O'Neal v. CF Watsonville West LLC

Background

Otis Robert O’Neal Jr. sued CF Watsonville West LLC in Santa Cruz County Superior Court after his father, Otis Robert O’Neal, died on September 25, 2020, from complications of COVID-19 contracted while he was living and receiving care at Watsonville Post Acute Center. The complaint alleged that the facility had deficient infection-control policies and experienced a COVID-19 outbreak. It asserted four California-law causes of action: elder neglect, negligence, wrongful death, and willful misconduct.

CF Watsonville West removed the case to federal court, arguing that the Public Readiness and Emergency Preparedness Act (PREP Act) provided a federal defense and supported federal-question jurisdiction. It moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which concerns the court’s subject-matter jurisdiction, and Rule 12(b)(6), which concerns whether a complaint states a legally sufficient claim. In the alternative, it moved to compel arbitration. O’Neal opposed dismissal and moved to remand, meaning to return the case to state court.

Federal-question jurisdiction

The court explained that a case generally may be removed only when the plaintiff’s properly pleaded complaint itself establishes a federal question. A federal defense ordinarily does not support removal. The court considered three theories advanced by the defendant: an embedded federal issue, complete preemption under the PREP Act, and federal-officer removal.

Under the embedded-federal-issue doctrine, a state-law claim can support federal jurisdiction only when it necessarily raises an actually disputed and substantial federal issue that a federal court can resolve without disrupting the balance between federal and state judicial responsibilities. The court rejected this theory because interpreting the PREP Act was not necessary to establish any element of O’Neal’s state-law claims. The PREP Act was implicated only by the defendant’s defenses.

The court did not decide whether the PREP Act is a complete-preemption statute. Complete preemption can support removal when a state-law claim falls within the scope of a federal statute. The court concluded, however, that the PREP Act did not apply to O’Neal’s claims. The complaint focused on alleged failures to implement infection-control policies, provide necessary staffing, enforce social distancing, screen people entering the facility, and create a plan of care. Those allegations concerned the facility’s inaction and alleged failures, rather than the administration or use of covered countermeasures. The court therefore found that the claims did not fall within the PREP Act’s scope and that the defendant had not established complete preemption.

The court also rejected removal under the federal-officer removal statute. That statute allows certain cases involving persons acting under federal officers to be removed, but the defendant had to show that it was acting under a federal officer’s direction and that there was a connection between that conduct and the plaintiff’s claims. The court concluded that the facility had shown, at most, compliance with federal laws and regulations. It had not shown that it was assisting or carrying out the duties of a federal superior. The court held that removal under that statute was improper.

Disposition

Because CF Watsonville West failed to establish subject-matter jurisdiction, the court granted the motion to remand and remanded the matter to Santa Cruz Superior Court. Judge Richard Seeborg denied as moot the motion to dismiss and the motion to compel arbitration. The court expressly stated that it did not need to reach the merits of those motions.