23-344-cv

Kelley v. Richford Health Ctr., Inc.

United States Court of Appeals

for the Second Circuit

August Term, 2023 

(Argued: February 27, 2024 Decided: August 20, 2024) 

Docket No. 23-344-cv

_____________________________________ 

BRUCE KELLEY, NANCY KELLEY, 

Plaintiffs-Appellees, 

v. 

RICHFORD HEALTH CENTER, INC. d/b/a NORTHERN TIER CENTER FOR 

HEALTH, 

Defendant-Appellant, 

TEIG MARCO, M.D., 

Defendant-Cross-Defendant-Appellant, 

FRANKLIN COUNTY REHABILITATION CENTER, FRANKLIN COUNTY 

REHABILITATION & ADULT CARE CENTER, KRISTY 

JANKOWSKI, R.N., MARION PERRY, R.N., KYLA APLEY, L.N.A., 

Defendants-Appellees, 

FRANKLIN COUNTY REHAB CENTER, LLC, 

Defendant-Cross-Claimant-Appellee, 
2 

THE UNIVERSITY OF VERMONT MEDICAL CENTER, INC., STEPHEN 

RANNEY, M.D., ANDREW STANLEY, M.D., 

Defendants, 

UNITED STATES OF AMERICA, 

Appellee.*

_____________________________________ 

Before: 

CALABRESI, CABRANES, and LOHIER, Circuit Judges. 

Richford Health Center, Inc. and its employee Dr. Teig Marco appeal from 

an order of the United States District Court for the District of Vermont 

(Crawford, C.J.) remanding a medical malpractice case against them to state 

court. Bruce Kelley (“Kelley”) and his spouse, Nancy Kelley, brought this 

lawsuit in state court, alleging that Dr. Marco’s negligent treatment paralyzed 

him. The United States intervened and removed the case to federal district 

court on the ground that Richford Health Center is a “deemed” federal employee 

under the Federally Supported Health Centers Assistance Act (FSHCAA), 42 

U.S.C. § 233(g)–(n). The District Court remanded the case after determining

that it lacked subject matter jurisdiction because the FSHCAA did not apply to 

Dr. Marco’s treatment of Kelley. The District Court correctly remanded the case

to state court. AFFIRMED. 

MATTHEW SIDNEY FREEDUS (Rosie Dawn Griffin, on the 

brief), Feldesman Tucker Leifer Fidell LLP, Washington, 

DC, for Appellants. 

Vincent Illuzzi, Orleans, VT, for Plaintiffs-Appellees. 

Kaveh Shahi, Cleary Shahi & Aicher, P.C., Rutland, VT, 

for Defendants-Appellees and Defendant-Cross-Claimant-

* The Clerk of Court is directed to amend the caption as set forth above.
3 

Appellee. 

DANA KAERSVANG, United States Department of Justice 

(Mark B. Stern, Brian M. Boynton, United States 

Department of Justice; Carla B. Freedman, United States 

Attorney for the Northern District of New York; Samuel 

R. Bagenstos, Michael I. Goulding, Meredith Torres, 

United States Department of Health and Human 

Services, on the brief), Washington, DC, for Appellee. 

LOHIER, Circuit Judge: 

Bruce Kelley (“Kelley”) and his spouse, Nancy Kelley, filed this medical 

malpractice suit in Vermont state court after Kelley was paralyzed from the waist 

down while residing in the Franklin County Rehabilitation Center (“FCRC” or 

the “Rehabilitation Center”), a skilled nursing facility. The Kelleys blame the 

injury on Dr. Teig Marco, who treated Kelley in the facility under a contract 

between FCRC and Dr. Marco’s employer, the Richford Health Center, Inc. 

(“RHC” or the “Health Center”). 

As a federally funded community health center, RHC is “deemed” to be a 

member of the Public Health Service under the Federally Supported Health 

Centers Assistance Act (FSHCAA), 42 U.S.C. § 233(g)–(n). Deemed health 

centers and their employees “are immune from malpractice suits for acts or 

omissions that occur within the scope of their [deemed] employment.” Agyin v. 
4 

Razmzan, 986 F.3d 168, 171 (2d Cir. 2021). 

The FSHCAA makes the Federal Tort Claims Act (FTCA) “the exclusive 

remedy for specified actions against members of the Public Health Service” 

(including deemed health centers) and protects “employees of the Public Health 

Service from being subject to suit while performing medical and similar 

functions by requiring that such lawsuits be brought against the United States 

instead.” Cuoco v. Moritsugu, 222 F.3d 99, 107–08 (2d Cir. 2000). As relevant 

here, the statute’s protection covers malpractice claims that arise from a deemed 

health center’s provision of medical services to patients and, in limited

circumstances, nonpatients too. 42 U.S.C. § 233(g)(1)(B). 

After the Kelleys filed their lawsuit against the Rehabilitation Center, the 

Health Center, and Dr. Marco, among others, the Government invoked the 

FSHCAA and the FTCA to intervene, remove the case to federal court, and 

substitute itself as the sole proper defendant. The Rehabilitation Center 

opposed and filed a motion to remand. Following an evidentiary hearing, the 

Government decided that the FSHCAA did not cover Dr. Marco’s treatment of 

Kelley after all, and urged that the matter be remanded to state court. The 
5 

District Court (Crawford, C.J.) agreed and granted the motion to remand. We 

AFFIRM. 

BACKGROUND

I. Statutory Framework 

The FSHCAA authorizes the United States Department of Health and 

Human Services (“HHS”) to deem federally qualified health centers as Public

Health Service members. The designation entitles the centers and their 

employees to FTCA coverage for certain medical malpractice suits. 42 U.S.C. 

§ 233(g); see Agyin, 986 F.3d at 172. HHS’s deeming decision is limited in scope. 

It applies only to services provided to “all patients of the [federally qualified 

health center], and . . . subject to [several conditions], to individuals who are not 

patients of the entity.” 42 U.S.C. § 233(g)(1)(B). In particular, HHS can extend 

its deeming determination to cover medical services to nonpatients if the 

federally qualified health center submits an application to HHS before providing 

those services. See id. § 233(g)(1)(C). 

HHS has carved out narrow exceptions to this requirement. If the 

employees of a deemed health center provide either “after-hours coverage” for a 

non-deemed community health center’s patients or emergency treatment to any
6 

nonpatient, those activities will be covered by HHS’s deeming decision without 

the need to apply for prior approval. 42 C.F.R. § 6.6(e)(4). But if the center’s 

employees provide medical services to nonpatients that do not “fit[] squarely” 

within the examples listed in Section 6.6(e)(4) of HHS’s regulations, then the 

center must seek a “particularized determination of coverage” from HHS. Id. 

II. Factual Background

 RHC applied for federal funding (and the corresponding malpractice 

coverage) under the FSHCAA in January 2017. In its application, RHC

proposed hiring a doctor to provide primary care services at skilled nursing and 

rehabilitation facilities “[i]n order to continue caring for our patients.” App’x 279 

(emphasis added). RHC also described its bid to provide medical services at 

rehabilitation centers as ensuring that its employees could “deliver health care 

services to patients confined to rehabilitation centers.” App’x 392 (emphasis 

added). HHS approved the Health Center’s grant application and deemed it a 

Public Health Service employee on August 31, 2017. 

 On October 1, 2017, RHC hired Dr. Marco to provide medical services to 

patients at local skilled nursing and rehabilitation facilities. That same day, Dr. 

Marco entered into a contract with FCRC to provide medical director services “as 
7 

a [Richford Health Center] employee.” App’x 228. 

 Dr. Marco admitted Kelley as a new patient to FCRC about six months 

later. Things quickly went awry. The Kelleys allege that two FCRC nurses 

injured Kelley’s back and that another nurse and Dr. Marco failed to properly 

treat the injury. As Kelley’s condition worsened, Dr. Marco prescribed pain 

medication in lieu of ordering or conducting a full neurological exam. Dr. 

Marco’s failure to provide the necessary neurological treatment, the Kelleys 

claim, resulted in a permanent spinal cord injury and paralysis from the waist 

down. 

III. Procedural History

The Kelleys filed suit in Vermont state court in February 2021. In 

November 2021, the United States Attorney for the Northern District of New 

York1 removed the action to federal court based on both the FSHCAA and the 

federal officer removal statute, 28 U.S.C. § 1442. The Government certified, 

pursuant to the FSHCAA, that Richford Health Center was a “deemed” entity 

eligible for FTCA coverage and that Dr. Marco was an employee of the Health 

1 The United States Attorney’s Office for the District of Vermont had a conflict, so the 

United States Attorney’s Office for the Northern District of New York took its place. 
8 

Center acting within the scope of his employment when he treated Kelley. The 

Government accordingly moved to substitute itself as the sole defendant and to 

dismiss the case for failure to exhaust administrative remedies under the FTCA. 

Franklin County Rehabilitation Center moved to remand and, along with the

Kelleys, opposed the motions to substitute and dismiss. 

The Government then changed its mind. Initially, the Government

revised its stated justification for the claim that Kelley’s treatment by Dr. Marco 

was covered by the FTCA. Kelley, it acknowledged, was never in fact a Health 

Center patient. Even so, it explained, Kelley’s treatment was entitled to FTCA 

coverage without HHS’s particularized determination of coverage because it 

occurred pursuant to an after-hours coverage agreement or on an emergency 

basis. 

 A subsequent evidentiary hearing prompted the Government to retreat 

even further. On December 12, 2022, it retracted its earlier certification that Dr. 

Marco’s treatment fell within RHC’s deemed federal employment and its claim 

that the FTCA provided the only remedy for the Kelleys’ malpractice claim. It 

then withdrew its motions to substitute and to dismiss, and consented to remand 

the action to Vermont state court. RHC and Dr. Marco opposed remand, but the 
9 

District Court sided with the Government, explaining that Dr. Marco’s treatment 

was not covered by HHS’s deeming decision for three reasons: First, Kelley was 

not a Health Center patient; second, the treatment fell outside the enumerated 

examples of services to nonpatients that qualify for FTCA coverage; and third, 

RHC never applied for a particularized coverage determination as to Dr. Marco’s 

treatment of FCRC patients. Because the only basis for subject matter

jurisdiction in this case “was the substitution of the United States as the 

defendant and the application of federal law through the FSHCAA and the 

FTCA,” Kelley v. Franklin Cnty. Rehab Ctr., LLC, No. 21-CV-278, 2023 WL 2529926, 

at *7 (D. Vt. Feb. 9, 2023) (Crawford, C.J.), the District Court remanded the case 

for lack of jurisdiction. 

DISCUSSION

I. Appellate Jurisdiction

Before proceeding to the merits, we must first determine whether we have 

jurisdiction to consider this appeal. The Kelleys and FCRC argue that we do 

not. “Since at least 1949, federal appellate courts have generally lacked the 

power to review a district court order remanding a case to state court. But like 

most rules, this one has accrued exceptions with time.” BP P.L.C. v. Mayor of 
10 

Balt., 141 S. Ct. 1532, 1536 (2021) (citing Act of May 24, 1949, § 84, 63 Stat. 102). 

“In 2011, Congress added a[n] . . . exception for suits against federal officers or 

agencies removed pursuant to 28 U.S.C. § 1442,” id., which “authorizes ‘the 

United States or any agency thereof or any officer (or any person acting under 

that officer) of the United States or of any agency thereof’ to remove actions ‘for 

or relating to any act under color of such office,’” Agyin, 986 F.3d at 174 (cleaned 

up) (quoting 28 U.S.C. § 1442). “Here, . . . Congress has deemed it appropriate 

to allow appellate review before a district court may remand a case to state 

court.” BP P.L.C., 141 S. Ct. at 1536 (citing Removal Clarification Act, § 2, 125 

Stat. 545–546 (amending 28 U.S.C. §§ 1442 and 1447)). 28 U.S.C. § 1447(d) thus

provides that “an order remanding a case to the State court from which it was 

removed pursuant to [28 U.S.C. §] 1442 . . . shall be reviewable by appeal . . . .” 

A “colorable claim for removal under § 1442” is all it takes to trigger our 

review of a remand order, even if we ultimately determine that removal was 

improper. Agyin, 986 F.3d at 174. To invoke Section 1442, RHC and Dr. Marco 

must demonstrate that Dr. Marco “is a person under the statute,” “acted under 

color of federal office” and that he “has a colorable federal defense.” Id.

(quotation marks omitted). 
11 

With that in mind, we conclude that the Government’s notice of removal 

“asserted a colorable claim for removal under § 1442” because it certified that 

RHC was a deemed entity and that Dr. Marco’s treatment of Kelley fell within

the scope of his employment. See id. at 174–78, 181. First, RHC and Dr. Marco 

had colorable claims to immunity from suit under the FTCA, which provides a 

colorable federal defense. “A merely colorable defense is sufficient to assure the 

federal court that it has jurisdiction to adjudicate the case.” Cuomo v. Crane Co., 

771 F.3d 113, 116 (2d Cir. 2014) (quotation marks omitted); see Agyin, 986 F.3d at 

174 (noting that we consider whether the defendant has raised a colorable federal 

defense at the time of removal). And because RHC was a federally deemed 

health center and Dr. Marco’s treatment of Kelley arguably fell within the scope 

of his employment with RHC, Dr. Marco likewise has at least a colorable 

argument that he was “acting under color of” his deemed federal office. See 

Agyin, 986 F.3d at 176–77, 181.2

Under 28 U.S.C. § 1446(b)(2)(B), “[e]ach defendant shall have 30 days after 

2 The parties do not dispute that RHC and Dr. Marco are “persons” for purposes of 

§ 1442. See 1 U.S.C. § 1 (“‘[P]erson’ . . . include[s] corporations, companies, 

associations, firms, partnerships, societies, and joint stock companies, as well as 

individuals.”). 
12 

receipt by or service on that defendant of the initial pleading or summons . . . to 

file the notice of removal.” FCRC and the Kelleys argue that, colorable defense 

or not, the Government’s notice of removal was procedurally defective because it 

was filed more than thirty days after the defendants’ receipt of the summons and 

complaint in this case. We have explained, though, that the “thirty-day time 

limitation is . . . not jurisdictional.” Agyin, 986 F.3d at 182 (quotation marks 

omitted). “Therefore, if an opposing party does not object to an untimely notice 

of removal by timely filing a motion to remand, the objection is waived.” Id. 

Here, “no party filed such a motion or otherwise objected to the timeliness” of 

the Government’s notice of removal. Id. at 183. So even if the Government’s 

“removal under § 1442 was untimely, any objection to that untimeliness has been 

waived.” Id. 

FCRC and the Kelleys also challenge our appellate jurisdiction because the 

District Court premised its remand order on the inapplicability of the FSHCAA, 

42 U.S.C. § 233(c), not on the federal officer removal statute. Their challenge is 

misplaced. Regardless of the District Court’s stated reasons for remanding the 

matter to Vermont state court, we retain jurisdiction to review its remand order 

as long as the case is removed at least in part under Section 1442. See BP P.L.C., 
13 

141 S. Ct. at 1538. 

Finally, the Kelleys contend that RHC and Dr. Marco lack standing to 

appeal the remand order because they were not the “party” that removed the 

case in the first instance. This argument is foreclosed by the plain text of Section 

1447, which provides that an order remanding a case removed under Section 

1442 shall be reviewable on appeal, without limiting that review based on which 

party removed the case. 28 U.S.C. § 1447(d). Accordingly, we may review the

District Court’s remand order on appeal. 

II. Merits of the Remand Order 

We review the merits of the remand order without deferring to the District 

Court’s decision. See Agyin, 986 F.3d at 173–74. 

 As the District Court explained, “[t]he deeming decision is highly 

consequential for [a federally qualified health center] because it makes it 

unnecessary to purchase liability insurance for many types of claims. Instead, 

the United States becomes the insurer of the [federally qualified health center], 

providing a defense and indemnity within the procedures of the FTCA.” Kelley, 

2023 WL 2529926, at *6.

 The FSHCAA makes clear that the scope of HHS’s deeming decision 
14 

depends on the patient’s status. In general, the deeming decision — and the 

corresponding FTCA coverage for malpractice claims — is limited to medical 

treatment that a deemed entity (such as the Health Center) and its employees 

provide to its patients. 42 U.S.C. § 233(g)(1)(B). Coverage extends to 

nonpatients only if the treatment meets specified statutory criteria. See id.

§ 233(g)(1)(B), (C). 

RHC and Dr. Marco dispute a reading of the FSHCAA that limits FTCA 

immunity to claims arising from medical services to patients of deemed entities. 

They insist that patient status is irrelevant to the scope of FTCA immunity. 

Immunity attaches here, they claim, as long as Dr. Marco treated Kelley within 

the scope of his employment with the Health Center and regardless of Kelley’s 

status as a nonpatient of the Health Center. But this interpretation ignores the 

text of the FSHCAA, which ties an entity’s deemed federal employment to the 

patient/nonpatient status of the individual receiving treatment. 

The parties agree that Kelley was not a Health Center patient before Dr. 

Marco treated him. The Appellants contend, though, that Kelley became a 

Health Center patient because Dr. Marco’s treatment fell within the scope of his 

employment for RHC. This argument again runs headlong against the 
15 

FSHCAA’s plain text, which limits HHS’s deeming decision to “patients of the 

entity,” not patients of the entity’s employees. See 42 U.S.C. § 233(g)(1)(B)(i) 

(emphasis added). Patients of a deemed entity’s doctors are not necessarily

patients of the entity itself. Otherwise, the FSHCAA’s distinction between 

coverage of services to patients on the one hand and coverage of services to 

nonpatients on the other would have no consequence. The Appellants’ 

interpretation would upend the statutory distinction between patients and 

nonpatients and improperly convert virtually every nonpatient treated by a 

health center doctor into a patient under the FSHCAA. Accordingly, we agree 

with the District Court that Kelley was not a Health Center patient. 

FTCA coverage thus applies to Dr. Marco’s treatment of Kelley only if the 

treatment satisfies one or more of the FSHCAA’s specified statutory criteria for 

services to nonpatients described in HHS’s regulations, 42 C.F.R. § 6.6(e)(4). But 

Dr. Marco’s treatment does not “fit[] squarely” within any of the nonpatientrelated activities or arrangements described in those regulations. Id. Take, for 

example, Section 6.6(e)(4)(iii), which covers treatment of non-health center 

patients so long as they are “part of a health center’s arrangement with local 

community providers for after-hours coverage of its patients.” 42 C.F.R. 
16 

§ 6.6(e)(4)(iii) (emphasis added). RHC employed Dr. Marco as the full-time 

medical director of the Rehabilitation Center, not for periodic, after-hours 

coverage. Another HHS regulation contemplates coverage for a health center 

provider that is “asked, called upon, or undertakes, at or near [its] location and 

as the result of a non-health center patient’s emergency situation, to temporarily 

treat or assist in treating that non-health center patient.” Id. § 6.6(e)(4)(iv). But 

it appears to be undisputed that Kelley’s pain did not present a medical 

emergency and that Dr. Marco therefore did not treat him in an emergency. 

Finally, HHS regulations provide that a health center planning to offer 

services that do not fit neatly into any of the descriptions listed in Section 

6.6(e)(4) may nonetheless “seek a particularized determination of coverage” in 

order to obtain FTCA immunity for those services. Id. § 6.6(e)(4). But RHC did 

not apply for a “particularized determination of coverage” at any point, let alone 

before Dr. Marco began treating Rehabilitation Center patients. 

We therefore conclude that Dr. Marco’s treatment of Kelley is not covered 

by HHS’s deeming decision, and accordingly that Dr. Marco and RHC are not 

entitled to FTCA medical malpractice liability coverage for the Kelleys’ claim. 
17 

CONCLUSION

We have considered the Appellants’ remaining arguments and conclude 

that they are without merit. For the foregoing reasons, the judgment of the 

District Court is AFFIRMED.