United States District Court, N.D. Illinois, Eastern Division
For Barbara Woodruff, Plaintiff: Brian Kent Hetzer, Karlin, Fleisher & Falkenberg, LLC, Chicago, IL.
For Humana Pharmacy, Inc, incorrectly and duplicatively sued herein as Rightsource Pharmacy and/or Rightsource, non entities, Defendant: James M. Bream, LEAD ATTORNEY, Lowis & Gellen, LLP, Chicago, IL; Deborah M OBrien, Lowis & Gellen, Chicago, IL; Mark Allan Baginskis, Lowis and Gellen, LLP, Chicago, IL.
MEMORANDUM OPINION ORDER
John J. Tharp, Jr., United States District Judge.
Plaintiff Barbara Woodruff sued Humana Pharmacy, Inc., in the Circuit Court of
Cook County, alleging that negligence in the untimely filling and shipping of her mail-order prescription drugs caused her to have a stroke. Humana removed the case to this Court, arguing that any negligence claim is completely preempted by the Medicare statute and therefore belongs in federal court, see 28 U.S.C. § 1441, and alternatively that Humana is entitled to removal as a " federal officer" with a federal defense to liability, see 28 U.S.C. § 1442(a). Humana further contends this Court must dismiss the case because Woodruff failed to exhaust her administrative remedies; that argument is the subject of a separate motion to dismiss. Woodruff now moves to remand to state court, arguing that her claim for damages for personal injuries is not a claim for Medicare benefits and that federal officer removal does not apply.
A. Federal Officer Removal
Humana, a private insurer, is a Medicare Advantage Part D  prescription drug provider that contracts with the Centers for Medicaid and Medicare Services (" CMS" ), a federal agency, to administer Medicare's prescription drug benefit. Because Humana's " negligent" conduct alleged in the state-court complaint is the belated filling and shipping of refill prescriptions--one of its delegated duties--Humana contends that the case is removable under the federal officer removal statute, which provides for the removal of actions against " [t]he United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, sued in an official or individual capacity for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue." 28 U.S.C. § 1442(a)(1). According to Humana: " As an approved and fully authorized Medicare Advantage prescription drug provider, [Humana] acts under the direction, governmental supervision, and control of the Secretary, through CMS, to administer Medicare Advantage Part D benefits to members, including Barbara Woodruff, subject to the strict rules and guidelines of the Medicare Act," and therefore qualifies as a " federal officer" within the meaning of the removal statute. Mem., Dkt. # 15 at 4. Woodruff, on the other hand, contends that the federal officer removal statute does not condone removal of this case because, among other things, there is no connection between plaintiff's claim and the action by Humana performed under the color of federal law.
Under the federal officer removal statute, a removing defendant must show that it is a (1) " person" (2) " acting under" the United States, its agencies, or its officers (3) that has been sued " for or relating to any act under color of such office," and (4) has a colorable federal defense to the plaintiff's claim. 28 U.S.C. § 1442(a); Ruppel v. CBS Corp., 701 F.3d 1176, 1180-81 (7th Cir. 2012) (citing Mesa v. California, 489 U.S. 121, 132-34, 109 S.Ct. 959, 103 L.Ed.2d 99 (1989)). The plaintiff argues that Humana fails to meet all but the first criteria.
As to the " acting under" prong, the Court disagrees. " Cases in which the Supreme Court has approved removal involve defendants working hand-in-hand with the federal government to achieve a task that furthers an end of the federal government." Ruppel, 701 F.3d at 1181 (further explaining that " '[a]cting under'covers
situations . . . where the federal government uses a private corporation to achieve an end it would have otherwise used its own agents to complete." ). Because the Secretary has delegated the task of administering prescription drug benefits to PDP sponsors like Humana, Humana acts under the authority of a federal officer. Humana is not merely complying with federal law--such as those requiring testing of products, see Watson v. Philip Morris Cos., 551 U.S. 142, 151, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007)--but assisting the federal government in carrying it out, see Kelly v. Martin & Bayley, Inc., 503 F.3d 584, 587 (7th Cir. 2007) (explaining that a private person acts under federal law when assisting or carrying out the duties of the federal officer). This not just a highly regulated industry, which is insufficient to support " acting under" status; Humana, a PDP sponsor with authority delegated by CMS, a federal agency, is a part of the federal bureaucracy that administers Medicare Part D.
As to the third element, however, an entity acts " under color of" federal authority only when its challenged actions were derived from its official duties. Ruppel, 701 F.3d at 1182. There must be a " causal connection" between the allegedly tortious conduct and the official authority of the removing defendant. The " under color of" element is analogous to a " scope of employment" inquiry. See 14B Charles Alan Wright, Arthur R. Miller, et al., Federal Practice and Procedure § 3726 at 245 (4th ed. 2009). Here, Humana's federal duties are to administer prescription drug benefits to Medicare patients. Yet Humana does not contend that CMS controls the manner in which Humana provides prescription drug refills; there is nothing to suggest that the manner of physically providing drugs to consumers is controlled by CMS or any federal agency. See Orthopedic Specialists of N.J. PA v. Horizon Blue Cross/Blue Shield of N.J.,518 F.Supp.2d 128, 137 (D.D.C. 2007) (explaining, in promissory estoppel case against insurer, that " It is [the] act of purportedly erroneous pre-authorization over which a federal agency or officer must have exercised 'direct and detailed' control if this Court is to exercise jurisdiction over Defendant under the federal officer removal statute." ). Humana refers generally to " strict rules and guidelines" to which it is subject but does not cite even one that pertains to the manner in which it fills and delivers prescriptions.  In short, Humana fails to support the implausible ...