Government of Puerto Rico v. Express Scripts, Inc.Government of Puerto Rico v. Express Scripts, Inc.
Jason R. Scherr, with whom Stephanie Schuster, Patrick A. Harvey, Lindsey T. Levy, Morgan, Lewis & Bockius LLP, Carlos A. Valldejuly-Sastre, Ricardo J. Casellas-Santana, and O‘Neill & Borges LLC, were on brief, for appellant Express Scripts, Inc.
A. Joshua Podoll, with whom Enu Mainigi, Craig Singer, Williams & Connolly LLP, Eduardo A. Zayas-Marxuach, and McConnell Valdés LLC were on brief, for appellants CaremarkPCS Health, LLC, and Caremark Puerto Rico, LLC.
Louis Bograd, with whom Motley Rice LLC, Andrés W. López, and The Law Offices of Andrés W. López, P.S.C., were on brief for appellee.
GELPÍ, Circuit Judge. This appeal is about
The Government of Puerto Rico (“the Commonwealth“) sued pharmaceutical benefit managers (“PBMs“) including Express Scripts, Inc. (“Express Scripts“), CaremarkPCS Health, LLC, and Caremark Puerto Rico, LLC, (“Caremark,” together with Express Scripts, “PBM Defendants“), and several pharmaceutical manufacturers1 in the Commonwealth of Puerto Rico Court of First Instance (“Court of First Instance“). The Commonwealth alleges that the PBM Defendants schemed to unlawfully inflate insulin prices through rebate negotiations and price setting. The PBM Defendants removed to federal court under
But the Commonwealth‘s complaint claimed not to seek relief related to the PBM Defendants’ federal service. Indeed, it purported to disclaim all “relief relating to” a federal program or contract. So, the Commonwealth argues that disclaimer excluded any claims upon which Express Scripts and Caremark might remove under
This appeal presents a novel issue in our circuit. So far, the courts to consider the issue as it relates to these PBM Defendants have reached different conclusions. Compare California v. CaremarkPCS Health LLC, No. 23-55597, 2024 WL 3770326, at *1 (9th Cir. Aug. 13, 2024) (mem.) (concluding that, in a dispute between California and these PBM Defendants
Ultimately, we chart a different analytical course than the district court, based upon our reading of the federal officer removal statute and the relevant jurisprudence. For we recognize that we must credit Caremark‘s allegation that it performed the challenged conduct jointly for private parties and for the federal government. And if Caremark can properly remove on this basis, then the entire action belongs in federal court. Despite what the disclaimer says, it does not foreclose Caremark‘s assertion that it performed this indivisible conduct under a federal officer‘s authority and are so entitled to colorable federal defenses. To credit the disclaimer would permit the Commonwealth to recover based on what, when considered through Caremark‘s theory of removal, were acts under a federal officer. The Commonwealth‘s attempts at artful pleading cannot serve as an end run around the federal officer removal statute. Accordingly, we reverse and remand.
I. BACKGROUND
To set the stage, we outline the pharmaceutical industry, recount the proceedings below, and, along the way, summarize the parties’ allegations.
A. Pharmaceutical Industry Basics
There are a few key players in the pharmaceutical industry. There are pharmaceutical manufacturers, who research, develop, and sell prescription drugs at a certain list price. Of course, there are the individuals who pay either cash to the pharmacy for prescription drugs or premiums to cover their prescription drug co-pay. Those premiums go to carriers, such as an employer-sponsored health plan or an insurance company, that provide health insurance. And then there are PBMs, like Caremark and Express Scripts. Think of PBMs as “middlemen” between health care plans, pharmacies, and pharmaceutical manufacturers. They contract with health plans and carriers to administer prescription drug benefits, manage drug costs, and negotiate rebates and discounts from pharmaceutical manufacturers.
As relevant here, PBMs create drug formularies -- lists of prescription drugs that health plans cover and to which PBMs designate tiers according to how much consumers owe for a co-payment. For example, a tier-1 drug would require a $5 co-payment, while a tier-2 drug would require a $10 co-payment, and so on. Drugs excluded from a PBM‘s formulary must be purchased out-of-pocket by consumers, making them a less desirable option in the marketplace.
Manufacturers accordingly work to ensure that PBMs include their drugs on formularies. Among other incentives, manufacturers pay rebates -- post-sale discounts calculated based on how many consumers fill a prescription for the manufacturers’ drug -- and other fees to PBMs, which in turn keep a portion of the rebates and fees before passing off the remainder to health insurance plans.
B. Procedural History
i. Initial Lawsuit
The Commonwealth sued in the Court of First Instance on January 17, 2023. Its four claims under the Puerto Rican Fair Competition Act,
Central to the Commonwealth‘s claims are the PBM Defendants’ rebate negotiations. The Commonwealth alleges that, since 2014, the PBM Defendants excluded certain drugs from their formularies to increase competition and encourage drug companies to offer higher rebates. The Commonwealth, in other words, accuses the PBM Defendants of effectively using their leverage as formulary holders to “sell” that “formulary space to the highest bidding drug company.” To keep up with the rising costs of formulary space, drug manufacturers in turn had to increase the WAC price. Those increased costs, the Commonwealth asserts, were then passed on to the consumers: Because “[m]any consumers’ out-of-pocket payments for insulin are tied to the WAC price, . . . consumers’ out-of-pocket payments increase when the WAC price increases.” And as a result of the jockeying and negotiating between PBMs and pharmaceutical manufacturers, consumers who use insulin are forced to switch medications every few years.
At bottom, the Commonwealth alleges that, despite the PBM Defendants’ claims that their rebate practices are helping consumers, the PBM Defendants are in fact focused on something else: receiving a higher rebate for themselves. Indeed, the Commonwealth asserts, the PBM Defendants often choose to include on their formularies the drugs for which they received the highest rebate, excluding otherwise identical -- and more cost-effective -- drugs.
The Commonwealth seeks to enjoin the PBM Defendants from engaging in any future unfair and deceptive practices related to this alleged scheme. The Commonwealth also seeks restitution, payable to any Commonwealth resident consumer affected by those practices, along with damages to the Commonwealth in the amount resulting from increased insulin prices from the scheme.
Crucial to the instant appeal is the following disclaimer, which the Commonwealth included in its complaint:
The [Commonwealth] is not seeking relief relating to any federal program (e.g., Medicaid, Medicare) or any contract related to a federal program. Moreover,
the [Commonwealth‘s] claims do not arise out of a written contract, but rather are based on the larger unfair and deceptive scheme that violates the Fair Competition Act and increased prices and reduced access to insulin products for Puerto Rico consumers.
On March 17, 2023, the PBM Defendants removed under
ii. Caremark
Caremark premises removal on its obligations to carriers that provide health-insurance benefits to federal government employees through the Federal Employees Health Benefits Act of 1959 (“FEHBA“),
“OPM has direct and extensive control over these benefits contracts under the FEHBA.” Goncalves ex rel. Goncalves v. Rady Children‘s Hosp. San Diego, 865 F.3d 1237, 1246 (9th Cir. 2017) (citation omitted). And OPM‘s standard form contracts assume that PBMs will contract with FEHBA carriers and receive rebates. Off. Of Pers. Mgmt., Federal Employees Health Benefits Program Standard Contract for Experience-Rated Health Maintenance Organization Carriers I-18-I-20 (2019) (“FEHB Standard Contract“), https://perma.cc/7EX7-26DB (last visited Sept. 26, 2024). OPM thus requires FEHBA carriers to impose certain provisions in their contracts with PBMs concerning rebates, and PBMs must adhere to these provisions.2 Id. These include:
-
submitting quarterly and annual reports concerning negotiated rebates;
- using “pass-through transparent pricing based on the PBM‘s cost for drugs . . . in which the [FEHBA] Carrier receives the value of the PBM‘s negotiated . . . rebates“;
- crediting carriers “either as a price reduction or by cash refund the value all [rebates] properly allocated to the Carrier“; and
- providing OPM with certain information upon request -- such as the PBM‘s contracts with pharmacies, manufacturers, and third parties concerning the sales of claims data.
Id. at I-17-I-19.
Caremark removed because it claims that the Commonwealth‘s lawsuit challenges its performance for FEHBA plans under the FEHBA benefits contracts. Caremark reasons that the Commonwealth, by seeking to recover for every Commonwealth resident who purchased insulin at inflated prices, necessarily seeks to recover for its residents who are federal employees who receive benefits through FEHBA. That is, Commonwealth residents who are federal employees bought insulin using health care benefits from FEHBA carriers, and Caremark collected manufacturer payments -- subject to the contractual obligations listed above.
Caremark also points out that it does not distinguish between FEHBA and non-FEHBA clients during negotiations with manufacturers for rebates -- the rebates were, and still are, negotiated on behalf of all clients. These joint negotiations have led to “rebate agreements” between Caremark and the manufacturer. Caremark reiterates that, from 2014 to the present, it did not negotiate separate rebate agreements for its FEHBA and non-FEHBA clients. And during that time period, the same agreements governed rebates for insulin paid by manufacturers for both FEHBA plans and non-FEHBA plans. So whatever rebates Caremark received were not separated on a plan-by-plan basis.
Accordingly, because the Commonwealth‘s complaint sought relief for Commonwealth residents arising from Caremark‘s actions and rebate negotiations on behalf of FEHBA plans, Caremark invokes The Commonwealth moved to remand. It argued that its disclaimer eliminates any “legal basis for federal officer removal” and clarified that it would “categorically exclude[]” relief “relating to” FEHBA. PBM Defendants appealed.3 We have jurisdiction under “We review de novo the district court‘s jurisdictional determination on removal. Where the district court resolves disputed issues of fact, we review those factual findings for clear error.” Moore, 25 F.4th at 34 (citations omitted). In reviewing a ruling on a motion to remand, we ask “whether federal jurisdiction exist[ed]” as “cabined by the notice of removal.” López-Muñoz, 754 F.3d at 4 (first citing BIW Deceived v. Local S6, Indus. Union of Marine & Shipbuilding Workers, 132 F.3d 824, 830 (1st Cir. 1997); and then citing Ervast v. Flexible Prods. Co., 346 F.3d 1007, 1012 n.4 (11th Cir. 2003)). Accordingly, the removing parties bear the burden of showing federal officer jurisdiction as pleaded in their notice of removal. See Moore, 25 F.4th at 34; Ervast, 346 F.3d at 1012 n.4. In reviewing whether the removing party met its burden, Courts must “credit” that party‘s “theory of the case” for why removal under Section Section As we mentioned above, if a single defendant properly removes under To avail itself of “The words ‘acting under’ are broad,” and, like the rest of the statute, “must be ‘liberally construed.‘” Watson, 551 U.S. at 147 (quoting Symes, 286 U.S. at 517). “‘[A]cting under’ a federal officer . . . contemplate[s] a relationship where the private party engages in an effort ‘to assist, or to help carry out, the duties or tasks of the federal superior‘” and “typically involves ‘subjection, guidance, or control.‘” Moore, 25 F.4th at 34 n.3 (quoting Watson, 551 U.S. at 151-52). For example, a private contractor that “help[s] the Government to produce an item it needs” and thus “helps officers fulfill other basic governmental tasks” may remove because it assists with a governmental function that the government “itself would The defendant must also carry out the charged conduct “‘for or relating to’ the asserted official authority.” Moore, 25 F.4th at 34. “Relating to,” as it is used in Section To prevent a defendant from removing under the federal officer removal statute, plaintiffs often disclaim in their complaint claims that would serve as the basis for removal.6 See St. Charles Surgical Hosp. v. La. Health Serv. & Indem. Co., 990 F.3d 447, 451 (5th Cir. 2021). In other contexts, “federal courts [have] permit[ted] individual plaintiffs, who are the masters of their complaints, to avoid removal to federal court, and to obtain a remand to state court,” by refusing to bring a removable claim. Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 595 (2013) (considering this principle as it related to a plaintiff‘s attempt to stipulate, prior to class certification, that he, and the class he sought to represent, would not seek damages in excess of $5 million in the aggregate in an effort to avoid jurisdiction under The federal district courts that have analyzed this “disclaimer doctrine” in detail generally distinguish between two categories of § 1442(a)(1) disclaimers: (1) “express disclaimers of the claims that serve as the grounds for removal“; and (2) mere “artful pleading for purposes of circumventing federal officer jurisdiction.” Dougherty v. A O Smith Corp., No. 13-1972, 2014 WL 3542243, at *10 (D. Del. July 16, 2014); see St. Charles Surgical Hosp., 990 F.3d at 451. To defeat removal, an express disclaimer must “explicitly renounce[] claims” “upon which federal officer removalwas based.” Batchelor v. Am. Optical Corp., 185 F. Supp. 3d 1358, 1363-64 (S.D. Fla. 2016) (first quoting Hayden v. 3M Co., No. 15-2775, 2015 WL 4730741, at *3 (E.D. La. Aug. 10, 2015); and then quoting Dougherty, 2014 WL 3542243, at *10). If a plaintiff renounces such claims, then a defendant is not entitled to “a federal forum” in which “to raise a defense arising out of his official duties,” Manypenny, 451 U.S. at 241, “because such a defense pertains to claims that simply do not exist,” Batchelor, 185 F. Supp. 3d at 1364 (internal quotation marks and citation omitted). Accordingly, a valid disclaimer must eliminate any basis for federal officer removal so that, upon remand, there is no possibility that a state court would have to determine whether a defendant acted under a federal officer‘s authority. See, e.g., id. (remanding because the disclaimer of claims arising out of the plaintiff‘s exposure to asbestos while aboard naval ships meant that the defendant could not “assert a colorable federal defense based on government contractor immunity“); Kelleher v. A.W. Chesterton Co., No. 15-CV-893, 2015 WL 7422756, at *3 (S.D. Ill. Nov. 23, 2015) (same, when the plaintiff disclaimed claims from asbestos exposure from specific federal military property and during certain years of his military service). Thus, disclaimers that “clearly carve[] out certain factual bases, whether by time span or location, such that any alleged injury could not have happened under the direction of afederal officer” will prevent removal. Lopez, 2024 WL 1907396, at *11 (quoting O‘Shea v. Asbestos Corp., No. 3:19-cv-127, 2019 WL 12345572, at *7 (D.N.D. Dec. 13, 2019)). For instance, consider a plaintiff who disclaims any claims that arise from a location owned and operated by the federal government. The plaintiff then sues a defendant for the defendant‘s conduct on private property divorced from the work that it performed for a federal officer. See Dougherty, 2014 WL 3542243, at *1. The defendant thus could not raise a colorable federal defense arising from its private conduct, so § 1442(a)(1) would not be a proper basis for removal. See Fisher v. Asbestos Corp., No. 2:14-cv-2338, 2014 WL 3752020, at *3 (C.D. Cal. July 30, 2014); Batchelor, 185 F. Supp. 3d at 1364-65. Distinct from express disclaimers are those that amount to “artful pleading.” These disclaimers are never credited and come in a few varieties. First, there are those in which “the ‘applicability [of the disclaimer] turns on the core question of whether a defendant‘s alleged [unlawful behavior] was required or caused by their relationship with the federal government.‘” Healthcare Venture Partners, LLC v. Anthem Blue Cross & Blue Shield, No. 1:21-cv-29, 2021 WL 5194662, at *7 (S.D. Ohio Nov. 8, 2021) (quoting Martincic v. A.O. Smith Corp., No. 2:20-cv-958, 2020 WL 5850317, at *3 (W.D. Pa. Oct. 1, 2020)). These disclaimers are considered “circular” because, if permitted, they would “forcefederal contractors to prove in state court that they were acting under the direction Second, and equally as ineffective, are waivers that “disavow[] claims based on a defendant‘s acts or omissions carried out under color of office, but the plaintiff, nonetheless, s[eeks] to recover based on a defendant‘s official acts.” Batchelor, 185 F. Supp. 3d at 1363 (citations omitted). These disclaimers serve as an attempted end run around the federal officer removal statute, “depriv[ing] the federal officer of the right” to have their immunity litigated in federal court. In re Asbestos Prods. Liab. Litig. (No. VI), 770 F. Supp. 2d 736, 740-42 (E.D. Pa. 2011) (declaring ineffective a disclaimer excluding claims “caused by the acts or omissions of defendants committed at the specific and proven direction of an officer of the United States government acting in his official capacity” because “the only claims alleged against Defendant arise[] from exposure on U.S. Naval ships atU.S. Naval shipyards“). Therefore, courts must determine whether, despite the disclaimer, the facts of the case make it likely that the plaintiff will hold a defendant liable for its official acts for which it possesses a colorable federal defense. Such a disclaimer will not foreclose removal. See, e.g., Reinbold v. Advanced Auto Parts, Inc., No. 18-cv-605, 2018 WL 3036026, at *2 (S.D. Ill. June 19, 2018) (collecting cases). As we previewed above, we consider whether the disclaimer in the Commonwealth‘s complaint prevented Caremark from removing under § 1442(a)(1).7 The Commonwealth argues that itsdisclaimer eliminated any basis for federal officer removal. As it clarified at oral argument, the Commonwealth believes that its disclaimer made it so that the PBM Defendants could not claim that they (1) acted under a federal officer or (2) possessed colorable federal defenses.8 See The Commonwealth‘s complaint disclaimed any “relief relating to any federal program . . . or any contract related to a federal program.” The district court found this valid because it purportedly limited the Commonwealth‘s recovery to non-federal programs, a swath of claims that, the district court believed, would not require a state court to adjudicate whether the PBM Defendants acted on behalf of a federal officer. So, the district court concluded, the PBM Defendants could not claim that theirwork “with respect to non-federal contracts” were on behalf of a federal officer or raised a colorable federal defense. In reaching this conclusion, the district court disagreed with Caremark that it was “not possible” to divide its services between whether they were for the federal government or non-federal healthcare plans. However, the indivisibility of those services is an important facet of Caremark‘s “theory of the case” that must be “credit[ed]” in evaluating removal. Acker, 527 U.S. at 432. Under the federal officer removal statute, a federal court examines the notice of removal‘s well-pleaded allegations to see if the removing party has demonstrated “an adequate threshold showing” for removal. Id. Part of that task includes “credit[ing]” that party‘s “theory of the case” for removal. Id.; see Agyin, 986 F.3d at 175. To the extent the parties raise factual disputes about the scope of a defendant‘s federal obligations, Congress gave federal officers “the protection of a federal forum” in which to resolve those disputes. Willingham, 395 U.S. at 407. As we explain in more detail below, Caremark premised removal on its theory that its PBM services for FEHBA were indivisible from its PBM services for private entities. In this way, Caremark alleged that it performed the charged conduct on behalf of a federal officer. Concluding that Caremark‘s actions,nevertheless, can be so divided contradicted Caremark‘s theory of the case and resolved whether the challenged acts were outside the scope of its official duties. The district court‘s role at this early stage is to credit that theory because federal officers “should have the opportunity to present their version of the facts” on disputes at the heart of their federal service to a federal court. Id. at 409 (noting that, when the plaintiff‘s allegation that federal officers were on a “frolic” and not entitled to federal immunity contradicted the officers’ assertions, a federal court should retain the case under § 1442(a)(1)). Thus, we credit Caremark‘s theory of the case -- that its work for private clients was indivisible from its work for the federal government due to the structure of its rebate negotiations -- while evaluating the disclaimer. Before addressing the effectiveness of the Commonwealth‘s disclaimer, Caremark also possesses a colorable federal defense for its negotiations on behalf of FEHBA carriers. FEHBA contains an express preemption provision, which states that “[t]he terms of any [FEHBA] contract” relating to “benefits . . . preempt anyState or local law.”9 The Commonwealth‘s position is that it disclaims “relief relating to any federal program,” including FEHBA, which it argues negates Caremark‘s ability to satisfy the “acting under” and “colorable federal defense” elements. Caremark, however, alleges that it negotiates for rebates jointly for its FEHBA-based and non-FEHBA carriers. And those negotiations lead to rebate agreements, which do not distinguish between FEHBA and non-FEHBA plans. Considering the level of OPM‘s involvement in what provisions these rebate agreements must contain, holding Caremark liable for its role in the scheme to inflate insulin prices necessarily includes holding Caremark liable for itsnegotiations -- negotiations that are at least in part for FEHBA plans, carried out pursuant to OPM‘s detailed requirements. Once we credit these allegations and theory of the case “for purposes of . . . our jurisdictional inquiry,” Acker, 527 U.S. at 432, the disclaimer was not effective to prevent removal. Rather, the disclaimer would permit the Commonwealth to recover “based on [Caremark‘s] official acts.” Batchelor, 185 F. Supp. 3d at 1363 (citations omitted). That is so for three interrelated reasons. First, by targeting Caremark‘s rebate negotiations while disclaiming any “relief relating to a federal program” or contract, the Commonwealth necessarily targets what Caremark alleges are “act[s] under” a federal officer‘s authority. See Moore, 25 F.4th at 34. After all, Caremark alleged that it negotiates for rebates with manufacturers simultaneously for FEHBA and non-FEHBA plans; there are no “FEHBA-only” negotiations. And Caremark alleged that when it negotiated for rebates during the period relevant to the instant dispute, its negotiations led to rebate agreements that covered both types of plans. So, if Caremark is liable for its conduct in negotiating rebates for private clients and FEHBA plans, then it could be liable for its conduct under OPM‘s direction -- no matter what the disclaimer says. See, e.g., CaremarkPCS Health LLC, 2024 WL 3770326, at *2 (Ikuta, J., concurring) (noting that “no disclaimer, however worded,” could prevent removal becauseCaremark “engages in a single rebate negotiation” for its “private clients and the federal government,” so California‘s theory of liability “necessarily” made Caremark liable for negotiating rebates on behalf of FEHBA plans). Simply put, Caremark alleges that when it negotiates rebates as OPM‘s contractual provisions demand, it assists the federal government with a task that the government would otherwise have to perform itself: administering federal health benefits for federal employees through FEHBA. Lopez, 2024 WL 1907396, at *7-9 (concluding that Caremark “acts under” OPM when it negotiates for rebates); cf. Goncalves, 865 F.3d at 1245 (finding that FEHBA carrier “acted under” OPM in pursuing subrogation claims because it assisted OPM with administering federal health benefits and its OPM-negotiated contracts included provisions contemplating subrogation); Ray v. Tabriz, 110 F.4th 949, 957-58 (7th Cir. 2024) (same). And the Commonwealth‘s lawsuit -- by targeting those negotiations -- therefore implicates Caremark‘s work “carried out for” OPM “authority.” Moore, 25 F.4th at 34 (internal quotation marks and citations omitted). Second, because these negotiations allegedly cannot be disassembled, crediting the disclaimer would foreclose Caremark‘s right to have a federal court evaluate its “colorable” preemption defense under FEHBA‘s express preemption provision. Third, crediting the disclaimer would undercut § 1442(a)(1)‘s requirement that federal courts determine whether a defendant acted under a federal officer‘s authority. The disclaimer forgoes relief “relating to any federal program,” but Caremark claims that it negotiates for FEHBA and non-FEHBA plans in one fell swoop. Given this purported indivisibility, the Commonwealth‘s recovery for how It is thus possible for the Commonwealth “to recover based on” Caremark‘s “official acts” despite the disclaimer. Batchelor, 185 F. Supp. 3d at 1363. True, the disclaimer tries to disavow recovery “relating to federal programs” and contracts. But the Commonwealth seeks damages based on Caremark‘s rebate negotiations, even though Caremark negotiates for FEHBA and non-FEHBA plans simultaneously. Thus, the Commonwealth seeks to hold Caremark liable for acts that appear to otherwise entitle it to removal despite the disclaimer. See, e.g., In re Asbestos Prods. Liab. Litig., 770 F. Supp. 2d at 741-42. We do not believe it possible to divide Caremark‘s federal and non-federal work to enforce the disclaimer for two reasons. First, we must “credit” Caremark‘s “theory of the case” for removal. Acker, 527 U.S. at 432. We have explained why that means that we shall consider its work indivisible at this early juncture. Second, under Caremark‘s removal theory as “cabined by the notice of removal,” Lopez-Munoz, 754 F.3d at 4, Caremark conducts one negotiation, and the Commonwealth would hold Caremark liable because this negotiation allegedly inflated insulin prices. Caremark claims to have performed its actions simultaneously for private clients and the federal government, invoking a colorable preemption defense. This defense‘s presence is “decisive upon the subject of jurisdiction.” Cooper, 73 U.S. at 252. Crediting the disclaimer thus would trample a “primary purpose[]” of§ 1442(a)(1): “to have such defenses litigated in the federal courts.” Willingham, 395 U.S. at 407. To get around this impasse, the Commonwealth promises to “remove claims relating to . . . FEHBA” and disavow restitution, civil penalties, disgorgement, and injunctive relief relating to the same. This promise does not address the problem. The Commonwealth claims that how Caremark negotiated rebates inflated insulin prices. But this “charged conduct,” Moore, 25 F.4th at 34, is alleged to be indivisibly federal and non-federal. Even with the Commonwealth‘s promise to tailor its relief, its theory of liability premised on the negotiations make it possible that it will recover for work that Caremark claims to have “carried out” for the federal government. Id. The Commonwealth relies on location-based disclaimer cases to support remand. In its view, claims not related to a federal program are as “discrete and readily identifiable” as claims that do not arise on federal property. We are not persuaded. When a plaintiff disclaims claims arising from their injuries on federal property, the plaintiff‘s remaining claims presumably arise from their injuries on private property and are disconnected from the defendant‘s work for the federal government. See Dougherty, 2014 WL 3542243, at *1. A defendant cannot claim that it acted for a federal officer and is entitled to federal immunity in that scenario. See id. at *8-10;cf. Illinois ex rel. Raoul v. 3M Co., 111 F.4th 846, 849 (7th Cir. 2024) (affirming motion to remand where the State “expressly agreed that a factfinder would not need to apportion” The disclaimer here does not assuage that concern. Based on the allegedly indivisible nature of Caremark‘s negotiations, the Commonwealth‘s “alleged injury could . . . have happened under the direction of a federal officer,” presenting a colorable federal defense. Lopez, 2024 WL 1907396, at *11. And we have explained why this means that a federal court would lose the opportunity to adjudicate that defense -- a result that the federal officer removal statute prohibits. Location-based disclaimer cases are dissimilar. The district court was also troubled by the consequences of Caremark‘s indivisibility argument. It believed that the argument‘s “logical end” would permit “any organization that contracts with the government” to remove “if any portion of [its]work” is for “both private and government organizations, even if the government services are not at issue.” We can appreciate why this possibility concerned the district court. But recognizing the indivisibility problem here will not permit every private entity contracting with the federal government to remove. Government contractors may only remove when their relationship with the government “is an unusually close one involving detailed regulation, monitoring, or supervision.” Watson, 551 U.S. at 153. For example, a contractor is unlikely to meet the “acting under” requirement if it sells the government an off-the-shelf commercial product or its relationship with the government is a typical, arms-length business deal. See, e.g., City & Cnty. of Honolulu v. Sunoco LP, 39 F.4th 1101, 1108-09 (9th Cir. 2022) (concluding that private companies’ repayment of offshore leases and operation of strategic petroleum reserve was not performed under federal authority where companies acted independently and established only “a typical commercial relationship” with the government); Att‘y Gen. of N.J. v. Dow Chem. Co., No. 23-cv-02449, 2024 WL 1740087, at *5-9 (D.N.J. Apr. 23, 2024) (rejecting defendant‘s argument that it acted under federal authority by supplying government with chemicals because it sold substantially similar products to private parties). Nor may a defendant remove when confronted with a location-based disclaimer that limits the plaintiff‘s claims to those arising only on privateproperty and which do not concern that defendant‘s work for a federal officer. See, e.g., Fisher, 2014 WL 3752020, at *3 (granting remand premised on a disclaimer that limited claims to the plaintiff‘s “exposure to asbestos in civilian work environments” because denying remand “would affirm [the defendant‘s] right to assert a defense against a claim that does not exist“). But that is not so here. The Commonwealth‘s disclaimer failed to address Caremark‘s allegation that its service for the federal government is indivisible from its service for private clients. The federal officer removal statute was designed to afford a federal forum to those private actors who, as alleged here, help the federal government carry out its duties -- even if those actors perform the same service jointly for the federal government and private entities. The disclaimer did not acknowledge In sum, we credit Caremark‘s theory of the case that its federal and non-federal work is indivisible based on the way it negotiates rebates for the federal government and private clients simultaneously, and advise district courts prospectively to so credit the removing parties’ theory of removal under § 1442(a)(1). Analyzing Caremark‘s argument for removal absent the disclaimer, we hold that it satisfies Section 1442(a)(1)‘s three-part test. Because of this alleged indivisibility, the disclaimer did notforeclose Caremark‘s arguments that it acted under a federal officer and possess colorable federal defenses. In this way, the disclaimer did not eliminate the possibility that the Commonwealth would recover for Caremark‘s official acts. The disclaimer therefore did not justify remand. The district court remanded because it credited the Commonwealth‘s disclaimer. Although we do not reach the same conclusion, we “commend the district court for attempting to parse out [the] limited jurisprudence” on the disclaimer doctrine (while managing ably without any First Circuit precedent on the subject). Walsh v. Unitil Serv. Corp., 64 F.4th 1, 5 (1st Cir. 2023). This opinion shall hopefully clarify how district courts in our circuit should analyze similar disclaimers. For the reasons stated, we reverse and remand. The district court shall order the removed case returned from the Court of First Instance. Costs are awarded to Express Scripts and Caremark.iii. Removal Proceedings
II. DISCUSSION
A. Standard of Review
B. Federal Officer Removal Statute
i. Statutory Background
ii. Three-Part Test
iii. Disclaimer Doctrine
C. Application
III. CONCLUSION