HEALTH CARE SERVICE CORP. v. POLLITT
Juli Pollitt sued Health Care Service Corp. ("HCSC") in an Illinois state court for "bad-faith conduct" and HCSC removed the case to an Illinois federal district court. Ms. Pollitt is a federal employee and receives health insurance as one of her job's fringe benefits. HCSC manages her plan. In 2007, HCSC stopped paying claims submitted on behalf of Ms. Pollitt's son because the Department of Labor told HCSC that Ms. Pollitt's health coverage was for herself only and not her family. The district court dismissed, holding that her claim was preempted by the Federal Employees Health Benefits Act ("FEHB").
On appeal, the United States Court of Appeals for the Seventh Circuit vacated the decision and remanded the case to the district court. The court held that removal was inappropriate. The court reasoned that preemption is a defense, and "a federal defense does not allow removal." However, it recognized that where a claim is completely preempted by federal law, removal is appropriate. Here, because federal law does not completely occupy the entire field of health-insurance coverage for federal workers, Ms. Pollitt's claim did not "arise under" federal law such that it could be removed under 28 U.S.C. Section 1441. Instead, the court stated the only other source of removal is 28 U.S.C. Section 1442(a)(1), which says that "any person acting under" a federal officer may remove a suit that depends on the defendant's following the directions issued by a federal officer. Here, the court reasoned that because a dispute existed about whether HCSC was acting on its own or under the direction of the Department of Labor, the case should be remanded to the district court for further proceedings. That court should receive evidence and make appropriate findings to determine whether it should either retain or remand the case to state court, as the facts require.
1) Does the Federal Employee Health Benefits Act, 5 U.S.C. Section 8901-14, completely preempt, and therefore make removable to federal court, a state suit challenging enrollment and health benefit determinations that are subject to the exclusive remedial scheme established in FEHBA?
2) Does the federal officer removal statute, 28 U.S.C. Section 1442(a)(1), encompass a suit against a government contractor administering a FEHBA plan, when the contractor is sued for actions taken pursuant to the government contract?
Dismissed prior to argument pursuant to Rule 46.