No, they have to sue in state court. The lawsuit is just a simple disagreement over a contract, which state courts handle all the time. The federal law that created the insurance program doesn't say that these types of cases belong in federal court. Just because the government is connected to the insurance plan doesn't automatically make it a 'federal case' that needs a special federal judge to decide it.

Yes, they should be able to sue in federal court. Everything about this situation is federal: it's a federal program, for federal workers, and the money being argued over would go back to the U.S. government. To make sure the rules are the same for every federal worker no matter what state they live in, federal courts should be in charge of these cases.

No, the federal court can't hear Empire's case. The case is about a contract between a federal agency and Empire, not a federal law. Just because it involves a federal worker's health insurance doesn't mean it belongs in federal court. It's really a case about specific facts, which should be handled in state court. When Congress made the laws about federal worker health insurance, it didn't say these kinds of pay-back cases should be in federal court.

I think the federal court can hear this case. It's about a contract related to a federal program, so federal law should apply. The federal government cares about these contracts being handled the same everywhere. Even if the court uses state law to decide the case, choosing to use state law is a federal decision. So the case still belongs in federal court.

A case "arises under" federal law if a "well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law."

However, there is "a special and small category" of state law cases in which federal question jurisdiction may lie.

In Empire Health-choice, a health insurance carrier for federal employees sought reimbursement of benefits in federal court under the Federal Employees Health Benefits Act (FEHBA) on the ground that an enrollee had recovered damages for his injuries in a state-court tort action.

Also, a federal question is substantial and important where "its resolution is both dispositive of the case and would be controlling in numerous other cases."

Significantly, the Supreme Court has made clear that Grable calls for federal jurisdiction over only a "special and small category" of cases.

And "if a claim does not present `a nearly pure issue of law, one that could be settled once and for all and thereafter would govern numerous cases,'but rather is `fact-bound and situation-specific,'then federal question jurisdiction will generally be inappropriate. "

The Supreme Court has cautioned that Grable permits federal jurisdiction only in a "slim category" of cases and that "it takes more than a federal element `to open the "arising under" door.'"

—this case presents a nearly pure issue of federal law, and none of the other relevant factors weighs against federal jurisdiction.

—stressed that federal question jurisdiction under Grable was appropriate when a case presented a "nearly pure issue of law," rather than a "fact-bound and situation specific" issue.

No. A private insurance carrier's contract-based claim for reimbursement from the proceeds of a federal employee's state-court tort action does not arise under federal law and therefore does not establish federal question jurisdiction. The Federal Employees Health Benefits Act (FEHBA) itself does not create a federal cause of action for a carrier's reimbursement claim; its only jurisdictional provision applies to suits *against* the United States. Furthermore, the claim is not governed by federal common law because there is no demonstrated significant conflict between federal interests and the application of state contract law. The claim also does not fall into the narrow category of state-law claims that arise under federal law, as described in *Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg.*, because the reimbursement issue is a fact-bound and situation-specific matter of contract interpretation, not a substantial and contested issue of federal law whose resolution belongs in a federal forum.

Yes. The carrier's claim for reimbursement arises under federal law because the dispute concerns the meaning of terms in a federal contract that is part of a comprehensive federal program. The case is pervasively federal: the program was created by a federal statute for federal employees, funded by the U.S. Treasury, and the contract was negotiated by a federal agency. Under the doctrine of *Clearfield Trust Co. v. United States*, federal common law should govern such a dispute to ensure national uniformity, as the United States is the real party in interest. Because the claim is founded upon federal common law, it 'arises under' federal law for the purposes of jurisdiction under 28 U.S.C. § 1331.

No, federal courts do not have jurisdiction over Empire's reimbursement claim against McVeigh's estate. Empire's claim is based on the contract between the federal agency (OPM) and the carrier (Blue Cross Blue Shield), not on FEHBA itself. While the contract relates to a federal employee health benefits program, that alone does not confer federal jurisdiction. The dispute is fact-bound and situation-specific, making federal jurisdiction inappropriate. Congress considered jurisdictional issues when enacting FEHBA but did not provide for federal jurisdiction over reimbursement claims between carriers and beneficiaries. FEHBA's preemption provision does not confer federal jurisdiction either. Empire's claim does not fit within the narrow category of cases where federal-question jurisdiction exists because federal law is a necessary element of the claim.

I believe there is federal jurisdiction over Empire's reimbursement claim under 28 U.S.C. § 1331. The claim arises under federal common law because it involves the interpretation of a federal contract - the contract between OPM and Blue Cross Blue Shield. Under Clearfield Trust Co. v. United States, obligations to and rights of the United States under its contracts are governed exclusively by federal law. The federal government has important interests in uniform interpretation of these contracts. Even if state law is borrowed as the rule of decision, the decision to do so is itself a matter of federal common law. Therefore, Empire's claim arises under federal law for jurisdictional purposes.

Empire HealthChoice Assurance, Inc. v. McVeigh

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