[00:00:01] Speaker 02:
All right, ready to roll.

[00:00:02] Speaker 02:
Let's call 23-62090 versus Integris Health or Integris.

[00:00:09] Speaker 02:
How do you say that?

[00:00:11] Speaker 01:
May it please the court?

[00:00:12] Speaker 01:
Good morning.

[00:00:13] Speaker 01:
My name is Kyle Cutts.

[00:00:14] Speaker 01:
I represent Integris Health.

[00:00:17] Speaker 01:
This lawsuit challenges Integris's use of certain technologies on its website.

[00:00:23] Speaker 01:
Integris operates its website much like it operates its hospitals, for the benefit of its patients and the communities it serves.

[00:00:32] Speaker 01:
But Integris's website serves another important function, a governmental function.

[00:00:38] Speaker 01:
Integris operates its website in furtherance of the governmental objective of an interoperable network of healthcare technologies.

[00:00:48] Speaker 01:
The district court reviewing the record determined that by engaging in the challenge conduct, Integris was merely engaging in an incentive program and not complying with regulations.

[00:01:03] Speaker 01:
But we contend, Your Honors, that the involvement of Integris here goes well beyond engagement in an incentive program

[00:01:10] Speaker 01:
and is furthering the government's objective of creating this network of information technology.

[00:01:17] Speaker 01:
It's true the regulations are heavily involved here, but this case is a far cry from Watson.

[00:01:23] Speaker 01:
There, Philip Morris was following detailed regulations in order to test low tar cigarettes, a decidedly non-governmental contact.

[00:01:34] Speaker 01:
Here, by contrast, the regulations define the federal objectives

[00:01:39] Speaker 01:
and oversight that guide integrates in the creation of the envisioned infrastructure.

[00:01:44] Speaker 03:
So what is the basic governmental task that's at issue here for purposes of the removal statute?

[00:01:50] Speaker 01:
The basic governmental task, Your Honor, is ensuring that integrates' patients have the ability to engage meaningfully with their electronic health records.

[00:02:00] Speaker 04:
Does the government have the ability or the power to create patient portals?

[00:02:07] Speaker 04:
for private health providers?

[00:02:10] Speaker 01:
The government has received through first the 2004 executive order and then the HITECH Act.

[00:02:16] Speaker 04:
I mean to create them itself.

[00:02:18] Speaker 04:
Can the government go out and create health portals?

[00:02:22] Speaker 01:
I don't know if the government itself can create the health portals.

[00:02:27] Speaker 04:
What it can do... And if they can't delegate that responsibility to you or you can't be performing a government function?

[00:02:34] Speaker 01:
I believe what the government can do is engage in a quasi-contractual relationship with Integra to provide something that the government has decided it needs.

[00:02:45] Speaker 01:
In 2004, President Bush outlined goals of the meaningful use program, saying that what he wanted to see was an interoperable network of healthcare technology.

[00:02:55] Speaker 01:
That was slow to start off, and it required the High Tech Act in 2011 to incentivize private health care providers to assist the government in the provision of that interoperable network.

[00:03:09] Speaker 04:
In any of those regulations in the Patient Engagement Playbook, is there any discussion of the use of trackers?

[00:03:20] Speaker 01:
To my knowledge, the answer is no.

[00:03:23] Speaker 03:
That's what we have found as well.

[00:03:25] Speaker 03:
So are you asking us to infer that?

[00:03:28] Speaker 01:
What we're asking the court to conclude is to find that the government did indeed provide the instruction to Integris to help create this network.

[00:03:38] Speaker 01:
We're also finding that implicit in that instruction is the ability of Integris to determine the means by which it complies with its government mandate.

[00:03:48] Speaker 01:
We've submitted with our papers the declaration of William Hudson, who explains that the technologies at issue here

[00:03:54] Speaker 01:
were deployed in furtherance of the objectives of the Meaningful Use Program and help Integra satisfy its government-mandated obligations.

[00:04:05] Speaker 03:
So participation is entirely voluntary, right?

[00:04:08] Speaker 01:
Participation in the Meaningful Use Program is entirely voluntary.

[00:04:12] Speaker 01:
Once a hospital system has elected to participate in the Meaningful Use Program

[00:04:18] Speaker 01:
then there are required steps that the government, excuse me, the hospital must satisfy in order to, at first, to gain additional Medicare and Medicaid benefits and over time to avoid penalties or reductions in those benefits.

[00:04:33] Speaker 03:
So it used to be an incentive and now it's a penalty, is that correct?

[00:04:36] Speaker 01:
That's correct, Your Honor.

[00:04:37] Speaker 03:
How should we be thinking about that change?

[00:04:40] Speaker 01:
I think in either an incentive or as a reduction, it demonstrates control of the government over the private entity that exhibits the close relationship that Watson talks about when it discusses control and whether a private entity is acting under the federal government for purposes of the federal officer removal statute.

[00:05:03] Speaker 02:
What takes us out of the traditional regulator regulated context and makes it

[00:05:10] Speaker 02:
more intrusive.

[00:05:12] Speaker 01:
Watson explains that regulations can show supervision.

[00:05:16] Speaker 01:
That was the case in Watson itself where the FTC was supervising Philip Morris in the production of low tar cigarettes.

[00:05:23] Speaker 01:
Regulations in and of themselves are insufficient to establish the acting under relationship because they don't demonstrate assistance.

[00:05:34] Speaker 01:
And that's the complementary part of the acting under analysis.

[00:05:38] Speaker 01:
Are you supervised by the government and are you assisting the federal government

[00:05:42] Speaker 01:
in providing something the government has needed.

[00:05:44] Speaker 01:
We would claim that we were doing both here.

[00:05:47] Speaker 01:
We're supervised through the regulations and we're assisting the government through the creation and maintenance of that interoperable network.

[00:05:56] Speaker 01:
And what the government has determined here is that it wants patients, Integra's patients, other hospitals' patients, to engage in certain specific conduct that demonstrates engagement with their electronic health records.

[00:06:10] Speaker 01:
viewing, using, downloading, transmitting.

[00:06:14] Speaker 01:
This is the behavior that the government has determined shows that patients have been empowered with the ability to access their health records and make determinations about those health records.

[00:06:24] Speaker 04:
But again, there's nothing anywhere in the regs, there's nothing anywhere in the handbook, the engagement playbook that says anything about using trackers.

[00:06:36] Speaker 01:
That's correct, Your Honor, and we believe that goes to the second... Well, and that's what you're being sued for.

[00:06:42] Speaker 01:
That's correct.

[00:06:44] Speaker 01:
The question of whether the use of these technologies falls within the ambit of the federal officer removal statute, I think, is best addressed in the second prong of the statute, which is the causal connection prong, which asks, is the challenge conduct, were we engaging in the challenge conduct,

[00:07:03] Speaker 01:
which is here, the use of the technologies, because or while we're engaged in furthering the government's objective.

[00:07:11] Speaker 04:
Well, you first have to show that you're acting as a government agent in terms of using these trackers.

[00:07:18] Speaker 04:
I think... I mean, you're not being... This case has nothing to do with the fact that you did indeed set up patient portals.

[00:07:29] Speaker 01:
This lawsuit challenges the way, it's our view, it's our theory of the case, which courts credit under the causal connection prong, that we engaged in the challenge conduct here, the use of these technologies on the website in part in furtherance of our goal of meeting the meaningful use requirements, which is done under federal direction and control.

[00:07:58] Speaker 04:
What is your best site for federal direction to mine information from the patients?

[00:08:09] Speaker 01:
I would direct the court to Isaacson versus Dow, which was cited with favor in the Suncor case, which explains that when analyzing whether there is a causal connection between the government direction and the challenge conduct here,

[00:08:27] Speaker 01:
that you credit the defendant's theory of the case and you ask whether the challenge conduct occurred because or while the private entity was engaged in the activity furthering the governmental interest.

[00:08:39] Speaker 01:
Part of this analysis arises from the 2000 amendment to the federal officer removal statute.

[00:08:45] Speaker 01:
There was some concern that the federal officer removal statute had been read too narrowly

[00:08:51] Speaker 01:
And so Congress had amended it in 2011 to add or relating to the challenge conduct, which was intended to relax or expand the scope of the statute and keep it in line with the Supreme Court's instruction that the statute should be liberally construed.

[00:09:07] Speaker 03:
How should we be thinking about the circuit cases that don't help you?

[00:09:11] Speaker 01:
So to my knowledge, there are four circuit cases that have come out the other way in here, the third, the fifth,

[00:09:18] Speaker 01:
the eighth and the ninth.

[00:09:20] Speaker 01:
And I think that the fundamental, and although there's unique analysis in each one of them, I think a common thread that runs through them is an over-reliance on the concept of delegation.

[00:09:33] Speaker 01:
Courts have looked at this issue and go, we're not seeing any delegation.

[00:09:36] Speaker 01:
Delegation, of course, was a key word in the Watson decision.

[00:09:40] Speaker 01:
But I think these courts, the other appellate courts, respectfully, are putting too much emphasis on this delegation idea.

[00:09:47] Speaker 01:
Delegation, after all, was a concept introduced by Philip Morris in the briefing saying the FTC delegated us the authority to make sure these low tar cigarettes were safe.

[00:09:58] Speaker 01:
The Supreme Court held, we see no evidence of such delegation.

[00:10:02] Speaker 01:
And critically, and I think this is the language that I would guide the court to when thinking about our case, the Supreme Court said critically,

[00:10:09] Speaker 01:
nor do we see any contractual relationship, any payment, or any principal agent relationship that would suggest the close relationship necessary to create the type of relationship that gives rise to federal officer removal.

[00:10:25] Speaker 01:
So delegation is absolutely one way in which, after Watson, one way in which a private entity may show government control and show that it's acting under the government, but it's not the exclusive way.

[00:10:40] Speaker 01:
And so I think there's an overreliance on that.

[00:10:43] Speaker 01:
Equally, when thinking about these other cases, I do think there is an overemphasis on whether the government would have created patient portholes for itself.

[00:10:53] Speaker 01:
It's quite possible that the government may have, given the direction that the national coordinator was vested with and that Congress echoed.

[00:11:03] Speaker 01:
the necessary of creating these interoperable networks.

[00:11:06] Speaker 01:
But instead of doing that, the government enlisted private entities.

[00:11:10] Speaker 01:
So I don't think the question is, is Integris, you know, does the patient portal belong to the government or does Integris' website, would the government have created its own patient portal?

[00:11:23] Speaker 01:
In fact, the government has created things like the patient portal because the government, of course, is a provider of healthcare, one of the, if not the largest provider of healthcare,

[00:11:33] Speaker 01:
In 2004, it was contemplated that electronic health systems, early electronic health systems that were operated by the Department of Defense and the VA could be shared with private entities to further the goal.

[00:11:48] Speaker 02:
You may have already answered this question in responding to Judge McHugh, but if you had not put the tracking code in your website, would you have been out of compliance with the

[00:12:01] Speaker 02:
government's program requirements?

[00:12:05] Speaker 01:
No, I don't believe so.

[00:12:08] Speaker 02:
And they never ordered or instructed the companies to add this type of tracking code, right?

[00:12:16] Speaker 01:
That's correct, Your Honor.

[00:12:18] Speaker 01:
Rather, the technologies on the website are one of the means by which Integris ensures that it's in compliance with the meaningful use program.

[00:12:29] Speaker 02:
Well, if you have that kind of discretion on what to include in the website without government instruction, doesn't that tend to make this look more like it would be outside the scope of the nondiscretionary program?

[00:12:44] Speaker 01:
I would liken it, Your Honor, to the rural electrification cases, which were cited in our brief.

[00:12:50] Speaker 01:
This is Butler, Cessna, Carver, in which private, non-for-profit entities were enlisted by the federal government to bring electricity to underserved communities.

[00:13:02] Speaker 01:
They had that instruction, but they also had the freedom to determine the means by which they did so.

[00:13:07] Speaker 01:
And here, it's the means by which we choose to comply with the meaningful use program, in part, are being challenged here.

[00:13:14] Speaker 04:
But again, you weren't ordered to open these portals.

[00:13:18] Speaker 04:
It was discretionary.

[00:13:20] Speaker 04:
He didn't have to participate at all.

[00:13:22] Speaker 01:
That's correct.

[00:13:23] Speaker 01:
There was no requirement to participate in the meaningful use program.

[00:13:26] Speaker 02:
What is the scope of the Medicaid or Medicare reimbursement for these programs?

[00:13:32] Speaker 02:
Is it per patient or how does the funding economics work?

[00:13:38] Speaker 01:
I believe it's per patient, and I believe that the meaningful use criteria seek to establish a percentage of patients engaging in the sought-after behavior.

[00:13:51] Speaker 01:
I'm happy to answer additional questions.

[00:13:52] Speaker 01:
However, if there are none, I'll reserve the remainder of my time.

[00:13:55] Speaker 01:
Thank you very much.

[00:13:59] Speaker 00:
Good morning, your honors.

[00:14:00] Speaker 00:
May it please the court, Michael I. Davia for Appellee.

[00:14:04] Speaker 00:
I want to start off with the point that Judge McHugh and Judge Timkovich that you all had raised.

[00:14:10] Speaker 00:
What brings the parties to court and federal court here is appellants removal under the federal officer statute premised entirely on this meaningful use program.

[00:14:22] Speaker 00:
In this case, the allegations of this case, it's not the button that allows patients to access their medical records that brings us to court.

[00:14:31] Speaker 00:
Nobody has a problem with that.

[00:14:32] Speaker 00:
And it's also not the patient's ability to access their patient records.

[00:14:38] Speaker 00:
Nobody has a problem with that either.

[00:14:39] Speaker 00:
Those are the issues that are at the heart of the meaningful use program.

[00:14:44] Speaker 00:
And what brings the parties to court is what defendants did with the information that they collected surreptitiously

[00:14:51] Speaker 00:
when patients went to the portal or when they went on their website and typed in something about their health conditions or made an appointment with a doctor.

[00:15:03] Speaker 00:
And it's that privacy violation, that commercial activity that the defendant chose to engage in

[00:15:11] Speaker 00:
that is at issue in this case.

[00:15:14] Speaker 00:
And as we heard from my friend on the other side, none of that has anything to do with the meaningful use program.

[00:15:20] Speaker 00:
My friend on the other side explained that his client could have complied with the meaningful use program without having to install these tracking technologies that transmit private information to third parties.

[00:15:36] Speaker 00:
From the get-go, we have this claim that the meaningful use program or that these tracking technologies are somehow furthering the meaningful use program without any explanation.

[00:15:49] Speaker 00:
From the start, we're 100 miles away from a federal officer sort of relationship.

[00:15:57] Speaker 00:
Even just looking at the meaningful use program itself,

[00:16:00] Speaker 00:
Watson has been emphatic, was emphatic, and I think Judge McHugh in Suncor, you also explained this, that regulation by itself is simply not enough to confer federal officer status for acting under purposes.

[00:16:15] Speaker 03:
But we have more than that here, right?

[00:16:17] Speaker 03:
Because we have a penalty for noncompliance.

[00:16:20] Speaker 00:
Well, Your Honor, with respect,

[00:16:23] Speaker 00:
A penalty is really a normal attribute of any regulation.

[00:16:27] Speaker 00:
If you don't follow the regulation, you could be subject to a penalty.

[00:16:32] Speaker 00:
I don't see how that takes us out of the arena of regulated conduct and brings us into this close supervision, tightly monitored relationship.

[00:16:44] Speaker 03:
So you would say that it wouldn't matter if it were construed as an incentive either?

[00:16:48] Speaker 00:
That's exactly correct.

[00:16:50] Speaker 00:
I think that's what the district court said as well when the district court basically said that this actually is even less than a regulatory program because it's entirely voluntary and all they're getting is either a penalty or I guess they used to get incentives that that was phased out.

[00:17:11] Speaker 00:
The third, the fifth, the eighth, the ninth circuits all sort of agreed that this was just a straightforward application of Watson and that the task at issue here simply is not a governmental function.

[00:17:26] Speaker 00:
I think what I heard when I was listening to the argument is that

[00:17:33] Speaker 00:
you know, the question is not just whether a private actor is helping the government, it's helping with what?

[00:17:40] Speaker 00:
And here there's simply no evidence that the, nothing introduced in the record or in the notice of removal that would suggest that the federal government would come in and start building patient portals for the hospital, the private actor's patients.

[00:17:57] Speaker 00:
And we know that because

[00:18:00] Speaker 00:
Because they haven't, right?

[00:18:02] Speaker 00:
This was a program that was designed to further some sort of a task, just like a regulation, to encourage a certain behavior.

[00:18:13] Speaker 00:
And so the government is not in the business of providing these patient portals.

[00:18:19] Speaker 00:
And Integris is not providing the government with the patient portals, right?

[00:18:25] Speaker 04:
Let me interrupt.

[00:18:27] Speaker 04:
I've been waiting for you to take a breath.

[00:18:29] Speaker 04:
Sorry, sorry.

[00:18:30] Speaker 04:
I got excited.

[00:18:31] Speaker 04:
Does it matter whether we're dealing with the public portal or the private patient portal?

[00:18:38] Speaker 00:
Your Honor, I don't think it does, and for two reasons.

[00:18:41] Speaker 00:
One, because at the end of the day, we're still at

[00:18:44] Speaker 00:
interpreting the meaningful use program, which is a regulatory framework.

[00:18:48] Speaker 00:
We're parsing regulations.

[00:18:50] Speaker 00:
And so really, the meaningful use program is a non-starter to begin with.

[00:18:55] Speaker 00:
But to the extent that we throw in the private side, I think that brings us 100 miles even further because the meaningful use program, to the extent it has any applicability here, only pertains to the private side of the portal.

[00:19:11] Speaker 00:
I don't think it moves the needle in any way.

[00:19:14] Speaker 00:
And if anything, I think it cuts the opposite way if we try to parse out.

[00:19:18] Speaker 00:
And I would also point out that the Eighth Circuit actually addressed this issue in a separate opinion following the BJC health system, where it also agreed that it made no difference whether the allegations were premised on the private or the public portal.

[00:19:37] Speaker 03:
say to your adversary's argument that the circuit decisions that go your way overemphasized delegation?

[00:19:48] Speaker 00:
Well, Your Honor, I don't understand the other side to be saying that they were delegated any sort of authority.

[00:19:54] Speaker 00:
I think that's what the circuits have said is that there's, you know, in Watson in particular, I think the Supreme Court, Justice Breyer wrote,

[00:20:04] Speaker 00:
that delegation is usually explicit.

[00:20:07] Speaker 00:
The government just doesn't willy-nilly have some sort of an implied delegation when it's delegating its authority.

[00:20:15] Speaker 00:
And so I don't see any sort of overemphasis.

[00:20:19] Speaker 00:
I think what the courts were saying is here, there's no basic government task.

[00:20:24] Speaker 00:
And so

[00:20:25] Speaker 00:
this isn't something that the government is involved in.

[00:20:27] Speaker 00:
They're just trying to regulate or encourage a certain behavior, and that's simply not enough under Watson and other circuit precedent to confer federal officer status.

[00:20:39] Speaker 00:
And I think that brings me to my next point, which is

[00:20:42] Speaker 00:
you know, what is the limiting principle here?

[00:20:45] Speaker 00:
I listened to the argument, I read the briefs, and I just don't see one.

[00:20:50] Speaker 00:
I don't see how we can allow federal officer status in this case, but not in even the facts in Watson, where, you know, the cigarette manufacturer was under the strict scrutiny of the federal government to have all these testing mandates.

[00:21:05] Speaker 00:
And, you know, even I think the federal government even specified certain

[00:21:13] Speaker 00:
label, you know, things that have to be on the label, right?

[00:21:16] Speaker 00:
Here, I think we heard some argument where the federal government kind of says, here's the objective, figure out how to accomplish it, right?

[00:21:23] Speaker 00:
So there's autonomy here in terms of how they follow this program.

[00:21:28] Speaker 00:
And so I think that, you know, I don't see how you can have federal officer status here, but not in that case or even in other cases where there's some sort of delegation or there's some sort of

[00:21:40] Speaker 00:
activity that the government is interested in regulating, right?

[00:21:44] Speaker 04:
Farmers can take... Well, one of the arguments that was made this morning was that the rural electric cases are somehow helpful because you have a task that the government once performed, but you're given your own ingenuity to figure out how best to perform it.

[00:22:08] Speaker 00:
Right, and I think the key distinction between the rural electric cases and this case

[00:22:13] Speaker 00:
is that the federal government created those entities.

[00:22:16] Speaker 00:
They were in themed instrumentalities of the state.

[00:22:19] Speaker 00:
I don't think Integris is trying to assert that the federal government came and created it.

[00:22:24] Speaker 00:
It's a purely private entity.

[00:22:26] Speaker 00:
And so I think you still do have a much closer relationship in the rural electric cases where they were deemed an instrumentality of the case and were created by the federal government to further some sort of purpose.

[00:22:43] Speaker 00:
At the end of the day, I think the touchstone of this is the federal government asking them to produce something.

[00:22:55] Speaker 00:
I think I heard my friend on the other side cite Isakson versus Dow Chemical.

[00:23:01] Speaker 00:
That was one of the Agent Orange cases where the federal government came in and

[00:23:06] Speaker 00:
asked these companies to basically produce something that was being a chemical that was being used in the Vietnam War.

[00:23:14] Speaker 00:
And I think there was actually criminal penalties if they didn't comply with that and didn't agree to do that.

[00:23:20] Speaker 00:
And so I think that that case is so far off base from what we have here where at the end of the day, they don't even have to comply with the meaningful use program.

[00:23:29] Speaker 00:
They can choose not to be in it.

[00:23:31] Speaker 00:
And so for these reasons, Your Honor, unless the panel has further questions, I would respectfully request that the court follow the fifth, the eighth, the ninth, and the Third Circuit and affirm.

[00:23:51] Speaker 02:
Thank you, Counsel.

[00:23:53] Speaker 02:
Mr. Katz, you had some rebuttal.

[00:23:59] Speaker 01:
Thank you, Your Honors.

[00:24:00] Speaker 01:
If Your Honors are looking for the connection between the use of the challenge technologies and the claims here, and Integris's operation under the Meaningful Use Program, I direct the Court to the Declaration of William Hudson at A-221.

[00:24:18] Speaker 01:
If Your Honors were looking for corroboration of what Mr. Hudson says... I'm sorry.

[00:24:22] Speaker 04:
Can you give me that slide?

[00:24:23] Speaker 01:
I'm terribly sorry.

[00:24:25] Speaker 01:
A-221, the Declaration of William Hudson.

[00:24:29] Speaker 01:
specifically paragraph 10, in which he explains how the technologies assist integrists in understanding how users interface with the public website and the obstacles they may face in navigating to the patient portal.

[00:24:46] Speaker 01:
If you're looking for confirmation of that, I would point you to plaintiff's complaint in which they corroborate what Mr. Hudson says.

[00:24:53] Speaker 01:
Granted, they couch it as advertising and marketing, but they don't dispute

[00:24:58] Speaker 01:
And what they say is in line with the basic point that these technologies help Integris understand what's going on its website, which Integris claims is in furtherance of the Meaningful Use Program.

[00:25:10] Speaker 01:
Thank you for the time.

[00:25:11] Speaker 02:
We'd ask the court to reverse.

[00:25:12] Speaker 02:
Thank you, counsel.

[00:25:13] Speaker 02:
We appreciate the arguments.

[00:25:15] Speaker 02:
Your excuse in the case shall be submitted.

[00:25:18] Speaker 02:
We're going to take about a 10 minute break.