Back in March, we discussed the Administration’s declaration of tort immunity under the “PREP Act” (42 U.S.C. §§247d-6a, et seq.) for “countermeasures” combating the COVID-19 epidemic.  Today, we’re discussing the first cast that we know of to construe this declaration.

That case is Estate of Maglioli v. Andover Subacute Rehabilitation Center I, 2020 WL 4671091 (D.N.J. Aug. 12, 2020), and it arises in the context of the removal of a couple of nursing home negligence actions to federal court.

The defendants, a nursing home operator and certain of its employees, offered two bases for federal jurisdiction:  (1) complete preemption under the aforementioned PREP Act, and (2) federal officer jurisdiction under 28 U.S.C. §1442(a)(1), a topic we recently addressed hereMagioli, 2020 WL 4671091, at *2.  We are mostly interested in the first ground, which involves a lot of so-far legally uncharted territory.

Our readers have probably already figured out the substance of the allegations in Maglioli – defendants allegedly negligent in not preventing death/injury caused by COVID-19 at the facility in question.  Plaintiffs, who filed in state court and wished to remain there, “d[id] not in so many words set forth a federal-law cause of action.”  Id.  Defendants, however, alleged that the sweeping immunity conferred by the March, 2020 PREP Act declaration created federal jurisdiction by completely preempting the plaintiffs’ state-law negligence claims:

Defendants removed the actions on the basis that the PREP Act “provides liability protections for pandemic and epidemic products and security countermeasures,” including “respiratory protective devices.”  Defendants state that they are “covered persons” under the PREP Act and that such “a ‘covered person’ shall be immune from suit and liability under Federal and State law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure’ during a health emergency.”

Id. (citing 42 U.S.C. § 247d–6d(a)(1)).  Maglioli recognized that the HHS declarations we blogged about before set the scope of immunity and “expand[ed]” the definition of “covered countermeasure” to include:

any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, or any device used in the administration of any such product, and all components and constituent materials of any such product.

2020 WL 4671091, at *4 (quoting 85 Fed. Reg. 15,198, 15,202 (HHS March 17, 2020)).  “[F]urther expan[sion]” followed to:

Create[] a new category of covered countermeasures eligible for liability immunity under the PREP Act, namely, respiratory protective devices approved by . . . NIOSH . . . that the Secretary determines to be a priority for use during a public health emergency

Id.  See 42 U.S.C. §247d-6d(i)(1)(D) (“a respiratory protective device that is approved by the National Institute for Occupational Safety and Health”).

Maglioli also recognized the PREP Act’s express preemption clause:

During the effective period of a declaration . . . or at any time with respect to conduct undertaken in accordance with such declaration, no State or political subdivision of a State may establish, enforce, or continue in effect with respect to a covered countermeasure any provision of law or legal requirement that −

(A) is different from, or is in conflict with, any requirement applicable under this section; and

(B) relates to the design, development, clinical testing or investigation, formulation, manufacture, distribution, sale, donation, purchase, marketing, promotion, packaging, labeling, licensing, use, any other aspect of safety or efficacy, or the prescribing, dispensing, or administration by qualified persons of the covered countermeasure, or to any matter included in a requirement applicable to the covered countermeasure under this section or any other provision of this chapter, or under the [FDCA].

2020 WL 4671091, at *7 (quoting 42 U.S.C. §247d-6d(b)(8)) (emphasis added).

Maglioli discerned two limits to PREP Act preemption.  First, it held that preempted conduct “is bound to the ‘physical provision of the countermeasures to recipients,” or “relating to public and private delivery, distribution and dispensing of the countermeasures to recipients, management and operation of countermeasure programs, or management and operation of locations for purpose of distributing and dispensing countermeasures.’”  Id. at *6 (quoting HHS “supplemental information”).  Second, Maglioli erroneously equated the express preemption with “conflict preemption,” id., which is an implied preemption concept (albeit included in PREP Act’s express preemption language), and asserted that the PREP Act’s preemption clause “does not by itself mandate a federal forum or completely preempt all claims arising out of the adequacy, or not, of the medical care afforded by these defendants when infected with the COVID-19 virus.”  Id. at *7.  At best that second assertion is incomplete.

Here’s what’s wrong with Maglioli.  First, while the PREP Act’s preemption clause did not “mandate a federal forum,” the decision inexplicably failed to discuss 42 U.S.C. §247d-6e(a), which definitely does just that.  This section of the PREP Act expressly establishes an alternative federal compensation program where, as with COVID-19, a PREP Act declaration has issued:

Upon the issuance by the Secretary of a declaration . . . there is hereby established in the Treasury an emergency fund designated as the “Covered Countermeasure Process Fund” for purposes of providing timely, uniform, and adequate compensation to eligible individuals for covered injuries directly caused by the administration or use of a covered countermeasure pursuant to such declaration.

Id.  This is important for “complete preemption” purposes, since the availability of an alternative forum is usually required for this form of jurisdiction to exist.  See Aetna Health Inc. v. Davila, 542 U.S. 200, 208-09 (2004) (because ERISA contains an “integrated enforcement mechanism,” it has “extraordinary pre-emptive power” and “converts state causes of action into federal ones for purposes of determining the propriety of removal”); Beneficial National Bank v. Anderson, 539 U.S. 1, 10-11 (2003) (statute “providing an exclusive federal cause of action” contains “the requisite pre-emptive force to provide removal jurisdiction”); Goepel v. National Postal Mail Handlers Union, 36 F.3d 306, 311 (3d Cir. 1994) (“we have held that the complete preemption doctrine applies only if the statute relied upon by the defendant as preemptive contains civil enforcement provisions within the scope of which the plaintiff’s state claim falls”).

Second, Maglioli is mistaken when it reads the express preemption clause (quoted above) as “at most” “restrict[ing] any state from passing a law that conflicts with the federal government’s requirements for . . . of covered countermeasures.”  2020 WL 4671091, at *9.  That’s just wrong.  The battle over what “requirement” means in an express preemption clause ended years ago.  “Requirement” also includes state tort law:

In interpreting two other statutes we have likewise held that a provision pre-empting state “requirements” pre-empted common-law duties. . . .  Congress is entitled to know what meaning this Court will assign to terms regularly used in its enactments.  Absent other indication, reference to a State’s “requirements” includes its common-law duties.

Riegel v. Medtronic, Inc., 552 U.S. 312, 324 (2008) (citations omitted).  That ship has definitively sailed.

Other aspects of Maglioli fall in murkier areas.  The plaintiffs in Maglioli argued that “Defendants d[id] not fall within the scope of the PREP Act,” because their claims were “not directed against Defendants’ role in the manufacturing, distribution, administration, or use of a covered countermeasure.”  2020 WL 4671091, at *8 (citation omitted).  The court agreed, tying the scope of preemption to the defendant having actually used a PREP Act “countermeasure”:

Nothing in the language of the Act suggests that it was intended to more broadly displace state-law causes of action for, e.g., malpractice or substandard care − even if proper care possibly would have entailed administration of such countermeasures.

Id.

So Maglioli drew the jurisdictional line between cases where a PREP Act countermeasure was actually used – which by implication would be completely preempted and subject to removal to federal court – but would allow a state-court plaintiff to base a negligence claim on a defendant’s failure to employ such a countermeasure.  “[T]he PREP Act . . . is designed to protect those who employ countermeasures, not those who decline to employ them.”  Id. at *9.  “[A]cts such as social distancing, quarantining, lockdowns, and [the like] . . . are not covered ‘countermeasures’ under the PREP Act at all.”  Id. at *10 (citation and quotation marks omitted).  Cf. §247d-6e(a) (compensation program covers “injuries directly caused by the administration or use of a covered countermeasure”).  We don’t know whether this is the right line or not (“we’re more used to “different from or in addition to” preemption language, under which such claims would be preempted), but as Maglioli appears to be the first decision called upon to draw that line, it is significant.

Maglioli also rejects an “unstated premise” – which may mean a “straw man” − that the PREP Act creates “field preemption.”  2020 WL 4671091, at *8.  Field preemption is very rare, and since the express preemption clause doesn’t flatly state that “all is preempted,” its existence implies that something must be left that is outside of its scope.  So we question whether the defendants were ever actually arguing field preemption.  In any event, Maglioli rejected complete preemption by field preemption as a basis for subject matter jurisdiction:

[T]he PREP Act . . . does not “occupy the field” of negligence or malpractice claims, even if that negligence or malpractice happens to relate to the COVID-19 illness.  Its effect is confined, for example, to the administration of certain countermeasures, and requires case by case analysis.  In short, I think the PREP Act limits the range of what the plaintiff can sue for − whether in state or federal court − but does not rule out all such claims.  Plaintiffs, in pursuing their claims in state court, may find that their claims are confined by those limitations.  I believe, however, that the Act still leaves room for ordinary claims of negligent or substandard care.

Id. at *9.  A broader reading would, as Maglioli observed, id. at *11, effectively federalize all COVID-19-related litigation of this sort (nursing home negligence).

As indicated above, the defendants in Maglioli asserted a second jurisdictional basis for removal −  that they were “acting under” the supervision of the United States, the litigation “related to” their actions “under color” of that federal authority, and they stated a “colorable federal defense.”  2020 WL 4671091, at *3.  This second basis is less novel than the heretofore uninterpreted PREP Act.  We do point out, however, that Maglioli’s restrictive view of federal officer removal is distinctly at odds with the recent Fifth Circuit decision in Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286 (5th Cir. 2020) (en banc), discussed here, which pointed out that the Supreme Court “has consistently urged courts to avoid ‘a narrow, grudging interpretation of §1442(a)(1).’”  Id. at 290 (quoting Willingham v. Morgan, 395 U.S. 402, 407 (1969)).  In particular, Maglioli’s construction of this form of jurisdiction as requiring acts “performed pursuant to an officer’s direct orders or comprehensive and detailed regulations,” 2020 WL 4671091, at *13, is based entirely on cases that predate the 2011 congressional amendment broadening the statute that convinced the en banc Fifth Circuit to abandon more restrictive precedent in Latiolais.

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Note:  since this post was originally drafted, we have become aware of a second case (rather, set of cases) dealing with the same issue.  Seee.g.Baskin v. Big Blue Healthcare, Inc., 2020 WL 4815074, at *6 (D. Kan. Aug. 19, 2020) (reaching similar “conclusion that the PREP Act applies to action, not inaction”) (one of eleven legally identical decisions).