In an early blow to skilled nursing facilities, the 3rd U.S. Circuit Court of Appeals ruled against two nursing homes in New Jersey, finding the COVID-19 lawsuits should continue in state court.
Negligence and wrongful-death lawsuits were initially filed in April 2020 in state court against Andover Subacute & Rehabilitation I & II by families of four residents who died of COVID-19. The ruling, issued last week, is believed to be the first decided by a federal appeals court on the matter, according to the opinion.
The lawsuits alleged the facilities did not take precautions to contain the spread of COVID-19, including failing to monitor food preparation, failing to provide personal protective equipment and allowing visitors and employees to enter the facilities without taking their temperatures or making them wear a mask, the ruling stated.
After the lawsuits were filed in state court the nursing home defendants requested the cases be transferred to district court. The district court judge dismissed the case because it lacked jurisdiction and sent it back to state court, according to the opinion. The nursing homes appealed that decision.
The defendant nursing homes argued on appeal that they were covered by the Public Readiness and Emergency Preparedness (PREP) Act, and the cases should be heard in federal court.
“This is the first time we’ve had an appellate court really address that issue,” said Drew Graham, partner at Hall Booth Smith in New York City, of whether PREP Act cases fall under state or federal jurisdiction. “I think we’ll see some other states with a different interpretation, but it does clarify … for senior living operators and nursing home operators in the Third Circuit that removal is not available unless there’s death or serious bodily injury with willful misconduct allegations.”
The act, established by Congress in 2005, provides immunity from liability, with the exception of willful misconduct, from certain legal claims.
The Prep Act is one of many defenses nursing home operators are trying to use for COVID-19 lawsuit protection, Craig Conley, shareholder at Memphis, Tenn.-based Baker Donelson Bearman Caldwell & Berkowitz told Skilled Nursing News. State statutes and more executive orders provide other paths.
The ruling doesn’t exclude the use of the PREP Act at the state level either, Conley said.
“The judge did not rule whether or not the defendants are still entitled to a PREP Act defense if they’re in state court; that avenue is still open and undecided,” added Conley. “[The ruling] didn’t shut the door to the availability of using any defenses on the under the PREP Act for nursing home operators.”
The Philadelphia-based 3rd Circuit panel ruled that the lawsuits “asserted only garden-variety state-law claims” and so therefore they belonged in state court.
“The pandemic has tested our federal system, but this case confirms its resilience. The defendants invite us to assert the ‘judicial Power of the United States’ over a matter that belongs to the states,” Judge David Porter wrote. “We decline that invitation. We will not exercise power that the Constitution and Congress have not given us. There is no COVID-19 exception to federalism.”
The ruling went on to say that in similar cases where nursing home defendants have requested the cases be moved to federal court, “nearly every federal district court to confront these cases were dismissed for lack of jurisdiction and remanded to the state court.”
The Department of Health and Human Services (HHS), in its interpretation of the PREP Act, has generally favored moving the cases to federal court. The nursing home defendants argued on appeal that the court should defer to the agency’s assessment, but the three-judge panel declined to do so.
The attorneys representing both parties did not respond to requests for comment from SNN as of Friday.
Companies featured in this article:
