Moor v. All. HC 11, LLC

1

SUSAN M. MOOR, individually, and THE ESTATE OF JOHN J. WATTERS, Susan M. Moor as General Administratrix and Administratrix ad Prosequendum of the Estate, Plaintiffs, v. ALLIANCE HC 11 LLC d/b/a/ ANDOVER SUBACUTE AND REHABILIATION II d/b/a WOODLAND BEHAVIORAL AND NURSING CENTER, et al., Defendants.

Civ. No. A. 3:22-cv-4472 (GC) (TJB)

United States District Court, D. New Jersey

March 31, 2023

NOT FOR PUBLICATION

MEMORANDUM OPINION

Georgette Castner United States District Judge

THIS MATTER comes before the Court upon Plaintiffs Susan M. Moor and the Estate of John J. Watters' (hereinafter “Plaintiffs”) Motion to Remand (the “Motion”). (See Pls.' Mot., ECF No 6.) Defendants Alliance HC 11 LLC d/b/a Andover Subacute and Rehabilitation II d/b/a Woodland Behavioral and Nursing Center, Woodland Behavioral Nursing Center, Andover Subacute and Rehabilitation II, Chaim Scheinbaum, and Louis Schwartz (collectively, “Defendants”) opposed (see Defs.' Opp'n, ECF No. 11), and Plaintiffs replied (see Pls.' Reply, ECF No 14). The Court has carefully considered the parties' submissions and decides the matter without oral argument pursuant to Federal Rule of Civil Procedure (“Rule”) 78 and Local Civil Rule 78.1. For the reasons set forth herein, this matter is remanded to the New Jersey Superior Court, Law Division, Ocean County for all further proceedings.

I. BACKGROUND

The decedent in this action, John J. Watters, died on April 23, 2020, from a “COVID-19 virus infection” at one of Defendants' long-term elder care facilities, Andover Subacute II. (See Pls.' Compl. ¶¶ 2, 16, Notice of Removal Ex. A, ECF No. 1-1.) In the underlying Complaint, Plaintiffs assert the following four claims: (1) for violations of N.J. Stat. Ann. § 30:13 et seq. and the Omnibus Budget Reconciliation Act of 1987; (2) for medical malpractice and professional negligence; (3) negligence; and (4) gross negligence. (See generally Pls.' Compl.)

Defendants removed the action to this Court alleging that federal jurisdiction is proper for the following reasons: (1) Defendants state, they have asserted colorable federal defenses of immunity and preemption in accord with the Public Readiness and Emergency Preparedness Act (the “PREP” Act) (see Notice of Removal ¶¶ 18-78, ECF No. 1); (2) jurisdiction exists under the federal-officer removal statute, 28 U.S.C. § 1442(a)(1) (see id. ¶¶ 79-112); and (3) there is an embedded federal question in Plaintiffs' Complaint that “raises substantial questions concerning the application of various provisions of the PREP Act” (see id. ¶ 119).

To begin, the Court notes that this is not Defendants' first attempt at asserting jurisdiction on similar grounds in the District of New Jersey. Defendants previously sought to remove a similarly situated complaint, which was remanded by the district court. See Estate of Maglioli v. Andover Subacute Rehab. Ctr. I, 478 F.Supp.3d 518 (D.N.J. 2020). On appeal, the Third Circuit upheld the remand.^[1] See Maglioli v. Alliance HC Holdings LLC, 16 F.4th 393, 400 (3d Cir. 2021) (per curiam), reh'g en banc denied, No. 20-2833 (Feb. 7, 2022). As is the case here, Defendants asserted PREP Act preemption, embedded federal question jurisdiction, and federal officer jurisdiction as the bases for removal, all of which were rejected by the Third Circuit. See id. Since that time, Defendants have sought to remove at least two additional cases in this District, both of which were also remanded based on the Third Circuit's ruling in Maglioli. See Le Carre v. Alliance HC 11 LLC, No. 21-20226, 2022 WL 2805639 (D.N.J. July 18, 2022) (remanding the matter pursuant to Maglioli); see Iannuzzelli v. Alliance HC 11, LLC, No. 22-4473, 2022 WL 16822575 (D.N.J. Nov. 8, 2022) (remanding pursuant to the same).

II. LEGAL STANDARD

“Except as otherwise expressly provided by an Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the [defendants], to the district court[.]” 28 U.S.C. §1441(a). At all stages of litigation, the defendant bears the burden of proving federal jurisdiction is proper. Stephens v. Gentilello, 853 F.Supp.2d 462, 465 (D.N.J. 2012) (collecting cases).

The matter “must be remanded if, at any time before final judgment, the district court discovers that it lacks subject matter jurisdiction to hear the case.” Stephens, 853 F.Supp.2d at 465 (citing 28 U.S.C. § 1447(c)). Further, a court “should strictly construe removal statutes and resolve all doubts in favor of remand.” Id. at 466 (citing Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985)); see also Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990) (“The district court must resolve all contested issues of fact and uncertainties of law in favor of [the p]laintiff.”).

III. DISCUSSION

In their Motion, Plaintiffs articulate three principal arguments in support of remand. First, Plaintiffs argue that application of collateral estoppel is appropriate to preclude the assertion of jurisdiction under the theories of federal preemption, federal officer removal, and the existence of an embedded federal question because the Third Circuit has already addressed these exact issues in Maglioli. (See Pls.' Moving Br. 11-13, ECF No. 6.) Next, Plaintiffs contend that their claims are not completely preempted by the separate cause of action for willful misconduct under the PREP Act (see id. at 14-17). Finally, Plaintiffs argue that Defendants are not federal officers for purposes of the federal-officer-removal statute (see id. at 18-21).

A. Collateral Estoppel

Plaintiffs assert that collateral estoppal applies in this case based on the Third Circuit's decision in Maglioli. (See Pls.' Moving Br. 11-13.) “Offensive collateral estoppel occurs whenever a plaintiff seeks to estop a defendant from relitigating an issue which the defendant previously litigated and lost against another plaintiff.” Raytech Corp. v. White, 54 F.3d 187, 190 n.5 (3d Cir. 1995) (citing ParkLane Hosiery Co. v. Shore, 439 U.S. 322, 329 (1979)).

Plaintiffs here aver,

[D]efendants, and their counsel, fully litigated all of their claims for removal to the Third Circuit months ago. Since that time, no new essential facts have arisen between the Third Circuit's decision and now. Indeed, the claims in the instant matter arise from the same allegations of negligence against [D]efendants in their administration of the nursing home, during the Covid-19 outbreak, as in the Maglioli matter. Any new arguments [D]efendants raise with respect to preemption or federal officer removal were fully available to them at the time the Third Circuit decided Maglioli, and they simply chose not to raise such claims.

(Pls.' Moving Br. 12.)

Defendants respond that application of collateral estoppel to the instant matter is inappropriate because the issues here are not identical to those litigated in Maglioli. (See Defs.' Opp'n Br. 2-3, ECF No. 11 (quoting Maglioli, 16 F.4th at 409-10).) Defendants argue that Plaintiffs' Complaint in this case, unlike the complaint in Maglioli, alleges willful misconduct, which is preempted by the PREP Act. (See id.) Specifically, Defendants contend that Plaintiffs' use of the words “willful,” and “intentional” in the Complaint to describe Defendants' conduct is sufficient to defeat application of the Third Circuit's decision in Maglioli. (See id. at 3.) Plaintiffs respond by emphasizing that the PREP Act sets forth an “express, statutory definition for willful misconduct,” that is not implicated by the mere inclusion of the term “willful.” (Pls.' Reply Br. 15.) Plaintiffs also highlight that their Complaint is nearly identical to the underlying complaint remanded by this Court in Le Carre v. Alliance HC 11 LLC, No. 21-20226, 2022 WL 2805639 (D.N.J. July 18, 2022), except that the Le Carre complaint included an additional wrongful death claim. (See id. at 16.)

Attachment of collateral estoppel will result if the litigant seeking its imposition is able to demonstrate four factors: “(1) the identical issue was previously adjudicated; (2) the issue was actually litigated; (3) the previous determination was necessary to the decision; and (4) the party being precluded from relitigating the issue was fully represented in the prior action.” Raytech Corp., 54 F.3d at 190 (citing United Indus. Workers v. Gov't of V.I., 987 F.2d 162, 169 (3d Cir. 1993)). If the facts essential to the determination of the previously litigated issue have changed, then the Court should decline application of the doctrine to the current matter. Montana v. United States, 440 U.S. 147, 157-58 (1979). When considering whether to exert offensive preclusion, “the Supreme Court has instructed that courts must take special care to ensure that its application does not work unfairness to [the] party against whom estoppel is asserted.” Raytech Corp., 54 F.3d at 190.

Here the parties do not appear to contest that the matter was actually litigated before both the federal trial and appeals court in Maglioli, or that Defendants were fully represented in that case. The previous determination's necessity to the decision appears similarly not in dispute, in other words, the issues decided by the Third Circuit are those the parties “actually deem important, and not [those] on incidental matters.” Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 250 (3d Cir. 2006) (quoting Lynne Carol Fashions, Inc. v. Cranston Print Works Co., 453 F.2d 1177, 1183 (3d Cir. 1972)). Defendants do, however, challenge the presence of identical issues in Maglioli and the instant action, maintaining that Plaintiffs' Complaint is completely preempted because throughout the pleading Plaintiffs describe Defendan...