Goncalves v. Blue Cross & Blue Shield of Massachusetts, No. 15-55010 (9th Cir. 2017)
Annotate this CaseAfter the Blues asserted a lien against plaintiff's putative future settlement proceeds in an ongoing medical negligence action in California state court to satisfy a subrogation clause in a Federal Employee Health Benefit Act (FEHBA) health insurance plan that the Blues administer, plaintiff asked the state court to expunge the lien. The Blues then removed the action to federal court under the federal officer removal statute, 28 U.S.C. 1442(a)(1). The district court held that the probate exception precluded federal court jurisdiction and remanded. The Ninth Circuit held that it had jurisdiction to review the remand order under 28 U.S.C. 1447(d) and held that the action was properly in federal court. The panel explained that, in administering the FEHBA plan by pursuing subrogation against plaintiff, the Blues "acted under" a federal officer for purposes of the federal officer removal statute, and thus the action was properly removed to federal court. Because neither the probate exception to federal jurisdiction nor the prior exclusive jurisdiction doctrine precludes federal jurisdiction, the panel held that the action should not have been remanded back to state court.
Court Description: Federal Court Jurisdiction. The panel reversed the district court’s order remanding to state court an action that had been removed to federal court under the federal officer removal statute. Insurance companies asserted a lien against the plaintiff’s putative future settlement proceeds in an ongoing California state court medical negligence action. The plaintiff moved to expunge the lien, which was asserted pursuant to a subrogation clause in a Federal Employee Health Benefit Act health insurance plan that the insurance companies administered. The panel held that the insurance companies properly removed the action to federal court under the federal officer GONCALVES V. BLUE CROSS & BLUE SHIELD OF MASS. 3 removal statute, 28 U.S.C. § 1442(a)(1). The panel concluded that the insurance companies were a “person” within the meaning of the statute. Agreeing with the Eighth Circuit, the panel held that the insurance companies’ actions seeking subrogation from the plaintiff by pursuing a lien were “actions under” a federal officer because the insurance companies administered the FEHBA health insurance plan on behalf of the Office of Personnel Management. The insurance companies’ actions were causally connected to the dispute over the validity of the lien. In addition, the insurance companies had a colorable federal defense to the plaintiff’s motion to expunge their lien—the defense that California law is preempted by FEHBA’s express preemption provision. Finally, the insurance companies’ motion to expunge the lien was a “civil action” within the meaning of the statute. The panel held that the probate exception to federal jurisdiction did not apply. Agreeing with other circuits, the panel held that following Marshall v. Marshall, 547 U.S. 293 (2006), the probate exception does not apply unless a federal court is endeavoring to probate or annul a will, administer a decedent’s estate, or assume in rem jurisdiction over property that is in the custody of a probate court. The panel held that the prior exclusive jurisdiction doctrine, prohibiting federal and state courts from concurrently exercising jurisdiction over the same res, also did not apply. Dissenting, Judge Wardlaw wrote that she would affirm the district court’s remand order on the ground that the prior exclusive jurisdiction doctrine barred the exercise of federal jurisdiction. She wrote that both the state and the federal 4 GONCALVES V. BLUE CROSS & BLUE SHIELD OF MASS. actions were at least quasi in rem because the plaintiff’s settlement funds formed the basis of both actions.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.