Fidelitad, Inc. v. Insitu, Inc.
904 F.3d 1095
| 9th Cir. | 2018Background
- Insitu, a U.S. drone manufacturer, and Fidelitad, a value-added reseller formed by two former Insitu employees to sell Insitu drones in Latin America, had no written distributorship agreement.
- Fidelitad secured export licenses and placed orders with Insitu for drones sold to the Colombian Air Force and U.S. forces in Colombia; Insitu delayed shipments pending clarification on export-license terms (e.g., sensors) and suggested FMS alternatives.
- Fidelitad accepted one drone without disputed sensors and arranged government transfers for others; after fulfilling those orders, Insitu refused further orders from Fidelitad and later sold directly to customers Fidelitad had developed.
- Fidelitad sued in Washington state court for delay, wrongful termination, and appropriation of its market groundwork; Insitu removed under 28 U.S.C. § 1442(a)(1) (federal-officer removal) to federal court.
- The district court denied remand and later granted summary judgment for Insitu; on appeal, the Ninth Circuit reviewed denial of remand de novo and considered whether Insitu acted "under" a federal officer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Insitu's removal under 28 U.S.C. § 1442(a)(1) is proper | Removal improper; Insitu not acting under a federal officer | Insitu acted under federal direction by enforcing ITAR/export-license terms and ensuring compliance | Removal improper; remand required |
| Whether compliance with ITAR/export licenses suffices to be "acting under" a federal officer | Compliance is not delegation of federal authority; insufficient for removal | Enforcement of export-license conditions and ITAR obligations meant Insitu acted pursuant to federal direction | Mere regulatory compliance/efforts to ensure license compliance do not satisfy "acting under" requirement |
| Whether government-contractor doctrine supports removal where government interests or foreign-policy aims exist | Government policy/foreign-policy aims do not transform private sales into government-directed acts | Insitu aided government objectives and thus falls within contractor removal precedent | No applicable federal contract or formal delegation here; doctrine does not apply |
| Whether removal record showed colorable federal defense (alternative basis) | Not addressed; plaintiff presses remand | Insitu argued colorable defense but primary contention was acting under officer | Court did not reach colorable-defense question because "acting under" element failed |
Key Cases Cited
- Watson v. Philip Morris Cos., 551 U.S. 142 (2007) (extensive regulation alone does not make a private actor one "acting under" a federal officer)
- Durham v. Lockheed Martin Corp., 445 F.3d 1247 (9th Cir. 2006) (elements required for federal-officer removal)
- Leite v. Crane Co., 749 F.3d 1117 (9th Cir. 2014) (government-contractor removal possible where work was done for military under government contract)
- Trimble Navigation Ltd. v. Sec'y of State for Def., 484 F.3d 700 (4th Cir. 2007) (distinguishing DCS and FMS licensing frameworks)
- Jefferson Cty. v. Acker, 527 U.S. 423 (1999) (removal doctrine principles)
- Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996) (jurisdictional defects and post-removal adjudication)