Date: Sep 23, 2026

Federal Officer Removal for PBMs: “Indivisible” Federal–Commercial Opioid Formulary/Rebate Conduct Defeats State Disclaimers

1. Introduction

In Commw. of Ky. v. Express Scripts, Inc. (6th Cir. Sept. 18, 2026), the Commonwealth of Kentucky, through its Attorney General, sued multiple healthcare entities—including Pharmacy Benefit Managers (PBMs) Express Scripts and Optum—in Kentucky state court. Kentucky alleged the PBMs contributed to the opioid crisis by conspiring with manufacturers to increase opioid supply, chiefly by securing “preferred” formulary placement for opioids in exchange for rebates, fees, and other payments, in violation of state consumer protection laws and under a public nuisance theory.

The PBMs removed the action to federal court under the federal officer removal statute, 28 U.S.C. § 1442(a)(1), asserting their challenged conduct related to their federally supervised work for FEHBA (federal employees), TRICARE (Department of Defense), and the Veterans Health Administration (VHA), and that they had colorable federal defenses (including preemption and government-contractor immunity).

The district court remanded, accepting Kentucky’s position that its complaint effectively disclaimed liability for federally directed conduct. While the appeal was pending, the Sixth Circuit decided Ohio ex rel. Yost v. Ascent Health Services, LLC, 165 F.4th 999 (6th Cir. 2026), rejecting materially identical “disclaimer” tactics in PBM opioid litigation. Relying on Yost, the Sixth Circuit reversed the remand order here.

2. Summary of the Opinion

Chief Judge Sutton, writing for the panel, held that removal under 28 U.S.C. § 1442(a)(1) was proper because:

The PBMs are “persons” acting under federal officers when administering and negotiating prescription drug benefits for FEHBA, TRICARE, and VHA.
Kentucky’s claims are “for or relating to” acts under color of federal office because PBMs’ manufacturer negotiations and resulting rebate/formulary terms are integrated and “indivisible” across federal and commercial clients—so the suit necessarily bears on federally supervised conduct.
The PBMs asserted colorable federal defenses, including government-contractor immunity under Boyle v. United Technologies Corp. and multiple preemption theories (FEHBA, TRICARE, ERISA, and Medicare Part D).

The court declined Kentucky’s request to remand for the district court to apply Yost first, reasoning the dispute presented primarily legal questions with no material facts left to find. The Sixth Circuit reversed and remanded for proceedings in federal court.

3. Analysis

A. Precedents Cited

1) Core Sixth Circuit anchor: Ohio ex rel. Yost v. Ascent Health Services, LLC

Ohio ex rel. Yost v. Ascent Health Services, LLC, 165 F.4th 999 (6th Cir. 2026), is the opinion’s controlling template. Yost held that when PBMs conduct unified negotiations with manufacturers on behalf of both federal and non-federal clients, challenges to those negotiations “relate to” federally supervised work—and a state plaintiff cannot defeat § 1442 jurisdiction by disclaiming reliance on the federal portion of that “indivisible” conduct. Kentucky’s suit was treated as materially indistinguishable, making reversal straightforward.

2) Supreme Court guidance on removal pleading and “relating to”: Chevron USA Inc. v. Plaquemines Par.

The court relied on Chevron USA Inc. v. Plaquemines Par., 608 U.S. 1 (2026), in two ways:

Procedural posture: On review of remand, courts credit the removing defendant’s “plausible factual allegations.”
Substantive breadth: “Relating to” is expansive; the federal duty need not “specifically require” or “strictly cause” the challenged act, so long as the connection is more than “tenuous, remote, or peripheral.”

That broad understanding of “relating to” supported the conclusion that Kentucky’s formulary/rebate theories necessarily bore on the PBMs’ federally supervised negotiations.

3) “Acting under” and contractor-control framework: Watson v. Philip Morris Cos. and Bennett v. MIS Corp.

Watson v. Philip Morris Cos., 551 U.S. 142 (2007), supplied the classic “acting under” test: assisting the federal superior in carrying out governmental duties, in a relationship marked by “subjection, guidance, or control,” often where a contractor does what the government otherwise would have to do itself.

Bennett v. MIS Corp., 607 F.3d 1076 (6th Cir. 2010), was used both for the proposition that corporations qualify as “person[s]” under § 1442 and for the “colorable defense” threshold—especially regarding Boyle v. United Technologies Corp. immunity, which Bennett deemed at least plausible beyond military procurement, enough to satisfy § 1442 even if ultimate success is uncertain.

4) Federal-program structure informing “acting under”: Coventry Health Care of Mo., Inc. v. Nevils and Empire Healthchoice Assurance, Inc. v. McVeigh

For FEHBA, the court invoked Coventry Health Care of Mo., Inc. v. Nevils, 581 U.S. 87 (2017), to emphasize OPM’s broad administrative authority and the comprehensive nature of federal employee health benefits, supporting the idea that PBMs help execute core federal tasks.

It cited Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006), to underscore the federal role in “negotiating and regulating” FEHBA plans—placing PBM negotiations within a federally supervised duty set.

5) Colorable federal defenses and the low merits threshold: Mesa v. California and Willingham v. Morgan

Mesa v. California, 489 U.S. 121 (1989), was used to highlight the statute’s purpose: permitting federal defenses to be tried in federal court. Willingham v. Morgan, 395 U.S. 402 (1969), supplied the key limitation: a removing defendant need not “win” to remove; it must only raise a “colorable” defense.

6) Preemption authorities: Rutledge v. Pharm. Care Mgmt. Ass'n and Pharm. Care Mgmt. Ass'n v. Mulready

On ERISA, the court relied on Rutledge v. Pharm. Care Mgmt. Ass'n, 592 U.S. 80 (2020), for ERISA’s “connection with or reference to” test and for examples of state laws that impermissibly force plan structure or substantive coverage schemes.

It referenced Pharm. Care Mgmt. Ass'n v. Mulready, 78 F.4th 1183 (10th Cir. 2023), as persuasive authority finding ERISA preemption for certain PBM regulations and recognizing broad Medicare Part D preemption of state laws “concerning Part D plans.”

7) Cross-circuit alignment in opioid/PBM federal officer removal

The opinion situates the Sixth Circuit within a growing consensus that PBM opioid suits implicating integrated federal/commercial negotiations are removable under § 1442, citing:

Puerto Rico v. Express Scripts, Inc., 119 F.4th 174 (1st Cir. 2024)
Cnty. of Westchester v. Express Scripts, Inc., No. 24-1639, 2026 WL 2589574 (2d Cir. Sep. 2, 2026)
Cnty. Bd. of Arlington Cnty. v. Express Scripts Pharmacy, Inc., 996 F.3d 243 (4th Cir. 2021)
West Virginia ex rel. Hunt v. CaremarkPCS Health, L.L.C., 140 F.4th 188 (4th Cir. 2025)
Griffin v. Optum, Inc., 175 F.4th 897 (8th Cir. 2026)

These citations function less as contested interpretive sources than as reinforcement that the Sixth Circuit’s approach in Yost (and now here) is not an outlier.

8) Appellate procedure and post-removal amendment

Kentucky sought a “send back first” approach, but the court cited Fair Hous. Ctr. of Metro. Detroit v. Singh Senior Living, LLC, 124 F.4th 990 (6th Cir. 2025), to recognize that remand for application of intervening precedent is sometimes appropriate—yet unnecessary where the dispute is primarily legal.

On Kentucky’s suggestion it could amend to remove federal hooks, the court pointed to Royal Canin U.S.A., Inc. v. Wullschleger, 604 U.S. 22 (2025), confirming plaintiffs may amend (with leave) even after removal to adjust jurisdictional consequences—but that possibility does not defeat jurisdiction over the complaint as currently pleaded.

B. Legal Reasoning

1) “Acting under” is satisfied by delegated federal benefit-administration under close oversight

The court treated the PBMs as federal “helpers,” not merely regulated entities. For FEHBA, OPM bears statutory responsibility to administer federal employee health benefits and (per the court’s account) directs carriers to subcontract with PBMs; PBMs then negotiate with manufacturers—work the government would otherwise need to perform. OPM’s “broad” rulemaking/administrative authority and audit/disclosure regimes (with cited federal regulations) supplied the “guidance” and “control.”

For TRICARE, Congress required an “integrated pharmacy benefits program” and the Department of Defense contracted with Express Scripts under specifications that controlled formularies, networks, benefit management, and mail-order dispensing. For VHA, Optum’s contract required frequent communication, monitoring, and inspection. Across all three, the relationship looked like contractor implementation of federal tasks under federal supervision.

2) “For or relating to” turns on functional integration: a unified negotiation is an “indivisible” act

The opinion’s central jurisdictional move is to treat Kentucky’s challenged conduct—rebate negotiations and opioid formulary placement—as a single, integrated negotiation performed for all clients. Because the PBMs allegedly “conduct[] a single negotiation on behalf of all of their clients,” the agreements and economic incentives Kentucky attacks necessarily include federal plans. That makes the state-law theories “relate to” federal duties under the broad Plaquemines standard.

Importantly, the court held Kentucky could not “sever” that relationship by pleading a disclaimer: if the alleged conduct is operationally indivisible, a plaintiff cannot avoid § 1442 by promising not to seek recovery for the federal slice. The court thus prioritizes the real-world structure of PBM negotiations over litigation drafting strategies.

3) Colorable defenses: low threshold met by plausible immunity and multiple preemption paths

The PBMs’ defenses were not resolved on the merits; they only had to be “colorable.”

Government-contractor immunity: The PBMs invoked Boyle v. United Technologies Corp., arguing immunity from state tort liability for acts performed pursuant to FEHBA/TRICARE/VHA contracts. The court acknowledged extension beyond military procurement is “open” in the circuit, but under Bennett v. MIS Corp., “at least plausible” is enough.
Preemption: The court found plausible preemption under FEHBA (5 U.S.C. § 8902(m)(1)) and TRICARE (10 U.S.C. § 1103(a)) given Kentucky’s attack on “national formularies” and opioid placement—core “benefits” administration. It also found plausible ERISA preemption under Rutledge v. Pharm. Care Mgmt. Ass'n and persuasive support from Pharm. Care Mgmt. Ass'n v. Mulready for claims that effectively target plan structure/formulary design. Finally, it recognized plausible Medicare Part D preemption (42 U.S.C. § 1395w-112(g)) to the extent Kentucky’s theories conflict with federal Part D standards.

C. Impact

Jurisdictional consolidation of opioid/PBM litigation: For PBMs serving FEHBA/TRICARE/VHA (and often ERISA/Medicare plans), the decision makes federal court a predictable forum when plaintiffs challenge rebate negotiations and formulary placement practices that are operationally unified across client types.
Limits on pleading around § 1442: States and local governments cannot reliably avoid federal officer removal through complaint disclaimers if the alleged PBM conduct is “indivisible” across federal and non-federal business lines.
Broader leverage for federal defenses: Because only “colorable” defenses are needed, defendants can reach federal court without litigating the merits of preemption or immunity at the jurisdictional stage—shifting the key battles to motions to dismiss, summary judgment, or merits trial.
Strategic pleading shift rather than strategic disclaimers: The opinion signals that the only durable way to avoid federal jurisdiction may be to actually plead and pursue claims that are severable from federally supervised conduct (if feasible), not merely to promise not to recover on the federal portion.

4. Complex Concepts Simplified

Federal officer removal (28 U.S.C. § 1442(a)(1)): A special removal rule allowing private parties working for (or under) federal officers to move a state case into federal court when the suit relates to their federally directed work and they have a plausible federal defense. Its purpose is to ensure federal defenses are heard in a federal forum.
“Acting under” a federal officer: More than being regulated. It means helping the federal government carry out its tasks—often via contract—while being subject to federal direction or control.
“For or relating to”: A broad connection test. The challenged conduct need not be commanded by federal contract; it is enough that the conduct has a meaningful link to the defendant’s federally supervised duties.
“Indivisible” conduct: Conduct that is not realistically separable into federal and non-federal pieces—here, a single manufacturer negotiation producing uniform rebate/formulary terms for all clients. If the act is indivisible, attacking it necessarily implicates the federal component.
Colorable federal defense: A defense that is plausible and non-frivolous. The defendant does not have to prove it will win; it only must show a legitimate federal issue to be adjudicated.
Preemption: The doctrine that federal law can displace state law. Here, the court highlighted multiple possible preemption sources (FEHBA, TRICARE, ERISA, Medicare Part D) that could bar or limit state-law regulation of formularies and benefit design/administration.

5. Conclusion

Commw. of Ky. v. Express Scripts, Inc. extends and applies Ohio ex rel. Yost v. Ascent Health Services, LLC to hold that opioid-crisis claims challenging PBMs’ integrated rebate negotiations and formulary placement practices are removable under 28 U.S.C. § 1442 when those practices are performed under federal contracts and supervision. The Sixth Circuit’s key contribution is its firm rejection of jurisdictional “disclaimers” where the allegedly wrongful PBM conduct is operationally “indivisible” across federal and commercial business. The decision strengthens a now multi-circuit trend toward federal adjudication of PBM opioid suits that implicate federally administered pharmacy benefits and reinforces the low-threshold role of “colorable” federal defenses in opening the federal courthouse doors.