Bradford v. Asian Health Services

Background

Ira Bradford filed a proposed class action in the Superior Court of California for Alameda County. He alleged that Asian Health Services failed to properly secure personal health information and personally identifiable information stored in its information network after an unauthorized person accessed an employee’s email account. The complaint asserted California-law claims for negligence, negligence per se, breach of implied contract, breach of the implied covenant of good faith and fair dealing, violations of the California Confidentiality of Medical Information Act, violations of the California Customer Records Act, and violations of California’s Unfair Competition Law. The complaint did not assert a direct violation of the Health Insurance Portability and Accountability Act or another federal law.

Asian Health Services removed the case to federal court about nine months after the state-court complaint was filed. It relied on 42 U.S.C. § 233(l)(2), concerning federally supported health centers, and 28 U.S.C. § 1442(a)(1), concerning removal by a federal officer or a person acting under one. Before removal, discovery had begun, Asian Health Services had filed a state-court demurrer, and Bradford had responded to it. The United States had appeared in state court within 15 days after receiving the summons and complaint, but had not yet decided whether Asian Health Services had the relevant federal coverage. The United States later declined coverage and said it would not substitute itself as the defendant.

Remand under 42 U.S.C. § 233

The court held that removal under § 233(l)(2) was unnecessary and improper because the United States Attorney had timely appeared in state court. The court explained that § 233(l)(2) protects a covered defendant from a default judgment caused by the Attorney General’s failure to appear on time. Because the United States had appeared within the required 15-day period, that concern was not present.

The court also applied the Ninth Circuit’s rule that the removal period begins when it is “unequivocally clear and certain” that a case is removable. The court concluded that, because the United States had appeared but had not made a coverage determination for this particular case, it was not clear and certain that the case was removable under § 233. The court did not decide whether the government’s coverage determination was correct or whether the claims involved medical or related functions covered by § 233. It stated that the state court could address disputes about the coverage determination.

Remand under 28 U.S.C. § 1442

The court also rejected Asian Health Services’ federal-officer removal argument. It concluded that prior federal funding and earlier annual deeming determinations did not automatically establish that removal was proper for the particular conduct alleged in this lawsuit. A deeming determination must address the relevant lawsuit, time period, and activities before removal. Asian Health Services removed the action before receiving the required determination for the relevant period and activities.

The court further held that removal was untimely even under Asian Health Services’ federal-officer theory. If the initial complaint triggered the removal period, the deadline began on May 11, 2023. If a later event triggered the period, the court identified January 5, 2024, when Asian Health Services notified the federal government that it had been served. Removal on February 21, 2024, was untimely under either calculation.

Attorney’s fees

Under 28 U.S.C. § 1447(c), a court may award costs and attorney’s fees resulting from removal when the removing party lacked an objectively reasonable basis for seeking removal. The court found that Asian Health Services lacked such a basis. It noted that the state court could decide the claims and any dispute about the federal coverage determination, and that the state litigation had already included months of discovery, settlement discussions, and motions. The court ordered Asian Health Services to pay Bradford $12,880 in attorney’s fees.

Request to stay

The parties and the non-party United States asked the court to stay the remand motions while the Ninth Circuit considered another case. The court denied that request as moot. It found no sufficient showing of irreparable injury, likelihood of success, harm to other parties, or public-interest benefit from a stay. The court concluded that returning the case to state court, where the litigation had already progressed, better served judicial economy.

Disposition

The court remanded the action to the Superior Court of California, County of Alameda, where it had originally been filed as Case No. 23-cv-033070. It denied the stipulated request to stay the two motions to remand as moot and ordered Asian Health Services to pay $12,880 in attorney’s fees. The supplied opinion text does not identify the judge’s name.