Federal-officer removal; 28 USC § 1442(a)(1); Action against pharmacy benefit managers (PBMs); Opioid litigation; Federal Employees Health Benefits Act (FEHBA); TRICARE; Acts under color of federal office; Indivisible federal conduct; Colorable federal defense; Government-contractor immunity; Boyle v United Techs Corp; Federal preemption; ERISA; Medicare Part D; Remand; Ohio ex rel Yost v Ascent Health Servs LLC; Chevron USA Inc v Plaquemines Parish

The court held that defendant-PBMs properly removed Kentucky’s opioid-related lawsuit under the federal-officer removal statute. Kentucky sued PBMs in state court, alleging they contributed to the opioid crisis by negotiating preferred formulary placement for opioids in exchange for rebates and fees. The PBMs removed under § 1442, and the district court remanded. On appeal, the court held that the three factors set forth in the statute required it “to permit removal of this case to federal court.” First, the PBMs acted under federal officers because they helped federal agencies carry out FEHBA, TRICARE, and Veterans Health Administration duties, and “remain subject to” federal “‘contractual control’ and supervision.” Second, Kentucky’s claims related to acts under color of federal office because “Kentucky seeks to impose liability based on the PBMs’ indivisible federal conduct,” including negotiations conducted for federal and non-federal clients together. Third, the PBMs raised colorable federal defenses, including government-contractor immunity and preemption, and the court emphasized that a removing party need only “raise[] a colorable federal defense.” The court declined to remand for the district court to apply Yost first because the dispute turned “principally [on] a question of legal theory rather than historical fact.” Reversed and remanded.