Decatur Hospital Authority v. Aetna Health, Inc.
2017 U.S. App. LEXIS 6690
| 5th Cir. | 2017Background
- Wise Regional (Texas municipal hospital authority) sent Aetna a demand letter on May 27, 2015, asserting Texas Prompt Pay Act late-payment penalties exceeding $17.4 million and requesting a detailed claims list and line-of-business identification for each claim.
- Wise Regional provided the claims spreadsheet to Aetna on June 22, 2015 and filed suit in Texas state court on June 24, 2015 alleging late payments; the petition referenced the claims list.
- Aetna removed the case to federal court on December 4, 2015 relying in part on the federal-officer removal statute, 28 U.S.C. § 1442.
- Wise Regional moved to remand; the district court remanded on February 19, 2016 as untimely and awarded $14,500 in attorneys’ fees on March 7, 2016, finding Aetna lacked an objectively reasonable basis to remove so late.
- Aetna appealed both the remand order and the fee award; the Fifth Circuit reviewed jurisdiction and the merits de novo for remand and for abuse of discretion for fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellate jurisdiction exists to review a remand that the district court grounded on timeliness when removal invoked § 1442 | Wise: Remand based on a procedural defect (untimeliness) is generally not reviewable under § 1447(d) | Aetna: § 1447(d) permits appellate review when removal was effected under § 1442 | Court: Appellate jurisdiction exists because § 1447(d) expressly excepts § 1442 removals from the bar on review; the court may review the remand order itself |
| Whether Aetna’s removal was timely under 28 U.S.C. § 1446(b) | Wise: The petition and the previously provided claims list put Aetna on notice; removal window began upon service of the petition (June 30, 2015) | Aetna: Case became removable only after Wise Regional’s interrogatory responses disclosed removable claims | Court: Removal was untimely; Aetna’s 30-day removal window began with receipt of the initial pleading (petition), not the later interrogatory responses |
| Whether the interrogatory answers constituted an "other paper" triggering a new 30-day removal period under § 1446(b)(3) | Wise: Interrogatory responses added nothing new beyond the claims list already provided and referenced in the petition | Aetna: Interrogatories first revealed intent to pursue removable claims | Court: Interrogatory responses did not supply new removable information; they referred to the already-served spreadsheet, so no new 30-day window arose |
| Whether the district court abused its discretion in awarding attorneys’ fees under 28 U.S.C. § 1447(c) | Wise: Fees warranted because Aetna lacked an objectively reasonable basis for late removal | Aetna: Subjective good-faith belief in removability should preclude fees | Court: No abuse of discretion; award upheld because Aetna lacked an objectively reasonable basis for removal and subjective belief is insufficient |
Key Cases Cited
- Miranti v. Lee, 3 F.3d 925 (5th Cir. 1993) (§ 1447(d) does not prohibit review of costs and fees awards)
- Garcia v. Amfels, Inc., 254 F.3d 585 (5th Cir. 2001) (standard of review for district court’s fee award is abuse of discretion)
- Savoie v. Huntington Ingalls, Inc., 817 F.3d 457 (5th Cir. 2016) (remand orders reviewed de novo and § 1447(d) exceptions explained)
- Kircher v. Putnam Funds Trust, 547 U.S. 633 (2006) (§ 1447(d) exceptions are textual and control reviewability)
- Chapman v. Powermatic, Inc., 969 F.2d 160 (5th Cir. 1992) (two-step § 1446(b) timeliness test for removal)
- Robertson v. Ball, 534 F.2d 63 (5th Cir. 1976) (limits on reviewing remand orders not covered by § 1447(d) exceptions)
- Am. Airlines, Inc. v. Sabre, Inc., 694 F.3d 539 (5th Cir. 2012) (award of fees when removing party lacks an objectively reasonable basis)
- Price v. Johnson, 600 F.3d 460 (5th Cir. 2010) (discusses limits on appellate review for remand orders)