Opposition Brief — Isaacson v. Dow Chemical Co. (No. 08-460)

[Supreme Coun 0S TT

FILED

Na ©) | | JAN 2 § 2009 |

} OFFICE O

No. 08-460 EOF THE CLERK |

Jn the Supreme Court of the United States

JOE ISAACSON, ET AL.,

Petitioners,

Vv.

Dow CHEMICAL COMPANY, ET AL.,

Respondents.

On Petition for a Writ of Certiorari to

The United States Court Of Appeals for the

Second Circuit

BRIEF IN OPPOSITION

CHARLES A. ROTHFELD ANDREW L. FREY

Mayer Brown LLP Counsel of Record

1909 K Street, NW LAUREN R. GOLDMAN

Washington, D.C. 20006 CHRISTOPHER J. HOUPT

(202) 263-3000 Mayer Brown LLP

1675 Broadway

New York, NY 10019

(212) 506-2500

Counsel for Respondent

The Dow Chemical Company

ADDITIONAL COUNSEL LISTED ON INSIDE COVERS

RRR ETE ET TT SSE LA STACI ACT I CR AE ae A

JAMES V. AIOSA

RICHARD S. FELDMAN

Rivkin Radler LLP

926 RexCorp Plaza

Uniondale, NY 11556

(516) 357-3000

JAMES L. STENGEL

LAURIE STRAUCH WEISS

Orrick, Herrington &

Sutcliffe LLP

666 Fifth Avenue

New York, NY 10103

(212) 506-3775

Counsel for Respondent

The Dow Chemical Company

LAWRENCE D’ALOISE, JR.

Clark, Gagliardi &

Miller

The Inns of Court

99 Court Street

White Plains, NY 10601

(914) 946-8900

Counsel for Respondents

T.H. Agriculture & Nutri-

tion Co., Inc., Thompson-

Hayward Chemical Co.,

and Harcros Chemicals,

Inc.

WILLIAM A. KROHLEY

WILLIAM C. HECK

Kelley Drye & Warren

LLP

101 Park Avenue

New York, NY 10178

(212) 808-7800

Counsel for Respondent

Hercules Incorporated

MICHAEL M. GORDON

McKee Nelson LLP

One Battery Park Plaza

34th Floor

New York, NY 10004

(917) 777-4567

Counsel for Respondents

Occidental Chemical Cor-

poration, as successor by

merger to Diamond

Shamrock Chemicals

Company; Maxus Energy

Corporation; Tierra Solu-

tions, Inc., formerly

known as Chemical Land

Holdings, Inc.; and Valero

Energy Corporation, as

successor by merger to UI-

tramar Diamond Sham.

rock Corporation

JOHN C. SABETTA SETH P. WAXMAN

ANDREW T. HAHN, SR. PAUL R.Q. WOLFSON

Seyfarth Shaw LLP MAkY K. GARDNER

620 Eighth Avenue Wilmer Cutler Pickering

New York, NY 10018- Hale and Dorr LLP

1405 1875 Pennsylvania Ave.

(212) 218-5509 NW

Washington, D.C. 20006

(202) 663-6000

RICHARD P. BRESS JAMES E. TYRRELL, JR.

Latham & Watkins Patton Boggs LLP

555 Eleventh Street, NW, The Legal Center

Suite 1000 One Riverfront Plaza —

Washington, D.C. 20004 6th Floor

(202) 637-2137 Newark, NJ 07102

(973) 848-5620

Counsel for Respondent Monsanto Company

MYRON KALISH

50 East 79th Street

New York, NY 10021

Counsel for Respondents

Uniroyal, Inc., Uniroyal

Chemical Co., and CDU

Holdings, Inc.

i

COUNTER-STATEMENT OF THE

QUESTION PRESENTED

Whether federal contractors who manufactured a

product that was designed by the federal government

for use in military operations, and who were com-

pelled to supply that product to the United States

under the since-lapsed Defense Production Act of

1950, 64 Stat. 798 (codified at 50 U.S.C. App. § 2061

et seq.), were entitled to invoke the federal officer

removal statute, 28 U.S.C. § 1442(a)(1), to remove

from state to federal court suits asserting state-law

claims arising from the production process.

il

RULE 29.6 STATEMENT

Respondent Monsanto Company has no parent

company, and no publicly-held company owns 10

percent or more of its stock.

Respondent The Dow Chemical Company has no

parent company, and no publicly-held company owns

10 percent or more of its stock.

Respondent Occidental Chemical Corporation,

the successor by merger to Diamond Shamrock

Chemicals Company (which was known prior to Sep-

tember 1, 1983 as Diamond Shamrock Corporation),

is an indirect, wholly-owned subsidiary of Occidental

Petroleum Corporation, a publicly-held company.

Respondent Valero Energy Corporation, the suc-

cessor by merger to Ultramar Diamond Shamrock

Corporation, has no parent company, and no pub-

licly-held company owns 10 percent or more of its

stock.

Respondent Maxus Energy Corporation is an in-

direct, wholly-owned subsidiary of YPF S.A. Ap-

proximately 85 percent of YPF S.A.’s stock is owned

by Repsol YPF S.A., a publicly-held company.

Respondent Tierra Solutions, Inc., formerly

known as Chemical Land Holdings, Inc., is an indi-

rect, wholly-owned subsidiary of YPF S.A. Approxi-

mately 85 percent of YPF S.A.’s stock is owned by

Repsol YPF S.A., a publicly-held company.

Respondent Hercules Incorporated is wholly

owned by Ashland Inc., a publicly-held company.

Respondent Uniroyal, Inc. is a dissolved corpora-

tion.

Respondent C.D.U. Holdings, Inc. is a dissolved

corporation.

ill

Respondent Uniroyal Chemical Corp. is wholly

owned by the Crompton Corporation, a publicly-held

company.

Respondent T H Agriculture & Nutrition Com-

pany, Inc. (now known as T H Agriculture & Nutri-

tion L.L.C.) is a wholly-owned subsidiary of Philips

Electronics North America Corporation. Philips

Electronics North America Corporation is an indirect

wholly-owned subsidiary of Koninklijke Philips Elec-

tronics N.V., a publicly-held company.

Respondent Thompson-Hayward Chemical Co. is

a subsidiary of Harcros Chemicals Inc.

1V

TABLE OF CONTENTS

Page

COUNTER-STATEMENT OF THE

PEF Wes REGION BE BGEUIIIEN BUDD ooo. ccceseverscncosssssvscescscsessseses i

RULE 20:6 STATEMENT. ......00cccccccsesossecsscscceescessseees il

MMII AAT FREE LI ives sncssecnsunscessssesécesssesseess Vv

I aoa cctasebaviceciianenusunieokaveuene 1

THE PETITION SHOULD BE DENIED.................. 9

A. The Decision Below Does Not Conflict

With The Approach Taken By Other

Courts To Removal By Government

I irae saat Un Li esial cones sedeuuniuueosrnievavi 10

B. The Courts Below Correctly Held

Removal Proper In The Circumstances

OS gE CPL TS a OI RM aR aS ee 14

ee ERT Ce eR ea ee ee eR 23

Vv

TABLE OF AUTHORITIES

CASES

Am. Mfrs. Mut. Ins. Co. v. Sullivan,

526 U.S. 40 (1999)

)

Arness v. Boeing N. Am., Inc.,

997 I. Supp. 1268 (C.D. Cal. 1998)

Boyle v. United Techs. Corp.,

487 U.S. 500 (1988)

City of Greenwood v. Peacock,

384 U.S. 808 (1966)

Dow Chem. Co. v. Stephenson,

539 U.S. 111 (2003) (per curiam)

Good v. Armstrong World Indus., Inc.,

914 F. Supp. 1125 (E.D. Pa. 1996)

Green v. A.W. Chesterton Co.,

366 F.Supp. 2d 149 (D. Me. 2005)

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

304 F. Supp. 21 404 (E.D.N.Y. 2004),

aff'd, 517 F.3d 76 (2d Cir. 2008),

petition for cert. filed, 77 U.S.L.W. 3242

(U.S. Oct. 6, 2008) (No. 08-461)

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

818 F.2d 187 (2d Cir. 1987)

Ivy v. Diamond Shamrock Chems. Co.,

996 F.2d 1425 (2d Cir. 1993)

vl

TABLE OF AUTHORITIES—continued

Page(s)

CASES (cont’d)

Jefferson County v. Acker,

BT Wi, BS Ua Fn dcvencvisctavensvcsrssvcsiences 6,9, 14, 17

Kelly v. Martin & Bayley, Inc.,

603 Fad SBE C70 Cir. ZO0T)........00ccrcccccccaccessessees 19

Mesa v. California,

489 U.S. 121 (1989) .o.cccccccccceccececcscceeseeeeees 14, 16-17

Miller v. Diamond Shamrock Co.,

210 PF .Oer O14 CO Civ. 2001)... coves ccccceccceeecsecses 9

Rendell-Baker v. Kohn,

Ge ee et I ov sva vce sntsencacansdsseeeconerenaane 18-19

Ryan v. Dow Chem. Co.,

Tel F. Supe. BG4 4B... 1OG2) an. ccccccsccresscveess 14

Stephenson v. Dow Chem. Co.,

346 F.3d 19 (2d Cir. 2003) (per curiam)............... 6

Stephenson v. Dow Chem. Co.,

517 F.3d 76 (2d Cir. 2008),

petition for cert. filed, 77 U.S.L.W. 3242

(U.S. Oct. 6, 2008) (No. 08-461)............ 4, 2 20 16

Syngenta Crop Protection, Inc. v. Henson,

GST ESB. FO Oe on ccescicensssvecsee Stee etpseieacesiiteaw ia 5

Watson v. Philip Morris Cos.,

651 0S. 14%, 127 BS. Ct: ZaG1 (007)........... passim

Vil

TABLE OF AUTHORITIES—continued

Page(s)

CASES (cont’d)

Willingham v. Morgan,

B95 U.S. 402 (19GQ)......cserscssosrsssessesseereereers passim

Winters v. Diamond Shamrock Chem. Co.,

149 F.3d 387 (5th Cir. 1998)............. 3, 8, 9, 13, 14

STATUTES

BE U.S.C. © Le seis ehirseskeccstneserevecvccess passim

BERR OM Be 8 19

4S UB... BF rites tdek kn cessecenescccceses 18

SO UF Al, Fe radar savncscscecexsssecccessees 4

HO WS, Fa ee eet esdsevscsscecerccccccceesee 4

Defense Production Act of 1950,

64 Stat. 798 (codified at 50 U.S.C. App.

Se ee Oe a airaeiiec cs asccveescascccccces 3

OTHER AUTHORITIES

EUGENE GRESSMAN ET AL., SUPREME COURT

PRACTICE Go rari ekicerncisesccecssccccccceees. 12

RICHARD H. FALLON, JR., ET AL., HART &

WESCHLER’S THE FEDERAL COURTS AND THE

FEDERAL SYSTEM (60M @G. ZOO0B)..............0...ccs.cc00e. 9

18 OXFORD ENGLISH DICTIONARY (2d ed. 1989)....... 15

BRIEF IN OPPOSITION

STATEMENT

These cases arise out of pctitioners’ state-law

claims that they were injured by exposure to the

chemical 2,3,7,8-tetrachlorodibenzo para dioxin (“di-

oxin”), trace amounts of which were present in vari-

ous herbicides — collectively referred to here as

“Agent Orange” — that respondents produced for use

by the U.S. military during the Vietnam War. In

Stephenson v. Dow Chemical Co., 517 F.3d 76 (2d

Cir. 2008), petition for cert. filed, 77 U.S.L.W. 3242

(U.S. Oct. 6, 2008) (No. 08-461), the Second Circuit

rejected those claims on the merits, holding them

barred by the federal government contractor defense.

The question posed by the petition here is whether

the Second Circuit was correct in also holding that

removal of these cases from state to federal court

was proper under 28 U.S.C. §1442(a)\1), which per-

mits removal by federal officers and those acting un-

der them.

That question does not merit this Court’s consid-

eration. The decisions of the courts below favoring

removal, which rested on the close control the gov-

ernment exercised over the production of Agent Or-

ange, plainly are correct. Petitioners do not even as-

sert a conflict in the courts of appeals on the question

presented, and they are incorrect in contending that

the district courts are confused on the standards

governing removal under Section 1442(a)(1). More-

over, the lower courts have not yet had an opportu-

nity to consider the impact of this Court’s recent de-

cision in Watson v. Philip Morris Cos., 551 U.S. 142,

127 S. Ct. 2301 (2007), which is the first time the

Court has addressed application of Section 1442(a)(1)

2

to a private entity; that makes review of the question

presented here premature. And even if the Court

were otherwise inclined to consider the issue, unique

features of this case — among them, that the govern-

ment invoked the since-lapsed Defense Production

Act of 1950 (the “DPA”), 64 Stat. 798 (codified at 50

U.S.C. App. §§ 2061 et seq.), to compel respondents to

produce Agent Orange — make it an especially ill-

suited vehicle with which to resolve any question of

general importance regarding the scope of federal-

officer removal. Further review accordingly is not

warranted.

1. The background regarding the development of

Agent Orange and the procedural history of early

Agent Orange litigation are set out in the brief in op-

position to the petition for certiorari in No. 08-461,

Stephenson v. Dow Chemical Co.' In brief, and inso-

far as is relevant here, the U.S. military used Agent

Orange as a herbicide during the war in Vietnam to

prevent enemy forces from concealing themselves

and ambushing American, South Vietnamese, and

other allied soldiers. The strategy is credited with

saving the lives of thousands of allied troops. See In

re “Agent Orange” Prod. Liab. Litig., 818 F.2d 187,

192-93 (2d Cir. 1987) (Agent Orange’s “success as a

herbicide saved many, perhaps thousands of, lives”).

1 Petitioners’ statement of facts is misleading in significant re-

spects. To offer one example, petitioners label it “uncontested”

that “the United States government officials involved in the

procurement process were not aware of the existence of dioxin

in the final product they had contracted for.” Pet. 6. In fact, as

the district court noted, “[t]he government was aware of the di-

oxin in Agent Orange.” Pet. App. 37a. See id. at 17a (“Accord-

ing to [respondents] theory of the case, the Government knew

that Agent Orange contained dioxin{[.}”).

3

The herbicidal properties of the components of Agent

Orange, 2,4-dichlorophenoxyacetic acid (“2,4-D”) and

2,4,5-trichlorophenoxyacetic acid (“2,4,5-T”’), had

been discovered by the U.S. military during the Sec-

ond World War, and it was the military that “devel-

oped these compounds as weapons of war.” In re

“Agent Orange” Prod. Liab. Litig., 304 F. Supp. 2d

404, 426 (E.D.N.Y. 2004), affd, 517 F.3d 76 (2d Cir.

2008), petition for cert. filed, 77 U.S.L.W. 3242 (U.S.

Oct. 6, 2008) (No. 08-461).

As the defoliation program got underway, “|t}]he

government designed, controlled, and supervised the

production of Agent Orange as a product vital to the

prosecution of the war in Vietnam.” Pet. App. 36a.

Although respondents “had produced 2,4-D and 2-

4,5-T for commercial use before government in-

volvement, their commercial formulations were

never composed of a mixture of 100% pure 2,4-

D/2,4,5-T, which the government required for the

most part.” Jd. at 38a (quoting Winters v. Diamond

Shamrock Chem. Co., 149 F.3d 387, 399 (Sth Cir.

1998)). Thus, “the Agent Orange supplied to the

government was not a ready-to-order, preexisting or

off-the-shelf chemical mixture.” Jbid. Instead, as

Judge Jack Weinstein, the district judge below, ex-

plained, “[flederal officers determined through gov-

ernment specifications that the ‘formulation’ for

Agent Orange would be a 50/50 mix of the n-butyl es-

ters of 2,4-D and 2,4,5-T.” Jd. at 36a-37a. As a con-

sequence, respondents’ contracts with the govern-

ment “set forth or incorporated by reference detailed

specifications for the herbicide.” Jd. at 37a.

Eventually, as the defoliation program acceler-

ated, the government compelled respondents to pro-

duce Agent Orange under the DPA. See Pet. App.

4

37a. That statute, which by its terms expired on

September 30, 1990 (see 50 U.S.C. App. § 2166(a)),

granted the President the authority to “to require ac-

ceptance and performance” of “contracts or orders”

deemed “necessary or appropriate to promote the na-

tional defense.” 50 U.S.C. App. § 2071(a). Regula-

tions promulgated under the DPA by the Business

and Defense Services Administration required that

every government order bearing a “rating” be “ac-

cepted and filled regardless of existing contracts and

orders,” on pain of criminal penalties. BDSA Reg. 2,

§§ 10, 27, A907, A910.2 Virtually all of respondents’

contracts with the government were rated. A912,

A917-18, A935-36. Ultimately, the government ap-

plied the DPA to effectively “commandeer[] the

United States industry’s entire capacity to manufac-

ture 2,4,5-T [and] ordered [respondents] to accelerate

the delivery of Agent Orange” (Pet. App. 37a), in

1967 directing each manufacturer to use its entire

plant capacity for production of Agent Orange. See,

e.g., A935-36, A965, A967, A1325-26, A1485.

2. Some years after the Vietnam War ended,

veterans and members of their families brought a

class action against respondents, claiming that they

had been injured by exposure to dioxin, an unwanted

byproduct of the Agent Orange production process,

present 1n minute quantities measurable in parts per

million (the average dioxin content was 1.58 parts

per million by weight). See In re “Agent Orange”

Prod. Liab. Litig., 304 F. Supp. 2d at 424; see also In

re “Agent Orange” Prod. Liab. Litig., 818 F.2d 187

(litigation by class action opt-outs); Juy v. Diamond

2“A _” refers to the defendants-appellees’ appendix in the Sec-

ond Circuit.

a

9)

Shamrock Chems. Co., 996 F.2d 1425 (2d Cir. 1993)

(litigation by class members who manifested injury

after class action settlement but were nevertheless

held subject to the bar of the settlement). More re-

cently, a different group of plaintiffs brought addi-

tional actions against respondents, arguing that they

were not bound by the class action scttlement be-

cause they did not manifest injury until after the

class settlement funds were exhausted in 1994. See

Pet. App. 7a. This new group of plaintiffs included

petitioners here, who initially brought their suits in

various state courts. Defendants removed the suits

to federal court and, along with actions initiated in

federal court, the cases were consolidated in the

Eastern District of New York pursuant to order of

the Judicial Panel on Multi-District Litigation. Ibid.

The district court held that the 1984 settlement

barred these new plaintiffs’ actions.

On appeal, the Second Circuit held that the fed-

eral courts had jurisdiction over petitioners’ actions

under the All Writs Act but reversed the district

court’s ruling that the post-1994 plaintiffs were

bound by the class settlement, finding instead that

they had not been adequately represented in the pro-

ceedings leading to the settlement. This Court af-

firmed the latter ruling by an equally divided Court,

but it reversed the holding predicating federal juris-

diction on the All Writs Act, in light of its decision in

Syngenta Crop Protection, Inc. v. Henson, 537 U.S.

28 (2002). It accordingly remanded the removed

cases for reconsideration of the propriety of removal.

See Dow Chem. Co. v. Stephenson, 539 U.S. 111

(2003) (per curiam); Pet. App. 8a. The Second Cir-

cuit then returned the cases to the district court for

(1) a determination whether an alternative basis ex-

isted for removal jurisdiction and (2) resolution of the

6

merits of those claims that were properly in federal

court. Stephenson v. Dow Chem. Co., 346 F.3d 19, 21

(2d Cir. 2003) (per curiam).

On remand, Judge Weinstein held that the cases

were properly removed undcr Section 1442(a)(1),

which in relevant part provides for the removal of a

suit against “(t]he United States or any agency

thereof or any officer (or any person acting under

that officer) of the United States or any agency

thereof, sued in an official or individual capacity for

any act under color of such office.” Pet. App. 23a-

42a. Judge Weinstein opined that removal is per-

missible under that provision if three elements are

satisfied. First, “a defendant must demonstrate that

it is a ‘person’ within the meaning of the statute.”

Id. at 30a. Second, the suit must be for an “act un-

der color of federal office,” which calls for “a causal

nexus between the defendant’s actions under federal

office and the plaintiffs state court claims” and re-

quires “[a] substantial degree of direct and detailed

federal control over the defendant’s work.” Id. at

30a, 32a. Third, “defendants must raise a colorable

claim to a federal law defense,” which “may be predi-

cated on the federal government contractor defense.”

Id. at 30a, 36a.

Noting that this Court has rejected “a ‘narrow,

grudging interpretation” of Section 1442(a)(1) (Pct.

App. 35a (quoting Jefferson County v. Acker, 527 U.S.

423, 431 (1999))), Judge Weinstein found these re-

quirements satisfied here. He held that “corpora-

tions are persons under Section 1442(a)(1).” Jd. at

36a. He also determined that respondents “act[ed]

under” a federal officer because “the government or-

dered specifications that differed from defendants’

commercial applications,” and “[t]he government’s

7

full knowledge of the dioxin ‘problem’ inherent in the

production of Agent Orange is evidence that the fed-

eral officials maintained control over the acts on

which the litigation is based.” Jd. at 39a-40a. And

Judge Weinstein reasoned that “[t]he government

contractor defense is a colorable federal law defense

in much the same way that self-defense is a colorable

state-law defense to civil assault charges. In an as-

sault case, the defendant may claim: ‘He made me do

it; here a defendant may properly assert, ‘the Gov-

ernment made me do it.” dd. at 40a. Judge

Weinstein added that this conclusion is strongly

supported by the policy underlying federal officer

removal because the government contractor defense,

“while laying down a substantive rule, may be read-

ily circumvented by state courts unsympathetic to

the defendants.” Id. at 41a.

3. The Second Circuit affirmed, relying in sub-

stantial part on this Court’s decision in Watson. Pet.

App. la-22a. The court of appeals agreed with Judge

Weinstein that “removal in these cases fulfills the

federal officer removal statute’s purpose of protecting

persons who, through contractual relationships with

the Government, perform jobs that the Government

otherwise would have performed.” /d. at 6a.

Like the district court, the court of appeals found

that corporations are “persons” within the meaning

of Section 1442(a)(1). Pet. App. 12a. It also con-

cluded that respondents “acted under” federal offi-

cers, pointing out that “[t]he words ‘acting under’ are

to be interpreted broadly, and the statute as a whole

must be liberally construed.” /d. at 14a (citing Wat-

son, 127 S. Ct. at 2304-05, and Willingham v. Mor-

gan, 395 U.S. 402, 407 (1969)). The Second Circuit

noted that, in Watson, this Court cited with evident

8

approval the Fifth Circuit’s holding in Winters, 149

F.3d 387, that manufacturers of Agent Orange satis-

fied the “acting under” requirement because they

helped federal officers “fulfill * * * basic governmen-

tal tasks.” Pet. App. at 15a (quoting Watson, 127 S.

Ct. at 2308). So too, the Second Circuit held that, in

this case, “the chemical companies ‘assist[ed]’ and

‘help|ed] carry out|| the duties or tasks of officers of

the department of defense. See [Watson, 127 S. Ct.]

at 2307. Defendants thus had the ‘special relation-

ship’ with the Government required by the ‘acting

under’ prong.” Jd. at 16a.

Finally, the court of appeals held that respon-

dents were being sued for an “act under color of [fed-

eral] office.” The court explained that, to satisfy this

requirement, nongovernmental defendants “must

demonstrate that the acts for which they are being

sued — here, the production of dioxin in Agent Or-

ange — occurred because of what they were asked to

do by the Government.” Pet. App. 17a. “According to

[respondents’] theory of the case,” the court contin-

ued, “the Government knew that Agent Orange con-

tained dioxin, and the Government controlled the

method of formulation”; “whether the challenged act

was outside the scope of [respondents’| official duties,

or whether it was specifically directed by the federal

Government, is one for the federal — not state —

courts to answer.” Jd. at 17a-18a (citing Willingham,

395 U.S. at 409). Finding that respondents also

raised “a colorable federal defense” because the gov-

ernment contractor defense “is a creature of federal

common law and serves to protect the interests of the

Government rather than the contractor defendant”

(id. at 19a, 20a), the court of appeals accordingly

held removal proper.

9

THE PETITION SHOULD BE DENIED

The general contours of Section 1442(a)(1) are

settled. The statute has three elements: it permits

removal of suits against “[1] any person [2] acting

under [a federal] officer * * * [3] for any act under

color of such office.” Section 1442(a)(1) is phrased “in

sweeping terms” (RICHARD H. FALLON, JR., ET AL.,

HART & WESCHLER’S THE FEDERAL COURTS AND THE

FEDERAL SYSTEM 908 (5th ed. 2003)), and this Court

has repeatedly “rejected a ‘narrow, grudging inter-

pretation’ of the statute” (Jefferson County, 527 U.S.

at 431), instead “ma[king] clear that the statute

must be ‘liberally construed.” Watson, 127 S. Ct. at

2305.

The Second Circuit’s application of these stan-

dards does not warrant review. Its decision is wholly

consistent with the rulings of other courts of appeals

that — as this Court noted in Watson — have approved

the removal to federal court of suits against manu-

facturers of Agent Orange. See 127 S. Ct. at 2308

(citing Winters, 149 F.2d at 387); Miller v. Diamond

Shamrock Co., 275 F.3d 414 (5th Cir. 2001). Nor is

there significant confusion in the district courts on

removal standards under Section 1442(a)(1); no court

has held removal by a government contractor im-

proper when, as here, the contractor is able to allege

that “(t]he government designed, controlled, and su-

pervised the production” of the assertedly harmful

product. Pet. App. 36a. And the decision below

plainly was correct in holding that Section 1442(a)(1)

authorizes removal of a case, like this one, where

“the relationship between the contractor and the

Government is an unusually close one involving de-

tailed regulation, monitoring, or supervision” and the

suit centers on actions of the contractor in “help[ing]

10

[federal] officers fulfill * * * basic governmental

tasks.” Watson, 127 S. Ct. at 2308. The petition for

certiorari accordingly should be denied.

A. The Decision Below Does Not Conflict

With The Approach Taken By Other

Courts To Removal By Government

Contractors.

Petitioners assert that the Second Circuit held

removal proper “based on the mere fact that [respon-

dents are] government contractor{s]” (Pet. 1), a char-

acterization of the holding that is repeated through-

out the petition. See Pet. 10, 12, 14, 16, 22, 28. This

holding, petitioners continue, conflicts with the deci-

sions of a handful of district courts, which are said to

have rejected the proposition that “mere participa-

tion in the contract alone” justifies removal, instead

looking to whether the “removing contractor was re-

quired or directed by federal authority to perform the

specific conduct challenged in the state-law claim.”

Id. at 17, 18. But both prongs of this argument are

wrong.3

3 Petitioners assert in a footnote to the petition that the Second

Circuit’s ruling that corporations are “persons” under Section

1442(a)(1) “conflicts with several district court opinions holding

that the statute only applies to natural persons.” Pet. 20 n.7.

It is not entirely clear whether petitioners mean to challenge

this aspect of the Second Circuit’s decisions. Such a contention

would, in any event, be insubstantial. The most recent of the

two district court decisions relied upon by petitioners is more

than 15 years old; for the reasons persuasively explained by the

Second Circuit (at Pet. App. 12a-14a), the courts have more re-

cently, and uniformly, held that corporations are “persons”

within the meaning of the statute. See id. at 3la-32a (citing

cases).

11

To begin with, petitioners mischaracterize the

holding below. The Second Circuit expressly did not

hold that any act by an entity that contracts with the

United States supports removal, or that removal

may be premised on the “mere fact” that the defen-

dant entered into a contract with the government.

To the contrary, it was central to the holdings of both

courts below that Agent Orange was not an off-the-

shelf product; it was designed by, and respondents

produced it according to precise specifications pro-

vided by, the government. Pet. App. 18a, 38a. Noth-

ing in the decisions of the court of appeals or district

court supports removal of disputes arising out of the

vast run of routine contracts performed by entitics

that provide light bulbs or chicken salad sandwiches

to the government.

Moreover, both courts below also emphasized

that removal by a private entity is proper only when

the defendant advances a colorable federal contractor

defense. Pet. App. 19a-22a, 35a. That requires a

showing of substantial federal involvement in, and

the exercise of government discretion regarding, the

activities giving rise to the plaintiffs’ suit. See Boyle

v. United Techs. Corp., 487 U.S. 500, 511-12 (1988).

Here, the court of appeals found a “special relation-

ship” between respondents and the government,

pointing to “close supervision of the private entity by

the Government” and noting that, in providing “a

product that the Government was using during war

— a product that, in the absence of Defendants, the

Government would have had to produce itself’ — “the

chemical companies ‘assist[ed]’ and ‘help[ed] carry

out[] the duties or tasks of officers at the Depart-

ment of Defense.” Pet. App. 15a-16a (quoting Wat-

son, 127 S. Ct. at 2307) (brackets added by the

court). Petitioners therefore are simply wrong in

12

reading the Second Circuit’s decision to hold that

removal is proper “any time a defendant is sued for

violations of state law that occurred while the defen-

dant was performing under a contract with the fed-

eral government.” Pet. 1.

It thus is not surprising that — wholly apart from

the point that conflict with a district court decision

ordinarily does not justify the grant of certiorari’ —

petitioners also are wrong in contending that the

Second Circuit’s decision is inconsistent with the dis-

trict court decisions cited at Pet. 17-19. Although pe-

titioners are correct in observing that courts have re-

jected the proposition that every suit involving a

government contractor is removable, the Second Cir-

cuit, as noted, clearly did not endorse that proposi-

tion here. To be sure, some district courts have re-

quired a significant degree of government “regula-

tion, monitoring, or supervision” of the contractor to

justify removal. Watson, 127 S. Ct. at 2308. See

Green v. A.W. Chesterton Co., 366 F. Supp. 2d 149 (D.

Me. 2005); Arness v. Boeing N. Am., Inc., 997 F.

Supp. 1268 (C.D. Cal. 1998) (cited at Pet. 18). But

4 See EUGENE GRESSMAN ET AL., SUPREME COURT PRACTICE 256

(9th ed. 2008) (“The Supreme Court will not grant certiorari to

review a decision of a federal court of appeals merely because it

is in direct conflict on a point of federal law with a decision ren-

dered by a district court, whether in the same circuit or in an-

other circuit.”). While petitioners are correct in stating (Pet. 17)

that decisions to remand are not appealable, the decision that

removal is proper may be appealed — as was done in this case.

Courts of appeals therefore address removal standards with

some frequency. Indeed, this is the third decision of a court of

appeals to address the specific question whether manufacturers

of Agent Orange may remove under Section 1442(a)(1). As

noted in text, each court to decide that question has held re-

moval proper.

13

that is present in this case, where “[t]he government

designed, controlled, and supervised the production

of Agent Orange as a product vital to the prosecution

of the war in Vietnam.” Pet. App. 36a. See Pet. 15a,

17a.5 Nothing in the district court decisions relied

upon by petitioners suggests that removal is inap-

propriate in such circumstances.®

5 The record here shows extensive day-to-day direction of and

contro) over Agent Orange production by Commerce and De-

fense Department officers. For example, the government as-

signed federal officers (including an Administrative Contracting

Officer, an Industrial Specialist, a Quality Assurance Represen-

tative, a Preservation Packing Specialist, a Transportation Of-

ficer, and a Labor Relations Specialist) to oversee the execution

and fulfillment of each Agent Orange contract (A1402); the

Business and Defense Services Administration directed each

manufacturer to provide monthly reports of production, total

shipments, and end-of-month inventory of 2,4,5-T and 2,4-D

(A2571); and it repeatedly ordered contractors to accelerate

their herbicide production. A2571. Any factual quibbles peti-

tioners may have with the lower courts’ findings on these points

are plainly inappropriate grounds for certiorari.

6 In Green, for example, where the plaintiff claimed injury from

exposure to asbestos used as insulation by a federal contractor,

the district court held that “the removing defendant must dem-

onstrate that the government specified the composition of the

offending product at issue so that there is a ‘causal nexus be-

tween the federal officer’s directions and the plaintiffs claims.”

366 F. Supp. 2d at 153 (quoting Winters, 149 F.3d at 398).

Here, of course, the federal government did specify the compo-

sition of Agent Orange — and the court in Green relied for its

standard on Winters, in which the Fifth Circuit approved re-

moval by manufacturers of Agent Orange. Similarly, in Good v.

Armstrong World Industries, Inc., 914 F. Supp. 1125, 1129 (E.D.

Pa. 1996), another asbestos case cited by petitioners (at Pet.

19), the defendant failed to show that “any * * * federal officer

directly controlled and supervised [its] work.” But respondents

made such a showing here. Petitioners also are wrong in as-

serting that “[nJothing demonstrates the confusion among the

14

B. The Courts Below Correctly Held Re-

moval Proper In The Circumstances Of

This Case.

Petitioners also are incorrect in their challenge

to the merits of the holding below. The Second Cir-

cuit’s decision relied on standards articulated by this

Court in Watson, Jefferson County, Willingham, and

Mesa v. California, 489 U.S. 121 (1989). Its analysis

— and its unexceptional holding that removal to fed-

eral court may be sought by private parties who as-

sisted the United States in the conduct of a war by

providing essential war matcrials, produced accord-

ing to precise government specifications that were

designed by the U.S. military and that differed mate-

rially from the formulation and use of commercial

herbicides — is entirely consistent with this Court’s

doctrine.

1. Pointing to Watson, petitioners insist that re-

spondents did not “act under” a federal officer be-

cause — on the assumption that the government did

not specify the methods respondents were to use in

manufacturing Agent Orange — respondents’ rela-

tionship with the government did not involve “sub-

jection, guidance, or control.” Pet. 23 (quoting Wat-

son, 127 S. Ct. at 2307). But this contention assumes

its conclusion. Nothing in the statutory mandate

that the party seeking removal “act under” federal

federal courts more” than Judge Weinstein’s change of mind be-

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

1992), in which he held that Section 1442(a)(1) removal was not

available to producers of Agent Orange, and this litigation, in

which he reached the opposite conclusion. Pet. 15. In fact, the

holding below eliminated any disagreement in the lower courts,

as Judge Weinstein declared himself persuaded by the Fifth

Circuit’s holding favoring removal in Winters. See Pet. App.

27a-28a.

15

supervision requires a showing that the government

dictated every detail of the means used by that party

to carry out the tasks assigned to it by the govern-

ment, and nothing in any decision of this Court sug-

gests that such a showing is necessary. There is no

question that, in this case, respondents were

“Is]ubject to the instruction, direction, or guidance

of” the United States (Watson, 127 S. Ct. at 2307

(quoting 18 OXFORD ENGLISH DICTIONARY 949 (2d ed.

1989))) within the ordinary meaning of those terms:

respondents produced Agent Orange according to the

government’s “detailed specifications” (Pep. App.

37a); “[t]he government was aware of the dioxin in

Agent Orange” (ibid.); the government actually com-

pelled respondents to produce Agent Orange under

the DPA, on pain of criminal penalties; and, as we

have noted, the government exercised substantial

day-to-day direction and control over Agent Orange

production. See note 5, supra; see also Pet. App. 16a

(“Defendants received delegated authority; they were

not simply regulated by federal law.”), id. at 36a

(“The government designed, controlled, and super-

vised the production of Agent Orange as a product

vital to the prosecution of the war in Vietnam.”), id.

at 39a (“federal officials maintained control over the

acts on which the litigation is based”).’

’ For this reason, petitioners are wrong in their improbable as-

sertion that the Second Circuit’s removal holding 1s inconsistent

with the same panel's simultaneous ruling on the merits re-

yarding application of the government contractor defense. Peti-

tioners point to the court of appeals’ observation, in its merits

ruling, that respondents “were under no federal contractual

duty to produce Agent Orange using any particular manufac-

turing process or with any particular reference to the toxicity

levels.” Pet. 24 (quoting Stephenson, 517 F.3d at 93). But as

we show in text, removal does not turn on a demonstration that

16

There should be no doubt that this relationship

satisfies the “acting under” standard articulated in

Watson. “(T]he relationship between [respondents]

and the Government [was] an unusually close one

involving detailed regulation, monitoring, or supervi-

sion.” 1278S. Ct. at 2308. “The assistance that |re-

spondents] provide[d] federal officers * * * help[ed]

officers fulfill * * * basic governmental tasks” (ibid.)

— that is, fighting a war. And respondents surely

“lawfully assist[ed]’ the federal officer[s] ‘in the per-

formance of [their] official duty.” Jd. at 2307.8 Re-

spondents accordingly “acted under” a federal officer.

2. Petitioners get no further in contending that

respondents did not act “under color” of federal au-

thority. In making this argument, petitioners rely on

Mesa for the proposition that “the fact that * * * fed-

the government mandated every particular of the defendant’s

conduct; it is enough that, as here, respondents were “([s]ubject

to the instruction, direction, or guidance of” the United States.

Watson, 127 S. Ct. at 2307.

8 Petitioners err in asserting that “the panel’s review of the sub-

stantial record below revealed that the alleged ‘regulation,

monitoring or supervision’ never existed.” Pet. 22 n.8. See also

Id. at 10 (contending that the court of appeals “expressly re-

jected the district court’s conclusion that ‘the government de-

signed, controlled and supervised the production of Agent Or-

ange”). Neither the Second Circuit’s holding on removal nor its

companion ruling on the merits even remotely suggested the

absence of significant government control over the design and

production of Agent Orange. Petitioners’ argument that the

Second Circuit’s ruling on the merits raised doubts about the

state of the record on this point is wrong; the portion of the

merits decision quoted by petitioner (id. at 22-23 n.8) ad-

dressed, not the degree of control exercised by the government,

but the extent of the government's knowledge of the possible

dangers of exposure to Agent Orange. See Stephenson, 517

F.3d at 98 n.19.

17

eral officer defendants were being prosecuted for acts

committed while on duty was insufficient to show

that they were acting under color of federal office,”

and maintain that “the Second Circuit clearly erred

in holding below that private contractors can do just

that.” Pet. 25. But this contention rests on a plain

misunderstanding both of Mesa and of the Second

Circuit’s holding.

In Mesa, the Court held removal improper be-

cause the defendants did not offer a federal defense

at all. See 489 U.S. at 129, 133-34. Here, in con-

trast, respondents advance the government contrac-

tor defense, which “clearly ‘ar[ose] out of [Defen-

dants’] duty’ pursuant to their contractual relation-

ship with the Federal Government.” Pet. App. 20a

(quoting Willingham, 395 U.S. at 407; bracketed ma-

terial added by the court). Petitioners do not deny

that the government contractor defense satisfies the

requirement of a “colorable federal defense” identi-

fied in Mesa. 489 U.S. at 129.9 And for this purpose,

it is enough that the federal defense is plausible; the

Court does “not require the [defendant] virtually to

‘win his case before he can have it removed.” Jeffer-

son County, 527 U.S. at 431 (quoting Willingham,

395 U.S. at 407).

Petitioners also are wrong on two counts when

they maintain that the Second Circuit’s analysis of

9 Petitioners do note that there is “federal court authority ques-

tioning this proposition,” pointing to a single district court deci-

sion that, in dictum, expressed uncertainty on the point. Pet.

21 n.7. But as Judge Weinstein explained below, the many

courts that have actually decided the question were unanimous

in holding that the government contractor defense is a “color-

able federal defense” for removal purposes. Pet. App. 36a; see

also id. at 2Ga-21a.

18

the “under color’ requirement is inconsistent with

decisions of this Court interpreting “identical lan-

guage in federal civil rights statutes.” Pet. 26. For

one thing, the language of Section 1442(a)(1) and

that of 42 U.S.C. § 1983, which was at stake in the

decisions cited by petitioners at Pet. 26, is not identi-

cal. Section 1983, which refers to actions taken “un-

der color of state law,” is directed at circumstances

where a private actor essentially is acting as the

State. See Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526

U.S. 40, 52 (1999) (emphasis added). Section

1442(a)(1), which refers to actions taken “under color

of [federal] office’ and expressly contemplates re-

moval by private persons who are not officers of the

United States, does not require the same sort of ex-

ercise of governmental] authority.

In any event, and even disregarding that distinc-

tion in the statutory text, the decisions cited by peti-

tioners are in fact consistent with the approach

taken by the Second Circuit here. In American

Manufacturers, the Court held only that a private

party does not act under color of state law within the

sees

meaning of Section 1983 when it “is subject to state

regulation”; “subtle encouragement” by the State

does not convert private activity into state action.

526 U.S. at 52-53. But here, of course, the federal

government — by specifically requesting and then, by

invoking the DPA, compelling production of Agent

Orange — offered far more than “subtle encourage-

ment” to respondents. Similarly, in Rendell-Baker v.

Kohn, 457 U.S. 830 (1982), the Court held that a pri-

vate party does not become a state actor simply be-

cause it is a government contractor when the par-

ticular actions challenged “were not compelled or

even influenced by any state regulation.” Jd. at 840-

41. See id. at 844 (White, J., concurring in the

19

judgment) (action not “based upon some rule of con-

duct or policy put forth by the State”). That holding

has no application to a situation like the one here,

where a private party is compelled to produce mate-

rials designed by the United States for use in the

prosecution of military action. These decisions offer

no reason to question the correctness of the holding

below.?°

3. Finally, even if there were some doubt about

the proper scope of Section 1442(a)(1), this case

would not be an appropriate one in which to consider

the question. Watson, the first modern decision in

which the Court has discussed application of the

statute to a government contractor, is little more

than a year old. The lower courts have not yet had

an opportunity to apply the Court’s analysis to any

significant degree, and it appears that the only deci-

sion of a court of appeals other than this one to apply

Watson did so in a factual setting (tobacco regula-

tion) identical to that considered in Watson. See

Kelly v. Martin & Bayley, Inc., 503 F.3d 584 (7th Cir.

2007) (per curiam). It therefore would be appropri-

ate for this Court to await further consideration of

the issue by the lower courts before weighing in it-

self.

10 Petitioners draw no more support from City of Greenwood v.

Peacock, 384 U.S. 808 (1966), which they cite at Pet. 27. The

Court there held that the civil rights removal statute, 28 U.S.C.

§ 1443(2), applies only to federal officers and those acting under

them, and therefore could not be invoked by private parties who

were not acting in concert with federal officers. See 384 U.S. at

810, 815, 821, 824. That holding has no bearing in this case,

where there is no doubt that respondents were acting at the be-

hest of the federal government.

20

Moreover, as we have noted, this case involves a

unique consideration that plainly bears on applica-

tion of the proper removal analysis: respondents

were compelled to supply Agent Orange to the gov-

ernment by invocation of the DPA. Because that

statute is no longer in effect, and there accordingly is

no possibility that a case with this unusual feature

will arise in the future, resolution of the dispute here

would provide little useful guidance to the lower

courts. If the Court is inclined to consider the scope

of Section 1442(a)(1), it would be appropriate to do so

in a vehicle that has more in common with the usual

run of government contractor cases.

Petitioners’ policy arguments in favor of immedi-

ate review are insupportable. Their contention that

the Second Circuit’s decision “has the potential to

overwhelm already over-burdened federal courts”

(Pet. 27-28) rests on a misstatement of the holding

below, which does not permit removal of “virtually

all” suits brought against government contractors.

Id. at 28. And petitioners’ assertion regarding the

purported inconvenience of litigating in federal court

(id. at 28-29), as well as their suggestion that an ex-

pansive removal rule is inconsistent with principles

of federalism (id. at 30-32), simply disregards the

particular goals that Congress sought to advance in

Section 1442(a)(1). The courts below did not, as peti-

tioners would have it, depart from controlling law by

improperly “voic[ing] their concerns about the capac-

ity of state courts to handle litigation.” Pet. 31-32.

Instead, this Court, in decisions dating back more

than a century, consistently has identified the con-

gressional purpose behind Section 1442(a)(1) and its

many statutory predecessors: “Congress has decided

that federal officers, and indeed the federal Govern-

21

ment itself, require the protection of a federal fo-

rum.” Willingham, 395 U.S. at 407.

As the Court put it most recently in Watson, “the

removal statute’s ‘basic’ purpose is to protect the

Federal Government from * * * interference with its

‘operations” at the hands of hostile state courts. 127

S. Ct. at 2306. “State court proceedings may reflect

‘local prejudice’ against unpopular federal laws or

federal officials,” “States hostile to the Federal Gov-

ernment may impede * * * the enforcement of * * *

federal law,” “[aJnd States may deprive federal offi-

cials of a federal forum in which to assert federal

immunity defenses.” Ibid. And, as the plain terms

of Section 1442(a)(1) indicate, “some of these same

considerations may apply” when “a private person

acts as an assistant to a federal official.” Jd. at 2307.

For this reason, “[t]he federal officer removal statute

is not ‘narrow’ or ‘limited,” and its important policy

“should not be frustrated by a narrow, grudging in-

terpretation of § 1442(a)(1).” Willingham, 395 U.S.

at 406-07.

These considerations apply with full force to this

litigation. The Vietnam War, like the other great na-

tional controversies that prompted enactment of Sec-

tion 1442(a)(1)’s predecessor statutes (see Watson,

127 S. Ct. at 2305), was the source of heated debate

and, in some quarters, considerable hostility to the

policies of the national government. The Agent Or-

ange defoliation program, which had a central role in

that debate, has not become less controversial over

time. The court of appeals therefore was quite cor-

rect in observing that “removal in these cases fulfills

the federal officer removal statute’s purpose of pro-

tecting persons who, through contractual relation-

ships with the Government, perform jobs that the

22

Government otherwise would have performed.” Pct.

App. 6a. Indeed, as Judge Weinstein noted below,

“(bJecause government contractor cases are freighted

with factual findings, [the government contractor de-

fense], while laying down a substantive rule, may be

readily circumvented by state courts unsympathetic

to the defendants.” Jd. at 41a. And “[i]f cases such

as those in the present wave of Agent Orange claims

were scattered throughout state courts[,] manufac-

turers would have to seriously consider whether they

would serve as procurement agents to the federal

government,” an outcome that would “provide a sig-

nificant deterrent to necessary military procure-

ment.” Jbid. Because the decision below accordingly

is faithful to the language and purpose of Section

1442(a)(1), and because there is no confusion in the

lower courts that requires this Court’s attention, this

case does not warrant further review.

23

CONCLUSION

The petition for a writ of certiorari should be de-

nied.

Respectfully submitted.

CHARLES A. ROTHFELD ANDREW L. FREY

Mayer Brown LLP Counsel of Record

1909 K Street, NW LAUREN R. GOLDMAN

Washington, D.C. 20006 CHRISTOPHER J. HOUPT

(202) 263-3000 Mayer Brown LLP

1675 Broadway

New York, NY 10019

(212) 506-2500

JAMES V. AIOSA JAMES L. STENGEL

RICHARD S. FELDMAN LAURIE STRAUCH WEISS

Rivkin Radler LLP Orrick, Herrington &

926 RexCorp Plaza Sutcliffe LLP

Uniondale, NY 11556 666 Fifth Avenue

(516) 357-3000 New York, NY 10108

(212) 506-3775

Counsel for Respondent

The Dow Chemical Company

LAWRENCE D’ALOISE, JR. MICHAEL M. GORDON

Clark, Gagliardi & McKee Nelson LLP

Miller One Battery Park Plaza

The Inns of Court 34th Floor

99 Court Street New York, NY 10004

White Plains, NY 10601 (917) 777-4567

(914) 946-8900

Counsel for Respondents

Counsel for Respondents Occidental Chemical Cor-

T.H. Agriculture & Nutri- poration, as successor by

tion Co., Inc., Thompson- merger to Diamond

24

Hayward Chemical Co.,

and Harcros Chemicals,

Ine.

WILLIAM A. KROHLEY

WILLIAM C. HECK

Kelley Drye & Warren

LEP

101 Park Avenue

New York, NY 10178

(212) 808-7800

Counsel for Respondent

Hercules Incorporated

JOHN C. SABETTA

ANDREW T. HAHN, SR.

Seyfarth Shaw LLP

620 Eighth Avenue

New York, NY 10018-

1405

(212) 218-5509

RICHARD P. BRESS

Latham & Watkins

555 Eleventh Street, NW,

Suite 1000

Washington, D.C. 20004

(202) 637-2137

Shamrock Chemicals

Company; Maxus Energy

Corporation; Tierra Solu-

tions, Inc., formerly

known as Chemical Land

Holdings, Inc.; and Valero

Energy Corporation, as

successor by merger to Ul-

tramer Diamond Sham-

rock Corporation

SETH P. WAXMAN

PAUL R.Q. WOLFSON

MARY K. GARDNER

Wilmer Cutler Pickering

Hale and Dorr LLP

1875 Pennsylvania Ave.

NW

Washington, D.C. 20006

(202) 663-6000

JAMES E. TYRRELL, JR.

Patton Boggs LLP

The Legal Center

One Riverfront Plaza —

6th Floor

Newark, NJ 07102

(973) 848-5620

Counsel for Respondent Monsanto Company

MYRON KALISH

50 East 79th Street

New York, NY 10021

Counsel for Respondents

Uniroyal, Inc., Uniroyal

Chemical Co., and CDU

Holdings, Inc.

JANUARY 2009