Panther Brands, LLC v. Indy Racing League, LLC
2016 U.S. App. LEXIS 11725
7th Cir.2016Background
- Panther Brands contracted with IndyCar in 2013 to purchase marketing benefits for its team sponsor, including Fan Village space.
- The Army National Guard had been Panther’s sponsor; Panther learned RLL Racing intended to provide the Guard with Fan Village space, displacing Panther’s benefit.
- Panther sued RLL Racing, Docupak (a bid management firm), IndyCar, and John Metzler (Guard liaison) in state court, alleging state-law claims (breach, interference, unjust enrichment, conversion, unfair competition/bid rigging).
- Defendants removed to federal court; the United States was later substituted for Metzler under 28 U.S.C. § 2679(d) (Westfall Act), and Panther then amended the complaint to drop Metzler/the United States.
- The district court dismissed the amended complaint under Rule 12(b)(6) against RLL Racing, IndyCar, and Docupak; the Seventh Circuit concluded federal jurisdiction no longer existed and vacated/remanded for dismissal for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal-question jurisdiction (28 U.S.C. § 1331/§1441) supports removal | Panther alleged defendants violated multiple federal statutes/regulations, implying federal question jurisdiction | Defendants argued federal regulations bear on the dispute, supporting federal jurisdiction | Held: Claims are state-law (contract, tort, unfair competition); mere relevance of federal regulation is insufficient — no federal-question jurisdiction |
| Whether federal-officer removal (28 U.S.C. § 1442) applies to Docupak | Panther implicitly disputed that Docupak acted as a federal officer | Defendants claimed Docupak acted "under" the Guard by collecting/summarizing bids, qualifying for §1442 removal | Held: Not met — performing contracted tasks or being regulated is insufficient to show acting under federal authority; §1442 removal unavailable |
| Whether Westfall Act substitution (28 U.S.C. § 2679) preserved federal jurisdiction after substitution | Panther amended to drop Metzler/U.S., eliminating the substituted federal defendant | Defendants relied on the Attorney General’s certification and Westfall Act substitution to create exclusive federal jurisdiction | Held: Even if Westfall Act removal was initially proper, once the United States/Metzler were removed from the complaint by amendment, the federal basis for jurisdiction disappeared |
| Proper disposition when federal jurisdiction disappears after amendment | Panther sought state-law adjudication; district court had dismissed on merits | Defendants urged dismissal on merits in federal court or retention | Held: Vacated the district court’s judgment and remanded with instructions to dismiss for lack of subject-matter jurisdiction |
Key Cases Cited
- Rivet v. Regions Bank of Louisiana, 522 U.S. 470 (well-pleaded complaint rule for federal-question jurisdiction)
- Nuclear Eng’g Co. v. Scott, 660 F.2d 241 (7th Cir.) (state-law claims that tangentially involve federal law do not create federal-question jurisdiction)
- Ruppel v. CBS Corp., 701 F.3d 1176 (7th Cir.) (elements for federal-officer removal)
- Lu Junhong v. Boeing Co., 792 F.3d 805 (7th Cir.) (being regulated or performing functions under agency control does not alone make a contractor a federal officer)
- Watson v. Philip Morris Cos., Inc., 551 U.S. 142 (federal regulatory supervision does not by itself make a private company a person "acting under" the United States)
- Osborn v. Haley, 549 U.S. 225 (Westfall Act substitution makes federal jurisdiction exclusive upon Attorney General certification)
- Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387 (5th Cir.) (example of contractor acting under federal authority for §1442 purposes)
- Maryland v. Soper, 270 U.S. 9 (examples of early Supreme Court cases finding private actors "acting under" federal authority)