Federal Court of Appeals Remands Case for Determination of Colorable Federal Defenses Alleged by Shipyard

In this case, the plaintiffs’ decedent claimed exposure to asbestos containing thermal insulation while working at the Avondale Shipyard in Louisiana as laborer and painter from 1948-1996. The shipyard at issued worked on contracts for the federal government.

The defendants removed the case under federal officer removal and took the position that removal was proper since the government, through Navy inspectors, was involved in the building of the ships and had control of safety issues during construction. The plaintiffs, on the other hand, argued that removal was improper, as the government did not control the actual shipyard’s safety department.

On appeal, from the U.S. District Court, the U.S. Court of Appeals for the Fifth Circuit analyzed federal removal on a three prong test. The court quickly dispensed of the first requirement and found the shipyard as a “person” within the meaning of the removal statute. The vourt noted the U.S. Supreme Court’s prior recognition of corporate entities as being a “person” for purposes of the statute. The second prong of the test dealt with a factual analysis of whether the federal government was indeed directing the defendant’s conduct which resulted in the plaintiff’s specific injuries. The District Court concluded that no causal connection existed between the two elements of the first prong, and, therefore, did not consider the third prong, whether or not the defendant had a colorable federal defense. The Appellate Court agreed with the District Court’s finding that the requirement to use asbestos insulation did not exonerate the shipyard from liability for purposes of the plaintiffs’ negligence claims. Relying on Bartel v. Alcoa S.S. Co., 805 F.3d 169 (5th Cir. 2015), the court found that even where the federal government had required the use of asbestos insulation, it had not prevented the shipyard from warning Plaintiff about the dangers of asbestos. The court, again relying on Bartel, stated that “the Navy neither imposed any special safety requirements on the shipyard nor prevented the shipyard from imposing its own safety procedures.” At the heart of the plaintiffs’ case was the claim that the defendant’s alleged conduct was not within the direction or control of the federal government.

Read the full decision here.