State ex rel. Biser v. United States

• Decision Date: 29 July 2021
• Docket Number: No. 20-1783,20-1783
• Citation: 7 F.4th 160
• Parties: STATE of North Carolina, ex rel.; Elizabeth S. Biser; North Carolina Department of Environmental Quality, Division of Air Quality, Plaintiffs – Appellants, v. UNITED STATES of America; United States Department of the Navy; United States Marine Corps ; Marine Corps Air Station Cherry Point, Defendants – Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

7 F.4th 160

STATE of North Carolina, ex rel.; Elizabeth S. Biser; North Carolina Department of Environmental Quality, Division of Air Quality, Plaintiffs – Appellants,

v.UNITED STATES of America; United States Department of the Navy; United States Marine Corps ; Marine Corps Air Station Cherry Point, Defendants – Appellees.

No. 20-1783

United States Court of Appeals, Fourth Circuit.

Argued: May 5, 2021

Decided: July 29, 2021

ARGUED: Sarah Gardner Boyce, NORTH CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellants. Robert Lundman, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Joshua H. Stein, Attorney General, Ryan Y. Park, Solicitor General, Mary S. Crawley, Assistant Attorney General, NORTH CAROLINA DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Jonathan D. Brightbill, Principal Deputy Assistant Attorney General, Eric Grant, Deputy Assistant Attorney General, David Gunter, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees.

Before MOTZ, KING, and AGEE, Circuit Judges.

Affirmed in part, reversed in part, and remanded for further proceedings by published opinion. Judge Motz wrote the opinion, in which Judge King joined. Judge Agee wrote an opinion concurring in part and dissenting in part.

DIANA GRIBBON MOTZ, Circuit Judge:

After a coal-powered Marine Corps facility failed an air quality compliance test, and so violated its state permit, North Carolina assessed a civil penalty against it. The Marine Corps facility refused to pay, so North Carolina brought suit in state court, seeking recovery of the unpaid penalty. The federal government defendants ("the United States") removed the case to federal court and sought dismissal, contending that the Clean Air Act does not waive sovereign immunity as to punitive civil penalties. North Carolina moved to remand the case to state court and, alternatively, opposed dismissal on sovereign immunity grounds.

The district court held for the United States on both fronts and dismissed the case. Because the Clean Air Act does not preclude removal but does waive sovereign immunity as to the penalty at issue here, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

I.

For several years, Marine Corps Air Station Cherry Point ("Cherry Point"), located in Craven County, North Carolina, generated heat from coal-fired steam boilers. Federal law requires all nonexempt federal facilities "engaged in any activity resulting ... in the discharge of air pollutants," including Cherry Point, to comply with state air quality provisions. See 42 U.S.C. § 7418(a). To that end, in 2014, Cherry Point obtained a North Carolina-issued permit authorizing operation of its steam boilers but imposing a cap on the emission of certain hazardous air pollutants.

Two years later, Cherry Point conducted mandatory tests to determine its compliance with the permit's limitations. Upon reviewing the results, North Carolina concluded that one of Cherry Point's steam boilers dramatically exceeded the permit's emissions cap. In light of this violation, the state imposed a civil penalty on Cherry Point of $8,000, plus $472 in investigation costs. When assessing the penalty, North Carolina also notified Cherry Point that, under state law, it had thirty days to submit payment, request remission, or file a petition for an administrative hearing.

Cherry Point did none of the above. Instead, it sent a letter to North Carolina maintaining that it need not pay the penalty "based on the legal principle of Federal sovereign immunity." Because Cherry Point declined to submit a signed remission form, North Carolina concluded that it could not process Cherry Point's letter as a remission request.

After two years of stalemate, North Carolina filed this suit in the Superior Court of Craven County, North Carolina, seeking recovery of the penalty, investigation costs, and accrued interest. A month later, the United States removed the case to the United States District Court for the Eastern District of North Carolina.

Once in federal district court, the United States moved to dismiss on sovereign immunity grounds. The following day, North Carolina filed a motion to remand the case to state court, contending that the Clean Air Act precludes removal. In the alternative, North Carolina opposed the motion to dismiss, arguing that two provisions of the Clean Air Act unambiguously waive the federal government's sovereign immunity as to punitive civil penalties levied pursuant to state air pollution laws. The district court agreed with the United States on both issues: It upheld removal and dismissed the case. North Carolina timely noted this appeal. We review the district court's resolution of both issues de novo . See Ripley v. Foster Wheeler LLC , 841 F.3d 207, 209 (4th Cir. 2016) ; Pittston Co. v. United States , 199 F.3d 694, 701 (4th Cir. 1999).

II.

We begin with the propriety of removal. The United States ordinarily enjoys an absolute right to remove cases to federal court. North Carolina, however, contends that the Clean Air Act carves out a novel exception to that right. Upon close examination, we cannot agree.

The United States removed this case pursuant to the federal officer removal statute, which provides that "[a] civil action ... that is commenced in a State court and that is against ... [t]he United States or any agency thereof" may be transferred to federal district court. 28 U.S.C. § 1442(a)(1). The Supreme Court has long "held that that the right of removal is absolute for conduct performed under color of federal office, and has insisted that the policy favoring removal ‘should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1).’ " Arizona v. Manypenny , 451 U.S. 232, 242, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981) (quoting Willingham v. Morgan , 395 U.S. 402, 407, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969) ). To that end, § 1442(a)(1) "ensure[s] a federal forum in any case where a federal [defendant] is entitled to raise a [federal] defense." Id. at 241, 101 S.Ct. 1657 (emphasis added); see also Jefferson Cty., Ala. v. Acker , 527 U.S. 423, 447, 119 S.Ct. 2069, 144 L.Ed.2d 408 (1999) (Scalia, J., concurring in part and dissenting in part) (noting that "the main point" of § 1442(a)(1) is to give federal defendants "a federal forum in which to litigate the merits of immunity defenses"). In 1996, when Congress amended § 1442(a)(1) to include "the United States or any agency thereof," Federal Courts Improvement Act of 1996, Pub. L. No. 104-317, § 206, 110 Stat. 3847, 3850, it did so to "fulfill[ ] Congress’ intent that questions concerning ... the scope of Federal immunity ... [would] be adjudicated in Federal court," S. Rep. 104-366, at 31 (1996); H.R. Rep. 104-798, at 20 (1996) (same).

The United States’ defense in this case — sovereign immunity — squarely implicates § 1442(a)(1) ’s core purpose. Nonetheless, North Carolina argues that the Clean Air Act's state suit provision, 42 U.S.C. § 7604(e), implicitly "carves out a narrow exception" to removal that precludes federal court adjudication of this federal immunity defense. Opening Br. at 33. In relevant part, § 7604(e) provides:

Nothing ... in any other law of the United States shall be construed to prohibit, exclude, or restrict any State ... from bringing any enforcement action or obtaining any judicial remedy or sanction in any State or local court ... against the United States ... under State or local law respecting control and abatement of air pollution.

42 U.S.C. § 7604(e).

Relying on the Ninth Circuit's decision in California ex rel. Sacramento Metro. Air Quality Mgmt. Dist. v. United States , North Carolina contends that § 7604(e) "guarantee[s] the right of state and local governments to obtain judicial remedies and sanctions in state and local courts." 215 F.3d 1005, 1011 (9th Cir. 2000). As such, North Carolina argues that § 7604(e) tacitly "nullifies" any law "that operates to ‘prohibit, exclude, or restrict’ a State from securing judicial relief against the federal government" in state court. Opening Br. at 26 (quoting 42 U.S.C. § 7604(e) ). In North Carolina's view, § 1442(a)(1) constitutes such a law because removal prevents a state court from proceeding "further unless and until the case is remanded," BP P.L.C. v. Mayor & City Council of Balt. , ––– U.S. ––––, 141 S.Ct. 1532, 1539, 209 L.Ed.2d 631 (2021) (quoting 28 U.S.C. § 1446(d) ), thus precluding the state court from granting relief. Accordingly, North Carolina says, § 7604(e) "overrides" § 1442(a)(1) and so requires North Carolina's suit — and the United States’ federal defense — to be litigated in state court. Opening Br. at 28.

The parties agree that "when two statutes are capable of co-existence," we cannot say that one nullifies the other "absent a clearly expressed congressional intent" to that effect. Morton v. Mancari , 417 U.S. 535, 551, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974). Without such indication, our "duty" is to "regard [both statutes] as effective." Id. Accordingly, if § 7604(e) and § 1442(a)(1) are capable of co-existence and Congress has not clearly expressed a contrary intent, we must regard § 1442(a)(1) as effective — and unaltered by § 7604(e).

These "two statutes are capable of co-existence." Morton , 417 U.S. at 551, 94 S.Ct. 2474. Contrary to North Carolina's argument, § 7604(e) does not require actions brought in state court to remain there. North Carolina claims that "nothing" — not even the United States’ absolute right of removal — may prevent North Carolina from "obtaining" remedies "in state court." 42 U.S.C. § 7604(e). Yet it concedes that "procedural constraints and valid substantive defenses" cabin its ability to "obtain" relief. Reply Br. at 6. Thus, even North Carolina recognizes that, unlike § 1442(a)(1), § 7604(e) does not confer an absolute right.

Rather, as the Clean Air Act's drafters confirmed, §...