JACKIE SALDANA; CELIA SALDANA; RICARDO SALDANA, JR.; MARIA SALDANA, as individuals and as successors and heirs to Ricardo Saldana, deceased v. GLENHAVEN HEALTHCARE LLC, a California corporation; CARAVAN OPERATIONS CORP., a California corporation; MATTHEW KARP, an individual; BENJAMIN KARP, an individual
No. 20-56194
United States Court of Appeals for the Ninth Circuit
February 22, 2022
D.C. No. 2:20-cv-05631-FMO-MAA
OPINION
Appeal from the United States District Court for the Central District of California Fernando M. Olguin, District Judge, Presiding
Argued and Submitted October 21, 2021 Pasadena, California
Filed February 22, 2022
Opinion by Judge Schreier
SUMMARY**
Federal Subject Matter Jurisdiction
The panel affirmed the district court‘s order remanding a removed case to state court for lack of federal subject matter jurisdiction.
Relatives of Ricardo Saldana, who allegedly died from COVID-19 at Glenhaven Healthcare nursing home, sued Glenhaven and other defendants in California state court, alleging state-law causes of action based on the allegation that Glenhaven failed to adequately protect Saldana. Glenhaven removed the case to federal court.
Affirming the district court‘s order granting plaintiffs’ motion to remand the case to state court, the panel rejected Glenhaven‘s argument that the district court had three grounds for federal jurisdiction. First, the panel held that the district court lacked jurisdiction under the federal officer removal statute,
Second, the panel held that plaintiffs’ claims were not completely preempted by the Public Readiness and Emergency Preparedness Act, which provides immunity from suit when the HHS Secretary determines that a threat to health constitutes a public health emergency, but provides an exception to this immunity for an exclusive federal cause of action for willful misconduct. In March 2020, the Secretary issued a declaration under the PREP Act “to provide liability immunity for activities related to medical countermeasures against COVID-19.” The panel held that the HHS Office of General Counsel‘s Advisory Opinion on complete preemption was not entitled to Chevron deference because it was an opinion on federal court jurisdiction. Instead, the panel applied the two-part test set forth in City of Oakland v. BP PLC, 969 F.3d 895 (9th Cir. 2020). The panel concluded that in enacting the PREP Act, Congress did not intend to displace the non-willful misconduct claims brought by plaintiffs related to the public health emergency, nor did it provide substitute causes of action for plaintiffs’ claims. Thus, the federal statutory scheme was not so comprehensive that it entirely supplanted state law causes of action.
Third, the panel held that the district court did not have jurisdiction under the embedded federal question doctrine, under which federal jurisdiction over a state law claim will lie if a federal issue is necessarily raised, actually disputed, substantial, and capable of resolution in federal court
COUNSEL
Lann G. McIntyre (argued), Lewis Brisbois Bisgaard & Smith LLP, San Diego, California; Kathleen M. Walker, Lewis Brisbois Bisgaard & Smith LLP, Los Angeles, California; for Defendants-Appellants.
Adam R. Pulver (argued), Allison M. Zieve, and Scott L. Nielson, Public Citizen Litigation Group, Washington, D.C.; Scott C. Glovsky, Law Offices of Scott C. Glovsky, Claremont, California; for Plaintiffs-Appellees.
Mark E. Reagan and Jeffrey Lin, Hooper Lundy & Bookman P.C., San Francisco, California, for Amici Curiae California Association of Health Facilities and American Health Care Association.
Eric M. Carlson, Justice in Aging, Los Angeles, California, for Amicus Curiae Justice in Aging.
SCHREIER, District Judge:
Glenhaven Healthcare LLC, Caravan Operations Corp., Matthew Karp, and Benjamin Karp (collectively, Glenhaven) appeal the district court‘s order remanding this case to state court for lack of federal subject matter jurisdiction. We have jurisdiction under
I. FACTUAL AND PROCEDURAL BACKGROUND
Ricardo Saldana was a resident of Glenhaven Healthcare nursing home from 2014 to 2020. Saldana died at the Glenhaven nursing home on April 13, 2020, allegedly from COVID-19. In June 2020, four of Saldana‘s relatives, Jackie Saldana, Celia Saldana, Ricardo Saldana, Jr., and Maria Saldana (the Saldanas), sued Glenhaven in California Superior Court for Los Angeles County. The Saldanas allege that Glenhaven failed to adequately protect Ricardo Saldana from the COVID-19 virus. The complaint states four state-law causes of action: elder abuse, willful misconduct, custodial negligence, and wrongful death.
Glenhaven removed the case to the United States District Court for the Central District of California in June 2020, and the Saldanas moved to remand the case to state court. The district court found that it did not have subject matter jurisdiction to hear the case and granted the Saldanas’ motion to remand. Glenhaven appeals, arguing that the district court has three independent grounds for federal
II. STANDARD OF REVIEW
We review questions of statutory construction and subject matter jurisdiction de novo. City of Oakland v. BP PLC, 969 F.3d 895, 903 (9th Cir. 2020). When the federal officer removal statute,
III. DISCUSSION
A. Federal Officer Removal
1. Legal Standard
Under
To remove a state court action under the federal officer removal statute, a defendant must establish that “(a) it is a person within the meaning of the statute; (b) there is a causal nexus between its actions, taken pursuant to a federal officer‘s directions, and plaintiff‘s claims; and (c) it can assert a colorable federal defense.” Stirling v. Minasian, 955 F.3d 795, 800 (9th Cir. 2020) (quoting Fidelitad, Inc. v. Insitu, Inc., 904 F.3d 1095, 1099 (9th Cir. 2018)). Here, the parties do not dispute that each defendant is a “person” under the statute. See
2. Whether Glenhaven Acted Under a Federal Officer‘s Directions
To determine whether there was a causal nexus between Glenhaven‘s actions and the Saldanas’ claims, the court first considers whether Glenhaven‘s actions were taken “pursuant to a federal officer‘s directions,” Stirling, 955 F.3d at 800, or while “acting under that officer.”
A private firm‘s compliance (or noncompliance) with federal laws, rules, and regulations does not by itself fall within the scope of the statutory phrase “acting under” a federal “official.” And that is so even if the regulation is highly detailed and even if the private firm‘s activities are highly supervised and monitored.
Id. at 153. “The upshot is that a highly regulated firm cannot find a statutory basis for removal in the fact of federal regulation alone.” Id.
Glenhaven argues that the federal government “conscript[ed] . . . private entities like Glenhaven to join in the fight [against COVID-19] through detailed and specific mandatory directives to nursing homes on the use and allocation of PPE, the administration of COVID-19 testing, intervention protocols, and virtually every other aspect of the operations of nursing homes during the pandemic.” Though it acknowledges that compliance with federal laws, regulations, and rules does not “by itself” bring a defendant under the federal officer removal statute, Glenhaven claims that the “unprecedent[ed] circumstances” of COVID-19 resulted in federal directives and operational control
Glenhaven points to memoranda it received from the Centers for Medicare and Medicaid Services (CMS), the Centers for Disease Control and Prevention (CDC), and the Department of Health and Human Services (HHS) during the COVID-19 pandemic to show that the “federal government and its agencies . . . became hyper-involved in the operational activities of nursing facilities in response to the pandemic.” But the agency communications Glenhaven relies on show nothing more than regulations and recommendations for nursing homes, covering topics such as COVID-19 testing, use and distribution of personal protective equipment, and best practices to reduce transmission within congregate living environments. For example, one CMS memo identifies what healthcare staff “should” do in response to the pandemic, and it states what CMS “expects,” “encourages,” “advise[s],” and “recommend[s].” Similarly, a CDC communication cited by Glenhaven identifies “recommendations” and steps that healthcare centers “should” take. Another memorandum published by the California Department of Public Health states that the agency “ensure[s] compliance with state licensing laws and federal certification regulations” on behalf of CMS. Licensing and Certification Program, Cal. Dep‘t of Pub. Health (Dec. 17, 2020), https://www.cdph.ca.gov/Programs/CHCQ/LCP/Pages/LandCProgramHome.aspx. Without more than government regulations and recommendations, Glenhaven has failed to establish that it was “acting under” a federal official, and it has not identified a duty of the federal government that it performed.
Glenhaven also claims that, as a nursing home, its designation as part of the national critical infrastructure necessarily means that it acted on behalf of a federal official
“It cannot be that the federal government‘s mere designation of an industry as important—or even critical—is sufficient to federalize an entity‘s operations and confer federal jurisdiction.” Buljic v. Tyson Foods, Inc., 22 F.4th 730, 740 (8th Cir. 2021); see also Maglioli v. All. HC Holdings LLC, 16 F.4th 393, 406 (3d Cir. 2021). Thus, Glenhaven‘s status as a critical infrastructure entity does not establish that it acted under a federal officer or agency, or that it carried out a government duty.
Glenhaven has failed to substantiate its claims that it was conscripted to assist a federal officer or agency in performance of a government duty or that it was authorized to act for a federal officer. All that Glenhaven has demonstrated is that it operated as a private entity subject to government regulations, and that during the COVID-19 pandemic it received additional regulations and
B. Preemption Under the PREP Act
1. Legal Standard
Glenhaven argues that this case was properly removed to federal court because the Saldanas’ claims are completely preempted by the Public Readiness and Emergency Preparedness (PREP) Act,
Complete preemption is an exception to the well-pleaded complaint rule. Id. at 905. Under the well-pleaded complaint rule, a civil action arises under federal law for purposes of federal question jurisdiction when a federal question appears on the face of the complaint. Id. at 903 (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)). Under the rule, removal must be based on the plaintiff‘s claims and cannot be based on a defendant‘s federal defense. Id. at 903–04. But the exception for complete preemption, the “artful-pleading doctrine[,] . . . allows removal where federal law completely preempts a plaintiff‘s state-law claim.” Id. at 905 (quoting Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998)).
2. The PREP Act
Passed by Congress in 2005, the PREP Act provides that “a covered person shall be immune from suit and liability under Federal and State law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure . . . .”
Section
In March 2020, the Secretary issued a declaration under the PREP Act “to provide liability immunity for activities related to medical countermeasures against COVID-19.” Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19, 85 Fed. Reg. 15,198, 15,198 (Mar. 17, 2020). The declaration provided immunity for covered persons for the use of covered measures, including “any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate COVID-19 . . . .” Id. at 15,202. The Secretary has issued subsequent amended declarations throughout the
3. Whether the PREP Act is a Complete Preemption Statute
Glenhaven‘s complete preemption argument relies on the HHS Secretary‘s and the HHS Office of General Counsel‘s respective conclusions that the PREP Act is a complete preemption statute. Fifth Amendment to the Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19, 86 Fed. Reg. 7874 (Feb. 2, 2021); Dep‘t Health & Hum. Servs., General Counsel Advisory Opinion 21-01 (Jan. 8, 2021). But “[c]omplete preemption is really a jurisdictional rather than a preemption doctrine[.]” Dennis, 724 F.3d at 1254 (internal quotation omitted). And an agency‘s opinion on federal court jurisdiction is not entitled to Chevron deference. Dandino, Inc. v. U.S. Dep‘t of Transp., 729 F.3d 917, 920 n.1 (9th Cir. 2013). Thus, Glenhaven‘s reliance on the Advisory Opinion is misplaced and not a sufficient basis to establish complete preemption and thus federal jurisdiction.
Instead of deferring to an opinion of the Office of General Counsel, this court applies the two-part test articulated in City of Oakland: (1) did Congress intend to displace a state-law cause of action and (2) did Congress provide a substitute cause of action? 969 F.3d at 906. Turning to the statute‘s text, the PREP Act states that it provides immunity under certain conditions for “covered person[s]” who use “covered countermeasure[s].”
Glenhaven argues that the PREP Act may preempt one of the Saldanas’ claims—the second cause of action under state law for willful misconduct. Whether the claim is preempted by the PREP Act turns on whether any of the conduct alleged in the complaint fits the statute‘s definitions for such a claim. But finding that one claim may be preempted is different than finding that the “federal statutory scheme is so comprehensive that it entirely supplants state law causes of action,” such as the Saldanas’ other causes of action for elder abuse, custodial negligence, and wrongful death. Retail Prop. Tr., 768 F.3d at 947 (emphasis added) (quoting Dennis, 724 F.3d at 1254); see also Caterpillar, 482 U.S. at 393 (distinguishing between complete preemption and raising a federal defense); Toumajian v. Frailey, 135 F.3d 648, 654 (9th Cir. 1998) (distinguishing between complete preemption and “conflict preemption” of
C. Embedded Federal Question
Glenhaven argues that the district court has jurisdiction under the embedded federal question doctrine. Under this doctrine, “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). The well-pleaded complaint rule applies when determining whether the embedded federal question doctrine applies. Cal. Shock Trauma Air Rescue v. State Comp. Ins. Fund, 636 F.3d 538, 542 (9th Cir. 2011).
Here, the Saldanas’ complaint states four causes of action: elder abuse, willful misconduct, custodial negligence, and wrongful death. The claims in the complaint are raised under California law and do not raise questions of federal law on the face of the complaint. Glenhaven seeks to raise a federal defense under the PREP Act, but a federal defense is not a sufficient basis to find embedded federal question jurisdiction. Provincial Gov‘t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1090 (9th Cir. 2009).
Glenhaven argues that the Saldanas’ willful misconduct claim raises a federal issue under the PREP Act. Glenhaven does not identify how a right or immunity created by the PREP Act must be an essential element of the willful misconduct claim as stated in the complaint. On its face, the issue is not a “substantial” part of the Saldanas’ complaint because, according to the complaint, only some of the steps Glenhaven allegedly took, and did not take, may have
IV. CONCLUSION
Glenhaven did not act under a federal officer or carry out a federal duty when it provided care to Ricardo Saldana. The PREP Act does not completely preempt the Saldanas’ claims, and the possible preemption of one claim cannot be determined by this court or the district court. And there is no embedded federal question in the Saldanas’ complaint. Thus, the district court lacked subject matter jurisdiction, and the suit was properly remanded to state court.
AFFIRMED.