Estate of Charles M. Demos, Sr. et al v. State of Nevada, et al

Filing 47

ORDER: The motions to compel arbitration and dismiss 20 and 21 are DENIED without prejudice.IT IS FURTHER ORDERED that this case is REMANDED to the Eighth Judicial District Court, Case No. A-15-729205-C, for all further proceedings. The Clerk of Court is instructed to close this case. Signed by Judge Jennifer A. Dorsey on 2/28/2017. (Copies have been distributed pursuant to the NEF; CC: CC: Certified Copy of Order and Docket Sheet Sent to State Court - DC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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Estate of Charles M. Demos, Sr., et al.,
2:16-cv-00324-JAD-CWH

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Plaintiffs
Order Denying Motions without
Prejudice and Remanding Case

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v.

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State of Nevada, et al.,

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[ECF Nos. 20, 21]

Defendants

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Defendant removed this wrongful-death action to federal court based on federal-question

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jurisdiction. I dismissed without prejudice and with leave to amend several claims in plaintiffs’

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original complaint, including their sole federal-law claim on which removal was based. Plaintiffs’

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amended complaint alleges only state-law claims, and defendant moves to stay and compel

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arbitration or, alternatively, to dismiss all claims under FRCP 12(b)(6). Because plaintiffs’ amended

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complaint includes only state-law claims and these claims raise novel and complex issues of state

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law, I decline to continue to exercise supplemental jurisdiction over them. I therefore deny without

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prejudice the defendant’s motions and remand this case back to the Eighth Judicial District Court.

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Background

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Paul C. Demos sues individually and as the heir and special administrator of the estate of his

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father Charles M. Demos, Sr., who died in April 2015 after contracting Legionnaires’ Disease while

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residing at the Nevada State Veteran’s Home. Paul, along with Charles Sr.’s other children, Andrew,

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Charles Jr., Denise, and Mark Demos, bring this putative class action against the State of Nevada on

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relation of the Nevada Department of Veterans Services (NDVS), which operates the VA facility.

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The NDVS moves to stay this case and compel arbitration or, alternatively, to dismiss all claims

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under FRCP 12(b)(6).

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Page 1 of 4

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Plaintiffs originally sued the NDVS and former NDVS Administrator Mark McBride in

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Nevada’s Eighth Judicial District Court.1 The defendants removed the action to this court, invoking

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federal-question jurisdiction based on the § 1983 claim against McBride, and then filed a motion to

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dismiss five of plaintiffs’ eight claims under FRCP 12(b)(6).2 I dismissed without prejudice and

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with leave to amend plaintiffs’ state-law claims for negligent infliction of emotional distress (NIED),

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intentional infliction of emotional distress (IIED), negligent hiring, training, and supervision, breach

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of contract (to the extent it was brought by plaintiffs as third-party beneficiaries), and plaintiffs’ sole

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federal-law § 1983 claim (plead against McBride only), leaving intact only plaintiffs’ claims for

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negligence, wrongful death, and breach of contract (on behalf of Charles Sr.’s estate).3 Plaintiffs

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timely filed a second-amended complaint, dropping McBride as a defendant and the § 1983 claim

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against him, and asserting eight state-law claims for relief: (1) negligence, (2) wrongful death, (3)

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elder abuse, (4) NIED, (5) IIED, (6) negligent hiring, training, and supervision, (7) breach of

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contract, and (8) declaratory and injunctive relief.4

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Discussion
A.

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Supplemental jurisdiction
Plaintiffs’ amended complaint includes only state-law claims that are proceeding in this court

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based on supplemental jurisdiction. Supplemental jurisdiction is a doctrine of discretion, not of

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right. The court may decline to exercise supplemental jurisdiction over a state-law claim if “(1) the

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claim raises a novel or complex issue of State law; (2) the claim substantially predominates over the

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claim or claims over which the district court has original jurisdiction; (3) the district court has

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dismissed all claims over which it has original jurisdiction; or (4) in exceptional circumstances, there

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ECF No. 1.

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ECF No. 4.

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ECF No. 18 (Minutes).

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As plead, these are requests for remedies, not separate causes of action.

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Page 2 of 4

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are other compelling reasons for declining jurisdiction.”5

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B.

I decline to continue exercising supplemental jurisdiction over plaintiffs’ state-law
claims.

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There are no federal claims pending before me, and plaintiffs’ remaining claims implicate

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complex issues of state law. As a threshold issue, plaintiffs’ claims require interpretation of the

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arbitration agreement under Nevada state contract-law principles to determine whether and to what

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extent these claims are subject to arbitration. Plaintiffs’ claims also hinge on whether and to what

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extent the NDVS owed Charles Sr. a duty to take proactive measures to detect and prevent the

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proliferation of Legionella in the VA facility’s water system. Because the discovery of

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Legionella–and thus Legionella-related litigation—is relatively recent, caselaw addressing whether

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and to what extent state law imposes such a duty is sparse, and the Nevada Supreme Court has not

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yet weighed in on the issue. Plaintiffs’ claims also require resolution of state-law immunity issues,

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including the application of NRS §§ 41.032 and 41.033 to the facts of this case. Accordingly, I find

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that 28 U.S.C. § 1367(c) authorizes me to decline to continue to exercise supplemental jurisdiction

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over plaintiffs’ remaining claims.

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My decision to decline to continue to exercise supplemental jurisdiction over state-law claims

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is also informed by the values of judicial economy, convenience, fairness, and comity.6 The

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Supreme Court has stated that “in the usual case in which all federal-law claims are eliminated

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before trial, the balance of factors . . . will point toward declining to exercise jurisdiction over the

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remaining state-law claims.”7 These interests also compel me to decline to continue to exercise

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supplemental jurisdiction here. This case involves only state-law claims against the State of Nevada

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on relation of the NDVS. And although this court could likely adjudicate the merits of plaintiffs’

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claims and resolve the arbitration issue on equal footing with the state court, interpretation and

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application of Nevada’s immunity statutes are better left to the state court. The court and the parties

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28 U.S.C. § 1367(c).

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6

Acri v. Varian Assocs, 114 F.3d 999, 1001 (9th Cir. 1997) (en banc).

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Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988).

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Page 3 of 4

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have not yet committed too great resources to litigating this case in federal court such that remand

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would be wasteful. Though the NDVS’s motions have been fully briefed for seven months—an

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unfortunate consequence of this district’s heavily backlogged docket—discovery has not yet been

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completed, and class certification has not yet been briefed. The parties should be able to use all the

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work and expense that they have invested in this forum to complete the litigation of these state-law

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claims in the Eighth Judicial District Court, where this case began and they will be free to raise the

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same dismissal and arbitration arguments and counterarguments and the same discovery will be

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relevant.

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Because plaintiffs allege only state-law claims that raise complex and novel issues of state

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law against a state entity, and economy, convenience, fairness, and comity favor remand, I deny the

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NDVS’s pending motions without prejudice and remand this case back to Nevada’s Eighth Judicial

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District Court under 28 U.S.C. § 1367(c).

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Conclusion
Accordingly, IT IS HEREBY ORDERED that the motions to compel arbitration and dismiss
[ECF Nos. 20, 21] are DENIED without prejudice.
IT IS FURTHER ORDERED that this case is REMANDED to the Eighth Judicial District

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Court, Case No. A-15-729205-C, for all further proceedings. The Clerk of Court is instructed

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to close this case.

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Dated this 28th day of February, 2017.

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_________________________________
Jennifer A. Dorsey
United States District Judge

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