the district court found that HealthSource required Thress to provide such coverage at Mercy. Accordingly, the district court deemed the services provided by Thress squarely within the “Hospital-Related Activities” contemplated by
In challenging this ruling, plaintiffs advance three arguments. First, they argue that the district court incorrectly found that Thress obtained admitting privileges in exchange for his performance of on-call services at Mercy. Second, they argue that the district court misread Thress‘s employment contract with HealthSource, as the contract did not require that Thress obtain admitting privileges at Mercy specifically. Third, they argue that application of
Section 6.6(e)(4)(ii)‘s first clause requires that “[p]eriodic hospital call or hospital emergency room coverage” is “required by the hospital as a condition for obtaining hospital admitting privileges.” Plaintiffs devote much of their reply brief to resolving the issue of whether this requirement “was met as a matter of fact.” CA6 R. 22, Appellants’ Reply Br., at 3. To fit squarely within the section, plaintiffs argue, we must find that Thress in fact obtained admitting privileges at Mercy in exchange for his on-call services. Plaintiffs argue that the
asserted purpose of HealthSource‘s contract with Mercy—the provision of obstetricians to account for Mercy‘s lack of weekend and night providers—belies the notion that Thress worked on-call at Mercy in exchange for admitting privileges. Put less congenially, plaintiffs allege that Thress instead performed on-call services at Mercy “to fill Mercy‘s needs and HealthSource‘s coffers.” Id. at 6.
Plaintiffs’ argument fails because the record supports the conclusion both that Mercy conditioned the obtainment and maintenance of admitting privileges on the performance of on-call shifts like the one in which Thress encountered Bray, and that Thress possessed such admitting privileges at Mercy. And contrary to plaintiffs’ position, the regulations demand no more: there is no requirement that privileges be obtained primarily in exchange for on-call services if § 6.6(e)(ii)‘s requirements are otherwise met.
We can address the first portion of the relevant inquiry largely by reviewing Mercy‘s bylaws and its rules and regulations. To this end, plaintiffs concede that Mercy
We also find that Thress treated Bray in accordance with Mercy‘s on-call coverage requirements. Although the district court found Thress‘s privileges obtained by virtue of the professional services agreement, while plaintiffs correctly note that the agreement required Thress to separately apply to obtain such privileges, the record otherwise supports the finding that Thress possessed the requisite clinical and admitting privileges at Mercy. We “can affirm the district court on any basis supported by the record,” and we do so here. Leary v. Daeschner, 228 F.3d 729, 741 n.7 (6th Cir. 2000).
First, while the agreement between HealthSource and Mercy did not itself confer admitting privileges, it did contemplate Thress obtaining such privileges in connection with the duties of an on-call house officer. Likewise, the agreement required Thress to apply for clinical privileges and medical staff membership before performing “any [s]ervices at Mercy.” DE 20-2, Pro. Servs. Agreement, Page ID 349. The clinical privileges, in turn, enabled Thress to admit
patients at Mercy. Had Thress treated Bray, or any other patient at Mercy for that matter, without obtaining appropriate clinical privileges, he would have breached the professional services agreement with Mercy and his employment agreement with HealthSource, both of which required him to comply with all applicable hospital rules and regulations concerning privileges.
The record does not support a finding that Thress breached both contracts and the Mercy bylaws by performing gynecological services at Mercy without the required clinical privileges. Instead, the record demonstrates that Thress possessed the requisite clinical and admitting privileges at Mercy when he treated Bray during his on-call shift. Because Mercy‘s applicable bylaws and rules and regulations condition admitting privileges on satisfaction of on-call coverage duties, and because the record otherwise demonstrates that Thress acted in accordance with that condition in his coverage at Mercy, the first requirement of
Section 6.6(e)(4)(ii) next requires “documentation for the particular health care provider that this coverage is a condition of employment at the health center.” Plaintiffs contend that this portion of
Thress‘s employment contract with HealthSource required both that Thress “obtain and maintain hospital privileges” and that he participate in “on-call rotations for hospital care and/or emergency coverage furnished to HealthSource and non-HealthSource patients in accordance with all requirements of applicable on-call agreements executed by HealthSource with hospitals.” DE 32-5, Emp. Agreement, Page ID 695. Similarly, HealthSource required that Thress provide hospital-based services to non-HealthSource patients when “the services are required by a[] hospital as a requirement for medical staff membership, credentials and privileges.” Id. These requirements tie in
And, as previously discussed, Mercy required on-call coverage as a condition of obtaining appropriate clinical privileges, including those related to admissions. Likewise, the agreement between HealthSource and Mercy required Thress to obtain appropriate clinical privileges and membership on Mercy‘s medical staff prior to providing services at Mercy in accordance with Mercy‘s bylaws and applicable rules and regulations. HealthSource therefore required Thress to obtain admitting privileges and to provide such coverage at Mercy, and it was during the provision of this coverage that Thress encountered Bray.
We thus reject plaintiffs’ contention that because HealthSource‘s employment contract with Thress did not explicitly name Mercy, it could not have required Thress to obtain admitting privileges at Mercy as a condition of employment. As explained above, the “arrangement” between Thress, HealthSource, and Mercy fit “squarely within” the circumstance set out in
D.
FTCA Exhaustion. Because this action can proceed only under the FTCA, plaintiffs are subject to
The FTCA provides that “[a]n action shall not be instituted upon a claim against the United States” for damages for injury or loss caused by acts or omissions of a government employee acting within the scope of his or her employment “unless the claimant shall have first presented the claim to the appropriate Federal agency” and obtained a final decision.
The Supreme Court has also spoken on this statutory requirement. The Court interpreted the term “instituted” to be “synonymous with the words ‘begin’ and ‘commence.‘” McNeil v. United States, 508 U.S. 106, 112 (1993). “The most natural
In an attempt to avoid McNeil‘s import, plaintiffs urge us to “carve out a narrow exception” to the FTCA exhaustion requirement where an FTCA claim becomes exhausted during litigation and the plaintiff “then seeks to make a subsequent amendment that would render the earlier complaint null and void.” CA6 R. 12, Appellants’ Br., at 37. But we have interpreted McNeil as holding that “[a] plaintiff who fails to comply can‘t cure that failure by exhausting administrative remedies while the suit is pending: the claim must be reasserted ‘in a new action.‘” Kellom, 86 F.4th at 292 (citing McNeil, 508 U.S. at 110–12). Kellom rebuffed the notion “that a plaintiff can bring an FTCA claim before exhausting and cure the defect by reasserting the same claim in an amended complaint.” Id. at 293. And while plaintiffs
distinguish McNeil by discussing the potential applicability of tolling to their claim, disputes over tolling and accrual speak to application of the statute of limitations—not the exhaustion requirement—to plaintiffs’ claim. Such distinctions are therefore inapposite.
Plaintiffs also argue that McNeil did not address whether filing an amended complaint after the initiation of suit can “be said to have ‘instituted’ the case over again” for exhaustion purposes. CA6 R. 12, Appellants’ Br., at 39. But this argument is also without merit. Plaintiffs’ suit became an action “instituted” on a claim against the United States upon the Attorney General‘s certification under
Many of these cases contemplated amending a plaintiff‘s complaint to allege substantively new FTCA claims—that is, claims based on facts that were previously the subject of final administrative dispositions but not previously alleged in federal court. See, e.g., Mackovich v. United States, 630 F.3d 1134, 1135–36 (8th Cir. 2011) (allowing for assertion of exhausted FTCA claim in amended complaint where the plaintiff “abandoned his initial claim” and essentially “commenced an entirely new action” by asserting an FTCA claim based on newly alleged conduct). Here, in contrast, plaintiffs do not raise a new claim in their proposed amended complaint; rather, they reassert “the same claim” in substance as before—a malpractice claim arising from Thress‘s failure to diagnose Bray‘s preeclampsia. See Kellom, 86 F.4th at 293 (distinguishing Mackovich for this reason); see also Malouf v. Turner, 814 F. Supp. 2d 454, 461–62 (D.N.J. 2011) (deeming claim instituted for
So, plaintiffs instituted suit upon the filing of their initial complaint concerning Thress‘s conduct. The action plaintiffs
plaintiffs had not filed, much less exhausted, an administrative complaint concerning the substance of plaintiffs’ FTCA claim.3
And as previously explained, plaintiffs’ attempt to amend their complaint to include the United States as a defendant cannot cure this failure to exhaust. This claim became an FTCA claim against the United States prior to plaintiffs’ request to amend the complaint to show the same. Plaintiffs’ proposed amendments—specifically those to name the United States as a defendant and label the applicable law as the FTCA—were therefore immaterial, as the application of
IV.
For the previously discussed reasons, we affirm.
CONCURRENCE
THAPAR, Circuit Judge, concurring. Provisions in the Federally Supported Health Centers Assistance Act (FSHCAA) and Federal Tort Claims Act (FTCA) can trap unwary litigants. So while I agree entirely with the majority opinion, I write separately for two reasons: (1) to explain how litigants can avoid these traps and preserve meritorious claims and (2) to recognize the tension between this statutory scheme and the Seventh Amendment right to a jury trial.
I.
The FSHCAA allows the United States to “substitute in” as the defendant when a covered doctor is sued. If that arrangement sounds familiar, it‘s because the Westfall Act has similar provisions. Under both statutes, the government takes the place of an individual defendant. And under both statutes, the Federal Tort Claims Act provides the exclusive remedy.
This case is a good example: Bray had private insurance, she was a patient at a privately funded hospital, and her doctor was listed as staff of Mercy hospital—a private, nonprofit health center. What reason was there for Bray to suspect the United States was lurking in her hospital room? There wasn‘t any. Nor would there be any reason for plaintiffs in her situation to know ahead of time that the FTCA, rather than state malpractice law, would govern their claims. That means they‘ll face several surprise hurdles when litigation begins, such as the FTCA‘s two-year statute of limitations or administrative-exhaustion requirement.
The second difference is jurisdictional. The Westfall Act applies to federal employees. So once the government substitutes itself as the defendant, federal jurisdiction is conclusively established.
By contrast, government substitution doesn‘t conclusively establish jurisdiction under the FSHCAA. O‘Brien v. United States, 56 F.4th 139, 147 n.6 (1st Cir. 2022). That‘s because the line between government and private healthcare is often blurry. Here, for instance, HealthSource received money from both the federal government and from private sources. In situations like this, the government occasionally draws the line incorrectly and substitutes itself for a defendant when it shouldn‘t have. When that happens, the FSHCAA instructs the district court to remand the case to state court.
Here comes the rub. Before plaintiffs can file an FTCA claim, they must first exhaust their remedies with the relevant administrative agency. And if a plaintiff doesn‘t file with the agency within two years, her claim is time-barred.
But even when plaintiffs are on time, they still face a hard choice. Recall that plaintiffs with unexhausted claims will likely want to challenge federal jurisdiction under the FSHCAA. If they lose this jurisdictional dispute, their claim will be dismissed for failure to exhaust. On the flip side, if a litigant voluntarily dismisses her suit to exhaust, she might forfeit her ability to challenge jurisdiction under the FSHCAA.
In this case, Bray tried to avoid this problem by administratively exhausting her claim while she challenged jurisdiction
II.
Fortunately, there‘s a path that allows litigants to challenge jurisdiction and exhaust administrative remedies while protecting their claims from being time-barred.
To do this, plaintiffs should file a separate, “protective” action in federal court after they exhaust, even as their jurisdictional dispute continues in the original case. This allows plaintiffs to properly institute a new, exhausted claim against the government while also not losing progress in their jurisdictional dispute. As often happens in these circumstances, the district court can consolidate the two actions. Plaintiffs could even provide advance notice to the judge presiding over their initial action that they plan to take these steps. That way, the judge won‘t misinterpret the protective action as conceding federal jurisdiction. Instead, like arguing in the alternative, plaintiffs using this strategy would simply be protecting their options should they lose on jurisdiction.
But what about litigants who are already out of time? Although the majority opinion doesn‘t decide this issue, equitable tolling might be appropriate. See United States v. Wong, 575 U.S. 402, 420 (2015). Under the FSHCAA, even litigants who diligently pursue their claims might be completely unaware of a defendant‘s federal status. Indeed, they might not discover that their malpractice claim is subject to the FTCA—and its two-year statute of limitations—
until it‘s too late. When litigants fall into this trap through no fault of their own, equitable tolling may be appropriate.
Other circuits have diverged on this issue. Compare Santos ex rel. Beato v. United States, 559 F.3d 189, 203–04 (3d Cir. 2009) (tolling), with Gonzalez v. United States, 284 F.3d 281, 291 (1st Cir. 2002) (no tolling), Gould v. HHS, 905 F.2d 738, 745 (4th Cir. 1990) (same), and Motley v. United States, 295 F.3d 820, 824 (8th Cir. 2002) (same). But granting equitable tolling in a case like this one would not create or deepen a circuit split. The cases from the First, Fourth, and Eighth Circuits are distinguishable from cases like Bray‘s. In those cases, plaintiffs were patients of either commissioned Public Health Service officers or federally funded health centers. Gould, 905 F.2d at 740 (officer); Gonzalez, 284 F.3d at 286 (federally funded center); Motley, 295 F.3d at 821, 824 (same). Thus, those plaintiffs likely had notice that they were dealing with the federal government. That‘s not true here. As discussed, Bray was a private patient at a private hospital. And Dr. Thress was listed on Mercy‘s staff. Bray had no reason to know he was covered by these statutes. Plaintiffs with these—or similar—facts may merit equitable tolling.
III.
This statutory scheme also raises interesting questions about a plaintiff‘s jury trial right. There are two dimensions to
Of course, the Supreme Court has told us that in certain instances, Congress can eliminate jury trials for federally created, public-law rights. Cf. Atlas Roofing Co. v. OSHA, 430 U.S. 442, 450 (1977). But that‘s not what happens under the FSHCAA. The FTCA adopts the state‘s
preexisting causes of action—it doesn‘t create a new public-law right.
Doesn‘t this fly in the face of the Seventh Amendment? It certainly appears that way. That said, plaintiffs suing under the FTCA seek money damages against the government.
But defining a claim based on the defendant has troubling implications. Imagine Congress passed a law substituting the government in any suit against medical providers that accept Medicare or Medicaid. And imagine the FTCA applied to these suits. Such a law would essentially eliminate jury trials for all medical-malpractice claims. Or take it even further. Congress could turn any state common-law claim within its legislative power into a suit against the government, functionally nullifying the Seventh Amendment.
At some point a line will have to be drawn. But that is a question for another day.