Morrison v. Humana Inc.
3:16-cv-00598
| W.D. Ky. | May 26, 2017Background
- Plaintiff Neal Morrison, a Medicare Advantage enrollee, sued Humana in Jefferson Circuit Court seeking payment for an unpaid $25,973.25 hospital bill after Humana rescinded an initial payment for an 18-day 2012 hospitalization.
- Morrison pleaded state-law claims for breach of contract and bad faith after exhausting Humana’s internal appeals without relief.
- Humana removed the case to federal court invoking the federal-officer removal statute, 28 U.S.C. § 1442(a)(1), arguing it was acting on behalf of CMS as a Medicare Advantage Organization (MAO).
- Humana also moved to dismiss for lack of subject-matter jurisdiction or, alternatively, for failure to state a claim, asserting Morrison failed to exhaust Medicare Act administrative remedies and that federal law preempted his state-law claims.
- The district court sua sponte analyzed subject-matter jurisdiction and concluded Humana could not remove under § 1442 because MAOs do not act “under” a federal agency for removal purposes; consequently the court remanded the case to state court and denied Humana’s motion to dismiss as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Humana (an MAO) properly removed the state-law suit under 28 U.S.C. § 1442(a)(1) (federal-officer removal) | Morrison implicitly argued removal was improper by pursuing the case in state court (no separate remand motion filed) | Humana argued it was “acting under” CMS/Secretary of HHS as an MAO and therefore could remove under § 1442(a)(1) | Court held MAOs cannot rely on § 1442 to remove; Humana’s removal was improper and the case was remanded to state court |
| Whether the federal court had jurisdiction to resolve Humana’s exhaustion/preemption defenses | Morrison maintained state-law claims unresolved in state court; exhaustion was not before this Court because removal was improper | Humana argued federal jurisdiction existed and that Morrison had failed to exhaust Medicare Act remedies, warranting dismissal | Court concluded it lacked subject-matter jurisdiction (due to improper removal) and therefore did not decide exhaustion or preemption issues; dismissal denied as moot |
Key Cases Cited
- Am. Telecom Co., LLC v. Republic of Leb., 501 F.3d 534 (6th Cir.) (threshold requirement that federal courts must determine subject-matter jurisdiction)
- Page v. City of Southfield, 45 F.3d 128 (6th Cir.) (district courts may sua sponte remand when jurisdiction is lacking)
- United States v. Sandford, 476 F.3d 391 (6th Cir.) (unpublished decisions have only persuasive, not precedential, value)