In John Doe v. SSM Health Care Corporation, the United States Court of Appeals for the Eighth Circuit addressed pivotal issues surrounding the removal of class action lawsuits from state to federal court. The case centers on alleged violations of Missouri state laws related to the unauthorized sharing of private health information by SSM Health’s MyChart patient portal. This commentary explores the court’s decision to affirm the district court’s ruling to remand the case to state court, delving into the legal principles and precedents that guided this outcome.

Plaintiff John Doe initiated a putative class action in Missouri state court against SSM Health Care Corporation, alleging that SSM unlawfully transmitted personal health data to third-party marketers via its MyChart portal. SSM sought to remove the case to federal court under two statutes: the federal officer removal statute (28 U.S.C. § 1442(a)(1)) and the Class Action Fairness Act (CAFA, 28 U.S.C. § 1332(d)). The district court denied both removal motions, and SSM appealed. The Eighth Circuit affirmed the district court’s decision, holding that SSM failed to meet the stringent requirements for federal officer removal and that CAFA did not apply due to lack of minimal diversity within the proposed class.

Precedents Cited

The court relied heavily on precedents such as BJC Health System, Inc. v. Doe and Mosaic Health System v. Doe. In BJC Health, the Eighth Circuit held that creating a private website and receiving federal incentives did not constitute “acting under” a federal officer. Similarly, in Mosaic Health System, it was determined that operating a website under a federal incentive program did not equate to acting under federal direction. These cases established that mere compliance with federal programs does not satisfy the “acting under” requirement for federal officer removal.

Legal Reasoning

The court undertook a de novo review of the district court’s decision, focusing first on SSM’s attempt to invoke federal officer removal under 28 U.S.C. § 1442(a)(1). The stringent criteria require that the defendant not only be a federal officer or agency but also that it acted under the direction of a federal officer, with a clear causal connection to federal authority. The court found that SSM’s participation in the Meaningful Use Program (MUP) and receipt of federal incentives did not amount to acting under federal direction, as there was no subordination or control exerted by the federal government over SSM’s operations.

Regarding CAFA, the court scrutinized the definition of the proposed class. SSM argued that the inclusion of non-Missouri citizens in the proposed class satisfied the minimal diversity requirement. However, the court clarified that "all Missouri citizens" unambiguously limited the class to Missouri residents at the time of filing, negating any minimal diversity as SSM is also a Missouri citizen. The nearest-reasonable-referent canon was applied to interpret the duration clause in the class definition, reinforcing that the class did not extend beyond Missouri citizens.

Impact

This judgment reaffirms the high threshold for removing state court cases to federal court under both the federal officer removal statute and CAFA. It clarifies that participation in federal incentive programs alone does not equate to acting under federal authority. Additionally, it emphasizes the importance of precise class definitions in CAFA cases to ensure proper jurisdictional boundaries. Future litigants must carefully assess their standing and the composition of proposed classes to navigate removal challenges effectively.

Federal Officer Removal under 28 U.S.C. § 1442(a)(1)

This statute allows certain cases to be moved from state to federal court if the defendant is a federal officer or acting under federal authority. However, the bar is high: the defendant must demonstrate a clear connection and direction from a federal officer. Simply participating in federal programs or receiving federal funds does not meet this requirement.

Class Action Fairness Act (CAFA)

CAFA aims to provide federal courts jurisdiction over certain large-scale class actions to ensure uniformity and manage caseloads efficiently. For a case to be removed under CAFA, it must meet criteria including the size of the class, the amount in controversy, and diversity among parties. "Minimal diversity" means that at least one member of the class must be from a different state than any defendant.

Nearest-Reasonable-Referent Canon

This principle in statutory interpretation dictates that modifiers in a sentence typically apply to the closest relevant term, unless context clearly indicates otherwise. In this case, it was used to interpret the duration clause in the class definition, determining that it referred to the period of conduct rather than the citizenship status.

The Eighth Circuit’s affirmation in John Doe v. SSM Health Care Corporation underscores the rigorous standards required to shift jurisdiction from state to federal courts, particularly under the federal officer removal statute and CAFA. By delineating the boundaries of "acting under" federal authority and enforcing strict interpretations of class definitions, the court ensures that federal jurisdiction is appropriately applied. This decision serves as a pivotal reference for future litigation concerning data privacy and the complexities of jurisdictional challenges in class action lawsuits.