996 F.3d 243
4th Cir.2021Background
- Arlington County sued numerous opioid manufacturers, distributors, and pharmacies, alleging they caused a local opioid epidemic and seeking substantial monetary relief; ESI Mail Pharmacy and Express Scripts Pharmacy, Inc. (the “ESI Defendants”) were added as mail-order pharmacies.
- Express Scripts, Inc. (a distinct corporate affiliate) held a Department of Defense (DOD) contract to administer TRICARE Mail Order Pharmacy (TMOP); the ESI Defendants operated TMOP as subcontractors under a detailed Statement of Work (SOW).
- ESI removed the state-court suit under 28 U.S.C. § 1442(a)(1) (federal-officer removal), arguing they acted under DOD’s direction, had colorable federal defenses (government-contractor immunity and preemption), and the claims related to government-directed conduct.
- The district court remanded, finding ESI’s interactions with DOD too attenuated and peripheral to satisfy the “acting under” requirement and declined to decide the other two removal prongs.
- On appeal the Fourth Circuit reviewed jurisdiction de novo, held that ESI met the “acting under” requirement (subcontract performance under a detailed SOW, audits/oversight, statutory duty of DOD to contract), and addressed the remaining two prongs for judicial economy.
- The Fourth Circuit concluded ESI raised colorable federal defenses (government-contractor immunity and TRICARE preemption) and that Arlington’s claims “relate to” ESI’s government-directed conduct; it reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ESI was “acting under” a federal officer for § 1442(a)(1) removal | ESI lacked privity with DOD, had no direct contract, and interactions with DOD were too attenuated | ESI administered TMOP pursuant to Express Scripts’ DOD SOW, followed DOD formulary and detailed requirements, and were subject to audits/oversight | ESI satisfied “acting under”; subcontractor status/privity not dispositive where relationship involves detailed regulation, monitoring, or supervision |
| Whether ESI has a colorable government-contractor immunity defense | Immunity unavailable because no direct contract approval or authority to modify contract terms | Government approved precise specifications (SOW/formulary), ESI conformed to them, and plausibly lacked greater knowledge than government | Government-contractor immunity is a plausible (colorable) defense for jurisdictional purposes |
| Whether federal preemption under TRICARE bars Arlington’s state-law claims | Arlington’s complaint does not plead claims tied to TMOP, veterans, or the DOD contract | TRICARE statute and contract/regulations may preempt state laws to the extent claims conflict with contract/formulary requirements | Preemption is a plausible (colorable) defense sufficient for removal jurisdiction |
| Whether Arlington’s claims “relate to” government-directed conduct (nexus) and whether appellate resolution is appropriate | Complaint does not mention TMOP/DOD; alleged harms are to the public, not veterans—no causal relation | ESI’s filling of prescriptions under the DOD formulary and SOW is directly tied to the conduct complained of | The claims “relate to” government-directed conduct; appellate court exercised discretion to resolve remaining prongs for judicial economy |
Key Cases Cited
- Watson v. Philip Morris Cos., 551 U.S. 142 (U.S. 2007) (scope of “acting under” and limits on mere regulatory compliance)
- Willingham v. Morgan, 395 U.S. 402 (U.S. 1969) (historical purpose of federal-officer removal)
- Sawyer v. Foster Wheeler LLC, 860 F.3d 249 (4th Cir. 2017) (private-contractor “acting under” precedent)
- Mayor & City Council of Baltimore v. BP P.L.C., 952 F.3d 452 (4th Cir. 2020) (standards for reviewing federal-officer removal; liberal construction)
- Ripley v. Foster Wheeler LLC, 841 F.3d 207 (4th Cir. 2016) (government-contractor immunity framework)
- Isaacson v. Dow Chem. Co., 517 F.3d 129 (2d Cir. 2008) (definition and low bar for a “colorable federal defense”)
- Mesa v. California, 489 U.S. 121 (U.S. 1989) (federal defense must be based in federal law)
- Arizona v. Manypenny, 451 U.S. 232 (U.S. 1981) (defense must arise out of official duties)
- In re Nat’l Prescription Opiate Litig., 327 F. Supp. 3d 1064 (N.D. Ohio 2018) (MDL decision finding government-contractor defense plausible for opioid distributor defendants)