PHILADELPHIA – A federal appellate court has ruled that a class action case alleging the University of Pennsylvania Health System violated a Pennsylvania privacy law by installing a Facebook Pixel on its patient portal – allowing the social media company to access personal health information of its users – will be heard in state court.
On Feb. 21, U.S. Court of Appeals for the Third Circuit judges Cheryl Ann Krause, David J. Porter and Cindy K. Chung found that a lower federal court did properly remand an action from Johnathon Mohr versus the Trustees of the University of Pennsylvania, to state court.
Porter authored the Court’s opinion in this matter.
“Plaintiffs filed a putative class action in state court against the Trustees of the University of Pennsylvania (Penn), which controls and operates the Hospital of the University of Pennsylvania Health System (Penn Medicine). Using mobile devices or desktop computers, patients can access and provide information to Penn Medicine. Plaintiffs allege that Penn Medicine shares patients’ identities, sensitive health information and online activity from its patient portals with Facebook in violation of Pennsylvania privacy law,” Porter said.
“Penn removed the case to federal court, invoking the federal-officer removal statute, 28 U.S.C. Section 1442(a)(1). It argued that, in operating Penn Medicine’s patient portals, it was ‘acting under’ the federal government.”
However, the U.S. District Court for the Eastern District of Pennsylvania rejected that argument and ordered the suit remanded to the Philadelphia County Court of Common Pleas – leading the defendants to appeal that remand decision to the Third Circuit.
But in order for federal court removal to be proper under the statute cited by the defendant, the plaintiff’s claims “must be based upon the defendant ‘acting under’ the United States, its agencies or its officers.”
In this matter, Porter and his colleagues found this was not the case and thus, the case was not proper for federal court jurisdiction.
“Penn argues that the plaintiffs’ allegations regarding Penn Medicine’s patient portal involve conduct that occurred while Penn was acting under the federal government. Penn receives incentive payments from the federal government under the program and avoids reductions in Medicare reimbursements, in part, because it operates Penn Medicine’s patient portal. According to Penn, this relationship shows that it is ‘fulfilling’ the federal government’s policy and thus acting under it. We disagree,” Porter stated.
“The federal government did not delegate any legal authority to Penn to operate a patient portal on behalf of the government. Absent private action, the federal government itself would not be operating any patient portal. When Penn operates Penn Medicine’s patient portal, it is not doing the government’s business; it is doing its own. To be sure, Penn does advance the government’s policy by operating a patient portal that meets certain objectives and measures under the Program. But that is mere compliance ‘with federal laws and regulations.’ Advancing governmental policy while operating one’s own business is not the same as executing a delegated governmental duty.”
While Penn argued it is acting under the federal government because it has a contractual relationship with the government, the Third Circuit found that “simply because a private party has a contractual relationship with the federal government does not mean that it is acting under that federal authority.”
“We must look to the nature of the relationship between the private party and the federal government. Here, that relationship demonstrates that Penn is not acting under the federal government in operating Penn Medicine’s patient portals. Penn also urges us to follow Doe I v. UPMC. There, based on nearly identical facts to plaintiff’s case, the District Court concluded that UPMC acted like a government contractor in operating its patient portal and receiving payments under the program. We reject the court’s holding in Doe I,” Porter said.
“A defendant acts as a government contractor when, for example, a manufacturer produces a product for the federal government, doing so ‘under the specific supervision of…the government.’ But Penn’s relationship to the federal government is nothing of the sort. It is not producing or operating any patient portal for the government; absent private action, the government itself would not provide this service. In short, Penn fails to show that it was acting under the federal government for purposes of Section 1442(a)(1). In reaching this holding, we join at least one of our sister circuits and many District Courts that have addressed nearly identical issues.”
U.S. Court of Appeals for the Third Circuit case 23-1924
U.S. District Court for the Eastern District of Pennsylvania case 2:23-cv-00731
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com