DENISE THORNTON et al.
MARYLAND GENERAL HOSPITAL, et al.
WILLIAM M. NICKERSON, Senior District Judge.
Pending before the Court are Plaintiffs' Motion to Sever, ECF No. 27, and Third-Party Defendant Dana Lee, M.D.'s ("Dr. Lee") Motion to Dismiss and Remand to State Court, or Alternatively, Motion to Substitute, Sever, and Stay Action. ECF No. 29. The motions are fully briefed. Upon consideration of the pleadings and applicable law, the Court determines that no hearing is necessary, Local Rule 105.6, and that the Third Party Complaint against Dr. Lee will be dismissed but the action will not be remanded to state court. Plaintiffs' Motion to Sever will be denied as moot.
I. FACTUAL AND PROCEDURAL BACKGROUND
This lawsuit has an unusual procedural history. It arises from the death of Cierra Randolph while a patient at Maryland General Hospital ("MGH"). Plaintiffs initially filed this medical malpractice/wrongful death action in the Circuit Court for Baltimore City naming MGH as the sole defendant. ECF No. 2. After learning that two of the physicians involved in Ms. Randolph's care, Dr. Harold T. Rowson and Dr. Dana Lee, were not MGH employees, Plaintiffs filed an Amended Complaint naming Drs. Rowson and Lee as additional defendants. ECF No. 15.
Plaintiffs subsequently learned that Dr. Lee was employed at all times relevant by the People's Community Health Center, a federally-funded community health center. As such, he is deemed a federal employee under the provisions of the Federally Supported Health Centers Assistance Act (FSHCAA). See Wilson v. Big Sandy Healthcare, Inc. , 553 F.Supp.2d 825, 829-30 (E.D. Ky. 2008) (citing 42 U.S.C. § 233). The United States Attorney for the District of Maryland, as representative of the Attorney General of the United States, filed a certification pursuant to 28 U.S.C. § 2679(d) that Dr. Lee was acting within the scope of his federal employment at the time of the incident out of which Plaintiffs' claim arose and notified Plaintiffs that the government would be defending Dr. Lee and would be removing the case to this Court. To avoid removal, Plaintiffs dismissed the claims against Dr. Lee, without prejudice, on November 19, 2012. Plaintiffs still seek recovery for Dr. Lee's alleged negligent acts, but now from MGH under a theory of "ostensible agency." ECF No. 27 at 5.
MGH subsequently filed a third-party complaint against Dr. Lee in January 2013 for indemnity and contribution. ECF No. 23. Dr. Lee then removed the case to this Court on January 15, 2013, pursuant to 28 U.S.C. § 1442(a), which states that "[a] civil action... that is commenced in a State court... may be removed... to the district court of the United States for the district and division embracing the place wherein it is pending" where the claim is brought against "any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office or on account of any right, title or authority claimed under any Act of Congress." On January 22, 2013, Plaintiffs filed their motion to sever Dr. Lee from the case, arguing that MGH's third-party complaint against Dr. Lee was not timely. ECF No. 27. The following day, Dr. Lee filed the present motion to dismiss and remand the case to state court, or alternatively, to substitute, sever, and stay the claims against him. ECF No. 29. Plaintiffs responded supporting Dr. Lee's motion to dismiss. ECF No. 33. MGH and Dr. Rowson opposed both Dr. Lee's motion to dismiss and Dr. Lee's and Plaintiffs' motions to sever. ECF Nos. 35-38.
A. Jurisdiction Over Claims Against Dr. Lee
Dr. Lee argues that the claims against him must be dismissed under the derivative jurisdiction doctrine. "The doctrine of derivative jurisdiction requires that a federal court's jurisdiction over a removed case mirror the jurisdiction that the state court had over the action prior to removal." Palmer v. City Nat'l Bank, of West Virginia , 498 F.3d 236, 239 (4th Cir. 2007). Because federal employees acting within the scope of their employment are immune from suit in state courts except where immunity has been waived, the state court had no jurisdiction over the claims against Dr. Lee. Relying on the Fourth Circuit's affirmation in Palmer of the continued viability of the doctrine of derivative jurisdiction, the government argues that, because the state court had no jurisdiction over the claims against Dr. Lee, this Court has no jurisdiction over those claims.
In Palmer, Defendant City National Bank of West Virginia served a third-party complaint on two federal agencies: the Farms Service Agency and U.S. Department of Agriculture. Id . The federal agencies filed a notice of removal pursuant to 28 U.S.C. § 1442(a)(1), based on their federal agency status. Id . Following removal, the federal agencies filed a motion to dismiss the third-party complaint, arguing that the doctrine of derivative jurisdiction applied and that, under that doctrine, the federal court also lacked jurisdiction over the federal agencies. Id . The Fourth Circuit agreed and affirmed the district court's dismissal of the claims against the federal agencies for lack of subject matter jurisdiction. Id. at 246.
In reaching this conclusion, the Fourth Circuit acknowledged the somewhat anomalous result of the dismissal of removed actions that would have been within the exclusive jurisdiction of the federal courts had they been originally filed in federal court. Id. at 245. The court also noted the criticism leveled at the doctrine by other courts. Id . (quoting, inter alia, Welsh v. Cunard Lines, Ltd. , 595 F.Supp. 844 (D. Ariz. 1984), which deemed the derivative jurisdiction doctrine as "an archaic concept that impedes justice'" and "is out of tune with the federal rules.'"). Nonetheless, the Fourth Circuit concluded that Congress had never altered this longstanding rule, at least as to removals under § 1442. The Fourth Circuit observed that a then-recent amendment to the general removal statute, 28 U.S.C. § 1441, actually confirmed the continued viability of the doctrine as applied to removals under § 1442. In 2002, Congress amended § 1441 to provide: "The court to which a civil action is removed under this section is not precluded from hearing and determining any claim in such civil action because the State court from which such civil action is removed did not have jurisdiction over that claim.'" Id . (quoting 28 U.S.C. § 1441(f), emphasis added by Fourth Circuit). The court concluded from the language used in that amendment that Congress's abrogation of derivative jurisdiction was limited to removals under § 1441 and that the doctrine remains viable for removals under § 1442. Id. at 246.
To avoid the controlling precedent of Palmer, MGH argues that Dr. Lee improperly removed the case under § 1442 and that the Court should re-characterize the removal as taking place under 42 U.S.C. § 233. In support, MGH relies on an unreported district court decision from the District of Hawaii. Nye v. Hilo Med. Ctr., Civ. No. 09-00220 JMS/KSC, 2010 WL 931926 (D. Haw. Mar. 11, 2010). In Nye, the District Court of Hawaii found that the federal third-party defendant improperly removed its case under § 1442 because the third-party defendant, like Dr. Lee, was a health care provider as defined in § 233(g) of the FSHCAA. Id. at *3. Because the third-party defendant was only eligible to remove the case to federal court due to its § 233 designation, the court concluded that removal under § 1442 was improper. The court then found that the derivative jurisdiction did not apply under a § 233 removal.
Assuming, arguendo, that this Court could re-characterize the ground for removal, it would be of no avail to MGH. While courts like Nye, in other circuits, have reached a different conclusion, the Fourth Circuit has stated that the derivative jurisdiction doctrine has been abrogated only as to removals under § 1441. Palmer , 498 F.3d at 245-46 ("[T]here is no legislative history to support the view that Congress intended to... eliminate the derivative-jurisdiction doctrine entirely... Congress left no doubt that Section 1441(f) applies only to removals under Section 1441 and not to removals under any other section of the United States Code.'") (quoting Barnaby v. Quintos , 410 F.Supp.2d 142, 144 (S.D.N.Y. 2005); see also, Jiron v. Christus St. Vincent Reg'l Med. Ctr., ___ F.Supp.2d ___, Civ. No. 12-428, 2012 WL 7869678 (D.N.M. Nov. 7, 2012) (recognizing that courts, including Nye, have reached a different conclusion but holding that removals under § 233 are subject to the ...