HITECH Patient-Portal Compliance Does Not Establish Federal-Officer Removal Jurisdiction

1. Introduction

The Seventh Circuit held that private health care providers do not become persons “acting under” federal officers merely by establishing patient portals to satisfy federal electronic-health-record requirements and receive financial incentives. The decision applies the distinction between complying with federal regulation and helping the government perform a delegated governmental task.

Brian and Annie Elkins sued Southeastern Indiana Health Management Inc., doing business as Columbus Regional Health (“CRH”), alleging that Facebook’s Meta Pixel, embedded in CRH’s online webpage, disclosed their health information without consent. Their proposed class action asserted state-law claims for breach of implied contract, unjust enrichment, and violations of the Indiana Deceptive Consumer Sales Act and Indiana Wiretapping Act.

CRH removed the action from Indiana state court under the federal-officer removal statute, 28 U.S.C. § 1442(a)(1). It argued that its creation and maintenance of patient portals under the federal Meaningful Use Program constituted action under the Department of Health and Human Services (“HHS”). The district court rejected that jurisdictional theory and remanded the action.

The appeal was consolidated with similar cases involving Kaitlin Lamarr and Goshen Health System, Jennifer Fleece and the Board of Trustees of the Hancock Regional Hospital, and Keith Chiaro and Jane Doe and Methodist Hospitals. A fifth consolidated appeal was dismissed. The resulting decision governs the four remaining appeals.

The central issue was jurisdictional, not substantive: Did participation in a federally encouraged patient-portal program make the providers sufficiently subordinate to the federal government to invoke federal-officer removal? The court answered no. It did not decide whether the providers unlawfully disclosed patient information.

2. Statutory and Regulatory Background

Congress enacted the Health Information Technology for Economic and Clinical Health (“HITECH”) Act in 2009 to promote health information technology, including electronic health records (“EHRs”). The statute directed HHS to provide incentive payments to qualifying Medicare-participating providers that became “meaningful EHR users.” Beginning in 2015, providers that failed to satisfy the applicable requirements faced reduced Medicare reimbursements.

The Centers for Medicare and Medicaid Services (“CMS”) implemented the statute through the Meaningful Use Program. Its objectives included providing patients timely electronic access to their health information. Providers established online portals through which patients could access records and communicate with their health care providers.

The providers characterized this arrangement as a federal assignment supported by federal payments. The court instead understood it as a regulatory program influencing how private providers conduct their own operations. That distinction controlled the appeal.

3. Summary of the Opinion

The Seventh Circuit affirmed all four remand orders. Federal-officer removal requires the removing defendant to establish that it:

1. Is a “person” within the statute;
2. Was “acting under” the United States, a federal agency, or a federal officer;
3. Was acting under color of federal authority; and
4. Has a colorable federal defense.

The providers failed the second requirement. The court gave two principal reasons:

• No delegated governmental task: The portals were private websites serving the providers and their patients. Advancing federal health-information policy did not convert their operation into government business.
• No unusually close federal supervisory relationship: The regulations specified patient-access objectives, but did not closely direct portal construction or maintenance. Nonbinding federal guidance did not supply the missing control.

Because that failure defeated removal, the court did not decide whether the challenged conduct sufficiently related to an exercise of federal authority or whether the providers possessed a colorable federal defense.

4. Analysis: Precedents Cited

A. Appellate Review and the Removal Framework

BP P.L.C. v. Mayor & City Council of Balt., 593 U.S. 230 (2021)

The court cited this decision in recognizing appellate jurisdiction under 28 U.S.C. § 1447(d). Although remand orders generally face substantial restrictions on appellate review, the statute permits review where removal rests on the federal-officer provision. This precedent supplied the procedural basis for reviewing the district courts’ remand decisions; it did not establish that removal was substantively proper.

Baker v. Atl. Richfield Co., 962 F.3d 937 (7th Cir. 2020)

Baker supplied the governing standard of review: subject-matter jurisdiction and the propriety of removal are reviewed de novo. It also placed the burden of establishing federal jurisdiction on the removing party and stated the four-part federal-officer removal test, drawing on Betzner.

Substantively, Baker also illustrated a qualifying relationship. The defendant supplied raw materials to the government during World War II and manufactured them under continuous governmental supervision and detailed specifications. That production relationship contrasted with the providers’ general obligation to make patient information electronically accessible.

Betzner v. Boeing Co., 910 F.3d 1010 (7th Cir. 2018)

In Betzner, a manufacturer contracted to produce heavy bomber aircraft for the United States Air Force under detailed and ongoing military control. The case supported both the removal framework and the court’s substantive comparison: producing government-required military equipment under close direction differs from operating a private patient portal subject to regulatory objectives.

B. The Controlling Distinction: Regulation Versus Delegation

Watson v. Philip Morris Cos., Inc., 551 U.S. 142 (2007)

Watson provided the central doctrinal foundation. Consumers alleged that Philip Morris’s advertising and packaging violated Arkansas law. The company sought federal-officer removal based on the Federal Trade Commission’s detailed supervision of cigarette testing. The Supreme Court rejected removal because the relationship remained an ordinary regulator-regulated relationship.

The Seventh Circuit drew three propositions from Watson:

• “Acting under” is interpreted broadly, but its reach is not unlimited.
• The relationship ordinarily involves subjection, guidance, or control, together with assistance in carrying out a federal superior’s duties.
• Even extensive regulatory supervision does not, by itself, transform legal compliance into delegated governmental work.

This reasoning directly answered the providers’ position. Their portals furthered federal policy, but furthering policy through regulated private activity was not equivalent to performing a federal officer’s task.

Colorado v. Symes, 286 U.S. 510 (1932)

The opinion cited this case through Watson for the principle that the federal-officer removal statute must be liberally construed. Its role was interpretive rather than factually analogous. The court recognized generous construction while emphasizing that statutory language, context, history, and purpose still impose limits.

Winters v. Diamond Shamrock Chemical Co., 149 F.3d 387 (5th Cir. 1998)

Discussed through Watson, Winters concerned a chemical company producing Agent Orange for the Department of Defense. It illustrated a private entity arguably performing work the government otherwise would have undertaken itself. The contrast was important: the federal government required wartime supplies for its operations, whereas the patient portals remained tools for private providers’ treatment relationships.

C. Government Contractors and Closely Directed Performance

Ruppel v. CBS Corporation, 701 F.3d 1176 (7th Cir. 2012)

Ruppel involved manufacturing turbines for an aircraft carrier according to government specifications. The opinion also noted allegations that the defendant supplied asbestos under Navy direction, with close governmental control over the process.

The case illustrated both dimensions missing here: assistance with a governmental undertaking and an unusually close supervisory relationship. Together, Ruppel, Betzner, and Baker demonstrated why actual performance of closely directed government work can support removal, while participation in a generally applicable regulatory program does not necessarily do so.

Panther Brands, LLC v. Indy Racing League, LLC, 827 F.3d 586 (7th Cir. 2016)

The relationship between a private marketing agent and the Army National Guard fell short of the close monitoring and regulation necessary to establish federal-officer jurisdiction. The Seventh Circuit used this precedent to reinforce that an association with a federal entity is not enough. The nature and intensity of the working relationship matter.

D. Extensive Health Care Regulation Is Insufficient

Martin v. Petersen Health Operations, LLC, 37 F.4th 1210 (7th Cir. 2022)

In this case, a deceased nursing-home resident’s estate alleged inadequate precautions during the COVID-19 pandemic. The nursing home invoked federal-officer removal because it operated under extensive federal regulation. The Seventh Circuit rejected that argument, explaining that regulation does not turn a private entity into a public actor.

This was the closest existing Seventh Circuit health care analogy. Like the nursing home, the providers remained private actors notwithstanding substantial federal involvement in their industry. Federal incentives and requirements did not change the essential character of their activities.

E. Agreement with Other Circuits on Patient Portals

The court aligned itself with five sister circuits that had rejected materially similar removal theories:

• Doe v. BJC Health Sys., 89 F.4th 1037 (8th Cir. 2023): The Eighth Circuit explained that designing private websites is not a basic governmental task. This supported the Seventh Circuit’s characterization of the portals as private operational infrastructure.
• Mohr v. Trs. of Univ. of Pa., 93 F.4th 100 (3d Cir. 2024): The Third Circuit distinguished advancing government policy from acting under federal authority. Operating a portal could promote federal objectives while remaining mere compliance with federal law.
• Martin v. LCMC Health Holdings, Inc., 101 F.4th 410 (5th Cir. 2024): The Fifth Circuit held that compliance with Meaningful Use regulations did not establish action pursuant to a federal officer’s directive. This directly reinforced the rejection of the providers’ program-participation theory.
• Doe v. Cedars-Sinai Health Sys., 106 F.4th 907 (9th Cir. 2024): The Ninth Circuit found that the HITECH Program’s requirements did not demonstrate an express delegation to perform a basic governmental task on the National Coordinator’s behalf. This supported the distinction between regulatory participation and delegated responsibility.
• Doe v. Integris Health, Inc., 123 F.4th 1189 (10th Cir. 2024): The Tenth Circuit emphasized that the government neither required tracking technologies nor otherwise controlled how the provider furnished EHR access. This supported the conclusion that general access requirements do not establish federal operational control.

These decisions did not replace the controlling analysis under Watson. They confirmed that the Seventh Circuit’s application of that analysis was consistent with a substantial body of appellate authority addressing the same setting.

5. Analysis: Legal Reasoning

A. A Federal Policy Objective Is Not Necessarily a Federal Task

The providers argued that creating patient portals fulfilled a fundamental federal governmental task. The court rejected that characterization. Although the portals advanced the federal goal of accessible electronic records, they were designed and operated by private providers primarily for their own patients and staff.

The distinction concerns responsibility, not simply usefulness. Many private activities benefit the government or promote public policy. Federal-officer removal requires more: the private actor must assist a federal superior in carrying out governmental duties. Otherwise, regulatory programs could bring broad categories of ordinary private litigation into federal court.

The court did not hold that only military contractors can qualify, or that private benefits necessarily preclude removal. Rather, its contractor precedents illustrated the governmental undertaking and supervisory relationship absent from these cases.

B. Financial Incentives Did Not Convert Compliance into Delegation

The HITECH framework combined incentive payments with reimbursement reductions. Those financial consequences made compliance important, but did not establish that HHS had engaged the providers to perform its own work.

The opinion therefore distinguishes financial encouragement from delegated service. A payment intended to change a private entity’s conduct is not, without more, equivalent to procuring performance of a government task. Participation in the Meaningful Use Program remained regulatory compliance despite its financial consequences.

C. Outcome Requirements Did Not Establish Detailed Operational Control

The relevant regulations required providers to give patients the ability to view, download, and transmit health information within a prescribed period. They did not closely specify how the providers should construct or maintain their portals.

This left the providers with substantial operational discretion. Unlike the detailed production requirements in the military-contractor cases, the regulations identified an access objective rather than establishing an unusually close federal supervisory relationship.

The two aspects of the court’s analysis must be read together. Detailed regulation alone would not necessarily suffice under Watson; nor did the general regulation present here establish the close relationship that the providers claimed.

D. Nonbinding Guidance Did Not Supply the Missing Relationship

The providers also relied on the Office of the National Coordinator for Health Information Technology’s “Patient Engagement Playbook.” The court stressed that the Playbook described itself as a compilation of tips and best practices and encouraged practices to use it in ways that suited their circumstances.

Those features made it advisory rather than directive. Recommendations for improving private operations did not demonstrate federal supervision comparable to the detailed, ongoing control found in qualifying contractor relationships.

E. The Court Decided Only the Necessary Jurisdictional Question

Because the providers could not establish that they were “acting under” federal authority, the court did not address the remaining disputed removal requirements. In particular, it did not decide whether the alleged disclosures related sufficiently to federal authority or whether a federal defense was colorable.

Nor did the court adjudicate the state-law claims, authorize tracking practices, or determine whether any patient information had actually been disclosed unlawfully. Affirmance of remand resolved the forum question presented, not liability.

6. Potential Impact

A. Patient-Tracking and Health Privacy Litigation

The decision substantially restricts a specific removal theory in the Seventh Circuit: providers cannot establish federal-officer jurisdiction merely by pointing to HITECH incentives, Meaningful Use requirements, and general portal guidance. Comparable state-law privacy actions will not qualify for removal on that basis alone.

The holding does not eliminate every possible basis for federal jurisdiction. A different jurisdictional ground or materially different federal relationship would require separate analysis.

B. Federally Regulated and Funded Private Entities

The reasoning has broader relevance to entities operating under federal reimbursement, grant, or incentive programs. Federal funding, regulatory importance, and alignment with national policy do not automatically establish that an entity acts under a federal officer.

Future defendants relying on § 1442(a)(1) will need to identify the governmental responsibility they actually help perform and substantiate the asserted federal direction. General program participation will be insufficient where it describes only regulation of private activity.

C. Greater Consistency Across Circuits

By joining five sister circuits, the Seventh Circuit strengthens the appellate consensus against treating ordinary HITECH portal participation as delegated federal service. Its contribution is principally a context-specific application of established removal doctrine, rather than a departure from it.

7. Complex Concepts Simplified

Removal

A procedure allowing a defendant to transfer an eligible lawsuit from state court to federal court.

Remand

An order returning a removed case to state court. Here, the asserted federal-officer ground did not establish federal jurisdiction.

Subject-matter jurisdiction

A court’s legal authority to hear a category of dispute. It is separate from whether the plaintiff should win.

“Acting under” a federal officer

Helping carry out a federal superior’s duties within the required subordinate relationship—not merely obeying federal rules.

Regulation versus delegation

Regulation directs how private actors conduct their own activities. Delegation involves entrusting them with governmental work.

Colorable federal defense

A plausible defense grounded in federal law, rather than one already established as successful. The court did not decide whether such a defense existed here.

De novo review

Independent appellate consideration of a legal question, without deferring to the district court’s legal conclusion.

Putative class action

A lawsuit proposed on behalf of a larger group before a court has certified that group as a class.

8. Conclusion

The decision establishes that private providers’ compliance with HITECH patient-access requirements, supported by federal incentives and advisory guidance, does not itself satisfy the “acting under” requirement for federal-officer removal.

Its significance lies in preserving the boundary between federally influenced private conduct and delegated governmental service. The remand orders stand, leaving the patients’ underlying state-law claims unresolved.