1. Introduction
In consolidated appeals that included Keith Chiaro and Jane Doe’s action against Methodist Hospitals, Inc., the Seventh Circuit held that health care providers did not qualify for federal-officer removal merely because they developed patient portals in response to federal electronic-health-record requirements and financial incentives. Operating these portals advanced federal policy, but it did not establish that the providers were carrying out delegated federal responsibilities under sufficiently close federal supervision.
The underlying lawsuits alleged that hospital websites disclosed patients’ health information through tracking technology without their consent. The jurisdictional question was narrower than those privacy allegations: could the providers transfer the state-law lawsuits to federal court by claiming that they were “acting under” a federal officer when they created and maintained their patient portals?
The court answered no. Applying established Supreme Court and circuit precedent, it distinguished compliance with federal regulation from assistance in performing the government’s own work. Its decision determines the appropriate forum for these lawsuits, not whether the alleged disclosures were unlawful.
2. Parties, Allegations, and Regulatory Background
The consolidated litigation
The four appeals resolved by the opinion involved:
- Brian and Annie Elkins against Southeastern Indiana Health Management Inc., doing business as Columbus Regional Health;
- Kaitlin Lamarr against Goshen Health System, Inc.;
- Jennifer Fleece against the Board of Trustees of the Hancock Regional Hospital; and
- Keith Chiaro and Jane Doe against Methodist Hospitals, Inc.
A fifth appeal, Doe v. Sarah Bush Lincoln Health Center, had initially been consolidated but was dismissed. The court expressly made its holding applicable to the four remaining appeals.
The opinion principally describes the Elkinses’ allegations. They asserted that the “Meta Pixel,” a Facebook tracking tool embedded in Columbus Regional Health’s website, shared their health data without consent. Their putative class action alleged breach of implied contract, unjust enrichment, and violations of the Indiana Deceptive Consumer Sales Act and Indiana Wiretapping Act. The other cases presented substantially similar allegations and the same removal question.
The HITECH Act and Meaningful Use Program
Congress enacted the Health Information Technology for Economic and Clinical Health Act, commonly called the HITECH Act, in 2009. It encouraged adoption of electronic health records through incentive payments to qualifying Medicare-participating providers. Beginning in 2015, providers that failed to satisfy the program’s requirements faced reduced Medicare reimbursements.
The Centers for Medicare and Medicaid Services, or CMS, implemented these provisions through the Meaningful Use Program. Among its objectives was timely electronic access to patients’ health information. Providers established online portals through which patients could access records and communicate with their health care teams.
The providers argued that creating and maintaining these portals under the federal program meant they were “acting under” the Department of Health and Human Services. They therefore removed the lawsuits under 28 U.S.C. § 1442(a)(1). The district courts rejected that argument and remanded the cases to state court.
3. Summary of the Opinion
The Seventh Circuit affirmed the remand orders. It identified two principal deficiencies in the providers’ asserted federal relationship:
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The providers were not performing a delegated governmental task.
Their portals were private websites serving their own patients and staff. Advancing federal health-information policy did not transform that private activity into the government’s business.
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The providers lacked an unusually close supervisory relationship with the government.
The regulations prescribed access objectives without detailed instructions governing portal operation. Nonbinding federal guidance did not supply the missing direction and control.
Because the “acting under” requirement failed, the court did not decide whether the challenged conduct sufficiently related to federal authority or whether the providers possessed a colorable federal defense. It also made no determination about the merits of the privacy claims or whether any class should be certified.
4. The Governing Legal Framework
Section 1442(a)(1) permits removal of certain actions against the United States, federal agencies and officers, and private persons acting under federal officers. As stated in the opinion, a removing defendant must establish that it:
- Is a “person” within the statute;
- Was acting under the United States, its agencies, or its officers;
- Was acting under color of federal authority; and
- Has a colorable federal defense.
The removing party bears the burden of establishing federal jurisdiction. The appellate court reviewed jurisdiction and removal de novo, meaning independently rather than deferentially.
Although the federal-officer removal statute receives a liberal construction, that principle does not eliminate its substantive requirements. A private party must demonstrate more than participation in a heavily regulated industry or responsiveness to federal financial incentives.
5. Precedents Cited and Their Influence
A. Appellate review and jurisdictional standards
BP P.L.C. v. Mayor & City Council of Balt., 593 U.S. 230 (2021), supported appellate jurisdiction under 28 U.S.C. § 1447(d). Although remand orders are generally insulated from appellate review, that provision allows review in the federal-officer-removal setting relevant here. This authority explained why the Seventh Circuit could examine the district courts’ orders.
Baker v. Atl. Richfield Co., 962 F.3d 937 (7th Cir. 2020), supplied the standard of review, the removing party’s burden, and the statutory framework, drawing on Betzner v. Boeing Co., 910 F.3d 1010 (7th Cir. 2018). Both decisions also supplied substantive examples of qualifying federal relationships, discussed below.
B. The controlling distinction: regulation versus delegation
Watson v. Philip Morris Cos., Inc., 551 U.S. 142 (2007), was the opinion’s central authority. Consumers had sued Philip Morris under state unfair-business-practice law. The company invoked detailed Federal Trade Commission supervision of cigarette testing as grounds for federal-officer removal.
The Supreme Court rejected that position. Extensive supervision within an ordinary regulator–regulated relationship was not enough. “Acting under” requires an effort to assist a federal superior in carrying out governmental duties or tasks, rather than simply obeying federal law.
The Seventh Circuit applied that distinction directly: the Meaningful Use Program regulated and incentivized private health care activity, but did not delegate a governmental function to the providers. Even substantial federal influence over private conduct does not necessarily make that conduct federal work.
Colorado v. Symes, 286 U.S. 510 (1932), appeared through Watson v. Philip Morris Cos., Inc. as authority for construing the removal statute liberally. Its role was interpretive, not outcome-determinative: liberal construction remained bounded by the statute’s language, context, history, and purposes.
C. Government contractors as contrasting examples
Winters v. Diamond Shamrock Chemical Co., 149 F.3d 387 (5th Cir. 1998), appeared through the Supreme Court’s discussion in Watson v. Philip Morris Cos., Inc.. A manufacturer producing Agent Orange for the Department of Defense arguably performed work the government otherwise would have had to undertake itself. That example illustrated assistance with governmental responsibilities, rather than ordinary regulatory compliance.
Ruppel v. CBS Corporation, 701 F.3d 1176 (7th Cir. 2012), likewise involved production for military use under government specifications. The Seventh Circuit had recognized that a private manufacturer could act under federal authority when the government used it to accomplish an objective otherwise assigned to government agents. The present opinion also emphasized the Navy’s detailed specifications and close control described in that case.
Betzner v. Boeing Co. involved a contract to manufacture heavy bomber aircraft for the United States Air Force under detailed and ongoing military control. It demonstrated both dimensions missing here: performance of government work and a closely directed relationship.
Baker v. Atl. Richfield Co. involved supplying and manufacturing wartime materials under continuous federal supervision and detailed specifications. It reinforced the distinction between producing something for the government under its direction and operating a private enterprise within a federal regulatory program.
These decisions were contrasts, not a declaration that only military contractors can invoke the statute. Their significance lay in the nature of the work and the relationship, not merely the industry involved.
D. Extensive health care regulation remains insufficient
Martin v. Petersen Health Operations, LLC, 37 F.4th 1210 (7th Cir. 2022), provided the closest existing Seventh Circuit analogy. A nursing home sued over COVID-19 precautions argued that extensive federal regulation supported removal.
The court rejected that argument because regulation does not convert a private entity into a public actor. Here, the same principle defeated the providers’ attempt to treat their compliance with electronic-record requirements as federal service. The reference to a “public actor” served this removal analysis; the opinion did not resolve a separate constitutional state-action question.
E. The need for a sufficiently close federal relationship
Panther Brands, LLC v. Indy Racing League, LLC, 827 F.3d 586 (7th Cir. 2016), concerned a private marketing agent’s relationship with the Army National Guard. That relationship fell short of the closely monitored and highly regulated arrangement necessary for removal.
The present opinion cited it to reinforce that some connection with a federal institution is not enough. The actual direction and supervision must support the claimed subordinate relationship.
F. Agreement with other circuits on patient portals
The court aligned itself with five appellate decisions addressing comparable arguments:
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Doe v. BJC Health Sys., 89 F.4th 1037 (8th Cir. 2023), rejected the characterization of private website design as a basic governmental task.
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Mohr v. Trs. of Univ. of Pa., 93 F.4th 100 (3d Cir. 2024), recognized that patient portals advance federal policy but treated their operation as compliance with federal law, not performance of delegated federal work.
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Martin v. LCMC Health Holdings, Inc., 101 F.4th 410 (5th Cir. 2024), distinguished compliance with Meaningful Use regulations from acting pursuant to a federal officer’s directive.
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Doe v. Cedars-Sinai Health Sys., 106 F.4th 907 (9th Cir. 2024), found no express delegation authorizing the provider to accomplish a basic governmental task on the National Coordinator’s behalf.
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Doe v. Integris Health, Inc., 123 F.4th 1189 (10th Cir. 2024), emphasized that the government neither required tracking technology nor controlled how the provider furnished access to electronic records.
Together, these decisions supplied persuasive support for the same jurisdictional boundary. The Seventh Circuit’s contribution was to adopt that application within its own circuit, rather than announce a departure from existing doctrine.
6. Analysis of the Court’s Legal Reasoning
A. Advancing government policy is not performing government work
The providers’ principal argument treated electronic access to health information as a fundamental federal task because Congress had encouraged it. The court rejected that inference. A governmental policy objective does not make every private action supporting that objective an exercise of delegated governmental authority.
The portals remained privately designed websites serving private providers, patients, and staff. The government benefited indirectly through improved access to health information, but the providers were not shown to be carrying out work assigned to them on the government’s behalf.
This distinction prevents federal-officer removal from expanding to virtually every business participating in a federal incentive program. Otherwise, federal encouragement alone could transform ordinary private activity into federal service.
B. Financial incentives do not establish delegation
The program combined incentive payments with reductions in Medicare reimbursement for noncompliance. Those financial consequences made federal policy consequential for providers, but did not change the legal character of their relationship with the government.
The relevant question was not whether federal money motivated portal development. It was whether the providers assisted federal officers in performing governmental duties. The court found no such delegation in the relationships presented.
C. Performance objectives are different from operational supervision
The regulations required electronic access to health information. One provision discussed by the court required patients to be able to view, download, and transmit information within four days of its availability to the eligible professional.
That requirement specified an outcome, not detailed instructions for building and operating a portal. It therefore differed materially from the government specifications and ongoing control present in the military-production precedents.
Importantly, detailed regulation would not itself automatically establish removal jurisdiction. The opinion’s reasoning requires both a qualifying governmental-assistance relationship and sufficient federal direction; supervision cannot substitute for delegation.
D. The Patient Engagement Playbook did not supply binding direction
The providers also relied on the Office of the National Coordinator for Health Information Technology’s Patient Engagement Playbook. The court examined how that document described itself: a compilation of tips and best practices that providers could adapt to their practices.
Those descriptions undermined any claim that the Playbook imposed mandatory operational instructions. Recommendations permitting substantial private discretion were not equivalent to the detailed specifications and supervision supporting removal in the contractor cases.
E. The jurisdictional ruling remained deliberately narrow
Once the providers failed to establish that they were “acting under” federal authority, the court had no need to resolve the remaining contested removal requirements. In particular, it did not decide whether the alleged tracking activity related sufficiently to federal authority or whether a federal defense was colorable.
The decision therefore neither establishes liability for using tracking technology nor recognizes a defense to the alleged disclosures. Those questions remain separate from the forum question.
7. Potential Impact
Health care privacy litigation
Within the Seventh Circuit, providers facing comparable state-law tracking claims cannot establish federal-officer removal merely by pointing to HITECH participation, Meaningful Use compliance, incentive payments, or general federal guidance. They would need materially different facts demonstrating a qualifying federal relationship.
The immediate consequence is that these four cases return to state court. The decision does not prevent removal under a separate, independently valid jurisdictional ground in another case.
Federal incentive programs more broadly
The reasoning is relevant beyond patient portals. It reinforces the principle that federal funding conditions and policy alignment do not automatically turn private recipients into federal subordinates. Courts must examine what the private entity actually undertook to do for the government and how that work was directed.
Limits of the holding
The opinion does not categorically exclude health care providers from federal-officer removal. A provider performing genuinely delegated federal responsibilities under a materially different arrangement could present a different case. Nor does the decision establish that only formal procurement contracts or military work can qualify.
Its broader significance lies in preserving the boundary between federal regulation of private conduct and private assistance in federal operations.
8. Complex Concepts Simplified
- Removal
- A defendant’s transfer of a lawsuit from state court to federal court when a federal statute authorizes it.
- Remand
- A federal court’s return of a removed lawsuit to state court. Here, remand did not decide whether the plaintiffs’ allegations were true.
- “Acting under” a federal officer
- Assisting a federal superior with governmental duties in a qualifying subordinate relationship—not merely following federal rules.
- Regulation versus delegation
- Regulation tells a private party how it must conduct its own activities. Delegation entrusts it with carrying out governmental work.
- Colorable federal defense
- A plausible defense grounded in federal law. The court did not decide whether the providers had one.
- De novo review
- Independent appellate consideration of a legal issue without deference to the lower court’s conclusion.
- Putative class action
- A lawsuit proposed on behalf of a larger group before the court has approved class treatment.
9. Conclusion
The Seventh Circuit held that creating patient portals under HITECH incentives and Meaningful Use requirements did not make the providers persons “acting under” federal officers. Their activities remained private health care operations subject to federal regulation, not delegated governmental work performed under close federal direction.
By affirming remand, the court reinforced a growing appellate consensus: federal policy encouragement, financial incentives, and regulatory compliance do not, without more, establish federal-officer removal jurisdiction. The underlying privacy claims remain to be adjudicated.