Case 1:09-cv-01186-HTW Document 7 Filed 06/11/09 Page 1 of 13

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA JAMES J. MURTAGH, M.D., Movant, v. EMORY UNIVERSITY, et al., Respondents. ) ) ) ) ) ) ) ) )

CIVIL ACTION FILE NO. 1:09-CV-1186-RWS

EMORY UNIVERSITYS AND EMORY HEALTHCARE, INC.S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Dr. Murtaghs Response, which is little more than a regurgitation of the unsupported and conclusory jurisdictional allegations set forth in his Motion to Vacate, (1) fails to address the substantial legal authority undermining his jurisdictional arguments; (2) fails to acknowledge (let alone carry) his burden of proving subject matter jurisdiction; and (3) continues his pattern of making groundless attacks against Defendants and the Arbitrator.1 Because Emorys Motion to Dismiss has been fully briefed, and because Dr. Murtagh has completely failed to carry his burden of proving that federal subject Realizing the obvious jurisdictional defects that exist in this case, Dr. Murtagh suggests that he will file an unauthorized Amended Motion to Vacate sometime in the future. (Murtagh Resp. at 13). Dr. Murtagh offers no basis for allowing any such amendment and Emorys Motion to Dismiss should be granted now.
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matter jurisdiction exists, this case should be dismissed and Dr. Murtaghs counsel should be sanctioned for filing it. LEGAL ARGUMENT AND CITATION TO AUTHORITY I. DR. MURTAGH HAS FAILED TO CARRY HIS BURDEN OF ESTABLISHING FEDERAL SUBJECT MATTER JURISDICTION Dr. Murtagh has the burden of establishing by a preponderance of the evidence the existence of either diversity or federal question jurisdiction. See, e.g., 28 U.S.C. 1331-1332; Gilmore v. Day, 125 F. Supp. 2d 468, 471 (M.D. Ala. 2000). The Federal Arbitration Act (FAA) does not confer any such jurisdiction; rather, Dr. Murtagh must prove some other jurisdictional basis. See Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1469 (11th Cir. 1997). Dr. Murtagh has completely failed to carry that burden and his Motion to Vacate should be dismissed. A. Dr. Murtagh Has Not And Cannot Establish Diversity Jurisdiction

Dr. Murtagh admits that (1) prior to his alleged temporary job in Arkansas in 2008, he was a long-time citizen of Georgia; (2) he currently resides and works in Georgia (and did so at the time he filed his Motion to Vacate); (3) he was a citizen of Georgia at the time he initiated the underlying litigation in 2004; and (4) his alleged 2008 employment in Arkansas was temporary and he has no intention to

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return to Arkansas. (Murtagh Resp. at 4-5). Additionally, Dr. Murtagh asserts that he hopes to start some unidentified new job in Louisiana, at some undetermined point in the future, and hopes to work temporarily in Mississippi as a transition to the [unidentified] Louisiana job. (Id. at 4). Dr. Murtagh cannot establish diversity jurisdiction based on an alleged temporary stay in Arkansas or an alleged future desire to leave his Georgia residence and move to Louisiana by way of Mississippi. See, e.g., Mississippi Choctaw v. Holyfield, 490 U.S. 30, 49 (1989) (physical presence in a place (residence) is an essential element of domicile and thus, citizenship); Bevilaqua v. Bernstein, 642 F. Supp. 1072, 1075 (S.D.N.Y. 1986) (plaintiff was not a citizen of Virginia despite residing there for 10 months as plaintiff had previously lived in New York and following commencement of suit returned to New York); Sattler v. Mowry, 167 F. Supp. 607, 608 (E.D. Pa. 1958) (court found that plaintiff was a resident of Pennsylvania despite plaintiffs prior two year stay in Oregon and acquisition of an Oregon drivers license, in part, because plaintiff was domiciled in Pennsylvania prior to and after living in Oregon and was living in Pennsylvania at time he filed litigation); Slate v. Shell Oil Co., 444 F. Supp. 2d 1210, 1215 (S.D.

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Ala. 2006) (a party's place of residence is prima facie evidence of his domicile).2 Because Dr. Murtagh has not and cannot establish that he is a citizen of a State other than Georgia, he has failed to prove the existence of diversity jurisdiction. B. Dr. Murtagh Has Not And Cannot Establish The Existence Of Federal Question Jurisdiction

Dr. Murtaghs Response regurgitates the same baseless federal question jurisdiction allegations that were set forth in his Motion to Vacate, i.e., that federal question jurisdiction exists because (1) Dr. Murtagh allegedly asserted a False Claims Act retaliation claim in the arbitration; (2) the Arbitrator was not impartial and/or engaged in misconduct and therefore his decision is subject to challenge under the FAA; (3) there are substantial questions of federal law to be decided; and (4) the Arbitrator manifestly disregarded federal law. (Murtaghs Resp. at 614). However, as briefed in Emorys Motion to Dismiss, none of these conclusory assertions establishes federal question jurisdiction. (See Emory Br. at 16-24; Dkt.

See also Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555 (5th Cir. 1985) (residence in fact is an essential element of domicile); Britton v. Scott, Case No. 96-14041-CIV-PAINE, 1996 U.S. Dist. LEXIS 22857, *3-4 (S.D. Fla. Sept. 27, 1996) (statements of intent are accorded minimal weight); Audi Performance & Racing, LLC v. Kasberger, 273 F. Supp.2d 1220, 1226 (M.D. Ala. 2003) (recognizing presumption that state of residence equates to domicile); Valentin v. Hosp. Bella Vista, 254 F.3d 358, 367 (1st Cir. 2001) (amorphous desire to relocate from one place to another at an indeterminate future date does not suffice to effect a change of domicile).
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3-3). Indeed, Dr. Murtaghs Response fails to even address the substantial case law cited by Emory that directly rejects each of his arguments.3 As previously briefed by Emory, each of Dr. Murtaghs arguments fail because (1) federal question jurisdiction cannot be based on the claims asserted in the underlying arbitration;4 (2) Dr. Murtaghs claims of partiality and misconduct by the Arbitrator do not include federal questions;5 (3) the Motion to Vacate does

See Kaplan v. Dean Witter Reynolds, Inc., 896 F. Supp. 1219, 1220 (S.D. Fla. 1995) (federal question jurisdiction cannot be found by looking beyond the petition to the underlying claims that were the subject of arbitration), affd, 129 F.3d 615 (11th Cir. 1997). Although Dr. Murtagh argues that Kaplan is not binding authority because it was affirmed by the Eleventh Circuit without written opinion, (Murtagh Resp. at 7), Dr. Murtagh offers no contrary legal authority.
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See, e.g., Kaplan, 896 F. Supp. at 1220; Kasap v. Folger Nolan Fleming & Douglas, Inc., 166 F.3d 1243, 1247 (D.C. Cir. 1999) ( 10 does not create federal question jurisdiction, even when the underlying arbitration involves federal law); Minor v. Prudential Secs., Inc., 94 F.3d 1103, 1106 (7th Cir. 1996) (same).
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See Baltin, 128 F.3d at 1472 ([a] motion to vacate on the grounds of fraud, corruption, undue means, evident partiality, and failure to consider pertinent and material evidence, does not require the resolution of any federal issue, let alone a substantial question of federal law; court affirmed district courts dismissal of motion to vacate on the grounds that the court lacked subject matter jurisdiction); see also Sodi v. Discover Fin. Servs., Case No. 04-0128 2004 U.S. Dist. LEXIS 24133, *6 (E.D. Pa. Nov. 30, 2004) (To the extent that the arbitration hearing was unfair, procured by corruption, fraud, or undue means, or evidenced partiality or corruption in the arbitrators, [plaintiff] may pursue such a claim under the FAA in a state court; motion to vacate dismissed for lack of subject matter jurisdiction, notwithstanding plaintiffs allegations of due process violations). This rule applies even when a party attempts to couch his claims of bias or partiality as a denial of due process or constitutional rights. See id.; see also Elmore v. Chicago & Ill. Midland Ry. Co., 782 F.2d 94, 96 (7th Cir. 1986) (the fact that a private arbitrator
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not raise any substantial questions of federal law; 6 and (4) Dr. Murtaghs conclusory arguments that the Arbitrator manifestly disregarded federal law when he failed to apply Fed. R. Civ. P. 11 and/or 37, rather than the Georgia Civil Practices Act, to sanction Dr. Murtagh do not involve federal issues.7 (Emory Br. at 16-24; Dkt. 3-3).

denies the procedural safeguards that are encompassed by the term due process of law cannot give rise to a constitutional complaint); Giangrande v. Shearson Lehman/E.F. Hutton, 803 F. Supp. 464, 467, 474 (D. Mass. 1992) (court determined that it lacked subject matter jurisdiction to hear motion to vacate despite plaintiffs claims that the evident partiality of arbitrator violated their due process rights). As briefed in Emorys Motion to Dismiss, federal-question jurisdiction exists when "the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28 (1983). None of the various issues raised by Dr. Murtagh, including whether the parties 2001 settlement agreement is enforceable or whether the State Court properly compelled this matter into arbitration, raise a question of federal law, much less a substantial question of federal law. (Emorys Br. at 19-23).
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See Northeast Sec., Inc. v. Quest Capital Strategies, Inc., Case No. 03 Civ. 2056 (RWS), 2003 U.S. Dist. LEXIS 20025, *7 (S.D.N.Y. Nov. 7, 2003) (an arbitrator[s] decision not to follow the Federal Rules of Civil Procedure in its conducting of the Arbitration hearings cannot form the basis for a viable manifest disregard of the law claim); see also Woods v. Saturn Distrib. Corp., 78 F.3d 424, 430 (9th Cir. 1996) (The Federal Rules of Civil Procedure do not apply to post hoc questioning of arbitrators). Indeed, arbitrators are "not constrained by formal rules of evidence and procedure." Northeast Sec., 2003 U.S. Dist. LEXIS 20025 at *7.
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Dr. Murtaghs attempt to avoid these authorities by arguing that public policy, ethical standards, and/or arbitration rules require application of federal law to the Motion to Vacate are equally baseless. Indeed, the existing case law

establishes that ethical standards and arbitration rules do not have the force of law and, thus, cannot provide even a basis for vacator, let alone a basis for federal subject matter jurisdiction. See, e.g., Delta Mine Holding Co. v. AFC Coal Props., 280 F.3d 815, 820 (8th Cir. 2001) (only the statutory grounds in 10(a) of the [Federal Arbitration] Act justify vacating an award; arbitration rules and ethical codes do not have the force of law); Merit Insur. Co. v. Leatherby Insur. Co., 714 F. 2d 673, 680 (7th Cir. 1983) (the arbitration rules and code do not have the force of law). Dr. Murtaghs argument that the public policy exception to the enforcement of arbitration awards provides this Court with subject matter jurisdiction is similarly flawed. As an initial matter, despite having the burden of establishing federal jurisdiction, Dr. Murtagh fails to cite to a single case which supports his contention that federal question jurisdiction exists when a party alleges that a settlement agreement is unenforceable. 8 Indeed, Dr. Murtaghs arguments

Dr. Murtaghs reliance on the Ninth Circuits decision in United States v. Northrop Corp., 59 F.3d 953 (9th Cir. 1995) is misplaced as that decision had nothing to do with subject matter jurisdiction. 7

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regarding this issue are directed at the State Courts Orders (not the Arbitrators Award) and are nothing more than an improper attempt to obtain federal court review of the State Courts Injunction and Contempt Orders. (Murtagh Resp. at 13). II. THERE IS NO REASON TO DELAY THE DISMISSAL OF DR. MURTAGHS MOTION TO VACATE Dr. Murtagh states an intent to file an unauthorized amendment to his Motion to Vacate. (Murtagh Resp. at 13). Dr. Murtagh fails to identify any legal authority allowing or even justifying such an amendment and Emory is aware of none. Moreover, Dr. Murtagh has had ample time to seek permission to amend his motion and has failed to do so. There is simply no reason to delay the dismissal of this case for lack of federal subject matter jurisdiction. III. AN AWARD OF SANCTIONS UNDER 28 U.S.C. 1927 IS WARRANTED Dr. Murtaghs counsel should be sanctioned under 28 U.S.C. 1927 for unreasonably and vexatiously multiplying these proceedings. Section 1927 allows a court to sanction an attorney who has engaged in unreasonable and vexatious conduct, where such conduct has the effect of multiplying the proceedings. Hudson v. Int'l Computer Negotiations, Inc., 499 F.3d 1252, 1262 (11th Cir. 2007). An attorney's conduct "multiplies proceedings" when it "results in proceedings that

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would not have been conducted otherwise." Peterson v. BMI Refractories, 124 F.3d 1386, 1396 (11th Cir. 1997). While Dr. Murtagh is within his right to file a legitimate motion to vacate, he may not file it in a federal court that lacks subject matter jurisdiction for the purpose of delaying the State Court litigation, attempting to forum shop, or multiplying the proceedings in this case. See Steinlage v. Mayo Clinic Rochester, 235 F.R.D. 668, 673 (D. Minn. 2006) ([w]illful pursuit of a litigation strategy that actively conceals the court's lack of subject matter jurisdiction may warrant 1927 sanctions); Itel Containers Int'l Corp. v. Puerto Rico Marine Mgmt., Inc., 108 F.R.D. 96, 103 (D.N.J. 1985) (sanctions warranted when defendant concealed its state of incorporation in order to remain in federal court on diversity jurisdiction). Here, Dr. Murtaghs counsel has multiplied the proceedings in a manner tantamount to bad faith so as to warrant 28 U.S.C. 1927 sanctions. Among other things, Dr. Murtaghs counsel unilaterally doubled the proceedings and created the inefficient, undesirable situation where one issue (whether to confirm or vacate the Arbitrators Award) is being litigated in two courts. (Emorys Br. at 3-4).

Moreover, Dr. Murtaghs counsel has been advised of the lack of subject matter jurisdiction in this case and in the related action before Judge Ward (where Emorys motion to remand is pending). His counsel, nevertheless, continue to

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vigorously pursue this matter rather than consolidate it before Judge Ward or dismiss it. Counsels behavior in filing this jurisdictionally baseless lawsuit when the same issues are already pending before Judge Ward warrants sanctions under 28 U.S.C. 1927. CONCLUSION Emory respectfully requests that Dr. Murtaghs Motion to Vacate be dismissed for lack of subject matter jurisdiction and that Dr. Murtaghs counsel be sanctioned pursuant to 28 U.S.C. 1927. Respectfully submitted this 11th day of June, 2009. s/Todd D. Wozniak Todd D. Wozniak Georgia Bar No. 777275 Lindsey Camp Edelmann Georgia Bar No. 141479 GREENBERG TRAURIG LLP 3290 Northside Parkway, Suite 400 Atlanta, Georgia 30327 Telephone: 678-553-7326 Facsimile: 678-553-7327 Attorneys for Defendants Emory University and Emory Healthcare, Inc.

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CERTIFICATE OF COMPLIANCE WITH L.R. 5.1B I HEREBY CERTIFY that the foregoing motion was prepared in Times New Roman, 14-point font, as approved by Local Rule 5.1B. s/Todd D. Wozniak Todd D. Wozniak Georgia Bar No. 777275

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CERTIFICATE OF SERVICE This is to certify that I have served a true and correct copy of the foregoing EMORY UNIVERSITYS AND EMORY HEALTHCARE, INC.S REPLY IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION with the Clerk of the Court using the CM/ECF system which will automatically send e-mail notification of such filing to the following attorneys of record: J. Clayton Culotta Culotta and Culotta LLP 432 E. Court Avenue Jeffersonville, Indiana 47130 Email: clay@culottalaw.com Mick G. Harrison, Esq. The Caldwell Center 323 S. Walnut Street Bloomington, Indiana 47401 Email: mickharrisonesq@earthlink.net Glenn L. Goodhart, Esq. 6065 Roswell Road, Suite 410 Sandy Springs, Georgia 30328 Email: glenn@publicprotectionlawyer.com Theodore B. Eichelberger Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309-3424 E-mail: TEichelberger@alston.com

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This 11th day of June, 2009. s/Todd D. Wozniak Todd D. Wozniak