Opposition Brief — Watson v. Philip Morris Companies, Inc.

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OFFICE OF THE CLERK

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IN THE

Supreme Court of the United States

LiSA WATSON AND LORETTA LAWSON, INDIVIDUALLY AND ON

BEHALF OF ALL OTHERS SIMILARLY SITUATED,

Petitioners,

Vv.

PHILIP MORRIS COMPANIES, INC.,

AND PHILIP MORRIS INC.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Eighth Circuit

BRIEF IN OPPOSITION

RICK T. BEARD, III MURRAY R. GARNICK *

STUART P. MILLER JAMES M. ROSENTHAL

MITCHELL, WILLIAMS, SELIG, ARNOLD & PORTER LLP

GATES & WOODYARD PLLC 555 12th Street, N.W.

425 West Capital Avenue Washington, D.C. 20005

Suite 1800 (202) 942-5000

Little Rock, AR 72201

(501) 688-8800

Counsel for Respondent

Apnil 21, 2006 * Counsel of Record

qe ED

CORPORATE DISCLOSURE STATEMENT

Respondent makes the following corporate disclosure

statements pursuant to Supreme Court Rule 29.6:

Respondent Philip Morris USA Inc. is a wholly-owned

subsidiary of Altria Group, Inc.' Altria Group, Inc. is the

only publicly held company that owns 10% or more of Philip

Morris USA Inc.’s stock.

' Altria Group, Inc. (identified in plaintiffs’ complaint and in the

caption by its former name, Philip Morris Companies, Inc.) was

never served process in plaintiffs’ lawsuit and therefore is not a

party to this appeal.

TABLE OF CONTENTS

UU I i sectileee 2

A. HISTORY OF FTC REGULATION. .................0...00. 2

i. NII chica shiessediteianbiiindictshetntinhatniniesecteiabiale 2

2. FTC Direction With Respect To The

Disclosure Of Tar And Nicotine Yields ................ 4

Eee ae eENT er: 7

C. REMOVAL AND DECISION .....0cccccsccccccssessssesessecees 7

D. THE EIGHTH CIRCUIT DECISION .................0....... 8

REASONS FOR DENYING THE PETITION ..................... 10

I. THERE IS NO CIRCUIT CONPLICT..............000000000.... 11

A. THE EIGHTH CIRCUIT’S DECISION IS

ENTIRELY CONSISTENT WITH OTHER

CIRCUIT COURT DECISIONS APPLYING

CE ERE SRD DES PEO 11

B. THE EIGHTH CIRCUIT’S DECISION IS

CONSISTENT WITH DISTRICT COURT

DECISIONS APPLYING § 1442(A)(1)............008. 14

Il. THE ISSUE PRESENTED IS NOT WORTHY OF

REVIEW BECAUSE IT IS LIMITED TO THE

LIGHTS CRSARET TE CONTEXT .....0cceccccceaessessossssrese 18

Ill. THE EIGHTH CIRCUIT’S DECISION IS

ENTIRELY CONSISTENT WITH § 1442(A)(1)

AND THIS COURT’S PRECEDENTS ...............c cee 21

A. THE EIGHTH CIRCUIT CORRECTLY

HELD THAT THE STATUTE SHOULD

NOT BE GIVEN A “NARROW” OR

“LIMITED” INTERPRETATION .................:cseeeeee 22

B. THE STATUTE IS NOT LIMITED TO

INSTANCES IN WHICH THE PRIVATE

PARTY IS ENFORCING FEDERAL LAW............. 23

1. The Plain Language Of § 1442(a)(1) Is Not

Limited To “Enforcement” Of Federal Law........ 23

2. The Policy Underlying § 1442(a)(1)

Supports The Eighth Circuit’s

TT cciscncincesehinsibiiclibilaphiiadsiclindiciinsbubicnibesiinisiitih 25

3. Petitioners’ Reliance On An Analogy To

28 U.S.C. § 1443(2) Is Misplaced .............cceeeeee 26

C. THE EIGHTH CIRCUIT DID NOT

CONFLATE REMOVAL WITH CONFLICT

PREEMPTION ...............00++. Riodsiineniiiniastnidenlintnennpnidente 27

Se EE Pe crctnenicncimnictenesesentnocssiags sssrnaniahinsnamatiiainaiesineatiinia 27

TABLE OF AUTHORITIES

Page(s)

CASES

AIG Europe (UK) Ltd. v. McDonnell Douglas Corp.,

No. CV 02-8703-GAF, 2003 WL 257702

me Ea EO 15

Ajemba v. Kaiser Found. Health Plan of the Mid-Atl.

States, Inc., No. 98-713, 1998 U.S. Dist. LEXIS

BRET Cees FU UG, TI es vcisssecvcceseseicrnssontsoncssessonse 15

Barnhart v. Sigmon Coal Co., 534 U.S. 438 (2002)............ 24

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

1995 WL 619293 (9th Cir. Oct. 17, 1995)... 13, 24

Camacho v. Autoridad de Telefonos de Puerto Rico,

868 F.2d 482 (Ist Cir. 1989)... ce ceeseeeeeeneeeen 11,12

City of Greenwood, Miss. v. Peacock,

a EE icccniconccscciinicersideunineitinientasehinnciniiiian 26

City of Livingston v. Dow Chem. Co.,

No. C 05-03262, 2005 WL 2463916

I i cially 16

Crocker v. Bordon, Inc.,

S52 F. Supp. 1322 CE.D. La. 1994).....ccceoseccsseserosssseveesees 15

Edwards v. Blue Cross/Blue Shield of Tex.,

No. Civ. 3:05CV0144-H, 2005 WL 1240577

A Us Se EEN AED sectiiednssensconssciecnsanseaceveconnees 14, 15

Epperson v. Northrop Grumman Sys. Corp.,

No. 4:05CV2953, 2006 WL 90070

I I a cnidisnantiiaie 14

FDA v. Brown & Williamson Tobacco Co.,

RE AINS, SUIT sinstnsissdsrictnintcctunepebenndintcobebateentls 20, 25 —

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

245 F. Supp. 2d 1144 (D. Colo. 2002)... eee 15

Fung v. Abex Corp.,

816 F. Supp. 569 (N.D. Cal. 1992) oo... eens 14, 15

Geier v. Am. Honda Motor Co.,

SED UE. BBE Ca ctncsncsscsiseccinsssssisceainsiatantintaiidnaatadion 27

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

2000 WL 647190 (10th Cir. May 19, 2000)...........000.... 13

Guckin v. Nagle,

259 F. Supp. 2d 406 (E.D. Pa. 2003) ......... cece 16, 20

Guillory v. Ree’s Contract Serv., Inc.,

872 F. Supp. 344 (S.D. Miss. 1994) oo... ec ceeeeeeeees 15

Haller y. Kaiser Found. Health Plan of the NW,

184 F. Supp. 2d 1040 (D. Or. 2001) oo... ee ceeeeeeeceeeeee 15

In re Agent Orange Prod. Liab. Litig.,

304 F. Supp. 2d 442 (E.D.N.Y. 2004)... eee 15,24

In re Methyl Tertiary Butyl Ether (“MTBE")

Prods. Liab. Litig.,

342 F.Supp. 2d 147 (S.D.N.Y. 2004) o00.. 15,24

In re Wireless Tel. Radio Frequency Emissions Prods.

Liab. Litig., 327 F. Supp. 2d 554 (D. Md. 2004)........... 15

Int'l Primate Prot. League v. Administrators of

Tulane Educ. Fund, 500 U.S. 72 (1991) ......cccccceeeeeeeneees 23

Jama v. Immigration & Customs Enforcement,

SOD URE. BG Gi ccctsnscsssmsconsecestncifnenvesionsinsbounicesiniiia 24

Jamison v. Purdue Pharma Co.,

251 F. Supp. 2d 1315 (S.D. Miss. 2003) ..........eeeeeeeeees 16

Jefferson County v. Acker, 527 U.S. 423 (1991) oe. 8, 22

Kaye v. SW Airlines Co.,

No. Civ.A.3:05CV0450-D, 2005 WL 2074327

DEED. Fee. RA, Ti Fa sees tniestiinicsiinanpcpiasapapuiaiiin 16, 20

Kelly v. Martin & Bayley, Inc., No. 06-8007

Se IIIE A, HE seentsicnirinncenscestnssconcsetnensnsecanes 1,2, 17

Kennedy v. Health Options, Inc.,

329 F. Supp. 2d 1314 (S.D. Fla. 2004)... 15, 16

King v. Provident Bank, No. 2:05-CV-961,

2006 WL 902271 (M.D. Ala. Apr. 6, 2006)...... 14, 15, 20

Lalonde v. Delta Field Erection,

No. Civ. A. 96-3244-B-M3,

1998 WL 34301466 (M.D. La. Aug. 6, 1998)............... 15

Layne & Bowler Corp. v. Western Well Works, Inc.,

ie tice cntane ic cistigntnnnnctnnnenseti 17

Little v. Purdué Pharma, L.P.,

227 F. Supp. 2d 838 (S.D. Ohio 2002)... cece 16

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001) .......... 2

Magnin v. Teledyne Continental Motors,

Pe ate SPEER Es CRUD cccccccccccccscencercccecesesceseccosns 12

McMahon v. Presidential Airways, Inc.,

410 F. Supp. 2d 1189 (M.D. Fla. 2006)..........00...... 14,15

Mesa v. California, 489 U.S. 121 (1989)..........cccccceees 8, 22

N.J. Dep't of Envtl. Prot. v. Exxon Mobil Corp.,

381 F. Supp. 2d 398 (D.N.J. 2005)... cee cccccceseeceeeeeees 15

Pack v. AC & S, Inc.,

838 F. Supp. 1099 (D. Md. 1993) ..........cccccceeeeee 14,24

Paldrmic v. Altria Corporate Servs., Inc.,

327 F. Supp. 2d 959 (E.D. Wis. 2004).............ccceeceeees 16

Parks v. Guidant Corp.,

402 F. Supp. 2d 964 (N.D. Ind. 2005)............... 14, 16, 20

Pearson v. Philip Morris USA, Inc.,

Civ. No. 03-CV-178, 2003 U.S. Dist.

LEXIS 24508 (D. Or. Aug. 8, 2003) .............:cccceeeees 17

Perry v. Leeke, 488 U.S. 272 (1989) ..........ccccccccceescseeceeeeees 18

Reed v. Fina Oil & Chem. Co.,

995 F. Supp. 705 (E.D. Tex. 1998)................cccccccsssseee 24

Russell v. Baxter Healthcare Corp.,

No. CIV.A.01-2296, 2002 WL 975679

SPREE TN SURE GIA CII etsienectiticciciesccsenintemaistmiocavenenanseies 16

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

Venezia v. Robinson, 16 F.3d 209

(7th Cir.), cert. denied, 513 U.S. 815 (1994)... 12

Virden v. Altria Group, Inc., |

304 F. Supp. 2d 832 (N.D.W. Va. 2004) ...00.0...eee. 17

White v. Wellington,

gh eee 26

Willingham v. Morgan, 395 U.S. 402 (1969) .......... 22, 24, 25

Winters v. Diamond Shamrock Chem. Co.,

149 F.3d 387 (Sth Cir. 1998) ................cccc0000 8, 12, 13, 24

STATUTES

Ark. Code Ann. §§ 4-88-107 ef 80 ........cccccccecccseeeeseeeeseeeesnees 7

Se ereaies i oe ctacniiiciesiel shins ibtatabeiaesiihaaiteitiiialsaeipiiaatiaiincdade 2

Se eas, Se I OU astertcicctnsecscetisconsinsinndssncsiitminmmennicintanibans 2

UII TE TEN sccathehentesinmnidaninneinisiipsideimnieidiundbihiclinnadiieianaiiiesiaietins 2

Sitar Ht SRE cicnsirnsitainirtesstancecsinnersininadeniaaiiniitetatauitivesionieii 8

irc ie TT inctriniciennmsciniisiictcieetniniibiosainbiaineia passim

ae ae MUU ikccilictihiiccaiessiiitiaiiaiaabatiaaieedaiaiainaia 26

Pub. L. 104-317, § 206(a)(1) (1996) .......ccccccccccccsescesesseseeens 23

Vii

ADMINISTRATIVE MATERIALS

62 Fed. Reg. 48,158 (Sept. 12, 1997) .....cccccccsescsseesseeseseeese.

LEGISLATIVE MATERIAL

142 Cong. Rec. $6517 (June 19, 1996) 0.0.0... eeeeees

H.R. Rep. No. 106-796 (1996)..........0cccc.csscosscscessessorseees 23,

S. Rep. No. 104-366 (1996), reprinted in 1996

eee AT iicinthiniccersictiinennrausietnaniinaspsenetneesin 23,

MISCELLANEOUS

WO UR On ieee ia

TR eS | | | See aa eae e ann

Robert L. Stern, et a/., Supreme Court Practice

SEED eIETs cUIUT Ee icsiechinsiliiininbaieiadieainiiedghenciinineigtissiniisesiamnibaibinaeet

vill

INTRODUCTION

This case does not meet the Court’s standards for review.

There is no circuit conflict. In each of the six circuit court

cases cited by petitioners, the court found that removal under

28 U.S.C. § 1442(a)(1) was proper. None of the cases

disagreed with the reasoning in any other case or rejected the

approach taken by the Eighth Circuit below. None of the

cases even acknowledged any confusion in the case law.

Rather, the cases reflect only different factual scenarios in

which removal under § 1442(a)(1) may be invoked. And,

because the six decisions do not purport to define the full

reach of the removal statute, they do not create a conflict even

by implication. Simply put, petitioners have attempted to

manufacture a circuit conflict where none exists.

The Eighth Circuit’s holding is not likely to be applied to

other industries or other contexts. The Eighth Circuit reached

its decision based on the “unique” and “unusual” facts with

respect to the Federal Trade Commission’s (“FTC”) 40-year

regulatory history over cigarettes, finding that “(t]he FTC

involved itself in the tobacco industry to an unprecedented

extent.” Pet. App. 13a. (emphases added). As Judge

Gruender emphasized in his concurrence, this is “a rare case”

insofar as “the FTC’s direction and control of the testing and

marketing practices at issue is extraordinary.” /d. at 18a.

Furthermore, even in the context of tobacco litigation, the

decision below will not apply to future class actions, given

the enactment of the Class Action Fairness Act of 2005

(“CAFA”). CAFA (enacted after removal below) now

provides an independent basis for removal of class actions

such as this one.

In any event, other than the Eighth Circuit, no federal

appeals court has addressed the availability of § 1442(a)(1)

removal in the specific “lights” cigarette factual context

presented by this case. Notably, the Seventh Circuit has

recently granted interlocutory review in Kelly v. Martin &

Bayley, Inc., No. 06-8007 (7th Cir. Mar. 6, 2006) (reviewing

2006 WL 44183 (S.D. Ill. Jan. 9, 2006)), an individual lights

cigarette case that raises the same issue regarding removal

under § 1442(a)(1) as presented by this case. That

development makes review by this Court of the application of

§ 1442(a)(1) to a “lights” case particularly premature.

As demonstrated below, this case does not warrant review

because the holding below is correct, consistent with this

Court’s guidance concerning § 1442(a)(1), does not conflict

with any other circuit court case, and is not likely to be

applied beyond the unique factual context of the FTC’s

regulatory history at issue here.

STATEMENT OF THE CASE

A. History Of FTC Regulation

1. The FTC Method

For over 40 years, the FTC has exercised unprecedented

detailed and direct control over the measurement and

disclosure of cigarettes’ tar and nicotine yields, including

precisely what information the tobacco companies could and

could not disclose to consumers in advertising.” The FTC

itself initially measured tar and nicotine yields in its own lab,

and now requires the tobacco companies to conduct the

testing to detailed specifications under FTC supervision. As

the Eighth Circuit noted, the record shows “comprehensive

* The FTC has broad authority under the FTC Act, 15 U.S.C. § 45,

to address deceptive advertising. Moreover, in the Federal

Cigarette Labeling & Advertising Act (“Labeling Act”), 15 U.S.C.

§§ 1331 ef seg., Congress specifically affirmed the FTC’s

regulatory authority with respect to cigarette advertising and even

required the FTC to report annually to Congress relating to

cigarette advertising practices. See 15 U.S.C. § 1336; see also

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 548 (2001) (“to the

extent that Congress contemplated additional targeted regulation of

cigarette advertising, it vested that authority in the FTC”).

and detailed control,” as the FTC has “involved itself in the

tobacco industry to an unprecedented extent.” Pet. App. 13a.

In the early 1950s, scientific studies linking cigarettes to

cancer identified “tar” (the particulate matter in cigarette

smoke other than nicotine) as the cause of the health problems

associated with smoking. DA-1-3.° Manufacturers

responded by making filtered cigarettes and by marketing

cigarettes based on claims of lower tar and nicotine delivery.

DA-4. The manufacturers, however, employed different

methods to measure tar and nicotine yields, which made it

difficult to compare claims. DA-4. Concerned that the

claims were confusing, the FTC in 1959 directed the tobacco

companies to cease making any representations regarding tar

and nicotine yields. DA-4-6.

By 1966, the public health community was urging tobacco

companies to develop reduced tar cigarettes and encouraging

the FTC to lift its tar and nicotine advertising ban. DA-21;

31-36; 38-40. The FTC responded by developing its own test

for measuring tar and nicotine yields (the “FTC Method”) and

making it the only permissible test for substantiating any

advertising claim regarding tar and nicotine yields. Pet. App.

24a; DA-33; 37; 680; 685. The FTC specifically advised that

the use of any other method as a basis for such claims would

be deemed deceptive. DA-294-96; Pet. App. 24a. The FTC

thus encouraged manufacturers to compete based on tar and

nicotine yields, but only with reference to FTC Method

results.

Before the FTC adopted the FTC Method, the scientific

community and cigarette companies (including PM USA)

advised the FTC that its method did not measure the actual

amount of tar and nicotine that smokers would receive. Pet.

App. 3a. The FTC responded that its method was not

intended “to determine the amount of tar and nicotine inhaled

* Citations to DA-xx are references to respondent Philip Morris

USA’s (“PM USA”) Appendix, filed before the Eighth Circuit.

by any human smoker,” but concluded that it provided a

“standardized method” that consumers could use to compare

cigarettes. DA-294-96; Pet. App. 3a.

The FTC established detailed testing specifications for its

method, including how cigarettes must be gathered for

testing, how they must be stored prior to testing, and how the

testing machine itself must be operated. Pet. App. 8a; DA-37;

248; 294-96.* For the next 20 years, the FTC operated the

testing lab itself. Pet. App. 3a; 9a; 13a; 26a-27a; 41a. In

1987, the FTC transferred testing to the tobacco companies,

but retained unlimited monitoring and inspection rights to

ensure complete conformity with its specifications. /d. at 9a;

26a-27a. PM USA must now submit FTC Method results to

the FTC under penalty of perjury. /d. at 28a; 42a.

2. FTC Direction With Respect To The Disclosure

Of Tar And Nicotine Yields

With the adoption of the FTC Method and the opening of

the FTC’s Tobacco Testing Laboratory, the FTC began

publishing tar and nicotine yields of cigarette brands in the

Federal Register and in its annual reports to Congress

(pursuant to its statutory reporting obligation). Pet. App. 3a;

42a. In 1970, the FTC proposed a regulation requiring

manufacturers to disclose tar and nicotine yields in all

cigarette advertising, but suspended its rulemaking after

“compell[ing]” the industry to reach an acceptable agreement

imposing essentially the same requirements that would have

* In particular, the FTC’s testing method required the following:

(1) [s]moke 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) [bJase results on a test of 100 cigarettes per brand, or type,

(3) [c]igarettes to be tested will be selected on a random basis, as

opposed to ‘weight selection,’ (4) [djetermine particulate matter on

a ‘dry’ basis . . . to determine the moisture content, (5) [djetermine

and report the ‘tar’ content after subtracting moisture and alkaloids

(as nicotine) from particulate matter, [and] (6) [rjeport tar content

to the nearest whole milligram and nicotine content to the nearest

1/10 milligram.” Pet. App. 8a.

been imposed by the proposed regulation. /d. at 10a-11a; see

also id. at 3a; 25a; 41a. The agreement specified the precise

language that the tobacco companies were required to use in

disclosing tar and nicotine yields in all advertisements. /d. at

26a; 9a. Furthermore, the FTC directed that the disclosure of

information about tar and nicotine measurements had to be

substantiated by the FTC Method. /d. at lla. The FTC

repeated this direction even when a tobacco company in 1978

sought to claim tar and nicotine yields higher than those

measured according to the FTC Method. /d. at 1 1la-12a.

The FTC has vigorously enforced its directive that the

tobacco companies use the FTC Method. For example, in

1969, the FTC brought proceedings against a cigarette

company for stating that certain brands were lower in tar

when the claim was not substantiated by the FTC Method.

DA-530-35. A 1971 decree resolving the case banned the use

of descriptive terms such as “low,” “lower,” “reduced,” or

“like qualifying terms,” unless the term was substantiated by

the FTC Method. Pet. App. 15a. Contrary to petitioners’

contentions, Petition for a Writ of Certiorari (“Pet.”) at 28, the

FTC also “formally defined” “low tar” cigarettes as those

measuring 15 milligrams or less in tar according to the FTC

Method. DA-31-36; Pet. App. 15a; 29a. More recently, in a

similar consent decree reached in 1995, the FTC reaffirmed

its requirement that information about tar and nicotine yields

be substantiated based exclusively on FTC Method results.

DA-624-26; Pet. App. 30a.

Since the adoption of its testing program, the FTC has

repeatedly considered claims that the FTC Method was

misleading and that tobacco companies should not be required

to base all information about tar and nicotine yields on it. In

1977, for example, the FTC examined the claim that its

measurements were misleading because some smokers might

cover ventilation holes that are used on many cigarettes,

including “lights,” to dilute the smoke with air. Pet. App.

15a-16a; DA-352. In 1981, the FTC undertook a broad-based

study of low tar cigarettes and “compensatory smoking” --

i.e., changes in smoking behavior (such as deeper puffs) that

may accompany a switch to lower yield cigarettes. DA-307-

21; 419-22; 423-25. And, in 1992, at the behest of a

consumer group, the FTC launched an investigation focused

specifically on whether terms like “lights” and “low tar” were

deceptive. DA-708-806; 547-52.

Each time, the FTC decided to continue requiring the

tobacco companies to disclose information regarding tar and

nicotine yields and to use the FTC Method. It did so for two

reasons. First, the FTC relied on studies showing that

smokers of lower FTC-measured yield cigarettes had a lower

risk of disease than smokers of higher yield cigarettes. DA-~

310-11; 320; 715. Thus, the FTC determined that,

notwithstanding its limitations, the FTC Method provided

consumers with meaningful information regarding the relative

risks posed by different types of cigarettes. DA-698; 707.

Second, the FTC retained its method because it provided a

single standardized rating system that consumers could use to

compare brands and on which competition could be based.

DA-359-60.

In 1997, the FTC reopened its investigation of whether the

term “lights” is deceptive to consumers and whether a new

test methodology should be adopted. 62 Fed. Reg. 48,158

(Sept. 12, 1997). That investigation remains open. In the

meantiine, the FTC continues to require manufacturers to

measure tar and nicotine yields by the FTC Method and report

those measurements -- and only those measurements -- to the

public. Pet. App. 34a; 43a.

B. The Complaint

In April 2003, petitioners filed this massive putative class

action in Arkansas state court on behalf of all persons who

purchased at least one pack of Marlboro Lights or Cambridge

Lights (together, “Lights”) in Arkansas over a 30-year period.

Petitioners allege that PM USA violated the Arkansas

Deceptive Trade Practices Act, Ark. Code Ann. §§ 4-88-107

et seq., and has been unjustly enriched. Petitioners do not

seek to recover for illnesses relating to smoking Lights. -

Instead, they seek purported economic damages in the form of

a total or partial refund of the purchase price of Lights. Pet.

App. 72a § 47. Petitioners claim that they suffered a financial

loss when they failed to receive a true “light” cigarette, even

though Lights have always been priced the same as their full-

flavored counterparts. /d. at 71a { 41.

Petitioners do not dispute that Lights yield less tar and

nicotine than full-flavor cigarettes when tested under the FTC

Method. In fact, they agree that FTC Method results provide

“support” for any such representation. /d. at 63a-64a § 9.

Nevertheless, petitioners claim that PM USA’s use of low tar

descriptors such as “lighter” or “lower tar” are “deceptive and

misleading.” /d. at 64a 4 10. Petitioners allege that Lights

“register misleading tar and nicotine measurements” under

the FTC Method, id. at 67a § 22b, because “consumers

receive higher levels of tar and nicotine than the testing

apparatus registers.” /d. at 64a 411. Thus, petitioners

directly attack the validity of the FTC Method and PM USA’s

conduct in carrying out the FTC’s directives to use the FTC

Method and disseminate its results to consumers.

C. Removal And Decision

On July 2, 2003, PM USA timely removed petitioners’ case

to the U.S. District Court for the Eastern District of Arkansas,

asserting that removal was proper under § 1442(a)(1),

because petitioners’ allegations challenged conduct taken

under the direction of the FTC.

The district court (Eisele, J.) denied petitioners’ motion for

remand on December 12, 2003, finding jurisdiction under

§ 1442(a)(1) on an undisputed record. See Pet. App. 58a.

The court certified its opinion for interlocutory review

pursuant to 28 U.S.C. § 1292(b) and stayed the case pending

appeal.

Contrary to petitioners’ claims, the district court did not

state that “its decision expanded the scope of § 1442(a)(1).”

Pet. at 7; see Pet. App. 57a-60a. Nor did the district court

recognize the circuit split that petitioners claim exists with

respect to the “acting under” requirement. The court simply

concluded that appellate review pursuant to § 1292(b)

certification was appropriate because a few district courts,

applying the same legal standard, had rejected removal in

similar lights cases. Pet. App. 58a-59a.

D. The Eighth Circuit Decision

The Eighth Circuit accepted review and unanimously

affirmed. The court applied the four-prong test established by

this Court for determining whether removal under

§ 1442(a)(1) was appropriate: that the defendant “(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.” Pet.

App. 4a (citing Jefferson County v. Acker, 527 U.S. 423, 431

(1999); Mesa v. California, 489 U.S. 121, 125 (1989)). The

court found each requirement satisfied.

First, relying on Winters v. Diamond Shamrock Chemical

Co., 149 F.3d 387 (Sth Cir. 1998), the Eighth Circuit

explained that “[w]hether 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.” Pet. App. 6a. The court explained that “[m]Jere

participation in a regulated industry is insufficient to support ~

removal.” Jd. at 6a. Rather, the removing party must show

that the federal officer provided a sufficiently high level of

“control and direction.” /d. at 8a.

Based on an examination of the FTC’s regulatory history,

the Eighth Circuit found a “level of compulsion that

establishes that Philip Morris was indeed ‘acting under’ the

direction of a federal officer.” /d. at 10a. The court

explained that the FTC, through its regulatory program,

exercises “comprehensive, detailed regulation” and “ongoing

monitoring” and that it “controls the delivery of tar and

nicotine information to consumers.” /d. at 13a.

Second, the Eighth Circuit found that PM USA had

demonstrated the necessary causal connection between the

FTC’s direction and the allegations in the petitioners’

complaint. /d. at 13a-16a. As the court summarized:

“({w]hether Philip Morris’s labeling of cigarettes as ‘lights’ is

deceptive directly implicates the enforcement and wisdom of

the FTC’s tobacco policies.” /d. at 15a.

Finally, although the petitioners did not contest the

remaining two requirements, the Eighth Circuit “review[ed]”

those requirements “for jurisdictional purposes.” /d. at 17a.

The court had “no hesitation in concluding that Philip Morris,

in its Notice of Removal, has set forth a colorable federal

defense” -- federal preemption. /d. The court also held that a

corporation “can be a ‘person’ within the requirements of

federal officer removal.” /d. at 17a-18a.

In a separate concurring opinion, Judge Gruender explained

that the court’s decision would not apply to the typical

participant “in a heavily regulated industry.” /d. at 18a. This

case was unique, he emphasized, because “(t]he FTC

developed the [FTC 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 disclosure of the results

throughout.” Jd. Judge Gruender stressed that “the FTC

passed the function of performing the testing to the cigarette

companies while allowing them no independent control of the

process whatsoever.” /d. Judge Gruender concluded that

“this is a rare case in which federal officer jurisdiction is

appropriate even in the absence of a contract, principal-agent

relationship, or near employee relationship with “the

government.” /d. at 18a-19a.

Petitioners thereafter petitioned for rehearing and rehearing

en banc, which were denied. /d. at 61a.

REASONS FOR DENYING THE PETITION

This Court should deny review. All six circuit court cases

cited by petitioners, as well as the Eighth Circuit below,

upheld federal officer removal in a range of factual contexts,

all of which involved a defendant being sued for actions that

were subject to the direction, control, and supervision of

federal officials carrying out official federal functions under

federal law. None of the cases conflicts with any of the

others; none of them conflicts with Watson. This is not a

circuit conflict except in the imagination of petitioners. And,

far from a conflict or even any confusion, the district court

decisions reveal a remarkable consistency in defining the

legal test for § 1442(a)(1) removal -- a test identical to the one

the Eighth Circuit applied below.

Moreover, the Eighth Circuit’s decision was based on a

heavily fact-intensive examination of the “unique” and

“unusual” facts relating to the FTC’s regulatory history. As a

result, this case will have no application beyond the tobacco

context -- and at most limited application in the tobacco

context, given the enactment of CAFA, which provides an

independent basis for federal court jurisdiction over future

class actions. In any event, the Eighth Circuit is the only

circuit court to have addressed § 1442(a)(1) in the context of

a tobacco case. The Seventh Circuit recently granted review

of a decision to allow removal under similar circumstances.

That is enough, in and of itself, to make review by this Court

at this time inappropriate.

Finally, this decision is entirely consistent with this Court’s

interpretation of § 1442(a)({1). Petitioners propose to limit the

federal officer statute in a manner that conflicts with both this

Court’s guidance and the plain language of the statute.

I. THERE IS NO CIRCUIT CONFLICT

A. The Eighth Circuit’s Decision Is_ Entirely

Consistent With Other Circuit Court Decisions

Applying § 1442(a)(1)

Petitioners attempt to manuf.cture a circuit conflict where

none exists. They claim that the First, Seventh, and Eleventh

Circuits apply an “official function” test, that the Fifth and

Eighth Circuits apply a “comprehensive federal control” test,

and that the Ninth and Tenth Circuits apply a “general

supervision” test. Pet. at 10-17. These “tests” are made up

for the petition. They do not appear in any of the six

decisions that petitioners cite as evidence of the “deep

division” among the courts of appeals.

In each case cited by petitioners, the circuit court found that

removal was proper, and none purported to set out a legal test

for removal contrary to the holding of any other circuit.

Indeed, none of the cited decisions expressed disapproval! of

any other decision or even noted the existence of any

confusion among the courts.

At bottom, the six cited cases reveal nothing more than

different factual scenarios in which § 1442(a)(1) removal may

be appropriate. The mere fact that the statute may apply to a

range of different kinds of cases hardly constitutes a

“conflict” justifying this Court’s review.

For example, petitioners cite Camacho v. Autoridad de

Telefonos de Puerto Rico, 868 F.2d 482 (ist Cir. 1989), for

the proposition that the First Circuit requires that the conduct

at issue have an “official character” before § 1442(a)(1)

applies. Pet. at 10-11. But nowhere in the opinion did the

First Circuit purport to adopt such a requirement. There, the

defendants (telephone companies) invoked § 1442(a)(1)

because they helped federal officials implement a duly

authorized wiretap. The complaint expressly alleged that the

defendants had acted under the orders, control, and directions

of the federal officers. In upholding the removal, the First

Circuit held only that such allegations were sufficient for

purposes of invoking the statute. 868 F.2d at 486-87. The

First Circuit did not address whether removal would be

proper in other settings.

Venezia v. Robinson, 16 F.3d 209 (7th Cir.), cert. denied,

513 U.S. 815 (1994) (cited in Pet. at 11), involved a state

officer participating in an FBI undercover sting operation.

The Seventh Circuit held merely that removal was proper; as

in Camacho, the court did not purport to consider under what

other circumstances removal may be appropriate. /d. at 212.

In Magnin v. Teledyne Continental Motors, 91 F.3d 1424

(11th Cir. 1996) (cited in Pet. at 12), the Eleventh Circuit

similarly found that a private party had properly invoked

§ 1442(a)(1). There, the private party was sued as an

authorized agent of the Federal Aviation Administration.

Again, as in Camacho and Venezia, the circuit court held only

that such a circumstance was sufficient for removal. Notably,

Judge Gibson -- who authored Watson -- served on the panel

in Magnin. See id. at 1426 (sitting by designation). Judge

Gibson gave no indication that he saw any conflict between

the two decisions.

In the only case cited by petitioners even remotely

analogous to the case here, Winters v. Diamond Shamrock

Chemical Co., 149 F.3d 387 (Sth Cir. 1998), cert. denied, 526

U.S. 1034 (1999) (cited in Pet. at 13-14), the Fifth Circuit

found § 1442(a)(1) removal proper, just as the Eighth Circuit

did here. There, a plaintiff asserted product liability claims

against an Agent Orange manufacturer. The court found that

the government specified the formula for Agent Orange, as

well as its packaging, labeling, and shipping. /d. at 399. The

government also inspected the labeling of the containers and

compelled the manufacturer to deliver Agent Orange to it

under threat of criminal sanctions. /d. at 399-400. The court

concluded that the manufacturer had acted pursuant to federal

direction. /d. at 400.

Finally, petitioners cite two unpublished cases from the

Ninth and Tenth Circuits. Pet. at 16-17. In California v.

H&H Ship Service Co., No. 94-10182, 1995 WL 619293 (9th

Cir. Oct. 17, 1995), the Ninth Circuit held that when a private

party is hired to help the Coast Guard remove spills, the

private party can invoke § 1442(a)(1). And in Greene v.

Citigroup Inc., No. 99-1030, 2000 WL 647190 (10th Cir.

May 19, 2000), the Tenth Circuit similarly held that a private

company implementing a remedy for clean up ordered by the

Environmental Protection Agency can invoke § 1442(a)(1).

Neither case is inconsistent with the Eighth Circuit decision.

Nor did either case purport to limit removal under

§ 1442(a)(1) in a manner that would yield a different result

here. Indeed, in Greene, the Tenth Circuit favorably cited the

Fifth Circuit’s decision in Winters. See 2000 WL 647190, at

*2.

In short, contrary to petitioners’ argument, the First,

Seventh, and Eleventh Circuit have not taken an “approach”

that is inconsistent with the Eighth Circuit or contrary to the

Fifth Circuit’s Winters decision. See 166 A.L.R. Fed. 297,

§ 4 (listing Camacho, Winters, and Magnin as applying the

same “acting under” standard). Rather, the cases that have

come before the First, Seventh, and Eleventh Circuits simply

have not required them to consider the full range of

circumstances in which the statute might apply. In the only

remotely analogous case petitioners cite -- Winters -- the

court found removal proper.

There is no reason to think that the outcome of this case

would have been any different in any other circuit.

Accordingly, there is no division of authority that would

warrant this Court’s review.

B. The Eighth Circuit’s Decision Is Consistent With

District Court Decisions Applying § 1442(a)(1)

Petitioners suggest that there is also confusion among the

district courts regarding the appropriate legal test for

determining when a private party is “acting under” a federal

officer. Pet. at 9 n.1. To the contrary, the district court

decisions reveal remarkable consistency in defining the legal

test.” af

The district courts are uniform in holding that mere

participation in a regulated industry is insufficient. Rather,

courts recognize that a defendant must demonstrate that a

federal officer had “direct and detailed control” over the

operation in question. Fung v. Abex Corp., 816 F. Supp. 569,

572 (N.D. Cal. 1992). “Direct control 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.” Pack v. AC & S, Inc., 838 F. Supp. 1099,

1103 (D. Md. 1993) (citation and quotations omitted). This

test has been adopted by district courts in virtually every

circuit.” It is the same test expressly adopted and applied by

the Eighth Circuit below. Pet. App. 6a-13a.

* Petitionérs quote a sentence from PM USA’s appellate brief that

courts have “articulated different legal tests to describe the level of

federal direction necessary.” Pet. at 10 (citing Appellee’s Br. 35).

Plaintiffs omit the rest of that paragraph, which explained that

“[t}he substance of the standard, however, is the same.” Appellee’s

Br. at 36.

* King v. Provident Bank, No. 2:05-CV-961, 2006 WL 902271, at

*4 (M.D. Ala. Apr. 6, 2006); MfcMahon v. Presidential Airways,

Inc., 410 F. Supp. 2d 1189, 1196 (M.D. Fla. 2006); Parks v.

Guidant Corp., 402 F. Supp. 2d 964, 967 (N.D. Ind. 2005);

Epperson v. Northrop Grumman Sys. Corp., No. 4:05CV2953,

2006 WL 90070, at *3 (E.D. Va. Jan. 11, 2006); Edwards v. Blue

Indeed, district courts in the First, Seventh, and Eleventh

Circuits have adopted and applied this test without noting any

confusion or concern as to whether the law in their circuits

may be different. For instance, within the Eleventh Circuit,

the district court in McMahon v. Presidential Airways, Inc.,

410 F. Supp. 2d 1189 (M.D. Fla. 2006) (cited in Pet. at 10

n.2), upheld removal based on a government contract

relationship where a _ federal officer supervised the

performance of the contract. /d. at 1196-97. In so holding,

the court relied heavily on cases that petitioners erroneously

characterize as contrary to Eleventh Circuit law. /d. at 1196

(citing MTBE, 342 F. Supp. 2d at 154); see also Pet. at 15

(discussing M7BE). Similarly, in King v. Provident Bank,

No. 2:05-CV-961-MEF, 2006 WL 902271 (M.D. Ala. Apr. 6,

2006), the court cited both Watson and Magnin in ruling that

“{a] defendant’s actions taken pursuant to a comprehensive

and detailed federal regulatory scheme may qualify the

Cross/Blue Shield of Tex., No. Civ. 3:05CV0144-H, 2005 WL

1240577, at *4 (N.D. Tex. May 25, 2005); NJ. Dep't of Envil.

Prot. v. Exxon Mobil Corp., 381 F. Supp. 2d 398, 404-405 (D.N.J.

2005); Jn re Wireiess Tel. Radio Frequency Emissions Prods. Liab.

Litig., 327 F. Supp. 2d 554, 562 (D. Md. 2004); Kennedy v. Health

Options, Inc., 329 F. Supp. 2d 1314, 1318 (S.D. Fla. 2004); /n re

Agent Orange Prod. Liab. Litig., 304 F. Supp. 2d 442, 448

(E.D.N.Y. 2004); In re Methyl Tertiary Butyl Ether (“MTBE”)

Prods. Liab. Litig , 342 F. Supp. 2d 147, 156 (S.D.N.Y. 2004); AJG

Europe (UK) Ltd. v. McDonnell Douglas Corp., No. CV 02-8703-

GAF, 2003 WL 257702, at *2 (C.D. Cal. Jan. 28, 2003); Freiberg

v. Swinerton & Walberg Prop. Servs., Inc., 245 F. Supp. 2d 1144,

1152-53 (D. Colo. 2003). Haller v. Kaiser Found. Health Plan of

the NW, 184 F. Supp. 2d 1040, 1044 (D. Or. 2001); Lalonde v.

Delta Field Erection, No. Civ. A. 96-3244-B-M3, 1998 WL

34301466, at *4 (M.D. La. Aug. 6, 1998); Ajemba v. Kaiser Found.

Health Plan of the Mid-Atl. States, Inc., Civ. No. 98-713, 1998 U.S.

Dist. LEXIS 22297 (D.D.C. July 14, 1998); Crocker v. Bordon,

Inc.; 852 F. Supp. 1322, 1325-26 (E.D. La. 1994); Guillory v. Ree's

Contract Serv., Inc., 872 F. Supp. 344, 346 (S.D. Miss. 1994).

defendant as ‘acting under’ the direction of a federal officer.”

Id. at *4,’

Under the test applied by these courts, only rarely will a

private party involved in implementing federal policy and

programs qualify for removal under § 1442(a)(1). The district

courts have had no problem in distinguishing between cases

that satisfy this standard and those that do not.

Finally, petitioners note that a few district court cases

reached a different outcome with respect to § 1442(a)(1)

removal in lights cases. See Pet. at 15 n.8. Those courts,

however, applied the same legal standard as the Eighth

Circuit; they simply reached a different conclusion as to

whether the FTC had exercised sufficient control for purposes

of § 1442(ay(1). See, eg., Paldrmic v. Altria Corporate

Servs., Inc., 327 F. Supp. 2d 959, 966 (E.D. Wis. 2004)

’ Plaintiffs also cite, as “follow{ing] the Fifth Circuit,” two other

courts in the Seventh and Eleventh Circuits. See Pet. at 14 & n.7

(citing Park, 402 F. Supp. 2d at 967; Kennedy, 329 F. Supp. 2d at

1318).

* See, e.g., City of Livingston v. Dow Chem. Co., No. C 05-03262,

2005 WL 2463916, at *3 (N.D. Cal. Oct. 5, 2005) (“{t}he grant of

an EPA registration does not constitute direction from the federal

government”) (citation and quotation omitted); Kaye v. Southwest

Airlines Co., No. Civ.A.3:05CV0450-D, 2005 WL 2074327 (N.D.

Tex. Aug. 29, 2005) (rejecting removal in airline industry);

Kennedy, 329 F. Supp. 2d 1314 (removal! inappropriate despite

Medicare regulations); Jamison v. Purdue Pharma Co., 251 F.

Supp. 2d 1315, 1326-27 (S.D. Miss. 2003) (regulated status of drug

manufacturers and marketers is insufficient for removal); Guckin v.

Nagle, 259 F. Supp. 2d 406, 415-18 (E.D. Pa. 2003) (rejecting

removal in the claim related to FDA-approved medical device);

Russell v. Baxter Healthcare Corp., No. CIV.A.01-2296, 2002 WL

975679, at *8 (E.D. La. May 10, 2002) (“While the FDA licensed

and regulated many of defendants’ activities with respect to the

production, manufacturing, [and] distribution . . ., the federal

involvement was not so invasive” so as to warrant § 1442(a\1)

removal); Little v. Purdue Pharma, L.P., 227 F. Supp. 2d 838, 860-

62 (S.D. Ohio 2002) (regulated drug manufacturers not entitled to

removal).

(defendant must establish “direct and detailed control’’);

Virden v. Altria Group, Inc., 304 F. Supp. 2d 832, 845

(N.D.W. Va. 2004) (requiring conduct “performed pursuant

to an officer’s direct orders or to comprehensive and detailed

regulations”) (citation and quotations omitted); Pearson v.

Philip Morris USA, Inc., Civ. No. 03-CV-178, 2003 U.S.

Dist. LEXIS 24508, at *5 (D. Or. Aug. 8, 2003) (requiring

“direct and detailed” control) (citation omitted). Any

“conflict” raised by these district court cases does not warrant

Supreme Court review. See Robert L. Stern, et a/l., Supreme

Court Practice 229 (8th ed. 2002); see also Layne & Bowler

Corp. v. Western Well Works, Inc., 261 U.S. 387, 393 (1923).

Notably, the Seventh Circuit recently accepted

interlocutory review of a decision permitting § 1442(a)(1)

removal in a personal injury action based on lights

allegations. See Kelly v. Martin & Bayley, Inc., No. 06-8007

(7th Cir. Mar. 6, 2006); see also Pet. at 16 n.8 (noting

pending review). Accordingly, in the near future, a second

circuit court will rule on the availability of § 1442(a)(1)

removal in the lights cigarette context. Petitioners have

offered no good reason why this Court should grant review of

this issue now when no other circuit court has addressed the

issue and when another circuit will do so imminently.’

* Petitioners refer to certain statements made by lawyers for the

Department of Justice (DOJ) in the course of ongoing RICO

litigation against PM USA and other tobacco companies. See Pet.

at 23-24. In the court below, amici attempted to rely on these

statements in supporting rehearing or reconsideration en banc, but

the Eighth Circuit struck the statements as outside the record.

Watson v. Philip Morris USA, No. 04-1225, Order (8th Cir. Nov. 2,

2005). Furthermore, petitioners ignore that in that litigation the

FTC had someone speak directly on its behalf -- the Deputy

Director of the FTC’s Bureau of Consumer Protection testifying in

a Rule 30(b)(6) capacity. The Eighth Circuit found that this

testimony supported its decision below. Pet. App. 13a.

II. THE ISSUE PRESENTED IS NOT WORTHY OF

REVIEW BECAUSE IT IS LIMITED TO THE

LIGHTS CIGARETTE CONTEXT

Petitioners contend that permitting § 1442(a)(1) jurisdiction

here will inevitably swamp the federal courts by permitting

jurisdiction for all regulated industries. Pet. at 29-30. These

“Chicken Little” fears are entirely groundless. Indeed, the

courts’ reaction to the Fifth Circuit’s decision in Winters

proves the point. Petitioners assert that the Eighth Circuit’s

approach “tracks” the Fifth Civcuit’s approach in Winters.

Pet. at 13. Winters, however, was issued over eight years ago

-- in 1998 -- yet petitioners can point to no resulting explosion

in cases pending in federal court because of removals under

§ 1442(a)(1).'° As noted above, no court -- including the

Eighth Circuit in Watson -- has held that mere participation in

a regulated industry is sufficient to justify removal under

§ 1442(a)(1). Pet. App. 6a.

This case is not worthy of review because the Eighth

Circuit’s decision is based on a one-of-a-kind regulatory

program and thus presents issues that will not “frequently

arise.” Perry v. Leeke, 488 U.S. 272, 277 (1989). The Eighth

Circuit made clear that its decision was based on the “unique”

and “unusual” facts with respect to the FTC’s 40-year

regulatory history. Pet. App. 13a (emphases added). As the

court summarized, “[t}he FTC involved itself in the tobacco

industry to an unprecedented extent.” /d. (emphasis added).

For example, the Eighth Circuit found that the FTC:

1. specified the testing method that was to be used for

measuring tar and nicotine yields, id. at 8a-9a;

' CAFA, for example, has had a much more significant impact.

Between its enactment on February 18, 2005 and Apri! !9, 2006, a

search of Westlaw reveals 86 reported decisions addressing

whether removal is proper under CAFA. By contrast, during that

period, there were 27 reported decisions addressing whether private

parties could remove under the federal officer statute, and only 7

permitted removal.

2. “itself conducted the entire testing process for twenty

years,” id. at 9a;'' |

3. “now requires the cigarette manufacturers to conduct

testing to its specifications,” Pet. App. 9a;

4. “continues to inspect the industry labs, independently

verify the results, and publish the ratings,” id.;

5. “compelled the tobacco industry to advertise the tar

and nicotine ratings” measured by the FTC’s test, id. at

lla;

6. directed the “specific manner” in which the industry

must advertise the FTC’s tar and nicotine measurements, id.

at 8a-9a;

7. “made it clear” that “it has not found any other testing

method adequate” and that tt would be “deceptive” to use

any other method even if the alternative method produced

higher yields, id. at 11a;

8. “was well-aware of the limitations” of its test and

even “studied” how cigarette design features “affected their

tar and nicotine ratings,” yet “ultimately chose to continue

using” its test, id. 15a-16a;

9. ““monitor[s] cigarette ads and occasionally bring/[s]

claims against [the] companies,” id. at 9a; and

10. declared and affirmed that the use of such terms as

“low tar” and “lights” were not deceptive as long as they

were substantiated by the FTC Method, /d. 13a-16a.

Given the “unique” and “unprecedented” FTC history upon

which the Eighth Circuit’s decision was based, the decision

will have little or no impact outside of the lights cigarette

'' Petitioners question why the Eighth Circuit found the fact that the

FTC conducted the testing itself to be significant. Pet. at 28 n.16.

That the FTC developed and conducted the test in its own labs for

two decades is one indication of the extent to which the FTC has

gone beyond mere regulation and is actively participating in and

controlling the challenged conduct. Indeed, as the Deputy Director

of the FTC’s Bureau of Consumer Protection recognized, the FTC’s

creation of its own testing lab “was really something that was

unique.” Pet. App. 13a.

context. Indeed, Judge Gruender wrote separately to warn

that Watson “should not be construed as an invitation to every

participant in a heavily regulated industry” to-invoke removal.

Id. at 18a. Judge Gruender emphasized that “this is a rare

case,” in which the “FTC’s direction and control of the testing

and marketing practices at issue is extraordinary.” Id.

(emphases added). os

Contrary to petitioners’ predictions, Pet. at 27-28, courts

are not ignoring Judge Gruender’s admonitions. No court has

relied on the Eighth Circuit’s decision as the basis for

removal for any other industry. To the contrary, courts

outside of the lights cigarette context have recognized the

limited nature of the decision. Indeed, one court refused to

apply it to the medical device context -- one of the very

regulatory contexts in which petitioners contend cases would

become removable under Watson. Compare Pet. at 30

(identifying medical devices as regulatory scheme that is

supposedly no different from the FTC’s program here) with

Parks, 402 F. Supp. 2d at 969-70 (distinguishing Watson

based on the “unprecedented” FTC history with respect to

light cigarettes); see also King,-2006 WL 902271, at *4

(rejecting an argument that Watson compels removal in the

home lending context).'? In the unlikely event that Watson

did lead to a dramatic increase in removals for other

industries, this Court could grant review in one of those cases

at that time. It makes no sense to grant review now, when

there is no indication that Watson will have any impact

outside of lights cigarette litigation.

'? Indeed, this Court has recognized that, “fo]wing to its unique

place in American history and society, tobacco has its own unique

political history. Congress, for better or for worse, has created a

distinct regulatory scheme for tobacco products...” FDA vy.

Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000).

'* Courts have rejected removal in other regulated industries

identified by petitioners. See, eg., Kaye, 2005 WL 2074327

(airline industry); Guckin, 259 F. Supp. 2d at 417 (FDA-approved

medical device).

Finally, even within the tobacco context, Watson will have

limited application, particularly with respect to the most

complex and burdensome cases -- i.e., class actions. The

enactment of CAFA on February 18, 2005 -- after Watson

was filed -- provides an independent basis for removal and

thus obviates the need for § 1442(a)(1) removal for Watson-

type class actions filed after February 18, 2005. Thus, even

with respect to class actions like Watson, removal under

§ 1442(a)(1) is unlikely to recur beyond Watson and a very

small number of other cases pending before CAFA took

effect.'* This is yet another reason why there is no basis for

this Court’s review.

Il. THE EIGHTH CIRCUIT’S DECISION IS

ENTIRELY CONSISTENT WITH § 1442(A)(1)

- AND THIS COURT’S PRECEDENTS

The decision below is entirely consistent with the statute

and decisions of this Court. The Eighth Circuit expressly

relied upon this Court’s four-prong test for removal under

§ 1442(a)(1), which requires that the defendant (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

‘* Of the 17 lights class actions or putative class actions pending

against PM USA in state court, PM USA removed only two

pending class actions based on fine Eighth Circuit’s decision in

Watson -- the two other lights class actions filed before CAFA that

were pending against PM USA in state courts within the Eighth

Circuit. In one of these two cases, Curtis v. Altria Group, Inc.,

Case No. 0:05-cv-02231-JMR-FLN (D. Miin. Feb. 14, 2006), the

court denied plaintiffs’ motion to remand. In the other, the court

remanded, concluding that the removai was not timely. See Craft

v. Philip Morris Cos., No. 4 05-CV-01531ERW (E.D. Mo. Mar. 17,

2006). Nor is the decision below likely to have broad application

to individual smoking and health cases. Many smoking and health

cases are withir federal jurisdiction based on diversity of

citizenship. Further, most do not make the lights-specific

allegations at issue here and therefore would not implicate the

decision below.

“person” within the meaning of the statute. See Pet. App. 4a

(citing Jefferson County v. Acker, 527 U.S. 423, 431 (1999),

and Mesa v. California, 489 U.S. 121, 124-25 (1989)). This

Court’s decisions recognize that Congress provided, in broad

and inclusive language, for removal not just of suits brought

against federal officers, but also suits brought against “any

person acting under that officer.” 28 U.S.C. § 1442(a)(1).

Petitioners do not dispute the Eighth Circuit’s holdings with

respect to three of these four factors (causal connection,

colorable federal defense, or person). Instead, they challenge

only the finding that PM USA satisfied the “acting under”

requirement. None of petitioners’ arguments withstands

scrutiny.

A. The Eighth Circuit Correctly Held That The

Statute Should Not Be Given A “Narrow” Or

“Limited” Interpretation

As a threshold matter, petitioners contend that the Eighth

Circuit erred in refusing to interpret the statute in a narrow,

limited fashion. Pet. at 20-21. Yet, as the Eighth Circuit

correctly recognized, this Court expressly rejected such a

“narrow, grudging interpretation” of § 1442(a)(1) in

Willingham v. Morgan, 395 U.S. 402, 407 (1969). The statute

has even been recognized as an exception to the “well-

pleaded complaint” rule. Mesa, 489 US. at 136.

Petitioners contend that Willingham’s directive is limited to

instances involving federal officers, not a private party acting

under federal direction. Pet. at 20-21. This Court, however,

did not distinguish between the type of party asserting

removal, but rather held that a broad interpretation of the

statute is necessary to further the “policy” underlying

§ 1442(a)(1). 395 U.S. at 407. The policy applies with the

same force regardless of whether the defendant is a federal

officer or a private party acting under the direction of a

federal officer. See, e.g., id. at 405-06; Tennessee v. Davis,

100 U.S. 257, 263-66 (1879).

In support of a narrow construction, petitioners cite to

International Primate Protection League v. Administrators of

Tulane Educational Fund, 500 U.S. 72 (1991), in which this

Court held that a federal agency does not constitute a federal

officer. /d. at 81-82 (cited in Pet. at 21). But petitioners

ignore that Congress subsequently amended the statute to

reverse /nternational Primate and clarify that agencies are

federal officers. See Pub. L. 104-317, § 206(a)(1), 110 Stat.

3847, 3850 (1996). In amending the statute, Congress made

clear that “[a] federal forum in such cases is important since

state court actions against federal agencies and officers often

involve complex federal issues and federal-state conflicts.”

H.R. REP. No. 104-798, at 19 (1996); see also S. REP. No.

104-366, at 31 (1996), reprinted in 1996 U.S.C.C.A.N. 4202,

4210. As the Eighth Circuit recognized, Congress’ decision

to amend the statute to overrule /nfernational Primate

“provides further support for a broad interpretation.” Pet.

App. 6a.

B. The Statute Is Not Limited To Instances In

Which The Private Party Is “Enforcing” Federal

Law

1. The Plain Language Of § 1442(a)(1) Is Not

Limited To Enforcement Of Federal Law

Petitioners argue for an _ extraordinarily narrow

interpretation of § 1442(a)(1), asserting that the statute should

apply only where the private party is serving in an official

capacity by enforcing federal law. Pet. at 19-20. This Court

has never interpreted the statute in such a limited fashion.

Nor has any circuit or district court. In fact, lower courts

have repeatedly recognized that, where the level of federal

control is sufficiently strong and detailed, a private party may

be “acting under” federal direction in circumstances involving

the implementation of federal policies and directives. '°

Petitioners’ argument is also squarely contradicted by the

plain language of the statute. Section 1442(a)(1) provides

that “any person acting under that officer” may remove under

the statute. The generic language of the statute does not

distinguish among the ways in which a party may “act under”

federal direction, and nowhere does the statute provide that

the party must be enforcing federal law. In _ essence,

petitioners ask this Court to add a requirement that Congress

did not include in the statute. See, e.g., Jama v. Immigration

& Customs Enforcement, 543 U.S. 335, 341 (2005) (the Court

does “not lightly assume that Congress has omitted from its

adopted text requirements that it nonetheless intends to

apply”); Barnhart v. Sigmon Coal Co., 534 U.S. 438, 461-62

(2002) (“courts must presume that a legislature says in a

statute what it means and means in a statute what it says —

there”) (citation omitted).

Petitioners note that the statute provides that the removing

party must have been sued “for any act under color of such

office.” Pet. at 19. But a federal officer can act “under color

of office” in a variety of ways other than enforcing federal

law. The “color of office” requirement is intended to ensure

that the federal officer was not participating “in some kind of

‘frolic of [his or her] own.” Willingham, 395 U.S. at 409;

see also 54 A.L.R. Fed. 442 § 2(b) (“color of office”

requirement ensures that the conduct was “justified” by the

federal officer’s “federal duties”). Here, the FTC was clearly

not participating in a “frolic of its own” in providing its

direction to PM USA -- as discussed above, there can be no

° See, e.g., Winters, 149 F.3d at 399; H&H Ship, 1995 WL 619293;

In re Agent Orange, 304 F. Supp. 2d at 446-48; M7BE, 342 F.

Supp. 2d at 156-57; Reed v. Fina Oil & Chem. Co., 995 F. Supp.

705, 710-11 (E.D. Tex. 1998); Pack, 838 F. Supp. at 1102-03.

question that the FTC has broad authority under both the FTC

Act and the Labeling Act to address the advertising and

marketing of cigarettes. See supra n.2."°

2. The Policy Underlying § 1442(a)(1) Supports

The Eighth Circuit’s Interpretation

Petitioners’ narrow construction of § 1442(a)(1) is also not

supported by the purpose of the statute. Petitioners cannot

point to any evidence that Congress was concerned on/y about

“state animus against the enforcement of federal law,” as they

contend. Pet. at 22. Rather, as Congress explained in its most

recent amendments to the statute, its “intent” is much broader:

to ensure “that questions concerning the exercise of Federal!

Authority, the scope of Federal immunity and Federal-State

conflicts be adjudicated in Federal court.” S. Rep. No. 104-

366, at 31; see also H.R. REP. No. 104-798, at 19 (same).

Accordingly, contrary to _ petitioners’ suggestions,

§ 1442(a)(1) is not limited to instances involving the assertion

of the “official immunity” defense. Pet. at 23. Instead, as this

Court has held, the statute applies where the removing party

asserts any colorable federal defense. See Willingham, 395

U.S. at 406. Indeed, Congress has specifically made clear

that it intends for § 1442(a)(1) to ensure a “federal forum” for

“important and complex Federal issues such as preemption,”

the federal defense at issue here. 142 Cong. Rec. $6517,

$6519 (June 19, 1996) (emphasis added); see also S. REP. No.

104-366, at 31 (same).

In short, as the Eighth Circuit correctly recognized, this

case presents a clear state law challenge to the FTC’s exercise

'° Petitioners note that “this Court has expressly recognized

statutory limitations on the FTC’s regulatory authority over

cigarettes.” Pet. at 28. The only such limitation with respect to

cigarette advertising is that Congress has reserved to itself the

decision of what health warnings to require on cigarette packaging -

- an issue that has no significance here. FDA v. Brown &

Williamson Tobacco Corp., 529 U.S. at 149-50.

of its authority over tar and nicotine measurements,

disclosures, and marketing, and thus falls well within the

ambit of § 1442(a)(1).

3. Petitioners’ Reliance On An Analogy To 28

U.S.C. § 1443(2) Is Misplaced

Nor does City of Greenwood, Mississippi v. Peacock, 384

U.S. 808 (1966) (cited in Pet. at 19), support petitioners’

Strained interpretation of the statute. In City of Greenwood,

this Court was interpreting a different statute -- the civil rights

removal provision of 28 U.S.C. § 1443(2). There, defendants

asserted that removal was proper because, by engaging in

“civil rights activity,” they were acting under the general

authority of the Constitution and civil rights statutes. 384

U.S. at 810-11. The question before this Court was whether

the removing party must show any relationship with a federal

officer to remove under § 1443(2).

Beyond that, § 1443(2) has different statutory language and

history and does not include the “acting under” language at

issue here. Section 1443(2) is also much more limited in its

purpose -- it is specifically intended to ensure a federal forum

for parties that are sued for enforcing civil rights statutes. See

28 U.S.C. § 1443(2). By contrast, § 1442(a)(1) is intended to

apply more broadly when a party is “acting under” federal

direction. See White v. Wellington, 627 F.2d 582, 585 n.4 (2d

Cir. 1980) (§ 1442(a)(1) is “greater in scope” than § 1443(2)).

Contrary to petitioners’ arguments, this Court never held that

§ 1443(2) “track[{s]” the “acting under” requirement of

§ 1442(a)(1). Pet. at 20. Rather, this Court merely noted that

there is an “overlap between the provisions,” such that

“many, if not all” of the cases removable under § 1443(2)

would also be independently removable under § 1442(a)(1).

City of Greenwood, 384 U.S. at 820 n.17.

C. The Eighth Circuit Did Not Conflate Removal

With Conflict Preemption

Finally, petitioners mischaracterize the Eighth Circuit’s

decision as conflating removal with preemption. See Pet. at

24-25. The court did no such thing. Instead, the court

properly defined the “acting under” test as “depend{ing] on

the detail and specificity of the federal direction of the

defendant’s activities and whether the government exercises

control over the defendant.” Pet. App. 6a.. That test is

different from the conflict preemption standard, which

examines whether state law stands as “an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress.” Geier v. Am. Honda Motor Co., 529

U.S. 861, 873-74 (2000).

The language focused on by petitioners, in which the

Eighth Circuit noted that the lawsuit “directly implicates the

enforcement and wisdom of the FTC’s tobacco policies,” 1 Sa,

was part of the court’s determination as to whether the

“causal connection” requirement was satisfied. Petitioners do

not cha!lenge that finding here. In determining whether PM

USA satisfied the “causal connection” prong, the court was

merely determining whether the “acts challenged in the

plaintiff's complaint” were the acts taken at the direction of a

federal officer. Pet. App. 13a. That the lawsuit inevitably

challenges the FTC’s policies is one means of establishing

that such a causal connection exists.

CONCLUSION

The Court should deny the Petition for Writ of Certiorari.

Respectfully submitted,

RICK T. BEARD, III MuRRAY R. GARNICK *