Douglas Leite v. Crane Company ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DOUGLAS P. LEITE; MARY ANN K. No. 12-16864
LEITE,
Plaintiffs-Appellants, D.C. No.
1:11-cv-00636-
v. JMS-RLP
CRANE COMPANY, a Delaware
corporation; AURORA PUMP
COMPANY, a foreign corporation;
BAYER CROPSCIENCE, INC.,
successor-in-interest to Rhone-
Poulenc AG Company, a foreign
company, AKA Amchem Products,
Inc., AKA Benjamin Foster Products
Company; UNION CARBIDE
CORPORATION, a New York
corporation; AIR & LIQUID SYSTEMS
CORPORATION, successor-by-merger
to Buffalo Pumps, Inc., a New York
corporation; CERTAINTEED
CORPORATION, a Delaware
corporation; CLEAVER-BROOKS,
INC., a Delaware corporation;
GOULDS PUMPS, INC., a Delaware
corporation; IMO INDUSTRIES, INC.,
individually and as successor-in-
interest to Delaval Turbine, Inc., a
Delaware corporation, FKA Delaval
Steam Turbine Company, FKA IMO
2 LEITE V. CRANE CO.
Delaval, Inc., FKA Transamerica
Delaval, Inc.; INGERSOLL RAND
COMPANY, a New Jersey
corporation; JOHN CRANE, INC., a
Delaware corporation; THE LYNCH
COMPANY, INC., a Hawaii
corporation; METROPOLITAN LIFE
INSURANCE COMPANY, a New York
corporation; WARREN PUMPS, LLC,
a Delaware corporation; THE
WILLIAM POWELL COMPANY, an
Ohio corporation; VELAN VALVE
CORPORATION, a New York
corporation; COPES-VULCAN, a
subsidiary of SPX Corporation, a
Delaware corporation; ATWOOD &
MORRILL, a subsidiary of Weir
Valves & Controls USA, Inc., a
Massachusetts Corporation; DOES 1
TO 25,
Defendants-Appellees.
DAVID THOMPSON, No. 12-16982
Plaintiff-Appellant,
D.C. No.
v. 1:11-cv-00638-
LEK-RLP
CRANE COMPANY, Delaware
corporation; AURORA PUMP OPINION
COMPANY, a foreign corporation;
BAYER CROPSCIENCE, INC.,
successor-in-interest to Rhone-
LEITE V. CRANE CO. 3
Poulenc AG Company, a foreign
company, AKA Amchem Products,
Inc., AKA Benjamin Foster Products
Company; UNION CARBIDE
CORPORATION, a New York
corporation; AIR & LIQUID SYSTEMS
CORPORATION, successor-by-merger
to Buffalo Pumps, Inc., a New York
corporation; CERTAINTEED
CORPORATION, a Delaware
corporation; CLEAVER-BROOKS,
INC., a Delaware corporation;
GOULDS PUMPS, INC., a Delaware
corporation; IMO INDUSTRIES, INC.,
individually and as successor-in-
interest to Delaval Turbine, Inc., a
Delaware corporation, FKA Delaval
Steam Turbine Company, FKA IMO
Delaval, Inc., FKA Transamerica
Delaval, Inc.; INGERSOLL RAND
COMPANY, a New Jersey
corporation; JOHN CRANE, INC., a
Delaware corporation; THE LYNCH
COMPANY, INC., a Hawaii
corporation; METROPOLITAN LIFE
INSURANCE COMPANY, a New York
corporation; WARREN PUMPS, LLC,
a Delaware corporation; THE
WILLIAM POWELL COMPANY, an
Ohio corporation; VELAN VALVE
CORPORATION, a New York
corporation; COPES-VULCAN, a
subsidiary of SPX Corporation, a
4 LEITE V. CRANE CO.
Delaware Corporation; ATWOOD &
MORRILL, a subsidiary of Weir
Valves & Controls USA, Inc., a
Massachusetts Corporation; DOES 1
TO 25,
Defendants-Appellees.
Appeals from the United States District Court
for the District of Hawaii
J. Michael Seabright, District Judge, Presiding
Leslie E. Kobayashi, District Judge, Presiding
Argued and Submitted
October 8, 2013—Honolulu, Hawaii
Filed April 25, 2014
Before: Alex Kozinski, Chief Judge, and Raymond C.
Fisher and Paul J. Watford, Circuit Judges.
Opinion by Judge Watford
LEITE V. CRANE CO. 5
SUMMARY*
Removal Jurisdiction
The panel affirmed the district court’s orders denying
motions to remand to state court actions that were removed to
federal court under the federal officer removal statute,
28 U.S.C. § 1442.
Plaintiffs worked as machinists at the Pearl Harbor Naval
Shipyard, and they alleged that Crane Co. failed to warn them
of the hazards posed by asbestos used in and around
equipment that Crane Co. sold to the United States Navy.
The panel held that a plaintiff’s motion to remand may
raise either a facial attack or a factual attack on the
defendant’s jurisdictional allegations. The panel held that
plaintiffs raised a factual attack by contesting the truth of
Crane’s allegations regarding the existence of a colorable
federal defense and requisite causal nexus. The panel noted
that Crane bore the burden of proving by a preponderance of
the evidence that the colorable federal defense and causal
nexus requirements for removal jurisdiction were met. Crane
asserted a government contractor defense, and the panel held
that Crane’s affidavits established that it had a colorable
federal defense. Finally, the panel held that Crane proved by
a preponderance of the evidence that a causal nexus existed
between plaintiffs’ claims and actions Crane took at the
direction of a federal officer.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
6 LEITE V. CRANE CO.
COUNSEL
L. Richard DeRobertis (argued), Gary O. Galiher, and Todd
W. Eddins, Galhier DeRobertis Ono, Honolulu, Hawaii, for
Plaintiffs-Appellants.
Michael J. Ross (argued), Nicholas P. Vari, and Michael J.
Zukowski, K&L Gates LLP, Pittsburgh, Pennsylvania;
Edward P. Sangster, K&L Gates LLP, San Francisco,
California, for Defendants-Appellees.
OPINION
WATFORD, Circuit Judge:
The plaintiffs in these consolidated appeals, Douglas
Leite and David Thompson, worked as machinists at the Pearl
Harbor Naval Shipyard in Hawaii, where they were allegedly
injured by exposure to asbestos. They sued defendants under
state tort law on the theory that defendants failed to warn
them of the hazards posed by asbestos used in and around
equipment that defendants sold to the United States Navy.
(We focus here on only one of the defendants, Crane Co.,
because it alone filed a brief on appeal.)
Plaintiffs filed separate lawsuits against Crane in state
court, but Crane removed the actions to federal court under
the federal officer removal statute, 28 U.S.C. § 1442.
Plaintiffs asked the district courts to remand the actions to
state court on the ground that Crane had not provided
sufficient evidence of the factual requirements for removal
jurisdiction. In both cases, the district courts denied
plaintiffs’ motions. Acknowledging that other district courts
LEITE V. CRANE CO. 7
confronted with similar facts have reached the opposite
conclusion,1 the courts certified their orders for interlocutory
appeal. We agreed to hear these appeals under 28 U.S.C.
§ 1292(b).
As relevant here, the federal officer removal statute
authorizes removal of a civil action brought against any
person “acting 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).2 To invoke the statute, Crane must show that
(1) it is a “person” within the meaning of the statute, (2) a
causal nexus exists between plaintiffs’ claims and the actions
Crane took pursuant to a federal officer’s direction, and (3) it
has a “colorable” federal defense to plaintiffs’ claims. See
1
See, e.g., Holdren v. Buffalo Pumps, Inc., 614 F. Supp. 2d 129 (D.
Mass. 2009); Westmiller v. IMO Indus., Inc., 2005 WL 2850334 (W.D.
Wash. Oct. 20, 2005); Nguyen v. Allied Signal, Inc., 1998 WL 690854(N.D. Cal. Sept. 29, 1998).
2
28 U.S.C. § 1442(a)(1) currently provides:
(a) A civil action or criminal prosecution that is
commenced in a State court and that is against or
directed to any of the following may be removed by
them to the district court of the United States for the
district and division embracing the place wherein it is
pending:
(1) The United States or any agency thereof or any
officer (or any person acting under that officer) of the
United States or of any agency thereof, in an official or
individual capacity, for or relating to any act under
color of such office or on account of any right, title or
authority claimed under any Act of Congress for the
apprehension or punishment of criminals or the
collection of the revenue.
8 LEITE V. CRANE CO.
Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1251 (9th
Cir. 2006).
In its removal notices, Crane alleged facts satisfying each
of these requirements. Crane alleged that it is a “person” for
purposes of § 1442(a)(1); that it omitted any warning of
asbestos hazards pursuant to the direction of Navy officers;
and that it has a colorable federal defense to plaintiffs’
claims—the government contractor defense. Crane
substantiated these allegations by attaching extensive
testimonial and documentary evidence, including affidavits
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. The Sargent and Horne
affidavits describe the Navy’s procurement policies, and in
particular the Navy’s detailed specifications regulating the
warnings that equipment manufacturers were required to
provide. Dr. Forman’s affidavit describes the Navy’s
evolving awareness of asbestos risks, and opines that the
Navy always knew at least as much about asbestos hazards as
equipment manufacturers like Crane.
Plaintiffs contest Crane’s jurisdictional allegations and
raise evidentiary objections to portions of Crane’s affidavits,
mainly on the ground that the affidavits contain speculative
expert opinion testimony that must be excluded under Federal
Rule of Evidence 702. Plaintiffs argue that, without these
improper opinions, Crane hasn’t satisfied each of the
requirements for removal jurisdiction.
LEITE V. CRANE CO. 9
Plaintiffs’ arguments raise several novel procedural
questions we have not yet squarely addressed: May a
defendant establish removal jurisdiction under § 1442(a)(1)
by adequately alleging the necessary facts, or must the
defendant prove those facts before the case may proceed in
federal court? If actual proof is required, must the district
court resolve evidentiary challenges to the defendant’s
evidence before deciding whether removal jurisdiction exists?
And if the existence of jurisdiction turns on disputed factual
issues, should the district court resolve those issues itself or
instead leave them to be resolved by the trier of fact?
Fortunately, all of these questions have been answered in
a procedurally analogous context—cases in which the
plaintiff files suit in federal court and the defendant moves to
dismiss for lack of subject-matter jurisdiction under Federal
Rule of Civil Procedure 12(b)(1). We’ll start by sketching
out the rules that govern in that context, for we conclude
those same rules should apply here.
To invoke a federal court’s subject-matter jurisdiction, a
plaintiff needs to provide only “a short and plain statement of
the grounds for the court’s jurisdiction.” Fed. R. Civ. P.
8(a)(1). The plaintiff must allege facts, not mere legal
conclusions, in compliance with the pleading standards
established by Bell Atlantic Corp. v. Twombly, 550 U.S. 544(2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). See
Harris v. Rand, 682 F.3d 846, 850–51 (9th Cir. 2012).
Assuming compliance with those standards, the plaintiff’s
factual allegations will ordinarily be accepted as true unless
challenged by the defendant. See 5C Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 1363, at
107 (3d ed. 2004).
10 LEITE V. CRANE CO.
Under Rule 12(b)(1), a defendant may challenge the
plaintiff’s jurisdictional allegations in one of two ways. A
“facial” attack accepts the truth of the plaintiff’s allegations
but asserts that they “are insufficient on their face to invoke
federal jurisdiction.” Safe Air for Everyone v. Meyer,
373 F.3d 1035, 1039 (9th Cir. 2004). The district court
resolves a facial attack as it would a motion to dismiss under
Rule 12(b)(6): Accepting the plaintiff’s allegations as true
and drawing all reasonable inferences in the plaintiff’s favor,
the court determines whether the allegations are sufficient as
a legal matter to invoke the court’s jurisdiction. Pride v.
Correa, 719 F.3d 1130, 1133 (9th Cir. 2013).
A “factual” attack, by contrast, contests the truth of the
plaintiff’s factual allegations, usually by introducing evidence
outside the pleadings. Safe Air for Everyone, 373 F.3d at
1039; Thornhill Publ’g Co. v. Gen. Tel. & Elec. Corp.,
594 F.2d 730, 733 (9th Cir. 1979). When the defendant raises
a factual attack, the plaintiff must support her jurisdictional
allegations with “competent proof,” Hertz Corp. v. Friend,
559 U.S. 77, 96–97 (2010), under the same evidentiary
standard that governs in the summary judgment context. See
Norse v. City of Santa Cruz, 629 F.3d 966, 973 (9th Cir.
2010) (en banc); Trentacosta v. Frontier Pac. Aircraft Indus.,
Inc., 813 F.2d 1553, 1559 (9th Cir. 1987); Fed. R. Civ. P.
56(c). The plaintiff bears the burden of proving by a
preponderance of the evidence that each of the requirements
for subject-matter jurisdiction has been met. Harris, 682 F.3d
at 851. With one caveat, if the existence of jurisdiction turns
on disputed factual issues, the district court may resolve those
factual disputes itself. Safe Air for Everyone, 373 F.3d at
LEITE V. CRANE CO. 11
1039–40; Augustine v. United States, 704 F.2d 1074, 1077
(9th Cir. 1983); Thornhill, 594 F.2d at 733.3
Challenges to the existence of removal jurisdiction should
be resolved within this same framework, given the parallel
nature of the inquiry. The statute governing removal of civil
actions tracks the language of Rule 8(a)(1), requiring the
defendant to provide “a short and plain statement of the
grounds for removal.” 28 U.S.C. § 1446(a). Like plaintiffs
pleading subject-matter jurisdiction under Rule 8(a)(1), a
defendant seeking to remove an action may not offer mere
legal conclusions; it must allege the underlying facts
supporting each of the requirements for removal jurisdiction.
Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992) (per
curiam). A plaintiff who contests the existence of removal
jurisdiction may file a motion to remand, see 28 U.S.C.
§ 1447(c), the functional equivalent of a defendant’s motion
to dismiss for lack of subject-matter jurisdiction under Rule
12(b)(1). As under Rule 12(b)(1), a plaintiff’s motion to
remand may raise either a facial attack or a factual attack on
the defendant’s jurisdictional allegations, triggering
application of the rules discussed above for resolving such
challenges.
We recognize that defendants enjoy much broader
removal rights under the federal officer removal statute than
they do under the general removal statute, 28 U.S.C. § 1441.
See Durham, 445 F.3d at 1253 (cataloging the differences).
3
The caveat is that a court must leave the resolution of material factual
disputes to the trier of fact when the issue of subject-matter jurisdiction is
intertwined with an element of the merits of the plaintiff’s claim. See,
e.g., Safe Air for Everyone, 373 F.3d at 1039–40; Augustine, 704 F.2d at
1077.
12 LEITE V. CRANE CO.
We nonetheless conclude that applying the Rule 12(b)(1)
framework to resolve jurisdictional challenges in this context
will not unduly burden the unique rights § 1442 affords
removing defendants. In most cases, defendants will already
be in possession of competent proof supporting what they are
required to show: personhood, a causal nexus, and a colorable
federal defense. Requiring defendants to produce such proof
when their § 1442 jurisdictional allegations are challenged
will not frustrate the statutory policy of facilitating access to
a federal forum.
In this case, plaintiffs do not raise a facial attack on
Crane’s jurisdictional allegations, as the allegations are
sufficient on their face to support removal jurisdiction under
§ 1442(a)(1). But plaintiffs have raised a factual attack by
contesting the truth of Crane’s allegations regarding the
existence of a colorable federal defense and the requisite
causal nexus. See Durham, 445 F.3d at 1251. In support of
their factual attack, plaintiffs have submitted extensive
evidence outside the pleadings, including military
specifications, technical manuals, warning label guides, and
deposition excerpts.
Because plaintiffs have raised a factual attack on Crane’s
jurisdictional allegations, Crane must support its allegations
with competent proof. See Safe Air for Everyone, 373 F.3d
at 1039. And Crane bears the burden of proving by a
preponderance of the evidence that the colorable federal
defense and causal nexus requirements for removal
LEITE V. CRANE CO. 13
jurisdiction have been met. See Valdez v. Allstate Ins. Co.,
372 F.3d 1115, 1117 (9th Cir. 2004).4
The only federal defense Crane asserts is the government
contractor defense recognized in Boyle v. United
Technologies Corp., 487 U.S. 500 (1988). To establish that
defense in the context of plaintiffs’ failure-to-warn claims,
Crane will ultimately have to prove that (1) the Navy
exercised its discretion and approved certain warnings for
Crane’s products, (2) Crane provided the warnings required
by the Navy, and (3) Crane warned the Navy about any
asbestos hazards that were known to Crane but not to the
Navy. See Getz v. Boeing Co., 654 F.3d 852, 866 (9th Cir.
2011); accord Tate v. Boeing Helicopters, 140 F.3d 654,
658–60 (6th Cir. 1998); Oliver v. Oshkosh Truck Corp.,
96 F.3d 992, 1003–04 (7th Cir. 1996).
Crane’s affidavits establish that it has a colorable federal
defense. With respect to the first element, Rear Admirals
Horne and Sargent state 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. According to their affidavits, the Navy was directly
involved in preparing the manuals, which included safety
information about equipment operation only to the extent
directed by the Navy. Horne and Sargent further state that
equipment manufacturers could not include warnings beyond
those specifically required and approved by the Navy, and
4
Plaintiffs do not contest that Crane, a private contractor producing
equipment for the Navy, qualifies as a “person” under § 1442(a)(1). See
Watson v. Philip Morris Cos., 551 U.S. 142, 153–54 (2007); Isaacson v.
Dow Chem. Co., 517 F.3d 129, 135–36 (2d Cir. 2008).
14 LEITE V. CRANE CO.
that the Navy’s specifications did not require equipment
manufacturers to include warnings about asbestos hazards.
These statements, which are supported by an adequate
foundation based on the affiants’ knowledge of Navy
procurement policies, establish a colorable showing that the
Navy exercised its discretion and approved certain warnings
for Crane’s products. See Getz, 654 F.3d at 866–67.5
In their affidavits, Horne and Sargent go further and opine
that if Crane had asked the Navy to approve warnings about
asbestos hazards, the Navy would have rejected them.
Plaintiffs argue at length that this counterfactual opinion
testimony is entirely speculative and unreliable and therefore
can never be established by admissible evidence under
Federal Rule of Evidence 702. We need not resolve
plaintiffs’ evidentiary objections to this testimony because
Crane has made a colorable showing under Getz’s first
element without it, based on the portions of the Horne and
Sargent affidavits discussed above. It’s enough under Getz
that the Navy exercised its discretion by prescribing certain
warnings and prohibiting others without its express approval.
Horne and Sargent are competent to testify to those facts;
5
We note that the government contractor defense will not lie if the
warnings approved by the military are completely unrelated to the
warnings prescribed by state law. Because the defense is intended to
protect the government’s discretion, there must be a conflict between the
military specifications and state-law requirements. See Boyle, 487 U.S.
at 507, 511–12. Only when the warnings required by state law fall within
the scope of the warnings approved by the federal government will the
government’s exercise of discretion necessarily conflict with the
contractor’s state-law duty to warn. See Getz, 654 F.3d at 866–67. For
the reasons explained above, Crane has made a colorable showing that
warnings about the risks of asbestos fell within the scope of the warnings
considered and adopted by the Navy.
LEITE V. CRANE CO. 15
there’s nothing speculative about what, in their view, the
Navy’s procurement policies actually required. Contrary to
plaintiffs’ assumption, Crane need not prove that the Navy
would have forbidden it to issue asbestos warnings had Crane
requested the Navy’s approval. As we held in Getz, the
government contractor defense isn’t limited to “instances
where the government forbids additional warning or dictates
the precise contents of a warning.” 654 F.3d at 867; accord
Ruppel v. CBS Corp., 701 F.3d 1176, 1185 n.2 (7th Cir.
2012).
Crane’s affidavits also establish a colorable showing with
respect to the second and third elements of the government
contractor defense. Pantaleoni, a Crane vice-president, states
that all of the equipment Crane sold to the Navy complied
with Navy specifications, which would include the
specifications regarding required warnings. Sargent confirms
that an outside vendor’s equipment could not have been
installed aboard Navy vessels unless it complied with all
applicable Navy specifications. Plaintiffs do not raise
evidentiary objections to these statements, which make a
colorable showing that Crane provided the warnings required
by the Navy. And Dr. Forman’s affidavit, supported by an
adequate foundation based on his years of historical research,
makes a colorable showing that the Navy at all times knew at
least as much about asbestos hazards as the equipment
manufacturers, leaving nothing for Crane to warn the Navy
about.
At this stage, Crane doesn’t have to prove that its
government contractor defense is in fact meritorious, and we
express no view on whether it is. As the Supreme Court has
held, a defendant invoking § 1442(a)(1) “need not win his
case before he can have it removed.” Willingham v. Morgan,
16 LEITE V. CRANE CO.
395 U.S. 402, 407 (1969). All that Crane must prove by a
preponderance of the evidence is that its government
contractor defense is “colorable.” Jefferson Cnty. v. Acker,
527 U.S. 423, 431 (1999). The evidence Crane has submitted
satisfies its burden.
Based on the same evidence, Crane has also proved by a
preponderance of the evidence that a causal nexus exists
between plaintiffs’ claims and the actions Crane took at the
direction of a federal officer. In assessing whether a causal
nexus exists, we credit the defendant’s theory of the case. Id.
at 432; Isaacson, 517 F.3d at 137. Such a nexus exists here
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. Crane may not be right—indeed, it may be that the
Navy had nothing to do with Crane’s failure to warn. But the
question “whether the challenged act was outside the scope
of [Crane’s] official duties, or whether it was specifically
directed by the federal Government, is one for the
federal—not state—courts to answer.” Isaacson, 517 F.3d at
138; see also Willingham, 395 U.S. at 407.
AFFIRMED.