American Policyholders Ins. Co. v. Nyacol Products, Inc.

Decision Date09 December 1992
Docket NumberNo. 92-1949,92-1949
Citation989 F.2d 1256
PartiesAMERICAN POLICYHOLDERS INSURANCE COMPANY, Plaintiff, Appellant, v. NYACOL PRODUCTS, INC., et al., Defendants, Appellees. . Heard
CourtU.S. Court of Appeals — First Circuit

Jennifer S.D. Roberts, with whom Rackemann, Sawyer & Brewster, P.C. Boston, MA, was on brief, for plaintiff, appellant.

Catherine M. Flanagan, Atty., Dept. of Justice, Environment & Natural Resources Div., with whom Vicki A. O'Meara, Acting Asst. Atty. Gen., and David C. Shilton, Atty., Environment & Natural Resources Div., Washington, DC, were on brief, for Julie Belaga, Regional Adm'r, U.S. E.P.A., defendants, appellees.

Before SELYA, Circuit Judge, COFFIN, Senior Circuit Judge, and STAHL, Circuit Judge.

SELYA, Circuit Judge.

This appeal, which arises out of an insurance company's efforts to secure a binding declaration of its rights and responsibilities under an insurance contract, poses an intriguing question: does the "officer removal" statute, 28 U.S.C. § 1442(a)(1), permit a federal official, sued only in her representative capacity, to remove an action to federal district court? Because we think that the statute does not confer such a right, and because there is no other cognizable basis for federal jurisdiction, we return the case to the district court with instructions that it be remitted to a state forum.

I

From 1917 until 1977, a succession of dye-houses occupied a thirty-five acre plot in Ashland, Massachusetts. During these six decades, toxic wastes impregnated the site. Eventually, the United States Environmental Protection Agency (EPA) and the Massachusetts Department of Environmental Protection (DEP) discovered the pollution and documented its source in the dye manufacturing processes. In early 1982, EPA notified Nyacol Products, Inc. (Nyacol), a producer of colloidal silicas at a portion of the site, that it considered Nyacol a potentially responsible party (PRP) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9626, 9651-9661, 9671-9675. 1

Pursuant to Massachusetts law, which deems PRP notices equivalent to law suits for the purpose of triggering an insurer's duty to defend, see Hazen Paper Co. v. United States Fid. & Guar. Co., 407 Mass. 689, 555 N.E.2d 576, 581 (1990), Nyacol called upon its insurance carrier, plaintiff-appellant American Policyholders Insurance Company (American), to defend it against EPA's claims and to indemnify it for loss, costs, damages, or other expense related thereto. American provisionally undertook the company's defense under its general liability policy. In December of 1991, American brought suit in a Massachusetts state court seeking a declaration that it had no obligation to defend or recompense its insureds. In addition to naming the insureds as parties defendant, American joined two other defendants: Julie Belaga, in her capacity as EPA's Regional Administrator, and Daniel S. Greenbaum, in his capacity as Commissioner of the DEP. Invoking the officer removal statute, 28 U.S.C. § 1442(a)(1), Belaga transferred the action to federal district court. 2

On February 20, 1992, DEP agreed to be bound by a declaration of rights in American's lawsuit insofar as the judgment resolves insurance coverage issues. The case proceeded against Belaga and the insureds. On May 12, 1992, the district court granted Belaga's motion to dismiss, reasoning that a suit against her, in her official capacity, was really a suit against EPA and that, since EPA had never sued Nyacol or brought an enforcement proceeding against it, American could articulate no justiciable controversy with EPA. The court entered final judgment for Belaga, see Fed.R.Civ.P. 54(b), and remanded all other parties and claims to the state court. American appeals from the dismissal order.

II

While the parties vigorously debate an insurance company's ability, consistent with Article III's case or controversy requirement, to join EPA in a coverage dispute before EPA has brought an enforcement action against the insureds, our discussion seeps into vastly different legal ground. The impetus behind this diversion lies in the Supreme Court's opinion in International Primate Protection League v. Administrators of Tulane Educ. Fund, --- U.S. ----, 111 S.Ct. 1700, 114 L.Ed.2d 134 (1991). Concerned about the implications of Primate Protection League for federal court jurisdiction, we requested supplemental briefing on whether this action was properly removed to federal court. Both sides responded that removal was valid under 28 U.S.C. § 1442(a)(1) because of Belaga's status as a federal officer.

Notwithstanding this accord, we must pursue the matter. Litigants cannot confer subject matter jurisdiction by agreement. See Insurance Corp. of Ir. v. Compagnie des Bauxites, 456 U.S. 694, 702, 102 S.Ct. 2099, 2104, 72 L.Ed.2d 492 (1982); California v. LaRue, 409 U.S. 109, 113 n. 3, 93 S.Ct. 390, 394 n. 3, 34 L.Ed.2d 342 (1972). Because a federal court is under an unflagging duty to ensure that it has jurisdiction over the subject matter of the cases it proposes to adjudicate, we are obliged to address the propriety of removal as a threshold matter even though neither party has raised a question in that regard. See Mansfield, Coldwater & Lake Michigan Ry. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct.

510, 511, 28 L.Ed. 462 (1884) (stating that a federal appellate court, on its own motion, must "deny its own jurisdiction, and, in the exercise of its appellate power, that of all other courts of the United States, in all cases where such jurisdiction does not affirmatively appear in the record").

A

The officer removal statute, 28 U.S.C. § 1442(a)(1), quoted supra note 2, is designed to allow federal officers to remove actions to federal court that would otherwise be unremovable. See Willingham v. Morgan, 395 U.S. 402, 406-07, 89 S.Ct. 1813, 1815-16, 23 L.Ed.2d 396 (1969) (stating that the section covers all cases in which federal officers, sued in state court, "can raise a colorable defense arising out of their duty to enforce federal law"). 3 In Primate Protection League, the Supreme Court held that the reference to "any agency" of the United States contained in the officer removal statute did not stand alone, but constituted part of a possessive phrase modifying the noun "officer." See --- U.S. at ----, 111 S.Ct. at 1705. Put another way, the statute is to be read as if a second "of" appeared in the text immediately following the disjunctive "or." Hence, section 1442(a)(1) permits removal by an "officer of ... any agency [of the United States]," and, conversely, does not permit removal by the federal agency itself. See id. at ----, 111 S.Ct. at 1709.

Although Primate Protection League makes it crystal clear that EPA, as a federal agency, cannot remove an action to federal court under color of section 1442(a)(1), this case presents a variation on the theme: it requires that we decide the closely related, but nonetheless different, question of whether, for purposes of the officer removal statute, a suit brought against an executive of an agency, exclusively in the executive's official capacity, constitutes a suit against an "officer," thereby permitting removal under the statute, or a suit against an "agency," thereby precluding such removal. It is to this inquiry that we now turn. 4

B

Generally, a suit against an officer in the officer's official capacity constitutes a suit against the governmental entity which the officer heads. For example, in Kentucky v. Graham, 473 U.S. 159, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985), the Court dwelt on the distinction between suits against a person in an individual, as opposed to official, capacity. The Court explained that while individual-capacity actions "seek to impose personal liability upon a government official," id. at 165, 105 S.Ct. at 3105 (emphasis supplied), payable out of personal assets, see id. at 166, 105 S.Ct. at 3105, an official-capacity action is, "in all respects other than name, to be treated as a suit against the entity." Id. Phrased differently, "official-capacity suits generally represent only another way of pleading an action against an entity of which an officer is an agent." Monell v. New York City Dep't of Social Servs., 436 U.S. 658, 690 n. 55, 98 S.Ct. 2018, 2035, n. 55, 56 L.Ed.2d 611 (1978). Thus, a string of Supreme Court cases holds that a suit against a government officer in his or her official capacity binds the agency or other governmental entity, not the officer personally. See, e.g., Graham, 473 U.S. at 166, 105 S.Ct. at 3105; Brandon v. Holt, 469 U.S. 464, 471, 105 S.Ct. 873, 877, 83 L.Ed.2d 878 (1985); cf. Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 687, 69 S.Ct. 1457, 1460, 93 L.Ed. 1628 (1949) (explaining that, in deciding whether a suit against a government officer is an official-capacity or individual-capacity suit, "the crucial question is whether the relief sought ... is relief against the sovereign").

The character of an official-capacity suit is not transformed simply because jurisdiction is in issue. In Loeffler v. Frank, 486 U.S. 549, 108 S.Ct. 1965, 100 L.Ed.2d 549 (1988), a case in which the plaintiff sued the Postmaster General in his official capacity, the Court held that acts of a government officer in his official capacity "are always chargeable" as acts of the agency for purposes of a sue-and-be-sued clause. Id. at 563 n. 8, 108 S.Ct. at 1973 n. 8; see also FHA v. Burr, 309 U.S. 242, 249-50, 60 S.Ct. 488, 492-93, 84 L.Ed. 724 (1940) (holding that a suit against the head of an agency in his official capacity was indistinguishable from a suit against the agency itself for purposes of a sue-and-be-sued clause and that a waiver of immunity as to the agency head necessarily waived the agency's immunity). Similarly, even when pondering jurisdictional and...

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