Equal Emp't Opportunity Comm'n v. Vicksburg Healthcare, LLC

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION PLAINTIFF v. VICKSBURG HEALTHCARE, LLCAND COMMUNITY HEALTH SYSTEMS, INC.D/B/A RIVER REGION MEDICAL CENTER DEFENDANTS

CIVIL ACTION NO. 3:13cv895-KS-MTP

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI NORTHERN DIVISION

September 22, 2014

MEMORANDUM OPINION AND ORDER

This matter is before the Court on the Defendant Community Health Systems, Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction and Insufficient Service of Process ("Motion to Dismiss") [12] and Motion to Dismiss, or in the Alternative, Motion for Summary Judgment ("Motion for Summary Judgment") [14]. Having considered the submissions of the parties, the record, and the applicable law, the Court finds that the Motion to Dismiss [12] should be granted and the Motion for Summary Judgment [14] should be denied as moot.

I. BACKGROUND

On September 30, 2013, the Plaintiff Equal Employment Opportunity Commission ("EEOC") filed this action on behalf of Beatrice Chambers alleging disability discrimination under Title I of the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12111 et seq. ("ADA"). (See Compl. [1].) The Complaint names Community Health Systems, Inc. ("CHSI") and Vicksburg Healthcare, LLC ("VHL") as Defendants, and asserts that both CHSI and VHL have been continuously doing business as River Region Medical Center ("River Region") in Vicksburg, Mississippi, at all times relevant to the Complaint. The EEOC alleges that Beatrice Chambers wasemployed as a nurse at River Region and that the Defendants terminated her employment because of her disability and failed to provide her with a reasonable accommodation in violation of 42 U.S.C. § 12112(a) and (b)(5)(A) of the ADA.

On December 10, 2013, VHL and CHSI filed their Answers to the Complaint. Both Defendants denied any and all liability. VHL admitted doing business as River Region and employing Beatrice Chambers from approximately 1975 until her termination on October 14, 2011. CHSI denied doing business as River Region or employing Beatrice Chambers. In addition, CHSI asserted the affirmative defenses of lack of personal jurisdiction, insufficient process, and insufficient service of process.

On January 27, 2014, CHSI filed its Motion to Dismiss [12], seeking dismissal pursuant to Federal Rule of Civil Procedure 12(b)(2) (lack of personal jurisdiction) and (b)(5) (insufficient service of process). Also on January 27, CHSI filed its Motion for Summary Judgment [14]. CHSI's summary judgment motion is submitted "as an alternative dispositive motion", and posits that CHSI is entitled to judgment as a matter of law because it does not qualify as a statutory employer under the ADA. (CHSI's Mem. Brief in Supp. of Mot. for SJ [15] at p. 1 n.1.)

The Court finds that the issue of personal jurisdiction over CHSI is controlling. The following circumstances relevant to this issue appear to be uncontested between the litigants. CHSI was incorporated in Delaware and has its principal place of business in Franklin, Tennessee. VHL is a subsidiary of CHSI. VHL was formed in Delaware and has its principal place of business in Franklin, Tennessee. VHL does business under the fictitious names "River Region Medical Center" and "River Region Health System".

Whether CHSI has jurisdiction establishing contacts with Mississippi, either by virtue of an alter ego relationship with VHL or its own business activities, is the primary dispute presented by the Motion to Dismiss [12]. The Court has fully considered the undisputed facts and the parties' competing contentions and is ready to rule.

II. DISCUSSION

A. Legal Standards

"When a federal question case is based upon a federal statute that is silent as to service of process," the district court must determine if the defendant is subject to the jurisdiction of the courts of the forum state. Aviles v. Kunkle, 978 F.2d 201, 203-04 (5th Cir. 1992) (citation omitted). The ADA, under which the EEOC asserts its federal claim, is such a statute. See Elliot v. Firearms Training Sys., Inc., No. SA-04-CA-0490-RF, 2004 WL 2567619, at *2 (W.D. Tex. Oct. 21, 2004) (examining the Texas long-arm statute in an action alleging discrimination under the ADA). Therefore, this Court must determine if CHSI is subject to suit in a Mississippi state court.

A non-resident defendant is amenable to being sued in Mississippi if: (1) Mississippi's long-arm statute confers jurisdiction over the defendant; and (2) the exercise of personal jurisdiction comports with the requirements of federal due process. See Stripling v. Jordan Prod. Co., 234 F.3d 863, 869 (5th Cir. 2000) (citation omitted). Both inquiries are relevant here since "Mississippi's long-arm statute is not coextensive with due process." Id. at 869 n.7. Mississippi's long-arm statute states in pertinent part:

Any nonresident . . . who shall make a contract with a resident of this state to be performed in whole or in part by any party in this state, or who shall commit a tort in whole or in part in this state against a resident or nonresident of this state, or who shall do any business or perform any character of work or service in this state, shall by such act or acts be deemed to be doingbusiness in Mississippi and shall thereby be subjected to the jurisdiction of the courts of this state.

Miss. Code Ann. § 13-3-57. This statute consists of three prongs: (i) the contract prong; (ii) the tort prong; and (iii) the doing-business prong. See Walker v. World Ins. Co., 289 F. Supp. 2d 786, 788 (S.D. Miss. 2003).

Due process requires that a defendant "have certain minimum contacts with . . . [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945) (citations and internal quotation marks omitted). The defendant's minimum contacts may give rise to general or specific personal jurisdiction. See Luv n' care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006). "Where the plaintiff alleges specific jurisdiction, as here, due process requires (1) minimum contacts by the defendant purposefully directed at the forum state, (2) a nexus between the defendant's contacts and the plaintiff's claims, and (3) that the exercise of jurisdiction over the defendant be fair and reasonable." Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 177 (5th Cir. 2013) (citation omitted), cert. denied, 134 S. Ct. 644 (2013). An exercise of general jurisdiction requires that the defendant possess "'continuous and systematic' contacts with the forum state." Herman v. Cataphora, Inc., 730 F.3d 460, 464 (5th Cir. 2013) (quoting Bullion v. Gillespie, 895 F.2d 213, 216 (5th Cir. 1990)).

"Generally, a foreign parent corporation is not subject to the jurisdiction of a forum state merely because its subsidiary is present or doing business there; the mere existence of a parent-subsidiary relationship is not sufficient to warrant the assertion of jurisdiction over the foreign parent." Hargrave v. Fibreboard Corp., 710 F.2d 1154,1159 (5th Cir. 1983) (citing 2 J. Moore & J. Lucas, Moore's Federal Practice ¶ 4.25[6], at 4-272 (2d ed. 1982)). Courts presume corporate separateness, although this presumption may be rebutted by clear evidence of a parent corporation asserting sufficient control over its subsidiary to render the subsidiary its agent or alter ego. Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir. 1999) (citations omitted). "The rationale for such an exercise of jurisdiction is that the parent corporation exerts such domination and control over its subsidiary that they do not in reality constitute separate and distinct corporate entities but are one and the same corporation for purposes of jurisdiction." Hargrave, 710 F.2d at 1159 (citations and internal quotation marks omitted). The Fifth Circuit has set forth several factors to be utilized in determining whether personal jurisdiction can be exercised over a parent corporation based on the actions of its subsidiary.¹

The plaintiff must establish personal jurisdiction, but need only present a prima facie case to meet his burden. See Luv n' care, Ltd., 438 F.3d at 469 (citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)). The Court may decide the jurisdictional issue by receiving affidavits, depositions, interrogatories, and other forms of discovery. See Adams v. Unione Mediterranea Di Sicurta, 220 F.3d 659, 667 (5th Cir. 2000) (citing Jobe v. ATR Mktg., Inc., 87 F.3d 751, 753 (5th Cir. 1996)). The uncontrovertedallegations of the complaint are to be taken as true, and factual disputes evidenced by the parties' affidavits are to be resolved in the plaintiff's favor. See Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004) (citation omitted).

B. Analysis

CHSI argues that only the doing-business prong of Mississippi's long-arm statute is potentially applicable to this dispute. The EEOC has not rebutted this argument. Given the EEOC's silence on this issue and its underlying burden to establish personal jurisdiction, the Court's opinion will not address the tort or contract prong of section 133-57.

CHSI has submitted an affidavit from Ben C. Fordham, the Senior Vice-President and Chief Litigation Counsel for CHSI, in support of the positions that it does no business in Mississippi and that it lacks sufficient minimum contacts to be haled into court in Mississippi. (See Fordham Aff. [12-1].) The affidavit states in pertinent part:

• "CHSI is a holding company that has no employees." (Fordham Aff. [12-1] at ¶ 3.)

• CHSI indirectly owns, through subsidiaries, numerous hospitals nationwide, including VHL "d/b/a River Region Medical Center (the 'Hospital')." (Fordham Aff. [12-1] at ¶¶ 3-4.)

• CHSI neither operates the Hospital, does business as the Hospital, nor controls the day-to-day operations of the Hospital. (See Fordham Aff. [12-1] at ¶ 5.)

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