Deborah Ripley v. Foster Wheeler LLC , 841 F.3d 207 ( 2016 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-1918
DEBORAH H. RIPLEY, individually and as Administrator of the
Estate of Bernard W. Ripley, deceased,
Plaintiff - Appellee,
and
BERNARD W. RIPLEY,
Plaintiff,
v.
FOSTER WHEELER LLC; FOSTER WHEELER ENERGY CORPORATION,
Defendants – Appellants,
and
J. HENRY HOLLAND CORPORATION; WACO, INCORPORATED;
METROPOLITAN LIFE INSURANCE COMPANY; UNION CARBIDE
CORPORATION; SB DECKING, INC., a/k/a Selby Battersby; AURORA
PUMP, CO; IMO INDUSTRIES, INCORPORATED, as successor in
interest to Delaval Pumps; GOULDS PUMPS, INCORPORATED;
INGERSOLL-RAND COMPANY; WARREN PUMPS, INCORPORATED; CRANE
COMPANY; GRINNELL CORPORATION; THE J.R. CLARKSON COMPANY,
individually and as successor by mergers to Kunkle
Industries, Inc.; MILWAUKEE VALVE COMPANY; FLOWSERVE US,
INC., individually and as successor in interest to Rockwell
Edward Valves and Vogt Valves; SPIRAX SARCO, INC.; ARMSTRONG
INTERNATIONAL, INC., individually and as a successor to
Armstrong Machine Works,
Defendants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Newport News. Arenda L. Wright Allen,
District Judge. (4:14-cv-00070-AWA-LRL)
Argued: September 22, 2016 Decided: November 1, 2016
Before TRAXLER, DIAZ, and THACKER, Circuit Judges.
Reversed and remanded by published opinion. Judge Thacker wrote
the opinion, in which Judge Traxler and Judge Diaz joined.
ARGUED: Erik David Nadolink, WHEELER TRIGG O’DONNELL, LLP,
Denver, Colorado, for Appellants. William Harty, PATTEN,
WORNOM, HATTEN & DIAMONSTEIN, L.C., Newport News, Virginia, for
Appellee. ON BRIEF: Anthony B. Taddeo, Jr., David M. Sturm,
Matthew D. Joss, TADDEOSTURM PLC, Richmond, Virginia, for
Appellants. Robert R. Hatten, Hugh B. McCormick, III, PATTEN,
WORNOM, HATTEN & DIAMONSTEIN, L.C., Newport News, Virginia, for
Appellee.
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THACKER, Circuit Judge:
Facing claims in Virginia state court for failing to
warn of asbestos hazards in products manufactured for the Navy,
Foster Wheeler LLC and Foster Wheeler Energy Corporation
(“Appellants”) removed the case pursuant to the federal officer
removal statute to the United States District Court for the
Eastern District of Virginia. The district court remanded to
state court, citing longstanding precedent in the district that
denies the government contractor defense in failure to warn
cases. Appellants timely appealed. For the reasons below, we
reverse.
I.
From 1969 to 1972 and from 1974 to the late 1970s,
Bernard W. Ripley worked as a boilermaker at Norfolk Naval
Shipyard in Portsmouth, Virginia. He was diagnosed with
malignant mesothelioma on February 24, 2014. On May 13, 2014,
he and his wife, Deborah Ripley (“Appellee”), filed suit in the
Newport News Circuit Court in Virginia, naming Appellants and
others as defendants. The complaint alleges Mr. Ripley was
exposed to asbestos contained in products Appellants
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manufactured for the Navy, and that Appellants are liable for
failure to warn of asbestos hazards. 1
On June 16, 2014, Appellants filed a Notice of Removal
in the United States District Court for the Eastern District of
Virginia. Appellants asserted a government contractor defense,
arguing that the suit stemmed from Appellants’ contract with the
Navy to construct boilers and related equipment, and that
removal is thus proper pursuant to the federal officer removal
statute, 28 U.S.C. § 1442(a)(1).
On August 6, 2015, the district court granted
Appellee’s motion to remand, following a decades-old practice in
the district that denies the government contractor defense in
failure to warn cases. Because the defense did not apply, the
court reasoned, Appellants could not establish the colorable
federal defense necessary to support federal officer removal,
thereby precluding federal subject matter jurisdiction.
On August 8, 2015, Appellant filed a Notice of Appeal,
urging this court to overturn the district court’s remand order. 2
1
Mr. Ripley died on November 14, 2014; the court
substituted Appellee as administratrix of Mr. Ripley’s estate on
March 18, 2015.
2
Of note, this issue only recently became appealable. In
2011, Congress amended 28 U.S.C. § 1447(d) to allow appeals from
remand orders pursuant to § 1442. See Removal Clarification Act
of 2011, Pub. L. No. 112–51, 125 Stat. 545, 546 (2011).
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II.
We review de novo issues of subject matter
jurisdiction, including removal. See Dixon v. Coburg Dairy,
Inc., 369 F.3d 811, 815–16 (4th Cir. 2004) (en banc) (quoting
Mayes v. Rapoport, 198 F.3d 457, 460 (4th Cir. 1999)). Denial
of the government contractor defense in failure to warn cases is
also an issue of law we review de novo. See Warfaa v. Ali, 811
F.3d 653, 658 (4th Cir. 2016).
III.
The federal officer removal statute allows a defendant
to remove a case from state to federal court if the defendant
establishes (1) it is a federal officer or a “person acting
under that officer,” 28 U.S.C. § 1442(a)(1); (2) a “colorable
federal defense”; and (3) the suit is “for a[n] act under color
of office,” which requires a causal nexus “between the charged
conduct and asserted official authority,” Jefferson Cty., Ala.
v. Acker, 527 U.S. 423, 431 (1999) (alteration and emphasis in
original) (citation and internal quotation marks omitted).
Section 1442 is thus an exception to the well-pleaded complaint
rule, which, absent diversity, prohibits removal unless a
federal question appears on the face of the plaintiff’s
complaint. See Jamison v. Wiley, 14 F.3d 222, 239 (4th Cir.
1994) (citing Mesa v. California, 489 U.S. 121, 136–37 (1989)).
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The Supreme Court has recognized that “[o]ne of the
primary purposes” of federal officer removal is to provide a
federal forum for a federal defense. Willingham v. Morgan, 395
U.S. 402, 407 (1969). Proof of a “colorable” federal defense
thus does not require the defendant to “win his case before he
can have it removed” nor even establish that the defense is
“clearly sustainable.” Id.Here, Appellants sought removal pursuant to § 1442 by
asserting the government contractor defense as elucidated in
Boyle v. United Technologies Corp., 487 U.S. 500 (1988). In
Boyle, the Supreme Court announced that design defects in
military equipment do not give rise to state-law tort claims if,
“(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.” 487 U.S. at 512.
The defense only applies if a contractor’s obligations to the
government conflict with state law such that the contractor may
not comply with both. See id. at 507–09.
The rationales behind the defense are twofold. First,
given the complexities of military decision making and the
constitutional delegation of the war powers to the legislative
and executive branches, separation of powers suggests the
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judiciary should hesitate to intervene in matters of military
procurement contracts. See Tozer v. LTV Corp., 792 F.2d 403,
405–07 (4th Cir. 1986). Second, as a practical matter, a higher
risk of liability for government contractors would increase
costs to the government while decreasing the supply of
contractors and research and development in military equipment.
Id. at 407–08.
We must therefore decide whether the Supreme Court’s
pronouncement in Boyle, holding the government contractor
defense applicable in design defect cases, likewise shields
defendants against failure to warn claims and thus provides a
basis for federal jurisdiction pursuant to § 1442.
In this case, given “the thousands of asbestos cases
that have preceded” it in the Eastern District of Virginia, the
district court “determined that the government contractor
defense is not available in failure to warn cases.” McCormick
v. C.E. Thurston & Sons, Inc., 977 F. Supp. 400, 403 (E.D. Va.
1997) (internal quotation marks omitted).
However, the Eastern District of Virginia is clearly
an outlier in this regard. No other jurisdiction in the country
to have considered the issue is in accord with the Eastern
District of Virginia. Indeed, the Second, Fifth, Sixth,
Seventh, Ninth, and Eleventh Circuits have all applied the
defense to failure to warn cases. See e.g., In re Joint E. & S.
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Dist. N.Y. Asbestos Litig., 897 F.2d 626, 629–30 (2d Cir. 1990);
Perez v. Lockheed Corp. (In re Air Disaster at Ramstein Air
Base, Germany, on 8/29/90), 81 F.3d 570, 576 (5th Cir.),
modified on other grounds, 88 F.3d 340 (5th Cir. 1996) (per
curium); Tate v. Boeing Helicopters (Tate II), 140 F.3d 654, 656
(6th Cir. 1998); Oliver v. Oshkosh Truck Corp., 96 F.3d 992,
1003–04 (7th Cir. 1996); Snell v. Bell Helicopter Textron, Inc.,
107 F.3d 744, 749–50 (9th Cir. 1997); Dorse v. Eagle-Picher
Indus., Inc., 898 F.2d 1487, 1489 (11th Cir. 1990). And
although we have not yet had the opportunity to consider this
issue directly, we have recognized that these decisions of our
sister circuits are “reasoned soundly.” Emory v. McDonnell
Douglas Corp., 148 F.3d 347, 350 (4th Cir. 1998) (collecting
cases). Moreover, the multidistrict litigation court for
asbestos products -- tasked with handling thousands of such
claims -- has also applied the defense and allowed removal on
this basis in failure to warn cases. See e.g., Hagen v.
Benjamin Foster Co., 739 F. Supp. 2d 770, 777–86 (E.D. Pa.
2010).
In addition to the multitude of authorities adopting
this approach, the rationales identified in Boyle remain
applicable in failure to warn cases. Just as decisions on
military equipment design involve complex cost-benefit analyses
in which lay juries and judges are not versed, military
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procurement contracts and specifications involve manifold
warning and labeling requirements inapplicable to nonmilitary
equipment. Cf. Tozer, 792 F.2d at 405–07 (applying government
contractor defense in design defect case). Moreover, the
constitutional separation of the judiciary from military matters
carries no less force with respect to the design of military
equipment than it does with respect to the warnings accompanying
such equipment. Further, whether the risk of liability flows
from design defect or failure to warn, the effect remains the
same: government contractors willing to take such a risk will
pass the increased cost to the government and will invest less
in research and development. Cf. id. at 407–08.
Given the weight of opposing precedent and the
rationales supporting the defense, we now join the chorus and
hold that the government contractor defense is available in
failure to warn cases. Having established this, we leave it to
the district court to decide whether Appellants have presented
sufficient proof to warrant removal pursuant to § 1442.
IV.
For the foregoing reasons, we reverse and remand for
further proceedings.
REVERSED AND REMANDED
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