LEGEND JOSIAH CROMER, by and through his parent and Guardian ad Litem, FREDDIE L. CROMER, et al., v. DIGNITY HEALTH d/b/a CALIFORNIA HOSPITAL MEDICAL CENTER, et al.,
Case No. 2:24-cv-04731-WLH-SK
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
April 18, 2025
A. Factual Background
This action arises from the tragic death of Bridgette Breana Burks (“Burks” or “Decedent“), mother to Minor Plaintiffs Legend Josiah Cromer (“Plaintiff LJC“), Legacy Errine-Helen Cromer (“Plaintiff LEHC“), Knowledge Elijah Cromer (“Plaintiff KEC“), Supreme Freddie-Lee Cromer (“Plaintiff SFLC“) and Divinity Bridgette Cromer (“Plaintiff DBC“) (collectively, “Minor Plaintiffs“) and wife to Plaintiff Freddie L. Cromer (“Plaintiff FLC” or “Plaintiff Cromer“) (collectively, “Plaintiffs“). (Compl., Docket No. 1 ¶¶ 1-7). Plaintiff Cromer is the Guardian ad Litem to Minor Plaintiffs and is Decedent‘s Successor in Interest. (Id. ¶ 7).
On February 29, 2024, Plaintiffs brought this action in the Superior Court of the State of California for the County of Los Angeles.1 Defendant physicians Ian Tilley, M.D. (“Defendant Tilley“), Penelope Velasco, M.D. (“Defendant Velasco“), Lillian Morris, M.D. (“Defendant Morris“) and Nathana Lurvey, M.D. (“Defendant Lurvey“) are employees of Defendant Eisner Health2 (collectively, the “Eisner Defendants“). (Id. ¶ 23). Plaintiffs allege that the negligence of the Eisner Defendants caused the death of Decedent on March 2, 2023, shortly after giving birth at California Hospital Medical Center (“California Hospital“).3 (Id. ¶¶ 27-43).
1. Decedent‘s Treatment at California Hospital
Plaintiffs allege that Burks arrived at California Hospital on March 1, 2023, for a scheduled cesarean section and tubal ligation. (Id. ¶ 28). Burks had been receiving prenatal care at Watts Health but presented to California Hospital for the procedure
Due to a communication failure, California Hospital did not have Burks’ paperwork from Watts Health, and the procedure was delayed. (Id. ¶¶ 28-30). Burks returned the next day, March 2, 2023, to undergo the procedure, which took roughly one hour. (Id. ¶ 31). Burks began to bleed heavily while in recovery, and Plaintiffs allege the Eisner Defendants “[did not] seem to know what was happening to [Burks‘] condition.” (Id. ¶¶ 34-36). Burks was taken back to the operating room later that night and ultimately passed away before midnight. (Id. ¶ 39f).
When Plaintiff Cromer returned to California Hospital on March 3, 2023, he learned that Burks had passed away. (Id. ¶ 36). Plaintiffs allege that Defendant Velasco indicated that if they “wanted to find out what happened to [Burks], [Plaintiff Cromer] must sign a consent form for an autopsy” to be performed by California Hospital. (Id.). This allegedly avoided an independent autopsy by the Los Angeles County Medical Examiner. (Id. ¶ 37).
Plaintiffs allege that the Eisner Defendants committed serious errors leading to Burks’ death, including failing to recognize her as a high-risk patient, mismanaging her care during and after the procedure and generally failing to adhere to best practices. (Id. ¶ 39). Burks’ medical records indicate that Defendant Tilley was the attending doctor; Defendant Velasco performed the cesarean section; Defendant Morris provided post-cesarean recovery care with Defendant Velasco; and Defendant Lurvey performed the emergency surgery with Defendants Velasco and Morris. (Decl. of Ryan C. Chapman in Supp. of Mot. to Remand (“Chapman Decl.“), Docket No. 38-1 ¶ 3(a), Exhibit A).
The California Department of Public Health (“CDPH“) later conducted an investigation and issued a Statement of Deficiencies and Plan of Correction to California Hospital. (Chapman Decl. ¶ 4, Exhibit D). The CDPH concluded that California Hospital had failed to recognize “the signs of bleeding or
2. Defendant Eisner Health‘s Arrangement with California Hospital
Defendant Eisner Health is the recipient of a federal grant under
California Hospital entered into an agreement in 2022 with Defendant Eisner Health, with Defendant Eisner Health acting as an independent contractor for California Hospital. (Chapman Decl. ¶ 5, Exhibit E §§ 2.2, 4.2). Much of their arrangement revolves around California Hospital‘s Laborist Program, which ensures staffing and coordination of OB/GYN services to California Hospital patients either whose attending physician is unavailable to respond in time for delivery or who do not have an attending physician already at California Hospital. (Id. ¶ 5, Exhibit E § Recitals(D)).
The contract establishes “appropriate and effective means” to facilitate and administer California Hospital‘s OB/GYN training and programming, “ensure efficient operation” of California Hospital‘s other departments and services, ensure
Under the contract, Defendant Eisner Health‘s employees were to work at California Hospital (herein, “Eisner Professionals“) and provide treatment to patients in the Laborist Program.4 (Id. ¶ 5, Exhibit E § 2.2(b)). To that end, Defendant Eisner Health was expected to provide its physicians “to be on-site on a 24 hours per day, 7 days per week, 365 days per year basis to be available to provide obstetrics and gynecology services and related medical care and treatment . . . (the ”Coverage Services“), upon the terms and subject to the conditions set forth in this Agreement.” (Id. ¶ 5, Exhibit E § 2.2(a)) (emphasis in original). It is unclear from the terms of the contract whether it was required that Eisner Professionals were physicians who presently or even formerly worked at Defendant Eisner Health; rather, it merely states that Defendant Eisner Health was required to “employ or otherwise engage Eisner Professionals to furnish Services under this Agreement . . .” (Id. ¶ 5, Exhibit E § 2.4(a)). Eisner Professionals were, however, expected to “dedicate substantially all of their respective professional efforts as Eisner Professionals to the provision of services at [California Hospital].” (Id.). Significantly, in exchange for running the Labor Department, Defendant Eisner Health did not seek the right to refer Eisner patients to California Hospital; rather, the contract explicitly states that it does not “contemplate[] or require[] the admission or referral of any patients . . .” (Id. ¶ 5, Exhibit 5 § 4.3(a)).
The contract goes beyond the provision of OB/GYN services. Defendant Eisner Health was also required to operate California Hospitals’ residency program, in which new doctors are trained. (Id. ¶ 5, Exhibit E at Exhibit 2.7). More specifically, Defendant Eisner Health was required to supervise the residents, provide teaching services and perform evaluations. (Id.).
B. Procedural Background
The procedural history is drawn primarily from the Court‘s Order on October 31, 2024, in which it denied both previous motions to remand. (Order, Docket No. 31). On May 24, 2024, the Attorney General (through the local United States Attorney) made a “limited appearance to advise [the Los Angeles Superior Court] that whether [the Eisner Defendants] are deemed to be employees of the Public Health Service for purposes of
On June 21, 2024, the Government filed a motion to remand. (Mot. to Remand, Docket No. 13). On July 3, 2024, Plaintiffs also filed a motion to remand. (Mot. to Remand, Docket No. 18). On September 6, 2024, and September 9, 2024, the parties provided the Court with supplemental authority following the Ninth Circuit‘s decisions in A.H. v. Khalifa, 2024 WL 4119690 (9th Cir. Sept. 9, 2024) and Blumberg v. Tilley, 115 F.4th 1113 (9th Cir. 2024).
On November 26, 2024, the Government filed the Motion to Remand before the Court. (Mot. to Remand, Docket No. 38). On November 27, 2024, Plaintiffs filed their Motion to Remand now before the Court.5 (Mot. to Remand, Docket No. 43). On December 11, 2024, the Eisner Defendants filed an ex parte application (the “EPA“) to continue the hearing on those Motions from January 3, 2025, to February 28, 2025. (Docket No. 55). On December 13, Plaintiffs and the Government filed oppositions (Docket Nos. 56, 57), but the Court ultimately granted the application on December 16, 2024.6 (Order, Docket No. 60). On February 28, 2025, the Court heard oral argument and took the matters under submission.
Before the Court are Plaintiffs’ and the Government‘s renewed Motions to Remand. (Docket Nos. 38, 43). The Motions are fully briefed. For the reasons more thoroughly explained below, the Court GRANTS the Government‘s Motion. Plaintiffs’ Motion is DENIES as moot.7
A. Legal Standard
“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A defendant may remove an action to federal court only if the federal court would have had original subject matter jurisdiction over the suit. See
Whether the instant action is properly before this Court turns on whether the Government is the proper defendant under the Federal Tort Claims Act (the “FTCA“). See
B. Analysis
The Court begins by addressing the relevant statutory scheme, which
1. Relevant Statutory Scheme Demonstrates Defendant Eisner Health‘s “Deemed” Status Does Not Conclusively Establish FTCA Coverage
This matter finds itself entangled within “the thicket” that is
The United States Public Health Service (“PHS“) is a federal uniformed service within the Department of Health and Human Services (“HHS“). Blumberger, 115 F.4th at 1117. “When an employee of the PHS is sued for medical malpractice arising from acts or omissions within the scope of his employment, the United States is substituted as the defendant, and the malpractice action proceeds against the government under [the FTCA],
To entice medical providers to join federally funded health centers, Congress enacted the FSHCAA, codified at
“The deeming decision is highly consequential for a[] [Federally Qualified Health Center (“FQHC“)] because it makes it unnecessary to purchase liability insurance for many types of claims.” Kelley v. Franklin County Rehab Center (”Kelley I“), LLC, No. 5:21-cv-278, 2023 WL 2529926, at *6 (D. Ver. Feb. 9, 2023); see also Blumberger, 115 F.4th at 1124-25 (“Congress enacted the FSHCAA to prevent these community health centers from having to use their federal funds to purchase costly medical malpractice insurance, which is ‘one of the most significant expenses for health centers‘“) (quoting H.R. Rep. No. 104-398, at 5 (1995)). When plaintiffs sue “deemed employees” for actions taken within the scope of their employment, the Government is “similarly substituted as the defendant and the action proceeds as an FTCA suit,” as described above. Blumberger, 115 F.4th at 1117. The Secretary‘s deeming decision means the entity and its employees “are deemed PHS employees for one calendar year.” Id.
Although the Secretary‘s deeming decision is “generally ‘final and binding upon the Secretary and the Attorney General,‘” the decision “does not automatically immunize a covered entity or employee from a particular malpractice suit.” Id. (quoting
Under the FSHCAA, when a civil action is filed in state court, the Attorney General must “make an appearance in such court” within 15 days.
The Ninth Circuit‘s recent decision in Blumberger is instructive with respect to this procedure. 115 F.4th at 1120. In Blumberger, a doctor working at California Hospital, “just blocks” from the federally funded Eisner, was alleged to have “failed to provide proper medical care” when delivering a baby. Id. The plaintiff patient filed a complaint in state court. Id. The Attorney General appeared in state court within 15 days, as required, but only notified the state court that “whether [the defendant doctor] . . . [was] deemed to be an employee of [PHS] for purposes of
As this Court has already noted, the Attorney General in the instant matter, as in Blumberger, failed to timely advise the state court as to the Secretary‘s deeming determination. (Order, Docket No. 31 at 7). The deeming notice and complaint clearly demonstrate that the HHS Secretary “approved [Defendant Eisner Health‘s] deeming application for calendar year 2023.” (Docket No. 1 ¶ 2; Docket No. 20 at 10). Further, Plaintiffs’ lawsuit arose out of conduct that is “medical” in nature during the 2023 calendar year. (Compl. ¶ 39(f)) (“...[Decedent] succumbed to her condition at approximately 11:15 p.m., approximately four hours after a C-section delivery, a devastating outcome attributed to the poor medical treatment she received“). The Attorney General should have conveyed Defendant Eisner Health‘s deemed status and “expeditiously” removed the case. Blumberger, 115 F.4th at 1139.
Whether Defendant Eisner Health had deemed status, however, is a separate question from whether the action at issue is “covered” pursuant to the Attorney
2. Eisner Defendants Were Not Acting Within the Scope of Their Employment, Such That This Court Lacks Subject Matter Jurisdiction
The Government argues that the Secretary‘s “deeming decision” does not “conclusively establish coverage for a particular lawsuit,” emphasizing that “whether FTCA coverage is available for a particular suit” is a case-specific determination that hinges on the circumstances in which care is provided. (Mot. to Remand, Docket No. 38 at 3); see also O‘Brien v. United States, 56 F.4th 139, 148-49 (1st Cir. 2022) (“We hasten to add that the Secretary‘s annual ‘deeming’ determination does not conclusively establish . . . FTCA coverage with respect to a particular lawsuit . . . Rather, coverage hinges on the circumstances in which care has been provided“). To
The FSHCAA‘s plain text establishes limitations on a health center‘s “deemed status.” As a preliminary matter, while the deemed status applies to services provided to “all patients of the entity,” only in limited situations does it apply to services provided “to individuals who are not patients of the entity.”
The federal regulations establish what acts or omissions occur during the scope of employment and are, thus, covered within the “deemed” status. For example, the regulations make clear that only health center employee‘s actions that are “related to grant-supported activity” of the health center will be covered.
The regulations provide one more limitation. The deemed status does not apply to a situation in which “a covered individual is providing services which are not on behalf of the covered entity,” such as medical care provided “on a volunteer basis or on behalf of a third-party[,]” except when any of the Exceptions as laid out in section (d) apply.
Because the language of the Exceptions is ambiguous, the federal regulations provide explicit examples that present situations that definitively fall within them. See
a) Decedent Was Not a Patient of Deemed Entity
It is important to clarify whether Decedent is properly considered a patient of Defendant Eisner Health. As noted, the FSHCAA creates a distinction between services rendered to patients of the covered entity versus individuals who are not patients of the covered entity.
Here, because Defendant Eisner Health had deemed status for the calendar year, so did the physicians employed by Defendant Eisner Health. Blumberger, 115 F.4th at 1118. A physician‘s deemed status, however, does not imply that any patient they treat is considered a patient of the covered entity. See Kelley II, 115 F.4th at 140 (“‘Patients of a deemed entity‘s’ doctor are not necessarily patients of the entity itself“). Rather, “the FSHCAA‘s plain text . . . limits HHS’ deeming decision to ‘patients of the entity, ‘not patients of the entity‘s employees.” Id. (quoting
Thus, the deemed status of the Eisner Defendants working at California Hospital does not dictate whether Decedent is properly considered a patient of Defendant Eisner Health. In fact, under the terms of the contract, these physicians working at California Hospital were explicitly not treating patients of Defendant Eisner Health, but of California Hospital. (Chapman Decl. ¶ 5, Exhibit E § 2.2(b)).
Plaintiffs do not allege that Decedent was ever a patient of Defendant Eisner Health. The only allegations relating to Decedent‘s prior care indicate that she
The Eisner Defendants submitted evidence indicating that Watts Health center is one of eight health centers that make up the Southside Coalition of Community Health Centers (“SCCHC“) - a network of FQHCs “that have joined together to better sustain, coordinate, and improve health care to the impoverished, vulnerable, publicly insured and under- and uninsured people without access to care in the South Los Angeles Region.” (Decl. of Pajmon Zarrineghbal in Supp. of Opp‘n to Mot. to Remand (“Zarrineghbal Decl.“), Docket No. 71-1 ¶ 8). The Eisner Defendants’ implication is that, because Decedent had been a patient of a deemed entity, FTCA coverage is required.
The Eisner Defendants misconstrue the text of the FSHCAA. The question is not whether the individual was a patient of any deemed health center; but whether the patient was a patient of the deemed entity whose deemed physician provided care. See
In Kelley II, a physician was employed by an FQHC. Kelley II, 115 F.4th at 136. The physician, however, was then staffed at a non-federally funded nursing facility (the “Nursing Facility“) to provide medical director services on a full-time basis, though still considered an employee of the FQHC. Id. at 137. A patient under the physician‘s care at the Nursing Facility sued the physician for injuries sustained there, alleging medical malpractice. Id. The district court found that the conduct was not covered by the deemed status because the plaintiff was not a patient of the FQHC. Id. at 138. Furthermore, the arrangement fell outside of the enumerated examples provided by the federal regulations, and no particularized determination had been sought. Id. The Second Circuit affirmed. Id. at 140.
Kelley II and the instant matter are indistinguishable. Just as the plaintiff in Kelley II had not before been a patient at the deemed health center, Decedent was not a patient at Defendant Eisner Health.13 Nowhere do Plaintiffs allege Burks ever received care from Defendant Eisner Health in the past, such that she should be considered its patient.14 Rather, Decedent received her prenatal care at Watts Health and underwent the cesarean section and subsequent surgery at California Hospital. (Compl. ¶¶ 28, 31, 39). Though the Eisner Professionals were still considered employees of Defendant Eisner Health, they were hired to provide full-time services
Furthermore, the contractor agreement between Defendant Eisner Health and California Hospital - which was similar to the one at issue in Kelley II - demonstrates that Defendant Eisner Health was staffing California Hospital for the benefit of California Hospital and its patients. (Chapman Decl. ¶ 5, Exhibit E § 2.2(b)). This implies that the care provided to patients under this agreement by Eisner Professionals is more aptly considered services provided on behalf of California Hospital, a third party, rather than on behalf of Defendant Eisner Health, the deemed entity.15 The Court finds that the specific arrangement between Defendant Eisner Health and California Hospital lends additional support for the conclusion that Decedent cannot be considered a patient of Defendant Eisner Health. As Decedent‘s treatment is more aptly characterized as treatment of a nonpatient - and on behalf of a third party, California Hospital - the Court now turns to whether the care provided to her fits squarely in the examples provided by the federal regulations, such that no particularized determination was needed. See
Defendant Eisner Health Was Required to Seek a Particularized Determination of Coverage
As noted, the regulations provide specific examples of situations in which a deemed entity‘s provision of care to nonpatients or on behalf of a third party meets the limited instances where coverage is explicitly extended, making clear that “if the activity or arrangement in question fits squarely within these descriptions[,]” then no particularized coverage determination is necessary.
With respect to “hospital-related activities,” the example provided in the regulations is a situation in which “[p]eriodic hospital calls or hospital emergency room coverage is required by the hospital as a condition for obtaining hospital admitting privileges.”
The Court, therefore, turns to the nature of the relationship between Defendant Eisner Health and California Hospital and finds that the arrangement does not “squarely fit” the example of acceptable hospital-related activity not requiring of a particularized determination. California Hospital entered into an agreement in 2022 with Defendant Eisner Health, with Defendant Eisner Health acting as an independent contractor. (Chapman Decl. ¶ 5, Exhibit E §§ 2.2, 4.2). Much of their arrangement has to do with California Hospital‘s Laborist Program, which ensures staffing and coordination of OB/GYN services to California Hospital patients either whose attending physician is unavailable to respond in time for delivery or who do not have an attending physician already at California Hospital. (Id. ¶ 5, Exhibit E § Recitals(D)).
The contract establishes “appropriate and effective means” to facilitate and administer California Hospital‘s OB/GYN training and programming, “ensure efficient operation” of California Hospital‘s other departments and services, ensure OB/GYN services are available for California Hospital patients, reduce disruptions in California Hospital‘s operations and “promote participation” in its educational programs. (Id. ¶ 5, Exhibit E § Recitals(G)).
The Eisner Professionals were to work at California Hospital and provide treatment to patients in the Laborist Program. (Id. ¶ 5, Exhibit E § 2.2(b)). To that end, Defendant Eisner Health was expected to provide its physicians “to be on-site on
Significantly, in exchange for running the Labor Department, Defendant Eisner Health did not seek the right to refer Eisner patients to California Hospital; rather, the contract explicitly states that it does not “contemplate[] or require[] the admission or referral of any patients . . .” (Id. ¶ 5, Exhibit 5 § 4.3(a)).
All Eisner Professionals were expected to use California Hospital‘s electronic health record system, follow all California Hospital rules and bylaws and comply with its standards and protocols. (Id. ¶ 5 & Exhibit E §§ 2.9, 2.11, 2.11, 2.14). All records were to remain the “sole property of [California Hospital].” (Id. ¶ 5, Exhibit E § 2.9). An Eisner Professional was required to serve as the Medical Director of the Laborist Program, similarly expected to perform her services “in accordance with [California Hospital] Rules” and the “Medical Staff Bylaws[.]” (Id. ¶ 5, Exhibit E § 2.6).
In addition, the contract goes beyond the provision of OB/GYN services. Defendant Eisner Health was also required to operate California Hospitals’ residency program, in which new doctors are trained. (Id. ¶ 5, Exhibit E at Exhibit 2.7). More specifically, Defendant Eisner Health was required to supervise the residents, provide teaching services and perform evaluations. (Id.).
Here, the arrangement between Defendant Eisner Health and California Hospital bears little resemblance to the example provided in the federal regulations. See
Defendants Velasco and Lurvey submitted declarations stating that as a condition of their employment they were “required to maintain clinical privileges at California Hospital” and “required to participate in [Defendant Eisner Health‘s] call panel with California Hospital for the provision of hospital-based and emergency obstetrical and gynecological care.” (Decl. of Nathana Lurvey, M.D., in Supp. of Opp‘n to Mot. to Remand (“Lurvey Decl.“), Docket No. 71-2 ¶¶ 12-13; Decl. of Penelope Velasco, M.D., in Supp. of Opp‘n to Mot. to Remand (“Velasco Decl.“), Docket No. 71-3 ¶¶ 11-12). This is a necessary condition, but not sufficient on its own. Because the arrangement was not for the Eisner Defendants to provide periodic calls and coverage as a condition of obtaining admitting privileges, the argument fails. See
It was mandatory, therefore, for Defendant Eisner Health to have sought a particularized determination, as its hospital-related services did not “squarely fit” within the example provided. See, e.g., Thomas, 2019 WL 6039976, at *4-5 (remanding to state court where the health center‘s contract for employee to provide 24/7 coverage at a hospital was not an arrangement that “squarely fits” into regulation‘s examples). The Eisner Defendants have made no indication that any such determination was applied for or affirmatively received. To the contrary, a letter dated November 14, 2024 – in which the United States Attorney‘s Office indicated it would not be substituting itself as a defendant in this action16 – indicates that Defendant Eisner Health was specifically notified of the need for a particularized
Significantly, the Eisner Defendants failed to address the “core arguments” put forth by the Government regarding the limitations of the FTCA protection, as set forth by the FSHCAA.17 (Reply, Docket No. 70). Instead, the Eisner Defendants’ argument focuses almost entirely on the fact that California Hospital was an “approved service site,” as more thoroughly elaborated on below. (Opp‘n to Mot. to Remand, Docket No. 58 at 1). “[I]n most circumstances, failure to respond in an opposition brief to an argument put forward in an opening brief constitutes waiver or abandonment in regard to the uncontested issue.” Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 802 F.Supp.2d 1125, 1132 (C.D. Cal. 2011) (citations and quotations omitted); see also Kroeger v. Vertex Aerospace LLC, 2020 WL 3546086, at *8 (C.D. Cal. June 30, 2020) (collecting cases holding that party conceded argument by failing to address it in opposition brief). As the Eisner Defendants fail to directly address these points regarding the requirement to seek a particularized determination, the Court considers them conceded.18
The Eisner Defendants’ Arguments Regarding California Hospital as an Approved Service Site Are Necessary but Insufficient
To demonstrate that the conduct in question occurred during the scope of employment, the Eisner Defendants argue that they “were doing precisely what [Defendant Eisner Health] hired them to do,” which was to “perform labor and delivery services at California Hospital.” (Opp‘n to Mot. to Remand, Docket No. 58 at 12). In other words, because the Eisner Defendants were providing “OB/GYN and related services on behalf of [Defendant Eisner Health] at California Hospital,” the Eisner Defendants argue that this “reflects and confirms that the Eisner Defendants were acting on behalf of [Defendant Eisner Health] with respect to the Complaint.” (Id.). The Court finds that this argument is both circular and overly reductive. The fact that the Eisner Defendants were specifically hired to work at California Hospital‘s Laborist Program does not address the threshold issue of whether the arrangement between California Hospital and Defendant Eisner Health was covered by Defendant Eisner Health‘s deemed status. If anything, the fact that the Eisner Defendants were hired, essentially, solely to work at California Hospital makes it less likely that such conduct would be considered to fall within Defendant Eisner Health‘s deemed status;
The Eisner Defendants next argue that their agreement with California Hospital must fall within their deemed status because “[Defendant Eisner Health‘s] grant-related activities include ‘the performance of medical, surgical, dental, or related functions within the scope of the approved Federal section 330 grant project, which includes sites, services, and other activities or locations, as defined in the covered entity‘s grant application and any subsequently approved change in scope requests.‘” (Opp‘n to Mot. to Remand, Docket No. 58 at 13). Put simply, they argue that because the Health Resources and Service Administration (“HRSA“) “approved [Defendant Eisner Health‘s] OB/GYN service delivery site and call-panel activities at California Hospital” through a 2008 “change in scope request,” that the activities there inherently fall within Defendant Eisner Health‘s deemed status and, consequently, FTCA coverage. (Id.). The Government states that this reasoning is flawed because “it confuses a single necessary condition (an approved service site) for the end result (FTCA protection).” (Reply, Docket No. 70 at 8). The Court agrees with the Government.
A “change in scope” request is when a grant recipient seeks to expand the services they intend to be covered by the grant, which must be approved of by HHS.
The Government highlights that the “HHS has long informed health centers of the fact that a location‘s approval as a service site does not necessarily equate to FTCA protection.” (Reply, Docket No. 70 at 8). Rather, the HHS makes clear that “[w]hile identification as a service site within a scope of project is required for participation in the FTCA . . . it is not a guarantee that these benefits will be realized.” See Dep‘t of Health and Human Servs., Health Resources and Servs. Administration, Policy Information Notice, “Defining Scope of Project and Policy for Requesting Changes,” (PIN No. 2008-01, Jan. 13, 2009) at 4. The HHS goes on to state that “identification as a service site within a scope of project is necessary, but not sufficient, to ensure participation in other programs[,]” which includes FTCA coverage. (Id.). California Hospital‘s approval as a service site does not mean that the arrangement falls within Defendant Eisner Health‘s deemed status.
The Eisner Defendants also argue that a recent Sixth Circuit decision “exemplifies an analogous arrangement in which the court recognized a deemed health center‘s OB/GYN hospital coverage activities as covered by § 233(a) immunity.” (Opp‘n to Mot. to Remand, Docket No. 58 at 16); see Bray, 97 F.4th at 414. They contend that the holding in Bray supports the conclusion that the conduct at issue here falls within the scope of Defendant Eisner Health‘s deemed status. The Court disagrees.
In Bray, a doctor failed to diagnose a pregnant woman with preeclampsia. Id. at 407. Though the doctor was employed by a “covered community health center under the FSHCAA,” the incident in question occurred while the physician was working at the defendant hospital. Id. at 408. The physician‘s contract with the FQHC included providing periodic overnight and weekend OB/GYN
As the Government highlights, “the contract between [Defendant Eisner Health] and [California Hospital] is not for ‘[p]eriodic hospital call or hospital emergency room coverage,’ or ‘required by the hospital as a condition for obtaining hospital admitting privileges.’
The Eisner Defendants also cite to Thomas, attempting to distinguish the instant matter. Thomas, 2019 WL 6039976. In Thomas, the employee of an FQHC provided care to a patient at the defendant hospital, where he later died. Id. at *1. Though the FQHC was providing primary health care services at fifteen locations in the area, the defendant hospital in question was not one of them. Id. Rather, the FQHC had a separate arrangement with the defendant hospital, which required the provision of physicians ““twenty-four hours a day, seven days a week.” Id. The Attorney General ultimately did not certify the conduct as covered, finding that 1) the activity was not grant-related; 2) the patient was not a patient of the covered entity; and 3) the arrangement did not fall within one of the limited exceptions extending FTCA coverage to nonpatients. Id. at *3. The district court agreed, concluding that the defendants failed to carry their burden to demonstrate that the activity was grant-related, the patient was a patient of the covered entity or that the arrangement “squarely fits” within an example in the federal regulations. Id. at *5.
Here, the Eisner Defendants argue that because the California Hospital was an included service site in its grant application, unlike in Thomas, that this means the conduct must be covered. This, however, continues to fail to address the crucial issue: where Decedent was a patient of California Hospital, not Defendant Eisner Health, and the arrangement in question did not fall squarely into the example provided by the federal regulations, a particularized determination was required. This was the same conclusion reached in Thomas, and it is the conclusion here in the instant matter.
Public Policy Explains Why FTCA Coverage Does Not Extend Here
The Court now briefly addresses policy rationales that explain why the FTCA coverage does not automatically extend to all grant-funded activities, including in the instant matter. Blumberger, once again, is instructive. See 115 F.4th at 1128.
First, the Ninth Circuit explained that “[t]he logic of the statute depends on policing the boundaries between the Secretary‘s deeming decision and the Attorney General‘s coverage determination.” Id. “The Secretary makes the ex-ante deeming decision by relying on his public health expertise; the Attorney General makes the ex-post scope-of-employment certification by relying on his experience defending the United States‘s interests in court.” Id. To that end, the Ninth Circuit emphasized that “[t]he division of labor that Congress has made between the Secretary (who determines an entity‘s deemed status) and the Attorney General (who determines an employee‘s coverage status) reflects the unique expertise of the two actors.” Id.
Approving a deeming application requires the Secretary to “review[] and verif[y] professional credentials, references, claims history, fitness professional review organization findings, and license status of its physicians and other licensed or certified health care practitioners,” as well as “ensure the entity ‘has implemented appropriate policies and procedures to reduce the risk of malpractice[.]‘” Id. (quoting
By contrast, the Attorney General is “charged with vindicating the interests of the United States in court and defending the public fisc[.]” Id. Where the Attorney General is “intimately familiar with the legal doctrine governing scope of employment in tort cases[,]” they are in the best position to understand when the Government must substitute itself in any given situation. Id. The Attorney General is, unsurprisingly, incentivized to protect the financial and legal interests of the Government and minimize its liability.
Common sense explains why these different actors possess distinct, yet complementary roles. The Attorney General and the Secretary, respectively, are motivated by distinct objectives and concerns, in addition to having different expertise. Were the Secretary‘s deeming decisions to apply to all grant-funded activity, they might be disincentivized from expanding such grants due to the associated expansion of the Government‘s liability that could accompany. The Attorney General‘s role allows for the Secretary to focus on expanding access to health services, without automatically expanding the Government‘s liability. Therefore Defendant Eisner Health‘s change of scope request in 2008 was approved does not bear on whether or not FTCA coverage applies. They are different considerations made by separate actors with distinct incentives.
Furthermore, there is a simple solution to the problem Defendant Eisner Health faces, along with other similarly situated FQHCs. As made explicit in the federal regulations, an FQHC need only seek a particularized determination as to coverage. That Defendant Eisner Health failed to do so with respect to its arrangement with California Hospital was avoidable.
In short, the Court agrees with the Government‘s conclusion that the conduct in question did not fall within the scope of employment for purposes of FTCA coverage, given the limitations imposed by the FSHCAA. “Should a United States district court
The Court finds that FSHCAA does not extend FTCA coverage in this scenario, such that immunity is now unavailable to the Eisner Defendants. This Court, accordingly, lacks subject matter jurisdiction. See Kelley I, 2023 WL 2529926, at *8 (remanding to state court pursuant to 42 U.S.C. § 233(c), upon determination that FTCA immunity did not apply and the court accordingly lacked subject jurisdiction). As such, the Court GRANTS the Government‘s Motion to Remand.
III. CONCLUSION
For the foregoing reasons, the Court GRANTS the Government‘s Motion to Remand and DENIES Plaintiffs’ Motion to Remand as moot. The Court, however, temporarily stays the Order to Remand. At oral argument, Defendants requested that, in the event that the Court granted the Motion to Remand, they be afforded an opportunity to move for a stay pending appeal. Should Defendants choose to file a motion to stay, they must identify the source of the Court‘s authority to issue such a stay, in addition to providing argument for why a stay is warranted. To that end, the Order to Remand is temporarily stayed for sixty (60) days, or until the resolution of Defendants’ forthcoming motion to stay, whichever is sooner.
IT IS SO ORDERED.
Dated: April 18, 2025
HON. WESLEY L. HSU
UNITED STATES DISTRICT JUDGE