New Mexico ex rel. Balderas v. Monsanto Co.

Decision Date09 April 2020
Docket NumberCase No. 19-cv-01139 WJ-GBW
Citation454 F.Supp.3d 1132
Parties The State of NEW MEXICO, EX REL. Hector BALDERAS, Attorney General, Plaintiff, v. MONSANTO CO., Solutia, Inc., and Pharmacia LLC, Defendants.
CourtU.S. District Court — District of New Mexico

Cholla Khoury, Anne Minard, New Mexico Office of the Attorney General, Santa Fe, NM, Marcus J. Rael, Jr., Robles, Rael & Anaya, PC, Albuquerque, NM, Jason Wilson, Pro Hac Vice, Kyle McGee, Pro Hac Vice, Viola Vetter, Pro Hac Vice, Grant & Eisenhofer, P.A., Wilmington, DE, for Plaintiff.

Aaron E. Schwartz, Pro Hac Vice, Adam E. Miller, Pro Hac Vice, Capes Sokol, St. Louis, MO, Timothy C. Holm, Alex Cameron Walker, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, NM, for Defendants.

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

WILLIAM P. JOHNSON, CHIEF UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court upon a Motion to Remand filed by Plaintiff on December 23, 2019 (Doc. 8) . Having reviewed the parties’ pleadings and the applicable law, the Court finds that Plaintiff State of New Mexico's Motion is well-taken and, therefore, is GRANTED.

BACKGROUND

This lawsuit involves the transboundary transport of polychlorinated biphenyls ("PCBs") to and from areas outside of New Mexico. On May 29, 2019, Plaintiff, the State of New Mexico through its Attorney General (hereinafter "the State") filed a lawsuit against Defendants Monsanto Company ("Monsanto"), Solutia, Inc. ("Solutia"), and Pharmacia LLC ("Pharmacia") (collectively, "Defendants" or "Monsanto"), in the First Judicial District Court, County of Santa Fe to recover damages associated with Defendants’ alleged contamination of New Mexico's natural resources with toxic PCBs manufactured, marketed, and sold by Monsanto. Doc. 1-1. Defendants removed the case to federal court on December 4, 2019, claiming that removal is authorized under 28 U.S.C. § 1441(a) (general removal statute); § 1331 (federal question for "federal enclave" jurisdiction); and § 1442(a)(1) (federal officer removal). In this motion, the State requests that the Court remand this matter back to state court because Defendants have failed to show any basis for federal officer, federal enclave, or federal question jurisdiction.

The complaint alleges that Monsanto knew for decades that PCBs were toxic and were widely contaminating natural resources and living organisms because of their foreseeable use and disposal, yet Monsanto concealed these facts and continued producing and promoting PCBs until Congress enacted the Toxic Substances Control Act ("TSCA") which banned the manufacture of PCBs as of January 1, 1978. 15 U.S.C. § 2605(3). The State also alleges that Monsanto exacerbated the contamination from PCBs by instructing customers to dispose of PCBs in landfills, knowing that landfills were not suitable for PCB contaminated waste. The State asserts the following claims in the complaint and seeks compensatory and injunctive relief at law and in equity, as well as civil penalties under the relevant statutes:

First Cause of Action: Public Nuisance
Second Cause of Action: Design Defect
Third Cause of Action: Failure to Warn and Instruct
Fourth Cause of Action: Negligence
Fifth Cause of Action: Unjust Enrichment
Sixth Cause of Action: Violations of Unfair Practices Act ( NMSA 1978, §§ 57-12-1, et seq. )

Monsanto claims that Plaintiff paints an "incomplete and misleading picture of PCBs and Old Monsanto's manufacturing practices." Doc. 22 at 2.1 Monsanto describes commercial production of PCBs as a response to the electrical industry's need for materials that would provide increased fire resistance when used in transformers and capacitors, making PCBs "attractive for numerous industrial applications" because PCBs reduced the risk of costly and deadly fires. Monsanto claims that it also produced PCBs for decades as a federal officer, charged with supplying to the United States Government ("Government") and its military contractors for national defense purposes including multiple wars, from World War II through the 1970's. Old Monsanto produced PCBs at facilities financed by the Government pursuant to "Certificates of Necessity" in order to fulfill national defense needs and to conform to federal specifications for military needs. Defendant further contends that in the 1970's, after Old Monsanto ceased selling PCBs to private industry due to environmental concerns, the Government "compelled" it to sell PCBs to military contractors pursuant to the Defense Production Act, deeming PCBs critical to the national defense.

Monsanto also contends that while it may be responsible for the majority of PCB manufacture, PCBs were produced globally by other manufacturers and that "byproduct PCBs" are introduced everyday into the environment by consumers including public entities such as the State. However, the merits of the State's claims and the extent of the damages allegedly caused by Monsanto are not before the Court in this motion. The only issue to be considered here is whether removal of this case was proper.

DISCUSSION

Federal courts are courts of limited jurisdiction; there is a presumption against removal jurisdiction, which the defendant seeking removal must overcome. Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001). Removal statutes are strictly construed, and ambiguities should be resolved in favor of remand. See Laughlin v. Kmart Corp. , 50 F.3d 871, 873 (10th Cir. 1995) (under 28 U.S.C. § 1441(a), there is a strong presumption against removal jurisdiction" and doubtful cases must be resolved in favor of remand). The defendant seeking removal must establish that federal court jurisdiction is proper "by a preponderance of the evidence." McPhail v. Deere & Co. , 529 F.3d 947, 953 (10th Cir. 2008) ; see also De La Rosa v. Reliable, Inc. , 113 F. Supp. 3d 1135, 1151 (D.N.M. 2015).

The State contends that there is no legal basis for removal under either 28 U.S.C. § 1331 or § 1442(a)(1), offering several arguments in support of remand.

I. Monsanto is not a Federal Officer

Monsanto's removal notice claims "federal officer" jurisdiction under 28 U.S.C. § 1442 based on assertions that it sold its PCBs to federal contractors and that it was ordered by the Government to provide PCBs that it did not want to provide.

Section 1442(a)(1) permits removal of a state court action against "any person acting under [an officer] ... of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office." 28 U.S.C. § 1442. For § 1442(a)(1) to constitute a basis for removal, a private corporation must show:

(1) that it acted under the direction of a federal officer;
(2) that there is a causal nexus between the plaintiff's claims and the acts the private corporation performed under the federal officer's direction; and
(3) that there is a colorable federal defense to the plaintiff's claims.

Bd. of Cty. Commissioners of Boulder Cty. v. Suncor Energy (U.S.A.) Inc. , 405 F. Supp. 3d 947, 975 (D. Colo. 2019) (citing Greene v. Citigroup, Inc. , No. 99-1030, 2000 WL 647190, at *6 (10th Cir. May 19, 2000) ).

While federal officer removal is read "expansively" in suits involving federal officials, it is read "narrowly where ... only the liability of a private company purportedly acting at the direction of a federal officer is at issue." Mobley v. Cerro Flow Prods., Inc. , No. 09-697-GPM, 2010 WL 55906, at *3 & n.4 (S.D. Ill. Jan. 5, 2010) ; see Watson v. Philip Morris Companies, Inc. , 551 U.S. 142, 147, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007) (liberal construction of § 1442 "can find limits in a text's language, context, history and purposes"). The State contends that this lawsuit does not implicate the purposes of § 1442 because it does not seek to protect a federal officer from prosecution under state law in a state court. Rather this lawsuit seeks to hold Monsanto, a private company, accountable for contamination of a sovereign's natural resources. Moreover, the State contends that Monsanto is not a federal officer because (i) Monsanto was a mere vendor and not an arm of the Government, (ii) Monsanto did not act under the direction of a federal officer that is causally connected to the claims presented in this case, and (iii) Monsanto did not produce PCBs under any government contract or specifications.

A. "Acting Under"

For purposes of section 1442, "acting under" a federal officer "must involve an effort to assist, or to help carry out, the federal superior's duties or tasks." Watson v. Philip Morris Cos. , 551 U.S. 142, 152, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007). Cases in which the Supreme Court has approved removal involve defendants "working hand-in-hand with the federal government to achieve a task that furthers an end of the federal government." Bailey v. Monsanto Co. , 176 F. Supp. 3d 853, 869-870 (E. D. Mo. 2016) ; Ruppel v. CBS Corp., 701 F.3d 1176, 1181 (7th Cir. 2012).

The assistance that private contractors provide federal officers "goes beyond simple compliance" with the law and helps officers fulfill other basic governmental tasks." Watson , 551 U.S. at 153, 127 S.Ct. 2301 ("Government contractors fall within the terms of the federal officer removal statute, at least when the relationship between the contractor and the Government is an unusually close one involving detailed regulation, monitoring, or ‘supervision’ ").

In its Notice of Removal, Monsanto claims that between 1929 and 1977, it sold PCB products to the U.S. Army and Navy and to Government agencies such as the Tennessee Valley Authority, the U.S. Department of Agriculture and NASA. Doc. 1 at 18, ¶54. The State argues that Monsanto did not sell its PCB products under a direct contract with the Government but instead sold those products to government contractors rather than directly to the Government. The State's position appears to be supported by the evidence. The exhibits cited by Monsanto are...

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