Preston v. Tenet Healthsystems Mem’l Med. Ctr., Inc. (Full Text)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

ELMIRA PRESTON, ET AL.

VERSUS

TENET HEALTHSYSTEM MEMORIAL
MEDICAL CENTER, INC., ET AL.

CIVIL ACTION

NO. 06-3179

SECTION “L” (4)

ORDER AND REASONS

On July 14, 2006, the Plaintiffs filed a Motion to Remand (Rec. Doc. 15) the above-

captioned case to state court. This motion came for hearing with oral argument on August 22,

2006. The Court concluded that more information was needed on the jurisdictional issues and

ordered the parties to conduct limited discovery. During the discovery period, however, the

Plaintiffs filed a Motion to Withdraw their Motion to Remand (Rec. Doc. 54). The Court

granted the Plaintiffs’ Motion to Withdraw (Rec. Doc. 59), but ordered that the parties file

supplemental briefing on information revealed through the jurisdictional discovery process. As

the Court has now been fully advised on the jurisdictional issues, the Court determines for the

following reasons that it may not hear this case and orders that the action be REMANDED to the

Civil District Court for the Parish of Orleans.

I. Factual and Procedural Background

This lawsuit arises from the injuries and/or deaths of patients at Memorial Medical

Center in New Orleans in the aftermath of Hurricane Katrina in late August and early September

of 2005. After the storm, conditions at the hospital deteriorated rapidly. Without electrical

power, temperatures in the hospital quickly approached one-hundred-and-ten degrees, sanitation

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systems were overwhelmed, and life-altering decisions were made regarding patient evacuations.

According to reports, more than one thousand people were trapped at the hospital due to

floodwaters rising more than eight feet in height. Though helicopter rescues began within a day

of the storm’s passing and several rescue boats ferried hundreds of patients to higher ground,

many vulnerable patients remained trapped at the hospital. In total, approximately thirty-five

people passed away in these chaotic circumstances.1

Various patients and relatives of both deceased and allegedly injured patients

(“Plaintiffs”) filed the instant action against Tenet Healthsystem Memorial Medical Center, Inc.

d/b/a Memorial Medical Center (“Memorial”) in Civil District Court for the Parish of Orleans on

October 6, 2005. The Plaintiffs subsequently amended their petition four times to include a

request for class certification under Louisiana law and to include as Defendants LifeCare

Management Services, Inc., d/b/a LifeCare Hospital and LifeCare Hospital of New Orleans,

L.L.C., d/b/a LifeCare Hospital (together, “LifeCare”), who leased space from Memorial and

operated an acute-care unit on the seventh floor of the hospital.2

In their petition, the Plaintiffs bring claims against Memorial, LifeCare, and their officers

and agents (the “Defendants”) asserting various allegations of negligence and intentional

misconduct, “reverse patient dumping” under the Emergency Medical Treatment and Active

Labor Act (“EMTALA”), 42 U.S.C. § 1395dd, and involuntary euthanization. The Plaintiffs

1 See, e.g., Jeffrey Meitrodt, For Dear Life: How Hope Turned to Despair at Memorial
Medical Center, Times-Picayune, Aug. 20 – Aug. 24, 2006, A-1 (five-part story).

2 A Sixth Supplemental and Amended Complaint to include additional Plaintiffs was
subsequently filed on November 7, 2006 (Rec. Doc. 88), after the Plaintiffs’ Motion to Remand
had been submitted and withdrawn.

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have filed a class action and propose certification of a class composed as follows:

All patients of Memorial and LifeCare who sustained injuries including death or
personal injury as a result of the insufficient design, inspection and/or maintenance
of LifeCare and/or Memorial’s back-up electrical system, its failure to implement its
evacuation plan and/or its emergency preparedness plan and/or its failure to have a
plan which would have facilitated the safe transfer of patients out of harm’s way, and
its failure to have a plan of care for patients in the event of a power outage in the
wake of Hurricane Katrina within the property owned by Memorial and leased and/or
operated by LifeCare on or about the time period of August 26[ ]…through and
including August 29, 2005 and thereafter, and all persons who sustained personal
injury as a result of the deaths or personal injuries to patients of LifeCare and
Memorial. . . .

(Pls.’ Fifth Supplemental and Am. Pet. for Damages).3

II. LifeCare’s Notice of Removal

Defendant LifeCare filed a Notice of Removal on June 18, 2006, and subsequently filed

an Amended Notice of Removal on June 26, 2006, asserting: (a) that jurisdiction is proper under

the Federal Officer Removal Statute, 28 U.S.C. § 1442(a)(1), as LifeCare was a person acting

under color of federal authority and has colorable defenses to the Plaintiffs’ claims; (b) the case

falls under the Multiparty, Multiforum Trial Jurisdiction Act, (“MMTJA”), 28 U.S.C. § 1369, as

it involves minimal diversity and a single accident in which at least 75 persons died; (c) the

proposed class action consists of more than 100 persons, the aggregated amount in controversy

exceeds $5 million, excluding interests and costs, and it meets the minimum diversity

requirements of the Class Action Fairness Act of 2005 (“CAFA”); (d) the EMTALA claim

3 LifeCare represents that, to date, approximately one-hundred-and-twenty claims have
been filed arising out of the conditions at Memorial following Hurricane Katrina. LifeCare has
removed a number of these individual cases to this Court stating the same bases of federal
jurisdiction as asserted here. Although these related cases have not been consolidated, many
have been transferred to this Section and will be governed by this analysis. Individual remand
orders will be entered in each case.

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presents a federal question for which the Court has original subject matter jurisdiction under 28

U.S.C. § 1331; and (e) the remainder of the Plaintiffs’ claims are so related to the federal claim

that this Court should exercise supplemental jurisdiction over such claims pursuant to 28 U.S.C.

§ 1367.

III. Standard for Remand

On July 14, 2006, the Plaintiffs filed a Motion for Remand (Rec. Doc. 15). As noted, the

Plaintiffs have withdrawn this Motion. However, on November 13, 2006, in response to

LifeCare’s supplemental briefing opposing remand, LifeCare’s co-defendant Memorial filed a

memorandum supporting remand and adopting the Plaintiffs’ since-withdrawn Motion (Rec.

Doc. 93). Thus, the Court has before it Plaintiffs’ Motion for Remand resurrected, adopted, and

urged by Memorial, which had never consented to removal in the first place.

Whether or not the Motion is viable in view of the Plaintiffs’ withdrawal is of no

consequence since the Court must sua sponte address the issue and remand the action back to

state court if it determines at any time that it lacks subject matter jurisdiction. See 28 U.S.C. §

1447(c); Ziegler v. Champion Mortgage Co., 913 F.2d 228 (5th Cir. 1990). LifeCare claims

federal jurisdiction under any of four bases: (i) the Federal Officer Removal Statute; (ii)

MMTJA; (iii) CAFA; and (iv) EMTALA. The Court will address each of LifeCare’s asserted

bases of federal jurisdiction.

The removing defendant ordinarily carries the burden of showing the existence of federal

jurisdiction. See Jernigan v. Ashland Oil, Inc., 989 F.3d 812, 815 (5th Cir. 1993). As a general

matter, the removal statute is to be construed narrowly and in favor of remand to state court. See

Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941). Indeed, “doubts regarding whether

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removal jurisdiction is proper should be resolved against federal jurisdiction.” Acuna v. Brown

& Root Inc., 200 F.3d 335, 339 (5th Cir. 2000). Accordingly, all disputed questions of fact must

be resolved in favor of the non-moving party. See Burden v. Gen. Dynamics Corp., 60 F.3d 213,

216 (5th Cir. 1995). However, as explained below, the traditional standard of review does not

apply when reviewing removal under the Federal Officer Removal Statute or the Class Action

Fairness Act.

IV. Federal Officer Removal Statute

The Federal Officer Removal Statute, 28 U.S.C. § 1442(a)(1), provides in pertinent part:

(a) A civil action . . . commenced in a State Court against any of the following may
be removed by them to the district court of the United States for the district and
division embracing the place wherein it is pending:

(1) The United States . . . or any officer (or any person acting under that
officer) of the United States or of any agency thereof, sued in an official or
individual capacity for any act under color of such office . . . .

The purpose of this statute is to provide a federal forum in cases where federal officials are

entitled to raise a defense arising out of their official duties. See Arizona v. Manypenny, 451

U.S. 232, 241 (1981). Though generally remand to state court is favored when removal

jurisdiction is questionable, removal jurisdiction under the Federal Officer Removal Statute must

be broadly construed. See Willingham v. Morgan, 395 U.S. 402, 407 (1969). Indeed, the Court

must interpret the statute liberally, resolving any factual disputes in favor of federal jurisdiction.

See Louisiana v. Sparks, 978 F.2d 226 (5th Cir. 1992). Removal is proper in this case under §

1442(a)(1) if LifeCare (1) is a “person,” (2) that acted under color of federal authority when

committing the allegedly tortious conduct, and (3) can assert a colorable federal defense. See

Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387 (5th Cir. 1998) (applying three-part test

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elucidated by United States Supreme Court in Mesa v. California, 489 U.S. 121 (1989)).

In the present case, LifeCare, a private entity, contends that it is a “person acting under”

the direction of an officer of the United States and, therefore, that it is entitled to litigate the

Plaintiffs’ claims in a federal forum. The parties agree that LifeCare is a “person” for purposes

of the statute. Questions remain whether LifeCare acted “pursuant to a federal officer’s

directions” and whether “a casual nexus” exists “between the defendant[’s] action under color of

federal office and the plaintiff[s’] claims.” Winters, 149 F.3d at 398. The Court must also

determine whether LifeCare can assert a colorable federal defense.

LifeCare contends that it conducted the evacuation of Memorial at the direction of a

federal officer and, therefore, that this matter belongs in federal court. In support of removal,

LifeCare submits the affidavits of two of its employees, Marie B. Cote and Diane Cloinger, who

claim that a federal officer informed them that the federal government had assumed control of

patient evacuations following Hurricane Katrina and that LifeCare was not authorized to execute

its own evacuation plan. The alleged federal official is Knox Andress.

Mr. Andress is a registered nurse at Christus Schumpert Health Systems, which is a

private entity. Mr. Andress also serves as a District Regional Coordinator for the United States

Health Resources Services Administration (“HRSA”). The HRSA is a branch of the United

States Department of Homeland Security.

In 2002, the Louisiana Department of Health and Hospitals was awarded a $1.9 million

grant from HRSA for statewide bioterrorism and public health emergency planning.4 The grant

4 See Louisiana Hospital Association, HRSA Emergency Preparedness,
http://www.lhaonline.org/displaycommon.cfm?an=1&subarticlenbr=138 (last visited Nov. 20,
2006); see also 42 U.S.C.A. § 247d-3a (statutory authorization for the grant).

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was continued in 2003 and 2004, with an additional $7.7 million each year, and in 2005 with an

additional $7.3 million. Incidental to meeting the objectives of the federal grant, Louisiana has

been divided into nine regions, with each region having at least one HRSA District Regional

Coordinator assigned to it. Mr. Andress is the HRSA District Regional Coordinator for Region 7

in Louisiana. LifeCare argues that HRSA exercised control over the Louisiana Department of

Health and Hospitals and Mr. Andress by virtue of the bioterrorism grant and the concern that

the grant might not be renewed in coming years. The Court is not persuaded.

In his deposition, Mr. Andress testified that he is not employed by the federal

government in any capacity. (Andress Dep. 79:17-80:11, Sept. 6, 2006.) Indeed, Mr. Andress

was examined at length on this topic and after reviewing the relevant testimony, the Court finds

that Mr. Andress is not a federal officer by virtue of his volunteer position as an HRSA District

Regional Coordinator. (Andress Dep. 12:21-21:14.) Assuming, arguendo, that Mr. Andress is a

federal officer, the Court nevertheless finds that he did not exercise the requisite control over

LifeCare necessary to invoke 28 U.S.C. § 1442(a)(1).

On the days leading up to and following Hurricane Katrina’s landfall, the Louisiana

Hospital Association (“LHA”) conducted conference calls with the HRSA District Regional

Coordinators, including Mr. Andress. (Andress Dep. 26:17-28:14.) These LHA calls took place

at 10:00 a.m. and 2:00 p.m. each day. Id. At his deposition, Mr. Andress testified that he

conducted additional conference calls at 11:00 a.m. with various administrators from hospitals

within his region, and that LifeCare employees participated in several of these calls. (Andress

Dep. 30:22-32:17.) In addition, Mr. Andress testified that Ms. Cote and Ms. Cloinger contacted

him on several occasions to discuss the evacuation of Memorial. (Andress Dep. 32:18-34:14.)

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Indeed, Mr. Andress testified that the LifeCare representatives called to inform him that people

were trapped in the LifeCare unit at Memorial and that they needed his help to get them

evacuated. (Andress Dep. 65:24-67:8.)

In her affidavit, Ms. Cote states that Mr. Andress identified himself as a representative of

FEMA and informed her that “FEMA and the United States Coast Guard had assumed control of

all evacuation efforts of New Orleans healthcare facilities.” (Cote Aff. 1, Aug. 3, 2006.) She

also states that Mr. Andres declared that “LifeCare was not authorized by FEMA to implement

its evacuation plan without further direction from FEMA.” (Cote Aff. 2.) Ms. Cloinger states in

her affidavit that she was advised by Mr. Andress that “FEMA’s [evacuation] plan was to be

followed by all hospitals and individuals.” (Cloinger Aff. 2, Aug. 4, 2006.) In his deposition,

Mr. Andress testified that he did not identify himself as a FEMA representative (Andress Dep.

58:25-59:10, 81:14-19) and did not represent that FEMA was in control nor that LifeCare was

prevented from executing its own evacuation plan (Andress Dep. 80:12-83-7).

LifeCare principally relies on Dixon v. Georgia Indigent Legal Services, Inc., 388 F.

Supp. 1156 (S.D. Ga. 1975), in support of its argument that it acted under the direction of a

federal officer. In Dixon, the plaintiffs sought to enjoin two Georgia non-profit corporations

from engaging in the unauthorized practice of law. Id. at 1157. The defendants removed the

case to federal court pursuant to the Federal Officer Removal Statute. The district court held that

the non-profit corporations were administering federally-funded legal assistance programs for

the indigent and, therefore, were acting under the direction of the federal agencies that funded

them. Id. at 1162-63.

No similar “federal interest” is involved in this case. See Winters, 149 F.3d at 398. The

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most that can be said is that Mr. Andress served as a conduit between the federal government

and various hospitals throughout Louisiana through which information flowed. When a private

entity such as LifeCare invokes the Federal Officer Removal Statute, it must “demonstrate that a

federal officer has direct and detailed control over it.” Kaye v. Sw. Airlines Co., No. 05-0450,

2005 WL 2074327, at *3 (N.D. Tex. Aug. 29, 2005) (citing Winters, 149 F.3d at 399-400 and 16

James Wm. Moore et al., Moore’s Federal Practice § 107.15(1)(b)(ii) (3d ed. 2005)). Indeed, in

Winters, the private entity was compelled to produce and deliver the product Agent Orange

pursuant to detailed regulations under threat of criminal sanction. See Winters, 149 F.3d at 398-

400; see also Teague v. Bell Helicopter Servs., Inc., No. 03-004, 2003 WL 21135481 (N.D. Tex.

Feb. 12, 2003) (finding federal direction where the government dictated every aspect of design

and manufacture of helicopter). LifeCare has not demonstrated that Mr. Andress exercised

“direct and detailed control” over their operations.

The Court recognizes that the LifeCare personnel and Mr. Andress have different

recollections of their communications in late August, 2005. While the Federal Officer Removal

Statute is to be liberally construed, it must nevertheless be interpreted “with the highest regard

for the right of the states to make and enforce their own laws in the field belonging to them under

the Constitution.” Dixon, 388 F. Supp. at 1162 (citation omitted). Accordingly, the Court finds

that LifeCare has failed to demonstrate that it acted under color of federal authority in allegedly

failing to maintain conditions and procedures sufficient to sustain the lives of its patients and,

thus, that removal under the Federal Officer Removal Statute was improper.

V. Multiparty, Multiforum Trial Jurisdiction Act (“MMTJA”)

LifeCare also argues that removal is proper under 28 U.S.C. § 1441(e)(1)(A) because

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this “action could have been brought in a United States district court under section 1369.”

Section 1369, the Multiparty, Multiforum Trial Jurisdiction Act (“MMTJA”), creates original

federal jurisdiction over “any civil action involving minimal diversity between adverse parties

that arises from a single accident, where at least 75 natural persons have died in the accident at a

discrete location.” 28 U.S.C. § 1369(a).

The MMTJA seeks “to allow full consolidation of state and federal cases related to a

common disaster to eliminate multiple or inconsistent awards arising from multiforum

litigaiton.” Southall v. St. Paul Travelers Ins. Co., No. 06-1235, 2006 WL 2385365 (E.D. La.

Aug. 16, 2006); see Laura Offenbacher, Note, The Multiparty, Multiforum Trial Jurisdiction Act:

Opening the Door to Class Action Reform, 23 Rev. Litig. 177 (2004). Enacted in 2002 shortly

after the terrorist attacks of September 11, 2001, the MMTJA has rarely been invoked, prior to

Hurricane Katrina that is. See, e.g., Passa v. Derderian, 308 F. Supp. 2d 43 (D. R.I. 2004)

(finding removal of wrongful death and negligence claims arising from a nightclub fire proper

under the MMTJA). LifeCare argues that the various levee breaches following Hurricane

Katrina qualify as an MMTJA “accident” and that 75 natural persons died in the subsequent

flooding of New Orleans. Therefore, LifeCare argues that this case could have been brought in

federal court under § 1369 and is thus properly removed.

An “accident” under § 1369 is defined as “a sudden accident, or natural event

culminating in an accident, that results in death incurred at a discrete location by at least 75

natural persons.” 28 U.S.C. § 1369(c)(4). While courts have refused to consider Hurricane

Katrina an “accident,” see Hillery v. State Farm Fire & Cas. Co., No. 06-2909, 2006 U.S. Dist.

LEXIS 51446 (E.D. La. July 26, 2006) and Willhoft v. Kert Leblanc Ins. Agency, No. 06-1235,

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2006 U.S. Dist. LEXIS 45796 (E.D. La. July 5, 2006), individual levee breaks caused by

Hurricane Katrina might qualify as “accidents” under the statute. See Flint v. La. Farm Bureau

Mut. Ins. Co., No. 06-2546, 2006 U.S. Dist. LEXIS 58264, at *4-12 (E.D. La. Aug. 15, 2006).

Even if the hurricane-related levee breaches are MMTJA “accidents,” it is clear that the

requirement that 75 deaths occur at a discrete location has not been satisfied in this case. While

the accident may not need to be localized, the plain language of the statute requires that the

deaths resulting from the accident must occur at a discrete location. See Joseph M. Creed,

Comment, Choice of Law Under the Multiparty, Multiforum Trial Jurisdiction Act of 2002, 17

Regent U. L. Rev. 157 (2005). LifeCare would have the Court define the “discrete location” in

this case as the metro New Orleans area, in which it is undisputed that at least 75 deaths occurred

following Hurricane Katrina. LifeCare’s argument is untenable and would effectively deprive

the Louisiana state courts of jurisdiction over any dispute related to Hurricane Katrina.

Therefore, the Court finds that Memorial is the “discrete location” in this case. It is undisputed

that 75 deaths did not occur at the hospital; accordingly, federal jurisdiction does not exist under

the MMTJA.5

VI. Class Action Fairness Act (“CAFA”)

The Class Action Fairness Act of 2005 (“CAFA”), Pub. L. No. 109-2, 119 Stat. 4

(codified in various sections of 28 U.S.C.), expands federal diversity jurisdiction over interstate

class actions. A defendant may remove an action to federal court under CAFA if a threshold

5 To the extent that LifeCare has been subjected to the burdens of multiforum litigation,
it has brought such burdens upon itself by removing a number of these cases from the Civil
District Court for the Parish of Orleans. It does not appear that claims have been filed
elsewhere.

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amount in controversy and minimal diversity exist. Specifically, 28 U.S.C. § 1332(d)(2) states

that a federal court has original jurisdiction over a class action if the amount in controversy

exceeds $5,000,000, exclusive of interests and costs, and at least one class member is a citizen of

a different state than one or more defendants. In addition, the proposed class must be comprised

of at least 100 members. 28 U.S.C. § 1332(d)(5).

However, CAFA contains exceptions to this expanded jurisdiction which may bar the

court’s ability to hear a case otherwise satisfying the statute. Sections 1332(d)(3) and (4)

provide federal courts with discretionary authority to decline jurisdiction and also prescribe

circumstances where the Court is required to decline jurisdiction.

For example, the “local controversy” and “home-state controversy” carve-out provisions,

located at 28 U.S.C. § 1332 (d)(4)(A) and (B), mandate federal courts to refuse jurisdiction when

a case is distinctly local in nature. See Evans v. Walter Indus., Inc., 449 F.3d 1159 (11th Cir.

2006); Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 678 (7th Cir. 2006). Under this

section, a district court “shall” decline jurisdiction

(A)(i) over a class action in which–

(I) greater than two-thirds of the members of all proposed plaintiff classes in
the aggregate are citizens of the State in which the action was originally
filed;

(II) at least 1 defendant is a defendant–

(aa) from whom significant relief is sought by members of the
plaintiff class;

(bb) whose alleged conduct forms a significant basis for the claims
asserted by the proposed plaintiff class; and

(cc) who is a citizen of the State in which the action was originally
filed; and

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(III) principal injuries resulting from the alleged conduct or any related
conduct of each defendant were incurred in the State in which the action was
originally filed; and

(ii) during the 3-year period preceding the filing of that class action, no other class
action has been filed asserting the same or similar factual allegations against
any of the defendants on behalf of the same or other persons; or

(B) two-thirds or more of the members of all proposed plaintiff classes in the
aggregate, and the primary defendants, are citizens of the State in which the action
was originally filed.

28 U.S.C. § 1332 (d)(4).

When determining the citizenship of the plaintiffs, the Court looks to citizenship at the

time the complaint or amended complaint was filed, or if the case stated by the initial pleading is

not subject to federal jurisdiction, citizenship is determined as of the date of service by plaintiffs

of an amended pleading, motion, or other paper, indicating the existence of federal jurisdiction.

28 U.S.C. § 1332(d)(7). For purposes of diversity, “citizenship has the same meaning as

domicile.” Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954). Residence establishes prima facie

indication of domicile, but it must be accompanied by an intent to remain in that state. Id. Thus,

prolonged absence or “[m]ere presence in a new location does not effect a change of domicile; it

must be accompanied with requisite intent.” Coury v. Prot, 85 F.3d 244, 250 (5th Cir. 1996).

With this standard of citizenship in mind, the Court reviews the information provided by

the parties through the discovery process to determine whether it is required to send the action

back to state court based on the mandate set forth in 28 U.S.C. § 1332(d)(4). Though the Fifth

Circuit holds that the plaintiffs carry the burden of proving exceptions to jurisdiction under

CAFA, see Frazier v. Pionner Americas, LLC, 455 F.3d 542, 546 (5th Cir. 2006), this Court

found in this case that information regarding the patients, their relatives, and other beneficiaries

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was most likely in the hands of the Defendants and thus ordered the Defendants to produce this

information.6 Specifically, the Court required Memorial to provide the addresses and phone

numbers of those patients who died at Memorial within the relevant time period, as well as the

phone numbers of the patients’ emergency contacts listed on their medical forms (Rec. Doc. 39).

The Court also ordered Memorial to provide the percentage of patients in the entire Memorial

facility with Louisiana addresses (Rec. Doc. 43).

This information presents a valuable indication of the citizenship of the proposed class

members and reveals that of the thirty-five patients who died in the storm’s aftermath, only two

provided addresses outside the State of Louisiana (Rome Aff., Sept. 6, 2006). These same two

deceased individuals’ emergency contacts were the only contacts who had telephone numbers

with a New Orleans area code. Additionally, Memorial’s Medical Records Supervisor provided

a second affidavit in which he attests that of the 256 patients hospitalized in the entire hospital at

the time when Hurricane Katrina struck on August 29, 2005, only seven of those patients, or

2.73% of the total patient population, indicated that they were residents of other states (Rome

Aff., Sept.18, 2006).

In a supplemental brief, LifeCare submits an affidavit of a private investigator who traced

the mailing addresses of 146 individuals LifeCare’s counsel identified as potential class

members (Mazur Aff., Oct. 24, 2006). The investigator claims that 49 of 146 individuals

6 Moreover, given Memorial’s opposition to LifeCare’s removal of this matter, the Court
was not troubled burdening Memorial in this respect. The difficulty of determining whether the
CAFA carve-outs have been satisfied is indeed “exacerbated by the fact that this determination
must be made as a threshold matter” upon an undeveloped factual record. See Edward F.
Sherman, Class Actions After the Class Action Fairness Act of 2005, 80 Tul. L. Rev. 1593, 1598
(2006).

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identified currently reside outside of Louisiana. However, as mentioned above, domicile, and

hence citizenship, is determined by looking at residence and intent, both at the date the suit was

filed. LifeCare did not provide any information regarding the length of time that these

individuals have been residing outside of Louisiana, even though the investigator’s review

included collecting former addresses, property transactions, prior driver’s license information,

prior automobile ownership, prior residential and cellular phone numbers, etc., all useful aids in

determining whether these individuals were displaced following Hurricane Katrina.

Additionally, if these individuals were in fact displaced, LifeCare did not indicate whether these

individuals intend to remain in their new state of residence. Eight affidavits submitted by the

Plaintiffs with their Motion to Remand suggest that at least some displaced proposed class

members intend to return to New Orleans in the near future (Pls.’ Mot. to Remand Ex. B).7

Every single one of these individuals state that they lived in New Orleans at the time of the

hurricane, but were forced to evacuate to another state. However, they continue to have every

intention of returning to the New Orleans area.

Though it is the Plaintiffs, and not LifeCare, who must demonstrate that an exception to

CAFA jurisdiction applies, and though the Plaintiffs have since withdrawn their Motion to

Remand and thus do not contest CAFA jurisdiction, the Court is nevertheless required to

examine the record and determine whether or not it has jurisdiction. Furthermore, though

“CAFA’s legislative history suggests that Congress intended the local controversy exception to

7 See Affidavits of Darlene Preston, Cynthia Preston, Rose La France, Elmira Preston,
Terry Gaines-Oden, Wanda Preston, Anthony Preston, Aster Preston (stating though displaced to
other states due to Hurricane Katrina, they are residents and domiciliaries of New Orleans and
intend to return to the city as soon as housing becomes available).

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be a narrow one, with all doubt resolved ‘in favor of exercising jurisdiction over the case,’”

Evans, 449 F.3d at 1163 (quoting S. Rep. No. 109-14 at 42, U.S. Code Cong. & Admin. News 3,

40), Congress also emphasized that the purpose of § 1332(d)(4) was to “identify a truly local

controversy–a controversy that uniquely affects a particular locality to the exclusion of all

others.” Id. From a review of the evidence, it is clear to the Court that more than two-thirds of

the proposed plaintiff class are citizens of Louisiana, both Defendants are incorporated in

Louisiana and hence citizens of this State (Pls.’ Mot. to Remand Ex. C), and that the injuries

took place in Louisiana. Therefore, the Court finds that the “local controversy” and “home

state” exceptions apply and that it must remand the action back to state court under §

1332(d)(4)(A) and/or (B).

Moreover, the Court also believes it appropriate to use its discretionary authority to

remand the action back to state court under 28 U.S.C. § 1332(d)(3). That provision provides, in

pertinent part:

A district court may, in the interests of justice and looking at the totality of the
circumstances, decline to exercise jurisdiction . . . over a class action in which
greater than one-third but less than two-thirds of the members of all proposed
plaintiff classes in the aggregate and the primary defendants are citizens of the State
in which the action was originally filed based on consideration of–

(A) whether the claims asserted involve matters of national or interstate
interest;

(B) whether the claims asserted will be governed by laws of the State in
which the action was originally filed or by the laws of other States;

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(D) whether the action was brought in a forum with a distinct nexus with the
class members, the alleged harm, or the defendants; [and]

(E) whether the number of citizens of the State in which the action was
originally filed in all proposed plaintiff classes in the aggregate is
substantially larger than the number of citizens from any other State, and the
citizenship of the other members of the proposed class is dispersed among a
substantial number of States
. . . .

28 U.S.C. § 1332(d)(3).

The Court finds that a distinct nexus exists between the forum of Louisiana, the

Defendants, and the proposed class. All of the Defendants’ actions and all of the alleged injuries

to patients took place at Memorial in New Orleans, Louisiana within a defined period of time.

Most of the claims involve issues of negligence which will be governed by Louisiana law. Both

of the Defendants are citizens of Louisiana and over 97% of the patients registered at the hospital

on August 29, 2005 provided information indicating a New Orleans residence. Though the

effects of Hurricane Katrina caused the displacement of many members of the proposed class, it

is anticipated that a majority of the proposed class members remain citizens of Louisiana.

Therefore, the Court finds that this local controversy must be remanded to state court.

VII. Emergency Medical Treatment and Active Labor Act (“EMTALA”)

Lastly, LifeCare asserts that the Plaintiffs’ EMTALA claim provides federal question

jurisdiction under 28 U.S.C. § 1331. The Plaintiffs allege that the Defendants’ decision to

evacuate certain patients and abandon others amounts to “reverse patient dumping” under the

Emergency Medical Treatment and Active Labor Act ( “EMTALA”), 42 U.S.C. § 1395dd (Pls.’

Supplemental and Am. Pet. for Damages). Memorial has filed a Motion to Dismiss for Failure to

State a Claim (Rec. Doc. 7). However, the hearing for this motion has been continued until the

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jurisdictional issues are resolved.

In this case, a viable cause of action under federal law does not exist for “reverse patient

dumping” and thus does not confer jurisdiction under 28 U.S.C. § 1331. EMTALA was enacted

by Congress to prevent hospitals and physicians from refusing to treat patients who lacked

financial means to pay for services. See Marshall v. E. Carroll Parish Hosp. Serv. Dist., 134

F.3d 319, 322 (5th Cir. 1998). Accordingly, EMTALA provides that administrative proceedings

may be conducted to assess civil monetary penalties against a hospital or doctor who is found to

have improperly transferred or discharged an emergency room patient before the patient’s

medical condition was stabilized. See 42 U.S.C. § 1395dd(d)(1)(A)-(B). The statute also creates

a private right of action for an individual injured by the “participating hospital.” 42 U.S.C. §

1395dd(d)(2)(A). However, the clear language of the statute indicates that the private right of

action is only available to those patients who were injured through the hospital’s improper

transfer or discharge of the patient. Thus, a claim of “reverse dumping,” i.e., not transferring or

discharging a patient, is not valid. This determination is consistent with legislative intent as “the

statute was not intended to be used as a federal malpractice statute.” Marshall, 134 F.3d at 322.

Though the failure to state a claim is considered a judgment on the merits and may not

normally be asserted until after the federal court determines that it has jurisdiction to hear the

case, the United States Supreme Court has established exceptions whereby a “suit may be

dismissed for jurisdiction where the alleged claim under the Constitution or federal statutes

appears to be immaterial . . . wholly unsubstantial or frivolous.” Patterson v. Hamrick, 889 F.

Supp. 913, 915 (E.D. La. 1995) (citing Bell v. Hood, 327 U.S. 678, 682-83 (1946); Oneida

Indian Nation of New York State v. Oneida, 414 U.S. 661, 666 (1974); Grinter v. Petroleum

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Operation Support Serv., Inc., 846 F.2d 1006, 1008 (5th Cir. 1988)).

Even if it could be argued that federal jurisdiction may exist for the EMTALA claim, the

Court finds that the state-law claims predominate over the case in its entirety and thus remand

under 28 U.S.C. § 1441(c) is appropriate. See Miller v. John Sexton Sand, Gravel Corp., No. 96-

315, 1996 U.S. Dist. LEXIS 21142, at *11 (N.D. Miss. Sept. 18, 1996) (citing Moralez v. Meat

Cutters Local 539, 778 F. Supp. 368, 370-71 (E.D. Mich. 1991) and Alexander v. Goldome

Credit Corp., 772 F. Supp. 1217, 1223-35 (M.D. Ala. 1991)).8

The case at bar is a prime example of a case that should be heard in state court. To
allow the entire case to be removed to federal court on the basis of a relatively
insignificant claim when compared to the state law claims is a classic illustration of
‘the tail wagging the dog.’ There can be no doubt that state law predominates in this
case.

Miller, 1996 U.S. Dist. LEXIS 21142, at *11 (quoting Alexander, 772 F. Supp. at 1225).

VIII. Conclusion

For the foregoing reasons, the Court finds that it lacks subject matter jurisdiction to hear

this case. Therefore, IT IS ORDERED that the action is hereby REMANDED to Civil District

8 The federal EMTALA claim and state-law claims seek separate relief for distinct
wrongs. For example, the EMTALA claim seeks damages for failure to transfer or discharge
patients, whereas the state-law claims involve issues such as insufficient design, inspection
and/or maintenance of Memorial’s back-up electrical system, failure to implement its evacuation
plan and/or its emergency preparedness plan, and failure to have a plan of care for patients in the
event of a power outage in the wake of Hurricane Katrina. Thus, these are separate and
independent claims and § 1441(c) is applicable:

Whenever a separate and independent claim or cause of action within the jurisdiction
conferred by section 1331 of this title is joined with one or more otherwise non-
removable claims or causes of action, the entire case may be removed and the district
court may determine all issues therein, or, in its discretion, may remand all matters
in which State law predominates.

28 U.S.C. § 1441(c).

Case 2:06-cv-03179-EEF-KWR Document 94 Filed 11/21/2006 Page 20 of 20

Court for the Parish of Orleans, State of Louisiana.

New Orleans, Louisiana, this 21st day of November, 2006.

UNITED STATES DISTRICT JUDGE