Lack of Federal Court in County Hinders Removal

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By Bernie Pazanowski

A forum selection clause requiring lawsuits between a nursing home and its residents to be filed in the county where the facility is located prevents removal of a suit because there is no federal court in that county, the U.S. Court of Appeals for the Fourth Circuit held Jan. 23.

Saber Healtcare Holdings LLC runs a family of wholly owned limited-liability assisted-living facilities and nursing homes. Its contract says “the county in which the Facility is located shall be the sole and exclusive venue for any dispute between the parties.”

The plaintiffs, current residents of one facility, argued in state court that Saber and its North Carolina facilities violated the contract by providing substandard care. The defendants removed the suit to federal court, but the district court ruled the removal was improper.

The Class Action Fairness Act allows a single defendant to remove a case without consent of the other defendants, the appeals court said in an opinion by Judge William B. Traxler Jr.

But the forum selection clause requires litigation in the county where the facility is located, the court said. Because there is no federal court in Franklin County, removal was improper, it said. Every federal circuit court to decide the issue agrees, the court noted.

But Saber shouldn’t have had to disprove the plaintiffs’ argument that the defendants were bound by the clause, the court said. The plaintiffs bear that burden of proof, it said.

Judge Albert Diaz joined the opinion.

Concurring in the judgment, Judge Henry F. Floyd argued the forum selection clause limited venue to state courts in the county regardless whether any federal courts were located there.

Williams & Connolly LLP represented Saber. Gugenheim Law Offices PC represented the plaintiffs.

The case is Bartels v. Saber Healthcare Grp., LLC , 2018 BL 21395, 4th Cir., No. 16-2247, 1/23/18 .

To contact the reporter on this story: Bernie Pazanowski in Washington at bpazanowski@bloomberglaw.com

To contact the editor responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com

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