Bloomberg Law’s® Bankruptcy Law News publishes case summaries of the most recent important bankruptcy law decisions, tracks major commercial bankruptcies, and reports on developments in bankruptcy...
By Daniel Gill
May 25 — A complaint for health care liability under Texas law against a hospital and nurse was sufficiently “related to” the bankruptcy case of a non-party surgeon to create subject matter jurisdiction for the claim in the district court, the U.S. Court of Appeals for the Fifth Circuit ruled May 19 ( Passmore v. Baylor Health Care Sys., 2016 BL 160438, 5th Cir., No. 15-10358, 5/19/16 ).
The Fifth Circuit reversed the U.S. District Court for the Northern District of Texas, which had dismissed an action by applying a Texas procedural rule related to the timing by which a plaintiff must submit an expert's report in a “health care liability” action.
The circuit court found that the state court claim was properly brought in the district court because the claim was sufficiently related to the bankruptcy of a doctor who was not party to the lawsuit but against whom the named defendants might have rights of contribution or indemnity.
The central issue for the court was whether a Texas procedural law would apply in the federal court action based on a Texas state law claim for “health care liability.” In Texas, a health care liability claim is an action brought in tort or contract against health care providers for death or injury.
In the action, plaintiffs Robert Passmore and his wife sued a hospital and nurse for injuries the plaintiffs claimed Mr. Passmore suffered as the result of two back surgeries. The plaintiff's surgeon, the debtor in a pending Chapter 11 bankruptcy case, was not named as a party.
Before examining the Texas procedural law in question, the court discussed whether it and the district court below properly had jurisdiction to hear the state law claim in the first place. The court noted that it is “duty-bound” to consider whether subject matter jurisdiction is proper, citing Union Planters Bank Nat'l Ass'n v. Salih, 369 F.3d 457, 460 (5th Cir. 2004).
Apparently none of the defendants to the action argued against the propriety of the federal court's jurisdiction for the state court claim, nor did the district court address the question below. The circuit court explained that by ruling on a motion to dismiss, it was implicit that the district court found it had proper subject matter jurisdiction.
The court examined the facts of the case under the rubric of 28 U.S.C. §1334(b), which confers jurisdiction on the district courts for “all civil proceedings … arising in or related to cases under title 11.”
Although the plaintiffs did not explain (either in the district court or on appeal) how their suit might affect the surgeon's bankruptcy case, the circuit court decided that if the plaintiffs prevailed, the defendants “may have contribution or indemnity claims” under Texas law against the debtor. Therefore, the court said, the lawsuit “could conceivably have an effect on [the surgeon's] estate, and the action is therefore sufficiently ‘related to' bankruptcy to provide” the federal court jurisdiction.
The court did not discuss questions of mandatory or permissive joinder of the debtor in the district court case.
Judge James L. Dennis wrote the opinion.
Girards Law Firm represented the plaintiffs. Cooper & Scully PC represented Baylor Health Care System and Baylor Regional Medical Center. The Law Offices of Brian J. Judis represented the individual defendant.
To contact the reporter on this story: Daniel Gill in Washington at email@example.com
To contact the editor responsible for this story: Jay Horowitz at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)