Wrong Standard Applied in Remanding Case against Boiler Manufacturer to State Court; Remand Reversed United States Court of Appeals, Fourth Circuit June 22, 2017

Decedent Joseph Morris worked as a shipbuilder at the Bethlehem Steel Sparrows Point Shipyard from 1948-1970s, and died of mesothelioma in 2015. The plaintiffs commenced this action in Maryland state court, and Foster Wheeler removed pursuant to government contractor immunity. The district court remanded to state court because Foster Wheeler did not make a sufficient showing that it had a colorable federal defense; Foster Wheeler appealed. The Fourth Circuit concluded that the district court applied the wrong standard for determining removability and reversed and remanded the case to the district court to determine whether Foster Wheeler’s removal was timely noticed.

The plaintiffs asserted that the decedent was exposed to asbestos while working in the boiler shop. Foster Wheeler removed, stating that it made boilers for the U.S. Navy under the Navy’s strict specifications, and in doing so acted under an officer or agency of the United States. Foster Wheeler submitted an affidavit from a Foster Wheeler employee who stated that the company designed boilers to match highly detailed ship and military specifications. The plaintiff filed a motion to remand and argued that Foster Wheeler’s notice of remand was untimely and filed more than 30 days after Foster Wheeler learned it had a possible federal defense and it failed to meet statutory requirements, in that the specifications did not restrict Foster Wheeler’s ability to warn individuals of the presence of asbestos.

A private defendant, such as a government contractor, seeking to remove a case under § 1442(a)(1), must show: (1) that it acted under a federal officer; (2) that it has a colorable federal defense; and (3) that the charged conduct was carried out for on in relation to the asserted official authority. 28 U.S.C. § 1442(a)(1).

First, there was no question that Foster Wheeler was a person acting under the Navy. “[C]ourts have unhesitatingly treated the ‘acting under’ requirement as satisfied where a contractor seeks to remove a case involving injuries arising from equipment that it manufactured for the government.” Second, the government-contractor immunity defense had three requirements: (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States. This defense applied to both design defect and failure to warn claims. Here, Foster Wheeler satisfied all three criteria. The district court applied a different standard that did not follow the established criteria, in that because the warnings Foster Wheeler could have given employees were not prohibited by the Navy, the defense did not apply. This implied that unless the government explicitly regulated all possible warnings, Foster Wheeler could not have a colorable defense. This reasoning overlooked the fact that, in specifying some warnings, the government exercised discretion in not requiring additional warnings. Further, the defense need only apply to one claim to remove the case—here the defense applied to the product liability claim with respect to the boilers themselves.

Third, Foster Wheeler established a sufficient connection between the charged conduct and the asserted official authority. The district court applied a stricter standard than that recognized by the statute.

Read the full decision here.


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