Court Opinion

ID: 65524
Source: CourtListenerOpinion
Date Created: 2010-04-26 05:59:46+00
Date Added: 2024-06-11T17:20:38.893785
License: Public Domain

[PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS
                                                             FILED
                 FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                   ________________________ ELEVENTH CIRCUIT
                                                         AUG 26, 2008
                          No. 07-15529                 THOMAS K. KAHN
                    ________________________               CLERK

               D. C. Docket No. 07-00412-CV-2-KD-C

DELLA DIAL,
A. C. JOHNSON,
NANCY NORFLEET,
CONSTANCE TAYLOR,
ABRAHAM WASHINGTON,
GEORGIA M. WOODS,
LAURA B. WASHINGTON,

                                                      Plaintiffs-Appellants,

                               versus

HEALTHSPRING OF ALABAMA, INC.,
MARCUS TROTTER,

                                                     Defendants-Appellees.

                    ________________________

             Appeal from the United States District Court
                for the Southern District of Alabama
                   _________________________

                         (August 26, 2008)
Before WILSON and PRYOR, Circuit Judges, and MIDDLEBROOKS,* District
Judge.

PRYOR, Circuit Judge:

       This appeal presents the question whether a complaint about conduct

regulated by the Medicare Act filed in a state court may be removed to a federal

court. Seven individual beneficiaries of the federal Medicare program filed a

complaint against Healthspring of Alabama, Inc., the administrator of a Medicare

Advantage health-insurance plan. Healthspring removed the case to a federal court

and asserted that the complaint is “founded on a claim or right arising under the . .

. laws of the United States,” 28 U.S.C. § 1441, because it asserts claims that arise

under the Medicare Act. The district court concluded that at least one claim for

relief arises under federal law because the federal Medicare Act “wholly displaces

the state-law cause of action through complete preemption,” Beneficial Nat’l Bank

v. Anderson, 539 U.S. 1, 6, 124 S. Ct. 2058, 2062 (2003), and denied the

beneficiaries’ motion to remand. Because removal jurisdiction exists only where

“the district courts have original jurisdiction,” 28 U.S.C. § 1441, and the Medicare

statute “strips federal courts of primary federal-question subject matter

jurisdiction” over claims that arise under the Medicare Act, Cochran v. U.S. Health

       *
          Honorable Donald M. Middlebrooks, United States District Judge for the Southern
District of Florida, sitting by designation.

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Care Fin. Admin., 291 F.3d 775, 779 (11th Cir. 2002), we reverse with instructions

to the district court to remand the case to the state court.

                                  I. BACKGROUND

      Della Dial, A.C. Johnson, Nancy Porter Norfleet, Constance Taylor,

Abraham Washington, Laura B. Washington, and Georgia M. Woods are

beneficiaries of Medicare, a social-security program that provides

federally-subsidized health insurance and is administered by the Department of

Health and Human Services through the Centers for Medicare and Medicaid

Services. The benefits available under Medicare are prescribed by law and divided

into four “parts.” Part A provides hospital, skilled nursing, home health, and

hospice care benefits. Part B provides physician and other outpatient services.

Part D provides outpatient prescription drug benefits. The traditional Medicare

structure allows beneficiaries access to Parts A, B, and D as separate benefits. Part

C provides beneficiaries with an option to instead obtain the benefits available

under Parts A and B as well as some additional benefits through a health insurance

plan, known as a “Medicare Advantage Plan,” administered by a private company.

See generally Matthews v. Leavitt, 452 F.3d 145, 147 n.1 (2d Cir. 2006).

      Dial and the other six persons had been beneficiaries under Parts A and B of

Medicare until 2005, when they enrolled in a Medicare Advantage Plan

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administered by Healthspring, known as the “Seniors First” plan. According to the

complaint, an agent of Healthspring met with each beneficiary. The beneficiaries

enrolled in the Seniors First plan based on representations made by the agent.

      The beneficiaries filed a complaint against Healthspring in the Circuit Court

of Perry County, Alabama. The complaint asserts twelve counts, which are

phrased as claims under Alabama law. The complaint also states that “[t]he

Plaintiffs make no claims pursuant to any Federal Law, nor do the Plaintiffs make

any claims which would give rise to Federal jurisdiction. Plaintiffs’ claims arise

solely from state law.”

      Healthspring removed the action to the federal district court under the

general federal-question removal statute, 28 U.S.C. § 1441(b), and asserted that the

beneficiaries’ claims are “completely preempted by federal law.” The district court

denied the beneficiaries’ motion to remand. The district court later granted the

plaintiffs’ application for an interlocutory appeal under 28 U.S.C. § 1292(b).

                          II. STANDARD OF REVIEW

      We review de novo the denial of a motion to remand. Florence v. Crescent

Res., LLC., 484 F.3d 1293, 1297 (11th Cir. 2007).

                                III. DISCUSSION

      Healthspring removed this action under the general federal-question removal

                                          4
statute, which provides, “Any civil action of which the district courts have original

jurisdiction founded on a claim or right arising under the Constitution, treaties or

laws of the United States shall be removable without regard to the citizenship or

residence of the parties.” 28 U.S.C. § 1441(b). To be removable under this statute,

the action must be founded on a claim or right arising under federal law, see Rivet

v. Regions Bank of La., 577 U.S. 470, 475, 118 S. Ct. 921, 925 (1998), and the

action must be one of which the district court has original jurisdiction, which

means that the action “originally could have been filed in federal court.”

Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 2429 (1987).

      Ordinarily, “[t]o determine whether [a] claim arises under federal law, we

examine the ‘well pleaded’ allegations of the complaint and ignore potential

defenses.” Anderson, 539 U.S. at 6, 123 S. Ct. at 2062. The complaint expressly

alleges only state-law claims, but Healthspring argues that the complaint contains

claims that fall within an exception to the well-pleaded complaint rule that applies

“when a federal statute wholly displaces the state-law cause of action through

complete pre-emption.” Id. at 9, 123 S. Ct. at 2063. Complete preemption occurs

when a federal statute both preempts state substantive law and “provides the

exclusive cause of action for the claim asserted.” Id. at 8, 123 S. Ct. at 2063.

Healthspring argues that the Medicare Act expressly preempts state substantive

                                           5
law, see 42 U.S.C. § 1395w-26, and provides the exclusive remedy for at least

some of the allegations in the complaint, see 42 U.S.C. § 1395w-22(g)(5). Another

statute grants to district courts “original jurisdiction of all civil actions arising

under” federal law. 28 U.S.C. § 1331. If the complaint contains at least one claim

that arises under federal law within the meaning of section 1331, then the district

court has supplemental jurisdiction over related claims, even if those claims do not

arise under federal law. 28 U.S.C. § 1367(a).

       The wrinkle in this appeal is that the only source of federal law that

Healthspring invokes in support of removal is the Medicare Act, which “strips

federal courts of primary federal-question subject matter jurisdiction” over claims

that arise under that Act. Cochran, 391 F.3d at 779 (citing 42 U.S.C. § 405(h )). In

place of that primary federal-question jurisdiction, the Act provides for an

administrative hearing before the Secretary of the Department of Health and

Human Services. 42 U.S.C. § 1395w-22(g)(5). If the amount in controversy is

sufficient, the Act provides for “judicial review of the Secretary’s final decision” in

the form of a civil action in federal district court against the Secretary. Id.; 42

U.S.C. § 405(g). This procedure for judicial review of the administrative decision

of the Secretary “to the exclusion of 28 U.S.C. § 1331, is the sole avenue for

judicial review for all ‘claim[s] arising under’ the Medicare Act.” Heckler v.

                                             6
Ringer, 466 U.S. 602, 614, 104 S. Ct. 2020 (1984).

      Because the plaintiffs’ action is not a “civil action of which the district

courts have original jurisdiction,” the action is not removable. 28 U.S.C. §

1441(b); Williams, 482 U.S. at 392, 107 S. Ct. at 2429. We need not decide

whether the complaint against Healthspring arises under the Medicare Act because

the district court lacks removal jurisdiction in any event. Even if we assume that at

least one of the beneficiaries’ claims for relief arises under the Medicare Act, the

district court would lack subject-matter jurisdiction over their complaint because it

is not against the Secretary of the Department of Health and Human Services for

review of an administrative decision.

                                IV. CONCLUSION

      The denial of the plaintiffs’ motion to remand is REVERSED. We

REMAND to the district court with instructions to remand the case to the state

court from which it was removed.

      REVERSED and REMANDED.

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