Marcum v. McDonough

ORDER

Hon. Jane Magntts-Stinson, Judge.

It is peculiar indeed that the invocation of a contradictorily named jurisdictional bar - derivative jurisdiction - would call to mind one of the biggest selling pop albums of all time, but so it does. The seminal singer-songwriter Billy Joel observed in his breakout album The Stranger that one must "[g]et it right the first time, that's the main thing. [You] can't afford to let it pass." Billy Joel, "Get it Right the First Time," The Stranger, Columbia Records (1977). While the Court takes no position regarding the providence of Mr. Joel's advice in a social context, the Court believes that this simple tune is full of sound advice for Plaintiff and his counsel in the present case. In fact in all cases, the parties should take better care to ensure that they are getting their arguments "right the first time" rather than letting them pass.

Plaintiff, Bradley Marcum, seeks recovery from Defendant, Denis R. McDonough - Secretary of the United States Department of Veterans Affairs, for violations of the Rehabilitation Act of 1973, 29 C.F.R. § 1630.14(c) (the "Rehabilitation Act"). [Filing No. 26.] Presently before the Court is Mr. McDonough's Motion to Dismiss and Motion for Summary Judgment, which is ripe for this Court's decision. [Filing No. 28.] Mr. Marcum opposes the motion. [Filing No. 31.]

For the reasons set forth below, the Court GRANTS Mr. McDonough's Motion to Dismiss, and DENIES Mr. McDonough's Motion for Summary Judgment as moot. [Filing No. 28]. The Court further STRIKES the portion of its May 12, 2021 Order, [Filing No. 25], ordering the filing date of Mr. Marcum's Second Amended Complaint to relate back to December 17, 2020.

I.

Standard of Review

Rule 12(b)(1) "allows a party to move to dismiss a claim for lack of subject matter jurisdiction." Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). When deciding a motion to dismiss under Rule 12(b)(1), the Court accepts the allegations in the plaintiff's complaint as true and draws all reasonable inferences in the plaintiff's favor. Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). The burden is on the plaintiff to prove, by a preponderance of the evidence, that subject matter jurisdiction exists for his or her claims. See Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003).

Because the Court has determined that dismissal is appropriate, the Court need not address the standard for a Motion for Summary Judgment under Fed. R. Civ. P. 56.

II.

Statement of Facts

Mr. Marcum is a disabled United States Army veteran, who was employed by the Department of Veteran Affairs ("VA"). [Filing No. 26 at 2.] Mr. Marcum also received health care treatment from the Roudebush Veterans Affairs Medical Center ("VAMC"), who maintained his medical records. [Filing No. 26 at 2.] While Mr. Marcum received medical care from the VAMC, he has never received dental treatment from the VAMC. [Filing No. 26 at 2.]

Prior to December of 2018, Mr. Marcum suspected his medical records were impermissibly accessed. [Filing No. 26 at 3.] On December 17, 2018, Mr. Marcum requested that the VAMC's

Privacy Officer, Richard Kurth, determine if his medical records has been improperly accessed. [Filing No. 26 at 3.] Mr. Kurth's inquiry revealed that Dr. Jefferey Bennett, a dentist at the VAMC, had accessed Mr. Marcum's medical records. [Filing No. 26 at 3.] Dr. Bennett was not and has never been Mr. Marcum's treatment provider. [Filing No. 26 at 3.]

Mr. Marcum also alleges that his second-level supervisor, Dr. Sunil Tholpady, made a number of negative comments to Mr. Marcum referencing the information contained in Mr. Marcum's medical file. [Filing No. 26 at 3.] Mr. Marcum asserts that the subject of Dr. Tholpady's remarks was discussed with Mr. Marcum's treating physician, but Mr. Marcum "never discussed that issue with anyone else at the VAMC." [Filing No. 26 at 3.] Mr. Marcum alleges that Dr. Tholpady and other co-workers utilized the information in his medical file to make derogatory remarks about him in front of fellow co-workers. [Filing No. 26 at 3.] He also alleges that Dr. Tholpady harassed him and blocked his promotion within the VA in retaliation for his investigation of and complaint about the illegal access and disclosure of his medical records. [Filing No. 26 at 3.]

On October 31, 2019, Mr. Marcum filed an Equal Employment Opportunity ("EEO") Complaint with the VA's Office of Resolution Management, Diversity, and Inclusion, which was subsequently forwarded to the VA's Office of Employment Discrimination Complaint Adjudication ("OEDCA") for final determination. [Filing No. 15-1 at 1.] On November 18, 2020, the OEDCA issued its Final Agency Decision ("FAD"), finding two per se violations of the Rehabilitation Act for the illegal access and disclosure of Mr. Marcum's medical records. [Filing No. 15-1 at 12.] The OEDCA, in its final decision, noted that Mr. Marcum "also has the right to file a civil action in an appropriate United States District Court . . . within 90 days of receipt of

this final decision if no appeal to [the Equal Opportunity Employment Commission] has been filed." (emphasis added.) [Filing No. 15-1 at 19.]

On December 17, 2020, Mr. Marcum filed a civil action in the Superior Court of Marion County, Indiana against Dr. Bennett and Dr. Tholpady asserting state tort claims arising out of the unauthorized access and disclosure of his medical records. [Filing No. 1-2.] On February 24, 2020, the United States removed Mr. Marcum's complaint to this Court, invoking 28 U.S.C. §§ 1442, 1446, and 2679(d). [Filing No. 1.] Pursuant to 28 C.F.R. § 15.4, the United States certified that Dr. Bennett and Dr. Tholpady were acting within the scope of their employment as employees of the VAMC when the incidents at issue occurred. [Filing No. 1-4; Filing No. 1-5.] Accordingly, the United States was substituted as the sole defendant pursuant to 28 U.S.C. § 2679. [Filing No. 1.]

On April 10, 2021, Mr. Marcum filed his First Amended Complaint in this Court, alleging that Dr. Bennett and Dr. Tholpady violated the Rehabilitation Act as well as Indiana law by illegally accessing and disclosing his medical records. [Filing No. 13 at 4-5.] On May 8, 2021, Mr. Marcum moved for leave to file his Second Amended Complaint, which added an additional claim under the Rehabilitation Act based upon a theory of retaliation and dropped the previously asserted claims under Indiana law. [Filing No. 23; Filing No. 23-1.] On May 8, 2021, the Court granted Mr. Marcum's motion for leave to file the Second Amended Complaint and, by signing the order tendered by Mr. Marcum, ordered its relation back to December 17, 2020 - the date of his original filing in state court. [Filing No. 25.] In the Second Amended Complaint, Mr. Marcum no longer brought claims against the United States, Dr. Bennett, or Dr. Tholpady, instead suing Mr. McDonough, Secretary of Veterans Affairs. The Second Amended Complaint was the first time Mr. McDonough was included in this action.

On May 26, 2021, Mr. McDonough filed his Motion to Dismiss for Lack of Jurisdiction and Motion for Summary Judgment for Failure to Exhaust, [Filing No. 28], which is now ripe for the Court's decision. Concurrent with this litigation, the OEDCA issued a second FAD on March 29, 2021 awarding Mr. Marcum $5, 000 in compensatory damages. [Filing No. 25.]

III.

Discussion

This case raises a rare jurisdictional oddity that arises when a defendant removes a case to federal court from a state court that never had jurisdiction known as the "derivative jurisdiction doctrine." The doctrine, which operates as a procedural bar to cases removed from state courts, has been described by courts in this circuit as "[b]ewildering" and has been "criticized a great deal over the course of many years." Pelto v. Off. of Reg'l Chief Couns., 2013 WL 5295678, at *3 (W.D. Wis. 2013)(internal citations omitted). Nevertheless, when a defendant "timely raises the derivative jurisdiction doctrine, it erects a mandatory bar to the court's exercise of federal jurisdiction." Ricci v. Salzman, 976 F.3d 768, 773 (7th Cir. 2020). However, the Seventh Circuit Court of Appeals has required that defendants must assert the derivative jurisdiction doctrine within 30 days from removal or the claim is forfeited. Id. at 774.

In support of his motion, Mr. McDonough argues that the Court should dismiss Mr. Marcum's claims because it lacks jurisdiction pursuant to the derivative jurisdiction doctrine. [Filing No. 29.] Alternatively, Mr. McDonough argues that even if the Court has jurisdiction over Mr. Marcum's Rehabilitation Act claims, the Court should grant summary judgment in his favor because Mr. Marcum failed to exhaust his administrative remedies. [Filing No. 29.] Because the Court has determined that dismissal is required, it will address that issue first.

A. Federal Jurisdiction in Removed Cases Under the Derivative Jurisdiction Doctrine

Mr. McDonough argues that in removed cases, the "scope of a federal court's subject-matter jurisdiction is derived from that of the court in which the plaintiff originally filed the lawsuit." [Filing No. 29 at 7.] Accordingly, if the "state court would have lacked jurisdiction over the claims, then the federal court may not acquire it through removal even if the claim could have been brought in the federal court in the first instance." [Filing No. 29 at 7.] Mr. McDonough asserts that "state courts do not have jurisdiction over Rehabilitation Act claims brought by federal employees against the federal...