Nursing Home Death Suit Could Put PREP Act Before Supreme Court

A California nursing home operator has asked the US Supreme Court to interpret the 2005 PREP Act for the first time and declare that federal courts have exclusive authority to hear wrongful death and personal injury claims arising out of the Covid-19 pandemic.

The federal Public Readiness and Emergency Preparedness Act so wholly displaces state-law causes of action related to public health emergencies that it strips state courts of jurisdiction to hear them, Glenhaven Healthcare LLC said in a petition for review.

Signed into law by President George W. Bush in 2005, the act was largely untested until the coronavirus pandemic hit the US, killing more than 1 million people and leaving a litigation “tsunami” in its wake, Glenhaven said.

At issue is a decision by the US Court of Appeals for the Ninth Circuit that sent back to state court a suit involving the Covid-19 related death of a Los Angeles-area nursing home resident. Ricardo Saldana’s family alleged that Glenhaven didn’t do enough to prevent him from getting the virus.

The Ninth Circuit held that the family’s suit belonged in state court. The PREP Act didn’t create an exclusive federal cause of action that wholly displaced their garden variety state-law negligence claims, it said.

A petition for Supreme Court review always faces long odds, but this one has a “decent chance” of being granted, according to Mark Reagan in San Francisco.

Reagan, a managing shareholder at Hooper, Lundy & Bookman PC, represented the California Association of Health Facilities and the American Health Care Association as amici in the Ninth Circuit.

Federal Question

Federal courts have jurisdiction over cases involving questions of federal law, but they’re normally limited to considering complaints that plead a federal cause of action on their face.

None of the complaints against providers like Glenhaven facially pleads a federal question. But, under the doctrine of complete preemption, a federal law can so broadly cover a subject that there’s no room for state-law claims.

That’s exactly what the PREP Act does, Glenhaven said. It’s so all-encompassing that state-law claims related to public health emergencies are really federal claims and, so, can be tried only in federal courts, it said.

National Standards Necessary

The PREP Act gives health-care providers a federal defense—immunity from suit and immunity from liability for actions taken to avert a national public health emergency.

That affirmative defense applies only when plaintiffs are seeking damages for injuries arising out of the use of a covered countermeasure. But there are questions about the meaning of terms such as “use.”

One question is whether PREP Act immunity is triggered only by an actual use, or does a “nonuse” suffice to kill a claim over an allegedly negligent failure to—for example—provide staff members with personal protective equipment that may not have been readily available.

The immunity defense, by itself, doesn’t transform the case into a federal one. But the answers to these types of questions should be uniform throughout the US, Glenhaven said. That can best be accomplished if there are national standards defined by federal courts, not the whims of 50 state courts, it said.

Evidence of Intent

Moreover, when the immunity provision is read together with three other PREP Act provisions, it’s clear Congress intended the law to apply to all suits related to national public health emergencies, Glenhaven said.

The provisions create an exclusive federal cause of action for injuries caused by willful misconduct, establish an administrative no-fault compensation fund for non-willful misconduct claims, and bar states from establishing any legal requirement different from or in conflict with any of its requirements.

Willful misconduct cases, moreover, must be filed in the US District Court for the District of Columbia, lending more credence to the argument that Congress intended all claims to be filed in federal courts, according to Glenhaven’s Aug. 29 petition.

Setting the Tone

The case will “set the tone” for how the PREP Act will be applied now and in the event of a future public health emergency, Reagan told Bloomberg Law.

Moreover, if the Supreme Court doesn’t intervene, Congress’ intent that the PREP Act be interpreted uniformly and consistently will be thwarted, Reagan said.

Courts in all 50 states will be able to weigh in on crucial questions, like what constitutes the use of covered counterclaim for purposes of triggering the immunity provision, he said.

But the Supreme Court, “for decades, has made clear that the desire to have uniform application of a federal defense"—like PREP Act immunity—"does not create federal jurisdiction,” Adam Pulver said. Pulver, an attorney with Washington-based Public Citizen, argued the case for the Saldana family in the Ninth Circuit.

“State courts are presumed capable of applying federal law, and if nursing homes disagree, they are free to seek review of state supreme court decisions,” Pulver said. He’s currently reviewing the petition.

This may be the top court’s only chance for several years to settle the preemption question and to ensure the development of a uniform body of PREP Act law relating to the scope of the immunity provision, Reagan added.

If it passes at this juncture, the court will have to wait until after numerous lawsuits make their way through the states’ courts—a process that could take 10 to 12 years, he said.

Unconventional Circuit Split

The case doesn’t involve a “conventional” circuit split, Reagan said. No federal appeals court has held that the PREP Act completely preempts all state-law causes of action.

But the US Court of Appeals for the Third Circuit, unlike the Ninth Circuit, held that the law completely preempts willful misconduct claims. And a federal court can exercise supplemental jurisdiction over state-law causes of action filed with a properly removed willful misconduct claim, Reagan said.

Even the Third Circuit, however, sent non-willful misconduct claims back to New Jersey courts, Glenhaven said. And the Fifth and Seventh circuits sent Covid-19 death cases back to Texas, Illinois, and Louisiana courts.

The Eleventh Circuit is currently weighing the matter, and the Second and Sixth circuits will hear oral arguments in similar cases from New York and Ohio this fall.

Orrick, Herrington & Sutcliffe LLP and Lewis Brisbois Bisgaard & Smith LLP represent Glenhaven.

The case is Glenhaven Healthcare, LLC v. Saldana, U.S., No. 22-192, petition for review filed 8/29/22.