Peterson v. Blue Cross/Blue Shield of Texas, 74-1374

• Decision Date: 14 February 1975
• Docket Number: No. 74-1374,74-1374
• Citation: 508 F.2d 55
• Parties: Donald M. PETERSON, Plaintiff-Appellant, v. BLUE CROSS/BLUE SHIELD OF TEXAS et al., Defendants-Appellees. Donald M. PETERSON, Plaintiff-Appellant, v. Bill WEST et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 55

508 F.2d 55

Donald M. PETERSON, Plaintiff-Appellant, v. BLUE CROSS/BLUE SHIELD OF TEXAS et al., Defendants-Appellees.

Donald M. PETERSON, Plaintiff-Appellant, v. Bill WEST et al., Defendants-Appellees.

No. 74-1374.

United States Court of Appeals, Fifth Circuit.

Feb. 14, 1975, Rehearing Denied March 26, 1975.

Glynn A. Pugh, Dallas, Tex., for plaintiff-appellant.

Frank D. McCown, U.S. Atty., Kenneth J. Mighell, Asst. U.S. Atty., Dallas, Tex., for defendants-appellees.

Appeals from the United States District Court for the Northern District of Texas.

Before DYER, SIMPSON and CLARK, Circuit Judges.

DYER, Circuit Judge:

In these two cases (consolidated on appeal) Dr. Peterson sought damages for malicious prosecution and for tortious conduct related to his alleged wrongful suspension under the Medicare program. The district court granted summary judgment for the defendants. We affirm.

The first suit was filed May 8, 1973, in a Texas state court against West, Vice President of Blue Cross of Texas, Stafford and Martin, Regional and Assistant Regional Counsel, respectively, of the Department of Health, Education and Welfare, and McSteen, Gruninger, Adams and Chancellor, all H.E.W. employees, whose duty it was to insure the integrity of the Medicare program. The claims made in this suit are admittedly identical (except for malicious prosecution) with the claims made in Peterson v. Weinberger, 5 Cir. 1975, 508 F.2d 45 this day decided. Likewise, the defendants are the same in both suits except for the addition here of the defendants West, Stafford, and Martin.

The second suit filed a week later, on May 17, 1973, in a Texas state court was against Blue Cross/Blue Shield of Texas, Group Medical and Surgical Services, and Group Hospital Service, Inc. It raised the identical issues against the same corporate defendants as were included in Weinberger, supra. Admittedly this was a 'protective' suit filed in the state court against the contingency that the federal court would determine in Weinberger that it was without jurisdiction over the corporate defendants.

Final judgment in Weinberger was entered on October 29, 1973. The district court found that Peterson had failed to prove a claim for either breach of contract or tort damages. It further found that the agents and employees of the Government had immunity from liability because they had acted within the scope of their employment in suspending Peterson and withholding payments due him under the Medicare program because of his possible fraud. The court also found that Peterson and his brother had submitted false claims to the Government, for which they were cast in damages.

A petition for removal under 28 U.S.C.A. 1442(a)(1), ¹ was timely filed in both state court cases in behalf of all the defendants as officers, employees, and agents of the United States. The district court granted summary judgment for the Government, finding that the issues presented were identical to those resolved on the merits in Weinberger and therefore should not be relitigated. We have this day affirmed Weinberger in all respects.

Peterson makes a two-pronged attack in these cases. He contends that both cases were improperly removed and should have been remanded, ergo the district court was without jurisdiction to pass upon the merits. He next argues that, even if the district court had jurisdiction, the judgment in Weinberger does not operate as res judicata because in one of these suits, a new cause of action (malicious prosecution) was alleged, and in the other, three additional defendants were included.

Although we are strongly inclined to the view that the issues resolved in Weinberger were identical to the issues in these suits and are therefore res judicata as to the same defendants and their privies, we prefer to sustain the district court's judgment on the grounds that the removal of the suits was proper, the district court had jurisdiction of the parties and the subject matter, and all the defendants had governmental immunity from liability.

The defendants in these suits, except West, Stafford and Martin, were defendants in Weinberger. West's official capacity and his duties and responsibilities were detailed by him in that proceeding. Stafford and Martin, Regional and Assistant Regional Counsel, H.E.W., here named as co-conspirators, are alleged to have carried out the same illegal acts leading to Peterson's Medicare suspension as were attributed to the Weinberger defendants.

It is indisputable that each of the defendants was either an 'officer of the United States or an agency thereof, or persons acting under him' and that their actions were 'under color of such office.' Peterson urges however, that what he labels as tortious conduct took the defendants beyond the scope of their statutory authority. We took some pains in Weinberger to relate the factual background...