SCOTUS Rejects Federal Question Jurisdiction over FEHBA Plan Reimbursement Claim

The Supreme Court has just issued a decision in Empire Healthchoice Assurance Inc. v. McVeigh, No. 05–200 (Jun. 15, 2006). Here is an excerpt from the Syllabus:

Under the Federal Employees Health Benefits Act of 1959 (FEHBA), the Office of Personnel Management (OPM) negotiates and regulates health-benefits plans for federal employees. See 5 U. S. C. §8902(a). . . .

OPM has contracted with the Blue Cross Blue Shield Association (BCBSA) to provide a nationwide fee-for-service health plan administered by local companies (Plan). . . . Petitioner Empire HealthChoice Assurance, Inc. (Empire), administers the BCBSA Plan as it applies to federal employees in New York State. Respondent Denise McVeigh (McVeigh) is the administrator of the estate of Joseph McVeigh (Decedent), a former Plan enrollee who was injured in an accident. This case originated when a state-court tort suit brought by McVeigh against third parties alleged to have caused the Decedent's injuries terminated in a settlement. Empire filed this suit in federal court invoking 28 U. S. C. §1331, which authorizes jurisdiction over "civil actions arising under the ... laws ... of the United States." Empire sought reimbursement of the $157,309 it had paid under the Plan for the Decedent's medical care, with no offset for McVeigh's attorney's fees or other litigation costs in the state-court tort action. The District Court granted McVeigh's motion to dismiss for want of subject-matter jurisdiction.

. . .

Held: Section 1331 does not encompass Empire's suit.

Justice Ginsburg delivered the opinion of the Court, in which Roberts, Stevens, Scalia, and Thomas joined. Justice Breyer filed a dissenting opinion, in which Kennedy, Souter, and Alito joined.

Commentators will likely be evaluating whether this case reflects a new uncertainty about federal question jurisdiction wrought by the Court's decision last year in Grable & Sons v. Darue, 545 U.S. 308 (2005). Observers are also certain to highlight the fact that Justices Scalia and Alito found themselves on opposite sides of this decision.