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Case 1:09-cv-00752-HTW Document 13 Filed 05/11/09 Page 1 of 17

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA JAMES J. MURTAGH, M.D., Plaintiff, v. EMORY UNIVERSITY AND EMORY HEALTHCARE, INC., Defendants. ) ) ) ) ) ) ) ) ) ) )

CIVIL ACTION FILE NO. 1:09-CV-0752-HTW

EMORY UNIVERSITYS AND EMORY HEALTHCARE, INC.S REPLY IN SUPPORT OF THEIR MOTION TO REMAND Dr. Murtaghs Response misrepresents the facts and law applicable to this removal and continues his pattern of bad faith litigation that led the State Court to twice hold him in contempt and the Arbitrator to sanction him. For example, Dr. Murtagh argues in the first section of his Response brief that Emorys Motion to Confirm the Arbitration Award must, as a matter of law, be treated as a separate, stand-alone lawsuit from the State Court action despite the undisputed facts that (1) in its Order compelling the parties damages claims into arbitration, the State Court stayed the parties litigation over these claims and did not dismiss the claims (see

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8/3/05 State Court Order attached as Ex. 1); 1 (2) the State Court retained jurisdiction over and continued to adjudicate Emorys related claims for injunctive relief; and (3) Emory filed its Motion to Confirm the Arbitrators Award in the same State Court that stayed the parties damages claims and adjudicated Emorys related injunctive relief claims. Under these facts, Emorys Motion to Confirm the Arbitration Award should be treated as part of the State Court action and not as a stand-alone case. See e.g., Balt. & O. Chi. Terminal R.R. v. Wis. Cent., 154 F.3d 404, 407 (7th Cir. 1998) (The issuance of a stay, as distinct from an order of dismissal, implies that the proceeding in the court that issued the stay remains on the courts docket, albeit in a state of suspended animation. As long as the case remains before the court, the judge has the power to issue any order that is within his power to issue in a case of that sort. And that includes an order confirming an arbitration award when, as in this case, the agreement pursuant to which the parties dispute (or some part of it) is being arbitrated is within the compass of the Federal Arbitration Act.). In arguing to the contrary, Dr. Murtagh misrepresents the holdings of City of Naples v. Prepakt Concrete Co., 490 F.2d 182 (5th Cir. 1974) (actually addressing venue,
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Dr. Murtagh even requested the State Court certify the Order compelling arbitration for interlocutory appeal to the Georgia Court of Appeals because he knew his claims had been stayed in favor of arbitration and not dismissed. (See 7/25/05 Request that the Trial Court Certify Its Order Granting the Defendants Motion to Compel Arbitration for Immediate Appellate Review, attached as Ex. 2).
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not jurisdiction) and Baltin v. Alaron Trading Corp., 128 F.3d 1466 (11th Cir. 1997) (explaining that City of Naples addressed venue, not jurisdiction). (See Dr. Murtaghs Resp. at 4-5). Although this is just one example of Dr. Murtaghs many misrepresentations throughout his Response brief, it is fairly representative of his brief as a whole. For these reasons and the reasons set forth further below, the Motion to Remand should be granted and Dr. Murtagh and his counsel should be required to pay Emorys attorneys fees, expenses, and costs. I. Dr. Murtagh Is the Plaintiff And Cannot Remove Dr. Murtagh goes to great lengths to recast himself as a defendant. First, as discussed above, he misrepresents the case law in an effort to argue that Emorys Motion to Confirm the Arbitration Award must be treated as a separate lawsuit. Emory properly filed its Motion to Confirm the Arbitration Award with the same State Court that stayed the parties claims pending arbitration. See 9 U.S.C. 6; Wisconsin Central, 154 F.3d at 407 (court that compelled arbitration and stayed litigation retained jurisdiction to confirm arbitration award); Scurtu v. Intl Student Exch., No. 07-0410-WS-B, 2008 U.S. Dist. LEXIS 49879, *2 (S.D. Ala. June 30, 2008) (a court that has stayed litigation and compelled arbitration can enforce a subpoena issued by the arbitrators or confirm, vacate or modify the arbitrators award once it is made) (emphasis added). As a result, the Motion to Confirm is
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not (and cannot be treated as) a separate lawsuit. See O.R. Secs., Inc. v. Profl Planning Assocs., Inc., 857 F.2d 742, 746 (11th Cir. 1988) (The policy of expedited juridical action expressed in section 6 . . . would not be served by permitting parties who have lost in the arbitration process to file a new suit in federal court.). Dr. Murtagh also argues (without any supporting authority) that the FAA requires that arbitration motions be treated as separate, federal statutory proceedings: The FAA correctly treats arbitration motions as federal statutory proceedings separate and distinct from any litigation that was compelled into arbitration. . . . Actions to confirm or vacate FAA arbitration awards are new litigations even though the new action is termed a motion. The arbitration was not litigation either related to any future federal arbitration motion or any preceding State Court action that was compelled into arbitration. The arbitration is a separate alternative to litigation. Once claims are referred to or compelled into arbitration, they are no longer part of any prior litigation in which the party who lost on the motion to compel arbitration sought to litigate them. These claims have been dismissed and are no longer before the court in which they were originally filed. **** Although Emory sought confirmation of Arbitrator Deanes award before the Georgia Superior Court using the same caption and in the same action that Dr. Murtagh had initially filed his own claims (which were dismissed and compelled into arbitration) and in which Emory had filed its counterclaims, some of which remained pending, this procedure by Emory was incorrect under the FAA. Emorys motion to confirm the arbitration award is a new action that under the FAA should have been filed separate from any prior litigation.
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(See Resp. at 3-4). The law, of course, is directly contrary to Dr. Murtaghs position. See Termorio S.A. E.S.P. v. Electranta, S.P., 487 F.3d 928, 940 (D.C. Cir. 2007) (holding that motions to enforce arbitral awards should proceed under motions practice, not notice pleading); Philadelphia Elec. Co. v. Nuclear Elec. Ins. Ltd., 845 F. Supp. 1026, 1028 (S.D.N.Y. 1994) (rejecting argument that motion to vacate was required to be filed as a separate action under a new docket number because that argument is unsupported by the language of the Federal Arbitration Act); see also O.R. Secs., 857 F.2d at 746 (The policy of expedited juridical action expressed in section 6 . . . would not be served by permitting parties who have lost in the arbitration process to file a new suit in federal court.). Moreover, in this case, the State Court expressly stayed the parties damages claims and did not dismiss them. (See Ex. 1). Thus, Dr. Murtaghs assertion that the claims compelled into arbitration have been dismissed and are no longer before the court in which they were originally filed is both factually and legally incorrect. Once Dr. Murtaghs misrepresentations are brushed aside, it is obvious that he cannot remove only one part of the State Court action (the Motion to Confirm the Arbitration Award). See 28 U.S.C. 1441 (only civil actions may be

removed); Fla. Dept of Ins. v. Chase Bank of Tex., N.A., 243 F. Supp. 2d 1293,
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1296 (N.D. Fla. 2002) (The removal statutes generally deal with an entire case, making an entire case removable or not, rather than allowing separate removal of only a portion of a case.). As a result, Emorys Motion to Remand should be granted.2 II. There Is No Federal Question Subject Matter Jurisdiction A. Murtaghs Own FCA Claim Cannot Be The Basis For Removal

Murtaghs Response regurgitates the same failed argument relating to his False Claims Act (FCA) claim that was contained in his Notice of Removal, without even bothering to address Emorys argument in its Motion to Remand. Quite simply, a party may not remove based on his own claims. Either Murtagh asserts his FCA claim as a plaintiff, in which case he cannot remove because only defendants can remove. See 28 U.S.C. 1441. Or Murtagh asserts his FCA claim as a defendant, in which case he cannot remove because counterclaims cannot provide removal jurisdiction. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.

Because this matter is not properly before this Court, all pending motions and filings should be remanded to the State Court, including Murtaghs Response to Emorys Motion to Confirm the Arbitration Award, [Doc. No. 11], filed on May 4, 2009. However, if the Court were to deny the Motion to Remand, then Murtaghs Response to Emorys Motion to Confirm the Arbitrators Award should be stricken as untimely. Under Rule 81(c)(2)(C), Murtagh had five days after filing the notice of removal (until March 26, 2009) to respond to Emorys Motion to Confirm. Murtaghs Response was not filed until May 4, 2009.
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100, 109 (1941) (holding that removal by a plaintiff/counter-defendant is improper). Murtagh has offered no argument to the contrary.3 Moreover, the case law is clear that a federal claim in the underlying arbitration does not confer federal question jurisdiction over a motion to confirm or vacate the arbitration award. See Kaplan v. Dean Witter Reynolds, Inc., 896 F. Supp. 1219, 1220 (S.D. Fla. 1995), affd, 129 F.3d 615 (11th Cir. 1997) (holding that federal question jurisdiction cannot be found by looking beyond the petition [to confirm or vacate] to the underlying claims that were the subject of arbitration); Fox v. Faust, 239 Fed. Appx. 715, 717 n.2 (3d Cir. 2007) (There is agreement [among the courts] . . . that a suit to vacate an arbitration award under 10 of the FAA . . . does not raise a federal question merely because the underlying arbitration involves a federal question.).4

Dr. Murtagh also argues that some unspecified public policy underlying the FCA requires that he be allowed to remove the Motion to Confirm the Arbitration Award. (See Resp. at 12-14). Yet, he offers no legal authority to support this baseless assertion. 4 See also 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 claim involves federal law); Collins v. Blue Cross Blue Shield of Mich., 103 F.3d 35, 38 (6th Cir. 1996) (holding that the federal nature of underlying arbitrated claim [could not] provide an independent basis of federal jurisdiction in an action to confirm or vacate an arbitration award); Minor v. Prudential Securities, Inc., 94 F.3d 1103, 1106 (7th Cir. 1996) (a strong body of case law has developed . . . holding that the nature of the underlying dispute is irrelevant for purposes of subject matter jurisdiction). It is clear that the Eleventh Circuit agrees with the majority of courts that a federal claim in arbitration cannot
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B.

Neither Dr. Murtaghs Assertion Of Alleged Federal Issues In The Underlying Arbitration Nor His Claim That The Arbitrator Sanctioned Him Under Rules 11 And 37 Justify Removal

Dr. Murtagh asserts that removal is proper because (1) there are a number of alleged federal law issues that arise from the underlying arbitration; and (2) this is an FAA arbitration, based on federal law (here Rule 11 and Rule 37). (See Resp. at 13-14). As an initial matter, any federal claim or issue asserted by Murtagh in the underlying arbitration would suffer from the same flaw as his FCA claim a party cannot remove based on his own claims or arguments. (See supra at 6-7). Emory did not assert any federal claims or issues in the arbitration (or at any other time, for that matter). Moreover, although Dr. Murtagh continues to assert that the Arbitrator could only have sanctioned him under Federal Rules of Civil Procedure 11 and 37, he offers no legal authority to support that argument, which is both legally and factually wrong. In fact, the Arbitrator expressly stated that he was sanctioning Dr. Murtagh under Georgia law, which is consistent with the parties stipulation that
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provide subject matter jurisdiction for a motion to compel or vacate. The Eleventh Circuit affirmed Kaplan, which expressly so held, without opinion. 129 F.3d 615 (11th Cir. 1997). Moreover, the Eleventh Circuit in Baltin approvingly cited a Seventh Circuit case that expressly held that a federal claim in arbitration does not provide federal question jurisdiction over a motion to confirm or vacate. See Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1472 n.15 (11th Cir. 1997) (citing Minor, 94 F.3d at 1106).
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the arbitration would be conducted pursuant to the Georgia Civil Practice Act. (See February 4, 2009 Decision of the Arbitrator at 5-6, attached as Ex. 3; Consent Scheduling Order at 2, attached as Ex. 4). Because the parties stipulated to the application of Georgia law in the arbitration, Murtaghs continued, inexplicable reliance on the Federal Rules of Civil Procedure is unavailing. See Volt

Information Sciences v. Bd. of Trustees, 489 U.S. 468, 476 (1989) (There is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate.); Jones v. Titlemax of Ga., Inc., No. 1:05-cv1154-TWT-CCH, 2006 U.S. Dist. LEXIS 11706, *24 (N.D. Ga. Jan. 31, 2006) (noting that the Eleventh Circuit, in interpreting the Supreme Court and Georgia law, has held that an arbitrations limitations on mechanisms traditionally available in courts do not offend notions of due process, are part and parcel of the arbitration process, and therefore, are not unconscionable). Thus, Dr. Murtaghs assertion that Rules 11 and 37 provide for federal question jurisdiction is both factually and legally incorrect. Further, it is well-established that the FAA does not provide a jurisdictional basis for removal. Peebles v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 431 F.3d 1320, 1325 (11th Cir. 2005). And, as discussed above, federal courts may not look through to the underlying arbitration dispute to find a basis for jurisdiction
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on a motion to confirm or vacate. See Kaplan, 896 F. Supp. at 1220; Fox, 239 Fed. Appx. at 717 n.2. As a result, Dr. Murtaghs attempted removal is devoid of any legal or factual support. C. None Of Murtaghs Proposed Federal Questions Appear On The Face Of Emorys Motion To Confirm

Dr. Murtaghs effort to establish federal question jurisdiction must also fail because none of the alleged federal issues appear on the face of Emorys Motion to Confirm as required by the well-pleaded complaint rule. Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1295 (11th Cir. 2008) (In determining whether jurisdiction exists under 28 U.S.C. 1331, a court must look to the well-pleaded complaint alone.). Murtaghs purported federal questions relate exclusively to his defenses to Emorys Motion, as evidenced by the fact that his Response appears to copy verbatim some of the arguments made in Murtaghs Motion to Vacate the Arbitration Award, which Murtagh inexplicably filed as a new lawsuit on May 4, 2009, in the Northern District of Georgia as Murtagh v. Emory University, et al., Civil Action No. 1:09-CV-1186-RWS. (See Motion to Vacate and memorandum in support, attached as Ex. 5; see also Emorys Motion to Dismiss Dr. Murtaghs Motion to Vacate for Lack of Subject Matter Jurisdiction and memorandum in support, attached as Ex. 6). None of Murtaghs alleged federal defenses can

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provide a jurisdictional basis for removal. See Stern v. IBM, 326 F.3d 1367, 1370 (11th Cir. 2003). D. None of Murtaghs Proposed Federal Questions Is Sufficient For Federal Question Jurisdiction

Emory addresses Dr. Murtaghs purported federal questions more fully in its Memorandum of Law in Support of its Motion to Dismiss Civil Action No. 1:09CV-1186-RWS for Lack of Subject Matter Jurisdiction. (See id.). As stated in that Memorandum, not a single one of Murtaghs purported nine federal questions can withstand scrutiny. For example, Dr. Murtagh argues that a federal question exists as to whether the Arbitrator was biased against him. (Pl. Resp. at 15). However, it is wellestablished that [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. Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1472 (11th Cir. 1997). As another example, Dr. Murtagh claims there is a federal question as to whether the state court had the power to compel arbitration in the first place. (Pl. Resp. at 14-15). This argument also fails, since it is clear that [f]ederal courts and state courts have concurrent jurisdiction to enforce the FAA. Id. at 1469. Dr.

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Murtaghs other alleged federal questions are equally as baseless as set forth in Emorys Motion to Dismiss Civil Action No. 1:09-CV-1186-RWS.5 (See Ex. 6). III. Diversity Jurisdiction Does Not Exist Diversity jurisdiction does not exist because Murtagh and Emory have beeh Georgia residents at all relevant times. See 28 U.S.C. 1332(a). Diversity is to be determined according to citizenship at the time the action is filed. FreeportMcMoran, Inc. V. KN Energy, Inc., 498 U.S. 426, 428 (1991). For purposes of diversity jurisdiction, an individual is considered to be a citizen of the state in which he is domiciled. Crowley v. Glaze, 710 F.2d 676, 678 (10th Cir. 1983). Here, Dr. Murtagh admits that he was a resident of Georgia at the time he filed the State Court action. (See Pl. Resp., Ex. 1). He also admits that he currently resides in Georgia and has been residing in Georgia since before Emory filed its Motion to Confirm and he removed it. (Id. at 8). Nevertheless, he attempts to claim diversity jurisdiction based solely on a short stay in Arkansas while he was allegedly working a temporary job. (See id. at 2-8). Dr. Murtagh cannot establish diversity based on a temporary job assignment. See, e.g.,

Mississippi Choctaw, 490 U.S. at 49 (physical presence in a place (residence) is an

Emory has sought sanctions against Dr. Murtaghs counsel in Civil Action No. 1:09-cv-1186-RWS. This Court, however, should also sanction Dr. Murtaghs counsel for removing Emorys Motion to Confirm without any good faith basis for doing so.
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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 and his former employment in 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. Ala. 2006) (a party's place of residence is prima facie evidence of his domicile); 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). Because there is not

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complete diversity among the parties, diversity jurisdiction cannot support Dr. Murtaghs improper removal. IV. Emory Should Be Awarded Its Fees And Costs In Responding To Murtaghs Frivolous And Vexatious Removal Dr. Murtagh argues that Emory should not be awarded its costs and fees pursuant to 28 U.S.C. 1447(c) because such fees may not be granted where the removing party had an objectively reasonable basis for the removal. (See Resp. at 20) (citing Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)). As the Supreme Court implied in Martin, however, attorneys fees may be awarded where the removal is not objectively reasonable. Here, there is no reasonable basis objective or otherwise to support Dr. Murtaghs removal. At every step of the removal analysis, Dr. Murtagh is met with plain language and controlling authority conclusively demonstrating that his removal is meritless. Dr. Murtaghs insistence on continuing the same vexatious and abusive litigation tactics that led to the State Court holding him in contempt twice and the Arbitrator sanctioning him once should not be tolerated by this Court. Dr. Murtaghs counsel should also be personally ordered to pay Emorys costs and attorneys fees as a result of the frivolous and vexatious removal. See 28 U.S.C. 1927; Schwartz v. Million Air, Inc., 341 F.3d 1220, (11th Cir. 2003) (holding that bad faith exists when an attorney knowingly or recklessly pursues a
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frivolous claim or engages in litigation tactics that needlessly obstruct the litigation of non-frivolous claims). Dr. Murtaghs counsels abusive tactics are only further evidenced by their filing of Civil Action No. 1:09-CV-1186-RWS rather than filing the Motion to Vacate the Arbitration Award in this case. Thus, by joint operation of 1447(c) and 1927, Murtagh and his counsel should be held jointly and severally liable for Emorys costs and attorneys fees in defending this frivolous removal. WHEREFORE, for all the foregoing reasons, Emorys Motion to Remand should be granted and Emory should be awarded its costs, attorneys fees, and such other relief as the Court deems just and proper. A proposed Order granting

Emorys Motion to Remand is attached hereto for the Courts convenience as Ex. 7. Respectfully submitted this 11th day of May, 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 ITS MOTION TO REMAND 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

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