Baum v. KEYSTONE MERCY HEALTH PLAN
826 F. Supp. 2d 718
E.D. Pa.2011Background
- Baum, as parent and guardian of Chaya Baum, sues Keystone Mercy Health Plan and AmeriHealth Mercy Health Plan in Pennsylvania; action later removed to federal court.
- Plaintiff alleges a misplaced USB drive containing personal health information of Baum and over 280,000 children; Keystone reported the loss and planned safeguards.
- Keystone allegedly allowed employees to transport the drive, did not encrypt data, failed to restrict access, and failed to secure information.
- Plaintiff asserts three claims: violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law; negligence; and negligence per se.
- Defendants remove under 28 U.S.C. § 1441(a) claiming federal question jurisdiction via HIPAA interpretation.
- Court grants remand, holding no substantial federal question and no Grable-type federal jurisdiction; HIPAA does not confer a private federal right of action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction: does removal invoke federal question jurisdiction? | Baum contends no federal question; claims rely on state law. | Keystone argues HIPAA interpretation creates federal question. | Remand granted; no federal question jurisdiction. |
| Grable exception applicability? | Grable exception may apply if a substantial federal issue is central. | No substantial federal issue; HIPAA privacy does not create federal claim. | Grable exception does not apply; jurisdiction remains lacking. |
| HIPAA private right of action relevance? | HIPAA interpretation could anchor a federal question. | HIPAA does not create a private right of action; not a federal claim here. | HIPAA absence of private right does not sustain removal; remand stands. |
Key Cases Cited
- Grable & Sons Metal Prods., Inc. v. Darue Engineering & Mfg., 545 U.S. 308 (Supreme Court, 2005) (federal-question jurisdiction rare but arises with substantial federal issue)
- Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (Supreme Court, 1986) (arising-under jurisdiction is limited and not all federal questions qualify)
- Abels v. State Farm Fire & Casualty Co., 770 F.2d 26 (3d Cir. 1985) (well-pleaded complaint standard for removal; favors remand when federal issue not substantial)
- Dodd v. Jones, 623 F.3d 563 (8th Cir. 2010) (absence of federal private right; HIPAA context in removal analysis)
- Webb v. Smart Document Solutions, LLC, 499 F.3d 1078 (9th Cir. 2007) (HIPAA-related privacy in federal-question considerations discussed)