Petition for Writ of Certiorari — Grumman Technical Services, Inc. v. Estate of Ishee

Suprems Court, 0.8.

FILED

96 65 JUL t 1 199%

No, ———

Dec

In THE

Supreme Court of the United States

OCTOBER TERM, 1996

GRUMMAN TECHNICAL SERVICES, INC., et al.,

Petitioners,

Vv.

ESTATE OF LAMAR ISHEE, et al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

PETITION FOR A WRIT OF CERTIORARI

THOMAS C, GERITY L. JOSEPH LOVELAND

COPELAND, CooK, TAYLOR JAMES D. MILLER *

& BusH, P.A. MATTHEW L. BENNETT

Suite 1700 Capital Towers KING & SPALDING

Jackson, MS 39225-2132 1730 Pennsylvania Ave., N.W.

(601) 354-0123 Washington, D.C. 20006

FRANK J. CHIARCHIARO (202) 787-0500

THOMAS R. PANTINO Attorneys for Petitioner

MENDES & Mount, LLP Grumman Technical Services,

750 Seventh Avenue Inc.

New York, NY 10019-6829

(212) 261-8750 * Counsel of Record

ciel

WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

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QUESTIONS PRESENTED

1. Whether an order remanding a case to State court

is reviewable by a federal court of appeals where that

order was based on discretionary grounds but also includes

an extraneous or ambiguous use of the “tag” of 28 U.S.C.

§ 1447(c).

2. Whether the government contractor defense should

be applied to a closely supervised provider of services to

the United States Navy, and whether a colorable claim of

such a defense is enough to provide jurisdiction in federal

court.

(i)

ii

PARTIES TO THE PROCEEDING

In addition to Petitioner Grumman Technical Services,

Inc. and Respondent Estate of Lamar Ishee, the follow-

ing were parties to the proceedings in the Fifth Circuit:

McDonnell Douglas Corporation

UNC Aviation Services, Inc.

Jerome A. Kuechmann

Thomas Harden

Edwin E. Gennette

Jerry Fox

Benny Revels

Mark Glasgow

David Callaghan

Grover Miley

Angela N. Ishee, individually and on behalf of Caitlin

S. Ishee, a minor child

RULE 29.6 LISTING

Petitioner Grumman Technical Serwices, Inc., is a sub-

sidiary of Grumman Aerospace Corporation, which is a

subsidiary of Grumman Corporation, which is a subsid-

iary of Northrop Grumman Corporation.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .2000..0..02:.-.-..cccecccscscccescei cco. i

PARTIES TO THE PROCEEDING ...........................-...-. ii

BeAP Ess ee Aas ele te ii

eee A i ee iv

oe | Es PENS SRE rls oe Re Te 1

RES A ose ee Oe 1

STATUTORY PROVISIONS INVOLVED ................ 2

Dinan Oe Bee CAB os

I

ETE ERE

REASONS FOR GRANTING THE PETITION 6

I. THE FIFTH CIRCUIT IS IN CONFLICT

WITH THE FOURTH CIRCUIT ON THE RE-

VIEWABILITY OF REMAND ORDERS .......... 6

II. DENIAL OF GRUMMAN’S REMOVAL

UNDER 28 U.S.C. §1442(a) IMPROPERLY

LIMITED APPLICATION OF THE GOVERN-

MENT CONTRACTOR DEFENSE AND ER-

RONEOUSLY EXCLUDED A FEDERAL

CONTRACTOR FROM FEDERAL COURT... 11

PETRI ONIN assis cceceecs ; = an 17

(iii)

iv

TABLE OF AUTHORITIES

CASES Page

Amtreco, Inc. v. O.H. Materials, Inc., 802 F. Supp.

OGD: CHEE... Gh: BI etisalat ae 13, 14

Beaver Valley Power Co. v. National Eng’g and

Contracting Co., 883 F.2d 1210 (3d Cir. 1989) .... 14

Boyle v. United Technologies Corp., 487 U.S. 500

EI srcelactnnes teas conti a tactpachdinieialetaclnasddictcc-onsnuadasigouansaiinn 11, 14, 15

Briscoe v. Bell, 482 U.S. 404 (1977) ....................-..-. 7

Carley v. Wheeled Coach, 991 F.2d 1117 (3d Cir.),

cert. denied, 114 S. Ct. 191 (1998) —........-. 15

Crawford v. National Lead Co., 784 F. Supp. 439

3 EE _, Se Pree oe YL a Pa 14

Gravitt v. Southwestern Bell Tel. Co., 430 U.S. 723

(3077). Aner EN Win ee. 7

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

S64 (3D. Bee Red niet a 14

Harduvel v. General Dynamics Corp., 878 F.2d

1311 (11th Cir. 1989), cert. denied, 494 US.

i Bk; ena a ee 15

In re Hawaii Federal Asbestos Cases, 960 F.2d 806

(9th Cie; SIGE ce aa a ee 13

International Primate Protection League v. Ad-

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

gt peat cAine na i aR a Ae a OE RRA EAD 12

Lamb v. Martin Marietta Energy Systems, Inc.,

835 F. Supp. 959 (W.D. Ky. 1998) ...........-....... 14

Mangold v. Analytic Servs., Inc., T7 F.3d 1442 (4th

Cle TORS i Bee ois eae 6, 7, 8, 9, 10

Mesa v. California, 489 U.S. 121 (1989) —-.............. 12, 16

Peterson v. Blue Cross/Blue Shield of Texas, 508

F.2d 55 (5th Cir.), cert. denied, 422 U.S. 1043

(ROG bik enue ee 13

Richland-Lexington Airport Dist. v. Atlas Proper-

ties, Inc., 854 F. Supp. 400 (D.S.C. 1994) -.......... 14

Ryan v. Dow Chem. Co., 781 F. Supp. 934 (E.D.

We Bes Ee Sichcdacitieninceiids eeebihes cea eanaiedabicidscic: 12, 13

Shaw v. Grumman Aerospace Corp., 778 F.2d 736

(11th Cir. 1985), cert. denied, 487 U.S. 1233

CIID isnccsictsccccicicisipbcntcath helt aacicniilasacclnaibscapantee aed tecanke 15

ee ee

Vv

TABLE OF AUTHORITIES—Continued

Page

Sykes v. Texas Air Corp., 884 F.2d 488 (5th Cir.

ig 2 ey TORR ET EOL ge SPT De OE IO eee 10

Thermtron Products, Inc. v. Hermansdorfer, 423

ne I ei as fees 6,7

Things Remembered, Inc. v. Petrarca, 116 S. Ct.

see cg EET ee NR Ete ee eR 10

United States v. Orleans, 425 U.S. 807 a: | an 15

Willingham v. Morgan, 395 U.S. 402 (1969) _..... 11, 12, 16

Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18

Si: I ERD Pane ne eS SpE R ND todos aoe 13

STATUTES

See ED nos Se 1

adc (8 1 SR err eer ee ae ae 3, 7,8

ech eee hg Re TREE OT Oe 2, 5,7

uae TN I Ss SS 2,4, 5, 7,11, 12

oc || CREE RAPES A oe tse ie er Pes 2, 5, 6,7

MN BE elite nhc eee 13

Judicial Improvements Act of 1988, Pub. L. No.

100-702, §1009(c), 1988 U.S.C.C.A.N. (102

eles “GOO, WOOO eat 6

In THE

Supreme Court of the United States

OCTOBER TERM, 1996

No.

GRUMMAN TECHNICAL SERVICES, INC., ef al.,

" Petitioners,

ESTATE OF LAMAR ISHEE, et al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

PETITION FOR A WRIT OF CERTIORARI

Grumman Technical Services, Inc., petitions for a writ

of certiorari to review the judgment of the United States

Court of Appeals for the Fifth Circuit in this case.

OPINIONS BELOW

The per curiam opinions and orders of the United States

Court of Appeals for the Fifth Circuit, App. la-3a, 12a-

16a, are not officially reported. The opinions of the

United States District Court for the Southern District of

Mississippi, App. 4a-lla, 17a-53a, are not officially

reported.

JURISDICTION

The judgment of the United States Court of Appeals

for the Fifth Circuit was entered on April 12, 1996. App.

la. The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1).

2

STATUTORY PROVISIONS INVOLVED

The statutory provisions involved include 28 U.S.C.

§ 1367, 28 U.S.C. § 1442, and 28 U.S.C. § 1447. The

relevant portions of these statutes are set forth in the

Appendix. App. 54a-55a.

STATEMENT OF THE CASE

A. Factual Background

Respondents are the surviving wife, child and estate of

Captain Lamar Ishee (“the Ishees”). Their claim arises

out of Captain Ishee’s death during a military training

flight accident near the runway at Meridian, Mississippi

Naval Air Station (“NAS”). App. 19a. On August 26,

1992, while on active duty as a Marine Corps instructor

pilot, Captain Ishee was aboard a TA-4J Skyhawk military

jet aircraft being flown by Navy Lieutenant Vernon Hill.

Id. The two men encountered a thunderstorm upon their

return to the NAS, and after landing on the runway, the

plane began sliding out of control. Lieutenant Hill and

Captain Ishee ejected, but Captain Ishee’s parachute never

completely opened, and he fell to his death. /d.

Petitioner Grumman Technical Services, Inc. (“Grum-

man”), a government contractor, provided organizational

level maintenance support for the Navy’s TA-4J military

aircraft at Meridian NAS. App. 19a-20a. In addition to

Grumman, the original defendants also included the man-

ufacturer of the TA-4J aircraft and the ejection seat,

McDonnell Douglas Corporation (“MDC”), another

maintenance contractor, UNC Aviation Services, Inc.

(“UNC”), and several individual employees of Grumman

and UNC. 7/d. All of the original corporate defendants

were foreign corporations, and all of the individual de-

fendants were Mississippi residents. 7d. at 21a.

Contracts between Grumman and the United States

prescribed the specific procedures the contractor was to

follow in the performance and administration of TA-4J

3

maintenance activities. (R. G17-176).1. Grumman was

required to perform maintenance support services in ac-

cordance with the specific provisions of its contract, mili-

tary specifications, aircraft and engine manuals, and nu-

merous types of government instructions and directives.

(R. M807-08). All of Grumman’s employees working on

the project rendered services in accordance with the direc-

tives and regulations of the commanding naval officer at

the Meridian NAS. (R. M808). The government exer-

cised control over each and every aspect of Grumman’s

performance of the government contracts. (R. M806-12).

Indeed, Grumman was performing work that had tradi-

tionally been performed by enlisted personnel and officers

of the United States Navy. The Navy replaced its own

maintenance program at Meridian with contractor person-

nel in 1987. The Grumman and UNC people thus were

simply “substitute sailors.” (Deposition of Howard H.

Pace at 80-81).

B. Proceedings Below

The Ishees filed their original Complaint in the Circuit

Court for the First Judicial District of Hinds County, Mis-

Sissippi, seeking compensatory and punitive damages under

the Mississippi wrongful death statute. The defendants

were Grumman, MDC, UNC, and several individuals.

(R. G186). MDC and Grumman timely filed separate

Notices of Removal on July 30, 1993 (they were later

consolidated). (R. M1, 202; G1). Grumman based its

removal on two jurisdictional grounds: (1) diversity of

citizenship (28 U.S.C. § 1332), claiming that the individ-

1The record on appeal to the Fifth Circuit consisted of two

district court files, one initiated by the filing of the MDC Notice

of Removal, the other initiated by the filing of the Grumman Notice

of Removal. Citations to the MDC file will appear as “R. M-,” and

citations to the Grumman file will appear as “R. G-.” The district

court record also contains the complete transcripts of all depositions

taken in this case. The depositions have not been assigned record

page numbers, so the citations to the depositions will refer to the

actual page numbers of the depositions.

4

ual managerial defendants had been fraudulently joined

and that the Ishee estate was properly resident in Alabama

(rather than Mississippi); and (2) federal officer removal

(28 U.S.C. § 1442(a)(1)), claiming a government con-

tractor defense. (R. G1-9). The Ishees moved to remand

the case to State court. (R. M110). Before the district

court ruled on the Ishees’ motion, the Ishees and MDC

served a joint motion seeking the dismissal (without prej-

udice) of MDC, as well as the withdrawal of MDC’s

Notice of Removal. (R. M549). Grumman opposed the

dismissal of MDC. App. 31a.

The district court entered its first Opinion and Order on

December 15, 1994. App. 17a. On the issue of diversity,

the district court did not determine the citizenship of the

Ishee Estate or whether the managerial defendants were

fraudulently joined. 7d. The district court did permit the

Ishees to file a Second Amended Complaint that added a

number of newly identified “Doe” defendants. Id. at 26a-

27a. The district court concluded that the post-removal

identification of the Does “related back” to the date of the

filing of the original removal petition and thereby pre-

cluded a fraudulent joinder removal. App. 26a-27a.

On the federal officer question, the district court found

that Grumman, UNC and Fox (an individual defendant)

were not entitled to remove under § 1442(a)(1), because

they did not have a colorable claim to a federal defense

and no causal nexus existed between the Ishees’ allegations

and the acts performed under federal authority. App. 40a-

S5la. MDC, by contrast, was assumed to have a valid

claim to § 1442(a)(1) jurisdiction as a “person” acting

under a federal officer, and the district court therefore

“assumed” that it had subject-matter jurisdiction. /d.

at 39a.

In addition to granting the plaintiffs leave to file their

Second Amended Complaint, the district court granted

the joint motion for voluntary dismissal of MDC. App.

39a. The court then found that it had dismissed all claims

5

over which it had original jurisdiction, and it declined to

exercise its supplemental jurisdiction over the remainder

of the case. Id. at 5la-53a; see 28 U.S.C. § 1367. The

court then announced: “Pursuant to 28 U.S.C. §1447(c),

the Court determines that this action has been ‘removed

improvidently and without jurisdiction’” and ordered the

case remanded to State court. Jd. at 52a-53a.

Grumman (and others) appealed, and the Fifth Circuit

found that the district court had “assumed that at the time

of removal it had jurisdiction to hear this case.” App.

14a. This presumption of jurisdiction, the Fifth Circuit

determined, created supplemental jurisdiction over the

nonfederal elements of the case, which the district court

declined, in its discretion, and ordered remand. Id. at

14a-15a. The Fifth Circuit noted, however, that the dis-

.trict court had stated at the end of its Opinion that it

was remanding the case pursuant to 28 U.S.C. § 1447(c),

leaving the circuit court unable to determine the basis of

the district court’s remand order. Id. at 15a-1l6a. Noting

that “resolution of this question of jurisdiction at the time

of removal is crucial to the determination whether we have

appellate jurisdiction to review the remand order,” the

Fifth Circuit remanded the case to the district court for

further proceedings on the “narrow question” of whether

MDC had properly removed the case. Id.

The district court then issued its second remand order,

this time focusing exclusively on the question of whether

MDC’s removal was proper. App. 4a. The court found

that MDC qualified as a “person” under 28 U.S.C. § 1442,

id. at Sa-6a, and that MDC had raised a colorable federal

defense to the plaintiffs’ claims. Jd. at 6a-7a. The district

court concluded, however, that MDC had failed to demon-

Strate that it had “acted under” an officer of the United

States. Id. at 7a-10a. Without discussing any other

grounds for removal, including fraudulent joinder and

Grumman’s federal officer defense, the district court then

6

determined that since no other party had properly removed

the case, the court had no jurisdiction, and remanded

pursuant to § 1447(c). 7d. at Ila.

The Fifth Circuit found that the district court’s

holding based on § 1447(c) divested the court of its

appellate jurisdiction, and the appeal was dismissed. App.

la-3a. The case has now been remanded to Mississippi

State court.

REASONS FOR GRANTING THE PETITION

I. THE FIFTH CIRCUIT IS IN CONFLICT WITH THE

FOURTH CIRCUIT ON THE REVIEWABILITY OF

REMAND ORDERS.

This case presents an important and unsettled question

concerning appellate review of remand orders under this

Court’s decision in Thermtron Products, Inc. v. Hermans-

dorfer, 423 U.S. 336 (1976) (finding that only remands

based on grounds specified in 28 U.S.C. § 1447(c)* are

immune from appellate review under § 1447(d)). The

result of the Fifth Circuit’s rulings in this case is that even

where 28 U.S.C. § 1447(c) did not provide the actual

basis for the district court’s remand order, an inadvertent

or extraneous reference to that statute is enough to bar

appellate review under 28 U.S.C. § 1447(d). This deci-

sion creates an untenable standard for appellate review of

remand orders and conflicts with a recent decision of the

Fourth Circuit, Mangold v. Analytic Services, Inc., 77

F.3d 1442 (4th Cir. 1996). In Mangold, the court looked

beyond the district court’s “inadverten[t]” reference to

§ 1447(c) and accepted appellate review when it was

2 The language of 1447(c) has changed since Thermtron. The

current section involves remands based on either a defect in removal

procedure or lack of subject-matter jurisdiction, while the prior

statute, amended in 1988, involved remand for cases removed “im-

providently and without jurisdiction.” See Judicial Improvements

Act of 1988, Pub. L. No. 100-702, § 1009(c), 1988 U.S.C.C.A.N.

(102 Stat.) 4642, 4670.

Pe ae

7

unclear whether the district court’s actual basis for re-

mand was lack of subject-matter jurisdiction. /d. at

1452-53.

The key issue in these cases is ambiguity, rather than

error. It is beyond dispute, as the Fourth Circuit correctly

noted, that where a district court unambiguously bases its

remand decision upon § 1447(c) an appellate court has

no jurisdiction to review the order, even if it is “mani-

festly, inarguably erroneous.” Mangold, 77 F.3d at 1450

(citing Gravitt v. Southwestern Bell Tel. Co., 430 U.S.

723 (1977) (per curiam) ); see also Briscoe v. Bell, 432

U.S. 404, 414 n.13 (1977). In both Mangold and the

present case, however, the district courts explicitly based

their decisions to remand on 28 U.S.C. § 1367(c), which,

under Thermtron, made them reviewable. Only after

emphasizing the discretionary nature of their orders did

the two district courts refer to § 1447(c). Those allusions

to § 1447(c) not only were clearly erroneous on the

merits (which was, by itself, unreviewable), they did not

constitute the actual basis of the district courts’ decisions.

The question of whether such ambiguity is reviewable is

posed by the conflict between Mangold and this case.

The Fifth Circuit’s view of this corollary to the Therm-

tron rule can produce absurd results, as the present case

demonstrates. With the exception of one reference to

§ 1447(c) at the end of its 43-page opinion (App. 52a),

the district court’s initial remand order was based entirely

on the premise that removal of the case was proper and

that the court had jurisdiction (pursuant to MDC’s right

to remove under § 1442(a)). App. 39a. This was so

clear to the district court that it did not deem it necessary

to decide Grumman’s allegation of federal jurisdiction

based on diversity of citizenship. Indeed, the court itself

noted that the question before it was whether, pursuant

to 28 U.S.C. § 1367, it had discretion to remand the re-

mainder of the case if MDC was dismissed. /d. at 34a-

35a. In the final section of the Opinion, entitled “Discre-

tionary Jurisdiction,” the court stated that it would

“decline[] to exercise continued jurisdiction over the non-

federal elements of this case.” /d. at 52a (emphasis

added). It was in this “Discretionary Jurisdiction” sec-

tion where the district court also made its unaccountable

reference to § 1447(c). Id. at 51la-52a.

Despite the district court’s clear basis for its holding in

§ 1367, the Fifth Circuit remanded for clarification as to

the grounds for the district court’s order. App. 16a. Tak-

ing this hint from the Court of Appeals, the district court

then found that MDC had not filed a proper notice of re-

moval in the first instance. 7d. at 10a. Without providing

the parties an opportunity to brief the issues, the Fifth

Circuit affirmed. /d. at la-3a.

The facts of the district court’s initial remand order in

the present case are strikingly similar to those of the re-

mand in Mangold, but the conclusion drawn by the Fourth

Circuit was precisely the opposite of that reached by the

Fifth Circuit. Mangold involved an action filed in Vir-

ginia State court against a government contractor, Ana-

lytic Services, Inc. (““ANSER”), and an Air Force official

(“Rooney”), for emotional distress and reputational in-

jury that allegedly arose out of an investigation into

charges of misconduct by Colonel Mangold. Mangold,

77 F.3d at 1444. Defendant Rooney removed the case

to federal court, and the United States was substituted as

a defendant for him under the Federal Tort Claims Act.

At the outset of a hearing on defendants’ motions for

summary judgment, plaintiffs revealed that they had vol-

untarily dismissed the United States as a defendant. /d.

at 1451. Finding that there was no federal question

remaining, the judge inquired: “Then there is no longer

any basis for federal jurisdiction to this, is there?” /d.

Counsel for ANSER suggested that it was “appropriate”

for the court to “retain[] jurisdiction based upon the asser-

tion by the private defendants of a Federal-immunity de-

fense.” Id. The district court, noting that it was “purely

9

discretionary with the Court whether to hold on to the

case in the posture that it presently is in,” asked counsel

to proceed to the merits of the immunity claims. /d. (em-

phasis in original). The district court’s subsequent written

order denied defendants’ immunity claim and found that

“a determination of whether defendants have met [the

state law evidentiary privilege] standard is better left to a

Virginia tribunal.” Jd. at 1452. The district court then

incongruously—and extraneously—ordered remand “pur-

suant to 28 U.S.C. § 1447(c).” Id.

The Fourth Circuit took up the jurisdictional issue sua

sponte and found that, the district court’s invocation of

§ 1447(c) notwithstanding, the court of appeals had juris-

diction to consider the remand order. The court deter-

mined that there is an important distinction between cases

in which § 1447(c) is the actual ground invoked and

those in which the district court bases its remand on other

authority but nevertheless references § 1447(c):

[Powerful policy considerations and persuasive deci-

sional authority support our power—and responsibil-

ity—to look past contextually ambiguous allusions

and even specific citations to § 1447(c) to determine

by independent review of the record the actual

grounds or basis upon which the district court con-

sidered it was empowered to remand. First, it must

be the case, as some courts have had the occasion to

recognize, that neither the citation of § 1447(c) nor

the failure to cite it as presumed authority for a

remand is conclusive of the real question: whether

one of its two grounds is the actual basis being

invoked as authority for remand. If a review of the

record discloses to a reviewing court’s satisfaction

that, notwithstanding any indications to the contrary,

the actual basis upon which the court thought it

was empowered to remand was neither of these,

§ 1447(d) does not bar review.

Id. at 1450 (citations omitted) (emphasis added and in

original).

10

This argument could be equally applied to the district

court’s initial remand order in this case. As the Fifth

Circuit concluded, “[a]lthough the body of the opinion

clearly indicates that the district court assumed that it

had jurisdiction over the case and that it remanded the

remaining state law claims pursuant to its discretionary

authority, the district court states at the end of its opinion

that it was remanding the case pursuant to 28 U.S.C.

§ 1447(c).” App. 15a. Unlike the Mangold court, how-

ever, the Fifth Circuit chose to handle this ambiguity (in

language) by giving the district court another opportunity

for error and almost openly suggesting to the district court

that it base its second decision on § 1447(c). TId. at

15a-16a (“If the district court determines that McDonnell

Douglas was unable to remove the case to federal court,

the district court does not have jurisdiction over the case

and the remand order is unreviewable by this court.”).

While this Court established in Gravitt that an appellate

court must tolerate even clearly erroneous decisions based

on § 1447(c), nothing in Gravitt or its progeny suggests

that the district court should be given a second oppor-

tunity for error when its first decision is (at best) ambigu-

ous. Indeed, the Gravitt rule is already stretched to its

logical limits. As Justice Ginsburg recently reiterated, it

“ ‘makes little sense’ to rest reviewability vel non on the

tag the trial court elects to place on its ruling.” Things

Remembered, Inc. v. Petrarca, 116 §. Ct. 494, 500

(1995) (Ginsburg, J., concurring) (quoting Sykes v.

Texas Air Corp., 834 F.2d 488, 492 (Sth Cir. 1987)).

Although it is true, as Judge Gee lamented, that review-

ability often turns on an “incantation” of § 1447(c) by

the district court, Sykes, 834 F.2d at 492, ignoring the

explicit and actual grounds of the remand order in the

face of an ambiguous “incantation” simply pushes the

Gravitt principle too far.

Important federal interests are at stake in this case, and

Grumman has attempted to exercise its right to have such

cm a ee

11

claims heard in federal court. Indeed, Grumman pre-

sented to the district court not only a “colorable” claim

to a federal defense (which is all that is required for

removal under 28 U.S.C. § 1442(a), Willingham v.

Morgan, 395 U.S. 402, 406-07 (1969)), but, as the

discussion in Section II infra demonstrates, Grumman pre-

sented a clearly meritorious claim that it is covered by

the government contractor defense. The district court

improperly abrogated that right, and the Fifth Circuit

declined to review that decision based on the slimmest

connection to the Thermtron rule: a single, ambiguous

invocation of § 1447(c). This case is an appropriate

vehicle for this Court to consider the proper application

of Thermtron and to resolve the conflict on this important

issue between the Fifth and Fourth Circuits.

II. DENIAL OF GRUMMAN’S REMOVAL UNDER 28

U.S.C. §1442(a) IMPROPERLY LIMITED APPLI-

CATION OF THE GOVERNMENT CONTRACTOR

DEFENSE AND ERRONEOUSLY EXCLUDED A

FEDERAL CONTRACTOR FROM FEDERAL

COURT.

Two important and recurring issues are raised by the

lower court’s remand order, both involving the scope and

application of the “government contractor defense,” as

delineated by this Court in Boyle v. United Technologies

Corp., 487 U.S. 500 (1988). The district court denied

Grumman, a military service contractor, the opportunity

to have its federal issues—those arising out of its contract

with the United States—adjudicated in federal court. This

erroneous decision (which was left unreviewed by the

Fifth Circuit) raises the underlying issues of whether, as

the district court suggests, the government contractor de-

fense is limited exclusively to procurement contracts and

whether “independent contractors” are barred from invok-

ing such a defense. Such a cramped reading of Boyle

cannot be justified by the language or the logic of this

Court’s decision. The present case provides this Court

12

with the opportunity to make clear that Boyle applies to

government service providers such as Grumman and that

such providers are entitled to federal jurisdiction under

28 U.S.C. § 1442(a).

As this Court has noted, “one of the most important

reasons for removal is to have the validity of the defense

of official immunity tried in a federal court.” Willingham

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

Officer Removal Statute guarantees a federal forum both

to officers (or agencies) of the United States, and to per-

sons acting under such officers, for “any act under color

of such office.” 28 U.S.C. § 1442(a)(1). This Court has

stated that § 1442(a)(1) should not be given a “narrow,

grudging interpretation.” Willingham, 395 U.S. at 407.

It is well-established that a defendant may remove under

§ 1442(a)(1) upon establishing: (1) that it is a “per-

son”; (2) that it was acting under the direction of a

federal officer; (3) that it has raised a colorable claim

to a federal defense; and (4) that a causal nexus exists

between the plaintiff's allegations and the acts performed

under federal authority. Mesa v. California, 489 US.

121, 124-34 (1989). As a corporation that contracted to

provide services to the United States, Grumman meets

each of these tests.

1. As the district court noted, there is a split of au-

thority regarding whether corporations may be considered

“persons” under § 1442(a). See App. 40a-4la (citing

cases). This Court held in /nternational Primate Protec-

tion League v. Administrators of Tulane Educational

Fund, 500 U.S. 72 (1991), that the word “persons” in

§ 1442(a) does not apply to federal agencies, but the

Court left open the question of whether the statute applies

to corporations. The district court, and the better rea-

soned opinions, have found that a corporation is a “per-

son” for purposes of the removal statute, because the logic

of International Primate does not apply to private corpora-

tions. See App. 42a; Ryan v. Dow Chem. Co., 781

13

F. Supp. 934, 946 (E.D.N.Y. 1992) (including corpora-

tions within the definition of “person” makes the most

sense “in light of the purpose of the section read as a

whole”); Peterson v. Blue Cross/Blue Shield of Texas,

508 F.2d 55, 57 (5th Cir.) (implicitly recognizing that

corporations are “persons” under the statute), cert. denied,

422 U.S. 1043 (1975). Moreover, 1 U.S.C. § 1 provides

that the word “person” includes corporations when used

in a federal statute, “unless the context indicates other-

wise.”

2. The district court also properly held (or at least

assumed), that Grumman acted “under the direction of

an officer of the United States,” and that, in “a general

sense, the defendants’ activities on the base were under

the direction of the federal government.” App. 42a.

There is little doubt that an entity whose work was con-

trolled by volumes of detailed, step-by-step specifications

and overseen by a Navy officer “acted under” a federal

Official. See Ryan, 781 F. Supp. at 947.

3. The district court erred, however, in concluding

that Grumman did not raise even a colorable claim to a

government contractor defense under Boyle. This error

presents this Court with an opportunity to clarify several

important points about the application of the government

contractor defense that have caused confusion in lower

courts.

First, the district court and others have mistakenly at-

tempted to distinguish the government contractor defense,

established in Boyle, from the government agency defense,

established in Yearsley v. W.A. Ross Construction Co.,

309 U.S. 18 (1940). The district court found that Boyle

could not “by implication be extended to providers of

services to the military,” because the government con-

tractor defense applies only to product manufacturers.

App. 46a; see also In re Hawaii Federal Asbestos Cases,

960 F.2d 806, 810-12 (9th Cir. 1992) (holding that

Boyle defense applies only to contractors supplying the

military with equipment); Amtreco, Inc. v. O.H. Mate-

14

rials, Inc., 802 F. Supp. 443, 445 (M.D. Ga. 1992)

(finding “no authority” to support the claim that the gov-

ernment contractor defense applies to service providers).

This is clearly wrong. Despite the district and Amtreco

courts’ professed inability to identify authority on this

point (App. 46a; 802 F. Supp. at 445), many courts have

found no distinction between the government contractor

defense and the government agency defense. See, e.g.,

Beaver Valley Power Co. v. National Eng’g and Contract-

ing Co., 883 F.2d 1210, 1215 n.4 (3d Cir. 1989) (find-

ing no doctrinal distinction between the “government

contractor defense” and the “government agency de-

fense”); Guillory v. Ree’s Contract Serv., Inc., 872

F. Supp. 344, 346 (S.D. Miss. 1994) (applying the Boyle

defense to performance contracts); Richland-Lexington

Airport Dist. v. Atlas Properties, Inc., 854 F. Supp. 400,

422-23 (D.S.C. 1994) (applying Boyle to service con-

tracts); Lamb v. Martin Marietta Energy Systems, Inc.,

835 F. Supp. 959, 966 n.7 (W.D. Ky. 1993) (finding no

reason to limit Boyle to procurement contracts since Boyle

itself was based on Yearsley, which concerned a contrac-

tor’s construction and other performance of work on dams

for the government); Crawford v. National Lead Co., 784

F. Supp. 439, 445 n.7 (S.D. Ohio 1989) (“Although the

Boyle court discussed the government contractor defense

within the context of a procurement contract, the defense

is viable with regard to performance contracts.”). These

courts have correctly reasoned that the dispositive issue

should be whether there was a “uniquely federal interest

in the subject matter of the contract,” not whether a

procurement or performance contract is involved. See

Richland-Lexington Airport, 854 F. Supp. at 422.

Moreover, this Court itself has found that the govern-

ment contractor defense is not limited to product manu-

facturers. As the Boyle majority noted, “the federal in-

terest justifying this holding surely exists as much in pro-

curement contracts as in performance contracts; we see

no basis for a distinction.” 487 U.S. at 506. This Court

15

should use this case to reiterate that there is no distinction

between the Boyle “government contractor” defense and

the Yearsley “government agency” defense.

Second, the district court’s holding that Grumman was

not entitled to a federal defense because it was acting as

an “independent contractor,” App. 49a-51a, was erroneous.

The district court relied on Shaw v. Grumman Aerospace

Corp., 778 F.2d 736, 740 (11th Cir. 1985), cert. denied,

487 U.S. 1233 (1988), in concluding that the Boyle/

Yearsley defense is inapplicable to independent contrac-

tors. Id. at 47a.. This Court has sharply criticized the

Eleventh Circuit’s formulation of the government contrac-

tor defense, Boyle, 487 U.S. at 513, and other courts have

found—contrary to Shaw—that Boyle eliminated the dis-

tinction between “agents of the United States” and “inde-

pendent contractors.” See, e.g., Carley v. Wheeled Coach,

991 F.2d 1117, 1120 (3d Cir.), cert. denied, 114 S. Ct.

191 (1993).° This Court should use this case to explain

that in examining the government contractor defense, the

Shaw independent contractor analysis is unnecessary and

unwarranted.

Third, even if the independent contractor analysis is

proper, a contractor as closely supervised by the military

as Grumman would clearly meet the criteria for agency.

As the district court itself correctly noted, this Court’s test

for whether an individual or entity is an “independent

contractor” is “‘whether its day-to-day operations are

supervised by the Federal Government.’” App. 49a

(quoting United States v. Orleans, 425 U.S. 807, 815

(1976)). The contracts between Grumman and the

United States imposed precise specifications directing

every facet of contractor conduct at Meridian NAS, from

the clothes Grumman employees would wear (R. G37),

to how often the waste baskets would be emptied (R.

*The Eleventh Circuit itself has recognized the abrogation of

Shaw. Harduvel v. General Dynamics Corp., 878 F.2d 1811, 1316

(11th Cir. 1989), cert. denied, 494 U.S. 1030 (1990).

16

G77). The contracts described execthy whet the conae-

tors were required to do, specified the record-keeping and

reporting required of them, and identified the Navy and

Department of Defense forms they were required to pre-

pare and submit. (R. G77-83). Every maintenance pro-

cedure—every turn of the wrench—was described in

voluminous maintenance documents provided to Grumman

by the Navy and incorporated into its contract. (R. G49

and R. G128-134). The district court does not explain

why a contractor subject to such comprehensive govern-

ment oversight does not meet the Orleans test.

The district court’s several errors on this point were

compounded by the misapplication of the low standard

required for removal under 28 U.S.C. § 1442(a)(1).

Under that statute, removal is not contingent upon estab-

lishing a federal defense on the merits. Rather, those seek-

ing to invoke § 1442(a)(1) removal must raise only a

“colorable” claim to a federal defense. Willingham, 395

U.S. at 406-07; see also Mesa, 489 U.S. at 132-33. There

is simply no doubt that Grumman established at least

a “colorable” claim to a government contractor defense.

4. The final prong of the Mesa test was satisfied in

this case because a causal nexus exists between the claims

asserted by the Ishees and the acts performed by Grumman

under color of federal office. Mesa, 489 U.S. at 131-32.

As this Court has instructed, a defendant’s mere presence

at the place of his federal employment is sufficient to

satisfy the causal nexus requirement when the claims as-

serted against the officer arise out of that employment.

See Willingham, 395 U.S. at 409 (finding the required

“causal connection” where petitioners had shown that their

only contact with respondent occurred while they were

performing their duties).

It is undisputed that the claims asserted against Grum-

man all relate to the contractual duties owed to the United

States government. The causal nexus prong of the Mesa

17

test fhus was satished, and the district court's conclusion

that no causal nexus existed, App. 5la, was clearly

erroneous.

The district court’s determination that providers of serv-

ices to the military such as Grumman are not covered by

the government contractor defense constitutes a serious

misinterpretation of this Court’s holdings in Boyle and

Yearsley. Furthermore, the district court’s decision barred

the door of federal court to a military contractor with

important federal rights at stake. This Court should re-

verse this erroneous decision and establish clearly that the

government contractor defense is to be applied, in federal

court, to military service contractors.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

THOMAS C. GERITY L. JOSEPH LOVELAND

COPELAND, CooK, TAYLOR JAMES D. MILLER *

& BusH, P.A. MATTHEW L. BENNCTT

Suite 1700 Capital Towers KING & SPALDING

Jackson, MS 39225-2132 1730 Pennsylvania Ave., N.W.

(601) 354-0123 Washington, D.C. 20006

FRANK J. CHIARCHIARO. (202) 737-0500

THOMAS R. PANTINO Attorneys for Petitioner

MENDES & Mount, LLP Grumman Technical Services,

750 Seventh Avenue Ine.

New York, NY 10019-6829

* Counsel of Record

(212) 261-8750 ee ee

Dated: July 11, 1996