Amicus Curiae Brief — Watson v. Philip Morris Companies, Inc.

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SUPRE WE ous

No. 05-1284 '—2== fart

IN THE

Supreme Court of the Gnited States

LISA WATSON, ET AL..-

Petitioners,

Vv.

PHILIP MORRIS COMPANIES, INC., ET AL..

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Eighth Circuit

BRIEF OF PUBLIC CITIZEN, INC., AARP,

NATIONAL ASSOCIATION OF CONSUMER

ADVOCATES, U.S. PIRG, CONSUMER FEDERATION

OF CALIFORNIA, CONGRESS OF CALIFORNIA

SENIORS, AND PUBLIC HEALTH ADVOCACY

INSTITUTE, INC., AS AMICI CURIAE IN SUPPORT

OF PETITIONERS

STACY CANAN SCOTT L. NELSON

BRUCE VIGNERY Counsel of Record

AARP FOUNDATION BRIAN WOLFMAN

MICHAEL SCHUSTER PUBLIC CITIZEN LITIGATION

AARP GROUP

601 E Street, N.W. 1600 20th Street. N.W.

Washington, D.C. 20049 ~ Washington, D.C. 20009

(202) 434-2130 (202) 588-1000

Attorneys for Amici Curiae

February 2007

QUESTION PRESENTED

Whether a private corporation engaged in marketing ciga-

rettes is a “person acting under [a federal] officer” and is act-

ing “under color of such office” for purposes of 28 U.S.C.

§ 1442(a)(1), entitling the corporation to remove to federal

court a civil action brought in state court under state law,

solely because the corporation’s actions were influenced by

federal regulatory authorities.

TABLE OF CONTENTS

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INTRODUCTION AND SUMMARY OF

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I. The Corporate Defendants Are Not “Persons”

Entitled To Invoke Federal Officer Removal. .................. 6

Il. A Private Business, Even If Subject to Federal

Regulation, Does Not Act “Under” a Federal

Officer or Perform “Any Act Under Color of Such

Office” When It Is Not Enforcing or Executing

ITE sncsisssssittesiecahianilienndlitatiiinitniecaedeblaeaeaiiaiabnanei 10

Ill. The FTC’s “Regulation” of Cigarettes Has Never

Been Uniquely or Even Unusually Extensive................. 17

A. The FTC’s Weak “Regulation” of the Cigarette

Industry Did Not Compe] Philip Morris to Take

the Actions for Which It Has Been Sued.................. 17

B. Other Industries Face Much More Extensive,

Specific, and Formal Regulation than Do Ciga-

rette Manufacturers Such as Philip Mormis. .............. 20

C. Whether Broadly or Narrowly Applied, the

Eighth Circuit’s Ruling Will Have Mischievous

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TABLE OF AUTHORITIES

Cases:

In re “Agent Orange,” Product Liability Litigation,

304 F. Supp. 2d 442 (E.D.N.Y. 2004) oo... eeceseeseeeeeees 9

Adams v. United States, 420 F.3d 1049 (9th Cir.

Sree eiasssiaciteinnialetececsteisteshinaileiiinelaiabaiiabeitintainiebianiniatiibii’ 8

Arizona v. Manypenny, 451 U.S. 232 (1981)... eee 4,11

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

RET Tis, UTE ssostiiscisaciesitadatiniacbbietnangtaniiiieninnntiaiiint 15

Blum v. Yaretsky, 457 U.S. 991 (1982).......cccccseceeseeeseeeeeeees 14

Brown vy. Philip Morris Inc., 250 F.3d 789 (3d Cir.

ee isesecdaicliniaihdiesinsnpiasinidstasltasinsitisnbensenpiinaiiahiaibiabiniieiedii 13,17

Brown & Williamson Tobacco Corp. v. Wigand,

913 F. Supp. 530 (W.D. Ky. 1996)..............csccssscossssoeee 16

C.H. v. American Red Cross, 684 F. Supp. 1018

SAEs SENG: UTI ncccsiesoienniidacenesenpeiisinapmiadeciatceanieiesmimetivae 6

Cob» v. Georgia Power Co., 757 F.2d 1248 (11th

I, See eisiitsiicniecstinicesnalaaihechisiieiuiniininitvipbilaltiansidiganitacmiiwaned 14

Craft v. Philip Morris Companies, Inc., 2006 WL.

744415 (E.D. Mo. Mar. 17, 2006). ...........cccccsscesssesseeeees 16

FTC v. Brown & Williamson Tobacco Corp.,

Fe ee is Ts I ticecincnacennnssnssecgassnteninsoninee 19

Gay v. Ruff, 292 U.S. 25 (1934)...ccccccccccscesscssscesseceeseesees 12, 13

Gensplit Fin. Corp. v. Foreign Credit Ins. Ass'n,

616 F. Supp. 1504 (E.D. Wis. 1985)......... ccc eesesceeeeeeees 6

International Primate Prot. League v. Adminis-

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

iv

Jackson v. Metropolitan Edison Co., 419 U.S. 345

Sateen cada alae ai hdl 14

Johnson v. Wells Fargo & Co., 98 F. 3 (C.C. Cal.

ee adie emeeblieitaiaiineiaaiciedpbiiaibiietitdidniigal 15

King v. Provident Bank, 428 F. Supp. 2d 1226

aN aE cerviishicinsitsbsenaapiatinssnibupiinbdicncibensieitndidbninaniben 26

Krangel v. Crown, 791 F. Supp. 1436 (S.D. Cal.

ENE nN TRO 6

Lippoldt v. Cole, 468 F.3d 1204 (10th Cir. 2006)................... 8

Maryland v. Soper (No. 1), 270 U.S. 9 (1926)........:000008 11,12

Maryland v. Soper (No. 2), 270 U.S. 36 (1926)........ 11, 12, 13

Maryland v. Soper (No. 3), 270 U.S. 44 (1926)........:cccecseee 13

Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) .........ccccceeeeees 20

Mesa v. California, 489 U.S. 121 (1989)... cc eeeeeeeeeeeee 4,7

Mignona v. Sair Aviation, Inc., 937 F.2d 37 (2d Cir. ;

SITUTTT cinsasnitietieiedibdeiiataioatatiieidcadiiisiaapddeienpiidaieiasibatianiininiapinideiill 9

New Jersey v. Moriarity, 268 F. Supp. 546 (D.N.J.

Sanat i sictiiisenieninebceiiedeloteansacutiiaudpuicalibepeaecisiaianasdannineniaiie 7

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

Sah MIE cetsieshthhesshicailpdecearidapaibieetiiaieiebicietinibannietnebeisivencennnii 26

Rendell-Baker v. Kohn, 457 U.S. 830 (1982), ....ccccscecseesees 14

Roche v. American Red Cross, 680 F. Supp. 449 (D.

NI, MU die iica latte diaaa i ialnihitnennitibainidi 6

Ryan v. Dow Chem. Co., 781 F. Supp. 934

Ne aU eissirlseniliniteninihanipibiniaeiasiioamidneiadsaeniniii 7,8

Screws v. United States, 325 U.S. 91 (1945) 0.0... eeeceeeeeeees 14

Single Moms, Inc. v. Montana Power Co., 331 F.3d

743 (9th Cir. 2003), cert. denied, 540 U.S. 1180

ise i intsintbisinsteliniiniatadiaisteietiossenenininiianpiiiniiontminsieshinennitenen 14

Vv

Sutton v. Providence St. Joseph Medical Center,

BOS FS SIS CO Car. FOB) cccccnscscssssscrnersensevnicsnmnesnvunanl 14

Tennessee v. Davis, 100 U.S. 257 (1880) ........ccceeeeeeeeeeeeeees 4,6

Tremblay v. Philip Morris, Inc., 23\ F. Supp. 2d

SES GRICE, BOD eevecivininnsustcitiiiinnnniaaaeaiaal 16

United States v. Philip Morris, 263 F. Supp. 2d 72

GE,. GED) <wrssonwisiisieninisiieriidiiaianiinbinaaiaaaml 18

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

LEA Wl. Vi, Bee cnnitinsiniiiemmaial 15, 16

Willingham v. Morgan, 395 U.S. 402 (1969) ............0. 4,7, 10

Statutes and Regulations:

Federal Courts Improvement Act of 1996, Pub. L.

No. 104-317, § 206, 110 Stat. 3847, 3850 oes 9

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21 C.F.R. Part 101

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Other:

71 Fed. Reg. 10,100 (Feb. 28, 2006) ........00cececrsssrersresseesseees 25

FTC, Cigarette Testing: Request for Public Com-

ment, 62 Fed. Reg. 48,158 (Sept. 12, 1997)......0...... 19, 23

FTC, Cigarettes: Testing for Tar and Nicotine Con-

fart, 32 Fed. Reg. 11,178 (1967) .....ccccercsercescssscssessorsesees 23

STE Ts ce ccncnennsnnbencuntecsemienetocoecesnssent 8

www.epa.gov/fueleconomy/index.htm (last visited

Titres criteria ictemeancncentecemisteannesontees 23

www.federalreserve.gov/pf/pdf/pf_5.pdf. (last vis-

Ecce 25

www_fueleconomy.gov/ (last visited February 23,

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vil

www. fsis.usda.gov/Fact Sheets/FSIS Food Recall

s/index.asp. (last visited February 23, 2007) ...........:00+- 22

www. SaferCar.gov (last visited February 23, 2007)............ 22

www.tngenweb.org/monroe/news3.txt (last visited

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INTEREST OF AMICI CURIAE

Public Citizen, Inc., AARP, the National Association of

Consumer Advocates, U.S. PIRG, the Consumer Federation

of California, the Congress of California Seniors, and the

Public Health Advocacy Institute, Inc., submit this bref in

support of the petitioners because the decision below directly

implicates amici’s interests in defending the role of state

courts in providing consumer remedies under state law.’

Public Citizen, Inc., is a consumer advocacy organization

founded in 1971. On behalf of its approximately 100,000

members nationwide, Public Citizen appears before Con-

gress, administrative agencies, and the courts on a wide range

of issues and works toward enactment and effective enforce-

ment of laws protecting consumers, workers, and the general

public. Public Citizen is concerned with improving public

health laws and regulations and ensuring access to the court

system for the redress of injuries caused by unsafe and defec-

tive products. Public Citizen thus has an interest in litigation

involving tobacco products, which have caused grievous ill-

ness and injury to so many people. Public Citizen also seeks

to counter the misuse of removal and the defense of preemp-

tion, which defendants increasingly invoke to burden plain-

tiffs and escape liability.

AARP is a non-profit, nonpartisan organization with

more than 36 million members. As the largest membership

organization representing interests of Americans aged 50 and

older, AARP supports laws and public policies designed to

protect its members’ rights and to preserve availability of le-

gal redress when they are harmed in the marketplace. AARP

is concerned that if allowed to stand, the Eighth Circuit’s

‘ Letters of consent to the filing of this brief from all parties are on

file with the Clerk. The brief was not authored in whole or part by coun-

sel for a party. No person or entity other than amici curiae or their coun-

se] made a monetary contribution to the brief’s preparation or submission.

2

opinion will encourage other regulated products and entities

(e.g., prescription drugs, long term care services, nursing

homes, etc.) to claim the same entitlement not to be sued in

state court that the court afforded Philip Morris, thereby dis-

rupting the balance of state and federal judicial authority,

needlessly impairing plaintiffs’ access to state courts to assert

state-created causes of action involving a broad array of

products and services, and substantially burdening an already

overtaxed federal judiciary.

The National Association of Consumer Advocates

(NACA) is a non-profit corporation whose members are pri-

vate and public sector attorneys, legal services attorneys, law

professors, and law students whose primary focus involves

the protection and representation of consumers. NACA’s

mission is to promote justice for all consumers by maintain-

ing a forum for information sharing among consumer advo-

cates across the country and serving as a voice for its mem-

bers as well as consumers in the ongoii.g effort to curb unfair

and abusive business practices.

U.S. PIRG, the federation of state PIRGs, is a national

non-profit advocacy group. Its mission is to protect consum-

ers, ordinary citizens, and our natural environment. It seeks

to uncover threats to public health and well-being and fight to

end them, using the tools of investigative research, media

exposés, grassroots organizing, advocacy and litigation.

The Consumer Federation of California is non-profit con-

sumer advocacy organization, established in 1960, for the

purpose of enacting consumer protection laws and regula-

tions, ensuring their enforcement and conducting education

and research on consumer matters. CFC has filed armmcus

briefs in both state and federal courts in matters, such as this

one, that relate to the protection of consumers.

The Congress of California Seniors (CCS) is a member-

ship non-profit organization dedicated to protection of Cali-

fornia’s senior population through education and advocacy.

The Public Health Advocacy Institute, a 501(c)(3) non-

profit organization founded in 1979 and located at Northeast-

ern University School of Law in Boston, is devoted to sup-

porting and enhancing public health understanding and

commitment among law teachers and students, legislators

and regulators, the courts, and others who shape public pol-

icy through the law. Its primary area of research and scholar-

ship focuses on legal strategies to reduce the adverse public

health impact of tobacco industry products.

This case implicates amici’s concerns in several ways.

The decision below places a roadblock in the way of plain-

tiffs asserting state-law tort claims in state courts by cloaking

cigarette companies in the guise of federal government actors

and granting them the removal rights of federal officers sued

for actions under color of government office. By treating a

company subject to federal regulation as if it were a federal

officer or agency, the Eighth Circuit’s opinion will give rise

to many more removal attempts as other companies—-many

subject to much greater federal regulation than the tobacco

industry—seek to take advantage of this broad, judicially

created expansion of the federal officer removal statute.

Amici believe a brief reflecting their perspective may as-

sist the Court in reviewing the Eighth Circuit’s novel ruling.

In particular, it may be useful to the Court to consider argu-

ments, not addressed by the court below, about the statutory

requirement that the removing party be a “person” who is

being sued for action “under color of | federal] office,” and to

receive detailed information about how the supposedly “un-

usual” and “unique” regulation of cigarettes by the Federal

Trade Commission compares to the much more extensive

regulation of other products and businesses by other federal

agencies. Far from justifying a special status for cigarette

companies as federal agents, the FTC’s actions provide no

basis for singling them out for special protections unavailable

to other industries that are, in fact, more heavily regulated.

4

INTRODUCTION AND SUMMARY OF ARGUMENT

In May 1878, federal internal revenue agent James Davis

raided a moonshine still in the hills near Tracy City, Tennes-

see. Before he and his companion could destroy the still,

seven armed men attacked them. Returning fire, Davis killed

one of his assailants, wounded another, and captured a third,

but he was forced to retreat without destroying the still. Ac-

cording to a contemporary newspaper account, the raid

caused “intense excitement” in the neighborhood.

www.tngenweb.org/monroe/news3.txt.

A local grand jury indicted Davis for murder. With the

support of the Attorney General of the United States, Davis

invoked the predecessor to 28 U.S.C. § 1442(a)(1) and re-

moved the case to federal court on the ground that he had

acted in the discharge of his duties as a federal officer and

was immune from state prosecution. In Tennessee v. Davis,

100 U.S. 257 (1880), this Court affirmed the removal, hold-

ing that because the federal government “can act only

through its officers and agents,” the ability to remove state

court actions brought against federal officers and agents for

actions within the scope of their duties was essential to the

vindication of federal authority. /d. at 263. The Court has re-

peatedly pointed to Davis as exemplifying the core purposes

of § 1442(a)(1)’s authorization for removal of cases by fed-

eral officers and persons acting under their direction who are

sued in state court for the performance of official acts. See,

e.g., Mesa v. California, 489 U.S. 121, 126-27 (1989); Ari-

zona v. Manypenny, 451 U.S. 232, 241 n.16 (1981); Willing-

ham v. Morgan, 395 U.S. 402, 406 (1969).

This case is a far cry from Davis. Here, the Philip Morris

Companies, Inc., a corporation engaged in a purely private

enterprise, has been sued for fraudulently misrepresenting the

hazardous nature of one of its products—so-called “light”

cigarettes. The statute’s history provides no support for the

notion that it was intended to protect private corporations, as

opposed to natural persons acting on behalf of the federal

government (or, under a recent amendment to the statute,

federal agencies themselves).

In addition, there is no claim that, in promoting and sell-

ing its cigarettes, Philip Morris was exercising any govern-

ment authority or carrying out any official function of the

United States. Rather, the company’s claim to removal,

which was accepted by the Eighth Circuit, rests solely on the

supposed “regulation” of certain aspects of the cigarette in-

dustry’s activities by the Federal Trade Commission, as a re-

sult of which Philip Morris claims to have been “acting un-

der” a federal officer.

Finally, the Eighth Circuit's decision departs from ail

previous federal appellate case law on federal officer removal

by permitting removal based solely on the extent of federal

regulation of private business activity that is not in any way

performed for the benefit of the federal government. The jus-

tification offered by the Eighth Circuit and parroted by Philip

Morris—that the FTC’s regulation of cigarette companies is

so “unusual” or, indeed, “unique” as to justify treating ciga-

rette makers as if they were federal agents—is patently

wrong. Many industries are subject to much more detailed

and extensive regulation than the cigarette industry. Thus, if

the Eighth Circuit’s reasoning were extended beyond ciga-

rette companies, its decision could result in a tremendous ex-

pansion of federal removal jurisdiction. And any attempt to

limit the effect of the ruling to Philip Morris and other ciga-

rette companies (based on the supposed “uniqueness” of fed-

eral regulation of the industry) would result in an equally

significant distortion of federal law: A special dispensation

would be granted to the very industry whose claim to such

indulgence is weakest.

ARGUMENT

I. The Corporate Defendants Are Not “Persons” Enti-

tled To Invoke Federal Officer Removal.

The federal officer removal statute, 28 U.S.C.

§ 1442(a)(1), provides for removal when “any officer (or any

person acting under that officer) of the United States or any

agency thereof” is sued in a state court “for any act under

color of such office.” As the Davis case illustrates, and as

this Court held in Jnternational Primate Protection League v.

Administrators of Tulane Educational Fund, 500 U.S. 72

(1991), the principal purpose of the removal statute was to

protect individual federal officers, employees, and agents

from prosecutions and lawsuits in unsympathetic state courts

arising out of performance of their official duties. Philip

Morris, as a corporation, falls well outside of the universe of

intended beneficiaries of the statute and does not qualify as a

“person” who may invoke removal under it. Although the

Fighth Circuit followed the majority of courts in assuming

that a corporation is a person under the statute, that issue has

never been resolved by this Court, and several federal courts

have concluded that the statute only applies to natural per-

sons. See Krangel v. Crown, 791 F. Supp. 1436, 1442 (S.D.

Cal. 1992); CH. v. American Red Cross, 684 F. Supp. 1018,

1023-24 (E.D. Mo. 1987) (“person” in 1442(a)(1) refers to

natural person); Roche v. American Red Cross, 680 F. Supp.

449, 455 (D. Mass.1988) (same); Gensplit Fin. Corp. v. For-

eign Credit Ins. Ass'n, 616 F. Supp. 1504, 1508-10 (E.D.

Wis. 1985) (same).

We emphasize that the Court need not reach this issue to

reverse the Eighth Circuit here, because, as explained below,

it is so clear that even if the Philip Morris Company qualifies

as a “person,” it is not here being sued for actions taken “un-

der” a federal officer and “under color of [federal] office.”

However, the Court could not affirm the exercise of subject

matter jurisdiction over this action without addressing this as-

yet unresolved issue and deciding that the Philip Morris

Company is a “person” under this statute.

The history of the removal statute, which was canvassed

extensively by this Court in Willingham, 395 U.S. at 405-06,

Mesa, 489 U.S. at 125-28, and Primate Protection, 500 U.S.

at 85-86, shows an overwhelming concern for the protection

of vulnerable individual officers and employees of the federal

government against arrest or other interference by state au-

thorities in the performance of their duties. See also Ryan v.

Dow Chem. Co., 781 F. Supp; 934, 941-44 (E.D.N.Y. 1992)

(describing history of statute). As this Court put it in Primate

Protection, addressing the statutory predecessors to

§ 1442(a)(1), “Congress expressly limited whatever removal

power it conferred upon federal defendants to individual offi-

cers,” and the Congress that enacted the current version of

the statute in 1948 similarly determined “that individual offi-

cers ... needed the protection of a federal forum in which to

raise their federal defenses.” 500 U.S. at 85, 86 (emphasis

added). In the words of one federal district court:

The series of enactments culminating in Section

1442(a) were initially designed to protect Federal reve-

nue officers from prosecution or civil suit in State Court

for violation of State law. ... Subsequent amendments

have, from time to time, enlarged the class of Federal

officers and employees who might claim protection, but

these additions left unchanged the basic theory and pur-

pose of this removal privilege: that the officer was enti-

tled to—and the interest of national supremacy re-

quired—his protection in actions brought against him

which attacked and threatened him with personal li-

abilities or penalties.

New Jersey v. Moriarity, 268 F. Supp. 546, 555 (D.N_J.

1967) (footnote omitted).

Moreover, when read in context, the statutory language

granting removal nights not only to an “officer,” but also to a

“person acting under his direction” does not reflect an intent

to grant protection to corporations and other artificial enti-

ties.? Rather, it was apparently intended to protect federal

employees and other individual agents who would not other-

wise qualify as “officers of the United States,” a term of art

referring to officers who exercise significant authonty. See

Primate Prot., 500 U.S. at 81 (noting limited scope of term

“officers of the United States”); see also Ryan, 781 F. Supp.

at 941 (noting that the need to protect “[sJubordinate [cus-

toms] inspectors” was among the reasons for enactment of

‘the first federal officer removal statute). Thus, the committee

report accompanying the 1948 legislation that created

§ 1442(a)(1) in its current form explained that “[t]he revised

subsection ... is extended to apply to all officers and employ-

ees of the United States and any agency thereof.” H.R. Rep.

No. 80-308, at A134 (1947) (quoted in Primate Protection,

500 U.S. at 84). Nothing in the history of the statute as can-

vassed in the relevant judicial decisions suggests that Con-

gress intended generally to benefit corporations, much less

? The Dictionary Act, codified in its current form at 1 U.S.C. § 1,

provides that “unless the context indicates otherwise,” the word person

includes corporations and other impersonal private entities. Here, as ex-

plained below, the context does indicate otherwise. Cf Adams v. United

States, 420 F.3d 1049 (9th Cir. 2005) (context of Federal Tort Clairns Act

indicates that “persons acting on behalf of a federal agency in an official

capacity” in 28 U.S.C. § 2671 includes only natural persons). In addition,

the use of the term “person” in the federal officer removal statute long

predates the first enactment of the Dictionary Act in 1871 and could not

possibly have been informed by the Act. See Lippoldt v. Cole, 468 F.3d

1204, 1215 (10th Cir. 2006) (holding that Dictionary Act does not assist

in determining congressional intent in statutes predating its enactment).

> Indeed, Primate Protection suggests that the 1948 enacting Con-

gress may have even had a more limited definition of “officer of the

United States” in mind, see 500 U.S. at 81, because at that time it was not

clear that the phrase encompassed officers of certain independent agen-

cies. Thus, it was all the more essential to add the word “person” to en-

sure coverage of employecs and agents of independent agencies.

9

those whose only qualification for “officer” status is that they

are regulated by (or doing business with) the government.

Although this Court has never addressed a case involving

the application of the statute to a corporation, in Primate

Protection the Court demonstrated the limits of the statute in

holding that the term “officer ... or person acting under him”

did not apply even to federal agencies. 500 U.S. at 82-84. In

so holding, the Court emphasized that Congress had limited

the statute to “individual federal officers” (as opposed to

agencies) because it was individual federal officers and em-

ployers who were being prosecuted and sued in state courts,

and whom Congress wanted to protect from such actions. /d.

at 85. The Court further reasoned that “individual federal

officers” had a greater need for “the protection of a federal

forum in which to raise their federal defenses.” /d. at 86. The

Court’s reasoning strongly suggests that corporations, like

agencies, fall outside the concerns that led Congress to pro-

vide protection for vulnerable individuals against potentially

hostile state courts.*

Following Primate Protection, Congress amended

§ 1442(a)(1) to permit the United States and federal agencies,

in addition to federal officers and persons acting under them,

to invoke removal. See Federal Courts Improvement Act of

1996, Pub. L. No. 104-317, § 206, 110 Stat. 3847, 3850. Al-

though one court has suggested that “Congress’s amendment

of the statute to emphasize its broad scope supports the con-

clusion that ‘person’ encompasses more than mere individu-

als,” In re “Agent Orange,” Product Liability Litigation, 304

F. Supp. 2d 442, 447 (E.D.N.Y. 2004), the way Congress

amended the statute in fact supports exactly the opposite in-

* Cf Mignona v. Sair Aviation, Inc., 937 F.2d 37, 41 (2d Cir. 1991)

(holding, in the aftermath of Primate Protection, that a nonappropnated

fund instrumentality of the federal government was not entitled to remove

cases against it, because, as “an impersonal entity, [it] is not an ‘officer’

of the United States”).

10

ference. Congress did not bring agencies within the ambit of

the statute by changing the definition of “person,” which the

Court in Primate Protection had held did not encompass

them. Rather, Congress left in place the statutory protection

for officers and persons acting under them, and added the

United States and federal agencies as a separate category of

entities that could invoke the statute. Nothing in Congress’s

changes to the statute reflects a broader intent to alter, let

alone expand, the definition of “person” or to benefit non-

human entities other than the United States and its agencies.

Thus, if the statute applies to corporations because they

are “persons,” it must also have done so before 1996, when

actual agencies of the United States were held by this Court

to be prohibited from invoking the statute—an incongruous

result, to say the least. In short, the history of the statute con-

tains no suggestion that Congress intended to grant to corpo-

rations and other non-human entities an entitlement that, until

1996, was not even available to the government’s own agen-

cies; and the 1996 amendment of the statute in no way indi-

cates that in extending that entitlement to agencies, Congress

also gave it to corporations.

Il. A Private Business, Even If Subject to Federal

Regulation, Does Not Act “Under” a Federal Officer

or Perform “Any Act Under Color of Such Office”

When It Is Not Enforcing or Executing Federal

Law.

On its face, the federal officer removal statute requires

not only that the actor who is sued be a goveriunent officer

Or person acting directly under an officer, but also that the

action for which the defendant is sued be an official one—

that is, an act “under color of such office.” The under-color-

of-office requirement is a critical limitation of the statute,

integral to its core purpose of providing for removal “broad

enough to cover all cases where federal officers can raise a

colorable defense arising out of their duty to enforce federal

law.” Willingham, 395 U.S. at 406-07 (emphasis added); see

1]

also Arizona v. Manypenny, 451 U.S. at 241 (“{R]Jemoval

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 arising out of his official duties.”’)

(emphasis added).

The Court emphasized this critical limitation in two of its

leading decisions applying the statute, Maryland v. Soper

(No. 1), 270 U.S. 9 (1926), and Maryland v. Soper (No. 2),

270 U.S. 36 (1926). The Soper cases, like Davis, arose from

the efforts of federal revenue agents to break up an illegal

still, this one near the hamlet of Madonna, Maryland. After a

futile pursuit of a group of moonshincrs, the agents destroyed

the still and, as they left the site, found a mortally wounded

man lying beside a path. Although they claimed not to know

how the man had been killed, the agents (and their chauffeur)

were arrested by the local sheriff and indicted for murder and

conspiracy to obstruct justice by falsely denying any knowl-

edge of the circumstances leading to the victim’s death. The

officers invoked the predecessor to § 1442(a)(1) to remove

the prosecutions to the U.S. District Court for the District of

Maryland, which denied a motion to remand. This Court re-

versed as to both the murder and conspiracy prosecutions.

In Soper (No. 1), addressing the murder prosecution, the

Court held that the defendants’ removal petition was defi-

cient because it failed to explain in any manner how the al-

leged murder constituted an action “under color of ... office”

other than that the death occurred during a time when the

agents were engaged in performing their duty of enforcing

the prohibition laws. 270 U.S. at 35. The Court emphasized

that the statute required more:

The [action] to be removed under the section must have

been instituted “on account of’ acts done by the defen-

dant as a federal officer under color of his office ....

There must be causal connection between what the offi-

cer has done under asserted federal authority and the

‘ state prosecution. It must appear that the prosecution of

12

him for whatever offense has arisen out of the acts done

by him under color of federal authority and in en-

forcement of federal law ....

Id. at 33 (emphasis added). Because the defendants’ petition

did not state that “whatever was done by them leading to the

prosecution was done under color of their federal official

duty,” and thus left open the possibility that they were being

prosecuted for a murder not committed under color of federal

authority, id. at 35, the Court found that, unless the petition

could be amended to rectify this deficiency, the case must be

remanded.

Having so held with respect to the murder charges, the

Court in Soper (No. 2) made even shorter shrift of the claim

that the prosecution for conspiracy to obstruct justice was

removable. The Court held that the defendants’ responses to

the criminal investigation by state authorities were not “acts

under federal authority” because they were not “closely con-

nected with, and included in, the attempted enforcement of

the federal law,” nor were the officers acting “in performance

of their duty as officers of the United States” when they gave

the allegedly false evidence. 270 U.S. at 43. Because the

prosecution was not for “acts done by these defendants solely

in pursuance of their federal authority,” the Court held that a

“fair construction” of the statute did not permit removal. /d.

at 44.

Similarly, in Gay v. Ruff, 292 U.S. 25 (1934), the Court

enforced the limit placed on removal by the statute’s re-

quirement that an action be based on acts “under color of of-

fice.” Gay concerned a 1916 amendment to the statute that

provided that any “officer of the courts of the United States”

could remove an action brought against him “for or on ac-

* In a third case, Marviand v. Soper (No. 3), 270 U.S. 44 (1926), the

Court also applied Soper (No. 2) to require remand of a perjury prosecu-

tion against one of the defendants.

13

count of any act done under color of his office or in the per-

formance of his duties as such officer.” Jd. at 27.° The re-

moved action was a lawsuit brought against the receiver of a

railroad (who had been appointed by and was an officer of a

federal court) alleging that the railroad’s negligence had re-

sulted in the death of the plaintiff's son. Emphasizing that the

statute’s purpose was to protect officers engaged in the en-

forcement of federal law and not to produce a wholesale ex-

pansion of federal jurisdiction over otherwise non-federal

claims, see id. at 31-35, Justice Brandeis’ opinion held that

the claim must be remanded to state court, and rested its

holding squarely on the “under color of office” requirement:

“A suit for damages for an injury resulting from negligent

operation of a train is not, within the meaning of [the federal

officer removal statute], a suit ‘for or on account of any act

done under color of his (the receiver’s) office.” Jd. at 39.

For precisely the same reason, a suit predicated on inju-

ries resulting from Philip Morris’s design, marketing and sale

of so-called “light” cigarettes is not brought “for any act un-

der color of [federal] office” within the meaning of

§ 1442(a)(1). As Philip Morris itself has successfully argued

elsewhere, whatever sclling cigarettes may be, it is not an

activity performed under color of federal office. See Brown v.

Philip Morris Inc., 250 F.3d 789, 801 (3d Cir. 2001) (accept-

ing Philip Morris’ argument that federal regulation of its

marketing practices did not make its actions “under color of

federal law” for purposes of a Bivens action). And Soper (No.

2) leaves no doubt that misleading the public as to the health

risks associated with “light” cigarettes falls well outside the

furthest possible bounds of action under color of federal of-

fice.

Nor can Philip Morris’s purely self-interested private

conduct be brought within the realm of action “under color of

* The provision is now codified at 28 U.S.C. § 1442(a)(3).

14

office” by the federal regulation to which it was (supposedly)

subject. This Court has made clear that even “extensive”

regulation of the activities of a business does not make its

actions under color of law; rather, a private person acts under

color of law only when its action “may be fairly treated as

that of the [government] itself.” Jackson v. Metropolitan Edi-

son Co., 419 U.S. 345, 350 (1974); accord Blum v. Yaretsky,

457 U.S. 991 (1982); see also Single Moms, Inc. v. Moniana

Power Co., 331 F.3d 743, 748 (9th Cir. 2003) (“That a pri-

vate entity is regulated by government does not transform

that private entity’s conduct into state action.”); Sutton v.

Providence St. Joseph Medical Center, 192 F.3d 826, 837-39

(9th Cir. 1999) (a private entity does not act “under color of

law” merely because it acts under compulsion of government

regulation); Cobb v. Georgia Power Co., 757 F.2d 1248

(11th Cir. 1985) (heavy regulation of a private entity does not

make its actions “under color of law”).

Indeed, this Court’s precedents suggest that, if anything,

the phrase “under color of such office” in the removal statute

is even more limited than the “under color of law,” which is

used in 42 U.S.C. § 1983 and elsewhere to describe conduct

that qualifies as government action for constitutional pur-

poses. Thus, under § 1983, action “under color of law” in-

cludes action “under pretense of law,” but, as the Soper hold-

ings illustrate, the under color of office requirement in the

removal statute requires an exercise of authority actually con-

ferred by office. See Screws v. United States, 325 U.S. 91,

111-12 (1945) (opinion of Douglas, J.). A fortiori, if regula-

’ Similarly, that a business is operating under government contracts

whose specifications it must meet does not transform its conduct into

government action. As this Court has stated, “many private corpora-

tions[’] ... business depends primarily on contracts to build roads,

bridges, dams, ships, or submarines for the government. Acts of such

private contractors do not become acts of the government by reason of

their significant or even total engagement in performing public con-

tracts.” Rendell-Baker v. Kohn, 457 U.S. 830, 841 (1982).

15

tory compulsion is not enough to make private action “under

color of law,” it also cannot bring private conduct within the

narrower category of action “under color of [federal] office”

within the meaning of 28 U.S.C. § 1442(a)(1). There is all

the difference in the world between merely complying with

federal regulations and stepping into the shoes of a federal

regulator acting under color of his office. As one early deci-

sion under the removal statute put it:

The purpose of the statute is to protect the revenue offi-

cers of the government in the line of their official du-

ties, and those who are employed to act under them in

the performance of such duties; but, further than pro-

viding this necessary protection to the administration of

its revenues, the federal government has no interest in

the business affairs of the people incidentally brought

within the range of the tariff system.

Johnson v. Wells Fargo & Co., 98 F. 3, 8 (C.C. Cal. 1899).®

Rather, removal of suits based on actions taken by federal

officers or their subordinates under color of office must be

limited to cases where the removing defendant was “effec-

tively an agent or employee of the government” performing

“official functions” on its behalf. Virden v. Altria Group,

Inc., 304 F. Supp. 2d 832, 846, 845 (N.D. W. Va. 2004); see

also Bakalis v. Crossland Sav. Bank, 781 F. Supp. 140, 145

(E.D.N.Y. 1991) (a defendant invoking the removal statute

must be so “intimately involved with government functions

as to occupy essentially the position of an employee”);

* In Johnson, the plaintiff sued Wells Fargo, a common carrier, for

refusing to deliver a package for which the plaiatiff had refused to pur-

chase a one-cent stamp that federal law required Wells Fargo to affix to

each item shipped. Wells Fargo removed the case to federal court, argu-

ing that in requiring the purchase of the stamp, it was acting »nder the

direction of a federal revenue officer. The federal court rejected Wells

Fargo’s argument that its mere compliance with the federal regulatory

requirement made its action one under color of federal office.

16

Brown & Williamson Tobacco Corp. v. Wigand, 913 F. Supp.

530, 533 (W.D. Ky. 1996) (tobacco whistleblower Jeffrey

Wigand could not remove an action brought against him for

giving grand jury testimony because “he has not been di-

rected to perform official functions as an officer or agent of

the government”),

The requirement that a removing defendant act under of-

ficial direction in the performance of an official function thus

excludes from the coverage of the statute entities that are

merely conducting their own private business under regula-

tory or other requirements imposed by the federal govern-

ment. See Virden, 304 F. Supp. 2d at 844-45 (citing cases).

Philip Morris’s conduct in marketing “light” cigarettes was

not in any way performed on behalf of the federal govern-

ment or as_n exercise of its authority; hence it was not action

“under color of [federal] office.”

The intrinsically private nature of Philip Morris’s conduct

no doubt explains why Philip Morris discovered that it was

“acting under” a federal officer so late in the game (particu-

larly in light of the company’s assertion that there is a long

and unique history of federal regulation of its activities). The

first reported decision in a case where a cigarette company

claimed federal officer removal did not come until 2002, see

Tremblay v. Philip Morris, Inc., 231 F. Supp. 2d 411 (D.N.H.

2002), and even in the Eighth Circuit some of Philip Morris’s

attempted removals on this ground have recently been held

untimely. Craft v. Philip Morris Companies, Inc., 2006 WL

744415 (E.D. Mo. Mar. 17, 2006). And as noted above, when

it suited Philip Morris’s interests in other litigation, the com-

pany steadfastly denied that its actions could be equated to

those of a government officer acting under color of law. See

17

Brown v. Philip-Morris, 250 F.3d at 801. Philip Morris was

right then; it is wrong now.”

Ii1.The FTC’s “Regulation” of Cigarettes Has Never

Been Uniquely or Even Unusually Extensive.

Recognizing that “mere participation in a regulated in-

dustry is insufficient” to support removal, Br. in Opp. 14,

Philip Morris has attempted to defend the Eighth Circuit's

decision on the ground that the regulation to which it was

subject was so “unusual” and even “unique” as to differenti-

ate Philip Morris from other regulated businesses and justify

a special removal rule for tobacco cases. Br. in Opp. 10. But

if regulation is not enough to transform a private enterprise’s

conduct of its business into action “under color of federal of-

fice,” it does not matter whether that regulation is more or

less extensive. And in any event, the Eighth Circuit’s charac-

terization of the regulation of cigarette companies as “un-

precedented,” on which Philip Morris relies, Br. in Opp. 18,

is baseless. Left standing, the decision below will lead either

to a potentially vast expansion of federal officer removal, as

other more heavily regulated businesses seek the same bene-

fit afforded Philip Morris by the Eighth Circuit, or to an un-

principled special rule benefiting only the tobacco industry.

A. The FTC’s Weak “Regulation” of the Cigarette

Industry Did Not Compel Philip Morris to Take

the Actions for Which It Has Been Sued.

Philip Morris, echoing the Eighth Circuit’s opinion, is

long on adjectives characterizing the supposedly extensive

regulation to which it was subjected by the FTC. See Br. in

” Indeed, accepting the company’s belated characterization of regu-

lated business activity as action “under color of office” would, especially

if extended to other industries, render legal battles that have raged in re-

cent years over other grounds for removal such as “complete preemption”

largely beside the point as regulated industries rushed to invoke this new

basis for federal} jurisdiction. See infra pp. 19-27.

18

Opp. 3-6. The undisputed, public-record facts, however, fall

far short of justifying those characterizations. The critical

points are:

e First, and most importantly, whatever the FTC may or

may not have “directed” Philip Morris to do, Philip

Morris does not claim—because it cannot—tuat the

FTC ever required it to sell “low tar” cigarettes, or

compelled it to call its cigarettes “lights,” or otherwise

ordered it to use advertising that would mislead con-

sumers by suggesting, on the basis of measured tar and

nicotine levels, that “light” cigarettes are somehow

healthier than “regular” cigarettes.

e The United States is currently suing Philip Morris and

other cigarette manufacturers for precisely the conduct

that Philip Morris insists in this case it undertook as an

agent of the federal government acting under color of

federal office. The district court in that case has rejected

the defendants’ argument that they were merely follow-

ing FTC mandates, noting that the advertisements in

which they suggested that “light” cigarettes were less

hazardous “were certainly not mandated by the FTC.”

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

(D.D.C. 2003) (emphasis added).

e The FTC has never promulgated regulations requiring

cigarette makers to test the tar and nicotine levels of

cigarettes, let alone regulations defining how such tests

must be conducted, how the results must be disclosed, -

or how test results may be used in cigarette advertising.

e The major cigarette makers’ adherence to the FIC

method of testing cigarettes was the result of a volun-

tary agreement ‘o stave off formal regulation and/or en-

forcement actions under the FTC’s general authority to

sanction “unfair or deceptive acts or practices in or af-

fecting commerce” under § 5 of the FTC Act, 15 U.S.C.

19

§ 45(a). See FTC, Cigarette Testing: Request for Pub-

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

e Absent agreement by the manufacturers to use the

FTC’s test method, the FTC could not, as a matter of

law, foreclose use of other methods unless it could

prove that advertising their results wceuld be unfair or

deceptive under the FTC Act. As the D.C. Circuit held

in FTC v. Brown & Williamson Tobacco Corp., 778

F.2d 35, 44 (D.C. Cir. 1985), “[b]ecause the FTC has

not adopted its system of testing pursuant to a Trade

Regulation Rule under section 18 of the FTC Act, 15

U.S.C. § 57a (1982), one cannot say that the FTC sys-

tem constitutes the only acceptable one available for

measuring milligrams of tar per cigarette.”

Although Philip Morris, following the Eighth Circuit’s

lead, insists that the FTC “‘formally defined’ ‘low tar’

cigarettes as those measuring 15 milligrams or less in

tar according to the FTC Method,” Br. in Opp. 5, nei-

ther Philip Morris nor the court below can cite any FTC -

regulation or other “formal” action of the Commission

embodying such a definition. As the Commission itself

has stated, “Cigarette manufacturers use a number of

descriptive terms (such as ‘low tar,’ ‘light,’ ‘medium,’

‘extra light,’ ‘ultra light,’ ‘ultra low,’ and ‘ultima’) in

advertising “nd labeling information about their ciga-

rettes. ... There are no official definitions for these

terms but they appear to be used by the industry to re-

flect ranges of FTC tar ratings.” FTC, Cigarette Test-

ing: Request for Public Comment, 62 Fed. Reg. at

48,163 (emphasis added).

The most that can be said is that the FTC at one point

followed an informe! enforcement policy of not taking

action against cigarette companies that advertised ciga-

rettes as “light” or “low tar” based on test results using

the Cambridge method; but as Philip Morris itself ac-

knowledges, the Commission has more recently begun

20

an investigation, as yet unresolved, of whether such ad-

vertising is deceptive. Br. in Opp. 6.

B. Other Industries Face Much More Extensive,

Specific, and Formal Regulation than Do Ciga-

rette Manufacturers Such as Philip Morris.

The “regulation” of cigarette testing and advertising by

the FT'C—which, as explained above, is virtually non-

existent—is by no means “unique,” “extraordinary” or “un-

usual” in its intrusiveness. Federal regulatory actions are

typically much more formal and prescriptive than the FTC’s

actions regarding cigarettes. And although it may have been

“unprecedented” for the FTC to involve itself in product test-

ing as it did with cigarettes (Br. in Opp. 18), detailed federal

product-testing mandates are common, and are usually set

forth in regulations with the force of law rather than adopted

informally and by agreement with regulated companies, as in

the case of the FTC’s cigarette testing regime.

The Food and Drug Administration’s regulation of drugs

and medical devices demonstrates the fallacy of the argument

that the FTC’s actions concerning cigarettes constituted an

unusually extensive regulatory scheme. Unlike cigarette

makers, drug and medical device manufacturers must comply

with detailed, legally enforceable federal standards governing

the approval and marketing of new drugs and medical de-

vices. Once approved, drugs and devices are subject to for-

mal regulations that incorporate the formulation and design

originally developed by the manufacturer, as well as the pre-

cise contents of their labels; other regulations address manu-

facturing practices to which their makers must conform. See

generally Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996). The

FDA’s manufacturing standards specify how drug and device

manufacturers must audit and inspect their manufacturing

facilities (see, e.g., 21 C.F.R. Part 820), and the agency itself

conducts inspections of manufacturing facilities pursuant to

its statutory authority under 21 U.S.C. § 374(a). The regula-

tory scheme for drugs and medical devices differs from the

21

FTC’s cigarette testing program both in that it involves ‘regu-

lations with the force of law, and in that it directly regulates

product design and production.

In some cases, FDA regulations also set forth detailed

product testing requirements that manufacturers are legally

required to follow. For instance, the FDA has promulgated a

regulation prescribing in detail how surgical gloves must be

tested for leaks, which calls not only for testing by manufac-

turers, but also for sampling and testing by the agency itself.

21 C.F.R. § 800.20. Unlike the FTC’s test program for ciga-

rettes, the FDA’s testing has teeth: gloves that fail are “adul-

terated within the meaning of section 501(c) of the Federal

Food, Drug, and Cosmetic Act, and are subject to regulatory

action, such as detention ... and seizure ....” Jd. § 800.20(d).

The FDA’s glove regulation is by no means unique.

Other FDA regulations provide detailed testing and labeling

requirements for tampons, 21 C.F.R. § 801.430, impact-

resistant eyeglass lenses, id. § 801.410, hearing aids, id.

§ 801.420, and condoms. id. § 801.435. The tampon regula-

tion, for example, requires manufacturers to use an absor-

bency test conforming to the detailed descriptions and dia-

grams set forth in the regulatory text, and to report the results

on package labels using specifically defined terms. Again,

the regulation has the force of law, and any noncomplying

tampons are “misbranded” within the meaning of the Food,

Drug, and Cosmetic Act.

Foods, in sharp contrast to cigarettes, are subject to sig-

nificant, mandatory federal regulation. Food additives (unlike

cigarette ingredients) are subject to detailed federal regula-

tions, which require formal FDA approval of the use of any

additive not generally recognized as safe. See 21 C.F.R. Parts

170, 171. Manufacturers secking approval of a food additive

must provide detailed scientific information supporting the

claim that it is safe for human consumption. See 21 C.F.R.

171.1. Food packages (unlike cigarette packages) must list

their ingredients, provide nutritional information and comply

22

with other mandatory labeling requirements. See 21 C.F.R.

Part 101. And federal agencies, including the FDA and the

Agriculture Department’s Food Safety and Inspection Ser-

vice, conduct mandatory, not voluntary, inspection and test-

ing programs to determine the safety of meat, poultry, eggs,

seafood, and other food products. And unlike cigarettes,

foods are subject to seizure by federal authorities if testing or

inspection reveals them to be adulterated. See generally

www.fsis.usda.gov/Fact_Sheets/FSIS Food Recalls/index.as

Pp.

Such detailed and compulsory federal regulatory schemes

are by no means confined to the food, drug, and medical de-

vice industries. The National Highway Traffic Safety Ad-

ministration (NHTSA), for example, conducts its own pro-

gram of crash and rollover testing of automobiles, gives ve-

hicles one- to five-star ratings as a result, and tells car manu-

facturers how to use those ratings in automobile advertising.

See www.SaferCar.gov. NHTSA’s testing activities, which

are far more extensive than the FTC’s, are carried out under a

specific statutory mandate, 49 U.S.C. § 30168, not pursuant

to voluntary agreements or informally adopted policies.

Moreover, unlike the FTC, NHTSA does more than test

vehicles and instruct automakers concerning the use of those

test results in advertising. It also formally promulgates spe-

cific design and performance standards for vehicles, known

as Federal Motor Vehicle Safety Standards (FMVSSs). Those

mandatory standards, codified at 49 C.F.R. Part 571, fill ap-

proximately 700 pages of the Code of Federal Regulations.

Typically, FMVSSs not only define what safety features

manufacturers are required to install in vehicles and what

standards of protection they must provide, but they also spec-

ify exactly how manufacturers must measure their perform-

ance. For example, NHTSA’s standard governing seatbelts

and airbags, 49 C.F.R. § 571.208, which by itself is 87 pages

long, prescribes exactly what crash tests manufacturers must

conduct to test their passenger protection systems, including

23

the speed and angle at which vehicles must be crashed, the

forces that must be measured, and the precise “anthropomor-

phic test devices” (i.e., crash-test dummies) that must be

used.

Similarly, EPA regulations define exactly how auto-

makers must test the fuel economy of their vehicles, and fur-

ther provide for testing by the agency itself of a significant

percentage of vehicles as a double-check on the manufactur-

ers’ own testing. See generally www.epa.gov/fueleconomy/

index.htm; www.fueleconomy.gov/. Again, unlike the FTC’s

cigarette testing program, fuel economy tesung is mandated

by regulations with the force of law. See 40 C.F.R. Parts 86

& 600. And those regulations not only specify precisely how

automakers must disclose fuel economy test results to con-

sumers, but also define fleet fuel economy performance stan-

dards (CAFE standards) that the automobile industry is re-

quired by law to meet.'®

Other consumer products are also subject to detailed

regulatory testing regimes. Under regulations promulgated by

the Department of Energy, 10 C.F.R. Part 430, manufacturers

of refrigerators, freezers, dishwashers, water heaters, clothes

washers and dryers, air conditioners, television sets, home

heating equipment, kitchen ranges and ovens, fluorescent

light tubes, showerheads, faucets, and toilets must use pre-

scribed test methods to measure the energy and water con-

sumption of their products. And unlike the FTC’s cigarette

testing program, the Energy Department’s regulations not

only require product testing, but also require that the products

meet specific energy and water conservation standards.

'° By contrast, although the FTC opened a cigarette testing laboratory

using the Cambndge Filter Method in 1967, see FTC, Cigarettes: Testing

for Tar and Nicotine Content, 32 Fed.Reg. 11,178 (1967), that laboratory

was closed in 1987 when most testing of tar and nicotine levels was

turned over to a private laboratory funded by the tobacco companies

themselves. See 62 Fed. Reg. 48,158 n.5.

24

The Consumer Product Safety Commission (CPSC), in

addition to engaging in voluntary efforts to improve product

safety similar to the FTC’s interactions with cigarette com-

panies, also promulgates mandatory safety standards for con-

sumer products, ranging from bicycle helmets to lawn mow-

ers to cigarette 1ighters to baby cribs. Mandatory CPSC stan-

dards are formally promulgated as regulations and published

in 16 C.F.R. Chapter II. Typically, they set forth design

and/or performance standards that manufacturers are required

to meet and specify the exact test methods that must be used

to determine compliance.

The CPSC’s standards for flammability of children’s

sleepwear (sizes 7 through 14) are illustrative. The standards,

set forth at 16 C.F.R. Part 1616, occupy 30 pages of the Code

of Federal Regulations, and specify not only what criteria

affected products must meet and how they must be labeled,

but also how manufacturers must sample fabric for testing,

how the testing must be conducted (including eight pages of

engineering drawings describing the test chamber), what re-

cords the manufacturer must keep, the Commission’s en-

forcement policy, the role of the Commission itself in testing,

and the consequences of noncompliance. As to the latter, the

regulations state that “[t]he Commission will test fabrics and

garments subject to the standard for compliance with the

standard ... [and] will consider any failing results from com-

pliance testing as evidence of a violation of the standard and

section 3 of the Flammable Fabrics Act (15 U.S.C. § 1192).”

16 C.F.R. § 1616.35(f).

Financial institutions also operate under detailed federal

regulatory regimes. Agencies such as the Federal Reserve,

the Office of the Comptroller of the Currency, the Federal

Deposit Insurance Corporation, and the Office of Thrift Su-

pervision extensively supervise the activities of banks and

25

savings associations.'’ Federal regulation of these institutions

involves not only the promulgation of mandatory standards

governing their soundness and the types of activities they

may undertake, but also examination of banks by federal of-

ficers. Unlike cigarette testing, bank examination is carried

out directly by the responsible federal agencies, and it is

mandatory, not voluntary. And findings made by bank exam-

iners may lead to consequences far more drastic than any-

thing associated with the FTC’s limited tar and nicotine test-

ing regime, including removal of the financial institution’s

management, placement into federal receivership, and liqui-

dation.

As a final example, the Occupational Safety and Health

Administration (OSHA), pursuant to the Occupational Safety

and Health Act, 29 U.S.C. § 651 et seq., formally promul-

gates regulations requiring employers to limit the exposure of

their workers to hazardous substances and conditions. Those

standards, which have the force of law, typically specify not

only precise exposure limits, but also means of compliance

and specific methods for exposure testing. For example,

OSHA’s recently promulgated rule on exposure to hexava-

lent chromium, 71 Fed. Reg. 10,100 (Feb. 28, 2006), not only

prescribes a precise exposure limit (5 micrograms of hexava-

lent chromium per cubic meter of air as an eight-hour time-

weighted average), but also defines exactly the testing that

employers must use to determine compliance: “the employer

shall use a method of monitoring and analysis that can meas-

ure chromium (VI) to within an accuracy of plus or minus 25

percent (+/- 25%) and can produce accurate measurements to

within a statistical confidence level of 95 percent for airborne

concentrations at or above the action level.” /d. at 10,375. In

addition to requiring employers to monitor their compliance

_--

'' An overview of federal financial institution regulation and the

roles of the various agencies involved may be found at

www.federalreserve.gov/pf/pdf/pf_S.pdf.

. 26

using specified methods, OSHA itself periodically tests em-

ployer compliance, and violation of its regulations can result

in administrative sanctions.

We could go on. The point is that federal regulation of

business activity is ubiquitous, and regulations that impose

detailed testing and compliance requirements are common-

place. Indeed, if anything is “unique” and “unusual” about

the FTC’s testing of cigarettes, it is that it has not been im-

posed by regulations with the force of law, that it does not

involve enforcement of any design or performance standards

regarding the regulated products, and that it involves no en-

forceable regulations concerning the use of test results in

cigarette advertising or marketing. No one who understood

federal regulation could possibly credit Philip Morris’s (and

the Eighth Circuit’s) view that the “regulation” of cigarette

companies by the FTC is “uniquely,” “extraordinarily,” or

even “unusually” extensive. When compared to most other

modern regulatory regimes, just the opposite is true.

C. Whether Broadly or Narrowly Applied, the

Eighth Circuit’s Ruling Will Have Mischievous

Consequences.

Precisely because the federal “regulation” of cigarette

testing and marketing has been so feeble compared to other

federal regulatory regimes that impose enforceable legal re-

quirements on their subjects, affirmance of the Eighth Cir-

cuit’s ruling would likely lead other regulated businesses

who are sued by consumers injured by their products to claim

that they, too, “acted under” a federal officer. Indeed, medi-

cal device manufacturers have already done so, see Parks v.

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

banks claiming to be acting under federal officers by virtue

of federal regulation of their lending practices. See King v.

Provident Bank, 428 F. Supp. 2d 1226 (M.D. Ala. 2006).

27

The range of state-law tort actions potentially subject to

claims of removal is virtually unlimited, but the regulations

described above provide a number of illustrations, including:

e Actions against manufacturers of drugs and medical

devices alleging design or manufacturing defects or

failure to disclose risks associated with use of the prod-

ucts;

e Actions against automobile manufacturers alleging de-

fective design, manufacture or testing of safety equip-

ment;

e Consumer fraud actions involving improper disclosure

of energy consumption figures for vehicles and other

consumer products;

e Personal injury actions against manufacturers or sellers

of virtually any product subject to regulation by the

CPSC;

e Actions by consumers sickened or injured by contami-

nated or unsafe foods or food additivies;

e Consumer fraud actions based on misleading labeling

of the contents or nutritional qualities of foods;

e Consumer or commercial fraud actions involving bank

transactions.

Thus, if this Court were to leave the Eighth Circuit’s de-

cision intact, a number of undesirable consequences would

be likely. Courts that conscientiously applied the principle

that regulation, if extensive enough, can justify removal, and

that und \\»« a serious comparison of the degree of regula-

tion faced .. defendants in other industries with that faced by

cigarette companies, might allow a broad range of defendants

to remove cases under § 1442(a)(1), dramatically expanding

the scope of federal removal jurisdiction in a manner having

nothing to do with the statute’s purpose of protecting federal

officers in the performance of their official duties.

28

Alternatively, it is possible that this Court, or lower

courts, might grasp at the lifeline offered by the Eighth Cir-

cuit’s characterization of the Philip Morris case as “unique,”

“unusual,” “extraordinary,” and “unprecedented,” and use it

to reject removal by defendants outside the cigarette industry

even though, in reality, they face regulations much more ex-

tensive than cigarette companies. But even if courts declined

to extend removal to other industries, much time and effort

would be expended litigating meritless removals. And, at the

end of the day, the cigarette companies would be left with a

special benefit not available to other more heavily regulated

industries. A decision resulting in an unprincipled exception

to ordinary jurisdictional rules for the benefit of a single in-

dustry should not be allowed to stand by this Court.

CONCLUSION

For the reasons stated above, and by the petitioner, the

Eighth Circuit’s decision should be reversed, and the case

remanded with directions that it be remanded to the state

court in which it was filed.

Respectfully submitted,

SCOTT L. NELSON

Counsel of Record

BRIAN WOLFMAN

PUBLIC CITIZEN LITIGATION

GROUP

1600 20th Street, N.W.

Washington, D.C. 20009

(202) 588-1000

Date: February 2007

29

STACY CANAN

BRUCE VIGNERY

AARP FOUNDATION

MICHAEL SCHUSTER

AARP

601 E Street, N.W.

Washington, D.C. 20049

(202) 434-2130

Attorneys for Amici Curiae