Dahl v. R.J. Reynolds Tobacco Co.

• Decision Date: 28 February 2007
• Docket Number: No. 06-1776.,06-1776.
• Citation: 478 F.3d 965
• Parties: Michael S. DAHL; David Scott Huber, Plaintiffs-Appellants, v. R.J. REYNOLDS TOBACCO COMPANY; R.J. Reynolds Tobacco Holdings, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

478 F.3d 965

Michael S. DAHL; David Scott Huber, Plaintiffs-Appellants, v. R.J. REYNOLDS TOBACCO COMPANY; R.J. Reynolds Tobacco Holdings, Inc., Defendants-Appellees.

No. 06-1776.

United States Court of Appeals, Eighth Circuit.

Submitted: December 14, 2006.

Filed: February 28, 2007.

Kay Nord Hunt, argued, Minneapolis, MN, for appellant.

Hugh R. Whiting, argued, Houston, TX, for appellee.

Before LOKEN, Chief Judge, JOHN R. GIBSON, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

Michael S. Dahl and David Scott Huber filed this action in the Minnesota District Court alleging that R.J. Reynolds' practice of marketing and selling "light" cigarettes violated state consumer protection statutes and constituted common law fraud. After defendants unsuccessfully attempted to remove the case to federal court on diversity grounds, plaintiffs' claims were dismissed as preempted by federal law. Plaintiffs appealed the dismissal to the Minnesota Court of Appeals. While their appeal was pending, our court decided Watson v. Philip Morris Companies, 420 F.3d 852 (2005), cert. granted, ___ U.S. ___, 127 S.Ct. 1055, 166 L.Ed.2d 797 (Jan. 12, 2007) (No. 05-1284), holding in a case also involving the marketing of light cigarettes that there was removal jurisdiction under 28 U.S.C. § 1442(a) because Philip Morris had established federal officer jurisdiction. R.J. Reynolds then made a second try at removing this case, this time alleging federal officer jurisdiction under § 1442(a). Plaintiffs moved to remand the case to state court on the ground that the attempted removal was untimely. The district court denied the motion to remand, and plaintiffs appeal. We reverse.

I.

This case is one of many across the country and within our circuit which challenge the marketing, advertising, and distribution of "light" cigarettes. Plaintiffs filed their complaint in state court on April 3, 2003, seeking damages and restitution for R.J. Reynolds' "unfair business practices and/or deceptive and unlawful conduct in connection with the manufacture, distribution, promotion, marketing, and sale" of its light cigarettes. Plaintiffs claim that R.J. Reynolds: (1) designed its light cigarettes to register lower levels of tar and nicotine than what would actually be ingested by consumers, (2) intentionally misrepresented to consumers that its light cigarettes would deliver less tar and nicotine than other cigarettes, (3) intentionally misrepresented that its light cigarettes were healthy alternatives to other cigarettes, and (4) continued to sell light cigarettes as a healthy alternative knowing this to be false.

Within thirty days of being served with the complaint, R.J. Reynolds attempted to remove the case to federal court on April 24, 2003, arguing that the total award sought by plaintiffs exceeded the $75,000 threshold for diversity jurisdiction. Plaintiffs moved to remand because the amount sought by each individual plaintiff was less than $75,000, and the district court¹ granted their motion and remanded the case to state court.

Plaintiffs then moved for class certification, and R.J. Reynolds moved for dismissal of all claims against it. R.J. Reynolds argued that the claims were preempted because it had complied with the requirements set by Congress in the Cigarette Labeling and Advertising Act of 1965, 15 U.S.C. § 1331, and its amendments. The state district court agreed with R.J. Reynolds, dismissed the claims as preempted, and denied the motion for class certification as moot. The plaintiffs appealed to the Minnesota Court of Appeals.

While that appeal was pending, our court issued its decision in Watson v. Philip Morris Companies, 420 F.3d 852 (2005), cert. granted, ___ U.S. ___, 127 S.Ct. 1055, 166 L.Ed.2d 797 (Jan. 12, 2007) (No. 05-1284), a case involving claims against a cigarette manufacturer similar in nature to those alleged here. The manufacturer timely removed the case to federal court on July 2, 2003, asserting federal question jurisdiction under 28 U.S.C. § 1331, as well as jurisdiction under 28 U.S.C. § 1442(a), which permits removal if the defendant has been sued for actions taken under direction of a federal officer.² The Watson plaintiffs moved to remand. The district court³ denied their motion on December 12, 2003, concluding that it had federal officer jurisdiction over the dispute because the manufacturer had taken the challenged actions under the direction of the Federal Trade Commission (FTC) and had raised a colorable federal defense. See Watson v. Philip Morris Co., No. 4:03-CV-519, 2003 WL 23272484 (E.D.Ark. Dec.12, 2003). In affirming the district court on August 25, 2005, we concluded that the FTC's "comprehensive, detailed" control over the labeling of cigarettes provided a basis for federal officer jurisdiction over the claims under § 1442(a). Watson, 420 F.3d at 858. In the course of its analysis the court noted that a number of federal trial courts had remanded similar cases removed from state court under § 1442(a). Id. at 857.

R.J. Reynolds then attempted again to remove this case on September 22, 2005, now alleging federal officer jurisdiction under § 1442(a). Plaintiffs moved to remand, arguing that the notice of removal had not been filed within the thirty day limit to remove cases from state court, 28 U.S.C. § 1446(b), and that federal officer jurisdiction was not available. R.J. Reynolds responded that our court's decision in Watson made it clear for the first time that federal courts have jurisdiction over claims like those in this case and its receipt of that opinion recommenced the thirty day time period for removal. The district court agreed and denied the motion to remand; it then ordered the case "transferred" for appellate review. The plaintiffs appeal.

Appellants raise three issues. They argue that the case must be remanded to state court because R.J. Reynolds failed to remove the case within the thirty day limit in § 1446(b). Even if the removal were timely they argue, this case is distinguishable from Watson and that precedent has no relevance here. If we were to conclude that there is federal officer jurisdiction, however, the state district court should be reversed because it erred by dismissing their claims as preempted. R.J. Reynolds responds that its removal was timely because the Watson decision first made it clear that cases of this type are removable, that it is similarly situated to the defendant in Watson so federal officer jurisdiction is appropriate, and that the state court properly concluded that the claims are preempted.

II.

Appellants contend that the district court erred by denying their motion to remand because R.J. Reynolds did not raise federal officer jurisdiction within the thirty day opportunity for removing cases to federal court and the decision in Watson did not recommence the time limit for removal. First, they argue that the Watson opinion was not the type of document Congress had in mind to restart the running of the thirty day removal period. Second, they assert that our Watson decision was not the first basis from which R.J. Reynolds could ascertain that the case could be removed under the federal officer provision. They point to earlier instances, in which defendants including R.J. Reynolds,⁴ had attempted to use federal officer removal as evidence that the concept was ascertainable prior to our Watson decision.

R.J. Reynolds argues that all courts to have considered the issue prior to our Watson decision rejected federal officer jurisdiction over these types of claims and that it first ascertained that it could use that basis for removal upon receiving a copy of our opinion. It contends that that opinion was an "order or other paper" recommencing the thirty day removal period and that failure to permit federal officer removal would unduly burden defendants seeking federal jurisdiction. It also asserts that to ascertain means to become "certain, sure, or confident." See Oxford English Dictionary (1989). Only after receiving the Watson opinion could it be certain consistent with Rule 11 that federal officer removal was appropriate it says.

We apply de novo review to a district court's denial of a motion to remand, United States v. Todd, 245 F.3d 691, 693 (8th Cir.2001), and to all questions of statutory interpretation. Wingert & Assocs., Inc. v. Paramount Apparel Int'l Inc., 458 F.3d 740, 743 (8th Cir.2006). Federal courts are to "resolve all doubts about federal jurisdiction in favor of remand" and are strictly to construe legislation permitting removal. Transit Cas. Co. v. Certain Underwriters at Lloyd's of London, 119 F.3d 619, 625 (8th Cir.1997).⁵

The federal removal statute, 28 U.S.C. § 1446, provides that a civil defendant must file a notice of removal "signed pursuant to Rule 11 of the Federal Rules of Civil Procedure . . . within thirty days after the receipt by the defendant" of a copy of the initial state court pleading. A defendant is generally barred from asserting any ground for removal not attempted within that thirty day period. 28 U.S.C. § 1446(b); see also Lindsey v. Dillard's, Inc., 306 F.3d 596, 600 (8th Cir.2002).

Congress created one exception for situations where the case was not removable as originally filed, but the defendant has later received the type of document described in § 1446(b) making removability first ascertainable:

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable . . . .

28 U.S.C. § 1446(b). In such a situation the thirty day time period starts again upon receipt of the document, provided that the case as stated by the initial pleading was not removable. Id.

The issues before the court turn on the interpretation of the removal sta...