Petition for Writ of Certiorari — Blackwater Security Consulting, LLC v. Nordan, 127 S. Ct. 1381 (2007) (No. 06-857)

Supreme Court brief2007

Ask Donna

What actually matters in this document.

Text

(1) Supreme Court, U.S.

FILED

No. 06- i $

ss FFICE O E CLERK

4n the Supreme Court of the United orates

BLACKWATER SECURITY CONSULTING, LLC, ef al.,

Petitioners,

RICHARD P. NORDAN,

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Fourth Circuit

PETITION FOR A WRIT OF CERTIORARI

MICHAEL P. SOCARRAS KENNETH W. STARR

M. MILLER BAKER Counsel of Record

MICHAEL S. NADEt RICK RICHMOND

McDERMOTT WILL & EMERY LEP KIRKLAND & ELLISI LP

600 Thirteenth Street, N.W. 777 South Figueroa Street

Washington, DC 20005 Los Angeles. CA 90017

(202) 756-8000 (213) 680-8400

JOSEPH E. SCHMITZ

THE PRINCE GROUP

1650 Tysons Boulevard, Suite 800

McLean. VA 22102

(703) 663-6997

drtorneys for Petitioners Blackwater Security Consulting LLC.

and Blackwater Lodge and Training Center, Inc

Additional Counsel Listed on Inside Front Cover

December 20, 2006

WILSON-EPES PRINTING CO.. INC. - (202) 789-0096 - WASHINGTON. DC. 20001

KIRK G. WARNER SUSAN E, ENGEL

SMITH, ANDERSON, BLOUNT, JENNIFER S. ATKINS

DORSETT, MITCHELL & JERNIGAN KIRKLAND & ELLIS LLP

P.O. Box 261 | 655 Fifteenth Street, N.W.

Raleigh, NC 27602 Washington, DC 20005

(919) 821-1220 (202) 879-5000

‘Altorneys for Petitioners Blackwater Security Consulting LLC,

and Blackwater Lodge and Training Center, Inc.

QUESTIONS PRESENTED

In a far-reaching decision of enormous practical

importance to the nation’s unfolding military effort in Iraq

and Afghanistan, the Fourth Circuit has exposed U.S.

civilian contractors carrying on their Defense Department-

mandated operations in hostile territory to the destabilizing

reach of fifty state tort systems in this country. In remanding

this closely-watched case to the state courts of North

Carolina, the court_of appeals deepened a circuit conflict

going to the fundamental power of federal courts to

adjudicate — through dismissal — actions that by their

nature are exclusively federal. By so doing, the Fourth

Circuit has relegated civilian contractors serving in

profoundly dangerous circumstances to the vagaries of a

Balkanized regime of conflicting legal systems among the

several States. Indeed, the state court has already

commenced proceedings in this action, permitting

respondents to proceed with discovery relating to U.S.

military operations and planning. The Court should grant

certiorari on the questions presented below, or, alternatively,

call for the views of the Solicitor General on these questions,

which have far-reaching implications for the nation.

The questions presented are two:

1. Whether a federal district court that lacks subject-

matter jurisdiction over a removed action must dismiss rather

than remand the action when the state court also lacks

jurisdiction.

2. Whether a court of appeals has jurisdiction to review

a district court’s remand order notwithstanding 28 U.S.C.

§ 1447(d) when the remand order would circumvent federal

statutory and federal constitutional designs to preclude state

court jurisdiction.

PARTIES TO THE PROCEEDING

The parties to this proceeding are Petitioners Blackwater

Security Consulting, LLC and Blackwater Lodge and

Training Center, Inc.; and Respondent Richard P. Nordan.

iii

CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Court Rule 29.6, Petitioners state

that Blackwater Security Consulting, LLC, and Blackwater

Lodge and Training Center, Inc., are wholly-owned

subsidiaries of The Prince Group. No _publicly-held

company owns 10% or more of the stock of any of the

foregoing entities.

TABLE OF CONTENTS

PARTIES TO THE PROCEEDING

CORPORATE DISCLOSURE STATEMENT

TABLE OF CONTENTS

STATUTES INVOLVED

STATEMENT OF THE CASE

I. The Court Should Resolve An Important And

Recurring Question Of Federal Practice Over

Which The Federal Courts Are In Disarray. ............0..00..- 9

. The Court Of Appeals Has Jurisdiction To

Review A Remand Order Notwithstanding 28

U.S.C. § 1447(d) When The Remand Order

Would Circumvent Federal Statutory And Federal

Constitutional Designs To Preclude State Court

PN ahicschadoniesttiectaiatedcentaetiaeicdsacutencbiac asin 19

CONCLUSION

Vii

ABLE OF AUTHORITIES

Cases

Aliota v. Graham,

984 F.2d 1350 (3d Cir. 1993)

Arizona v. Manypenny,

451 U.S. 232 (1981)

Asarco, Inc. v. Glenara, Ltd.,

912 F.2d 784 (Sth Cir. 1990)

Barbara v. NYSE,

99 F.3d 49 (2d Cir. 1996)

Bell v. City of Kellogg,

922 F.2d 1418 (9th Cir. 1991)

Borneman v. United States,

213 F.3d 819 (4th Cir. 2000)

Bromwell v. Mich. Mut. Ins. Co.,

115 F.3d 208 (3d Cir. 1997)

Calcano- Martinez v. INS,

533 U.S. 348 (2001)

Cedano-Viera v. Ashcroft,

324 F.3d 1062 (9th Cir. 2003)

Chelsea Cmty. Hosp. v. Mich. Blue Cross Ass’n,

» SHRP FSF CO Foi cei, 24

Coyne ex rel. Ohio v. Am. Tobacco Co..,

183 F.3d 488 (6th Cir. 1999)

Vili

Czerkies v. Dep't of Labor,

73 F.3d 1435 (7th Cir. 1996)

Dep’t of Revenue v. Inv. Fin. Mgmt. Co.,

831 F.2d 790 (8th Cir. 1987)

Doe v. Cheney,

885 F.2d 898 (D.C. Cir. 1989)

Edwards v. U.S. Dep’t of Justice,

43 F.3d 312 (7th Cir. 1994)

Ethridge v. Harbor House Rest.,

861 F.2d 1389 (9th Cir. 1988)

Fisher v. Halliburton,

454 F. Supp. 2d 637 (S.D. Tex. 2006)

Franchise Tax Bd. of California v. Constr. Laborers

Vacation Trust for S. California,

Nee cana senceceacaneersseuntanecuveneniees 10

Gen. Inv. Co. v. Lake Shore & Mich. S. Ry. Co.,

260 U.S. 261 (1922) 10, 11, 13

Gilligan v. Morgan,

413 U.S. 1 (1973)

Humphries v. Various Fed. USINS Employees,

164 F.3d 936 (Sth Cir. 1999)

In re Elko County Grand Jury,

109 F.3d 554 (9th Cir. 1997)

International Primate Protection League v. Administrators

of Tulane Educational Fund,

500 U.S. 72 (1991)

Johnson v. Robison,

415 US. 361 (1974)

Koppers Co. v. Con’l Cas. Co.,

337 F.2d 499 (8th Cir. 1964)

Lambert Run Coal Co. v. Baltimore & Ohio R.R.,

258 U.S. 377 (1922)

Lane v. Halliburton,

No. H-06-1971, 2006 WL 2583438

{S.D. Tex. Sept. 7, 2006)

Lontiz v. Tharp,

413 F.3d 435 (4th Cir. 2005))

Mangold v. Analytic Servs., Inc.,

77 F.3d 1442 (4th Cir. 1996)

McBryde v. Comm. to Review Circuit Council Conduct,

Se Ee Fe Ci es Col ED sesrscanctutaceaaeapuiccantndiairitdiaais 24

McMahon vy. Presidential Airways, Inc.,

410 F. Supp. 2d 1189 (M.D. Fla. 2006)

Mignogna v. Sair Aviation, Inc.,

937 F.2d 37 (2d Cir. 1991)

Nyeholt v. Secretary of Veterans Affairs,

COE PE NII Oe K, BE i rvictvncenstvntoieieicinctincisniiiaa 24

Osborn v. Haley,

422 F.3d 359 (6th Cir. 2005)

Osborn v. Haley,

126 S. Ct. 2017 (2006)

Paluca v. Sec’y of Labor, 3

Fe ee Pe CRN) CIEE Ps ccsinsiccdecravnsenseninicbiningueineviies 24

Roach v. W.Va. Reg’l Jail & Corr. Facility Auth.,

Fe I BO iteieisistninscscsiininsipcenevinbvsititssninns 14

S. Windsor Convalescent Home v. Mathews,

Pe ee Fe ile FF Pe iicetvvnsceccnscestdsnsibevedtennenssasonnse 24

Schacht v. Wis. Dep’t of Corrs.,

BO Pe BEE CF Ge, BP iiicsinincitotccsieniancnitnsentiicnrsicianns 14

Shives v. CSX Transportation, Inc. (In re CSX Ti ransp.),

BPE Oe BO Cy, FIG i ceevesiccssrnsovvccivesdcscsnece 6, 13, 18

Smith v. Cromer,

Re Fe Te Ie ile Fe Mivccccnsersincenisnserndsisisntriniinsteciadaes 16

Smith v. Halliburton,

No. H-06-0462, 2006 WL 2521326

Sm es SUI: UR UI scsisiniisensacieediersushnsonecseeensens 15, 26

Smith v. Wis. Dep’t of Agric.,

Pa Bee Ty, Le 3) |) ee. paticaacnases i4

Smith-Idol v. Halliburton,

No. H-06-1168, 2006 WL 2927685

Ts MI, Us icicle i ci a 26

Tarble’s Case,

RE ok: 9 « SST ND ETE REE 19, 23, 25

Thermtron Products, Inc. v. Hermansdorfer,

AF We PE PD rtitrescticcbiiituttinentnnienasiadsunpnuncii 7,17, 24

Univ. of S. Ala. v. Am. Tobacco Co.,

FO ee UNE ee Ce rian veinnnstcnciseecdnenicizcns 14

Waco v. U.S. Fidelity & Guaranty Co.,

ein sacle cinissinentenctaceruinenidisee toca: 7

Webster v. Doe,

oes Bg 1.) MORO NERO AIE PALS RIN ert 23

Whitaker v. Kellogg Brown & Root, Inc.,

444 F. Supp. 2d. 1277 (M.D. Ga. 2006) o........ccccecsceseseee. 26

Woodson v. Halliburton Corp.,

No. H-06-2107, 2006 U.S. Dist. LEXIS 70311 (S. D. Tex.

Ne NINE seria sassaiialcdesasdobpaninmncanscaiaudtaniaiii tical aii 26

Statutes

coli sag Tk |__| SERN SRIM anne oar Ae Oo OTR RAD Se NE RE SPE T 18

Fe Re NO sectiscecncssnsieiiabiansnedsosabiaisseadcasucepc 1, 8,18

es UM airittdinshisiinvisseshiininitetindcilpsiokedsatoeis ater ue 9

Pe i IIE UP thaisiiciciabeuttcdcudacidtedianiegtiicomeetine esas l

ee I I taletancnsteidctabincsous ain jeatiblatinee accu totes 5

a IE ienisaainieasiasnatimendiescahicdsninttreccistas % 15, 16

Be eRe SID is oisoiss beiviesesdosacinneltonanittinkantinasbliccoucdbccn, 2

Sk RE GERI te ee AS OST O SSIS Hak z, 12, 45

Se Wa tetesike sui esteld sisvictnbaabascddessucioce coun da 16

PE A et SIG ED cicehskschvtcnoscistiosstdeastcaticnspitainiasiderccies 15, 16

PE Ae FIT sthekicaicciisenntardaadiwisddesteansonincedocecs 9, 15

Fh) 8, | i a i

xii

ee Sr EE tiiasniiceseunniahnainieinalaniananiiias passim

Be Ci ire 0 OTT criicisniensaciinnisainaianibianiicinataapiiiee 20

FF Uitiee @ Fad cccscccsrsenesie oles 6s eae 18

Fe in Ob EEE titcniiiniesiscaciniicaneeeninseiinineamaaidddaaaaas 22

Ae Rh is h DF i sicscansdvideadatactpenenpiemnicenninatinneiieeomeiaianinpéiniin l

Oe Shiai ce SF WP PUIED ecissosvbonicieseuesedelitdeonseccnntiissanainidinteaia 18, 21

Ae Ae ane Oh Be ED cistccdccteiccieiiinliadiatinidnldbaniniiialiaae passim

Ce Brian Se HD victcrtscbssidansuasansbaiaeiiadieiananaentl 5

EF Aire: IE scctintintaiuvstictitiienateianediniciiasaiimmanamalaiaal 5

FG ae Se ED vxressidridiiaviidcebitessilelidadibcianieiaiacmladiannnioncneaial 24

SEs ee PET cctnsresereesebtiitnssenntiesniiiiaaiinemenel 23

Fa Se IU ltas Et wvscdeindittnissipniaieicinbiessiettintalpinenidantiaaabennbaniaeladaaet 23

Pere SO, es Se ee cca taccnnretcssiicndinséinasiantenincemmmees: 5

Fees Mes, TIE Di; OF iccxesaretecedaaviieiantanincnsisiudeiadioeeianioalaaiaan 9

Rules

14B Charles Alan Wright, et-al., FEDERAL PRACTICE &

PE Ee Ge Fe iccerwicncccvedavecrsvensrsctuntebetinieouns 10, 12

16 MOORE’S FEDERAL PRACTICE § 107.41[1 ][e][iii][E] (3d

1 Be isissinicttiatcinvtatamedadimanumendtnameiacnees 14

FD TOE BOF 1 Be 6D eevcsccesncccnsencrscnscinatenvesiesniananeniniods 21

X1il

National Defense Authorization Act

for Fiscal Year 2007, Pub. L. No. 109-364,

UU ar a 8

Senate Report No. 92-1175 (1972) 2]

OPINIONS BELOW

The opinion of the court of appeals is reported at 460

F.3d 576 and is reprinted in the Appendix at App. la-32a.

The opinion of the district court is reported at 382 F. Supp.

2d 801 and is reprinted in the Appendix at App. 33a-57a.

JURISDICTION

The judgment of the court of appeals was entered on

August 24, 2006. A timely-filed petition for rehearing and

Suggestion for rehearing en banc was denied on September

28, 2006. App. 58a-60a. This Court has jurisdiction under

28 U.S.C. § 1254(1).

STATUTES INVOLVED

The Defense Base Act, 42 U.S.C. § 1651 ef seg.

(“DBA”), is reprinted in its entirety in the Appendix

beginning at App. 61a.

42 U.S.C. § 1651(c) provides, in pertinent part:

Liability as exclusive. The liability of an employer,

contractor (or any subcontractor or subordinate subcontractor

with respect to the contract of such contractor) under this

chapter shall be exclusive and in place of all other liability of

such employer, contractor, subcontractor, or subordinate

contractor to his employees (and their dependents) coming

within the purview of this chapter, under the workmen’s

compensation law of any State, Territory, or other juris-

diction, irrespective of the place where the contract of hire of

any such employee may have been made or entered into.

10 U.S.C. § 802(a)(10) provides:

The following persons are subject to this chapter: ... In time

of declared war or a contingency operation, persons serving

with or accompanying an armed force in the field.

28 U.S.C. § 1441(a) provides, in pertinent part:

Except as otherwise expressly provided by Act of Congress,

any civil action brought in a State court of which the district

courts of the United States have original jurisdiction, may be

removed by the defendant or the defendants, to the district

court of the United States for the district and division

embracing the place where such action is pending.

28 U.S.C. § 1441(f) provides:

The court to which a civil action is removed under this

section is not precluded from hearing and determining any

claim in such civil action because the State court from which

such civil action is removed did not have jurisdiction over

that claim.

28 U.S.C. § 1442(a)(1) provides, in pertinent part:

A civil action or criminal prosecution commenced in a State

court against any of the following may be removed by them

to the district court of the United States for the district and

division embracing the place wherein it is pending:

(1) The United States or any agency thereof or any officer

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

or of any agency thereof, sued in an official or individual

capacity for any act under color of such office or on account

of any nght, title or authonty claimed under any Act of

Congress for the apprehension or punishment of criminals or

the collection of the revenue.

28 U.S.C. § 1447(c) provides, in pertinent part:

A motion to remand the case on the basis of any defect other

than lack of subject matter jurisdiction must be made within

30 days after the filing of the notice of removal under section

1446(a). If at any time before final judgment it appears that

the district court lacks subject matter jurisdiction, the case

shall be remanded.

28 U.S.C. § 1447(d) provides:

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.

STATEMENT OF THE CASE

1. Petitioners are United States military contractors

carrying out profoundly dangerous missions in various

theaters of battle, including in Iraq and Afghanistan. In

faithfully discharging their duties under contracts with the

U.S. Department of Defense, petitioners’ contract personnel

daily enter wildly unpredictable, deeply menacing physical

environments.’ Lives are sometimes lost in that danger-

filled zone of contractual duty. These contract-mandated

functions are, by their very nature, utterly and completely

federal. There is no room for introducing the vagaries of

State tort law in determining the nature and scope of a

contractor’s duty to its employees, who heroically volunteer

‘ee military doctrine provides that “[t]he Department[{ of Defense ]|’s

Total Force its active and reserve military components, its civil

servants, and its contractors — constitutes iis warfighting capability and

capacity. ” Since contractors are part of the nation’s war-fighting force,

“(t]he Department's policy now directs that performance of commercial

activities by contractors, including contingency contractors and any

proposed contractor logistics support arrangements, shall be included in

operational plans and orders.”

for these extraordinarily dangerous assignments. Yet, the

Fourth Circuit has done exactly that. In this highly

controversial decision, the court of appeals has relegated

petitioners — and myriad federal contractors serving in Iraq

and Afghanistan — to the tort law of the several States

when, as here and as so frequently happens in times of war,

tragedy strikes. This Court’s intervention is urgently needed

to vouchsafe the federal integrity of the Total Force structure

of the United States military — a carefully fashioned

organizational arrangement authorized by Congress and

implemented by the Executive Branch as the most

expeditious strategy for carrying out the nation’s enormousty

challenging missions. War-risk liability exposure

(particularly if its contours must be defined by the tort laws

of the fifty States) is inherently unknowable and uninsurable,

and thus incompatible with this Total Force policy, which

provides for a _ war-fighting capability that includes

commercial contractors. Under the regime left standing by

the Fourth Circuit, a state court in Raleigh will determine

whether on the streets of Fallujah — decedents were

properly armed and commanded. This simply cannot be.

At a barebones minimum, this Court should not let the

Fourth Circuit’s destabilizing judgment stand without

seeking the guidance of the United States.

2. On March 31, 2004, Iraqi insurgents in Fallujah, [raq,

killed four Americans working for Petitioner Blackwater

Security Consulting, LLC. An Iraqi mob beat and set fire to

their bodies, and hung some of their remains from a bridge.

The four decedents were accompanying a truck convoy

bound for U.S. Army Camp Ridgeway. App. 4a.

3. Pursuant to the federal workers’ compensation

program that Congress created as an exclusive remedy to be

administered by the U.S. Department of Labor, see 42 U.S.C.

§ 165l(c) (liability under the Defense Base Act (“DBA”)

“shall be exclusive and in place of all other liability”); id.

§§ 1653(a)-(b) (providing for U.S. Department of Labor

administration of DBA benefits and providing for federal

judicial review), decedents’ DBA beneficiaries applied for

~~ and have been receiving —- maximum-rate benefits under

the DBA. The U.S. Department of Labor has entered a final

compensation order finding that one decedent (Zovko) is

covered by, and entitled to benefits under, the DBA, and has

entered a preliminary finding that a second decedent

(Teague) is likewise entitled to DBA benefits. Respondents’

counsel, who represents the DBA beneficiaries in agency

proceedings as well, has refused to consent to the formal

conclusion of agency proceedings as to the other two

decedents.

4. On January 5, 2005, plaintiff Richard P. Nordan, in

his capacity as administrator for the four decedents’ estates,

filed a complaint in North Carolina state court claiming that

Petitioners Blackwater Security Consulting, LLC,

Blackwater Lodge and Training Center, Inc., and Justin L.

McQuown (collectively “Blackwater”) had a duty under

North Carolina’s wrongful death statute, N.C. Gen. Stat. §

28A-18-2, to provide decedents with armored vehicles.

intelligence, additional training, planning time, and rear

gunners equipped with “SAW Mach 46” heavy automatic

weapons. The complaint also seeks rescission, under North

Carolina fraud law, of decedents’ contracts with Blackwater

to support United States military operations overseas. Those

contracts contain detailed provisions releasing Blackwater

trom any and all risk of war liability. App. 36a-39a.

Nordan filed his complaint in the Superior Court for

Wake County, North Carolina. App. 33a. Blackwater

removed the case, citing 28 U.S.C. § 1441 and 28 U.S.C. §

1331, and asserting that Nordan’s state-law claims were

completely preempted by the DBA’s exclusive remedy.

App. 4a. Once in the district court, Blackwater filed a

motion to dismiss on the basis that DBA _ workers

compensation benefits, the exclusive remedy provided by

Congress, had been claimed by — and paid for — the four

decedents. Jd. Nordan opposed dismissal and moved to

remand. App. 34a.

The district court granted Nordan’s motion to remand

and denied as moot Blackwater’s motion to dismiss. The

court held that “the DBA does not completely preempt state

law claims” because the statute “provides for the exclusive

filing of a claim for wrongful death benefits with the

Secretary of Labor, the adjudication of such claims by a

deputy commissioner or administrative law judge, the review

of claims by the Benefits Review Board, and appellate

review by a federal court of appeals,” and thus, according to

the district court, “United States District Courts are not

involved in the claims adjudication process.” App. 47a

(“‘[T]he sine qua non of complete preemption is a pre-

existing federal cause of action that can be brought in the

district courts.””) (quoting Lontz v. Tharp, 413 F.3d 435, 442

(4th Cir. 2005)). Finding a lack of complete preemption, the

court held that there was no federal question basis for

removal under 28 U.S.C. § 1441. The court acknowledged

that under Shives v. CSX Transportation, Inc. (In re CSX

Transp.), 151 F.3d 164, 171 (4th Cir. 1998), it would be

required to dismiss rather than to remand if the DBA

deprived the state court of subject-matter jurisdiction.

However, determining that it had no jurisdiction to determine

the extent of DBA coverage, the district court declined to

reach the issue. App. 56a.

5. Blackwater appealed and petitioned for a writ of

mandamus. Nordan moved to dismiss the appeal and the

mandamus petition on the grounds that 28 U.S.C. § 1447(d)

prohibits review of Section 1447(c) remand _ orders.

Blackwater defended as to the presence of appellate

jurisdiction, asserting that the district court based its order of

remand not on its lack of original federal question

jurisdiction under Section 1441, but on its finding that it

lacked jurisdiction to determine whether the DBA deprives

the state court of jurisdiction.

The Fourth Circuit dismissed Blackwater’s appeal under

Section 1447(d) and denied mandamus. App. 32a. The

court of appeals acknowledged the exceptions to Section

1447(d) that this Court recognized in Thermtron Products,

Inc. v. Hermansdorfer, 423 U.S. 336 (1976), and Waco v.

U.S. Fidelity & Guaranty Co., 293 U.S. 140 (1934), but

concluded that none of those exceptions applied. App. 12a-

13a. The court of appeals also recognized that the district

court erred in finding that the federal district courts have no

role in considering the coverage of the DBA.

The district court incorrectly concluded that the federal

district courts play no role in the adjudication of DBA

claims. The federal district courts, followed by the federal

courts of appeals and the United States Supreme Court,

review DBA claims after they have been initially adjudicated

in the Department of Labor.

App. 6a n.2. Even so, the court of appeals found that the

trial court’s conclusion that it lacked jurisdiction to decide

the state court’s jurisdiction was not reviewable because

“[t]he correctness of the district court’s jurisdictional

analysis is irrelevant under § 1447(d).” App. 25a. The

appeals court thus failed to distinguish between the trial

court’s finding that it lacked original jurisdiction to

adjudicate the complaint, and the trial court’s subsequent

finding that it lacked jurisdiction under the DBA to decide

whether the state court had jurisdiction.

In declining review, the court of appeals permitted the

state court to decide whether a state tribunal may, through

the application of state tort law, regulate the manner in which

United States armed forces supply lines are kept open under

enemy fire in a foreign theater of war — even though

Congress created an exclusive administrative remedy under

the DBA in order to preclude state court jurisdiction over

such __ constitutionally (and ~ militarily) — sensitive

determinations. The Fourth Circuit recognized the

“magnitude of the concerns Blackwater articulates” with

respect to the constitutional allocation of foreign affairs and

war powers to the United States, but it declined “to graft a

new exception onto the already significantly burdened text of

§ 1447(d).” App. 27a.

Blackwater’s concerns — that state court proceedings

will impermissibly intrude into areas constitutionally

reserved to the federal government — have already been

realized. On December 15, 2006, after Blackwater had filed

its demand for arbitration, and over Blackwater’s objection

that the state court lacks subject-matter jurisdiction, the state

court granted, in chambers, respondent’s request to issue a

commission for an out-of-state deposition in this case, and

thus proceeded to exercise jurisdiction to permit discovery

before Blackwater has had any opportunity to brief, and the

court has an opportunity to hear argument on, a motion to

dismiss for lack of jurisdiction.

The extraordinary significance of the remand order

below is magnified further by federal legislation enacted

after the Fourth Circuit’s mandate issued. On October 17,

2006, the President approved the National Defense

Authorization Act for Fiscal Year 2007, Pub. L. No. 109-

364, § 552, 120 Stat. 2083, which amends the Uniform Code

of Military Justice (““UCMJ”), 10 U.S.C. § 802(a)(10), by

clarifying that persons subject to the UCMJ include, “{iJn

time of declared war or a contingency operation, persons

serving with or accompanying an armed force in the field.”

That amendment is an exercise of Congress’ authority to

“make Rules for the Government and Regulation of the land

and naval Forces[,]” U.S. Const. art. I, § 8, cl.14, and to

“provide ... for governing such Part of [the Militia] as may

be employed in the Service of the United States,” id. § 8, cl.

16, by consigning cases such as this to military jurisdiction,

including court-martials for “culpable negligence” or

manslaughter. 10 U.S.C. § 919(b). This reform of UCMJ

jurisdiction brings it into harmony-with Total Force doctrine

— a foreseeable exercise of plenary federal authority within

an exclusive federal domain.

By declining to review the trial court’s order of remand,

and declining to consider whether there were constitutional

and statutory bars to remand, the Fourth Circuit’s decision

confers upon state courts a role in regulating the choice of

weapons and other operational decisions made during war; in

administering the DBA program; and in imposing tort

liability for alleged violations subject to court-martial.

REASONS FOR GRANTING THE PETITION

THE COURT SHOULD RESOLVE’ AN

IMPORTANT AND RECURRING QUESTION OF

FEDERAL PRACTICE OVER WHICH THE

FEDERAL COURTS ARE IN DISARRAY.

1. This case presents an important and recurring

question of federal practice. The issue has occasioned two

Statutory amendments to 28 U.S.C. § 1447, a circuit conflict,

and confusion with respect to the basis and vitality of this

Court’s decisions establishing the derivative-jurisdiction

doctrine. Under that familiar doctrine, federal court

jurisdiction in removed actions is derivative of state court

jurisdiction. Lambert Run Coal Co. v. Baltimore & Ohio

R.R., 258 U.S. 377, 382 (1922) (“The jurisdiction of the

federal court on removal is, in a limited sense, a derivative

jurisdiction. If the state court lacks jurisdiction of the

subject-matter or of the parties, the federal court acquires

none.”); Gen. Inv. Co. v. Lake Shore & Mich. S. Ry. Co., 260

U.S. 261, 288 (1922) (“A want of jursdiction in the state

court is not cured by the removal, but may be asserted after it

is consummated.”); Arizona v. Manypenny, 451 U.S. 232,

243 n.17 (1981) (same). The result is that where the state

court lacked jurisdiction over a case that is removed to

federal court, the federal court must dismiss (rather than

remand) the case. See Franchise Tax Bd. of California v.

Constr. Laborers Vacation Trust for S. California, 463 U.S.

1, 24 n.27 (1983) (“[P]recedent involving other statutes

granting exclusive jurisdiction to the federal courts suggests

that, if such an action were not within the class of cases over

which state and federal courts have concurrent jurisdiction,

the proper course for a federal district court to take after

removal would be to dismiss the case altogether, without

reaching the merits.”) (citing Gen. Inv. Co., 260 U.S. at 287-

88 (1922), and Koppers Co. v. Con’l Cas. Co., 337 F.2d 499,

501-502 (8th Cir. 1964) (Blackmun, J.)); see also 14B

Charles Alan Wright, et al., FEDERAL PRACTICE &

PROCEDURE § 3722, at p.481 (3d ed. 1998) (under the

derivative-jurisdiction doctrine, “the district court would

have to dismiss the removed action since the state court’s

lack of subject matter jurisdiction prevented remand”’).

Here, the question whether the derivative-jurisdiction

doctrine retains its vitality arises in the specific setting of a

remand order permitting a state court to exercise war powers.

This is extraordinary. Under the regime mandated by the

court of appeals, a state court in Raleigh will be called upon

to regulate (through North Carolina tort law) combat

operations on a foreign battlefield occupied by the United

States armed forces, thereby permitting a state court to

decide whether persons killed under enemy fire in such an

operation are entitled to DBA benefits administered by the

U.S. Department of Labor. Indeed, the state trial court only

recently directed that discovery should proceed immediately,

by granting plaintiff's request to conduct an out-of-state

deposition.

Surely that cannot be. The vehicle for achieving this

highly improbable — and federalism-threatening — result

was the district court’s declining to apply the derivative-

jurisdiction doctrine. Instead, the trial court concluded that it

lacked jurisdiction to determine whether Congress had

stripped the state courts of jurisdiction under the DBA. The

court of appeals likewise refused to apply the derivative-

jurisdiction doctrine, even though the panel found that the

district court erred in its jurisdictional analysis. The remand

order thus permits state courts to adjudicate whether the

DBA’s “Liability as exclusive” provision (42 U.S.C.

§ 1651(c)) applies, despite Congress’s clearly expressed

mandate that the U.S. Department of Labor is to be the

exclusive forum for resolving DBA coverage disputes in the

first instance (followed by federal-court review), and that

State courts have no jurisdiction over such disputes.

2. The derivative-jurisdiction doctrine arose in cases

similar to this one, namely, where federal law stripped state

courts of jurisdiction. In Lambert, for example, this Court

held that the district court was required to dismiss the action,

because Congress had stripped the state courts of jurisdiction

by statutorily committing to federal court all suits brought to

restrain or set aside orders of the Interstate Commerce

Commission. 258 U.S. at 382. Similarly, in General

Investment, this Court concluded that while the district court

would have had jurisdiction over the asserted Sherman and

Clayton Act claims had they been originally filed in federal

court, it properly dismissed the removed case because the

State court from which the case was removed had no

jurisdiction over claims committed by Congress exclusively

to the federal courts. 260 U.S. at 287-88.

3. Application of the derivative-jurisdiction doctrine by

the lower courts produced some paradoxical results. As set

forth by this Court, the derivative-jurisdiction doctrine

required federal courts to dismiss any case where the state

court lacked jurisdiction, even if the district court would

have had original jurisdiction over the suit. See 14B Charles

Alan Wright, et al., FEDERAL PRACTICE & PROCEDURE

§ 3721, at p.305 (3d ed. 1998); Dep't of Revenue v. Inv. Fin.

Mgmt. Co., 831 F.2d 790, 792 (8th Cir. 1987) (noting that

the doctrine was “frequently criticized”).

Congress sought to eliminate such inefficiencies in 1986

and 2002 by enacting and amending 28 U.S.C. § 1441(f).

Section 1441(f) now provides:

The court to which a civil action is removed

under this section is not precluded from

hearing and determining any claim in such

civil action because the State court from

which such civil action is removed did not

have jurisdiction over that claim.

28 U.S.C. § 1441(f)

? Some courts have mistakenly stated that § 1441(f) “abolishes

the derivative jurisdiction doctrine[.]” Ethridge v. Harbor House

Rest., 861 F.2d 1389, 1392 n.3 (9th Cir. 1988). By its plain

language, Section 1447(f) abolishes the rationale that district court

jurisdiction over removed cases is derivative of state-court

jurisdiction, but it says nothing about whether dismissal rather

than remand is required when the district court finds that both the

district court and the state court lack jurisdiction. Nothing in

Section 1441(f) purports to invite state courts to exercise

jurisdiction in derogation of other more specific federal statutes, or

in areas constitutionally reserved to the United States.

The amendments thus provide that a federal court is not

deprived of jurisdiction to hear a case merely because the

State court from which it was removed lacked jurisdiction.

The amendments do not resolve, however, the question

whether the derivative-jurisdiction doctrine continues to

apply where both the federal court and the state court lack

jurisdiction over a removed case. Nor do they resolve

whether this Court’s decisions in Lambert and General

Investment continue to prescribe dismissal rather than

remand in such circumstances because a remand would be

“futile.” The circuit courts are deeply divided on this

question.

a. The Fifth and Ninth Circuits have held that, despite

Section 1447(c)’s provision that a case shall be remanded

where a district court lacks subject-matter jurisdiction, the

district court should dismiss an improperly removed case

where the state court also lacks jurisdiction. The reason:

because remand would be futile. See Bell v. City of Kellogg,

922 F.2d 1418, 1425 (9th Cir. 1991); Asarco, Inc. v.

Glenara, Ltd., 912 F.2d 784, 787 (Sth Cir. 1990). As the

Ninth Circuit stated, “[w]e do not believe Congress intended

to ignore the interest of efficient use of judicial resources.”

Bell, 922 F.2d at 1424-25. The Second Circuit also has

“indicated that [it] might be willing to entertain the futility

exception.” Barbara v. NYSE, 99 F.3d 49, 56 n.4 (2d Cir.

1996); Mignogna v. Sair Aviation, Inc., 937 F.2d 37, 41 (2d

Cir. 1991) (“On the other hand, remand might be improper if

it would be futile, as it would be if the state court could not

exercise jurisdiction over [plaintiff's] claim against

[defendant].”’) (citation omitted).”

* Indeed, the Fourth Circuit has held that dismissal rather than

remand 1s required where Congress did not intend to delegate to a state

court the application of an exclusive federal remedy. See Shives, 151

F.3d 164; see also Borneman v. United States, 213 F.3d 819 (4th Cir.

b. The Third, Fourth, Sixth, Seventh, and Eleventh

Circuits have reached the opposite conclusion. Those

circuits have held that 28 U.S.C. § 1447(c) provides no

exception for cases where the state court lacks jurisdiction.

See Bromwell v. Mich. Mut. Ins. Co., 115 F.3d 208, 213 (3d

Cir. 1997); Roach v. W. Va. Reg’l Jail & Corr. Facility

Auth., 74 F.3d 46, 49 (4th Cir. 1996); Coyne ex rel. Ohio v.

Am. Tobacco Co., 183 F.3d 488, 496-97 (6th Cir. 1999);

Schacht v. Wis. Dep’t of Corrs., 116 F.3d 1151, 1153 (7th

Cir. 1997); Smith v. Wis. Dep’t of Agric., 23 F.3d 1134, 1139

(7th Cir. 1994); Univ. of S. Ala. v. Am. Tobacco Co., 168

F.3d 405, 410 (11th Cir. 1999). These decisions, however,

do not consider whether the derivative-jurisdiction doctrine

has continuing vitality. Nor do they consider whether

Section 1447(c) should be construed harmoniously with

other statutes that strip state courts of jurisdiction over

certain claims.

c. This Court has yet to address head on the discord

prevailing among the circuits on the issue. In /#ternational

Primate Protection League v. Administrators of Tulane

Educational Fund, 500 U.S. 72 (1991), the Court considered

whether the futility of a remand to a state court lacking

jurisdiction should be the basis for dismissal. But the Court

did not resolve the issue because it declined to find that

remand would be futile in the particular circumstances of

that case. 500 U.S. at 89 (“Similar uncertainties in the case

before us preclude a finding that a remand would be futile.”);

see also. 16 MOORE’S’ FEDERAL PRACTICE §

107.41[1 ][e][ii][E] (3d ed. 2006) (discussing the circuit split

and stating that /nternational Primate “discussed the futility

doctrine but dofes] not reject it”). The circuits embracing a

2000); Mangold v. Analytic Servs., Inc., 77 F.3d 1442 (4th Cir. 1996). In

the decision below, the court of appeals limited its earlier decisions to

their facts. App. 30a-32a.

futility exception to 28 U.S.C. § 1447(c), however, rely on

dicta in Jnternational Primate for support.

The cacophony is deep-seated. At long last, the Court

should revisit the derivative-jurisdiction doctrine. That

jurisprudential consideration is especially important where,

as here, the doctrine requires a district court to dismiss rather

than remand federal questions whose 12solution is

constitutionally and statutorily reserved within the federal

domain. By doing so, this Court would resolve the question

left open in International Primate. In particular, this highly

sensitive case could well serve as the vehicle for confirming

that the derivative-jurisdiction doctrine retains its vitality

where both the state and federal courts lack jurisdiction over

a removed action.

4. The need for the Court to resolve this discord is

heightened by the differential treatment the courts have

given to cases removed under 28 U.S.C. § 1441 and those

removed under Section 1442. That difference in treatment

affected the disposition of this case below. See App. 23a n.8.

Section 1442 permits removal of actions brought against

the United States, federal officers, and federal contractors

like Blackwater. See Arizona v. Manypenny, 451 U.S. 232,

242 (1981) (“[T]his Court has held that the right of removal

is absolute for conduct performed under color of federal

office, and has insisted that the policy favoring removal

should not be frustrated by a narrow, grudging interpretation

of § 1442(a)(1).”); see also McMahon v. Presidential

Airways, Inc., 410 F. Supp. 2d 1189, 1195-1200 (M.D. Fla.

2006); Fisher v. Halliburton, 454 F. Supp. 2d 637, 639 (S.D.

Tex. 2006); Lane‘v. Halliburton, No. H-06-1971, 2006 WL

2583438, at *1 (S.D. Tex. Sept. 7, 2006); Smith v.

Halliburton, No. H-06-0462, 2006 WL 2521326, at *1 (S.D.

Tex. Aug. 30, 2006). Because Section 1441(f) applies only

to “cases removed under this section,” 28 U.S.C. § 1441(f)

(emphasis added), courts have held that it does not apply to

removals under Section 1442 and that the derivative- -

jurisdiction doctrine continues to apply to such removals.

See Smith v. Cromer, 159 F.3d 875, 879 (4th Cir. 1998) (“It

is Clear that a federal court’s jurisdiction upon removal under

28 U.S.C. § 1442(a)(1) is derivative of the state court

jurisdiction, and where the state court lacks jurisdiction over

the subject matter or the parties, the federal court acquires

none upon removal, even though in a like suit originally

brought in federal court, the court would have had

jurisdiction.”); Jn re Elko County Grand Jury, 109 F.3d 554,

555 (9th Cir. 1997) (“[B]ecause this case was removed from

state court pursuant to § 1442, our jurisdiction is derivative

of the state court’s jurisdiction.”); Edwards v. U.S. Dep’t of

Justice, 43 F.3d 312, 315 (7th Cir. 1994) (“When a case is

removed from a state court pursuant to 28 U.S.C. § 1442, the

district court’s basis for jurisdiction is only derivative of that

of the state court.”). Thus, upon concluding that the state

tribunal lacked subject-matter jurisdiction in a Section 1442

removal, the trial court should dismiss (rather than remand)

when the state court has no jurisdiction. See, e.g., Cromer,

159 F.3d at 879, 883; In re Elko County, 109 F.3d at 555.

This is precisely the opposite of what the Third, Fourth,

Sixth, Seventh, and Eleventh Circuits have held is proper

with respect to Section 1441 removals. As discussed, these

courts have construed 28 U.S.C. § 1447(c) as mandating

remand, rather than dismissal, where a case is removed from

state court pursuant to Section 1441 and the state court

lacked subject-matter jurisdiction. This should not be.

There is no principled justification for the difference in

treatment between Section 1441 and Section 1442 removals.

Section 1441(f) cannot provide that justification. Section

1441(f) does not, on its face, carve out an exception to

Section 1447(c). To the contrary, that provision merely

confirms that district courts have jurisdiction to hear a case

that has been removed from a state court lacking jurisdiction.

Section 1441(f) is silent on whether district courts should

dismiss, rather than remand, such a case where the federal

court also lacks jurisdiction. Nothing in the statutory

language of Sections 1441 or 1442, or in any decision of this

Court, supports this differential treatment as a matter of

federal practice.’

The instant case illustrates why there is utterly no basis

for drawing such an ephemeral distinction. Although it is a

federal contractor, Blackwater cited only Section 1441 in its

removal notice; it did not cite Section 1442. App. 23a n.8.

But this is neither here nor there. There is no doubt

whatsoever that removal would have been proper under

Section 1442. See McMahon, 410 F. Supp. 2d at 1195-1200.

But even assuming arguendo that Section 1442 did not

apply, merely by citing it, Blackwater would have ensured

that, under the derivative-jurisdiction doctrine, either the

district court would have dismissed the case or its failure to

do so would have been reviewable under Thermtron

Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976)

* Indeed, the different treatment of the derivative-jurisdiction

doctrine under Section 1441 and Section 1442 results in

contradictory requirements if a case is removed under both Section

1441 and Section 1442, and the district court finds that both it and

the state court lack jurisdiction. The district court may have a duty

to remand such a case on the grounds that there is no futility

exception under Section 1447(c), yet have a duty to dismiss on the

grounds that the derivative-jurisdiction doctrine applies with full

force to Section 1442 removals.

> In Thermtron, this Court recognized an exception from the

bar on appellate review in 28 U.S.C. § 1447(d) in cases where the

district court “exceeded [its] statutorily defined power.” 423 U.S.

at 351; see also Borneman, 213 F.3d at 826 (“Accordingly, as

Thermtron instructs, § 1447(d) prohibits review of district courts’

determinations of whether jurisdictional statutes have been

Because Blackwater cited only Section 1441, the court of

appeals did not consider whether remand was appropriate

under Section 1442 jurisprudence. App. 23a n.8.

5. Absent this Court’s review, the result of the Fourth

Circuit’s decision is that a state court in Wake County, North

Carolina will decide whether respondents’ claims fall within

the scope of the DBA’s coverage. As the Fourth Circuit

previously has held, this issue is “exclusively a federal

question which Congress never intended for state courts to

resolve.” Shives, 151 F.3d at 167 (citing 33 U.S.C. § 921

which the DBA extends overseas through 42 U.S.C. §

1651(a)). So too, the Fourth Circuit’s decision will allow a

State court to decide whether Blackwater’s actions when

accompanying U.S. armed forces during military operations,

see 10 U.S.C. § 802, are exclusively under the command and

control of the United States or are subject to the conflicting

tort laws of fifty States. Moreover, in light of Congress’

recent amendment to the UCMJ, 120 Stat. 2083 (amending

10 U.S.C. § 802(a)(10)), the decision below places before a

state court the decision whether to exercise jurisdiction to

impose tort liability for court-martial offenses in the field.

This is so, because even though the district court

recognized that state courts lack jurisdiction over issues of

DBA coverage, App. 47a, the trial court declared itself

powerless to uphold the DBA; the court of appeals then

deemed that conclusion erroneous but unreviewable. This

profoundly destabilizing result should not be allowed to

Stand. Indeed, the state court lacked subject-matter

jurisdiction not only based on Congress’s clearly expressed

intent in the DBA, which directs the U.S. Department of

Labor to resolve questions of DBA coverage during military

satisfied, not review of determinations where district courts exceed

their jurisdictional authority.”’).

operations (followed by federal-court review), but also based

on the political-question doctrine and principles of

federalism: “The complex, subtle, and professional

decisions as to the composition, training, equipping, and

control of a military force are essentially professional

military judgments, subject a/ways to civilian control of the

Legislative and Executive branches.” Gilligan v. Morgan,

413 U.S. 1, 10 (1973) (emphasis added); see Tarble’s Case.

80 U.S. 397, 408 (1872) (holding that a state court lacks

jurisdiction because U.S. military forces operate “without

question from any State authority”).

This Court should resolve the split in the circuits over the

applicability of the derivative-jurisdiction doctrine and

_whether it continues to mandate dismissal of a case removed

under Section 1441 where both the federal and state court

lack jurisdiction. This case presents a_ particularly

compelling vehicle for doing so. It involves the

constitutional exclusivity of federal command and control

over the ficld of foreign military operations, as well as the

Statutory exclusivity of federal liability for contractor war

casualties sustained in foreign theaters of battle.

Il. The Court Of Appeals Has Jurisdiction To Review A

Remand Order Notwithstanding 28 U.S.C. § 1447(d)

When The Remand Order Would Circumvent

Federal Statutory And Federal Constitutional Designs

To Preclude State Court Jurisdiction.

|. This petition presents a question similar to one

pending before this Court in Osborn v. Haley, No. 05-593.

There, the Court directed the parties to brief the following

question: “Whether the court of appeals had jurisdiction to

review the district court’s remand order, notwithstanding 2%

U.S.C. § 1447(d).” Osborn v. Haley, 126 S. Ct. 2017 (2006).

A question presented in Osborn is whether an exception

exists to § 1447(d)’s bar on appellate review for cases arising

under the Westfall Act. That statute creates an exclusive

federal remedy against the United States and,

correspondingly, authorizes removal of cases in which the

Attorney General certifies that the employee is acting within

the scope of his employment. 28 U.S.C. § 2679.° A similar

question is presented by the decision below: whether an

exception exists to § 1447(d)’s bar on appellate review for

cases raising claims within the exclusive province of the

federal government. The Fourth’s Circuit decision ignores

the DBA’s “Liability as exclusive” provision (42 U.S.C.

§ 1651(c)), and it allows respondents to proceed under state-

tort law against American military contractors, despite

Blackwater’s claim that such an action unconstitutionally

intrudes on the exclusive authority of the federal government

to conduct military operations abroad.

2. Nothing in the text or legislative history of Section

1447(d) suggests that Congress intended to preclude

appellate review of a remand order that relegates to a state

court the resolution of respondents’ constitutionally-suspect

tort claims. To the contrary, Congress expressed a clear

intent in the DBA that such tort lawsuits not be justiciable in

a state court; rather, the “liability of a[] ... contractor ...

under this chapter shall be exclusive and in place of all other

liability of such ... contractor ... to his employees. 42

° In Osborn, the district court remanded a state tort claim

brought against an employee of an organization that contracted

with the United States Forest Service. See Osborn v. Haley, 422

F.3d 359, 361 (6th Cir. 2005). The Attorney General had certified

that the employee was acting within the scope of his employment,

and thus argued that the state tort action should be deemed an

action brought against the United States. The district court,

however, rejected the Attorney General’s certification and granted

plaintiff's motion to remand for lack of jurisdiction. /d. The Sixth

Circuit reversed both the certification ruling and the remand order,

holding that the Westfall Act foreclosed remand. /d. at 364.

U.S.C. § 1651(c) (emphasis added). Section 1447(d) should

not be construed in derogation of Congress’ mandate, which

displaces state-court jurisdiction over cases such as

respondents’ and thus ensures that state courts do not

adjudicate the constitutional questions, including questions

of federalism and separation of powers, that are raised by

such lawsuits brought in contravention of the DBA.

The DBA is Congress’ response to the question of tort

liability arising from dangerous deployments by contractors

in support of U.S. military operations (and other federal

activities) outside the United States. Congress has legislated

a solution consisting of extending the Longshore and Harbor

Workers’ Compensation Act (““LHWCA”) overseas, but has

foreclosed an election of remedies available under the

LHWCA. The LHWCA is an exclusive remedy but for the

concurrent availability of state workers compensation

benefits. The LHWCA’s exclusivity provision “shall apply”

‘under the DBA, see 42 U.S.C. § 1651(a), except that the

DBA also bars the LHWCA’s alternative state workers

compensation remedy. 42 U.S.C. § 1651(c) (DBA benefits

shall be exclusive of any other liability “under the

workmen’s compensation law of any State”). Thus,

Congress gives effect to the constitutional commitment of

foreign affairs and war powers to the United States by

expressly providing in the DBA that the States’ concurrent

remedy under the LHWCA stops at the water’s edge.

The DBA is therefore a very specific statutory expression

of Congress’ intent to exclude the states from any

interference in the relationship between contractors and

persons working for them to advance federal interests

overseas. See House Report 1070, p. 4, 7 (1941); Senate

Rep. No. 92-1175, p. 4 (1972). And that statutory intent is

immeasurably fortified by the fact that it rests on the

constitutional allocation of foreign affairs and war powers to

the United States.

3. This Court should grant certiorari and reverse

because the Fourth Circuit’s refusal to recognize an

exception to Section 1447(d) deepens a circuit split on

whether a statutory bar to appellate review should be

construed to preclude a federal court of appeals from

reviewing a constitutional question, such as the political

question and separation of powers arguments raised by

Blackwater below as requiring dismissal rather than remand

of respondents’ state tort lawsuit.

a. Nothing in the text or legislative history of Section

1447(d) suggests that Congress intended to preclude

appellate review of remand orders that would foreclose

federal review of constitutional questions. Cf Johnson v.

Robison, 415 U.S. 361, 365-68 (1974) (“[C]ontention that

[38 U.S.C.] § 211(a) [‘which prohibits judicial review of

decisions of the Veterans’ Administrator’] bars federal courts

from deciding constitutionality of veterans’ benefits

legislation ... would, of course, raise serious questions

concerning the constitutionality of § 211(a), and in such case

‘it is a cardinal principle that this Court will first ascertain

whether a construction of the statute is fairly possible by

which the [constitutional] question[s] may be avoided.’

Plainly, no explicit provision of § 211(a) bars judicial

consideration of appellee’s constitutional claims .... Nor

does the legislative history ... demonstrate a congressional

intention to bar judicial review even of constitutional

questions.” (footnote and internal citation omitted)).

This lack of any specific congressional intent to preclude

appellate review of constitutional questions should trigger

the “cardinal principle”-based rule of construction set forth

in Johnson v. Robison and followed as a rule by eight other

courts of appeals, particularly where Congress has iegislated

that an employer’s liability under the DBA “shall be

exclusive and in place of all other liability,” 42 U.S.C.

§ 1651(c).’

b. The Fourth Circuit’s refusal to recognize a

constitutional-questions exception to Section 1447(d) thus

creates a conflict with the decisions of eight other courts of

appeals. The Ninth Circuit is the only other court of appeals

in accord with the Fourth Circuit in “declin[ing] to graft a

new exception [for constitutional questions] onto the already

significantly burdened text of §1447(d).” App. 27a; see also

Cedano-Viera v. Ashcroft, 324 F.3d 1062, 1067 (9th Cir.

2003) (“The government argues that Calcano-Martinez v.

INS, 533 U.S. 348 [] (2001), and Webster v. Doe, 486 U.S.

592, 603 [] (1988), give us license to resolve [‘constitutional

claims’]. However, we have already held that an appellate

court does not have jurisdiction to consider even substantial

constitutional claims regarding removal orders covered by

INA § 242(a)(2)(C), 8 U.S.C. § 1252(a)(2)(C).”) (citing three

prior Ninth Circuit opinions).

Eight other circuits have held that a statutory bar to

review does not preclude a federal court from addressing a

constitutional claim, absent a clear statement ~of

Congressional intent. Those circuits have followed this

Court’s admonition in Johnson v. Robison, supra, that any

construction of a statutory bar to judicial review that would

preclude review of “constitutional questions” would “raise

Serious questions concerning the constitutionality of [the

Statutory bar itself],” 415 U.S. at 366. See Doe v. Cheney,

885 F.2d 898, 909 (D.C. Cir. 1989) (“In general,

constitutional claims are judicially reviewable unless

. Indeed, as a matter of federalism, see Tarble’s Case, 80 US. at 408,

and as a matter of the political-question doctrine, see Gilligan, 413 U.S.

at 10, the district court’s remand order raises significant constitutional

questions because it imposes on U.S. military contractors a risk of

exposure to a patchwork quilt of state tort regulation that impedes foreign

deployment of the contractor component of the “Total Force.”

Congress clearly expresses its intent to preclude review.”);

McBryde v. Comm. to Review Circuit Council Conduct, 264

F.3d 52, 59 (D.C. Cir. 2001) (“When the Constitution is

invoked, a claim of preclusion faces an especially high

hurdle.”); Paluca v. Sec’y of Labor, 813 F.2d 524, 526 (Ist

Cir. 1987); S. Windsor Convalescent Home v. Mathews, 541

F.2d 910, 914 (2d Cir. 1976) (“[T]he effect of precluding

federal jurisdiction over constitutional questions ... would be

at odds with the well established principle that a court will

not construe a statute to restrict access to judicial review

unless Congress manifests its intent to do so by ‘clear and

convincing evidence.””’); Aliota v. Graham, 984 F.2d 1350,

1357 (3d Cir. 1993) (recognizing the “jurisprudential

concerns associated with the inability to review a

constitutional decision”); Humphries v. Various Fed. USINS

Employees, 164 F.3d 936, 945 n.9 (Sth Cir. 1999) (“‘serious

constitutional questions’ ... would arise if a federal statute

were construed to deny any judicial forum for a colorable

constitutional claim.”); Chelsea Cmty. Hosp. v. Mich. Blue

Cross Ass’n, 630 F.2d 1131, 1135 (6th Cir. 1980) (&fAt+s a

‘cardinal principle’ that we should seek statutory

constructions which avoid constitutional doubts, Johnson v.

Robison ....”); Czerkies v. Dep't of Labor, 73 F.3d 1435,

1442-43 (7th Cir. 1996) (en banc) (Based on the

“presumption against denying all judicial remedies for

violations of the Constitution ... the district court had

jurisdiction to consider ... constitutional claim [not] barred

by 5 U.S.C. § 8128(b).”); Nyeholt v. Secretary of Veterans

Affairs, 298 F.3d 1350, 1353-54 (Fed. Cir. 2002) (citing

Johnson).

c. Any of the eight circuits that have spoken on the

issue would have recognized that Blackwater’s constitutional

claims deserved careful appellate review, notwithstanding

Section 1447(d). Cf Thermtron Prods., 423 U.S. at 351

(“Because the District Judge remanded a properly removed

case on grounds that he had no authority to consider, he

exceeded his statutorily defined power; and issuance of the

writ of mandamus was not barred by § 1447(d).”). The

district court’s remand order delegates to a state court the

duty to determine nonjusticiable political questions that are

within the exclusive province of the federal government; it

thus allows a state tort lawsuit to proceed in violation of the

fundamental constitutional delegation of foreign affairs and

war powers to the political branches of the federal

government. This cannot be — a state court simply cannot

regulate the order of battle. The Fourth Circuit nonetheless

refused to review the remand order. App. 26a. But nothing

in Section 1447(d) purports to strip appellate courts of

jurisdiction to review orders that remand cases raising

significant constitutional questions; there is certainly no clear

statement of Congressional intent to do so. To the contrary,

just as in Osborn, Congress has made clear its intent that

state courts have no role to play in adjudicating claims that

arise in the context of military action, including those of

respondents.

4. Whether the Fourth Circuit properly declined to

review the district court’s remand order is of particular

importance now, when respondents and others supporting the

United States Government’s efforts overseas are depending

upon the “Liability as exclusive” provision of the DBA and

at a time when the nation is at war. See Tarble’s Case, 80

U.S. at 408; see also Gilligan, 413 U.S. at 10 (“The complex,

subtle, and professional decisions as to the composition,

training, equipping, and control of a military force are

essentially professional military judgments, subject always to

civilian control of the Legislative and Executive Branches.”).

In the past five months, five tort lawsuits against battlefield

contractors have been dismissed as nonjusticiable by federal

district courts based on the political-question doctrine. See,

e.g., Fisher v. Halliburton, Inc., 454 F. Supp. 2d 637, 639-

45 (S.D. Tex. 2006); Whitaker v. Kellogg Brown & Root,

Inc., 444 F. Supp. 2d. 1277, 1279-82 (M.D. Ga. 2006);

Smith-Idol v. Halliburton, No. H-06-1168, 2006 WL

2927685, at *1-2 (S.D. Tex. Oct. 11, 2006); Woodson v.

Halliburton Corp., No. H-06-2107, 2006 U.S. Dist. LEXIS

70311, at *1-2 (S.D. Tex. Sept. 28, 2006); Smith vy.

Halliburton Co., No. H-06-0462, 2006 WL 2521326, at *2~7

(S.D. Tex. Aug. 30, 2006).

In view of the manifest national importance of the

constitutional issues at stake, this Court should grant

certiorari to resolve the split in the circuits over whether

there is a constitutional-questions exception to a statutory bar

to judicial review, absent a clear statement of Congressional

intent to preclude such review.

CONCLUSION

For the foregoing reasons, the petition should be granted.

In the alternative, this Court should invite the views of the

Solicitor General.

MICHAEL P. SOCARRAS

M. MILLER BAKER

MICHAEL S. NADEI

MCDERMOTT WILL & EMERY LLP

600 Thirteenth Street, N.W.

Washington, DC 20005

(202) 756-8000

JOSEPH E. SCHMITZ

THE PRINCE GROUP

1650 Tysons Boulevard, Suite 800

McLean, VA 22102

(703) 663-6997

KIRK G. WARNER

SMITH, ANDERSON, BLOUNT,

DORSETT, MITCHELL & JERNIGAN

P.O. Box 261!

Raleigh, NC 27602

(919) 821-1220

Respectfully submitted,

KENNETH W. STARR

Counsel of Record

RICK RICHMOND

KIRKLAND & ELLIS LLP

777 South Figueroa Street

Los Angeles, CA 90017

213) 680-8400

SUSAN E. ENGEL

JENNIFER S. ATKINS

KIRKLAND & ELLIS LLP

655 Fifteenth Street. N.W.

Washington, DC 20005

(202) 879-5000

Attorneys for Petitioners Blackwater Security Consulting LLC,

and Blackwater Lodge and Training Center, Inc.

APPENDIX

App. la

UNITED STATES COURT OF APPEALS

FOURTH CIRCUIT

In Re: BLACKWATER SECURITY CONSULTING, LLC,

a Delaware Limited Liability Company; BLACKWATER

LODGE AND TRAINING CENTER, INCORPORATED, a

Delaware Corporation,

Petitioners.

IN RE: JUSTIN L. MCQUOWN,

Petitioner.

RICHARD P. NORDAN, as Ancillary Administrator for the

separate Estates of Stephen S. Helvenston, Mike R. Teague,

Jerko Gerald Zovko and Wesley J.K. Batalona,

Plaintiff-Appellee,

and

ESTATE OF STEPHEN S. HELVENSTON;

ESTATE OF MIKE R. TEAGUE;

ESTATE OF JERKO GERALD ZOVKO;

ESTATE OF WESLEY J.K. BATALONA,

Plaintiffs,

¥.

BLACKWATER SECURITY CONSULTING, LLC, a

Delaware Limited Liability Company; BLACKWATER

LODGE AND TRAINING CENTER, INCORPORATED, a

Delaware Corporation,

Defendants-Appellants,

and

App. 2a

JUSTIN L. MCQUOWN, an individual; THOMAS

POWELL,

Defendants.

RICHARD P. NORDAN, as Ancillary Administrator for the

separate Estates of Stephen S. Helvenston, Mike R. Teague,

Jerko Gerald Zovko and Wesley J.K. Batalona,

Plaintiff-Appellee,

and

ESTATE OF STEPHEN S. HELVENSTON; ESTATE OF

MIKE R. TEAGUE; ESTATE OF JERKO GERALD

ZOVKO; ESTATE OF WESLEY LK. BATALONA,

Plaintiffs,

JUSTIN L. MCQUOWN, an individual, Defendant-

Appellant, and BLACKWATER SECURITY

CONSULTING, LLC, a Delaware Limited Liability

Company; BLACKWATER LODGE AND TRAINING

CENTER, INCORPORATED, a Delaware Corporation;

THOMAS POWELL,

Defendants.

No. 05-1949

460 F.3d 576

Decided August 24, 2006

Before SHEDD and DUNCAN, Circuit Judges, and JONES,

District Judge.

DUNCAN, Circuit Judge:

App. 3a

This appeal and petition for writ of mandamus require us

to consider the extent to which we can review a district court

order remanding a case to state court for lack of subject

matter jurisdiction. Concluding that the limited exceptions

to the congressional proscription of our ability to review

such orders are not applicable here, we dismiss the appeal for

lack of jurisdiction and decline to issue a writ of mandamus.

. Stephen S. Helvenston, Mike R. Teague, Jerko Gerald

Zovko, and Wesley J.K. Batalona (collectively, “decedents”’)

entered into independent contractor service agreements with

Blackwater Security Consulting, L.L.C., and Blackwater

Lodge and _ Training enter, Inc., (collectively,

“Blackwater”) to provide services in support of Blackwater’s

contracts with third parties in need of security or logistical

support. Blackwater assigned the decedents to support its

venture with Regency Hotel and Hospital Company

(“Regency”) to provide security to ESS Support Services

Worldwide, Eurest Support Services (Cyprus) International,

Ltd. (“ESS”). ESS had an agreement to provide catering,

build, and design support to the defense contractor firm

Kellogg, Brown & Root, which, in turn, had arranged with

the United States Armed Forces to provide services in

support of its operations in Iraq.

According to the complaint, at the time the decedents

entered into the independent contractor service agreements

on or about March 25, 2004, Blackwater represented that

certain precautionary measures would be taken with respect

to the performance of their security functions in Iraq. For

example, they were told that each mission would be handled

by a team of no fewer than six members, including a driver,

navigator, and rear gunner, and would be performed in

armored vehicles; they would have at least twenty-one days

App. 4a

prior to the start of a mission to become familiar with the

area and routes to be traveled; and they would have an

opportunity to do a pre-trip inspection of their anticipated

route.

Instead, the complaint alleges, Blackwater failed to

provide the decedents with the armored vehicles, equipment,

personnel, weapons, maps, and other information that it had

promised, or with the necessary lead time in which to

familiarize themselves with the area. On March 30, 2004,

the decedents’ supervisor, Justin McQuown, directed them to

escort three ESS flatbed trucks carrying food supplies to a

United States Army base known as Camp Ridgeway.

Lacking the necessary personnel and logistical support, the

decedents ultimately became lost in the city of Fallujah.

Armed insurgents ambushed the convoy; murdered the

decedents; and beat, burned, and dismembered their remains.

Two of the mutilated bodies were hung from a bridge.

Richard Nordan, in his capacity as administrator for the

decedents’ estates, sued Blackwater and McQuown

(hereinafter referred to collectively as “Blackwater”) in the

Superior Court of Wake County, North Carolina, alleging

causes of action for wrongful death and fraud under North

Carolina tort law. Blackwater removed Nordan’s action to

federal district court. It asserted that 28 U.S.C. § 1441(a)

(2000) permitted removal both because the Defense Base

Act (“DBA”), 42 U.S.C. §§ 1651-1654 (2000), completely

preempted Nordan’s state-law claims, and because the issues

in the case presented unique federal interests sufficient to

create a federal question. Once in federal court, Blackwater

moved to dismiss the case, arguing that the district court

lacked subject matter jurisdiction because the DBA covered

Nordan’s claims and, therefore, that Nordan could litigate his

claims only before the Department of Labor, which decides

DBA claims in the first instance.

App. 5a

The district court first considered whether Blackwater

had met its burden of establishing federal removal

jurisdiction. Nordan v. Blackwater Sec. Consulting, 382 F.

Supp. 2d 801, 806 (E.D.N.C. 2005). In concluding that

Blackwater had not met this burden, the district court

rejected both of Blackwater’s asserted bases for removal

jurisdiction. The court reasoned that, because the DBA

grants the Secretary of Labor exclusive original jurisdiction

over DBA claims, the statute does not completely preempt

state-law claims; the hallmark of complete preemption, the

district court concluded, is the presence of original

jurisdiction over the matter in federal district court. /d. at

807-10 (citing Lontz v. Tharp, 413 F.3d 435, 442-43 (4th Cir.

2005)). Further, the court determined that Blackwater’s

assertion of removal jurisdiction by way of a unique federal

interest in the adjudication of Nordan’s claims “assume[d]

the very conclusion which [the] court lack[ed] jurisdiction to

reach, namely that the decedents in this case are covered as

employees under the DBA.” /d. at 813.

Finding no basis for removal, the district court concluded

that it lacked subject matter jurisdiction and, citing 28 U.S.C.

§ 1447(c) (2000),' determined that it must remand the case.

Nordan, 382 F. Supp. 2d at 813-14. Although Blackwater

encouraged the district court to remedy its lack of

jurisdiction by dismissing the case rather than remanding it,

the district court further concluded that it lacked the

authority to dismiss. The court reasoned that federal district

courts play no role in the adjudication or review of DBA

Section 1447(c) provides: “If at any time before final

judgment it appears that the district court lacks subject matter

jurisdiction, the case shall be remanded. . . . The State court may

thereupon proceed with such case.”

App. 6a

claims? and, therefore, that it had no jurisdiction to decide

whether the DBA applied to Nordan’s claims. Jd. at 814.

The district court thus remanded the case to state court

without reaching the merits of Blackwater’s motion to

dismiss.

Blackwater now seeks review, via both an ordinary

appeal and a petition for a writ of mandamus. For the

reasons that follow, we hold that we lack jurisdiction to hear

the appeal and decline to issue a writ of mandamus.”

II.

We first address the issue of our authority to review this

case by appeal. Blackwater faces a formidable hurdle in this

regard because Congress has severely circumscribed federal

appellate review of certain orders remanding a case to the

state court from which it was removed. We begin our

analysis with a review of the body of law related to and

developed from that jurisdictional circumscription. We then

address whether the principles inherent in that body of law

allow us to exercise appellate jurisdiction in this case.

* The district court incorrectly concluded that the federal

district courts play no role in the adjudication of DBA claims. The

federal district courts, followed by the federal courts of appeals

and the United States Supreme Court, review DBA claims after

they have been initially adjudicated in the Department of Labor.

See 42 U.S.C. § 1653(b) (2000); see also Lee v. Boeing Co., Inc.,

123 F.3d 801, 803-05 (4th Cir. 1997) (describing agency and

judicial review of DBA claims).

> Nordan moved to strike a portion of the record that

Blackwater submitted on appeal. Because we dismiss the appeal

and the petition for lack of jurisdiction, we deny this motion as

moot.

The legal principles that govern appellate jurisdiction in

this case derive from Congress’s limitation on our authority

to review remand orders. A district court order “remanding a

case to the State court from which it was removed is not

reviewable on appeal or otherwise.” 28 U.S.C. § 1447(d)

(2000). This limitation on review applies even if the remand

order is “manifestly, inarguably erroneous.” Mangold vy.

Analytic Servs., Inc., 77 F.3d 1442, 1450 (4th Cir. 1996)

(Phillips, J., specially concurring and delivering the opinion

of the court on the issue of subject matter jurisdiction) (citing

Gravitt v. Sw. Bell Tel. Co., 430 U.S. 723; 97 S. Ct. 1439, 52

L. Ed. 2d 1 (1977) (per curiam)). If the plain language of the

Statute were all that we had to consult, we might not tarry

long with the notion that we could entertain a review of the

merits of this case. Several cases, however, provide for

limited exceptions to the reach of § 1447(d).°

* The full text of § 1447(d) is as follows:

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.

> In addition to the judicially developed exceptions upon

which we focus today, § 1447(d) itself permits review of a remand

order in a case removed to federal court pursuant to 28 U.S.C. §

1443 (2000), which concerns removal of state civil and criminal

actions involving civil rights claims. In addition, a separate statute

allows review of remand orders in cases concerning certain land

restrictions applicable to the Five Civilized Tribes of Oklahoma.

See Act of Aug. 4, 1947, ch. 458, sec. 3(c), 61 Stat. 731, 732, 25

U.S.C. § 355 note (2000); see also 28 U.S.C. § 1447 note (2000)

App. 8a

First, the Supreme Court has interpreted § 1447(d) to

prohibit review only when the order of remand was based

upon § 1447(c), which requires remand when the district

court determines that it lacks subject matter jurisdiction. See

Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 346,

96 S. Ct. 584, 46 L. Ed. 2d 542 (1976) (“{O]nly remand

orders issued under § 1447(c) and invoking the grounds

specified therein . .. are immune from review under §

1447(d).”), overruled on other grounds by Quackenbush v.

Allstate Ins. Co., 517 U.S. 706, 714-15, 116 S. Ct. 1712, 135

L. Ed. 2d 1 (1996).

Second, § 1447(d) does not prohibit review of a

collateral decision that is severable from the remand order.

See City of Waco v. U.S. Fid. & Guar. Co., 293 U.S. 140,

143, 55 S. Ct. 6, 79 L. Ed. 244 (1934) (holding § 1447(d)

inapplicable to the portion of a remand order that dismissed a

cross-claim because the dismissal “in logic and in fact... .

preceded [the order] of remand and was made by the District

Court while it had control of the cause .. . . [A]nd, if not

reversed or set aside, [the dismissal] is conclusive upon the

petitioner”); see also Nutter v. Monongahela Power Co., 4

F.3d 319, 321 (4th Cir. 1993) (“[W]here portions of a

remand order are ‘in logic and in fact’ severable from the

court’s determinations regarding remand, we may review the

severable portions of the order on appeal.”) (citing Waco,

293 U.S. at 143).

Finally, § 1447(d) does not prohibit review of a remand

order if that order exceeds the scope of the district court’s

authority. See Thermtron, 423 U.S. at 351 (holding that §

1447(d) does not bar review of a remand order based on

(Exception to Subsection (d)). Neither statutory provision is at

issue in this case.

App. 9a

“grounds that [the district court] had no authority to

consider” because such action “exceed[s] [the court’s]

statutorily defined power”); Borneman v. United States, 213

F.3d 819, 826 (4th Cir. 2000) (“ § 1447(d) prohibits review

of district courts’ determinations of whether jurisdictional

statutes have been satisfied, not review of determinations

where district courts exceed their jurisdictional authority”)

(citing Thermtron, 423 U.S. at 351). The issue before us is

whether one of these limited exceptions to the broad

jurisdictional proscription of § 1447(d) applies to the district

court’s actions in this case.

In order to determine whether an exception to § 1447(d)

allows us to exercise appellate jurisdiction in this case, we

draw from a related body of statutory text and jurisprudence

governing removal of cases from state court to federal

district court. Except as federal law may otherwise provide,

when a defendant removes a state civil action to federal

district court, federal removal jurisdiction exists if the action

is one “of which the district courts of the United States have

original jurisdiction.” § 1441(a). Among other categories of

cases, the federal district courts possess original jurisdiction

over civil cases raising federal questions, which are “all civil

actions arising under the Constitution, laws, or treaties of the

United States.” 28 U.S.C. § 1331 (2000). Removal

jurisdiction is not a favored construction; we construe it

strictly in light of the federalism concerns inherent in that

form of federal jurisdiction. See Lontz, 413 F.3d at 440. The

party seeking removal bears the burden of demonstrating that

removal jurisdiction is proper. See Mulcahey v. Columbia

Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994).

Under what has become known as the well-pleaded

complaint rule, § 1331 federal question jurisdiction is limited

App. 10a

to actions in which the plaintiff's well-pleaded complaint

raises an issue of federal law; actions in which defendants

merely claim a substantive federal defense to a state-law

claim do not raise a federal question. See Louisville &

Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152, 29 S. Ct.

42, 53 L. Ed. 126 (1908). In other words, a defendant may

not defend his way into federal court because a federal

defense does not create a federal question under § 1331.

The doctrine of complete preemption provides a

corollary to the well-pleaded complaint rule. This doctrine

recognizes that some federal laws evince such a strong

federal interest that, when : they apply to the facts

underpinning the plaintiff's state-law claim, they convert that

claim into one arising under federal law. See. é.g.,

Caterpillar, Inc. v. Williams, 482 U.S. 386, 393, 107 S. Ct.

2425, 96 L. Ed. 2d 318 (1987). Because complete

preemption transforms a state-law claim into one arising

under federal law, “the well pleaded complaint rule is

satisfied” even though the complainant never intended to

raise an issue of federal law. Lontz, 413 F.3d at 441.

However, “the sine qua non of complete preemption is a

preexisting federal cause of action that can be brought in the

district courts. . . . Congress’s allocation of authority to an

agency and away from district courts defeats a complete

preemption claim... .” Jd. at 442-43. The doctrine of

complete preemption, therefore, concerns itself with the

uniquely jurisdictional inquiry into whether a purportedly

State-law claim actually arises under federal law so as to

create federal jurisdiction over that claim.

By contrast, under the principles of “ordinary”

preemption, some federal laws may simply provide cither a

substantive defense to a plaintiff's state-law claims or a right

to adjudication of those claims in a federal administrative

forum or according to a federal scheme. See generally id. at

App. lla

440. “Complete preemption is a jurisdictional doctrine,

while ordinary preemption simply declares the primacy of

federal law, regardless of the forum or the claim.” /d.

(internal quotation marks and citation omitted). The

presence of ordinary federal preemption thus does not

provide a basis for federal question jurisdiction, and, in a

case removed from state court on the basis of federal

question jurisdiction, is relevant only after the district court

has determined that removal was proper and that it has

subject matter jurisdiction over the case.

We now turn our attention to the district court’s actions in

this case to determine whether § 1447(d) removes our ability

to hear it.

As we have explained, § 1447(d) bars appellate review of a

remand order only if that order was issued pursuant to §

1447(c)’s instruction to remand removed cases over which

the district court possesses no subject matter jurisdiction.

See Thermtron, 423 U.S. at 346. However, a district court’s

mere citation to § 1447(c) is insufficient to bring a remand

order within the purview of that provision. We must instead

look to the substantive reasoning behind the order to

determine whether it was issued based upon the district

court’s perception that it lacked subject matter jurisdiction.

See, e.g., Borneman, 213 F.3d at 824-25 (“Whether a district

court’s remand order is reviewable under § 1447(d) is not

determined by whether the order explicitly cites § 1447(c) or

not. The bar of § 1447(d) applies to any order invoking

substantively one of the grounds specified in § 1447(c).”)

(internal citation omitted).

App. 12a

The district court’s remand order in this case clearly falls

within the ambit of § 1447(c)’s requirement of remand in the

absence of subject matter jurisdiction. The court first

concluded that the DBA did not completely preempt

overlapping state law and thus did not create a federal

question. Nordan, 382 F. Supp. 2d at 807-11. It then

reasoned that Blackwater’s assertion of a unique federal

interest in the adjudication of Nordan’s claims likewise did

not confer federal removal jurisdiction. Jd. at 811-13. The

district court cited the untenability of these two suggested

jurisdictional bases as the source of its decision to remand

the case. “[T]his court lacks subject matter jurisdiction over

this cause of action . . . . [W]here the court finds no basis for

subject matter jurisdiction, § 1447(c) compels the court to

remand this action to state court. . . . Accordingly .. .

remand, rather than dismissal for lack of subject matter

jurisdiction, is proper.” /d. at 813-14.

To conclude that the remand order was issued pursuant to §

1447(c), we need not delve into whether the district court

was correct to hold that it lacked subject matter jurisdiction

over the removed action. Rather, an order is issued pursuant

to section § 1447(c) if the district court perceived that it was

without jurisdiction over the cause. See, e.g., Mangold, 77

F.3d at 1450 (holding that courts must “look past

contextually ambiguous allusions and even specific citations

to § 1447(c) to determine by independent review of the

record the actual grounds or basis ‘pon which the district

court considered it was empo ered to remand”).

Furthermore, as we have noted, § 1447(d)’s jurisdictional bar

app es with equal force to unassailably correct and

“manifestly, inarguably erroneous” orders of remand. /d.

Because the reasoning behind the district court’s remand

order in this case indicates the court’s belief that it lacked

subject matter jurisdiction upon removal, we conclude that

the remand order was issued pursuant to § 1447(c) and,

App. 13a

consequently, that § 1447(d) prohibits our review of that

order.

Having determined that the order before us was, indeed,

predicated upon § 1447(c), and therefore within the purview

of § 1447(d), we turn now to a consideration of whether one

of the other judicially created exceptions to § 1447(d)

applies. The severable order exception to § 1447(d) set forth

in Waco allows appellate review of certain distinct

component decisions that may be issued as part of a remand

order. We first discuss the contours of the Waco severable

order exception and then consider whether Waco permits

review of two constituent aspects of the district court’s

remand order.

The Supreme Court in Waco construed § 1447(d) not to

prohibit categorically appeals of certain orders in cases that

had been remanded to state court. In that case, the district

court dismissed the claim upon which the court’s removal

jurisdiction had been based; it then remanded the case to the

State court because, once the claim was no longer part of the

case, no basis for federal jurisdiction existed. The Supreme

Court held that § 1447(d)’s prohibition of appellate review

did not apply to the order dismissing the claim, even though

it clearly applied to the remand order itself. Waco, 293 U.S.

at 143-44. The order dismissing the claim was appealable,

the Court reasoned, because “in logic and in fact the decree

of dismissal preceded that of remand and was made by the

District Court while it had control of the cause. Indisputably

this order is the subject of an appeal; and, if not reversed or

sect aside, is conclusive upon the petitioner.” /d. at 143. The

Court concluded that, though action on the order of dismissal

App. 14a

“cannot affect the order of remand .. . it will at least, if the

dismissal of the petitioner’s complaint was erroneous, remit

the entire controversy . . . to the state court... .” Jd. at 143-

44.

This circuit has construed Waco to require, at a

minimum, that the purportedly reviewable order have a

conclusive effect upon the parties’ substantive rights. See

Nutter, 4 F.3d at 321. We have interpreted this

conclusiveness requirement to mean that the challenged

order must have a preclusive effect in subsequent

proceedings. See id.

As the Supreme Court recently reiterated, Waco also

requires that the reviewable decision be able to be

“disaggregated” from the remand order itself because “the

order of remand cannot be affected notwithstanding any

reversal of a separate order.” Kircher v. Putnam Funds

Trust, 126 S. Ct. 2145, 2156 n.13, 165 L. Ed. 2d 92 (2006)

(internal quotation marks and citation omitted). Similarly,

other circuits have had occasion to recognize as a key

component of Waco the requirement that the reviewable

decision be_logically and factually precedent to the remand

order. See, e.g., Carlson v. Arrowhead Concrete Works,

Inc., 445 F.3d 1046, 1052 (8th Cir. 2006) (holding that Waco

requires that the reviewed decision be both conclusive on the

parties and logically and factually precedent to the remand

order); Hernandez v. Seminole County, 334 F.3d 1233, 1241

(11th Cir. 2003) (construing Waco to require the challenged

decision to be both conclusive on the parties and logically

and factually precedent to the remand order); Christopher v.

Stanley-Bostitch, Inc., 240 F.3d 95, 99 (1st Cir. 2001)

(holding Waco applicable to a decision that was not

“inextricably intertwined with” or essential to the remand

order); Carr v. Am. Red Cross, 17 F.3d 671, 675 (3d Cir.

1994) (explaining that Waco requires the reviewed portion of

App. 15a

a remand order to be “both logically precedent to, and

separable from, the remand decision” and measuring the

severability of an issue by whether the district court reached

it as part of an inquiry into the existence of subject matter

jurisdiction); see also Kimbro v. Velten, 308 U.S. App. D.C.

134, 30 F.3d 1501, 1503 (D.C. Cir. 1994) (concluding that

Waco applies to decisions that “logically precede[] the

question of remand”) (internal quotation marks and citation

omitted). Our precedent also suggests that Waco applies to

orders that are logically and factually “antecedent” to the

order of remand. See Borneman, 213 F.3d at 825 (holding §

1447(d) inapplicable to two “antecedent components of the

district court’s remand order”). We therefore conclude that

logical and factual severability, along with conclusiveness,

are central requirements of Waco’s exception to § 1447(d).

Blackwater argues that Waco permits appellate review of

the district court’s choice of remedy for its lack of removal

jurisdiction. Specifically, the district court denied as moot

Blackwater’s motion to dismiss for lack of jurisdiction,

choosing instead to cure its lack of removal jurisdiction by

remanding Nordan’s claims to state court. According to

Blackwater, the district court’s denial of its motion to

dismiss is reviewable because it conclusively decided

Blackwater’s assertion that the DBA and the Constitution’s

foreign affairs and war powers clauses convey upon it an

immunity from suit in either state or federal court. This

position relies heavily on our decision in Shives v. CSY

Transp., Inc. (In re CSX Transp., Inc.), 151 F.3d 164 (4th

Cir. 1998). For the reasons that follow, its reliance is

misplaced.

App. 16a

Shives concerned a railroad employee’s action in state

court under the Federal Employers’ Liability Act (“FELA”),

45 US.C.A. §§ 51-60 (West 1986 & Supp. 2006), against his

employer for injuries that he had sustained while unloading a

train at a marine terminal. The employer removed the case

to federal court, claiming that the case raised a federal

question. The employer then moved to dismiss the case,

arguing that, because the employee had been injured while

performing maritime work, he could receive compensation

for that injury only by filing a claim with the United States

Department of Labor under the Longshore and Harbor

Workers Compensation Act (“LHWCA”), 33 U.S.C.A. §§

901-950 (West 2001 & Supp. 2006). Because 28 U.S.C. §

1445(a) (2000) prohibited removal of FELA claims that had

been initiated in state court, the district court first had to

determine whether the FELA or the LHWCA covered the

employee’s claims. The district court concluded that the

employee had not been engaged in maritime work and,

therefore, that the LHWCA did not apply. Because the

LHWCA did not apply, the court concluded, the claim had

been properly filed under the FELA. The district court then

remanded the case to state court because § 1445(a)

prohibited removal of the case. |

“(With some delicacy,” we exercised appellate

jurisdiction of the employer’s appeal of the remand order.

Shives, 151 F.3d at 168. We first concluded that the remand

was not based on the district court’s perceived lack of

subject matter jurisdiction and, therefore, that it had not been

issued pursuant to § 1447(c). /d. at 167. The district court,

we reasoned, had not perceived that it lacked subject matter

jurisdiction over the employee’s FELA claim because federal

and state courts have concurrent original jurisdiction over

such claims. /d. Instead, it had remanded the case because §

1445(a) prohibited removal in that instance. /d.

App. 17a

Alternatively, we concluded that the district court’s

decision concerning the LHWCA’s applicability to the

employee’s claim was a “conceptual antecedent” to the order

of remand. /d. We noted that letting the remand order stand

would

commit to the state courts the decision of whether the

LHWCA provided coverage to the employee. To follow

that course would thus deprive the federal courts of their

proper role in resolving this important issue and would

circumvent Congress’ intent that LHWCA coverage

issues be resolved in the first instance by the Department

of Labor and ultimately in the federal courts of appeals.

Id.

The procedural posture of this case distinguishes it from

Shives in two critical particulars. First, as already noted, in

Shives we exercised appellate jurisdiction over an appeal of

a remand order that we somewhat hesitantly construed to be

predicated upon § 1445(a)’s prohibition against removal of

state-filed FELA claims, not upon § 1447(c)’s mandate to

remand in the absence of subject matter jurisdiction. See id.

at 167-68. Because the Supreme Court has clarified that §

1447(d)’s restriction on review applies only to remand orders

made pursuant to § 1447(c), see Thermtron, 423 U.S. at 346,

we concluded that § 1447(d) did not prohibit appellate

jurisdiction, see Shives, 151 F.3d at 167. In other words,

appellate jurisdiction existed in Shives because the district

court’s order did not rest upon lack of subject matter

jurisdiction, the ground set forth in § 1447(c).° By contrast,

° We drew a similar conclusion in Mangold, 77 F.3d at 1452, a

decision that Blackwater misguidedly cites to ameliorate its

jurisdictional position in this case. In that case, we concluded that

§ 1447(d) did not prohibit appellate review of the district court’s

remand order because that order did not arise from the district

App. 18a

as we have explained, the district court remanded this case

under § 1447(c) for lack of subject matter jurisdiction.

The second distinction that defeats Blackwater’s reliance

on Shives to support appellate jurisdiction in this case is the

existence in Shives of a “conceptual antecedent” to the

district court’s remand order. As we have noted, a key

component of Waco’s collateral order exception is that the

challenged order “in logic and in fact . . . preceded that of

remand.” Waco, 293 U.S. at 143. The district court in

Shives faced, on the one hand, § 1445(a), which prohibited

removal of state-filed FELA claims, and, on the other hand, a

notice of removal claiming that the plaintiffs claim was not

brought under the FELA but was instead preempted by the

LHWCA. We concluded in Shives that the district court had

remanded the case because § 1445(a) prohibited removal of

FELA claims. See 151 F.3d at 167. In order to reach its

conclusion that § 1445(a) prohibited removal, the district

court in Shives had to determine whether the LHWCA

applied to the employee’s claim. If the LHWCA was

applicable, it would erase § 1445(a)’s protection of state-

filed FELA claims from removal. Shives thus presented the

court of appeals with an LHWCA coverage decision by the

district court, a distinct determination that was not entangled

with the jurisdictional analysis supporting the remand order.

Shives itself does not cite to Waco or explain how the

LHWCA coverage decision at issue in that case satisfied

Waco’s severability standard. It is nevertheless clear that

we took appellate jurisdiction in Shives because the district

court made a decision that was a “conceptual antecedent” to

the remand order. That conceptual antecedent took the form

of the district court’s substantive ruling that, because the

plaintiff had not been engaged in maritime employment, the

court’s perception that it lacked subject matter jurisdiction, and

thus was not issued pursuant to § 1447(c). /d.

App. 19a

application of the LHWCA had not been triggered in that

case. See id.

No such conceptual antecedent exists here. The district

court made no DBA coverage decision that might form the

basis of our review. In Shives, the district court reached the

issue of the LHWCA’s application to the plaintiff's claim,

but not because it needed help deciding how to remedy its

lack of removal jurisdiction. Rather, a determination of

LHWCA coverage in Shives was a necessary step in the

district court’s inquiry into the permissibility of removal.

Here, the district court appropriately did not decide whether

the DBA applied to Nordan’s claims because such an inquiry

was both unnecessary to its jurisdictional analysis and

unreachable on the merits once the court had determined that

removal jurisdiction was absent.’

The fact that the district court’s order made no

determination of DBA coverage has significance beyond

serving to distinguish the facts before us from those in

Shives. It also supports our conclusion that the denial of

Blackwater’s motion to dismiss was not conclusive upon its

substantive rights. We note again the caution in Nutter that,

for the purpose of determining whether an order meets the

criteria of Waco, “[a]t a minimum, the challenged portion of

the order must affect the parties’ substantive rights” by

having a preclusive effect in subsequent proceedings.

Nutter, 4 F.3d at 321. Here, the district court made no

determination with respect to whether the DBA covered

’ Another case upon which Blackwater significantly relies is

also distinguishable on this basis. In Jamison v. Wiley, 14 F.3d

222, 233 (4th Cir. 1994), we concluded that Waco’s exception

permitted review of the district court’s refusal to substitute the

United States as a defendant. We so concluded because the district

court decided to deny substitution “before it decided to remand the

case to state court, while it still had control of the case.” /d.

App. 20a

Nordan’s claims. One of the first principles of preclusion,

however, is that the precluding order either actually

determined the issue sought to be precluded (in the case of

issue preclusion) or issued a final judgment on the merits (in

the case of claim preclusion). See, e.g., Martin v. Am.

Bancorporation Ret. Plan, 407 F.3d 643, 650, 653 (4th Cir.

2005). Therefore, neither the district court’s refusal to decide

whether the DBA applies to Nordan’s claims, nor its

concurrent conclusion that it lacked jurisdiction to reach the

merits of the case will have any preclusive effect on

Blackwater’s ability to assert in state court its arguments

concerning ordinary federal preemption.

We further note that remanding despite a potential

federal defense does not hamstring the litigation of that

defense in state court. In Lontz, 413 F.3d 435, we decided a

similar case in which the defendant had removed a state

labor dispute to federal court, claiming federal question

jurisdiction via complete preemption. The Lontz defendant

had claimed complete preemption on the theory that Sections

7 and 8 of the National Labor Relations Act (“NLRA”), 29

U.S.C. §§ 157-158 (2000), required resolution of certain

labor disputes before the National Labor Relations Board

(“NLRB”) rather than in state or federal court. We

concluded that the NLRA provisions do not completely

preempt state law and that the district court consequently

lacked federal question removal jurisdiction. Lontz, 413

F.3d at 442-43. We directed the district court to remand,

rather than dismiss, claims that, if the NLRA applied to

them, would not be justiciable in state court. See id. at 443-

44. We recognized in Lontz that, to the extent that the

NLRA applied to the plaintiff's claims, the statute entitled

the defendant to adjudication of those claims solely before

the NLRB. See id. Nevertheless, that possible entitlement

did not transform a defense of ordinary federal preemption

into a right to a federal forum in which to raise and litigate

App. 2la

that defense on the merits. Furthermore, “the futility of a

remand to [state court] does not provide an exception to the

plain meaning of § 1447(c).” Roach v. W. Va. Reg’l Jail &

Corr. Facility Auth., 74 F.3d 46, 49 (4th Cir. 1996). We

therefore see no reason why Blackwater’s possible

entitlement to adjudication before the Department of Labor

should allow it to characterize the district court’s denial of its

motion to dismiss as a conclusive denial of a substantive

right.

Finally, once a district court determines that it lacks

subject matter jurisdiction over a removed case, § 1447(c)

directs that the case “shall be remanded.” This mandate is so

clear that, once a district court has found that it lacks subject

matter jurisdiction in a removed case, no other fact-finding,

legal analysis, or exercise of judicial discretion is necessary

in order to follow the congressional directive; the decision to

remand a case to remedy a lack of subject matter jurisdiction

is purely ministerial. See Int’l Primate Prot. League v.

Adm 'rs of Tulane Educ. Fund, 500 U.S. 72, 89, 111 S. Ct.

1700, 114 L. Ed. 2d 134 (1991) (noting that § 1447(c) grants

“no discretion to dismiss rather than remand [a removed]

action” in which subject matter jurisdiction is lacking

(internal quotation marks and citation omitted)), superseded

on other grounds by 28 U.S.C. § 1442(a)(1) (2000). We

therefore conclude that the district court’s “decision” to

remand instead of dismiss is not only_not conclusive, but also

intimately enmeshed with and unseverable from the remand

order.

ll.

We similarly do not have jurisdiction under Waco’s

severable order exception to review the district court’s

conclusions that neither complete preemption nor a unique

federal interest created a federal question for the purposes of

App. 22a

removal. Our decision in Nutter, 4 F.3d 319, forecloses the

possibility.

The Nutter defendant had claimed that removal

jurisdiction was proper because two federal statutes

completely preempted the plaintiff's state-law claims and,

therefore, presented federal questions. The district court

rejected this complete preemption argument and remanded

the case to state court for lack of removal jurisdiction. We

concluded that this determination that the federal statutes did

not completely preempt Nutter’s state-law claims would

have no preclusive effect in subsequent proceedings and thus

that it was not a decision that was conclusive upon the

parties. /d. at 321-22.

Similarly here, the district court’s findings regarding

complete preemption could foreclose state-court litigation of

Blackwater’s DBA and constitutional claims only if

principles of preclusion prevented Blackwater from later

raising a defense of ordinary federal preemption. Here, as we

did in Nutter, we conclude that the district court’s finding

that complete preemption did not create federal removal

jurisdiction will have no preclusive effect on a subsequent

state-court defense of federal preemption. We conclude that

Nutter’s reasoning applies with equal force to the district

court’s companion conclusion that Blackwater’s asserted

unique federal interest could not convey federal removal

jurisdiction.

In addition, the district court’s complete preemption and

unique federal interest analysis cannot be disengaged from

the remand order itself. In Nutter, we concluded that the

district court’s complete preemption conclusion was

unseverable from its determination that it lacked removal

jurisdiction: “the [district] court’s findings regarding

preemption and jurisdiction are indistinguishable. The

App. 23a

preemption findings were merely subsidiary legal steps on

the way to its determination that the case was not properly

removed.” Jd. at 321 (internal quotation marks and citation

omitted). Indeed, the district court’s conclusions here with

respect to complete preemption and the presence of a unique

federal interest cannot be severed from the remand order, as

they are simply the necessary legal underpinning to the

court’s determination that the case was not properly

removed.®

* Blackwater additionally argues that it is the functional

equivalent of a federal officer and that removal jurisdiction

therefore existed in the district court under 28 U.S.C. § 1442(a)

(2000). Blackwater failed to raise this issue before the district

court. Citing 28 U.S.C. § 1653 (2000), Blackwater nevertheless

invites us to deem its notice of removal to be amended to include §

1442(a) as an asserted basis for removal, to interpret the district

court’s failure to consider that basis as severable from its remand

order under Waco, and thereby to create jurisdiction to review an

issue that the district court never considered.

While “[dJefective allegations of jurisdiction may be

amended, upon terms, in the trial or appellate courts,” § 1653,

Blackwater did not simply omit to cite to § 1442(a). Rather, it

failed to argue before the district court that the provision supported

removal. This court generally declines to consider issues raised

for the first time on appeal absent a fundamental miscarriage of

justice. See, e.g., Muth v. United States, | F.3d 246. 250 (4th Cir.

1993). Even if it were appropriate, at this point, to deem an action

taken that Blackwater never sought to take, it would not cure

Blackwater’s waiver of the possible jurisdictional basis by failing

to marshal arguments and evidence in support of it below. See

Venkatraman v. REI Sys., Inc., 417 F.3d 418, 421-22 (4th Cir.

2005) (holding that a miscarriage of justice had not occurred, so as

to require appellate review, when the district court failed to

consider a cause of action not presented to it). We therefore do

not consider whether § 1447(d) bars our review of this newly

raised issue.

As we have explained, § 1447(d) also does not apply to

remand orders based upon factors that the district court was

not statutorily authorized to consider. See Thermtron, 423

U.S. at 351. A district court exceeds its statutory authority

when it remands a case “on grounds that seem justifiable to

[the court] but which are not recognized by the controlling

statute.” Jd. For example, in Thermtron the Supreme Court

held that § 1447(d) does not prohibit review of a remand

order based on the district court’s assessment that its docket

was too crowded to hear the case. /d.

Blackwater argues that the court exceeded its authority

by remanding the case instead of dismissing it. The district

court declined to dismiss the case as an alternative to remand

because it determined that it did not have the authority to

decide whether the DBA applied~to Nordan’s claims.

Nordan, 382 F. Supp. 2d at 814. It based this determination

upon the erroneous belief that district courts play no role in

the federal judicial review of DBA claims.’ Jd. Blackwater

claims that this error concerning the pipeline of review of

DBA claims demonstrates that the district court exceeded its

authority by remanding and that the order is therefore not

subject to § 1447(d)’s prohibition of review. It contends that

the district court’s remand order had nothing to do with its

” As we have noted, the federal district courts, followed by

the federal courts of appeals and the United States Supreme

Court, review DBA claims after they have been initially

adjudicated in the Department of Labor. See 42 U.S.C. §

1653(b) (2000); see also Lee v. Boeing Co., Inc., 123 F.3d

801, 803-05 (4th Cir. 1997) (describing agency and judicial

review of DBA claims).

App. 25a

stated lack of removal jurisdiction and was instead based on

an erroneous interpretation of the DBA’s judicial review

provisions.

The district court did not remand on. statutorily

unauthorized grounds. Rather, as we have already explained,

the remand order was based upon the district court’s

judgment that removal jurisdiction was not present. Of

course, we need look no further than § 1447(c) to conclude

that Congress has not only authorized remand under such a

circumstance, but also emphatically required it. The district

court’s error concerning the mechanism of judicial review of

DBA claims is a non sequitur to its determination that

remand was necessary because it lacked subject matter

jurisdiction to reach any issue other than. the removability of

the action.

The correctness of the district court’s jurisdictional

analysis is irrelevant under § 1447(d). See Mangold, 77 F.3d

at 1450. If it were not, we could circumvent the statute

simply by declaring the remand order to be wrong. Such an

interpretation of § 1447(d) would eviscerate the

congressional policy of limiting litigation over the

procedural matters that give rise to remand orders. We also

need not decide whether, possessing a proper understanding

of the district court’s role in the judicial review of DBA

claims, the district court would have been correct to dismiss

the case rather than remand it. For the purposes of §

1447(d), the only relevant aspect of the district court’s

decision not to dismiss the case is that it was grounded upon

a perceived lack of subject matter jurisdiction to decide

DBA claims. The presence of an error in that analysis does

not change its jurisdictional character. Thermtron’s

exception to § 1447(d) for ultra vires remands thus does not

apply in this case.

Finally, Blackwater argues that § 1447(d) does not

prohibit appellate review in this case because the district

court’s decision to remand undermines the constitutional

sequestration of foreign affairs and war powers within the

political branches of the federal government, out of reach of

both the federal and the state judiciaries. Specifically, it

contends that:

Even if the DBA is not applicable, the constitutional

separation of powers would preclude judicial intrusion

into the manner in which the contractor component of the

American military deployment in Iraq is trained, armed,

and deployed. Decedents were performing a classic

military function -- providing an armed escort for a

supply convoy under orders to reach an Army base --

with authorization from the Office of the Secretary of

Defense that classified their missions as “official duties”

in support of the Coalition Provisional Authority.

Federal courts, and a fortiori state courts, may not impose

liability for casualties sustained in the battlefield in the

performance of these duties. A North Carolina trial court

may not adjudicate national political questions that the

Supreme Court has deemed non-justiciable by federal

courts.

Br. of Appellant pp. 10-11.

Blackwater overstates both the extent of our decision

today and the state of the record. What we have before us is

a complaint alleging that the decedents were independent

contractors working for a security company, a notice of

removal, a motion to dismiss, and a remand order. Without

intending to diminish the magnitude of the concerns that

Blackwater articulates, we are unprepared to say at this

App. 27a

juncture that the Constitution overrides Congress’s ability to

prescribe the limits of federal appellate jurisdiction in

matters such as these.

Blackwater’s argument that neither federal nor state

courts may decide decedents’ claims also proves too much.

Distilled to their essence, Blackwater’s arguments appear to

be that we must have jurisdiction because we have no

jurisdiction and that our founding document simultaneously

creates and prohibits jurisdiction in this case. Both

constitutional interpretations are too extravagantly recursive

for us to accept. It is, in fact, axiomatic under our federalist

system of government that state courts have the authority to

decide federal constitutional issues. Blackwater may assert

in state court, subject to review by the United States

Supreme Court, its defenses regarding the constitutional

exclusivity of a federal administrative remedy. As we

recently noted in Lontz, the ability of a state court “to

determine its own jurisdiction is a serious obligation, and not

something that federal courts may easily take for

themselves.” 413 F.3d at 442. For these reasons, we decline

to graft a new exception onto the already significantly

burdened text of § 1447(d).

ITT.

Blackwater alternatively claims that, even if § 1447(d)

prohibits appellate jurisdiction, we should issue a writ of

mandamus to the district court. We are unpersuaded.

We may issue a writ of mandamus if the petitioner has no

other adequate means to obtain relief to which there is a

“clear and indisputable” right. Media Gen. Operations, Inc.

v. Buchanan, 417 F.3d 424, 433 (4th Cir 2005). “Mandamus

is a drastic remedy to be invoked only in extraordinary

situations.” United States v. Moussaoui, 333 F.3d 509, 516

App. 28a

(4th Cir. 2003 (internal quotation marks and citation

omitted). Before we may determine whether Blackwater has

met these stringent requirements, however, we must first

inquire whether we have the authority to issue the writ.

Congress’s restriction on review of remand orders

applies to review “on appeal or otherwise.” § 1447(d). The

Supreme Court has interpreted this language to forbid the use

of mandamus to circumvent the requirements of § 1447(d).

Thermtron, 423 U.S. at 343. Given that § 1447(d) precludes

our ability to review the district court’s order by appeal,

precedent dictates that it applies to preclude our review by

mandamus as well.

Further, given the state of the record at this juncture,

reflecting only cursory, untested factual allegations,

mandamus would still be inappropriate under these

circumstances. Mandamus is an extraordinary remedy

whose issuance depends upon the discretion of the court

considering the petition. United States ex rel. Rahman v.

Oncology Assocs., 198 F.3d 502, 511 (4th Cir. 1999) (citing

Kerr v. U.S. Dist. Court for the N. Dist. of Cal., 426 U.S.

394, 40396 S. Ct. 2119, 48 L. Ed. 2d 725 (1976)). As the

Supreme Court has instructed, we refrain from issuing a writ

of mandamus in all but the most extraordinary circumstances

to avoid circumventing congressional judgments about the

proper scope of appellate jurisdiction. See Kerr, 426 US. at

403 (“A judicial readiness to issue the writ of mandamus in

anything less than an extraordinary situation would run the

real risk of defeating the very policies sought to be furthered

by [the] judgment of Congress.”).

App. 29a

Blackwater argues, however, that we may issue a writ of

mandamus because this case presents a conflict between §

1447(d) and the DBA. We held in Borneman that § 1447(d)

could not “be read categorically when other statutes in

tension with it are considered.” 213 F.3d at 825. Because

we interpreted the statute creating that tension to prohibit

absolutely the district court’s remand of the case, we

concluded that this tension alternatively permitted review via

mandamus. /d. at 826. However, the statute “in tension”

with § 1447(d) in Borneman declared that certain state-court

actions brought against federal employees “shall be

removed.” 28 U.S.C. § 2679(d)(2) (2000).'° That statute

thus directly and specifically addressed the removability of

the relevant class of claims and contained language that

channeled the district court’s authority to remand in such

cases. This absence of discretion to remand created the

tension of which we spoke in Borneman. 213 F.3d at 825.

By contrast, Blackwater has not identified any portion of the

DBA that similarly addresses either the removability to

federal district court of state court actions purportedly

'° The tension-creating statute in Borneman was a portion of the

Federal Employees Liability Reform and Tort Compensation Act of 1988

(“the Westfall Act”). Sections 5 and 6 of the Westfall Act, 28 U.S.C. §

2679(b), (d) (2000), give federal employees absolute immunity from

liability in tort for actions within the scope of their employment and

create a procedural mechanism by which this immunity is enforced.

When a federal employee is sued for a tort committed within the scope of

his or her employment, the Attorney General may issue a certification

that the facts underlying the claim did in fact arise within the scope of the

defendant’s federal employment. § 2679(d)(1)-(2). If such a certification

is issued in a case brought in state court, the case “shall be removed

without bond . . . to the [appropriate federal] district court,” where the

court must substitute the United States as the sole defendant. §

2679(d)(2).

App. 30a

preempted by the DBA or the district court’s peculiar lack of

discretion with respect to remand of such cases.''

Blackwater next argues that we may issue a writ of

mandamus because the remand order risks unnecessary

tension between state and federal judicial fora on an

extraordinarily important question of federal law.

Blackwater attempts to characterize our opinions in

Mangold, Jamison, and Shives as authority for the

proposition that a writ of mandamus may issue despite the

applicability of § 1447(d) simply because the remand will

have the practical effect of allowing a state court to decide a

federal issue. Blackwater misapprehends the import of our

jurisprudence in two fundamental respects.

First, Blackwater contorts the meaning of Thermtron, in

which the Supreme Court held that federal appe!late courts

may review via mandamus remand orders inat are not

covered by § 1447(d). The Thermtron Court concluded that,

even though § 1447(d) did not apply to the remand order at

issue, the order was nevertheless unreviewable by appeal

because it was not a final judgment. 423 U.S. at 352-53,

overruled by Quackenbush, 517 U.S. at 714-15 (holding that

remand orders. are final for the purposes of appellate review).

Thermtron, therefore, established mandamus as a means io

circumven. not § 1447(d)’s proscription against review of

certain rernand orders, but the finality requirement of 28

U.S.C. § 1291 (2000). 423 U.S. at 352-53. Similarly, in

Mangold and Jamison, we referred to the use of the writ of

mandamus not as an end-run around § 1447(d) but as an

'' Indeed, the statutory authority under which Blackwater sought

removal in this case simply allows that state-court actions raising a

federal question “may be removed” to federal district court. § 1441(a).

App. 3la

alternative to satisfaction of § 1291 or membership in the

narrow class of collateral orders reviewable under Cohen v.

Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47, 69 S.

Ct. 1221, 93 L. Ed. 1528 (1949). See Mangold, 77 F.3d at

1453; Jamison, 14 F.3d at 233-34. Because we conclude that

Blackwater has not overcome the hurdle of § 1447(d), we

have no occasion to consider whether the doctrine of finality

has been satisfied in this case.

Second, Blackwater fails to acknowledge a_ key

difference between the record before us today and the record

before us in Shives. We expressed in Shives some doubt

about our ability to exercise appellate jurisdiction, but

concluded that we could, in the alternative, issue a writ of

mandamus “[t]o avoid forfeiting the federal courts’ role of

reviewing LHWCA coverage issues.” 151 F.3d at 167. As

we have explained, in Shives, the district court decided

whether the employee’s claim, which had been filed in state

court under the FELA, was in fact covered by the LHWCA.

If the FELA provided the employee with his cause of action,

then removal was improper because § 1445(a) prohibits

removal of state-filed FELA claims. However, if the

LHWCA governed the claim instead, the employee could not

proceed under the FELA and § 1445(a) would not apply.

Determination of the applicability of the LHWCA to the

employee’s claims was, therefore, a critical step in the

district court’s inquiry into the propriety of removal in that

case. Furthermore, the parties had stipulated to the facts

relevant to the question of whether the LHWCA applied to

the employee’s claim. Shives thus presented the court of

appeals with an order in which the district court actually

decided, on an uncontested factual record and as part of its

inquiry into the permissibility of removal, whether the

LHWCA covered the plaintiff's claims.

App. 32a

Here, as we have explained, we have no coverage

question to review -- and rightfully so, as the district court

did not need to reach that issue as part of its removal

jurisdiction analysis -- nor do we have a factual record in

which the legally material facts are uncontested. Given the

preliminary nature of the proceedings below and the

resulting lack of adversarial development of the factual

allegations in this case, as well as the absence of an

independently reviewable order, mandamus is not only not

compelled by Shives but is also particularly inappropriate.

We therefore decline to expand Shives so far afield of the

original congressional intent embodied in § 1447(d).

IV.

For the foregoing reasons, we conclude that we lack

jurisdiction to hear this case and grant Nordan’s motion to

dismiss Blackwater’s appeal. We also deny Blackwater’s

petition for a writ of mandamus. Finally, we deny as moot

Nordan’s motion to strike.

APPEAL DISMISSED; PETITION FOR WRIT OF

MANDAMUS DENIED; MOTION TO STRIKE DENIED

AS MOOT

App. 33a

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NORTH CAROLINA

RICHARD P. NORDAN, as Ancillary Administrator for the

separate Estates of STEPHEN S. HELVENSTON, MIKE R.

TEAGUE, JERKO GERALD ZOVKO and WESLEY J.K.

BATALONA, Plaintiff,

BLACKWATER SECURITY CONSULTING, LLC;

BLACKWATER LODGE AND TRAINING CENTER,

INC., and JUSTIN L. McQUOWN, Defendants.

No. 5:05-CV-48-FL(1)

382 F. Supp. 2d 801

LOUISE W.. FLANNIGAN, Chief United States District

Judge:

This matter is before the court on defendants’ motions to

dismiss (DE #’s 5 & 8), and plaintiff's motion to remand

(DE # 12). Plaintiff responded in opposition to the motions

to dismiss, and defendants responded in opposition to the

motion to remand. In this posture, the issues raised are ripe

for ruling. For the reasons that follow, the court grants

plaintiff's motion to remand and denies as moot defendants’

motions to dismiss.

STATEMENT OF THE CASE

Plaintiff commenced this action on January 5, 2005, in

the Superior Court of Wake County, North Carolina,

asserting claims arising out of the deaths of four security

personnel assigned to work in the vicinity of Fallujah, Iraq.

App. 34a

In the complaint, plaintiff asserts two state law claims for

wrongful death and fraud.

On January 24, 2005, defendants filed a notice of

removal in this court asserting federal question jurisdiction

on the basis of “complete preemption” and “unique federal

interests.” (Notice of Removal, PP 34, 36). On January 31,

2005, defendants Blackwater Security Consulting, LLC, and

Blackwater Lodge and Training Center, Inc. (“Blackwater”)

filed a motion to dismiss, pursuant to Federal Rules of Civil

Procedure 12(b)(6) and 9(b), on the basis of a defense of

preemption under the Defense Base Act (“DBA”), and for

failure to state a claim. On February 1, 2005, defendant

Justin L. McQuown (“McQuown”) filed a motion to dismiss,

pursuant to Rule 12(b)(6), also asserting a defense of

preemption under the DBA or the related Longshore and

Harbor Workers’ Compensation Act (LHWCA).

On February 11, 2005, plaintiff filed a motion to remand

to state court, arguing that the complaint only asserts state

law claims, and that the DBA and LHWCA do not

completely preempt the asserted claims. On March 7, 2005,

defendants responded in opposition to the motion to remand,

attaching copies of contracts referenced in the complaint and

compensation benefits decisions by the United States

Department of Labor, pertaining to the decedents in this

action. Plaintiff replied on March 17, 2005, objecting to

consideration of evidence outside the complaint, and arguing

that neither complete preemption nor unique federal interests

served to establish jurisdiction in this case. Plaintiff also

responded to defendants’ separate motions to dismiss, to

which defendants have replied.

App. 35a

STATEMENT OF ALLEGED FACTS

The facts alleged in plaintiff's complaint may be

summarized as follows. On March 8, 2004, defendant

Blackwater, and another entity, Regency Hotel and Hospital

Company (“Regency”) entered into a contract (“security

contract”) with ESS Support Services Worldwide (“ESS”) to

provide security services “for ESS’s catering operations in

the Middle East.” (Compl., P21). On March 12, 2004,

defendant Blackwater entered into a sub-contract (“sub-

contract”) with Regency, which gave defendant Blackwater

control over security details. On March 25, 2004, Stephen S.

Helvenston, Mike R. Teague, Jerko Gerald Zovko and

Wesley J.K. Batalona (hereinafter the “decedents”) entered

into “Independent Contractor Service Agreements” with

Blackwater, which expressly incorporated the terms of the

sub-contract and contract.

At the time the decedents entered into the Independent

Contractor Service Agreements, Blackwater representatives

told them that they would be performing security services in

Iraq, with the following precautions mandated by the

primary contract:

A. “Each security mission would be handled by a team of no

less than six (6) members.”

B. “Each security mission would be performed in armored

vehicles.”

C. “Security teams would be comprised of at least two

armored vehicles, with at least three security contractors in

each vehicle, which would provide for a driver, a navigator,

and a rear-gunner.

App. 36a

D. “The rear-gunner would have a heavy automatic weapon,

such as a “SAW Mach 46,’ which could fire up to 850 rounds

per minute, allowing the gunner to fight off any attacks from

the rear.”

E. There would be “at least 24-hours notice prior to any

security mission.”

F. “Each security detail mission would be subject to a Risk

Assessment completed prior to the mission, and that if the

threat level was too high, they would have the option of not

performing the mission.”

G. There would be an “opportunity to review the travel

routes, gather intelligence about each mission, do a pre-trip

inspection of the route and determine the proper logistics to

carry out the security detail.”

H. The security detail “would arrive in the Middle East and

have at least 21 days prior to any operations to become

acclimated to the area, learn the lay of the land, gather

intelligence, and learn safe routes through the area.”

(Compl., P13). The decedents relied upon these

representations in entering into the Independent Contractor

Security Agreements.

In preparing decedents for work under the Independent

Contractor Security Agreements, Blackwater representatives

conducted training and preparation programs for security

missions in Iraq. One of the representatives who conducted

training, defendant McQuown, “failed to provide adequate

training and intelligence data” to decedents. (Compl., P28),

and “harbored extreme animosity toward decedent Scott

Helvenston relating to Helventson’s superior credentials.

App. 37a

abilities, training, education, experience and knowledge.”

(Compl., P40).

Furthermore, plaintiff alleges that the training programs

and preparations provided for decedents were compromised

by defendant Blackwater’s interest in higher profits.

Decedents were not given twenty-one (21) days preparation

time prior to operations in Iraq, and, as such, were not

permitted to become acclimated to the area, learn the lay of

the land, gather intelligence, or learn safe routes through

Iraq. Rather, on March 27, 2004 they “were advised that they

would be leaving in two days for Baghdad to start their first

mission.” (Compl., P43). Specifically, although decedent

Helvenston was physically ill, defendant McQuown ordered

Helvenston to depart for Baghdad at 5:00 a.m. on March 29,

2004, to join the three other decedents for a security mission.

On March 30, 2004, Helvenston, Teague, Zovko and

Batalona were directed to conduct a security mission for

Blackwater. Pursuant to mission directions, the decedents

were required to “escort three ESS flatbed trucks” carrying

food supplies, “from the City of Taji to a U.S. Army base in

Iraq,” known as Camp Ridgeway, on the outskirts of the City

of Fallujah. (Comp., PP 21, 57, 59). At the time, Fallujah

was “universally known to be extremely hostile territory in

control of Iraqi insurgents.” (Compl., P59).

Even though the decedents were entering hostile

territory, defendant Blackwater failed to provide the

decedents with the protections, tools and information that it

initially promised to provide. Specifically, a Blackwater

representative refused to provide maps of the area and told

decedents that it was “too late for maps.” (Compl., P55). In

addition, defendant did not provide them with the minimum

number of six members on the security detail team, although

six members were available. Defendant did not provide

App. 38a

them with armored vehicles, and defendant did not permit

them to have three team members in each vehicle, which

resulted in each vehicle containing only a driver and a

navigator, but no rear-gunner to quell any attacks.

Moreover, it is alleged, defendant did not provide them

with heavy automatic machine guns, but instead merely with

semi-automatic rifles, which had not even been tested or

sighted. Likewise, defendant did not provide decedents with

twenty-four (24) hours notice or a Risk Assessment prior to

the March 30, 2004 security mission. Finally, defendant did

not provide them with the opportunity to gather intelligence

concerning the travel route or to do a pre-route inspection.

In sum, the decedents were obligated to set out on their

mission grossly under-prepared for the risks they faced.

Because the decedents “had not been able to perform a

pre-trip analysis of their route and [were] denied maps and

logistical information concerning the area, they set out

toward Camp Ridgeway on a road which led directly through

the heart of the hostile Fallujah.” (Compl., P60).

“Unbeknownst to them, there was an alternative, safer route

which led around the outskirts of Fallujah and would have

only taken them approximately two and a half hours longer

to get to Camp Ridgeway.” (Id.).

“Without having any information about the route or even

a map of the area, they became lost and ended up driving

through the center of the City of Fallujah.” (Compl., P17).

“While stopped in traffic, several armed Iraqi insurgents

walked up behind these two unarmored vehicles and

repeatedly shot these four Americans at point blank range,

_dragged them from their vehicles, beat, burned and

disfigured them and desecrated their remains.” (Id.). In

particular, “two of the burnt bodies were strung up from a

App. 39a

bridge over the Euphrates River for all of the world to see.”

(Compl., P61).

In support of the wrongful death claim, plaintiff alleges

that “when the Defendants sent Helvenston, Teague, Zovko

and Batalona out on this security mission in this condition,

without the proper protections, tools and information, they

knew that they were sending them into the center of Fallujah

with very little chance that they would come out alive.”

(Compl., P70). Plaintiff also alleges that “as a proximate

result of the Defendants’ intentional conduct, willful and

wanton conduct, and/or negligence, as alleged herein above,

Helvenston, Teague, Zovko and Batalona . . . were killed

March 31, 2004.”

In support of the fraud claim, plaintiff alleges that

defendants represented that the decedents would receive

protections guaranteed by the primary contract, which

induced the decedents to enter into the Independent

Contractor Service Agreements. Plaintiff further alleges that

when defendants made these representations they knew that

they were false and concealed true facts with the intent to

induce the decedents to enter into the Independent

Contractor Service Agreements.

Plaintiff seeks compensatory damages for wrongful death

of the decedents, recision of the Independent Contractor

Service Agreements, as well as punitive damages from each

defendant, including damages for “mental anguish, fear and

terror of being forced to travel into the center of Fallujah. . .

and the physical pain and suffering of being shot, beaten,

burned, tortured and dismembered.” (Compl., P93).

DISCUSSION

I. Removal Jurisdiction

The party seeking removal has the burden of establishing

federal jurisdiction. Mulcahey v. Columbia Organic Chems.

Co., 29 F.3d 148, 151 (4th Cir. 1994). The court must

strictly construe removal jurisdiction, and resolve all doubts

in favor of remand. /d. The rght to remove a case from

state to federal court derives solely from 28 U.S.C. § 1441,

which provides in relevant part:

Any civil action brought in a state court of which the

district courts of the United States have original

jurisdiction, may be removed by the defendant . . . to the

district court of the United States for the district and

division embracing the place where such action is

pending.

28 U.S.C. § 1441(a). In this case, there is no allegation of

diversity of citizenship between the parties. Accordingly, the

propriety of removal depends on whether the suit raises a

federal question, that is, whether it is an action “arising

under the Constitution, laws, or treaties of the United

States.” 28 U.S.C. § 1331.

Ordinarily, under the “well-pleaded complaint” rule, a

suit raises a federal question “only when the plaintiffs

statement of his own cause of action shows that it is based”

on federal law. Louisville & Nashville R.R. v. Mottley, 211

U.S. 149, 152, 53 L. Ed. 126, 29 S. Ct. 42 (1908). A defense

is not part of a plaintiff's properly pleaded statement of his

claim. Rivet v. Regions Bank, 522 U.S. 470, 475, 139 L. Ed.

2d 912, 118 S. Ct. 921 (1998). Therefore, “a case may not

be removed to federal court on the basis of a federal defense,

including the defense of preemption.” Franchise Tax Bd. of

App. 4la

Cal. v. Construction Laborers Vacation Trust for Southern

Cal., 463 U.S. 1, 14, 77 L. Ed. 2d 420, 103 S. Ct. 2841

(1983).

A limited exception to the well-pleaded complaint rule

exists where the state law claim has been “completely

preempted” by federal law. Beneficial National Bank v.

Anderson, 539 U.S. 1, 7, 8, 156 L. Ed. 2d 1, 123 S. Ct. 2058

(2003); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-

64, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987). In such a case,

even a complaint that only purports to raise a state law claim

may be removed to federal court because it necessarily raises

a federal question. See Beneficial National Bank, 539 U.S.

at 7-8; 10; Franchise Tax Bd., 463 U.S. at 22.

Here, defendants do not dispute that plaintiff's complaint

raises only state law causes of action. Defendants argue,

however, that the statutory and regulatory scheme of the

DBA completely preempts plaintiff's state law claims. In the

alternative, defendants argue that this lawsuit concerns a

“unique federal interest” in the remedies available to

individuals working in support of national defense or war-

zone efforts. The court will address each argument in turn.

A. Complete Preemption

A federal statute completely preempts a state law claim if

it “provide[s] the exclusive cause of action for the claim

asserted” and “set[s] forth procedures and remedies

governing that cause of action.” Beneficial National Bank,

539 U.S. at 8. To have complete preemption, not only must

the state law claim come “within the scope of the federal

cause of action” created in the statute, Caterpillar Inc. v.

Williams, 482 U.S. 386, 393, 96 L. Ed. 2d 318, 107 S. Ct.

2425 (1987), but also Congress must have manifested an

intent to make the federal cause of action “exclusive.”

App. 42a

Beneficial National Bank, 539 U.S. at 9, n.5; see

Metropolitan Life, 481 U.S. at 66-67 (holding that state law

claims which fall within the scope of the federal civil

enforcement provision of ERISA were completely pre-

empted); Franchise Tax Bd., 463 U.S. 1, 23-24, 77 L. Ed. 2d

420, 103 S. Ct. 2841 (noting that state law claims which fall

within the scope of the provision describing federal court

procedures and remedies for suits under the LMRA were

-- completely pre-empted); Rosciszewski v. Arete Assocs., 1

F.3d 225,/232 (4th Cir. 1993) (holding that the “grant of

exclusive jurisdiction to the federal district courts over civil

actions arising under the Copyright Act, combined with the

preemptive force of § 301(a) [of the Copyright Act], compels

the conclusion that Congress intended” to preempt state law

actions).

The Fourth Circuit recently held that there is a

“presumption” against complete preemption, and that

defendants’ burden “is to demonstrate that a federal statute

indisputably disflaces any state cause of action over a given

subject matter.” Lontz v. Tharp, 413 F.3d 435, 440 (4th Cir.

2005). Specifically, “the congressional intent that the state

law be entirely displaced must be clear in the text of the

statute.” Id. at 441 (citing Metropolitan Life, 481 U.S. at 65-

66). Reviewing Supreme Court precedent, the court further

affirmed that “the sine qua non of complete preemption is a

pre-existing federal cause of action that can be brought in the

district courts.” Jd. at 442. Accordingly, “Congress’s

allocation of authority to an agency and away from district

courts defeats a complete preemption claim.” Jd. at 443.

With these principles in mind, the court turns to an

analysis of whether the DBA completely preempts state law

claims falling within its scope. The DBA is a federal statute

that incorporates and extends the comprehensive worker’s

comipensation scheme established by the Longshore and

App. 43a

Harbor Worker’s Compensation Act (LHWCA) to select

forms of employment outside of the United States. Davila-

Perez v. Lockheed Martin Corp., 202 F.3d 464, 468 (ist Cir.

2000). In relevant part, the DBA provides:

Except as herein modified, the provisions of the

[LHWCA] as amended, shall apply in respect to the

injury or death of any employee engaged in any

employment -

* * *

under a contract entered into with the United States or

any executive department, independent establishment, or

agency thereof (including any corporate instrumentality

of the United States), or any subcontract, or subordinate

contract with respect to such contract, where such

contract is to be performed outside the continental United

States .. . for the purpose of engaging in public work. . . .

42 U.S.C. § 1651(a). By reference, the LHWCA provides

for the exclusivity of remedy against a qualifying employer

for injury or death:

The liability of an employer prescribed in section 4 [33

U.S.C. § 904] shall be exclusive and in place of all other

liability of such employer to the employee, his legal

representative, husband or wife, parents, dependents,

next of kin, and anyone otherwise entitled to recover

damages from such employer at law or in admiralty on

account of such injury or death .. . .

33 U.S.C. § 905(a). In addition to this LHWCA exclusion

provision, the DBA expressly excludes liability to employers

under “the workmen’s compensation law of any state.” 42

U.S.C. § 1651(c).

App. 44a

In place of recovery under state worker’s compensation

and tort law, the liability of an employer for the death of an

employee under the DBA is limited to statutory death

benefits. See 33 U.S.C. § 904(a) (referencing § 909, death

benefits). These include funeral expenses and monthly

payments set according to a statutory percentage rate of

average wages of the decedent. See 33 U.S.C. § 909 (a)-(b).

The DBA provides a comprehensive federal framework

for adjudication and administration of claims for statutory

death benefits. Specifically, a claim must be filed with the

United States Department of Labor:

Except as otherwise provided in this section, the right to

compensation for disability or death under this Act shall

be barred unless a claim therefore is filed within one year

after the injury or death. . . . Such claim shall be filed

with the deputy commissioner [of the Department of

Labor] in the compensation district in which such injury

or death occurred.

33 U.S.C. 913(a). Jurisdiction over such claims is vested

exclusively with United States Secretary of Labor:

a claim for compensation may be filed with the deputy

commissioner in accordance with regulations prescribed

by the commission [Secretary of Labor] at any time after

the first seven days of disability following any injury, or

at any time after death, and the deputy commissioner

shall have full power and authority to hear and determine

all questions in respect of such claim.

33 U.S.C. § 919(a); see also § 939(a) (providing that the

“Secretary [of Labor] shall administer the provisions of this

Act.”’).

App. 45a

In turn, the statute sets out a detailed procedure by which

the Secretary of Labor must adjudicate claims for

compensation:

(b) Notice of claim. Within ten days after such claim is

filed the deputy commissioner, in accordance with

regulations prescribed by the commission [Secretary of

Labor], shall notify the employer and any other person

(other than the claimant), whom the deputy

commissioner considers an interested party, that a claim

has been filed. Such notice may be served personally

upon the employer or other person, or sent to such

employer or person by registered mail.

award. The deputy commissioner shall make or cause to

be made such investigations as he considers necessary in

respect of the claim, and upon application of any

interested party shall order a hearing thereon. If a hearing

on such claim is ordered the deputy commissioner shall

give the claimant and other interested parties at least ten

days’ notice of such hearing, served personally upon the

claimant and other interested parties or sent to such

claimant and other interested parties by registered mail or

by certified mail, and shall within twenty days after such

hearing is had, by order, reject the claim or make an

award in respect of the claim. If no hearing is ordered

within twenty days after notice if given as provided in

subdivision (b), the deputy commissioner shall, by order,

reject the claim or make an award in respect of the claim.

(d) Provisions governing conduct of hearing;

administrative law judges. Notwithstanding any other

provisions of this Act, any hearing held under this Act

shall be conducted in accordance with the provisions of

App. 46a

section 554 of title 5 of the United States Code. Any such

hearing shall be conducted by a [an] administrative law

judge qualified under section 3105 of that title. All

powers, duties, and responsibilities vested by this Act, on

the date of enactment of the Longshoremen’s and Harbor

Workers’ Compensation Act Amendments of 1972 [Oct.

27, 1972], in the deputy commissioners with respect to

such hearings shall be vested in such administrative law

judges.

33 U.S.C. § 919. In other words, the Secretary of Labor,

through a deputy commissioner or administrative law judge,

is responsible for making an initial order rejecting a claim or

making an award of compensation. See 33 U.S.C. § 919(c).

“A compensation order shall become effective when filed in

the office of the deputy commissioner as provided in section

19 [33 USCS § 919], and, unless proceedings for the

suspension or setting aside of such order are instituted, . . .

shall become final at the expiration of the thirtieth day

thereafter.” 33 U.S.C. § 921(a).

Proceedings for review of compensation orders must

begin with an appeal to the United States Department of

Labor Benefits Review Board:

The Board shall be authorized to hear and determine

appeals raising a sulstantial question of law or fact taken

by any party in interest from decisions with respect to

claims of employees under this Act and the extensions

thereof. The Board’s orders shall be based upon the

hearing record. The findings of fact in the decision under

review by the Board shall be conclusive if supported by

substantial evidence in the record considered as a whole .

App. 47a

The Board may, on its own motion or at the request of

the Secretary, remand a case to the administrative law

judge for further appropriate action.

33 U.S.C. § 921(b). Finally, “any person adversely affected

or aggrieved by a final order of the Board may obtain a

review of that order in the United States court of appeals for

the circuit in which the injury occurred, by filing in such

court within sixty days following the issuance of such Board

order a written petition praying that the order be modified or

set aside.” § 921(c).

Upon review of the exclusive comprehensive scheme set

out by the DBA for compensation claims, the court is

compelled to find that the DBA does not completely preempt

state law claims. As the Fourth Circuit recently reiterated,

“the sine qua non of complete preemption is a pre-existing

federal cause of action that can be brought in the district

courts.” Lontz, 413 F.3d at 442 (emphasis added). Notably

missing from the DBA statutory scheme is any provision for

a “federal cause of action that can be brought in the district

courts.” /d. Rather, as noted above, the DBA provides for

the exclusive filing of a claim for wrongful death benefits

with the Secretary of Labor, the adjudication of such claims

by a deputy commissioner or administrative law judge, the

review of claims by the Benefits Review Board, and

appellate review by a federal court of appeals. See 42 U.S.C.

§ 1651(a), 33 U.S.C. §§ 913, 919, 921. United States

District Courts are not involved in the claims adjudication

process. See id. Consequently, this court lacks subject

matter jurisdiction to consider plaintiff's claims, however

much they involve coverage issues under the DBA. See

Lontz, 413 F.3d at 443 (“Congress’s allocation of authority

to a agency and away from district courts defeats a complete

preemption claim.”’).

App. 48a

In their argument, defendants cite several cases holding

that either the DBA or LHWCA provides a sweeping defense

of preemption against state tort claims. See e.g., Davila-

Perez v. Lockheed Martin Corp., 202 F.3d 464 (1st Cir.

2000); Smither & Co. v. Coles, 100 U.S. App. D.C. 68, 242

F.2d 220 (D.C. Cir. 1957); Pulley v. Peter Kiewit Son’s Co.,

223 F.2d 191 (7th Cir. 1955); Schmidt v. Northrop Grumman

Systems, Corp., 2005 U.S. Dist. LEXIS 24688, No. 3:04-CV-

042-JTC (unpublished, attached to Defs Notice of

Subsequently Decided Authority) (N.D. Ga.,- March 2,

2005); Colon v. United States Dep’t of Navy, 223 F. Supp. 2d

368 (D.P.R. 2002).

These cases, however, are inapposite to the question of

removal jurisdiction through complete preemption, and

concern only the defense of preemption. See Davila-Perez,

202 F.3d at 468 (dismissing action originally filed in federal

district court on grounds that DBA administrative scheme

provided exclusive remedy); Smither & Co., 242 F.2d at 221,

223 (same); Pulley, 223 F.2d at 192 (dismissing negligence

claims as preempted by the DBA); Schmidt, No. 3:04-CV-

042-JTC (dismissing plaintiff's tort claims filed in federal

court due to preemption under the DBA); Colon, 223 F.

Supp. 2d at 370 (same). Regardless of whether the

comprehensive federal compensation scheme set up by the

DBA defensively preempts any and all state law claims for

death benefits, defensive preemption does not act to establish

federal district court jurisdiction over state law claims. See

Franchise Tax Bd., 463 U.S. at 14 (“[A] case may not be

removed to federal court on the basis of a federal defense,

including the defense of pre-emption.”); Aaron v. Nat'l

Union Fire Ins. Co., 876 F.2d 1157, 1166 (Sth Cir. 1989)

(rejecting argument that LHWCA completely preempts state

claims, without reaching the question of defensive

preemption).

App. 49a

Defendants also cite to Shives v. CSX Transportation,

151 F.3d 164 (4th Cir. 1998), in which the Fourth Circuit

discussed preemption under the LHWCA. Although Shives

is an important case bearing on the final disposition of this

case in federal district court, it provides no assistance to

defendants on the complete preemption issue. Indeed, the

court’s discussion in Shives only further undermines

defendants’ argument in favor of complete preemption.

In Shives, plaintiff brought suit in state court asserting a

Federal Employers’ Liability Act (FELA) claim regarding an

injury suffered while unloading a flatbed rail car at an

intermodal marine terminal. 151 F.3d at 166. Although

federal statute expressly precluded removal of the FELA

claim, defendant removed on grounds that the LHWCA,

rather than FELA, covered plaintiff's injuries. Jd. Upon

review of the motion to remand by plaintiff, the district court

found that plaintiff's injuries were not covered under the

LHWCA, and remanded to state court. Jd. at 167. The court

of appeals, however, vacated the judgment of the district

court, noting that “interpretation of the LHWCA is a matter

for the federal executive and federal appeals courts.” 151

F.3d at 167. In addition, the court undertook its own

analysis of the coverage issue and concluded that plaintiff’ s

injuries were covered under the LHWCA. /d. at 171. Given

the limited statutory jurisdiction over LHWCA claims, the

court of appeals directed outright dismissal of the action for

lack of subject matter jurisdiction, so that the plaintiff could

“proceed through the administrative process” rather than a

civil action in state or federal district courts. Jd.

Shives undermines defendants’ argument in favor of

complete preemption, by confirming that even a claim falling

under the scope of the LHWCA “is not an action over which

the district courts have original jurisdiction.” Shives, 151

F.3d at 171. Rather, such a claim can “only be filed in the

App. 50a

first instance with the Secretary of Labor.” Jd. Accordingly,

where the DBA (incorporating the LHWCA) does not

provide a cause of action in the federal district courts,

removal based upon complete preemption by the DBA is

foreclosed. See Lontz, 413 F.3d at 442, 443; Rosciszewski, |

F.3d at 232 (noting “grant of exclusive jurisdiction to the

federal district courts” in finding complete preemption).

Indeed, the court in Shives anticipated this result by noting

that, even though plaintiff's claim fell under LHWCA, it was

“not removable under 28 U.S.C. § 1441(b).” Jd.

In sum, defendants’ argument that this case is removable

by virtue of complete preemption under the DBA is without

merit.

B. Unique Federal Interest

As an alternative basis for removal jurisdiction,

defendants argue that this lawsuit presents a “unique federal

interest,” specifically concerning the remedies available to

individuals working in support of national defense or war-

zone efforts. (Blackwater Def’s Mem. in Opp. to Remand, p.

17; Def. McQuown Mem. in Opp. to Remand, pp. 16, 17).

In response, plaintiff argues that a “unique federal interest”

is not, in itself, a viable ground for removal jurisdiction.

Under the circumstances presented by this case, the court

finds that defendants’ asserted “unique federal interest” is

insufficient to confer federal jurisdiction.

The sole case upon which defendants rely that applied

the “unique federal interest” doctrine for purposes of

removal jurisdiction is Caudill v. Blue Cross and Blue Shield

of North Carolina, 999 F.2d 74 (4th Cir. 1993). In Caudill,

plaintiff received health insurance benefits as a federal

employee under an insurance policy provided by defendant,

which provided insurance to government employees

App. 5la

“pursuant to the Federal Employees Health Benefits Act.”

Caudill, 999 F.2d at 76. Under the statutory framework then

in place, benefits decisions were decided by the United

States Office of Personnel Management. Jd. In Caudill,

plaintiff brought an action in state court, based upon breach

of contract, seeking to enjoin defendants from notifying a

hospital that defendant did not provide coverage for the

specific treatment she sought. /d. Defendant filed a notice

of removal, asserting federal jurisdiction on grounds of

complete preemption, and on grounds that the action “arises

from a federal contract, giving rise to a uniquely federal

interest so important that the ‘federal common law’

supplants state law.” Jd. at 77.

Upon motion to remand in Caudill, the Fourth Circuit did

not analyze the complete preemption issue, but rather agreed

with defendant that the case fell within a narrow category of

cases presenting a “‘uniquely federal interest’ so important

that the ‘federal common law’ supplants state law either

partially or entirely regardless of Congress’ intent to preempt

the area involved.” Caudill, 999 F.2d at 77 (citing Boyle v.

United Tech. Corp., 487 U.S. 500, 504, 101 L. Ed. 2d 442,

108 S. Ct. 2510 (1988)). In reaching this conclusion, the

court noted that “the federal government is a party to the

contract” with health insurers, and that federal common law

was in significant conflict with state law. /d. at 78.

Although Caudill remains binding precedent in this

Circuit, the case has been criticized on the issue of removal

jurisdiction. Importantly, the primary Supreme Court case

upon which Caudill derived its analysis, Boyle v. United

Tech. Corp., did not address the question of removal

jurisdiction, but rather only addressed the defense of

preemption in a case that had been brought in Federal

District Court. See Boyle, 487 U.S. at 502. Concerning this

distinguishing factor, the Second Circuit noted recently:

The Caudill court conflated the preemption and

jurisdiction analyses by holding that a significant conflict

with uniquely federal interests was sufficient to confer

subject matter jurisdiction on the federal court. See 999

F.2d at 78-79. We agree with the criticism Caudill has

received for giving short shnft to the well-pleaded

complaint rule. See Goepel v. Nat'l Postal Mail

Handlers Union, 36 F.3d 306, 314-15 (3d Cir. 1994)

(rejecting Caudill’s reasoning); 15 JAMES WM. MOORE,

ET AL., MOORE’S FEDERAL PRACTICE § 103.45[3][c] (3d

ed. 2004) (commenting that Caudill is “fatally flawed if

the validity of the well-pleaded complaint rule . . . [is]

accepted”).

Empire Healthchoice Assur., Inc. v. McVeigh, 396 F.3d 136,

142-143 (2d Cir. 2005); see also Reveal v. Stinson, 115 F.

Supp. 2d 688, 691 (D. W. Va. 2000) (“Caudill has been

roundly criticized by courts and commentators as an

aberration.”).

Moreover, after Caudill was decided, the Supreme Court

has stated without qualification that “a state claim may be

removed to federal court in only two circumstances - when

Congress expressly so provides . . . or when a federal statute

wholly displaces the state-law cause of action through

complete pre-emption.” Beneficial Nat'l Bank v. Anderson,

539 U.S. 1, 8, 156 L. Ed. 2d 1, 123 S. Ct. 2058 (2003)

(emphasis added). In addition, Fourth Circuit analysis of

removal jurisdiction more recent than Caudill is consistent

with this Supreme Court approach. In Lontz, the court noted

that a case may be removed to federal court only on three

separate grounds: 1) diversity jurisdiction, 2) a federal

question as “an element, and an essential one, of the

plaintiff's cause of action,” or 3) complete preemption.

App. 53a

Lontz, 413 F.3d at 439, 440. Notably missing from the

court’s discussion was any mention of “unique federal

interest” as a basis for removal jurisdiction.

This more recent precedent provides reason to doubt

whether removal on the basis of “unique federal interests,”

outside the specific facts of Caudill, is proper. Given the

questionable authority of Caudill, well-established precedent

requires resolution of such doubt in the favor of remand. See

Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148,

151 (4th Cir. 1994).

Moreover, even assuming that “unique federal interests”

may provide a basis for jurisdiction in some cases,

application of such doctrine here is unavailing. In this case,

the Blackwater defendants claim that this case involves a

unique federal interest “in the remedies available to

individuals killed or injured working under federal prime,

subcontracts, and subordinate contracts in support of national

defense or war zone efforts.” (Blackwater Def’s Mem. in

Opp. to Remand, pp. 17-18). In similar terms, defendant

McQuown claims that the “DBA advances a unique federal

interest . . . to provide uniformity and certainty in the

availability of compensation of injured non-military

employees . .. performing public work,” and that this federal

interest in an exclusive DBA remedy is raised by plaintiffs

claims. (Def. McQuown Mem. in Opp. to Remand, pp. 17).

This asserted unique federal interest, however, being

based upon coverage under the DBA, assumes the very

conclusion which this court lacks jurisdiction to reach,

namely that the decedents in this case are covered as

employees under the DBA. As discussed above, pursuant to

Shives, although this issue is plainly a federal question, it is

not an issue which this court has jurisdiction to address. See

Shives, 151 F.3d at 167 (stating that the “question of whether

App. 54a

the LHWCA applies to a workrelated injury is exclusively a

federal question . . . for the federal executive and federal

appeals courts” to resolve).

Moreover, this case does not present circumstances

which fall under the “unique federal interest” test as applied

by the court in Caudill. Unlike in Caudill, plaintiff's cause

of action does not involve the direct interpretation of “a

federal contract,” such that “federal common law” supplants

state law. See Caudill, 999 F.2d at 77. Indeed, the

application of “federal common law” is not even asserted by

defendants in this case. Rather, defendants assert a federai

interest in “the remedies” that are available to individuals

killed while working in war-zones. (Blackwater Def’s Mem.

in Opp. to Rem., p. 17; see also Def. McQuown’s Mem. in

Opp. to Rem., p. 18). The determination of such remedies

depends upon coverage under the DBA, which is not a

federal contract, but rather a federal statute. While there is

no doubt that there exists a federal interest in uniform

application of the DBA, this interest is not sufficient to

provide removal jurisdiction. .

In summary, under the circumstances of this case, this

court lacks subject matter jurisdiction over this cause of

action, whether asserted on the basis of complete preemption

or “unique federal interests.” Having found no basis for

subject matter jurisdiction the court turns to the remaining

question of the ultimate disposition of this case.

II. Disposition

Concerning the proper procedure following removal, 28

U.S.C. § 1447(c) provides that “if at any time before final

judgment it appears that the district court lacks subject

matter jurisdiction, the case shall be remanded.” 28 U.S.C. §

1447(c). Accordingly, where the court finds no basis for

App. 55a

subject matter jurisdiction, § 1447(c) compels the court to

remand this action to state court.

In opposition to remand, defendants raise an important

point concerning the disposition in Shives following removal

which must be addressed here. In Shives the court recognized

that the “question of whether the LHWCA applies to a

workrelated injury is . . . [a] question which Congress never

intended for state courts to resolve.” Shives, 151 F.3d at 167.

Rather, any “interpretation of the LHWCA is a matter for the

federal executive and federal appeals courts.” Id.

Accordingly, after finding that the LHWCA applied to the

facts of that case, the Fourth Circuit noted that, regardless of

whether the district court lacked jurisdiction upon removal,

remand to the state court was not proper. See id. at 171.

Specifically, the court explained:

While the only intuitive remedy might nevertheless be to

remand this case to the state court to decide the coverage

question, if we were to do so, we would be committing

the federal question of LHWCA coverage to the state

court when Congress intended that it be decided

exclusively in federal court. In the peculiarities of this

case, we believe that the district court should not have

remanded the case to state court, but should have

dismissed it. Accordingly, we vacate the district court’s

remand order and remand this case to the district court

with instructions to dismiss the case for lack of subject

matter jurisdiction. In this way, [plaintiff] will be able to

‘proceed through the administrative process before the

Department of Labor with his protectively filed LHWCA

claim.

Shives, 151 F.3d at 171 (emphasis added).

App. 56a

At first blush, where this court, like the court in Shives, is

facing a “federal question of LHWCA coverage,” Shives

151 F.3d at 167, it appears that the appropriate course of

action is to dismiss the action outright for lack of subject

matter jurisdiction rather than remand to the state court.

Such a disposition, however, is premature. Notably, in

Shives, the Fourth Circuit directed dismissal only after that

court, sitting as a federal court of appeals, had determined

the coverage issue under the LHWCA. Specifically, the

Fourth Circuit devoted several pages of its opinion to

discussing the question of coverage under the LHWCA. See

151 F.3d at 167-171. Although the Fourth Circuit in Shives

was in a position to resolve the question of coverage, “a

matter for the federal executive and federal appeals courts,”

id. at 167, this court is not--Accordingly, where this case is

distinguishable from Shives, remand, rather than dismissal

for lack of subject matter jurisdiction, is proper.

Lacking jurisdiction, this court does not reach

defendants’ arguments in support of dismissal for failure to

state a claim, under Federal Rules of Civil Procedure

12(b)(6) and 9(b). Finally, finding the jurisdictional issues

raised by this case to be novel and complex, the court rejects

plaintiff's argument in favor of attorney’s fees and costs

resulting from removal. See In re Lowe, 102 F.3d 731, 733

n.2 (4th Cir. +996)-frejecting request for attorney’s fees

where basis for remand is not “obvious”).

CONCLUSION a

Based upon the foregoing, the court GRANTS plaintiff's

motion to remand, pursuant to 28 U.S.C. § 1447(c). (DE #

12). Where the court lacks subject matter jurisdiction over

this action, the court DENIES AS MOOT defendants’

motions to dismiss brought under Federal Rules of Civil

Procedure 12(b)(6) and 9(b). (DE #’s 5 & 8). This case is

App. 57a

hereby REMANDED to the Superior Court of Wake County,

North Carolina. The Clerk is DIRECTED to serve a copy of

this order on the Clerk of Superior Court of Wake County,

North Carolina.

SO ORDERED, this 11th day of August, 2005.

LOUISE W. FLANAGAN

Chief United States District Judge

App. 58a

UNITED STATES COURT OF APPEALS

_ FOURTH CIRCUIT

In Re: BLACKWATER SECURITY CONSULTING, LLC,

a Delaware Limited Liability Company; BLACKWATER

LODGE AND TRAINING CENTER, INCORPORATED, a

Delaware Corporation,

Petitioners. _

IN RE: JUSTIN L. MCQUOWN,

Petitioner.

RICHARD P. NORDAN, as Ancillary Administrator for the

separate Estates of Stephen S. Helvenston, Mike R. Teague,

Jerko Gerald Zovko and Wesley J.K. Batalona,

Plaintiff-Appellee,

and

ESTATE OF STEPHEN S. HELVENSTON;

ESTATE OF MIKE R

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.