In California v. Express Scripts Inc., the Ninth Circuit Court of Appeals considered whether to extend the Supreme Court’s 2023 decision in Coinbase Inc. v. Bielski, which held that a district court must enter an automatic stay pending appeal brought under the Federal Arbitration Act “to an interlocutory appeal of the denial of a motion to compel arbitration” to matters involving federal officer removal. The Ninth Circuit declined to do so.
The underlying case involved claims brought by the state of California against certain pharmacy benefit management companies under the state’s public nuisance statute, alleging liability for contributing to the opioid epidemic through their opioid sale business practices. The defendants removed the case to federal court pursuant to the federal officer removal statute, which “permits a person ‘acting under’ a federal officer to remove claims ‘for or relating to’ the work for the federal officer.” The defendants’ basis for asserting federal officer removal was that their business involved contracts with certain federal departments, including the U.S. Department of Defense, Department of Veterans Affairs, and Office of Personnel Management. The district court granted the state’s motion for remand noting that the filing of an amended complaint, which limited the state’s claims to the non-federal market, “eviscerated Defendants’ ground for removal.” The defendant pharmacy companies appealed the remand order and moved in the district court for a stay of the order pending appeal, arguing that the holding in Coinbase “should be extended to automatically stay litigation during the appeals of remand orders in the federal officer removal context.” The district court denied the defendants’ motion for a stay. The Ninth Circuit affirmed the denial of a stay, finding “Coinbase’s logic is inapposite in the federal officer removal context” and the automatic stay rule is not warranted in the federal officer removal context.
California v. Express Scripts Inc., No. 24-1972 (9th Cir. June 2, 2025).
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