SCOTUS Decision in Nursing Home PREP Act Suit Slings Case Back to State Court

In an upset for the nursing home industry, the U.S. Supreme Court this week declined to hear a bid from California operator Glenhaven Healthcare to avoid a lawsuit under federal immunity provisions.

The case hinged on the scope of the Public Readiness and Emergency Preparedness Act (PREP Act), which authorizes the federal government to shield companies from lawsuits during a public health emergency. Within the context of Covid, companies are protected if they’re providing “countermeasures” like using personal protective equipment (PPE) and implementing reliable Covid tests.

The PREP Act was originally designed in 2015 to ensure that the concern or threat of litigation would not disway the private sector or other necessary entities from developing and administering necessary countermeasures, according to court documents.

Glenhaven asked SCOTUS to consider taking up the case in late August, following the 9th U.S. Circuit Court of Appeals decision earlier this year that upheld a lower court’s decision to keep the case in state court.

“It’s disappointing but this issue is by no means over,” said Mark Reagan, managing shareholder at Hooper Lundy & Bookman PC.

Reagan also represented the California Association of Health Facilities and the American Health Care Association (AHCA) as an amici or friend of the court in the 9th Circuit.

“The major challenge, for at least the long-term care sector, is to be able to educate state court judges about what the PREP Act is about, what it provides, what substantive immunity provisions it contains, and how they should be interpreted and applied in those state court actions,” he added.

Reagan was hoping SCOTUS would see the Glenhaven case as an opportunity to weigh in now, as Congress spoke “pretty loud and clear” about keeping a national uniformity around such cases.

He felt SCOTUS could have stepped in to provide some guidance to state court about how they might go about applying the substantive immunities.

Attorneys on behalf of the late Ricardo Saldana and his family filed a wrongful death lawsuit in May 2020 in California state court, alleging the nursing home did not provide proper PPE to employees nor did it identify or isolate workers or residents who had or were suspected of having Covid before others were exposed.

Glenhaven then removed the case from state to federal court but the U.S. District Court for the Central District of California disagreed with the nursing home’s arguments and sent the case back to state court in October 2020.

The argument made by nursing homes over the last two-plus years has often been used when facing negligence, wrongful death or other state law tort claims.

Scott Glovsky, one of the attorneys who represents the Saldana family, said he wasn’t surprised SCOTUS declined to hear Glenhaven’s bid.

“There really is no federal jurisdiction in the Covid nursing home abuse cases. Glenhaven and the industry have really created this stretched and tortured legal argument in their effort to first get immunity,” Glovsky told Skilled Nursing News.

So far, only one Covid-19 wrongful death case involving the PREP Act continued in federal court, Garcia v. Welltower — also in California. But that might not hold true much longer, according to Reagan.

On Monday, the 9th Circuit remanded the Garcia case back to the district court to make determinations about whether or not there was diversity jurisdiction present in that case, Reagan said.

While the Garcia case is still within the federal court system, the judge is determining whether there is an alternative ground for state jurisdiction.

The earliest case to test whether a Covid-related nursing home lawsuit should be heard state or federal court was a win for family plaintiffs in October 2021. The 3rd U.S. Circuit Court of Appeals found negligence and wrongful-death lawsuits against Andover Subacute & Rehabilitation I & II in New Jersey should proceed in state court.

There are about 50 other Covid-19 wrongful death cases in the 9th Circuit currently, according to Glovsky; he feels confident these cases will largely be heard in state court.

As for other cases brought to court, Glovsky said many families are simply out of time; there likely won’t be a flood of other Covid nursing home abuse cases given most state statutes of limitations are two years.