Preston v. Tenet Healthsystem Memorial Medical Center, ___ F. Supp. 2d ___, Civil Action No. 06-3179, 2006 WL 3396171 (E.D. La. November 21, 2006).
The Eastern District of Louisiana examines a Hurricane Katrina case surrounding stranded hospital patients that was removed to federal court pursuant to CAFA and remanded as a result of the local controversy and the home state exceptions.
United States District Judge Eldon E. Fallon of the Eastern District of Louisiana handed down an Order and Reasons remanding the case to state court on November 21, 2006.
The lawsuit arose from the injuries and/or deaths of patients at Memorial Medical Center in New Orleans after Hurricane Katrina. Conditions in the hospital after the storm deteriorated. There was no electrical power which caused temperatures to reach one hundred ten degrees. More than one thousand people were trapped in the hospital due to more than eight feet of flood water. Even though there were helicopter and boat evacuations, thirty-five people passed away in the chaotic circumstances.
Patients and relatives of both deceased and injured patients filed a case in Louisiana State Court on October 6, 2005. The plaintiffs amended their petition four times to include a request for class certification under Louisiana law. On June 18, 2006, defendant LifeCare removed the case to federal court under three separate theories, one of which included CAFA. On July 14, 2006, the plaintiffs filed a Motion to Remand. At oral argument, the Eastern District of Louisiana concluded that more information was needed and ordered the parties to conduct limited discovery. During the discovery, the plaintiffs withdrew their Motion to Remand. The court ordered the parties to file supplemental briefs on the information obtained through discovery. In an interesting twist, the other co-defendant, Memorial Hospital, filed its brief supporting remand and adopted the plaintiffs’ withdrawn Motion to Remand.
The court did not address the resurrected Motion to Remand, but instead addressed the jurisdictional issues on its own to determine subject matter jurisdiction. The court addressed the theories of removal including CAFA. The court outlined the minimal diversity requirements of CAFA, but quickly turned its focus to Sections 1332(d)(3) and (4), the local controversy and home state controversy exceptions. These exceptions mandate federal courts to refuse jurisdiction when a case is distinctly local in nature.
The court examined an affidavit submitted by Memorial’s Medical Records Supervisor. It stated that of 256 patients, only seven were residents of other states. The court noted that the plaintiffs had the burden to prove the applicability of CAFA’s exceptions, but they had consented to CAFA jurisdiction by withdrawing their Motion to Remand. The court stated that it still was required to examine the record and determine jurisdiction. The court applied both the local controversy and home state exceptions as more than two thirds of the proposed class were citizens of Louisiana, the defendants were Louisiana citizens, and the injuries took place in Louisiana.
The discretionary exception under 1332(d)(3) was also found applicable to the case. The court held there was a distinct nexus between the forum of Louisiana, the defendants, and the proposed class. All of the defendants’ actions and all of the alleged injuries to patients took place at Memorial Hospital in New Orleans, therefore, the case was a local controversy and had to be remanded to state court.