Government Contractor Defense Applied to Crane Such That Motion to Remand to State Court Denied

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The decedent’s family filed a complaint in state court, which was removed to federal court by Crane Co. based upon the federal officer defense. The plaintiffs filed a motion to remand or, in the alternative, to sever all claims other than those against Crane and to remand all other claims. The motion to remand was denied.

The decedent served in the Navy from 1952-56, and was then employed at Bethlehem Steel Sparrows Point Shipyard from 1956-59; from 1959-63, the decedent worked as a laborer at Eastern Stainless Steel. He died from mesothelioma and was allegedly exposed to Crane products while working aboard a Navy vessel.

The federal officer defense, or the government contractor defense when applied to contractors that supply goods to the federal government, states that “Liability for design defects in military equipment cannot be imposed, pursuant to state law, when (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 defects and failure to warn claims. To justify removal to federal court, the defense must be colorable, and the removing defendant must establish a causal connection between the allegedly wrongful conduct and asserted official authority.

Crane filed affidavits stating that Crane made and supplied equipment for use on Navy vessels, which was governed by extensive federal standards and specifications. The court found that Crane submitted ample support for its proposition that the Navy exercised strict control.

The plaintiffs argued this defense was not established because Crane provided no evidence supporting its allegation that the decedent was exposed to Crane products while serving in the Navy at a jobsite where the products were used, and that the products were under complete and direct control of the federal government. However, the court stated: “Given the dearth of specific allegations in Plaintiffs’ complaint regarding any specific product of any particular Defendant, the Court cannot fault Crane Co. for not providing the kind of specificity desired by Plaintiffs. Crane Co. is clearly anticipating that the course of discovery may flesh out what are now, at best, Plaintiffs’ conclusional allegations.”

Although the plaintiffs disclaimed any cause of action that could give rise to federal jurisdiction, the plaintiffs cited no authority allowing such language to bar the federal officer defense where it was otherwise applicable.

The plaintiffs’ motion to sever was likewise denied, since the plaintiffs provided no supporting argument. Further, the presence of cross-claims by all defendants, including Crane, made severance antithetical to judicial economy.

Read the full decision here.