Appalachian Regional v. U.S. Nursing Corporation
Filing
Per Curiam OPINION filed : REMANDED, decision not for publication. Danny J. Boggs, Circuit Judge; Eugene E. Siler , Jr., Circuit Judge and Alice M. Batchelder, Circuit Judge.
Case: 15-5354
Document: 33-2
Filed: 07/28/2016
NOT FOR PUBLICATION
File Name: 16a0427n.06
Page: 1
FILED
Jul 28, 2016
DEBORAH S. HUNT, Clerk
Case No. 15-5354
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
APPALACHIAN REGIONAL
HEALTHCARE, INC.,
Plaintiff–Appellant,
v.
U.S. NURSING CORPORATION,
Defendant–Appellee.
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ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF
KENTUCKY
ORDER
Before: BOGGS, SILER, and BATCHELDER, Circuit Judges.
PER CURIAM. This case arose out of a Kentucky state-court suit brought by Ralph
Edward Proffitt against Constance Foote, Appalachian Regional Healthcare, Inc. (“ARH”), and
United States Nursing Corp. (“USN”). Proffitt v. Corley Mfg. Co., Civil Action No. 08-CI-360
(Ky. Letcher Cir. Ct.). Proffitt claimed that Foote, a nurse, caused or exacerbated injuries he
experienced following a work accident, and he sought to hold ARH and USN vicariously liable
for her conduct. At the relevant time, Foote was working at ARH’s medical facility in
Whitesburg, Kentucky. Pursuant to a “Job Action Staffing Agreement” (“Agreement”), USN had
arranged for Foote and other individuals to work at the facility to satisfy a personnel shortage
caused by an ongoing labor dispute. USN agreed to “indemnify, defend, save, and hold harmless
[ARH] . . . from any and all liability or damage that ar[ose] from . . . the negligent or intentional
Case: 15-5354
Document: 33-2
Filed: 07/28/2016
Page: 2
Case No. 15-5354
Appalachian Regional Healthcare, Inc. v. United States Nursing Corporation
act or omission of [USN], its employees or agents, including staff members assigned by [USN]
to [ARH] pursuant to th[e] . . . Agreement.” In 2012, USN moved for summary judgment,
arguing that it “loaned or hired” out Nurse Foote to ARH and was therefore not vicariously liable
for any injuries caused or exacerbated by her under Kentucky’s “borrowed-servant doctrine.”
ARH then filed the present suit in federal court, claiming that USN breached the
Agreement by asserting the borrowed-servant defense in the Proffitt litigation; seeking injunctive
relief to prevent USN from its alleged ongoing breach of the Agreement; and requesting a
declaration (1) that USN was in breach, (2) determining the scope and meaning of USN’s
indemnification duties under the Agreement, and (3) determining whether USN’s insurance
policy met the requirements set forth in the Agreement. The state court then denied USN’s
pending motion for summary judgment, and USN filed a motion to dismiss in federal court,
arguing that the district court lacked subject-matter jurisdiction and that ARH had failed to state
a claim.
The district court ultimately found that ARH lacked standing to bring suit because it only
complained of “hypothetical” or “speculative” injuries rather than the “concrete” injury
necessary to satisfy Article III’s case or controversy requirement. Additionally, the court
declined to exercise jurisdiction over ARH’s claim for declaratory relief, reasoning that
considering the claim would mean “toss[ing] federalism and comity to the wind and
interven[ing] directly in ongoing state court litigation by telling the parties which arguments they
may or may not raise.” ARH has appealed, seeking reversal of the district court’s dismissal of its
claims for breach of contract and declaratory relief.1
After the case was briefed and argued on appeal, ARH filed a notice of supplemental
authority under Rule 28(j) of the Federal Rules of Appellate Procedure, informing the court that
1
ARH has not challenged the district court’s determination that its claim for injunctive relief is moot.
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Case: 15-5354
Document: 33-2
Filed: 07/28/2016
Page: 3
Case No. 15-5354
Appalachian Regional Healthcare, Inc. v. United States Nursing Corporation
ARH and USN have been dismissed from the Proffitt litigation pursuant to settlement
agreements. ARH claims that “[i]ndemnification and cost-of-defense issues are now squarely at
issue under the [Agreement]” and that federalism concerns have been obviated. It continues to
seek reversal and remand for further proceedings “because the case was justiciable when filed.”
In response, USN notes that ARH has now “demanded that USN reimburse it for (i) a settlement
payment that ARH . . . made to the state court plaintiffs to settle ARH’s liability and (ii) its cost
of defending those claims.” Although USN “strongly disputes the merits of [the] demand,” it
now agrees that a justiciable controversy exists and “does not oppose remand for further
proceedings.”
Though standing must exist “at the time the complaint is filed,” Already, LLC v. Nike,
Inc., 133 S. Ct. 721, 726 (2013) (quoting Alvarez v. Smith, 558 U.S. 87, 92 (2009)), subsequent
events may, on occasion, demonstrate the validity of a party’s belief at filing that a concrete
injury was likely to occur in the imminent future, see Hargrave v. Vermont, 340 F.3d 27, 34 (2d
Cir. 2003). Given the recent developments in this case, we REMAND the case to the district
court.
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