Kenneth Lake v. Ohana Military Communities
14 F.4th 993
| 9th Cir. | 2021Background
- Ohana Military Communities (a privatized housing PPV under the MHPI) built and managed housing on Marine Corps Base Hawaii (MCBH); Ohana developed a 2006 Pesticide Soil Management Plan and conducted long-term remediation for pesticide-contaminated soil but did not disclose contamination or remediation to tenants.
- Plaintiffs (military families) sued in Hawaii state court asserting multiple state-law claims (negligence, fraud, UDAP, nuisance, etc.); Defendants removed to federal court invoking federal-question jurisdiction and §1442 federal-officer/agency removal.
- The district court denied remand, dismissed some claims, and granted summary judgment for defendants on the remaining claims; Plaintiffs appealed jurisdictional denial and final judgment.
- The Ninth Circuit analyzed the Admission Act’s reservation of exclusive federal legislative power and concluded Hawaii retained concurrent legislative jurisdiction over MCBH (no formal “critical area” designation revoked that concurrency).
- The court held Hawaii law was not assimilated into federal law, §1442 removal failed for lack of causal nexus and because Ohana is not a federal agency, and the district court’s novel “substantial federal interest” enclave theory (adopting Federico) was rejected.
- Result: appellate court reversed the denial of remand, vacated subsequent rulings for lack of jurisdiction, and ordered remand to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state-law claims arising on MCBH present a federal question because MCBH is federal land | Lake: Hawaii retained concurrent legislative jurisdiction; state-law claims are state law and not federal | Ohana: federal interest in military housing and enclave "locus" theory creates federal question | Held: No federal question; Hawaii has concurrent jurisdiction and state law was not federalized |
| Whether the district court’s "substantial federal interest" theory (Federico) supports federal jurisdiction over state claims on a concurrent-jurisdiction enclave | Lake: Novel theory is inconsistent with precedent; Gunn/Grable govern federal-question analysis | Ohana: substantial federal interest in military housing sufficient to invoke federal jurisdiction | Held: Rejected; Durham and related precedent apply only to exclusive-jurisdiction enclaves, not concurrent ones |
| Whether removal under 28 U.S.C. §1442 (federal-officer or agency removal) is proper | Lake: Ohana acted as private landlord; Navy did not direct the challenged nondisclosure so no causal nexus; Ohana is not a federal agency | Ohana: Navy oversight, consent rights, and PPV structure establish causal nexus or agency status | Held: §1442 removal fails—no causal nexus that Ohana acted under a federal officer; Ohana is not a federal agency under In re Hoag Ranches factors |
| Whether the Grable/Gunn test (necessarily raised federal issue) supports federal jurisdiction | Lake: Plaintiffs’ state-law causes of action do not necessarily raise a federal right or issue | Ohana: Safety of military housing implicates substantial federal interests that necessarily raise federal issues | Held: Gunn prong one not met; federal issue is not necessarily raised, so no jurisdiction under Grable/Gunn |
Key Cases Cited
- Surplus Trading Co. v. Cook, 281 U.S. 647 (construction of "exclusive legislation" under Enclave Clause)
- James Stewart & Co. v. Sadrakula, 309 U.S. 94 (federal enclave assimilation of preexisting local law when exclusive jurisdiction applies)
- Offutt Hous. Co. v. Sarpy Cnty., 351 U.S. 253 (Congress may permit concurrent state jurisdiction over federal lands)
- Durham v. Lockheed Martin Corp., 445 F.3d 1247 (9th Cir.) (federal-question and §1442 removal principles for exclusive-jurisdiction enclaves)
- Gunn v. Minton, 568 U.S. 251 (federal issue must be necessarily raised, actually disputed, substantial, and capable of resolution without disturbing federal-state balance)
- Grable & Sons Metal Prods. v. Darue Eng'g & Mfg., 545 U.S. 308 (small category of state claims raising federal issues supports federal jurisdiction)
- Watson v. Philip Morris Cos., 551 U.S. 142 (acting-under for §1442 requires more than compliance with federal regulation)
- Fidelitad, Inc. v. Insitu, Inc., 904 F.3d 1095 (9th Cir.) (limits on §1442 removal and causal-nexus analysis)
- In re Hoag Ranches, 846 F.2d 1225 (9th Cir.) (six-factor test for determining whether a private entity is a federal "agency")
- Leite v. Crane Co., 749 F.3d 1117 (9th Cir.) (elements and burden for federal-officer removal)