Durham v. Lockheed Martin Corp., 04-15243.

Citation445 F.3d 1247
Decision Date26 April 2006
Docket NumberNo. 04-15243.,04-15243.
PartiesGerald DURHAM, Plaintiff-Appellee, v. LOCKHEED MARTIN CORPORATION, Defendant-Appellant, and 10,000 Holdings, Inc.; 4520 Corp., Inc.; et al., Defendants, v. Kearfott Guidance and Navigation Corporation, Third-party-Defendant.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Robert W. Loewen, Sarah M. Schlosser, Andrea M. Neuman, Gibson, Dunn & Crutcher, Irvine, CA; Charles H. Haake, Gibson, Dunn & Crutcher, Washington, DC; Steven E. Knott, Guy P. Glazier, Knott & Glazier LLP, Los Angeles, CA, for the defendant-appellant.

Gilbert L. Purcell, Alan R. Brayton, Lloyd F. Leroy, David L. Fiol, Brayton Purcell, Novato, CA, for the plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California; Thelton E. Henderson, District

Judge, Presiding. D.C. No. CV-03-04326-TEH.

Before KOZINSKI and FERNANDEZ, Circuit Judges, and TERRY J. HATTER, JR.,* District Judge.

KOZINSKI, Circuit Judge.

A defendant has thirty days to remove a case on diversity or federal question grounds. We consider whether the thirty-day clock is reset if the defendant later discovers the case is also removable on federal officer grounds.

Facts

Plaintiff Gerald Durham suffers from lung cancer, which he alleges was caused by exposure to asbestos during his thirty-year service as an electronics technician for the United States Air Force and Air Force Reserves. Durham filed his complaint against Lockheed Martin and sixty other defendants on August 7, 2003, in California Superior Court. In his complaint, Durham listed the Air Force facilities where he worked, but didn't allege which Lockheed products exposed him to asbestos. Durham's complaint incorporated by reference a Master Complaint filed by his law firm against 8,500 John Doe defendants, which was equally short on detail.

Plaintiff served Lockheed Martin on August 15, 2003. Lockheed didn't attempt to remove the case to federal court on federal enclave grounds because, based on past experience, it believed some of its co-defendants would be unwilling to consent to removal. Ten days later, Lockheed received plaintiff's answers to interrogatories. These interrogatories for the first time disclosed the specifics of Durham's claim — that he was exposed to asbestos while working on the SR-71 Blackbird and the C-141 Starlifter aircraft on military bases where Lockheed was a contractor.

Durham's responses disclosed to Lockheed a new basis for removing the case: Lockheed assembled the aircraft while acting as an agent of a federal officer, and was therefore immune to suit as a federal contractor. See 28 U.S.C. § 1442(a)(1). According to Lockheed, the military dictated the precise specifications of the aircraft Durham worked on, right down to directing Lockheed to install specific navigational components manufactured by other contractors. Lockheed also claims that the government directed it to use asbestos in the assembly of these aircraft because it was the only material capable of ensuring the aircraft performed to the military's exacting specifications — for example, that the Blackbird be able to fly at Mach 3, and thus withstand temperatures in excess of 550 degrees.

While Lockheed was evaluating Durham's responses to its interrogatories, the removal clock was ticking. When Lockheed received the responses, ten days had already passed since it had been served with the complaint. Lockheed didn't file a notice of removal until September 24 — more than thirty days after it had been served with the complaint, but less than thirty days after it had received Durham's interrogatory responses.

After Lockheed removed, Durham moved to remand to state court, claiming that Lockheed's removal was untimely. See 28 U.S.C. §§ 1446(b), 1447(c). The remand motion presented two questions: First, when did Durham put Lockheed on notice of the bases for removal? And, second, if Lockheed discovered federal officer grounds after it discovered federal enclave grounds, was it entitled to a new thirty-day period to remove? The district court found that the complaint disclosed a basis for federal enclave jurisdiction, and sided with Durham: "[T]here is no special extension of time to remove on the basis of federal officer jurisdiction under § 1442 where, as here, 30 days has passed from the time which another basis for federal jurisdiction existed under § 1441." The district court thus remanded the case to state court and awarded Durham $9,113.99 in costs and attorney's fees because Lockheed's removal was untimely. See id. § 1447(c). Lockheed appeals the award of costs and fees.

Analysis

28 U.S.C. § 1447(d) generally bars review of a district court order remanding a case to state court, and thus, whatever we decide here, we cannot recall the case to federal court.1 We consider only whether the district court properly awarded costs and attorney's fees to Durham. Notwithstanding section 1447(d), we have jurisdiction to review the award because the district court's grant of attorney's fees and costs is a final order subject to review under 28 U.S.C. § 1291. See Moore v. Permanente Med. Group, Inc., 981 F.2d 443, 447 (9th Cir.1992). The Supreme Court recently instructed that attorney's fees in removal cases are not to be awarded as a matter of course: "[A]bsent unusual circumstances, attorney's fees should not be awarded when the removing party has an objectively reasonable basis for removal." Martin v. Franklin Capital Corp., ___ U.S. ___, ___, 126 S.Ct. 704, 708, 163 L.Ed.2d 547 (2005). We review the award of fees and costs for abuse of discretion, but will overturn it if it is based on an erroneous determination of law. See Moore, 981 F.2d at 447.

1. After a defendant learns that an action is removable, he has thirty days to remove the case to federal court. See 28 U.S.C. § 1446(b). We held in Harris v. Bankers Life & Casualty Co., 425 F.3d 689 (9th Cir.2005), that "the `thirty day time period [for removal] . . . starts to run from defendant's receipt of the initial pleading only when that pleading affirmatively reveals on its face' the facts necessary for federal court jurisdiction." Id. at 690-91 (quoting Chapman v. Powermatic, Inc., 969 F.2d 160, 163 (5th Cir.1992)) (alterations in original). Otherwise, the thirty-day clock doesn't begin ticking until a defendant receives "a copy of an amended pleading, motion, order or other paper" from which it can determine that the case is removable. 28 U.S.C. § 1446(b).

Lockheed does not contest the district court's determination that the complaint revealed one basis for federal jurisdiction. Federal courts have federal question jurisdiction over tort claims that arise on "federal enclaves." See 28 U.S.C. § 1331; Willis v. Craig, 555 F.2d 724, 726 n. 4 (9th Cir.1977) (per curiam); Mater v. Holley, 200 F.2d 123, 125 (5th Cir.1952). The complaint revealed that some of Durham's claims arose on federal enclaves, so under Harris, Lockheed had thirty days from when it received the complaint to remove to federal court. But to do so successfully, it had to convince all of its co-defendants to go along — no small task where, as here, there are sixty-one defendants. See United Computer Sys., Inc. v. AT & T Corp., 298 F.3d 756, 762 (9th Cir.2002). Lockheed believed there was no way to forge consensus among the defendants — it had learned in prior asbestos litigation with these defendants that some of them preferred a state forum, and thus would not consent to removal. So Lockheed never attempted to remove on federal enclave grounds.

2. It turns out that there was another basis for federal jurisdiction in this case. Federal officers, and their agents, may remove cases based on acts performed under color of their federal office if they assert a colorable federal defense:

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. . . .

28 U.S.C. § 1442(a); Mesa v. California, 489 U.S. 121, 129, 109 S.Ct. 959, 103 L.Ed.2d 99 (1989). A party seeking removal under section 1442 must demonstrate that (a) it is a "person" within the meaning of the statute; (b) there is a causal nexus between its actions, taken pursuant to a federal officer's directions, and plaintiff's claims, and (c) it can assert a "colorable federal defense." Jefferson County v. Acker, 527 U.S. 423, 431, 119 S.Ct. 2069, 144 L.Ed.2d 408 (1999); Mesa, 489 U.S. at 124-25, 131-35, 109 S.Ct. 959.

To start the thirty-day clock under Harris, Durham had to provide Lockheed with facts to support each of the three requirements. Until Durham revealed which aircraft he had worked on during his Air Force career, Lockheed couldn't assert either that its actions were taken pursuant to a federal officer's directions, or that it had a colorable federal defense. Lockheed, like other federal military contractors, performs some activities on military bases that are protected by federal contractor immunity, and others that are not. See Boyle v. United Techs. Corp., 487 U.S. 500, 512, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). There wasn't enough information in Durham's complaint for Lockheed to discern whether its allegedly wrongful conduct was protected by federal contractor immunity. Had it removed upon filing of the complaint, it may well have subjected itself to fees and costs, and potentially Rule 11 sanctions, for filing a baseless notice of removal. After Harris, we no longer require defendants to take this blind leap — we don't charge defendants with notice of removability until they've received a paper that...

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