Bruce Betzner v. Boeing Company ( 2018 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-2582
BRUCE BETZNER AND BARBARA BETZNER,
Plaintiffs-Appellees,
v.
THE BOEING COMPANY,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Illinois.
No. 3:18-cv-01294 — Staci M. Yandle, Judge.
____________________
ARGUED DECEMBER 3, 2018 — DECIDED DECEMBER 14, 2018
____________________
Before SYKES, BARRETT, and ST. EVE, Circuit Judges.
ST. EVE, Circuit Judge. After Bruce and Barbara Betzner
named Boeing as a defendant in their state court personal in-
jury lawsuit, Boeing filed a notice of removal under the fed-
eral officer removal statute, 28 U.S.C. § 1442(a), alleging a gov-
ernment contractor defense. Three days later, the district
court, sua sponte, remanded the lawsuit to state court for lack
of subject-matter jurisdiction, and shortly thereafter, denied
Boeing’s motion for reconsideration. On appeal, Boeing
2 No. 18-2582
argues that the district court erred by requiring evidentiary
submissions to support its notice of removal.1 Boeing further
argues that it alleged sufficient facts to support federal officer
removal under § 1442(a). We agree and reverse.
I. Background
The Betzners filed suit in the Third Judicial Circuit, Madi-
son County, Illinois alleging that during the course of Bruce
Betzner’s employment, he was exposed to asbestos fibers em-
anating from certain products, which caused his mesotheli-
oma. They further contended that defendants, including Boe-
ing, manufactured these products.
Boeing filed a notice of removal under the federal officer
removal statute alleging that Bruce’s deposition and affidavit
show the negligence claims arise from Bruce’s work at Ling
Temco Vought in Dallas, Texas from 1967 to 2015. Relevant to
Boeing, Bruce was involved in the assembly of Boeing B-1 and
B-1B Lancer heavy bomber aircraft manufactured for the
United States Air Force from March 1982 to January 1987. Boe-
ing asserts that when it entered into contracts with the United
States government to design, manufacture, test, and supply
B-1 and B-1B military aircraft, the government controlled the
design and development of the aircraft and required adher-
ence to its detailed specifications.
1 In most removed cases, 28 U.S.C. § 1447(d) prohibits review of a re-
mand order “on appeal or otherwise.” Section 1447(d) provides an excep-
tion for “an order remanding a case to the State court from which it was
removed pursuant to section 1442", therefore, we may consider this ap-
peal. Hammer v. United States Dep't of Health & Human Servs., 905 F.3d 517,
525 (7th Cir. 2018).
No. 18-2582 3
The Betzners did not file a motion to remand or challenge
the factual allegations in the notice of removal. Instead, the
district court, sua sponte, remanded the case concluding that it
lacked subject-matter jurisdiction due to Boeing’s failure to
provide evidentiary support for its government contractor
defense. The district court specifically stated “Boeing’s 71-
page Notice of Removal is devoid of any facts, supporting af-
fidavits, or exhibits supporting its claimed government con-
tractor defense” and “Boeing’s bald assertions are insufficient
to meet the criteria for federal officer jurisdiction.” Without
the benefit of a response brief, the district court also denied
Boeing’s Federal Rule of Civil Procedure 59(e) motion ex-
plaining it was “not required to take Boeing’s allegations at
face value” and that Boeing “simply did not provide sufficient
information” for the court to conclude removal was proper.
II. Discussion
We review subject-matter jurisdiction and the propriety of
the removal of a state-court action de novo. Crosby v. Cooper B-
Line, Inc., 725 F.3d 795, 800 (7th Cir. 2013). The party seeking
removal bears the burden of establishing federal jurisdiction.
Tri-State Water Treatment, Inc. v. Bauer, 845 F.3d 350, 352 (7th
Cir. 2017); Ruppel v. CBS Corp., 701 F.3d 1176, 1180 (7th Cir.
2012). The presumption against removal in ordinary diversity
jurisdiction cases does not extend to the federal officer re-
moval statute. Hammer v. United States Dep’t of Health & Hu-
man Servs., 905 F.3d 517, 526–27 (7th Cir. 2018). Indeed, the
Supreme Court has made clear that courts must liberally con-
strue § 1442(a). Watson v. Phillip Morris Cos., 551 U.S. 142, 147
(2007); Willingham v. Morgan, 395 U.S. 402, 407 (1969).
We begin by correcting the district court’s misimpression
that Boeing was initially required to submit evidence to
4 No. 18-2582
support its notice of removal. The general statute governing
the removal of civil actions requires a defendant to file a no-
tice of removal “containing a short and plain statement of the
grounds of removal.” Dart Cherokee Basin Operating Co. v. Ow-
ens, 135 S.Ct. 547, 553 (2014) (quoting 28 U.S.C. § 1446(a)). “By
design, § 1446(a) tracks the general pleading requirement
stated in Rule 8(a) of the Federal Rules of Civil Procedure.” Id.
When addressing good-faith amount-in-controversy allega-
tions in a Class Action Fairness Act suit, the Dart Cherokee
Court held a “statement ‘short and plain’ need not contain ev-
identiary submissions.” Id. at 551; see also Spivey v. Vertrue,
Inc., 528 F.3d 982, 986 (7th Cir. 2008) (“Once the proponent of
federal jurisdiction has explained plausibly how the stakes ex-
ceed $5 million, then the case belongs in federal court unless
it is legally impossible for the plaintiff to recover that much.”)
(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)).
Dart Cherokee’s holding is not limited to amount-in-contro-
versy allegations as the district court suggested. After Dart
Cherokee, for example, we applied its holding beyond amount-
in-controversy allegations when discussing admiralty juris-
diction as a basis of removal. Lu Junhong v. Boeing Co., 792 F.3d
805, 814–15 (7th Cir. 2015). In doing so, we rejected the notion
that “federal jurisdiction depends on a high degree of cer-
tainty that jurisdictional facts exist.” Id. at 815. Instead, we
held “[j]urisdictional allegations control unless it is legally im-
possible for them to be true.” Id. Even before Dart Cherokee,
we emphasized that a colorable federal defense under
§ 1442(a) need only be plausible. Ruppel, 701 F.3d at 1181–82;
Venezia v. Robinson, 16 F.3d 209, 212 (7th Cir. 1994). Based on
the plain language of § 1446(a), as well as Dart Cherokee and
our precedent, the standard in assessing removal allegations
No. 18-2582 5
under § 1442(a) starts with Rule 8(a)’s short and plain state-
ment requirement.
We thus review Boeing’s allegations in its § 1442(a) notice
of removal under the federal pleading standards. See Ashcroft
v. Iqbal, 556 U.S. 662, 677-78 (2009). Federal officer removal is
proper when the defendant (1) is a person within the meaning
of the statute, (2) is acting under the United States, its agen-
cies, or its officers, (3) is acting under color of federal author-
ity, and (4) has a colorable federal defense. Panther Brands,
LLC v. Indy Racing League, LLC, 827 F.3d 586, 589–90 (7th Cir.
2016); Ruppel, 701 F.3d at 1180–81.
Corporations are persons under § 1442(a), and so, Boeing
has easily satisfied the “person” requirement within the
meaning of the federal officer removal statute. See Panther
Brands, 827 F.3d at 590; Ruppel, 701 F.3d at 1181.
Next, Boeing has sufficiently alleged it was “acting under”
the United States, its agencies, or its officers. “Acting under”
includes situations “where the federal government uses a pri-
vate corporation to achieve an end it would have otherwise
used its own agents to complete.” Ruppel, 701 F.3d at 1181. On
the other hand, “merely being subject to federal regulations
or performing some functions that the government agency
controls is not enough to transform a private entity into a fed-
eral officer.” Panther Brands, 827 F.3d at 590. Here, Boeing
plausibly alleged that it acted under federal officers when it
contracted to manufacture heavy bomber aircraft for the
United States Air Force, and that it acted under the military’s
detailed and ongoing control. In doing so, Boeing’s allega-
tions adequately state that it was assisting or carrying out the
duties of the United States Air Force.
6 No. 18-2582
Boeing has also plausibly alleged the “acting under the
color of federal authority” requirement, which “is distinct
from the ‘acting under’ requirement in the same way a bona
fide federal officer could not remove a trespass suit that oc-
curred while he was taking out the garbage—there must be a
‘causal connection between the charged conduct and asserted
official authority.’” Ruppel, 701 F.3d at 1181 (quoting Jefferson
Cty., Ala. v. Acker, 527 U.S. 423, 431 (1999)). Boeing has suffi-
ciently stated a causal connection between the Betzners’ neg-
ligence claims and its official actions controlled by the mili-
tary, namely, that it was under the sole direction of the United
States Air Force when it manufactured the B-1 and B-1B
Lancer aircraft that allegedly caused Bruce’s asbestos-related
illnesses.
Further, Boeing’s notice of removal sets forth sufficient
factual details regarding its government contractor defense.2
The colorable federal defense requirement fulfills Article III
jurisdiction and reflects Congress’s intent to have federal de-
fenses litigated in federal court. Id. at 1182. “Requiring the de-
fense only be colorable, instead of ‘clearly sustainable,’ ad-
vances this goal” and “at this point, we are concerned with
who makes the ultimate determination, not what that deter-
mination will be.” Id. (internal citations omitted); see also
Willingham, 395 U.S. at 407 (A defendant invoking § 1442(a)
“need not win his case before he can have it removed.”); Ve-
nezia, 16 F.3d at 212 (“A federal defendant need not show that
2 On appeal, the Betzners do not address whether Boeing plausibly
alleged its government contractor defense under Rule 8(a), but rather they
argue that the record was devoid of a factual basis to determine any such
defense. They further assert “Boeing relied on its bare assertions without
sufficient evidence in its Notice of Removal.”
No. 18-2582 7
he is entitled to prevail in order to have access to the federal
forum.”) (emphasis in original).
The government contractor defense shields contractors
from tort liability if they manufacture products for the gov-
ernment in accordance with precise government specifica-
tions. Hercules, Inc. v. United States, 516 U.S. 417, 421–22 (1996);
Boyle v. United Techs. Corp., 487 U.S. 500, 512 (1988). The de-
fense applies where (1) the federal government approved rea-
sonably precise specifications, (2) the manufactured equip-
ment conformed to the government’s specifications, and (3)
the contractor warned the federal government about the
equipment’s dangers that were unknown to the government.
Boyle, 487 U.S. at 512.
Boeing’s plausible allegations include that when design-
ing, manufacturing, supplying, testing, and repairing the B-1
and B-1B aircraft it acted as a government contractor under
the detailed and ongoing direction and control of the United
States military. Boeing also claimed that the military had ex-
clusive control over the design and development of the air-
craft and required adherence to precise specifications. Addi-
tionally, Boeing alleged the aircraft it manufactured con-
formed to the military’s specifications and the federal govern-
ment was independently aware of the potential health haz-
ards related to asbestos exposure.
Because Boeing’s allegations supporting its § 1442(a) no-
tice of removal are plausible on their face, this case belongs in
federal court. Accordingly, the district court erred in conclud-
ing that Boeing was required to submit evidence to support
its removal allegations.
8 No. 18-2582
III. Conclusion
We REVERSE the judgment of the district court and
REMAND for further proceedings consistent with this opin-
ion.