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Weirton Medical Center, Inc. v. Community Health Systems, Inc.

United States District Court, N.D. West Virginia

December 12, 2017

WEIRTON MEDICAL CENTER, INC., Plaintiff,
v.
COMMUNITY HEALTH SYSTEMS, INC., QUORUM HEALTH RESOURCES, LLC, STEPHEN MILLER, MICHAEL ROLPH, ROBERT LOVELL, ROBERT VENTO, DANIEL HAMMAN and JOHN WALTKO, Defendants.

          MEMORANDUM OPINION AND ORDER DISMISSING DEFENDANT COMMUNITY HEALTH SYSTEMS, INC. FOR LACK OF PERSONAL JURISDICTION AND DENYING WITHOUT PREJUDICE PLAINTIFF'S REQUEST TO TRANSFER

          FREDERICK P. STAMP, JR. UNITED STATES DISTRICT JUDGE.

         Pending for consideration is whether this Court may exercise personal jurisdiction over defendant Community Health Systems, Inc. (“CHSI”). During the briefing of the motion to vacate an arbitration award filed by Weirton Medical Center, Inc. (“Weirton”) (ECF No. 30), defendant CHSI filed a response (ECF No. 43) in which it purports to enter a special appearance to challenge whether this Court may exercise personal jurisdiction over it.

         This Court construes CHSI's challenge to personal jurisdiction as a motion to dismiss for lack of personal jurisdiction.[1] There has been full briefing in which the parties have set out their contentions. This memorandum opinion and order will specifically address the issue of personal jurisdiction as to defendant CHSI.

         For the reasons set forth below, this Court finds that it does not have personal jurisdiction over defendant CHSI, and thus, defendant CHSI's motion to dismiss for lack of personal jurisdiction (ECF No. 43) is granted. Accordingly, defendant Community Health Systems, Inc., is hereby dismissed from this civil action.

         I. Procedural History

         Non-party Quorum Intensive Resources (“QIR”), an entity affiliated with defendant Quorum Health Resources (“QHR”), was once an indirect subsidiary of CHSI. QIR initiated an arbitration against Weirton. The arbitrator issued an award in QIR's favor and denied all of Weirton's counterclaims. This Court then affirmed that award and the United States Court of Appeals for the Fourth Circuit affirmed this Court's ruling on appeal.

         On October 13, 2015, Weirton filed this action against the above-named defendants, including CHSI. This Court then granted the defendants' motion to compel arbitration in this new action and stayed this civil action pending arbitration. ECF No. 22. The arbitrator issued an award dismissing all of Weirton's claims, holding:

[Weirton]'s allegations directed to CHS[I] are conclusory, vague and/or on their face based upon only “information and belief” and/or speculation. Although not pled, [Weirton] seems to suggest that this Arbitrator should pierce the corporate veil of either QHR or QIR and hold CHS[I] liable for the actions of QHR and/or QIR simply because the parties are related. CHS[I] is indisputably a holding company, with no alleged direct connection with any claim. It has no place in this proceeding for these reasons alone.

ECF No. 33-1 at 2-3.

         Weirton then filed a motion to vacate the arbitration award (ECF No. 30) under § 10 of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. During the briefing of Weirton's motion (ECF No. 30), defendant CHSI raised the issue of personal jurisdiction in its response (ECF No. 43).

         In response to CHSI's response in opposition to the motion to vacate, Weirton filed a motion for jurisdictional discovery (ECF No. 50). CHSI opposed the motion for discovery and requested that the Court dismiss CHSI from this action for lack of personal jurisdiction. ECF No. 54.

         This Court directed the parties to conduct limited discovery regarding the nature and extent of defendant CHSI's minimum contacts with West Virginia as they pertain specifically to the claims alleged in this civil action dealing with personal jurisdiction.[2] ECF No. 56. This Court found that limited jurisdictional discovery was necessary to determine whether CHSI had sufficient minimum contacts with West Virginia for this Court to exercise personal jurisdiction over CHSI.

         Weirton then engaged in jurisdictional discovery and filed a “Supplemental Memorandum in Opposition to the Personal Jurisdiction Challenge Asserted by CHSI in its Response in Opposition to Weirton's Motion to Vacate” which included extensive discovery as to personal jurisdiction. ECF No. 78. CHSI then filed a response (ECF No. 79) and Weirton filed a reply to CHSI's response (ECF No. 80).

         II. A ...


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