Riggs v. Airbus Helicopters, Inc., 092019 FED9, 18-16396

Docket Nº:18-16396
Opinion Judge:RAWLINSON, CIRCUIT JUDGE.
Party Name:Mary Riggs, as Personal Representative of the Estate of Jonathan Neil Udall, for the benefit of the Estate of Jonathan Neil Udall, and Philip and Marlene Udall as Next of Kin and Natural Parents of Jonathan Neil Udall, deceased, Plaintiff-Appellee, v. Airbus Helicopters, Inc., Defendant-Appellant, v. Matthew Hecker; Daniel Friedman; Brenda ...
Attorney:Carter G. Phillips (argued), Sidley Austin LLP, Washington, D.C.; Yvette Ostolaza and Robert S. Velevis, Sidley Austin LLP, Dallas, Texas; David R. Carpenter, Sidley Austin LLP, Los Angeles, California; James J. Pisanelli and Todd L. Bice, Pisanelli Bice PLLC, Las Vegas, Nevada; for Defendant-App...
Judge Panel:Before: Mary M. Schroeder, Diarmuid F. O'Scannlain, and Johnnie B. Rawlinson, Circuit Judges. O'SCANNLAIN, Circuit Judge, dissenting:
Case Date:September 20, 2019
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Mary Riggs, as Personal Representative of the Estate of Jonathan Neil Udall, for the benefit of the Estate of Jonathan Neil Udall, and Philip and Marlene Udall as Next of Kin and Natural Parents of Jonathan Neil Udall, deceased, Plaintiff-Appellee,

v.

Airbus Helicopters, Inc., Defendant-Appellant,

v.

Matthew Hecker; Daniel Friedman; Brenda Halvorson; Geoffrey Edlund; Elling B. Halvorson;John Becker; Elling Kent Halvorson; Lon A. Halvorson; Scott Booth; Papillon Airways, Inc., DBA Papillon Grand Canyon Helicopters; Xebec LLC, Defendants-Appellees.

No. 18-16396

United States Court of Appeals, Ninth Circuit

September 20, 2019

Argued and Submitted February 14, 2019 San Francisco, California

Appeal from the United States District Court D.C. No. 2:18-cv-00912-JCM-GWF for the District of Nevada James C. Mahan, District Judge, Presiding

Carter G. Phillips (argued), Sidley Austin LLP, Washington, D.C.; Yvette Ostolaza and Robert S. Velevis, Sidley Austin LLP, Dallas, Texas; David R. Carpenter, Sidley Austin LLP, Los Angeles, California; James J. Pisanelli and Todd L. Bice, Pisanelli Bice PLLC, Las Vegas, Nevada; for Defendant-Appellant.

Gary C. Robb (argued) and Anita Porte Robb, Robb & Robb LLC, Kansas City, Missouri; Lawrence J. Smith, Bertoldo Baker Carter & Smith, Las Vegas, Nevada; for Plaintiffs-Appellees.

Patrick J. Kearns (argued), Wilson Elser Moskowitz Edelman & Dicker LLP, San Diego, California, for Defendants-Appellees.

Lauren L. Haertlein, General Aviation Manufacturers Association, Washington, D.C., for Amicus Curiae General Aviation Manufacturers Association.

Before: Mary M. Schroeder, Diarmuid F. O'Scannlain, and Johnnie B. Rawlinson, Circuit Judges.

SUMMARY[*]

Federal Officer Removal Statute

The panel affirmed the district court's order granting motions to remand to state court a case that had been removed to federal court pursuant to 28 U.S.C. § 1442(a)(1).

Following a fatal helicopter crash, plaintiffs filed suit in Nevada state court against the owners of the helicopter and the manufacturer, Airbus Helicopters, Inc. Airbus removed the action to federal court on the basis of § 1442(a)(1), which permits removal of an action against "any officer (or any person acting under that 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."

Federal Aviation Administration regulations set forth standards for certification of helicopters. Pursuant to 49 U.S.C. § 44702(d)(1), the FAA delegated to Airbus the authority to issue Supplemental Certificates for design changes to type-certified aircraft.

Agreeing generally with the Seventh Circuit, and applying Watson v. Philip Morris Cos., 551 U.S. 142 (2007), the panel held that Airbus failed to meet the "acting under" requirement of § 1442(a)(1) because, in issuing Supplemental Certificates pursuant to its FAA delegation, Airbus was merely complying with regulatory standards. The panel concluded that an aircraft manufacturer does not act under a federal officer when it exercises designated authority to certify compliance with governing federal regulations.

Dissenting, Judge O'Scannlain wrote that Airbus acted under a federal agency because it undertook duties on the FAA's behalf, and the majority's contrary holding misunderstood the FAA's regulatory regime and misapplied Watson.

OPINION

RAWLINSON, CIRCUIT JUDGE.

Appellant-Defendant Airbus Helicopters, Inc. (AHI) appeals the district court's order granting motions to remand to state court. AHI contended that it properly removed this case to federal district court pursuant to 28 U.S.C. § 1442(a)(1) (§ 1442(a)(1)). According to AHI, the district court erroneously determined that AHI did not satisfy the "acting under" requirement of § 1442(a)(1). Reviewing de novo, we affirm the judgment of the district court.

I. BACKGROUND

In February, 2018, John Udall, a resident of the United Kingdom, was killed in a helicopter crash while touring the Grand Canyon. The helicopter (Crashed Helicopter) was owned and operated by several of the Hecker Defendants[1] and manufactured by AHI.

Plaintiff-Appellee Mary Riggs (Riggs) filed this action in Nevada state court against AHI and the Hecker Defendants, alleging that the Crashed Helicopter was defectively designed because the fuel tank was not crash-resistant, and could not withstand an impact of a minimal or moderate nature without bursting into flames and engulfing the passenger compartment.[2]

AHI removed the case to federal district court, asserting § 1442(a)(1) as the basis for removal. That provision permits removal to federal court of an action against "any officer (or any person acting under that 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(a)(1). Riggs and the Hecker Defendants separately moved to remand the case to Nevada state court, on the basis that AHI did not meet the requirements of § 1442(a)(1).

While the motions to remand were pending before the district court, AHI moved to dismiss the lawsuit pursuant to Federal Rule of Civil Procedure 12(b)(2) and (b)(6).3

The district court granted Hecker and Riggs's motions to remand. Noting that we have not directly addressed § 1442(a)(1) removal based on an FAA delegation, the district court relied primarily on the Seventh Circuit decision of Lu Junhong v. Boeing Co., 792 F.3d 805 (7th Cir. 2015) addressing an almost identical situation. After applying the reasoning set forth in Lu Junhong, the district court ruled that AHI failed to meet the "acting under" requirement of § 1442(a)(1) because AHI's activities "pursuant to its [Federal Aviation Administration] delegation are rule compliance rather than rule making."

II. STANDARD OF REVIEW

"We review de novo a district court's decision to remand a removed case . . ." Corona-Contreras v. Gruel, 857 F.3d 1025, 1028 (9th Cir. 2017) (citation omitted).

III. DISCUSSION

Before turning to the issue before us, we first review the statutory framework that sets the stage for our decision.

Congress has charged the Federal Aviation Administration (FAA) with regulating aviation safety in the United States pursuant to the Federal Aviation Act, 49 U.S.C. § 40101, et seq. See Martin ex rel. Heckman v. Midwest Exp. Holdings, Inc., 555 F.3d 806, 808 (9th Cir. 2009). Pursuant to this authority, the FAA promulgated the Federal Aviation Regulations (FARs). See 14 C.F.R. § 1.1 et. seq. Standards for certification of helicopters, such as the Crashed Helicopter, are set forth in 14 C.F.R. § 27.1.

After demonstrating compliance with the FARs, an aircraft owner may obtain a certificate from the FAA approving the aircraft's design. See 49 U.S.C. § 44704(a)(1); 14 C.F.R. §§ 21.21, et. seq. The FAA requires a supplemental type certificate (Supplemental Certificate) for any design changes to a type-certificated aircraft. See 49 U.S.C. § 44704(b). Therefore, AHI could make no design change to the Crashed Helicopter absent the issuance of a Supplemental Certificate.

To help ameliorate the effect of the FAA's limited resources, 49 U.S.C. § 44702(d)(1) provides that the FAA "may delegate to a qualified private person . . . a matter related to–(A) the examination, testing, and inspection necessary to issue a certificate under this chapter; and (B) issuing the certificate." The Eighth Circuit has described this delegation approach as a means of "reducing governmental costs [and] eas[ing] the burden of regulation on the aviation community by expediting the issuance of requested certifications." Charlima, Inc. v. United States, 873 F.2d 1078, 1081 (8th Cir. 1989).

Pursuant to 49 U.S.C. § 44702(d)(1), the FAA instituted the Organization Designation Authorization (Designation) program to delegate to organizations, such as AHI, the FAA's authority to inspect aircraft designs and issue certifications. See 14 C.F.R. § 183.41. An FAA Designation "allows an organization to perform specified functions on behalf of the Administrator related to engineering, manufacturing, operations, airworthiness, or maintenance." 14 C.F.R. § 183.41(a). In 2009, AHI became an FAA-certified Designation holder with authority to issue Supplemental Certificates.4

The ongoing dispute in this appeal is whether AHI satisfies the "acting under" prong of § 1442(a)(1). AHI contends that it was formally delegated legal authority from the FAA, and that this delegation establishes that it was acting under the federal government for purposes of § 1442(a)(1). As an FAA delegee, AHI asserts that it does more than merely comply with federal law–it assists in...

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