Shumlai v. Glad Investments, Inc.

• Court: District Court, E.D. California
• Decided: December 13, 2022
• Docket: 2:22-cv-00363
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 GRACE SHUMLAI, et al., No. 2:22-cv-00363-DAD-DMC 12 Plaintiffs, 13 v. ORDER GRANTING MOTION TO REMAND AND REMANDING THIS ACTION TO THE 14 GLAD INVESTMENTS, INC., et al., BUTTE COUNTY SUPERIOR COURT 15 Defendants. (Doc. Nos. 3, 4) 16 17 This matter is before the court on plaintiffs’ motion to remand this action to the Butte 18 County Superior Court. (Doc. No. 4) The pending motion was taken under submission on the 19 papers on April 8, 2022.1 (Doc. No. 7.) For the reasons explained below, plaintiffs’ motion to 20 remand will be granted. 21 BACKGROUND 22 On October 6, 2021, plaintiffs Grace Shumlai, deceased by and through her personal legal 23 representative and successor in interest, Terry Lewis, and Terry Lewis, an individual, 24 (collectively, “plaintiffs”) filed a complaint in Butte County Superior Court against defendants 25 Glad Investments Inc., d/b/a Riverside Convalescent Hospital; Eretz Chico Properties, LLC; and 26 the Gladys v. Jennings Revocable Trust. (Doc. No. 1 at 27.) Therein, plaintiffs allege that 27

28 1 On August 25, 2022, this case was reassigned to the undersigned. (Doc. No. 11.) 1 plaintiff Shumlai was in the care of defendants’ skilled nursing facility in 2020, and due to 2 alleged failures on defendants’ part to provide the assistance plaintiff Shumlai required, plaintiff 3 Shumlai’s health declined, she tested positive for COVID-19 on October 3, 2020, and she died on 4 October 6, 2020. (Id. at 35–36.) In their complaint, plaintiffs assert the following four causes of 5 action: (1) an elder abuse and neglect claim brought pursuant to California Welfare and 6 Institutions Code § 15600, et seq.; (2) a claim for violation of patient rights brought pursuant to 7 California Health and Safety Code § 1430(b); (3) a negligence claim; and (4) a wrongful death 8 claim. (Id. at 27.) Defendant Eretz Chico Properties, LLC (“Eretz”) was served with the 9 summons and complaint on February 3, 2022. (Id. at 2.) 10 On February 24, 2022, defendant Eretz timely removed this action to this federal court, 11 asserting that this court has subject matter jurisdiction under 28 U.S.C. § 1331 (federal question 12 jurisdiction) and 28 U.S.C. § 1442(a)(1) (federal officer jurisdiction). (Id. at 3, 12.) Specifically, 13 defendant Eretz asserts, inter alia, that plaintiffs’ state law causes of action are preempted by the 14 Public Readiness and Emergency Preparedness Act, 42 U.S.C. §§ 247d-6d and 247d-6e (2006) 15 (the “PREP Act”). 16 However, two days before defendant Eretz filed its notice of removal, the Ninth Circuit 17 issued a decision in an appeal that raised the same jurisdictional arguments in a factually similar 18 case, and the Ninth Circuit rejected them, holding that the PREP Act did not preempt the 19 plaintiff’s state law claims for elder abuse, negligence, willful misconduct, and wrongful death. 20 See Saldana v. Glenhaven Healthcare LLC, 27 F.4th 679, 683, 689 (9th Cir. 2022) (concluding 21 that “the district court’s remand order for lack of federal subject matter jurisdiction based upon 22 complete preemption was proper”), cert. denied, No. 22-192, 2022 WL 17085186 (U.S. Nov. 21, 23 2022). In its notice of removal, Defendant Eretz did not mention the Ninth Circuit’s decision in 24 Saldana—which squarely forecloses defendant Eretz’s jurisdictional basis for removing this 25 action. 26 On March 17, 2022, plaintiffs filed the pending motion to remand this action, noting that 27 “as federal courts in this District and nationwide have recognized, removal of cases like this one 28 ///// 1 is improper because the federal court lacks subject matter jurisdiction.” (Doc. No. 4 at 9, 11-12) 2 (listing cases). 3 On April 7, 2022, defendant Eretz filed an opposition to plaintiffs’ motion to remand. 4 Therein, defendant Eretz maintains that complete preemption of plaintiffs’ claims by the PREP 5 Act exists here. (Id. at 10–11.) Defendant Eretz relies on a district court’s decision denying a 6 motion to remand under similar circumstances (id.), but that decision has recently been vacated 7 and remanded by the Ninth Circuit in light of the Saldana decision. See Garcia v. Welltower 8 OpCo Grp. LLC, 522 F. Supp. 3d 734, 746 (C.D. Cal. 2021), vacated and remanded sub 9 nom. Garcia by & through Garcia v. Welltower Opco Grp. LLC, No. 21-55224, 2022 WL 10 17077501 (9th Cir. Nov. 18, 2022). Notably, in its opposition, defendant Eretz acknowledged in 11 a footnote that its arguments were contrary to the Ninth Circuit’s decision in Saldana but tried to 12 downplay the impact of that decision, emphasizing that the Saldana decision was pending 13 rehearing and was not yet final (at that time).2 14 On April 14, 2022, plaintiffs filed their reply to defendant Eretz’s opposition, reiterating 15 their arguments and noting that in Saldana, “the Ninth Circuit, on nearly identical facts, held that 16 the PREP Act did not apply and there was no federal judication.” (Doc. No. 8.) 17 On September 29, 2022, the court issued an order to defendant Eretz to show cause why 18 this action should not be remanded in light of the Ninth Circuit’s decision in Saldana. (Doc. No. 19 29.) In response, the parties filed a stipulation noting that because the defendant in Saldana filed 20 a petition for writ of certiorari in the United States Supreme Court, the parties jointly requested 21 that the court stay this action pending resolution of that petition. (Doc. No. 13.) The court 22 granted the parties’ request and directed them to file a status report in this action no later than 23 fourteen (14) days after the Supreme Court issued its decision regarding the petition for review in 24 Saldana. (Doc. No. 14.) The Supreme Court denied the petition in Saldana on November 21, 25 2022, yet the parties did not thereafter file their status report as required. Rather, after the 26

27 2 In its opposition to pending motion to remand, defendant Eretz also stated that it “will update this Court in subsequent pleadings on the status of [Saldana] as it progresses.” (Doc. No. 6 at 11 28 n. 4.) Defendant Eretz did not provide the court any such update. 1 undersigned’s courtroom deputy contacted counsel to advise them of their failure to timely file 2 the joint status report, the parties filed their report, in which plaintiffs reiterate their position that 3 the Ninth Circuit’s Saldana decision controls and requires remand of this action, whereas 4 defendant Eretz stated nothing whatsoever as to its position. (Doc. No. 15.) 5 Accordingly, on December 6, 2022, the court issued a second order to defendant Eretz to 6 show cause why this action should not be remanded in light of the Ninth Circuit’s Saldana 7 decision. (Doc. No. 16.) In its response to the second order to show cause, defendant Eretz 8 merely stated that it “disagrees with the holding in Saldana as explained in the briefing and finds 9 that allegations in this matter, specifically that Defendant acted ‘willfully,’ distinguish the ruling 10 in Saldana.” (Doc. No. 17 at 2.) First, the “briefing” defendant Eretz references does not include 11 any explanation as to why defendant disagrees with the holding in Saldana; rather, defendant 12 Eretz downplayed the import and impact of that binding decision because it was not yet final— 13 not because it was substantively inapposite to this case. Second, defendant Eretz’s barebones 14 attempt to distinguish Saldana in one phrase by pointing to purported allegations of willful 15 conduct in this action is not only confusing, but also wholly lacking in support. Plaintiffs in this 16 action have not brought a “willful conduct” claim, whereas the plaintiffs in Saldana did bring 17 such a claim. See Saldana, 27 F.4th at 683 (“The Saldanas allege that Glenhaven failed to 18 adequately protect Ricardo Saldana from the COVID-19 virus. The complaint states four state- 19 law causes of action: elder abuse, willful misconduct, custodial negligence, and wrongful 20 death.”). 21 In short, defendant Eretz has had several opportunities to substantively address why it 22 believes the Saldana decision does not require remand of this action. Despite those opportunities, 23 and despite the court’s orders to show cause explicitly directing defendant Eretz to address that 24 question, defendant Eretz has refused to do so and instead has unnecessarily wasted the limited 25 judicial resources of this court. 26 LEGAL STANDARD 27 “If at any time before final judgment it appears that the district court lacks subject matter 28 jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c); see also Smith v. Mylan, Inc., 761 1 F.3d 1042, 1044 (9th Cir. 2014); Bruns v. NCUA, 122 F.3d 1251, 1257 (9th Cir. 1997). “The 2 removal statute is strictly construed against removal jurisdiction, and the burden of establishing 3 federal jurisdiction falls to the party invoking the statute.” California ex rel. Lockyer v. Dynegy, 4 Inc., 375 F.3d 831, 838 (9th Cir. 2004) (citation omitted); see also Provincial Gov’t of 5 Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (“The defendant bears the 6 burden of establishing that removal is proper.”). As such, a federal court must reject jurisdiction 7 and remand the case to state court if there is any doubt as to the right of removal. Matheson v. 8 Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003); see also Valdez v. Allstate 9 Ins. Co., 372 F.3d 1115, 1118 (9th Cir. 2004). The defendant seeking removal of an action from 10 state court bears the burden of establishing grounds for federal jurisdiction by a preponderance of 11 the evidence. Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). 12 “The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded 13 complaint rule,’ which provides that federal jurisdiction exists only when a federal question is 14 presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 15 482 U.S. 386, 392 (1987). “[T]he presence of a federal question . . . in a defensive argument does 16 not overcome the paramount policies embodied in the well-pleaded complaint rule—that the 17 plaintiff is the master of the complaint, that a federal question must appear on the face of the 18 complaint, and that the plaintiff may, by eschewing claims based on federal law, choose to have 19 the cause heard in state court.” Id. at 398–99. “If a defendant seeks to remove the case on federal 20 question grounds, jurisdiction must be determined from the face of the well-pleaded complaint, 21 unaided by the answer or by the petition for removal.” Preciado v. Ocwen Loan Servicing, No. 22 2:11-cv-1487-CAS-VBK, 2011 WL 977819, at *1 (C.D. Cal. Mar. 18, 2011) (citing California ex 23 rel. Lockyer, 375 F.3d at 838). 24 ANALYSIS 25 As to the first basis for removal asserted by defendant Eretz—federal question based on 26 complete preemption—the court rejects defendant Eretz’s argument that the PREP Act preempts 27 plaintiffs’ claims in this action. As this court has explained in an order remanding a similar case, 28 ///// 1 Saldana, like the present case, involves claims brought as a result of the death of nursing home resident from COVID-19, allegedly as a 2 result of neglect and/or abuse. Also like the case at bar, the lawsuit brought on behalf of the decedent in Saldana alleged claims for 3 elder abuse and neglect, negligence[,] and wrongful death. In rejecting complete preemption under those analogous 4 circumstances, the Ninth Circuit observed that the PREP Act “is not one of those ‘rare’ statutes ‘where a federal statutory scheme is so 5 comprehensive that it entirely supplants state law causes of action.” Martin v. Filart, No. 20-56067, 2022 WL 576012 at *1 (9th Cir. 6 Feb. 25, 2022) (citing Saldana, 27 F.4th at 688). Because the Ninth Circuit’s rejection of complete preemption there is binding on this 7 Court, Defendant’s removal on that basis necessarily fails. 8 Constantine v. Trestles LLC, No. 2:21-cv-01987-MCE-JDP, 2022 WL 5249280, at *3 (E.D. Cal. 9 Oct. 6, 2022). “The Ninth Circuit has indeed held the PREP Act is not a complete preemption 10 statute.” Zalman v. Windsor Vallejo Care Ctr., LLC, No. 2:21-cv-01395-TLN-DB, 2022 WL 11 2916906, at *3 (E.D. Cal. July 25, 2022) (citing Saldana, 27 F.4th at 688) (“The text of the statute 12 shows that Congress intended a federal claim only for willful misconduct claims and not claims 13 for negligence and recklessness.”). Consistent with the Ninth Circuit’s decision in Saldana, the 14 district court in Zalman granted the plaintiff’s motion to remand because his “claims for elder 15 abuse, negligence, and wrongful death are not completely preempted as the PREP Act does 16 not “entirely supplant[] state law causes of action . . . .” Id. 17 As to the second basis for removal asserted by defendant Eretz—federal officer 18 jurisdiction—the Ninth Circuit’s Saldana decision likewise forecloses this basis for removal. See 19 Saldana, 27 F.4th at 688 (finding that “all that [the nursing facility defendant] has demonstrated is 20 that it operated as a private entity subject to government regulations, and that during the COVID- 21 19 pandemic it received additional regulations and recommendations from federal agencies,” 22 which did not amount to “‘acting under’ a federal officer or agency as contemplated by the 23 federal officer removal statute”). 24 Accordingly, in light of the binding precedent in the Ninth Circuit’s Saldana decision, 25 plaintiff’s motion to remand will be granted because none of the bases for removal asserted by 26 defendant Eretz are proper in this case. See Martinez v. Novato Healthcare Ctr., LLC, No. 21- 27 CV-09547-HSG, 2022 WL 2981825, at *1 (N.D. Cal. July 28, 2022) (granting a motion to 28 remand because the Ninth Circuit in Saldana conclusively rejected all of defendants’ asserted 1 || bases for removal, including complete preemption of plaintiff's claims by the PREP Act and 2 || federal officer jurisdiction); see also Westbrook v. San Pablo Healthcare & Wellness Ctr., No. 3 | 21-cv-06474-JD, 2022 WL 2072933, at *1 (N.D. Cal. June 9, 2022) (granting the plaintiff's 4 | motion to remand where the defendant’s removal was based on federal officer jurisdiction, 5 || embedded federal question, and complete preemption by the PREP Act, because “a recent 6 || decision by the circuit in a very similar case, [Saldana], squarely rejected all three of the bases 7 || put forward by [defendant] here in support of federal subject matter jurisdiction”). “Indeed, 8 | several post-Saldana Ninth Circuit district court cases have similarly held that the PREP Act is 9 || not acomplete preemption statute and that federal officer jurisdiction is absent in cases of this 10 || sort.” Est. of Acebes v. Residences at Royal Bellingham Inc., No. 2:22-cv-06936-JLS-JC, 2022 11 || WL 16855564, at *2 (C.D. Cal. Nov. 9, 2022) (citing cases). 12 CONCLUSION 13 For the reasons set forth above, 14 1. Plaintiffs’ motion to remand (Doc. No. 4) is granted; 15 2. Defendant Eretz’s motion to dismiss (Doc. No. 3) is denied as having been 16 rendered moot by this order; 17 3. This action is remanded to the Butte County Superior Court, pursuant to 28 U.S.C. 18 § 1447(c), due to this court’s lack of subject matter jurisdiction; and 19 4. The Clerk of the Court is directed to close this case. 20 IT IS SO ORDERED. | Dated: _ December 12, 2022 Dab A. 2, eel 22 UNITED STATES DISTRICT JUDGE 23 24 25 26 27 28