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FIRICH v. AMERICAN CYSTOSCOPE MAKERS

January 11, 1980

DAVID A. FIRICH, Plaintiff,
v.
THE AMERICAN CYSTOSCOPE MAKERS, INC., a corporation, AMERICAN HOSPITAL SUPPLY CORPORATION, a corporation, V. MUELLER COMPANY, a corporation, STUART'S DRUG & SURGICAL SUPPLY, INC., a corporation, Defendants, v. ROBERT W. DOEBLER, M.D. and SEWICKLEY VALLEY HOSPITAL, Third-Party Defendants.



The opinion of the court was delivered by: COHILL

On July 28, 1977, the plaintiff, David A. Firich, entered Sewickley Valley Hospital, which is located in the Western District of Pennsylvania. The following day, as part of a standard medical procedure, Dr. Robert W. Doebler inserted an ACMI Filiform No. 6 French Olive Tip and its follower into Mr. Firich. During the course of this procedure, the tip unexpectedly disengaged from its follower and lodged in the plaintiff's bladder. Surgery was necessary to remove the tip.

Mr. Firich, currently a resident of the District of Columbia, brought an action in this Court on May 29, 1979 against the four companies that allegedly had manufactured, distributed and sold the instrument in question. None of the four companies is a citizen of the District of Columbia; the plaintiff alleges damages in excess of ten thousand dollars exclusive of interest and costs. Thus, this case meets the requirements for diversity jurisdiction set forth in 28 U.S.C. § 1332 (1976). Venue lies in the Western District of Pennsylvania, where the claim arose. See 28 U.S.C. § 1391(a) (1976).

 Both the doctor and the hospital have moved this Court, pursuant to Federal Rule of Civil Procedure 12(b)(1), to dismiss the third-party complaint. They argue that the Pennsylvania Health Care Services Malpractice Act, 40 Pa.Stat.Ann. §§ 1301.101-1301.1006 (Purdon's Supp. 1979-80), deprives this Court of subject matter jurisdiction over that aspect of the case. The third-party plaintiffs oppose this motion. The parties addressed the Court on the issue through briefs and oral argument.

 We will grant the third-party defendants' motion to dismiss the third-party complaint. Moreover, we recognize that under Federal Rule of Civil Procedure 12(h)(3), a federal district court has a responsibility to examine subject matter jurisdiction over an action even if the parties do not raise an objection. See Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152, 29 S. Ct. 42, 53 L. Ed. 126 (1908). Cf. Trent v. Allegheny Airlines, Inc., 431 F. Supp. 345, 351 (W.D.Pa.1977) (court on own motion dismisses Title VII action for failure to include in complaint allegation of compliance with certain statutory prerequisite to court suit). See generally C. Wright, Handbook of the Law of Federal Courts § 7 (3d ed. 1976). After reviewing the elements of this case, we have determined that we must dismiss the entire lawsuit for lack of subject matter jurisdiction. We do not take this action lightly, but rather, only after careful study of the Health Care Services Malpractice Act and federal and state cases arising from that Act.

 I.

 The Health Care Services Malpractice Act

 Confronted with skyrocketing medical malpractice insurance premiums, the Pennsylvania legislature in 1975 enacted the Health Care Services Malpractice Act (hereinafter referred to as the "Act"). Through the Act the legislature sought "to make available professional liability insurance at a reasonable cost, and to establish a system through which a person who has sustained injury or death as a result of tort or breach of contract by a health care provider can obtain a prompt determination and adjudication of his claim." 40 Pa.Stat.Ann. § 1301.102 (Purdon's Supp. 1979-80). The system established by the Act moves malpractice litigation out of the courts and into an arbitration proceeding. The Act imposes a duty on the Governor to appoint an Administrator for Arbitration Panels for Health Care, who will serve within the Commonwealth's Department of Justice. 40 Pa.Stat.Ann. § 1301.301 (Purdon's Supp. 1979-80). When a claim is filed, the Administrator appoints an arbitration panel consisting of two attorneys, two health care providers and three lay persons to hear the case. 40 Pa.Stat.Ann. § 1301.308 (Purdon's Supp. 1979-80).

 Section 1301.309 of the Act provides that

 
(t)he arbitration panel shall have original exclusive jurisdiction to hear and decide any claim brought by a patient or his representative for loss or damages resulting from the furnishing of medical services which were or which should have been provided. The arbitration panel shall also have original exclusive jurisdiction to hear and decide any claim asserted against a nonhealth care provider who is made a party defendant with a health care provider.

 Until the Administrator selects a panel for a particular case, "a party may join any additional party who may be necessary and proper to a just determination of the claim. The arbitration panel shall have jurisdiction over such additional parties whether they be health care providers or nonhealth care providers." 40 Pa.Stat.Ann. § 1301.502 (Purdon's Supp. 1979-80). "Appeals from determinations made by the arbitration panel shall be a trial de novo in the court of common pleas in accordance with the rules regarding appeals in compulsory civil arbitration and the Pennsylvania Rules of Civil Procedure." 40 Pa.Stat.Ann. § 1301.509 (Purdon's Supp. 1979-80).

 As discussed earlier, the present case satisfies the requirements for diversity jurisdiction set forth in 28 U.S.C. § 1332 (1976). In a diversity action, a federal district court must apply the substantive law of the forum state. See Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); Erie Railroad v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938). Of course, this general principle is easier to state than to apply. Federal courts often have had great difficulty in determining what qualifies as "substantive law." See, e.g., Cohen v. Beneficial Loan Corp., 337 U.S. 541, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949); Woods v. Interstate Realty Co., 337 U.S. 535, 69 S. Ct. 1235, 93 L. Ed. 1524 (1949). Employing the balancing test suggested by the Supreme Court in Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525, 78 S. Ct. 893, 2 L. Ed. 2d 953 (1958), the Third Circuit in Edelson v. Soricelli, 610 F.2d 131 (3d Cir. 1979), recently concluded that the Erie doctrine requires the federal courts to give effect to the jurisdictional provisions of the Health Care Services Malpractice Act. On the basis of this conclusion, the Third Circuit affirmed the dismissal by district courts of two cases in which non-resident, injured patients had asserted claims of medical malpractice against Pennsylvanian physicians and medical facilities. Accord, Stoner v. Presbyterian University Hospital, 609 F.2d 109 (3d Cir. 1979). These district courts had found that the Act confers original exclusive jurisdiction for malpractice actions on the state arbitration panels.

 Under Soricelli, we must apply the Act in appropriate diversity cases. Significant differences between Soricelli and the present case, however, prevent the specific holding of Soricelli from controlling this action. In the consolidated cases that were before the Third Circuit in Soricelli, injured patients had instituted malpractice actions in federal court against the physicians and hospitals that had treated them. Physicians and hospitals fall within the Act's definition of "health care provider(s)." Section 1301.103 of the Act defines "health care provider," in pertinent part, as "a primary health center or a person, corporation, facility, institution or other entity licensed or approved by the Commonwealth to provide health care or professional medical services as a physician, an osteopathic physician or surgeon." Section 1301.309 set forth in its entirety above explicitly grants original exclusive jurisdiction to the arbitration panels over cases brought by patients against health care providers. Thus, the Soricelli court affirmed the dismissals after finding that the Erie doctrine required federal courts to recognize the Act.

 No court federal or state sitting in Pennsylvania has yet addressed this issue. Under the Erie doctrine, we must predict how the Pennsylvania Supreme Court, if confronted by the present case, would decide the question. See Huddell v. Levin, 537 F.2d 726, 733 (3d Cir. 1976); Gates Rubber Company v. USM Corporation, 508 F.2d 603, 605, 614 (7th Cir. 1975). Cf. Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S. Ct. 1776, 18 L. Ed. 2d 886 (1967) (analogizing determination of state law by federal court in diversity case with determination of the character of a property interest for purposes of federal estate tax liability). This prediction must flow from our analysis of the purpose underlying the Act and from judicial opinions that have explored analogous questions.

 The Act seeks to minimize physicians' malpractice insurance premiums while providing maltreated patients with an efficient system for obtaining redress. In order to achieve these two goals, the legislature gave original exclusive jurisdiction over medical malpractice claims to arbitration panels that have expertise in medical and legal matters. The legislature also granted to these panels original exclusive jurisdiction over claims against nonhealth care providers when they are joined as defendants in actions against health care providers. This broad grant of original exclusive jurisdiction clearly indicates an intention ...


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