Robert H. Wright is a Partner with Horvitz & Levy LLP in Los Angeles, CA and is the WLF Legal Pulse’s Featured Expert Contributor on Mass Torts—Asbestos.

The U.S. Court of Appeals for the Fifth Circuit’s recent decision addressing the Federal Officer Removal Statute could have ramifications far beyond the specific military procurement contract and claims in that case.

In Latiolais v. Huntington Ingalls, Inc., No. 18-30652, 2020 WL 878930 (5th Cir. 2020) the Fifth Circuit, sitting en banc, overruled its prior decisions that had limited the breadth of the Federal Officer Removal Statute.  Those prior decisions held that a defendant seeking removal under the statute must show a causal nexus between the defendant’s actions under color of federal office and the plaintiffs’ claims.

But the prior decisions did not account for the statute’s amendment.  In 2011, Congress broadened the statute, altering the requirement that a removable case be “for” any act under color of federal office, and permitting removability of a case “for or relating to” such acts.  The Latiolais en banc court held that this change “plainly expresses that a civil action relating to an act under color of federal removal may be removed (if the other statutory requirements are met).”  Id. at *3.  Congress thus broadened federal officer removal to actions not just causally connected, but connected or associated, with acts under color of federal office.

Latiolais involved claims of negligent failure to warn and negligent failure to provide adequate safety equipment arising from alleged exposure to asbestos.  The defendant in Latiolais asserted the government contractor defense.  That defense applies when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) there were no dangers known to the defendant that were not known to the United States.  Boyle v. United Technologies Corp., 487 U.S. 500, 501 (1988).

Latiolais held that a federal defense is colorable for purposes of the Federal Officer Removal Statute unless the defense is “wholly insubstantial and frivolous.”  Latiolais, 2020 WL 878930, at *7.  The defendant in Latiolais offered evidence that it contracted with the United States Navy to build and refurbish navy vessels, the Navy required asbestos for some purposes, and the Navy approved reasonably precise specifications for installing asbestos.  In light of that evidence, the federal defense was neither wholly insubstantial nor frivolous, and thus supported removal.

Although the colorable federal defense giving rise to removal in Latiolais arose from a military procurement contract, the court’s analysis would seem to support removal to a much broader group of defendants.  Most courts have held that the government contractor defense is not limited to military procurement contracts or confined to narrow categories of claims.

Although the Ninth Circuit held that the defense “is only available to contractors who design and manufacture military equipment” Cabalce v. Blanchard & Assoc., 797 F.3d 720, 731 (9th Cir. 2015), many other courts have applied the defense outside that context.  For example, in Carley v. Wheeled Coach, 991 F.2d 1117, 1128 (3d Cir. 1993), the defendant manufactured a government ambulance in compliance with government contract specifications.  The Third Circuit recognized that the government contractor defense is “available to nonmilitary contractors.”  Id. at 1127-28 (emphasis added).

In Hudgens v. Bell Helicopters/Textron, 328 F.3d 1329, 1331-1332 (11th Cir. 2003), the defendant maintained Army helicopters.  The Eleventh Circuit held the government contractor defense was not limited to design defects.  Id. at 1344.  “Although Boyle referred specifically to procurement contracts, the analysis it requires is not designed to promote all-or nothing rules regarding different classes of contract.  Rather, the question is whether subjecting a contractor to liability would create a significant conflict with a unique federal interest.”  Id.

In In re World Trade Ctr. Disaster Site Litig., 521 F.3d 169, 173-174 (2d Cir. 2008), the City of New York contracted with defendants to clean up the World Trade Center site after the terrorist attacks of September 11, 2001.  The Second Circuit stated that the rationale for the government contractor defense would “extend to the disaster relief context due to the unique federal interest in coordinating federal disaster assistance and streamlining the management of large-scale disaster recovery projects.”  Id. at 197.

In more recent cases, the Sixth and Eighth Circuits have recognized colorable Boyle defenses without reaching the merits of whether the defense was available to “non-military service contractors.”  Jacks v. Meridian Res. Co., 701 F.3d 1224, 1235 (8th Cir. 2012) (recognizing colorable Boyle defense asserted by healthcare reimbursement services contractor); Bennett v. MIS Corp., 607 F.3d 1076, 1089-91 (6th Cir. 2010) (recognizing colorable Boyle defense asserted by mold remediation contractor).

Indeed, the United States Supreme Court has commented on the important role played by government contractors.  See NASA v. Nelson, 562 U.S. 134, 139 (2011) (“Contract employees play an important role in NASA’s mission, and their duties are functionally equivalent to those performed by civil servants.”); see also Watson v. Philip Morris Companies, Inc., 551 U.S. 142, 153 (2007) (“The assistance that private contractors provide federal officers . . . helps officers fulfill . . . basic governmental tasks.”).  The importance of that role would not seem dependent on whether the contract in question is one for military procurement.

As these cases show, the Latiolais decision is likely to have a wide impact, not limited to the facts of military procurement contracts or the claim at issue in that case, and will ease the standards that federal officers and their contractors must satisfy in seeking to move cases to federal court.