Petition for Writ of Certiorari — Dow Chemical Co. v. Brown

Supreme Court brief1992

Ask Donna

What actually matters in this document.

Text

Supreme Court, U.S.

ILED

92-438 SEP 1992

In the Supreme Court of the United States

OCTOBER TERM, 1992

THE DOW CHEMICAL COMPANY, et al.,

Petitioners,

-against-

CHARLES BROWN and JAMES WHITE,

Respondents.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR WRIT OF CERTIORARI

LEONARD L. RIVKIN

(Counsel of Record)

STEVEN BROCK

RIVKIN, RADLER & KREMER

EAB Plaza

Uniondale, New York 11556-0111

(516) 357-3000

Attorneys for Petitioners

The Dow Chemical Company, Diamond Shamrock

Chemicals Company, Hercules Incorporated,

Monsanto Company, T. H. Agriculture

and Nutrition Company, Inc., Uniroyal, Inc.

Attorney Information Continues on Inside Front Cover

Virgil Mountain, Inc. (212) 779-4046 L2140

Of Counsel:

CADWALADER, WICKERSHAM & TAFT

Attorneys for Petitioner

Diamond Shamrock Chemicals Company

100 Maiden Lane

New York, New York 10038

(212) 504-6000

KELLEY, DRYE & WARREN

Attorneys for Petitioner

Hercules Incorporated

101 Park Avenue

New York, New York 10178

(212) 808-7800

LORD DAY & LORD, BARRETT SMITH

Attorneys for Petitioner

Monsanto Company

1675 Broadway

New York, New York 10038

(212) 969-6000

CLARK, GAGLIARDI & MILLER

Attorneys for Petitioner

T. H. Agriculture & Nutrition Company, Inc.

99 Court Street

White Plains, New York 10601

(914) 946-8900

SHEA & GOULD

Attorneys for Petitioner

Uniroyal, Inc.

1251 Avenue of the Americas

New York, New York 10020

(212) 827-3000

QUESTIONS PRESENTED

1. Whether appellate review of a stayed remand

order is proper under Carnegie-Mellon v. Cohill,

where the district court did not find a complete lack

of subject matter jurisdiction initially and remanded

only a small part of the case originally removed, con-

sistent with § 1447(d), which generally bars appellate

review of an order remanding a case which was

removed without subject matter jurisdiction?

2. Whether, when a district court has certified a

remand order for appeal pursuant to § 1292(b), any

conflict between the grant of appellate jurisdiction in

§ 1292(b) and the denial of appellate jurisdiction in

§ 1447(d) should be resolved by permitting § 1292(b)

review of remand orders, so as to achieve Congress’

purpose in enacting both statutes: avoiding delay in

litigation?

3. Whether those remand orders which are

reviewable consistent with § 1447(d) are properly

reviewed by certification pursuant to § 1292(b), by

appeal under the collateral order doctrine, or by

mandamus?

this page

intentionally

left blank

PARTIES BELOW

The parties to the proceeding below, as required

by Supreme Court Rules 14.1(b) and 29.1 are listed in

the following footnote.!

'Charles Brown and James White, individually and as rep-

resentative of the Estate of Clarence White, respondents.

The Dow Chemical Company, petitioner. The parent

companies and subsidiaries (except wholly owned sub-

sidiaries) of the Dow Chemical Company are as follows:

Marion Merrell Dow, Inc., Gruppo Lepetit S.p.A.,

Destec Energy, Inc.

Diamond Shamrock Chemicals Company, petitioner. The

parent companies and subsidiaries (except wholly owned sub-

sidiaries) of Diamond Shamrock Chemicals Company are:

Oxy-Diamond Alkali Corporation, Occidental

Chemical Corporation, Occidental Petroleum Corpo-

ration.

Hercules Incorporated, petitioner. The parent companies and

subsidiaries (except wholly owned subsidiaries) of Hercules

Incorporated are:

Australian Chemical Holdings Limited

Monsanto Company, petitioner. The parent companies and

subsidiaries (except wholly owned subsidiaries) of Monsanto

Company are:

Sourthwall Technologies, Inc., Macneil-Schwendler

Corp., Micro General Corp., WEITEK Corporation,

Dara Pharmaceutical, Gensia Pharmaceuticals,

Biotechnology Development Corporation.

T. H. Agriculture & Nutrition Company, Inc., petitioner. The

parent companies and subsidiaries (except wholly owned sub-

sidiaries) of T. H. Agriculture & Nutrition Company are as

follows:

North American Philips Corporation

Uniroyal, Inc., a corporation dissolved pursuant to the laws of

the State of New Jersey, petitioner. The parent companies

and subsidiaries (except wholly owned subsidiaries) of

Uniroyal, Inc. are as follows:

CDU Holdings, Inc.

TABLE OF CONTENTS

PAGE

oP INNO Sis ossiesicssticcicccssarcccacutptanadannoceeem comeueseian 2

PIU sxctiisvicacsdsicks ccaraidlannesy coca cial eeeeaores 3

I I Da issi cactictiessencsecsansavscss rosea 3

RINE GE TOUR GB ivinivciecSeritccnecsemirnuee 4

I. THE COURTS OF APPEALS ARE IN

CONFLICT AS TO THE SCOPE OF

THE THERMTRON AND CARNEGIE-

MELLON EXCEPTIONS TO § 1447(d)...........::0000. 8

Il. THE GRANT OF APPELLATE

JURISDICTION IN § 1292(b) OVER-

Fe Te IN oti bistaccbuncabnvinetsadescscincncnsteabsieiekiu 17

Ill. THE COURTS OF APPEALS ARE IN

CONFLICT AS TO THE PROPER PRO-

CEDURE FOR APPELLATE REVIEW................ 21

RAO icccskansascnrsncopioerineencsacnieantnsecinia Sawer demaaomans 26

TABLE OF AUTHORITIES

PAGE

In re “Agent Orange” Prod. Liab. Litig., 818

F.2d 145 (2d Cir.1987), cert. denied sub

nom. Pinkney v. Dow Chemical Co., 484

Saie U OEE -isccdnnscecimidcadensiadsaliasediaeenbnidipticasecseatcats. 4

TABLE OF AUTHORITIES

PAGE

Amoco Petroleum Additives Co., 964 F.2d 706

SN i BPP ncacesiiicncsatcvnnncananspoonenee 9, 11, la, 1%, 21,

In re Bear River Drainage Dist., 267 F.2d 849

I 0 ocx oexnaitassaiainnssnqsicinioonniayiaiahannbencanbts 18

Bennett v. Liberty Nat'l Fire Ins. Co., 1992 WL

PROS CEN CAP. July 6, BFGZ) wvesscsnsinrcissnrversssscesssseess 22

Bregman v. Alderman, 955 F.2d 660 (11th

PD vas oxadnnsschpinsshansetetobasncandceneasbacieatnaakesiacunsshsentiven 15

Calderon v. Aerovias Nacionales de Colombia,

EP FO FOF CER Ce TO GD) osvscssssesscesissceenccaseniesne a AS

Carnegie-Mellon University v. Cohill, 484 U.S.

BID, sss ics Pans shinitiatebaaniaa coceknieiauianesmimen 8, 10, 14

In re Carter, 618 F.2d 1093 (5th Cir.1980), cert.

denied sub nom. Sheet Metal Workers’ Int'l

Ass'n v. Carter, 450 U.S. 949 (1961).............sssccseeeees 16

Cawley v. United States, 272 F.2d 443 (2d

I iissscch scot ssi ocscanices\anciehateececaumtoncteneansaeaneniasooa assis 20

Chappell & Co. v. Frankel, 367 F.2d 197 (2d

RIN claicaicosnisehasdashecthecielons Shipuna tps ctnnstecncassmaktxioengicocs 19

Clorox “o. v. U.S. Dist. Court for the N.

Di-iric’ of California, 779 F.2d 517 (9th

SR INE chini ssn sania eicneabianicban sabia eenshascakehemandeahinesuhteiien 22

TABLE OF AUTHORITIES

Connecticut Nat'l Bank v. Germain, 112 S. Ct.

RA EE ibe) ets supiceniaraneis ibaeapianadiacecucuandapnascnen

Corcoran v. Ardra Ins. Co., Ltd., 842 F.2d 31

GE Nt BET consphinrceucnrnencecdioaantcthekenmeaunnnchanenies

Foster v. Chesapeake Ins. Co., 933 F.2d 1207

(3d Cir.1991) cert. denied, 112 S. Ct. 302..........

Freeport-McMoRan, Inc. v. K N Energy, Inc.,

BES he Site MR siiesrcichanncledvaniehiiiiccneniinensntabis

Gravitt v. Southwestern Bell Telephone Co., 430

Aa Fae TET Bittndasandsninsuniabicinrblacaniiedaleteinibenin

Hays County Guardian v. Supple, 1992 U.5.

App. Lexis 18167 (5th Cir. August 10,

BPR ss teninnkciien ence ceetcsabseeaibceaacbncailiatinaninadainiddaidans

In re International Paper Co., ___F.2d___,

1992 WL 100487 (5th Cir. June 1, 1992).........

Karl Koch Erecting Co. Inc. v. New York

Convention Ctr. Dev. Corp., 838 F.2d 656

CRU SA MINN vastananisciddadansccsenenurth, ets Uheennaseck erences

In re Kolibash, CA No. 2:87-0444 (S.D. W. Va.

EARNS C RT URCEN, Oe re ON

Kolibash v. Committee on Legal Ethics of the

West Virginia Bar, 872 F.2d 571 (4th Cir.

TABLE OF AUTHORITIES

Krangel v. General Dynamics Corp., 1992 WL

148151 (9th Cir. Juiy 1, 1992) (per curiam)........ 18, 19

Lauro Lines s.l.r. v. Chasser, 490 U.S. 495

CI ves casvcsstdcivccnecnswanacentaspeckaenenspaessaninpnsacpaniicetacseonsunee 24

Massachusetts v. V & M Management, Inc.,

929 F.2d 830 (1st Cir.1991)........ssesrereeseseoees 10, 11, 23

McDermott Int'l, Inc. v. Lloyds Underwriters

of London, 944 F.2d 1199 (5th Cir.1991)...... yy Me eB

Melahn v. Pennock Ins. Co., 965 F.2d 1497

er ea eeaanedasainerineesmionaier 23

Milk ‘n’ More, Inc. v. Beavert, 963 F.2d 1342

PE Rie et D ccacacednacntaccarsustarssersnsabaaisserpsvaiiesioonsn 22, 24

Moses H. Cone Memorial Hosp. v. Mercury

Const. Corp., 460 U.S. 1 (1983)..........sssseeeeeeees Zi, az

National Audubon Soc’y v. Department of

Waiter, 869 F.2d 1196 (9th Cir.1988)........:.::cceeeceees 18

Pelleport Investors, Inc. v. Budco Quality

Theatres, Inc., 741 F.2d 273 (9th Cir.1984) ........ 21,25

Railroad Co. v. Wiswall, 90 U.S. 507 (1875) .........seee 22

Regis Associates v. Rank Hotels (Management)

Ltd., 894 F.2d 193 (6th Cir. 1990).........:cceeeeseeeesees 22

Rosado v. Wyman, 397 U.S. 397 (1970) «0... ecreeeceees 10

TABLE OF AUTHORITIES

PAGE

In re Shell Oil Co., 966 F.2d 1130 (7th Cir.

| See Ee pee nER EL cone aN ate LAC 9,11, 14

St. Paul Mercury Indem. Co. v. Red Cab Co.,

Ae a OR ictinemaiorrhcroriaciaaihaspicdldenipnstoiues 10

In re TMI Litig. Cases Consol. II, 940 F.2d 832

(3d Cir.1991), Cert. denied sub nom.

Gumby v. General Pub. Util. Corp., 112 S.

SL _ : SE een ET 16, 17, 18, 21, 24

Thermtron Products, Inc. v. Hermansdorfer,

SEF he NP ocacictenrasecnirienes 8, 11, 13, 20, 21, 22

Willingham v. Morgan, 395 U.S. 402 (1969)... 17

Statutes Cited

AE Or eI css ccnexechecksvtasiosrencihsuucarieihiaimciapeennneiels 19

ee Ses Mean cera seoprtiss ti ransacsinabnsonessdcxcusrakaccess oe estan 19

Be re ae RN aanesere th seoeeres steered ks eased aeons 3

ee Ce vic ecsistec eth inisielanssiaaccantearcnlinesionsves passim

ee I ch scesael iconsesnsisbicslinaiicaaeininauhsnunisaotanapiccceeatianss 4

ee Oe I iris si senscuestecaininge easseneninaseiccapeannsuenpecnaese passim

ss Oe TE oars esses ipeatacsctndaendoatenimmnaness passim

TABLE OF AUTHORITIES

PAGE

Statutes Cited, Cont’d

28 U.S.C. § 1447(d).....cccccccssecseeteenteeteenseeeneseeeeeeeeeees passim

28 U.S.C. § 1452(b).........sscssesessesessesseeensnsenssnsnssteeneenenes 13

APPENDIX

PAGE

Appendix A—Order of the United States

Court of Appeals for the Second Circuit

Dated May 8, 1992 .........:sseseseseseeeseeteeessessetsssenenenenens Al

Appendix B—Order of the United States

Court of Appeals for the Second Circuit

Dated June 8, 1992............csecsscrsessesnsesesresseneseeeees A4

Appendix C—Order of the United States

Court of Appeals for the Second Circuit

Dated June 16, 1992.............c:seeees sinidcelcahdahibetcandooninibans A7

Appendix D—Memorandum and Order of

the United States District Court for the

Eastern District of New York Dated

Darcy 30, 1GB2 ....arcccessesessssesssccsssrssnsssescsnesesenssensanes A10

Appendix E—Memorandum and Order of

the United States District Court for the

Eastern District of New York Dated

February 7, 1992..........:sscseseenesesesensnsnssesessenensnenenees Al2

APPENDIX

PAGE

Appendix F—Memorandum and Order of

Remand of the United States District

Court for the Eastern District of New

YORK Dates FORAY ZO, TORE ose cccnsccscveccisssesecssneses

Appendix G—Memorandum and Order of

the United States District Court for the

Eastern District of New York Dated

October 4, 1991 as Amended November

Scdiy: FaFI D Acensssenntnuinnsioninsannbiatesntasiligaciabnabianinaabindninauns

Appendix H—Sections 1292(b), 1447(c) and

1447(d) of Title 28 of the United States

. Al4

this page

intentionally

left blank

No. 92-

In The

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1992

THE DOW CHEMICAL COMPANY, et al.,

Petitioners.

Vv.

CHARLES BROWN and JAMES WHITE,

Respondents.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Petitioners The Dow Chemical Company, Dia-

mond Shamrock Chemicals Company, Hercules

Incorporated, Monsanto Company, T. H. Agriculture

and Nutrition Company, Inc. and Uniroyal, Inc. re-

- spectfully pray that a writ of certiorari issue to review

the judgments of the United States Court of Appeals

for the Second Circuit entered in Ryan v. Dow

Chemical Co. on June 8, 1992 and Ivy v. Diamond

Shamrock Chemicals Co. on June 16, 1992.

OPINIONS BELOW

The order of the court of appeals filed May 8, 1992

denying petitioners’ petition for permission to appeal

pursuant to 28 U.S.C. § 1292(b) is reprinted in the

Appendix at Al.

The order of the court of appeals filed June 8, 1992

denying petitioners’ motion for reargument and

recall and modification of mandate regarding the

court’s May 8, 1992 order is reprinted in the

Appendix at A4.

The order of the court of appeals filed June 16,

1992 granting respondent Brown’s motion to dismiss

petitioners’ appeal is reprinted in the Appendix at

A7.

The order of the district court dated March 30,

1992 adhering to its January 29, 1992 decision follow-

ing reargument is reprinted in the Appendix at A10.

The order of the district court dated February 7,

1992 deferring certification pending reargument of its

January 29, 1992 decision is reprinted in the

Appendix at A12.

The order of the district court dated January 29,

1992 remanding respondents’ claims, staying

remand, and certifying the order for immediate

appeal pursuant to § 1292(b) is published at 781

F.Supp. 934 (E.D.N.Y.1992) and is reprinted in the

Appendix at Al14.

The order of the district court dated October 4,

1991, as amended November 15, 1991, finding federal

jurisdiction over plaintiffs who were members of a

previously certified class and dismissing their claims

and severing the claims of respondents is published

at 781 F.Supp. 902 (E.D.N.Y.1991) and is reprinted in

the Appendix at A58.

JURISDICTION

The order of the court of appeals denying peti-

tioners’ petition for permission to appeal pursuant to

28 U.S.C. § 1292(b) was entered on May 8, 1992. The

order of the court of appeals denying petitioners’

motion for reargument and recall and modification

of mandate of the court’s May 8, 1992 order was

entered on June 8, 1992. The order of the court of

appeals granting respondent Brown’s motion to dis-

miss petitioners’ appeal was entered on June 16, 1992.

The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1).

STATUTES AND RULES

Section 1292(b) of Title 28 of the United States

Code appears in the Appendix at A149.

Sections 1447(c) and (d) of Title 28 of the United

States Code appear in the Appendix at A149-150.

STATEMENT OF THE CASE

In May 1989, thirty-four plaintiffs sued petitioners

in Texas state court, alleging damages resulting from

the government's use of the herbicide Agent Orange

for defoliation of jungle vegetation to protect troops

from hostile forces during the Vietnam War. Peti-

tioners are herbicide manufacturers who supplied

Agent Orange to the government. Petitioners re-

moved the case to federal court. Like hundreds of

earlier such cases filed throughout the country since

1979, the case was then transferred to the Eastern

District of New York for coordinated or consolidated

pretrial proceedings pursuant to 28 U.S.C. § 1407 as

part of M.D.L. No. 381.

During earlier proceedings in M.D.L. 381 in 1984,

petitioners entered into a settlement with a class of

plaintiff veterans and family members (the “Agent

Orange class”). The United States Court of Appeals

for the Second Circuit affirmed the fairness of the set-

tlement, characterizing it as “essentially a payment of

nuisance value” that was fair because “the plaintiffs’

case was so weak as to be virtually baseless.” In re

“Agent Orange” Prod. Liab. Litig., 818 F.2d 145, 151 (2d

Cir.1987), cert. denied sub nom. Pinkey v. Dow

Chemical Co., 484 U.S. 1004 (1988). See A61-85

(history of Agent Orange litigation). All but two of

the thirty-four original plaintiffs in the present litiga-

tion were veterans and their family members (the

“veteran plaintiffs”) and thus were part of the Agent

Orange class. The remaining two plaintiffs were

civilians and so were not members of the Agent

Orange class. These two plaintiffs are the respondents

here (the “civilian respondents”).

Plaintiffs moved to remand to state court. On

October 4, 1991, the District Court found federal sub-

ject matter jurisdiction over the veteran plaintiffs

and denied their motion to remand. A85-96..

Characterizing the suit as “a direct challenge to the

validity of the settlement and the programs now

financed by the Settlement Fund,” Id. at A78-79, the

court dismissed the veteran plaintiffs’ claims on

grounds that they were members of the Agent

Orange class and so were bound by the prior settle-

ment. Id. at A96. The veteran plaintiffs have ap-

pealed that decision to the Court of Appeals for the

Second Circuit. With respect to the civilian

respondents, the District Court stated:

The two civilian plaintiffs...are in a separate

category. They are not members of the class

and are therefore not bound by the Settlement

Agreement. Their cases are severed from the

claims of the remaining plaintiffs. The

question of the court’s jurisdiction over these

plaintiffs will be addressed in a separate

memorandum.

A86.

Petitioners opposed remand of the civilian re-

spondents on grounds that petitioners were “acting

under” federal officials, and so had a right to have

their federal defenses decided in a federal forum

under 28 U.S.C. § 1442(a)(1). In a second opinion

dated January 29, 1992, addressing remand of the

civilian respondents, the District Court acknowl-

edged that petitioners had been “compelled under

threat of criminal sanction to deliver Agent Orange

produced according to government specifications to

the Defense Department.” A49. The Court never-

theless concluded that, while it was a “close

question,” petitioners had “not met the requirements

of § 1442(a)(1).” A50. Since there was no other basis

for subject matter jurisdiction over respondents after

severance, the court remanded their actions to state

court. A56. Finding that its decision raised close and

important questions of law, and that an immediate

appeal might speed conclusion of the litigation, the

court certified its order for appeal under 28 U.S.C. §

1292(b). Id. The order of remand was stayed “pending

completion of appeals.” A57.

Relying on recent decisions of the courts of

appeals, the court decided that 28 U.S.C. § 1447(d) did

not bar appellate review by § 1292(b) certification of

its stayed remand order. A54. The Court explained

that lack of appellate review would be:

an unfortunate result given the closeness of

the case and the particular provision under

which removal is sought. 28 U.S.C. § 1442, after

all, is premised on the need for the federal

courts to protect federal interests from possible

state interference. In light of this concern, it

would be useful for the parties and the district

courts in this Circuit to have an authoritative

pronouncement from the Court of Appeals,

which has not yet had occasion to consider the

“person acting under” provisions of section

1442(a)(1).

A55. The court stressed that the certified question

“controls the extent of federal subject matter

jurisdiction in this and like cases where important

federal interests may be at stake.” A56. After

postponing certification to allow reargument, A12,

the District Court adhered to its prior decision in a

brief memorandum and order dated March 30, 1992.

A10.

Petitioners filed a timely petition for permission

to appeal pursuant to § 1292(b). In light of conflicting

authority regarding the proper avenue for review of

. remand orders, petitioners indicated in that petition

their intention to seek review by appeal and man-

damus, as well as by § 1292(b) certification. On May 8,

1992, the Court of Appeals for the Second Circuit

denied petitioners’ petition for permission to appeal,

Stating: “See Thermtron Products, Inc. v. Hermans-

dorfer, 423 U.S. 336, 343 (1976).” A3. Petitioners filed a

timely motion for reconsideration and for recall and

modification of mandate, which was denied on the

merits by an order entered June 8, 1992. A4.

Petitioners filed a notice of appeal dated April 29,

1992, intending to file a single brief both in support of

that appeal and, in the alternative, as a petition for a

writ of mandamus. Respondent Brown filed a

motion to dismiss the appeal, which the Court of

Appeals granted by order dated June 16, 1992. At oral

argument of the motion to dismiss, at which respon-

dents did not appear, members of the panel of the

Court of Appeals stated that mandamus would also

be denied and so a formal petition for mandamus

was not filed.

Petitioners ask the Court to review by writ of

certiorari whether there is appellate jurisdiction to

review the District Court’s stayed remand order con-

sistent with § 1447(d) and, if so, whether such juris-

diction is properly exercised by certification pursuant

to § 1292(b), appeal as a collateral order, or man-

damus. Upon a finding that appellate jurisdiction

exists, petitioners request that the Court remand to

the Court of Appeals for the Second Circuit for

further proceedings so that the underlying question

of subject matter jurisdiction under § 1442 may be

reviewed on the merits.

THE COURTS OF APPEALS ARE IN

CONFLICT AS TO THE SCOPE OF THE

THERMTRON AND CARNEGIE-MELLON

EXCEPTIONS TO §1447(d).

In denying petitioners’ § 1292(b) petition for per-

mission to appeal, the Court of Appeals simply cited

Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.

336, 343 (1976). A3. At the page cited, this Court stated

that “section [1447(d)] prohibits review of all remand

orders issued pursuant to § 1447(c) whether

erroneous or not and whether review is sought by

appeal or by extraordinary writ.” 423 U.S. at 343.

However, the Court in Thermtron emphasized that

the seemingly broad language of § 1447(d) was not in

fact an absolute bar to review of all remand orders:

“only remand orders issued under § 1447(c) and in-

voking the grounds specified therein—that removal

was improvident and without jurisdiction—are im-

mune from review under § 1447(d).” 423 U.S. at 346

(1976). The Court found that an order remanding

because a trial could be held more quickly in state

court was not issued under § 1447(c), and so appellate

review was not barred by § 1447(d). In Carnegie-

Mellon University v. Cohill, 484 U.S. 343 (1988), the

Court further limited the scope of § 1447(d), exer-

cising appellate jurisdiction to review an order re-

manding pendent state claims to state court after the

plaintiffs withdrew their only federal claim. Both the

majority and dissenters in Carnegie-Mellon agreed

that such a remand was not pursuant to § 1447(c).

See 484 U.S. at 355 n. 11, 357. Thus, § 1447(d) did not

bar review.

Judge Easterbrook of the United States Court of

Appeals for the Seventh Circuit recently addressed

the scope of the Thermtron and Carnegie-Mellon ex-

ceptions to § 1447(d) in In re Shell Oil Co., 966 F.2d

1140 (7th Cir.1992), and In re Amoco Petroleum

Additives Co., 964 F.2d 706 (7th Cir.1992). While con-

ceding that “a straightforward reading of § 1447(d)”

would seem to bar review of remand orders, Judge

Easterbrook stated that “[s]traightforward is about the

last word judges attach to § 1447(d) these days...” In re

Amoco, 964 F.2d at 708. After summarizing the

Seventh Circuit’s understanding that Thermtrom

and Carnegie-Mellon create three different categories

of remands, each governed by a different standard of

review, Judge Easterbrook observed:

Figuring out which remands fall into which

categories is a difficult task, as a series of our

cases illustrates. Complex proceedings just to

determine whether a remand is reviewable by

the court of appeals defeat the speed and

simplicity that one would have thought to be

the principle justification for § 1447(d).

Id. (citations omitted). Other courts of appeals have

approached this “difficult task” in different ways,

giving conflicting readings to § 1447(d). See pp.15-17,

infra.

The Second Circuit’s decision below represents a

perhaps understandable attempt to avoid such diffi-

culties entirely by retreating to the “straightforward

reading” of § 1447(d) rejected by the Seventh Circuit.

In summarily denying review based on § 1447(d), the

Second Circuit apparently thought that, because the

remand order found a lack of subject matter jurisdic-

tion, the remand was automatically within the scope

of § 1447(c) and review was barred by § 1447(d). This

interpretation is no longer viable after Carnegie-

Mellon and conflicts with several decisions in the

Courts of Appeals for the Seventh, Fifth, Fourth, and

Third Circuits, which have in a variety of circum-

stances found appellate jurisdiction to review

remand orders despite a district court’s finding of lack

of subject matter jurisdiction.

A. Section § 1447(d) only bars appellate review of

remands of an entire “case” because subject

matter jurisdiction was lacking at the outset.

The remand order in Carnegie-Mellon did not fall

within the scope of § 1447(c) (and thus was review-

able notwithstanding § 1447(d)) because the case had

been properly removed at the outset. Remand was

based on a subsequent event: the plaintiffs’ with-

drawal of their sole federal claim, after discovering

that it was precluded for failure to file a timely

administrative claim. 484 U.S. at 357.

This Court “has consistently held that if jurisdic-

tion exists at the time an action is commenced, such

jurisdiction may not be divested by subsequent

events.” Freeport-McMoRan, Inc. v. K N Energy, Inc.,

111 S.Ct. 858, 860 (1991) (per curiam). This principle

applies both when jurisdiction is based on the pres-

ence of diversity, see id. (“diversity jurisdiction is to

be assessed at the time the lawsuit is commenced”);

St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.

283, 293 (1938) (“events occurring subsequent to re-

moval ... do not oust the district court’s [diversity]

jurisdiction”), and when jurisdiction is based on fed-

eral claims, see Carnegie-Mellon, 484 U.S. at 348-351;

Rosado v. Wyman, 397 U.S. 397, 403-405 (1970) (court

had discretion to decide pendent claims after the fed-

eral jurisdiction-conferring claim became moot). See

also Massachusetts v. V & M Management, Inc., 929

F.2d 830, 834 (1st Cir.1991) (“Once a case is properly

removed, a district court has jurisdiction over the

entire case, whether or not the basis for removal, i.e.

the federal claim, thereafter remains.”).

The history of §§ 1447(c) and (d), set forth in

Thermtron, 423 U.S. at 346-352, confirms that

§ 1447(c) only authorizes remand for cases which

were improperly removed at the outset. The

predecessors of § 1447(c) specifically granted remand

authority only for cases “improperly removed.” 423

U.S. at 347-48. Thermtron indicated that § 1447(c) was

inapplicable where the case was “properly removed,”

and framed the relevant question for purposes of

§ 1447(c) as “whether the District Court would have

had jurisdiction of the case had it been filed initially

in that court.” Id. at 344 (emphasis supplied).

This reading of Thermtron and Carnegie-Mellon

is confirmed by In re Shell Oil Co., 966 F.2d 706 (7th

Cir.1992), and In re Amoco Petroleum Additives Co.,

964 F.2d 706 (7th Cir.1992). Judge Easterbrook found

that “the traditional view...that jurisdiction present

at the time a suit is filed or removed is unaffected by

subsequent acts” continued unaltered in the current

version of § 1447(c). In re Shell, 966 F.2d at 1133.

Thus, the reviewability of remands for lack of subject

matter jurisdiction turned on “whether the district

court remanded the case because in its view

jurisdiction was missing at the time of removal or

because of later events.” Id. This conclusion was

based squarely on Carnegie-Mellon: “we understand

. Carnegie-Mellon to permit review when the district

judge believes that removal was proper and that later

developments authorize remand.” In re Amoco, 964

F.2d at 708.

In In re Amoco, the court of appeals found that

the district court “believed that so long as the union

was a plaintiff, there was federal question jurisdic-

tion, which vanished when the union dropped out.”

Id. Even though the district court remanded for lack

of subject matter jurisdiction, that remand was not

pursuant to § 1447(c), since the case had not been

removed without jurisdiction. Thus, appellate

review was not barred by § 1447(d).

As in Amoco, the district court here found the

initial removal of the case proper. The court found

federal jurisdiction over the veteran plaintiffs and

dismissed their claims, which constituted the bulk of

the case. Because the initial removal was proper, the

court had jurisdiction over the entire case, including

the pendent civilian respondents. Only after a discre-

tionary midstream restructuring of the case by sever-

ance of the respondents (equivalent for jurisdictional

purposes to the substitution of parties in Amoco and

the withdrawal of federal claims in Carnegie-Mellon)

did the district court find a lack of subject matter

jurisdiction and issue its remand order. Accordingly,

under Carnegie-Mellon and Amoco, the remand

here was not pursuant to § 1447(c), and appellate

review is not barred by § 1447(d).

The fact that only a part of the case originally

removed was later remanded provides an important

additional reason that the remand here falls outside

the scope of § 1447(c) and § 1447(d). Those sections by

their terms apply only to remand of a “case,” not to

remand of individual claims or parties. Here, some

thirty-four plaintiffs—thirty-two plaintiff veterans

and two respondent civilians—elected to join their

claims in a single case. Upon removal, the District

Court found jurisdiction over the veteran plaintiffs

and dismissed their claims. It severed the two

respondent civilians sua sponte for discretionary

reasons, and only then found no independent

ground for federal jurisdiction over respondents and

remanded. The two respondent civilian actions that

were remanded were not the “case” which was

originally removed, but only a small part of it. The

District Court’s order was not “[a]n order remanding

a case to the State court from which it was removed,”

and thus was not within the terms of § 1447(d)

(emphasis supplied).

A comparison of § 1447(d) with 28 U.S.C. § 1452(b),

the analogous provision applicable to bankruptcy

cases, makes clear that Congress knew how to bar

appellate review of remands of less than an entire

case when it chose to do so. Section § 1452(b) permits

remand of an individual “claim or cause of action”

and specifically bars appellate review of remands of

such individual claims or causes of action. In contrast

to the bankruptcy provision, § 1447(d) plainly bars

review only of remands of the whole “case” which

was removed.

Consideration of the purpose of § 1447(d) rein-

forces the conclusion that Congress intended only to

bar appellate review when an entire case was found

not properly removed and so was remanded to state

court. Thermtron states that Congress intended §

1447(d) “to prevent delay in the trial of remanded

cases by protracted litigation of jurisdictional issues.”

423 U.S. at 351. When the entire case is remanded, a

bar on appellate review will achieve the simplicity

and finality which Congress sought. The case will

proceed in state court.

But when only part of the case is remanded, the

case may go forward in both federal and state court. A

bar on review would instead create complexity and

uncertainty. The potential for conflict between fed-

eral and state courts would be increased, not elimi-

nated. Litigants would struggle to have issues decided

first in the forums where their prospects seemed best

and to bind one forum to rulings of the other. Incon-

sistent rulings would inevitably occur. The federal

portion of the case and the grounds for dividing the

case could eventually be reviewed on appeal, and any

modification on appeal would trigger further

litigation over forum.

This litigation offers a clear example of how

applying the § 1447(d) bar on appellate review to a

remand order which splits a case between the federal

and state court systems would frustrate Congress’

goals of simplicity and finality. Petitioners will raise

their argument for federal jurisdiction under 28 U.S.

§ 1442—which the District Court found to be a close

question—in opposition to the veteran plaintiffs’

appeal now pending before the Court of Appeals.

Since the issue of jurisdiction under § 1442 will be

before the Court of Appeals in any event, it makes no

sense to bar review as to respondents, creating the

possibility of inconsistent results and renewed

litigation of the forum issue.

Accordingly, the decision of the Second Circuit

below conflicts with this Court’s decision in

Carnegie-Mellon, the Seventh Circuit’s decisions in

In re Amoco and In re Shell, and the plain text of

§ 1447(d), which bars appellate review only of an

entire “case” which is initially improperly removed,

and a writ of certiorari should be granted.

B. Other courts of appeals have reached conflict-

ing decisions based on differing readings of

Thermtron, Carnegie-Mellon, and § 1447(d).

There is little consistency in result or in reasoning

among the various courts of appeals in determining

the scope of the exceptions to § 1447(d) created by

Thermtron and Carnegie-Mellon. For example, the

Court of Appeals for the Eleventh Circuit, like the

Second Circuit here, persists in giving § 1447(d) the

“straightforward reading” rejected by the Seventh

Circuit. See, e.g., Bregman v. Alderman, 955 F.2d 660

(1ith Cir.1992); Calderon v. Aerovias Nacionales de

Colombia, 929 F.2d 599 (11th Cir.1991). These deci-

sions rely on an expansive reading of Gravitt v.

Southwestern Bell Telephone Co., 430 U.S. 723 (1977)

(per curiam), which declined to create an implied ex-

ception to the § 1447(d) bar on appellate review for

remand orders which are clearly erroneous.

The Court of Appeals for the Fourth Circuit

understands Thermtron to have created an exception

to § 1447(d) allowing appellate review of remand

orders which “represent[] a discretionary decision by

the district court not to hear a certain case on grounds

of public policy.” Kolibash v. Committee on Legal

Ethics of the West Virginia Bar, 872 F.2d 571, 573 (4th

Cir.1989). See also In re International Paper Co.,__

F.2d ___, 1992 WL 100487 (5th Cir. June 1, 1992)

(vacating order remanding “in the spirit of federal-

ism” to allow a state court to apply a state statute).

Significantly, while the district court in Kolibash jus-

tified its remand in terms of discretionary policy con-

siderations, it also found that subject matter jurisdic-

tion was lacking. The court specifically concluded

that the defendant did not have a “right” under §

1442 to “an adjudication of the proceeding...in a

federal court.” In re Kolibash, CA No. 2:87-0444, slip

op. at 5 (S.D. W. Va. April 21, 1988).

In Hays County Guardian v. Supple, 1992 U.S.

App. Lexis 18167 (5th Cir. August 10, 1992), the Court

of Appeals for the Fifth Circuit found that § 1447(d)

did not bar review of a district court order remanding

various state law claims—some for lack of jurisdic-

tion under the Eleventh Amendment and some on

discretionary grounds. While the result in Hays is

consistent with Carnegie-Mellon and In re Amoco,

the Fifth Circuit’s reasoning is completely different.

The Fifth Circuit relied on the seemingly incidental

fact that the district court had decided all the issues in

a single final judgment. Observing that § 1447(c) only

mandates remand for lack of subject matter

jurisdiction “at any time before final judgment,” the

court decided that a remand for lack of jurisdiction

included in a final judgment was not “before” final

judgment. 922 U.S. App. Lexis 18167, at *15 (Sth Cir.).

Thus, the remand was not within the scope of §

1447(c), and § 1447(d) did not apply to bar review. See

also In re Carter, 618 F.2d 1093, 1098-99 (5th Cir.1980)

(same), cert. denied sub nom. Sheet Metal Workers’

Int'l Ass'n v. Carter, 450 U.S. 949 (1981).

In In re TMI Litig. Cases Consol. II, 940 F.2d 832,

838-848 (3d Cir.1991), cert. denied sub nom. Gumby v.

General Pub. Util. Corp., 112 S.Ct. 1962 (1992), the

Court of Appeals for the Third Circuit found that an

order remanding for lack of subject matter jurisdic-

tion could be reviewed on certification pursuant to §

- 1292(b). The remand in In re TMI was based on a

finding that the jurisdictional statute at issue was un-

constitutional. After careful consideration, the court

concluded that Congress intended to bar review of re-

mands based on “routine subject matter jurisdiction

determinations,” but not on “an unsettled question

of constitutional proportions.” 940 F.2d at 848.

The underlying statute here, 28 U.S.C. § 1442(a)(1),

is “an incident of federal supremacy,” intended by

Congress to protect federal officials, and persons

acting under them, from potentially hostile state

courts. Willingham v. Morgan, 395 U.S. 402, 405

(1969). Petitioners supplied the United States military

with a weapon for use in an unpopular war and have

raised important federal defenses: immunity under

the Defense Production Act and the government

contractor defense. As in In re TMI, petitioners’ right

to a federal forum in such circumstances is surely not

the sort of routine jurisdictional determination

which Congress intended to insulate from review.

The importance of the underlying jurisdictional

question, combined with the importance of the ap-

pellate issues in and of themselves and the conflict-

ing decisions of the courts of appeals, fully warrants

the grant of certiorari.

II.

THE GRANT OF APPELLATE JURISDICTION

IN § 1292(b) OVERRIDES § 1447(d).

Section 1292(b) affirmatively grants the courts of

appeals discretion to permit appellate jurisdiction

over orders within its terms which would otherwise

be unappealable by statute. While § 1447(d) bars

appellate review of remand orders issued pursuant to

§ 1447(c), the District Court here made the required

findings under § 1292(b). Thus, the two federal

statutes seem, at least superficially, to be in conflict:

one granting discretion to permit appeal of an other-

wise unappealable order, and the other denying

appellate jurisdiction.

The District Court observed that § 1292(b) was

passed subsequently to § 1447(d) and considered the

“contrary view([s]” of the courts of appeals as to

whether § 1292(b) was “intended to modify or

supersede [§ 1447(d)].” A55—-56, citing In re TMI Litig.

Cases Consol. II. 940 F.2d at 838-48 (review of remand

for lack of subject matter jurisdiction under § 1292(b)

proper when remand order stayed); National

Audubon Soc’y v. Department of Water, 869 F.2d

1196, 1205 (9th Cir.1988) (review under § 1292(b) of

remand order); and In re Bear River Drainage Dist.,

267 F.2d 849 (10th Cir.1959) (declining to review

remand on certification). Persuaded to follow the

“more recent authority” from the Third and Ninth

Circuits, the District Court resolved the conflict in

favor of § 1292(b), allowing review on certification

where the order of remand is stayed pending an

immediate appeal. A56. However, the Court of

Appeals for the Second Circuit, without explanation,

instead gave precedence to § 1447(d) and denied

review for lack of appellate jurisdiction.

Following the District Court’s decision, the

Supreme Court denied certiorari in In re TMI, 940

F.2d 832, (3rd Cir.1991), cert. denied sub nom. Gumby

v. General Pub. Util. Corp., 112 S.Ct. 1962 (1992).

Then, in Krangel v. General Dynamics Corp., 1992

WL 148151 (9th Cir. July 1, 1992) (per curiam), a panel

of the Ninth Circuit distinguished In re TMI and

National Audubon and declined to review under

§ 1292(b) an order remanding for lack of jurisdiction.

Krangel simply rejected the district court’s conclusion

that “an exception to section § 1447(d) should be

made for orders deciding important legal issues for

the first time,” and did not consider whether

Congress intended § 1292 (b) to modify or supersede

§ 1447(d). 1992 WL 148151, at *2 (9th Cir.).

This Court’s prior decisions involving the two

statutes do not definitively resolve the question,

because the Court has described the scope of both

Statutes in expansive terms in isolation and has

never been presented with a situation where they

have appeared to be in conflict. The Court’s recent

decision in Connecticut Nat'l Bank v. Germain, 112

S.Ct. 1146 (1992), provides perhaps the closest analogy

to the present situation and solidly supports giving

precedence to § 1292(b) over § 1447(d) to the extent

that the statutes conflict. Connecticut National Bank

reversed the Second Circuit’s determination that

§ 158(a) of the Bankruptcy Code limited the scope of

§ 1292(b), stating that “nowhere else, whether in

§ 158(d) or any other statute, has Congress indicated

that the unadorned words of § 1292 are in some way

limited by implication.” Id. at 1150 (emphasis sup-

plied). See also Chappell & Co. v. Frankel, 367 F.2d

197, 204 (2d Cir.1966) (in Banc) (§ 1292(b) “explicitly

grants to the courts of appeals discretion to review

any interlocutory order” within its terms) (emphasis

supplied).

The canon of statutory construction which would

give precedence to a “specific” over a “general”

statute in the event of a conflict also supports allow-

ing appeilate review under § 1292(b). If read literally,

§ 1447(d) is very broadly worded and would seem-

ingly apply generally to all remand orders. In con-

trast, § 1292(b) provides detailed procedures and

specific criteria for permitting an appeal of an other-

wise unappealable order.

In any event, the purposes of the two statutes

provide “the best test of the meaning of the words

chosen.” Cawley v. United States, 272 F.2d 443, 445

(2d Cir.1959) (L. Hand, J.). Here, the purpose of both

§ 1292(b) and § 1447(d) is the same: avoiding unnec-

essary delay in litigation. In Thermtron, the Court

stated that Congress intended § 1447(d) to “prevent

delay.” 423 U.S. at 351. To the same effect, § 1292(b)

only permits appeals of otherwise unappealable

orders if “an immediate appeal from the order may

materially advance the ultimate termination of the

litigation.”

Viewed in terms of their common purpose, the

conflict disappears. Otherwise unappealable orders

are only appealable under § 1292(b) when review may

prevent delay, consistent with the purpose of § 1447

(d). The two statutes can be harmonized, and the

purposes of both realized, by allowing review of re-

mand orders under § 1292(b). On the other hand, a

literalistic reading of § 1447(d) would not only violate

the literal terms of § 1292(b) but would also defeat the

purpose of both statutes by barring review in situa-

tions such as the present where review would speed

rather than delay litigation. A56 (federal forum

preferrable because of the years of prior proceedings

and discovery in M.D.L. No. 381). Accordingly, the

Court should grant certiorari to resolve the apparent

conflict between § 1292(b) and § 1447(d) and the

conflicting decisions of the Court of Appeals.

ITI.

THE COURTS OF APPEAL ARE IN CONFLICT

AS TO THE PROPER PROCEDURE FOR

APPELLATE REVIEW.

In those cases where § 1447(d) does not bar review,

this Court and the courts of appeals have divided on

the proper avenue for appellate review of remand

orders. See, e.g., Thermtron Products, Inc. v.

Hermansdorfer, 423 U.S. 336 (1976) (mandamus); in

re Amoco, 964 F.2d 706, 713 (7th Cir.1992) (mandamus

only); In re TMI Litig. Cases Consol. II, 940 F.2d 832,

838-848 (3d Cir.1991), cert. denied sub nom. Gumby v.

General Pub. Util. Corp., 112 S.Ct. 1962 (1992) (certifi-

cation pursuant to § 1292(b)); McDermott Int'l, Inc. v.

Lloyds Underwriters of London, 944 F.2d 1199 (5th

Cir.1991) (mandamus in some circumstances, appeal-

able collateral order in others); Karl Koch Erecting

Co., Inc. v. New York Convention Ctr. Dev. Corp.,

838 F.2d 656, 658-59 (2d Cir.1988) (appealable collat-

eral order); Pelleport Investors, Inc. v. Budco Quality

Theatres, Inc., 741 F.2d 273, 277 (9th Cir.1988)

(appealable collateral order); Cf. Moses H. Cone

Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1,

11-13 (1983) (stay of federal proceeding pending reso-

lution of state suit held appealable collateral order).

Because of these conflicting precedents, petition-

ers seek review under each possible avenue: certifi-

cation under § 1292(b), appeal under the collateral

order doctrine, and mandamus. The appellants in In

re TMI also felt constrained to seek review by all

_ three routes. 940 F.2d at 838, 848. The conflicting deci-

sions of the courts of appeals—and the wasted efforts

of the parties and the courts in dealing with such

uncertainty—provide strong evidence of the need for

review in this Court. Since petitioners here seek

review under all three possible routes, the Court will

have the opportunity to consider all aspects of the

question and resolve these conflicts and uncertainties

in a comprehensive decision.

In Thermtron, the Court held that review by

mandamus was proper to compel a district court to

decide a case which it had improperly remanded on

grounds of its crowded docket. 423 U.S. at 352-53.

Thermtron stated that “an order remanding a re-

moved action does not represent a final judgment

reviewable by appeal.” Id., citing Railroad Co. v.

Wiswall, 90 U.S. 507, 508 (1875). Subsequently, in

Moses Cone, the Court reaffirmed the collateral order

doctrine and found that a stay whose “sole purpose

and effect...are precisely to surrender jurisdiction of a

federal suit to a state court” was an appealable collat-

eral order. Moses Cone, 460 U.S. at 10-11 n. 11.

In the years since Moses Cone, several courts of

appeals have found that remand orders based on

forum selection clauses, waiver of right to remove,

nonarbitrability and abstention are not within the

scope of § 1447(d) and are reviewable on appeal as

collateral orders, rather than by mandamus. See, e.g.,

Bennett v. Liberty Nat'l Fire Ins. Co., 1992 WL 150985

(9th Cir. July 6, 1992); Milk ‘n’ More, Inc. v. Beavert,

963 F.2d 1342 (10th Cir.1991); McDermott Internation-

al, Inc. v. Lloyds Underwriters of London, 944 F.2d

1199 (Sth Cir.1991); Foster v. Chesapeake Ins. Co., 933

F.2d 1207 (3d Cir.1991) cert. denied, 112 S.Ct. 302; Regis

Associates v. Rank Hotels (Management) Ltd., 894

F.2d 193 (6th Cir.1990); Karl Koch Erecting Co., Inc. v.

New York Convention Ctr. Dev. Corp., 838 F.2d 656,

658-59 (2d Cir.1988); Clorox Co. v. U.S. Dist. Court for

the N. District of California, 779 F.2d 517 (9th

Cir.1985); Pelleport Investors, Inc. v. Budco Quality

Theatres, Inc., 741 F.2d 273, 277 (9th Cir.1984).

Other courts of appeals have read Thermtron to

mean that review of remand orders is available

exclusively by mandamus. See, e.g., In re Amoco, 964

F.2d 706, 714 (7th Cir.1992) (“It is mandamus or

nothing”); Melahn v. Pennock Ins. Co., 965 F.2d 1497

(8th Cir.1992); Massachusetts v. V & M Management,

Inc., 929 F.2d 830, 833-34 (1st Cir.1991).

In Corcoran v. Ardra Ins. Co., Ltd., 842 F.2d 31 (2d

Cir.1988), the court reluctantly found that a remand

based on abstention could be reviewed only by man-

damus, not as a collateral order, distinguishing its

earlier decision in Karl Koch. The court was per-

suaded by the reasoning of Moses Cone, but felt

constrained by Thermtron:

Though it is by no means clear why an order

that remands an action to state court is any less

final than the stay discussed in Moses Cone,

the ruling in Thermtron that a remand order

is not reviewable on appeal could not have

been more explicit. Under the surrender-of-

federal jurisdiction test used in Moses Cone,

we wonder whether it can logically or pru-

dently remain the rule that a reviewable

remand order (i.e., one whose review is not

barred by § 1447(d)) is not reviewable by direct

appeal.

842 F.2d at 34. The Fifth Circuit considered the ques-

tion at length in McDermott, supra, and concluded

that Corcoran was “wrongly decided.” McDermott,

944 F.2d at 1203 n. 5. In In re Amoco, 964 F.2d at 712-

13, the Seventh Circuit rejected McDermott’s reasou-

ing as contrary to Lauro Lines s.l.r. v. Chasser, 490

U.S. 495 (1989). However, the Tenth Circuit has con-

tinued to follow the Pelleport/Karl Koch line of

cases, concluding that Lauro Lines is not controlling.

Milk ‘n’ More, 963 F.2d at 1345. The need for this

Court to grant certiorari to resolve the matter is clear.

Against the backdrop of the debate over whether

remands are to be treated as final judgments under

the collateral order doctrine, the feasibility and ad-

vantages of certification under § 1292(b) stand out

clearly. Thermtron reviewed a remand order by

mandamus rather than appeal because it was not a

final judgment. The district court had not certified its

remand order for appeal, so review under § 1292(b)

was obviously impossible and was not considered.

Section 1292(b) explicitly allows review of nonfinal

interlocutory orders. Thus, when review of a remand

order is not precluded by § 1447(d), review by certifi-

cation under § 1292(b) is permissible, consistent with

Thermtron, and with the other cases above cited. The

Third Circuit, given the option of reviewing a re-

mand order under each of the three possible routes,

chose § 1292(b) and found it unnecessary to consider

the availability of review as a collateral order or by

mandamus. In re TMI Litig. Cases Consol. II, 940 F.2d

832, 848 (3d Cir.1991), cert. denied sub nom. Gumby v.

General Pub. Util. Corp., 112 S.Ct. 1962 (1992).

Certification under § 1292(b) will allow uniform

appellate review of difficult and important questions

of federal jurisdiction—such as those here and in In

re TMI—whether the district court remands or finds

federal jurisdiction. Review by certification is avail-

able only at the discretion of the courts, not as a

matter of right for litigants. While virtually any

interlocutory order is now potentially reviewable by

certification, experience has shown that the courts

have used certification sparingly. Thus, allowing

review of remand orders by certification would not

burden the courts with a flood of remand appeals. On

the contrary, remands would only be reviewed when

both the district court and the court of appeals con-

clude that review will likely expedite litigation, not

delay it.

By granting certiorari and ruling that remand or-

ders may be reviewed by certification under § 1292(b),

the Court will ensure appropriate appellate review of

occasional difficult and important questions of fed-

eral jurisdiction (when the lower courts conclude

that such review is desirable and efficient) while

preserving the § 1447(d) bar on review of virtually all

orders remanding for lack of jurisdiction—consistent

with the intent of Congress in enacting both statutes.

CONCLUSION

For the reasons set forth above, petitioners

respectfully pray that a writ of certiorari be granted to

review the judgments of the Court of Appeals for the

Second Circuit.

Dated: Uniondale, New York

September 4, 1992

Respectfully submitted,

f (f/f) -

‘ f- L

Soap d <bivker

LEONARD L. RIVKIN

(Counsel of Record)

STEVEN BROCK

RIVKIN, RADLER & KREMER

E AB Plaza

Uniondale, New York 11556-0111

(516) 357-3000

Attorneys for the Petitioners

The Dow Chemical Company, Diamond

Shamrock Chemicals Com;any,

Hercules Incorporated, Monsanto

Company, T. H. Agriculture &

Nutrition Company, Inc., Uniroyal, Inc.

Of Counsel:

CADWALADER, WICKERSHAM & TAFT

_Attorneys for Petitioner Diamond

Shamrock Chemicals Company

100 Maiden Lane

New York, New York 10038

(212) 504-6000

KELLEY, DRYE & WARREN

Attorneys for Petitioner

Hercules Incorporated

101 Park Avenue

New York, New York 10178

(212) 808-7800

LORD DAY & LORD, BARRETT SMITH

Attorneys for Petitioner

Monsanto Company

1675 Broadway

New York, New York 10038

(212) 969-6000

CLARK, GAGLIARDI & MILLER

Attorneys for Petitioner

T. H. Agriculture & Nutrition Company, Inc.

99 Court Street

White Plains, New York 10601

(914) 946-8900

SHEA & GOULD

Attorneys for Petitioner

Uniroyal, Inc.

1251 Avenue of the Americas

New York, New York 10020

(212) 827-3000

this page

intentionally

left blank

APPENDIX A

ORDER OF THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

DATED MAY 8, 1992

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

RYAN v. DOW CHEMICAL CO.

92-8008

NOTICE OF MOTION

Petition for Permission to Appeal Under

28 U.S.C. §1292(b)

MOTION BY:

Steven Brock

Rivkin, Radler & Kremer

E AB Plaza

Uiniondale, New York 11556-0111

(516) 357-3000

OPPOSING COUNSEL:

Kelly L. Newman

350 North Sam Houston Parkway

Houston, Texas 77060

(713) 448-1173

Has consent of opposing counsel:

A. been sought? __yes x no

B. been obtained? __yes x no

Has service beed effected? x_yes no

Is oral argument desired? yes no

Second Circuit Rule 27(e) states that petitions for

leave to appeal “shall be submitted without oral

argument”

Requested return dated:

Has argument dated of appeal been set:

A. by scheduling order? yes x no

B. by firm date of

argument notice? yes x no

C. If Yes, enter dated:

Judge or agency whose order is being appealed:

Judge Jack B. Weinstein

EMERGENCY MOTIONS, MOTIONS FOR STAYS &

INJUNCTIONS PENDING APPEAL

Has request for relief

been made below? ___yes _ no

(See F.R.A.P. Rule 8)

Would expedited appeal eliminate

need for this motion? ___yes __no

If No. explain why not:

Will the parties agree to maintain the status quo

until the motion is heard? yes no

Brief statement of the relief requested:

The district court has certified two issues for

immediate review: subject matter jurisdiction under

28 U.S.C. § 1442(a)(1) and appellate jurisdiction under

28 U.S.C. § 1292(b). Defendants request that the Court

grant permission to appeal so that these issues may

be fully briefed and reviewed by the Court.

natal

By: s/

Steven Brock

Appearing for: The Dow Chemical Company

Appellant or Petitioner:

___ Plaintiff _x Defendant

Appellee or Respondent:

___ Plaintiff ___ Defendant

Date: April 15, 1992

IT IS HEREBY ORDERED that the motion be and it is

hereby denied. See Thermtron Products, Inc. v.

Hermansdorfer, 423 U.S. 336, 343 (1976).

George C. Pratt

J. Daniel Mahoney (p)

Joseph M. McLaughlin

Dated May 8, 1992

Filed May 8, 1992

APPENDIX B

ORDER OF THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

DATED JUNE 8, 1992

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

RYAN v. DOW CHEMICAL CO.

92-8008

NOTICE OF MOTION

for reconsideration and for recall and

modification of mandate

MOTION BY:

Steven Brock

Rivkin, Radler & Kremer

EAB Plaza

Uiniondale, New York 11556-0111

(516) 357-3000

OPPOSING COUNSEL:

Kelly L. Newman

350 North Sam Houston Parkway

Houston, Texas 77060

(713) 448-1173

Has consent of opposing counsel:

A. been sought? ___yes

B. been obtained? __yes

Has service beed effected? x__yes

Is oral argument desired? x__yes no

(Substantive motions only)

Requested return date: June 2, 1992

(See Second Circuit Rule 27(b))

Has argument dated of appeal been set:

A. by scheduling order? _x_yes ___no

B. by firm date of

argument notice? cite 28 ee

C. If Yes, enter date: As early as week of

August 10, 1992

Judge or agency whose order is being appealed:

Judge Jack B. Weinstein

EMERGENCY MOTIONS, MOTIONS FOR STAYS &

INJUNCTIONS PENDING APPEAL

Has request for relief

been made below? __yes __no

(See F.R.A.P. Rule 8)

Would expedited appeal eliminate

need for this motion? ___yes Oo

If No. explain why not:

Will the parties agree to maintain the status quo

until the motion is heard? yes no

Brief statement of the relief requested:

The District Court has certified two issues for

immediate review: subject matter jurisdiction under

28 U.S.C. §§ 1442(a)(1) and appellate jurisdiction

under 28 U.S.C. § 1292(b). Defendants’ Petition for

_ Permission to Appeal was denied by this court on

May 8, 1992. Defendants seek reconsideration and

recall and modification of the Court’s mandate based

on two recent decisions.

By: s/

Steven Brock

Appearing for: The Dow Chemical Company

Appellant or Petitioner:

__ Plaintiff _x Defendant

Appellee or Respondent:

___Plaintiff ___Defendant

Date: May 22, 1992

IT IS HEREBY ORDERED that the motion be and it is

hereby denied.

George C. Pratt

J. Daniel Mahoney (p)

Joseph M. McLaughlin (p)

Circuit Judge

Dated June 8, 1992

Filed June 8, 1992

A6é

APPENDIX C

ORDER OF THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

DATED JUNE 16, 1992

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

IVY v. DIAMOND SHAMROCK CHEMICALS

92-7487

NOTICE OF MOTION

DISMISSING APPEAL

MOTION BY:

Robert M. Hager

2020 Pennsylvania Ave. NW

Washington, D.C. 20006-1811

(202) 331-9831

OPPOSING COUNSEL:

Steven Brock

Rivkin, Radler & Kremer

E AB Plaza

Uiniondale, New York 11556-0111

(516) 357-3000

Has consent of opposing counsel:

A. been sought? _x_yes —

B. been obtained? __yes x no

Has service beed effected? _x_yes ___no

Is oral argument desired? ives x no

(Substantive motions only)

Requested return dated: June 8, 1992

Has argument dated of appeal been set:

A. by scheduling order? _xX_yes _ no

B. by firm date of

argument notice? ___yes _x no

C. If Yes, enter dated: as early as October 9, 1992

Judge or agency whose order is being appealed:

Judge Jack B. Weinstein

EMERGENCY MOTIONS, MOTIONS FOR STAYS &

INJUNCTIONS PENDING APPEAL

Has request for relief

been made below? ___yes _ no

(See F.R.A.P. Rule 8)

Would expedited appeal eliminate

need for this motion? ___yes _ no

If No. explain why not:

Will the parties agree to maintain the status quo

until the motion is heard? yes no

Brief statement of the relief requested:

Notice of Appeal from order remanding case to

state court filed after denial of 28 U.S.C. § 1292

Petition for Permission to Appeal the same order (92-

8008), stating same grounds for appeal, is repetitive

and frivolous. Notice of Appeal should be dismissed

under 28 U.S.C. § 1447(d) and final judgment rule.

By: s/

ROBERT HAGER

Appearing for: CHARLES BROWN

Appellant or Petitioner:

___ Plaintiff ___Defendant

Appellee or Respondent:

x__Plaintiff ___ Defendant

Date: May 29, 1992

Before: Hon. Thomas J. Meskill, Hon. George C.

Pratt, C.J.J. and Hon. Robert R. Merhige, D.J.

IT IS HEREBY ORDERED that the motion be and it is

hereby granted.

ELAINE B. GOLDSMITH, Clerk

By: _s/

Edward J. Guardaro, Staff Atty

Dated June 16, 1992

Filed June 16, 1992

APPENDIX D

MEMORANDUM AND ORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF NEW YORK

DATED MARCH 30, 1992

MEMORANDUM AND ORDER

CV-89-3361

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

79 Civ. 747

MICHAEL F. RYAN, et al.,

Plaintiffs,

-against-

DOW CHEMICAL CO., MONSANTO CO.,

HERCULES INC., T. H. AGRICULTURE &

NUTRITION CO., INC., DIAMOND

SHAMROCK CHEMICALS CO., UNIROYAL,

INC., and THOMPSON CHEMICALS CORP.,

Defendants.

MDL No. 381

In re “AGENT ORANGE”

Product Liability Litigation

89 Civ. 3361

SHIRLEY IVY, et al.,

Plaintiffs,

-against-

_ DIAMOND SHAMROCK CHEMICALS CO., et al.,

Defendants.

Al10

Jack B. Weinstein, District Judge:

On January 29, 1992, a memorandum and order

was issued remanding the suits of civilian plaintiffs

Charles Brown and Clarence White. See In re “Agent

Orange” Prod. Liab. Litig., _ F. Supp. __, MDL

No. 381 (E.D.N.Y. Jan. 29, 1992). Because the memo-

randum and order also certified a question for appeal

under 28 U.S.C. § 1292(b), the remand was stayed

pending the resolution of any appeal.

Defendants subsequently moved for reargument

and a stay on their time to appeal the certified issue

in order to reargue the January 29 memorandum and

order. The motion was granted on February 7, 1992.

All Supplemental and reply papers pertaining to

the motion to reargue have now been considered.

For the reasons stated in the court’s memorandum

and order of January 29, the plaintiffs actions are re-

manded. The order of remand is stayed pending

appeal of the issue certified under section 1292(b).

So ordered.

March 30, 1992

Brooklyn, New York

Jack B. Weinstein,

United States District Judge

All

APPENDIX E

MEMORANDUM AND ORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF NEW YORK

DATED FEBRUARY 7, 1992

ORDER

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

79 Civ. 747

MICHAEL F. RYAN, et al.,

Plaintiffs,

-against-

DOW CHEMICAL CO., MONSANTO CO.,

HERCULES INC., T. H. AGRICULTURE &

NUTRITION CO., INC., DIAMOND

SHAMROCK CHEMICALS CO., UNIROYAL,

INC., and THOMPSON CHEMICALS CORP.,

Defendants.

MDL No. 381

In re

“AGENT ORANGE”

Product Liability Litigation

89 Civ. 3361

SHIRLEY IVY, et al.,

Plaintiffs,

-against-

DIAMOND SHAMROCK CHEMICALS CO.,

et al.,

Defendants.

Al2

AND NOW, tnis 7th day of February, 1992, in

consideration of the Affidavit of Steven Brock sworn

to February 4, 1992, in support of the Order to Show

Cause for Deferral of Certification Pending Rear-

gument granted on February 4, 1992, and the Court

having heard oral argument on February 6, 1992, it is

ORDERED that defendants’ motion for reargu-

ment of the Court’s Memorandum and Order of

Remand dated January 29, 1992 (the “Order”) is

GRANTED and made returnable on February 24,

1992, with papers to be submitted by the parties in

accordance with the following schedule: defendants’

motion papers on February 13, 1992; plaintiffs’ oppos-

ing papers, if any, February 20, 1992; defendants’ reply

papers, if any, February 24, 1992; and it is further

ORDERED that, to permit consideration of said

reargument motion prior to application to the Court

of Appeals for permission to appeal pursuant to 28

U.S.C. § 1292(b), the Order be amended, and hereby is

amended, by deleting in its entirety the first full para-

graph on page 46, which certified the Order pursuant

to 28 U.S.C. § 1292(b), pending consideration of de-

fendants’ motion for reargument, following which,

the Order shall be certified for immediate appeal

pursuant to 28 U.S.C. § 1292(b).

Dated: February 7, 1992

Brooklyn, New York

Jack B. Weinstein

United States District Judge

Al3

APPENDIX F

MEMORANDUM AND ORDER OF REMAND

OF THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NEW YORK

DATED JANUARY 29, 1992

MEMORANDUM _ AND ORDER OF REMAND

Michael F. RYAN, et al., Plaintiffs,

DOW CHEMICAL CO., Monsanto Co., Hercules

Inc., T.H. Agriculture & Nutrition Co., Inc.,

Diamond Shamrock Chemicals + 3 Uniroyal, Inc.,

and Thompson Chemicals Corp., Defendants

In re “AGENT ORANGE” PRODUCT

LIABILITY LITIGATION.

Shirley IVY, et al., Plaintiffs,

DIAMOND SHAMROCK CHEMICALS

CO., et al., Defendants.

Nos. 79 Civ. 747, 89 Civ. 3361.

MDL No. 381.

United States District Court, E.D. New York.

Jan. 29, 1992.

Keily L. Newman, Houston, Tex., for Clarence

White.

Al4

Cadwalader, Wickersham & Taft, New York City,

by Michael M. Gordon, for Diamond Shamrock

Chemicals jCo.

Clark, Gagliardi & Miller, White Plains, nN.Y. by

Lynn Pucino, for T.H. Agriculture & Nutrition Co.,

Inc.

Lord Day & Lord, Barrett Smith, New York City by

John C. Sabetta, for Monsanto I!Co.

Rivkin, Radler, Bayh, Hart & Kremer, Uniondale,

N.Y. by Steven Brock, for Dow Chemical Co.

Shea & Gould, New York City by Myron Kalish,

for Uniroyal, Inc.

Rovert M. Hager, Washington, D.C., for Shirley

Ivy.

WEINSTEIN, District Judge:

TABLE OF CONTENTS

I MARGE Sal ES FESO FON eo Al17

A. Supply of Herbicides to the United

SEAS UE SID Al17

B. Defendants’ Removal Notice .........cccc00..... A20

hs I I occ ccsacaaceceaasecceccsceces A21

A. Pleading Requirements.................c.cccccccc00 A23

1. Amendment of Removal Notice

Upon Failure to Plead ..............cccccccee A23

2 APPECAION OF LAW....................csccccccsccsss A26

es A ie Oe IID) 6 oso acicccsececscccceesceccecccecse A27

+ Ra A27

2. Elements of § 1442(a)(1)...0.....ccccccceeseeee. A33

Al15

a. Colorable Claim to a Federal

fe ANA ete te LER As Ee A33

(1] Government Contractor

SORE eS ORL ye A34

[2] Defense Production Act............. A36

b. Person Acting Under an

RRR G SSRI RINT NE lia A A37

iti Wo is a “Person’’?.................:... A39

[2} When Is a Person “Acting

fo gat a |. 5 eee A41

Di PAIRIIINOIR OR EWI o.oo scsi esesesees A49

Be © RINE Ge MN iscsncaseccsnsnmsnesctecsncaissevesnncicsies A54

eo cdechanusieenientaie A57

_ Plaintiffs Charles Brown and Clarence White

were civilians in Vietnam during the war. They

claim injuries from exposure to herbicides produced

by defendants and used by the United States Armed

Forces. These suits (the civilian actions), which

sound exclusively in state law, along with compan-

ion actions by veterans and their families (the vet-

eran actions), were commenced in Texas state court

collectively under the caption Ivy v. Diamond

Shamrock Chemicals Co., 89 Civ. 3361. See also

Hartman v. Diamond Shamrock Chemicals Co., 90

Civ. 3928. The Ivy and Hartman actions were re-

moved by the defendants to federal court in Texas

and then transferred to this court by the Multidistrict

Litigation Panei.

In In re “Agent Orange” Product Liability

Litigation, 781 F.Supp. 902, (E.D.N.Y.1991), the

veteran actions were dismissed because the plaintiffs

in those actions were members of the class whose

action was settled in 1984. Consideration of subject

Al6

sn anima

matter jurisdiction over the civilian actions was

reserved. See Id.

Pending before the court are two motions. The

civilian plaintiffs have moved to remand their suits

to Texas state court because there is no diversity of

citizenship or other ground for federal jurisdiction.

The defendants have moved to amend their notice of

removal in the Ivy case to add 28 U.S.C. § 1442(a)(1)

on the ground that they were acting under govern-

ment orders when they supplied herbicides and were

therefore entitled to removal under that provision.

While amendment of the notice of removal is ap-

propriate despite the defendants’ failure to mention

section 1442(a)(1) in their removal notice, defendants

were not acting under government officials as re-

quired by that section. Remand is therefore required.

I. FACTS

A. Supply of Herbicides to the United States

The military use of Agent Orange and other

chemical defoliants in the Vietnam war has been

described elsewhere.. See, e.g., In re “Agent Orange”

Prod. Liab. Litig., 597 F.Supp. 740, 775-77 (E.D.N.Y.

1984). Some basic facts bear repeating. These facts are

discussed here for jurisdictional purposes only.

President Kennedy first approved the use of

chemical defoliants in Vietnam toward the end of

1961, with actual spraying beginning the next year

and lasting until 1971. Id. During this period, vari-_

ous chemical formulas were used under different

names, such as Agent Purple and Agent Pink. The

Al17

particular compound known as Agent Orange was

used by United States forces between 1965 and 1971.

The theory of both the veteran and civilian

actions is that when the United States sprayed these

defoliants, it exposed the plaintiffs to dangerous

levels of dioxin. Dioxin was an unwanted byproduct

in the manufacture of the defoliants. Although

dioxin had no herbicidal effect and was never listed

as an ingredient in the defoliants, it appeared in vary-

ing amounts in the herbicides delivered by the

defendants to the Defense Department. As affidavits

from some defendants’ employees indicate, the com-

ponent elements of the herbicides delivered to the

Defense Department, including the elements whose

production generated dioxin, were developed and

used long before the Vietnam war. See, e.g., Affidavit

of John P. Frawley 92 (March 1980) (Hercules em-

ployee); Affidavit of William J. McCarville 74 (Dec.

10, 1991) (Monsanto employee); Affidavit of Michael

M. Gordon 74 (Dec. 12, 1991) (Diamond Shamrock

counsel); see also In re “Agent Orange” Prod. Liab.

Litig., 597 F.Supp. 740, 848-49 (E.D.N.Y.1984) (noting

that Agent Orange was “closely related to ‘shelf

products’ with which the chemical companies had a

good deal of familiarity from the civilian market”

and that “defendants had years of experience with the

herbicides components”).

Initial use of chemical defoliants as weapons was

relatively selective. In fiscal year 1965, for example,

about 400,000 gallons of herbicides were used militar-

ily, as compared to the 3.4 million gallons produced

in the United States that year. W. Buckingham,

Operation Ranch Hand: The Air Force and Herbicides

in Southeast Asia 1961-1971, at 133 (1982). By fiscal

Al8

—==&oa>r° -— — —-

year 1966, however, the military use of defoliants had

increased to 1.6 million gallons annually, and the

Defense Department at that time projected that it

would require Agent Orange in amounts that

exceeded domestic production capacity. Those projec-

tions proved overstated, however, and by 1968 the

perceived supply crisis had passed.

From the outset of the spraying program, federal

officials, acting on behalf of the Defense Department,

entered into contracts with the defendants for

delivery of herbicides to the government. Most of

these contracts—and all of the contracts for Agent

Orange—were entered into pursuant to regulations

issued by the National Production Authority (NPA)

and its successor, the Business and Defense Services

Administration (BDSA). The NPA and BDSA were

the executive branch agencies within the Commerce

Department charged with establishing regulations for

obtaining materials necessary for military use under

the Defense Production Act, 50 U.S.C. App. § 2061 et

seq. (1988).

BDSA Regulation 2, at the time codified in 32A

C.F.R. chapter VI, established a rating system by

which different government orders for supplies were

granted’ priority. From less to more urgent, the hier-

archy ran: unrated orders, DO-rated orders, DX-rated

orders, Mandatory Orders or Directives. See BDSA

Reg. 2, §§ 3, 16. Section 10 of Regulation 2 established

that all rated orders (whether DO- or DX-Rated)

“must be accepted and filled regardless of existing

contracts and orders,” subject to certain exceptions.

Section 16 of Regulation 2 made performance of all

Mandatory Orders and Directives compulsory.

Section 27 of Regulation 2 rendered violators of

Al9

sections 10 and 16 subject to criminal fines or

imprisonment.

At various times between 1962 and 1971, each of

the defendants supplied Agent Orange to the

government under DO-rated contracts. In 1966-1967,

the expected shortage of Agent Orange caused the

Executive Secretary of the BDSA to issue letters to the

defendants requiring them to divert to the Defense

Department what amounted to their entire civilian

production of herbicides. For all orders, the govern-

ment specified the chemical recipe for Agent Orange

as weil as the terms of its packaging and delivery.

Government officials inspected defendants’ produc-

tion facilities. They also tested finished products to

ensure compliance with contract specifications. As

indicated above, however, the chemistry specified by

the government was already being used by the

defendants.

B. Defendants’ Removal Notice

After the civilian actions were commenced as part

of the Ivy action in Texas state court, defendants re-

moved to federal court. Section 1442(a)(1) of Title 28

was not mentioned in the initial notice of removal.

Instead, the removal notices in both the Hartman

and Ivy cases mentioned only “artful pleading,”

“federal question” and “federal preemption” grounds

for removal. See In re “Agent Orange” Prod. Liab.

Litig., 781 F.Supp. 902, (E.D.N.Y.1991). The removal

notice did cite Boyle v. United Technologies Corp.,

487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988),—a

_ case outlining the federal common law military con-

tractor defense—but only to support the “federal

preemption” basis for removal. The issue of section

A20

ee ee ee

1442(a)(1)’s applicability was not explicitly raised until

1991, when defendants filed their motion for leave to

amend their notice of removal under 28 U.S.C. §

1653.

Il. LAW OF REMOVAL

The federal officer removal statute allows execu-

tive branch officials and persons acting under them

to remove to a federal court civil and criminal action

brought against them in a state court for their official

acts. So far as relevant, the provision, 28 U.S.C. §

1442(a)(1), reads:

(a) civil action or criminal prosecution com-

menced in a State court against any of the

following persons may be removed by them to the

district court of the United States for the district

and division embracing the place wherein it is

pending:

(1) Any officer of the United States or any

agency thereof, or person acting under him, for

any act under color of such office....

Section 1442(a)(1) is designed to prevent state

courts from interfering with the implementation of

federal law. The provision does so by allowing those

whose federal activity may be inhibited by state court

actions to remove to the presumably less biased

forum of federal court. The provision confers federal

subject matter jurisdiction over properly removed

actions. See Niagara Mohawk Power Corp. v. Bankers

_ Trust Co., 791 F.2d 242, 244 (2d Cir.1986).

A21

(12] Under current Supreme Court case law,

proper removal of an action under section 1442(a)(1)

requires the satisfaction of two elements. First, the

defendant must raise a colorable claim to a federal

law defense. Mesa v. California, 489 U.S 121, 109 S.Ct.

959, 966-69, 103 L.Ed.2d 99 (1989). Second, the defen-

dant must establish that there is “a causa! connection

between what the officer has done under asserted

Official authority and the state prosecution.”

Maryland v. Soper (No. 1), 270 U.S. 9, 33, 46 S.Ct. 185,

190, 70 L.Ed. 449 (1926) (interpreting predecessor

Statute). To satisfy the causation element, the defen-

dant must prove that the acts being sued upon were

undertaken by a federal officer or “person acting

under him,” Florida v. Cohen, 887 F.2d 1451, 1453-54

(11th Cir.1989), and that those acts were under color

of the relevant federal office. Maine Ass’n of

Interdependent Neighborhoods v. Commissioner,

876 F.2d 1051, 1054 (1st Cir.1989).

(3] Federal officials and their subordinates who

Satisfy these elements overcome the well-pleaded

complaint rule of Louisville & Nashville Railroad

Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126

(1908), and gain access to federal court where no

federal question is presented by the plaintiff. See

Mesa, 109 S.Ct. at 968. The right to remove is abso-

lute, provided the proper procedures are followed.

Willingham v. Morgan, 395 U.S. 402, 406, 89 S.Ct

1813, 1815, 23 L.Ed.2d 396 (1969).

Defendants now claim to have been persons

“acting under” federal officers within the meaning of

section 1442(a)(1) when they contracted to sell, manu-

facture and deliver to the Department of Defense the

herbicides that plaintiffs allege injured them. This

A22

contention raises close questions of procedure and

substantive law. With respect to procedure, the issue

is whether the defendants may now plead section

1442(a)(1) as a basis for jurisdiction, having failed to

do so in their initial removal notice in the Ivy case.

The substantive question is whether that portion of

the defendants’ conduct allegedly giving rise to plain-

tiffs’ state law claims constituted acts under an officer

within the meaning of section 1442(a)(1).

A. Pleading Requirements

(4) In removal cases, defendant bears the burden

of showing that removal is clearly appropriate: “if the

right to remove is doubtful, the case should be

remanded.” Lance Int'l, Inc. v. Aetna Cas. & Sur. Co.,

264 F. Supp. 349, 356 (S.D.N.Y.1967); see also Roche v.

American Red Cross, 680 F.Supp. 449, 451 (D.Mass.

1988) (noting accord with authorities from Fifth and

Seventh Circuits).

1. Amendment of Removal Notice Upon

Failure to Plead

[5] As applied to removal petitions, section 1653

allows parties to clarify pleadings after filing. It does

not sanction the addition of new substantive allega-

tions. See Jacobs v. District Director of Internal

Revenue, 217 F.Supp. 104, 105 (S.D.N.Y.1963); 14A C.

Wright, A. Miller & E. Cooper, Federal Practice and

Procedure § 3733, at 537-38 (2d ed. 1985) (after 30-day

period for filing of removal notice, “petition may be

amended only to set out more specifically grounds

for removal that already have been stated, albeit im-

perfectly, in the original petition; new grounds may

not be added and missing allegations may not be

A23

furnished”) (citations omitted). To prevail on their

motion, defendants must therefore show that the §

1422(a){1) ground for removal was implicit in the

original notices of removal.

An examination of cases that have allowed

amendment of removal notices to include §

1442(a)(1) as a basis for removal reveals, as an initial

matter, two loosely defined categories of cases:

“mislabelling” and “lack of specificity” cases. In the

former, a defendant asserts facts supporting a § 1442

removal, but then seeks removal under another

statutory provision. In the latter, the defendant ex-

plicitly seeks § 1442 removal, but fails to specify the

facts necessary to support such removal.

Willingham v. Morgan, 395 U.S. 402, 89 S.Ct. 1813,

23 L.Ed.2d 396 (1969), presents an example of a “lack

of specificity” case. The prison officials in that case

had explicitly sought § 1442(a)(1) removal on grounds

of official immunity, yet failed to allege in the re-

moval petition facts supporting the claim that the

conduct upon which plaintiff was suing was under

color of their office. Such facts were later alleged by

defendants in affidavits in support of a motion for

summary judgment. The Supreme Court treated

these later, more specific, statements as having

“amended” the petition for removal: Id. at 407 n. 3.

8° S.Ct. at 1816 n. 3.

By contrast, Walker v. Gibson, 604 F.Supp. 916

(N.D.Il1.1985), is an example of a mislabelling case.

The issue of possible federal immunity was averred

in the removal petition, which stated that defendant

planned to argue that his actions were taken “as a

federal official and within the scope of his employ-

A24

ment.” Id. at 918. The defendants, however, sought

removal under a provision inappropriate to the sub-

stance of the defense. The court allowed the defen-

dants to relabel their removal petition. Id. at 919; see

also Bennett Constr. Co. v. Allen Gardens, Inc., 433

F.Supp. 825, 832 (W.D.Mo.1977) (although § 1442(a)(1)

was not cited, removal under that section appropriate

where there is no dispute that defendant was acting

as Secretary of HUD); Harlem River Produce Co. v.

Aetna Cas. & Sur. Co., 257 F.Supp. 160, 164

(S.D.N.Y.1965) (failure to cite 28 U.S.C. § 1442 as a

hasis for removal is a mere technical defect where

facts support removal under that section).

A hybrid approach that combines mislabelling

and lack of specificity analysis to support liberal

amendment of removal notices is illustrated by

National Audubon Society v. Department of Water

& Power, 496 F.Supp. 499 (E.D.Cal.1980), which relied

in part upon the Supreme Court’s review in

Willingham, supra, of the entire case file, including

affidavits, in order to determine whether the facts

already known to the court brought the case within

section 1442(a)(1). Various groups had sued the Los

Angeles Department of Water and Power for harm-

ing the Mono Lake Basin by diverting water. The

defendants then counterclaimed and filed a third-

party complaint against the United States Forest

Service and the Bureau of Land Management. The

United States initially sought removal solely under

federal question jurisdiction pursuant to 28 U.S.C. §

1441. Later, it sought to amend the petition to aban-

don the section 1441 claim and instead raise a section

' 1442 ground for removal. The court allowed the

amendment despite the fact that the removal notice

made no reference to section 1442 or to specific facts

A25

a ee

supporting section 1442 removal. Relying on

Willingham and its inherent powers of judicial

notice, it held that a court ought to “review the entire

file to determine what the file fairly reflects at the

time it considers the motion to amend.” Id. at 503.

On the basis of the facts in the file, the court con-

cluded that there were facts sufficient to warrant

amendment and removal.

2. Application of Law

[6] The facts of the instant case present either a

borderline mislabelling case or a hybrid case that falls

within the parameters of the National Audubon

line. As indicated above, the Ivy removal notice on

its face appears to have made only an oblique refer-

ence to the issue of whether the defendants could lay

claim to the federal military contractor defense by

citing the Boyle case. That reference takes on special

meaning, however, when read in light of the history

of the Agent Orange litigation, with which all parties

and the court are quite familiar. It was and has been

clear from the earliest stages of the litigation that,

with respect to any action based on exposure to Agent

Orange, the defendants would claim in their defense

that they produced herbicides for military use under

compulsion by federal officials. See, e.g., In re “Agent

Orange” Prod. Liab. Litig., 597 F.Supp. 740, 843-50

(E.D.N.Y.1984) (discussing possible validity of gov-

ernment contractor and Defense Production Act

defenses that defendants would raise absent settle-

ment); In re “Agent Orange” Prod. Liab. Litig., 91

F.R.D. 618, 620 (E.D.N.Y.1981) (denying summary

judgment for defendants on basis of government

contractor defense). Not surprisingly, the govern-

ment compulsion argument formed the crux of the

A26

defendants’ “federal question” and “federal preemp-

tion” claims. See, e.g., Defendants’ Memorandum of

Law in Response to Plaintiff's Motion to Remand, at

12-15 (Dec. 14, 1990).

In light of the defendants’ claim to have been

acting under federal officers, consistently maintained

through a decade of Agent Orange litigation, there

was sufficient evidence before the court in the notice

of removal and the case file to permit amendmant of

the defendants’ removal notice to include a section

1442(a)(1) claim. An analysis of the substance of that

section is therefore required.

B. 28 U.S.C. § 1442(a)(1)

1. History of § 1442

To understand the scope of section 1442(a)(1),

some historical context is required. Section 1442 has

several predecessors. See Willingham, 395 US at

405-06, 89 S.Ct. at 1815; P. Bator, D. Meltzer, P.

Mishkin & J. Shapiro, Hart and Wechsler’s The

Federal Courts and the Federal System 1057-60 (3d

ed. 1988); Rosenblatt, Removal of Criminal Pros-

ecutions of Federal Officials: Returning to the

Original Intent of Congress, 29 Santa Clara L.Rev. 21,

28-41 (1989). Its earlier incarnations were drafted to

protecct officials who faced state government resis-

tance to specific federal laws. The concern underlying

each, however, has been the same: that state gov-

ernments hostile to duly enacted federal laws would

be able to frustrate the implementation of those laws

by bringing (or allowing to be brought) civil or crimi-

nal actions in state court against the federal officials

responsible for their implementation. Although the

A27

Supreme Court can assist in the protection of federal

interests by reviewing decisions of state courts, see

Martin v. Hunter's Lessee, 14 U.S. (1 Wheat) 304, 350,

4 L.Ed. 97 (1816), Congress has found it expedient in

certain instances to allow officials sued in state courts

to remove immediately to the federal courts.

The first executive officer removal statute was

passed in 1815. Following the War of 1812, Vermont

sought to skirt a_national trade embargo against

Britain by limiting the extent to which federal

customs officials could delegate their authority to

conduct inspections. Subordinate inspectors lacking

specific authorization for their searches were subject

to civil liability. See Rosenblatt, supra, at 29-30. In

response, Congress passed a statute allowing for

removal of suits “against any collector, naval officer

. Or any other person aiding or assisting,” for any

actions undertaken within the scope of the officer’s

duties. Id. at 31.

The need for an officer removal statute arose

again during the nullification controversy that

preceded the Civil War. In 1832, South Carolina

authorized the criminal prosecution of federal tariff

collectors. Congress responded by providing for re-

moval of any “suit or prosecution” against an officer

“or other person” acting pursuant to federal customs

laws. Id. at 34. For the duration of the Civil War

itself, Congress expanded removal to include suits

against any civil or military officer or any other

person acting “by virtue or under color of any au-

thority derived from or exercised by or under” the

President or Congress. Id. After the Civil War,

several versions of a removal statute designed to

protect federal revenue officers performing duties

A28

pertaining to internal revenue collection were

enacted. See id. at 36.

In the 1860s and 1870s, Congress granted similar

protections to persons owning property pursuant to

feaeral law and to members of Congress for acts

performed in the course of their duties. See id. at 38

n. 64, 39. These provisions and those protecting

federal revenue officers were combined in section 33

of the Judicial Code of 1911, codified at the time at 28

U.S.C. § 76. The 1911 statute was amended in 1916 to

extend the power of removal to judicial officers faced

with suits based on their official actions. See, e.g., Gay

v. Ruff, 292 U.S. 25, 27 n. 1, 54 S.Ct. 608, 609 n. 1, 78

L.Ed. 1099 (1934).

The accumulation of specific protections for offi-

cials in each of the three branches culminated in 1948

with the enactment of section 1442(a). Section

1442(a)(1)-(4) incorporated the protections that sec-

tion 33 afforded to executive, legislative and judicial

Officials. In addition, the present language of section

1442(a)(1) was adopted, which granted removal to any

executive branch officer or “person acting under

him” rather than just to revenue officers. 28 U.S.C. §

1442 (1988) Historical and Revision Notes.

The federal officer removal statute thus saw

continuous expansion between 1815 and 1948.

Nevertheless, the underlying rationale of its various

incarnations has been constant. -

The series of enactments culminating in

Section 1442(a) were initially designed to protect

Federal revenue officers from prosecution or civil

Suit in State Court for violations of State law.

A29

Removal was restricted to cases where the

officer[’]s defense was that no personal liability,

civil or criminal, could be attached to his action,

since he was only performing his Federal duties.

Subsequent amendments have, from time to

time, enlarged the class of Federal officers and

employees who might claim protection, but these

additions have left unchanged the basic theory

and purpose of the removal privilege: that the

officer was entitled to—and the interest of nation-

al supremacy required—his protection in actions

brought against him which attacked and threat-

ened him with personal liabilities or penalties.

New Jersey v. Moriarity, 268 F.Supp. 546, 555

(D.N.J.1967) (citations omitted).

Willingham v. Morgan, 395 US. 402, 89 S.Ct.

1813, 23 L.Ed.2d 396 (1969), is the leading Supreme

Court case interpreting section 1442(a)(1).

Willingham held that federal prison officials sued by

a prisoner for alleged mistreatment were entitled to §

1442(a)(1) removal because they maintained a

colorable claim to a defense of official immunity.

Reviewing the history of § 1442(a), the Court con-

cluded that the purpose of the modern statute,

despite its expansion over its predecessors, was essen-

tially that outlined in Tennessee v. Davis, 100 US.

257, 25 L.Ed. 648 (1879). Davis interpreted the 1866

version of the revenue officer’s removal statute to

allow removal of the murder prosecution of a deputy

revenue collector who killed a man while attempting

"to seize an illegal distillery:

A30

[The federal government] can act only through

its officers and agents, and they must act within

the States. If, when thus acting, and within the

scope of their authority, those cfficers can be

arrested and brought to trial in a State court, for

an alleged offence against the law of the State, yet

warranted by the Federal authority they possess,

and if the general government is powerless to

interfere at once for their protection,—if their

protection must be left to the action of the State

court,—the operations of the general government

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

members.

Id. 100 U.S. at 263 (quoted in Willingham, 395 U.S. at

406, 89 S.Ct. at 1815).

Section 1442(a)(1), the Willingham Court noted,

ultimately rests on the Supremacy Clause, i.e., “the

very basic [federal] interest in the enforcement of

federal law through federal officials.” Willingham,

395 U.S. at 406, 89 S.Ct. at 1816. Accordingly, it should

not be given “a narrow, grudging interpretation.” Id.

at 407, 89 S.Ct. at 1816. Rather, it is applicable “at the

very least” in “all cases where federal officers can

raise a colorable defense arising out of their duty to

enforce federal law.” Id. at 406-07, 89 S.Ct. at 1816

(emphasis added).

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

L.Ed.2d 99 (1989), signalled a narrowing of section

1442. Two mail carriers were charged by California

with crimes relating to their operation of mail trucks.

The defendants successfully removed to federal court

even though they were not able to claim official im-

munity. Id. 109 S.Ct. at 961-62. The Court remanded,

A31

and, contrary to Willingham, found it necessary to

emphasize the limited scope of 1442(a)(1). With one

possible narow exception, see id. 109 S.Ct. at 966, a

defendant seeking removal under § 1442(a)(1) must

now allege a federal law defense. Id. at 966-67. The

Court thereby closed, without locking, the window

left open by Willingham’s “at the very least”

language.

The restrictive approach in Mesa reflects concern

by the Court over the rapid expansion of federal court

jurisdiction. Between the time of Willingham and

Mesa, for example, the courts found section 1442(a)(1)

conferred jurisdiction in a broad array of cases well

outside the paradigm case of the individual official

being intimidated by the threat of civil or criminal

prosecution in state courts. See cases discussed in Part

II.B.2.b infra. In this respect, Mesa is in keeping with

other recent decisions in which the Court has found

it appropriate to limit federal court encroachment on

State court jurisdiction. See, e.g., Pennzoil Co. v.

Texaco, Inc., 481 U.S. 1, 107 S.Ct. 1519, 95 L.Ed.2d 1

(1987) (federal district court in New York lacks

authority to enjoin enforcement of Texas state court

judgment pending state court appeals).

On the heels of Mesa came the further restriction

of section 1442(a)(1) removal in International Pri-

mate Protection League v. Administrators of Tulane

Educational Fund, ___ US. ___ 111 S.Ct. 1700; 114

L.Ed.2d 134 (1991). Rejecting the view of some

circuits, the Court held that state court suits naming

only.a federal agency (rather than a particular official)

as defendant were not removable under § 1442(a)(1)

because a federal agency was neither an “officer of the

United States” nor a “person acting under him.”

A32

Justice Marshall, who twenty-two years earlier had

authored Willingham, emphasized the limited focus

of section 1442 by holding that the statute ought to be

interpreted as if it reads “officer of the United States

or of an agency thereof.”

The Court also reasoned that, in protecting offi-

cials rather than agencies, Congress sought to distin-

guish lawsuits on the basis of their susceptibility to

state court manipulation. Congress wished to protect

individual officials because, typically, they would be

relying on an official immunity defense, a type of

defense “fraught with difficulty and subject to con-

siderable manipulation.” Id. 111 S Ct. at 1709. By

contrast, suits against agencies are more straightfor-

ward, leaving hostile state courts with less room to

discriminate.

2. Elements of § 1442(a)(1)

a. Colorable Claim to a Federal Defense

Mesa requires in the first instance that defendants

assert a federal defense. Mesa v. California, 489 U.S.

121, 109 S.Ct. 959, 966-67, 103 L.Ed.2d 99 (1989). The

question is not whether a defendant’s claimed

defense is metitorious, but only whether a colorable

claim to such a defense has been made. Id. 109 S.Ct. at

966.

Defendants aver a colorable claim to two federal

defenses: the federal common law “government” or

“military contractor” defense, see Boyle v. United

Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 101

L.Ed.2d 442 (1988), and the liability-limiting provi-

A33

—————

sions of the former Federal Defense Production Act,

30 U.S.C. App. § 2071 (1988).

[1] Government Contractor Defense

[7] With respect to the production of Agent

Orange, the government contractor defense allows a

defendant who manufactures products at the direc-

tion of the federal government to escape tort liability

for harms caused by those products “so long as it

informs the government of known hazards or the

information possessed by the government regarding

those hazards is equal to that possessed by the con-

tractor.” In re “Agent Orange” Prod. Liab. Litig., 818

F.2d 187, 190 (2d Cir.1987), cert. denied, 487 U.S. 1234,

108 S.Ct. 2899, 101 L.Ed.2d 932 (1988). The doctrine

thus provides protection to manufacturers not at

fault, safeguards the procurement process, and pre-

vents the courts from second-guessing executive

branch procurement strategies. See id. at 191.

In Boyle, the Supreme Court further shaped the

contours of this defense, holding that it preempts

State product liability law for design defects when-

ever: (1) the United States approved reasonably

precise specifications for the contracted-for equip-

ment; (2) the equipment produced conformed to

those specifications; and (3) the equipment supplier

warned the United States about possible dangers

presented by the equipment that were known to the

supplier but not to the United States. Boyle, 108 S.Ct.

at 2518.

There is considerable question as to whether the

military contractor defense amounts to a defense of

official immunity, or even to a defense at all.

A34

Generally, the Supreme Court has been reluctant to

expand the federal common law of official immunity

in the absence of specific congressional legislation.

See Boyle, 108 S.Ct. at 2523-24 (Brennan, J., dissent-

ing). This is because “official immunity comes as a

great cost,” and thus “absolute immunity for federal

Officials is justified only when ‘the contributions of

immunity to effective government in particular con-

texts outweigh the perhaps recurring harm to indi-

vidual citizens.'" Westfall v. Erwin, 484 U.S. 292, 108

S.Ct. 580, 583, 98 L.Ed.2d 619 (1988) (quoting Doe v.

McMillan, 412 U.S. 306, 320, 93 S.Ct. 2018, 2028, 36

L.Ed.2d 912 (1973)).

In Boyle, the Court refused to characterize its pre-

emption analysis as extending official immunity to

government contractors. See Boyle, 108 S.Ct. at 2514

n. 1. In fact, the majority took pains not to disagree

with the dissent’s claim that official immunity has

never been understood to extend to contractors acting

independently of any congressional enactment. See

id.; id. at 2524 (Brennan, J., dissenting). Most relevant

to the issue of § 1442(a)(1) removal, the Boyle dissent

noted that “a grant of immunity to Government con-

tractors could not advance ‘the fearless, vigorous, and

effective administration of policies of government’

nearly as much as does ... immunity for Government

employees.” Id. at 2524 (Brennan, J., dissenting)

(quoting Barr v. Matteo, 360 U.S. 564, 576, 79 S.Ct.

1335, 1342, 3 L.Ed.2d 1434 (1959) (plurality opinion)). It

is, of course, the vigorous pursuit of policy by gov-

ernment officials that section 1442(a)(1) is designed to

protect.

[8] The defendants themselves question whether

the military contractor defense is best understood as a

A35

defense. The defendants now regard the doctrine as a

form of official immunity which entitles them to

section 1442(a))(1) removal. Previously, in their

attempt to remove on the basis of federal question

jurisdiction, the defendants had cast the military con-

tractor defense as a liability standard. Citing previous

Agent Orange cases, the defendants noted that the

military contractor “defense” is “conceptually better

seen as part of the basis of liability.” Defendants’

Memorandum of Law in Response to Plaintiffs’

Motion to Remand at 12 (Dec. 14, 1990) (citing In re

“Agent Orange” Prod. Liab. Litig., 597 F.Supp. 740, 843

(E.D.N.Y.1984)). On this view, the military contractor

defense—which provides that a contractor must

inform the government of any dangerous conse-

quences of using its product of which the govern-

ment does not know—establishes not a defense but a

federal common law standard of care that must be

met to avoid liability.

[2] Defense Production Act

[9] If defendants were relying solely on the federal

common law military contractor “defense,” there

would be a question as to the existence of the col-

orable claim to a federal defense required by Mesa.

They have, however, also pled reliance on section

707 of the Defense Production Act. See 50 U.S.C. App.

§ 2061 et seq. (1988). The Act, which expired by its

terms in 1990, see id. § 2166, was passed in 1950 at the

outset of the Korean war to ensure governmental

access to materials necessary for the war effort.

Section 707 of the Act immunized contractors who

were forced under threat of criminal sanction to per-

form contracts for the Defense Department from

A36

certain liabilities stemming from the performance of

those contracts. In relevant part, it provided:

No person shall be held liable for damages or

penalties for any act or failure to act resulting

directly or indirectly from compliance with a rule,

regulation, or order issued pursuant to this Act...

Id. § 2157. Defendants argue that section 707 provides

the basis for a federal defense sufficient to support

removal under Mesa.

The defendants make out a colorable claim to the

protection of section 707. There is no dispute that

Agent Orange was delivered to the United States for

use in Vietnam under orders issued pursuant to the

Act. See Part I.A, supra: In re “Agent Orange” Prod.

Liab. Litig., 597 F.Supp. 740, 844 (E.D.N.Y.1984). There

is a dispute as to whether section 707 provides im-

munity against tort suits based in strict liability and

negligence of the sort the civilian plaintiffs now wish

to pursue. On a previous occasion, this court was in-

clined to view section 707 as immunizing contractors

only for contract damages, although it did not rule on

the issue. Id. at 844-45. For purposes of satisfying

section 1442(a)(1), however, the defendants need not

establish a meritorious federal defense, only a col-

| orable claim. This burden has been met.

b. Person Acting Under an Officer

That defendants can make out a colorable claim to

a federal defense does not end the inquiry.

Satisfaction of the causation element of § 1442—that

defendants were officers or persons “acting under”

officers and that they were acting under color of

A37

" —————————

office—is also required. In other words, the set of

defendants who can avail themselves of section

1442(a) is smaller than the set of defendants who can

make a colorable claim to a federal defense.

Moreover, the set of defendants whose federal

defense is that state law must give way to contrary

federal law is smaller than the set of defendants who

can rely on 1442(a)(1). See, e.g., Franchise Tax Bd. v.

Construction Laborers Vacation Trust, 463 U.S. 1, 103

S.Ct. 2841, 77 L.Ed.2d 420 (1983) (defendants asserting

federal preemption defenses are ordinarily not

entitled to removal).

In cases like this where the defendant claims to

have been a “person acting under" an officer, analysis

of the two parts of the causation element tends to

converge into a single inquiry: whether the defen-

dants are being sued “based upon actions taken

pursuant to federal direction.” Gulati v. Zuckerman,

723 F.Supp. 353, 358 (E.D.Pa.1989). Defendants must

prove the existence of a “federal nexus” between the

actions for which they are being sued and the direc-

tives of federal officers. See, e.g., Lowe v. Norfolk &

W. Ry., 529 F.Supp. 491, 495 (S.D.I11.1982) (company

hired by railroad to clean chemical spill cannot re-

move indemnity action brought by railroad based on

allegation that it cleaned pursuant to EPA regula-

tions; EPA did not direct clean up and a “federal

nexus” was otherwise lacking). Critical under the

Statute is “to what extent defendants acted under

federal direction” at the time they were engaged in

the conduct now being sued upon. Gurda Farms, Inc.

v. Monroe County Legal Assistance Corp., 358

F.Supp. 841, 844 (S.D.N.Y.1973); see also Northern

Colo. Water Conservancy Dist. v. Board of County

Comm'rs, 482 F.Supp. 1115, 1117-19 (D.Colo.1980)

(where federal agency exercised only the power to

approve or disapprove pollution control plans

developed by local governmental entities facing suits

concerning content of plans, entities were not “acting

under” officers; requisite nexus of control was

lacking).

[1] Who is a “Person”?

[10] The Supreme Court has held that section

1442(a)(1)’s use of the phrase “person acting under”

was not meant to include government agencies.

International Primate Protection League v. Adminis-

trators of Tulane Educ. Fund, __ U.S. ___, 111 S.Ct.

1700, 114 L.Ed.2d 134 (1991); see also Mignogna v. Sair

Aviation, Inc., 937 F.2d 37, 40-41 (2d Cir.1991)

(applying Primate Protection League). The Court did

not decide, however, whether a corporation could be

a “person acting under [an officer]” Bakalis v. Cross-

land Sav. Bank, 781 F.Supp. 140, 142-43

(E.D.N.Y.1991). Federal courts are divided on the

question. Compare C.H. v. American Red Cross, 684

F.Supp. 1018, 1023-24 (E.D.Mo.1987) (“person” in

1442(a)(1) refers to natural person”) and Roche v.

American Red Cross, 680 F.Supp. 449, 455

(D.Mass.1988) (same) and Gensplit Fin. Corp. v.

Foreign Credit Ins. Ass'n, 616 F.Supp. 1504, 1508-10

(E.D.Wis.1985) (same) with Peterson v. Blue

Cross/Blue Shield, 508 F.2d 55, 58 (5th Cir.) (“person’”

not limited to natural person), cert. denied, 422 U.S.

1043, 95 S.Ct.. 2657, 45 L.Ed.2d 694 (1975); Bakalis, 781

F.Supp. at 143-44 (same); Group Health Inc. v. Blue

Cross Ass'n, 587 F.Supp. 887, 890 (S.D.N.Y.1984)

(same).

A39

Determining in a vacum what the term “person”

is meant to encompass seems a fruitless exercise. The

statute’s use of the word could refer to either natural

or legal persons. Legislative history is equally

unilluminating. Although as a historical matter it

seems plausible to believe that the drafters were

concerned with protecting natural persons, there is

almost no recorded history for the provision, and

none to warrant reliance on such an intuition.

Given the arid interpretive landscape, it would

seem more productive to address a slightly different

question, namely, what definition of person makes

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

whole. Thus recast, the issue is whether a purely

legal person such as a corporation could be engaged

in activities that amount to the implementation of a

federal policy under the direction of a government

officer in such a manner that state court suits against

corporations arising out of those activities could be a

direct interference with the implementation of

federal law.

It is not difficult to imagine such a circumstance.

Consider, for example, the case of federal agents

ordering a private telephone company to intercept

and record the phone conversations of a suspected

criminal pursuant to Title III of the Omnibus Crime

Control and Safe Streets Act, 18 U.S.C. §§ 2510-20. In

a civil or criminal action against the company (e.g.,

for invasion of privacy or trespass), the telephone

company arguably qualifies for removal under sec-

tion 1442(a)(1) as a person acting under an officer, not

‘merely because Congress has seen fit to grant such

companies immunity for actions taken pursuant to

Title III, but also because the company was acting

A40

directly on the orders of a federal officer and it is

plausible, particularly in the case of a criminal prose-

cution, that a state might attempt to discourage the

implementation of Title III. Cf. Camacho v.

Autoridad de Telefonos, 868 F.2d 482 (1st Cir.1989).

[2] When Is a Person “Acting Under” an

Officer?

Having concluded that corporations can be

persons within the meaning of section 1442(a)(1), the

question remains whether defendant corporations

such as those which produced Agent Orange are

persons acting under a federal officer so as to warrant

removal under section 1442(a)(1).

[11] An examination of previous cases in which

private corporations and individuals have been

allowed removal under section 1442(a)(1) is helpful

in establishing the indicia of official control necessary

to warrant removal. The rule established is that re-

moval by a “person acting under” a federal officer

must be predicated upon a showing that the acts that

form the basis for the state civil or criminal suit were

performed pursuant to an officer’s direct orders or to

comprehensive and detailed regulations. Cf. Bakalis

v. Crossland Sav. Bank, 781 F.Supp. 140, 144-45

(E.D.N.Y.1991) (“The rule that appears to emerge

from the case law is one of ‘regulation plus ...’.”). By

contrast, a person or corporation establishing only

that the relevant acts occurred under the general

auspices of a federal office or officer is not entitled to

section 1442(a)(1) removal. Likewise, the mere fact

that a corporation participates in a regulated industry

is insufficient to support removal absent a showing

that the particular conduct being sued upon is closely

A4l

linked to detailed and specific regulations. Bakalis,

781 F.Supp. at 144-45. Between these extremes on the

“acting under” spectrum there will, of course, be

numerous close calls.

Camacho v. Autoridad de Telefonos, 868 F.2d 482

(1st Cir.1989), as was suggested by the preceding hypo-

thetical example, is close to the “direct and detailed

orders” end of the spectrum. Several residents of

Puerto Rico sued quasi-public telephone companies

for violations of their civil rights caused by phone

taps. The defendants’ removal petition was granted

because the wiretaps were authorized by federal

agents under 18 U.S.C. §§ 2510-20. As the court

noted: ““at all times ... defendants ... were acting un-

der express orders, control and directions of federal

Officers ... ‘” id. at 486 (quoting from removal peti-

tion), and the defendants’ involvement was “strictly

and solely at federal behest.” Id.

By contrast, a case well away from the direct and

detailed orders end of the spectrum is Lovell Manu-

facturing v. Export-Import Bank, 843 F.2d 725 (3d

Cir.1988). Plaintiff brought suit in state court against

an association of private insurers acting as an agent

through which the Export-Import Bank of the United

States insured plaintiff’s political risks. Although the

Court of Appeals did not rule on the defendant's

attempt to remove under section 1442(a)(1), it noted

that

it is not at all clear that a mere agency-principal

relationship ... would be sufficient to support

jurisdiction.... After all, the purpose of § 1442

removal is to protect federal officials from un-

friendly state forums, to allow the official to raise

A42

defenses (such as immunity) arising out of his

official duties, and to insure an impartial setting

“free from local interests or prejudice.” ... It is

doubtful whether removal here would serve any

of these purposes.

Id. at 734 n. 13 (citation omitted).

The majority and dissenting opinions in North

Carolina v. Ivory, 906 F.2d 999 (4th Cir.1990), disagree

about the facts of the case and therefore as to where

on the spectrum the case belongs. North Carolina

brought criminal charges against a United States

Marine driving in a military convoy whose truck

collided with a civilian vehicle, killing the civilian

driver. The majority thought removal was not war-

ranted in part because the driver’s allegedly action-

able conduct was not taken pursuant to specific

orders. Id. at 1003 (finding absence of any order to

driver to keep his truck close to others in convoy).

The dissent thought the facts warranted the opposite

conclusion. Id. at 1007 (Phillips, J., dissenting)

(finding that defendant was acting under direct

orders). Implicit in this disagreement was an agree-

ment on the law of section 1442(a)(1): a person is

only “acting under” a federal officer when under the

direct and specific control of that officer.

Texas v. National Bank of Commerce, 290 F.2d

229 (Sth Cir.), cert. denied, 368 U.S. 832, 82 S.Ct. 55, 7

L.Ed.2d 35 (1961), concerned removal of suits in

which Texas brought a quo warranto action against

private banks serving United States military installa-

tions. The Court of Appeals for the Fifth Circuit

found removal appropriate in part because the banks

operated only through the exercise of powers enu-

A43

merated in Treasury Department letters. See id. at

231. The banks, moreover, filed monthly reports with

the Treasury Department, id. at 231-32, which regu-

larly reviewed each facility and retained the power to

close the banks at will. Jd. at 231. In short, removal

under § 1442(a)(1) was appropriate because Texas was

using its state courts to raise a direct challenge to the

banking power of the national government by bring-

ing suits against banks under exclusive and direct

government control.

Distinguishable from State of Texas because fed-

eral control of the defendant bank was peripheral to

the case is First National Bank v. Aberdeen National

Bank, 627 F.2d 843, 848 n. 13 (8th Cir.1980). Plaintiff

sued for unfair competition based on the resem-

blance of defendant’s name to its own. Defendant's

only claimed basis for removal was that the

Comptroller of the Currency had approved its new

name, thereby rendering the bank a person acting

under an officer.

Another Fifth Circuit case, Noble v. Employers

Insurance, 555 F.2d 1257 (Sth Cir.1977), illustrates a

case properly removed under section 1442(a)(1). A

patient at a Veterans Administration hospital sued

the insurer of a surgeon employed by the VA under

the Louisiana Direct Action Statute. The Court of

Appeals, treating the suit as if it were brought directly

against the insured surgeon, found that the surgeon

was a person acting under an officer because the

surgeon had acted under the immediate supervision

of the Administrator of Veteran Affairs, who evalu-

ated the surgeon's performance and determined his

hours and working conditions pursuant to federal

statute. Id. at 1258-59.

A44

Gurda Farms, Inc. v. Monroe County Legal Assis-

tance Corp., 358 F.Supp. 841 (S.D.N.Y.1973), suggests

what would be the Second Circuit's view of the

‘person acting under" provision of section 1442(a)(1).

The Gurda court authorized the removal of assault

and trespass actions against attorneys who had com-

mitted alleged torts while acting on behalf of migrant

farm workers. The decision was based upon a find-

ing that the attorneys were governed by "exceedingly

complex regulations, guidelines, and evaluation

schemes," id. at 844, affecting the attorneys’ conduct

on "'a day to day basis." Id.. at 845 (quoting

defendant's affidavit).

Given this level of official control, the court

found removal in line with cases allowing removal

by private parties being sued for actions ordered by

specific officers or regulations. See id. at 843-44

(citing, inter alia, Texas v. National Bank of

Commerce, supra (private banks acting under

powers enumerated by federal authorities); Oregon v.

Cameron, 290 F.Supp. 36, 36 (D.Or.1968) (VISTA

employees subject to government control by "clear"

chain of command); Teague v. Grand River Dam

Auth., 279 F.Supp. 703, 704 (N.D.Okla.1968) (dam

operator acting pursuant to detailed orders and

regulations regarding appropriate responses to

changes in water levels); Colorado v. Maxwell, 125

F.Supp. 18 (D.Colo.1954) (police chief acting under

order of Air Force Captain)). Several subsequent

decisions have relied on Gurda’s analysis. See Dixon

v. Georgia Indigent Legal Servs., Inc., 388 F.Supp.

1156, 1161-63 (S.D.Ga.1974) (facts almost identical to

' Gurda), aff'd without opinion, 532 F.2d 1373 (5th

Cir.1976);Swan v. Community Relations-Social Dev.

Comm'‘n., 374 F.Supp. 9, 10, 11 n. 1 (E.D.Wis.1974)

A45

(quasi-public corporation Operating under same

officials as defendants in Gurda): cf. McGlynn v.

Employers Commercial Union Ins. Co., 386 F.Supp.

774, 777 (D.P.R.1974) (private insurer of United States

Navy not acting under officer with respect to suit

brought under direct action statute: Gurda

distinguished on facts).

Gulati v. Zuckerman, 723 F.Supp. 353

(E.D.Pa.1989), which bears some resemblance to the

instant case, succinctly states the appropriate standard

for section 1442(a)(1) removal. In Gulati, a defense

contractor and its employees were sued for defaming

the corporation's former president in various docu-

ments, including reports required by Department of

Defense regulations and issued in response to the

specific inquiries of Department officials. The court

held that insofar as the defamation action was "based

upon actions taken pursuant to federal direction,” it

was appropriately removed. Id. at 358; cf. Kaplansky

v. Associated YM-YWHAs, No. 88-1292, 1989, WL

29938, at *1-*3, 1989 U.S. Dist. LEXIS 3062, at *4-*8

(E.D.N.Y. Mar. 27, 1989) (defendant sued for allegedly

libelous statements made in response to federal

grand jury subpoena was not acting under federal

officer).

Defendants in suits against private companies

acting as fiscal intermediaries for the federal

Medicare program have been found entitled to

removal under section 1442(a)(1). See Peterson v.

Blue Cross/Blue Shield, 508 F.2d 55 (5th Cir.), cert.

denied, 422 U.S. 1043, 95 S.Ct. 2657, 45 L.Ed.2d 694

(1975); Neurological Assocs. v. Blue Cross/Blue

Shield, 632 F.Supp. 1078 (S.D.Fla.1986); Group Health

Inc. v. Blue Cross Ass'n, 587 F.Supp. 887

A46

(S.D.N.Y.1984); see also Kuenstler v. Occidental Life

Ins. Co., 292 F.Supp. 532 (C.D.Cal.1968); Allen v..

Allen, 291 F.Supp. 312 (S.D.lowa 1968). Intermediaries

perform the day to day work of administering an

ongoing federal program under strict official

oversight. For example, an insurer is held to various

"performance criteria," the satisfaction of which are

necessary if the insurer is to maintain its status as an

intermediary. See 42 C.F.R. § 421.120-124 (1990).

Typical of these cases is Neurological Associates.

The plaintiff challenged the suspension of payments

by a private company acting as a Medicare

intermediary. Removal was appropriate because the

suspension was ordered directly by officials at the

Department of Health and Human Services. Neuro-

logical Associates, 632 F.Supp. at 1079. Peterson and

Group Health also emphasize that private compa-

nies acting as Medicare intermediaries carry out the

duties of Secretary of Health and Human Services

pursuant to extensive and specific federal regula-

tions. See Peterson v. Weinberger, 508 F.2d 45, 51 & n.

7 (Sth Cir.) (companion opinion to 508 F.2d 55), cert.

denied, 423 U.S. 830, 96 S.Ct. 50, 46 L.Ed.2d 47 (1975);

Group Health, 587 F.Supp at 889, 891. When read

against the background of the closely integrated

system of officials and private intermediaries,

Peterson and Group Health do not, as defendants in

this case contend, support section 1442(a)(1) removal

solely on the basis of a defendant “acting pursuant to

a contract with the government." Peterson v. Blue

Cross/Blue Shield, 508 F.2d at 58; see Bakalis v. Cross-

land Sav. Bank, 781 F.Supp. 140,____ (E.D.N..Y.1991)

("Group Health ... allows private corporations to

remove only when the corporation is so intimately

involved with government functions as to occupy

A47

essentially the position of an employee of the

government.").

District of Columbia v. Landmark Services, Inc.,

411 F.Supp. 1002 (D.D.C.1976), represents a potentially

extreme application of section 1442(a)(i) that is

perhaps best explicable on the basis of the special

Statutory language there at issue. The District of

Columbia sued to enjoin the operation of a bus

company providing tours of parts of Washington,

D.C. because of the company's failure to comply with

District licensing and registration provisions. The

company sought removal on the ground that it was

Operating pursuant to a contract with the Department

of Interior which, in turn, had been specifically

authorized by Congress to contract for such tours. See

id. at 1003 (citing 40 U.S.C. § 804). Under the terms of

the authorizing legislation, any tour services for

which the Secretary of the Interior arranged were

"deemed transportation by the United States and

Shall be under the sole and exclusive charge and

control of the Secretary." Id.

The court found that the bus company was enti-

tled to removal because the authorizing legislation

appeared to confer official immunity on the bus

company by deeming it to be part of the United States

government. The case is unusual because, although

the court treated the bus company as a "person acting

under" a federal officer, the decision appears to have

turned on statutory language that essentially

rendered the bus company a federal officer.

A48

3. Application of Law

[12] Even from the brief recitation of facts pro-

vided in part I.A supra, it is apparent that some of the

defendants’ actions with respect to Agent Orange and

other herbicides were under the direct and detailed

control of various government officers including the

Executive Secretary of the BDSA. See, e.g., In re

“Agent Orange” Prod. Liab. Litig., 597 F.Supp. 740,

775, 849 (E.D.N.Y.1984); see also Uniroyal, Inc. v.

Home Ins. Co., 707 F.Supp. 1368, 1370 (E.D.N.Y.1988)

(describing control exercised by government over one

defendant's production of Agent Orange). The defen-

dants were, in this respect, compelled under threat of

criminal sanction to del'ver Agent Orange produced

according to government specifications to the

Defense Department.

While these facts are clear, they are not, as defen-

dants contend, dispositive. The issue is not simply

whether the defendants acted under Commerce and

Defense Department officials, but whether they are in

danger of being sued in state court "based upon

actions taken pursuant to federal direction." Gulati v.

Zuckerman, 723 F.Supp. 353 (E.D.Pa.1989). Defen-

dants are faced with suits sounding in common law

strict liability, products liability, negligence, and

implied warranty as well as statutory causes of action

for breach of express warranty and the Texas Decep-

tive Trade Practices Act. The gist of these actions is

that Agent Orange and other chemical herbicides

were improperly designed and produced because they

contained trace elements of dioxin. In this regard it is

necessary to recall that Agent Orange was a mix of

pre-existing chemical formulae that had long been

put to domestic commercial use to reduce unwanted

A49

vegetation along roads and railroad tracks and on

farms. The government brought chemical compo-

nents for Agent Orange and other defoliants as

existing products privately developed and used them

in mixtures which were derived from defendants’

standard recipes. Thus, the "compulsion" under

which the defendants operated predominantly

concerned marketing rather than design and

manufacture.

Although the case presents a close question, the

defendants have not met the requirements of section

1442(a)(1). They are being sued for formulating and

producing a product all of whose components were

developed without direct government control and all

of whose methods of manufacture were determined

by the defendants. Although the defendants later

produced and delivered Agent Orange under the

control of federal officers, these subsequent acts are

distinct from the earlier acts of product and manufac-

turing design being sued upon. The government

sought only to buy ready-to-order herbicides, not to

cause, cOntrol, or prevent the production of the

unwanted byproduct, dioxin, which is the alleged

cause of plaintiffs’ injuries. The necessary direct and

detailed official control over the acts for which the

defendants are now being sued is therefore lacking.

Consiceration of the purposes of section 1442(a)(1)

supports this result. Defendants’ removal petition

raises the question: does the adjudication of a product

liability suit in Texas state court against companies

that sold prefabricated component parts to the federal

‘ government amount to a threat to the enforcement

of federal policy sufficient to warrant removal? There

is little or no outward indication that the civilian

A50

actions could be a direct or indirect manifestation of

Texas's eagerness to inhibit federal policy. Arguably

there is no extant federal policy to thwart, save for

the generalized federal interest in ensuring that

future Defense Department procurement not be hin-

dered. Cf. Murray v. Murray 621 F.2d 103, 107 (5th

Cir.1980) (suit by divorcee to garnish income owed to

ex-husband by Veterans Administration not remov-

able where there is no showing "how the pendency

and disposition of the garnishment action in state

court could arrest, restrict, impair, or interfere with

either the actions of a federal official or the opera-

tions of the federal government").

Protection of future procurement is a matter read-

ily dealt with by federal statute or government

contractual indemnification. Suppose, however, that

th civilian actions were to expose the government

to an increase in the cost of future procurement of

chemicals for military use. The Supreme Court has

recognized a distinct federal interest in protecting

future defense procurement, see Boyle v. United

Technologies Corp., 487 U.S. 500, 108 S.Ct. 2510, 2514—

15, 101 L.Ed.2d 442 (1988), and one purpose of the

government contractor defense is to protect that

interest. Id. But the hypothesis that tort liability will

result in increased procurement costs, while suffi-

cient to establish the presence of a federal interest in

these cases, does not support the claim that a state

cannot fairly adjudicate cases in which that interest is

at issue. It is the concern for state court bias against

the federal government that is the ultimate

justification for section 1442(a)(1) removal.

From the standpoint of federalism, the mere

assertion of a nebulous federal procurement interest

AS51

cannot, without further specification, be a basis for

removal. Otherwise any state suit against a manufac-

turer whose product has at one time been diverted

and adapted for military use—for example, a nui-

sance suit against a metal foundry—would poten-

tially be subject to removal, seriously undercutting

the power of the state courts to hear and decide basic

tort law. Such a result is incompatible with the

respect owed to state courts under our federal system.

The point is not that section 1442(a)(1) is necessar-

ily inappropriate to protect the enforcement of

federal procurement policy. It is that removal is not

appropriate when the civil or criminal suit brought

in state court has only a speculative impact on such

policy. In this respect the defendants are in an

altogether different position from the private insur-

ers which, as Medicare intermediaries, have relied on

section 1442(a)(1). See cases cited in Part II.B.2.b.,

supra. The insurers act as continuing conduits for

government policy and the state court lawsuits had

the potential to interfere with an ongoing federal

program. The defendants, by contrast, are being sued

entirely for past acts in allegedly providing a tainted

product to the government.

Remanding the civilian actions also comports

with the Supreme Court's most recent treatment of

section 1442(a)(1), which found removal appropriate

where the claimed federal defense of immunity

raises issues "fraught with difficulty and subject to

considerable manipulation." International Primate

Protection League v. Administrators of Tulane Educ.

Fund, ___ U.S. ___, 111 S.Ct. 1700, 1709, 114 L.Ed.2d

134 (1991). The Military contractor defense raises

straightforward common law tort issues that the state

A52

courts are as adept at handling as the federal judi-

ciary. Likewise, the Defense Production Act issue

turns on basic questions of statutory interpretation.

Implicit in the parties’ arguments is their assump-

tion that, on remand, the civilian plaintiffs might

obtain a judgment or settlement in a Texas state court

in excess of that received by veterans whose actions

were settled in 1984. Such a result might be seen by

some as but another denigration of the Vietnam

veteran. Others would argue that what is more accu-

rately revealed is the special responsibility of a

nation's political bodies for its returning soldiers. As

Judge Cardozo advised, courts may "take judicial

notice ... that since the beginnings of our history, a

sense of the moral obligation to give aid to the

returning soldier has been felt and acted on by gov-

ernment." New York v. Westchester County Nat'l

Bank, 231 N.Y. 465, 486, 132 N.E. 241 (1921)

(dissenting opinion) (citation omitted). In this vein,

it should be noted that the Department of Veterans

Affairs and Congress have taken significant steps to

alleviate the special problems of veterans as con-

trasted with those of civilians who worked alongside

members of the armed forces. See Agent Orange Act

of 1991, Pub.L. No. 102-4, 105 Stat. 11 (1991); 38 C.F.R.

§ 3.311a (1990) (Department of Veterans Affairs regu-

lations establishing official "presumption" of connec-

tion between certain illnesses and military service in

Vietnam); In re "Agent Orange” Prod. Liab. Litig., 781

F.Supp. 902 (E.D.N.Y.1991) (describing recent statutory

and administrative developments). In any event, the

possibility of a result more favorable to the civilian

plaintiffs is present regardless of whether their action

is heard in state or federal court. Equitable considera-

tions, therefore, do not counsel against remand.

A53

Il. APPEAL OF REMAND

[13] 28 U.S.C. § 1447(d) was added in 1949 to the

Judicial Code of 1948. As first enacted, it read: "An

order remanding a case to the State court from which

it was removed is not reviewable on appeal or

otherwise.” In 1964, the provision was amended so as

not to apply to civil rights suits. The statute now

reads:

An order remanding a case to the State court from

which it was removed is not reviewable on appeal

or otherwise, except that an order remanding a

case to the State court from which it was removed

pursuant to section 1443 of this title shall be

reviewable by appeal or otherwise.

Section 1447(d)'s prohibition applies whenever

the district court remands for lack of subject matter

jurisdiction under 28 U.S.C. § 1447(c). See Thermtron

Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 343, 96

S.Ct. 584, 589, 46 L.Ed.2d 542 (1976); In re Pan

American Corp., 950 F.2d 839, 842 (2d Cir.1991). If the

district court remands for reasons not specified in

section 1447(c), mandamus or other forms of appel-

late review may be appropriate. Thermtron, 423 U.S.

at 351-53, 96 S.Ct. at 593-94 (mandamus proper

where district court ordered remand to ease crowded

docket); Karl Koch Erecting Co. v. New York Conven-

tion Cent. Dev. Corp., 838 F.2d 656, 658 (2d Cir.1988)

(remand order based on forum selection clause re-

viewable because clause does not oust court of subject

matter jurisdiction).

Since this case is to be remanded for lack of subject

matter jurisdiction, review appears to be barred by a

A54

literal reading of 28 U.S.C. § 1447(d). This is an unfor-

tunate result given the closeness of the case and the

particular provision under which removal is sought.

28 U.S.C. § 1442, after all, is premised on the need for

the federal courts to protect federal interests from

possible state interference. In light of this concern, it

would be useful for the parties and the district courts

in this Circuit to have an authoritative pronounce-

ment from the Court of Appeals, which has not yet

had occasion to consider the "person acting under"

provisions of section 1442(a)(1).

Recent case law from other circuits suggests that a

path out of this quandary lies in 28 U.S.C. § 1292(b). In

relevant part, that section provides:

When a district judge, in making in a civil action

an order not otherwise appealable under this

section, shall be of the opinion that such order

involves a controlling question of law as to which

there is substantial ground for difference of opin-

ion and that an immediate appeal from the order

may materially advance the ultimate termination

of the litigation, he shall so state in writing in

such order. The Court of Appeals which would

have jurisdiction of an appeal of such action, may

thereupon, in its discretion, permit an appeal to

be taken from such order, if application is made to

it within ten days after entry of the order...

An early Tenth Circuit case held that section 1292,

although passed subsequently to section 1447(d), was

not intended to modify or supersede the latter. See In

re Bear River Drainage Dist., 267 F.2d 849 (10th

Cir.1959); accord Dawson v. Orkin Exterminating Co.,

736 F.Supp. 1049 (D.Colo.1990); J. Moore & B. Ringle,

A55

1A Moore's Federal Practice 4 0.169[2.-1], at 688-90 (2d

ed. 1991). More recent authority from the Third and

Ninth Circuits maintains a contrary view, allowing

review of orders of remand when the grounds for

remand are certified for immediate appeal. See In re

TMI Litigation Cases Consolidated II, 940 F.2d 832,

$3848 (3d Cir.1991) (review of remand for lack of

subject matter jurisdiction appropriate where issue

controlling remand is certified for appeal and order

of remand is stayed pending outcome of appeal),

petition for cert. filed, 60 U.S.L.W. 3344 (Oct. 23, 1991)

(No. 91-676); National Audubon Soc'y v. Depariment

of Water, 869 F.2d 1196, 1205 (9th Cir.1988) (same).

The district and appellate court opinions in the TMI

case are particularly useful for their detailed analysis

of the interrelation of sections 1292 and 1447(d). See

In re TMI Litigation, 940 F.2d at 838-48; In re TMI

Coordinated Proceedings, 735 F.Supp. 640, 646-48

(M.D.Pa.1990), vacated on other grounds, 940 F.2d 832

(3d Cir.1991).

[14] In the present case, there is a controlling ques-

tion of law and a substantial ground for difference of

opinion as to the appropriateness of defendants’

attempt to remove under section 1442(a)(1). This

question controls the extent of federal subject matter

jurisdiction in this and like cases where important

federal interests may be at stake. An immediate

appeal might materially advance termination of the

litigation by preventing remand and leaving the case

in the present forum, where considerable materials

are already in the record available for judicial notice.

The court therefore certifies for immediate appeal the

issue of section 1442(a)(1)'s availability for natural or

legal persons providing goods and services to the

government under conditions of the sort described in

A56

this case. "Certification is made recognizing that the

first question for appellate resolution will be whether

§ 1292(b) review is available under these circum-

stances." In re TMI Coordinated Proceedings, 735

F.Supp. at 648.

IV. CONCLUSION

The defendants have not met their burden of

establishing that they were "person(s] acting under’

federal officers within the meaning of section

1442(a)(1). No other basis for federal subject matter

jurisdiction having been shown, the actions of

Charles Brown and Clarence White are remanded to

Texas state court. The court's order of remand is

stayed pending completion of appeals.

So ordered

A57

APPENDIX G

MEMORANDUM AND ORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF NEW YORK

DATED OCTOBER 4, 1991

AS AMENDED NOVEMBER 15, 1991

MEMORANDUM AND ORDER

MICHAEL F. RYAN, et al., Plaintiffs,

-against-

DOW CHEMICAL COMPANY, Monsanto Company,

Hercules Incorporated, T H Agriculture & Nutrition

Company, Inc., Diamond Shamrock Chemicals

Company, Uniroyal Inc., and Thompson Chemicals

Corporation, Defendants.

In re “AGENT ORANGE” PRODUCT

LIABILITY LITIGATION.

SHIRLEY IVY, et al., Plaintiffs,

-against-

DIAMOND SHAMROCK CHEMICALS COMPANY,

et al., Defendants.

Ronald L. HARTMAN, et al., Plaintiffs,

-against-

DIAMOND SHAMROCK CHEMICALS COMPANY,

et al., Defendants.

Nos. 79 Civ. 747, 89 Civ. 3361 and 90 Civ. 3928

MDL No. 381

United States District Court, E.D. New York

A58

October 4, 1991

As Amended November 15, 1991

Robert M. Hager, Washington, D.C., for Ivy

plaintiffs.

Kelly L. Newman, Houston, Tex., for Hartman

plaintiffs.

Cadwalader, Wickersham & Taft by Michael M.

Gordon, New York City, for Diamond Shamrock

Chemicals Co.

Clark, Gagliardi & Miller by Morton B. Silberman,

White Plains, N.Y., for T.H. Agriculture & Nutrition

Co., Inc.

Lord Day & Lord, Barrett Smith by John C. Sabetta,

New York City, for Monsanto Co.

Kelley, Drye & Warren by William C. Heck, New

York City, for Hercules Inc.

Rivkin, Radler, Bayh, Hart & Kremer by Steven

Brock, Uniondale, N.Y., for Dow Chemical Co.

Shea & Gould by Myron Kalish, New York City,

for Uniroyal, Inc.

WEINSTEIN, District Judge:

TABLE OF CONTENTS

Be. REE Pasa cs cdctncn ssticasinoibaiabelcaecuascccities deine: Aél

A. Agent Orange Litigation: 1979-1984....... A6é1

B. The Settlement Agreement..........0.000..-. A70

A59

IT.

ITI.

iV.

VI.

VII.

C. Dismissal of Opt-Out Claims........0.00....... A7]1

LD. AD ceerieiiieo entsactsteetecinilarinasas A72

OPERATION OF THE SETTLEMENT

PR FEED +in0qsciaisnnnaeerambcohateceeaaei aioe eee eases A73

A. Veteran Payment Program.................... A74

B. Class Assistance Program... A77

TERE PREORIVE FIR. LI iitsrissnecsistimiinanaccs A78

A. FRAP Bevis oi ee A79

SS. FO IN TEC TE ee risiarccsicrinnass A80

LAW ovvicisciccospu needa aa A85

A. Subject Matter Jurisdiction.........00000008. A85

1. Adequacy of Notice of

PRI cacsbiatinetdactiagantsd crstutsevessexvts A86

2. Court’s Retained Jurisdiction.......... A87

3. Court’s Power to Enforce Its

SIRTURDUT Ns ssa. danectisiannbateesan cacheniasssids A91

4. Federal Nature of Plaintiffs’

ROI aie sa srk inciaieicencscete taieatsaocahienieseass A92

5. Court’s Power to Order

I sivtcteciactinlsoihahuntscmumaan A95

B. WEOUOR We Ciavercstccsssmtteniaemntacons, A96

CII FAO scsenecvssnscciteierdenenacmuinnalanetecamndens A101

FPF PUD sccinsiicviskeesvmertneenn aaa A102

Plaintiffs consist of two groups: first, those veter-

ans and family members within the class covered by

the Agent Orange class action pending in this court,

and

second, civilians claiming injury from Agent

Orange who were never members of the class.

Defendants are the same as those in the class action.

The current suits began as state court actions in

_ Texas. They were removed to the federal court in

Texas and then transferred by the Multidistrict Panel

to the Eastern District of New York. Plaintiffs now

A60

seek to remand their actions to Texas state court for

lack of federal subject matter jurisdiction. Defendants

move to dismiss plaintiffs’ claims or for an injunc-

tion prohibiting plaintiffs from continuing their

actions.

As explained in this memorandum, the plaintiffs

who are members of the Agent Orange class must

have their suits dismissed; they are free to share in

the proceeds of the class action settlement to the

extent they can demonstrate entitlement under the

distribution plans being administered by the court.

As it pertains to the civilian plaintiffs—who are not

members of the class—the plaintiffs’ motion to re-

mand raises issues concerning the scope of 28 U.S.C. §

1442(a)(1) that require further consideration. These

issues will be addressed in a separate memorandum.

I. INTRODUCTION

A. Agent Orange Litigation: 1979-1984

The current controversy is part of a continuing

litigation whose first phase ended in settlement after

six years of effort by scores of lawyers and many court

officers—special masters, magistrates, and judges.

Among the hundreds of published and unpublished

decisions, see In re “Agent Orange” Prod. Liab. Litig.,

475 F.Supp. 928 (E.D.N.Y.1979) (dismissing federal

constitutional and statutory claims, reserving possi-

ble federal common law claims, denying motion to

limit communications to third parties); In re “Agent

Orange” Prod. Liab. Litig., 506 F.Supp. 737

(E.D.N.Y.1979) (finding subject matter jurisdiction on

basis of federal common law issues), rev'd, 635 F.2d

981 (2d Cir.1980), cert. denied, 454 U.S. 1128, 102 S.Ct.

A6é1

980, 71 L.Ed.2d 116 (1981); In re “Agent Orange” Prod.

Liab. Litig., 28 Fed.R.Serv.2d (Callaghan) 993

(E.D.N.Y.1980) (granting motion of terminally ill

plaintiff to videotape his own deposition); In re

“Agent Orange” Prod. Liab. Litig., 506 F.Supp. 750

(E.D.N.Y.1980) (ordering government to refrain from

destruction of documents pursuant to internal pro-

cedure); In re “Agent Orange” Prod. Liab. Litig., 506

F.Supp. 753 (E.D.N.Y.1980) (various orders concern-

ing modification of complaint and answers); In re

“Agent Orange” Prod. Liab. Litig., 506 F.Supp. 754

(E.D.N.Y.1980) (ordering videotaped deposition); In re

“Agent Orange” Prod. Liab. Litig., 506 F.Supp. 756

(E.D.N.Y.1980) (establishing agenda for status confer-

ence); In re “Agent Orange” Prod. Liab. Litig., 506

F.Supp. 757 (E.D.N.Y.1980) (requiring plaintiffs to file

individual notices to retain right to bring actions

against federal government); In re “Agent Orange”

Prod. Liab. Litig., 506 F.Supp. 762 (E.D.N.Y.1980)

(dismissing claims against government as third-party

defendant, establishing case management plan, con-

ditionally certifying Rule 23(b)(3) class, and denying

defendants’ motion for summary judgment); In re

“Agent Orange” Prod. Liab. Litig., 91 F.R.D. 616

(E.D.N.Y.1981) (establishing committee to review

procedures for videotaped depositions); In re “Agent

Orange” Prod. Liab. Litig., 91 F.R.D. 618 (E.D.N.Y.1981)

(allowing motion to amend caption, denying motion

to amend complaint, denying defendants’ motion for

summary judgment on “government contractor”

defense); In re “Agent Orange” Prod. Liab. Litig., 93

F.R.D. 514 (E.D.N.Y.1982) (allowing defendant to pro-

ceed with scheduled destruction of documents); In re

“Agent Orange” Prod. Liab. Litig., 534 F.Supp. 1046

(E.D.N.Y.1982) (denying reargument on dismissal of

government as third-party defendant, denying inter-

A62

locutory appeal, provisionally dismissing claims

against non-manufacturer defendants, denying mo-

tion to form steering committee for plaintiffs’

counsel, denying motion for decertification of class,

deferring decision on statute of limitations issues,

and establishing elements of government contractor

defense); In re “Agent Orange” Prod. Liab. Litig., 537

F.Supp. 977 (E.D.N.Y.1982) (provisionally dismissing

claims against non-manufacturer defendant); In re

“Agent Orange” Prod. Liab. Litig., 94 F.R.D. 173

(E.D.N.Y.1982) (appointing special master to super-

vise discovery); In re “Agent Orange” Prod. Liab.

Litig., 544 F.Supp. 808 (E.D.N.Y.1982) (denying motion

to disqualify defense attorneys; provisionally dismiss-

ing claims against certain non-manufacturer defen-

dants, and denying motion to implead suppliers); In

re “Agent Orange” Prod. Liab. Litig., 95 F.R.D. 191

(E.D.N.Y.1982) (clarifying that denial of motion to

implead suppliers was without prejudice); In re

“Agent Orange” Prod. Liab. Litig., 95 F.R.D. 192

(E.D.N.Y.1982) (affirming special master’s ruling as to

location of depositions); In re “Agent Orange” Prod.

Liab. Litig., 96 F.R.D. 578 (E.D.N.Y.1983) (adopting

special master’s protective order for discovery of gov-

ernment documents); In re “Agent Orange” Prod.

Liab. Litig., 96 F.R.D. 582 (E.D.N.Y.1983) (rejecting first

amendment challenge to protective order); In re

“Agent Orange” Prod. Liab. Litig., 96 F.R.D. 587

(E.D.N.Y.1983) (adopting with modifications special

master’s order regarding videotaped depositions); In

re “Agent Orange” Prod. Liab. Litig., 97 F.R.D. 424

(E.D.N.Y.1983) (adopting protective order); In re

“Agent Orange” Prod. Liab. Litig., 97 F.R.D. 424

(E.D.N.Y.1983) (adopting special master’s protective

order for Department of Agriculture documents); In

re “Agent Orange” Prod. Liab. Litig., 97 F.R.D. 427

A63

(E.D.N.Y.1983) (adopting special master’s procedures

for discovery of documents possibly subject to execu-

tive privilege); In re “Agent Orange” Prod. Liab.

Litig., 97 F.R.D. 541 (E.D.N.Y.1983) (denying interlocu-

tory appeal of decision deferring certification of class

and determination of appropriate notice); In re

“Agent Orange” Prod. Liab. Litig., 97 F.R.D. 542

(E.D.N.Y.1983) (affirming special master’s denial of

discovery request); In re “Agent Orange” Prod. Liab.

Litig., 565 F.Supp. 1263 (E.D.N.Y.1983) (granting

summary judgment for four defendants on govern-

ment contractor defense; denying summary

judgment for other defendants); In re “Agent

Orange” Prod. Liab. Litig., 98 F.R.D. 522 (E.D.N.Y.1983)

(adopting order of special master concerning discov-

ery of government documents); In re “Agent Orange”

Prod. Liab. Litig., 98 F.R.D. 539 (E.D.N.Y.1983)

(adopting special master’s order to unseal documents

in connection with summary judgment motions); In

re “Agent Orange” Prod. Liab. Litig., 98 F.R.D. 554

(E.D.N.Y.1983) (denying request for reconsideration of

order to unseal documents); In re “Agent Orange”

Prod. Liab. Litig., 98 F.R.D. 557 (E.D.N.Y.1983)

(ordering special master to review discovery deci-

sions in light of court’s decision to try causality and

liability issues); In re “Agent Orange” Prod. Liab.

Litig., 98 F.R.D. 558 (E.D.N.Y.1983) (approving special

master’s order of additional discovery to clarify cir-

cumstances surrounding document destruction); In

re “Agent Orange” Prod. Liab. Litig., 570 F.Supp. 693

(E.D.N.Y.1983) (clarifying program for discovery); In

re “Agent Orange” Prod. Liab. Litig., 571 F.Supp. 481

(E.D.N.Y.1983) (granting motion of law firm to be re-

‘ieved as lead counsel for piaintiffs and appointing

new plaintiffs’ management committee); In re

“Agent Orange” Prod. Liab. Litig., 99 F.R.D. 338

A6é4

(E.D.N.Y.1983) (approving discovery recommenda-

tions of special master); In re “Agent Orange” Prod.

Liab. Litig., 99 F.R.D. 645 (E.D.N.Y.1983) (lifting prior

protective order applying to government documents

obtained during discovery); In re “Agent Orange”

Prod. Liab. Litig., 100 F.R.D. 718 (E.D.N.Y.) (certifying

Rule 23(b)(3) and Rule 23(b)(1)(B) classes), appeal

denied, 100 F.R.D. 735 (E.D.N.Y.1983), mandamus

denied, 725 F.2d 858 (2d Cir.1984), aff'd, 818 F.2d 145

(2d Cir.1987), cert. denied, 484 U.S. 1004, 108 S.Ct. 695,

98 L.Ed.2d 648 (1988); In re “Agent Orange” Prod. Liab.

Litig., 100 F.R.D. 778 (E.D.N.Y.1984) (denying motion

to implead suppliers of chemical components); In re

“Agent Orange” Prod. Liab. Litig., 580 F.Supp. 690

(E.D.N.Y.1984) (finding national consensus law on

issues of liability, government contractor defense and

punitive damages); In re “Agent Orange” Prod. Liab.

Litig., 580 F.Supp. 1242 (E.D.N.Y.) (reinstating third-

party plaintiffs’ claim for indemnity against govern-

ment with respect to claims of veterans’ wives and

children), mandamus denied, 733 F.2d 10 (2d Cir.),

appeal denied, 745 F.2d 161 (2d Cir.), cert. denied, 465

U.S. 1067, 104 S.Ct. 1417, 79 L.Ed.2d 743 (1984); In re

“Agent Orange” Prod. Liab. Litig., 101 F.R.D. 97

(E.D.N.Y.1984) (ordering in camera disclosure of

names of scientists deleted from government report);

In re “Agent Orange” Prod. Liab. Litig., 597 F.Supp.

740 (E.D.N.Y.1984) (approving settlement of class

action subject to fairness hearings); In re “Agent

Orange” Prod. Liab. Litig., 603 F.Supp. 239

(E.D.N.Y.1985) (dismissing claims of veterans’ wives

and children against government), affd in part,

vacated in part, 818 F.2d 201 (2d Cir.1987), cert. denied,

- 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 648 (1988); In re

“Agent Orange” Prod. Liab. Litig., 104 F.R.D. 559

(E.D.N.Y.1985) (modifying protective orders); In re

A65

“Agent Orange” Prod. Liab. Litig., 105 F.R.D. 577

(E.D.N.Y.1985) (affirming with modification magis-

trate’s order that defendants in two non-settled cases

produce deponents); In re “Agent Orange” Prod. Liab.

Litig., 611 F.Supp. 1221 (E.D.N.Y.1985) (dismissing

defendants’ claim for indemnity from government

for settlement payments to veterans’ families), aff'd,

818 F.2d 204 (2d Cir.1987); In re “Agent Orange” Prod.

Liab. Litig., 611 F.Supp. 1223 (E.D.N.Y.1985) (ruling as

to admissibility of opt-out plaintiff’s scientific evi-

dence and expert testimony and granting summary

judgment in favor of defendants for plaintiffs’ failure

to establish causation), affd, 818 F.2d 187 (2d Cir.1987),

cert. denied, 487 U.S. 1234, 108 S.Ct. 2898, 101 L.Ed.2d

932 (1988); In re “Agent Orange” Prod. Liab. Litig., 611

F.Supp. 1267 (E.D.N.Y.1985) canes aff'd, 818 F.2d 187

(2d Cir.1987), cert. denied, 487 U.S. 1234, 108 S.Ct. 2898,

101 L.Ed.2d 932 (1988); In re “Agent Orange” Prod.

Liab. Litig., 611 F.Supp. 1285 (E.D.N.Y.1985)

(dismissing action brought by Hawaiian civilians),

aff'd in part, vacated in part, 818 F.2d 210 (2d Cir.1987),

cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 648

(1988); In re “Agent Orange” Prod. Liab. Litig., 611

F.Supp. 1290 (E.D.N.Y.1985) (dismissing claim of

civilian physician for failure to demonstrate expo-

sure to herbicides), aff'd in part, vacated in part, 818

F.2d 210 (2d Cir.1987), cert. denied, 484 U.S. 1004, 108

S.Ct. 695, 98 L.Ed.2d 648 (1988); In re “Agent Orange”

Prod. Liab. Litig., 611 F.Supp. 1296 (E.D.N.Y.1985)

(determining class-action plaintiffs’ attorney fees and

reaffirming settlement); aff'd in part, rev'd in part,

818 F.2d 226 (2d Cir.1987); In re “Agent Orange” Prod.

Liab. Litig., 611 F.Supp. 1396 (E.D.N.Y.1985)

- (establishing plan for disbursement of settlement

fund pending appeals), aff'd in part, rev'd in part, 818

F.2d 179 (2d Cir.1987); In re “Agent Orange” Prod.

A66

Liab. Litig., 611 F.Supp. 1452 (E.D.N.Y.1985) (denying

motion to set aside attorney fee-sharing arrange-

ment), rev'd in part, 818 F.2d 216 (2d Cir.), cert.

denied, 484 U.S. 926, 108 S.Ct. 289, 98 L.Ed.2d 249

(1987); In re “Agent Orange” Prod. Liab. Litig., 618

F.Supp. 623 (E.D.N.Y.1985) (approving settlement of

class action and dismissing with prejudice claims of

class members); In re “Agent Orange” Prod. Liab.

Litig., 618 F.Supp. 625 (E.D.N.Y.1985) (approving plan

for Australia and New Zealand); In re “Agent

Orange” Prod. Liab. Litig., 787 F.2d 822 (2d Cir.1986)

(dismissing claims of non-class plaintiffs against

defendant not named in complaints); In re “Agent

Orange” Prod. Liab. Litig., 800 F.2d 14 (2d Cir.1986)

(denying motion to disqualify plaintiffs’ attorneys

from appealing settlement); In re “Agent Orange”

Prod. Liab. Litig., 804 F.2d 19 (2d Cir.1986) (denying

repeal of stay on settlement funds pending appeal); In

re “Agent Orange” Prod. Liab. Litig., 689 F.Supp. 1250

(E.D.N.Y.1988) (modifying class assistance program as

required by 818 F.2d 179 and granting opt-out plain-

tiffs opportunity to opt into class for purposes of

benefiting from settlement fund).

Narratives of these events are in print. See, e.g., In

re “Agent Orange” Prod. Liab. Litig., 818 F.2d 145, 148-

61 (2d Cir.1987), cert. denied, 484 U.S. 1004, 108 S.Ct.

695, 98 L.Ed.2d 648 (1988). Nevertheless, a brief reca-

pitulation of certain aspects of this history is desirable

as background to the current phase of the Agent

Orange litigation saga.

While in the service of their country, hundreds of

thousands of military service personnel were

exposed to the defoliant Agent Orange, which con-

tained trace elements of dioxin. Lawsuits on behalf of

A67

veterans proliferated throughout the country starting

in 1978. The suits—as much a demand for compensa-

tion as a political protest of the treatment of Vietnam

veterans by the government and public at large—

were brought against the various manufacturers of

defoliants, who in turn impleaded the federal gov-

ernment. Between two and three million members

of the armed forces who served in or near Vietnam

as well as their families were potential plaintiffs.

In 1979, the Judicial Panel on Multidistrict Litiga-

tion transferred as MDL 381 over 600 cases involving

about 15,000 plaintiffs to the Eastern District of New

York for coordinated and consolidated pretrial pro-

ceedings. In the initial proceedings of MDL-381, the

court denied defendants’ motion to dismiss for lack

of subject matter jurisdiction because the complaint

raised questions of federal common law. See 506

F.Supp. at 737. When the Second Circuit Court of

Appeals reversed this ruling, see In re “Agent

Orange” Prod. Liab. Litig., 635 F.2d 987 (2d Cir.1980),

cert. denied, 454 U.S. 1128, 102 S.Ct. 980, 71 L.Ed.2d 116

(1981), the litigation became a suit predicated on

diversity jurisdiction.

In December of 1980, the court granted the federal

government's motion to be dismissed as a third-party

defendant on the basis of sovereign immunity. 506

F.Supp. at 762. It also denied plaintiffs’ motion to cre-

ate a “limited fund” class action under Federal Rule

of Civil Procedure 23(b)(1)(B), and instead indicated

that it planned to certify a “common question” class

under Rule 23(b)(3). Id. In addition, the court denied

the defendants’ motion to dismiss on the ground that

the production of defoliants was ordered by, and met

the specifications of, the federal government (the

A68

“military contractor defense”). The court indicated

the defendants could later attempt to prove the appli-

cability of the defense. Id. Following discovery, the

court granted, but did not enter, summary judgment

on the military contractor defense for some but not

all defendants. 565 F.Supp. at 1263.

In December of 1983, the court certified two classes

of plaintiffs and scheduled a trial to commence in

May of 1984. A Rule 23(b)(3) class with opt-out rights

was created to try the fundamental common question

of the causal relationship between dioxin and plain-

tiffs’ injuries. 100 F.R.D. at 718. In addition, a Rule

23(b)(1)(B) limited fund class without opt-out rights

was created to cover plaintiffs’ punitive damage

claims. Id. The 23(b)(3) class was defined as

those persons who were in the United States,

New Zealand or Australian Armed Forces at any

time from 1961 to 1972 who were injured while in

or near Vietnam by exposure to Agent Orange or

other phenoxy herbicides.... The class also

includes spouses, parents, and children of the

veterans born before January 1, 1984, directly or

derivatively injured as a result of the exposure.

Id. at 729. Pursuant to Rule 23(c)(2), the court ordered

plaintiffs’ counsel to notify class members by mail

where possible, and by radio, television, magazine,

and newspaper announcements throughout this

country, Australia, and New Zealand. The mailings

and announcements informed class members that

they would be bound by the class action unless they

forwarded a written request for exclusion to the clerk

of the court by May 1, 1984. Id. at 732. Fewer than

A69

2,500 servicepersons filed opt-out requests. See 597

F.Supp. at 756.

B. The Settlement Agreement

On May 7, 1984, a tentative settlement was forged.

According to its terms, the defendants agreed to pay

the class $180 million in final settlement of all claims

arising out of exposure to Agent Orange then or in

the future. Concerned with the potential for new

actions and recognizing the need for finality, the

Settlement Agreement expressly stated that “[t]he

class specifically includes persons who have not yet

manifested injury.” 597 F.Supp. at 865.

The Settlement Agreement provided that the $180

million be paid into a Settlement Fund to be estab-

lished, maintained, and administered by the court.

The agreement also required the court to retain

jurisdiction over the Settlement Fund pending its

final disposition. Id. at 866. The exclusive remedy

provided for all class members was a claim against

the Settlement Fund. Under the Settlement Agree-

ment, class members were forever barred from

instituting or maintaining any action against defen-

dants arising out of or relating to, or in the future

arising out of or relating to, exposure to Agent

Orange. The Settlement set aside $10 million of the

$180 million to indemnify the defendants from any

judgments obtained in state court actions by mem-

bers of the class alleging harm caused by exposure to

Agent Orange in or near Vietnam. Any part of the

indemnity fund not used reverts to the benefit of the

' class members.

A70

The Settlement Agreement was preliminarily

approved on January 7, 1985. See id. at 862. Notice of

the proposed settlement was given to the class.

Following eleven days of fairness hearings in five

cities, the court granted final approval of the Settie-

ment Agreement on June 18, 1985. 611 F.Supp. at

1347. Subsequently, the court issued an Order and

Final Judgment of Dismissal which: (1) dismissed

with prejudice all claims by class members; (2) barred

all class members from instituting or maintaining

any action ageinst defendants arising out of the sub-

ject matter of the class action; and (3) retained the

court's jurisdiction over the class action for the pur-

pose of maintaining, administering, and distributing

the Settlement Fund. See 618 F.Supp. at 624.

C. Dismissal of Opt-Out Claims

After the court preliminarily approved the

Settlement Agreement, most of the original 2,500

opt-outs chose to opt back into the class. Two

hundred and eighty-two servicepersons did not. See

611 F.Supp. at 1230. Their claims were embodied in

seventeen different cases.

Summary judgment was granted against each opt-

out plaintiff on the grounds, inter alia, that none

could prove by the probability demanded in tort

litigation that his or her ailment was caused by Agent

Orange, see 611 F.Supp. at 1260-63; 611 F.Supp. at

1284-85, and that all the claims were barred by the

military contractor defense. See 611 F.Supp. at 1263-

64; 611 F.Supp. at 1285.

A71

D. Appeals

Various district court rulings including the final

judgment were appealed to the Court of Appeals for

the Second Circuit. The rulings included orders certi-

fying the class action, approving the Settlement

Agreement, outlining the distribution plan, award-

ing counsel fees, granting summary judgment

against the opt-out claimants, dismissing untimely

claims, and dismissing all claims of class members

who objected to the Settlement Agreement. Specifi-

cally assigned as errors were the inclusion in the class

definition of persons with latent or “after-manifest-

ing” injuries, the sufficiency of the notices of class

certification and settlement of the action, the ade-

quacy of the Settlement Fund, and the propriety of

the distribution plan.

In nine unanimous opinions date April 21, 1987,

the Court of Appeals disposed of all of the numerous

individual appeals except those from the order of the

district court providing for public access to docu-

ments sealed from public view during discovery.

Petitions for rehearing were denied. The Court of

Appeals approved the settlement and multiple

petitions to the United States Supreme Court were

denied.

Specifically, the Court of Appeals affirmed the

adequacy of notice, the adequacy of the representation

given the absent class members, the fairness of the

settlement, and the dismissal of the opt-out plaintiffs’

claims. See 818 F.2d 145 (affirming class certification,

adequacy of notice to class, and approving settle-

ment); In re “Agent Orange” Prod. Liab. Litig., 818

F.2d 179 (2d Cir.1987) (approving Veteran Payment

A72

Program but rejecting Class Assistance Program as an

organization operated independently of the court); In

re “Agent Orange” Prod. Liab. Litig., 818 F.2d 187 (2d

Cir.1987) (affirming summary judgment against opt-

out plaintiffs), cert. denied, 487 U.S. 1234, 108 S.Ct.

2898, 101 L.Ed. 2d 932 (1988); In re “Agent Orange”

Prod. Liab. Litig., 818 F.2d 194 (2d Cir.1987) (affirming

dismissal of Federal Tort Claims Act claims of

servicepersons and their relatives); In re “Agent

Orange” Prod. Liab. Litig., 818 F.2d 201 (2d Cir.1987)

(affirming dismissal of “direct” claims against the

United States brought by wives and children of

servicepersons), cert. denied, 484 U.S. 1004, 108 S.Ct.

695, 98 L.Ed.2d 647 (1988); In re “Agent Orange” Prod.

Liab. Litig., 818 F.2d 204 (affirming dismissal of man-

ufacturers’ claim for indemnity against United States

for settlement payments); In re “Agent Orange” Prod.

Liab. Litig., 818 F.2d 210 (2d Cir.1987) (affirming

dismissals of Hawaiian civilians’ actions), cert.

denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 647

(1988); In re “Agent Orange” Prod. Liab. Litig., 818

F.2d 216 (2d Cir.) (rejecting plaintiff class attorneys’

fee-sharing agreement and reinstating in part fee

award determina

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.