647 F. App'x 619
6th Cir.2016Background
- Humana, a Medicare Advantage organization (MAO), mistakenly overpaid chiropractor Thaddeus C. Bosman after a 2012 claims-processing error and then withheld portions of subsequent payments to recoup the alleged overpayments.
- Bosman and the Ohio State Chiropractic Association sued Humana in Ohio state court asserting state-law claims (conversion, unjust enrichment, breach of implied contract) and seeking declaratory/injunctive relief and class certification.
- Humana removed the case to federal district court under the federal officer removal statute, 28 U.S.C. § 1442(a), and moved to dismiss for failure to exhaust Medicare administrative remedies; Bosman moved to remand for lack of federal jurisdiction.
- The district court granted Humana’s dismissal for failure to exhaust without deciding the remand motion.
- The Sixth Circuit reviewed whether Humana could invoke § 1442(a) as a private contractor "acting under" a federal officer/agency and concluded Humana did not act under CMS in a sufficiently close, delegated way to authorize removal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Humana could remove under 28 U.S.C. § 1442(a) ("acting under" a federal officer/agency) | Bosman argued Humana is not a federal officer or agency and cannot remove under § 1442(a). | Humana claimed its MA contract with CMS makes it perform delegated federal functions and be subject to detailed CMS regulation, so it "acts under" the federal government. | Court held Humana did not "act under" CMS in the unusually close, delegated sense required for § 1442(a); removal improper. |
| Whether detailed regulation alone suffices to satisfy "acting under" | Bosman argued extensive regulation does not equate to delegation of federal authority that permits removal. | Humana argued extensive regulation, supervision, and contractual obligations demonstrate an unusually close relationship with CMS. | Court ruled that regulation alone is insufficient; MAOs operate at arms-length and lack the formal delegation/close control needed for § 1442(a). |
| Whether MAOs perform a job the government would otherwise do (supports "acting under") | Bosman contended CMS would not have to perform MA functions itself and could rely on traditional Medicare. | Humana argued MA administration is a government function delegated to MAOs. | Court found government would likely rely on fee-for-service Medicare rather than perform MA plans itself, so this factor does not support "acting under." |
| Whether federal-question removal under 28 U.S.C. § 1441 was proper | Bosman argued no federal question on the face of the complaint. | Humana initially argued a federal question but abandoned that position on appeal. | Court noted no federal question on the face of the complaint; § 1441 removal not applicable. |
Key Cases Cited
- Willingham v. Morgan, 395 U.S. 402 (1969) (discusses scope of private parties suing under federal officer concepts and relates to "official duties" framing)
- Watson v. Philip Morris Cos., 551 U.S. 142 (2007) (private contractor must assist the federal officer’s duties; regulation alone insufficient)
- Jefferson County v. Acker, 527 U.S. 423 (1999) (nexus requirement between conduct and official authority under prior § 1442 formulation)
- TRW Inc. v. Andrews, 534 U.S. 19 (2001) (limits on rendering statutory conditions superfluous)
- Heckler v. Ringer, 466 U.S. 602 (1984) (administrative-exhaustion requirement when claims are inextricably intertwined with benefit determinations)
- Schweiker v. McClure, 456 U.S. 188 (1982) (discusses circumstances where private contractors act on behalf of CMS)
- Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387 (5th Cir. 1998) (example of contractor performing work government otherwise would do; discussed in Watson)
Outcome: Sixth Circuit reversed the district court’s retention of the action and remanded with instructions to remand the case to state court for lack of subject-matter jurisdiction under § 1442(a).