Pollitt v. Health Care Service Corp.

• Decision Date: 10 March 2009
• Docket Number: No. 08-3509.,08-3509.
• Citation: 558 F.3d 615
• Parties: Juli A. POLLITT and Michael A. Nash, Plaintiffs-Appellants, v. HEALTH CARE SERVICE CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

558 F.3d 615

Juli A. POLLITT and Michael A. Nash, Plaintiffs-Appellants, v. HEALTH CARE SERVICE CORPORATION, Defendant-Appellee.

No. 08-3509.

United States Court of Appeals, Seventh Circuit.

Submitted February 25, 2009.

Decided March 10, 2009.

Juli A. Pollitt, Park City, IL, pro se.

Michael A. Nash, Beach Park, IL, pro se.

Anthony F. Shelley, Miller & Chevalier, Washington, DC, for Defendant-Appellee.

Before EASTERBROOK, Chief Judge, and ROVNER and EVANS, Circuit Judges.

PER CURIAM.

Juli Pollitt, a federal employee, has health insurance as one of her job's fringe benefits. Health Care Service Corporation administers that coverage. In July 2007 HCSC stopped paying claims submitted on behalf of Pollitt's son Michael, and it also began trying to collect from health-care providers any payments made on Michael's behalf since 2003. According to HCSC, it did this because the Department of Labor, which tells HCSC which federal employees have what coverage, instructed HCSC that Pollitt's coverage is for herself only, rather than for herself and her family. According to Pollitt's complaint in this suit, however, HCSC reached this conclusion on its own, because the Department of Labor had failed to pay the appropriate premium into a fund that covers the expense of the medical benefits. Instead of checking with the Department or with her, Pollitt's complaint alleges, HCSC abruptly stopped covering Michael's medical expenses and made demands for reimbursement that subjected her family to humiliation and expense until, just as abruptly, HCSC changed course in October 2007 and started paying the claims again—but even then, Pollitt asserts, HCSC did not inform medical providers, who continued trying to collect from Pollitt the back payments they thought HCSC was dunning them for.

The complaint, filed in state court, seeks to recover from HCSC under state-law theories of bad-faith conduct by insurers. HCSC removed the proceeding to federal district court, where it was dismissed as preempted by the Federal Employees Health Benefits Act, 5 U.S.C. §§ 8901-14.

Preemption is a defense, and a federal defense does not allow removal. Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); Gully v. First National Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Bennett v. Southwest Airlines Co., 484 F.3d 907, rehearing denied, 493 F.3d 762 (7th Cir.2007). Things are otherwise for "complete preemption," the misleadingly named doctrine that applies when federal law has occupied a field, leaving no room for any claim under state law. See Franchise Tax Board of California v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). "Complete preemption" is not a defense; instead it represents a conclusion that all claims on the topic arise under federal law, so that 28 U.S.C. § 1441 permits removal. But Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006), holds that federal law does not completely occupy the field of health-insurance coverage for federal workers. Empire Healthchoice shows that the district court erred in allowing removal under § 1441 and dismissing the suit as completely preempted.

The only possible source of authority to remove is 28 U.S.C. § 1442(a)(1), which says that "any person acting under" a federal officer may remove a suit that depends on the defendant's following the directions issued by that federal officer. See Watson v. Philip Morris Cos., 551 U.S. 142, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007). HCSC insists that it did nothing but carry out the Department of Labor's instructions. Yet Pollitt maintains that HCSC acted unilaterally in concluding that her coverage was for self only rather than self and family—that HCSC drew an unwarranted inference from the Department of Labor's failure to remit the...