Lead Opinion
Shelby County Health Care Corporation, doing business as Regional Medical Center (“The Med,” for short), seeks relief for alleged impairment of a hospital lien. The district court dismissed The Med’s claim on the ground that it was barred by the Rooker-Feldman doctrine and, alternatively, that it failed under Arkansas law. We conclude that the claim is not barred by Rooker-Feldman, and that Tennessee law should apply, so we vacate the district court’s order and remand for further proceedings.
I.
The hospital lien in question arose from treatment that John Smiley received at The Med in Memphis, Tennessee, from February 18, 2009, when he was involved in an automobile accident, until March 6, 2009, when he died of his injuries. The Med promptly filed a hospital lien for Smiley’s medical bills pursuant to the Tennessee Hospital Lien Act in the Shelby County Circuit Court in Tennessee. Tenn. Code Ann. § 29-22-101. The Med mailed a copy of the hospital lien to the attorneys for Smiley’s estate.
Barbara Ford was appointed administrator of Smiley’s estate by an Arkansas circuit court. Ford negotiated a settlement with the tortfeasor’s insurer, Southern Farm Bureau Casualty Insurance Company. As part of the settlement negotiations, Ford sent to the insurer Smiley’s hospital bill and records from The Med documenting Smiley’s pain and suffering. The insurer, along with its insured Aaron Medford, and Medford’s employer Medford Farm Partnership, settled with Ford for $700,000. The administrator of the estate allocated the entire $700,000 to recovery for wrongful death and none to the recovery of compensatory damages for medical services and other expenses.
In September 2010, the settling parties (which did not include The Med) memorialized the agreement in an Arkansas probate court judgment that purported to extinguish any outstanding liens. The Med learned of the probate court judgment by April 2011, but did not seek to intervene in the proceedings. The probate court closed Smiley’s estate on September 16, 2011.
On remand, the district court again granted summary judgment for the settling parties. The court first ruled that the Rooker-Feldman doctrine barred The Med’s claims. See D.C. Court of Appeals v. Feldman,
II.
We consider first the district court’s ruling that it lacked jurisdiction. In concluding that The Med’s claim “appears to be barred by the Rooker-Feldman doctrine,” the district court reasoned that “[t]o now find that there was a valid, enforceable lien would effectively reverse the decision made by the Arkansas probate court.” The court explained that the probate court found that The Med’s lien was void and not enforceable in Arkansas, while The Med now alleges that the defendants impaired a valid lien.
The Rooker-Feldman doctrine is confined to “cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,
The district court relied on Lemonds v. St. Louis County,
Lemonds, however, has been superseded by the Supreme Court’s clarification of the Rooker-Feldman doctrine. In Exxon Mobil, the Court observed that “the doctrine has sometimes been construed to extend far beyond the contours of the Rooker and Feldman cases.”
In this case, moreover, The Med does not seek to reverse the order of the Arkansas probate court. The Med acknowledges that it could not seek a judgment directly against the proceeds of the personal injury settlement; those proceeds were awarded to Ford. In this case, The Med asserts that the probate court’s order is evidence that the settling parties impaired The Med’s hospital lien, and The Med seeks a judgment against Ford and the other settling parties. The Rooker-Feldman doctrine thus does not bar The Med’s claim.
III.
The district court ruled alternatively that Arkansas law applies to the dispute between the parties, and that The Med’s claim fails under Arkansas law. On appeal, the parties debate whether Arkansas law or Tennessee law should apply.
Federal jurisdiction over this case is based on diversity of citizenship, so we apply the choice-of-law rules of Arkansas, the forum State, to determine which law governs the dispute. Klaxon Co. v. Stentor Elec. Mfg. Co.,
The Med argues that the case raises an issue in contract, because hospital liens arise from an express or implied contract that is formed when the hospital provides emergency medical services. See Midwest Neurosurgery, P.C. v. State Farm Ins. Cos.,
Here, of course, the action is not to enforce a lien, but to seek relief for impairment of a lien. Ford, citing Lane v. Celadon Trucking, Inc.,
Although there are differences between a subrogation claim to recover on a worker’s compensation lien and a claim alleging impairment of a hospital lien, see Nat’l Ins. Ass’n v. Parkview Mem’l Hosp.,
Once upon a time, Arkansas courts resolving choice-of-law questions in tort cases followed the rule of lex loci delicti: apply the law of the place where the tort was committed. E.g., Wheeler v. Sw. Greyhound Lines, Inc.,
In determining which State has the most significant relationship to the action and parties, Arkansas courts examine the contacts that are most relevant in the particular case. Here, the most significant contacts do not weigh clearly in favor of either Arkansas or Tennessee. The medical bills that formed the basis for the hospital lien were incurred in Tennessee. The Med filed its hospital lien in Tennessee, would have received funds based on the lien in Tennessee, and thus felt the harm from any impairment of the lien in Tennessee. But the settlement agreement and corresponding probate order that allegedly impaired the lien were filed in Arkansas. The parties’ domiciles do not tip the balance. The Med is a Tennessee corporation that conducts business exclusively in Tennessee. Ford is domiciled in Virginia. The insurer is incorporated in Mississippi and does business in several states, including Arkansas, but not Tennessee. Medford is an Arkansas resident, employed by Medford Farm Partnership,
So we turn to the Leflar factors, three of which are most pertinent here. The first factor is predictability of results. “The consideration here is the idea that a decision following litigation on a given set of facts should be the same regardless of where the litigation occurs in order to prevent forum shopping.” Schubert,
The second Leflar factor — the maintenance of interstate and international order — also favors Tennessee law. This factor focuses on whether one State’s law would “manifest disrespect for [another state’s] sovereignty or impede the interstate movement of people and goods.” Whitney v. Guys, Inc.,
Under the fourth Leflar factor— the advancement of the forum’s interest— we determine the forum’s interest by examining its contacts with the case. Schubert,
In any event, we are not convinced that the forum’s interest outweighs the concerns previously expressed about forum shopping and the maintenance of interstate order that favor application of Tennessee law. The Arkansas Supreme Court, speaking of interstate order, has acknowledged that “[djeference to sister state law in situations in which the sister state’s substantial concern with a problem gives it a real interest in having its law applied, even though the forum state also has an identifiable interest, will at times usefully further this part of the law’s total task.” Gomez v. ITT Educ. Servs.,
Having considered both which State has the most significant relationship to the parties and the action, and Professor Lef-lar’s choice-influencing factors, we conclude that Tennessee law should apply to The Med’s lien impairment claim. We therefore reverse the district court’s order granting summary judgment in favor of the defendants and remand the case for further proceedings in accordance with this opinion.
Dissenting Opinion
dissenting.
Until now, the commonplace procedure where an Arkansas resident is fatally injured in an accident that occurs in Arkansas is that an Arkansas probate court appoints an administrator in an Arkansas county for the purpose of bringing a wrongful death claim. After that claim is settled in an Arkansas probate court, there has been no question that the proceeds from that action do not become a part of the assets of the estate and, therefore, are not subject to the debts of the deceased. Thus, the court defies controlling Arkansas law by holding that an out-of-state medical care provider — who is located less than 100 miles away and has actual notice of the proceedings, but nevertheless fails to file a claim against the estate, perfect an Arkansas medical lien, or otherwise appear in the probate case — is entitled to proceeds from a wrongful death action. Accordingly, I respectfully dissent.
Accordingly, although I agree with the majority’s determination that the Rooker-Feldman doctrine does not bar the present action, I cannot agree with the outcome of its conflict of laws analysis. The state, in Arkansas Code Annotated section 16-62-102(e), made unmistakably clear its policy goals with regard to the question of whether damages recovered by survivors of the deceased for wrongful death may be claimed by creditors by stating that “[n]o part of any recovery referred to in this section shall be subject to the debts of the
I agree with the majority’s conclusion that this action sounds in tort rather than in contract. See Stuttgart Reg’l Med. Ctr. v. Cox,
Assuming that an examination of the relevant contacts does not favor the application of either state’s law, I dissent from the majority’s conclusion that factors one, two, and four indicate that Tennessee law should apply. The first factor — predictability of results — weighs in favor of applying Arkansas law. “The consideration here is the ideal that a decision following litigation on a given set of facts should be the same regardless of where the litigation occurs in order to prevent forum shopping.” Schubert v. Target Stores, Inc.,
The second factor — maintenance of interstate order — likewise favors application of Arkansas law. “When the forum has little or no interest in applying its own law, its parochial decision to do so anyway could adversely affect the smooth functioning of the federal system and lead to retaliation in future cases by courts in the other state with a substantial interest in having its law applied.” 2 David Newbern et al., Arkansas Civil Practice & Procedure § 6:6 (5th ed. 2010). It is for this reason that the state supreme court has “note[d] that ‘[djeference to sister state law in situations in which the sister state’s substantial concern with a problem gives it a real interest in having its law applied, even though the forum state also has an identifiable interest, will at times usefully further this part of the law’s total task.’ ” Gomez,
“Under current Arkansas law, when a person’s death is caused by the negligence of another, two causes of action arise.” Davis v. Parham,
Finally, the fourth factor — advancement of the forum’s interest — favors application of Arkansas law. Analysis of this factor “requires the court to identify the factual connections linking the case to the forum state and then determine whether those facts implicate state policies that would justify application of forum law to the particular issue.” 2 Newbern et al., supra; see also Schubert,
The majority correctly notes that an Arkansas Court of Appeals decision—Mid-South Adjustment Co. v. Estate of Harris,
Moreover, the primary concern noted by the dissenters in Mid-South Adjustment involved the fact that the estate was settled and closed without notice to the creditors. See
Because I believe all three applicable factors favor the application of Arkansas law, I respectfully dissent. I would affirm the district court’s determination that Arkansas substantive law applies to the problem at issue.
Notes
. Elements of such damages include, inter alia, the decedent’s medical expenses, lost earnings prior to death, and pain and suffering. Brill, supra, § 34.2. "Apart from the personal injury action, the administrator may assert any claim that the decedent could have asserted if he had lived.” Id.
. Recovery for wrongful death is intended to compensate the statutory beneficiaries for pecuniary losses — “defined as the present value of the benefits, including money, goods, and services, that the decedent would have contributed to the statutory beneficiaries if he had lived” — mental anguish, and loss of consortium. Brill, supra, §§ 34.4, 35.5.
