Leite v. Crane Co.

• Decision Date: 25 April 2014
• Docket Number: 12–16982.,Nos. 12–16864,s. 12–16864
• Citation: 749 F.3d 1117
• Parties: Douglas P. LEITE; Mary Ann K. Leite, Plaintiffs–Appellants, v. CRANE COMPANY, a Delaware corporation; Aurora Pump Company, a foreign corporation; Bayer CropScience, Inc., successor-in-interest to Rhone–Poulenc AG Company, a foreign company, aka Amchem Products, Inc., aka Benjamin Foster Products Company; Union Carbide Corporation, a New York corporation; Air & Liquid Systems Corporation, successor-by-merger to Buffalo Pumps, Inc., a New York corporation; Certainteed Corporation, a Delaware corporation; Cleaver–Brooks, Inc., a Delaware corporation; Goulds Pumps, Inc., a Delaware corporation; IMO Industries, Inc., individually and as successor-in-interest to Delaval Turbine, Inc., a Delaware corporation, fka Delaval Steam Turbine Company, fka IMO Delaval, Inc., fka Transamerica Delaval, Inc.; Ingersoll Rand Company, a New Jersey corporation; John Crane, Inc., a Delaware corporation; The Lynch Company, Inc., a Hawaii corporation; Metropolitan Life Insurance Company, a New York corporation; Warren Pumps, LLC, a Delaware corporation; The William Powell Company, an Ohio corporation; Velan Valve Corporation, a New York corporation; Copes–Vulcan, a subsidiary of SPX Corporation, a Delaware corporation; Atwood & Morrill, a subsidiary of Weir Valves & Controls USA, Inc., a Massachusetts Corporation; Does 1 to 25, Defendants–Appellees. David Thompson, Plaintiff–Appellant, v. Crane Company, Delaware corporation; Aurora Pump Company, a foreign corporation; Bayer CropScience, Inc., successor-in-interest to Rhone–Poulenc AG Company, a foreign company, aka Amchem Products, Inc., aka Benjamin Foster Products Company; Union Carbide Corporation, a New York corporation; Air & Liquid Systems Corporation, successor-by-merger to Buffalo Pumps, Inc., a New York corporation; Certainteed Corporation, a Delaware corporation; Cleaver–Brooks, Inc., a Delaware corporation; Goulds Pumps, Inc., a Delaware corporation; IMO Industries, Inc., individually and as successor-in-interest to Delaval Turbine, Inc., a Delaware corporation, fka Delaval Steam Turbine Company, fka IMO Delaval, Inc., fka Transamerica Delaval, Inc.; Ingersoll Rand Company, a New Jersey corporation; John Crane, Inc., a Delaware corporation; The Lynch Company, Inc., a Hawaii corporation; Metropolitan Life Insurance Company, a New York corporation; Warren Pumps, LLC, a Delaware corporation; The William Powell Company, an Ohio corporation; Velan Valve Corporation, a New York corporation; Copes–Vulcan, a subsidiary of SPX Corporation, a Delaware Corporation; Atwood & Morrill, a subsidiary of Weir Valves & Controls USA, Inc., a Massachusetts Corporation; Does 1 to 25, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

749 F.3d 1117

Douglas P. LEITE; Mary Ann K. Leite, Plaintiffs–Appellants,

v.CRANE COMPANY, a Delaware corporation; Aurora Pump Company, a foreign corporation; Bayer CropScience, Inc., successor-in-interest to Rhone–Poulenc AG Company, a foreign company, aka Amchem Products, Inc., aka Benjamin Foster Products Company; Union Carbide Corporation, a New York corporation; Air & Liquid Systems Corporation, successor-by-merger to Buffalo Pumps, Inc., a New York corporation; Certainteed Corporation, a Delaware corporation; Cleaver–Brooks, Inc., a Delaware corporation; Goulds Pumps, Inc., a Delaware corporation; IMO Industries, Inc., individually and as successor-in-interest to Delaval Turbine, Inc., a Delaware corporation, fka Delaval Steam Turbine Company, fka IMO Delaval, Inc., fka Transamerica Delaval, Inc.; Ingersoll Rand Company, a New Jersey corporation; John Crane, Inc., a Delaware corporation; The Lynch Company, Inc., a Hawaii corporation; Metropolitan Life Insurance Company, a New York corporation; Warren Pumps, LLC, a Delaware corporation; The William Powell Company, an Ohio corporation; Velan Valve Corporation, a New York corporation; Copes–Vulcan, a subsidiary of SPX Corporation, a Delaware corporation; Atwood & Morrill, a subsidiary of Weir Valves & Controls USA, Inc., a Massachusetts Corporation; Does 1 to 25, Defendants–Appellees.

David Thompson, Plaintiff–Appellant,

v.Crane Company, Delaware corporation; Aurora Pump Company, a foreign corporation; Bayer CropScience, Inc., successor-in-interest to Rhone–Poulenc AG Company, a foreign company, aka Amchem Products, Inc., aka Benjamin Foster Products Company; Union Carbide Corporation, a New York corporation; Air & Liquid Systems Corporation, successor-by-merger to Buffalo Pumps, Inc., a New York corporation; Certainteed Corporation, a Delaware corporation; Cleaver–Brooks, Inc., a Delaware corporation; Goulds Pumps, Inc., a Delaware corporation; IMO Industries, Inc., individually and as successor-in-interest to Delaval Turbine, Inc., a Delaware corporation, fka Delaval Steam Turbine Company, fka IMO Delaval, Inc., fka Transamerica Delaval, Inc.; Ingersoll Rand Company, a New Jersey corporation; John Crane, Inc., a Delaware corporation; The Lynch Company, Inc., a Hawaii corporation; Metropolitan Life Insurance Company, a New York corporation; Warren Pumps, LLC, a Delaware corporation; The William Powell Company, an Ohio corporation; Velan Valve Corporation, a New York corporation; Copes–Vulcan, a subsidiary of SPX Corporation, a Delaware Corporation; Atwood & Morrill, a subsidiary of Weir Valves & Controls USA, Inc., a Massachusetts Corporation; Does 1 to 25, Defendants–Appellees.

Nos. 12–16864, 12–16982.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 8, 2013.

Filed April 25, 2014.

L. Richard DeRobertis (argued), Gary O. Galiher, and Todd W. Eddins, Galhier DeRobertis Ono, Honolulu, HI, for Plaintiffs–Appellants.

Michael J. Ross (argued), Nicholas P. Vari, and Michael J. Zukowski, K & L Gates LLP, Pittsburgh, PA; Edward P. Sangster, K & L Gates LLP, San Francisco, CA, for Defendants–Appellees.

Appeals from the United States District Court for the District of Hawaii, J. Michael Seabright, District Judge, Presiding, Leslie E. Kobayashi, District Judge, Presiding. D.C. Nos. 1:11–cv–00636–JMS–RLP, 1:11–cv–00638–LEK–RLP.

Before: ALEX KOZINSKI, Chief Judge, and RAYMOND C. FISHER and PAUL J. WATFORD, Circuit Judges.

OPINION

WATFORD, Circuit Judge:

The plaintiffs in these consolidated appeals, Douglas Leite and David Thompson, worked as machinists at the Pearl Harbor Naval Shipyard in Hawaii, where they were allegedly injured by exposure to asbestos. They sued defendants under state tort law on the theory that defendants failed to warn them of the hazards posed by asbestos used in and around equipment that defendants sold to the United States Navy. (We focus here on only one of the defendants, Crane Co., because it alone filed a brief on appeal.)

Plaintiffs filed separate lawsuits against Crane in state court, but Crane removed the actions to federal court under the federal officer removal statute, 28 U.S.C. § 1442. Plaintiffs asked the district courts to remand the actions to state court on the ground that Crane had not provided sufficient evidence of the factual requirements for removal jurisdiction. In both cases, the district courts denied plaintiffs' motions. Acknowledging that other district courts confronted with similar facts have reached the opposite conclusion,¹ the courts certified their orders for interlocutory appeal. We agreed to hear these appeals under 28 U.S.C. § 1292(b).

As relevant here, the federal officer removal statute authorizes removal of a civil action brought against any person “acting under” an officer of the United States “for or relating to any act under color of such office.” 28 U.S.C. § 1442(a)(1).² To invoke the statute, Crane must show that (1) it is a “person” within the meaning of the statute, (2) a causal nexus exists between plaintiffs' claims and the actions Crane took pursuant to a federal officer's direction, and (3) it has a “colorable” federal defense to plaintiffs' claims. See Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1251 (9th Cir.2006).

In its removal notices, Crane alleged facts satisfying each of these requirements. Crane alleged that it is a “person” for purposes of § 1442(a)(1); that it omitted any warning of asbestos hazards pursuant to the direction of Navy officers; and that it has a colorable federal defense to plaintiffs' claims—the government contractor defense. Crane substantiated these allegations by attaching extensive testimonial and documentary evidence, including affidavits from four individuals: retired Rear Admiral David Sargent, Jr.; retired Rear Admiral Roger Horne, Jr.; Dr. Samuel Forman, a medical doctor who conducted extensive research on the extent of the Navy's knowledge of asbestos hazards; and Anthony Pantaleoni, Crane's Vice–President of Environment, Health, and Safety. The Sargent and Horne affidavits describe the Navy's procurement policies, and in particular the Navy's detailed specifications regulating the warnings that equipment manufacturers were required to provide. Dr. Forman's affidavit describes the Navy's evolving awareness of asbestos risks, and opines that the Navy always knew at least as much about asbestos hazards as equipment manufacturers like Crane.

Plaintiffs contest Crane's jurisdictional allegations and raise evidentiary objections to portions of Crane's affidavits, mainly on the ground that the affidavits contain speculative expert opinion testimony that must be excluded under Federal Rule of Evidence 702. Plaintiffs argue that, without these improper opinions, Crane hasn't satisfied each of the requirements for removal jurisdiction.

Plaintiffs' arguments raise several novel procedural questions we have not yet squarely addressed: May a defendant establish removal jurisdiction under § 1442(a)(1) by adequately alleging the necessary facts, or must the defendant prove those facts before the case may proceed in federal court? If actual proof is required, must the district court resolve evidentiary challenges to the defendant's evidence before deciding whether removal jurisdiction exists? And if the existence of jurisdiction turns on disputed factual issues, should the district court resolve those issues itself or instead leave them to be resolved by the trier of fact?

Fortunately, all of these questions have been answered in a procedurally analogous context—cases in which the plaintiff files suit in federal court and the defendant moves to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). We'll start by sketching out the rules that govern in that context, for we conclude those same rules should apply here.

To invoke a federal court's subject-matter jurisdiction, a plaintiff needs to provide only “a short and plain statement of the grounds for the court's jurisdiction.” Fed.R.Civ.P. 8(a)(1). The plaintiff must allege facts, not mere legal conclusions, in compliance with the pleading standards established by Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). See Harris v. Rand, 682 F.3d 846, 850–51 (9th Cir.2012). Assuming compliance with those standards, the plaintiff's factual allegations will ordinarily be accepted as true unless challenged by the defendant. See5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1363, at 107 (3d ed.2004).

Under Rule 12(b)(1), a defendant may challenge the plaintiff's jurisdictional allegations in one of two ways. A “facial” attack accepts the truth of the plaintiff's allegations but asserts that they “are insufficient on their face to invoke federal jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004). The district court resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6): Accepting the plaintiff's allegations as true and drawing all reasonable inferences in the plaintiff's favor, the court determines whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction. Pride v. Correa, 719 F.3d 1130, 1133 (9th Cir.2013).

A “factual” attack, by contrast, contests the truth of the plaintiff's factual allegations, usually by introducing evidence outside the pleadings. Safe Air for Everyone, 373 F.3d at 1039;Thornhill Publ'g Co. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir.1979). When the defendant raises a factual attack, the plaintiff must support her jurisdictional allegations with “competent proof,” Hertz Corp. v. Friend, 559 U.S. 77, 96–97, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010), under the same evidentiary standard that governs in the summary judgment context. See Norse v. City of Santa Cruz, 629 F.3d 966, 973 (9th Cir.2010)...