Watson v. Philip Morris Companies, Inc., 04-1225.

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Citation420 F.3d 852
Docket NumberNo. 04-1225.,04-1225.
PartiesLisa WATSON; Loretta Lawson, Individually and On Behalf of All Others Similarly Situated, Plaintiffs—Appellants. v. PHILIP MORRIS COMPANIES, INC., a Corporation; Philip Morris, Incorporated, a Corporation, Defendants—Appellees.
Decision Date25 August 2005

Page 852

420 F.3d 852
Lisa WATSON; Loretta Lawson, Individually and On Behalf of All Others Similarly Situated, Plaintiffs—Appellants.
v.
PHILIP MORRIS COMPANIES, INC., a Corporation; Philip Morris, Incorporated, a Corporation, Defendants—Appellees.
No. 04-1225.
United States Court of Appeals, Eighth Circuit.
Submitted: November 15, 2004.
Filed: August 25, 2005.

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COPYRIGHT MATERIAL OMITTED

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Counsel who presented argument on behalf of the appellant was Marcus Neil Bozeman of Little Rock, AR.

Counsel who presented argument on behalf of the appellee was Amy Phillips Rosenthal of Arlington, VA.

Before RILEY, JOHN R. GIBSON, and GRUENDER, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.


Lisa Watson and Loretta Lawson filed this interlocutory appeal, on their own behalf and as representatives of a class, from the district court's1 denial of their motion to remand to state court. Watson and Lawson filed their class action in Arkansas state court, alleging that Philip Morris violated the Arkansas Deceptive Trade Practices Act. See Ark.Code Ann. § 4-88-107 et seq. We hold that the case was properly removed to federal court.

Watson and Lawson claim that Philip Morris engaged in "unfair business practices and/or deceptive and unlawful conduct in connection with the manufacture, distribution, promotion, marketing, and sale of Cambridge Lights and Marlboro Lights." They basically allege that Philip Morris designed its cigarettes to deliver more tar and nicotine to smokers than its use of the labels "lights" and "lowered tar and nicotine" in its advertising would suggest. The propriety of remand is the only issue before us, as it was in the district court, and we express no views on the merits.

Philip Morris removed the action pursuant to 28 U.S.C. § 1442(a)(1) (2000), which permits removal where a person is sued for actions taken under the direction of a federal officer. Philip Morris claims it satisfies the requirements of the federal officer statute because it was acting under the direct control of the Federal Trade Commission (FTC) when it engaged in the allegedly unlawful conduct. The district court denied Watson's and Lawson's motion to remand and certified the following question for interlocutory appeal under 28 U.S.C. § 1292(b): "May Philip Morris remove this lawsuit to federal court under 28 U.S.C. § 1442(a)?" Slip op. at 36. We affirm the district court's answer of "yes" to that question.

The applicability of this removal statute depends in large part on the role the FTC plays in regulating the tobacco industry.2

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The Federal Trade Commission Act authorizes the FTC to regulate "unfair methods of competition" and "unfair or deceptive acts or practices in or affecting commerce," 15 U.S.C. § 45(a)(2) (2000), which includes regulation of unfair and deceptive tobacco advertisements, Cipollone v. Liggett Group, Inc., 505 U.S. 504, 513, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (FTC has "long regulated unfair and deceptive advertising practices in the cigarette industry").

In the 1950s, the FTC's policy changed from permitting some claims of "low" or "lower" tar and nicotine levels to prohibiting all such representations in advertising. The FTC wanted a uniform rating system so that consumers could compare tar and nicotine levels among brands. The FTC developed the Cambridge Filter Method, which uses a smoking machine that takes a two-second puff on a cigarette every sixty seconds until the cigarette is smoked to a specified length. Brown & Williamson, 778 F.2d at 37. The machine collects tar and nicotine on filter pads to be measured. Since its first formal testing in 1967, the FTC has been reporting the Cambridge Filter Method results in the Federal Register. From its initial development, the FTC was aware that the testing method did not measure the amount of tar or nicotine that an individual smoker may receive. The purpose of the test was not to replicate human smoking but to provide a basis for comparison.

When the FTC proposed a trade regulation rule in 1970 that would require advertisements to disclose tar and nicotine ratings, as determined by the Cambridge Filter Method, several leading tobacco companies responded by entering into an agreement to disclose the Cambridge Filter Method results in all cigarette advertising. The FTC accepted the agreement, which was conditioned on suspension of the formal rulemaking proceedings. Letter from Eight Tobacco Companies to FTC (Dec. 17, 1970) ("Letter Agreement").

After twenty years of testing, the FTC decided to terminate its cigarette testing lab, and instead require the cigarette industry to self-test, using the Cambridge Filter Method, and to submit results that would continue to be published in the Federal Register. The FTC retained the right to conduct unannounced inspections of the industry testing facilities and the right to confirm the test results through a government lab.

Based upon the FTC's involvement in the tobacco industry, the district court denied Watson's and Lawson's motion to remand to state court. Our review of that denial is de novo. See Nichols v. Harbor Venture, Inc., 284 F.3d 857, 860 (8th Cir. 2002).

Section 1442(a)(1) permits removal by the following:

(1) The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, sued in an official or individual capacity for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue.

(emphasis added). Section 1442(a) requires that a defendant: (1) act under the direction of a federal officer; (2) show a nexus or "causal connection" between the alleged conduct and the official authority; (3) have a colorable federal defense; and (4) be a "person" within the meaning of the statute. See, e.g., Jefferson County v. Acker, 527 U.S. 423, 431, 119 S.Ct. 2069, 144 L.Ed.2d 408 (1999) (requiring a "colorable federal defense" to a suit for "a[n] act

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under color of office" and "a `causal connection' between the charged conduct and asserted official authority"); Mesa v. California, 489 U.S. 121, 125, 109 S.Ct. 959, 103 L.Ed.2d 99 (1989) (recognizing the 1442(a) requirement of "`person[s] acting under' an officer of the United States or any agency thereof" sued "for act[s] under color of such office"); United States v. Todd, 245 F.3d 691, 693 (8th Cir.2001) (requiring "a `colorable defense arising out of [the defendant's] duty to enforce federal law'"); Paldrmic v. Altria Corp. Servs., Inc., 327 F.Supp.2d 959, 964 (E.D.Wis. 2004) (incorporating all four requirements). Watson and Lawson dispute only the first and second requirements.

In Willingham v. Morgan, 395 U.S. 402, 406-07, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969), the Supreme Court explained why the federal officer removal statute was not meant to be given a "narrow" or "limited" interpretation:

One of the primary purposes of the removal statute-as its history clearly demonstrates-was to have such defenses litigated in the federal courts.... In cases like this one, Congress has decided that federal offices, and indeed the Federal Government itself, require the protection of a federal forum. This policy should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1).

The primary purpose of giving the protection of a federal forum under this statute has a lengthy history. The broad scope of federal officer removal is explained in the early case of Tennessee v. Davis, 100 U.S. 257, 263, 25 L.Ed. 648 (1879), where the Court applied the original version of the statute to revenue officers:

[I]f their protection must be left to the action of the State court,-the operations of the general government may at any time be arrested at the will of one of its members. The legislation of a State may be unfriendly. It may affix penalties to acts done under the immediate direction of the national government, and in obedience to its laws. It may deny the authority conferred by those laws. The State court may administer not only the laws of the State, but equally Federal law, in such a manner as to paralyze the operations of the government. And even if, after trial and final judgment in the State court, the case can be brought into the United States court for review, the officer is withdrawn from the discharge of his duty during the pendency of the prosecution, and the exercise of acknowledged Federal power arrested.

See also Arizona v. Manypenny, 451 U.S. 232, 243, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981) ("Respondent here, by obtaining a federal forum, has fully vindicated the federal policies supporting removal. The plainest evidence of this vindication is the District Court's application of the immunity defense."); Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387, 397-98 (5th Cir.1998). The Supreme Court interpreted the original version of the statute to exclude agencies' removal ability under the statute. Primate Protection League v. Admin'rs. of Tulane Educ. Fund, 500 U.S. 72, 87, 111 S.Ct. 1700, 114 L.Ed.2d 134 (1991). Congress responded by amending the statute to explicitly permit agency removal. See Pub.L. 104-317, § 206(a)(1) (1996). Congress's decision to amend the statute to reverse Primate and permit agency removal provides further support for a broad interpretation of the federal officer removal statute.

I.

Whether a defendant is "acting under" the direction of a federal officer depends on the detail and specificity of the

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federal direction of the defendant's activities and whether the government exercises control over the defendant.

"[R]emoval by a `person acting under' a federal officer must be predicated upon-a showing that the acts ... were performed pursuant to an officer's direct orders or to comprehensive and detailed regulations." Virden v. Altria Group, Inc., 304...

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