Jodie Nevils v. Group Health Plan, Inc. and ACS Recovery Services, Inc.
492 S.W.3d 918
Mo.2016Background
- Jodie Nevils, a federal employee covered by a FEHBA-governed plan, settled a personal-injury claim; Coventry (Group Health Plan, Inc.) and ACS enforced a subrogation lien against the settlement proceeds.
- Nevils sued, alleging Missouri law prohibits subrogation of personal-injury claims; the trial court granted summary judgment for Coventry based on FEHBA preemption.
- This Court previously reversed, holding the FEHBA express-preemption clause did not clearly preempt Missouri’s anti-subrogation law.
- After that decision, OPM promulgated a regulation stating that carrier subrogation/reimbursement rights under FEHB contracts “relate to the nature, provision, and extent of coverage or benefits,” and are therefore effective notwithstanding state law.
- The U.S. Supreme Court vacated and remanded for this Court to determine whether the OPM regulation establishes FEHBA preemption of Missouri’s anti-subrogation law.
- On remand this Court held the OPM regulation does not overcome the presumption against preemption; it declined to treat the agency rule as dispositive on the scope of an express preemption clause and reversed the circuit court judgment for Coventry.
Issues
| Issue | Plaintiff's Argument (Nevils) | Defendant's Argument (Coventry) | Held |
|---|---|---|---|
| Whether FEHBA preempts Missouri’s ban on subrogation of personal-injury recoveries | FEHBA’s preemption clause is ambiguous and does not clearly manifest congressional intent to displace Missouri’s anti-subrogation law | OPM’s formal regulation interprets FEHBA to preempt state anti-subrogation laws and is entitled to Chevron deference, so FEHBA preempts Missouri law | Held for Nevils: FEHBA does not preempt Missouri anti-subrogation law; OPM rule is not dispositive on express preemption clause |
| Whether courts must afford dispositive Chevron deference to an agency rule interpreting an express preemption clause | Deference is inappropriate for clauses dealing expressly with preemption; courts decide preemptive scope | OPM rule is a valid agency interpretation entitled to Chevron deference and resolves ambiguity | Held: No binding precedent requires dispositive Chevron deference for agency interpretations of express preemption clauses; Smiley/Cipollone distinction controls |
| Whether Supreme Court precedents (e.g., City of Arlington, Cuomo, Helfrich) compel deference here | Preemption analysis begins with presumption against preemption; City of Arlington and Cuomo do not displace that rule for express preemption clauses | These decisions support deference to agency interpretations and reinforce Chevron’s applicability | Held: City of Arlington and Cuomo do not mandate deference in this Supremacy Clause/preemption context; this Court declines to follow out-of-circuit decisions that reached the opposite result |
| Whether federal interest in uniform FEHBA benefits overcomes presumption against preemption | Ambiguity and unusual contract-based preemption require cautious reading favoring no preemption | Federal interest in uniform benefits justifies limiting state interference via preemption | Held: Federal interest does not overcome presumption; FEHBA’s text and precedent do not show clear and manifest congressional intent to preempt Missouri law |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (agency interpretations of ambiguous statutes can merit judicial deference under Chevron)
- Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) (apply presumption against preemption and narrowly construe express preemption clauses)
- Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006) (FEHBA preemption clause is ambiguous and warrants cautious interpretation)
- Smiley v. Citibank (S.D.), N.A., 517 U.S. 735 (1996) (distinguishes agency deference on substantive provisions from courts’ role in deciding preemptive scope)
- City of Arlington v. F.C.C., 569 U.S. 290 (2013) (Chevron applies to agency interpretations of statutory ambiguities concerning an agency’s jurisdictional reach)
- Cuomo v. Clearing House Ass’n, L.L.C., 557 U.S. 519 (2009) (discusses Chevron generally but does not endorse deference to agency preemption interpretations where regulation conflicts with statute)
- Wyeth v. Levine, 555 U.S. 555 (2009) (acknowledges that valid agency rules can have preemptive effect but courts must perform independent conflict analysis)