101 F. Supp. 3d 36
D.D.C.2015Background
- MobilizeGreen, a D.C. nonprofit, and its founder Leah Allen sued The Community Foundation for the National Capital Region and three executives in D.C. Superior Court alleging breach of fiduciary duty, breach of contract, negligence, fraud, defamation and negligent supervision related to a 2011 fiscal sponsorship of a Forest Service–funded internship project.
- The Community Foundation served as MobilizeGreen’s fiscal sponsor under a Sponsor Agreement (temporary fiscal sponsorship) and separately executed a Challenge Cost Share Agreement with the Forest Service to receive reimbursement for project expenses.
- MobilizeGreen alleges the Community Foundation failed to transfer the project to a new fiscal sponsor, delayed payment of legitimate project bills, and failed to provide promised fiduciary and administrative services.
- The Community Foundation removed the suit to federal court, asserting federal-question jurisdiction (Grable/Gunn) and federal-officer removal (28 U.S.C. § 1442).
- MobilizeGreen moved to remand; the District Court examined whether removal was proper under the Federal Officer Removal Statute and federal-question doctrine and granted remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1442 federal-officer removal applies | MobilizeGreen did not contest personhood or defenses; argued removal inappropriate | CFNCR: acted under Forest Service direction in administering federal funds and thus may remove under § 1442 | Denied — Court found CFNCR was not "acting under" the federal government; relationship was cooperative/ancillary, not carrying out federal duties |
| Whether breach of fiduciary duty "necessarily raises" federal issues under Grable/Gunn | Fiduciary duty arose from the parties’ private fiscal sponsorship relationship, independent of federal law | CFNCR: fiduciary duty depends on ownership/status of Forest Service funds and federal financial-award regulations | Denied — fiduciary-duty claim is fact-intensive and can be resolved under D.C. law without deciding federal-law questions |
| Whether breach of contract claim "necessarily raises" federal issues under Grable/Gunn | Contract claim enforces Sponsor Agreement rights; transfer theory does not require analyzing federal grant-transfer prohibitions | CFNCR: transfer clause conflicts with federal law (Anti-Assignment Act, USDA regs), making federal law necessarily implicated | Denied — alternative state-law theory (re-granting funds to new sponsor) avoids federal-law resolution; federal defenses insufficient for removal |
| Whether federal jurisdiction exists generally | Remand requested; plaintiff prefers Superior Court | CFNCR: federal jurisdiction exists via § 1331/§ 1441 because federal issues are necessarily raised or via § 1442 | Granted remand — no federal jurisdiction: § 1442 not satisfied; Grable/Gunn factors fail for asserted claims |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (federal courts are courts of limited jurisdiction)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (state-court jurisdiction presumption)
- McNutt v. General Motors Acceptance Corp., 298 U.S. 178 (burden on removing party)
- Dixon v. Coburg Dairy, Inc., 369 F.3d 811 (4th Cir.) (doubt as to federal jurisdiction mandates remand)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (well-pleaded complaint rule)
- Vaden v. Discover Bank, 556 U.S. 49 (defense-based federal questions do not create removal jurisdiction under the well-pleaded complaint rule)
- Jefferson County v. Acker, 527 U.S. 423 (federal officer removal can permit removal despite nonfederal complaint)
- Watson v. Philip Morris Cos., Inc., 551 U.S. 142 (clarifies the meaning of "acting under" for § 1442)
- Ruppel v. CBS Corp., 701 F.3d 1176 (7th Cir.) (examples of private actors acting under federal direction)
- Jacks v. Meridian Resource Co., LLC, 701 F.3d 1224 (8th Cir.) (elements for § 1442 removal)
- Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387 (5th Cir.) (private contractor removal under § 1442)
- Gunn v. Minton, 568 U.S. 251 (federal-question arising-under Grable/Gunn four-factor test)