Judge Lon F. Hurwitz, Case 23-01302765 2023-09-01 Tentative Ruling

Judge: Lon F. Hurwitz, Case: 23-01302765, Date: 2023-09-01 Tentative Ruling

Motion to Stay

Moving Party: Defendant Hoag Memorial Hospital Presbyterian (erroneously sued as Hoag Memorial Presbyterian Hospital)

Responding Party: Plaintiff Jane Doe, individually and on behalf of all others similarly situated

SERVICE: June 20, 2023, by electronic mail

RELIEF SOUGHT: Defendant moves to stay all proceedings, including discovery, and take the current trial off calendar pending Defendant’s appeal in the U.S. Court of Appeals for the Ninth Circuit of the district court’s order granting Plaintiff’s motion to remand.

UPCOMING EVENTS:

1. Case Management Conference, 9-6-2023

2. Motion to Appear Pro Hac Vice

FACTS/OVERVIEW

This is a putative class action for alleged violations of patients’ medical privacy rights. On January 13, 2023, Plaintiff Jane Doe, individually and on behalf of all others similarly situated (“Plaintiff”), filed a Complaint against Defendant Hoag Memorial Hospital Presbyterian, erroneously sued as Hoag Memorial Presbyterian Hospital (“Defendant”). (ROA 2). The Complaint alleges the following causes of action:

1. Violation of the California Invasion of Privacy Act (“CIPA”), Penal Code Section 630 et. seq.;

2. Violation of California Confidentiality of Medical Information Act (“CIMA”), Civil Code § 56.06;

3. Violation of CIMA, Civil Code § 56.101;

4. Violation of CIMA, Civil Code § 56.10;

5. Invasion of Privacy and Violation of the California Constitution, Art. I, § 1;

6. Violation of Comprehensive Computer Data Access and Fraud Act, Penal Code § 502;

7. Breach of Implied-in-Fact Contract;

8. Quasi-Contract / Restitution / Unjust Enrichment;

9. Violation of Bus. & Prof. Code §§ 17200, et seq.; and

10. Violation of Civil Code § 1798.83

On March 10, 2023, Defendant removed the action to the U.S. District Court, Central District of California. (ROA 13). On April 7, 2023, Plaintiff filed a motion to remand, and on May 2, 2023, the District Court granted her motion. (ROA 19). Defendant appealed the District Court ruling on June 1, 2023. [RJN, Exh. F.]

On July 14, 2023, pursuant to stipulation and order (ROA 43), Plaintiff filed the operative First Amended Complaint (“FAC”), which deleted the breach of contract claim, and amended the final cause of action to a violation of Civil Code section 1798.82. (ROA 59).

On June 20, 2023, Defendant filed the current Motion for Stay of Proceedings Pending Appeal. (ROA 39). Plaintiff opposes the motion (ROA 51), and Defendant replies (ROA 75).

REQUESTS FOR JUDICIAL NOTICE:

Defendant asks this Court to take judicial notice of the following documents:

1. Exhibit A – Court Order re Motion for Stay of Proceedings Pending Appeal, filed June 8, 2023, in LASC Case No. 22STCV36178, Angela Heard v. Torrance Memorial Medical Center

2. Exhibit B – Notice of Removal, filed March 10, 2023, in U.S. District Court Case, C.D. Cal., No. 8:23-cv-00444, Jane Doe v. Hoag Memorial Presbyterian Hospital, Dkt. 1

3. Exhibit C - Opposition to Motion to Remand, filed April 17, 2023, in Jane Doe v. Hoag Memorial Presbyterian Hospital, Dkt. 13

4. Exhibit D – Order Granting Motion to Remand, filed May 2, 2023, in Jane Doe v. Hoag Memorial Presbyterian Hospital, Dkt. 17

5. Exhibit E – Notice of Transmittal of Remand Order, filed May 2, 2023, in Jane Doe v. Hoag Memorial Presbyterian Hospital, Dkt. 18

6. Exhibit F – Notice of Appeal from a Judgment or Order of a United States District Court, filed June 1, 2023, in Jane Doe v. Hoag Memorial Presbyterian Hospital, Dkt. 20

7. Exhibit G – Order Granting Motion for Further Stay of Enforcement of October 20, 2021 Order to Remand, U.S. District Court, C.D. Cal., Case No. 2:21-cv-06418, Fox v. Cerritos Vista Healthcare Center LLC

8. Exhibit H – Order Recalling Court’s Transmittal of Order to Remand and Staying Enforcement for 30 days, U.S. District Court, C.D. Cal., Case No. 2:21-cv-02845, Forman, et al. v. C.P.C.H., Inc., Dkt. 34

9. Exhibit I – Order on Motion to Stay, U.S. District Court, C.D. Cal., Case No. 2:21:cv-02845, Forman, et al. v. C.P.C.H., Inc.

10. Exhibit J – Order, Maglioli, et al. v. Andover Subacute Rehabilitation Ctr., et al., U.S. District Court, District of New Jersey, Case No. 2:21-cv-02114, Dkt. 24

11. Exhibit K – Docket Report for In re Silverado Senior Living, Inc., U.S. District Court, C.D. Cal., Case No. 2:21-cv-00070

12. Exhibit L – Docket Report for Jane Doe v. Hoag Memorial Presbyterian Hospital, U.S. District Court, C.D. Cal, Case No. 8:23-cv-00444

Pursuant to Evidence Code section 452, subdivision (d), judicial notice shall be GRANTED as to Exhibits B, C, D, E, F, and L, with the caveat that judicial notice is not being taken as to the truth of the matters asserted in Exhibits B, C, and F. Judicial notice is DENIED as to Exhibits A, G, H, I, J, and K on the ground of relevance.

CONTENTIONS AND ANALYSIS:

Defendant is moving for an order to stay all proceedings in this action, including discovery, pending resolution of its appeal to the United States Court of Appeals for the Ninth Circuit of the U.S. District Court’s May 2, 2023 Order remanding this litigation to this Court.

As noted above, Plaintiff filed the original Complaint in this action on January 13, 2023. On March 10, 2023, Defendant removed the action to the U.S. District Court, Central District of California. However, on May 2, 2023, the District Court granted Plaintiff’s motion to remand the action back to state court. Defendant then appealed the District Court’s order of remand.

Now, Defendant contends this Court should stay these proceedings pending the outcome of the appeal to the Ninth Circuit. As argued by Defendant, litigating this matter in state court during the pendency of its appeal undermines the effectiveness of the appeal and would result in a loss of benefit to Defendant if the Ninth Circuit reverses the district court’s order. Defendant removed this action pursuant to the “federal officer” removal statute, 28 U.S.C. § 1442(a), on the ground that it was entitled to be treated as a federal officer because it “acted within the penumbra of federal action and office” when it helped the federal government “develop a nationwide infrastructure for health information technology” through the “Meaningful Use” program. [RJN, Exh. B.] In granting Plaintiff’s motion for remand, the District Court directly rejected Defendant’s argument and found it “had not shown that it acted under the direction of a federal officer or agency.” [RJN, Exh. D.] The District Court went on to note that mere compliance with federal regulations or law did not bring a private person or entity within the scope of 28 U.S.C. § 1442(a), and that several other courts had rejected arguments identical to those made by Defendant. “In short, Defendant has established only that it is subject to ‘highly detailed’ regulations and that its ‘activities are highly supervised and monitored.’ [Citation.]” [RJN, Exh. D, Order Granting Plaintiff’s Motion to Remand, 7:25-27.]

In the instant motion, Defendant contends this Court should exercise its discretion to grant a stay of the proceedings to protect Defendant’s right to appeal the District Court’s remand order. According to Defendant, Congress has provided an immediate right to appeal a remand order in a case that was removed under the federal officer removal statute. In citing to BP P.L.C. v. Mayor & City Council of Baltimore (2021) 141 S.Ct. 1532, 1536, Defendant argues that Congress intended to provide defendants invoking removal under 28 U.S.C. § 1442(a) with an opportunity to appeal an order rejecting such removal before the remand order is effectuated. Defendant contends that its right to appeal the District Court’s remand order would be meaningless if it is forced to immediately resume litigation in this Court while awaiting appellate review by the Ninth Circuit. In addition, Defendant argues that in the absence of a stay, the parties will be burdened with simultaneously litigating in this Court and the Ninth Circuit. Defendant contends that since the Ninth Circuit will be reviewing whether a state court has jurisdiction to hear Plaintiff’s claims at all, a stay is necessary to avoid any injustice or harm to Defendant. Defendant, in pointing to rulings in other courts, argues that stays are routinely granted in this situation.

In opposition, Plaintiff contends that with this motion, Defendant only seeks to delay discovery in this action until the Ninth Circuit repeats what every federal district court in California has already held in similar data privacy cases—namely, that hospitals are not federal agents entitled to privileged access to federal courts. In citing to several district court cases, Plaintiff contends that federal courts in the Ninth Circuit have uniformly rejected federal officer removal when defendant hospitals have argued that their implementation of technology was part of a broader effort to assist the federal government in creating a nationwide digitized healthcare system. Plaintiff argues that Defendant had a full and fair opportunity to have a federal court consider this basis for removal of this action, and Defendant failed to show it had acted under the direction of a federal officer or agency.

Plaintiff notes, however, that after the remand order was issued, Defendant did not ask the district court or the Ninth Circuit to stay enforcement of the order. In citing to People v. Bhakta (2006) 135 Cal.App.4th 631, 636, Plaintiff contends that since Defendant did not seek a stay from the federal courts, then this Court rightly has jurisdiction over this matter. In addition, Plaintiff contends that upon remand, this Court has a “duty to proceed” expeditiously. As a result, Plaintiff argues that any burden that results from proceeding in both this Court and the Ninth Circuit is the fault of Defendant.

Plaintiff also contends that Defendant’s appeal does not involve a difficult question of law, nor does it have anything to do with the substantive issues in this litigation. According to Plaintiff, even if the Ninth Circuit reverses the district court’s remand order, Defendant can go on to litigate this matter in federal court even if a stay is not issued by this Court. Plaintiff contends that at most, the parties would have completed some discovery, but that this would not deprive Defendant of the “fruits of reversal.” Moreover, Plaintiff argues that a denial of a stay does not impede Defendant’s rights, noting that Defendant’s right to appeal remains unencumbered even if this Court does not stay this litigation. In citing to Limehouse v. Hulsey (S.C. 2013) 744 S.E.2d 566, 577, Plaintiff contends that after remand, this Court has a “duty to proceed as though no removal had been attempted.”

Courts have held that “[t]he appeal of a remand order does not deprive the state court of jurisdiction unless a stay is obtained from the federal court.” (Bhakta, supra, 135 Cal.App.4th at p. 636.) “Although a removal petition deprives the state court of jurisdiction as soon as it is filed and served upon the state court, jurisdiction returns to the state court when a remand order is filed and served on the state court, unless that order is stayed.” (Ibid., emphasis added.)

Defendant seems to ignore this holding in Bhakta. As a preliminary matter, it is noted that remand is effective when the federal court clerk mails a certified copy of the order of remand to the clerk of the state court. At that point, jurisdiction is vested in the state court, and it may proceed with the case. (28 U.S.C. § 1447(c); Spanair S.A. v. McDonnell Douglas Corp. (2009) 172 Cal.App.4th 348, 356.) Here, the Clerk of the U.S. District Court, Central District of California, mailed the remand order on May 2, 2023, and its receipt was acknowledged by this Court on May 24, 2023. (ROA 18). Therefore, the remand was effective no later than May 24, 2023.

The Bhakta court also held that once a remand order is filed and served, jurisdiction returns to the state court. (Bhakta, supra, 135 Cal.App.4th at p. 636.) The only exception noted in Bhakta was that jurisdiction returned to the state court “unless that [remand] order is stayed.” (Ibid.) Presumably, since state courts should generally refrain from intruding on the plenary power of the federal courts, the district court’s remand order should be stayed either by the district court or the federal appellate court. Indeed, the Federal Rules of Appellate Procedure, rule 8(a) provides in relevant part that “[a] party must ordinarily move first in the district court for the following relief: (A) a stay of the judgement or order of a district court pending appeal ….” (F.R.A.P. Rule 8, 28 U.S.C.A. [emphasis added].)

Defendant did not seek a stay from the federal court under F.R.A.P. Rule 8, nor does it explain why it did not do so. Notably, all but one of the cases cited by Defendant in support of a stay are federal cases where the district court imposed the stay sought.

Defendant also appears to ignore the parties’ June 23, 2023 Stipulation wherein it was agreed that Plaintiff could file the First Amended Complaint and Defendant would have until August 14, 2023, to respond. (ROA 43). Although Defendant’s appeal had already been filed, Defendant entered into this stipulation. It is noted that shortly thereafter, Defendant moved ex parte for a temporary stay of proceedings pending resolution of the instant motion, or alternatively, an order extending time to respond to the Complaint. (ROA 65). On August 17, 2023, this Court granted the ex parte to extend the time for Defendant to respond to the FAC to October 2, 2023. (ROA 70).

Nevertheless, Defendant contends that it is not contesting the jurisdiction of this Court to proceed following the district court’s remand order. Instead, Defendant contends it is asking this Court to exercise its independent discretion to stay this matter.

Given the failure of Defendant to seek a stay from the Federal Court under F.R.A.P. Rule 8, and the June 23, 2023 Stipulation which was entered into AFTER Defendant’s appeal had already been filed, it would be inequitable to delay this case; particularly when jurisdiction of this matter now rests with this Court, and Defendant’s seek a stay based on what might happen, without any indication as to when it might happen.

Unlike a State Court Appeal, where a stay is automatic because the trial court loses jurisdiction during the pendency of the Appeal, this Court has full jurisdiction of this matter until the Federal Appeals Court says otherwise-which could be a year from now or longer.

RULING

This Court declines to exercise its discretion to delay the progress of this case. The Motion is DENIED.

The Case Management Conference (9/06/23) and Motion to Appear Pro Hac Vice (9/29/23) remain ON CALENDAR.

Clerk to give Notice.