Empire HealthChoice Assur. v. McVeigh

In Empire HealthChoice Assur., Inc. v. McVeigh, 126 S. Ct. 2121 (2006), a 5-4 United States Supreme Court held that federal court lacked jurisdiction over a dispute about the meaning of terms in a federal health insurance contract. The contract, between a federal agency and a private carrier, sets forth the details of a federal health insurance program created by federal statute and covering 8 million federal employees.

This decision was a victory for states rights, as the Court found a lack of federal jurisdiction over this matter traditionally governed by state law:

[I]t is hardly apparent why a proper "federal-state balance" would place such a nonstatutory issue under the complete governance of federal law, to be declared in a federal forum. The state court in which the personal-injury suit was lodged is competent to apply federal law, to the extent it is relevant, and would seem best positioned to determine the lawyer's part in obtaining, and his or her fair share in, the tort recovery.

The United States no doubt "has an overwhelming interest in attracting able workers to the federal workforce," and "in the health and welfare of the federal workers upon whom it relies to carry out its functions." But those interests, we are persuaded, do not warrant turning into a discrete and costly "federal case" an insurer's contract-derived claim to be reimbursed from the proceeds of a federal worker's state-court-initiated tort litigation.

This 5-4 split was unusual, with Justice Ruth Bader Ginsburg writing the majority opinion and being supported by Chief Justice John Roberts and Justices John Paul Stevens, Antonin Scalia and Clarence Thomas. A dissent by Justice Stephen Breyer was joined by Justices Anthony Kennedy, David Souter and Sam Alito.

This case illustrates how Justice Sam Alito is not as supportive of states' rights as the other conservative Justices are.