JOSEPH et al v. UNITED STATES OF AMERICA et al

Filing 26

OPINION. Signed by Judge John Michael Vazquez on 10/18/2018. (JB, )

Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

WALNISE JOSEPH, Individually and on behalf
of A.J. as her Guardian Ad Litem,

Plaintiff

Civil Action No. 17-927 (JMV)(MF)
OPINION

V.

JOSEPH VAYDOVSKY, M.D., et al.

Defendants.

John Michael Vazguez, U.S.D.J.

This case concerns alleged medical malpractice by a doctor employed by the Newark
Community Health Center (“NCHC”), who assisted Plaintiff Walnise Joseph in the birth of her
child, A.J. The issue before the Court is whether NCHC is immune from liability, and if not,
whether Plaintiffs’ damages are capped by statute at $250,000.

The United States (the

“Government”) filed the instant motion to dismiss for lack of subject matter jurisdiction, or in the
alternative, for summary judgment or partial summary judgment on the issue of damages. D.E.
12. The Court reviewed the parties’ submissions’ and decided the motion without oral argument
pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons set forth below, the
Government’s motion to dismiss is DENIED, and its motion for partial summary judgment is
GRANTED.

The following briefs were submitted in connection with this motion: Defendant’s Brief in
Support, D.E. 12, hereinafter “Defendant’s Brief’ or “Def. Br.”; Plaintiffs Brief in Opposition,
D.E. 13, hereinafter “Opposition” or “Opp.”; Defendant’s Reply Brief in Support, D.E. 16,
hereinafter “Reply” or “Reply Br.”

I.

FACTUAL BACKGROUND

The following facts are taken from the Complaint. D.E. 1. (“Complaint” or “Cornpl.”).2
On or about July 18, 2013, at forty-weeks pregnant, Walnise Joseph was admitted to Newark Beth
Israel Medical Center. Id. at 8. Ms. Joseph was experiencing contractions and fetal monitoring
strips indicated “limited variability and recurring decelerations.” Id. Dr. Tabassum Sabzwari,
D.O., an employee of NCHC, delayed in calling for the performance of a cesarean section so that
the procedure was no longer a viable option. Id. After the child’s head was delivered, there were
indications of “shoulder dystocia.” Id.
After Dr. Sabzwari performed two methods used to deliver fetuses with shoulder dystopia,
he called for assistance.

Id. at 8-9.

Dr. Joseph Vaydovsky, M.D., an employee of Raritan

Obstetrical Gynecological Associates, PA (“Raritan”) arrived three to four minutes after the
delivery of the head, and “extracted the posterior ann, which finally allowed the shoulder to come
beneath the sumphysis [sic] pubis and allowed the baby to be born.” Id. at 9. However, “Dr.
$abzwari and/or Dr. Vaydovsky applied unwarranted

.

.

.

lateral traction

avulsion of nerve roots and to inflict permanent damage.” Id.

.

.

.

sufficient to cause

As a result of hypoxic-ischemic

encephalopathy and the alleged excessive lateral traction to the head, the delivery “resulted in a
bilateral brachial plexus injury.” Id. at 10. According to Plaintiffs, this injury is pennanent. Id.
In accordance with the terms of the Federal Tort Claims Act (“FTCA”), Plaintiffs’ “counsel
submitted a Standard Form 95 Administrative Claim for a sum certain” on or about June 29, 2015.
Id. at 4. On March 17, 2016, the claims were denied. Id. Plaintiffs filed for reconsideration, and

on October 26, 2016, Plaintiffs’ claims on appeal were denied. Id. at 5.

2

The Complaint is referenced by page number because the paragraphs are not consecutively
numbered throughout.
2

Plaintiffs filed the Complaint on February 11, 2017. D.E. 1. The Complaint lists three
counts for (1) negligence against the United States, Vaydovsky, and Raritan;3 (2) respondeat
superior liability against the United States; and (3) respondent superior liability against Raritan.
Id. at 5-12. Plaintiffs seek S5,000,000 in damages. Id. at 12. Defendant Vaydovsky filed an
Answer to the Complaint on May 9, 2017. D.E. 5. The Government filed the instant motion on
August 21, 2017, D.E. 12, which Plaintiffs opposed. D.E. 13. The Government filed a reply. D.E.
16. The Government has since filed supplemental authority. D.E. 25. Dr. Vaydovsky filed an
Answer. D.E. 5. As noted, he is an employee of a separate organization, Raritan. As a result, he
has not participated in the current motion.
The following facts were taken from the Government’s Statement of Material Facts in
support of their motion for partial summary judgment.4 D.E. 12-2 (“SOMF”). NCHC was deemed
a Federally Qualified Health Center (“FQHC”) in 1996; as a result, NCHC has been deemed a
federal employee eligible for malpractice coverage under the FTCA since June 23, 1996. SOMF
at

¶J 3-4.

NCHC was founded as a “private, non-profit charitable ambulatory care facility” that

serves a “medically underserved population” in Newark, New Jersey. Id. at ¶ 2. NCHC has been
tax-exempt under Section 501(c)(3) of the Internal Revenue Code, “and classified as a public
charity” under Section 509(a)(1) since its founding in 1987. Id. at

¶ 23.

Article II of NCHC’s

bylaws—that were in effect from 2012-2013—state its purpose as a non-profit “organized
exclusively for charitable, scientific, and educational purposes.” Id. at

¶ 8.

“The purpose of the

The Complaint also lists John Does, Janes Roes, and John Doe Employers as Defendants.
Plaintiffs responded to the Government’s $OMF in their Opposition brief at pg. 4-5. See D.E.
13-1. Plaintiffs admitted all but five paragraphs, but the five objections pertain to the interpretation
of the relevant statutes. Opp. at 4-5; see also Reply at 1 (“The Plaintiff merely disagrees at to the
application of the law to the facts. Therefore, the facts are undisputed for purposes of the United
States’ motion.”).
3

corporation is to provide ambulatory health care services, consistent with its funding and mandate
as a [FQHC], including, but not limited to, primary health care services and such supplementary
services as are necessary to fulfill the mission of the corporation.” Id. NCHC’s Certificate of
Incorporation states their nonprofit status and charitable purpose:
A. To provide comprehensive primary health services including the
services of physicians, physician’s assistants, nurse clinicians and
other health providers; dental services, diagnostic laboratory and
radiologic services, preventive health services (including children’s
eye and ear examinations to determine the need for vision and
hearing corrections, prenatal services, well child services,
preventive dental services and family planning services) emergency
medical services and transportation services required for adequate
patient care;
B. To provide as appropriate supplemental health services, including
hospital services, home health services, extended care facilities
service, rehabilitative services (including physical therapy) and long
term physical medicine, dental services, vision services, allied
health services, phan-naceutical services, therapeutic radiologic
services, public health services (including nutrition, education and
social services), health education services and services which
promote optimal use of primary and supplementary health services
including as necessary and appropriate services of bi-lingual
outreach workers.
Id. at6.
Their funding policy is stated in Article III of the bylaws:
NCHC shall apply for, and be maintained and supported by,
contributions, donations and legacies from the general public, by
such grants as may be received from governmental or charitable
bodies, and by such fees and charges as may be collected from
patients and from such other sources of revenue as the Board of
Trustees in its discretion may accept and provide.
The corporation shall use its best efforts to apply for all appropriate
grants and funding consistent with its mission and shall provide
services consistent with funding received.
Id. atJ9.

4

NCHC uses a “sliding fee scale based on patient family size and ability to pay.” Id. at

¶

12. A patient, however, will not be turned away if they do not have the ability to pay. Id. “NCHC
bills a patient for any unpaid account balance three times,” afier which it is written off as bad debt.
Id. In 2012, NCHC brought in more than $22,000,000 in net revenue. Id. at ¶J 29. Of that amount,
from patient service revenue, the largest percentage came from Medicare Managed Care with 42%.
Id. Of non-patient revenue, the majority came from government grants and “other grants and

contributions”

—

each at 40%. Id. at

¶ 30.

The vast majority of government grant money came

from the U.S. Department of Health and Human Services. Id. at ¶J 33-34.
II.

STANDARD OF REVIEW
A. Subject Matter Jurisdiction

In deciding a federal Rule of Civil Procedure 12(b)(1) motion to dismiss for lack of subject
matter jurisdiction, the Court must first detennine whether the moving party presents a facial or
factual attack. See Mortensen v. first fed. Say. & Loan Ass ‘n, 549 F.2d 884, 891 (3d Cir.
1977). “A facial attack concerns an alleged pleading deficiency whereas a factual attack concerns
the actual failure of a plaintiffs claims to comport factually with the jurisdictional
prerequisites.” Yottngv. United States, 152 F. Supp. 3d 337, 345 (D.N.J. 2015). The Government
has presented this Court with a factual attack. A factual attack asks the court to “look beyond the
pleadings” and consider whether “there is no subject matter jurisdiction because the facts of the
case

...

do not support the asserted jurisdiction.” Constitution Party of Pa. v. Aichele, 757 F.3d

347, 358 (3d Cir. 2014).

When a defendant raises a factual challenge, no presumption of

truthfulness attaches to the allegations in a complaint. Tucker v. Sec ‘v ofHealth & Human Servs.,
487 F. App’x 52, 54 (3d Cir. 2012) (citation omitted). Instead, a court considers the evidence
presented by the parties. C’NA v. United States, 535 F.3d 132, 144-45 (3d Cir. 200$) (internal

5

quotation marks omitted). The burden of persuasion is placed on plaintiffs to establish jurisdiction,
and the Court may make factual findings beyond the pleadings that are decisive to determining
jurisdiction. C’NA, 535 f.3d at 145; see also US. cx rd. Atkinson v. PA. Shipbttilding Co., 473

F.3d 506, 514 (3d Cir. 2007). However, the Court is also mindful of the fact that as this particular
jurisdictional issue that is “intertwined with the merits,” the Court will “demand less in the way of
jurisdictional proof than would be appropriate at a trial stage.” See CNA, 535 F.3d at 144-45
(internal quotation marks omitted).
B. Summary Judgment Standard

A moving party is entitled to summary judgment where “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” fed. R. Civ. P. 56(a). A fact in dispute is material when it “might affect the outcome of the
suit under the governing law” and is genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). Disputes over irrelevant or unnecessary facts will not preclude granting a motion for
summary judgment. Id. “In considering a motion for summary judgment, a district court may not
make credibility deteni-iinations or engage in any weighing of the evidence; instead, the
nonmoving party’s evidence ‘is to be believed and all justifiable inferences are to be drawn in his
favor.” Marino v. Inthts. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477
U.S. at 255)). A court’s role in deciding a motion for summary judgment is not to evaluate the
evidence and decide the truth of the matter but rather “to determine whether there is a genuine
issue for trial.” Anderson, 477 U.S. at 249.
A party moving for summary judgmnent has the initial burden of showing the basis for its
motion and must demonstrate that there is an absence of a genuine issue of material fact. Celotex

6

Corp.

Catrett, 477 U.S. 317, 323 (1986). After the moving party adequately supports its motion,

the burden shifts to the nonmoving party to “go beyond the pleadings and by her own affidavits,

or by the depositions, answers to interrogatories, and admissions on file, designate specific facts
showing that there is a genuine issue for trial.” Id. at 324 (internal quotation marks omitted). To
withstand a properly supported motion for summary judgment, the nonmoving party must identify
specific facts and affrnriative evidence that contradict the moving party. Anderson, 477 U.S. at
250. “[I]f the non-movant’s evidence is merely ‘colorable’ or is ‘not significantly probative,’ the
court may grant summary judgment.” Messa v. Omaha Prop. & Cas. Ins. Co., 122 F. Supp. 2d
523, 528 (D.N.J. 2000) (quoting Anderson, 477 U.S. at 249-50)).
Ultimately, there is “no genuine issue as to any material fact” if a party “fails to make a
showing sufficient to establish the existence of an element essential to that party’s case.” Celotex
Corp., 477 U.S. at 322. “If reasonable minds could differ as to the import of the evidence,”
however, summary judgment is not appropriate. See Anderson, 477 U.S. at 250-51.
III.

LAW AND ANALYSIS

The Government makes two arguments: first, that NCHC is entitled to absolute immunity

under the New Jersey Charitable Immunity Act (“NJCIA”), N.J.S.A. 2A:53A-7 (“Section 7”); and
second, that if NCHC is not immune, damages should be capped at S250,000 under a separate
provision of the NJCIA, N.J.S.A. 2A:53A-8 (“Section 8”).
A. Sovereign Immunity

Under the Eleventh Amendment, “[t]he judicial power of the United States shall not be
construed to extend to any suit in law or equity, commenced or prosecuted against one of the
United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S.
Const. amend. XL. The United States Supreme Court has interpreted the Eleventh Amendment as

7

affinriing “the fundamental principle of sovereign immunity” as a limit on a federal court’s judicial
authority. Pennhurst State Sc/i. & Hosp. v. Halderman, 465 U.S. $9, 98 (1984).
Due to sovereign immunity, a federal court does not have jurisdiction over suits against the
United States unless Congress, by statute, expressly and unequivocally waives the United States’
immunity to suit. United States v. Craig, 694 F.3d 509, 511 (3d Cir. 2012) (internal quotation
marks omitted). As a FQHC, under the Federally Supported Health Centers Assistance Act, 42
U.S.C.

§ 233(a)-(n) (“fSHCAA”), both the NCHC and its employees are considered “employees”

of the Public Health Service (“PHS”) under the FTCA.

42 U.S.C.

§ 233(g)-(n); 28 U.S.C.

§sS

1346(b), 267 1-2680. The United States is the only proper defendant in an action against an FQHC
for damages due to personal injuries arising from the provision of medical, surgical, dental, or
related functions. 42 U.S.C.

§ 233(a). The United States, however, is only liable to the extent of

its express waiver of sovereign immunity in the FTCA. Id.; see S.M v. United States, 2016 WL
7374530, at *2 (D.N.J. Dec. 20, 2016); see also United States v. Bein, 214 F.3d 408, 412 (3d Cir.
2000) (indicating that not only must waivers of sovereign immunity be unequivocally expressed,
the waiver must also be strictly construed in favor of the sovereign).
The FTCA “does not itself create a substantive cause of action against the United States;
rather, it provides a mechanism for bringing a state law tort action against the federal government
in federal court.” Lomando v. United States, 667 F.3d 363, 372 (3d Cir. 2011). “Accordingly,
‘the extent of the United States’ liability under the FTCA is generally determined by reference to
state tort law.” Id. Neither party contests that New Jersey law applies here.
Under the FTCA, the United States is liable for “tort claims, in the same manner and to the
same extent as a private individual under like circumstances.” 28 U.S.C.
United States acts as an employer with respondeat

8

superior

§ 2674. Essentially, the

liability for its employees under the

FTCA. See Lomando, 667 F.3d at 374 (3d Cir. 2011). Thus, the United States “stands in the
shoes” of NCHC, and can assert “any defense based upon judicial or legislative immunity which
otherwise would have been available to the employee of the United States whose act or omission
gave rise to the claim, as well as any other defense to which the United States is entitled.” Id.
(citing 28 U.S.C.

§ 2674).

The party bringing a claim under the FTCA must satisfy the six threshold requirements of
2$ U.S.C. §1346(b)(1). See Gremrningerv. United States, 2017 WL 1170853, at *3 (D.N.J. Mar.
29, 2017). The FTCA claim must be made
(3) for
(1) against the United States, (2) for money damages,
or personal injury or death (4) caused by
injury or loss of property,
the negligent or wrongful act or omission of any employee of the
Government (5) while acting within the scope of his office or
employment, (6) under circumstances where the United States, if a
private person, would be liable to the claimant in accordance with
the law of the place where the act or omission occurred.
...

CNA, 535 F.3d at 141 (internal quotation marks omitted). Here the dispute centers on the final
criteria because the NJCIA is the “law of the place,” that is, New Jersey. See Gremminger, 2017
WL 1170853, at *3
Plaintiffs do not contest that NCHC can raise a defense under the NJCIA. Instead they
argue that Section 8 applies,5 while Defendant argues that it is entitled to absolute immunity under
Section 7. “The most prominent distinction between nonprofit entities organized exclusively for
charitable, religious, or educational purposes [under Section 7] and nonprofits organized

Plaintiffs argue in their Opposition that because all six elements under § 1346(b)(l) are met,
this Court has subject matter jurisdiction. Opp. at 3-4. Plaintiffs appear to be arguing that
absolute immunity under Section 7 does not impact the Court’s subject matter jurisdiction. The
Court disagrees. See Young, 152 F. Supp. 3d 337, 343-44 (D.N.J. 2015) (“Because ‘being liable
to the claimant in accordance with the law of the place’ is an element ofjurisdiction under the
statute, the issue of absolute immunity of the Government is an issue ofjurisdiction.”) (citing
CNA, 535 F. 3d at 143-44)
9

exclusively for hospital purposes [under Section 8] is that the former are immune from liability
while the latter are subject to liability for negligence, albeit with a cap on its damages.” Kztchera
v. Jersey Shore family Health Ctr., 221 N.J. 239, 247 (2015).
Section 7 of the NJCIA provides in relevant part as follows:
a. No nonprofit corporation, society or association organized
exclusivelyfor religio us, charitable or edttcational purposes or its
trustees, directors, officers, employees, agents, servants or
volunteers shall, except as is hereinafter set forth, be liable to
respond in damages to any person who shall suffer damage from the
negligence of any agent or servant of such corporation, society or
association, where such person is a beneficiary, to whatever degree,
of the works of such nonprofit corporation, society or association;
provided, however, that such immunity from liability shall not
extend to any person who shall suffer damage from the negligence
of such corporation, society, or association or of its agents or
servants where such person is one unconcerned in and unrelated to
and outside of the benefactions of such corporation, society or
association.
N.J.S.A. 2A:53A-7(a) (emphasis added); see also Bicker v. Cmty. House ofMoorestown, 169 N.J.
167, 175 (2001).
Section 8, in turn, provides as follows:
Notwithstanding the provisions of [N.J.S.A. 2A:53A-7], any
nonpi-ofit corporation, society or association organized exclusively
fr hospital purposes shall he liable to respond in damages to such
beneficiary who shall suffer damage from the negligence of such
corporation, society or association or of its agents or servants to an
amount not exceeding $250,000, together with interest and costs of
suit, as the result of any one accident and to the extent to which such
damage. together with interest and costs of suit. shall exceed the sum
of $250,000 such nonprofit corporation, society or association
organized exclusively •for hospital purposes shall not be liable
therefor.
N.J.S.A. 2A:53A-8 (emphasis added); See also Kitchera, 221 N.J. at 249 (observing that a
nonprofit hospital is subject to limited liability under Section 8 if “it is formed as a nonprofit
corporation, sociality, or association, is organized exclusively for hospital purposes, was
10

promoting those objectives and purposes at the time plaintiff was injured, and the plaintiff was a
beneficiary of the activities of the hospital.”).
In detenriining whether Section 7 or Section 8 of the NJCIA applies, a relatively recent
New Jersey Supreme Court case is instructive. In Kitch era, the Court held that deciding which
section applies “turns on the purpose of the [nonprofit] institution, not the use to which the facility
is put on any given day.” 221 N.J. 239, 242 (2008). The plaintiff in Kitchera slipped and fell
while attending a free eye screening held at a family health care facility of a regional teaching
hospital. Id. at 241. The organizer of the screening was the New Jersey Commission for the Blind
and Visually Impaired, and the event was staffed by employees of both organizations. Id. at 242.
In determining whether an organization is a hospital, the Court in Kttchera considered
whether “a patient can obtain twenty-four hour continuous care” at the facility. Id. at 250. The
Kttchera Court added the following:

[T]he core aspects of a hospital’s purposes are to address the needs
of all of the types of patients that a hospital is expected to serve.
Therefore, we hold that any medical service that a hospital patient
may require pre-admission, during a hospital stay, or postadmission, constitutes a presumptive core ‘hospital purpose’ under
[the NJCIA].”
Id. at 250-51 (quoting Httnterdon Medical Center

Township ofReadington, 195 N.J. 549, 572,

(2008)). The New Jersey Supreme Court stressed that the modern definition of a hospital is more
expansive than that used by the Appellate Division, which previously held that the defendant was
a “hybrid” charity-hospital. Instead, the New Jersey Supreme Court overturned the Appellate
Division’s holding and decided that Section 8 applied and that damages were limited to $250,000.
In doing so, the Court acknowledged that “[t]he provision of charity care is a core function of a
hospital.” Id. at 254.

11

In a 2015 case, Judge Kugler from this District reached the same result. Young, 152 F.
Supp. 3d 337 at 350. In Yottng, Judge Kugler noted that the New Jersey Supreme in Kuchera
expanded the definition of “hospital purposes” which resulted in a “complimentary narrowing of
‘charitable purposes” under the NJCIA. Id. In Young, the plaintiff, when pregnant, was admitted
to Cooper University Hospital (“CUH”) and treated by CUH physicians and doctors employed by
CAMcare Health Corporation (“CAMcare”). Id. at 340. Similar to the current case, there was a
delay in giving the plaintiff the necessary care during her delivery, which resulted in her child’s
pennanent medical disability. Id. at 341. Like NCHC, CAMcare was a FQHC. Id. at 340.
CAMcare’s mission statement was “to provide high quality comprehensive primary health care to
the families we serve.” Id. at 350 (emphasis in original).
The court in Yottng, relying on Kuch era, decided that CAMcare “can be nothing other than
an organization that is ‘exclusively for hospital purposes’ and is certainly not ‘exclusively for
charitable purposes.” Id. at 349. As a result, Judge Kugler denied complete immunity under
Section 7 and instead applied Section 8 with its colTespondmg statutory cap on damages of
$250,000 pursuant to Section 8, as opposed to complete immunity under Section 7. Id. The Yoitng
court reasoned as follows:
The Government in seeking absolute immunity under the NJCIA,
argues that CAMcare is a charitable organization because it
“provides comprehensive health services to underserved families—
regardless of insurance status or ability to pay—in the City of
Camden and throughout Camden and Gloucester Counties.” But
this is the very definition of charity care, and as stated by the New
Jersey Supreme Court, a “core function of a hospital.” To find
otherwise would be contrary to the settled state law.
Indeed, the evidence the Government points to in support of being
organized for charitable purposes directs this court to the conclusion
that CAMcare is actually organized for hospital purposes. Each of
the first five statements contained in CAMcare’s corporate purpose
section on its Certificate of Incorporation explicitly mention “health
12

services” and a laundry list of other medical services provided by
the modem day hospital. The remaining statements in the corporate
purpose section deal with functions related to hospital purposes—
such as billing for services rendered, providing residency programs,
and conducting research—or the basic functions of a non-profit
related to fundraising and operations. These same corporate
purposes were incorporated into CAMcare’s Bylaws, which state on
the cover of the document that CAMcare’ s mission statement is “to
provide high quality comprehensive prirnaly health care to the
families we serve.”
This can be nothing other than an organization that is “exclusively
for hospital purposes” and is certainly not “exclusively for
charitable purposes.” As the New Jersey Supreme Court noted, an
organization can only avail itself of one immunity provision or the
other. See Kuchera, 221 N.J. at 247, 111 A.3d 84. The burden is on
Young as plaintiff to prove jurisdiction, which she has done
sufficiently in the SAC. The Government has failed to present
evidence to overcome the pleadings or even call them into question;
rather, the Government has supported the argument against itself by
showing that it does not qualify for absolute immunity.
Accordingly, the Government’s Initial Motion with respect to the
absolute immunity defense will be denied.
Id. at 350 (citations omitted).

In three other medical malpractice cases, courts within this District have found that the
government was not subject to charitable immunity under Section 7, but instead was entitled to the
$250,000 damage cap set forth in Section 8 ofNJCIA. In S.li

1’.

United States, the plaintiff alleged

that CompleteCare Health Network (“CompleteCare”) failed to offer her timely prenatal screening
for Down Syndrome before the birth of her child. 2016 WL 7374530, at *1. The court found that
CompleteCare was a “modem hospital,” based on the variety of medical and health related services
that it provided its patients, and the training and supervising it provided its medical residents. Id.
at *56. Consequently, the court held that the government was only entitled to immunity under
Section 8. Id.

In Gremminger, the plaintiff alleged that while in the care of America and

Monmouth family Health Center (MFHC), she received inadequate medical treatment, which

13

resulted in the stillbirth of her child. 2017 WL 1170853, at *1. The court there found that MFHC’s
funding structure and billing practices demonstrated that it was organized for a hospital purpose
rather than a charitable one, especially since it did not solicit charitable contributions nor engage
in fundraising efforts. Id. at *$•

Similarly, in Juarez-Atitano

1’.

United States, plaintiff had

complications during birth, resulting in an emergency cesarean section and a stillbirth at Ocean
Health Initiatives, Inc. (“OHI”), a FQHC. 2018 WL 3866693, at *1 (D.N.J. Aug. 14, 2018). The
court found that because OHI provided numerous hospital services to underprivileged individuals
in the community and these functions were comparable to functions a hospital would perform,
OHI was subject to Section $s damage cap. Id. at *8.
In light of the New Jersey Supreme Court’s ruling in Kttchera, which expanded the
definition of a hospital under Section 8 to reflect modern reality, the Court also concludes that
NCHC is also a “nonprofit corporation organized exclusively for hospital purposes.” The facts in
this matter are remarkably similar to those in Yoztng, and the Court finds Judge Kugler’s thorough
analysis and reasoning to be persuasive. NCHC provides health care services to underserved
populations and treats regardless of ability to pay. NCHC’s bylaws indicate that its purpose,
among things, is to provide “primary care services[.]”

Section A of NCHC’s Certificate of

Incorporation indicates that its purpose, among other things, is “[t]o provide comprehensive
primary health services[.]” D.E. 12-2 at ¶ 6. Certain of the non-exclusive services listed include
traditional hospital functions such as diagnostic, radiologic, and emergency services. Id. In fact,
Section 3 of the Certificate indicates that NCHC is to provide “hospital services[.]”

The

conclusion that NCHC is a hospital under Section 8 is also buttressed by persuasive reasoning in
S.li, Gremminger, and Juarez-Atilano. For purposes of Section 8 of the NJCIA, NCHC is a
“modern hospital” and is organized for “hospital purposes.”

14

Consistent with the recent decisions of the New Jersey Supreme Court and this District,
the Court finds that NCHC is subject to Section 8 rather than Section 7 of the NCIA. As a result,
the Government’s motion to dismiss for lack of subject matter jurisdiction is denied.
B. Partial Summary Judgment

Because NCHC (and as a result, the United States here) is subject to Section $ of the
NJCIA, there is a corresponding $250,000 cap on damages. N.J.S.A. 2A:53A-8. Plaintiffs do not
contest that the cap should not apply; instead, they argue that the statutory cap should not apply to
the alleged negligence of the individual healthcare provider, Dr. Sabzwari. Opp. at 9-10. In
support of their argument, Plaintiffs rely on the following language from Section 7, not Section 8,
of the NJCIA: “Nothing in this subsection shall be deemed to grant immunity to any health care
provider, in the practice of his profession, who is a compensated employee, agent or servant of any
nonprofit corporation, society or association organized exclusively for religious, charitable or
educational purposes.” N.J.S.A. 2A:53A-7(a).
Plaintiffs’ argument is foreclosed by 42 U.S.C.

§ 233. As noted, there is no dispute that

NCHC and its employees (including Dr. Sabzwari) are employees of the Public Health Service for
purposes of the FTCA, and, as a result, the United States is the only proper defendant in this matter.
42 U.S.C.

§ 233(a), (g). As the Court in Young observed: “[U]nder the FTCA. the [United States]

stands in the shoes of the individual doctors and CAMcare simultaneously as sovereign. employer.
and employee.” Young, 152 F.Supp.3d at 34$ (citing Lomando, 667 F.3d at 374-76); see also
United States v. Smith, 499 U.S. 160, 166 (1991) (“Congress recognized that the required
substitution of the United States as the defendant in tort suits filed against Government employees
would sometimes foreclose a tort plaintiffs recovery altogether.”).

15

Thus, while the Court

recognizes that Plaintiffs’ assertion may be meritorious if it were able to sue NCHC in state court,
the FTCA requires a different result.
For the foregoing reasons, Section 8’s $250,000 statutory cap applies to the United States
in this matter, and the United States is comprised of both NCHC and Dr. Sabzwari pursuant to the
FTCA.
IV.

CONCLUSION

For the reasons stated above, the Government’s motion to dismiss is DENIED and the
Government’s motion for partial summary judgment is GRANTED.

An appropriate Order

accompanies this Opinion.

Dated: October 18, 2018

C\Q\J-

/

John’Michael Vazquez/tL.J.

16