Petition for Writ of Certiorari — Watson v. Philip Morris Companies, Inc.

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Suprame Court 118

1) FILE

No. Res O5 128 4A? 4 - 2006

INTHE OFFICE OF THE CLERK

Supreme Court of the Gnited States

- [LISA WATSON AND LORETTA LAWSON, INDIVIDUALLY

AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED.

Petitioners.

PHILIP MORRIS COMPANIES, INC... A CORPORATION:

AND PHILIP MORRIS, INCORPORATED, A CORPORATION.

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Eighth Circuit

PETITION FOR A WRIT OF CERTIORARI

STEVEN EUGENE CAULEY DAVID C. FREDERICK

MARCUS N. BOZEMAN Counsel of Record

CAULEY, BOWMAN, CARNEY KELLY P. DUNBAR

& WILLIAMS, PLLC KELLOGG, HUBER, HANSEN,

11311 Areade Drive TODD, EVANS & FIGEL,

Suite 200 P.Lka€.

Little Rock, Arkansas 72212 1615 M Street, N.W.

(501) 312-8500 Suite 400

Washington, D.C. 20036

(202) 326-7900

Counsel for Petitioners

April 7, 2006

QUESTION PRESENTED

Whether a private actor doing no more than complyihg

with federal regulation is a “person acting under a federal

officer” for the purpose of 28 U.S.C. § 1442(a)(1), entitling

the actor to remove to federal court a civil action brought

in state court under state law.

)

ill

TABLE OF CONTENTS

Page

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TT csiiiiisdbiiinsieiclenunicicinnniiceinninictninniniavecesienvnadeinncieiiaees 2

STATUTORY PROVISIONS INVOLVED.......00.000......0000.8 3

STATEMENT OF THE CASB.....................cscecsssccsenssssesssereed

A. The Federal Officer Removal Statute .....................3

B. FTC “Regulation” of Light Cigarettes Sacinniuhaatididesaiaiiinds 4

C. Proceedings in State and District Court .................5

D. The Court of Appeals’ Decision.........................000008 7

REASONS FOR GRANTING THE PETITION..... ’ saeiipeiaaal 8

THE EIGHTH CIRCUIT'S DECISION DIVIDES

THE FEDERAL COURTS ON SIGNIFICANT

ISSUES PERTAINING TO THE PROPER

APPLICATION OF THE FEDERAL OFFICER

ee STITT cesctctniasinsisincinictestaniessitaiiniibinsibandincisiininnnien 9

A. Federal Courts Are Divided Or Otherwise In

Disarray With Respect To When A Private

Party Is “Acting Under” A Federal Officer

Within The Meaning Of § 1442(a)(1)..........0..0.000004. y

1. The First, Seventh, and Eleventh Circuits

have adopted an official function test ............. 10

2. The approach of the Eighth and Fifth Cir-

cuits rests on the comprehensiveness and

I Ae Se GIG hice nccicccicccdcnceccincsettieninn 13

3. The Ninth and Tenth Circuits construe

the “acting under” clause to permit re-

moval! if the federal officer had general

supervision over a private actor ...................... 16

B. In Holding That Philip Morris May Avail It-

self Of The Federal Officer Removal Statute,

- The Eighth Circuit Misinterpreted This

Court’s Precedents, Reaching An Outcome

Inconsistent With Statutory Text And Pur-

1. The Eighth Circuit embraced an interpre-

ation of “acting under” that does not ac-

cord with the statutory text viewed in

light of this Court’s precedents.....................04. 18

2. The Eighth Circuit’s control test is incon-

sistent with the purpose of § 1442(a)(1).......... 21

3. The federal government's suit against

Philip Morris for acts similar to those at

issue here underscores the consequence of

the distinction between private actors and

SPT dactiicichadeiibintidenddlintnandiiabigtibiabbdainveniadae 23

4. The Eighth Circuit’s approach conflates

ordinary preemption analysis with the

justification for federal officer removal ........... 24

C. This Case Presents An Excellent Vehicle To

Resolve The Issues Presented........................c0c0000- 25

D. The Eighth Circuit’s Decision Raises Juris-

dictional Issues Of Exceptional Importanée ......... 26

TE indniehininnncnscdenieinibiderdeniasuiindsstasisidsninnieieinenienin 30

APPENDIX

TABLE OF AUTHORITIES

Page

CASES

Abdullah v. American Airlines, Inc., 181 F.3d 363

Ge GR i tensesdncbasctavesunistcusecnniudineniinenaonete 29

‘Agent Orange’ Prod. Liab. Litig., In re, 304 F. Supp.

BD GE Ges Sc OD crccccsnnstnserintnniasinntictdediedaitaiai 14

Akin v. Big Three Indus., Inc., 851 F. Supp. 819

GR SUE: Bee cacenciscicepcsuciiocdacedtehessiatescamidiaiiaeencnnael 18

Angelides v. Baylor College of Medicine, 117 F.3d

BE Ge GO: ED cccncnsatiinntccitnasceticeniavenebtasitibunimanmaaen i]

Arizona v. Manvpenny, 451 U.S. 232 (1981)......... 21, 22, 27

Bakalis v. Crossland Sav. Bank, 781 F. Supp. 140

Gees Ho PIED cccssansctessncensesenntniatedinbinminaiddiamamiamiaanes 13

Bates v. Dow AgroSciences LLC, 125 S. Ct. 1788

(2005) ......... védemonenagpeennoesnnspatedbedapiionbbineemientaaenamaa 29

Brown & Williamson Tobacco Corp. v. Wigand,

913 F. Supp. 530 (W.D. Ky. 1996) ...............0......- 12, 13

California v. H&H Ship Serv. Co., No. 94-10182,

1995 WL 6192938 (9th Cir. Oct. 17, 1995)... 16

Camacho v. Autoridad de Telefonos de Puerto Rico,

BEB F.Bad 46Z (lat Cir. 1BBBD .occecccccscccscccscosscesccsscess 10, 11

Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) ............ 25

Chapman v. Lab One, 390 F.3d 620 (8th Cir. 2004)......... 29

Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988).....25

Cipollone v. Liggett Group, Inc., 505 U.S. 504

SOE eenscnsss <sdamdeeensbennbepiesecnniibainiaanasbaimiiibamiaann 24

City of Greenwood v. Peacock, 384 U.S. 808 (1966)....19, 20

City of Indianapolis v. Chase Natl Bank, 314 U.S. 63

CUPID vccccsdee. sessostccsssuscsnsedédgossononensnnesseueasimanadeianiaaeaaaae 30

City of Livingston v. Dow Chem. Co., No. C05-03262-

AISW, 2005 WL 2463916 (N.D. Cal. Oct. 5, 2005) ....... 16

Colorado v. Symes, 286 U.S. 510 (1932)................ 21, 22, 26

Crocker v. Borden, Inc., 852 F. Supp. 1322 (E.D. La.

TIT chiussietiirieined elicited ipeibieaeaenatapanamnnnrnnntennsnteneseneees 17

Cutter v. Wilkinson, 125 S. Ct. 2113 (2005) ...........ccccccceee 26

Diet Drugs Prods. Liab. Litig., In re, 93 Fed. Appx.

ECE eee earn 10

Edwards v. Blue Cross/Blue Shield of Texas, No.

Civ. 3:05CV0144-H, 2005 WL 1240577 (N.D. Tex.

ET ae Se 14

FDA v. Brown & Williamson Tobacco Corp., 529 U.S.

ETE So oc ae ee nae 28

Freiberg v. Swinerton & Walberg Prop. Servs., Inc.,

245 F. Supp. 2d 1144 (D. Colo. 2002).............. 13, 18, 21

FTC v. Brown & Williamson Tobacco Corp., 778 F.2d

re 5

Fung v. Abex Corp., 816 F. Supp. 569 (N.D. Cal.

EES a See 15

Gay &. Behl, BOB UB. BB (IGBE) ..2....00cccccescecescessesescecess 21, 22

Geier v. American Honda Motor Co., 529 U.S. 861

i I ET 29

Good v. Armstrong World Indus., Inc., 914 F. Supp.

a cosetinanenouaion 18

Greene v. Citigroup Inc., No. 99-1030, 2000 WL

647190 (10th Cir. May 19, 2000).......................0.. 17

Guillory v. Ree’s Contract Serv., Inc., 872 F. Supp.

EL a Ree 15

Gustafson v. Alloyd Co., 513 U.S. 561 (1995) ................... 19

Haller v. Kaiser Found. Health Plan of the North-

west, 184 F. Supp. 2d 1040 (D. Or. 2001).............. 14-15

vil

International Primate Protection League v. Admin-

istrators of Tulane Educ. Fund, 500 U.S. 72

TERRE LER ET ee 21, 23

Jefferson County v. Acker, 527 U.S. 423 (1999)................ 19

Kaplansky v. Associated YM-YWHA’s of Greater New

York, Inc., No. 88 CV 1292, 1989 WL 29938

8 EE en ce 13

Kaye v. Southwest Airlines Co., No. Civ. A.

3:05CV0450-D, 2005 WL 2074327 (N.D. Tex. —

aa a 14

Kelly, In re, No. 06-8007 (7th Cir. Mar. 6, 2006).............. 16

Kelly v. Martin & Bayley, Inc., No. 05-CV-0409-

DRH, 2006 WL 44183 (S.D. Ill. Jan. 9, 2006),

appeal pending, No. 06-1756 (7th Cir.) ....................... 16

Kennedy v. Health Options, Inc., 329 F. Supp. 2d

ERR, CR ea 14

Krangel v. General Dynamics Corp., 968 F.2d 914

SG UU siietalesisinciiashtineibeintniamithdciinaimnianhaninlacaeaal y

Lalonde v. Delta Field Erection, No. Civ. A. 96-3244-

B-M3, 1998 WL 34301466 (M.D. La. Aug. 6,

SPEED Uindanntbassianitnbianabidenmabbennetansmibieiinininetneinninitdmendianngsbiiien 10

Louisville & Nashville R.R. v. Mottley, 211 U.S. 149

EEE eer aes eee ee nee SO A Ren 3

Lovell Mfg. v. Export-Import Bank of the United

States, 843 F.2d 725 (3d Cir. 1988) .................ccccsseesees 12

Magnin v. Teledyne Continental Motors, 91 F.3d

SEC ine eee eee Smee Ew 12

Maine Ass'n of Interdependent Neighborhoods v.

Commissioner, Maine Dept of Human Servs.,

ig ff fe 11

McMahon v. Presidential Airways, Inc., 410 F. Supp.

Be ey I TI rssicertitneiccitnitsiiiinincnicatinmsiaiiniaainiiitsanai 10

Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) .....00.00000.......30

vill

Mesa v. California, 489 U.S. 121 (1989) ..................ce eee 21

Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab.

Litig., In re, 342 F. Supp. 2d 147 (S.D.N.Y. 2004),

clarified, 341 F. Supp. 2d 386 (S.D.N.Y. 2004)........... 15

Miller v. Diamond Shamrock Co., 275 F.3d 414

| ee nenemeneeennbeoninseneeniiint 14

Neal v. Clark, 95 U.S. 704 (1878)..........cccccccccccessescecseesesees 19

New Jersey Dep't of Envtl. Protection v. Exxon Mobil

Corp., 381 F. Supp. 2d 398 (D.N.J. 2005) ................... 18

Norfolk Southern Ry. Co. v. James N. Kirby, Pty

OM aT 26

Northern Colorado Water Conservancy Dist. v. Board

of County Comm'rs, 482 F. Supp. 1115 (D. Colo.

TTETIEED creceumsinnmepdnadaweceeneentinedinpamutaininipintadninamemiiiiinsiasiitialiaaied 13

Pack v. AC & S, Inc., 838 F. Supp. 1099 (D. Md.

TEED ccinnrnctinnenesinanedngnnedintanienspabegaiauntdeninbanibainenmiiatieiinidsants 17

Paldrmic v. Altria Corporate Servs., Inc., 327 F.

8 YS een 15

Parks v. Guidant Corp., 402 F. Supp. 2d 964 (N.D.

Sui Saat ocsetieeicintinensiteiiartpciiaiheaatiiiniia etapa asiminpaespiaasieaniiameiiiaaae 14

Pearson v. Philip Morris USA, Inc., No. 03-CV-178-

HA, 2003 U.S. Dist. LEXIS 24508 (D. Or. Aug. 8.

TITEE? ccnunincsencdudctnaunnteninieneipentmnietiinmeneninneinioeenenseN 15

Public Citizen, Inc. v. NHTSA, 374 F.3d 1251 (D.C.

RE SRE een ENE aN eee mee Mae REIT ERE 29

Reiser v. Fitzmaurice, No. 94 Civ. 7512, 1996 WL

54326 (S.D.N.Y. Feb. 8, 1996) .........:cccccceceesseesvesseeseeeees 12

Richardson v. McKnight, 521 U.S. 399 (1997).................. 23

Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100

I iia aaa 20, 27

’ Sprietsma v. Mercury Marine, 537 U.S. 51 (2002) ........... 30

Swirsky v. National Ass'n of Sec. Dealers, 124 F.3d

Py TE Weieei re cnsnsenceniscicicnsencsatiicnadnivianeminiidongnesiathiad 29

Tafflin v. Levitt, 493 U.S. 455 (1990) ..................cccseeeeeeeees 27

Taylor v. Progress Energy, Inc., 415 F.3d 364

Ey Ts TUTE cscs teninats iapiciadihamaainasiaienidll 29

Tennessee v. Davis, 100 U.S. 257 (1880) ..............00000.. 22, 27

Tremblay v. Philip Morris, Inc., 231 F, Supp. 2d 411

SUIT TRIIE: SEITE iscinisicpipescelhcinnintaiaitiigdeiipinniaecinnduiniiedtbadmtannipiiatiin 15

United States v. Philip Morris Inc., 263 F. Supp. 2d

Er eenen ere 22

Venezia v. Robinson, 16 F.3d 209 (7th Cir. 1994)............. 11

Virden v. Altria Group, Inc., 304 F. Supp. 2d 832

SEE: ile, Tis TINIE sinsctiinteneitpintemnnenppsieniantiusietibiaatmnniaes 15

Waymire v. Norfolk & Western Ry. Co., 218 F.3d 773

SI TING, SIITIITTT cuit cosstisnisinicinemninditainndgniadsiiancansdataiadisainbaudmtaniandae 29

Wells Fargo Bank N.A. v. Boutris, 419 F.3d 949

SITET, STITT inosine eal eipeactniecinaiabemndiliabibdaiieadnlaainaiiah 29

Willingham v. Morgan, 395 U.S. 402 (1969) ........... 3, 4, 20,

21, 22, 23, 28

Winters v. Diamond Shamrock Chem. Co., 149 F.3d

ee ener 8,14, 18

Wireless Telephone Radio Frequency Emissions

Prods. Liab. Litig., In re, 327 F. Supp. 2d 554 (D.

Bet, GTI UE cccnccnhseseescosideneutuusteianiianneienntenndentsantinmnmaleseiniins 14

STATUTES

Act of Feb. 4, 1815, ch. 31, 3 Stat. 195:

ne Oe a TET 4

Act of Mar. 2, 1833, ch. 57, 4 Stat. 632 (Force Act)......4, 22

es es ee certccrettinntianseniidntastniintniensiontinedinnsiicitid 4

Civil Rights Act of 1866, ch. 31, 14 Stat. 27 ............... 19, 20

Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seg. ......... 13

Family and Medical Leave Act of 1993, Pub. L. No.

ey ST TPUNs Uicincisstieriicentsiienciisiciienhaninatiiinienatddognidaaseiasitiel 29

Federal Courts Improvement Act of 1996, Pub. L.

No. 104-317, 110 Stat. 3847:

I I eas 4

EOP ET ET,

I iiiccaceas anette in ial 10

REESE Re eee PORN ar oe 7, 25, 26

| | EERE ney orem Oa ee ETOP aE: 22

TET Tm ETT eT 3

28 U.S.C. § 1442(a)(1) .....ccceeeee 1, 2, 3, 4, 6, 7, 9, 11, 12, 14,

15, 18, 19, 20, 21, 23, 25, 26, 27, 28

EE eR eC TT 19, 20

28 U.S.C. § 1447) ceccccccsssseeoeee PE NW A a cr EO, 9

Arkansas Deceptive Trade Practices Act, Ark. Code

TT SEIN, ‘siiinisidaicriiisitienmtncindaiibinniinmmannatetadiansil 6

ADMINISTRATIVE MATERIALS

Advertising of Cigarettes, 35 Fed. Reg. 12,671 (1970)........5)

Cigarettes: Testing for Tar and Nicotine Content,

EE neon eer er een 5

Federal Trade Commission, Report to Congress (Dec.

Se SUE cetusescantetetantantesinntedlbaiienmnens eniciitiiniaiaibiabaiindanilianenininii 5

Notice, Cigarette Testing; Request for Public Com-

ment, 62 Fed. Reg. 48,158 (1997) .............cccccceeceeceeeeees 28

OTHER MATERIALS

Richard H. Fallon, Jr., et al., Hart & Wechsler’s The

Federal Courts and the Federal System (4th ed.

IIITEED siknenntaieneininddtiantntadinteneninaddnsentenitiiniedinnteanaendiihied 3,4

Post-Trial Br. of the United States of America,

United States v. Philip Morris USA Inc., No. 99-

CV-02496 (D.D.C. filed Aug. 24, 2005).................000080 24

Reply Mem. in Support of the Post-Trial Br. of the

United States of America, United States v. Philip

Morris USA Inc., No. 99-CV-02496 (D.D.C. filed

ee EERE aa 24, 28

Robert L. Stern, et al., Supreme Court Practice

STII, SEIUIDTEEEcsniiietechiteiaiieniatinsiecsicntienininninditdndeatininintemibaenmsanetil 26

Charles Alan Wright, et al., Federal Practice and

ED Cre innicicccocnenicncteinanisiiasentsustiamiinnabions 22

Petitioners Lisa Watson and Loretta Lawson, individu-

ally and on behalf of all others similarly situated, respect-

fully petition for a writ of certiorari to review the judgment

of the United States Court of Appeals for the Eighth Cir-

cuit in this case.

INTRODUCTION

This case presents issues of exceptional importance to

the balance of judicial authority between the state and

federal judicial systems. Before the court of appeals, de-

fendant Philip Morris argued that this case — a class ac-

tion brought under Arkansas law related to Philip Mor-

ris's marketing and promotion of light cigarettes — “is ex-

actly the type of case for which the federal officer removal

statute was created.” Appellee’s Br. 34. The Eighth Cir-

cuit agreed with that extraordinary proposition, holding

that Philip Morris was a “person acting under” a federal

officer. 28 U.S.C. § 1442(a)(1). The court held that Philip

Morris had a right to defend this action in federal rather

than state court, simply because Philip Morris was sub-

ject to comprehensive and detailed regulation by the Fed-

eral Trade Commission (“FTC”) in marketing and promot-

ing its light cigarettes. That holding is at odds with this

Court's precedents, conflicts with the text and purpose of

the statute, defies common sense, and furthers already

profound confusion in the federal courts as to the proper

interpretation of the statute.

The Eighth Circuit's decision is not an aberration, but

“rather reflects a pervasive confusion in the federal courts

conterning the proper interpretation of the federal officer

removal statute in cases involving private parties. The

courts of appeals have articulated markedly differing

tests for when a private actor is “acting under” a federal

officer within the meaning of the statute. The First, Sev-

enth, and Eleventh Circuits, for example, have embraced

an official function approach that looks to whether a pri-

vate actor is standing in the shoes of a federal officer in

enforcing federal law. Under the law of those circuits,

Philip Morris unquestionably does not qualify as a person

“acting under’ a federal officer and is thereby not entitled

to remove an action to federal court. The Eighth Circuit

followed the Fifth Circuit, however, in making dispositive

the comprehensiveness and detail of federal control over

the activities of a private actor. And, in the Ninth and

Tenth Circuits, a private actor must show only that it is

under the general supervision of a federal officer. The

current articulation of “acting under” in four circuits,

therefore, differs markedly from the official function test

adopted by three circuits.

This Court's review is urgently needed to bring clarity

to the test for determining if and when a private actor is

“acting under’ a federal officer for purposes of federal offi-

cer removal. Left uncorrected, the Eighth Circuit's ap-

proach to interpreting § 1442(a)(1) will have significant

consequences. By radically expanding the category of

cases in which removal is appropriate, the Eighth Cir-

cuit’s rule threatens the established interest of States in

having state courts be the primary forums for the adjudi-

cation of state law. The Eighth Circuit's rule will invite

regulated parties of all types to remove cases from state

court, based on no more than artful characterizations of

the regulatory regime to which the party is subject.

Channeling ordinary state lawsuits to federal courts in

this manner will drastically stretch federal judicial re-

sources and undermine the interests of States in having

their judicial systems available to vindicate the interests

of their citizens.

OPINIONS BELOW

The court of appeals’ opinion (Pet. App. la-19a) is re-

ported at 420 F.3d 852. The district court’s opinion deny-

ing petitioners’ motion to remand (Pet. App. 20a-60a) is

unreported (but available at 2003 WL 23272484).

JURISDICTION

The judgment of the court of appeals was entered on

August 25, 2005. A petition for rehearing was denied on

November 18, 2005. See Pet. App. 6la. On February 9,

2006, Justice Alito extended the time within which to file

a petition for a writ of certiorari to and including March

20, 2006, and on March 14, 2006, further extended the

time within which to file a petition to and including April

17, 2006. See id. at 100a-10la. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Relevant statutes are set forth at Pet. App. 98a-99a.

STATEMENT OF THE CASE

A. The Federal Officer Removal Statute

The federal officer removal statute, 28 U.S.C. § 1442(a),

governs the removal to federal court of criminal and civil

actions in which federal offieers and agencies are defen-

dants. The statute provides that “[a] civil action . . . com-

menced in a State court .. . may,” in certain circum-

stances, “be removed . . . to the district court of the United

States for the district and division embracing the place

wherein it is pending.” 28 U.S.C. § 1442(a). The first sub-

section of § 1442(a) defines one such circumstance as

when “|t]he 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, [is] sued in an offi-

cial or individual capacity for any act under color of such

office.” Id. § 1442(a)(1). By providing federal officers with

the statutory right to remove a civil action based on state

law, § 1442(a)(1) functions as an exception to the well-

pleaded complaint rule. See generally Louisville & Nash-

ville R.R. v. Mottlev, 211 U.S. 149, 152 (1908).

“The federal officer removal statute has had a long his-

torv.”. Willingham v. Morgan, 395 U.S. 402, 405 (1969).

The first federal officer removal statute was enacted dur-

ing the War of 1812. See Richard H. Fallon, Jr., et al.,

Hart & Wechsler’s The Federal Courts and the Federal

System 951 (4th ed. 1996) (‘Hart & Wechsler”). The pro-

vision “was part of an attempt to enforce an embargo on

trade with England over the opposition of the New Eng-

land States, where the War of 1812 was quite unpopular.”

Willingham, 395 U.S. at 405. To that end, the statute

provided for the removal of actions brought in state court

against “any collector, naval officer, surveyor, inspector,

or any another officer .. . or any other person aiding or

assisting” in enforcing the customs provisions of the act.

Act of Feb. 4, 1815, ch. 31, § 8, 3 Stat. 195, 198. By its

terms, the removal provision expired at the end of the

war. See Willingham, 395 U.S. at 405.

The next iteration of a federal officer removal statute

came in the Force Act of 1833, enacted in response to

South Carolina’s threat of nullification. See Act of Mar. 2,

1833, ch. 57, § 3, 4 Stat. 632, 633-34. See generally Hart

& Wechsler at 951. The removal provision of that Act au-

thorized the removal of suits against federal officers or

“other person[s]” on account of acts done in enforcing the

customs laws. § 3, 4 Stat. 633.

Congress enacted a new series of federal officer removal

statutes during the Civil War, authorizing the removal of

cases brought against federal officers for acts committed

during the rebellion and justified under the authority of

the President or Congress. See Hart & Wechsler at 951.

These provisions “were eventually codified into a perma-

nent statute which applied mainly to cases growing out of

enforcement of the revenue laws.” Willingham, 395 U.S.

at 405-06. The permanent removal statute was amended

several times prior to 1948, at which time the statute was

broadened, as a part of the Judicial Code of 1948, to in-

clude all federal officers. Jd. at 406.

In 1996, Congress amended § 1442(a)(1) to include fed-

eral agencies within the compass of the removal provision.

See Federal Courts Improvement Act of 1996, Pub. L. No.

104-317, § 206, 110 Stat. 3847, 3850.

B. FTC “Regulation” of Light Cigarettes

In the 1950s, the FTC became alarmed about the accu-

racy of representations made in cigarette advertising

- about the tar and nicotine content of cigarettes. The FTC

published guidelines “advising manufacturers to make no

representations about the tar and nicotine content of a

cigarette that could not be supported with reliable scien-

tific evidence.” FTC v. Brown & Williamson Tobacco

Corp., 778 F.2d 35, 37 (D.C. Cir. 1985).

In 1967, the FTC sought to standardize tar and nicotine

testing by endorsing a method to test the tar and nicotine

levels of cigarettes known as the Cambridge Filter

Method. See id.; see also Cigarettes: Testing for Tar and

Nicotine Content, 32 Fed. Reg. 11,178 (1967). The Cam-

bridge Filter Method was intended to provide a means for

making factual statements in advertising about tar and

nicotine content of cigarettes. In August 1970, the FTC

sought comment on a formal agency rule that would have

made it “an unfair or deceptive act or practice .._ to fail to

disclose, clearly and prominently, in all advertising the

tar and nicotine content fof the cigarettes] ... based on

the most-recently published” data resulting from tests us-

ing the Cambridge Filter Method. Advertising of Ciga-

rettes, 35 Fed. Reg. 12,671, 12,671 (1970).

Later that year, however, five leading cigarette compa-

nies, including Philip Morris, agreed to a “voluntary pro-

gram” by which the companies would disclose tar and

nicotine data culled from FTC test results on advertising,

although cigarette companies have never entered into any

such agreement regarding labeling on packages or car-

tons. See Federal Trade Commission, Report to Congress,

App. C (Dee. 3), 1970). Upon reviewing the voluntary

agreement, the FTC suspended its proposed rulemaking

indefinitely. Brown & Williamson Tobacco Corp., 778

F.2d at 37.

C. Proceedings in State and District Court

This case arises out of a civil action brought against

Philip Morris by Lisa Watson and Loretta Lawson in Ar-

kansas state court for violations of Arkansas state law.

Petitioners, acting on behalf of a class of all persons who

purchased two brands of so-called “iight” cigarettes — viz.,

Marlboro Lights and Cambridge Lights — in Arkansas,

have alleged that Philip Morris engaged in unfair and

deceptive business practices in connection with promoting

and marketing its light cigarettes.

Specifically, petitioners’ complaint alleges that Philip

Morris, “|w|hile marketing and promoting decreased tar

and nicotine deliveries, . . . designed Cambridge Lights

and Marlboro Lights to register lower levels of tar and

nicotine on the [Cambridge Filter Method]. . . than would

be delivered to the consumers of the product.” Pet. App.

63a-64a (4 9). Petitioners have averred that Philip Morris

falsely represented its cigarettes as light or low tar by

“fijntentionally manipulating the design and content” of

its cigarettes to lower artificially the results of the testing

method used to measure tar and nicotine levels. See id. at

64a-65a ("4 12-13). Based on those allegations, petition-

ers seek relief under the Arkansas Deceptive Trade Prac-

tices Act (Counts | and II).

Philip Morris removed petitioners’ action to the United

States District Court for the Eastern District of Arkansas,

relying on, among other provisions, the federal officer re-

moval statute. Philip Morris argued that removal of a

“private party |is appropriate] where it is sued for actions

taken under the direction of a federal officer.” Jd. at 76a.

Philip Morris insisted that “[t]he 60-year history of FTC

mandates” caused Philip Morris to be a federal officer or a

“person acting under” a federal officer. Jd. at 88a.

Philip Morris argued further that it had a “colorable

federal defense” because petitioners’ claims “inevitably

conflict with the FTC’s policy judgments, giving rise to a

valid preemption defense.” Jd. at 90a-9la. Philip Morris

also maintained a causal connection existed between FTC

regulation and the challenged acts because petitioners

sought to impose lability “for conduct ... that was under-

taken at the express direction” of the FTC. /d. at 92a.

Petitioners moved to remand the case to Arkansas state

court, challenging Philip Morris's entitlement to avail it-

self of § 1442(a)(1). Petitioners argued that they were not

challenging the use of FTC testing procedures “but rather

the company’s deceptive practices in labeling its products

as low tar and nicotine ... accomplished by manipulation

of the [FTC] testing_procedures.” Appellants’ Br. xii (cit-

ing Motion for Remand §# 4-5). Furthermore, petitioners

maintained that Philip Morris’s marketing of light ciga-

rettes subject to FTC regulation did not make the com-

pany a “person acting under” a federal officer. /d.

On December 12, 2003, the district court denied peti-

tioners’ motion to remand. The court held that “[t]he ‘per-

son acting under’ element and the causal nexus element

tend to converge into a single issue: whether the actions

that form the basis of the state suit were performed pur-

suant to comprehensive and detailed federal government

regulation.” Pet. App. 36a. After surveying the landscape

of federal cases passing on the subject, the court then held

that, because FTC “regulation of cigarette testing and ad-

vertising spans over forty years and is detailed and spe-

cific,” “Philip Morris acted under the direction of a federal

officer within the meaning of § 1442(a)(1) when it cited

the tar and nicotine values derived from the FTC Method

in its |cigarette] advertisements.” Jd. at 41a.

Recognizing that its decision expanded the scope of

§ 1442(a)(1) and created a split in the federal courts, the

district court certified the question for interlocutory re-

view under 28 U_S.C. § 1292(b). See id. at 57a-60a.

D. The Court of Appeals’ Decision

The Eighth Circuit affirmed the district court's denial of

petitioners’ motion to remand. The court of appeals

opined that it was obliged not to give § 1442(a)(1) a “‘nar-

row or ‘limited’ interpretation.” Pet. App. 4a. The court

then held that Philip Morris qualified as a “person acting

under” a federal officer, even though it noted that that

decision was contrary to that of “every other district court

confronted with tobacco companies alleging they were act-

ing under a federal officer.” /d. at 6a. In holding that

Philip Morris was entitled to invoke § 1442(a)(1), the

Kighth Circuit articulated a test that looked to whether

the FTC exercised “comprehensive, detailed regulation”

over Philip Morris. See id. at 8a; see also id. at 6a

(whether “acting under” condition is satisfied depends on

“detail and specificity of the federal direction of the defen-

dant’s activities”). Relying primarily upon analogy to the

Fifth Circuit’s decision in Winters v. Diamond Shamrock

Chemical Co., 149 F.3d 387, 398 (5th Cir. 1998), the

Kighth Circuit held the FTC did exercise “comprehensive,

detailed regulation” over Philip Morris, and thereby satis-

fied the “acting under” condition. Pet. App. 7a-8a.

Furthermore, the court deemed it irrelevant that the

FTC “regulations” that Philip Morris claimed rendered it

a federal officer were never adopted and that the industry

acted by voluntary agreement. The court decided that

“[t]he FTC effectively used its coercive power to cause the

tobacco companies to enter the agreement.” /d. at 10a.

The Eighth Circuit also held that a causal connection

existed between Philip Morris’s challenged conduct and

the acts regulated by the FTC. The court explained that

petitioners’ complaint both “directly implicates the en-

forcement and wisdom of the FTC's tobacco policies” and

“challenge|s] the FTC’s policy judgment that despite the

failure of the Cambridge Filter Method .. . the test results

should still be included in advertising.” /d. at 15a-16a.

In addition, the Eighth Circuit decided that, although”

petitioners’ claims were entirely under Arkansas state

law, Philip Morris had a colorable federal defense of pre-

emption that supported its claim to removal under the

federal officer removal statute. /d. at 16a-18a.

REASONS FOR GRANTING THE-PETITION

The Eighth Circuit's decision that Philip Morris may

remove to federal court further divides the courts of ap-

peals on the important jurisdictional issue of when a pri-

vate actor is “acting under” a federal officer such that the

party may avail itself of the federal officer removal stat-

ute. The First, Seventh, and Eleventh Circuits have each

adopted a framework for interpreting the “acting under’

requirement that looks to whether a private actor is per-

forming an official governmental function; under that

framework, removal jurisdiction for Philip Morris would

have been improper. The Eighth Circuit, however, fol-

lowed an approach similar to that of the Fifth “ircuit in

making dispositive the detail or comprehensiveness of

federal control. By contrast, the Ninth and Tenth Circuits

have each held that general supervision by a federal offi-

cer may be sufficient to support removal jurisdiction.

This Court's review is needed to give clarity to an im-

portant jurisdictional provision aimed at maintaining a

proper division between state and federal judicial author-

ity when federal officers are sued in state court. Absent

correction by this Court, the Eighth Circuit's decision en-

courages private regulated actors of all types to assert an

immunity from suit in state court for alleged violations of

state law based on nothing more than that the party is

subject to comprehensive and detailed federal regulation.

THE EIGHTH CIRCUIT'S DECISION DIVIDES THE

FEDERAL COURTS ON SIGNIFICANT ISSUES

PERTAINING TO THE PROPER APPLICATION OF

THE FEDERAL OFFICER REMOVAL STATUTE

A. Federal Courts Are Divided Or Otherwise In

Disarray With Respect To When A Private

Party Is “Acting Under” A Federal Officer

Within The Meaning Of § 1442(a)(1)

The courts of appeals are deeply divided over the legal

test for determining when a private party ts “acting un-

der” a federal officer.’ Although the “acting under” clause

Ordinarily, a division among the courts of appeals signals most

plainly the need for this Court's intervention. Although that is also

true here, we also highlight the deep confusion among the district

courts because an order granting or denying a motion to remand to

state court is not reviewable on interlocutory appeal. See 28 U.S.C.

§ 1447¢d) Corder remanding a case to the State court from which it was

removed is not reviewable on appeal”); Angelides v. Bavlor College of

Medicine. 117 F.3d 333 (5th Cir. 1997) (no jurisdiction under § 1447(d)

or collateral order doctrine to review remand order): Arangel v. General

Dynamics Corp., 968 F.2d 914. 915 (9th Cir. 1992) (per curtam) (declin-

ing to make exception to § 14.47(d) for “orders deciding important legal

issues for the first time”): /n re Diet Drugs Prods. Liab. Litig.. 93 Fed.

serves a crucial function in differentiating private parties

from federal actors, courts of appeals’ decisions interpret-

ing the clause run the gamut from those holding that a

private party availing itself of the statute must be carry-

ing out official governmental functions, to those requiring

comprehensive and detailed federal control over the re-

moving party, to those looking only to whether the federal

government exercises any control, broadly defined. Philip

Morris made a similar point before the Eighth Circuit,

arguing that “[cjourts have articulated different legal

tests to describe the level of federal direction nécessary to

bring a defendant within the ‘acting under’ provision of

the federal officer removal statute.” Appellee’s Br. 35.”

1. The First, Seventh, and Eleventh Circuits have

adopted an official function test

In Camacho v. Autoridad de Telefonos de Puerto Rico,

868 F.2d 482 (ist Cir. 1989), the First Circuit upheld re-

moval by a telephone company sued for its alleged in-

volvement in electronic surveillance by federal agents.

See id. at 486. The plaintiffs specifically alleged that the

Appx. 345. 348 (3d Cir. 2004) (court of appeals lacked appellate juris-

diction, under 28 U.S.C. § 1291. to entertain appeal from denial of mo-

tion to remand; jurisdiction was not proper under collateral order doc-

trine). Many cases. therefore. that would further demonstrate the di-

vergent approaches of the courts simply do not reach the courts of ap-

peals for lack of appellate jurisdiction. Petitioners accordingly look

hoth to the federal courts of appeals and to the federal district courts -

the forums in which, as a practical matter, this important jurisdic-

tional issue is often ultimately resolved - to demonstrate the urgency

of action by the Court.

* See also McMahon v. Presidential Airways. Inc.. 410 F. Supp. 2d

1189, 1196 (M.D. Fla. 2006) (observing that “there are varying formu-

lations of the test for removal under the federal officer provision”):

Lalonde v. Delta Field Erection. No. Cw. A. 96-3244-B-M3, 1998 WL

34301466, at *2 (M.D. La. Aug. 6, 1998) (Neither the Supreme Court

nor the Fifth Circuit have established what 1s required to show that a

government contractor is ‘acting under’ an officer of the United States

or of an agency thereof. Cases from other federal district courts . . .

vary in their approach to what is required under this element.”).

telephone company “wiretapped and/or offered technical

assistance to federal agents to wiretap.” Jd. Without a

word as to whether federal control over the telephone

company was comprehensive or detailed — the factors

deemed dispositive by the Eighth Circuit — the First Cir-

cuit there held that the defendant's “involvement in the

electronic surveillance” — which was “official government

business” — “was strictly and solely at federal behest.”

Id.’ Thus, the First Circuit's approach makes the official

or private character of the performed acts determinative

of whether the private actor is “acting under” the federal

officer for removal purposes.

In Venezia v. Robinson, 16 F.3d 209 (7th Cir. 1994), the

Seventh Circuit adopted a comparable approach — looking

to whether the removing party was acting in an official

capacity in enforcing federal law — in deciding whether a

state officer was entitled to removal under § 1442(a)(1).

In that case, a civil suit was brought against an officer of

the Illinois Liquor Control Commission in connection with

a seizure of video gaming machines. The state officer

sought removal on the ground that he was acting as a

part of an FBI investigation and thus was a “‘person act-

ing under a federal agent.” /d. at 211. The court of ap-

peals agreed, reasoning that “|a] federal agent or infor-

mant who asserts that he was (or is) acting in the course

of a criminal investigation is entitled to remove under

§ 1442(a)(1). presenting to the federal tribunal all ques-

tions of justification and immunity.” /d. at 212 (emphasis

added).'

“Cf. Maine Ass'n of interdependent Neighborhoods v. Commissioner,

Maine Dept of Human Servs.. 876 F.2d 1051, 1054 (ist Cir. 1989)

(Brever. J.) (commissioner of state agency “might be considered a ‘per-

son acting under the Secretary jof Health and Human Services|” inso-

far as state agency is “administering the AFDC rules and regulations’)

(emphasis added).

' The Seventh Corcuit’s decision has been viewed by a district court

outside that circuit as supporting the notion that private parties per-

forming official governmental! functions may be entitled to be treated

The Eleventh Circuit followed a similar path in Magnin

v. Teledyne Continental Motors, 91 F.%d 1424 (Lith Cir.

1996). There, the court of appeals upheld a refusal to re-

mand to state court a state-law action for negligent in-

spection and wrongful certification of an aircraft engine.

The Eleventh Circuit, consistent with the First and Sev-

enth Circuits, found that the defendant, an “authorized

agent of the [Federal Aviation Administration (“FAA”)].”

was entitled to removal because there was a connection

between the defendant's acts “under asserted official au-

thority” and the civil action brought against him. 7d. at

1427-28 (internal quotation marks omitted). The Elev-

enth Circuit deemed it crucial that the defendant had

acted “in his capacity as an agent of the FAA” with re-

spect to all claims alleged against him in the complaint.

Id. at 1428.’ Underscoring the divide in the circuits, the

Eleventh Circuit did not feature the issue of whether the

federal government exercised comprehensive and detailed

control with respect to engine inspections, but instead fo-

cused upon whether the defendant was performing the

official delegated functions of the federal government. See

id. (noting that defendant was “acting on behalf of the

FAA, under the authority granted to him by the FAA’).

Relatedly, federal district courts have applied varia-

tions of the official function test, holding that the conduct

of a private party invoking § 1442(a)(1) must be tanta-

mount to official governmental conduct, and that this test

is not satisfied by showing merely that the private actor

complied with the law. In Brown & Williamson Tobacco

Corp. v. Wigand, 913 F. Supp. 530 (W.D. Ky. 1996), for

example, the court denied removal to a defendant testifv-

as federal officers. See Reiser v. Fitzmaurice, No. 94 Civ. 7512. 1996

WL 54326, at *1-*5 (S.D.NLY. Feb. 8. 1996).

* But cf. Lovell Mfg. v. Export-Import Bank of the United States, 843

F.2d 725. 734 n.13 (3d Cir. 1988) (it is not at all clear that a mere

agency-principal relationship between [a government agency| and [a

private corporation] would be sufficient to support jurisdiction” under

§ 1442(a)(1)). :

ing pursuant to a subpoena, reasoning that he was not

acting under a federal officer because he “hald] not been

directed to perform official functions as an officer or agent

of the government.” /d. at 533 (emphasis added). Con-

trary to the framework employed by the Eighth Circuit,

the court explained that testifying before a grand jury is

“something private citizens are regularly required to do”

and “such testimony does not make a citizen a federal offi-

cial or agent.” /d.°

In short, under the official function approach taken by

the First, Seventh, and Eleventh Circuits, Philip Morris —

a private corporation doing no more than complying with

federal law — would not have been entitled to removal.

2. The approach of the Eighth and Fifth Circuits

rests on the comprehensiveness and detail of fed-

eral control

The Eighth Circuit’s framework tracks an approach

taken by the Fifth Circuit in making the comprehensive-

" See also Freiberg v. Swinerton & Walberg Prop. Servus., Inc., 245 F.

Supp. 2d 1144, 1150 (D. Colo. 2002) (“Because [§ 1442(a)(1)] is prem-

ised on the protection of federal activity and an anachronistic mis-

trust of state courts ability to protect and enforce federal interests and

immunities from suit, private actors seeking to benefit from its provi-

sions bear a special burden of establishing the official nature of their

activities.”); Bakalis v. Crossland Sav. Bank, 781 F. Supp. 140, 145

(E.D.N.Y. 1991) (bank was not “acting under” federal officer based on

federal regulation because removal is permitted only “when the corpo-

ration is so intimately involved with government functions as to occupy

essentially the position of an employee of the government”): Kaplansky

v. Associated YM-YWHA's of Greater New York, Inc.. No. 88 CV 1292.

1989 WL 29938, at *3 (E.D.N.Y. Mar. 27, 1989) (parties complying with

subpoena were not “acting under” federal officer because defendants

were not “asked to stand in the shoes of [federal] officers or agents and

perform ‘official functions’); Northern Colorado Water Conservancy

Dist. v. Board of County Comm'rs, 482 F. Supp. 1115, 1118 (D. Colo.

1980) (county and regione! council were not “acting under” federal offi-

cer in participating in Cl-an Water Act program because, although “the

federal clean water program provides for the use of various agencies of

state and local government in pursuing environmental goals. it does

not constitute a grant of substantive powers to political subdivisions of

another sovereign’).

ness and detail of control exercised by a federal officer

both necessary and sufficient to permit removal by a pri-

vate party under § 1442(a)(1).

In Winters, the Fifth Circuit invoked the principle that

§ 1442(a)(1) should be interpreted liberally, and held that

a chemical manufacturer sued for harm allegedly caused

by Agent Orange was entitled to remove a case because of

the federal government’s “strict control” and “on-going su-

pervision” of the Agent Orange production process, as well

as its “detailed und direct orders . . . to supply a certain

product.” 149 F.3d at 398-400 (internal quotation marks

omitted); see also Miller v. Diamend Shamrock Co., 275

F.3d 414, 417-18 (5th Cir. 2001) (reading Winters as ap-

plying a “strict control” test). Numerous federal district

courts in a variety of other circuits have followed the Fifth

Circuit or applied similar control tests, none of which asks

whether a private party is performing an official function

in enforcing federal law, as does the test of the First, Sev-

enth, and Eleventh Circuits.’

' See, e.g., Parks v. Guidant Corp., 402 F. Supp. 2d 964, 967 (N.D.

Ind. 2005) (removing party must show conduct is “linked to detailed

and specific regulations’); Kave v. Southwest Airlines Co., No. Civ. A.

3:05CV0450-D, 2005 WL 2071327. at *4 (N.D. Tex. Aug. 29, 2005)

(Southwest Airlines not entitled to remove claims relating to failure to

refund passenger charge because. “lajlthough [the regulations] demon-

strate that Southwest was compelled to take certain actions concern-

ing the charge, Southwest did not establish. under Winters, “the de-

tailed control necessary for a private party to avail itself of removal’):

Edwards v. Blue Cross/Blue Shield of Texas. No. Civ. 3:05CV0144-H.,

2005 WL 1240577, at *4 (N.D. Tex. May 25. 2005) (“acting under” test

not satisfied because company did not take challenged acts “pursuant

to the direci and detailed control of an officer of the United States”):

Kennedy v. Health Options, Inc... 329 F. Supp. 2d 1314, 1318 (¢S.D. Fla.

2004) «contractual relationship “does not tn itself constitute the direct

and detatled control that ts required to assert federal jurisdiction”), Jn

re Wireless Telephone Radio Frequency Emissions Prods. Liab. Litig..

327 F. Supp. 2d 544, 562-63 (D. Md. 2004) (applying “direct and de-

tailed” federal control test): Jn re ‘Agent Orange’ Prod. Liab. Litig.. 304

F. Supp. 2d 442. 447 (E.D.N.Y. 2004) (acting under” clause is satisfied

by showing “substantial degree of direct and detailed federal control”):

Haller v. Kaiser Found. Health Plan of the Northwest, 184 F. Supp. 2d

Moreover, a court in the Second Circuit applying a com-

prehensive and detailed control test has allowed federal

officer removal on the basis of regulated corporations’

compliance with federal environmental regulations. That

ruling suggests the unbounded nature of a test based only

upon the comprehensiveness and detail of federal control.

See In re Methyl Tertiary Butyl Ether (“MTBE”) Prods.

Liab. Litig., 342 F. Supp. 2d 147, 156 (S.D.N.Y. 2004) (de-

fendants had “sufficiently alleged that they added MTBE

to gasoline at the direction of the [Environmental Protec-

tion Agency (“EPA”)], a federal agency, thereby meeting

the [“acting under’) requirement of removal pursuant to

section 1442(a)(1)"), clarified on other grounds, 341 F.

Supp. 2d 386 (S.D.N.Y. 2004).”

1040, 1044 (D. Or. 2001) (private individuals may be “acting under”

federal officer when the officer has “direct and detailed control over the

defendant”) (internal quotation marks omitted); Guillory v. Ree’s Con-

tract Serv., Inc., 872 F. Supp. 344, 346-47 (S.D. Miss. 1994) (general-

ized rules not sufficient to establish direct and detailed control); Fung

v. Abex Corp., 816 F. Supp. 569, 572-73 (N_D. Cal. 1992) (acting un-

der” clause satisfied because Navy monitored contract performance “at

all times” and exercised “direct and detailed” control over contractor)

(internal quotation marks omitted).

“ Even district courts applying a variation of the comprehensive and

detailed control test have found, in similar circumstances, that Philip

Morris is not entitled to removal. See Paldrmic v. Altria Corporate

Servus., Inc., 327 F. Supp. 2d 959, 966 (E.D. Wis. 2004) (acting under”

clause ts satisfied when a defendant establishes “direct and detailed

control.” but that standard was not satisfied because Philip Morris was

sued “primarily” for “the manner in which it designed and manufac-

tured light cigarettes, which actions were not taken pursuant to FTC

direction”): Virden «. Altria Group, Inc., 304 F. Supp. 2d 832, 845, 846

(N.D. W. Va. 2004) (although private actor can claim protection of

§ 1442(a)(1) when “it is threatened with liability for actions taken on

behalf of a federal officer.” FTC did not require Philip Morris to employ

testing method or to “disseminate misleading information”), Pearson v.

Philip Morris USA, Inc.. No. 03-CV-178-HA, 2003 U.S. Dist. LEXIS

24508, at *11-*12 (D. Or. Aug. &. 2003) (following Tremblay); Tremblay

v. Philip Morris, Inc., 231 F. Supp. 2d 411. 419 (D.N.H. 2002) (removal

inappropriate because plamtiffs did not “challenge the enforcement

or wisdom of any FTC policy, procedure or regulation” but rather

the “conduct of a private corporation, acting without direction from a

3. The Ninth and Tenth Circuits construe the “acting

under” clause to permit removal if the federal offi-

cer had general supervision over a private actor

Differing from the comprehensive and detailed control

test adopted by the Eighth and Fifth Circuits and con-

trary to the official function test embraced by the First,

Seventh, and Eleventh Circuits, the Ninth and Tenth Cir-

cuits have construed the “acting under” clause more

broadly, requiring only that a federal officer have had

general supervision over the defendant.

In California v. H&H Ship Service Co., No. 94-10182,

1995 WL 619293 (9th Cir. Oct. 17, 1995) (judgment noted

at 68 F.3d 481), the Ninth Circuit held that companies

cleaning up a hazardous waste spill under the auspices of

a remediation plan approved by the Coast Guard were

“acting under” a federal officer. Specifically, the defen-

dants argued that removal was appropriate because “their

actions were taken as part of a removal action supervised

by the United States Coast Guard.” Jd. at *1 (emphasis

added). Although noting that the question was “difficult,”

the Ninth Circuit reasoned that the defendants were act-

ing under a federal officer because the Coast Guard had

a general “on-scene command over the removal” of the

hazardous waste and “the defendants were present at the

site in order to execute a removal that was under the di-

rection and control of a federal officer.” Jd. at *1-*2. No-

tably, the court analyzed neither the comprehensiveness

nor the detail of the Coast Guard’s on-scene command or

federal officer or agency’); see also City of Livingston v. Dow Chem. Co..,

No. C05-03262-JSW, 2005 WL 2463916, at *3 (N.D. Cal. Oct. 5, 2005)

(Dow Chemical not entitled to removal because “merely being subject

’ to federal regulations. even if extensive, is insufficient to demonstrate

that a private litigant acted under the direction of a federal officer”)

(internal quotation marks omitted). By contrast. the District Court for

the Southern District of [linois, expressiy following the reasoning of

Watson, permitted Philip Morris to remove. See Kelly v. Martin &

Bayley, Inc., No. 05-CV-0409-DRH, 2006 WL 44183, at *3-*4 (S.D. Tl.

Jan. 9, 2006). The Seventh Circuit has accepted interlocutory review of

that issue. See Order, Jn re Kelly, No, 06-8007 (7th Cir. Mar. 6, 2006).

control. Nor did it assess whether the private actors were

performing an official governmental function. Federal

district courts have sometimes taken a broad analytic

approach.”

Similarly, the Tenth Circuit, in Greene v. Citigroup Inc..,

No. 99-1030, 2000 WL 647190 (10th Cir. May 19, 2000)

(judgment noted at 215 F.3d 1336), held that a private

company was “acting under” a federal officer in engaging

in the remediation of a hazardous waste site. In so hold-

ing, the court of appeals, without assessing the compre-

hensiveness-or detail of federal control or whether the

remediation was an official governmental function, ex-

plained only that the company “implemented a remedy

selected by the EPA, pursuant to CKRCLA, and it was

subject to civil penalties for failure to comply with that

directive.” Id. at *2.

In sum, there is deep confusion in and a mature split

among the courts of appeals with respect to the proper

interpretation of the “acting under” clause. That confu-

sion is consequential. The phrase distinguishes private

parties from government officials, and thus acts as a key

limitation of the jurisdictional statute. But, owing to a

dizzying array of doctrinal formulations, the outcome of a

removal decision pertaining to a private regulated actor

will depend upon the circuit — or even the district — in

which removal is sought. In order to bring consistency

and clarity to this important area of jurisdictional law,

this Court should grant certiorari.'”

" See Crocker v. Borden, Inc., 852 F. Supp. 1322, 1326 (E.D. La.

1994) (“acting under” test was met merely because private corporation

was “acting under the direction of the Navy im the construction of the

marine turbines”); Pack v. AC & S, Inc., 838 F. Supp. 1099, 1103 (D.

Md. 1993) (‘acting under” requirement satisfied by “direct control,”

which is “established by showing strong government intervention and

the possibility that a defendant will be sued in state court as a result of

the federal control”).

" Adding to the doctrinal confusion, the Fifth Circuit. as well as

numerous district courts, has merged the “acting under” and “under

B. In Holding That Philip Morris May Avail Itself

Of The Federal Officer Removal Statute, The

Eighth Circuit Misinterpreted This Court’s

Precedents, Reaching An Outcome Inconsis-

tent With Statutory Text And Purpose

By permitting Philip Morris to remove under the fed-

eral officer removal statute, the Eighth Circuit departed

from any reasonable interpretation of § 1442(a)(1) and

this Court's precedents.

1. The Eighth Circuit embraced an interpretation of

“acting under” that does not accord with the statu-

tory text viewed in light of this Court's precedents

a. The Eighth Circuit fundamentally erred in holding

that the “acting under” clause was satisfied merely by

showing that “the acts ... were performed pursuant .. .

to comprehensive and detailed regulations.” Pet. App.

6a (internal quotation marks omitted, first ellipsis in

original). The Eighth Circuit’s test — which has never

been endorsed by this Court — is inconsistent with

§ 1442(a)(1)'s text.

color of such office” inquiries under § 1442(a)(1). See Winters, 149 F.3d

at 398 (without undertaking independent “acting under” analysis, ask-

ing whether “government specified the Composition of Agent Orange so

as to supply the causal nexus betweem the federal officer's directions

and the plaintiff's claims”); New Jersey Dept of Envtl. Protection v.

Exxon Mobil Corp., 381 F. Supp. 2d 398, 404 (D.N.J. 2005) (“To estab-

lish that it was ‘acting under an officer of the United States. Defen-

dant must show a causal nexus between the conduct charged .. . and

the acts performed by Defendant at the direction of official federal au-

thority.”): Freiberg. 245 F. Supp. 2d at 1149 (private party may remove

“as long as the private actor asserts a colorable federal defense” and

“demonstrates a sufficient causal nexus between what it has done un-

der asserted official authority and the acts giving rise to the state

claims”); Good v. Armstrong World Indus., Inc., 914 F. Supp. 1125,

1128 (E.D. Pa..1996) (“The ‘acting under’ language in the statute forces

[the defendant] to show a causal nexus between the plaintiff's claims

and the conduct taken pursuant to direction from a federal officer.”);

Akin v. Big Three Indus., Inc., 351 F. Supp. 819, 823 (E.D. Tex. 1994)

(treating “acting under” limitation as a causation requirement).

The wording of § 1442(a)(1) gives good reason to believe

that regulation of a private corporation, however compre-

hensive or detailed, cannot support removal by a private

party. The statute states that a removing defendant must

be sued in “an official or individual capacity for any act

under color of such office,” bespeaking Congress's expecta-

tion that a defendant will have been acting in an official

capacity — that is, that the private actor was functionally

standing in the shoes of a federal officer in carrying out

the challenged acts. Cf. Jefferson County v. Acker, 527

U.S. 423 (1999) (“under color of office” requirement de-

mands showing “a causal connection between the charged

conduct and asserted official authority’) (internal quota-

tion marks omitted, emphasis added). The language ad-

joining the “acting under” clause thus strongly supports a

reading of the clause that excludes a private actor, such

as Philip Morris, that has not carried out an official gov-

ernmental function. See Gustafson v. Alloyd Co., 513 U.S.

561, 575 (1995) (under “doctrine of noscitur a sociis.” a

“word is known by the company it keeps’); Neal v. Clark,

95 U.S. 704, 708 (1878) (“It is a familiar rule in the inter-

pretation of .. . statutes that a passage will be best inter-

preted by reference to that which precedes and follows

it.”) (internal quotation marks omitted).

This Court's decision in City of Greenwood v. Peacock,

384 U.S. 808 (1966), underscores that textual point. In

that case, the Court decided whether private parties could

avail themselves of the civil mghts removal provision of 28

U.S.C. § 1443(2), which authorizes removal for “any act

under color of authority derived from any law providing

for equal rights.” In resolving that question, the Court

looked to a predecessor statute of § 1443(2), which limited

removal to “officer[s]” or “other person[s].” 384 U.S. at

816. The Court concluded that the “other person” clause

protected only “officers and agents” of the Freedmen’s

Bureau charged with enforcing the Civil Rights Act of

1866. /d. at 816-17. The Court explained that those

agents derived their authority from the Freedmen’s

Bureau legislation and were entitled to removal, if not as

officers, then “based upon their enforcement activities

under the Freedmen’s Bureau legislation and the Civil

Rights Act.” /d. at 818. Although interpreting § 1443(2),

the Court held that the “other person” clause of that pro-

vision tracked the “acting under” clause of a predecessor

to § 1442(a)(1). /d. at 820 n.17, 823 n.20; see also id. at

820 n.17 (“The limitation of 28 U.S.C. § 1443(2) to official

enforcement activity . . . draws support from analogous

provisions in the removal statutes available to federal

revenue officers.”).

Thus, Peacock supports the proposition that the “acting

under” clause of § 1442(a)(1) should encompass only “fed-

eral officers or agents and those authorized to act with or

for them in affirmatively executing duties under .. . fed-

eral law.” /d. at 824. The Eighth Circuit’s framework —

which looks to whether a private party is subject to com-

prehensive and detailed control — is inconsistent with that

teaching, as it confuses those private parties authorized to

enforce federal law (such as a private party imbued with

authority to enforce the Civil Rights Act) with those that

comply with federal lew (such as Philip Morris in market-

ing light cigarettes).

b. The court below also erred in thinking that it should

give a “broad” interpretation to the “acting under” clause.

Ordinarily, statutes affording removal jurisdiction are

strictly construed, a corollary of the principle that federal

courts are courts of limited jurisdiction. See Shamrock

Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941).

The court of appeals rested on this Court's decision in Wil-

lingham, however, to interpret the statute broadly in de-

ciding that Philip Morris was “acting under” a federal offi-

cer. See Pet. App. 4a-5a.

The Eighth Circuit’s reliance on Willingham was en-

tirely misplaced. In Willingham, this Court rejected the

view that doubt as to whether a federal officer could claim

official immunity rendered removal improper, explaining

that, “|a]t the very least,” the statute “is broad enough to

cover all cases where federal officers can raise a colorable

defense arising out of their duty to enforce federal law.”

395 U.S. at 406 (emphases added). Properly construed,

the upshot of Willingham is that the removal by a federal

officer sued based on the performance of official duties

_ should not be frustrated by a narrow interpretation of

§ 1442(a)(1). That principle has no bearing in a context,

such as this, where the very question to be answered is

whether a defendant stands in the shoes of a federal

officer.'' Indeed, in analogous circumstances in which

the scope of the statute has been at issue, this Court

has adopted narrowing constructions of § 1442(a)(1). See

International Primate Protection League v. Administrators

of Tulane Educ. Fund, 500 U.S. 72, 81-82 (1991) (rejecting

defendant agency's broad interpretation of “officer of the

United States”); see also Mesa v. California, 489 U.S. 121,

132-35 (1989) (removal requires the “averment of a fed-

eral defense”).

2. The Eighth Circuit’s control test is inconsistent

with the purpose of § 1442(a)(1)

The distinction between being authorized to enforce fed-

eral law and complying with federal law explains why a

comprehensive and detailed control test, which treats a

private actor doing no more than complying with regula-

tion in engaging in commercial activity as a federal offi-

cer, is flatly inconsistent with the purpose of § 1442(a)(1).

This Court has frequently looked to the history and pur-

pose of the statute in resolving interpretive disputes

about the statute’s scope. See Arizona v. Manypenny, 451

U.S. 232, 241-42 (1981): Willingham, 395 U.S. at 405-06;

Gay v. Ruff, 292 U.S. 25, 32-33 (1934): Colorado v. Symes,

286 U.S. 510, 517-19 (1932). The purpose, this Court has

said, “is not hard to discern.” Willingham, 395 U.S. at

'' See Freiberg, 245 F. Supp. 2d at 1152 n.6 (Given the purpose of

§ 1442 and its basis in a mistrust of states and state courts to protect

federal interests, [the statute] should be read expansively only when

the immunity of individual federal officials, and not government con-

tractors, Is at issue. ).

406. The statute rests on the premise that “the Federal

Government ‘can act only through its officers and agents,

and they must act within the States. If, when thus acting,

and within the scope of their authority, those officers can

be arrested and brought to trial in a State court, for an

alleged offence against the law of the State, .. . the opera-

_ tions of the general government may at any time be ar-

rested at the will of one of its members.’” Jd. (quoting

Tennessee v. Davis, 100 U.S. 257, 263 (1880)).'* Expand-

ing the federa! officer removal statute to encompass a pri-

vate corporation doing business in compliance with fed-

eral regulation does not honor that purpose."

Furthermore, because Philip Morris is complying with

rather than enforcing federal law in marketing light ciga-

rettes, Philip Morris faces no plausible risk that state

court animus against the enforcement of federal law — a

key historical rationale for removal — will be directed

against it. See Manypenny, 451 U.S. at 241-42 (“Histori-

cally, removal under § 1442(a)(1) and its predecessor

statutes was meant to ensure a federal forum in any case

where a federal official is entitled to raise a defense aris-

ing out of his official duties. The act of removal permits a

trial upon the merits of the state-law question free from

local interests or prejudice.”) (footnote omitted); Ruff, 292

U.S. at 32 (Force Act removal provision was designed to

' See Willingham. 395 U.S. at 406 (federal officer removal statute

rests upon “very basic interest in the enforcement of federal law

through federal! officials”); see also Charles Alan Wright. et al., Federal

Practice and Procedure § 3727, at 125 (3d ed. 1998) (§ 1442 authorized

removal by those “who are acting in the course of their employment by

or on behalf of the United States”) (emphasis added); Symes, 286 U.S.

at 517 (federal officer removal statutes were enacted to “safeguard| |

officers and others acting under federal authority against peril of pun-

ishment for violation of state law .. . by reason of opposing policy on

the part of those exerting or controlling state power’).

' See United States v. Philip Morris Inc., 263 F. Supp. 2d 72. 81

(D.D.C. 2003) (“The specific advertisements which the Government

claims were intentionally misleading . .. were certainly not mandated

by the FTC.”).

quell South Carolina’s threat of nullification by “pro-

tect{ing] those engaged in the enforcement of the federal

revenue law from attack by means of prosecutions and

suits in a state court for violation of state law’).

Nor does the Eighth Circuit's comprehensive and de-

tailed control test find support in other, secondary, pur-

poses of § 1442(a)(1). This Court has explained, for exam-

ple, that “one of the most important reasons for removal is

to have the validity of the defense of official immunity

tried in a federa! court.” Willingham, 395 U.S. at 407: see

also International Primate Protection League. 500 U.S. at

86-87 (one justification for § 1442(a)(1) is that federal offi-

cers need protection of a federal forum “because of the

manipulable complexities involved in determining {federal

officers’] immunity”). -The Eighth Circuit, however, made

no mention of that purpose, which weighs heavily against

an interpretation of § 1442(a)(1) that includes a private

actor, such as Philip Morris, with no claim whatsoever to

official immunity."

3. The federal government's suit against Philip Mor-

ris for acts similar to those at issue here under-

scores the consequence of the distinction between

private actors and federal officers

One of the great paradoxes of the Eighth Circuit's rul-

ing is that the federal government is currently locked in a

lengthy legal dispute with several tobacco companies, in-

cluding Philip Morris, over their non-compliance with fed-

eral law. Indeed, the very acts that Philip Morris alleges

were required by the federal government to qualify it for

“federal officer” removal purposes are the very same acts

that the federal government alleges constituted a RICO

conspiracy in which Philip Morris, and other conspirators,

‘* See Richardson v. McKnight. 521 U.S. 399. 404-10 (1997)

(privately emploved prison guards of for-profit corporation running

state correctional center not entitled to qualified immunity because

“[hhistory does not reveal a ‘firmly rooted’ tradition of immunity” for

prison guards and immunity would not serve purposes of the doctrine).

“did the exact opposite of what the Government and pub-

lic health community called for” and “fraudulently ex-

ploited the FTC test method to target and benefit finan-

cially by deceiving smokers.” Post-Trial Br. of the United

States of America at 70-71, United States v. Philip Morris

'SA Inc., No. 99-CV-02496 (D.D.C. filed Aug. 24, 2005).

In fact, the federal government itself has taken the

position that the Eighth Circuit's decision in this case

was in grave error by pointing out that “le]very other

court to consider Philip Morris’s claim for removal under

[§ 1442(a)(1)] has rejected it.” Reply Mem. in Support of

the Post-Trial Br. of the United States of America at 28

n.31, United States v. Philip Morris USA Inc., No. 99-CV-

02496 (D.D.C. filed Sept. 19, 2005) (“U.S. Reply Mem.”)

(discussing Watson).

The government's suit against Philip Morris therefore

brings into high relief the common sense difference be-

tween a private commercial actor allegedly complying

with regulation and a federal officer performing official

duties, a difference that the Eighth Circuit's approach to

federal officer removal entirely elides.

4. The Eighth Circuit's approach conflates ordinary

preemption analysis with the justification for fed-

eral officer removal

Underlying the Eighth Circuit’s badly mistaken deci-

sion is the court’s apparent confusion between the requi-

sites for preemption of state law and the standards and

justifications for federal officer removal. The court of ap-

peals explained, for example, that “|w|hether Philip Mor-

ris's labeling of cigarettes as ‘lights’ is deceptive directly

implicates the enforcement and wisdom of the FTC's to-

baeco policies.” Pet. App. 15a. But it is the law of pre-

emption, not federal officer removal, that safeguards fed-

eral interests in carrying out regulatory objectives vis-a-

vis regulated parties. See, e.g., Cipollone v. Liggett Group,

Inc., 505 U.S. 504 (1992) (reconciling, under preemption

principles, various state common law damage actions with

federal regulation of cigarettes). A necessary premise of

the Eighth Circuit’s holding, therefore, is that Congress,

through § 1442(a)(1). decided that state courts are not

competent to hear preemption defenses raised by private

regulated parties.

This Court has squarely rejected that premise in two

ways. First, “a case may not be removed to federal court

on the basis of a federal defense, including the defense of

pre-emption, even if the defense is anticipated in the

plaintiff's complaint, and even if both parties concede that

the federal defense is the only question truly at issue.”

Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987) (sec-

ond emphasis added). And, second, “when a state pro-

ceeding presents a .. . pre-emption issue, the proper

course is to seek resolution of that issue by the state

court,” as state courts are “presumed competent to resolve

federal issues.” Chick Kam Choo v. Exxon Corp., 486 U.S.

140, 149-50 (1988).

In sum, the Eighth Cireuit erred in adopting a frame-

work in which “(t]he applicability of [the federal officer]

removal statute depend{ed] in large part on the role the

FTC plays in regulating the tobacco industry.” Pet. App.

2a. By asking a fundamentally misguided question, the

Eighth Circuit arrived, predictably, at the wrong answer —

a result incompatible with this Court’s precedents and out

of keeping with any reasonable rendition of § 1442(a)(1).

A private regulated corporation doing no more than abid-

ing by federal regulation cannot avail itself of the protec-

tion of the federal officer removal statute.

C. This Case Presents An Excellent Vehicle To

Resolve The Issues Presented

This case is a particularly suitable vehicle for this Court

to bring needed clarity to the law of federal officer re-

moval. The district court certified the issue of whether

Philip Morris was entitled to federal officer removal pur-

suant to 28 U.S.C. § 1292(b). finding that its ruling “in-

volve[d] a controlling question of law” and that there was

a “substantial ground for difference of opinion” on that

issue. See Pet. App. 57a: see also id. at 58a (“The facts

surrounding the FTC's involvement with cigarette testing

and advertising are not in dispute. This question is

purely a legal one.”). The legal errors committed by the

Eighth Circuit pertained to important jurisdictional is-

sues that are wholly separate from the merits of petition-

ers claims and that can be resolved as questions of law.

Furthermore, it is common ground that Philip Morris is

an entirely private corporation and that Philip Morris was

not performing an official governmental function in abid-

ing by FTC regulations. And Philip Morris has acknowl-

edged that “(t]he facts relating to the history of the FTC's

regulation ... are not in dispute.” Appellee’s Br. 8. This

Court will accordingly have the opportunity to fashion a

framework for federal officer removal unhampered by an

incomplete record or by equivocal or disputed facts.

The interlocutory character of the court of appeals’ deci-

sion does not at all weigh against this Court’s review.

Where, as here, “there is some important and clear-cut

issue of law that is fundamental to the further conduct of

the case and that would_otherwise qualify as a basis for

certiorari, the case may be reviewed despite its interlocu-

tory status.” Robert L. Stern, et al., Supreme Court Prac-

tice 259 (8th ed. 2002). As we set forth above, those condi-

tions are unarguably satisfied in this case. Indeed, this

Court has granted certiorari in order to review similar

decisions certified under 28 U.S.C. § 1292(b) on many re-

cent occasions. See, e.g., Cutter v. Wilkinson, 125 S. Ct.

2113 (2005); Norfolk Southern Ry. Co. v. James N. Kirby,

Pty Ltd., 543 U.S. 14 (2004).

D. The Eighth Circuit’s Decision Raises Jurisdic-

tional Issues Of Exceptional Importance

Because § 1442(a)(1) regulates an exceptionally impor-

tant intersection of the interest of States in the enforce-

ment of their own laws in their own forums and the inter-

est of the federal government in the supremacy of federal

law, this Court has long recognized the importance of

maintaining legal clarity in the test for federal officer

removal. See Symes, 286 U.S. at 518 (federal officer

removal statute reflects important “equality” of interests

of States and federal government). Indeed, issues per-

taining to the removal statute, this Court has said, are “of

great importance, bringing . . . into consideration the rela-

tion of the general government to the government of the

States.” Davis, 100 U.S. at 260; see also id. at 273 (Clhif-

ford, J., dissenting) (“[q]uestions of greater importance

than those certified . . . could hardly be presented for dis-

cussion”); Manypenny, 451 U.S. at 239 (certiorari was

granted to resolve issue of jurisdiction arising from

§ 1442(a)(1) “[b]ecause it is an issue that carries signifi-

cance for federal-state relations”).

In other contexts, this Court has zealously protected

States’ interest in enforcing both state and federal law in

state courts. See, e.g.. Tafflin v. Levitt, 493 U.S. 455, 458

(1990) (state courts have concurrent jurisdiction over civil

RICO claims because under “system of dual sovereignty

... State courts have inherent authority, and are thus pre-

sumptively competent, to adjudicate claims arising under

the laws of the United States”). The need for such protec-

tion is even greater in this type of case, in which a statu-

tory removal provision is used to wrest an action based on

state law from state court. See Shamrock Oil, 313 U.S. at

109 (“Due regard for the rightful independence of state

governments, which should actuate federal courts, re-

quires that jfederal courts] scrupulously confine their own

jurisdiction to the precise limits which the statute has de-

fined.”) (internal quotation marks omitted).

The Eighth Circuit's reasoning will, predictably, invite

regulated entities of all types to assert that they, too, have

a statutory right not to be sued under state law in state

court. In concurrence, Judge Gruender, recognizing the

expansiveness of the Eighth Circuit's framework, at-

tempted to restrict the holding, suggesting that, because

the FTC’s regulation of Philip Morris was “extraordinary,”

the decision should not be “an invitation to every partici-

pant in a heavily regulated industry to claim that it...

acts at the direction of a federal officer merely because it

tests or markets it products in accord with federal regula-

tion.” Pet. App. 18a. Judge Gruender’s effort at damage

limitation, however, is deeply flawed. It rests on a mis-

taken appraisal of FTC regulation and misunderstands

the comprehensiveness and detail of other federal regula-

tory regimes.'”

FTC regulation of light cigarettes is anything but ex-

traordinary. It is undisputed that the FTC has regulated

neither the design nor the manufacturing of light ciga-

rettes. Nor has the FTC required that tobacco companies

advertise their cigarettes as “light” or “low tar.” In fact,

the FTC has never even defined those significant terms.

See Notice, Cigarette Testing; Request for Public Com-

ment, 62 Fed. Reg. 48,158, 48,163 (1997) (observing that

there are no “official definitions” for cigarette descriptors

such as “low tar” and “light”). Indeed, this Court has ex-

pressly recognized statutory limitations on the FTC's

regulatory authority over cigarettes. See FDA v. Brown &

Williamson Tobacco Corp., 529 U.S. 120, 149-50 (2000). It

is thus hardly surprising that the federal government sub-

mitted evidence in its suit against Philip Morris squarely

“reject|ing}] [Philip Morris's] claim that the FTC has given

special focus to cigarette advertising.” U.S. Reply Mem.

at 29.'°

'’ In addition to being a party “acting under” a federal officer, a re-

moving party must also be sued for an “act under color of such office.”

28 U.S.C. § 1442(a)1). Under Willingham, however, the “under color

of office” limitation is satisfied merely by an allegation that the party

was acting in an official capacity in performing the charged conduct.

See 395 U.S. at 409. Thus. once a private actor is judged to be acting

under a tederal officer by the Eighth Circuit’s control test, it will be

easy to maintain that the challenged acts were under color of office. It

is therefore imperative that this Court provide guidance on the proper

interpretation of the “acting under” clause.

'© The majority opinion also found it significant that the FTC's “ac-

tually conductliing| the testing fof cigarettes] itself for over twenty

vears, instead of delegating that task to the industry, was outside the

government's normal course of conduct.” Pet. App. 13a. But the court

of appeals offered no explanation — and none is apparent — for why that

fact is at all relevant to judging whether governmental regulation 1s

Indeed, federal regulation in other regulatory contexts

is at least as comprehensive and detailed as is the FTC's

regulation of light cigarettes.'’ The National Highway

Traffic Safety Administration (“NHTSA”), for example,

has long broadly regulated automobile safety measures,

including mandating detailed specifications for crash

tests. See Public Citizen, Inc. v. NHTSA, 374 F.3d 1251,

1253-57 (D.C. Cir. 2004) (detailing NHTSA regulation of.

automobile airbag regulations, including testing proce-

dures); see also Geier v. American Honda Motor Co., 529

U.S. 861, 874-81 (2000) (describing history of federal

regulation of passive restraints). Federal regulation of

other consumer products, such as pesticides, medical de-

vices and drugs, and recreational boats, is similarly ex-

pansive and detailed. See, ¢c.g., Bates v. Dow AgroSciences

LLC, 125 S. Ct. 1788, 1794-97 (2005) (detailing broad

federal regulation of pesticide labeling, packaging, and

comprehensive or detailed. Thus, it offers no logical basis, under the

court's own test, upon which to distinguish between regulation by the

FTC and regulation by other federal agencies.

'" See Wells Fargo Bank N.A. v. Boutris, 419 F.3d 949, 966 (9th Cir.

2005) (“[Office of the Comptroller of the Currency| regulations [of na-

tional bank subsidiaries] establish a comprehensive and finely cali-

brated scheme for the creation of operating subsidiaries.”); Taylor v.

Progress Energy, Inc., 415 F.3d 364, 369 (4th Cir. 2005) (Secretary of

Labor has “promulgated comprehensive regulations” of employers un-

der Family and Medical Leave Act of 1993); Chapman v. Lab One. 390

F.3d 620, 624 (8th Cir. 2004) ("Congress specifically required the Sec-

retary of Transportation to develop comprehensive regulations regard-

ing controlled substance testing and laboratory procedures” for manda-

tory drug testing in railroad industry); Waymire v. Norfolk & Western

Ry. Co., 218 F.3d 773, 775 (ith Cir. 2000) (Secretary of Transporta-

tion is authorized “to implement comprehensive and detatled railroad

safety regulations”); Abdullah v. American Airlines, Inc., 181 F.3d 363,

369 (3d Cir. 1999) ({T]he Administrator of the FAA has implemented a

comprehensive svstem of rules and regulations. which promotes flight

safety by regulating pilot certification, pilot pre-flight duties, pilot

flight responsibilities, and flight rules.”) (footnotes omitted); Swirsky v.

National Ass'n of Sec. Dealers, 124 F.3d 59, 61 (ist Cir, 1997) (The

Securities Exchange Act of 1934 and its subsequent amendments cre-

ate a detailed, comprehensive system of federal regulation of the secu-

~ rities industry.”).

distribution); Medtronic, Inc. v. Lohr, 518 U.S. 470, 476-

80 (1996) (describing comprehensive federal regulation of

distribution of medical devices); Sprietsma v. Mercury

Marine, 537 U.S. 51, 56-59 (2002) (detailing comprehen-

sive federal regulation of recreational boats). Yet, in each

of those latter circumstances, the federal regulation is not

so “comprehensive” as to preempt state-law claims, much

less to support federal officer removal.

Given that the system of voluntary regulation underly-

ing Philip Morris’s claimed entitlement to removal is less

formal and certainly no more comprehensive or detailed

than many other federal regulatory regimes, there is no

reasonable prospect that the damage from the Eighth Cir-

cuit’s rule can be contained. The wave of removals sure to

follow in the wake of the Eighth Circuit’s decision thus

calls for intervention by this Court. Apart from divesting

States of the ability to enforce state laws in their own fo-

rums against private companies alleged to have harmed

their citizens, a wave of removals will severely, and un-

necessarily, tax the resources of the federal judiciary. Cf.

City of Indianapolis v. Chase Natl Bank, 314 U.S. 63, 76-

77 (1941) (federal diversity statute is strictly construed to

avoid “offense to state sensitiveness” and to “reliev[e] the

federal courts of the overwhelming burden of business

that intrinsically belongs to the state courts”) (internal

quotation marks omitted).

CONCLUSION

The petition for a writ of certiorari should be granted.

STEVEN EUGENF CAULEY

MARCUS N. BOZEMAN

CAULEY, BOWMAN, CARNEY

& WILLIAMS, PLLC \

11311 Areade Drive

Suite 200

Little Rock, Arkansas 72212

(501) 312-8500

Respectfully submitted,

DAVID C. FREDERICK

Counsel of Record

KELLY P. DUNBAR

KELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL,

P.L.L.C.

1615 M Street, N.W.

Suite 400

Washington, D.C. 20036

(202) 326-7900

Counsel for Petitioners

April 7, 2006

APPENDIX

TABLE OF CONTENTS

Page

Opinion of the United States Court of Appeals for

the Eighth Circuit, Watson, et al. v. Philip Morris

Cos., Inc., et al., No. 04-1225 (Aug. 25, 2005) ................0.. la

Order of the United States District Court for

the Eastern District of Arkansas, Watson, et al.

v. Philip Morris Cos., Inc., et al., No. 4:03-CV-

EEE A ee 20a

Order Denying Petition for Rehearing of the

United States Court of Appeals for the Eighth

Circuit, Watson, et al. v. Philip Morris Cos., Inc.,

et al., No. 04-1225 (Nov. 18, 2005) .0........cccccceeeeteesteeeees 6la

First Amended Class Action Complaint, Watson,

et al. v. Philip Morris Cos., Inc., et al., Case No.

CV03-4661 (Pulaski Cty., Ark. Cir. Ct. filed May

Sas TUTTE iacchnmsecischcninestersiceseepeninindesieltaiincacisnnaipainineatisiaditiessesitinisbecsindsoieatal 62a

Notice of Removal, Watson, et al. v. Philip Morris

Cos., Inc., et al., No. 4:03-CV-519-GTE (E.D. Ark.

I i cell 74a

Statutory Provisions Involved ...................cceceeeeceeeeeseeeeees 98a

Letter from Supreme Court Clerk regarding ex-

tension request for filing a petition for a writ of

ee I Wi IED ccstbiintinrcclitncisnstiitantransitniicnadeltiansentidad 100a

Letter from Supreme Court Clerk regarding sec-

ond extension request for filing a petition for a

writ of certiorari (Mar. 14, 2006)..2............cccccceceeeeeeeeeees 10la

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 04-1225

LISA WATSON AND LORETTA LAWSON, INDIVIDUALLY

AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,

Plaintiffs-Appellants,

Vv.

PHILIP MORRIS COMPANIES, INC., A CORPORATION,

AND PHILIP MORRIS, INCORPORATED, A CORPORATION,

Defendants-Appellees.

[Submitted Nov. 15, 2004]

[Filed Aug. 25, 2005]

Before RILEY, JOHN R. GIBSON, and GRUENDER,

Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

Lisa Watson and Loretta Lawson filed this interlocutory

appeal, on their own behalf and as representatives of a

class, from the district court’s' denial of their motion to

remand to state court. Watson and Lawson filed their

class action in Arkansas state court, alleging that Philip

Morris violated the Arkansas Deceptive Trade Practices

Act. See Ark.Code Ann. § 4-88-107 et seq. We hold that

the case was properly removed to federal court.

Watson and Lawson claim that Philip Morris engaged

in “unfair business practices and/or deceptive and unlaw-

ful conduct in connection with the manufacture, distribu-

' The Honorable G. Thomas Eisele, United States District Judge for

the Eastern Distric’ of Arkansas.

tion, promotion, marketing, and sale of Cambridge Lights

and Marlboro Lights.” They basically allege that Philip

Morris designed its cigarettes to deliver more tar and

nicotine to smokers than its use of the labels “lights” and

“lowered tar and nicotine” in its advertising would sug-

gest. The propriety of remand is the only issue before us,

as it was in the district court, and we express no views on

the merits.

Philip Morris removed the action pursuant to 28 U.S.C.

§ 1442(a)(1) (2000), which permits removal where a per-

son is sued for actions taken under the direction of a fed-

eral officer. Philip Morris claims it satisfies the require-

ments of the federal officer statute because it was acting

under the direct control of the Federal Trade Commission

(FTC) when it engaged in the allegedly unlawful conduct.

The district court denied Watson’s and Lawson's motion

to remand and certified the following question for inter-

locutory appeal under 28 U.S.C. § 1292(b): “May Philip

Morris remove this lawsuit to federal court under 28

U.S.C. § 1442(a)?” Slip op. at 36. We affirm the district

court's answer of “yes” to that question.

The applicability of this removal statute depends in

large part on the role the FTC plays in regulating the to-

bacco industry.”

The Federal Trade Commission Act authorizes the FTC

to regulate “unfair methods of competition” and “unfair or

deceptive acts or practices in or affecting commerce,” 15

U.S.C. § 45(a)(2) (2000), which includes regulation of un-

fair and deceptive tobacco advertisements, Cipollone v.

Liggett Group, Inc., 505 U.S. 504, 513, 112 S.Ct. 2608, 120

L.Ed.2d 407 (1992) (FTC has “long regulated unfair and

deceptive advertising practices in the cigarette industry’).

* See Federal Trade Comm'n v. Brown & Williamson Tobacco Corp.,

778 F.2d 35, 37-38 (D.C.Cir.1985). for a comprehensive history of the

FTC's involvement in regulating unfair and deceptive advertising in

the tobacco industry.

In the 1950s, the FTC’s policy changed from permitting

some claims of “low” or “lower” tar and nicotine levels to

prohibiting all such representations in advertising. The

FTC wanted a uniform rating system so that consumers

could compare tar and nicotine levels among brands. The

FTC developed the Cambridge Filter Method, which uses

a smoking machine that takes a two-second puff on a

cigarette every sixty seconds until the cigarette is smoked

to a specified length. Brown & Williamson, 778 F.2d at

37. The machine collects tar and nicotine on filter pads to

be measured. Since its first formal testing in 1967, the

FTC has been reporting the Cambridge Filter Method re-

sults in the Federal Register. From its initial develop-

ment, the FTC was aware that the testing method did not

measure the amount of tar or nicotine that an individual

smoker may receive. The purpose of the test was not to

replicate human smoking but to provide a basis for com-

parison.

When the FTC proposed a trade regulation rule in 1970

that would require advertisements to disclose tar and

nicotine ratings, as determined by the Cambridge Filter

Method, several leading tobacco companies responded by

entering into an agreement to disclose the Cambridge Fil-

ter Method results in all cigarette advertising. The FTC

accepted the agreement, which was conditioned on sus-

pension of the formal rulemaking proceedings. Letter

from Eight Tobacco Companies to FTC (Dec. 17, 1970)

(“Letter Agreement”). :

After twenty vears of testing, the FTC decided to termi-

nate its cigarette testing lab, and instead require the ciga-

rette industry to self-test. using the Cambridge Filter

Method, and to submit results that would continue to be

published in the Federal Register. The FTC retained the

right to conduct unannounced inspections of the industry

testing facilities and the right to confirm the test results

through a government lab.

Based upon the FTC's involvement in the tobacco indus-

try, the district court denied Watson’s and Lawson's mo-

tion to remand to state court. Our review of that denial is

de novo. See Nichols v. Harbor Venture, Inc., 284 F.3d

857, 860 (8th Cir.2002). >

Section 1442(a)(1) permits removal by the following:

(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, sued in an of-

ficial or individual capacity for any act under color of

such office or on account of any right, title or author-

ity claimed under any Act of Congress for the appre-

hension or punishment of criminals or the collection

of the revenue.

(emphasis added). Section 1442(a) requires that a defen-

dant: (1) act under the direction of a federal officer; (2)

show a nexus or “causal connection” between the alleged

conduct and the official authority; (3) have a colorable

federal defense; and (4) be a “person” within the meaning

of the statute. See, e.g.. Jefferson County v. Acker, 527

U.S. 423, 431, 119 S.Ct. 2069, 144 L.Ed.2d 408 (1999) (re-

quiring a “colorable federal defense” to a suit for “a[n] act

under color of office” and “a ‘causal connection’ between

the charged conduct and asserted official authority”);

Mesa v. California, 489 U.S. 121, 125, 109 S.Ct. 959, 103

L.Ed.2d 99 (1989) (recognizing the 1442(a) requirement of

“‘person|s}] acting under’ an officer of the United States or

any agency thereof” sued “for act|s] under color of such

office”); United States v. Todd, 245 F.3d 691, 693 (8th

Cir.2001) (requiring “a ‘colorable defense arising out of

[the defendant's] duty to enforce federal law’”); Paldrmic

v.. Altria Corp. Servs., Inc., 327 F.Supp.2d 959, 964

(E.D.Wis.2004) (incorporating all four requirements).

Watson and Lawson dispute only the first and second re-

quirements.

In Willingham v. Morgan, 395 U.S. 402, 406-07, 89

S.Ct. 1813, 23 L.Ed.2d 396 (1969), the Supreme Court ex-

plained why the federal officer removal statute was not

meant to be given a “narrow” or “limited” interpretation:

One of the primary purposes of the removal statute —

as its history clearly demonstrates-was to have such

defenses litigated in the federal courts. ... In cases

like this one, Congress has decided that federal of-

fices, and indeed the Federal Government itself, re-

quire the protection of a federal forum. This policy

should not be frustrated by a narrow, grudging inter-

pretation of § 1442(a)(1).

The primary purpose of giving the protection of a fed-

eral forum under this statute has a lengthy history. The

broad scope of federal officer removal is explained in the

early case of Tennessee v. Davis, 100 U.S. 257, 263, 25

L.Ed. 648 (1879), where the Court applied the original

version of the statute to revenue officers:

{I|f their protection must be left to the action of the

State court, the operations of the general government

may at any time be arrested at the will of one of its

members. ‘The legislation of a State may be un-

friendly. It may affix penalties to acts done under the

immediate direction of the national government, and

in obedience to its laws. It may deny the authority

conferred by those laws. The State court may admin-

ister not only the laws of the State, but equally Fed-

eral law, in such a manner as to paralyze the opera-

tions of the government. And even if, after trial and

final judgment in the State court, the case can be

brought into the United States court for review, the

officer is withdrawn from the discharge of his duty

during the pendency of the prosecution, and the exer-

cise of acknowledged Federal power arrested.

See also Arizona v. Manypenny, 451 U.S. 232, 243, 101

S.Ct. 1657, 68 L.Ed.2d 58 (1981) (“Respondent here, by

obtaining a federal forum, has fully vindicated the federal

policies supporting removal. The plainest evidence of this

vindication is the District Court's application of the im-

munity defense.”); Winters v. Diamond Shamrock Chem.

Co., 149 F.3d 387, 397-98 (Sth Cir.1998). The Supreme

Court interpreted the original version of the statute to ex-

clude agencies’ removal ability under the statute. Pri-

mate Protection League v. Admin's. of Tulane Educ.

Fund, 500 U.S. 72, 87, 111 S.Ct. 1700, 114 L.Ed.2d 134

(1991). Congress responded by amending the statute to

explicitly permit agency removal. See Pub.L. 104-317,

§ 206(a)(1) (1996). Congress's decision to amend the stat-

ute to reverse Primate and permit agency removal pro-

vides further support for a broad interpretation of the fed-

eral officer removal statute.

Whether a defendant is “acting under” the direction of a

federal officer depends on the detail and specificity of the

federal direction of the defendant's activities and whether

the government exercises control over the defendant.

“{Rlemoval by a ‘person acting under’ a federal officer

must be predicated upon-a showing that the acts .. . were

performed pursuant to an officer's direct orders or to com-

prehensive and detailed regulations.” Virden v. Altria

Group, Inc., 304 F.Supp.2d 832, 844 (N.D.W.Va.2004)

(quoting Ryan v. Dow Chem. Co., 781 F.Supp. 934, 947

(E.D.N.Y.1992)). Mere participation in a regulated indus-

try is insufficient to support removal unless the chal-

lenged conduct is “closely linked to detailed and specific

regulations.” Virden, 304 F.Supp.2d at 844 (quoting /n re

Wireless Tel. Radio Frequency Emissions Prods. Liab.

Litig., 216 F.Supp.2d 474, 500 (D.Md.2002), revd sub

nom. on other grounds, Pinney v. Nokia, Inc., 402 F.3d 430

(4th Cir.2005)). In contrast to the district court's decision

in this case, every other district court confronted with to-

bacco companies alleging they were acting under a federal

officer has remanded the case to state court. See Virden.

304 F.Supp.2d 832; Paldrmic v. Altria Corp. Servs., 327

F.Supp.2d 959 (E.D.Wis.2004); Tremblay v. Philip Morris,

231 F.Supp.2d 411 (D.N.H.2002).

Although tobacco companies’ efforts at federal officer

removal have not been successful in other courts, compa-

nies contracting with the government have had more suc-

cess. Courts have found private actors, working under

government contracts, to be acting under the direction of

a federal officer where the government maintained control

over the manner in which the contractor performed the

contracted work or monitored the performance of the

work. Virden, 304 F.Supp.2d at 845-46.

In a Fifth Circuit government contract case, Diamond

Shamrock Chemical Company manufactured herbicide,

now known as Agent Orange, for the government. Win-

ters v. Diamond Shamrock Chem. Co., 149 F.3d 387, 390

(5th Cir.1998). A nurse in Vietnam claimed that exposure

to Agent Orange caused her to develop lymphoma. /d.

Diamond removed the case to federal court and argued

that when it manufactured Agent Orange it was acting

under the direction of a federal officer. /d. at 398. The

government specified the formula for Agent Orange, as

well as the packaging, labeling and shipping require-

ments. /d. at 399. The government also inspected the la-

beling of the containers, id.; and compelled Diamond to

deliver the Agent Orange to it under threat of criminal

sanctions, id. at 398. In finding Diamond acted under the

direction of a federal officer, the court stated:

We are convinced that the government's detailed

specifications concerning the make-up, packaging,

and delivery of Agent Orange, the compulsion to pro-

vide the product to the government's specifications,

and the on-going supervision the government exer-

cised over the formulation, packaging, and delivery of

Agent Orange is all quite sufficient to demonstrate

that the defendants acted pursuant to federal direc-

tion and that a direct causal nexus exists between the

defendant's actions taken under color of federal office

and Winters’s claims.

Id. at 399-400.

The extent of federal direction reached a siinilar level in

Fung v. Abex Corp., 816 F.Supp. 559 (N.D.Jal. 1992).

Fung involved exposure to asbestos during Abex’s con-

struction of submarines pursuant to federal contract. /d.

at 570-71. The district court found that the government

monitored Abex’s performance “at all times” and required

it to “construct and repair the vessels” according to the

contract specifications. Jd. at 572-73. In addition, the

government retained the right to inspect, test, and ap-

prove all contract supplies, and performed its own tests on

the submarines to ensure compliance with the contract.

Id. at 573. The district court found that this level of con-

trol and direction satisfied the “acting under” requirement

of section 1442(a). Id.

Here, the FTC exercises the same type of comprehen-

sive, detailed regulation and does the same kind of ongo-

ing monitoring as in Winters and Fung. In addition to

specifying a testing method that was discussed in detail in

two separate submissions to chemists’ journals, the FTC

mod “ied the testing method to include the following re-

quirc nents:

1. Smoke cigarettes to a 23 mm. butt length, or to

the length of the filter and overwrap plus 3 mm. if in

excess of 23 mm.,

2. Base results on a test of 100 cigarettes per

brand, or type,

3. Cigarettes to be tested will be selected on a

random basis, as opposed to “weight selection,”

4. Determine particulate matter on a “dry” basis

... to determine the moisture content,

5. Determine and report the “tar” content after

subtracting moisture and alkaloids [(jas_ nicotine)

from particulate matter,

6. Report tar content to the nearest whole milli-

gram and nicotine content to the nearest 1/10 milli-

gram.

Federal Trade Commission: Testing for Tar and Nicotine

Content, 32 Fed.Reg. 11,178 (Aug. 1, 1967). The FTC's

specificity in testing procedures is comparable to the

specificity of the government's formula for Agent Orange.

Another example of the detail involved in the govern-

ment’s directives to the tobacco industry is the specific

manner in which the industry agreed to disclose the tar

and nicotine ratings in advertising:

The disclosure will be in the following language:

____smg. “tar”, __ mg. nicotine

av. per cigarette, FTC report (date)

Letter Agreement at 2. In Fung, the parties’ agreement

included the design for submarines, and in this case the

parties agreement included the design for testing ciga-

rettes and disclosure of ratings. In Winters, the govern-

ment controlled the delivery and labeling of Agent Or-

ange. Here, the FTC controls the delivery of tar and nico-

tine information to consumers. The FTC’s ongoing moni-

toring of the cigarette industry far exceeds the monitoring

in Winters. The government in Winters monitored one

small aspect of the Agent Orange creation and distribu-

tion process — the labeling of the containers. Here, the

FTC itself conducted the entire testing process for twenty

years and now requires the cigarette manufacturers to

conduct the testing to its specifications. The FTC contin-

ues to inspect the industry labs, independently verify the

results, and publish the ratings. In addition, part of the

FTC’s ongoing monitoring includes monitoring cigarette

ads and occasionally bringing claims against companies

for deceptive advertising.

We are satisfied that the level of specificity of the direc-

tion is more extensive than that in Winters, but the ques-

tion remains whether the government compels compliance

with its directions. In Winters, Diamond Shamrock was

compelled to supply the Agent Orange to the government.

In Fung, the defendant acted pursuant to a binding con-

tract that gave the government legal rights to enforce its

directions. In this case, Philip Morris acted pursuant to a

voluntary industry agreement. Two of the courts con-

fronted with federal officer removal and the tobacco in-

dustry have found it significant that the agreement to test

and disclose ratings was a “voluntary” agreement, not a

formal rule. See, e.g.. Paldrmic, 327 F.Supp.2d at 966;

Virden, 304 F.Supp.2d at 841-42.

10a

We are convinced that the record in this case shows a

level of compulsion that establishes that Philip Morris

was indeed “acting under” the direction of a federal offi-

cer. The FTC effectively used its coercive power to cause

the tobacco companies to enter the agreement. The FTC

made the policy decision to pursue a voluntary agreement

instead of proceeding by formal rulemaking. The tobacco

industry first proposed an agreement on October 23, 1970,

which was just over two months after the FTC announced

an intention to make a formal rule requiring disclosure of

the Cambridge Filter Method tar and nicotine ratings.

This “voluntary agreement” was a substitute for a formal

rule. The industry almost certainly would not have pro-

posed the agreement if the FTC had not threatened to

make a formal rule. Though the FTC did not act formally,

the effect of its actions still compelled the tobacco compa-

nies to adhere to a testing and advertising standard that

was prompted by the FTC. The FTC agreed with the in-

dustry that a voluntary agreement was preferable to the

formalities of rulemaking.

FTC Chairperson Miles W. Kirkpatrick explained how

an agreement would best serve the goals of the FTC:

The Commission’s objective is to insure that all ciga-

rette advertising make these tar and nicotine disclo-

sures as soon as possible. If the industry can devise a

voluntary plan that is feasible and appropriate, the

Commission is willing to consider it. A trade regula-

tion rule, if contested in the courts, might take a long

time to become effective; a workable, voluntary plan

by the industry could be put into effect immediately.

Press Release, FTC (Oct. 1, 1970).

Daniel Oliver, Chairman of the FTC in 1987, explained

that the FTC's practice in advertising regulation was

moving more toward agreements and away from rulemak-

ing, which had proved to be inefficient, “little used and

not terribly successful.” Bringing a single case against

one cigarette company would have the effect of bringing

the whole industry into compliance and would do so much

lla

more quickly than would a formal rulemaking process. As

a result, voluntary agreements have become part of a

general trend in administrative law, and the tobacco in-

dustry has responded to that trend with cooperation.

Even if the companies had not been compelled to enter

the agreement originally. after the companies entered the

agreement, the FTC has enforced compliance with the

agreement. The FTC's comments suggest it would bring

an action for deceptive advertising or reinstitute formal

rulemaking proceedings if a company did not disclose the

tar and nicotine ratings. Though one could call the

agreement voluntary, the reality is that the cigarette

companies have included the Cambridge Filter Method

results in their cigarette advertising for over thirty years.

The main difference between a formal rule and an agree-

ment is that the FTC enforces the disclosure of the Cam-

bridge Filter Method’s results by bringing an action

against the company for deceptive advertising rather than

directly enforcing a regulation.’ Regardless of the en-

forcement method, the FTC has compelled the tobacco in-

dustry to advertise the tar and nicotine ratings as deter-

mined by the Cambridge Filter Method.

The FTC has made it clear it has not found any other ~

testing method adequate and will consider advertising to

be “deceptive” if it deviates from the Cambridge Filter

Method. In an advisory opinion rejecting one company’s

offer to advertise a tar level higher than the most recent

Cambridge Filter method results, the FTC explained that

consumers could be confused if a coinpany were to adver-

tise tar levels tnat differed from the published Cambridge

Filter Method results. Jn re Lorillard, 92 F.T.C. 1035.

‘“[W]e cannot force a company to use nor can we approve in advance

the kind of testing a company uses. We can make sure that the testing

a company uses Is an accurate test, especially as that accuracy relates

to the FTC method.” MacLeod testimony. See FTC v. Brown & Wil-

liamson Tobacco Corp., 778 F.2d 35, 44-45 (D.C.Cir. 1985).

_ l2a ,

(1978). That statement, along with others,’ sent a clear

signal to the tobacco companies that they would risk a de-

ceptive advertising claim if they failed to advertise tar

and nicotine levels in accordance with the Cambridge Fil-

ter Method.

In comparison, the government contract in Fung was

not compelled and could be considered a “voluntary

agreement” and yet was certainly enforceable once en-

tered. Similarly, in the Agent Orange case, Diamond

Shamrock chose to participate in the herbicide industry

and was already manufacturing herbicide with some of

the components of Agent Orange before it was compelled

to turn over its Agent Orange to the government. See

Winters, 149 F.3d at 399. Even a volunteer can be “acting

under” a federal officer. In Oregon v. Cameron, 290

F.Supp. 36, 37 (D.Or.1968), an unpaid supervisor of a vol-

unteer program and other participants were acting under

a federal officer when they entered a farm to help a mi-

grant worker obtain health care. Removal was appropri-

ate because the volunteers were assigned pursuant to fed-

eral statute “to work in meeting the health .. . needs of

migratory workers and their families.” /d. at 38.

They chose to participate in the program and acted in ac-

cordance with the duties they had been assigned, just as

Philip Morris has chosen to participate in the cigarette

industry and has agreed to follow the FTC’s policies.

We have been instructed by the Supreme Court to in-

terpret this removal statute broadly, to give effect to its

purpose. See Colorado v. Svmes, 286 U.S. 510, 517, 52

S.Ct. 635, 76 L.Ed. 1253 (1932); Willingham v. Morgan,

‘The FTC additionally stated that “the public interest requires that

all test results presented to the public be based on a uniform method

used by all laboratories” because “[u]se of more than one testing

method . . . would only serve to confuse or mislead the public.” News

Release, FTC (Aug. 1. 1967). It added that “statements or representa-

tions based on non-standardized tests having no official or governmen-

tal sanction would tend to confuse and mislead the public.” Letter

from FTC secretary Joseph W. Shea to Howard Bell (Oct. 25, 1967).

loa

395 U.S. 402, 406-07, 8S S.Ct. 1813, 23 L.Ed.2d 396

(1969); see also Winters, 149 F.3d at 398. In essence, the

requirement that the companies enter the agreement was

a rule in substance though not in form. If we give the

statute a broad and liberal interpretation as we are re-

quired to do, the fact that the FTC approved an agree-

ment instead of proposing a rule should not defeat re-

moval under section 1442(a).

The FTC involved itself in the tobacco industry to an

unprecedented extent. Throughout the record, there were

several indications that both developing a testing method

and carrying out the testing evidenced an unusually high

level of governmental participation and control. Deputy

Director of the Bureau of Consumer Protection of the

FTC, C. Lee Peeler, could not recall any other instance

where the FTC had gone so far as to specify the testing

methodology. To actually conduct the testing itself for

over twenty years, instead of delegating that task to the

industry, was outside the government's normal course of

conduct. The operation of a cigarette lab by the FTC was

“really something that was unique” and “unusual for .. .

the Commission.”

The record is filled with FTC announcements of its pol-

icv as well as communications between the FTC and the

cigarette industry, which show comprehensive and de-

tailed control. The record establishes that Philip Morris

acted under the direction of a federal officer.

Il.

For federal officer removal there must be a “causal con-

nection” that links the federal officer's direction and con-

trol to the acts challenged in the plaintiff’s complaint. It

must be shown that “the acts that form the basis for the

state civil or criminal suit were performed pursuant to an

officer's direct orders or to comprehensive and detailed

regulations.” Virden v. Altria Group, 304 F.Supp.2d 832,

844 (N.D.W.Va.2004) (quoting Rvan v. Dow Chem. Co..

781 F.Supp. 934, 947 (E.D.N.Y.1992)). Here, the acts

l4a

regulated by the FTC form the basis for Watson’s and

Lawson's class action.

The complaint in Tremblay v. Philip Morris, 231

F.Supp.2d 411, 418-19 (D.N.H.2002) was drawn more

narrowly. than Watson's and Lawson’s complaint. The

court in 7remblay held that Philip Morris's actions were

not conducted under the direction of a federal officer or

agency because the complaint did not challenge the “en-

forcement or wisdom of any FTC policy, procedure or

regulation.” /d. at 419. Instead, the complaint alleged

that Philip Morris manipulated the FTC's policies and ex-

ploited the Cambridge Filter Method. Jd. at 419.

The allegations of the complaint in Paldrmic also fo-

cused narrowly on the manufacture and design of the

cigarettes. “Although the Cambridge System is deeply

intertwined with plaintiff's allegations, the gravamen of

his lawsuit is that defendant, fully aware that it had

agreed to communicate tar and nicotine test results

within certain parameters, designed and manufactured

its product so as to use the test to mask the truth about

its product.” 327 F.Supp.2d at 967. The conduct chal-

lenged in the complaint was the design or manufacture of

cigarettes, and the FTC did not direct Philip Morris how

to design and manufacture its product. /d.

In this case, Watson and Lawson challenge more than

just the cigarette design. They also challenge Philip Mor-

ris's “marketing and promoting” of low tar and nicotine

cigarettes, its “representations,” and its alleged deception

of consumers. Thus, in part, their complaint challenges

Philip Morris's advertising. It cannot seriously be argued

that the FTC does not direct and control the advertising of

cigarettes. This Court must look at the FTC’s regulation

of cigarette advertising because the conduct Watson and

Lawson challenge includes cigarette advertising.

Here, Watson and Lawson claim that Philip Morris's

use of low tar descriptors such as “lights” or “lowered tar”

are deceptive or misleading because the actual tar and

nicotine delivered to the smoker is much higher than the

ld5a

FTC results communicate to smokers. The FTC defines

“low tar” as 15.0 mg. or less tar.’ FTC Report to Congress,

Pursuant to the Federal Cigarette Labeling and Advertis-

ing Act (1979).

In 1971, the FTC and American Brands, Inc. entered

into a consent order based upon a complaint the FTC is-

sued. There, the FTC explained its view of how the use of

certain descriptors could constitute deceptive advertising

— it would be deceptive to use descriptors lke “low,”

“lower,” “reduced,” or other qualifying terms unless the

tar and nicotine levels were also stated. The tar and nico-

tine levels were to be measured by “the testing method

employed by the Federal Trade Commission,” which is the

Cambridge Filter Method. Watson and Lawson ciaim it is

deceptive for Philip Morris to use a low tar descriptor in

conjunction with its cigarette: FTC rating. The verv

combination Watson and Lawson challenge as deceptive is

the same combination the FTC requires to not be decep-

tive. Whether Philip Morris's labeling of cigarettes as

“lights” is deceptive directly implicates the enforcement

and wisdom of the FTC's tobacco policies.

It is not as if Watson and Lawson discovered new de-

signs by Philip Morris that the FTC did not contemplate

when it required the disclosure of test results. The FTC

was well-aware of the limitations of the Cambridge Filter

Method. In 1977, the FTC solicited public comment on a

problem similar. if not identical to, some of Watson's and

Lawson's claims in this case. The FTC studied how the

placement of ventilation holes in cigarettes affected their

tar and nicotine ratings. If vent holes were covered by the

smoking machine's cigarette holder, but open when

smoked by a person, then less tar and nicotine would pass

through the cigarette to the smoker than the ratings re-

flected. Conversely, if the smoker covered vents that the

’ The FTC recognized that cigarette manufacturers have also used

the term “ultra low tar” for cigarettes containing 1.0—5.0 mg. tar, but

the FTC has not formally defined that term.

l6a

machine’s cigarette holder left open, more tar and nicotine

would pass through the cigarette to the smoker than the

ratings reflected.

The FC was fully aware that the placement of ventila-

tion holes near the tip of the cigarette complicated the

comparability of the tar and nicotine ratings among dif-

ferent brands. The same problem reemerged in the early

1980's when Brown and Williamson developed the Bar-

clay brand, which had ventilation channels instead of ven-

tilation holes. Although the FTC recognized these prob-

lems and solicited comment on them, the FTC ultimately

chose to continue using the Cambridge Filter Method.

Watson and Lawson challenge the FTC's policy judg-

ment that despite the failure of the Cambridge Filter

Method to take into account ventilation holes or channels,

the test results should still be included in advertising,

even if alongside “light” descriptors, to prevent deception.

In contrast, Watson and Lawson claim that this grouping

of test results and descriptors renders advertising decep-

tive. Their claims are sufficiently related to the FTC’s di-

rect and comprehensive control to establish a causal con-

nection.

Il.

The final two requirements for removal under 28 U.S.C.

§ 1442(a) are thet Philip Morris must present a “colorable

federal defense” and that it must be a “person” within the

meaning of the statute. To satisfy the requirement of a

colorable federal defense, Philip Morris pleaded that Wat-

son’s and Lawson's state law claims were preempted by

Section Five of the Federal Cigarette Labeling and Adver-

tising Act. Philip Morris's Notice of Removal cites Geier v.

American Honda Motor Co., 529 U.S. 861, 120 S.Ct. 1913,

146 L.Ed.2d 914 (2000) in support of its preemption de-

fense. The district court order stated that Watson and

Lawson “do not dispute that the federal preemption de-

fense raised by the Defendants is a ‘colorable’ claim to a

federal defense.” Ship op. at 14. The court cited United

States v. Todd, 245 F.3d 691, 693 (8th Cir.2001), that for a

l7a

defense to be colorable it need only be plausible and fur-

ther stated that it did not believe the district court opin-

ion in United States v. Philip Morris, Inc., 263 F.Supp.2d

72 (D.D.C.2003), prevents the preemption defense from

being “colorable.” Slip op. at 14 & fn. 5. The district court

emphasized that its decision “reaches no conclusion on the

merits of Philip Morris’ preemption defense but is ruling

that the FTC’s regulation of Philip Morris’ cigarette test-

ing and advertising rises to a level sufficient to invoke

federal jurisdiction under the federal removal statute.”

Slip op. at 24.

In their brief before this Court Watson and Lawson

state, “For the purposes of the Remand Motion only,

Plaintiffs do not contest ... whether the federal preemp-

tion defense it had raised sufficed as a ‘colorable’ federal

defense.” Watson and Lawson argue only that Philip

Morris failed at a minimum to demonstrate that it acted

under the direction of a federal officer, or to show a causal

nexus between plaintiffs’ claims and the acts of Philip

Morris, allegedly performed under the color of a federal]

office.

Although we are required to review the requirement of

a colorable federal defense for jurisdictional purposes, the

threshold is quite low. We do not require the defendant to

“win his case before he can have it removed.” Willingham

v. Morgan, 395 U.S. 402, 407, 89 S.Ct. 1813, 23 L.Ed.2d

396 (1969). The defendant need only raise a “colorable”

federal defense. Id.; Jefferson County v. Acker, 527 U.S.

423, 431, 119 S.Ct. 2069, 144 L.Ed.2d 408 (1999). We

have no hesitation in concluding that Philip Morris, in its

Notice of Removal, has set forth a colorable federal de-

fense which Watson and Lawson have not contested.

The fourth requirement for federal officer removal is

that the party must be a “person” within the meaning of

the statute. Several courts have concluded that a corpo-

ration can be a “person” within the requirements of fed-

eral officer removal. See Rvan v. Dow Chem. Co., 781

F.Supp. 934, 946- 47 (E.D.N.Y.1992); Fung v. Abex Corp..

18a

816 F.Supp. 569, 572 (N.D.Cal.1992). We find the analy-

sis in Rvan to be persuasive.

We affirm the district court’s order denying remand and

finding removal proper under section 1442(a).

GRUENDER, Circuit Judge, concurring.

1 fully concur in the court’s opinion and judgment. I

write separately to emphasize that our decision today

should not be construed as an invitation to every partici-

pant in a heavily regulated industry to claim that it, like

Philip Morris, acts at the direction of a federal officer

merely because it tests or markets its products in accord

with federal regulations. I believe that in most instances,

a contract, principal-agent relationship, or near-employee

relationship with the government will be necessary to

show the degree of direction by a federal officer necessary

to invoke removal under 28 U.S.C. § 1442(a)(1). See Vir-

den, 304 F.Supp.2d at 845-46 (collecting cases embodying

the “regulation plus” concept, where limited discretion

under a government contract, action as an agent for the

federal government, or action in the nature of a govern-

ment employee, in addition to government regulation,

supported a defendant's invocation of the federal officer

removal statute).

In this case, as the court’s opinion makes clear, the

FTC's direction and control of the testing and marketing

practices at issue is extraordinary. The FTC developed

the Cambridge Filter Method, conducted the testing itself

for twenty years before farming it out to the cigarette

companies, threatened a deceptive advertising action if

the method of testing deviated in the smallest way from

the government-mandated method and controlled the dis-

closure of the results throughout. Because the FTC

passed the function of performing the testing to the ciga-

rette companies while allowing them no independent con-

trol of the process whatsoever, this is a rare case in which

federal officer jurisdiction is appropriate even in the ab-

19a

sence of a contract, principal-agent relationship, or near-

employee relationship with the government.

With these observations, I join the court’s opinion and

judgment.

20a

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF ARKANSAS

LITTLE ROCK DIVISION

Case No. 4:03-CV-519 GTE

LISA WATSON AND LORETTA LAWSON, INDIVIDUALLY

AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,

Plaintiffs,

Vv.

PHILIP MORRIS COMPANIES, INC., AND

PHILIP MORRIS, INCORPORATED,

Defendants.

[Filed Dec. 12, 2003]

MEMORANDUM OPINION AND ORDER

Eisele, J.

Before the Court is the Plaintiffs’ Motion to Remand, to

which the Defendants have responded. For the reasons

provided herein, the Plaintiffs’ Motion will be denied.

I. Procedural Background

Plaintiffs filed this action on April 18, 2003 in the Cir-

cuit Court of Pulaski County, Arkansas, Sixth Division.

On May 29, 2003, Plaintiffs filed an Amended Complaint.

On June 3, 2003, Defendants were served. Defendants

removed the action to this Court on July 2, 2003. Plain-

tiffs frled the instant Motion for Remand on August 1.

2003. The Court has also received and reviewed the De-

fendants’ Memorandum in Opposition, filed on August 20,

2003; the Plaintiffs’ Reply Memorandum, filed on Septem-

ber 12, 2003; the Defendants’ Supplemental Memoran-

dum, filed on November 18, 2003; and the Defendants’ let-

ter of November 19, 2003 submitting additional exhibits

Zia

(66-71). Oral argument was conducted on November 20,

2003.

Plaintiffs are smokers who have consumed approxi-

mately one pack of Marlboro Lights or more over at least

the past six years. They allege that Philip Morris' violated

the Arkansas Deceptive Trade Practices Act, Ark.Code

Ann. § 4-88-107 et seg., by deceptively marketing ciga-

rettes as “lighter,” or lower in tar. The essence of Plain-

tiffs’ complaint is that Philip Morris advertised their ciga-

rettes as light despite the fact that the cigarettes conveyed

more tar and nicotine to smokers than shown by the Fed-

eral Trade Commission (“FTC”) testing method, known as

the Cambridge Filter Method.” The Plaintiffs’ First

Amended Complaint, filed in Pulaski County Circuit

Court, states in pertinent part:

9. While marketing and promoting decreased tar

and nicotine deliveries, Defendants designed Cam-

bridge Lights and Marlboro Lights to register lower

levels of tar and nicotine on the “Cambridge” or “Ogg”

testing apparatus-the testing machine used by the to-

bacco industry to “measure” tar and nicotine levels in

cigarettes-than would be delivered to the consumers

of the product. Defendants controlled the tar and

nicotine delivery of Cambridge Lights and Marlboro

Lights cigarettes under machine testing conditions

apparently to achieve support for their representa-

tions that their Cambridge Lights and Marlboro

Lights cigarettes are “light” and contain decreased tar

and nicotine and that their Marlboro Lights ciga-

rettes contain “lowered tar and nicotine.”

' Throughout this opinion, the Court's reference to “Philip Morris”

refers to Defendants Philip Morris Compamies. Inc. and Philip Morris

Incorporated jointly. The Court notes that Defendants’ Supplemental

Memorandum styles the case as “Watson, et al. v. Altria Group. Inc., et

al.” However, neither party has filed any amendment inserting Altria

Group, Inc. as a Defendant.

* The “Cambridge Filter Method” is often referred to as the “FTC

Method.” The terms are used interchangeably in this Order.

22a

—

10. Defendants representations that Cambridge

Lights and Marlboro Lights cigarettes are “lighter”

(ie: lower tar and nicotine) than regular cigarettes are

deceptive and misleading and constitute unfair busi-

ness practices.

11. Not only do consumers receive higher levels of

tar and nicotine than the testing apparatus registers,

but the smoke produced by Cambridge Lights and

Marlboro Lights is more mutagenic (causing genetic

and chromosomal! damage) per milligram of tar than

‘regular’ cigarettes.

12. Defendants engaged in a common course of un-

fair business practices and/or deceptive and unlawful

conduct in connection with the manufacture, distribu-

tion, promotion, marketing, and sale of Cambridge

Lights and Marlboro Lights cigarettes by:

a. Falsely and/or misleadingly representing that

their product is “light” and/or delivers lowered tar

and nicotine in comparison to regular cigarettes;

b. Describing the product as light when the so-

called lowered tar and nicotine deliveries depended

on deceptive changes in cigarette design and com-

position that dilute the tar and nicotine content of

smoke per puff as measured by the industry stan-

dard testing apparatus, but not when used by the.

consumer;

ec. Intentionally manipulating the design and con-

tent of Cambridge Lights and Marlboro Lights ciga-

rettes in order to maximize nicotine delivery while

falsely and/or deceptively claiming lowered tar and

nicotine. These manipulations include, but are not

limited to, the modification of tobacco blend,

weight, rod length, and circumference; the use of

reconstituted tobacco blend, weight, rod length-and-

circumference; the use of reconstituted tobacco

sheets and/or expanded tobacco; and the increase of

smoke pH levels by chemical processing and addi-

tives, such as ammonia, which resulted in the de-

23a

livery of greater amounts of tar and nicotine when

smoked under actual conditions than Defendants

represent bv use of the “light” description;

d. Employing techniques that purportedly reduce

machine-measured levels of tar and nicotine in

Cambridge Lights and Marlboro Lights cigarettes,

while actually increasing the harmful biological ef-

fects. including mutagenicity (genetic and chromo-

somal damage) caused by the tar ingested by the

consumer per milligram of nicotine.

13. Through longstanding fraudulent and unfair

conduct, Defendants willfully deceived consumers, in-

cluding the Plaintiffs named herein, regarding the

nature and effect of their “light” cigarettes.

Plaintiffs further indicate in their First Amended com-

plaint that thev seek class action status, with the class to

include all persons who purchased Cambridge Lights and

Marlboro Lights cigarettes in Arkansas for personal con-

sumption since those cigarettes were first sold in the state.

Defendants contend that this court has jurisdiction un-

der 28 U.S.C. § 1442(a) because Philip Morris is “a person

acting under’ the direction of an officer of the United

States for purposes of cigarette testing and advertising.

Defendants also argue that federal question jurisdiction

under 28 U.S.C. § 1331 is appropriate because Plaintiffs’

complaint, though premised on the Arkansas Deceptive

Trade Practices Act, necessarily implicates the FTC's ciga-

rette testing and advertising requirements, including the

accuracy of the Cambridge Filter Method. Plaintiffs argue

that federal jurisdiction is not appropriate under either

§ 1442 or § 1331 because their allegations center on Philip

Morris deceptive advertising, not the faults of the Cam-

bridge Filter Method. The Court concludes, forthe rea-

sons stated below, that it has jurisdiction under 28 U.S.C.

§ 1442(a)(1). Therefore, the Court will not address re-

moval pursuant to 28 U.S.C. § 1331.

24a

Il. Factual, Statutory, and Regulatory Background

The FTC’s jurisdiction over advertising and testing of

tar and nicotine content of cigarettes is premised on the

Federal Trade Commission Act. Title 15 U.S.C., Section

45(a) of the Act declares unlawful “unfair methods of com-

petition in or affecting commerce and unfair and deceptive

acts or practices in or affecting commerce.” Section 45(a)

also grants the FTC broad authority to prevent such un-

fair and deceptive acts, including unfair and deceptive ad-

vertisements for products such as tobacco. See Federal

Trade Commission v. Brown & Williamson Tobacco Corp..,

778 F.2d 35, 40 n. 2 (D.C.Cir.1985).

Judge Bork discussed the FTC’s regulation of the adver-

tising of tar and nicotine content claims in the following

excerpt from Brown & Williamson:

Since at least the mid-1950’s the FTC has been con-

cerned about the validity of tar and nicotine content

claims in cigarette advertising. In 1955 the Commis-

sion published cigarette advertising guides advising

manufacturers to make no representations about the

tar and nicotine content of a cigarette that could not

be supported with reliable scientific evidence. By the

mid-1960's the FTC became concerned about the ab-

sence of a standard method for testing cigarette deliv-

ery of tar and nicotine. Accordingly, in 1967 the

Commission adopted a testing method and began a

program to analyze the tar and nicotine levels of each

brand of cigarettes sold in the United States.

The test adopted by the FTC is known as the Cam-

bridge Filter Method and is used with minor varia-

tions throughout the world. The test utilizes a smok-

ing machine that takes a 35 milliliter puff of two sec-

onds’ duration on a cigarette every 60 seconds until

the cigarette is smoked to a specified butt length.

The tar and nicotine collected by the machine is then

weighed and measured. This provides an objective

basis for assessing the relative amounts of tar and

nicotine different cigarettes will deliver when they

25a

are smoked in the same way. The test does not

measure the amount of tar or nicotine that any indi-

vidual smoker may receive since that quantity will

depend on individual smoking behavior.

In 1970, the FTC proposed a formal rulemaking in

order to promulgate a Trade Regulation Rule requir-

ing disclosure of FTC tar and nicotine ratings in ciga-

rette advertising. Immediately following this pro-

posal, five leading cigarette companies, including

B & W, agreed among themselves to a voluntary dis-

closure plan (the “1970 agreement”). This plan pro-

vided that the cigarette manufacturers would disclose

the tar and nicotine figures in all advertising for their

cigarettes according to the most recently published

Commission test results. Upon accepting the 1970

agreement, the FTC indefinitely suspended its rule-

making proceeding.

Brown & Williamson, 778 F.2d at 36-37. The FTC's pro-

posed rule was published in the Federal Register. See

Proposed Rule Making by the Federal Trade Commission

Regarding Advertising of Cigarettes, 35 Fed.Reg. 12671

(August 8, 1970). The voluntary agreement itself was re-

flected in a letter to the FTC signed by eight cigarette

manufacturers, including Philip Morris. That letter

states:

In accordance with the Commission Press Release

of October 1, 1970, each of the undersigned companies

which manufactures, or is a primary distributor of,

varieties of cigarettes which are presently advertised,

and any of its subsidiaries similarly engaged, is writ-

ing to set forth a voluntary program for the disclosure

of “tar” and nicotine in its paid consumer-directed

cigarette advertising in the United States placed by

each of the undersigned companies.

Under this program, each company will disclose

clearly and prominently for the variety of cigarettes

advertised the values for “tar” in milligrams and for

nicotine in tenths of a milligram contained in the

26a

Federal Trade Commission published test results,

under its present methodology, in all advertising

newspapers, magazines, and other periodicals pub-

lished and distributed in the United States.... Each

of these advertisements will include the “tar” and

nicotine data, as rounded off by the Federal Trade

Commission, from the Commission test results most

recently published in the Federal Register.... Nec-

essarily, the carrying out of this voluntary program is

predicated upon the Commission continuing to test

the advertised varieties of cigarettes and to publish

its results in the Federal Register at regular and pe-

riodic intervals of not more than six months....

Each of these companies is confident that the pro-

gram presented, which they intend to begin thirty

working days after the Commission has considered it

in lieu of any formal Trade Regulation Rule proceed-

ing and hearing, constitutes a plan that is feasible.

See Defendants’ exhibit 66, Letter from Ross R. Millhiser,

President, Philip Morris, U.S.A., et. al. to Federal Trade

Commission (December 17, 1970).

As the FTC recently stated, the voluntary agreement

“remains in effect today, and it forms the basis for current

disclosure of tar and nicotine yield.” See Cigarette Test-

ing:-Request for Public Comment, Federal Trade Commis-

sion, 62 Fed.Reg. 48158, 1997 WL 563104 (February 12,

1997). The FTC itself tested cigarettes in its own lab us-

ing the Cambridge Filter Method until 1987. Jd. Lee

Peeler, an employee of the FTC since 1973, testified in a

Rule 30(b)(6) deposition in the case of United States v.

Philip Morris, Inc., then pending in the District of Colum-

bia Federal District Court, regarding the approximately

twenty vear period in which the FTC tested cigarettes in

its own lab:

A. The point I was trying to make is that the . . . op-

eration of the cigarette lab was really something

that was unique and ... was designed to prevent

a certain type of deception, but ... as we said

when we closed the lab it was unusual for a pro-

27a

gram like that to be maintained by the Commis-

sion.

Q. Right. We’re going to talk about that specifically.

There are other industries that run testing and it

was unusual for the Commission itself to be run-

ning the testing for the cigarette industry, right?

A. It is both unusual for the Commission to be run-

ning the testing and to be the agency that speci-

fied the testing methodology because ... I can’t

recall any other instances where the FTC itself

specifies the testing methodology .... .

Q. Okay, Now I think you testified earlier that hav-

ing the FTC run the testing lab is unusual.

A. Among government programs it seems very un-

usual to have an agency actually doing the test-

ing for an industry.

See Defendants’ Exhibit 70, Deposition of C. Lee Peeler,

Deputy Director of the Bureau of Consumer Protection of

the FTC, pp. 96-97, taken in connection with United States

v. Philip Morris, Case No. 99-CV-02496 (D.D.C. July 30,

2002).

In 1987, the FTC closed its testing lab, but required

manufacturers, including Philip Morris, to continue test-

ing cigarettes using the Cambridge Filter Method. See

Cigarette Testing; Request for Public Comment, Federal

Trade Commission, 62 Fed.Reg. 48158, 1997 WL 563104.

Responsibility for conducting the testing was transferred

to the Tobacco Institute Testing Lab (“TITL”)', and the

voluntary agreement was modified to reflect the change.

See Defendants’ Exhibit 67, Letter from John P. Rupp.

counsel to TITL, to Judith P. Wilkenfield, Program Ad-

viser, Cigarette Advertising and Testing, Federal Trade

“ TITL had been testing cigarettes under the Cambridge Filter

Methed prior to the transfer of authority in 1987. See Peeler Deposi-

tion at 198. The TITL lab and the FTC lab had collaborated to ensure

accuracy of test results. Jd The FTC considered the uniformity be-

tween TITL’'s testing results and the FTC lab’s testing results im abol-

ishing the FTC lab and transferring sole testing authority to TITL. /d.

28a

Commission dated June 30, 1987: see also Cigarette Test-

ing, 62 Fed.Reg. 48158. Although TITL is an industry

funded lab, the FTC retains the authority to inspect the

lab. Id; see also Defendants’ exhibit 70, Peeler Deposition

at 201. An FTC contractor and former director of the FTC

laboratory has unrestricted access to the TITL laboratory

to monitor and review the testing process. See Defendants’

Exhibit 20, Federal Trade Commission, Tar, Nicotine, and

Carbon Monoxide of the Smoke of 1206 Varieties of Do-

mestic Cigarettes for the Year 1994 (1997). Additionally,

the FTC requires cigarette manufacturers, by “compulsory

process’ to provide results of TITL testing for all cigarettes

to the FTC. See Cigarette Testing, 62 Fed.Reg. 48158; see

also Peeler Deposition at 202. The results obtained by the

FTC are published annually in the Federal Register.

The FTC recently described the FTC Method in a re-

quest for public comment published in the Federal Regis-

ter:

Thus, although some changes have been made, the

modified Cambridge Filter Method adopted by the

Commission in 1967 remains essentially in place to-

day. The Commission's test method was not designed

‘to determine the amount of ‘tar’ and nicotine inhaled

by any human smoker, but rather to determine the

amount of tar and nicotine generated when a ciga-

rette is smoked by a machine in accordance with the

prescribed method. The purpose of the program was

~ to provide smokers seeking to switch to lower tar

cigarettes with a single, standardized measurement

with which to choose among the existing brands. This

goal was consistent with the then-consensus of the

scientific community that lower tar and nicotine ciga-

rettes should be less harmful than higher tar and

nicotine brands.

See Cigarette Testing: Request for Public Comment, Fed-

eral Trade Commission, 62 Fed.Reg. 48158. (February 12,

1997).

29a

In addition to mandating the disclosure of tar and nico-

tine values under the FTC Method in all cigarette adver-

tising, the FTC permits a manufacturer to advertise a

cigarette as ‘low tar” or “light” if a cigarette’s tar value

under the FTC Method is 15.0 mg or less.* As with disclo-

sure of tar and nicotine values under the FTC Method, no

formal rule permitting descriptors such as “light” or “low

tar’ was ever promulgated. However, the FTC has. in a

variety of advisory opinions and proceedings, expressed its

view that cigarette companies engage in deceptive adver-

tising in violation of the Federal Trade Commission Act

when they advertise cigarettes as “light” or “low tar” with-

out publishing Cambridge Filter Method test results that

reflect that the cigarettes are, in fact, “low tar.”

In 1971, the FTC issued a complaint against American

Brands, Inc. for advertising cigarettes as “lower in tar”

without disclosing Cambridge Filter Method tar ratings.

In the Matter of Am. Brands, 79 F.T.C. 255, 258-259

(1971). As a result of that complaint, the FTC and Ameri-

can Brands, Inc. entered into a consent order requiring

American Brands to cease advertising its cigarettes as low

tar without clearly disclosing FTC Method tar ratings. Jd.

In 1978, the FTC issued an advisory opinion to Lorillard,

another cigarette manufacturer. See In re Lorillard, 92

F.T.C. 1035 (1978); see also Defendants’ Exhibit 70, Peeler

Deposition at 470. That opinion stated the Commission's

view that it would be deceptive to advertise a cigarette tar

figure that differed from that obtained using the FTC

method. /d.

‘The FTC stated in Reports to Congress for 1979 and 1980 that it

defined “low tar” as 15.0mg or less of tar under the Cambridge Filter

Method. See Defendants’ Exhibits 55 and 456, Federal Trade Commis-

sion, Report to Congress, Pursuant to the Federal Cigarette Labeling

and Advertising Act. For the Years 1979 and 1980. n.8. n.11: but see

Cigarette Testing. Request for Public Comment, Federal Trade Com-

mission, 62 Fed. Reg 48158 (February 12, 1997) (stating that the FTC

had never defined ‘low tar”). The FTC has not formally defined other

descriptors, such as “ultra low tar.” but that term is generally under-

stood to mean 6 mg or less of tar and nicotine. /d.

30a

In 1981, the FTC began an investigation of Brown and

Williamson, manufacturer of Barclay cigarettes, for adver-

tising cigarettes as “1 mg tar, .2 mg nicotine by the FTC

method.” See FTC v. Brown & Williamson, 778 F.2d 35,

37 (D.C.Cir.1985). The FTC first concluded that the

method did not accurately measure the tar content of Bar-

clay cigarettes, and attempted to require Barclay adver-

tisements to state an estimated tar content of 3 to 7 mg. of

tar. Jd. at 38. Barclay refused, but revised its advertise-

ments to state that the 1 mg tar content was produced us-

ing a method recognized by independent laboratories, not

the FTC. Id. The FTC filed suit in Federal District Court

seeking an injunction to prevent Brown and Williamson

from continuing to advertise Barclay cigarettes in a false

and deceptive manner in violation of § 45(a) of the Federal

Trade Commission Act. Jd. The District Court granted

injunctive relief, which the District of Columbia Court of

Appeals eventually curtailed on First Amendment

grounds. /d. See further discussion infra.

The FTC again challenged a cigarette manufacturer's

“low tar” advertising in 1994 when it contested American

Tobacco’s claim that consumers would get less tar by

smoking 10 packs of Carlton cigarettes than by smoking a

single pack of the other brands. The FTC found these ad-

vertisements deceptive, and entered into a consent agree-

ment with American Tobacco prohibiting the ads.

Despite the FTC's pursuit of companies that did not dis-

close FTC Method test results with their “light” adver-

tisements, the FTC acknowledged flaws in the FTC

Method on several occasions. In 1977, the FTC evaluated

-the FTC Method’s ability to measure tar delivery to hu-

man smokers when cigarettes are designed with ventila-

tion holes. Ventilation holes. like the various cigarette de-

sign components that Plaintiffs allege Philip Morris uses,

cause smokers that smoke in certain ways to receive a_

higher amount of tar and nicotine than is reflected in the

FTC Method’s ratings. After investigating, the FTC di-

rected that the FTC Method would not be changed. In

1981, the FTC evaluated the Cambridge Filter Method’s

sla

inability to measure the tar and nicotine content of Bar-

clay Cigarettes. See Brown & Williamson, 778 F.2d at 37.

Other cigarette manufacturers, including Philip Morris,

complained to the FTC that the ventilation system in Bar-

clay cigarettes produced a lower tar rating under the FTC

Method, but produced much higher tar when smoked by

actual humans. /d. at 37. Although the FTC concluded in

1982 that the FTC Method did not accurately measure

Barclay cigarettes, the FTC continued to mandate that all

cigarettes other than the Barclay be tested according to

the method. Jd. at 38. The FTC also continued to evaluate

the FTC Method after the Brown & Williamson decision.

An FTC official acknowledged this evaluation, when she

stated:

Since the Brown & Williamson decision, the Commis-

sion has conducted an ongoing review of the cigarette

testing methodology that, amoug other things, has

examined possible ways to measure the effects of

compensatory smoking, but to date no cigarette com-

pany, scientific agency or health group has offered a

viable alternative to the present testing system.

See Defendants’ Exhibit 33, Letter from E. Rock to Hon.

T.A. Luken (June 17, 1988). The Cambridge Filter Method.

remained mandatory for all cigarettes but Barclay. See

Brown & Williamson, 778 F.2d at 37.

In 1997, the FTC solicited public comment on proposed

ways to alter the FTC Method and to change cigarette ad-

vertising to better reflect the method's inability to meas-

ure the tar and nicotine actually conveyed to smokers. See

Cigarette Testing: Request for Public Comment. Federal

Trade Commission, 62 Fed.Reg. 48158 (February 12,

1997). The request for public comment summarized the

history of the Method and its regulation by the FTC. 7d.

The FTC first acknowledged that the voluntary agreement

that bound cigarette manufacturers to disclose FTC

Method results formed the basis for the FTC's annual,

compulsory demand for cigarette tar and nicotine ratings.

Id. The request went on to summarize current concerns

about the FTC Method:

32a

Changes in cigarette design and increased knowl-

edge about human smoking behavior have high-

lighted the limitations of the existing test method. In

particular, research indicates that smokers switching

to cigarettes at the lower end of the range of machine

measured nicotine yields tend to take larger and more

frequent puffs to satisfy their need for nicotine. This

compensatory smoking behavior substantially reduces

the informative value of the current ratings. As a re-

sult, public and private health groups and others

have questioned the usefulness of the FTC ratings

over the past few years, suggesting that they may

mislead consumers with respect to the relative risks

of smoking cigarettes with various levels of tar and

nicotine ratings.

The Commission has been especially concerned that

some consumers may believe that the existing ma-

chine measured yields are literal indicators of how

much tar and nicotine they will get from particular

brands of cigarettes. To the extent that smokers in-

terpret current tar and nicotine disclosures in this

manner, they may fail to understand that the amount

of tar and nicotine they get from a cigarette depends

in part on how that cigarette is smoked. In addition,

smokers--especially those who engage in compensa-

torv smoking--may underestimate the risk associated

with lower rated brands by assuming that a very low

tar vield necessarily translates into a correspondingly

low health risk. In fact, even the lowest rated ciga-

rette represents an important adverse health risk. . . .

The FTC protocol was based on cursory observa-

tions of human smoking behavior. Actual human

smoking behavior is characterized by wide variations

in smoking patterns which result in wide variations

in tar and nicotine exposure. Smokers who switch to

lower tar and nicotine cigarettes frequently change

their smoking behavior which may negate potential

health benefits.

joa

Cigarette Testing, 62 Fed.Reg. 48158. The request for

comment also cites several changes to the FTC Method

proposed at a conference held by the National Cancer In-

stitute at the request of the FTC, and requests comments

on ways to improve communication of the FTC Method rat-

ings through advertising. /d. In addressing the weak-

nesses of the current advertising requirements, the Com-

mission commented:

Finally, the Commission considered keeping the

current unitary rating system and adding disclosures

warning smokers that the amount of tar and nicotine

they get will vary depending on how a cigarette is

smoked. This plan has the advantage of avoiding the

costs and complexities involved in moving to a two-

tier system. It would emphasize the artificial nature

of the smoking machine measurements and the fact

that ratings produced by machines do not indicate

what smokers actually get from their cigarettes. The

advertising disclosure, along with appropriate educa-

tion efforts, could potentially inform smokers about

compensation and ways to avoid it. The Commission

believes, however, that unitary ratings will be less ef-

fective than a range of ratings in communicating to

smokers the variability in potential smoke ingestion.

The Commission is seeking comment on the desir-

ability and feasibility of these alternative approaches

to revising the test method.

Id.

In 1998, the FTC informed Senator Frank Lautenberg,

in response to his letter inquiring as to the status of the

proposed changes, that the FTC was still evaluating prob-

lems with the Cambridge Filter Method. See Defendants

Exhibit 63, FTC News (Nov. 24, 1998). Finally, Defen-

dant’s counsel reported to this Court at oral argument that

the FTC continues to evaluate. the Cambridge Filter

Method at the present time, but has not yet adopted any

other testing procedure or any substantial changes to the

Method. Additionally, Peeler testified in his deposition

34a

that the FTC had not come to a final determination as to

whether to keep, abandon, or revise the Method. See De-

fendants’ Exhibit 70, Peeler Deposition at 367, 587.

As the Peeler deposition and the FTC’s 1997 request for

public comment make clear, the voluntary agreement of

1970 remains in place and the FTC continues to ensure

compliance with that agreement by inspecting the TITL

testing facility, compelling cigarette manufacturers to dis-

close tar and nicotine ratings for all cigarettes both to the

FTC and in all advertisements, and publishing tar and

nicotine figures in the Federal Register.

Ill. Discussion

Ordinarily, the Court may only accept a case upon its

removal from a state court if the lawsuit is one that could

have been originally brought in federal court. See 28

U.S.C. § 1441. For example, removal is appropriate in

federal question cases, that is, cases arising under the

Constitution, laws or treaties of the United States, because

Federal Courts have original jurisdiction over those cases

under 28 U.S.C. § 1331. In the typical § 1331 situation,

the well-pleaded complaint rule provides that a civil action

arises under federal law only when the plaintiff's well-

pleaded complaint raises issues of federal law. See Crews

v. General American Life Ins. Co., 274 F.3d 502, 504-05

(8th Cir. 2001). As a general rule, a federal defense will

not give rise to federal question jurisdiction. See Caterpil-

lar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96

L.Ed.2d 318 (1987).

The federal officer removal statute, 28 U.S.C. § 1442.

provides an exception to the general rule. This statute

“serves to overcome the ‘well-pleaded complaint rule

which would otherwise preclude removal even if a federal

defense were alleged.” See Mesa v. California, 489 U.S.

121, 136, 109 S.Ct. 959, 103 L.Ed.2d 99 (1989). “The right

to removal funder § 1442] ‘is made absolute whenever a

suit in a state court is for any act under color of federal

office, regardless of whether the suit could originally have

been brought in federal court.” See United States v. Todd,

35a

245 F.3d 691, 693 (8th Cir. 2001) (quoting Willingham v.

Morgan, 395 U.S. 402, 406, 89 S.Ct. 1813, 23 L.Ed.2d 396

(1969)).

A. Standard for Removal based on Federal Offi-

cer Jurisdiction

28 U.S.C. § 1442(a)(1) provides:

(a) A civil action or criminal prosecution commenced

in a State court against 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 where 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, sued in an of-

ficial or individual capacity for any act under color of

such office . . .

Id. In Mesa, the United States Supreme Court set forth a

three-part test for determining whether § 1442(a)(1) is ap-

plicable. To remove under § 1442(a)(1), a defendant must:

(1) have acted under the direction of a federal officer; (2)

raise a “colorable” federal defense to the plaintiffs’ claims

and (3) demonstrate a causal nexus between plaintiffs’

claims and the acts Defendant performed under color of

federal office. Mesa, 489 U.S. at 124-25. A defendant

must also be a “person” within the meaning of § 1442(a)(1).

The Plaintiffs do not dispute that both of the Defen-

dant corporations are “persons” within the meaning of

§ 1442(a)(1). See Rvan v. Dow Chem. Co., 781 F.Supp. 934

(E.D.N.Y.1992) (Holding a corporation to be a person

within the statute and noting that “a corporation could be

engaged in activities that amount to the implementation of

federal policy under the direction of a governmeni officer.”)

They also do not dispute that the federal preemption de-

fense raised by the Defendants is a “colorable” claim to a

federal defense.’ See United States v. Todd, 245 F.3d 691.

* The Court notes the case of ULS. v. Philip Morris. in which the Dis-

trict Court for the District of Columbia held that FTC jurisdiction over

36a

693 (8th Cir. 2001) (“For a defense to be considered color-

able, it need only be plausible; § 1442(a)(1) does not re-

quire a court to hold that a defense will be successful be-

fore removal is appropriate”). Plaintiffs, however, do con-

test whether Philip Morris was acting at the direction of a

federal officer and whether a causal nexis exists between

Philip Morris and the FTC regarding the testing and mar-

keting of “light” cigarettes.

The “person acting under” element and the causal nexis

element tend to converge into a single issue: whether the

actions that form the basis of the state suit were per-

formed pursuant to comprehensive and detailed federal

government regulation. See Ryan v. Dow Chem. Co., 781

F.Supp. at 947. Participation in an industry regulated by

the federal government is insufficient alone to support re-

moval. There must also be detailed and specific involve-

ment by the federal government. /d. If direct and detailed

regulation does exist, the Defendant must have been fol-

lowing that federal direction in performing the actions

that form the basis of the lawsuit. Jd. To determine

whether Philip Morris acted under the direction of a fed-

eral officer, the Court must decide whether the FTC's

regulation of cigarette testing and advertising consti-

tutes the direct and detailed control required to invoke

§ 1442(a)(1) jurisdiction and whether the manner in which

Philip Morris tested and advertised Malboro Lights and

Cambridge Lights was directed by the FTC.

Several courts have addressed the level of regulation

necessary for a private person or corporation to act under

the direction of a federal officer. In many of these cases,

courts have evaluated whether government contractors

cigarette advertising, marketing, promotion and warning claims did

not prevent the government from bringing civil Racketeer Influenced

and Corrupt Organizations Act (RICO) claims against several cigarette

manufacturers for a wide range of actions involving deceptive advertis-

ing. See U.S. v. Philip Morris. 265 F.Supp.2d 72 (D.D.C.2006.%. The

Court would consider this case in ruling on the merits of Defendants

preemption defense, but does not believe that lS. v. Philip Morris

prevents Defendants preemption defense from being “colorable~

37a

had sufficiently detailed contact with the contracting

agency to allow federal officer removal. In Crackau v. Lu-

cent, 2003 WL 21665135 (D.N.J. June 25, 2003), radar

technicians and operators sued the manufacturer of cer-

tain radar devices for injuries sustained due to exposure to

ionizing radiation allegedly emitted by the radar devices.

Id. at 1. Jurisdiction under § 1442(a)(1) centered on the

U.S. Army’s involvement in the development of the radar

system. At a hearing on a motion to remand, Lucent pre-

sented evidence that the Army controlled training given to

technicians, wording in manuals accompanying radar de-

vices, and specifications of the radar system at issue in the

suit. Id. at 3. Lucent would have had to obtain prior ap-

proval from the Army before modifying the equipment

used in manufacturing the radar system. /d. at 3. Since

“government guidelines and specifications controlled Lu-

cent’s activities,” the Court concluded that federal officer

jurisdiction existed. See Crackau. 2003 WL 21665135 at 5.

Similarly, in Fung v. Abex Corporation, 816 F.Supp. 569

(N.D.Cal.1992), employees of a contractor sued the con-

tractor for damages arising from injuries allegedly caused

by exposure to asbestos during manufacture of submarines

for the Department of Defense. The Department of De

fense monitored the manufacture of the submarines, re-

quired construction and repair in accordance with contract

specifications, and subjected all supplies used in the

manufacturing process to inspection, test, and approval.

Id. at 572-573. The Court found that this level of govern-

mental oversight was “direct and detailed,” rendering fed-

eral officer removal appropriate. /d.

Another case involving a Department of Defense con-

tractor reached a different conclusion. In Ryan v. Dow

Chemical, civilians present in Vietnam sued the manufac-

turers of “Agent Orange” in state court for injuries caused

by exposure to the herbicide. See Rvan, 781 F.Supp. at

937. The manufacturers attempted to remove under

§ 1442(a)(1), arguing that contracting to sell, manufacture.

and deliver Agent Orange to the Department of Defense

satisfied the “acting under” requirement. /d. The Court

38a

acknowledged that the interaction between the manufac-

turers and the Defense Department presented a close call,

but ultimately decided that federal officer removal was not

appropriate. Jd. at 947, 953. The Court distinguished the

design and formulation of Agent Orange from the produc-

tion and delivery of the herbicide. /d. at 950. The Court

noted that the Department of Defense did not control the

herbicide’s development, but only directed the production

and sale of the product. Ryan, 781 F.Supp. at 950. There-

fore, the Court concluded that the manufacturers did not

act under the direction of a federal officer when they cre-

ated Agent Orange. /d; see also Pack v. AC and_-S, Inc.,

838 F.Supp. 1099, 1103 (D.Md.1993) (Holding government

construction, design, and testing of turbines under gov-

ernment specifications amounted to direct and detailed

control, constituting more government direction than the

purchase at issue in Ryan).

Two cases involving personnel associated with the Office

of Economic Opportunity (OEO) are also instructive. In

Oregon v. Cameron, 290 F.Supp. 36 (D. Oregon 1968), the

state of Oregon sued workers in the Volunteers in Service

to America (“VISTA”) program for trespass stemming from

an incident in which the volunteers went onto a farm to

pick up a child of migrant workers for a visit to a doctor.

42 U.S.C. § 2992 authorizes the director of the OEO “to

work in meeting the health, education, welfare, or re‘ated

needs of ... migratory workers and their families.” Based

on this statute and the OKEO’s general directions that

VISTA volunteers were to work with migrant farm work-

ers, the Court concluded that the volunteers acted under

the direction of a federal officer in entering the farm to

pick up the child. Jd. at 38. The Court reached this con-

clusion even though 42 U.S.C. § 2992 emphasizes the lim-

ited employee status of VISTA personnel.

The second OEO case involved attorneys with a legal

services corporation. See Gurda Farms v. Monroe County

Legal Assistance Corp., 358 F.Supp. 841 (S.D.N.Y.1973).

Employers of migrant farm workers brought suit against a

legal assistance corporation and lawyers associated with

39a

the corporation for conspiracy to induce workers to breach

their employment agreements and for civil assault. /d. at

842. The Monrve County Legal Assistance Corp. received

a grant from the OKO to serve the needs of migrant farm

workers. Jd. at 845. In order to receive the grant, the

Corporation was required to comply with several O.E.O.

regulations, including submitting reports and allowing

audits to be performed. /d. The O.E.O.’s conditions for

receipt of the grant amounted to sufficient governmental

involvement for the Court to conclude that the attorneys

were acting at the direction of a federal officer when they

interacted with migrant farm workers. /d. at 847.

Courts have also applied § 1442(a)(1) to Medicare inter-

mediaries. The consistent holding from these cases is that

private companies acting as intermediaries in the Medi-

care program are persons acting under the direction of the

Secretary of Health and Human Services and therefore

eligible to remove actions under § 1442(a)(1). See Peterson

v. Blue Cross/Blue Shield, 508 F.2d 55 (5th Cir.), cert. de-

nied, 422 U.S. 1048, 95 S.Ct. 2657, 45 L.Ed.2d 694 (1975);

Neurological Assocs. v. Blue Cross/Blue Shield, 632

F.Supp. 1078 (S.D.Fla.1986); Group Health Inc. v. Blue

Cross Ass'n, 587 F.Supp. 887 (S.D.N.Y.1984); see also

Kuenstler v. Occidental Life Ins. Co., 292 F.Supp. 532

(C.D.Cal.1968); Allen v. Allen, 291 F.Supp. 312 (S.D.lowa

1968); see also Ryan, 781 F.Supp. at 949. Medicare inter-

mediaries are charged with administering the Medicare

program. See Ryan, 781 F.Supp. at 949. They are subject

to “extensive and specific” federal regulations and must

satisfy “performance criteria” to remain in service as in-

termediaries. /d. at 949. After evaluating the medicare

intermediary removal caselaw, the Ryan court concluded

that these cases do not stand for the proposition that re-

moval solely on the basis of a contract with the govern-

ment is allowed under § 1442(a)(1). /d. at 949. Instead,

some additiona! level of involvement betw

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