Cagle v. NHC Healthcare-Maryland Heights, LLC

78 F.4th 1061

Zane CAGLE, Individually, and in a Representative Capacityfor All Persons Identified by RSMo 537.080, Plaintiff - Appellee, v. NHC HEALTHCARE-MARYLAND HEIGHTS, LLC; NHC/OP, LP;NHC/Delaware, Inc.; National Healthcare Corporation, Delaware, Defendants - Appellants.United States Chamber of Commerce;Missouri Chamber of Commerce and Industry; American Medical Association;Missouri State Medical Association; DRI Center for Law and Public Policy, Amici on Behalf of Appellant(s),Justice in Aging, formerly known as National Senior Citizens Law Center;AARP; AARP Foundation, Amici on Behalf of Appellee(s).

No. 22-2757

United States Court of Appeals, Eighth Circuit

Submitted: April 13, 2023

Filed: August 28, 2023

Appeal from United States District Court for the Eastern District of Missouri - St. Louis

Counsel who presented argument on behalf of the appellants was David Patrick Franklin, of Saint Louis, MO. Attorneys who appeared on brief on behalf of the appellants were Timothy C. Sansone, of St. Louis, MO., Stephen M. Strum, of St. Louis, MO., and Jamie L. Bracewell, of St. Louis, MO.

Counsel who presented argument on behalf of the appellee was Adam R. Pulver, of Washington, DC. Attorneys who appeared on brief on behalf of the appellee were Michael E. Campbell, of Columbia, MO., Kristin Arnold, of Columbia, MO., Adam R. Pulver, of Washington, DC., and Scott L. Nelson, of Washington, DC.

Counsel who appeared on the amicus brief of The Chamber of Commerce of the United States of America, Missouri Chamber of Commerce and Industry, American Medical Association, and Missouri State Medical Association in support of appellants were Jennifer B. Dickey, of Washington, DC; Jordan L. Von Bokern, of Washington, DC; Jeffrey S. Bucholtz, of Washington, DC; Alexander Kazam, of Washington, DC; Brendan Cossette, of Jefferson City, MO; Leonard A. Nelson, of Chicago, IL; and Geoffrey M. Drake, of Atlanta, GA.

Counsel who appeared on the amicus brief of DRI Center for Law and Public Policy in support of appellants were William M. Jay, of Washington, DC; and Andrew Kim, of Washington DC.

Counsel who appeared on the amicus brief of AARP, AARP Foundation, and Justice in Aging in support of appellees were Eric Carlson, of Los Angeles, CA; Maame Gyamfi, of Washington, DC; Wiliam Alvarado Rivera, of Washington, DC; and Kelly Bagby, of Washington DC.

Before COLLOTON, WOLLMAN, and GRUENDER, Circuit Judges.

COLLOTON, Circuit Judge.

In June 2020, Willis Cagle died from COVID-19. He allegedly contracted the disease at his nursing home, NHC HealthCare-Maryland Heights, LLC. His son, Zane Cagle, brought suit in Missouri state court against the nursing home, three corporate entities that own the facility, and twelve administrators and medical professionals employed by NHC HealthCare-Maryland Heights, LLC. The nursing home and the three corporate entities removed the case to federal court, but the district court^* concluded that it lacked subject matter jurisdiction, and remanded the case to state court. The NHC entities appeal and argue that removal was proper. We affirm the remand order of the district court.

I.

Zane Cagle's complaint alleges that Willis Cagle resided at NHC HealthCare-Maryland Heights, LLC from April 18 to May 29, 2020. Beginning in May 2020, numerous residents contracted COVID-19 and died from the disease. According to the complaint, the nursing home failed to follow proper infection control procedures to prevent and control this outbreak. The complaint alleges that the facility allowed staff with COVID-19 symptoms to work with the residents, failed to quarantine contagious residents from the rest of the nursing home's population, did not train staff on how to use personal protective equipment, and did not require its staff to adhere to social distancing guidelines.

On May 20, 2020, Willis Cagle was diagnosed with COVID-19. Following this diagnosis, Zane Cagle alleges that the nursing home failed adequately to monitor and respond to his father's deteriorating condition. On May 29, Willis Cagle was transported to a hospital where he was treated for COVID-19 symptoms until he passed away from the disease on June 12, 2020.

Zane Cagle, a Missouri citizen, sued NHC Healthcare-Maryland Heights, LLC, NHC/OP, LP, NHC/Delaware, Inc., National HealthCare Corporation, and twelve staff members of the nursing home in the Missouri state court. He asserted Missouri causes of action for wrongful death, negligence per se, and lost chance of survival. The NHC entities, none of which is a Missouri citizen, were served on November 23, 2021. Most of the individual defendants are Missouri citizens, but they were not served immediately. On December 7, 2021, before any of the individual defendants had been served, the NHC entities removed the case to federal district court.

The NHC entities asserted three independent grounds for federal jurisdiction. First, they argued that diversity of citizenship jurisdiction existed, because none of the "properly joined and served" defendants were Missouri citizens like the plaintiff, Zane Cagle. Second, while the complaint alleged exclusively state law claims, the NHC entities argued that the case arose under the laws of the United States. The companies maintained that the state law claims are "completely preempted" by the Public Readiness and Emergency Preparedness Act (the "PREP Act"), 42 U.S.C. §§ 247d-6d, 247d-6e, and that the claims "necessarily raise" a substantial, disputed federal question. See Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005). Third, the NHC entities contended that due to the extensive federal regulation of nursing homes during the COVID-19 pandemic, they "acted under" a federal officer for the purpose of 28 U.S.C. § 1442(a)(1).

The district court disagreed on all fronts, and remanded the case to state court. The NHC entities appeal, and we review the district court's decision de novo.

II.

Under 28 U.S.C. § 1441(a), a defendant may remove a civil action from state court to federal court when the action could originally have been brought in a federal district court. The NHC entities first rely on a district court's jurisdiction over civil suits between "citizens of different States" when the matter in controversy exceeds $75,000. 28 U.S.C. § 1332(a). To establish federal jurisdiction, the parties must be completely diverse: no plaintiff can be a citizen of the same State as any defendant. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996).

In evaluating the complete diversity of the parties, we consider the citizenship of all of the defendants named in the complaint. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005). Whether all of the named parties have been served with process is irrelevant when evaluating diversity of citizenship. Pecherski v. Gen. Motors Corp., 636 F.2d 1156, 1160-61 (8th Cir. 1981). If complete diversity exists—that is, the case could have "originally been brought" in a federal district court—then 28 U.S.C. § 1441(b)(2) imposes the additional requirement: none of the "parties in interest properly joined and served as defendants" may be citizens of the forum State. So in order to remove a suit from state court to federal court based on diversity jurisdiction, there must be complete diversity between all named plaintiffs and all named defendants, and no "properly joined and served" defendant can be a citizen of the forum State. Lincoln Prop., 546 U.S. at 84, 126 S.Ct. 606.

The removal here falters on the first of these requirements: the parties do not dispute that Zane Cagle shares Missouri citizenship with some of the named individual defendants. The NHC entities assert that under a so-called "snap removal," complete diversity is required among only the "properly joined and served" defendants. That is not correct. A snap removal—the practice of removing a case before the plaintiff has "properly joined and served" the forum-state defendant—arguably allows a defendant to satisfy the additional requirement of § 1441(b)(2) that no "properly joined and served" defendant is a citizen of the forum State. But snap removal does not cure a lack of complete diversity among the named parties. Without complete diversity of citizenship, Zane Cagle's suit could not have been brought in a federal district court, and the case cannot be removed based on diversity of citizenship.

The NHC entities next suggest that the district court had original jurisdiction because the action arose under the Constitution, law, or treaties of the United States, or under federal common law. See 28 U.S.C. § 1331; Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Whether the action presents a federal question generally is governed by the "well-pleaded complaint rule," under which federal jurisdiction "exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc., 482 U.S. at 392, 107 S.Ct. 2425. The potential availability of a federal defense does not create federal question jurisdiction. Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). But there are two exceptions to the well-pleaded complaint rule that allow for removal even when a federal question does not appear on the face of a complaint: when the state law claims "(1) are completely preempted by federal law or (2) necessarily raise a substantial, disputed federal question." Minnesota v. Am. Petrol. Inst., 63 F.4th 703, 709 (8th Cir. 2023).

Although Zane Cagle's complaint pleads only state law causes of actions on its face, the NHC entities maintain that both exceptions to the well-pleaded complaint rule apply based on the federal PREP Act. This Act authorizes the Secretary of the Department of Health and Human Services to declare that a disease is a public emergency...