Cent. W. Va. Reg'l Airport Auth., Inc. v. Triad Eng'g, Inc., Civil Action No. 2:15-cv-11818

• Decision Date: 18 February 2016
• Docket Number: Civil Action No. 2:15-cv-11818
• Court: U.S. District Court — Southern District of West Virginia
• Parties: CENTRAL WEST VIRGINIA REGIONAL AIRPORT AUTHORITY, INC., Plaintiff v. TRIAD ENGINEERING, INC.; CAST & BAKER CORPORATION; MICHAEL BAKER INTERNATIONAL, INC.; WEST VIRGINIA PAVING, INC.; SENEX EXPLOSIVES INC.; AFFORDABLE ASPHALT MAINTENANCE CORPORATION; ENGINEERED ARRESTING SYSTEMS CORPORATION; ROYAL TEN CATE (USA), INC.; NOVEL GEO-ENVIROMENTAL, LLC; JMD COMPANY, INC.; ARCHITECTS & ENGINEERS INSURANCE COMPANY; ERIE INSURANCE GROUP; GREAT AMERICAN INSURANCE COMPANY; HDI-GERLING AMERICA INSURANCE COMPANY; LANCER INSURANCE COMPANY; LIBERTY MUTUAL INSURANCE COMPANY; OHIO FARMERS INSURANCE COMPANY; WESTFIELD INSURANCE COMPANY; XL INSURANCE AMERICA, INC.; NEW HAMPSHIRE INSURANCE COMPANY; AIG AEROSPACE INSURANCE SERVICES, INC.; CINCINNATI INSURANCE COMPANY; TRAVELERS INDEMNITY COMPANY; ACE AMERICAN INSURANCE COMPANY; JOHN DOE INSURANCE COMPANY 1; JOHN DOE INSURANCE COMPANY 2; JOHN DOE INSURANCE COMPANY 3; JOHN DOE INSURANCE COMPANIES 4-20; JOHN DOES NOS 1 THROUGH 20, Defendants

CENTRAL WEST VIRGINIA REGIONAL AIRPORT AUTHORITY, INC., Plaintiff v. TRIAD ENGINEERING, INC.; CAST & BAKER CORPORATION;

MICHAEL BAKER INTERNATIONAL, INC.; WEST VIRGINIA PAVING, INC.;

SENEX EXPLOSIVES INC.; AFFORDABLE ASPHALT MAINTENANCE CORPORATION;

ENGINEERED ARRESTING SYSTEMS CORPORATION; ROYAL TEN CATE (USA), INC.;

NOVEL GEO-ENVIROMENTAL, LLC; JMD COMPANY, INC.;

ARCHITECTS & ENGINEERS INSURANCE COMPANY; ERIE INSURANCE GROUP;

GREAT AMERICAN INSURANCE COMPANY; HDI-GERLING AMERICA INSURANCE COMPANY;

LANCER INSURANCE COMPANY; LIBERTY MUTUAL INSURANCE COMPANY;

OHIO FARMERS INSURANCE COMPANY; WESTFIELD INSURANCE COMPANY;

XL INSURANCE AMERICA, INC.; NEW HAMPSHIRE INSURANCE COMPANY;

AIG AEROSPACE INSURANCE SERVICES, INC.; CINCINNATI INSURANCE COMPANY;

TRAVELERS INDEMNITY COMPANY; ACE AMERICAN INSURANCE COMPANY;

JOHN DOE INSURANCE COMPANY 1; JOHN DOE INSURANCE COMPANY 2;

JOHN DOE INSURANCE COMPANY 3; JOHN DOE INSURANCE COMPANIES 4-20;

JOHN DOES NOS 1 THROUGH 20, Defendants

Civil Action No. 2:15-cv-11818

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF WEST VIRGINIA AT CHARLESTON

February 18, 2016

MEMORANDUM OPINION AND ORDER

Pending is defendants' motion for Leave to Amend Notice of Removal, filed September 14, 2015.

Background

Defendant Engineered Arresting Systems Corporation, doing business as Zodiac Arresting Systems America ("Zodiac"), timely filed a notice of removal in this case on August 5, 2015. On September 14, Zodiac moved to amend its original notice of removal pursuant to 28 U.S.C. § 1653, which provides that "Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts."

Zodiac's original notice stated that removal was proper under 28 U.S.C. §§ 1331 and 1441 based on the doctrine of complete preemption. Not. of Removal ¶ 4. The proposed amendment would add 28 U.S.C. § 1442, the "federal officer" removal statute, as a basis for removal, and would present substantial new material justifying removal thereunder.

Zodiac's proposed amendment first adds several references to § 1442 and its elements. See Am. Not. Of Removal at *3 (noting "Zodiac's status as a person acting under an officer of an agency of the United States," and stating that removal is proper under § 1442 because "at all times relative to Plaintiffs' Complaint, Zodiac was acting under the authority of and pursuant to direction and control by the Federal Aviation Administration"). The proposed amendment also includes more than a full page of new factual and legal statements that set out and justify the § 1442 removal theory:

12. The FAA's control, oversight, participation and final design approval authority of the EMAS [engineered material arresting system] system designed by Zodiac render this case removable under 28 U.S.C. § 1442(a).

13. As observed in Virden v. Altria Group, Inc., 304 F.Supp.2d 832, 843 (N.D. W.Va. 2004), in order to remove an action pursuant to 28 U.S.C. § . . . 1442(a), a defendant must establish that (1) it is a "person" within the meaning of the statute, (2) it acted under the direction of a federal officer, (3) it has a colorable federal defense to the plaintiffs' claims, and (4) there is a causal nexus or connection between the plaintiffs' claims and acts it performed under color of federal office.

14. In the present case, Zodiac meets all criteria required to assert Federal Officer Removal Jurisdiction. First, Zodiac is a person within the meaning of 28 U.S.C. § 1442(a). See Virden., 304 F.Supp.2d 844 (noting that corporations are considered "persons" under 28 U.S.C. § 1442 ).

Second, based on the level of control and oversight exerted by the FAA in the design and construction of the EMAS system, Zodiac acted underthe direction of the FAA.

Third, Zodiac has a colorable federal defense to the Authority's claims. Because the FAA approved reasonably precise design specifications for the EMAS system, the EMAS system conformed to those specifications (as evidenced by the FAA's approval of Zodiac's design for the EMAS system), and Zodiac was unaware of any dangers in the use of the EMAS system, Zodiac can claim protection under the government contractor defense. See Boyle v. United Technologies Corp., 487 U.S. 500, 108 S. Ct. 2510, 101 L.Ed.2d 442 (1988).

Fourth, there is a causal connection between the Authority's claims and acts Zodiac performed under color of federal office. Specifically, the Authority alleges that Zodiac was negligent with respect to the design, construction, inspection, analysis, testing, engineering, supervision of and installation of the EMAS system. Zodiac designed, inspected, analyzed and engineered the EMAS system subject to the oversight, control and approval of the FAA.

See Am. Not. of Removal at *6-7. The proposed Amended Notice contains various other minor changes that mention or support the § 1442 argument. See, e.g., id. at *2 (stating that removal basis includes § 1442); *7 (mentioning federal officer removal statute); *9-10 (contending that co-defendants' consent to remove under § 1442 is unnecessary).

In its motion to amend the notice, Zodiac concedes that § 1442 was "not specifically cited in the initial Notice of Removal." Mot. for Leave to Amend Not. of Removal of Def. Engineered Arresting Systems Corp. (hereinafter "Mot. to AmendNot. of Removal") at *1. But Zodiac contends that "the allegations [in the original notice] give rise to federal jurisdiction under 28 U.S.C. § 1442," and that the amendment will simply allow the notice "to specifically state that jurisdiction is proper . . . pursuant to 28 U.S.C. § 1442." Id. at *1-2. In Zodiac's view, the original notice supports "federal officer" removal for two reasons. First, the plaintiff's legal theory is that defendants were negligent in completing several construction projects at the airport, and, second, the original removal notice states that the FAA regulates the design, construction, and other components of these projects. Id. at *1-2.

Plaintiff opposes the motion to amend, arguing that Zodiac's proposed addition "does far more than correct defective allegations" as allowed by 28 U.S.C. § 1653. Plaintiff contends, in particular, that defendant does not seek to "correct[] factual allegations that are incorrect or 'imperfectly stated,'" but instead wishes to add "[e]ntirely new grounds for jurisdiction," which are "beyond the scope of section 1653." Pl. Resp. to Mot. for Leave to Amend Not. of Removal of Def. Engineered Arresting Systems Corp. (hereinafter "Pl. Resp.") at *7. Plaintiff notes that Zodiac's amendment "isboth a new ground for removal [and] requires extensive additional allegations . . . that were not present in the original notice of removal." Pl. Resp. at *9.

Zodiac's reply asserts that "[t]he additional allegations" in the amendment "cannot be characterized as facts, but legal conclusions concerning jurisdiction." Rep. in Supp. of Mot. for Leave to Amend Not. of Removal at *2. Zodiac analyzes each proposed addition to its notice, and attempts to show how each addition is a purely legal conclusion, or a factual assertion based on material that was present in the original notice. Id. at *9-12.

Legal Standard

"[T]he strict time limit of 28 U.S.C. § 1446(b)" requires that defendants file a notice of removal "within thirty days" of receiving copies of an initial pleading. W. Va. v. Minn. Mining & Mfg. Co., 354 F.Supp.2d 660, 668 (S.D.WV 2005). Within these thirty days, amendment is allowed for "either missing or imperfectly stated grounds for removal." Muhlenbeck v. K.I., LLC, 304 F.Supp.2d 797, 799 (E.D.Va. 2004). "After the thirty-day removal period, a defendant may amend its removal petition with leave of court, pursuant to 28 U.S.C. § 1653,which provides that '[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.'" Id.

The Fourth Circuit has recently clarified and simplified the standard for amendment under § 1653. See Wood v. Crane Co., 764 F.3d 316 (4th Cir. 2014). Whether a notice of removal may be amended under § 1653 depends on whether the amendment would "correct allegations already present in the notice of removal," which is permissible, or whether it "furnish[es] new allegations of a jurisdictional basis," which is not allowed. Id. at 323. In general, "amendment is appropriate for technical changes, such as the exact grounds underlying diversity jurisdiction." Id.

The court in Wood gave specific examples of permissible "technical changes," which involved the correction of minor errors or updates of the parties' domiciles. Id. at 323-24. A defendant has been allowed to amend a notice of removal stating that a party is a "Kentucky corporation" so that the notice instead states that Kentucky is the party's "principal place of business." See Nutter v. New Rents, Inc., No. 90-2493, 1991 WL 193490, at *2 (4th Cir. Oct. 1, 1991). In another case, a notice of removal was deemed amended to update aplaintiff's domicile from Ohio to Pennsylvania when either state would have supported diversity jurisdiction. Yarnevic v. Brink's, Inc., 102 F.3d 753, 754-55 (4th Cir. 1996). Particularly relevant in Yarnevic was that the defendant had already removed the case properly using plaintiff's previous address, such that "change of domicile information simply added new evidence to rebut [the] motion to remand." Wood, 764 F.3d at 324 (quoting Yarnevic, 102 F.3d at 755).

Defendant Zodiac contends that Supreme Court cases, or decisions of our court of appeals, distinguish sharply between amendments adding "jurisdictional facts," as opposed to amendments adding "jurisdictional allegations," or legal bases for removal, and that courts generously allow amendments adding the latter but not the former. See Rep. in Supp. of Mot. for Leave to Amend Not. of Removal at *1-2.

That is not a correct view of the applicable law. First, the text of § 1653 refers to "allegations," which may be either legal or factual. Probably the most frequent amendment allowed under § 1653 is a...