Contract Dispute
Ortiz-Enriquez v. Nat'l Healthcare
Affiliates, No. Civ. 05-1461(PG) (D.P.R. Oct. 18, 2005)
A
sales agreement for a home care services company provided that the seller
could retain funds in an account established pursuant to a deed of trust,
less any amount owed to Medicare as a result of termination of, or a withdrawal
from, the trust. The buyer was paid these funds by the Medicare Program.
The seller claimed that the buyer failed to pay him these amounts. The buyer
disagreed. When the seller sued in state court, the buyer petitioned that
the state court remove the action to federal court because the complaint
implicated federal Medicare law. The Puerto Rican state court complied with
the buyer's request. The seller then filed a motion with the federal district
court to remand the lawsuit back to state court. The United States District
Court for Puerto Rico agreed with the seller and remanded the case back to
state court, holding that although an interpretation of Medicare law may
be necessary to defend the buyer's actions, removal to a federal court may
not be based exclusively on a federal defense. The federal court noted that
all claims were founded in state law, and therefore the federal court did
not have original jurisdiction over the case.