FEDERAL OFFICER REMOVAL

Health Care Service Corporation v. Pollitt

Issues

Whether a government contractor who provides insurance coverage to federal employees is entitled to remove a complaint against it to federal court under either the “complete preemption” doctrine with respect to the Federal Employees Health Benefits Act (“FEHBA”) or the federal officer removal statute?

 

In 2007, Juli Pollitt sued Health Care Service Corporation (“HCSC”) in state court for bad-faith insurance practices. HCSC removed the case to federal court, where it was dismissed because the court reasoned that the Federal Employees  Benefit  Act preempted the case. Pollitt appealed, and the Seventh Circuit vacated the lower court decision, holding that removal was inappropriate because the claim was not “completely preempted” by federal law. The Seventh Circuit added that whether the federal officer removal statute applied here was a question of fact and remanded the case for further proceedings. The Supreme Court decision will decide whether a government contractor who provides insurance coverage to federal employees is entitled to remove a suit under either the “complete preemption” doctrine or the federal officer removal statute. This decision is of great importance to all businesses that contract with the federal government.

Questions as Framed for the Court by the Parties

1. Whether the Federal Employees Health Benefits Act ("FEHBA"), 5 U.S.C. §§ 8901-14, completely preempts -- and therefore makes removable to federal court -- a state court suit challenging enrollment and health benefits determinations that are subject to the exclusively federal remedial scheme established in FEHBA.

2. Whether the federal officer removal statute, 28 U.S.C. § 1442(a)(1), which authorizes federal removal jurisdiction over state court suits brought against persons "acting under" a federal officer when sued for actions "under color of [federal] ... office," encompasses a suit against a government contractor administering a FEHBA plan, where the contractor is sued for actions taken pursuant to the government contract.

Respondent, Juli Pollitt (“Pollitt”), sued her health care insurance carrier, Petitioner, Health Care Service Corporation (“HCSC”), in state court for bad-faith conduct by insurers. See Pollitt v. Health Care Service Corp., 558 F.3d 615, 616 (7th Cir.

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Additional Resources

• Wex: Law about Jurisdiction

• Wex: Law about Removal

• The National Underwriter: Labor’s Own Benefits Problems Reach Supreme Court

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Watson v. Philip Morris Companies, Inc.

Issues

Where no other reason exists for a federal court to have jurisdiction in a case, is a defendant corporation entitled to have the case heard in federal court because that corporation should be considered a “person acting under a federal officer” where the conduct in question occurred in a field which is heavily regulated by the federal government?

 

Philip Morris removed a class action tobacco lawsuit from an Arkansas state court to the Federal District Court for the Eastern District of Arkansas. Plaintiffs Watson and Lawson sought to remand the case to state court, but their motion was denied. The Eighth Circuit held that Philip Morris was a corporation qualifying as a “person acting under a federal officer” and thus entitled to removal under 28 U.S.C. § 1442(a)(1). The Supreme Court takes up the question of whether parties operating in an arena of heavy federal regulation qualify under this federal officer removal statute or, to the contrary, if the statute’s origins and history preclude such interpretation.

Questions as Framed for the Court by the Parties

Whether a private actor doing no more than complying with federal regulation is a “person acting under a federal officer” for the purpose of 28 U.S.C. § 1442(a)(1), entitling the actor to remove to federal court a civil action brought in state court under state law.

Lisa Watson and Loretta Lawson are smokers who purchased “light” cigarettes from tobacco company Philip Morris. Watson v. Philip Morris Companies, Inc., 2003 WL 23272484 *1 (E.D. Ark 2003) (not reported in F. Supp.2d). Watson and Lawson, and the class of individuals they represent, have sued the Philip Morris company for false advertising with regard to these purchased cigarettes, specifically, the Marlboro Lights and Cambridge Lights brands. Id.

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