Opinion
Case No. 8:02-cv-1177-T-23EAJ
October 16, 2002
ORDER
The defendant, Norman Understein, moves to remand this action to state court (Doc. 9) on the theory that the amount in controversy falls below the $75,000 statutory requirement imposed by 28 U.S.C. § 1332. As noted in third-party defendant Aetna Health, Inc.'s response (Doc. 11), Understein misunderstands Aetna's asserted basis for removal, which depends not on diversity jurisdiction (i.e., 28 U.S.C. § 1332) but rather upon Aetna's role as an entity acting under the authority of an officer of the United States (i.e., the Federal Officer Removal Statute, 28 U.S.C. § 1442 (a)(1)) and upon the federal nature of Understein's claim against Aetna, which claim implicates the federal Medicare Act (i.e., 28 U.S.C. § 1331, 1441). Therefore, Understein's motion to remand (Doc. 9)is DENIED.
Given the somewhat unusual circumstance of removal by a third-party defendant (which, in most instances, is prohibited), Aetna presents a surprisingly spare removal paper. Nonetheless, Aetna sufficiently alleges (and Understein expresses no disagreement) that Aetna's obligations to Understein as a provider of "Medicare + Choice" benefits under contract with the Health Care Financing Administration of the United States Department of Health and Human Services qualifies Aetna as a "person acting under" an agency or officer of the United States for purposes of the Federal Officer Removal Statute, 28 U.S.C. § 1442 (a)(1). See 42 U.S.C. § 1395w-21; Lifecare Hosp., Inc. v. Ochsner Health Plan, Inc., 139 F. Supp.2d 768 (W.D. La. 2001); see also Magnin v. Teledyne Cont'l Motors, 91 F.3d 1424 (11th Cir. 1996); Peterson v. Blue Cross/Blue Shield of Texas, 508 F.2d 55 (5th Cir. 1975); Holton v. Blue Cross Blue Shield of S. Carolina, 56 F. Supp.2d 1347 (M.D. Ala. 1999);Neurological Assoc.-H. Hooshmand, M.D., P.A. v. Blue Cross/Blue Shield of Fla., 632 F. Supp. 1078 (S.D. Fla. 1986); Group Health Inc. v. Blue Cross Assoc., 587 F. Supp. 887 (S.D.N.Y. 1984). Although a third-party defendant typically may not remove an action to federal court, a third-party defendant proceeding under 28 U.S.C. § 1442 (a)(1) may remove an action. See e.g. Johnson v. R.G. Showers v. Nat'l Flood Ins. Program, 747 F.2d 1228 (8th Cir. 1984); IMFC Prof'l Serv. of Fla., Inc. v. Latin Am. Home Health Inc. v. Schweiker, 676 F.2d 152 (5th Cir. 1982); Hendrickson v. Superior Aviation, 934 F. Supp. 332 (E.D. Mo. 1996); Davenport v. Borders v. Harris, 480 F. Supp. 903 (N.D.Ga. 1979). Accordingly, Aetna has properly removed this action.
Aetna moves (Doc. 6) to dismiss Understein's third-party complaint based on Understein's failure to exhaust administrative remedies. As of the date of this order, Understein has filed no response to Aetna's motion to dismiss, which Aetna filed on July 9, 2002. Accordingly, Aetna's motion to dismiss stands unopposed.
The certificate of service attached to Aetna's motion to dismiss certifies that Aetna's counsel mailed a copy of the motion to Understein's counsel on July 9, 2002. A pending joint motion (Doc. 12) to extend the case management report deadline, signed by Understein's counsel, acknowledges the pendency of Aetna's motion to dismiss. This record leads to the conclusion that Understein harbors no intention of responding to Aetna's motion in accordance with Local Rule 3.01(b).
Both the plain text of Aetna's "Medicare + Choice" "Evidence of Coverage" document and the pertinent provisions of the Medicare Act, 42 U.S.C. § 1395w-22 (g), obligate a Medicare claimant to exhaust administrative remedies before resort to litigation in federal court. "Until a claimant has exhausted her administrative remedies by going through the agency appeals process, a federal district court has no subject mailer jurisdiction over her lawsuit seeking to `recover on any claim arising out of' the Medicare Act." Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775, 779 (11th Cir. 2002). Understein's third-party complaint, which undoubtedly seeks recovery for a claim arising out of the Medicare Act, makes no allegation that Understein has exhausted administrative remedies or that the pursuit of administrative remedies would be futile, and the record contains no evidence of any administrative proceedings with respect to Understein's claim. Understein's failure to exhaust administrative remedies robs this Court of subject matter jurisdiction over this action. Accordingly, Aetna's motion to dismiss Understein's third-party complaint (Doc. 6) is GRANTED, the third-party claim asserted against Aetna is DISMISSED, and Aetna is DISMISSED as a party to this action.
Although somewhat counter intuitive, Aetna's removal under 28 U.S.C. § 1442 (a)(1) and the Courts dismissal of the third-party complaint for lack of subject matter jurisdiction creates no logical or legally impermissible contradiction of the sort that arises, for example, when a party removes an action to federal court based on federal question jurisdiction and then moves to dismiss by asserting that no claim under federal law exists. See Johnson v. R.G. Showers v. Nat't Flood Ins. Program, 747 F.2d 1228, 1229 (8th Cir. 1984).
The dismissal of Understein's third-party complaint against Aetna leaves only the original complaint filed by Manorcare Potomac against Understein, which complaint alleges state law claims for breach of contract, account stated, and unjust enrichment, none of which implicate federal law or otherwise justify retention of this action in federal court. Accordingly, pursuant to 28 U.S.C. § 1441 (c), the balance of this action is REMANDED to state court. The Clerk is directed to (1) mail a certified copy of this order to the Clerk of the Twelfth Judicial District, Sarasota County, Florida, pursuant to 28 U.S.C. § 1447 (c); (2) terminate all pending motions; and (3) close the file.