Tommy Krebs, a citizen of Maryland and a senior at the University of Maryland, is an active and proficient recreational athlete. He tears his anterior cruciate and medial collateral ligaments playing soccer in College Park Maryland. Based on an extensive advertising campaign in the University of Maryland student newspaper, Krebs travels to Health South’s Birmingham, AL hospital for arthroscopic surgery on his knee. Health South is incorporated in AL.

Miranda Bailey, moonlighting in the hospital as an orthopedic surgeon (she formerly was the chief resident at Seattle Grace Hospital in WA), bungles the surgical procedure, resulting in apparently permanent instability in Krebs’ knee, ending any serious athletic endeavors for him. Bailey is a citizen of MD, having recently moved there to take up a fellowship at Washington (DC) Medical Center.

AllPlaces Insurance Co., (which advertises under the motto, “You’re in slippery hands with AllPlaces.”) is incorporated in MD and has its main headquarters there. AllPlaces wrote malpractice insurance coverage for Health South as an entity, and for Bailey as an individual practitioner.

Krebs sues Health South and Bailey in the Court of Common Pleas for Philadelphia County, PA (he is dating someone who is a member of the PA bar).

Health South files a third-party complaint under the PA equivalent of Fed.R.Civ.P. 14 against AllPlaces. Krebs then amends his complaint to add a third-party-beneficiary contract claim against AllPlaces. Bailey files a cross claim under the PA equivalent of Fed.R.Civ.P. 13(g) for indemnification against AllPlaces.

Health South issues a press release characterizing Krebs as a “life-long whiner, malingerer and hypochondriac.” Krebs emails the president of HealthSouth threatening to “clean your clock,” and amends his complaint again to add a defamation claim against Health South. Health South files a counterclaim under the PA equivalent of Fed.R.Civ.P. 13 for violation of a federal statute providing a private right of action for terroristic threats crossing state lines.

Bailey removes the case to the United States District Court for the Eastern District of Pennsylvania.

Can Krebs force some or all of it back to state court? How and why?

HealthSouth just bought Bethesda Naval Hospital from the United Stages government, which is selling off assets to raise money to bail out investment banks. Would it change your analysis if HealthSouth closes its Birmingham facility and does all its procedures in Bethesda?