Childs v. San Diego Family Housing, LLC

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LENA CHILDS, an individual; No. 24-1256

DONALD CHILDS, an individual; T.

D.C. No.

CHILDS, a minor by and through her

3:19-cv-02329-

guardian ad litem, Lena Childs; A.

JM-SBC

CHILDS, a minor by and through her

guardian ad litem, Lena Childs,

OPINION

Plaintiffs - Appellees,

v.

SAN DIEGO FAMILY HOUSING,

LLC, a California Limited Liability

Corporation; LINCOLN MILITARY

PROPERTY MANAGEMENT LP, a

Delaware Limited Partnership,

Defendants - Appellants,

and

INDEPTH CORPORATION, a

California Corporation,

Defendant - Appellee.

2 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

Appeal from the United States District Court

for the Southern District of California

Jeffrey T. Miller, District Judge, Presiding

Argued and Submitted March 4, 2025

Pasadena, California

Filed August 28, 2025

Before: Mary H. Murguia, Chief Judge, and Gabriel P.

Sanchez and Holly A. Thomas, Circuit Judges.

Opinion by Judge Sanchez

SUMMARY *

Removal Jurisdiction

Affirming the district court’s order remanding to state

court an action that defendants had removed to federal

district court, the panel held that the district court lacked

federal enclave, federal officer, or federal agency

jurisdiction.

Donald and Lena Childs, who rented military housing on

Saipan Road within the Naval Amphibious Base Coronado,

alleged negligence and other state law claims against San

Diego Family Housing, a public-private venture created by

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 3

federal statute, and Lincoln Military Property Management,

the property manager.

The panel held that under 28 U.S.C. § 1447(d), federal

courts of appeals generally lack jurisdiction to review a

district court’s remand order based on lack of subject matter

jurisdiction. Here, however, the panel had jurisdiction to

review the remand order in its entirety under a statutory

exception to the jurisdictional bar because one of the

asserted grounds for removal was federal officer removal

under 28 U.S.C. § 1442.

The panel held that the district court lacked federal

enclave jurisdiction. Under 40 U.S.C. § 3112 (the “1940

Act”), when the United States acquires land, its jurisdiction

over that federal property depends upon its acceptance of

jurisdiction. From 1941 to 1976, the United States acquired

the lands now comprising Naval Amphibious Base

Coronado, including the “Saipan Property.” The panel held

that there was no federal enclave jurisdiction under a theory

that the government acquired the land through civil

condemnation because there was no evidence of the

government’s assent to jurisdiction over the Saipan Property

through the filing of notice or written consent. The panel

rejected defendants’ argument that the 1940 Act, and its

notice-filing requirement, did not apply on the theory that

the relevant parcel was “made” by the United States by

dredging and filling the San Diego Bay and therefore was

not “acquired.”

The panel held that the district court lacked federal

officer removal jurisdiction under 28 U.S.C. § 1442, which

required defendants to demonstrate that they were persons

within the meaning of the statute; there was a causal nexus

between defendants’ actions, taken pursuant to a federal

4 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

officer’s directions, and plaintiffs’ claims; and defendants

could assert a colorable federal defense. The panel affirmed

the district court’s determination that defendants did not

meet the causal nexus requirement because they did not

show how their challenged actions in failing to reasonably

manage water intrusion and mold contamination at the

Saipan Property occurred because of what they were asked

to do in fulfilling the governmental function of housing

military service members and their families.

The panel held that the district court lacked federal

agency jurisdiction under 28 U.S.C. § 451 because, under the

six-factor test of In re Hoag Ranches, 846 F.2d 1225 (9th

Cir. 1988), defendant San Diego Family Housing was not a

federal agency.

COUNSEL

Christian B. Clark (argued), Lenden F. Webb, and Katherine

E. Cervantes, Webb Law Group APC, Fresno, California, for

Plaintiffs-Appellees.

Kristin N. Reyna DeHart (argued) and Matthew P. Nugent,

Gordon Rees Scully Mansukhani LLP, San Diego,

California; Don Willenburg, Gordon Rees Scully

Mansukhani LLP, Walnut Creek, California; for

Defendants-Appellants.

Christina Matian, Bremer Whyte Brown & O'Meara LLP,

San Diego, California, for Defendant-Appellee.

Daniel L. Winik (argued) and Michael S. Raab, Attorneys,

Appellate Staff; Brian M. Boynton, Principal Deputy

Assistant Attorney General; Civil Division, United States

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 5

Department of Justice, Washington, D.C.; Tara K. McGrath,

United States Attorney, Office of the United States Attorney,

United States Department of Justice, San Diego, California;

for Amicus Curiae the United States of America.

OPINION

SANCHEZ, Circuit Judge:

Plaintiffs Donald and Lena Childs rented military

housing within the Naval Amphibious Base Coronado.

During their lease, the Childs dealt with water-intrusion and

mold contamination issues that allegedly damaged their

personal property and impacted their health. According to

Plaintiffs, Defendants San Diego Family Housing, a public-

private venture created by federal statute, and Lincoln

Military Property Management, the property manager, were

aware of these issues and did not adequately remediate the

problem. Plaintiffs filed the instant action in state court

asserting negligence and other state law claims. Defendants

removed the action to federal district court on the basis of

federal enclave, federal agency, and federal officer

jurisdiction. After assessing each of these grounds for

removal, the district court concluded that it lacked

jurisdiction over the action and remanded to state court. We

conclude that no basis for federal jurisdiction applies and

affirm.

I.

A.

Defendant San Diego Family Housing (“SDFH”) is a

public-private venture between the Navy and Lincoln/Clark

6 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

San Diego, LLC under the Military Housing Privatization

Initiative (“MHPI”). See 10 U.S.C. §§ 2871‒2885. SDFH

contracted with Lincoln Military Property Management

(“Lincoln”) to provide property management services to the

Silver Strand I housing community, which includes military

housing on Naval Amphibious Base Coronado (“NAB

Coronado”). In 2016, Plaintiffs Donald and Lena Childs,

with their minor children, leased a home from SDFH at 1333

Saipan Road, Coronado, California (“the Saipan Property”).

Soon after Plaintiffs moved into their home, the property

began to suffer from repeated water-intrusion and related

mold contamination. According to Plaintiffs, these

problems caused damage to their personal property and

eventually impacted the family’s health, causing fatigue,

shortness of breath, chronic headaches, and other symptoms.

After reporting these issues to Defendants, Lincoln sent

InDepth, a mold remediation company, to inspect the

property. InDepth discovered visible mold in multiple areas

of the home and allegedly told Plaintiffs that there “[was] no

reason to run any tests” because the mold was visible.

InDepth informed Lincoln of its findings, and Lincoln

provided temporary relocation assistance to the Childs while

InDepth performed remediation services.

After Plaintiffs were told that the remediation service

was successfully completed, Plaintiffs requested

documentation verifying that the mold had been addressed,

which Lincoln allegedly refused to provide. Upon their

return to the property, Plaintiffs engaged their own mold

testing service provider who ran tests that indicated

heightened levels of hazardous mold. Plaintiffs told Lincoln

and InDepth about the test results and allege that Defendants

dismissed their concerns and insisted that the home was

habitable. Plaintiffs refused to remain at the property, and,

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 7

after rejecting alternative housing in the same community,

Defendants immediately ceased paying the Childs’

relocation costs. Defendants allegedly refused to

acknowledge the presence of mold and took no further steps

to properly remediate the property.

B.

In 2019, Plaintiffs brought suit in state court against

SDFH, Lincoln, and InDepth, asserting claims for

negligence, private nuisance, breach of contract, breach of

the implied warranty of habitability, breach of the implied

covenant of peaceful and quiet enjoyment, and constructive

eviction. SDFH and Lincoln removed the action to federal

court on the basis of federal enclave, federal officer, and

federal agency jurisdiction under 28 U.S.C. § 1331 and 28

U.S.C. § 1442(a)(1). Upon removal, SDFH and Lincoln

moved to dismiss the action under a claim of derivative

sovereign immunity pursuant to the Yearsley doctrine. See

Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18 (1940). The

district court denied the motion, and Defendants appealed.

We held that the district court’s order rejecting dismissal was

not an immediately appealable collateral order and

dismissed the appeal. See Childs v. San Diego Fam. Hous.

LLC, 22 F.4th 1092, 1099 (9th Cir. 2022).

Following remand, SDFH and Lincoln moved for

summary judgment on the grounds that Yearsley provided

them derivative sovereign immunity and that the legal effect

of federal enclave jurisdiction precluded most of Plaintiffs’

state law claims. 1 The United States then filed a Statement

1

SDFH and Lincoln also challenged Plaintiffs’ settlement with InDepth.

The district court did not address the propriety of that settlement in its

remand order, and Defendants do not seek review of this issue on appeal.

8 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

of Interest before the district court asserting that (1) Yearsley

did not apply to Defendants, (2) the Saipan Property was not

within a federal enclave, and (3) under this court’s

intervening precedent in Lake v. Ohana Military

Communities, LLC, 14 F.4th 993 (9th Cir. 2021), the district

court lacked federal officer or agency jurisdiction.

The district court ordered supplemental briefing and

eventually rejected all of Defendants’ proffered grounds for

federal jurisdiction. Specifically, the district court found that

Defendants failed to establish that the Saipan Property was

within a federal enclave because there was no evidence that

the United States had retained or assented to exclusive

federal jurisdiction over the property. Next, the district court

concluded that Defendants failed to show the requisite causal

nexus between the challenged actions and the federal

government’s involvement in Defendants’ housing

management to establish federal officer jurisdiction under 28

U.S.C. § 1442(a)(1). Finally, the district court concluded

that Defendants were unable to establish federal agency

jurisdiction under the six-factor test of In re Hoag Ranches,

846 F.2d 1225, 1227‒28 (9th Cir. 1988). The district court

remanded the case to state court. 2 Defendants timely

appealed.

2

In its remand order, the district court also ruled on Defendants’

evidentiary objections, sustaining their objection to an unauthenticated

parcel map of NAB Coronado, thereby declining to take judicial notice

of the parcel map. The district court also sustained, in part, Defendants’

objections to the declaration of a senior land surveyor, Lonie Cyr,

determining that legal conclusions as to whether the federal government

exercises exclusive jurisdiction over the Saipan Property were improper

witness testimony.

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 9

II.

Before reaching the merits of these claims, we must first

assess our appellate jurisdiction to review the district court’s

remand order. Federal courts of appeals generally lack

jurisdiction to review a district court’s remand order based

on lack of subject matter jurisdiction. See 28 U.S.C.

§ 1447(d) (“An order remanding a case to the State court

from which it was removed is not reviewable on appeal or

otherwise,” subject to certain exceptions); see also Yakama

Indian Nation v. State of Wash. Dept. of Revenue, 176 F.3d

1241, 1248 (9th Cir. 1999) (“Remand orders based on a

defect in removal procedure or lack of subject matter

jurisdiction are immune from review even if the district

court’s order is erroneous.”). Nonetheless, § 1447(d)

provides for two exceptions to this bar. Under the statute, a

remand order is reviewable for actions initially removed

pursuant to the federal officer removal statute codified at

§ 1442. See 28 U.S.C. § 1447(d) (“[A]n order remanding a

case to the State court from which it was removed pursuant

to section 1442 or 1443 of this title shall be reviewable by

appeal or otherwise.”). In their notice of removal, SDFH and

Lincoln asserted federal enclave jurisdiction under § 1331 as

well as federal officer and federal agency jurisdiction under

§ 1442(a)(1). Because one of the asserted grounds for

removal was § 1442, we have jurisdiction to review the

remand order in its entirety. Id. § 1447(d); see also BP

P.L.C. v. Mayor and City Council of Baltimore, 593 U.S.

230, 238 (2021) (explaining that the scope of appellate

jurisdiction extends to the “whole of [the district court’s]

order” when a defendant cites § 1442 as a ground for

removal).

10 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

III.

We review de novo the district court’s decision to

remand a removed case and its determination that it lacks

subject matter jurisdiction. Lively v. Wild Oats Mkts., Inc.

456 F.3d 933, 938 (9th Cir. 2006). The defendant bears the

burden of proving that the requirements for removal

jurisdiction have been met. Leite v. Crane Co., 749 F.3d

1117, 1122 (9th Cir. 2014). On appeal, Defendants renew

their contentions that subject matter jurisdiction exists under

(1) 28 U.S.C. § 1331 because the Saipan Property is located

within a federal enclave, (2) 28 U.S.C. § 1442 (federal

officer removal statute) because SDFH and Lincoln operated

under the Navy’s oversight and control in dealing with the

Childs’ complaints, and (3) 28 U.S.C. § 1442 because SDFH

qualifies as a federal agency. We consider each of these

arguments in turn.

A.

Federal enclave jurisdiction is dependent on the federal

government’s exercise of exclusive legislative jurisdiction.

See Lake, 14 F.4th at 1003‒04; Paul v. United States, 371

U.S. 245, 263‒64 (1963); United States v. Jenkins, 734 F.2d

1322, 1325‒26 (9th Cir. 1983). The Enclave Clause of the

Constitution authorizes Congress to:

[E]xercise exclusive Legislation in all Cases

whatsoever, over such District . . . as may, by

Cession of particular States, and the

Acceptance of Congress, become the Seat of

the Government of the United States, and to

exercise like Authority over all Places

purchased by the Consent of the Legislature

of the State in which the Same shall be, for

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 11

the Erection of Forts, Magazines, Arsenals,

dock-Yards, and other needful Buildings.

U.S. Const. art. I, § 8, cl. 17. Beyond the Enclave Clause’s

specified method of establishing exclusive federal

jurisdiction through the purchase of land with a state’s

consent, the Supreme Court has also recognized two other

methods by which the federal government can acquire

exclusive jurisdiction over land. First, Congress may

condition the admission of a state to the Union on a cession

of jurisdiction of land within that state. Fort Leavenworth

R.R. Co. v. Lowe, 114 U.S. 525, 526‒27 (1885). And

second, states themselves may cede legislative jurisdiction

over land within their borders to the federal government. Id.

at 540–42.

Defendants’ arguments for enclave jurisdiction over the

Saipan Property do not involve a straightforward application

of any of these methods. Instead, Defendants rely on an

intricate web of state and federal statutes to support their

theory. Therefore, to determine whether federal enclave

jurisdiction exists over the Saipan Property requires a brief

historical detour.

In 1897, California passed a law ceding “to the United

States of America exclusive jurisdiction over all lands within

this State now held, occupied, or reserved by the

Government of the United States for military purposes or

defense, or which may hereafter be ceded or conveyed to

said United States for such purposes.” 1897 Cal. Stat. ch.

56, § 1. 3 In 1940, Congress passed legislation applying to

3

This state law also required the United States to provide “a sufficient

description by metes and bounds” of the land and that “a map or plat of

such lands” be filed in “the proper office of record in the county” in

12 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

land acquired thereafter which required the federal

government’s assent to exclusive or partial jurisdiction over

federal property located within state boundaries. See 40

U.S.C. § 255 (1940) (re-codified at 40 U.S.C. § 3112); Paul,

371 U.S. at 264; Adams v. United States, 319 U.S. 312, 313

(1943). The 1940 Act provided that “it shall be conclusively

presumed that no [exclusive or partial] jurisdiction has been

accepted,” “[u]nless and until the United States has accepted

jurisdiction over lands hereafter to be acquired.” 40 U.S.C.

§ 255 (1940). The 1940 Act mandated that the federal

government indicate its acceptance of jurisdiction by “filing

a notice of such acceptance with the Governor of such State

or in such other manner as may be prescribed by the laws of

the State where such lands are situated.” Id. Following re-

codification, the statutory text makes clear that “[i]t is not

required that the Federal Government obtain exclusive

jurisdiction in the United States over land or an interest in

land it acquires.” 40 U.S.C. § 3112(a).

From 1941 to 1976, the United States acquired the lands

now comprising NAB Coronado, including the Saipan

Property, in a series of land transactions as well as by

dredging and filling portions of the San Diego Bay. The

precise mode and date of the federal government’s

acquisition of the Saipan property, however, is contested by

the parties.

The United States and Plaintiffs rely on a declaration by

Lonie Cyr, a senior land surveyor for the Navy, who attests

that the government did not acquire the lands where the

Saipan Property is located until 1955 through civil

which the land is located. 1897 Cal. Stat. ch. 56, § 1. The statute was

amended with minor modifications in 1943, see 1943 Cal. Stat. ch. 134

§ 114, but was later repealed in 1947, see 1947 Cal. Stat. ch. 1532.

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 13

condemnation. 4 According to Plaintiffs and the United

States, because the acquisition of land through civil

condemnation occurred after the 1940 Act, federal enclave

jurisdiction over the Saipan Property requires the federal

government’s assent to exclusive jurisdiction by “filing a

notice of . . . acceptance with the Governor of [the] State or

in such other manner as may be prescribed by the laws of the

State where [the] lands are situated.” 40 U.S.C. § 255

(1940). By this time, California had also enacted legislation

conditioning any transfer of jurisdiction on, inter alia, the

federal government’s written assent and the State Lands

Commission’s declaration that the transfer was “in the

interest of the State.” 1951 Cal. Stat. ch. 875, § 1. Because

Defendants have not offered any evidence that the federal

government assented to exclusive federal jurisdiction over

this property by filing notice or written consent, there can be

no federal enclave jurisdiction under this theory.

Defendants respond that the 1940 Act (and its notice-

filing requirement) does not apply to the Saipan Property

because the relevant parcel was not “acquired” through civil

condemnation in 1955; it was instead “made” by the United

States by dredging and filling the San Diego Bay to create a

seaplane base between 1941 and 1943. According to

Defendants, the United States “has sole ownership over land

created in this manner,” and they rely on United States v.

F.E.B. Corp., 52 F.4th 916, 926‒29 (11th Cir. 2022) to

4

Defendants’ claim that this proffered fact was excluded by the district

court is incorrect. The district court expressly overruled Defendants’

objections concerning the factual contentions in the Cyr Declaration,

such as how the property came into the United States’ ownership. See

supra n. 2.

14 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

buttress their arguments. 5 But, as the 1940 Act clarified, the

United States’ acquisition and ownership of land does not

require that the United States obtain exclusive jurisdiction

over that land. See 40 U.S.C. § 255 (1940); 40 U.S.C.

§ 3112(a). Therefore, Defendants’ claim of enclave

jurisdiction requires two predicates: (1) a factual predicate

that the Saipan Property originated from the United States’

own dredging and filling operation from 1941 to 1943 and

not the 1955 condemnation proceeding; and (2) a legal

predicate that land created by the United States for its own

use lies outside the scope of the 1940 Act because it was not

“acquired” and instead passed exclusively to the United

States based on California’s 1897 ceding statute. We need

not resolve the parties’ dispute over the factual predicate

because Defendants’ arguments fail as to the legal predicate.

The 1940 Act does not itself define the term “acquire.”

See generally, 40 U.S.C. § 255 (1940); see also 40 U.S.C.

§§ 3101‒3177. “Where Congress does not furnish a

definition of its own,” courts “generally seek to afford a

statutory term its ordinary or natural meaning.”

HollyFrontier Cheyenne Refin., LLC v. Renewable Fuels

Ass’n, 594 U.S. 382, 388 (2021) (quotation and citation

omitted). Under Black’s Law Dictionary, the term “acquire”

means “[t]o gain possession or control of” or “to get or

obtain” “by any means.” Acquire, Black’s Law Dictionary

(12th ed. 2024); see also Acquire, Black’s Law Dictionary

(3d ed. 1933) (“[t]o become the owner of property; to make

5

That case involved a dispute about ownership of an island created by

the Navy via dredging activities near Key West, Florida. The question

presented was not about whether the United States held exclusive

jurisdiction over the island, but whether the United States had a claim of

ownership over the island pursuant to the Submerged Lands Act, 43

U.S.C. §§ 1301–1315.

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 15

property one’s own” “[t]o gain permanently”). Under both

its contemporary and historical plain meanings, the term

“acquire” contemplates the United States’ acquisition of

land created by dredging and filling operations and therefore

the Saipan Property falls within the scope of the 1940 Act’s

requirements.

This plain meaning of the term “acquire” also accords

with the purpose of the 1940 Act. The Act followed several

Supreme Court decisions that addressed “controversies

concerning the relation of federal and state powers over

government property,” and, specifically, whether the federal

government’s acquisition of property resulted in exclusive

federal jurisdiction. Adams, 319 U.S. at 314 (collecting

cases). Before enactment, federal government officials

conducted a cooperative study which resulted in legislation

“aimed at giving broad discretion to the various agencies in

order that they might obtain only the necessary jurisdiction.”

Id. The 1940 Act achieved this goal by enshrining a

presumption against federal jurisdiction in the absence of

express federal assent. See 40 U.S.C. § 255 (1940).

Defendants rely on a definition of “acquire” from an

inapplicable statute relating to timber resources on federal

lands. See 16 U.S.C. § 620e (noting the definitions of § 620e

apply only “[f]or purposes of sections 620 to 620j of this title

[16 U.S.C. §§ 620‒620j]”). And the relevant chapter at

issue, Title 40, Subtitle II, Chapter 31, does not contain any

provision which would suggest that the term “acquire”

should be limited to lands obtained via transaction as

opposed to creation by the government itself. See generally,

40 U.S.C. §§ 3101‒3177.

Even if we were to credit Defendants’ contention that the

land was created by the United States and therefore the 1940

16 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

Act does not apply because there was no “acquisition,” the

California 1897 statute does not save their argument. That

statute provided for the transfer of exclusive jurisdiction

only in lands “which may hereafter be ceded or conveyed to

said United States for” military purposes or defense. 1897

Cal. Stat. ch. 56, § 1. If, under Defendants’ theory, the land

was created by the United States through dredging and

filling, the land cannot have been ceded or conveyed by the

State of California to the United States.

Finally, Defendants presented a different theory for

exclusive jurisdiction before the district court that merits

some discussion. Defendants earlier argued that the federal

government retains exclusive jurisdiction over lands created

by dredging and filling for the government’s use under the

Submerged Lands Act. See 43 U.S.C. § 1313(a). This, too,

is incorrect. Although § 1313 carves out an exception to the

Act’s general transfer of federal title and claims to

submerged lands within the territorial boundaries of states,

nothing in the text of § 1313 suggests that it extinguished

state jurisdiction over submerged lands within its territories.

Id. Indeed, Congress’ purpose in passing the Submerged

Lands Act was “not for the Federal Government to retain

exclusive jurisdiction over navigation of the waters above

the submerged lands, but for the Federal Government to

retain concurrent jurisdiction over those waters.” Barber v.

State of Hawai’i, 42 F.3d 1185, 1191 (9th Cir. 1994).

Accordingly, regardless of the parties’ competing

versions of events as to how the Saipan Property came into

the United States’ possession, Defendants have failed to

provide any evidence that the federal government has

assented to exclusive jurisdiction over it so as to establish

federal enclave jurisdiction.

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 17

B.

The district court did not err in determining that it lacked

original jurisdiction under the federal officer removal

statute. Under 28 U.S.C. § 1442(a), federal courts may

exercise removal jurisdiction over actions commenced in

state court against an “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.” To satisfy federal officer

removal jurisdiction under § 1442(a), defendants must

demonstrate (1) that they are persons “within the meaning of

the statute;” 6 (2) that “there is a causal nexus between [their]

actions, taken pursuant to a federal officer’s directions, and

plaintiff’s claims;” and (3) that they “can assert a colorable

federal defense.” Durham v. Lockheed Martin Corp., 445

F.3d 1247, 1251 (9th Cir. 2006) (cleaned up).

The district court correctly determined that Defendants

did not meet the causal nexus requirement. Under this

requirement, a private defendant must show that they were

“acting under a federal officer in performing some act under

color of federal office” and “that such action is causally

connected with the plaintiff’s claims against it.” Cnty. of San

Mateo v. Chevron Corp., 32 F.4th 733, 755 (9th Cir. 2022).

Here, Plaintiffs’ claims relate to SDFH and Lincoln’s

alleged failure to properly inspect, warn of, cure, and

otherwise reasonably manage the water-intrusion and mold

contamination issues that the Childs family experienced at

6

It is undisputed that Defendants are “persons” for the purposes of

§ 1442(a).

18 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

the Saipan property. 7 In their Notice of Removal,

Defendants asserted that they were acting under naval

officers in “fulfill[ing] the governmental function of housing

military service members and their families,” and they

further claimed that “the alleged bodily injuries and property

damage arose from [SDFH] and [Lincoln’s] performance of

their duties to the Navy under the Operating Agreement and

Property Management Agreement.”

Although Defendants have proffered numerous pieces of

evidence in support of their causal nexus theory, they fail to

show how their challenged actions occurred “because of

what they were asked to do by the Government.” Goncalves

By & Through Goncalves v. Rady Children’s Hosp. San

Diego, 865 F.3d 1237, 1245 (9th Cir. 2017) (quoting

Isaacson v. Dow Chem. Co., 517 F.3d 129, 137 (2d Cir.

2008)); see also Stirling v. Minasian, 955 F.3d 795, 800 (9th

Cir. 2020) (explaining that the “relationship between

someone acting under a federal officer and the federal officer

‘typically involves subjection, guidance, or control.’”

(quoting Fidelitad, Inc. v. Insitu, Inc., 904 F.3d 1095, 1099

(9th Cir. 2018)). Rather, the agreements, policies, letters,

and declarations offered by Defendants demonstrate, at

most, only general federal oversight over Defendants’

housing management efforts and compliance with applicable

laws and regulations.

Our decision in Lake v. Ohana Military Communities is

instructive to our analysis. There, the defendant was also a

military housing public-private venture established under

the MHPI. 14 F.4th at 999. In holding that the defendant

7

Plaintiffs also assert that many of Defendants’ actions were in violation

of state housing laws, their lease agreements, and Defendants’ own

policies.

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 19

failed to demonstrate a causal nexus between its alleged

failure to warn of pesticide contamination on the premises

and the Navy’s oversight, we emphasized the “sole and

exclusive management and control” afforded to the

government’s private counterpart and the defendant’s

inability to show that the Navy’s involvement in other

aspects of the housing arrangement amounted to anything

more than mere “consent power over aspects of the housing

arrangement.” Id. at 1004‒05. After determining that no

federal officer had “directed” the defendant to take the

challenged actions, we concluded that “the central issue” in

the causal nexus analysis was “unmet.” Id. at 1005.

As in Lake, the Operating Agreement here shows that the

government’s private counterpart, Lincoln/Clark San Diego,

LLC, enjoyed “exclusive management and control of the

business of [SDFH]” as well as “full authority to take all

actions necessary or appropriate to pursue the business and

carry out the purpose of the Company.” See id. at 1004‒05.

Defendants’ reliance on other provisions of the Operating

Agreement relating to income sharing and approval rights

over matters like cash flow, contracts and capitalization,

hiring, and other clerical duties does not demonstrate federal

control or direction over the relevant actions at issue here—

mold testing and remediation. See id. at 1004 (“It is not

enough that the regulation is highly detailed and . . . the

private firm’s activities are highly supervised and

monitored.” (quotations and citation omitted)).

Defendants also point to their Ground Leases for

evidence of federal control, but these agreements explicitly

assigned responsibilities, costs, and liability over mold

20 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

management during the applicable term to SDFH. 8

Moreover, we have previously explained that “the federal

government’s willingness to lease federal property . . . to a

private entity for that entity’s commercial purposes does not,

without more, constitute the kind of assistance required to

establish that the private entity is ‘acting under’ a federal

officer.” Cnty. of San Mateo, 32 F.4th at 760.

Defendants rely on the Navy’s input and consent over

their Operation and Management Plan (“O&M Plan”), which

included a Mold Management Plan that SDFH was required

to prepare. But the O&M Plan reflects minimum standards

under applicable laws, regulations, project requirements, and

housing policies. Nothing in the O&M Plan’s mold

management guidance constrained Defendants’ capacity to

inspect premises for mold and water contamination, 9

prevented Defendants from further investigating mold-

related complaints, or restricted Defendants’ capacity to

remediate mold-related issues within the premises.

Defendants’ reliance on the Navy’s Mold Policy is

similarly unavailing as that policy also lacks any restraining

or controlling language. Rather, the “policy”—if it can be

called that—informs readers of pertinent facts about the

hazards of mold, the efficacy of testing, and general

8

Although the Ground Leases assigned liability for injuries to third

parties from pre-existing mold contamination to the government, they

provide that SDFH is “responsible for any claims or liability for injury

to persons to the extent resulting from . . . the disturbance of a Mold

Condition during the applicable Term of [SDFH’s] Lease.”

9

The testing guidance contained in the O&M Plan reflects only what

maintenance technicians are required to tell residents when they request

testing. The O&M Plan otherwise does not appear to explicitly limit

additional testing.

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 21

recommendations by expert bodies. The same can be said of

the Navy’s periodic “letter directives” to MHPI-created

entities, such as SDFH, as these letters largely describe only

general guidelines for minimum housing standards or

statutory requirements under 10 U.S.C. § 2891a. As the

Supreme Court explains, “[a] private firm’s compliance (or

noncompliance) with federal laws, rules, and regulations

does not by itself fall within the scope of the statutory phrase

‘acting under’ a federal ‘official.’” Watson v. Philip Morris

Cos., Inc., 551 U.S. 142, 153 (2007). In any event, these

letters were sent in 2020 and therefore post-date the relevant

time period. Accordingly, nothing in these letters suffices to

demonstrate that Defendants acted pursuant to the Navy’s

instructions with regard to mold inspection and remediation.

Given the dearth of evidence suggesting federal

involvement in or control over Defendants’ mold

management practices, the cases in which we have found a

causal nexus are readily distinguishable. In Leite v. Crane

Co, the plaintiffs brought suit based on the defendants’

alleged failure to warn of potential asbestos exposure. 749

F.3d at 1119–20. There, the defendant-entity submitted

evidence showing the Navy’s knowledge of asbestos

hazards, its participation in the procurement of hazardous

equipment, and its “detailed specifications regulating the

warnings that equipment manufacturers were required to

provide.” Id. at 1120. Similarly, in Goncalves By and

Through Goncalves v. Rady Children’s Hosp. San Diego, the

challenged subrogation lien resulted directly from the

government’s delegation to the defendant-insurer its

authority to pursue subrogation claims on behalf of the

government. 865 F.3d at 1245.

Although we interpret the federal officer and agency

removal statute “broadly in favor of removal,” Durham, 445

22 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

F.3d at 1252, and “credit the defendant’s theory of the case,”

Defendants “must allege facts, not mere legal conclusions,

in compliance with the pleading standards established in Bell

Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and

Ashcroft v. Iqbal, 556 U.S. 662 (2009).” Leite, 749 F.3d at

1121–22, 1124. As we have explained, Defendants’

allegations suggest, at most, that the Navy “direct[ed],

supervise[d], and monitor[ed]” their general housing

activities, which does not plausibly meet their causal nexus

burden with regard to their challenged conduct. Lake, 14

F.4th at 1004 (quoting Fidelitad, 904 F.3d at 1100). Because

“the central issue in the causal nexus analysis . . . is unmet,”

id. at 1005 (quotation and citation omitted), Defendants have

failed to establish federal officer jurisdiction. 10

C.

Defendants further contend that the instant case is

removable pursuant to 28 U.S.C. § 1442(a)(1) because

SDFH is a federal agency. 11 To determine whether an entity

is an “agency” under 28 U.S.C. § 451, this court considers

the factors laid out in In re Hoag Ranches, 846 F.2d at 1227‒

28. These factors are (1) “the extent to which the alleged

10

Because we conclude that no federal officer directed Defendants to

take the challenged actions, we do not address Defendants’ arguments

that SDFH “was performing acts delegated to it by the Navy,” Lake, 14

F.4th at 1005 n.4, nor do we reach the question of whether Defendants

asserted a “colorable federal defense,” Durham, 445 F.3d at 1251.

11

For purposes of § 1442(a)(1), a federal “agency” is defined as “any

department, independent establishment, commission, administration,

authority, board or bureau of the United States or any corporation in

which the United States has a proprietary interest, unless the context

shows that such term was intended to be used in a more limited sense.”

28 U.S.C. § 451; see also Lake, 14 F.4th at 1005 (applying § 451 to

§ 1442(a)(1)).

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 23

agency performs a governmental function,” (2) “the scope of

government involvement in the organization’s

management,” (3) “whether its operations are financed by

the government,” (4) “whether persons other than the

government have a proprietary interest in the alleged agency

and whether the government’s interest is merely custodial or

incidental,” (5) “whether the organization is referred to as an

agency in other statutes,” and (6) “whether the organization

is treated as an arm of the government for other purposes,

such as amenability to suit under the Federal Tort Claims

Act.” Id.

Regarding the first factor, Defendants note that “SDFH

took over operations for a significant volume of military

housing that was affordable to Navy servicemembers within

their [Basic Allowance for Housing

(“BAH”)] . . . something the Navy previously provided on

its own.” This argument, however, is foreclosed by Lake,

where we explained that “leasing housing on a military

installation under the MHPI” is not necessarily a

“historically and exclusively governmental function” and

“[m]erely leasing housing to a servicemember cannot itself

be a governmental function” since “BAH can be used on or

off a military base.” 14 F.4th at 1005.

Under the second factor, the government’s control over

SDFH’s housing operations is limited. As in Lake, the

“exclusive management and control” conferred to SDFH’s

private managing member, Lincoln/Clark San Diego, LLC,

coupled with the Navy’s “limited rights and

responsibilities,” demonstrate that “the government only

ever had limited control.” Id. at 1006. “At most, this factor

does not weigh heavily in either direction” because an entity

subject to federal regulation does not, by virtue of that

24 CHILDS V. SAN DIEGO FAMILY HOUSING, LLC

regulation, become controlled by the federal government.

Id. at 1006.

As to the third factor, which relates to government

financing, Defendants highlight that the United States

capitalized SDFH at a rate of nearly twice the private

partner. But as we observed in Lake, “[a]n initial financial

contribution does not show ongoing operational financing.”

Id. at 1006. And Defendants have not presented any

evidence that the United States continued to finance SDFH’s

operations beyond its contributions during the development

period.

Under the fourth factor, whether any person other than

the government has a proprietary interest in the alleged

agency, the answer is clearly yes. As noted above,

Lincoln/Clark San Diego, LLC, retains “exclusive

management and control of the business of [SDFH].” See

id. at 1006. Defendants’ reliance on Acron Investments, Inc.

v. Federal Savings & Loan Insurance Corp., is misplaced.

In Acron, we concluded that the Federal Savings & Loan

Insurance Corporation was a federal agency based on the

government’s proprietary interest in the defendant

government corporation. 363 F.2d 236, 239‒40 (9th Cir.

1966), cert denied, 385 U.S. 970 (1966). Acron, however, is

distinguishable because that case addressed the character of

a government corporation in which the government had once

owned all stock but had since retired it. Id. at 240. Here, the

government has never retained an equivalent interest in

SDFH. Rather, any interest the government retains in SDFH

is merely “custodial” or “incidental” in light of

Lincoln/Clark San Diego, LLC’s exclusive control over the

venture’s business. Hoag Ranches, 846 F.2d at 1228; see

also Lake, 14 F.4th at 1006 (finding the government’s

CHILDS V. SAN DIEGO FAMILY HOUSING, LLC 25

interest in the defendant public-private venture insufficient

to satisfy factor four).

With respect to the fifth factor, Defendants do not cite

any statute that identifies SDFH or any public-private

venture formed for the purpose of military housing as an

agency. And Defendants concede that they do not satisfy

factor six. Balancing these factors, we conclude that

Defendants have not demonstrated that SDFH is a federal

agency under 28 U.S.C. § 1442(a)(1).

IV.

In light of the foregoing, the district court correctly

determined that Defendants have not carried their burden in

demonstrating federal enclave jurisdiction under 28 U.S.C.

§ 1331 or federal officer or agency jurisdiction under 28

U.S.C. § 1442(a)(1).

AFFIRMED.