The U.S. Supreme Court ruled today that federal courts do not have jurisdiction over an FEHB carrier’s lawsuit to enforce its subrogation/reimbursement rights against an FEHB plan member. Empire Healthchoice Assurance, Inc. v. McVeigh, — U.S. — , No. 05-200 (PDF copy), affirming the Second Circuit’s opinion. According to the majority opinion, written by Justice Ruth Bader Ginsburg, in this 5-4 decision, “Federal courts should await a clear signal from Congress before treating” these recovery cases as arising under federal law for purposes of federal court jurisdiction under 28 U.S.C. § 1331 (Slip op, p. 2). Justice Breyer, supported by Justices Kennedy, Souter, and Alito, wrote a strong dissent that makes perfect sense to me.
The Supreme Court soon will grant certiorari and remand the related Cruz case (No. 04-1657) back to the Seventh Circuit for reconsideration in light of McVeigh.
This is the first time that the Supreme Court has issued an opinion interpreting the FEHB Act, a statute that the Wall Street Journal’s Law Blog described as “relatively obscure.” (What does that say about my blog??)