Limitations on PREP Act Preemption as Basis for Removal

As litigation involving the Public Readiness and Emergency Preparedness Act (PREP Act) and the Department of Health and Human Services (HHS) COVID-19 Declaration grows, some courts are following the logic set forth in two cases we previously discussed here—Estate of Maglioli v. Andover Subacute Rehab. Ctr. I, 2020 WL 4671091 (D.N.J. Aug. 12, 2020) and Baskin v. Big Blue Healthcare, Inc., 2020 WL 4815074 (D. Kan. Aug. 19, 2020)—in rejecting defendants’ attempts to use the PREP Act as a basis for removal of state court actions, suggesting limitations of PREP Act immunity from state tort claims related to COVID-19.

In Gunter v. CCRC OPCO-Freedom Square, LLC, No. 8:20-cv-1546-T-36-TGW, 2020 U.S. Dist. LEXIS 201622 (M.D. Fl. Oct. 29, 2020), the U.S. District Court for the Middle District of Florida granted a motion to remand claims regarding a nursing home’s alleged failure to implement adequate protocols and care to minimize the spread of COVID-19. Id. at *15. While the defendants contended that the PREP Act provided complete preemption of the state tort causes of action such that jurisdiction was proper in federal court, the district court held otherwise, noting that “[p]laintiff does not assert any theory of liability that is in any way related to the [defendants’] ‘physical provision’ of any 'countermeasure.’” Id. at *9, 15. The court thus concluded that the defendants’ alleged failure to properly staff the facility, communicate with residents, and provide medical supplies to the staff had “nothing to do” with the administration of a covered countermeasure under the PREP Act, and therefore removal on that basis was improper. Id. at *10-11.

The court also found that the defendants’ reliance on the HHS General Counsel Advisory Opinion regarding the PREP Act did not “salvage their cause.” Id. at *14. Noting that the Advisory Opinion is not binding on federal courts, the court went on to say that “[t]he Opinion’s discussion of the broad application of ‘administration’ of ‘activities related to management and operation of programs and locations for providing countermeasures’ was in the context of operating a vaccination program.” Id. As such, the court concluded that “[w]hile the Opinion provides that PREP Act immunity can apply to private individuals and organizations, such coverage applies to these private entities only when acting in accordance with the PREP Act and the Declaration.” Id.

The U.S. District Court for the Central District of California likewise granted a motion to remand a wrongful death case alleging negligent failure to act by a nursing home in Martin v. Serrano Post Acute LLC, No. 2:20-cv-05937-DSF-SK, 2020 U.S. Dist. LEXIS 165874 (C.D. Cal. Sep. 10, 2020), finding that “[i]t is largely irrelevant that federal courts have exclusive jurisdiction under the PREP Act because none of the claims in the complaint, on its face, are brought under that Act.” Id. at *5. The Martin court noted that “[i]f [the defendants] believe that some or all of [the plaintiffs’] state law claims are barred by the PREP Act,” then the appropriate response “is to file a demurrer in state court.” Id. And if the court dismisses the state law claims, plaintiffs “could then decide if they wish to file claims under the PREP Act in [] the court with exclusive jurisdiction over such claims.” Id. (citing 42 U.S.C. § 247d-6d(e)(1)). The U.S. District Court for the Western District of Pennsylvania similarly remanded claims regarding a nursing home’s negligence in Sherod v. Comprehensive Healthcare Mgmt. Servs., LLC, No. 2:20-cv-1198, 2020 U.S. Dist. LEXIS 191885 (W.D. Pa. Oct. 16, 2020), holding that because the plaintiff alleged that the nursing home failed to provide appropriate protection and/or countermeasures, the plaintiff’s claims “fall outside the purview of the PREP Act, which purports to provide immunity to facilities like [the nursing home] when a claim is brought against them for the countermeasures the facility actually utilized.” Id. at *20.

While these cases are limited to the discrete question of whether removal under the PREP Act is proper when the underlying claims are based solely on a failure to use covered countermeasures, they do also suggest limitations to the scope of PREP Act immunity where a direct link to actual use of a drug, biological product, or device used to combat COVID-19 is lacking.

For any questions regarding the PREP Act, please contact Sandra Edwards, Rand Brothers or your Winston relationship attorney.

Update: The recently issued Fourth Amendment to the PREP Act incorporates all Advisory Opinions and also broadens PREP Act immunity to cover situations where a covered countermeasure was not administered (see our recent alert here). Although the Fourth Amendment does not provide guidance on what types of circumstances would fall under this potentially large expansion of PREP Act immunity, it remains to see what impact the Amendment will have on decisions like those discussed here.

View all of our COVID-19 perspectives here. Contact a member of our COVID-19 Legal Task Force here.