1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 THE ESTATE OF FRANK PALFY, et Case No. 22-cv-0048-MMA (KSC) al., 13

ORDER AFFIRMING TENTATIVE

Plaintiffs, 14 RULINGS RE: PLAINTIFFS’ v. MOTION TO REMAND, 15

DEFENDANT’S REQUEST FOR

DEL DIOS CARE, LLC and Does 1–25, 16 JUDICIAL NOTICE, DEFENDANT’S

REQUEST FOR JURISDICTIONAL

17 Defendants, DISCOVERY, AND DEFENDANT’S 18 REQUEST FOR A STAY ON and REMAND 19

20 KURTY PALFY, [Doc. Nos. 6, 10] 21 Nominal Defendant. 22 23 Plaintiff Robin Joy Maxson, individually and as successor-in-interest to Frank 24 Palfy, deceased (collectively, “Plaintiffs”) brings this wrongful death action against 25 Defendants Del Dios Care, LLC d/b/a Vista Del Lago Memory Care, (“Defendant”), Kurt 26 Palfy, and Does 1–25. See Doc. No. 1-2 (“FAC.”). On January 13, 2022, Defendant 27 removed this action from the Superior Court of California, County of San Diego, to the 28 United States District Court for the Southern District of California pursuant to 28 U.S.C. 1 § 1441, asserting federal question jurisdiction under 28 U.S.C. § 1331 and federal officer 2 jurisdiction under 28 U.S.C. § 1442(A)(1).1 See Doc. No. 1. 3 Two motions and three requests for judicial notice are pending before the Court. 4 See Doc. Nos. 1-3, 3, 4, 6, 10. Defendant moves to dismiss all causes of action against it 5 in the FAC pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). See Doc. 6 No. 3. Plaintiffs move to remand the action to state court pursuant to 28 U.S.C. § 1447. 7 See Doc. No. 6. Defendant filed an opposition to Plaintiffs’ motion, to which Plaintiffs 8 replied. See Doc. Nos. 9, 12. Defendant has also filed three requests for judicial notice. 9 See Doc. Nos. 1-3, 4, and 10. 10 On March 28, 2022, the parties appeared before the Court for a hearing on the 11 motion to remand. See Doc. No. 14. In anticipation of the hearing, the Court issued 12 tentative rulings on Plaintiffs’ motion to remand, Defendant’s request for jurisdictional 13 discovery, Defendant’s request for a stay on remand, and Defendant’s request for judicial 14 notice made in support of its opposition to the motion to remand. See Doc. No. 13. For 15 the reasons set forth below, the Court AFFIRMS its tentative rulings. 16 I. BACKGROUND2 17 On January 6, 2022, Plaintiffs filed their First Amended Complaint (“FAC”) in 18 state court. Doc. No. 1-2 at 1.3 Plaintiffs allege that Frank Palfy was a resident of Vista 19 Del Lago Memory Care, a skilled nursing facility. See FAC ¶¶ 8, 45. On or about 20 November 18, 2020, “Decedent [Palfy] tested positive for COVID-19.” Id. ¶ 48. On 21 22 1 Only Defendant Del Dios Care, LLC filed the notice of removal. See Doc. No. 1. However, Kurt 23 Palfy is named only as a nominal defendant. FAC ¶ 16; see G.M. v. Poole, No. 17-cv-02415-TLN- CK2019, U.S. Dist. LEXIS 156259, at *9 (E.D. Cal. Sept. 11, 2019) (citing Ruttenberg v. Ruttenberg, 53 24 Cal. App. 4th 801, 808 (1997) (“If an heir refuses to participate in the suit as a plaintiff, he or she may 25 be named as a [nominal] defendant so that all heirs are before the court in the same action; an heir named as a defendant in a wrongful death action is, in reality, a plaintiff.”). 26 2 Based on the parties’ and the Court’s familiarity with Plaintiffs’ factual allegations, the Court does not set forth a detailed recitation of those allegations herein except as relevant to the disposition of the 27 instant motions. Except where otherwise indicated, the following information is taken from the operative First Amended Complaint. 28 1 November 18, 2020, he died from “extreme respiratory infection/syndrome and other 2 injuries.” Id. ¶ 50. On November 12, 2021, Plaintiffs filed their Complaint in state court. 3 Doc. No. 1-2 at 31. On January 6, 2022, Plaintiffs filed their First Amended Complaint 4 (“FAC”) in state court. FAC at 1. Plaintiffs bring four causes of action in their FAC: 5 (1) dependent adult abuse and neglect pursuant to California Welfare & Institution Code 6 §§ 15600, et seq.; (2) violation of patient rights pursuant to California Health & Safety 7 Code § 1430(b); (3) negligence; and (4) wrongful death. See id. ¶¶ 51–89. Plaintiffs 8 state that “all allegations in this case relate to [Defendant’s] negligent failure to protect 9 Mr. Palfy from contracting and dying from COVID-19.” Doc. No. 6 at 10. 10 On January 13, 2022, Defendant removed this action from the Superior Court of 11 California, County of San Diego, to the United States District Court for the Southern 12 District of California pursuant to 28 U.S.C. § 1441, asserting federal question jurisdiction 13 under 28 U.S.C. § 1331 and federal officer jurisdiction under 28 U.S.C. § 1442(A)(1). 14 See Doc. No. 1. 15 Shortly after removal, Defendant filed a motion to dismiss pursuant to Federal 16 Rules of Civil Procedure 12(b)(1) and 12(b)(6), which remains pending, along with a 17 request for judicial notice. See Doc. Nos. 3, 4. Plaintiffs subsequently filed a motion to 18 remand, arguing that the Court lacks subject matter jurisdiction. See Doc. No. 6. 19 Defendant filed an opposition to Plaintiffs’ motion. See Doc. No. 9. In support of its 20 opposition, Defendant also filed a request for judicial notice. See Doc. No. 10. Plaintiffs 21 filed a reply to the opposition, which, among other things, argues that Defendant’s 22 request for judicial notice should be denied. Doc. No. 12 at 15. 23 II. REQUEST FOR JUDICIAL NOTICE 24 A judicially noticed fact must be one not subject to reasonable dispute in that it is 25 either (1) generally known within the territorial jurisdiction of the trial court or 26 (2) capable of accurate and ready determination by resort to sources whose accuracy 27 cannot reasonably be questioned. Fed. R. Evid. 201(b); see also Khoja v. Orexigen 28 Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018) (quoting Fed. R. Evid 201(b)). 1 In support of its opposition to the motion to remand, Defendant requests judicial 2 notice of thirty-four documents, largely consisting of agency acts and advisory opinions, 3 along with a copy of Plaintiffs’ FAC as filed in the state court. See Doc. No. 10. The 4 Court GRANTS Defendant’s request for judicial notice as the documents are publicly 5 available and their authenticity is not subject to reasonable dispute. 6 III. MOTION TO REMAND 7 A. Legal Standard 8 “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. 9 Co. of Am., 511 U.S. 375, 377 (1994). “They possess only that power authorized by 10 Constitution and statute.” Id. “A federal court is presumed to lack jurisdiction in a 11 particular case unless the contrary affirmatively appears.” Stock W., Inc. v. Confederated 12 Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989) (citing California ex rel. Younger v. Andrus, 13 608 F.2d 1247, 1249 (9th Cir. 1979)). The party seeking federal jurisdiction bears the 14 burden to establish jurisdiction. Kokkonen, 511 U.S. at 377 (citing McNutt v. Gen. 15 Motors Acceptance Corp., 298 U.S 178, 182–83 (1936)). Generally, subject matter 16 jurisdiction is based on the presence of a federal question, see 28 U.S.C. § 1331, or on 17 complete diversity between the parties, see 28 U.S.C. § 1332. 18 Pursuant to 28 U.S.C. § 1331, a federal district court has jurisdiction over cases 19 “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. 20 The existence of federal question exists “only when a federal question is presented on the 21 face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S. 22 386, 392 (1987). A well pleaded complaint must establish “either that federal law creates 23 the cause of action or that the plaintiff’s right to relief necessarily depends on resolution 24 of a substantial question of federal law.” Franchise Tax Bd. of State of Cal. v. Constr. 25 Laborers Vacation Tr. for S. Cal., 463 U.S. 1, 27 (1983). 26 Additionally, 28 U.S.C. § 1441(a) provides for removal of a civil action from state 27 to federal court if the case could have originated in federal court. The removal statute is 28 construed strictly against removal, and “[f]ederal jurisdiction must be rejected if there is 1 any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 2 564, 566 (9th Cir. 1992) (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 3 (9th Cir. 1979)). 4 B. Discussion 5 Defendant removed the action to this Court on the basis that federal jurisdiction 6 exists for three reasons: (1) the Public Readiness and Emergency Preparedness Act, 42 7 U.S.C. § 247d-6d (the “PREP Act”) completely preempts Plaintiffs’ claims; 8 (2) Plaintiffs’ claims present a federal issue under the Grable doctrine; and (3) the federal 9 officer removal statute, 28 U.S.C. § 1442(A)(1), provides for jurisdiction. See Doc. No. 1 10 at 7, 20, 22. Defendant raises the same arguments in its opposition to the motion to 11 remand. Doc. No. 9. In Plaintiffs’ motion to remand, Plaintiffs contest each of these 12 grounds, and additionally argue that the PREP Act does not apply to their claims at all. 13 Doc. No. 6. 14 1. Complete Preemption 15 “Ordinarily federal pre-emption is raised as a defense to the allegations in a 16 plaintiff’s complaint . . . . [I]t is now settled law that a case may not be removed to 17 federal court on the basis of a federal defense . . . .” Caterpillar Inc., 482 U.S. at 392–93. 18 However, the doctrine of complete preemption permits removal where the “pre-emptive 19 force” of a federal statute is “so ‘extraordinary’ that it ‘converts an ordinary state 20 common-law complaint into one stating a federal claim for purposes of the well-pleaded 21 complaint rule.’” City of Oakland v. BP PLC, 969 F.3d 895, 905 (9th Cir. 2020) (quoting 22 Caterpillar, 482 U.S. at 393). The Ninth Circuit has held that “complete preemption for 23 purposes of federal jurisdiction under [28 U.S.C.] § 1331 exists when Congress: 24 (1) intended to displace a state-law cause of action, and (2) provided a substitute cause of 25 action.” Id. at 905 (citing Hansen v. Grp. Health Coop., 902 F.3d 1051, 1057 (9th Cir. 26 2018)). The federal statute “must ‘provide[ ] the exclusive cause of action for the claim 27 asserted and also set forth procedures and remedies governing that cause of action.’” Id. 28 (quoting Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003)). 1 Defendant argues that the PREP Act is a complete preemption statute. Doc. No. 9 2 at 11–20. Its main support for this argument is that a handful of nonbinding cases and 3 various agencies—namely, the U.S. Department of Health and Human Services 4 (“HHS”)—have said so.4 See id. at 13–18. The Ninth Circuit recently rejected this line 5 of reasoning in Saldana v. Glenhaven Healthcare LLC, refusing to give deference to 6 agency opinions on the issue of complete preemption, such as the U.S. Department of 7 Health & Human Services, General Counsel Advisory Opinion 21-01 (Jan. 8, 2021). See 8 Saldana v. Glenhaven Healthcare LLC, __ F.4th. __, 2022 U.S. App. LEXIS 4631, at *16 9 (9th Cir. Feb. 22, 2022) (citing Dandino, Inc. v. United States DOT, 729 F.3d 917, 920 10 n.1 (9th Cir. 2013)) (“[A]n agency’s opinion on federal court jurisdiction is not entitled to 11 Chevron deference.”) Applying the Ninth Circuit’s two-part complete preemption test, 12 the Saldana Court concluded that the PREP Act is not a complete preemption statute 13 even when a plaintiff explicitly alleges willful misconduct. See Saldana, 2022 U.S. App. 14 LEXIS 4631, at *17 (“[F]inding that one claim may be preempted is different than 15 finding that the ‘federal statutory scheme is so comprehensive that it entirely supplants 16 state law causes of action,’ such as the [plaintiffs’] other causes of action for elder abuse, 17 custodial negligence, and wrongful death.”). At the hearing, Defendant could not 18 articulate any dispositive distinction between this case and the facts present in Saldana. 19 Therefore, consistent with the Ninth Circuit’s reasoning in Saldana, the Court concludes 20 that it does not have subject matter jurisdiction based on the doctrine of complete 21 preemption. 22 23 24 25 4 At the hearing on the motion to remand, Defendant argued that the Court should find complete 26 preemption under Aetna Health Inc. v. Davila, 542 U.S. 200 (2004). However, at the hearing, Defendant also conceded that the complete preemption tests used in Davila, Saldana, and the Third 27 Circuit’s opinion in Estate of Maglioli v. Alliance Holdings, LLC, 16 F.4th 393 (3d Cir. 2021) are essentially the same. Thus, fundamentally, Defendant appears to argue that the Ninth Circuit misapplied 28 1 2. Grable Doctrine 2 Under Grable, “federal jurisdiction over a state law claim will lie if a federal issue 3 is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of 4 resolution in federal court without disrupting the federal-state balance approved by 5 Congress.” Gunn v. Minton, 568 U.S. 251, 258 (2013). 6 7 Only a few cases have fallen into this slim category, including: (1) a series of quiet-title actions from the early 1900s that involved disputes as to the 8 interpretation and application of federal law. . .; (2) a shareholder action 9 seeking to enjoin a Missouri corporation from investing in federal bonds on the ground that the federal act pursuant to which the bonds were issued was 10 unconstitutional; and (3) a state-quiet title action claiming that property had 11 been unlawfully seized by the Internal Revenue Service (IRS) because the notice of the seizure did not comply with the Internal Revenue Code. . . . 12

13 14 City of Oakland, 969 F.3d at 904 (internal citations omitted). 15 Defendant argues that the Grable doctrine supplies federal jurisdiction. Doc. No. 9 16 at 23–24. The Ninth Circuit concluded it does not: 17 18 Here, the [Plaintiffs’] complaint states four causes of action: elder abuse, willful misconduct, custodial negligence, and wrongful death. The claims in 19 the complaint are raised under California law and do not raise questions of 20 federal law on the face of the complaint. [The defendant nursing home] seeks to raise a federal defense under the PREP Act, but a federal defense is not a 21 sufficient basis to find embedded federal question jurisdiction. Provincial 22 Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1090 (9th Cir. 2009). 23 24 25 Saldana, 2022 U.S. App. LEXIS 4631, at *18. Here, as in Saldana, Plaintiffs allege state 26 law claims that do not raise questions of federal law on the face of the complaint. See 27 FAC. Consistent with the Ninth Circuit’s reasoning in Saldana, the Court concludes it 28 does not have subject matter jurisdiction based on embedded federal question grounds. 1 3. Federal Officer Removal 2 To invoke federal officer removal pursuant to § 1442(a)(1), “a defendant in a state 3 court action ‘must demonstrate that (a) it is a “person” within the meaning of the statute; 4 (b) there is a causal nexus between its actions, taken pursuant to a federal officer’s 5 directions, and plaintiff’s claims; and (c) it can assert a ‘colorable federal defense.’” 6 Fidelitad, Inc. v. Insitu, Inc., 904 F.3d 1095, 1099 (9th Cir. 2018) (citing Durham v. 7 Lockheed Martin Corp., 445 F.3d 1247, 1251 (9th Cir. 2006)). 8 Defendant argues that the federal officer removal statute supplies jurisdiction. 9 Doc. No. 9 at 24–30. As its primary support for this argument, Defendant points to its 10 designation by the federal government as part of the national “critical infrastructure,” 11 HHS’s identification of “medical and healthcare providers as its ‘critical partners,’” and 12 “federal directives issued by the CDC, CMS, and local health departments. . .” See id. at 13 26. Again, the Ninth Circuit rejected these arguments in Saldana: “It cannot be that the 14 federal government’s mere designation of an industry as important—or even critical—is 15 sufficient to federalize an entity’s operations and confer federal jurisdiction.” Saldana, 16 2022 U.S. App. LEXIS 4631, at *11. In the instant case, as in Saldana, “[a]ll that [the 17 defendant nursing home] has demonstrated is that it operated as a private entity subject to 18 government regulations, and that during the COVID-19 pandemic it received additional 19 regulations and recommendations from federal agencies.” See id. “But ‘simply 20 complying’ with a law or regulation is not enough to ‘bring a private person within the 21 scope of the statute.’” Id. at *10 (quoting Watson v. Philip Morris Cos., 551 U.S. 142, 22 152 (2007)). Thus, Defendant “was not ‘acting under’ a federal officer or agency as 23 contemplated by the federal officer removal statute.” Id. at *11. Therefore, consistent 24 with the Ninth Circuit’s reasoning in Saldana, the Court concludes it does not have 25 subject matter jurisdiction pursuant to the federal officer removal statute. 26 4. Summary Regarding Subject Matter Jurisdiction 27 In light of the foregoing analysis, the Court concludes that it lacks subject matter 28 jurisdiction over the instant case. Accordingly, the Court GRANTS Plaintiffs’ motion to 1 remand. See Gaus, 980 F.2d at 566 (citing Libhart, 592 F.2d at 1064) (“Federal 2 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 3 instance.”). 4 5. Request for Jurisdictional Discovery 5 Defendant asks for “limited jurisdictional discovery” before rendering a decision if 6 there is “insufficient clarity of facts to decide whether federal jurisdiction lies in this 7 Court based on application of the PREP Act . . . .” Doc. No. 9 at 2. 8 A district court has discretion to permit or deny jurisdictional discovery. Boschetto 9 v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008). “Discovery may be appropriately 10 granted when pertinent facts bearing on the question of jurisdiction are controverted or 11 where a more satisfactory showing of the facts is necessary.” Id. 12 There is not a lack of clarity regarding the Court’s lack of subject matter 13 jurisdiction; the Court concludes that Defendant fails to meet its burden demonstrating 14 that removal was proper. Moreover, Defendant has not identified the facts it seeks to 15 discover or demonstrated how such facts would change the Court’s analysis, especially in 16 light of the Ninth Circuit’s Saldana opinion. Therefore, the Court DENIES Defendant’s 17 request for jurisdictional discovery. 18 6. Request for Stay on Remand 19 Defendant alternatively asks for a temporary stay on remand pursuant to Federal 20 Rule of Civil Procedure 62(a) to “allow Defendant its right to appeal.” Doc. No. 9 at 2. 21 Defendant argues that “Defendant’s removal is based in part on 28 U.S.C. § 1442(a)(1), 22 federal officer jurisdiction, such [that] any action removed pursuant to 28 U.S.C. § 23 1442(a)(1) is reviewable by appeal.” Id. 24 “The party requesting a stay bears the burden of showing that the circumstances 25 justify an exercise of that discretion.” Nken v. Holder, 556 U.S. 418 433 (2009). A 26 federal court’s discretion in whether to grant a stay pending appeal is guided by an 27 analysis of four factors set forth by the Supreme Court in Nken: “(1) whether the stay 28 applicant has made a strong showing that he is likely to succeed on the merits; 1 ||(2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of 2 || the stay will substantially injure the other parties interested in the proceeding; and 3 ||(4) where the public interest lies.” Lair v. Bullock, 697 F.3d 1200, 1203 (9th Cir. 2012) 4 (citations omitted). 5 Defendant summarily requests a stay and provides no explanation as to how the 6 || circumstances justify a stay in this case. The Court therefore DENIES Defendant’s 7 ||request for a temporary stay on remand. See Gavert v. CF Modesto, LLC, 2022 U.S. 8 || Dist. LEXIS 42276, at *2 n.1 (E.D. Cal. Mar. 8, 2022) (collecting cases similarly denying 9 ||a request for a stay based on a court’s denial of federal officer jurisdiction where a 10 || defendant “has not demonstrated that the circumstances justify a stay in [the] case’’). 1] IV. CONCLUSION 12 Based upon the foregoing, the Court AFFIRMS its tentative rulings. Accordingly, 13 ||the Court GRANTS Defendant’s request for judicial notice made in support of 14 || Defendant’s opposition to the motion to remand, see Doc. No. 10, GRANTS Plaintiffs’ 15 || motion to remand, see Doc. No. 6, and REMANDS this action to the Superior Court of 16 || California, County of San Diego. Further, the Court DENIES Defendant’s request for 17 || jurisdictional discovery, see Doc. No. 9, and DENIES Defendant’s request for a 18 || temporary stay on remand, see id. Additionally, in light of the remand, the Court 19 || DECLINES to rule on the following: (1) Defendant’s motion to dismiss, see Doc. No. 3; 20 || (2) Defendant’s request for judicial notice made in support of its motion to dismiss, see 21 ||Doc. No. 4; and (3) Defendant’s request for judicial notice made in support of its notice 22 removal, see Doc. No. 1-3. The Court DIRECTS the Clerk of Court to close the case 23 terminate all pending motions, deadlines, and hearings. 24 IT IS SO ORDERED. 25 Dated: April 5, 2022 Mikal lM -(hipllr 27 HON. MICHAEL M. ANELLO 28 United States District Judge