Background
Keith Chiaro and Jane Doe sued Methodist Hospitals, Inc. in a putative class action arising from allegations that tracking software embedded in a health care provider’s website disclosed patients’ health information without consent. The case was one of several nearly identical actions against health care providers consolidated on appeal.
Methodist Hospitals removed the action to federal court under the federal officer removal statute, 28 U.S.C. § 1442(a)(1). It argued that it was “acting under” the Department of Health and Human Services when it created and maintained an online patient portal in response to the federal Meaningful Use Program, which encouraged electronic access to health records through incentive payments and later reductions in Medicare reimbursement for noncompliance. The district court rejected that jurisdictional theory and remanded the case to state court.
The Court’s Holding
The Seventh Circuit affirmed. It held that Methodist Hospitals and the other providers were not “acting under” a federal officer or agency when they created their patient portals. The providers were complying with federal regulation and responding to federal incentives, not carrying out a basic governmental task delegated to them by the federal government.
The court also found no unusually close relationship involving the detailed federal direction, monitoring, or supervision characteristic of federal contractors entitled to remove under § 1442(a)(1). The Meaningful Use regulations generally required providers to give patients electronic access to health information but did not dictate how to design or operate their portals. Nonbinding federal guidance offering tips and best practices did not establish the necessary federal control. Because the “acting under” requirement was not satisfied, the court did not decide whether the challenged conduct related to federal authority or whether the providers had a colorable federal defense.
Key Takeaways
- Federal incentives and extensive regulation do not, without more, make a private health care provider a person “acting under” a federal officer.
- Operating a private patient portal advances federal policy but does not constitute performance of a basic governmental task.
- General regulatory requirements and nonbinding best-practices guidance do not create the unusually close federal supervision required for federal officer removal.
Why It Matters
The decision keeps patient-portal privacy claims like Chiaro’s in state court when a provider’s removal theory rests only on participation in the federal Meaningful Use Program. It aligns the Seventh Circuit with other federal appellate courts that have rejected substantially similar federal officer removal arguments by health systems.