morning inmate please the court i'm anthony shelley here on behalf of the appellant blue cross blue shield entities i'd like to reserve three minutes of my time for rebuttal this case raises two issues first  reimbursement dispute subject to removal under the federal office removal statute and second assuming so was remained nonetheless required because of the probate exception to federal jurisdiction the district court answered the first question correctly finding that there was a federal officer removal jurisdiction but it nonetheless remanded the case incorrectly under the probate exception i'd like to spend a few moments on the officer removal jurisdiction question and then turn to the probate exception unfair officer removal all of the recent cases uniformly hold that he be carriers properly may remove cases under the statute and for that we cite the jacks case from the eighth circuit from two thousand eleven the bell district court decision arkansas very recent which was affirmed on appeal by the circuit ten two way you decision from a california district court the inspire malibu case from a district court here in california each case from the tenth circuit from last year which wasn't an officer removal case but particularly noted the agency relationship between the government contractor here and the federal government i'm having a hard time accepting that th different from any other government contractor who has a contract in their performing pursuant to the contract terms but they also are acting just as a private insurance company w to set up a program to administer health benefits for federal employees they decided to do so through contracts with private insurers and the eighth circuit in jacks for instance noted the very close relationship and how the blues were assisting were assisting the federal government to provide the insurance and if the blues weren't going to do it the federal government would have to go now there's other insurance companies when does the booze contract run out it's a yearly contract that so they get sixty years right but it could end any time it duties are here that make it turn the blues into their own acting under federal officer three sure way you can look first of all at the overall program that it's a government program and that's really all that's necessary it's the government's a comprehensive government program with the federal where the contractors assisting the federal government that was the jacks holding but more specifically to your point your honor reimbursement is a particular action under the government contract that the federal government has ordered it is issued a regulation for instance just in the and the money goes back to the federal government we don't keep a cent of the reimbursement money that we get and so as a result that's that that's a very very distinct any come from in the first place the federal treasury comes from the federal treasury to pay the benefits on a page or go basis and as soon as we collect the money in reimbursement we have to send it all back to the federal treasury and therefore that was blue cross make money in this deal and doesn't make any money in the deal on reimbursement it's only profit under the service benefit plan is through a fixed service fee that the government at the end of the contract year will decide it wants to give or not to the carrier so that there you're simply blues just do this for free now the blues do it out of the blues do it for the service charge but also i mean they do it for the service charge of that contract that was begun sixty years ago but they don't make any money off of each benefit payment or any money also recently admitted to making many the government's paying the money to provide this service pursuant to the government  accurate they're making a service charge at the last year tell me what it looks the service charge and how much money here well it's maybe about one hundred know i believe it's about one hundred million but this contract is a twenty billion dollar contract ok so they're making about one hundred million a year on this i don't want to be you know that is if the reaction of the it's a fraction of the total money that is that is transferred in this in these government under the government contracts and th billions and billions of dollars the number of claims does blue cross blue shield administered to decide eligibility questions and decide to decide payment questions so what they're doing in the first instance it does but there's a reconsideration are there any are there felt that they had not been afforded appropriate due process can they sue the blues under ninety three i know of no case that says they can or they can actually i'm sorry probably you begins quite rather than ninety three claim it's i i'm not aware that any such action been brought but i think it might run into a jurisdictional problem under five u s c section eight nine twelve which specifically says that suits related to this program are to be brought against the united states in federal court ok so the united states has assumed responsibility for any suits against the blues any suits under the program i would say so so right the lawsuit was brought against the blues basically removed and it was in state court were removed to federal court and almost uniformly the federal courts have said the loss of can't be brought because the only proper party under this program is the united states and i can't think of a case we lost in fact under that where there was a loss where there was a suit brought against a blue plan   issue its decision and then the o p s regulations and five u s c section eight one twelfth of the say the sole lawsuit that can be brought after that is against o p m to challenge its decision regarding the benefits now so we're only we're only a first well if you were of blue you would think differently because the blues are still regulated under the government contract and i have such a close relationship with with o p m including all of their decisions being subject to individual ministry of proceedings by the government does make it difference to me that that suit against wrongful coverage or bad faith denial of coverage would be defended by the us government it does make sense or does that know that that makes a difference to me as opposed to blues and instead have to be channeled into the denial of benefits scenario and opium with respect to reimbursement though it's particularly something that only better benefits the federal government because a dollar for dollar goes back to the federal government and the federal government uses that money to reduce the cost of benefits for its employees because the government pays the seventy five to eighty percent of all coverage for federal employees and so they're looking for cost containment measures and have insisted on this particular this particular reimbursement concept i also want to point out that i was asking about how is reimbursement tied to the government contracting there was a carrier letter that we cite in the record in two thousand and twelve where the government specifically told the carriers must be seeking reimbursement on our behalf in connection with the contract and i would just point out where it is in the record that said exercise  record one o six you must be seeking reimbursement you must be doing it pursuant to the contract and you must not follow stating tysabri geishas doctrines because there preempted by fever and as a result the carriers diligently do this do it on behalf of the federal government that's why we assert that they act under federal officers and i ask the courts to agree with the eighth circuit on this issue really the tenth circuit in the health for each case as well holding essentially that for a minute i'd like to focus on the probate exception in the main point i'd like to make with respect to that there's a lot of argument on the probate exception in the two briefs but the court really doesn't have to do any heavy lifting on that because the markham case from the supreme court from the one nine hundred forty s is exactly the same situation money was being held or property was being held in a state court a federal officer went to federal courts and said i have an interest in it properly misstate court and i want the federal court to duplicate my rights there and the lower courts if that sorry it's in the sta proceeding in state court so you can't bring your case to federal court and then markham the supreme court said specifically that rights to property being held in the state court can be adjudicated in the federal court without any problem  insurer so presumably that's not a noun and now in the amount of money that the state is holding so doesn't that have a bearing on whether or not you can bring this proceeding at all no because in fact i think i think that the defendant could it could or could not could or could not be included under state law in any award to depending on what the defendant wants to do in th case but let's assume it's not included in the here here didn't the defendant pay a letter but that state rule would be preempted by federal law because the contract itself has a provision in it that says specifically we don't we get the first dollar it doesn't matter how it's designated get paid by the party then they wouldn't get their benefits from their insurer well no it's their obligation it's the the obligation of the other side to understand that that california was preempted by federal law and say i'm entitled to get the full recovery including the benefits that the carrier paid because they're going to come back and try to get them from me because federal law controls here the government wants its money back the government's trying to keep the cost of the program down they couldn't bring that  well there's a obviously you know eventually could go to the u s supreme court if necessary to straighten it all out but only an ancillary piece of this proceeding was eventually by over to the federal court anyway just this lean quashing proceeding the whole suit stays there but again i repeat that the state law rule that health benefits don't necessarily need to be included in a jury award or a settlement it's preempted by federal law and award should have included more the settlement should have included more because the government requires the reimbursement be made blue cross was not acting under the direction of a federal officer i think there are three key points that i'd like to make that maybe didn't jump out as much in the briefing and one is that there isn't there's a sufficient level of control exercised by the government one thing i did in preparing for today is i read more carefully a house report that was cited by blue cross in its briefing and that's house report one of five dash three seventy four in which congress is it is describing fuga as this very successful program able to provide excellent benefits to employees and in that context congress stated the program's market orientation has effectively contained costs through private sector competition with limited government intervention so the whole success of this program is the notion that there is market competition that these are private for profit companies this lucrative government contract and it's the hands are are they referring to the fact that there are multiple plans available to federal employees i have therefore there's competition between those plans but all within the the the bubble of federal oversight well i believe that they are referring to the fact that that the that they are taking more of a hands off approach and allowing market market forces to work and that's really the opposite right thing but i don't think you i don't think  question so when i get when i go to the at the end of the year during the during the open season i have my choice of a blue cross plan i have a choice of something of something else of variety of different plans and they offer me you know different different kinds of coverage and different kinds of withholdings now there's competition but that's still competition all with the o p m bubble is that what congress was referring to there i would say within the regulatory scheme and within competition in of the contract terms so when one way in which the level of control is not sufficient here is that the insurance companies have choice and they have negotiating power and these contract t and the segregation term in that contract is quite different than the term in blue cross so the difference between government contractors performing whether or not contractors are free to accept  the work of the government at all is that in the cases where the federal officer removeable statute has applied it that the government has has exercised extreme control in detail specifications language that was at issue there in humor what we have is negotiations between private insurance companies and the government to perform these services i think another fundamental distinction here is that whatever function the private entity is performing if it's going to be determined as acting at the direction of a federal officer is that it has to be a government function and in all of these other cases  had to deal with that i believe that that supports my position because the congress hasn't acted specifically have dealt with federal jurist felt federal jurisdiction and the only instance in which there is original jurisdiction in the federal courts is when there's a lawsuit against the united states and there's a lawsuit against the united states when blue cross has made it claims determination and the office of personnel management has decided that that was appropriate and then the lawsuit goes against the office of personnel management and the amicus brief in the polit case that was just discussed in the amicus brief decided to benefit our cars that are to support our position was that the carriers make their own decisions as to benefits they act independently but that the oversight isn't enough to make the contractor essentially an agent for the private government and congress could have in fact made a much broader jurisdictional statute like the one interest that congress could have said that any civil action relating a federal officer is going to go to the district courts or congress could have said that carriers are acting under the direction of a federal officer for the purposes of the federal office or remov statute but congress did not and so i submit that the inference there is that congress intended that disputes between carriers and insurance are meant to be resolved in state court so another point i would like to discuss is that well i think i'll move on to the program exception i'd just like to make of a couple of comments on the probate exception and i think the fundamental difference between his and two u s supreme court cases is that the united states supreme court decided in the context in the context of administration of a seat that  federal court was proper her federal court to make a decision as to the right to the parties and then that would improperly dispose of property within the custody of the state probate court because the probate court would just simply take that back and administer the estate but the fundamental distinction here is that the state court under the probate codes has jurisdiction and has a duty to supervise the settlement on behalf of the minor so the state court is required to make a determination that the entire settlement is in the in the best interests of the child and if so is a federal court exercises jurisdiction than in this instance given the supervisory authority and duty of the state court the  exercise of jurisdiction here would be an improper disposal or effect on property within the custody of the state court and that unless the court has any further questions i like this and that if a government contractor may remove the case it just then depends on the type of government contract here you have a unique federal program that is run by the federal government which the blues assist it in running the government exercises guidance to provide supervision and control in terms of the watson case and that makes this different from say a paperclip manufacturer who has a contract with the federal government is the comprehensive federal program that the in the government would have to take up the function if it's insurers its contractors didn't do it in the first place so this isn't just this is a government function that's involved the well the well being the fringe benefits of its federal employees is a government function not a private not private function so that that you reverse the remain