"There's no obligation on the part of any other federal appellate court to resolve these issues in the way that Third Circuit has or on the grounds that they have, but I'm sure they will be giving careful consideration to the Third Circuit's arguments," Georgetown law professor Heidi Li Feldman said. 

In a report released at the end of 2020, Lex Machina tracked 173 tort cases relating to COVID-19, many against nursing homes alleging that failures to take steps to prevent the spread of the virus led to deaths of residents. In most cases, complaints were filed in state court and providers sought to remove them—requests that have been largely denied by district court judges. 

Appeals to those decisions are now pending in the D.C., Second, Third, Fifth, Sixth, Ninth and 11th circuits. Judges David Porter, Michael Chagares and Jane Roth in the Third Circuit were the first to issue an appellate opinion on the matter in Estate of Maglioli v. Alliance HC Holdings. 

Already, the decision is being used to analyze issues in similar appeals.  

Last week, during oral arguments in the U.S. Court of Appeals for the Ninth Circuit, Judges Ryan Nelson, Lawrence VanDyke and Karen Schreier questioned if and how the Maglioli case differs from a case before them filed against Glenhaven Healthcare brought by Jackie Saldana, whose relative died of COVID-19 at a California nursing home operated by the company. Attorneys pointed to the PREP Act's carveout for willful misconduct claims to explain differences between the two cases.

The PREP Act was passed by Congress in 2005 and allows the secretary of the Department of Health and Human Services to issue a declaration during any public health emergency to provide certain "covered entities" immunity from claims of loss caused by the administration or use of countermeasures, such as drugs, vaccines and masks in the case of COVID-19. In lieu of litigation, there is an emergency fund in the U.S. Treasury to provide compensation for injuries from covered countermeasures. The act also carves out an exception that allows willful misconduct claims to be litigated in the U.S. District Court for the District of Columbia. 

The Third Circuit found that the sole negligence claims alleged in Maglioli do not fall within the scope of the PREP Act's exclusive federal cause of action for willful misconduct, and that the compensation fund is not an exclusive federal cause of action triggering removal jurisdiction. 

In a court filing in the Ninth Circuit's case Wednesday, attorney Lann G. McIntyre, of Lewis, Brisbois, Bisgaard & Smith, who is representing the nursing home, said that while the Maglioli case doesn't allege willful misconduct, the Saldana complaint does. During oral arguments, she contended that allegations the estate was intentionally injured belong in federal court while other claims should be either resolved through the compensation fund or dismissed. 

"Although the court concluded plaintiffs alleged negligence, not willful misconduct, and thus the claims were not completely preempted in Maglioli, the Saldana allegations are different," McIntyre wrote. "The Saldana complaint specifically alleges a separate cause of action for 'willful misconduct' regarding the use of PPE and testing. … Under the Maglioli court's reasoning, the Saldana's claims were properly removed to federal court."

Meanwhile, Adam Pulver, an attorney with Public Citizen Litigation Group who is representing Saldana, contended that his client couldn't bring a willful misconduct claim pursuant to the PREP Act because the complaint doesn't accuse the facility of a failure in the use or administration of personal protective equipment or testing. The estate instead claims the nursing home failed to implement those infection control policies. 

Orrick Herrington & Sutcliffe attorney Andrew Silverman, who is representing a long-term assisted living center in a similar appeal pending in the Second Circuit, says defendants will continue to argue the intention of the PREP Act and its compensation fund is to prevent litigation against providers during public health emergencies, such as the current pandemic. He says other circuits will consider whether willful misconduct claims can be removed to D.C. federal court while other claims are resolved through the compensation fund. 

"I think that there are some arguments for why the Third Circuit didn't go far enough," Silverman said. "As to nonwillful claims the Third Circuit said could go forward in state court, Congress … didn't create a special court but it created this administrative process of a no-fault compensation fund so that there wouldn't have to be litigation at all. And so the position defendants are taking is that it doesn't make any sense to let those negligence claims be litigated in state court. In no event should there be litigation all across the United States with potentially inconsistent and contradictory results when Congress has set up this scheme to avoid all of that."

Feldman, however, said the Saldana case is not representative of most COVID-19 wrongful death suits against nursing homes. A majority of estates only claimed negligence, knowing it will be easier to prove than willful misconduct, she said. While some circuit courts will need to address those additional claims, most won't, she said. 

District courts have largely agreed the cases belong in state court. At least one U.S. district judge, in the Northern District of Texas, found that removal to federal court was not "objectively reasonable" and ordered a nursing home in May to pay $1,000 in attorney fees to the family of a resident who had filed a wrongful death suit in state court. 

But a circuit split on the issue is possible, given district courts aren't completely aligned, Feldman said. In March, a judge in the Central District of California ruled that a wrongful death suit belongs in federal court.

"I wouldn't be surprised if this issue and potentially others related to nursing home liability are ultimately heard in the Supreme Court, because there's tremendous exposure to tort damages based on insufficiently careful conduct by nursing homes. That's obviously why they're fighting so hard to prevail and for complete preemption," she said. 

There are still challenges ahead in state court for estates that filed these claims, said Drew Graham, an attorney with Hall Booth Smith who is representing health care providers in similar cases. 

Graham said there are still pretrial issues that will be litigated in state courts that could lead to dismissals. Defense attorneys will argue that the language of the PREP Act provides immunity from COVID-19 claims under federal and state law alike. 

"It will be asserted as a defense in state court, and [defendants] will argue preemption based on the act in all state courts," he said.