State of Mississippi v. Optum, Inc.
3:24-cv-00718
S.D. Miss.Jun 9, 2025Background
- The State of Mississippi sued several pharmacy benefit managers (PBMs) in state court, alleging the PBMs contributed to the opioid epidemic through coordination with opioid manufacturers.
- PBM defendants, including Express Scripts and OptumRx, provided PBM services to both federal health plans (TRICARE, FEHBA, VHA) and nonfederal clients in Mississippi.
- PBMs removed the case to federal district court under the federal officer removal statute (28 U.S.C. § 1442(a)(1)), asserting that the alleged misconduct was directed by federal agencies.
- Mississippi moved to remand the case to state court, arguing it waived all claims relating to PBMs' federal work and was only pursuing claims for nonfederal activity.
- PBMs argued their negotiations and conduct for federal and nonfederal plans are indivisible, so Mississippi’s waiver is illusory.
- The court addressed whether Mississippi’s federal officer disclaimer was valid and whether the requisites for federal officer removal were met.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal Officer Removal Applicability | MS disclaimed all claims involving federal directives, so removal is improper | PBMs' federal and nonfederal work is indivisible; allegations unavoidably relate to federal directives | Removal proper; disclaimer is illusory and does not prevent jurisdiction |
| Validity of Section 1442 Disclaimer | Disclaimer severs all federal claims; only nonfederal conduct at issue | No practical way to separate nonfederal from federal conduct; single set of negotiations/services | Disclaimer rejected as artful pleading; federal nexus present |
| Colorable Federal Defense | No colorable defense as only nonfederal acts targeted | Government contractor defense applies due to federal requirements and oversight | PBMs have a colorable federal contractor defense |
| Acting Under a Federal Officer | PBMs are merely private entities in business arrangements | PBMs contracted to perform functions the govt. would otherwise perform; high govt. oversight | PBMs satisfy the "acting under" prong |
Key Cases Cited
- Rutledge v. Pharm. Care Mgmt. Ass’n, 592 U.S. 80 (explaining PBM role as intermediary between plans and pharmacies)
- Jefferson County v. Acker, 527 U.S. 423 (recognizing breadth of federal officer removal)
- Willingham v. Morgan, 395 U.S. 402 (defendants have right to try federal officer defenses in federal court)
- Watson v. Philip Morris Cos., 551 U.S. 142 (defining "acting under" for federal officer removal)
- Boyle v. United Techs. Corp., 487 U.S. 500 (framework for government contractor immunity)
- Home Depot U.S.A., Inc. v. Jackson, 587 U.S. 435 (requirements for federal original jurisdiction)