Hospital’s Claims Dismissed for Lack of Personal Jurisdiction
The plaintiff hospital in Northshore Regional Medical Center, L.L.C., d/b/a Northshore Regional Medical Center v. Edith and Brian Dill, et al. recently appealed a judgment from the Parish of St. Tammany, dismissing their claims against one of the defendants in the case, White Horse Insurance Ireland, LTD, for lack of personal jurisdiction. Of all the choices facing someone that decides to resort to a court to settle a claim, choosing where to seek relief can prove to be the most important. Because a court will not hear a claim when it does not have jurisdiction, the wrong choice will lead to wasted time and money.In anticipation of upcoming travel, an English couple acquired a travel insurance policy that was underwritten by an Irish corporation, White Horse Insurance Ireland, LTD, (White Horse) and purchased through an English corporation, Atlas Travel Insurance Services Limited, d/b/a/ Atlas Direct (Atlas). The policy included coverage for travel in the United States, and as part of their travel, the couple, Mr. and Mrs. Dill were visiting Louisiana in November 2006. While in Louisiana, Mrs. Dill was stricken with a serious illness and was admitted to NorthShore Regional Medical Center, L.L.C., in Slidell, Louisiana. An extensive stay in the facility, coupled with emergency surgery brought NorthShore’s charges for her care to a final total of $1,256,229.08.
NorthShore’s payment requests to White Horse were handled administratively through Global Excel Management, Inc., (Global Excel) a Canadian corporation. Global Excel facilitated one $309,498.31 payment from White Horse to NorthShore in February, 2007. After requesting and failing to receive further payments, NorthShore resorted to filing claims against Mr. and Mrs. Dill, Atlas, and Global Excel in 2009, and adding its claims against White Horse in 2010.
There are procedural rules that must be followed in civil law suits. While each state maintains their own rules of civil procedure for use in their state courts, there is only one set of rules that are used in federal courts, the Federal Rules of Civil Procedure (FRCP). Many of the state rules follow, or are similar to, the FRCP. Both federal and state courts use law developed in prior cases to interpret the meaning of the applicable rules of civil procedure. Also, even though states have their own rules of civil procedure, they sometimes use the reasoning and interpretation from federal case law when applying their own rules. Louisiana refers to its rules of civil procedure as the Code of Civil Procedure (CCP), and courts in the state may refer to prior state and/or federal case law to interpret specific provisions of the Code.
In order for any court to decide a case, that court must first have the authority over the subject matter of the dispute, as well as authority over the parties to the dispute. Authority over the subject matter of the dispute is aptly called “subject matter jurisdiction.” Subject matter jurisdiction is usually not a problem for parties in state courts, because those courts have “general jurisdiction” which basically means that as long as the dispute meets the minimum requirements imposed by the state for the courts to hear a case, then subject matter jurisdiction is met. Federal courts however, are courts of “limited jurisdiction” and subject matter jurisdiction is much more difficult to establish. If a court lacks subject matter jurisdiction, the court will raise the issue even if none of the parties do so because courts will not exercise their authority when subject matter jurisdiction is absent.
Unlike subject matter jurisdiction, courts will not raise the issue of personal jurisdiction if the party does not object to the court exercising authority over that party. This is because, unlike subject matter jurisdiction, personal jurisdiction is a right that can be waived. The waiver can be expressed by the party, or can be implied by the party’s actions. When a party objects to the court’s authority on lack of personal jurisdiction, the court will evaluate the party’s objection to determine if personal jurisdiction is indeed lacking.
In response to NorthShore’s action, White Horse filed a declinatory exception objecting to the court’s personal jurisdiction. White Horse pointed to its status as an Irish company underwriting insurance for an English company on a policy held by two English citizens. White Horse also pointed out that “it has absolutely no contact with Louisiana, does not solicit or conduct business, advertise, or underwrite any policies of insurance in Louisiana, and has no employees or offices in Louisiana.” White Horse further asserted that any exercise by the court of authority over it would be unconstitutional.
The trial court proceeded to analyze the question of its personal jurisdiction over White Horse, primarily using federal case law and examining the requirements for a court to assert personal jurisdiction over a defendant that is not a resident of the state where the court has jurisdiction. A court can establish personal jurisdiction over a non-resident defendant if the defendant’s contacts within the court’s jurisdiction are sufficient and asserting jurisdiction over the defendant would be reasonable considering all the circumstances. One case, St. Luke’s Episcopal Hosp. v. Louisiana Health Service & Indem. Co., provided particular support for the trial court’s conclusion that the single payment that NorthShore received on behalf of White Horse was not a substantial enough contact with Louisiana such that the court could assert personal jurisdiction over White Horse. The trial court noted that White Horse’s initiation of payment to NorthShore was simply a response to an event triggered by their insurance policy holder’s independent decision to travel to Louisiana and use NorthShore’s hospital services. NorthShore’s claims against White Horse were dismissed with prejudice.
NorthShore appealed the trial court’s dismissal of its claims. The appeals court began their de novo review of the legal question of whether personal jurisdiction over White Horse could be established by a Louisiana court with La R.S. 13:3201, the Louisiana long-arm statute. Long arm statutes are state laws that allow courts to exercise of personal jurisdiction over non-resident defendants. States can authorize the exercise of personal jurisdiction through their long arm statutes up to the limit imposed by the due process requirements of the United States Constitution. Louisiana’s long arm statute contains specific acts and conditions that allow the state to exercise of jurisdiction, as well as a provision that authorizes jurisdictional assertion to the full extent allowed by the U.S. Constitution through 13:3201(B) which provides in part “a court of this state may exercise personal jurisdiction over a nonresident on any basis consistent with the constitution of this state and of the Constitution of the United States.”
The court of appeals proceeded through a two-part due process test to evaluate Louisiana’s authority to assert personal jurisdiction over White Horse. The test requires (1) the defendant to have a sufficient level of contact with the state, and (2) that in consideration of several factors, exercising personal jurisdiction over the defendant is not unreasonable. The court of appeals evaluated White Horse’s contacts with Louisiana, and found them insufficient to support the assertion of either specific or general jurisdiction. The court found that the only contacts with Louisiana that could potentially be attributed to White Horse were insurance coverage communication and partial payment authorization to NorthShore. Further, neither of those acts were initiated by White Horse, and only occurred as a result of the policy-holder’s independent choices to travel to Louisiana and seek medical services from NorthShore.
While upholding the trial court’s decision to dismiss NorthShore’s claims against White Horse for lack of personal jurisdiction, NorthShore gained a partial victory in the appellate court’s determination that the claims should be dismissed without prejudice, rather than dismissed with prejudice as the trial court held. This means that NorthShore is now free to pursue its claims against White Horse in a court that can properly assert personal jurisdiction over the defendant, should it choose to do so.
There are many decisions that, once made can significantly affect the outcome of the case. If you are facing litigation, contact the Berniard Law Firm.
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