Third Court Rejects Federal Forum for Covid-19 Death Suits

Nursing homes in Louisiana, Mississippi, and Texas must defend lawsuits over residents’ Covid-19 related deaths and injuries in state, not federal, court, the Fifth Circuit said Thursday.

The decision means that all three federal appeals courts to have considered the question are unanimous. But it’s still possible the U.S. Supreme Court could weigh in, as the cases involve important issues affecting the nursing home industry. Many nursing homes have been criticized for their handling of the pandemic.

The federal Public Readiness and Emergency Preparedness Act doesn’t completely preempt state-law wrongful death and personal injury causes of action arising out of infections caused by the coronavirus, the U.S. Court of Appeals for the Fifth Circuit said in an opinion by Judge Kurt D. Engelhardt.

The Third Circuit rejected nursing home operators’ arguments that the PREP Act demands that the state law claims be heard in a federal forum in October. The Ninth Circuit reached the same result in February.

The PREP Act creates only one cause of action, and that is limited to a claim for willful misconduct, the Fifth Circuit said. The plaintiff here, however, only asserted claims for negligence that aren’t subject to the law’s directives, it said.

A compensation fund created by the act, moreover, isn’t preemptive, the court said. Quoting from the Third Circuit’s opinion, the court said that “neither the Supreme Court nor any circuit court has extended complete preemption to a statute because it created a compensation fund.”

And even if the compensation fund sufficed to create a cause of action, the law doesn’t create a specific grant of exclusive federal jurisdiction, it said.

The Fifth Circuit also rejected arguments that the case belonged in the federal court under the federal officer removal jurisdiction law. The law applies when the defendant was “acting under” or at the direction of a U.S. officer or agency in connection with the allegedly wrongful conduct.

The court sent the case back to a federal trial court with instructions to remand it to the appropriate state court.

Chief Judge Priscilla R. Owen and Judge Edith Brown Clement joined the opinion.

Smith Clinesmith LLP represents plaintiff Troy Mitchell. Lewis Brisbois Bisgaard & Smith LLP represents the defendant nursing homes.

The case is Mitchell v. Advanced HCS, LLC, 5th Cir., No. 21-10477, 3/10/22.