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Maryland District Court Allows Private Government Contractor “Acting Under” Government’s Control to Invoke Federal Officer Jurisdiction, 28 U.S.C. §1442

James Joyner v. AC & R Insulation Co., et al.
United States District Court for the District of Maryland, No. CCB-12-2294 (D. Md. Mar. 7, 2013)
by Jhanelle Graham, Law Clerk
Semmes, Bowen & Semmes (www.semmes.com)

In James Joyner v. AC & R Insulation Co., et al., the United States District Court for the District of Maryland was asked to determine the propriety of a motion for removal of an asbestos case to federal district court under the federal officer removal statute, 28 U.S.C. § 1442(a)(1), on the basis of the government contractor defense; and whether, pursuant to 28 U.S.C. § 1367(a), claims against one defendant could be severed from claims against all other remaining defendants.

Plaintiff, James Joyner, was a twenty-two-(22) year veteran of the United States Coast Guard who was diagnosed with malignant pleural mesothelioma in March 2012. Three (3) months later, he brought an asbestos product-liability action in the Circuit Court for Baltimore City. The defendants allegedly manufactured and distributed various products that contained asbestos. Some of these products were allegedly sold to the United States Navy and United States Coast Guard. Invoking the government contractor defense to tort liability, Defendant, Crane Co., removed Joyner’s action to the United States District Court for the District of Maryland under the federal officer/removal statute, 28 U.S.C. § 1442(a)(1). Plaintiff Joyner first asked the court to remand the entire case to the Circuit Court for Baltimore City. In the event that motion failed, Joyner moved to sever one of his claims against Crane Co. from the rest of the suit and to remand the other claims to the State court. A hearing on both motions was held on February 8, 2013.

In granting the motion to sever and granting in part and denying in part the motion to remand, the district court explained that Congress enacted the federal officer removal statute, 28 U.S.C. §1442(a)(1), to abrogate the well-pleaded complaint rule in certain cases against an officer of the United States or a person “acting under” a federal officer. See Jefferson Cnty. v. Acker, 527 U.S. 423, 431 (1999). Pursuant to § 1442(a)(1), a civil or criminal defendant may remove a case to federal court if the removing defendant (1) is either a federal officer or a “person” who acted under the direction of a federal officer, (2) raises a colorable federal defense to the plaintiff’s claims, and (3) demonstrates a causal nexus between the plaintiff’s claims and the conduct performed under color of federal office. Pack v. AC & S, Inc., 838 F. Supp. 1099, 1101 (D. Md. 1993).

After reviewing conflicting case law in various jurisdictions, the Maryland district court found the analysis in Hagen v. Benjamin Foster Co., 739 F. Supp. 2d 770, 776 (E.D. Pa. 2010) cogent and consistent with the general removal standard. Hagen was a Pennsylvania asbestos multidistrict litigation, in which District Judge Eduardo C. Robreno examined the conflicting line of cases and “decline[d] to follow those courts that have seemingly required a heightened showing,” where the removing defendant must submit evidence enabling the court to “carefully weigh the plausibility of the proffered defense.” Id. at 779–82. Rather, Judge Robreno stated that “[i]t is the sufficiency of the facts stated—not the weight of the proof presented—that matters.” Id. at 782–83.

Adopting this standard, the district court determined that Joyner’s motion to remand would be denied if Crane Co. “identifie[d] facts which, viewed in the light most favorable to the defendant, would establish a complete defense at trial.” Id. at 783. The district court found that Crane Co. had plausibly alleged the satisfaction of each element of the federal officer removal statute. The first element of the statute, Section 1442(a)(1), authorizes removal by a person “acting under” the direction of a federal officer. “The words ‘acting under’ are broad, and . . . the statute must be liberally construed.” Watson v. Philip Morris Cos., 551 U.S. 142, 147 (2007). Moreover, the scope of §1442(a)(1) is widely recognized to embrace private firms that manufacture products for the United States subject to the “strict control” of the federal government. In its notice of removal, Crane Co. declared that it designed and manufactured its valves “pursuant to precise contracts and specifications approved by the Navy” and under the Navy’s “direct and detailed control.” Also, according to Crane Co., several of the relevant ships were constructed for the Navy and later transferred to the Coast Guard. The court concluded that Crane Co. plausibly alleged that it was acting under the strict control of the federal government when it manufactured and sold its valves to the United States Navy. In addition, the court found that Crane Co. plausibly alleged facts supporting its claim that the Navy prohibited any warnings concerning the dangers posed by asbestos. These allegations, in concert with the allegation that Joyner served on ships built for the Navy, were sufficient to demonstrate, at this preliminary stage, that Crane Co. was “acting under” the “direct and detailed control” of federal officials when it allegedly failed to provide the requisite warnings.

Under the second element of the statute, Section 1442(a)(1), removal “must be predicated upon averment of a federal defense.” Mesa v. California, 489 U.S. 121, 139 (1989). Crane Co. invoked the government contractor defense, which, when applicable, shields government contractors from certain state-law tort liabilities. Although first articulated in a suit alleging design defects, “[i]t is well established that the government contractor defense . . . may operate to defeat a state failure-to-warn claim.” Oliver v. Oshkosh Truck Corp., 96 F.3d 992, 1003 (7th Cir. 1996). Stating that “a colorable federal defense need only be plausible,” the court held that Crane Co. alleged sufficient facts to demonstrate that the government contractor defense plausibly shielded it from liability for its alleged failure to warn Joyner of the dangers associated with asbestos exposure, because Crane Co. was “acting in compliance with reasonably precise specifications imposed on it by the United States.”

The third element of the federal officer removal statute requires the removing defendant to demonstrate a causal nexus between the plaintiff’s claims and the conduct performed under color of federal office. According to the district court, when removal is predicated on the government contractor defense, the “causal nexus” requirement is ordinarily satisfied whenever the removing defendant is able to establish a colorable government contractor defense. Thus, because the court found that Crane Co. plausibly alleged sufficient facts to support removal pursuant to §1442(a)(1) and the government contractor defense, the case was properly removed.

The final issue before the district court was whether all claims, except the claim related to Crane Co.’s valves, should be severed and remanded. In deciding that severance and remand were appropriate, the court had to resolve whether it had supplemental jurisdiction over the remaining claims and, if so, whether the court should decline to exercise its supplemental jurisdiction. Pursuant to 28 U.S.C. § 1367(a), the court found that it had supplemental jurisdiction over the remaining claims because there was no question that the claims against each defendant formed part of the same case or controversy. The more difficult question was whether the court should decline to exercise its supplemental jurisdiction. The court’s exercise of supplemental jurisdiction is permitted only when (1) the claim over which the court has supplemental jurisdiction “raises a novel or complex issue of State law,” (2) the claim “substantially predominates over” the claim over which the court has original or removal jurisdiction, (3) the court has dismissed all claims over which it has original or removal jurisdiction, or (4) there are “exceptional circumstances” and “compelling reasons.” 28 U.S.C. §1367(c). Weighing each of these considerations, the Maryland district court concluded that severance was appropriate because: (1) The other claims clearly predominate over Joyner’s claim against Crane Co.; (2) all of Joyner’s claims were based on state law; (3) federal jurisdiction was invoked only because Crane Co. asserted a federal defense; and (4) severance would advance fundamental principles of fairness and comity. Therefore, the court held that all claims against Crane Co. would remain in federal court, and the claims against the other defendants would be remanded to the Circuit Court for Baltimore City.