Hammer v. U.S. Dept. of Health and Human Services

In action by plaintiff seeking declaration that defendant’s set-off of its own debt (generated under Affordable Care Act) to defunct insurance company violated Ill. circuit court order, Dist. Ct. erred in remanding case back to Ill. circuit court (that had been removed to federal court by defendant under federal officer removal statute, 28 USC section 1442), where Dist. Ct. believed that it lacked removal jurisdiction of plaintiff’s request for declaratory relief, and where Dist. Ct. otherwise believed that abstention doctrine applied. Defendant established all four requirements for removal under section 1442, and Dist. Ct. erroneously believed that qualifying “civil action” under section 1442(d)(1) was limited to ancillary proceeding that pertained only to pre-suit discovery disputes. Moreover, instant request for declaratory relief was “ancillary” proceeding within text of section 1442, where only part of state court action was removed to federal court. Also, defendant had colorable defense in its contention that it had not waived sovereign immunity. Also, Dist. Ct. could not rely on abstention doctrine to support instant remand order, where federal issues in case concerning sovereign immunity overshadowed state-law issues.