By James M. Beck, Senior Life Sciences Policy Analyst with Reed Smith, LLP in its Philadelphia, PA office.
By statute, Congress has designated state-court cases against a “federal officer” or against a “person acting under that officer . . . for or relating to any act under color of such office” as removable to federal court as of right at the option of those defendants. 28 U.S.C. § 1442(a)(1). However, in Watson v. Philip Morris Cos., 551 U.S. 142 (2007), the Supreme Court slammed the door closed on removal by defendants who could allege only compliance with federal regulations.
Watson unanimously held that “the removal statute’s ‘basic’ purpose is to protect the Federal Government from the interference with its ‘operations.’” 551 U.S. at 150. By itself, that holding was not dispositive, but Watson added criteria to preclude removal upon mere “regulation”—the statute required that “affirmative” assistance be provided to the government:
- “[A] private person acts as an assistant to a federal official in helping that official to enforce federal law.” 551 U.S. at 151.
- “[T]he statute authorized removal by private parties ‘only’ if they ‘were authorized to act with or for [federal officers or agents] in affirmatively executing duties under . . . federal law.’” Id. (quoting statute).
- “[T]he private person’s ‘acting under’ must involve an effort to assist, or to help carry out, the duties or tasks of the federal superior.” Id. at 152.
- “[D]ifferences in the degree of regulatory detail or supervision cannot by themselves transform . . . regulatory compliance into the kind of assistance that might bring [the case] within the scope of the statutory phrase ‘acting under.’” Id. at 157.
The removing defendant in Watson, a tobacco company being sued despite its compliance with federal regulations for marketing of “light” cigarettes, could not “establish the type of formal delegation that might authorize [it] to remove the case” with evidence limited to “testing specifications,” agency “inspection and supervision of . . . testing,” and federal “prohibition of statements in [product] advertising.” Id. at 156. Such involvement with the government “sounds to us like regulation, not delegation,” and even “considerable regulatory detail and supervision,” is not “distinct from the usual regulator/regulated relationship” that does not come “within the scope of the statutory phrase ‘acting under’ a federal ‘officer.’” Id. (quoting 28 U.S.C. § 1442(a)(1)).
Watson thus largely eliminated the utility of federal actor removal in product liability litigation. Indeed, the Court in Watson went out of its way to analogize to FDA “regulation of prescription drug marketing and advertising,” as an example of mere “regulation.” Id. at 157.
In 2011, however, Congress enacted the Removal Clarification Act, PL 112-51, 125 Stat. 545, which amended (among other things) §1442(a)(1). This legislation materially expanded the grounds for federal officer removal, changing “capacity for” to “capacity, for or relating to,” so that the critical language of §1442(a) makes removable to federal court any “civil action . . . that is against or directed to . . . any person acting under [a federal] officer . . . for or relating to any act under color of such office.” Congress acted deliberately, with knowledge of prior Supreme Court precedent that had “observed repeatedly” that the added “or relating to” language in other contexts was “broadly worded” and “clearly expansive.” Egelhoff v. Egelhoff, 532 U.S. 141, 146 (2001) (ERISA, 29 U.S.C. § 1144(a)). The Court has also stated,
[T]he key phrase, obviously, is ‘relating to.’ The ordinary meaning of these words is a broad one. . . . We have repeatedly recognized that in addressing the similarly worded . . . provision of [ERISA] . . . that the ‘breadth of [its] reach is apparent from [its] language.’
Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383-84 (1992) (Airline Deregulation Act, 49 U.S.C. §1305(a)(a)) (quoting Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 (1983)).1
This language materially expanded the scope of cases subject to “federal officer” removal under the aegis of §1442(a), as recognized by a recent en banc Fifth Circuit product liability decision involving asbestos litigation—and suggests that business defendants should re-examine federal officer removal in regulatory compliance situations precluded by Watson prior to the 2011 amendment. See Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286 (5th Cir. 2020) (en banc). In a rarity for en banc decisions, Latiolais was unanimous—only one opinion, with a couple of concurrences in the result.
Latiolais recognized that, in reaction to decisions like Watson, Congress amended §1442(a)(1) specifically to “broaden” defendants’ ability to remove. 951 F.3d at 292.
This change plainly expresses that a civil action relating to an act under color of federal office may be removed (if the other statutory requirements are met). . . . [T]he ordinary meaning of the words ‘relating to” is a broad one. . . . Congress added this “broad’ term to ‘for’ . . . . By the Removal Clarification Act, Congress broadened federal officer removal to actions, not just causally connected, but alternatively connected or associated, with acts under color of federal office.
Id. (citations and quotation marks omitted) (emphasis added). Since Congress amended the statute to broaden removal, the restrictive, pre-amendment reading in Watson is no longer the last word.
Latiolais also addressed the above-referenced “other statutory requirements.” It eliminated the Fifth Circuit’s prior “causal nexus” test that had restricted removal, as incompatible with the amended statutory language:
[W]e overrule [prior precedent] to the extent that those cases erroneously relied on a ‘causal nexus’ test after Congress amended section 1442(a) to add ‘relating to.’ Henceforth, to remove under section 1442(a), a defendant must show (1) it has asserted a colorable federal defense, (2) it is a ‘person’ within the meaning of the statute, (3) that has acted pursuant to a federal officer’s directions, and (4) the charged conduct is connected or associated with an act pursuant to a federal officer’s directions.
Latiolais, 951 F.3d at 296 (footnote omitted).2
The removal prerequisite Latiolais set forth is much lower than the “effort to assist”/”help carry out” requirement Watson imposed under the pre-2011 statutory language. Instead, a removing defendant need only present a “colorable federal defense.” 951 F.3d at 296-97. As Latiolais also held:
To be ‘colorable,’ the asserted federal defense need not be clearly sustainable, as section 1442 does not require a federal official or person acting under him to win his case before he can have it removed. Instead, an asserted federal defense is colorable unless it is immaterial and made solely for the purpose of obtaining jurisdiction or wholly insubstantial and frivolous.
Id. (citations and quotation marks omitted). Many defendants in heavily regulated industries, such as manufacturing of airplanes and prescription medical products, can in many cases “colorably” assert that their compliance with the federal government’s strict oversight provides them with a federal preemption defense. A “colorable,” defense does not necessarily, or even usually, have to prevail.3
The colorable defense standard in Latiolais is a far cry—and much more friendly to removal—from the general federal question jurisdiction test under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005), and its progeny, where no federal officer is involved. A decided majority of post-Grable precedent has held that a federal defense such as preemption is not enough to support federal question jurisdiction under 28 U.S.C. §1331.4
Thus, the same facts that support preemption as to heavily regulated industries and products may, under the post-2011 approach now exemplified by Latiolais, simultaneously support arguments for federal officer removal. As Latiolais held, any “action” “not just causally connected, but alternatively connected or associated, with” obeying the dictates of a federal officer such as the FDA is enough to support federal jurisdiction under §1442(a)(1). 951 F.3d at 292 (emphasis original). Thus, “any civil action that is connected or associated with an act under color of federal office may be removed.” Id. at 296.5
In light of the 2011 congressional amendments to §1442(a), particularly as applied by the en banc Fifth Circuit in Latiolais, defendants should take a closer look at “federal officer” removal as a means to federal jurisdiction, particularly those defendants in heavily federally regulated industries where preemption is often at least a “colorable” defense.
- Morales collected prior Supreme Court precedent describing statutory “related to” language as having a “broad scope,” Metropolitan Life Insurance Co. v. Massachusetts, 471 U.S. 724, 739 (1985); an “expansive sweep,” Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 47 (1987); being “broadly worded,” Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138 (1990), “deliberately expansive,” Pilot Life, 481 U.S. at 46; and “conspicuous for its breadth.” FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990).
- The cases expressly overruled in Latiolais were: IntegraNet Physician Resource, Inc. v. Tex. Independent Providers, L.L.C., 945 F.3d 232 (5th Cir. 2019); Legendre v. Huntington Ingalls, Inc., 885 F.3d 398 (5th Cir. 2018); Zeringue v. Crane Co., 846 F.3d 785 (5th Cir. 2017); Savoie v. Huntington Ingalls, Inc., 817 F.3d 457 (5th Cir. 2016); and Bartel v. Alcoa Steamship Co., 805 F.3d 169 (5th Cir. 2015).
- In the removal context a “colorable” claim is often the standard against which defense assertions of fraudulent joinder are judged. E.g., Casias v. Wal-Mart Stores, Inc., 695 F.3d 428, 433 (6th Cir. 2012); Junk v. Terminix International Co., 628 F.3d 439, 445-46 (8th Cir. 2010); Brown v. Jevic, 575 F.3d 322, 326 (3d Cir. 2009); Smallwood v. Illinois Central Railroad Co., 385 F.3d 568, 590 (5th Cir. 2004).
- Burrell v. Bayer Corp., 918 F.3d 372, 380 (4th Cir. 2019) (“a substantial majority of district courts to consider the issue have held that state-law tort and products liability claims . . . do not give rise to federal question jurisdiction”).
- Another advantage of federal officer removal is that it doesn’t require consent of other defendants. E.g., Humphries v. Elliott Co., 760 F.3d 414, 417 (5th Cir. 2014) (“Removal under § 1442(a) . . . does not require the consent of co-defendants.”) (citation omitted).