3. Analysis
A. The statutory framework and standard of review
Section 1442(a)(1) allows qualifying defendants connected to federal governmental activity to remove certain state-court actions to federal court. Under the framework applied here, a removing defendant must establish that it:
- Is a “person” within the statute;
- Was acting under the United States, a federal agency, or a federal officer;
- Was acting under color of federal authority; and
- Has a colorable federal defense.
Only the second requirement was dispositive. The court reviewed jurisdiction and removal de novo, meaning independently rather than deferentially, and placed the burden of establishing federal jurisdiction on the providers.
Although remand orders generally face restrictions on appellate review, 28 U.S.C. § 1447(d) permits review in the federal-officer removal setting. That exception supplied appellate jurisdiction here.
B. Precedents cited and their significance
Appellate review and the removal framework
BP P.L.C. v. Mayor & City Council of Balt., 593 U.S. 230 (2021), supported the court’s authority to review the remand orders under § 1447(d). Its role was procedural: it enabled appellate examination of the jurisdictional rulings rather than supplying the substantive test for the providers’ relationship with HHS.
Baker v. Atl. Richfield Co., 962 F.3d 937 (7th Cir. 2020), and Betzner v. Boeing Co., 910 F.3d 1010 (7th Cir. 2018), supplied the standard of review, the removing party’s burden, and the four-part federal-officer removal framework. Both also furnished substantive examples of private entities acting under federal direction.
The controlling distinction: regulation versus delegation
Watson v. Philip Morris Cos., Inc., 551 U.S. 142 (2007), was the opinion’s central authority. There, Philip Morris argued that detailed Federal Trade Commission supervision of cigarette testing made it a person acting under federal authority. The Supreme Court rejected that argument because the relationship remained an ordinary regulator–regulated relationship.
Watson v. Philip Morris Cos., Inc. established that “acting under” requires more than obeying federal law. A private party must assist or help carry out the duties of a federal superior. Even extensive regulatory detail and supervision do not, without more, establish that relationship.
The opinion also invoked Colorado v. Symes, 286 U.S. 510 (1932), through Watson v. Philip Morris Cos., Inc., for the principle that the removal statute should be liberally construed. Crucially, liberal construction is not unlimited construction: statutory language, context, history, and purpose continue to restrict its reach.
Together, these authorities prevented the providers from equating a federally encouraged activity with a delegated federal responsibility.
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.. It involved production of Agent Orange for the Department of Defense. The example illustrated assistance with a governmental undertaking: producing something the government needed to conduct a war, arguably performing work the government otherwise would have undertaken itself.
In Ruppel v. CBS Corporation, 701 F.3d 1176 (7th Cir. 2012), the defendant produced turbines for an aircraft carrier according to government specifications. The opinion emphasized the Navy’s direction, detailed specifications, and close control. That relationship demonstrated both governmental assistance and meaningful federal supervision.
Betzner v. Boeing Co. likewise involved contracted manufacture of heavy bomber aircraft for the United States Air Force under detailed and ongoing military control. In Baker v. Atl. Richfield Co., the defendant supplied wartime raw materials and manufactured them under continuous governmental supervision and detailed specifications.
These cases mattered by contrast. The patient portals were not products commissioned to meet a comparable governmental operational need, and the federal government did not exercise similar control over their design and maintenance.
The court’s reasoning does not make wartime manufacturing the exclusive route to removal. Rather, those precedents illustrate the substantive assistance and supervisory relationship missing from this record.
The closest Seventh Circuit regulatory analogy
Martin v. Petersen Health Operations, LLC, 37 F.4th 1210 (7th Cir. 2022), involved allegations that a nursing home failed to take adequate precautions during the COVID-19 pandemic. The nursing home relied on extensive federal regulation to support removal. The Seventh Circuit rejected that position because regulation did not transform the private facility into a federal actor.
This precedent was especially persuasive because it involved a heavily regulated health care provider. The court applied the same principle here: participation in a comprehensive federal health program does not itself establish that a provider acts under a federal officer.
The opinion’s references to retaining a “private character” concern the statutory removal inquiry. They should not be mistaken for a separate ruling on constitutional state-action doctrine or every possible classification of the defendants.
Insufficient supervision despite a governmental relationship
Panther Brands, LLC v. Indy Racing League, LLC, 827 F.3d 586 (7th Cir. 2016), provided another limiting comparison. The relationship between a private marketing agent and the Army National Guard fell short of the close monitoring and regulation needed for federal-officer removal.
Its significance is that a connection with a governmental entity is not enough by itself. The actual nature and intensity of the relationship matter.
Agreement with other circuits on patient portals
The Seventh Circuit expressly joined five sister circuits that had rejected comparable removal arguments:
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Doe v. BJC Health Sys., 89 F.4th 1037 (8th Cir. 2023), explained that designing private websites is not a basic governmental task.
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Mohr v. Trs. of Univ. of Pa., 93 F.4th 100 (3d Cir. 2024), distinguished advancing government policy through a portal from anything beyond compliance with federal law.
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Martin v. LCMC Health Holdings, Inc., 101 F.4th 410 (5th Cir. 2024), held that compliance with Meaningful Use regulations did not establish action 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 of authority to perform 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 otherwise controlled how the provider supplied electronic-record access.
These authorities reinforced both parts of the Seventh Circuit’s reasoning: private portal operation was not delegated governmental work, and federal program participation did not supply the required control. The decision therefore adds circuit-level authority to an existing consensus rather than creating an entirely new national doctrine.
C. Legal reasoning
1. Advancing federal policy is not performing federal duties
The providers argued that making electronic health records available through portals fulfilled a fundamental federal task. The court rejected the premise. The portals remained websites operated for the providers’ own patients and staff, who received their most direct benefits.
The government’s interest in accessible records did not change the character of that work. Otherwise, any private activity undertaken in response to a federal incentive could become federal governmental activity. The court instead required a meaningful distinction between pursuing federally favored private objectives and helping a federal superior perform governmental responsibilities.
This is a functional inquiry. It asks what the provider was actually doing for the government, not simply whether Congress wanted the activity to occur.
2. Financial incentives did not establish delegation
Incentive payments and potential reimbursement reductions made federal policy economically consequential. Nevertheless, those mechanisms encouraged compliance; they did not establish that HHS had assigned its own operational duties to the providers.
The court therefore treated the financial structure as part of the regulatory program rather than as proof of a government-contractor relationship. Receiving federal money for meeting program objectives was insufficient on these facts.
3. The government set objectives, not detailed operating instructions
The relevant regulations required timely electronic access. One provision required patients to be able to view, download, and transmit health information within four days after it became available to the eligible professional. Those requirements identified a result, but did not prescribe the detailed means of designing or maintaining the portals.
The providers consequently lacked the “unusually close” relationship present in the military-contractor precedents. Their implementation discretion contrasted sharply with manufacturing under detailed governmental specifications and continuous supervision.
Importantly, the two strands of reasoning work together. Detailed regulation alone would not overcome the rule in Watson v. Philip Morris Cos., Inc.; close supervision must concern a relationship that goes beyond ordinary regulatory compliance.
4. The Patient Engagement Playbook supplied guidance, not commands
The providers relied on the Office of the National Coordinator for Health Information Technology’s Patient Engagement Playbook to demonstrate federal direction. But the publication described itself as a compilation of tips and best practices and encouraged providers to use it in ways suited to their practices.
Those features undermined the claim of governmental control. Advisory recommendations cannot be treated as mandatory specifications merely because a federal office publishes them.
5. Failure on one necessary element ended the inquiry
The court did not need to decide whether the alleged tracking conduct sufficiently related to an exercise of federal authority or whether a federal defense was available. Without an “acting under” relationship, the statutory prerequisites were already incomplete.
Accordingly, the opinion neither validates nor rejects any particular substantive federal defense. Its treatment of the other elements is a reservation, not an implicit ruling against the providers.
D. Potential impact
Patient-privacy litigation. Within the Seventh Circuit, providers facing comparable state-law portal-tracking claims cannot establish federal-officer removal merely by citing HITECH participation, Meaningful Use compliance, or associated payments. Such cases remain in state court unless another valid jurisdictional basis exists.
Other regulated industries. The reasoning reinforces a broader limit: extensive federal oversight, financial inducements, and contribution to national policy do not automatically establish a federal-superior relationship. Defendants must demonstrate actual assistance with federal duties and the requisite relationship of direction or control.
Removal practice. Future defendants relying on § 1442(a)(1) will need concrete evidence of delegation and supervision rather than general program descriptions. Governmental operational responsibilities, binding instructions, and actual oversight will be more important than policy alignment alone.
Limits of the holding. The decision does not categorically bar health care providers from invoking federal-officer removal under materially different arrangements. Nor does it decide other routes to federal jurisdiction or the merits of privacy claims. Its significance is the rejection of this particular regulatory-compliance theory.