Janet L. Rowland Donald E. Rowland v. Donald A. Patterson, M.D. Tom J. Altizer, M.D. Michael A. Winslow, M.D. Robert K. Hobbs, M.D., Robert J. Cirincione, M.D.
Docket: 87-1721
Court: Court of Appeals for the Fourth Circuit; September 6, 1988; Federal Appellate Court
On July 16, 1985, Janet L. Rowland and Donald Rowland initiated a malpractice proceeding against five medical doctors with the Maryland Health Claims Arbitration Office (HCAO), as mandated by Maryland law requiring such proceedings before filing a lawsuit in court. Following a summary judgment in favor of the defendants on May 6, 1987, due to expired limitations, the plaintiffs rejected the HCAO decision on June 12, 1987, and subsequently filed a civil action in the U.S. District Court for Maryland, citing diversity jurisdiction.
Judicial review of the HCAO decision was sought under a standard similar to de novo review, acknowledging that while the HCAO decision retained credibility, it could be modified if fraud, misconduct, or legal errors were evident. The HCAO's findings, such as Donald Rowland's deposition, remained admissible in subsequent judicial proceedings.
Key to the case was determining which filing—HCAO or federal court—commenced the action for diversity jurisdiction purposes. The district court concluded that the HCAO filing marked the commencement of the suit, noting a lack of diversity at that time, leading to a dismissal for lack of subject matter jurisdiction.
The district judge determined that an action must commence on a single date, concluding that the filing with the Maryland Health Care Claims Arbitration Office (HCAO) initiated the action for statute of limitations purposes on July 16, 1985. He expressed reluctance to recognize two separate commencement dates, one for limitations and another for diversity jurisdiction when the federal suit was filed on June 15, 1987. However, the legal framework, particularly the Erie doctrine, allows for an action to commence on different dates based on state definitions and federal procedural rules. The case hinges on determining which filing established the action for diversity jurisdiction, which is considered a federal procedural issue.
The court found that the HCAO filing served as the first necessary step to initiate a federal civil action, as it is a prerequisite to filing in both state and federal courts. Thus, the HCAO filing was deemed to have commenced the suit for diversity purposes, but at that time, there was no diversity among the parties. Consequently, the court affirmed the dismissal of the case.
District Judge McMillan dissented, arguing that the majority's position improperly recognized the HCAO filing as the commencement of the action for diversity purposes, in contradiction to Rule 3 of the Federal Rules of Civil Procedure, which requires a complaint to be filed in federal court. The Rowlands' medical malpractice action necessitated HCAO claims filing as mandated by Maryland law before pursuing action in either court system.
Rowlands filed a claim with the Maryland Health Care Alternative Dispute Resolution Office (HCAO) on July 16, 1985, while both they and the defendants were Maryland residents. On May 6, 1987, the HCAO granted a summary judgment to the defendants, ruling the claim was untimely based on Maryland's three-year statute of limitations for medical malpractice claims (Md.Cts. Jud. Proc.Code Ann. Sec. 5-109). Subsequently, on June 15, 1987, the Rowlands filed a complaint in the U.S. District Court for the District of Maryland, alleging they were West Virginia residents at that time, a claim disputed by the defendants but assumed by the court for the appeal's purposes. The district court dismissed the suit, asserting it commenced on July 16, 1985, due to the HCAO filing tolling the statute of limitations. The judge emphasized the necessity of a single commencement date to avoid expanding diversity jurisdiction. However, this reasoning was deemed inconsistent with the law, as federal courts must adhere to state law regarding tolling statutes, while the commencement of action for federal diversity jurisdiction is governed by federal law. The majority opinion highlighted that the district court's approach did not align with established federal legal principles.
Circuit courts unanimously determine that, except for cases removed from state court, diversity of citizenship is assessed based on the date a complaint is filed in federal court. This principle is supported by multiple cases, which establish that citizenship is evaluated at the initiation of the suit. For instance, in Topp v. CompAir Inc., the relevant date is the filing date of August 30, 1985, for determining CompAir Inc.'s citizenship. Similar conclusions are drawn in cases such as Lugo-Vina v. Pueblo International, Inc., Wigand v. Flo-Tek, Inc., and others, which emphasize that diversity jurisdiction is established as of the filing date, not at the time the cause of action arose or subsequently.
Additionally, the jurisdictional determination must be made according to the facts existing at the time the complaint is filed, as mandated by Federal Rules of Civil Procedure Rule 3, which states that a civil action is commenced by filing a complaint. The Advisory Committee's note clarifies that this rule governs all actions, having the force of a federal statute. Courts are limited in their interpretation of the Federal Rules only when it aligns with the Erie doctrine or constitutional limits. Thus, the application of federal rules in diversity jurisdiction cases is obligatory, not discretionary.
When a Federal Rule applies, the court must adhere to it unless there is clear evidence that it violates the Enabling Act or constitutional limitations. In this case, there is no conflict between federal and state law regarding the determination of diversity, which is governed by federal law. The majority asserts that the filing of the Health Care Alternative Dispute Resolution Office (HCAO) claim marks the commencement of the suit, arguing that the HCAO process remains relevant even after the case assumes a judicial nature. However, this interpretation does not align with Rule 3's explicit language.
The majority's logic is further complicated by the fact that the federal court lacked subject matter jurisdiction when the HCAO claim was filed, as exhausting the HCAO process is a prerequisite for jurisdiction over medical malpractice claims in Maryland. Thus, the majority's approach requires a federal court to evaluate its jurisdiction based on a time when it could not have exercised that jurisdiction.
The dissent argues against the majority's position, emphasizing that federal courts should apply Federal Rules of Civil Procedure unless there is a compelling reason otherwise. The dissent also notes the similarity between the nullification action and the medical negligence claim initially filed with HCAO, although the court did not need to address the defendants' challenge to that fact. The dissent references the case Cannon v. Kroger to support the notion that federal procedural questions are at play, reinforcing the principle that federal courts ought to apply the Federal Rules unless compelling reasons suggest otherwise. Ultimately, the dissent contends that the majority's reasoning lacks legal support and that the federal procedural law should govern the determination of when the case commenced for diversity purposes.
Judge Hall referenced the case Cannon v. Kroger Co., 832 F.2d 303 (4th Cir. 1987), where the plaintiff attempted to toll the six-month statute of limitations under Sec. 301 of the Labor Management Relations Act by obtaining a summons from a North Carolina court. The Fourth Circuit, in a divided decision, rejected this claim, stating that the Supreme Court's ruling in West v. Conrail required the application of Federal Rules to determine the tolling of the limitation period. The majority concluded that the North Carolina summons did not equate to a Federal complaint as defined by Fed. R. Civ. P. Rule 8(a)(2). Consequently, since a proper complaint was not filed within the limitation period, the action was deemed not commenced under Fed. R. Civ. P. Rule 3. While the specifics of Cannon differ, the ruling supports the principle that federal courts should apply Federal Rules unless compelling reasons suggest otherwise.
