Shаnnon JACKS, Plaintiff-Appellee v. MERIDIAN RESOURCE COMPANY, LLC; Blue Cross Blue Shield, of Kansas City, Defendants-Appellants
No. 11-3037
United States Court of Appeals, Eighth Circuit
Dec. 17, 2012
701 F.3d 1224
Submitted: June 12, 2012. Association of Federal Health Organizations, Amicus on Behalf of Appellant.
“A sentence within the guideline range is given a presumption of substantive reasonableness on appeal.” United States v. Norris, 685 F.3d 1126, 1128 (8th Cir.2012) (per curiam) (quotation omitted). During sentencing, the district court judge thoroughly reviewed the factors contained in
C.
Finally, Montgomery argues that his sentence violates the Eighth Amendment. We review this issue de novo. United States v. Lee, 625 F.3d 1030, 1037 (8th Cir.2010), cert. denied, U.S. -, 132 S.Ct. 124, 181 L.Ed.2d 46 (2011). “[I]t is exceedingly rare for a noncapital sentence to violate the Eighth Amendment.” Id. at 1037 (quotation and citation omitted). Montgomery‘s sentence is nоt one of those rare instances.
To the extent Montgomery challenges the constitutionality of the ACCA‘s mandatory minimum sentence of 180 months, this argument is foreclosed by prior decisions of this court. See United States v. Rudolph, 970 F.2d 467, 470 (8th Cir.1992) (holding that the mandatory minimum sentence of 180 months under the ACCA does not violate the Eighth Amendment); see also United States v. Yirkovsky, 259 F.3d 704, 707 (8th Cir.2001) (affirming imposition of ACCA‘s 180-month mandatory minimum sentence on felon possessing a single round of ammunition). This leaves only the eight-month difference between the mandatory minimum sentence (180 months) and Montgomery‘s actual sentence (188 months), which, as explained by the district court, was justified by the gravity of thе offense, Montgomery‘s level of culpability, and his extensive criminal history. See United States v. Wiest, 596 F.3d 906, 911–12 (8th Cir.2010), cert. denied, U.S., 131 S.Ct. 339, 178 L.Ed.2d 220 (2010). We conclude that Montgomery‘s sentence, which fell at the bottom of the guideline range and only eight months above the mandatory minimum, does not violate the Eighth Amendment‘s prohibition against cruel and unusual punishment.
IV.
Accordingly, we affirm.
Mitchell L. Burgess, argued, Ralph K. Phalen, Don P. Saxton, on the brief, Kansas City, MO, for appellee.
David M. Ermer, Jason SC. Suter, Washington, DC, on the brief, for amicus.
Before BYE, BEAM, and SMITH, Circuit Judges.
BEAM, Circuit Judge.
Meridian Resource Company and Blue Cross Blue Shield-Kansas City (hereinafter BCBS-KC collectively) appeal the district court‘s remand based upon the local
I. BACKGROUND
The Federal Employees Health Benefits Act of 19591 (FEHBA) establishes a comprehensive program of health insurance for federal employees аnd charges the United States Office of Personnel Management (OPM) with negotiating contracts with private insurance carriers to provide an array of health-care plans. Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 682, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). “Largest of the plans for which OPM has contracted, annually since 1960, is the Blue Cross Blue Shield Service Benefit Plan (Plan), administered by local Blue Cross Blue Shield companies [such as BCBS-KC].” Id. Appellant BCBS-KC administers the Plan in Missouri. FEHBA provides that the government pays about 75% of health-plan premiums and the enrollee pays for the rest.
FEHBA requires that contracts between OPM and carriers “contain a detailed statement of benefits offered,” including “such maximums, limitations, exclusions, and other definitions of ben-
If another person or entity ... causes you to suffer an injury or illness, and if we pay benefits for that injury or illness, you must agree to [the following]: All recoveries you obtain (whether by lawsuit, settlement, or otherwise), no matter how described or designated, must be used to reimburse us in full for benefits we paid. Our share of any recovery extends only to the amount of benefits we have paid or will pay to you or, if applicable, to your heirs, administrators, successors, or assignees.
If the insured does not voluntarily reimburse under these terms, the Plan requires thе carrier to make a “reasonable effort to seek recovery of amounts ... it is entitled to recover in cases ... brought to its attention,” and gives the carrier discretion to file suit in federal court to enforce its rights. “Pursuant to the OPM-BCBSA [Blue Cross Blue Shield Association] master contract, reimbursements obtained by the carrier must be returned to the Treasury Fund.” Empire, 547 U.S. at 685.
In 2007, Shannon Jacks, a Missouri resident, was in a motor vehicle accident and received benefits from BCBS-KC for her injuries. Jacks subsequently asserted a personal injury claim against the third-party tortfeasor, reached a settlement, and recovered funds for her injuries. BCBS-KC asserted a lien on Jacks’ third-party award in an amount equal to the amount BCBS-KC had paid on her behalf for the injuries she sustained in the accident. Jacks sued BCBS-KC in Jackson County, Missouri, on behalf of herself and others similarly situated alleging Missouri state law violations. Missouri has laws prohibiting subrogation.
The crux of this suit challenges the application, in Missouri, of the provision in the Plan administered by BCBS-KC that requires a Plan enrollee who receives benefits in connection with any injury in addition to compensation from a third party must reimburse BCBS-KC the amount of benefits paid. Given the state‘s anti-subrogation laws, Jacks сontends that BCBS-KC is unable to recover its reimbursement lien in Missouri.
BCBS-KC removed the action to federal district court, citing three grounds in support: (1) CAFA,
II. DISCUSSION
A. Jurisdiction on Appeal
The parties first dispute whether this court has jurisdiction to hear all of the issues presented by this appeal.2 Jacks
The district court remanded this matter, in part, based upon its interpretation of the local controversy exception in CAFA, which operates as an abstention doctrine and does not divest the district court of subject matter jurisdiction. Graphic Commc‘ns Local 1B v. CVS Caremark Corp., 636 F.3d 971, 973 (8th Cir.2011). “The local controversy provision, which is set apart from the ... jurisdictional requirements in thе statute, inherently recognizes the district court has subject matter jurisdiction by directing the court to ‘decline to exercise’ such jurisdiction when certain requirements are met.” Id. Accordingly,
In light of this
B. Removal Jurisdiction
Noted previously, BCBS-KC removed this action frоm Missouri state court, citing three bases in support of removal—each one, if valid, is independently suffi-
The district court rejected removal under
It is the first (acted under) and third (colorable federal defense) elements noted above that are critical to the instant analysis.3 To satisfy the “acted under” requirement of
In Watson, the plaintiffs filеd a state-court suit against Philip Morris, claiming that the company violated Arkansas consumer laws by advertising certain cigarette brands as “light” when, in fact, Philip Morris manipulated federally mandated testing results to register lower levels of tar and nicotine in the advertised cigarettes than would be delivered to consum-
In Watson, the Court looked to the statute‘s language, context, history, and purposes to inform the analysis regarding just how broadly the federal officer removal statute should be applied. Id. at 147-53. The Court relayed the history of the federal officer removal statute and pointed out that the “basic’ purpose [of the statute] is to protect the Federal Government from the interference with its ‘operations’ that would ensue were a State able, for example, to ‘arres[t]’ and bring ‘to trial in a State cour[t] for an alleged offense against the law of the State,’ ‘officers and agents’ of the Federal Government ‘acting ... within the scope of their authority.‘” Id. at 150 (quoting Willingham v. Morgan, 395 U.S. 402, 406, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969)). There are times that state court proceedings reflect local prejudice against unpopular federal laws or federal officials. Id. States hostile to the federal government may impede through delay, federal revenue collection or the enforcement of other federal law. Id. Tоo, states may deprive federal officials of a federal forum in which to assert federal immunity defenses. Id. Very generally, then, the federal officer removal statute was designed to avert various forms of state court prejudice against federal officers or those private persons acting as an assistant to a federal official in helping that official carry out federal law. Id. at 151.
Within the context of that historical rubric, Watson established that not all relationships between private entities or individuals and the federal government suffice to effect removal under the federal officer removal statute. In order to fall within the scope of the federal officer removal statute, “[t]he assistance that private contractors provide federal officers [must go] beyond simple compliance with the law and help[] officers fulfill other basic governmental tasks.” Id. at 153. Taxpayers who fill out complex federal tax forms, or airline passengers who obey federal regulations prohibiting smoking certainly “help” or “assist” the federal law enforcement authorities in some sense of those words, but these individuals do not “act under” an agency or officer of the federal government for purposes of removal under the statute. Id. at 152. In contrast, the production of Agent Orange by a private defense contractor, Dow Chemical, to help the government conduct a war is an example of the sort of assistance contemplated by the statute. Id. at 153-54 (citing Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387 (5th Cir.1998)).
“Government contractors fall within the terms of the federal officer removal statute, at least when the relationship between the contractor and the Government is an unusually close one involving detailed regulation, monitoring, or supervision.” Watson, 551 U.S. at 153. In analyzing the relationship necessary for purposes of
The answer to this question lies in the fact that the private contractor in [cases where close supervision by a federal officer or agency is sufficient,] is helping the Government to produce an item that it needs. The assistance that private contractors provide federal officers goes beyond simple compliance with the law and helps officers fulfill other basic governmental tasks. In the context of Winters, for example, Dow Chemical fulfilled the terms of a contractual agreement by providing the Government with a product that it used to help conduct a war. Moreover, at least arguably, Dow performed a job that, in the absence of a contract with a private firm, the Government itself would have had to perform.
Id. at 153-54. This examination sufficiently answered the question in Watson—a case where private contracting was not at issue.
Requiring more than mere compliance (or noncompliance) with federal laws, rules, and regulations to support removal under the federal officer removal statute—even if highly detailed, and even if the private firm‘s activities are highly suрervised and monitored—makes sense. Indeed, inclusion of entities or individuals merely complying with federal law would considerably expand the scope of the federal officer removal statute, “potentially bringing within its scope state-court actions filed against private firms in many highly regulated industries.” Id. at 153.
There are diverging views as to whether the federal officer removal statute applies to the multifarious instances involving disputes, such as we have here, between federal employee members and their respective carriers contracting under the FEHBA. The district court in this case reliеd upon Van Horn v. Arkansas Blue Cross and Blue Shield, 629 F.Supp.2d 905 (E.D.Ark.2007), which similarly involved a reimbursement issue. In Van Horn, the district court denied application of
We take a different view. The legislative history of the FEHBA demonstrates that Congress‘s purpose was to estаblish a health benefits program for federal employees, so as to compete for the best talent along with private companies. H.R.Rep. No. 86-957, at 2 (1959); 1959 U.S.C.C.A.N. 2913, 2914.
Unlike Watson, where the Court denied removal under the statute because Philip Morris operated under federal regulation, not delegation, there is evidence in the instant case that by way of the FEHBA, the federal government has sufficiently “delegated” authority to these carriers to undertake the task of insuring federal employees. Watson, 551 U.S. at 156-57. Likewise, there is evidence of contracts, payments, and other such relational evidence sufficient to support removal here. Id. (noting that even though Philip Morris used the word “delegation” in its attempt to characterize its alleged relationship with the FTC, there was no evidence of a special relationship—no evidence of any delegation of legal authority, nor evidence of any contract or any payment, leaving only the conclusion that, again, Philip Morris conducted business under the regulation, not delegation, of the federal government).
To be sure, the delegation discussed in this case is the pursuit of subrogation, or not, on the part of the carrier. When they enroll in the FEHBA program, federal employees necessarily subscribe to the OPM standard contract and Statement of Benefits (which make up the Plan) approved by OPM for their respective Plans. Noted earlier, the Plan includes the subrogation and reimbursement provisions that are the subject of this suit. That the Plan allows the carrier the discretion to pursue subrogation does not foreclose the application of the federal officer removal statute. To do so parses the analysis too finely—these carriers “act under” the federal government for purposes of this statute. In fact, broadly speaking, the subrogation provision is necessarily a product of the benefit payment process, a process over which OPM exerts regulatory control. See
To deny removal solely because the carrier is allowed discretion within a minute area contemplated by the governmental Plan defies the overall purpose and thrust of the federal officer removal statute generally. At all times, the carrier is subject to OPM oversight, uniquely operates with the United States Treasury, submits to OPM‘s regulatory requirements, and ultimately answers to federal officers. Accord Anesthesiology Assocs. of Tallahassee, FL, P.A. v. Blue Cross Blue Shield of Florida, Inc., No. 03-15664, 2005 WL 6717869, at *2 (11th Cir. Mar. 18, 2005) (unpublished) (“A health plan insurer contracting with a government agency under a federal benefits program is considered a ‘person acting under’ a federal officer.“). We remain mindful as well that at all times, if OPM finds an insurer‘s performance wanting, it can withdraw approval of that carrier or terminate its contract.
Contrary to Jacks’ assertion on appeal, allowing BCBS-KC to remove this action in these circumstances does not result in a “broad and limitless interpretation” of the federal officer removal statute. See id. at 154-57 (using cigarette companies as exemplary of companies operating in a highly regulated arena, which would not be allowed, on that basis alone, to invoke the federal officer removal statute when litigation ensued). In fact, removal here is in accord with the boundaries established by Watson, which, as noted by the Court, did not involve private contracting such as we have here. Id. at 154.
By way of this ruling, we do not open the federal door to all private firms doing business in industries that are highly regulated by the federal government. Nor does our conclusion rest upon the fact that the FEHBA creates a highly regulated arena wherein the OPM supervises and monitors many aspects of the provider‘s activities. Indeed, noted earlier, Watson clearly establishes that “a highly regulated firm cannot find a statutory basis for removal in the fact of federal regulation alone.” Id. at 153. As a private contractor, BCBS-KC is helping the government to produce an item that it needs—the basic governmental task of providing health benefits for its employees.
We thus conclude that FEHBA program carriers contracting with the federal government to provide health care insurance for federal employees are not unrelated and wholly separate business entities merely doing business in a highly regulated arena, but rather conduct business under the delegation of the federal government. That the federal government maintains the funds for all carriers
Finally, in order to remove under
We do not require that these defenses be clearly sustainable in order to support removal under
III. CONCLUSION
As stated at the beginning of our analysis, because we determine that this matter is properly in federal court under the federal officer removal statute, we need not address Jacks’ remaining claims. That said, we do not delve into the CAFA claim, but rather reverse the district court‘s judgment and remand this matter for further consideration, directing that this action remain in federal court.