No Federal-Question Jurisdiction Over Declaratory Action Complaint to Block Federal-Law Defense, Holds Eleventh Circuit

In Patel v. Hamilton Medical Center, Inc., No. 19-13088 (11th Cir. July 30, 2020), the Eleventh Circuit holds that there is no federal-question subject matter jurisdiction over a declaratory action brought by a doctor against a hospital for suspending his privileges.

Although the plaintiff’s claim arose under state law (and the parties were apparently non-diverse), the doctor-plaintiff attempted to bootstrap federal jurisdiction by bringing one claim under federal law: a declaratory-judgment action against the hospital to prevent it from raising a possible immunity defense under the Health Care Quality Improvement Act, 42 U.S.C. § 11111(a)(1). That federal act immunizes hospitals from damages arising from peer-review processes. The doctor then pled his state-law claims as falling within the district court’s supplemental jurisdiction. This apparently satisfied the district court judge, who adjudicated the case for several years, ultimately entering a judgment for the hospital on all claims.

On appeal, the Eleventh Circuit spots a couple of deficiencies in federal jurisdiction that doom the appeal.

First, the doctor-plaintiff appealed only the denial of declaratory relief, without also appealing the merits of the case. Absent a financial stake on the issue of liability, the doctor may have mooted his own case by narrowing the appeal to the immunity issue.

Nevertheless, rather than wrestle with that issue, the court spots a second, more straightforward defect going to the entire case. Because jurisdiction was predicated entirely on federal-question grounds, 28 U.S.C. § 1331, the court’s power over the case depended on the Declaratory Judgment Act (DJA), 28 U.S.C. § 2201(a), supplying the federal-law basis for the case. But the DJA by its own terms may only be invoked in “case[s] of actual controversy within [the court’s] jurisdiction,” it could not by itself provide a basis for jurisdiction.

The doctor pointed to fact that the declaratory judgment action sought adjudication of the effect of another federal statute[PM1]  on his state-law claims. But this fails because there is no look-through approach to declaratory judgment that predicates subject-matter jurisdiction on the nature of the underlying dispute. The federal statue provides no basis for the hospital to sue the doctor, and thus no claim could be brought by either party under its provisions. “Patel’s complaint does not establish that the Medical Center could file a coercive action under federal law. The Health Care Quality Improvement Act—the only federal law at issue—does not create a private right of action.”

The judgment for the hospital was vacated, and the entire case dismissed without prejudice.


 [PM1]

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