Health Law Daily Wrap Up, ELECTRONIC HEALTH RECORDS—5th Cir.: Medical center concedes that it did not act pursuant to federal officer’s direction, (Jun 11, 2024)

By Susan L. Smith, JD, MA

A medical center lost its appeal of the decision to remand a lawsuit that alleged that the center violated customers’ privacy rights by exposing patients’ personal information to third parties.

In an unpublished opinion, the U.S. Court of Appeals for the Fifth Circuit concluded that a medical center that removed a patient’s state court petition to federal court invoking federal officer jurisdiction did not act pursuant to a federal officer’s direction for the purposes of federal officer removal. Thus, the court affirmed the district court’s remand to state court. The patient, who brought a class action suit in Louisiana state court, alleged that the medical center’s online patient portal violated its customers’ privacy rights by exposing patients’ personal information to third parties without their permission. Contending that removal was proper because the Health Information Technology for Economic and Clinical Health Act (HITECH), Pub. L. No. 116-321, allegedly encouraged healthcare providers to adopt health care technology, including electronic health records (EHR), the medical center removed the case to federal court. The patient requested the district court to remand the case to state court, arguing that that there was neither federal question nor diversity jurisdiction, and the federal officer removal statute was inapplicable. The district court granted the patient’s remand request. The appellate court affirmed the district court’s remand after determining that the medical center could not invoke the federal officer removal statute because it failed to show that it acted pursuant to a federal officer’s directions (Horton v. Willis-Knighton Medical Center, No. 23-30653 (5th Cir. June 5, 2024)).

Lawsuit. The patient’s complaint alleged that the medical center embedded the Meta-Pixel tool on its website, resulting in the disclosure of patients’ private health information to Facebook for the purpose of targeted advertising in violation of the Louisiana Electronic Surveillance Act.

Court’s analysis. The appellate court stated that the question presented on appeal was whether the medical center acted pursuant to a federal officer’s direction by creating online patient portals. To successfully remove a lawsuit to federal court the medical center had to show that (1) it had asserted a colorable federal defense, (2) it was a “person” within the meaning of the statute, (3) that it had acted pursuant to a federal officer’s directions, and (4) the charged conduct was connected or associated with an act pursuant to a federal officer’s directions.

The medical center contended that removal was proper because it was acting pursuant to a directive from the federal government to make patient records available online. Specifically, it created the online patient portal at issue based on the HITECH Act’s encouragement to adopt EHR and incentive payments issued to healthcare providers that comply with certain electronic records requirements.

The court explained that, in a virtually identical case, the Fifth Circuit recently joined two other circuits that had addressed the question and held that the connection between the HITECH Act and the development of online patient portals was too attenuated to find that healthcare providers were acting pursuant to direction from the federal government. Specifically, in Martin v. LCMC Health Holdings, Inc. (see Hospital does not act under federal government direction when maintaining online patient portal that utilizes tracking pixels, May 16, 2024), the court held that a hospital does not act under the direction of the federal government when it maintains an online patient portal that utilizes tracking pixels because the connection between the hospital and the federal government is too attenuated to show any delegation of legal authority. The medical center conceded that the issues in its case are identical to those in Martin v. LCMC Health Holdings, Inc. Thus, the appellate court held that the medical center did not act pursuant to a federal officer’s direction for the purposes of the federal officer removal.

The case is No. 23-30653.

Judge: Per curiam.

Attorneys: Stephen Jay Herman (Fishman Haygood, L.L.P.) for Jacqueline Horton. Lamar Powell Pugh (Pugh, Pugh & Pugh, L.L.P.) for Willis-Knighton Medical Center d/b/a Willis-Knighton Health System.

Companies: Willis-Knighton Medical Center d/b/a Willis-Knighton Health System

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