Class action lawsuite Mixon v. CareSouth Carolina, Inc. - 4:22-cv-00269
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION
SUMMER MIXON, individually and on
behalf of all others similarly situated,
Plaintiff,
v.
CARESOUTH CAROLINA, INC.,
Defendant.
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Civil Action No.:
REMOVED FROM:
Court of Common Pleas County of
Darlington, Case No. 2021CP1600887
DEFENDANT CARESOUTH CAROLINA, INC.’s
NOTICE OF REMOVAL
I. INTRODUCTION
Pursuant to 42 U.S.C. § 233(l)(2), 28 U.S.C. § 1442, 28 U.S.C. § 2679(d), and 28 U.S.C.
§ 1331, and on the grounds set forth below, defendant CareSouth Carolina, Inc. (hereinafter
“CareSouth”), hereby removes to this Court the civil action of Plaintiff Summer Mixon, entitled
Summer Mixon, individually and on behalf of all others similarly situated v. CareSouth Carolina,
Inc., Case No. 2021CP1600887, and filed on or about November 9, 2021 in the Court of Common
Pleas for the Fourth Judicial District, Darlington County, State of South Carolina.
Under Section 330 of the Public Health Service Act (codified at 42 U.S.C. § 254b et seq.),
CareSouth is a community health center recipient of federal grant funds. At all relevant times, the
Secretary of the U.S. Department of Health and Human Services (HHS) deemed CareSouth and
its officers, governing board members, employees, and (certain) contractors U.S. Public Health
Service (PHS) employees a protected entity under 42 U.S.C. § 233(a). That protection is an
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absolute immunity from any civil action or proceeding for a deemed individual or entity’s
performance of (or alleged failure to perform) medical or related functions within the scope of his,
her, or its deemed federal employment. 42 U.S.C. § 233(a) et seq.
This action falls squarely within the statutory protection. According to the operative
complaint, this civil action arises out of CareSouth’s alleged failure to safeguard protected health
information and other confidential information (referred to herein collectively as Protected Health
Information or “PHI”) related to the provision of health care services to its patients. As set forth
in the complaint, CareSouth’s alleged failures include allowing an unauthorized individual to
access and steal PHI from a cloud-based Information Technology (IT) system operated and
maintained by CareSouth’s contracted partner, Netgain Technology, LLC. This action seeks
damages as well as declaratory and injunctive relief. A copy of the summons and complaint are
included in Exhibit A (State Court docket and complete set of pleadings to date, including
summons and complaint).
II. JURISDICTION
1. The Court has jurisdiction under 42 U.S.C. § 233(l)(2), a federal officer removal
statute enacted specifically for the benefit of deemed PHS employees. Section 233(l)(2) provides
a deemed individual or entity the right to a federal forum for determination as to the availability
of a federal immunity defense. Campbell v. S. Jersey Med. Ctr., 732 F. App’x 113 (3d Cir. 2018)
(recognizing this statutory purpose of § 233(l)(2)); see also Booker v. United States, Case No. 13–
1099, 2015 WL 3884813 *7 (E.D. Pa. June 24, 2015) (recognizing “removal pursuant to §
233(l)(2) serves the same purpose as procedure contemplated by [28 U.S.C.] § 2679(d)(3)”]). The
PHS Act imposes no time limit on Section 233(l)(2) removals. Estate of Booker v. Greater
Philadelphia Health Action, 10 F.Supp.3d 656, 665-66 (E.D. Pa. 2014) (“The fact that § 233(l)(2)
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was added to a statutory scheme in which suits against health centers were removable at any time
before trial provides a basis to infer that Congress intended the same time frame to govern removals
by the health centers themselves”); 42 U.S.C. § 233(c) (permits Attorney General to remove state
actions on behalf of actual and deemed PHS employees “any time before trial”).
2. The Court also has jurisdiction under the general officer removal statute, 28 U.S.C.
§ 1442(a)(1). Section 1442(a)(1) affords a right of removal to “any officer (or any person acting
under that officer) of the United States or of any agency thereof, sued in an official or individual
capacity for any act under color of such office.” 28 U.S.C. § 1442(a)(1). The statute permits
removal even when the underlying federal question arises only as a defense to a state-law claim.
See Jefferson County v. Acker, 527 U.S. 423, 431 (1999); Kircher v. Putnam Funds Trust, 547
U.S. 633, 644 n.12 (2006) (noting federal officer removal statute operates as an exception to the
“well-pleaded complaint” rule). The general officer removal statute protects important federal
interests, and must be broadly construed in favor of a federal forum. See Colorado v. Symes, 286
U.S. 510, 517 (1932) (“It scarcely need be said that such measures [allowing for federal officer
removal] are to be liberally construed to give full effect to the purposes for which they were
enacted.”), Willingham v. Morgan, 395 U.S. 402, 406–407 (1969) (finding § 1442’s language
“broad enough to cover all cases where federal officers can raise a colorable defense arising out of
the duty to enforce federal law”).
3. Pursuant to 42 U.S.C. § 1442(a)(1), CareSouth is an officer, or a person acting
under a federal officer. When broadly construed, as required, the phrase “any officer” in § 1442
can be read to include CareSouth as it is “deemed to be an employee of the Public Health Service”
under a federal statute that not only affords CareSouth a federal immunity defense, but affords an
additional removal right as well.
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4. In the alternative of finding that CareSouth is a qualifying federal officer under 42
U.S.C. § 1442, it nevertheless qualifies as a person acting under a federal officer. Agyin v.
Razmzan, 986 F.3d 168, 177 (2d Cir. 2021) (holding that (a) individual deemed PHS employee’s
removal under 42 U.S.C. § 1442 was proper because, as an employee of a deemed health center
entity, he was acting under a federal officer with respect to medical and related functions
performed on behalf of the health center entity, and (b) deemed PHS employee enjoyed “the same
legal immunity that is extended to employees of the Public Health Service”)); see also H.R. Rep.
104-398, 10 reprinted in 1995 U.S.C.C.A.N. 767, 774 (indicating congressional intent that deemed
PHS employees be “covered for malpractice claims under the [FTCA] in the same manner as are
employees of the Public Health Service.”).
5. To invoke § 1442(a)(1), a defendant who is not a federal officer must demonstrate
that (1) he or she or it is a “person” under the statute (2) who acted ‘under color of federal office’
and (3) has a “colorable federal defense.” 42 U.S.C. § 1442(a)(1). As a nonprofit corporation,
which operates a federal grant project on behalf of HHS, CareSouth qualifies as a person within
the meaning of § 1442. Isaacson v. Dow Chem. Co., 517 F.3d 129, 135 (2d Cir. 2008) (finding
that the “term ‘person’ includes corporate persons”). CareSouth “acted under” an office of HHS
to “assist, or to help carry out, the duties or tasks of the federal superior.” Watson v. Philip Morris
Cos., 551 U.S. 142, 149 (2007); 42 U.S.C. § 254(o) (the central office of the Health Resources and
Services Administration administers Health Center grant program on behalf of the HHS Secretary).
In particular, CareSouth is statutorily obligated to serve an area or population that the HHS
Secretary designated “medically underserved.” Id. at 254b(a)(1). CareSouth is therefore supporting
the mission of the actual PHS by performing functions that would otherwise fall within PHS
responsibilities.
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6. CareSouth’s deemed federal status, which is irrevocable as to specified periods,
affords “the same” immunity that an actual PHS employee enjoys under 42 U.S.C. § 233(a). 42
U.S.C. § 233(g)(1)(A) (making remedy against United States “exclusive of any other civil action
or proceeding to the same extent as the remedy against the United States is exclusive pursuant to
subsection (a)”), (F) (providing that deemed status is “final and binding” on the United States and
all parties to litigation). For § 1442, CareSouth’s federal defense is “colorable,” to the say the least.
7. The Court also has jurisdiction under 28 U.S.C. § 1331. This case raises a question
of substantive federal law as a threshold matter—i.e., whether the alleged acts or omissions in the
state action resulted from or arose out of CareSouth’s “performance of medical, surgical, dental or
related functions” within the scope of its deemed PHS employment status and, in turn, whether the
United States must be substituted as the only proper defendant. See also Gutierrez de Martinez v.
Lamagno, 515 U.S. 417, 435 (1995) (“Because a case […] raises a question of substantive federal
law at the very outset, it clearly ‘arises under’ federal law, as that term is used in Art. III”) (internal
citations and quotations omitted); 28 U.S.C. § 1346(b)(1) (United States “district courts […] have
exclusive jurisdiction of civil actions on claims against the United States”).
8. Finally, as an additional basis, CareSouth seeks removal of this action under 28
U.S.C. § 1441(c) based upon the district court’s original jurisdiction over Plaintiff’s claims under
the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §§ 1332(a)(1), (d). CAFA grants
district courts of the United States original jurisdiction over class actions in which: (1) any member
of the putative class is a citizen of a state different from any defendant; (2) the members of the
putative class are over 100 people; and (3) where the amount in controversy for the putative class
exceeds $5 million. Id.
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III. PARTIES
9. Defendant CareSouth is a South Carolina-based nonprofit organization that
receives federal funding under Section 330 of the PHS Act (42 U.S.C. § 254b) to operate a
community-based health center project that provides primary and related health care services to
medically underserved residents of various South Carolina counties, regardless of any individual’s
ability to pay for the services. See 42 U.S.C. § 254b(a), (b), (j), (k). CareSouth serves specific
geographic areas that the HHS Secretary has designated as “medically underserved.” Id. at
254b(a)(1).
10. According to the Complaint: Plaintiff Summer Mixon (“Plaintiff”) is a citizen and
resident of Darlington County, State of South Carolina.
IV. STATUTORY FRAMEWORK
A. Federal Immunity under 42 U.S.C. § 233 et seq.
11. Under the Emergency Health Personnel Act of 1970, Pub. L. No. 91-623, § 4, 84
Stat. 1868, 1870-71 (1970), codified at 42 U.S.C. § 233, PHS personnel are absolutely immunized
from any civil action or proceeding arising out of their performance of medical, surgical, dental or
related functions within the scope of their employment. 42 U.S.C. § 233(a). Section 233(a) extends
absolute immunity to PHS personnel by making the remedy for damages against the United States
under the FTCA the exclusive remedy for such actions. Id.
12. To facilitate the legislative objective of ensuring medical services in underserved
areas, 42 U.S.C. § 233(a) shields PHS personnel from personal liability arising out of their medical
and related duties. Without such protection, reports suggest that the cost of professional liability
insurance would greatly hinder or altogether preclude the provision of these services. See § 2, 84
Stat. 1868; H.R. Rep. No. 1662, 91st Cong., 2d Sess. 1 (1970); 116 Cong. Rec. 42,543 (1970)
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(Rep. Staggers, the House of Representatives sponsor, stating that PHS physicians “cannot afford
to take out the customary liability insurance as most doctors do,” “because of the low pay that so
many of those who work in the [PHS] receive.”). To achieve it purpose, the grant of absolute
immunity to PHS personnel under 42 U.S.C. § 233(a) is “broad” and “comprehensive.” Hui v.
Castaneda, 559 U.S. 799, 806 (2010) (immunity is broad enough to “easily accommodate both
known and unknown causes of action”).
13. The Federally Supported Health Centers Assistance Act of 1992 (and as amended
in 1995) (the “FSHCAA”), 42 U.S.C. § 233(g) et seq., authorizes the HHS Secretary to extend to
certain federally-funded health centers and their officers, directors, and employees (and certain
contractors) the same protection that § 233(a) affords to actual PHS employees. That protection
grants “absolute immunity . . . for actions arising out of the performance of medical or related
functions within the scope of their employment by barring all actions against them for such
conduct.” Hui, 559 U.S. at 806 (emphasis added).
14. To qualify as a deemed entity for § 233(a) immunity, a health center grantee must
submit an application with detailed information and supporting documentation sufficient for HHS
to verify that the coverage should apply to all services provided by the health center to patients
(and in limited circumstances, non-patients) of the center. The applicant is also required to
demonstrate that the health center meets four requirements listed in § 233(h), including a
requirement to “implement[] appropriate policies and procedures to reduce the risk of malpractice
and the risk of lawsuits arising out of any health or health-related functions performed by the
entity.” 42 U.S.C. § 233(g)(1)(D) and (h) (emphasis added).
15. The statute requires the HHS Secretary to make a deeming determination for health
centers and their personnel within 30 days of receipt of such an application. Id. at 233(g)(1)(E).
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The application seeks § 233(a) immunity in advance of and with respect to a specific prospective
period (i.e., calendar year). A favorable deeming determination by the Secretary (which confers
immunity) is “final and binding” (42 U.S.C. § 233(g)(1)(D)-(F)) on HHS, the Attorney General,
and “other parties to any civil action or proceeding.” 42 U.S.C. § 233(g)(1)(F) (emphasis added),
with respect to the designated period.
16. A negative determination (one denying a deeming application under 233(g) and
(h)) is not final and binding. El Rio Santa Cruz Neighborhood Health Ctr. v. U.S. Dep’t of Health
and Human Servs., 396 F.3d 1265, 1271 (D.C. Cir. 2005) (recognizing statute’s “final and binding”
clause does not apply to a negative deeming determination).
17. In the event of a negative deeming determination, the FSHCAA contemplates that
the applicant would have a reasonable opportunity to pursue one or more of the following options:
seek reconsideration of the Secretary’s decision; submit a new application addressing the
Secretary’s stated basis for the prior denial; challenge the Secretary’s decision under the APA; or,
procure private malpractice insurance. El Rio Santa Cruz, 396 F.3d at 1272.
18. By requiring a prompt and advance deeming determination, which constitutes a
final and binding determination on all parties for a specified and prospective period, and conferring
absolute immunity from any and all forms of civil malpractice suits for that period, the FSHCAA
is designed to eliminate a federally-funded health center’s need to purchase (expensive) private
malpractice liability insurance for actions arising out of the performance of medical or related
functions within the scope of their employment and in so doing allows centers to devote their
federal grant funds to patient services (rather than insurance premiums). See H.R. Rep. 102-823,
pt. 1, at 3 (1992).
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19. When a civil action or proceeding is brought against a deemed PHS employee, the
entity or individual has a duty to deliver the pleadings to the grantor agency’s designated
representative, which is HHS’s Office of General Counsel (OGC). HHS OGC is in turn required,
to promptly deliver copies of the pleadings to the Attorney General and appropriate local U.S.
Attorney. 42 U.S.C. § 233(b)
20. Upon notification of a state court action against a deemed individual or entity
(which is confirmed by a Notice of Deeming Action), the Attorney General has a mandatory (nondiscretionary) duty to appear in that court within 15 days of notice of the lawsuit to report whether
the “Secretary has determined under subsections (g) and (h) of [Section 233], that such entity,
officer, governing board member, employee, or contractor of the entity is deemed to be an
employee of the Public Health Service for purposes of this section with respect to the actions or
omissions that are the subject of such civil action or proceeding.” Id. at § 233(l)(1). The report to
the state or local court of the HHS Secretary’s deeming determination is also, as a matter of law,
“deemed to satisfy” the Attorney General’s scope of employment certification under 42 U.S.C. §
233(c) for purpose of removal to federal court. Id. at § 233(l)(1); Cf. 28 U.S.C. § 2679(d)(3).
21. If, despite that mandatory duty, the Attorney General (or his or her authorized
representative) fails to appear in the state court action and effectuate its removal to federal court
within 15 days of notice of the state action, the deemed entity or individual has an absolute right
to remove the matter to the appropriate federal district court, without any time limit for doing so.
Id. at § 233(l)(2). Section 233(l)(2) is in substance and effect an officer removal statute, akin to
(but even more generous than) the general officer removal statute at 28 U.S.C. § 1442(a)(1).
22. Upon removal, all proceedings are stayed, by operation of law, until the federal
district court conducts a “hearing” to determine the proper forum or procedure and issues an order
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consistent with its determination. 42 U.S.C. § 233(l)(2)—“that is, to decide whether to remand the
case or to substitute the United States as a party and deem the action as one brought under the
FTCA.” Campbell, 732 F. App’x at 117.
23. The hearing in federal district court following § 233(l)(2) removal allows a deemed
entity or individual to challenge the federal government’s failure or refusal to “determine[] under
subsections (g) and (h) of [§ 233], that such entity [or] employee … is deemed to be an employee
of the [PHS] for purposes of [§ 233] with respect to the actions or omissions that are the subject
of such civil action or proceeding.” Id. at § 233(l)(1). Where, as here, the claim is covered by the
deemed defendant’s § 233(a) immunity, § 233(l)(2) ensures that the United States is substituted as
the only proper defendant in his or her (or its) place. El Rio Santa Cruz, 396 F.3d at 1272; see also
Booker, 10 F.Supp.3d at 656.
B. Federal Question
24. As an additional basis, removal of this action is proper pursuant to 28 U.S.C. §
1331, because Plaintiff’s allegations include a question arising under “[c]onstitution, laws, or
treaties of the United States.” See Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986)
(“[T]he question whether a claim ‘arises under’ federal law must be determined by reference to
the ‘well-pleaded complaint’”), quoting Franchise Tax Board v. Construction Laborers Vacation
Trust, 463 U.S. 1, 9-10 (1983).
25. Because the substance of Plaintiffs’ action hinges on a contested question of federal
law, it necessarily arises under federal law. Removal to this Court is thus proper pursuant to 28
U.S.C. §§ 1331 and 1441(a).
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C. Removal under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332
26. In addition to removal under the Federal Officer Statute, the Class Action Fairness
Act of 2005, 28 U.S.C. § 1332, (“CAFA”) provides another basis for removal of Plaintiff’s
complaint.
27. CAFA was enacted “to facilitate adjudication of certain class actions in federal
court,” and must be read “broadly, with a strong preference that interstate class actions should be
heard in a federal court if properly removed by any defendant.” Dart Cherokee Basin Operating
Co., LLC v. Owens, 574 U.S. 81, 89 (2014) (quoting S.Rep. No. 109-14, at 43 (2005)). While
Defendant CareSouth disputes Plaintiff’s claims in this matter, and reiterates that it is not the
proper party defendant, nor that Plaintiff’s claims have merit, the complaint itself meets each of
CAFA’s threshold requirements.
28. Under CAFA, original jurisdiction exists within the district courts when a class
comprises more than 100 members. See 28 U.S.C. § 1332(d)(5)(B). In addition to the threshold
numerosity requirement, minimal diversity must exist for CAFA to confer original jurisdiction on
the district court. Minimal diversity is satisfied when any plaintiff, or prospective class member is
a citizen of a different state than any defendant. 28 U.S.C. § 1332(d)(2)(A). See Mississippi ex rel.
Hood v. AU Optronics, Corp., 571 U.S. 161, 165 (2014) (finding that CAFA replaces the ordinary
requirement of complete diversity among all plaintiffs and defendants with a requirement of
minimal diversity). Finally, CAFA confers jurisdiction on the district court when the amount in
controversy, taking into account all purported categories of damages, exceeds $5 million.
V. FACTUAL AND LEGAL GROUNDS FOR REMOVAL
29. CareSouth submitted deeming applications for itself and its personnel with respect
to each year and all times relevant to this action. The HHS Secretary, under 42 U.S.C. § 233(g)
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and (h), approved the applications and deemed CareSouth and its personnel for purposes of the
protections afforded under § 233(a) et seq. Copies of the Notice of Deeming Action for the
calendar years 2019, 2020, and 2021 are attached hereto as Exhibit B.
30. On or about November 9, 2021, Plaintiff filed a civil action against CareSouth
alleging that it failed to safeguard her PHI in connection with or related to health care services she
received. See Ex. A, Compl.
31. The complaint alleges, in essence, that: Plaintiff and members of the proposed class
sought and obtained health care services from CareSouth; that, as a condition of receiving such
services, Plaintiff and members of the proposed class had to furnish PHI to CareSouth; CareSouth
allegedly failed to safeguard the protected PHI of Plaintiff and other similarly situated individuals;
and, as a result, an unauthorized individual was able to infiltrate and steal their PHI from the cloudbased medical records system Netgain maintained and operated on behalf of CareSouth. Ex. A,
Compl.
32. On January 3, 2022, CareSouth’s undersigned counsel advised Plaintiff’s counsel,
among other things, that: CareSouth is a deemed federal employee under 42 U.S.C. § 233 et seq.
for purposes of a federal immunity; the immunity extends to this action; other patient-plaintiffs
voluntarily dismissed similar actions against CareSouth or other deemed health centers arising out
of the same exact underlying events. Undersigned counsel invited Plaintiff’s counsel to voluntarily
dismiss this case.
33. In response, Plaintiff’s counsel requested copies of the dismissals in the other
similar cases and indicated that Plaintiff would consider the requested dismissal. During that
period of consideration, out of an abundance of caution, undersigned counsel asked Plaintiff’s
counsel to consent to an extension of any applicable responsive pleading deadline for several
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reasons: HHS would be making a coverage determination under 42 U.S.C. § 233 et seq.; CareSouth
would be removing the action to federal court and asserting immunity in the event of the
government failed to do so; and CareSouth had concerns with Plaintiff’s purported service of
process (explaining, for example, that the individual who apparently signed for a delivery of the
summons and complaint was neither an officer or agent of CareSouth authorized to accept service
of process on its behalf). See Ex. C (undersigned counsel’s emailed to Plaintiff’s counsel dated
January 3, 6, and 9, 2022, without attachments).
34. That same day undersigned counsel emailed Plaintiff’s counsel with copies of the
dismissals in other similar cases as well as a pleading detailing the basis of CareSouth’s federal
status and immunity. Id. Plaintiff’s counsel did not respond to that email or two subsequent emails.
Id.
35. Instead, on January 6, 2022, Plaintiff filed a motion for entry of default in state
court. Ex. A, Motion for Entry of Default dated January 6, 2022.
36. On January 12, 2022, CareSouth delivered copies of the summons and complaint
to HHS. Ex. D (Notice through U.S. Mail and HHS OGC’s designated email address without
enclosure). That same day, CareSouth provided courtesy copies of the summons and complaint to
the U.S. Attorney for the District for the District of South Carolina, even though HHS, not
CareSouth, is required to provide such notice. 42 U.S.C. § 233(b). Ex. E (Notice to U.S. Attorney
for the District of South Carolina via U.S. mail and email without enclosure).
37. On January 20, 2022, a representative of the Attorney General filed a notice in the
underlying state court action, indicating that “the decision whether the United States of America
will intervene is under consideration.” Although the notice cites 42 U.S.C. § 233(l)(1), it did not
advise the state court as to whether the Secretary had made favorable deeming determinations
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under 42 U.S.C. § 233(g) and (h) with respect to the periods in which the events giving rise to the
action occurred, nor did it remove the action to federal court, as contemplated by 42 U.S.C. §
233(l)(1), to preserve the status quo pending a threshold immunity determination. Ex. F, United
States Notice to State Court.
A. SCOPE OF FEDERAL IMMUNITY
38. As previously stated, § 233(a) provides absolute immunity to deemed PHS
employees “for damage for personal injury, including death, resulting from the performance of
medical, surgical, dental, or related functions, […] while acting within the scope of his office or
employment.” 42 U.S.C. § 233(a), (g).
39. The immunity provided under § 233(a) is not limited to medical malpractice, but
encompasses liability arising out of “related functions”—i.e., functions that are related to the
performance of medical, surgical, or dental functions. 42 U.S.C. § 233(a); see e.g., Z.B. ex rel.
Next Friend v. Ammonoosuc Community Health Services, Inc., 2004 WL 1571988, *4 (D. Me.
June 13, 2004) (phrase “related to” in regulation recognizes that § 233(a) immunity extends beyond
the mere act of providing medical care); see also Pinzon v. Mendocino Coast Clinics Inc., Case
No. 14–cv–05504–JST, 2015 WL 4967257 at *1 (N.D. Ca. 2015 Aug. 20, 2015) (granting, over
objection, motion by United States to substitute itself in place of deemed health center defendant
in civil action asserting claims for, among other things, violation of “the Americans with
Disabilities Act,” “Civil Rights Act of 1964,” and “Health Insurance Portability and
Accountability Act of 1996”).
40. The claims against CareSouth resulted from its “performance of medical … or
related functions” within the scope of its deemed federal employment. 42 U.S.C. §§ 233(a), 254(b).
On its face, the complaint alleges various theories of professional malpractice or malfeasance
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against CareSouth. In essence, the complaint alleges that CareSouth, with respect to Plaintiff
Summer Mixon and its other similarly situated patients, breached its duty maintain the
confidentiality of their respective PHI and, as a result, caused harms to Plaintiff and the proposed
class member patients of CareSouth.
41. Maintaining the confidentiality of a patient’s health and confidential information is
a “medical … or related function” within the meaning of 42 U.S.C. § 233(a). The statute that
governs the health center program, and makes a health center eligible for deemed status in the first
place, requires the center to have, among other things, “an ongoing quality improvement system
that includes clinical services and management, and that maintains the confidentiality of patient
records.” 42 U.S.C. § 254b(b)(1)–(2), (k)(3)(C); see also Kezer v. Penobscot Community Health
Center, 15-cv-225-JAW, 2019 BL 141566 at *6 (D. Me. Mar. 21, 2019) (breach of patient
confidentiality claim against deemed PHS employees falls within the scope of § 233(a) immunity,
and performance of administrative or operational duties, including the duties the maintain the
confidentiality of patient PHI, can qualify as “related functions” within the meaning of § 233(a));
Cf. Teresa T. v. Ragaglia, 154 F. Supp. 2d 290, 300 (D. Conn. 2001) (finding that doctor’s duty to
report suspected child abuse is a “related function to the doctor’s performance of medical
services.”); Brignac v. United States, 239 F.Supp.3d 1367 (N.D. Ga. 2017) (recognizing that
allegations of failing to report misconduct and failing to hire and retain is conduct covered under
the FSCHAA); La Casa de Buena Salud v. United States, 2008 WL 2323495, **18-20 (D.N.M.
March 21, 2008) (recognizing that FSHCAA coverage under § 233(a) may extend to claims of
negligent hiring, retention, and supervision).
42. The maintenance of confidential patient records and information is not only a
medical or related function within the scope of CareSouth health center project/deemed PHS
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employment, but this action, to the extent it seeks relief from CareSouth (as opposed to Netgain),
is rooted in allegations that it failed to adequately perform such functions. In other words, with
respect to CareSouth, the complaint acknowledges, if not hinges on, the inextricable connection
between the provision of health care services and the duty to maintain the confidentiality of patient
information. Ex. A, Compl. at ¶ 30 (“As a condition of receiving treatment, Plaintiffs and members
of the classes were required by [the defendant health care providers] . . . to confide sensitive and
confidential PHI . . . related to the care sought”) (emphasis added).
43. Plaintiff’s exclusive remedy with respect to the alleged acts or omissions of
CareSouth is a claim against the United States under the FTCA. See 42 U.S.C. § 233(a) (remedy
against United States provided by FTCA “shall be exclusive of any other civil action or
proceeding.”).
B. FEDERAL QUESTION JURISDICTION
44. Plaintiff’s complaint presents questions of federal law—i.e., whether CareSouth
violated the Federal Trade Commission Act (Ex. A., Compl. ¶¶ 45, 58) and that Defendant failed
to employ reasonable and appropriate measures to protect against unauthorized access to patient
Protected Health Information constituted an unfair act or practice prohibited by the Federal Trade
Commission Act (id.).
45. Pursuant to a plain reading of Plaintiff’s complaint, Plaintiff has alleged that
CareSouth violated federal law. Thus, Plaintiffs’ cause of action for negligence cannot be resolved
without determining substantial questions of federal law, including whether the FTC Act creates a
private right of action, whether Plaintiff and the putative class are within the class of persons the
FTC Act was designed to protect, and whether and to what extent, if at all, Defendants’ conduct
implicates the protections of the FTC Act.
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46. Even where a complaint arguably sets forth only state law causes of action, a case
may nevertheless arise under federal law where the “well-pleaded complaint establishes either that
federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on
resolution of a substantial question of federal law.” Franchise Tax Bd. v. Construction Laborers
Vacation Trust, 463 U.S. 1, 27–28 (1983). In this case, in addition to Plaintiff’s cause of action for
negligence, Plaintiff’s theory of the case requires interpretation of the FTC Act.
47. Because the substance of Plaintiff’s action hinges on a contested question of federal
law, it necessarily arises under federal law. Removal to this Court is thus proper pursuant to 28
U.S.C. §§ 1331 and 1441(a).
C. JURISDICTION UNDER CAFA
48. As stated, CareSouth also seeks removal of this action under CAFA. CAFA grants
district courts of the United States original jurisdiction over class actions in which: (1) any member
of a putative class is a citizen of a state different from any defendant; (2) the members of the
putative class are over 100 people; and (3) where the amount in controversy for the putative class
exceeds $5 million. 28 U.S.C. §§ 1332(a)(1), (d).
49. In the instant matter, the proposed class satisfies CAFA’s numerosity requirement,
which provides that, for removal to be proper, a class must be composed of more than 100
members. See 28 U.S.C. § 1332(d)(5)(B). Plaintiff has plead a class of “geographically dispersed”
members, and estimates the potential class members to be in the “thousands.” (Ex. A., Compl. ¶
57). Accordingly, the putative class patently exceeds 100 members.
50. In addition, to the threshold numerosity requirement, this case meets the
requirement of minimal diversity. Plaintiff, is a citizen of South Carolina. (Ex. A, Compl. ¶ 9) and
seeks to bring a class action on behalf of herself and on behalf of all others similarly situated (Ex.
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A., Compl. ¶ 109). (Ex. A., Compl. ¶¶ 20, 21, 22, 23). Defendant CareSouth is organized and does
business in the State of South Carolina. Recognizing that CareSouth’s patients may reside in other
states, the complaint alleges that the putative class members are “geographically dispersed.” (Ex.
A., Compl. ¶ 57). Accordingly, minimal diversity exists between the putative class members and
CareSouth.
51. Notwithstanding Plaintiff’s failure to allege the total amount of monetary relief she
and the putative class seek, CAFA authorizes the removal of class actions in which the amount
Jurisdiction before this Court is also proper because the purported amount in controversy for all
potential class members exceeds $5 million. See 28 U.S.C. § 1332(d)(6) (“To determine whether
the matter in controversy” exceeds $5,000,000, “the claims of the individual class members shall
be aggregated.”)
52. “[A] defendant’s notice of removal need include only a plausible allegation that the
amount in controversy exceeds the jurisdictional threshold.” See Dart Cherokee, 135 S. Ct. at 554.
53. CareSouth denies Plaintiff’s claims of wrongdoing, denies the allegations in the
complaint, and denies that Plaintiff can meet the requirements for class certification. As pled,
however, the total amount of compensatory, exemplary, punitive, and statutory damages,
restitution, attorney’s fees, injunctive relief, and other monetary relief at issue in this action, on an
aggregate, class wide basis, it is plausible that the monetary relief at issue would exceed CAFA’s
$5 million jurisdictional minimum. Id.
54. No exceptions to CAFA jurisdiction apply in this case, whether mandatory or
discretionary. See 28 U.S.C. § 1332(d)(3)-(4). In addition, CAFA jurisdiction is to be interpreted
broadly, and in favor of removal. Because no exception to jurisdiction exists in this matter, and
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because each of the threshold jurisdictional requirements are met, the district court has original
jurisdiction over Plaintiff’s claims.
VI. TIMING AND VENUE
55. Venue before this court is proper because this Notice of Removal is filed in the
federal district court that embraces the place where the local circuit court matter is pending. See
42 U.S.C. § 233(l)(2); 28 U.S.C. §§ 1441(a), 121(3).
56. Under 42 U.S.C. § 233(l)(2), removal is timely as no trial has occurred in state court
and there is otherwise no time limit. 42 U.S.C. § 233(c), (l)(2).
57. Under 28 U.S.C. § 1446(b)(1), removal is timely as CareSouth has yet to be served
with the summons and complaint in accordance with South Carolina law.
58. A copy of this Notice of Removal is being contemporaneously filed with the state
court where the underlying action was commenced.
VII. CONCLUSION
For the forgoing reasons, the Court should, after staying all proceedings and conducting a
hearing pursuant to 42 U.S.C. § 233(l)(2), substitute the United States as the only proper defendant
in place of CareSouth in the above-captioned action.
Dated: January 28, 2022 Respectfully submitted,
TURNER PADGET GRAHAM AND LANEY P.A.
/s/ Arthur E. Justice
Arthur E. Justice, (Federal Court ID #2261)
J. Rene’ Josey, (Federal Court ID #1004)
1831 W. Evans Street
Suite 400
Florence, SC 29501
Tel: 843.656.4412
[email protected]
Tel: 843.656.4451
[email protected]
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and
FELDESMAN TUCKER LEIFER FIDELL LLP
/s/ Matthew S. Freedus
Matthew S. Freedus*
1129 20th Street, N.W., 4th Floor
Washington, DC 20036
Tel: 202.466.8960
[email protected]
Attorneys for Defendant CareSouth Carolina, Inc.
*A motion for pro hac admission will be filed
promptly
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ClassAction.org
This complaint is part of ClassAction.org's searchable class action lawsuit
database and can be found in this post: Class Action Claims CareSouth to Blame
for Patient Data Breach
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION
SUMMER MIXON, individually and on
behalf of all others similarly situated,
Plaintiff,
v.
CARESOUTH CAROLINA, INC.,
Defendant.
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Civil Action No.:
REMOVED FROM:
Court of Common Pleas County of
Darlington, Case No. 2021CP1600887
DEFENDANT CARESOUTH CAROLINA, INC.’s
NOTICE OF REMOVAL
I. INTRODUCTION
Pursuant to 42 U.S.C. § 233(l)(2), 28 U.S.C. § 1442, 28 U.S.C. § 2679(d), and 28 U.S.C.
§ 1331, and on the grounds set forth below, defendant CareSouth Carolina, Inc. (hereinafter
“CareSouth”), hereby removes to this Court the civil action of Plaintiff Summer Mixon, entitled
Summer Mixon, individually and on behalf of all others similarly situated v. CareSouth Carolina,
Inc., Case No. 2021CP1600887, and filed on or about November 9, 2021 in the Court of Common
Pleas for the Fourth Judicial District, Darlington County, State of South Carolina.
Under Section 330 of the Public Health Service Act (codified at 42 U.S.C. § 254b et seq.),
CareSouth is a community health center recipient of federal grant funds. At all relevant times, the
Secretary of the U.S. Department of Health and Human Services (HHS) deemed CareSouth and
its officers, governing board members, employees, and (certain) contractors U.S. Public Health
Service (PHS) employees a protected entity under 42 U.S.C. § 233(a). That protection is an
4:22-cv-00269-RBH Date Filed 01/28/22 Entry Number 1 Page 1 of 20
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absolute immunity from any civil action or proceeding for a deemed individual or entity’s
performance of (or alleged failure to perform) medical or related functions within the scope of his,
her, or its deemed federal employment. 42 U.S.C. § 233(a) et seq.
This action falls squarely within the statutory protection. According to the operative
complaint, this civil action arises out of CareSouth’s alleged failure to safeguard protected health
information and other confidential information (referred to herein collectively as Protected Health
Information or “PHI”) related to the provision of health care services to its patients. As set forth
in the complaint, CareSouth’s alleged failures include allowing an unauthorized individual to
access and steal PHI from a cloud-based Information Technology (IT) system operated and
maintained by CareSouth’s contracted partner, Netgain Technology, LLC. This action seeks
damages as well as declaratory and injunctive relief. A copy of the summons and complaint are
included in Exhibit A (State Court docket and complete set of pleadings to date, including
summons and complaint).
II. JURISDICTION
1. The Court has jurisdiction under 42 U.S.C. § 233(l)(2), a federal officer removal
statute enacted specifically for the benefit of deemed PHS employees. Section 233(l)(2) provides
a deemed individual or entity the right to a federal forum for determination as to the availability
of a federal immunity defense. Campbell v. S. Jersey Med. Ctr., 732 F. App’x 113 (3d Cir. 2018)
(recognizing this statutory purpose of § 233(l)(2)); see also Booker v. United States, Case No. 13–
1099, 2015 WL 3884813 *7 (E.D. Pa. June 24, 2015) (recognizing “removal pursuant to §
233(l)(2) serves the same purpose as procedure contemplated by [28 U.S.C.] § 2679(d)(3)”]). The
PHS Act imposes no time limit on Section 233(l)(2) removals. Estate of Booker v. Greater
Philadelphia Health Action, 10 F.Supp.3d 656, 665-66 (E.D. Pa. 2014) (“The fact that § 233(l)(2)
4:22-cv-00269-RBH Date Filed 01/28/22 Entry Number 1 Page 2 of 20
3
was added to a statutory scheme in which suits against health centers were removable at any time
before trial provides a basis to infer that Congress intended the same time frame to govern removals
by the health centers themselves”); 42 U.S.C. § 233(c) (permits Attorney General to remove state
actions on behalf of actual and deemed PHS employees “any time before trial”).
2. The Court also has jurisdiction under the general officer removal statute, 28 U.S.C.
§ 1442(a)(1). Section 1442(a)(1) affords a right of removal to “any officer (or any person acting
under that officer) of the United States or of any agency thereof, sued in an official or individual
capacity for any act under color of such office.” 28 U.S.C. § 1442(a)(1). The statute permits
removal even when the underlying federal question arises only as a defense to a state-law claim.
See Jefferson County v. Acker, 527 U.S. 423, 431 (1999); Kircher v. Putnam Funds Trust, 547
U.S. 633, 644 n.12 (2006) (noting federal officer removal statute operates as an exception to the
“well-pleaded complaint” rule). The general officer removal statute protects important federal
interests, and must be broadly construed in favor of a federal forum. See Colorado v. Symes, 286
U.S. 510, 517 (1932) (“It scarcely need be said that such measures [allowing for federal officer
removal] are to be liberally construed to give full effect to the purposes for which they were
enacted.”), Willingham v. Morgan, 395 U.S. 402, 406–407 (1969) (finding § 1442’s language
“broad enough to cover all cases where federal officers can raise a colorable defense arising out of
the duty to enforce federal law”).
3. Pursuant to 42 U.S.C. § 1442(a)(1), CareSouth is an officer, or a person acting
under a federal officer. When broadly construed, as required, the phrase “any officer” in § 1442
can be read to include CareSouth as it is “deemed to be an employee of the Public Health Service”
under a federal statute that not only affords CareSouth a federal immunity defense, but affords an
additional removal right as well.
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4. In the alternative of finding that CareSouth is a qualifying federal officer under 42
U.S.C. § 1442, it nevertheless qualifies as a person acting under a federal officer. Agyin v.
Razmzan, 986 F.3d 168, 177 (2d Cir. 2021) (holding that (a) individual deemed PHS employee’s
removal under 42 U.S.C. § 1442 was proper because, as an employee of a deemed health center
entity, he was acting under a federal officer with respect to medical and related functions
performed on behalf of the health center entity, and (b) deemed PHS employee enjoyed “the same
legal immunity that is extended to employees of the Public Health Service”)); see also H.R. Rep.
104-398, 10 reprinted in 1995 U.S.C.C.A.N. 767, 774 (indicating congressional intent that deemed
PHS employees be “covered for malpractice claims under the [FTCA] in the same manner as are
employees of the Public Health Service.”).
5. To invoke § 1442(a)(1), a defendant who is not a federal officer must demonstrate
that (1) he or she or it is a “person” under the statute (2) who acted ‘under color of federal office’
and (3) has a “colorable federal defense.” 42 U.S.C. § 1442(a)(1). As a nonprofit corporation,
which operates a federal grant project on behalf of HHS, CareSouth qualifies as a person within
the meaning of § 1442. Isaacson v. Dow Chem. Co., 517 F.3d 129, 135 (2d Cir. 2008) (finding
that the “term ‘person’ includes corporate persons”). CareSouth “acted under” an office of HHS
to “assist, or to help carry out, the duties or tasks of the federal superior.” Watson v. Philip Morris
Cos., 551 U.S. 142, 149 (2007); 42 U.S.C. § 254(o) (the central office of the Health Resources and
Services Administration administers Health Center grant program on behalf of the HHS Secretary).
In particular, CareSouth is statutorily obligated to serve an area or population that the HHS
Secretary designated “medically underserved.” Id. at 254b(a)(1). CareSouth is therefore supporting
the mission of the actual PHS by performing functions that would otherwise fall within PHS
responsibilities.
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6. CareSouth’s deemed federal status, which is irrevocable as to specified periods,
affords “the same” immunity that an actual PHS employee enjoys under 42 U.S.C. § 233(a). 42
U.S.C. § 233(g)(1)(A) (making remedy against United States “exclusive of any other civil action
or proceeding to the same extent as the remedy against the United States is exclusive pursuant to
subsection (a)”), (F) (providing that deemed status is “final and binding” on the United States and
all parties to litigation). For § 1442, CareSouth’s federal defense is “colorable,” to the say the least.
7. The Court also has jurisdiction under 28 U.S.C. § 1331. This case raises a question
of substantive federal law as a threshold matter—i.e., whether the alleged acts or omissions in the
state action resulted from or arose out of CareSouth’s “performance of medical, surgical, dental or
related functions” within the scope of its deemed PHS employment status and, in turn, whether the
United States must be substituted as the only proper defendant. See also Gutierrez de Martinez v.
Lamagno, 515 U.S. 417, 435 (1995) (“Because a case […] raises a question of substantive federal
law at the very outset, it clearly ‘arises under’ federal law, as that term is used in Art. III”) (internal
citations and quotations omitted); 28 U.S.C. § 1346(b)(1) (United States “district courts […] have
exclusive jurisdiction of civil actions on claims against the United States”).
8. Finally, as an additional basis, CareSouth seeks removal of this action under 28
U.S.C. § 1441(c) based upon the district court’s original jurisdiction over Plaintiff’s claims under
the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §§ 1332(a)(1), (d). CAFA grants
district courts of the United States original jurisdiction over class actions in which: (1) any member
of the putative class is a citizen of a state different from any defendant; (2) the members of the
putative class are over 100 people; and (3) where the amount in controversy for the putative class
exceeds $5 million. Id.
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III. PARTIES
9. Defendant CareSouth is a South Carolina-based nonprofit organization that
receives federal funding under Section 330 of the PHS Act (42 U.S.C. § 254b) to operate a
community-based health center project that provides primary and related health care services to
medically underserved residents of various South Carolina counties, regardless of any individual’s
ability to pay for the services. See 42 U.S.C. § 254b(a), (b), (j), (k). CareSouth serves specific
geographic areas that the HHS Secretary has designated as “medically underserved.” Id. at
254b(a)(1).
10. According to the Complaint: Plaintiff Summer Mixon (“Plaintiff”) is a citizen and
resident of Darlington County, State of South Carolina.
IV. STATUTORY FRAMEWORK
A. Federal Immunity under 42 U.S.C. § 233 et seq.
11. Under the Emergency Health Personnel Act of 1970, Pub. L. No. 91-623, § 4, 84
Stat. 1868, 1870-71 (1970), codified at 42 U.S.C. § 233, PHS personnel are absolutely immunized
from any civil action or proceeding arising out of their performance of medical, surgical, dental or
related functions within the scope of their employment. 42 U.S.C. § 233(a). Section 233(a) extends
absolute immunity to PHS personnel by making the remedy for damages against the United States
under the FTCA the exclusive remedy for such actions. Id.
12. To facilitate the legislative objective of ensuring medical services in underserved
areas, 42 U.S.C. § 233(a) shields PHS personnel from personal liability arising out of their medical
and related duties. Without such protection, reports suggest that the cost of professional liability
insurance would greatly hinder or altogether preclude the provision of these services. See § 2, 84
Stat. 1868; H.R. Rep. No. 1662, 91st Cong., 2d Sess. 1 (1970); 116 Cong. Rec. 42,543 (1970)
4:22-cv-00269-RBH Date Filed 01/28/22 Entry Number 1 Page 6 of 20
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(Rep. Staggers, the House of Representatives sponsor, stating that PHS physicians “cannot afford
to take out the customary liability insurance as most doctors do,” “because of the low pay that so
many of those who work in the [PHS] receive.”). To achieve it purpose, the grant of absolute
immunity to PHS personnel under 42 U.S.C. § 233(a) is “broad” and “comprehensive.” Hui v.
Castaneda, 559 U.S. 799, 806 (2010) (immunity is broad enough to “easily accommodate both
known and unknown causes of action”).
13. The Federally Supported Health Centers Assistance Act of 1992 (and as amended
in 1995) (the “FSHCAA”), 42 U.S.C. § 233(g) et seq., authorizes the HHS Secretary to extend to
certain federally-funded health centers and their officers, directors, and employees (and certain
contractors) the same protection that § 233(a) affords to actual PHS employees. That protection
grants “absolute immunity . . . for actions arising out of the performance of medical or related
functions within the scope of their employment by barring all actions against them for such
conduct.” Hui, 559 U.S. at 806 (emphasis added).
14. To qualify as a deemed entity for § 233(a) immunity, a health center grantee must
submit an application with detailed information and supporting documentation sufficient for HHS
to verify that the coverage should apply to all services provided by the health center to patients
(and in limited circumstances, non-patients) of the center. The applicant is also required to
demonstrate that the health center meets four requirements listed in § 233(h), including a
requirement to “implement[] appropriate policies and procedures to reduce the risk of malpractice
and the risk of lawsuits arising out of any health or health-related functions performed by the
entity.” 42 U.S.C. § 233(g)(1)(D) and (h) (emphasis added).
15. The statute requires the HHS Secretary to make a deeming determination for health
centers and their personnel within 30 days of receipt of such an application. Id. at 233(g)(1)(E).
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The application seeks § 233(a) immunity in advance of and with respect to a specific prospective
period (i.e., calendar year). A favorable deeming determination by the Secretary (which confers
immunity) is “final and binding” (42 U.S.C. § 233(g)(1)(D)-(F)) on HHS, the Attorney General,
and “other parties to any civil action or proceeding.” 42 U.S.C. § 233(g)(1)(F) (emphasis added),
with respect to the designated period.
16. A negative determination (one denying a deeming application under 233(g) and
(h)) is not final and binding. El Rio Santa Cruz Neighborhood Health Ctr. v. U.S. Dep’t of Health
and Human Servs., 396 F.3d 1265, 1271 (D.C. Cir. 2005) (recognizing statute’s “final and binding”
clause does not apply to a negative deeming determination).
17. In the event of a negative deeming determination, the FSHCAA contemplates that
the applicant would have a reasonable opportunity to pursue one or more of the following options:
seek reconsideration of the Secretary’s decision; submit a new application addressing the
Secretary’s stated basis for the prior denial; challenge the Secretary’s decision under the APA; or,
procure private malpractice insurance. El Rio Santa Cruz, 396 F.3d at 1272.
18. By requiring a prompt and advance deeming determination, which constitutes a
final and binding determination on all parties for a specified and prospective period, and conferring
absolute immunity from any and all forms of civil malpractice suits for that period, the FSHCAA
is designed to eliminate a federally-funded health center’s need to purchase (expensive) private
malpractice liability insurance for actions arising out of the performance of medical or related
functions within the scope of their employment and in so doing allows centers to devote their
federal grant funds to patient services (rather than insurance premiums). See H.R. Rep. 102-823,
pt. 1, at 3 (1992).
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19. When a civil action or proceeding is brought against a deemed PHS employee, the
entity or individual has a duty to deliver the pleadings to the grantor agency’s designated
representative, which is HHS’s Office of General Counsel (OGC). HHS OGC is in turn required,
to promptly deliver copies of the pleadings to the Attorney General and appropriate local U.S.
Attorney. 42 U.S.C. § 233(b)
20. Upon notification of a state court action against a deemed individual or entity
(which is confirmed by a Notice of Deeming Action), the Attorney General has a mandatory (nondiscretionary) duty to appear in that court within 15 days of notice of the lawsuit to report whether
the “Secretary has determined under subsections (g) and (h) of [Section 233], that such entity,
officer, governing board member, employee, or contractor of the entity is deemed to be an
employee of the Public Health Service for purposes of this section with respect to the actions or
omissions that are the subject of such civil action or proceeding.” Id. at § 233(l)(1). The report to
the state or local court of the HHS Secretary’s deeming determination is also, as a matter of law,
“deemed to satisfy” the Attorney General’s scope of employment certification under 42 U.S.C. §
233(c) for purpose of removal to federal court. Id. at § 233(l)(1); Cf. 28 U.S.C. § 2679(d)(3).
21. If, despite that mandatory duty, the Attorney General (or his or her authorized
representative) fails to appear in the state court action and effectuate its removal to federal court
within 15 days of notice of the state action, the deemed entity or individual has an absolute right
to remove the matter to the appropriate federal district court, without any time limit for doing so.
Id. at § 233(l)(2). Section 233(l)(2) is in substance and effect an officer removal statute, akin to
(but even more generous than) the general officer removal statute at 28 U.S.C. § 1442(a)(1).
22. Upon removal, all proceedings are stayed, by operation of law, until the federal
district court conducts a “hearing” to determine the proper forum or procedure and issues an order
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consistent with its determination. 42 U.S.C. § 233(l)(2)—“that is, to decide whether to remand the
case or to substitute the United States as a party and deem the action as one brought under the
FTCA.” Campbell, 732 F. App’x at 117.
23. The hearing in federal district court following § 233(l)(2) removal allows a deemed
entity or individual to challenge the federal government’s failure or refusal to “determine[] under
subsections (g) and (h) of [§ 233], that such entity [or] employee … is deemed to be an employee
of the [PHS] for purposes of [§ 233] with respect to the actions or omissions that are the subject
of such civil action or proceeding.” Id. at § 233(l)(1). Where, as here, the claim is covered by the
deemed defendant’s § 233(a) immunity, § 233(l)(2) ensures that the United States is substituted as
the only proper defendant in his or her (or its) place. El Rio Santa Cruz, 396 F.3d at 1272; see also
Booker, 10 F.Supp.3d at 656.
B. Federal Question
24. As an additional basis, removal of this action is proper pursuant to 28 U.S.C. §
1331, because Plaintiff’s allegations include a question arising under “[c]onstitution, laws, or
treaties of the United States.” See Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986)
(“[T]he question whether a claim ‘arises under’ federal law must be determined by reference to
the ‘well-pleaded complaint’”), quoting Franchise Tax Board v. Construction Laborers Vacation
Trust, 463 U.S. 1, 9-10 (1983).
25. Because the substance of Plaintiffs’ action hinges on a contested question of federal
law, it necessarily arises under federal law. Removal to this Court is thus proper pursuant to 28
U.S.C. §§ 1331 and 1441(a).
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C. Removal under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332
26. In addition to removal under the Federal Officer Statute, the Class Action Fairness
Act of 2005, 28 U.S.C. § 1332, (“CAFA”) provides another basis for removal of Plaintiff’s
complaint.
27. CAFA was enacted “to facilitate adjudication of certain class actions in federal
court,” and must be read “broadly, with a strong preference that interstate class actions should be
heard in a federal court if properly removed by any defendant.” Dart Cherokee Basin Operating
Co., LLC v. Owens, 574 U.S. 81, 89 (2014) (quoting S.Rep. No. 109-14, at 43 (2005)). While
Defendant CareSouth disputes Plaintiff’s claims in this matter, and reiterates that it is not the
proper party defendant, nor that Plaintiff’s claims have merit, the complaint itself meets each of
CAFA’s threshold requirements.
28. Under CAFA, original jurisdiction exists within the district courts when a class
comprises more than 100 members. See 28 U.S.C. § 1332(d)(5)(B). In addition to the threshold
numerosity requirement, minimal diversity must exist for CAFA to confer original jurisdiction on
the district court. Minimal diversity is satisfied when any plaintiff, or prospective class member is
a citizen of a different state than any defendant. 28 U.S.C. § 1332(d)(2)(A). See Mississippi ex rel.
Hood v. AU Optronics, Corp., 571 U.S. 161, 165 (2014) (finding that CAFA replaces the ordinary
requirement of complete diversity among all plaintiffs and defendants with a requirement of
minimal diversity). Finally, CAFA confers jurisdiction on the district court when the amount in
controversy, taking into account all purported categories of damages, exceeds $5 million.
V. FACTUAL AND LEGAL GROUNDS FOR REMOVAL
29. CareSouth submitted deeming applications for itself and its personnel with respect
to each year and all times relevant to this action. The HHS Secretary, under 42 U.S.C. § 233(g)
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and (h), approved the applications and deemed CareSouth and its personnel for purposes of the
protections afforded under § 233(a) et seq. Copies of the Notice of Deeming Action for the
calendar years 2019, 2020, and 2021 are attached hereto as Exhibit B.
30. On or about November 9, 2021, Plaintiff filed a civil action against CareSouth
alleging that it failed to safeguard her PHI in connection with or related to health care services she
received. See Ex. A, Compl.
31. The complaint alleges, in essence, that: Plaintiff and members of the proposed class
sought and obtained health care services from CareSouth; that, as a condition of receiving such
services, Plaintiff and members of the proposed class had to furnish PHI to CareSouth; CareSouth
allegedly failed to safeguard the protected PHI of Plaintiff and other similarly situated individuals;
and, as a result, an unauthorized individual was able to infiltrate and steal their PHI from the cloudbased medical records system Netgain maintained and operated on behalf of CareSouth. Ex. A,
Compl.
32. On January 3, 2022, CareSouth’s undersigned counsel advised Plaintiff’s counsel,
among other things, that: CareSouth is a deemed federal employee under 42 U.S.C. § 233 et seq.
for purposes of a federal immunity; the immunity extends to this action; other patient-plaintiffs
voluntarily dismissed similar actions against CareSouth or other deemed health centers arising out
of the same exact underlying events. Undersigned counsel invited Plaintiff’s counsel to voluntarily
dismiss this case.
33. In response, Plaintiff’s counsel requested copies of the dismissals in the other
similar cases and indicated that Plaintiff would consider the requested dismissal. During that
period of consideration, out of an abundance of caution, undersigned counsel asked Plaintiff’s
counsel to consent to an extension of any applicable responsive pleading deadline for several
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reasons: HHS would be making a coverage determination under 42 U.S.C. § 233 et seq.; CareSouth
would be removing the action to federal court and asserting immunity in the event of the
government failed to do so; and CareSouth had concerns with Plaintiff’s purported service of
process (explaining, for example, that the individual who apparently signed for a delivery of the
summons and complaint was neither an officer or agent of CareSouth authorized to accept service
of process on its behalf). See Ex. C (undersigned counsel’s emailed to Plaintiff’s counsel dated
January 3, 6, and 9, 2022, without attachments).
34. That same day undersigned counsel emailed Plaintiff’s counsel with copies of the
dismissals in other similar cases as well as a pleading detailing the basis of CareSouth’s federal
status and immunity. Id. Plaintiff’s counsel did not respond to that email or two subsequent emails.
Id.
35. Instead, on January 6, 2022, Plaintiff filed a motion for entry of default in state
court. Ex. A, Motion for Entry of Default dated January 6, 2022.
36. On January 12, 2022, CareSouth delivered copies of the summons and complaint
to HHS. Ex. D (Notice through U.S. Mail and HHS OGC’s designated email address without
enclosure). That same day, CareSouth provided courtesy copies of the summons and complaint to
the U.S. Attorney for the District for the District of South Carolina, even though HHS, not
CareSouth, is required to provide such notice. 42 U.S.C. § 233(b). Ex. E (Notice to U.S. Attorney
for the District of South Carolina via U.S. mail and email without enclosure).
37. On January 20, 2022, a representative of the Attorney General filed a notice in the
underlying state court action, indicating that “the decision whether the United States of America
will intervene is under consideration.” Although the notice cites 42 U.S.C. § 233(l)(1), it did not
advise the state court as to whether the Secretary had made favorable deeming determinations
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under 42 U.S.C. § 233(g) and (h) with respect to the periods in which the events giving rise to the
action occurred, nor did it remove the action to federal court, as contemplated by 42 U.S.C. §
233(l)(1), to preserve the status quo pending a threshold immunity determination. Ex. F, United
States Notice to State Court.
A. SCOPE OF FEDERAL IMMUNITY
38. As previously stated, § 233(a) provides absolute immunity to deemed PHS
employees “for damage for personal injury, including death, resulting from the performance of
medical, surgical, dental, or related functions, […] while acting within the scope of his office or
employment.” 42 U.S.C. § 233(a), (g).
39. The immunity provided under § 233(a) is not limited to medical malpractice, but
encompasses liability arising out of “related functions”—i.e., functions that are related to the
performance of medical, surgical, or dental functions. 42 U.S.C. § 233(a); see e.g., Z.B. ex rel.
Next Friend v. Ammonoosuc Community Health Services, Inc., 2004 WL 1571988, *4 (D. Me.
June 13, 2004) (phrase “related to” in regulation recognizes that § 233(a) immunity extends beyond
the mere act of providing medical care); see also Pinzon v. Mendocino Coast Clinics Inc., Case
No. 14–cv–05504–JST, 2015 WL 4967257 at *1 (N.D. Ca. 2015 Aug. 20, 2015) (granting, over
objection, motion by United States to substitute itself in place of deemed health center defendant
in civil action asserting claims for, among other things, violation of “the Americans with
Disabilities Act,” “Civil Rights Act of 1964,” and “Health Insurance Portability and
Accountability Act of 1996”).
40. The claims against CareSouth resulted from its “performance of medical … or
related functions” within the scope of its deemed federal employment. 42 U.S.C. §§ 233(a), 254(b).
On its face, the complaint alleges various theories of professional malpractice or malfeasance
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against CareSouth. In essence, the complaint alleges that CareSouth, with respect to Plaintiff
Summer Mixon and its other similarly situated patients, breached its duty maintain the
confidentiality of their respective PHI and, as a result, caused harms to Plaintiff and the proposed
class member patients of CareSouth.
41. Maintaining the confidentiality of a patient’s health and confidential information is
a “medical … or related function” within the meaning of 42 U.S.C. § 233(a). The statute that
governs the health center program, and makes a health center eligible for deemed status in the first
place, requires the center to have, among other things, “an ongoing quality improvement system
that includes clinical services and management, and that maintains the confidentiality of patient
records.” 42 U.S.C. § 254b(b)(1)–(2), (k)(3)(C); see also Kezer v. Penobscot Community Health
Center, 15-cv-225-JAW, 2019 BL 141566 at *6 (D. Me. Mar. 21, 2019) (breach of patient
confidentiality claim against deemed PHS employees falls within the scope of § 233(a) immunity,
and performance of administrative or operational duties, including the duties the maintain the
confidentiality of patient PHI, can qualify as “related functions” within the meaning of § 233(a));
Cf. Teresa T. v. Ragaglia, 154 F. Supp. 2d 290, 300 (D. Conn. 2001) (finding that doctor’s duty to
report suspected child abuse is a “related function to the doctor’s performance of medical
services.”); Brignac v. United States, 239 F.Supp.3d 1367 (N.D. Ga. 2017) (recognizing that
allegations of failing to report misconduct and failing to hire and retain is conduct covered under
the FSCHAA); La Casa de Buena Salud v. United States, 2008 WL 2323495, **18-20 (D.N.M.
March 21, 2008) (recognizing that FSHCAA coverage under § 233(a) may extend to claims of
negligent hiring, retention, and supervision).
42. The maintenance of confidential patient records and information is not only a
medical or related function within the scope of CareSouth health center project/deemed PHS
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employment, but this action, to the extent it seeks relief from CareSouth (as opposed to Netgain),
is rooted in allegations that it failed to adequately perform such functions. In other words, with
respect to CareSouth, the complaint acknowledges, if not hinges on, the inextricable connection
between the provision of health care services and the duty to maintain the confidentiality of patient
information. Ex. A, Compl. at ¶ 30 (“As a condition of receiving treatment, Plaintiffs and members
of the classes were required by [the defendant health care providers] . . . to confide sensitive and
confidential PHI . . . related to the care sought”) (emphasis added).
43. Plaintiff’s exclusive remedy with respect to the alleged acts or omissions of
CareSouth is a claim against the United States under the FTCA. See 42 U.S.C. § 233(a) (remedy
against United States provided by FTCA “shall be exclusive of any other civil action or
proceeding.”).
B. FEDERAL QUESTION JURISDICTION
44. Plaintiff’s complaint presents questions of federal law—i.e., whether CareSouth
violated the Federal Trade Commission Act (Ex. A., Compl. ¶¶ 45, 58) and that Defendant failed
to employ reasonable and appropriate measures to protect against unauthorized access to patient
Protected Health Information constituted an unfair act or practice prohibited by the Federal Trade
Commission Act (id.).
45. Pursuant to a plain reading of Plaintiff’s complaint, Plaintiff has alleged that
CareSouth violated federal law. Thus, Plaintiffs’ cause of action for negligence cannot be resolved
without determining substantial questions of federal law, including whether the FTC Act creates a
private right of action, whether Plaintiff and the putative class are within the class of persons the
FTC Act was designed to protect, and whether and to what extent, if at all, Defendants’ conduct
implicates the protections of the FTC Act.
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46. Even where a complaint arguably sets forth only state law causes of action, a case
may nevertheless arise under federal law where the “well-pleaded complaint establishes either that
federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on
resolution of a substantial question of federal law.” Franchise Tax Bd. v. Construction Laborers
Vacation Trust, 463 U.S. 1, 27–28 (1983). In this case, in addition to Plaintiff’s cause of action for
negligence, Plaintiff’s theory of the case requires interpretation of the FTC Act.
47. Because the substance of Plaintiff’s action hinges on a contested question of federal
law, it necessarily arises under federal law. Removal to this Court is thus proper pursuant to 28
U.S.C. §§ 1331 and 1441(a).
C. JURISDICTION UNDER CAFA
48. As stated, CareSouth also seeks removal of this action under CAFA. CAFA grants
district courts of the United States original jurisdiction over class actions in which: (1) any member
of a putative class is a citizen of a state different from any defendant; (2) the members of the
putative class are over 100 people; and (3) where the amount in controversy for the putative class
exceeds $5 million. 28 U.S.C. §§ 1332(a)(1), (d).
49. In the instant matter, the proposed class satisfies CAFA’s numerosity requirement,
which provides that, for removal to be proper, a class must be composed of more than 100
members. See 28 U.S.C. § 1332(d)(5)(B). Plaintiff has plead a class of “geographically dispersed”
members, and estimates the potential class members to be in the “thousands.” (Ex. A., Compl. ¶
57). Accordingly, the putative class patently exceeds 100 members.
50. In addition, to the threshold numerosity requirement, this case meets the
requirement of minimal diversity. Plaintiff, is a citizen of South Carolina. (Ex. A, Compl. ¶ 9) and
seeks to bring a class action on behalf of herself and on behalf of all others similarly situated (Ex.
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A., Compl. ¶ 109). (Ex. A., Compl. ¶¶ 20, 21, 22, 23). Defendant CareSouth is organized and does
business in the State of South Carolina. Recognizing that CareSouth’s patients may reside in other
states, the complaint alleges that the putative class members are “geographically dispersed.” (Ex.
A., Compl. ¶ 57). Accordingly, minimal diversity exists between the putative class members and
CareSouth.
51. Notwithstanding Plaintiff’s failure to allege the total amount of monetary relief she
and the putative class seek, CAFA authorizes the removal of class actions in which the amount
Jurisdiction before this Court is also proper because the purported amount in controversy for all
potential class members exceeds $5 million. See 28 U.S.C. § 1332(d)(6) (“To determine whether
the matter in controversy” exceeds $5,000,000, “the claims of the individual class members shall
be aggregated.”)
52. “[A] defendant’s notice of removal need include only a plausible allegation that the
amount in controversy exceeds the jurisdictional threshold.” See Dart Cherokee, 135 S. Ct. at 554.
53. CareSouth denies Plaintiff’s claims of wrongdoing, denies the allegations in the
complaint, and denies that Plaintiff can meet the requirements for class certification. As pled,
however, the total amount of compensatory, exemplary, punitive, and statutory damages,
restitution, attorney’s fees, injunctive relief, and other monetary relief at issue in this action, on an
aggregate, class wide basis, it is plausible that the monetary relief at issue would exceed CAFA’s
$5 million jurisdictional minimum. Id.
54. No exceptions to CAFA jurisdiction apply in this case, whether mandatory or
discretionary. See 28 U.S.C. § 1332(d)(3)-(4). In addition, CAFA jurisdiction is to be interpreted
broadly, and in favor of removal. Because no exception to jurisdiction exists in this matter, and
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because each of the threshold jurisdictional requirements are met, the district court has original
jurisdiction over Plaintiff’s claims.
VI. TIMING AND VENUE
55. Venue before this court is proper because this Notice of Removal is filed in the
federal district court that embraces the place where the local circuit court matter is pending. See
42 U.S.C. § 233(l)(2); 28 U.S.C. §§ 1441(a), 121(3).
56. Under 42 U.S.C. § 233(l)(2), removal is timely as no trial has occurred in state court
and there is otherwise no time limit. 42 U.S.C. § 233(c), (l)(2).
57. Under 28 U.S.C. § 1446(b)(1), removal is timely as CareSouth has yet to be served
with the summons and complaint in accordance with South Carolina law.
58. A copy of this Notice of Removal is being contemporaneously filed with the state
court where the underlying action was commenced.
VII. CONCLUSION
For the forgoing reasons, the Court should, after staying all proceedings and conducting a
hearing pursuant to 42 U.S.C. § 233(l)(2), substitute the United States as the only proper defendant
in place of CareSouth in the above-captioned action.
Dated: January 28, 2022 Respectfully submitted,
TURNER PADGET GRAHAM AND LANEY P.A.
/s/ Arthur E. Justice
Arthur E. Justice, (Federal Court ID #2261)
J. Rene’ Josey, (Federal Court ID #1004)
1831 W. Evans Street
Suite 400
Florence, SC 29501
Tel: 843.656.4412
[email protected]
Tel: 843.656.4451
[email protected]
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and
FELDESMAN TUCKER LEIFER FIDELL LLP
/s/ Matthew S. Freedus
Matthew S. Freedus*
1129 20th Street, N.W., 4th Floor
Washington, DC 20036
Tel: 202.466.8960
[email protected]
Attorneys for Defendant CareSouth Carolina, Inc.
*A motion for pro hac admission will be filed
promptly
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ClassAction.org
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database and can be found in this post: Class Action Claims CareSouth to Blame
for Patient Data Breach
