Federal Officer Jurisdiction Is Alive and Well: Ninth Circuit Affirms Jurisdiction for Navy Equipment Manufacturer

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Federal Officer Jurisdiction Is Alive and Well: Ninth Circuit Affirms Jurisdiction for Navy Equipment Manufacturer

The Ninth Circuit Court of Appeals’ recent opinion in Leite v. Crane Co., 2014 WL 1646924 (9th Cir. April 25, 2014), affirmed a decision by the Hawaii Federal District Court denying a motion to remand after finding that a Navy equipment manufacturer had established a “colorable” federal defense based on the federal officer removal statute, 28 U.S.C. § 1442. 

In Leite, the plaintiffs, both machinists at the Pearl Harbor Naval Shipyard, allegedly developed mesothelioma caused by exposure to asbestos while working on various equipment on board numerous U.S. Naval vessels.  The plaintiffs filed separate lawsuits in Hawaii state court under the state tort law theory that the defendants failed to warn them about the hazard of asbestos posed by work with and around equipment, including valves manufactured by defendant Crane Co., that the defendants sold to the U.S. Navy.  Crane Co. timely removed both lawsuits to federal court on the basis that they acted under an officer of the United States “for or relating to any act under color of such office.” 28 U.S.C. § 1442(a)(1).   

Though the district court acknowledged conflicting case law in other jurisdictions, the court denied the plaintiffs’ motions to remand. The plaintiffs filed for interlocutory appeal with the Ninth Circuit, which consolidated the two cases.

In affirming the district court’s denial of the motions to remand, the Ninth Circuit found that Crane Co. had satisfied the three elements to invoke the federal officer removal statute by showing: (1) Crane is a “person” within the meaning of the statute, (2) a causal nexus exists between the plaintiffs’ claims and the actions Crane took pursuant to a federal officer’s direction, and (3) Crane has a “colorable” federal defense to the plaintiffs’ claims as set forth in Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1251 (9th Cir. 2006). 

In order to substantiate its allegations of federal officer jurisdiction, Crane Co. submitted affidavits and documentary evidence from four individuals: retired Rear Admiral David Sargent, Jr.; retired Rear Admiral Roger Horne, Jr.; Dr. Samuel Forman, a medical doctor who conducted extensive research on the extent of the Navy’s knowledge of asbestos hazards; and Anthony Pantaleoni, Crane’s vice president of Environment, Health, and Safety.  In response, the plaintiffs submitted extensive evidence, including military specifications, technical manuals, warning label guides, and deposition excerpts to contest federal jurisdiction.

The Leite court noted that the plaintiffs raised several novel arguments that had not been decided by the Ninth Circuit, including whether a defendant can simply allege the necessary facts to invoke the federal officer removal statute, or must the defendant prove those facts at the removal stage.  The plaintiffs also argued that even if actual proof is required, the district court should resolve evidentiary challenges to the defendant’s evidence before deciding whether removal jurisdiction exists.  Lastly, the plaintiffs argued that the district court should resolve factual issues when the existence of jurisdiction turns on disputed factual issue.

Addressing these arguments, the Leite court noted that Fed. R. Civ. P. 8(a)(1) requires only “a short and plain statement of the grounds for the court’s jurisdiction” and that, at the pleading stage, the court must accept the allegations as true and draw all reasonable inferences in the nonmoving party’s favor when deciding whether the allegations are sufficient as a legal matter to invoke the court’s jurisdiction.  The Leite court also noted that, while the party seeking federal jurisdiction bears the burden of proving by a preponderance of the evidence that each of the requirements for subject matter jurisdiction has been met, if the existence of jurisdiction turns on disputed factual issues, the district court may resolve those factual disputes itself.  The court also noted that defendants enjoy much broader removal rights under the federal officer removal statute than they do under the general removal statute.

However, given the evidence submitted by the plaintiffs, the Ninth Circuit required Crane Co. to support its allegations regarding jurisdiction with competent proof.  The court held that “Crane’s affidavits establish that it has a colorable federal defense” because the evidence submitted by Crane Co. established that the Navy issued detailed specifications governing the form and content of all warnings that equipment manufacturers were required to provide, both on the equipment itself and in accompanying technical manuals.  Crane Co.’s evidence also established that the Navy was directly involved in preparing the manuals, which included safety information about equipment operation and that equipment manufacturers could not include warnings beyond those specifically required and approved by the Navy.  Lastly, Crane Co. established that the Navy’s specifications did not require equipment manufacturers to include warnings about asbestos hazards.  As a result, the court held that “because the very act that forms the basis of plaintiffs’ claims—Crane’s failure to warn about asbestos hazards—is an act that Crane contends it performed under the direction of the Navy,” a sufficient nexus exists to establish federal officer jurisdiction.

The Ninth Circuit’s decision in Leite provides further support for federal officer jurisdiction for equipment manufacturers in asbestos cases involving allegations of exposure on board U.S. Navy vessels. 




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