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October 22, 2021

Health Law Weekly

Third Circuit Says COVID-19 Negligence Actions Against Nursing Homes Belong in State Court

  • October 22, 2021

The Third Circuit ruled October 20 that wrongful death and negligence actions against two New Jersey nursing homes brought by the estates of residents who died after contracting COVID-19 should be remanded to state court.

Affirming the decision below dismissing and remanding the actions, the Third Circuit held that the Public Readiness and Emergency Preparedness Act (PREP Act) did not preempt the “garden-variety” state law negligence claims, nor did the federal-officer removal statute confer subject matter jurisdiction. The appeals court also found no substantial federal issue for keeping the actions in federal court.

The Third Circuit decision, the first by a federal circuit court on the issue, aligns with nearly every federal district court to rule on the removal question, the opinion said. 

Plaintiffs filed the instant actions in state court alleging the nursing homes were negligent in handling the COVID-19 pandemic, causing the residents' deaths. The nursing homes removed the cases to federal court and appealed when the district court dismissed the cases for lack of subject matter jurisdiction.

At the outset, the Third Circuit declined to defer to the Department of Health and Human Services’ (HHS’) interpretations of the PREP Act, which the appeals court said generally favored removal. “HHS is not delegated authority under the PREP Act to interpret the scope of federal courts’ jurisdiction,” the appeals court said.

The Third Circuit also found the federal-officer removal statute did not provide subject matter jurisdiction because the nursing homes were not “acting under” the federal government or its agencies or officers.

Merely complying with federal laws and regulations does not amount to “acting under” a federal officer even under a broad construction of the phrase, the appeals court said. The nursing homes “do not assist or help carry out the duties of a federal superior,” they are not government contractors, and they are not delegated federal authority.

The nursing homes argued that “a more specific level of regulation”--as was the case here--support removal, but the appeals court rejected this “regulation-plus” theory, finding the degree of regulatory compliance or supervision alone is insufficient to trigger the federal officer removal statute.

The Third Circuit also held PREP Act preemption was not a basis for removal. The PREP Act unambiguously creates an exclusive cause of action for willful misconduct. But the estates alleged only negligence, not willful misconduct. The appeals court therefore concluded that their claims did not fall within the scope of the exclusive federal cause of action, were not completely preempted, and belonged in state court.

The appeals court acknowledged that some state law claims could fall within the narrow cause of action for willful misconduct, but the negligence claims at issue in the actions did not. The appeals court also did not address whether the PREP Act preempted the estates’ claims under ordinary preemption rules, saying that question was one for the state court on remand.

Finally, the appeals court held the estates’ claims did not raise a substantial federal issue permitting removal.

Estate of Maglioli v. Alliance HC Holdings LLC, Nos. 20-2833 (3d Cir. Oct. 18, 2021).  

  • Coronavirus Pandemic