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Case Law Update: Removal in Medical Expenses Case

Pollitt v. Health Care Service Corp, No. 08-3509 (3/10/09) is a seventh circuit decision that decided that in state-court action seeking recovery under state-law theories of bad-faith conduct on part of defendant-insurer, which in turn sought to recover medical expenses paid by defendant on behalf of plaintiff’s son, Dist. Ct. erred in finding that plaintiff’s action was preempted by Federal Employees Health Benefits Act without first determining propriety of defendant’s removal of said action to federal court. While preemption is defense in state-court claim, existence of federal defense does not allow removal, and while 28 USC sec. 1442(a)(1) permits removal if record supported defendant’s claim that it did nothing but carry out directions issued b y federal officer, Dist. Ct. cannot merely accept defendant’s version of events as basis for removal without conducting evidentiary hearing as to role Dept. of Labor played in defendant’s actions. Ct. also held that if case is properly in federal court, dismissal would only be appropriate due to plaintiff’s failure to name Office of Personnel Management, rather than instant insurer. This decision will have a great impact on removal jurisdiction.