Larkin et al v. Community Health Systems Inc, No. 1:2019cv03005 - Document 15 (E.D. Wash. 2019)
Court Description: ORDER granting 6 Defendant's Motion to Dismiss; Plaintiff's claims against Defendant are DISMISSED WITHOUT PREJUDICE. Signed by Judge Salvador Mendoza, Jr. (CLP, Case Administrator)
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Larkin et al v. Community Health Systems Inc Doc. 15 1 FI LED I N THE U.S. DI STRI CT COURT EASTERN DI STRI CT OF WASHI NGTON 2 Mar 28, 2019 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 3 SEAN F. MCAVOY, CLERK 4 5 6 7 CHARLES WALTER LARKIN III, Personal Representative of the ESTATE OF STEPHANIE NICOLE LARKIN; and SIDNEY P. OTTEM, as Guardian ad Litem for Z.G., minor child of Stephanie Nicole Larkin; and EVA LARKIN, No. 1:19-cv-03005-SMJ ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 8 Plaintiffs, 9 v. 10 11 12 13 COMMUNITY HEALTH SYSTEMS, INC., a Delaware corporation, d/b/a Yakima HMA, LLC, d/b/a Yakima Regional Medical and Cardiac Center, Defendant. 14 Before the Court is Defendant Community Health Systems, Inc.’s (“CHSI”) 15 Motion to Dismiss for Lack of Jurisdiction, ECF No. 6. Plaintiffs oppose the 16 motion. ECF No. 10. Having reviewed the pleadings and the file in this matter, the 17 Court is fully informed and grants the motion. 18 BACKGROUND 19 On January 1, 2017, 29-year-old Stephanie Nicole Larkin, a single mother, 20 was hospitalized at Yakima Regional Medical and Cardiac Center (“the hospital”) ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 1 Dockets.Justia.com 1 for a tailbone cyst abscess and general weakness. ECF No. 1 at 4. She had a history 2 of lupus erythematosus, an autoimmune disease that can be effectively treated. Id. It 3 is typically treated by rheumatologist physicians. Id. During the 19-day 4 hospitalization period, the abscess essentially healed, but Larkin’s condition steadily 5 deteriorated. Id. 6 Some physicians and nurses made recommendations to transfer Larkin to a 7 different facility with a higher level of care, including inpatient rheumatology 8 services. Id. at 5. The family repeatedly requested such transfers. Id. However, the 9 hospital wrongfully kept Larkin at its facility. Id. On January 19, 2017, the hospital 10 finally approved Larkin’s transfer to Deaconess Medical Center in Spokane, 11 Washington. Id. Despite efforts by Deaconess staff and physicians, Larkin’s 12 condition was such that she did not recover. Id. She passed away at the Deaconess 13 Medical Center on January 20, 2017. Id. 14 On January 11, 2019, Plaintiffs filed a complaint against CHSI in this Court, 15 alleging failure to obtain informed consent, negligence, and outrage. ECF No. 1. 16 They claim that CHSI was doing business as Yakima HMA, LCC, which was doing 17 business as the hospital. Id. Plaintiffs further allege that the “physicians, resident 18 physicians, physicians with fellowships, hospitalists, nurses and other medical staff 19 who treated or otherwise provide medical services to . . . Larkin . . . were employees 20 and/or agents of defendant CHSI/Yakima Regional.” Id. at 3. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 2 1 CHSI is a Delaware corporation with its principal place of business in 2 Tennessee. Id. CHSI owns the stock of CHS/Community Health Systems, Inc.; 3 which is the sole member of Health Management Associates, LLC; which is the sole 4 member of Hospital Management Associates, LLC; which is the sole member of 5 Yakima HMA, LLC. ECF No. 14 at 5. 6 LEGAL STANDARD 7 In resolving a motion to dismiss for lack of personal jurisdiction under 8 Federal Rule of Civil Procedure 12(b)(2) on written materials, a court accepts 9 uncontroverted facts in the complaint as true and resolves conflicts presented in 10 affidavits in the plaintiff’s favor. Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 11 1218, 1223 (9th Cir. 2011). Courts may consider evidence presented in affidavits 12 and declarations to determine whether personal jurisdiction exists over a defendant. 13 Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). Where a defendant’s 14 motion is based on a written record of affidavits and discovery materials and no 15 evidentiary hearing is held, the plaintiff need only make a prima facie showing of 16 jurisdictional facts. Picot v. Weston, 780 F.3d 1206, 1210 (9th Cir. 2015); Fields v. 17 Sedgwick Associated Risks, Ltd., 796 F.2d 299, 301 (9th Cir. 1986). To make a 18 prima facie showing, “the plaintiff need only demonstrate facts that if true would 19 support jurisdiction over the defendant.” Unocal Corp., 248 F.3d at 922. 20 A court exercises personal jurisdiction over a defendant if (1) it is permitted ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 3 1 by the state’s long-arm statute and (2) the exercise of jurisdiction does not violate 2 federal due process. See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 3 2006). 4 The Court first “begins its personal jurisdiction analysis with the long-arm 5 statute of the state in which the court sits.” Glencore Grain Rotterdam B.V. v. 6 Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir. 2002). Washington’s 7 long-arm statute extends the Court’s personal jurisdiction to the broadest reach 8 permitted by the United States Constitution. See Wash. Rev. Code (“RCW”) 9 § 4.28.185. Because Washington’s long-arm statute is coextensive with federal due 10 process requirements, the jurisdictional analysis is the same. See Schwarzenegger 11 v. Fred Martin Motor Co., 374 F.3d 797, 800–01 (9th Cir. 2004). 12 Due process requires that a defendant “have certain minimum contacts with 13 [the forum state] such that the maintenance of the suit does not offend traditional 14 notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 15 310, 315 (1945); see Walden v. Fiore, 571 U.S. 277, 283 (2014). The strength of 16 “minimum contacts” required depends on the type of jurisdiction invoked: general, 17 “all-purpose,” or specific, “conduct-linked.” Daimler AG v. Bauman, 571 U.S. 117, 18 121 (2014). 19 A. 20 General Jurisdiction To establish general jurisdiction, a plaintiff must demonstrate that the ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 4 1 defendant has continuous and systematic contacts sufficient to approximate 2 physical presence in the state. In re W. States Wholesale Nat. Gas Antitrust Litig., 3 715 F.3d 716, 741 (9th Cir. 2013). The standard is “exacting” because it would 4 allow a defendant to be haled into court in the forum state to answer for any of its 5 activities anywhere in the world. Schwarzenegger, 374 F.3d at 801. 6 A foreign entity must have affiliations so continuous and systematic as to 7 render it “essentially at home” in the forum state. Goodyear Dunlop Tires 8 Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (corporations); Ranza v. Nike, 9 Inc., 793 F.3d 1059, 1069 (9th Cir. 2015) (limited liability companies). 10 B. Specific Jurisdiction 11 To establish specific jurisdiction, a plaintiff must show that the defendant’s 12 suit-related conduct “creates a substantial connection with the forum State.” 13 Walden, 571 U.S. at 284. Three requirements must be satisfied: (1) the defendant 14 either “purposefully direct[s]”1 its activities or “purposefully avails”2 itself of the 15 benefits afforded by the forum’s laws; (2) the claim arises out of or relates to the 16 defendant’s forum-related activities; and (3) the exercise of jurisdiction comports 17 with fair play and substantial justice, i.e., it is reasonable. Dole Food Co. v. Watts, 18 303 F.3d 1104, 1111 (9th Cir. 2002). The requisite minimum contacts must arise 19 1 20 A purposeful direction analysis is generally used in suits sounding in tort. Schwarzenegger, 374 F.3d at 802. 2 A purposeful availment analysis is generally used in suits sounding in contract. Id. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 5 1 out of contacts that the defendant itself creates with the forum state, and not the 2 defendant’s contacts with persons who reside there. Walden, 571 U.S. at 284. DISCUSSION 3 4 CHSI argues that Plaintiffs fail to establish both general and specific 5 jurisdiction. ECF No. 6 at 5. It posits that it is not doing business as Yakima HMA 6 or Yakima Regional Medical and Cardiac Center (“the hospital”) and that it has no 7 offices, agents, or employees in the state of Washington. Id. at 2. It contends that the 8 only relationship with the hospital where Larkin was admitted is as a remote parent 9 company. Id. And because merely having an “indirect ownership interest in a 10 Washington company,” it argues, does not subject it to the Court’s personal 11 jurisdiction, it notes that dismissal is appropriate. Id. at 6. In support, it submits the 12 declaration of Justin D. Pitt, the Chief Litigation Counsel for a company that 13 provides consulting services to CHSI in its role as a publicly-traded company. ECF 14 No. 7. 15 Plaintiffs oppose the motion and request oral argument.3 ECF No. 10. They 16 argue that through CHSI’s own public filings, press releases, interactive website, 17 and lobbying activities, it has established that it is not merely a remote parent 18 company and that it does transact business in Washington. Id. In support, they submit 19 3 20 As the Court finds that oral argument is not warranted under Local Civil Rule 7(i)(3)(B)(iii), the Court considered the motion without oral argument on the date signed below. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 6 1 the declaration of Richard C. Eymann, counsel of record, who appends various 2 materials including CHSI’s website, annual report, and registration information. See 3 generally ECF No. 11. 4 Importantly, the affidavits and documentary evidence presently before the 5 Court create one coherent picture, so the Court need not resolve any conflicts in 6 Plaintiffs’ favor. Consistent with Pitt’s declaration, Plaintiffs’ own documentary 7 evidence shows that CHSI is a holding company with no employees. See, e.g., ECF 8 No. 11-13 at 4 n.1. Its subsidiary companies and partnerships, not CHSI itself, “own 9 or lease and operate their respective hospitals and other assets and businesses.” Id. 10 Moreover, Plaintiffs append the homepage of CHSI’s website in support of 11 the contention that it operates hospitals, including the Washington hospital in 12 question. ECF No. 11-1. But also listed on the same page is information that its 13 “affiliates own, operate or lease” hospitals. Id. (emphasis added). Elsewhere on the 14 website, the legal information states: 15 16 17 18 19 20 Community Health Systems, Inc. is a holding company and does not engage in any business other than those activities associated with being a publicly traded (NYSE: CYH) stock company, such as, listing agreements with the New York Stock Exchange (‘NYSE’) and registration and compliance with the U.S. Securities and Exchange Commission (‘SEC’). CHSPSC, LLC provides management services to Community Health Systems, Inc., including assisting it with its compliance obligations with both the NYSE and the SEC. Both of these institutions require that public companies maintain information on an internet website that is accessible to shareholders; this website fulfills those obligations. . . .Statements that include the words ‘we,’ ‘us,’ ‘our,’ ‘the Company,’ and similar inclusive words are intended to be summary ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 7 1 2 3 4 5 information about the consolidation of Community Health Systems, Inc., and its subsidiaries taken as a whole, and are not intended to bind or imply that the actions of one legal entity should be attributed to the actions of another legal entity (such as Community Health Systems, Inc.). In its registered filings with the SEC, Community Health Systems, Inc., is required to adhere to the SEC’s principles of ‘plain English’ and avoid the use of defined terms, jargon, and parenthetical exculpatory statements; for ease of reading, Community Health Systems, Inc. and CHSPSC, LLC adhere to those principles throughout this website. 6 7 8 9 10 Each hospital affiliated with Community Health Systems, Inc. and CHSPSC, LLC is owned (or leased) and operated by a separate and distinct legal entity. Each such legal entity is responsible for the healthcare services delivered at its respective facility, employs its own management and other personnel, and grants medical staff privileges and credentials to its own, separate medical staff. ECF No. 14-1 at 2. 11 Viewed in context, it is evident that CHSI had no employees, did not own or 12 operate any hospitals, and referred to it and its subsidiaries through words like “we” 13 and “our”—such that it understandably gave Plaintiffs reason to believe CHSI 14 directly owned or operated the hospitals and employed its staff and physicians. 15 Consequently, Plaintiffs’ documentary evidence indicating that CHSI was involved 16 in recruitment, patient care, and other aspects of hospital management does not 17 support its prima facie showing because CHSI was broadly referring to it and its 18 affiliates. See, e.g., ECF No. 11-2 at 5, 16–17, 20; ECF No. 11-13. 19 Plaintiffs do not allege or provide documentation of any other forum-related 20 activities that CHSI engaged in other than that it owned and operated a Washington ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 8 1 hospital. Thus, the Court cannot undertake a personal jurisdiction analysis. As it 2 appears that Plaintiffs merely sued the wrong defendant, this motion is more 3 appropriately viewed as a motion to dismiss for failure to state a claim. In any case, 4 the Court concludes that Plaintiffs have not met their prima facie showing of 5 jurisdiction. Accordingly, the Court does not exercise personal jurisdiction over 6 CHSI. 7 Plaintiffs alternatively request the opportunity to conduct targeted 8 jurisdictional discovery of CHSI’s relevant forum-specific subsidiaries. ECF No. 9 10. The Court declines to do so given that CHSI’s motion to dismiss and reply brief 10 contain sufficient information to guide Plaintiffs in their search of a proper 11 defendant. 12 Accordingly, IT IS HEREBY ORDERED: 13 1. Defendant’s Motion to Dismiss for Lack of Jurisdiction, ECF No. 6, is GRANTED. 14 2. 15 Plaintiffs’ claims against Defendant are DISMISSED WITHOUT PREJUDICE. 16 3. 17 The Clerk’s Office is DIRECTED to ENTER JUDGMENT and CLOSE the file. 18 19 // 20 // ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 9 1 2 3 IT IS SO ORDERED. The Clerk’s Office is directed to enter this Order and provide copies to all counsel. DATED this 28th day of March 2019. 4 5 _________________________________ SALVADOR MENDOZA, JR. United States District Judge 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS - 10
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