Janya SAWYER, representative of the Estate of Joseph W. Morris; Garnette Morris, individually and as surviving spouse of Joseph W. Morris; Nancy Pike, surviving child of Joseph W. Morris; Edward Morris, surviving child of Joseph W. Morris; Wayne Morris, surviving child of Joseph W. Morris; Joanne Traynor, surviving child of Joseph W. Morris, Plaintiffs-Appellees, v. FOSTER WHEELER LLC, Defendant-Appellant, and Union Carbide Corporation; John Crane-Houdaille, Inc., f/k/a Crane Packing Company; Owens-Illinois Glass Co., f/k/a Owens-Illinois, Inc.; Foster Wheeler Corporation; Hopeman Brothers, Inc.; Universal Refractories Company; Selby, Battersby & Company; CBS Corporation, а Delaware corporation, f/k/a Viacom, Inc., f/k/a CBS Corporation, a Pennsylvania Corp., f/k/a Westinghouse Electric Corp.; J.H. France Refractories Co.; the Goodyear Tire & Rubber Co.; MCIC, Inc., and its remaining Director of Trustees, Robert I. McCormick, Elizabeth McCormick and Patricia Shunk; Metropolitan Life Insurance Co.; General Electric Company; Bayer Cropscience, Inc., individually and as successor in Interest to Benjamin Foster Co., Amchem Products, Inc., H.B. Fuller Co., Aventis CropScience USA, Inc., Rhone-Poulenc AG Company, Inc., Rhone-Poulenc, Inc., Rhodiа Inc.; International Paper Company, individually and as successor in Interest to Champion International Corporation, U.S. Plywood Corp.; Cooper Industries, Inc., individually and as successors in Interest to Crouse-Hinds Co.; Ferro Engineering, Division of On Marine Services Company; Foseco, Inc.; Wayne Manufacturing Corporation; Lofton Corporation, as Successor-in-Interest to Wayne Manufacturing Corporation, Hopeman Manufacturing Corporation; Schneider Electric USA, Inc., f/k/a Square D Company; Greene, Tweed & Co., individually and as successor in Interest to Pаlmetto, Inc.; Wallace & Gale Asbestos Settlement Trust, successor to the Wallace & Gale Company; Crown, Cork & Seal Co., Inc.; Georgia-Pacific, LLC, Ind/Successor to BestWall Gypsum Co.; Koppers Company, Inc.; Pfizer, Inc.; Phelps Packing & Rubber Co., Phelps Industrial; Paramount Packing & Rubber, Inc.; Lloyd E. Mitchell, Inc.; Pecora Corporation, individually and as successor in Interest to Pecora, Inc., New Pecora Corp., Defendants, v. General Refractories Co.; A.W. Chesterton Company; Manville Trust Personal Injury Settlement Trust; SB Decking, Inc., f/k/a Selby, Battersby & Co., Inc.; Uniroyal, Inc., Third Party Defendants.
No. 16-1530
United States Court of Appeals, Fourth Circuit
June 22, 2017
860 F.3d 249
Before NIEMEYER, KING, and DUNCAN, Circuit Judges.
Reversed and remanded by published opinion. Judge Niemeyer wrote the opinion, in which Judge King and Judge Duncan joined.
NIEMEYER, Circuit Judge:
In this appeal, we are presented with the single issue of whether a government contractor was entitled to remove a state tort action to federal court under
Joseph Morris worked as shipbuilder at the Bethlehem Steel Sparrows Pоint Shipyard, beginning in 1948 and continuing into the 1970s. He died of mesothelioma in 2015. Morris’ family and the personal representative of his estate commenced this
Foster Wheeler, a manufacturer of the boilers that Morris and other Shipyard employees assembled for use aboard U.S. Navy vessels, removed this action to federal court pursuant to
On appeal, we conclude that the district court applied the wrong standard for determining removability under
I
In June 2015, Morris’ surviving spouse, his children, and the representative of his estate commenced this action against Foster Wheeler and other defendants in the Circuit Court for Baltimore City, Maryland, alleging—in claims for strict liability, breach of warranty, and negligence, among others—that the defendants had failed to warn Morris of the dangers of asbestos. They asserted that Morris was exposed to asbestos while working in the boiler shop at the Sparrows Point Shipyard from 1948 through the 1970s and that his exposure caused the mesothelioma that killed him in 2015. In response to interrogatories, the plaintiffs explained in more detail that Morris and other Shipyard employees assembled boilers containing asbestos at the Shipyard that had been mаnufactured off-site, including ones manufactured by Foster Wheeler.
Foster Wheeler filed a notice of removal pursuant to
In support of its notice, Foster Wheeler submitted an affidavit from J. Thomas Schroppe, a former Foster Wheeler employee who, from 1962 to 1999, rose through the ranks of Foster Wheeler as an engineer and eventually became president of its subsidiary Boiler Corporation. Schroppe, who stated that he was “personally involved” in the Navy‘s procurement
The Navy required that every piece of equipment be supplied with a defined number of copies of one or more technical manuals. Navy personnel participated intimately in the preparation of this kind of information and exercised specific direction and control over its сontents. These manuals included safety information related to the operation of naval boilers and economizers only to the extent directed by the Navy.
Furthermore, the Navy had precise specifications, practices and procedures that governed the content of any communication affixed to machinery supplied by Foster Wheeler to the Navy. Foster Wheeler would not be permitted, under the specifications, associated regulations and procedures, and especially under actual practice аs it evolved in the field, to affix any type of warning or caution statement to a piece of equipment intended for installation onto a Navy vessel, beyond those required by the Navy.
The plaintiffs filed a motion to remand the case to state court, arguing that Foster Wheeler‘s notice of removal was untimely because it was filed more than 30 days after Foster Wheeler learned that it had a possible federal defense and that, in any event, it failed to meet the substantive requirements of
The liability asserted by Plaintiffs against Foster Wheeler is based on a failure to warn ... relating to the erection of boilers. The boilers were not constructed upon U.S. Naval Ships, but at an off-ship boiler shop, under the direction of Foster Wheeler personnel, and only later transported and installed upon U.S. Naval ships. Navy specifications in no way restricted Foster Wheeler‘s ability to warn individuals constructing the boilers of the presence of asbestos and their need to take proper precautions.
They therefore claimed that Foster Wheeler failed to meet any of the three requirements for removal under
In response to the plaintiffs’ motion to remand, Foster Wheeler submitted a 2006 affidavit from Lawrence Stilwell Betts, a retired Navy Captain and medical consultant, which had been given in connection with a different action. Based on contemporary medical literature, Betts stated that “the Navy was well aware of the health hazards associated with the use of asbestos from the early 1920s” and that the Navy‘s information “with respect to the specification and use of asbestos, and the health hazards associated with its use aboard Navy vessels, far exceeded any information that possibly could have been provided by a boiler manufacturеr.”
Foster Wheeler filed this appeal from the district court‘s remand order dated April 20, 2016, as authorized by
II
any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office.
With the statute‘s requirements in hand, we address whether Foster Wheeler satisfied each of them.
First, there can be no question that Foster Wheeler was a “person acting under” the Navy when it constructed the boilers with asbestos that allegedly harmed Morris. When a private entity is involved, the Supreme Court has interpreted the phrase “acting under” to contemplate a relationship where the government exerts some “subjection, guidance, or control,” Watson, 551 U.S. at 151 (quoting Webster‘s New International Dictionary 2765 (2d ed. 1953)), and where the private entity engages in an effort “to assist, or to help carry out, the duties or tasks of the federal superior,” id. at 152 (emphasis omitted). In Watson, the Court distinguished relationships where private entities are merely subject to federal regulation—holding that mere regulation of private entities cannot justify removal under the statute—from the relationships where the private entity contracts with the government to fulfill a government need. As the Court explained:
The assistance that private contractors provide federal officers goes beyond simple compliance with the law and helps officers fulfill other basic governmental tasks.... Moreover, at least arguably, [a contractor] perform[s] a job that, in the absence of a contract with a private firm, the Government itself would have had to perform.
Id. at 153-54. In addition, the Court stated that the phrase “acting under” is “broad” and is to be “liberally construed” in favor of the entity seeking removal. Id. at 147.
Accordingly, courts have unhesitatingly treated the “acting under” requirement as satisfied where a contractor seeks to remove a case involving injuries arising from equipment that it manufactured for the government. See Hurley v. CBS Corp., 648 Fed. Appx. 299, 303 (4th Cir. 2016) (per curiam) (“GE is a ‘person acting under’ a federal officer because it was acting under a valid government contract at all times relevant to the litigation“); Papp v. Fore-Kast Sales Co., 842 F.3d 805, 813 (3d Cir. 2016) (“Papp‘s allegations are directed at actions Boeing took while working under a federal contract to produce an item the government needed, to wit, a military aircraft, and that the government otherwise would have been forced to produce on its own“).
In this case, the record shows that during Morris’ tenure as an employee at the Sparrows Point Shipyard, Foster Wheeler manufactured boilers under contracts with the U.S. Navy for use on its vessels. Given the Supreme Court‘s direction that we construe the statute liberally and the holdings of courts that have followed that direction, Foster Wheeler‘s status as a Navy contractor readily satisfies the requirement that it have acted under the Navy, as used in
B
Second, we conclude that Foster Wheeler has asserted a colorable federal defense—the defense of government-contractor immunity—to the plaintiffs’ claims.
The Supreme Court first articulated thе government-contractor immunity defense in Boyle v. United Technologies Corp., 487 U.S. 500 (1988), to prevent the imposition of state tort liability “for design defects in military equipment” when three requirements are met:
- the United States approved reasonably precise specifications;
- the equipment conformed to those specifications; and
- the supplier warned the United States about the dangers in the use of
the equipment that were known to the supplier but not to the United States.
As the district court recognized, the defense in Boyle can apply not only to a “design defect” claim, but also to a claim like that asserted here—one based on Foster Wheeler‘s alleged failure to warn Morris about the dangers of asbestos. As we explained in Ripley, imposing failure-to-warn liability on a contractor could produce the same conflict with federal policy that the Supreme Court sought to prevent in Boyle. See 841 F.3d at 211; see also In re Joint E. & S. Dist. N.Y. Asbestos Litig., 897 F.2d 626, 629 (2d Cir. 1990) (“When a federal contract and state tort law give contrary messages as to the nature and content of required product warnings, they cause the sort of conflict Boyle found so detrimental to the federal interest in regulating the liabilities of military contractors“).
The courts applying Boyle to failure-to-warn cases have articulated three criteria necessary to establish the immunity defense, holding that it is established when “(1) the government exercised its discretion and approved certain warnings; (2) the contractor provided the warnings required by the government; [and] (3) the contractor warned the government about dangers in the equipment‘s use that were known to the contractor but not to the government.” Oliver v. Oshkosh Truck Corp., 96 F.3d 992, 1003-04 (7th Cir. 1996); see also, e.g., Jowers v. Lincoln Electric Co., 617 F.3d 346, 352 (5th Cir. 2010); Tate v. Boeing Helicopters, 55 F.3d 1150, 1157 (6th Cir. 1995). Under this formulation, which we also now adopt, the government need not prohibit the contractor from providing additional warnings; the defense applies so long as the government dictated or approved the warnings that the contractоr actually provided. See, e.g., Tate, 55 F.3d at 1157 (“Government discretion is required, not dictation or prohibition of warnings“). Where “the government chooses its own warnings,” rather than merely approves of a contractor‘s, it has “certainly” exercised the requisite discretion to support a colorable defense for the contractor. Oliver, 96 F.3d at 1004; see also Tate, 55 F.3d at 1157.
In this case, Foster Wheeler satisfied all three of the criteria for showing a colorable government-contractor defense in failure-to-warn cases. First, Foster Wheeler showed that the Navy “exercised intense direction and control оver all written documentation to be delivered with its naval boilers,” including those manufactured by Foster Wheeler. Thomas Schroppe‘s affidavit states that “Foster Wheeler would not be permitted, under the specifications, associated regulations and procedures, and especially under actual practice as it evolved in the field, to affix any type of warning or caution statement to a piece of equipment intended for installation onto a Navy vessel beyond those required by the Navy.” Second, Foster Wheeler actually gave the warnings that were required by the Navy. Schroppe‘s affidavit describes a rigorous inspection process and indicates that the Navy would notice and penalize any deviation. And third, Foster Wheeler credibly demonstrated, with Lawrence Betts’ affidavit, that the Navy‘s knowledge of asbestos-related hazards exceeded Foster Wheeler‘s during the relevant time period. Indeed, several other courts have cited the same affidavit as supporting a finding that the government contractor did not withhold risk-related information of which the military was unaware. Seе, e.g., Hagen v. Benjamin Foster Co., 739 F. Supp. 2d 770, 784 (E.D. Pa. 2010) (asbestos MDL action). Thus, Foster Wheeler has made at least a colorable showing that the government exercised
The district court, in concluding that Foster Wheeler did not demonstrate a colorable federal defense as to the plaintiffs’ negligence claim, applied a different standard that does not follow the established criteria. It found that, even though the Navy “provided Foster Wheeler with detailed specifications governing warnings and written information that accompanied Foster Wheeler boilers,” the fact that the Navy did not consider additional warnings to employees was fatal to Foster Wheeler‘s defense. Specifically, the court explained that, because the warnings that Foster Wheeler could have given employees in the workplace were not prohibited by the Navy, and because Foster Wheeler did not propose and the Navy did not reject the giving of such warning, the defense does not apply, as it “does not shield defendants where the government might have exercised its discretion and final authority but did not.” (Internal quotation marks and citation omitted). The district court‘s clear implication is that, unless the government explicitly regulated all possible warnings, Foster Wheeler could not have a colorable federal defense of immunity. But this reasoning overlooks the fact that, in specifying some warnings in responsе to the known dangers of asbestos, the government necessarily exercised discretion in not requiring additional warnings. See Oliver, 96 F.3d at 1004; Tate, 55 F.3d at 1157. It is this exercise of governmental discretion that, under the reasoning of Boyle, supports a defense for federal contractors who execute it.
Moreover, the district court failed to recognize, even on the terms of its own analysis, that removal need not be justified as to all claims asserted in the plaintiffs’ complaint; rather, the defense need only apply to one claim to remove the case. See
C
Addressing the third requirement, we conclude that Foster Wheeler has estab-
Before 2011, the contractor had to establish that the suit against it was “for a[n] act under color of office,” Acker, 527 U.S. at 431 (alterations in original) (quoting
But in 2011, Congress amended
Foster Wheeler hаs amply shown a sufficient “connection or association” in this case. As Foster Wheeler explains, the Navy dictated the content of warnings on Foster Wheeler‘s boilers, and Foster Wheeler complied with the Navy‘s requirements. That relationship was sufficient to connect the plaintiffs’ claims, which fault warnings that were not specified by the Navy, to the warnings that the Navy specified and with which Foster Wheeler complied. These claims undoubtedly “relat[e] to” all warnings, given or not, that the Navy determined in its discretion.
The district court imposed a stricter standard of causation than that recognized by the statute. It concluded that “[b]ecause no federal officer provided any direction regarding whether to warn Foster Wheeler‘s workers in the shipyard‘s boiler shop about asbestos, Foster Wheeler has not established the necessary causal nexus between their actions and the plaintiffs’ claims.” In demanding a showing of a specific government direction, however, the district court went beyond what
The record in this case shows that the Navy was aware of the dangers of asbestos; that it required the use of asbestos in boilers for which it contracted with Foster Wheeler to manufacture; that it provided for a comprehensive set of warnings, but not all possible warnings; and that Foster Wheeler complied with the Navy‘s requirements. Foster Wheeler‘s alleged failure to give warnings to Shipyard employees is therefore clearly related to Foster Wheeler‘s performance of its contract with the Navy.
* * *
Because the district court addressed only the substantive requirements of
REVERSED AND REMANDED
PAUL V. NIEMEYER
UNITED STATES CIRCUIT JUDGE