SCOTUS: Litigation Over the PREP Act Will Remain in State Courts

empty hospital bed.After much speculation in the realm of health care law, the U.S. Supreme Court has declined to hear arguments in a case related to the Public Readiness and Emergency Preparedness (PREP) Act and nursing homes’ potential liability in COVID-19 wrongful death litigation.

Glenhaven Healthcare, an independent nursing home, had appealed the February 2022 decision of a Ninth District Court of Appeals to the U.S. Supreme Court. In Saldana v. Glenhaven Healthcare LLC, the Ninth Circuit upheld a district court’s remand to state court in a case against Glenhaven. The case involved a nursing home resident at Glenhaven whose death from COVID-19 prompted his family to sue the nursing facility.

The petition Glenhaven subsequently filed in August 2022 ultimately put SCOTUS in a position to decide whether COVID-19 liability cases related to PREP should be decided in federal or state courts. According to Glenhaven, such cases should be heard only at the federal level because state courts do not have jurisdiction to hear cases related to PREP.

On November 21, 2022, SCOTUS declined to hear Glenhaven’s appeal.

One other U.S. Circuit Court of Appeals is considering a similar question, and two more are about to hear arguments on related matters. Other circuit courts have sent cases back to states when they have distinguished between willful and non-willful state claims.

Without a decision by the U.S. Supreme Court on the issues raised in the Saldana v. Glenhaven Healthcare LLC case, litigation over the PREP Act and whether it provides immunity for nursing homes will be decided in state courts across the country for years to come.

For further reading, please find below a summary of the February 2022 opinion:

Federal Court Lacks Jurisdiction to Determine If PREP Act Provides Immunity for Nursing Home

The Ninth Circuit Court of Appeals affirmed a district court’s remand to state court in a case against a California nursing home for lack of subject matter jurisdiction. In Saldana v. Glenhaven Healthcare LLC (9th Cir., No. 20-56194, February 22, 2022).

Ricardo Saldana died from COVID-19 while living at a Glenhaven nursing home in California. His relatives sued Glenhaven in state court, alleging elder abuse, willful misconduct, custodial negligence, and wrongful death.

Glenhaven removed the case to the U.S. District Court for the Central District of California in June 2020, and the Saldanas moved to remand the case back to state court. The district court found it did not have subject matter jurisdiction to hear the case and granted the Saldanas’ motion to remand.

In its appeal to the Ninth Circuit Court of Appeals, Glenhaven argued the district court had three grounds for federal jurisdiction: federal officer removal, complete preemption of state law, and an embedded federal question.

28 U.S.C. §1442(a)(1), the federal officer removal statute, provides an act in state court may be removed to federal court when it is against the United States, a federal agency, any officer of the United States, or person acting under the control of a federal officer, in an official or individual capacity.

Glenhaven argued that the “unprecedented circumstances” of COVID-19 resulted in federal directives and operational control amounting to more than compliance with government regulations. It relied on memoranda received from CMS, CDC, and HHS to show that the federal government and its agencies “became hyper-involved in the operational activities of nursing facilities.”

The panel hearing the appeal said the agency communications Glenhaven relied on showed nothing more than the government had provided regulations and recommendations for nursing homes to cope with the pandemic.

The Court found that without more than government regulations and recommendations, Glenhaven had not established that it was “acting under” a federal official, or was conscripted to assist a federal officer or agency in performance of a government duty, or that it was authorized to act for a federal officer. Because of that, no causal nexus existed that allowed removal under 28 U.S.C. §1442.

Glenhaven then argued that its case was properly removed to federal court because the Saldanas’ claims were completely pre-empted by the Public Readiness and Emergency Preparedness (PREP) Act, 42 U.S.C. §§ 247d-6d, 247d-6e.

Complete pre-emption applies only where a federal statutory scheme is so comprehensive that it entirely supplants state law causes of action.

The Court explained the PREP Act provides immunity under certain conditions for “covered person[s]” who use “covered countermeasure[s]. 42 U.S.C. §247d-6d(a)(1). Subsection (d) was the only subsection that explicitly stated that “there shall be an ‘exclusive Federal cause of action,’ limited to claims against ‘covered persons’ for ‘willful misconduct.’” The text of the statute showed that Congress only intended a federal claim for willful misconduct claims, and not claims for negligence and recklessness. §247d-6d(c)(1)(B).

The Court ruled the district court’s remand order for lack of federal subject matter jurisdiction upon complete preemption was proper.

Glenhaven finally argued the district court had jurisdiction under the embedded federal question doctrine.

Under the doctrine, “federal jurisdiction over a state law claim will be if a federal issue is (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.

The Court pointed out that the Saldanas’ complaint stated four causes of action raised under California law and did not raise federal law on the face of the complaint. While Glenhaven sought to raise a federal defense under the PREP Act, the Court said a federal defense is not a sufficient basis to find embedded federal question jurisdiction.

Remand was proper, therefore, because the complaint did not present an embedded federal question.

The Court concluded the district court did lack subject matter jurisdiction and its remanded to state court was proper. The Court affirmed the district court’s decision.

Read the complete opinion filed in February 2022.