Bailey et al v. Monsanto Company et al

Filing 85

MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that the parties motions for leave to supplement the record are GRANTED. (Doc. Nos. 75 & 80 ) IT IS FURTHER ORDERED that Plaintiffs motion to remand this case to state court due to lack of diversity jur isdiction is GRANTED. (Doc. No. 24 .) IT IS FURTHER ORDERED that Plaintiffs motion to remand this case to state court due to lack of federal officer jurisdiction is GRANTED. (Doc. No. 39 .) IT IS FURTHER ORDERED that the Clerk of Court shall take a ll necessary steps to remand this case to the state court in which it was filed. Signed by District Judge Audrey G. Fleissig on 3/31/2016. (Two copies of the Memorandum and Order and a copy of the docket sheet was mailed to St. Louis, County.) (KCB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

ROGER BAILEY, et al.,

)
)
Plaintiffs,
)
)
v.
)
)
MONSANTO COMPANY; SOLUTIA,
)
INC.; PHARMACIA CORP.; and PFIZER, )
INC.,
)
)
Defendants.
)

Case No. 4:15CV00844 AGF

MEMORANDUM AND ORDER
This products liability action is before the Court on Plaintiffs’ two motions (Doc.
Nos. 24 & 39) to remand the case to state court. Twelve individual Plaintiffs seek to hold
four inter-related corporations liable, under Missouri tort law, for the manufacture and
sale of polychlorinated biphenyls (“PCBs”), environmental and dietary exposure to which
Plaintiffs allege caused them to contract non-Hodgkin’s lymphoma. The case was filed
in Missouri state court and removed to this Court based on diversity jurisdiction, 28
U.S.C. § 1332(a), and federal officer removal, 28 U.S.C. § 1442(a)(1).
One motion to remand presents the question of whether the two forum Defendants
– Monsanto Co. (“New Monsanto”) and Solutia, Inc. (“Solutia”) – simply indemnified,
rather than assumed the liabilities of, a third Defendant – Pharmacia, LLC1 (“Pharmacia”)

1

This Defendant is named as Pharmacia Corp. in the complaint (petition); however, as
of November 30, 2012, the entity converted to an LLC.

– for claims arising out of the manufacture of PCBs, such that both of the forum
Defendants were fraudulently joined to defeat diversity jurisdiction. The other motion to
remand presents the question of whether federal officer removal is proper here. On
November 24, 2015, oral argument was held on the motions to remand, and the parties
thereafter filed motions for leave to supplement the record. The motions for leave will be
granted, and for the reasons set forth below, both motions to remand will be granted.
BACKGROUND
Plaintiffs all reside in states other than Missouri. They initiated this action in
Missouri state court on May 22, 2015, against New Monsanto, Solutia, Pharmacia, and
Pfizer, Inc. It is undisputed that there is complete diversity of citizenship. It is also
undisputed that New Monsanto and Solutia have their principal places of business in
Missouri, and are thus Missouri residents for purposes of diversity jurisdiction, whereas
Pharmacia and Pfizer are not residents of Missouri. The complaint alleges that Plaintiffs
contracted non-Hodgkin’s lymphoma as a result of their dietary and environmental
exposure to PCBs manufactured by the chemical division of “Old Monsanto,” a company
that, as of 2000, ceased to exist. It is also undisputed that Pharmacia, which was formerly
“Old Monsanto,” is a proper Defendant in this action.
For purposes of the motions now before the Court, the record establishes the
following. From the early 1930s2 until 1977, Old Monsanto (and its predecessor in
interest) was virtually the sole manufacturer of the PCBs used in the United States. PCBs

2

Various years appear in the record as the start date of Old Monsanto’s manufacture of
PCBs. The exact year is not relevant.
2

are a group of man-made chemicals that have been used in many different products,
including electrical equipment to prevent fires and explosions. By the late 1930s it was
known that PCBs were systemically toxic to humans, and by the late 1960s that PCBs
were accumulating in the environment and food chain. In the early 1970s, Old Monsanto
ceased manufacturing PCBs in “open systems,” and limited their manufacture to “closed
systems.” In August 1977, Old Monsanto stopped all manufacture of PCBs. The Toxic
Substance Control Act of 1976 (“TCSA”) allowed the manufacture of PCBs until 1979
and banned it thereafter.
In 1997, Old Monsanto’s chemical business was spun off into a new independent
company, Solutia, pursuant to a “Distribution Agreement” (Doc. No. 34-10 at 5-53).
Under the Distribution Agreement, Solutia expressly assumed and agreed to indemnify
Old Monsanto for liabilities related to Old Monsanto’s chemical business, including its
manufacture of PCBs.3 The Distribution Agreement included a provision, § 10.07, that
there were no third-party beneficiaries thereto, as follows:
Except for the provisions of sections 3.03 and 3.04 relating to Indemnities,
which are also for the benefit of the Indemnitees, this Agreement is solely
for the benefit of the parties hereto and . . . and is not intended to confer
upon any other Persons any rights or remedies hereunder.
Id. at 52.
On March 31, 2000, the remaining divisions of Old Monsanto (agricultural and
pharmaceutical) merged with Pharmacia & Upjohn, Inc., with Old Monsanto being the

3

The relevant section of the Distribution Agreement, § 4.03(b), stated that Solutia
“shall retain or assume, as the case may be, and shall indemnify and hold harmless [Old
Monsanto] from and against (1) all Chemicals Liabilities . . . .” (Doc. No. 34-10 at 25.)
3

surviving corporation and taking the Pharmacia name. Pharmacia then transferred its
agricultural business to a newly created subsidiary, New Monsanto, which it spun off by
means of a “Separation Agreement” dated September 1, 2000 (Doc. No. 34-10 at 55148), and amended on July 1, 2002 (Doc. No. 73-2). Under the Separation Agreement,
Pharmacia contributed and transferred to New Monsanto, and New Monsanto “received
and assumed, directly or indirectly, certain assets and liabilities.” (Doc. No. 34-10 at 59.)
More specifically, under § 2.01 of the Separation Agreement, Pharmacia was to
transfer to New Monsanto all of Pharmacia’s interests in the New Monsanto assets, and
New Monsanto was “to assume all the [New] Monsanto Liabilities,” with “[New]
Monsanto Liabilities” defined in the definitional section (Article I) as including all
liabilities of either New Monsanto or Pharmacia “that were assumed by Solutia . . . in
connection with the spinoff of Solutia . . . to the extent that Solutia fails to pay, perform
or discharge such Liabilities . . . .” Id. at 74, 71. The Separation Agreement contained
the same no-third-party-beneficiaries language as the Distribution Agreement. Id. at 97.
In a July 1, 2002 amendment to the Distribution Agreement, Pharmacia and New
Monsanto described the 2000 Separation Agreement as having the following effect:
Pharmacia assigned and transferred certain assets related to its chemicals
and agricultural businesses and certain other assets to New Monsanto and
New Monsanto assumed certain liabilities relating thereto and all liabilities
that were assumed by Solutia or any of its subsidiaries in connection with
the Solutia Distribution to the extent that Solutia fails to pay, perform or
discharge such liabilities.
(Doc. No. 73-1at 3) (emphasis added).

4

In 2003, Pharmacia merged with Pfizer. Thereafter, on December 17, 2003,
Solutia filed a petition for Chapter 11 bankruptcy in the Bankruptcy Court for the
Southern District of New York. In Solutia’s June 29, 2007 memorandum to the
bankruptcy court in support of approval of a Settlement Agreement reached between
Solutia and New Monsanto that was to be part of Solutia’s Reorganization Plan, Solutia
explained that at the time of Solutia’s spin-off, it was believed that PCB tort lawsuits
against Old Monsanto were “manageable.” But since that time, PCB litigation had
become unmanageable, and the Settlement Agreement “would allow Solutia to
accomplish its primary goal since it filed for chapter 11: to reallocate the majority of the
legacy liabilities.” (Doc. No. 25-1 at 5-6.) Solutia continued that under the Settlement
Agreement, New Monsanto had “agreed to be responsible for all past and future claims
related to conduct that occurred before the spin-off . . . [including PCB claims] (the
‘Legacy Tort Claims’.)” Id. at 6. And in a supplemental memorandum, Solutia
represented several times that pursuant to the Settlement Agreement, New Monsanto
would be “financially responsible for all Legacy Tort Claims.” (Doc. No. 25-2 at 3, 4.)
The “Recitals” section of Settlement Agreement (Doc. No. 34-10 at 150-200)4
includes the following statements:
WHEREAS, in connection with the Settlement, [New] Monsanto will
receive, as set forth in the [Reorganization] Plan, up to . . . $175 million . . .
4

Defendants have submitted to the Court, as an exhibit to their reply addressing the first
motion to remand, a copy of an unexecuted version of the Settlement Agreement dated
October 15, 2007. After oral argument, they submitted a copy of an executed “Amended
and Restated Settlement Agreement” dated February 28, 2008. The relevant provisions
are identical in both versions. The Court will cite to the October 15, 2007 version which
appears in the record as part of Doc. No. 34-10.
5

for, among other things, [New] Monsanto’s agreement to be financially
responsible for (i) the Legacy Tort Claims. . . .
WHEREAS, in accordance with the [Reorganization] Plan and the terms of
this Agreement, the Distribution Agreement . . . is superseded [by the
Settlement Agreement] and, on the Effective Date [of the Settlement
Agreement], of no further force and effect.
Id. at 157.
The Settlement Agreement set out indemnification obligations of Solutia (§ 5.01)
and of New Monsanto (§ 5.02). Section 5.01 provided that “Solutia shall indemnify
[New] Monsanto . . . and Pharmacia . . . for any liability arising out of . . . the Chemical
Liabilities, [except] to the extent that . . . [New] Monsanto agreed to indemnify Solutia
. . . for such Loses pursuant to Section 5.02 . . . .” Id. at 179-80. Section 5.02 provided
that “[New] Monsanto shall indemnify Solutia . . . for any Losses which [Solutia] . . .
becomes subject to, as a result or arising out of . . . any Legacy Tort Claims.” Id. at 180.
Although the Settlement Agreement was between Solutia and New Monsanto, it
attached and adopted therein the “Pharmacia Indemnity Agreement” between Solutia and
Pharmacia. Thus the Settlement Agreement establishes rights and obligations among all
three parties. In the Pharmacia Indemnity Agreement, Solutia agreed to “indemnify
Pharmacia” for “any Loss” arising from, among other things, “Solutia Tort Claims” and
“Chemical Liabilities [with certain exceptions].” (Doc. No. 73-3 at 2-3).
On November 29, 2007, the bankruptcy court confirmed Solutia’s Reorganization
Plan and approved and attached thereto the Settlement Agreement between Solutia and
New Monsanto. (Doc. No. 34-11 at 1-67.) The Confirmation Order included an
injunction against persons enforcing claims against Solutia and an injunction against
6

persons enforcing claims against New Monsanto and Pharmacia. Each of the two
injunctions provided, however, that it “shall not prevent the Holders of Tort Claims . . .
from exercising their rights against” Solutia, and Monsanto and Pharmacia, respectively.
Id. at 41, 43-44.
The Reorganization Plan (Doc. No. 34-11 at 69-157) stated, as did the Settlement
Agreement, that the Distribution Agreement “shall not survive the Chapter 11 Case[].”
(Doc. No. 34-11 at 111.) The Reorganization Plan also stated as follows in a section
dealing with the treatment of tort claims:
The Tort Claims shall be unaffected by the Chapter 11 Cases, this Plan or
the Plan Documents. After the Effective Date, the Tort Claims shall be
resolved pursuant to applicable law and in the ordinary course of business.
Payment of the Tort Claims, in accordance with the [New] Monsanto Tort
Management, will be allocated between Reorganized Solutia and [New]
Monsanto pursuant to the terms of the [New] Monsanto Settlement
Agreement, provided, however, that such allocations are solely as between
Solutia and [New] Monsanto and nothing in the Monsanto Settlement
Agreement shall impair or adversely affect the Tort Claims. For the sake of
clarity, pursuant to the [New] Monsanto Settlement Agreement, [New]
Monsanto shall take financial responsibility, as between itself and
Reorganized Solutia only, for the management and payment of the Legacy
Tort Claims, including all costs related to the defense, mediation,
arbitration, settlement, and any judgment with respect to the Legacy Tort
Claims and Reorganized Solutia shall be financially responsible for the
Solutia Tort Claims [defined as “all Tort Claims other than Legacy Tort
Claims”] if any.
Id. at 105.
Later, in a section entitled “Releases by Holders of Claims and Equity Interests,”
the Plan stated that “the Holders of Tort Claims shall not be deemed to release [Solutia]
. . . on account of any liability arising from or related to the Tort Claims and . . . the
Holders of Tort Claims . . . as a result of the [New] Monsanto Settlement Agreement,
7

shall not be deemed to release [New] Monsanto or Pharmacia . . . on account of any
liability from or related to the Tort Claims.” Id. at 139. The Reorganization Plan defined
“Legacy Tort Claims” to include all claims arising under tort law, whether currently
asserted or asserted in the future,
(a) which constitute Chemicals Liabilities assumed by Solutia under the
Distribution Agreement;
(b) for which Solutia was required to indemnify Monsanto and Pharmacia
under the Distribution Agreement; and
(c) which are for . . . personal injury [or] products liability . . . arising out
of or related to exposure to . . . PCB.
Id. at 88. “Tort Claims” were defined as:
“all Claims, whether currently asserted or asserted in the future, . . . arising
under tort law for personal injury . . . arising from exposure to chemicals . .
. regardless of whether: (a) [Solutia] is, was or will be named as a defendant
in any action commenced by or on behalf of the holder of such Tort Claim;
(b) such holder has filed a proof of claim in the Chapter 11 Case; or (c) the
alleged exposure occurred before or after the [Solutia] Spinoff.
Id. at 96.
Plaintiffs assert in the complaint that as a result of these various transactions, all
four Defendants “collectively have legal responsibility” for Old Monsanto’s production
of PCBs. (Doc. No. 5 at 5-6.) Plaintiffs assert two state law claims: strict liability for
design defect, and negligence. The complaint states that the case was not removable
under the forum-defendant rule of 28 U.S.C. § 1441(b)(2), due to the presence of at least
one Missouri Defendant. Plaintiffs also state that they “affirmatively disclaim” any
damages or action arising out of an act of the United States or of any federal officer.

8

On May 28, 2015, six days after the action was filed in state court, and before any
Defendants had been served, New Monsanto and Solutia removed the case to this Court
pursuant to federal diversity jurisdiction under 28 U.S.C. § 1332(a). The removing
Defendants contended that although they were forum Defendants, and §1442(b)(2)
precludes removal if any party “properly joined and served”5 is a forum defendant,
removal here was nonetheless proper because (1) removal was accomplished before the
forum Defendants were served,6 and (2) the forum Defendants were fraudulently joined,
as neither company ever manufactured or sold PCBs. The moving Defendants contended
that while they indemnified Pharmacia for tort liabilities arising out of the manufacture
and sale of PCBs, they did not assume liability for these activities; thus, pursuant to
Missouri law, which does not allow a direct suit against an indemnitor, Plaintiffs have no
direct cause of action against New Monsanto and Solutia.
On May 29, 2015, Pfizer and Pharmacia filed their consent to removal. In its
answer filed on June 4, 2015, Pharmacia asserted 34 affirmative defenses, the 33rd of
which was that Plaintiffs’ action was preempted by the TSCA and the Federal Food,
Drug, and Cosmetic Act (“FFDCA”). (Doc. No. 16 at 11-20). On June 19, 2015,
Pharmacia filed a notice of additional grounds supporting removal (Doc. No. 22), in
which it argued that removal was also proper under the federal officer removal statute, 28
5

Section 1441(b)(2) provides as follows: “A civil action otherwise removable solely
on the basis of [diversity] may not be removed if any of the parties in interest properly
joined and served as defendants is a citizen of the State in which the action is brought.”
6

New Monsanto and Solutia stated that they obtained a copy of the complaint from the
state court’s electronic file. (Doc. No. 1 at 2.)
9

U.S.C. §1442(a)(1),7 because the production of PCBs was done “at the request and under
the direction of” the federal government, and because Pharmacia asserted a colorable
federal defense: that Plaintiffs’ claims were preempted by the TSCA.
Pharmacia bases its federal officer removal on the following facts (as presented in
its notice of additional grounds supporting removal): In 1971, the federal government
convened an Interdepartmental Task Force on PCBs to “coordinate the scientific efforts
of the Government aimed at understanding [PCBs], and to strengthen the Government’s
ability to protect the public from actual or potential hazards from PCBs.” (Doc. No. 222 at 4). In a 1972 report, the Task Force concluded that:
The use of PCBs should not be banned entirely. Their continued use for
transformers and capacitors in the near future is considered necessary
because of the significantly increased risk of fire and explosion and the
disruption of electrical service which would result from a ban on PCB use.
Id. at 7.
In February 1972, OSHA adopted electrical standards that required the use of
PCBs in a number of applications. In 1976, Congress passed the TSCA, and delegated to
the EPA the power to regulate a wide range of chemicals in the United States, specifically
including PCBs. 15 U.S.C. § 2601-2629. Recognizing that the continued use of PCBs
remained necessary in certain applications, Congress specifically authorized their
continued manufacture until January 1979. Id. at §2605(e)(3)(A)(i). The FDA regulates

7

Section 1442(a)(1) allows the removal of cases directed against “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 . . . .”
10

acceptable levels of PCBs in food under the FFDCA, and established tolerance levels
allowing low levels of PCBs to occur in a wide range of foods.
According to Pharmacia, for many years it (Old Monsanto) “manufactured PCBs
directly for agencies of the federal government, under contracts that specifically required
the manufacture of PCBs.” Pharmacia gives one example of having been a federal
contractor: “For example, in the 1970s, Pharmacia produced heat transfer fluids
containing PCBs for the U.S. Atomic Energy Commission.” (Doc. No. 22 at 7).
Pharmacia submits an exhibit dated March 28, 1972, showing an intended future sale of
400 barrels of PCBs to the Atomic Energy Commission (and Bendix Corp. as a joint
buyer). (Doc. No. 22-5). Pharmacia asserted that it also manufactured PCBs for federal
defense contractors, “under contracts specifically requiring PCBs, at the direction of the
federal government.” (Doc. No. 22 at 8.) As an example, Pharmacia submits evidence
that “[b]y the mid-1970s, the Tennessee Valley Authority had over a million gallons of
PCB-containing fluids in use on the TVA system.” Id. at 11.
ARGUMENTS OF THE PARTIES
Diversity Jurisdiction
On June 26, 2015, Plaintiffs filed their first motion to remand, challenging
Defendants’ assertion of diversity jurisdiction. Plaintiffs argue that removal on the basis
of diversity is barred by the forum-defendant rule for two reasons.8 First, while
recognizing some contrary authority, Plaintiffs cite numerous cases that hold that a
8

A third reason – that the Notice of Removal did not identify the citizenship of the
members of Pharmacia – is now moot in light of New Monsanto and Solutia’s filing that
does so (Doc. No. 32), and that establishes that there is complete diversity in this case.
11

defendant should not be permitted to avoid the forum-defendant rule by removing a case
before any forum defendants were “properly . . . served,” by “hawking” the state court
docket, as that would violate the intent of the rule. Second, Plaintiffs argue that the
forum Defendants (New Monsanto and Solutia) were not fraudulently joined, and
Defendants have made no factual showing that one or both of them cannot be held liable
for Old Monsanto’s manufacture of PCBs, a determination which cannot be made at this
early stage of the proceedings.
Plaintiffs assert that they “are in the process of investigating the historic
responsibility for PCB liabilities on the part of the various defendants in this case,” and
need to engage in further discovery on the matter. (Doc. No. 25 at 11.) But they point to
some evidence they now have in support of their position, namely Solutia’s memorandum
and supplemental memorandum filed in the bankruptcy court in support of Solutia’s
motion for approval of the Settlement Agreement with New Monsanto, which Plaintiffs
maintain show that as part of Solutia’s reorganization, certain liabilities it had assumed in
its spinoff from Old Monsanto were assumed (not merely indemnified) by New
Monsanto, including liability for PCB tort claims such as Plaintiffs’.
On July 20, 2015, all Defendants filed a joint response (Doc. No. 34) to Plaintiffs’
first motion to remand. Defendants first argue that Plaintiffs’ claims are legally and
factually frivolous, legally frivolous because they are based on the faulty premise that
Old Monsanto owed a duty to everyone in the nation not to manufacture PCBs, and
factually frivolous because there is no scientific basis for finding causation between
PCBs and Plaintiffs’ cancer. Turning to the question of the Court’s subject matter
12

jurisdiction, Defendants first question the continued viability of the principle that “any
doubt” should be resolved in favor of remand. They also question the applicability of the
forum-defendant rule itself in a case such as this in which the rationales for the rule,
according to Defendants, do not fit, and where removal is not based “solely” on diversity
(i.e., removal is also based on federal officer removal).
Defendants continue to maintain that, in any event, the forum-defendant rule does
not bar removal here because the forum-Defendants were not served prior to removal,
and because New Monsanto and Solutia were fraudulently joined as they are mere
indemnitors with respect to Plaintiffs’ claims and thus, under Missouri law, cannot be
held directly liable. The gravamen of Defendants’ fraudulent-joinder argument is that the
Settlement Agreement superseded whatever obligations Solutia or New Monsanto
undertook in the Distribution Agreement and the Separation Agreement, and replaced
those older obligations with the obligation to indemnify only. Defendants also argue that
the no-third-party-beneficiaries provisions in the Distribution Agreement and the
Separation Agreement preclude Plaintiffs’ claims against Monsanto and Solutia.
According to Defendants, even if Solutia or Monsanto agreed to assume Old
Monsanto/Pharmacia’s liabilities, only Pharmacia has the legal right to enforce that
obligation; Plaintiffs do not.
In their reply (Doc. No. 50) addressing diversity jurisdiction, Plaintiffs re-argue
their points previously raised, stressing that the Settlement Agreement did not “take the
liabilities out of Solutia and/or Monsanto, where they resided, and put them back into
Pharmacia.” Plaintiffs bring to the Court’s attention a recent case that held that Solutia
13

could be held liable for Old Monsanto’s PCB liabilities, based on an analysis of the
documents described above: Town of Lexington v. Pharmacia Corp., No. 12-CV-11645,
2015 WL 1321457, at *7 (D. Mass. Mar. 24, 2015).
The plaintiff in Town of Lexington was a town that sought recovery for
environmental remediation of property damage due to the presence of PCBs in the air of
one of its school buildings. The plaintiff asserted state tort claims and named as
defendants Pharmacia, Solutia, and New Monsanto. The district court denied Solutia’s
motion for summary judgment that was based on virtually the same arguments Solutia
raises here. The court concluded that the liability assumed by Solutia in the Distribution
Agreement was unaltered by Solutia’s Reorganization Plan, which preserved the rights of
“Holders of Tort Claims.” Thus, according to the court, “although the Distribution
Agreement was superseded by the Plan Documents, including the Settlement Agreement,
Solutia retained the liability it assumed by virtue of the Distribution Agreement . . . .
Solutia assumed direct liability and, therefore, [Plaintiff] may assert its [PCB] claims
directly against Solutia.” Id. at *6. The court also held that Solutia could not shield itself
from liability it expressly assumed by virtue of the clause negating third-party beneficiary
rights. Id. at *5.
With respect to New Monsanto, the Town of Lexington court held that the matter
was not that clear (“The intent of the parties is difficult to discern from the various
agreements apportioning liability among the three defendants [New Monsanto, Solutia,
and Pharmacia].”), id. at *8, and invited further briefing on the matter.

14

Plaintiffs here attach to their reply a 2015 Form 10-K that New Monsanto
submitted to the Securities and Exchange Commission, in which New Monsanto stated
that it was involved in legal proceedings “to which our former parent Pharmacia LLC and
its former subsidiary Solutia Inc. is a party but that we manage and for which we are also
responsible.” (Doc. No. 50-8 at 4.) In the same form, New Monsanto included in its
liabilities “tort litigation related to” Pharmacia’s former chemical business, specifically
noting PCBs. Id. at 5. As Plaintiffs acknowledge, elsewhere in the Form 10-K New
Monsanto characterizes its litigation liability in these cases as arising “in the ordinary
course of its business or pursuant to [New] Monsanto’s indemnification obligations to
Pharmacia.” Id. at 7. In Plaintiff’s view, such conflicting language shows that
Defendants have not met their burden of presenting clear and convincing evidence that
Plaintiffs do not have a colorable claim against New Monsanto.
Federal Officer Removal
On July 23, 2015, Plaintiffs filed a second motion to remand, this motion
addressing the issue of federal officer removal. Plaintiffs argue that Old Monsanto was
not “acting under” a federal officer within the meaning of § 1442(a)(1) when it
manufactured PCBs, and there is no causal connection between Old Monsanto’s actions
and official authority, as required for federal officer removal. According to Plaintiffs, the
PCBs Monsanto manufactured for the government were for use in “closed electrical
settings,” whereas Plaintiffs’ claims “attack [Old] Monsanto’s supply of PCBs for use in
non-closed applications, prior to the interval in which [Old Monsanto] says it was

15

required [by the government] to continue selling [PCBs] for use in closed applications.”
(Doc. No. 40 at 4.)
Plaintiffs also argue that Old Monsanto lacks a colorable federal defense (another
requirement for federal officer removal) based on TSCA preemption, as evidenced by the
fact that such a defense has never been raised – much less successfully – in the years of
PCB litigation against Old Monsanto. According to Plaintiffs, the defense is especially
unavailable here as the TSCA became effective in 1977, and Plaintiffs are challenging
conduct that occurred before its enactment. Plaintiffs also point to “the savings clause”
in the TSCA that Plaintiffs argue preserves state tort claims seeking damages.
In response to Plaintiffs’ second motion to remand, Pharmacia states that for
federal officer removal, a liberal standard for removal applies. Pharmacia relies on the
facts that from 1929 to 1977, Old Monsanto manufactured PCBs directly for use by the
federal government, an executive branch task force determined their use was “necessary”
to maintain the safety of the nation’s power grid, federal OSHA regulations required their
use, and Congress passed legislation expressly permitting their manufacture through
1979. Pharmacia argues that as a result, Plaintiffs’ claims challenge Old Monsanto’s
conduct performed under color of federal office. Pharmacia notes that the complaint is
based on the manufacture of all PCBs by Old Monsanto, and it is not possible to
determine to which PCBs Plaintiffs were exposed. In addition, according to Pharmacia,
courts routinely deny requests for remand based on “generic disclaimers” like that in
Plaintiff’s complaint.

16

In their reply addressing federal officer removal, Plaintiffs maintain that the
federal removal statute is not read liberally where only the liability of a private company
purportedly acting at the direction of a federal officer is at issue. Plaintiffs argue that
“[t]he vast, overwhelming majority of [Old Monsanto’s] products were sold to private
companies” not the government. . . . [and] simply because a vanishingly small number of
PCB sales were made to government purchasers” does not make the case removable on
federal officer grounds. (Doc. No. 52 at 4-5.)
Plaintiffs provide excerpts from the report of one if their experts on the total
quantity of PCBs sold for domestic use, which estimates that over the years, a total of 1.2
billion pounds of PCB were sold. (Doc. No. 52-1 at 4.) Plaintiffs argue that Defendants
had provided evidence that only 47,000 pounds of PCBs were sold to the government, or,
in other words, that “slightly more than one one hundredth of one percent of all of [Old]
Monsanto’s PCB sales were made to the government.” (Doc. No. 52 at 6.) At the
hearing, Plaintiffs characterized this argument as a “de minimis” argument,
acknowledging that due to the unique theory of liability in this case, they do not have
case law supporting their position. While Defendants sought to debunk the de minimis
argument, they did not challenge the one one hundredth of one percent figure presented
by Plaintiffs.
Surreply and Surresponse
In a surreply directed to both motions to remand, Defendants argue that the liberal
standard favoring federal officer removal applies even when the removing party is a
private company. According to Defendants, the volume of PCBs manufactured for direct
17

sale to the government is irrelevant because the complaint challenges the manufacture of
all PCBs. Cases alleging improper disposal of PCBs that rejected federal officer removal
are not instructive, according to Defendants, because the government did not tell the
private companies in those cases how to dispose of the PCBs, but OSHA did “require the
use of PCBs in certain applications (and, thus, their manufacture).”
On the question of diversity jurisdiction, Defendants continue to argue that New
Monsanto and Solutia were fraudulently joined. They again stress that the 2007
Settlement Agreement in Solutia’s bankruptcy case superseded any assumption of
liabilities in the Distribution Agreement or the Separation Agreement, and replaced any
previous assumption of liability with indemnification obligations. Further, “[t]he specific
terms of the Settlement Agreement – limiting New Monsanto’s obligations to those of
indemnity – control over more general provisions in the Bankruptcy Plan.” According to
Defendants, Town of Lexington was wrongly decided. (Doc. No. 55 at 6.)
Last in the volley of briefs is Plaintiffs’ surresponse in which they argue that Town
of Lexington was correctly decided, and point the Court to a recent case from the Eighth
Circuit, Hubbard v. Federated Mutual Insurance Co., 799 F.3d 1224, 1227 (8th Cir. Sept.
8, 2015), in which the Eighth Circuit reaffirmed the rule that “[a]ll doubts about federal
jurisdiction [based on diversity of citizenship] should be resolved in favor of remand to
state court.”
Supplemental Facts and Arguments re Federal Officer Removal
On January 28, 2016, Defendants moved to supplement the factual record with
respect to their assertion that removal is proper under the federal officer removal statute.
18

Defendants explain that they uncovered this evidence only recently with the assistance of
a historical research firm and their own search of their historical records and files
undertaken in connection with a subsequent case9 raising the same claims and
jurisdictional issues as the present case. The proposed “newly-discovered” evidence
(Doc. No. 75-1 to 75-5) consists of documents from 1941-1942 and from 1972.
The documents from 1941-1942 consist of three requests for issuance of a
Necessity Certificate made to the Secretary of War and The Advisory Commission of
National Defense between May 21 and November 27, 1941, and granted between August
6, 1941 and March 13, 1942. Each of these three requests was for government funding
for new facilities to increase production of PCBs. The first application states that the
new facility would increase PCB production from 720,000 to 1,200,000 pounds per
month and that 100% of the “increase in productive capacity [would] be directly or
indirectly absorbed in the Defense Program.” (Doc. No. 75-1 at 5.) The application also
states that Old Monsanto had no contract with the government or its agencies for supply
of diphenyl, but that there was “no doubt that a substantial part of Firestone’s rubber
products are today being required for defense purposes,” and that four named electric
companies use the product for transformers, condensers, and similar products. Id. at 4.
The Office of Production Management recommended 100% certification, noting that
PCBs were essential in the insulation of Navy cable and that there was a demand for this
product to fill government orders which was “greater than can be supplied with present
production facilities.” Id. at 10, 14-15. The second request for additional funding again
9

Kelly v. Monsanto, 4:15CV01825 JMB.
19

states that 100% of the increased production would be “directly or indirectly absorbed in
the Defense program.” (Doc. No. 75-2 at 5.) The Office of Production Management
recommended that the Certificate of Necessity be granted 100%, noting that the project
would increase the annual production of PCBs by 7,200,000 pounds annually and was
“necessary in the interest of national defense during this emergency period….” Id. at 23.
The application also stated that Old Monsanto did not expect to furnish any of this
material to the Army or Navy. Id. at 3.
A third request for funds was for new facilities that were expected to increase Old
Monsanto’s PCB production by an additional 130,000 pounds per month. (Doc. No. 75-3
at 4.) This document stated that demand upon manufacturers of transformers and
condensers “has increased to large proportions on account of the defense program, and
consequently a serious shortage of [PCPs] is now faced.” Id. at 6. Once again, 100% of
the “increase in productive capacity [would] be directly or indirectly absorbed in the
Defense Program.” This document also stated that Old Monsanto has not entered into
any supply contract with the United States for the product nor is any such contract now
anticipated.” Id. at 3.
The proposed new evidence also shows that in 1972, the federal government
directed Old Monsanto, pursuant to the Defense Production Act of 1950, to sell 3,000
pounds of PCBs to one military contractor, and in 1974 to sell three 55 gallon drums to
another military contractor. The directives were issued despite Old Monsanto’s objection
to fill these military contractors’ orders because of the environmental problems of PCBs
in “open systems.”
20

Defendants maintain that this new evidence is “directly relevant to Defendants’
right to litigate cases challenging [the] manufacture of PCBs in a federal forum – an issue
of first impression . . . .” (Doc. No. 75 at 6.) Plaintiffs respond that the motion for leave
to supplement is untimely, and, in any event, the new evidence does not support federal
officer removal because (1) federal officer jurisdiction is unavailable to entities that
simply subcontracted with other companies that were themselves contracting with the
government, and (2) sales of PCBs for ultimate use by the government, even with the
new sales in 1941-42 and 1971, “do not change the ultimate calculus” and were still “a
vanishingly small part” of Old Monsanto’s overall sales of PCBs, and thus those “de
minimis” sales cannot give rise to federal officer jurisdiction. (Doc. No. 79 at 3.)
In their reply, Defendants do not refute Plaintiffs’ renewed “de minimis”
assertions. Rather, they argue that the new documents “showing that the federal
government funded the expansion of Pharmacia’s production of PCBs and ordered
Pharmacia to sell PCBs to government contractors are relevant to show that Pharmacia
‘acted under’ color of federal office in manufacturing PCBs.” (Doc. No. 81 at 5.)
Despite the late request for leave to submit the supplemental evidence, the Court
will grant Defendants’ motion for leave.
DISCUSSION
Diversity Jurisdiction
General Principles and Forum-Defendant Rule
As Plaintiffs argue, the Eighth Circuit continues to apply the “anti-removal
presumption” in run-of-the-mill diversity cases, even after Dart Cherokee Basin
21

Operating Co. v. Owens, 135 S. Ct. 547, 554 (Dec. 15, 2014), in which the Supreme
Court held that there is no “anti-removal presumption” in cases removed on the basis of
the Class Action Fairness Act. See Hubbard, 799 F.3d at 1227 (applying the presumption
without discussing Dart). Under the presumption, “any doubts about the propriety of
removal are resolved in favor of remand.” Id. at 1227 (citation omitted); see also Byrd v.
TVI, Inc., No. 4:15 CV 1439 CDP, 2015 WL 5568454, at *2 (E.D. Mo. Sept. 21, 2015)
(same). In addition, “the party invoking jurisdiction, bears the burden of proving that all
prerequisites to jurisdiction are satisfied.” Byrd, 2015 WL 5568454, at *2.
As noted above, the removal statute provides that a case may not be removed on
diversity grounds “if any of the parties in interest properly joined and served as
defendants is a citizen of the State in which suit is brought.” 28 U.S.C. § 1441(b)(2). A
violation of the forum defendant rule constitutes a jurisdictional defect in the Eighth
Circuit. See Horton v. Conklin, 431 F.3d 602, 604-05 (8th Cir. 2005) (“The violation of
the forum defendant rule is a jurisdictional defect and not a mere procedural irregularity
capable of being waived.”).
The Court recognizes the split of authority among district courts, including courts
in this district, on whether a defendant can avoid the forum-defendant rule by removing a
case before a local defendant – or as here, any defendant – has been served. Compare,
e.g., Hensley v. Forest Pharm., Inc., 21 F. Supp. 3d 1030, 1036 (E.D. Mo. 2014) (holding
that strict adherence to the language of the statute would be inconsistent with the
fundamental purposes of removal and in contravention of the legislative intent behind the
forum-defendant rule), and Prather v. Kindred Hosp., No. 14-0828-CV-W-FJG, 2014
22

WL 7238089, at *4 (W.D. Mo. Dec. 17, 2014) (same), with, e.g., Rogers v. Boeing
Aerospace Operations, Inc., 13 F. Supp. 3d 972, 977 (E.D. Mo. 2014) (holding that the
language of the statute must be followed; but recognizing, as an exception, the
“egregious” case where a defendant “hawked” the state court docket and removed before
any defendant had been served). The Court believes that the Hensley line of cases
presents the better approach, especially today, in light of state court electronic filing
systems, and will follow that line of authority. In any event, under Rogers, this case
would qualify as an “egregious” one because it was removed six days after it was filed
and before any Defendant had been served.10
Fraudulent Joinder Doctrine
An exception to the forum-defendant rule is that if the forum defendant was
fraudulently joined, the case may be removed (assuming all other removal requirements
are met, as they are here). In determining whether a defendant was fraudulently joined,
the district court must decide “whether there is arguably a reasonable basis for predicting
that the state law might impose liability based upon the facts involved.” Filla v. Norfolk
S. Ry. Co., 336 F.3d 806, 811 (8th Cir. 2003). Put another way, the court must decide
whether plaintiff might have a “colorable” claim against the forum defendant. Junk v.
Terminix Int’l Co., 628 F.3d 439, 446 (8th Cir. 2010). Thus, a defendant asserting
fraudulent joinder must “prove that the plaintiff’s claim against the diversity destroying
defendant has no reasonable basis in fact and law.” Knudson v. Sys. Painters, Inc., 634

10

The Court rejects out-of-hand Defendants’ argument that the forum-defendant rule is
not a good rule in the context of this case and so should not be followed.
23

F.3d 968, 977 (8th Cir. 2011) (citation omitted). In resolving a fraudulent joinder issue, a
district court may consider materials outside the pleadings. In re Genetically Modified
Rice Litig., 618 F. Supp. 2d 1047, 1052 (E.D. Mo. 2009) (collecting cases); Petersen v.
Rusch, Inc., No. 4:05CV01328ERW, 2006 WL 83492, at *2 (E.D. Mo. Jan. 12, 2006).
Furthermore, “the district court should resolve all facts and ambiguities in the current
controlling substantive law in the plaintiff’s favor.” Filla, 336 F.3d at 811.
The Court first concludes that, resolving all facts and ambiguities in the current
controlling substantive law in Plaintiffs’ favor, there is “arguably a reasonable basis for
predicting” that Missouri tort law might impose liability on Pharmacia (Old Monsanto)
based on the facts alleged. See Clair v. Monsanto Co., 412 S.W.3d 295 (Mo. Ct. App.
2013) (holding that under California tort law, which is the same as Missouri law for
relevant purposes, claims of strict liability and negligence arising from the manufacture
of PCBs could go forward).
And so the question at this juncture is whether Plaintiffs have a colorable claim
against either New Monsanto or Solutia based on Old Monsanto’s manufacture of PCBs.
The answer turns on whether either of these two entities assumed, rather than merely
agreed to indemnify Pharmacia (Old Monsanto) for, Old Monsanto’s PCBs’ liabilities,
and if so, whether Plaintiffs here may bring their claims against either forum Defendant.
The crux of the matter centers on the interpretation of the various contracts and
bankruptcy court documents noted above. The 1997 Distribution Agreement (as
amended), the 2000 Separation Agreement (as amended), the 2007 Settlement
Agreement, and the 2007 Pharmacia Indemnity Agreement all provide that they shall be
24

governed by Delaware law. “Confirmed bankruptcy plans of reorganization are binding
contracts that must be interpreted in accordance with applicable contract law.” In re
Sugarhouse Realty, Inc., 192 B.R. 355, 362 (E.D. Pa. 1996).
Delaware law adheres to an objective theory of contracts, under which a
court will not consider extrinsic evidence to interpret the intent of the
parties, to vary the terms of the contract or to create an ambiguity when the
relevant contract terms are unambiguous. Contract terms are not
ambiguous merely because the parties to the contract disagree on their
meaning; rather, the Court stands in the shoes of an objectively reasonable
third-party observer, and determines whether the contract language is
unmistakably clear.
Revolution Retail Sys., LLC v. Sentinel Techs., Inc., No. CV 10605-VCP, 2015 WL
6611601, at *9 (Del. Ch. Oct. 30, 2015) (citations omitted).
“When the provisions in controversy are fairly susceptible of different
interpretations or may have two or more different meanings, there is ambiguity.”
Aleynikov v. Goldman Sachs Grp., Inc., 765 F.3d 350, 362 (3d Cir. 2014) (applying
Delaware law) (holding that summary judgment could not be awarded because the
language of an agreement was ambiguous and the moving party failed to offer
uncontested evidence as to the proper interpretation); see also GMG Capital Investments,
LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776, 783 (Del. 2012).
Here, the Court concludes that the relevant provisions of the agreements between
Pharmacia, Solutia, and New Monsanto are “fairly susceptible of different
interpretations” with respect to (1) whether the PCB liability assumed by Solutia in the
Distribution Agreement remains with Solutia, and (2) whether New Monsanto ever
assumed PCB liability, and if so, whether New Monsanto retains that liability.

25

With respect to Solutia, the Court concludes, as did the Town of Lexington court,
that although the Distribution Agreement was superseded by the Settlement Agreement
and the Reorganization Plan, Solutia retained the liability it assumed by virtue of the
Distribution Agreement. This conclusion is based on the “Holders of Tort Claims”
exclusion in the Reorganization Plan,11 and the section in the Reorganization Plan on the
treatment of “Tort Claims,” notably the statement that “The Tort Claims shall be
unaffected by the Chapter 11 Cases, this Plan or the Plan Documents [which included the
Settlement Agreement].” Although these statements refer to “Tort Claims” and not
“Legacy Tort Claims,” there is at least an ambiguity as to whether “Tort Claims” includes
“Legacy Tort Claims.” Clearly the term “Tort Claims” is broader than “Legacy Tort
claims,” and without specifying the exclusion of Legacy Tort Claims, the term Tort
Claims would naturally be understood to include Legacy Tort Claims.
With respect to New Monsanto, § 2.01 of the Separation Agreement, quoted
above, is not a strict indemnification provision, but rather indicates an assumption of
liability. In SSM Health Care St. Louis v. Radiological Imaging Consultants, LLP, 128
S.W. 3d 534 (Mo. Ct. App. 2003), the Missouri Court of Appeals explained the concept
of indemnity as follows:
Indemnity is a right that inures to the person who has discharged a duty that
is owed by him, but which, as between himself and another, should have
been discharged by the other, so that if the other does not reimburse the
11

As quoted above, this exclusion provided that “the Holders of Tort Claims shall not
be deemed to release [Solutia] . . . on account of any liability arising from or related to
the Tort Claims and . . . the Holders of Tort Claims . . . as a result of the [New] Monsanto
Settlement Agreement, shall not be deemed to release [New] Monsanto or Pharmacia . . .
on account of any liability from or related to the Tort Claims.” (Doc. No. 34-11 at 139.)
26

person, the other is unjustly enriched to extent that his liability has been
discharged.
Id. at 539. This is not the type of arrangement described in § 2.01. This conclusion
would seem to be supported by the above-quoted statement in the July 1, 2002
amendment to the Distribution Agreement that pursuant to the Separation Agreement,
New Monsanto “assumed certain liabilities related [to]” the chemical business assets
Pharmacia had transferred to New Monsanto, followed by the statement, in the
conjunctive, that New Monsanto assumed all liabilities that Solutia had assumed “to the
extent that Solutia fails to pay.” (Doc. No. 73-1 at 3.) The use of the conjunctive
suggests that New Monsanto directly assumed PCB liabilities.
Other evidence that New Monsanto can be held directly liable for PCB claims is
provided by the statements, described above, in Solutia’s Reorganization Plan that
“Holders of Tort Claims” were not releasing New Monsanto . . . on account of any
liability arising from or related to the Tort Claims.” (Doc. No. 34-11 at 139.) As in the
case of Solutia, although these statements refer to “Tort Claims” and not “Legacy Tort
Claims,” there is at least an ambiguity as to whether “Tort Claims” includes “Legacy Tort
Claims.” Further, New Monsanto’s 2015 Form 10-K, also described above, seems to
suggest that New Monsanto viewed itself as more than just an indemnitor with respect to
PCB claims such as Plaintiffs’.
Given these ambiguities, the Court cannot say, based on the record before it, that
Plaintiffs do not have colorable claims against Solutia and/or New Monsanto (assuming
that the theory of recovery itself is legally and factually sound). Thus, Plaintiffs’ first

27

motion for remand is well taken. See Grady Bros. Investments, LLC v. Gen. Motors
Acceptance Corp., No. CIV.A.07-0747-WS-B, 2007 WL 4577701, at *6 (S.D. Ala. Dec.
27, 2007) (concluding that there was an ambiguity as to whether a warranty provision
between the parties was intended to supersede other provisions, such that it would have
been reasonable for the plaintiff to rely on representations of the non-diverse defendant
concerning the environmental status of certain property; overruling the defendant’s
fraudulent joinder objection predicated on alleged lack of reliance, and remanding the
case “because resolving such an ambiguity would be a step beyond” the jurisdictional
inquiry).
Defendants’ argument based on the no third-party beneficiaries provisions in the
Distribution Agreement and the Separation Agreement is without merit. Plaintiffs are not
suing on claims created by either of those agreements. Rather, their claims are based on
the manufacture and sale of PCBs, and liabilities for conduct prior to any spin-offs.
Neither the interpretation of the various agreements involved to determine whether
Solutia and/or New Monsanto are proper Defendants, nor the viability of the theory of
recovery in this case, are matters of federal law. The Court, thus, believes that the oftstated principle applies here, that “where the sufficiency of the complaint against the nondiverse defendant is questionable, the better practice is for the federal court not to decide
the doubtful question . . . but simply to remand the case and leave the question for the

28

state courts to decide.” See Byrd v. TVI, Inc., No. 4:15 CV 1439 CDP, 2015 WL
5568454, at *2 (E.D. Mo. Sept. 21, 2015) (citing numerous cases).12
Federal Officer Removal
Title 28 U.S.C. § 1442(a)(1) “grants independent jurisdictional grounds over cases
involving federal officers where a district court otherwise would not have jurisdiction.”
Jacks v. Meridian Res. Co., 701 F.3d 1224, 1230 (8th Cir. 2012). Section 1442(a)(1), in
relevant part, allows removal to a federal forum of any civil action against “any officer
(or any person acting under that officer) of the United States or of any agency thereof,
sued in an official or individual capacity for or relating to any act under color of such
office.” 28 U.S.C. § 1442(a)(1).
In Mesa v. California, 489 U.S. 121 (1989), the Supreme Court traced the history
of § 1442(a), from its origin in 1814 as a congressional response to New England’s
opposition to the War of 1812, through its expansion in the Civil War era as the need to
enforce unpopular federal revenue laws became acute. Mesa, 489 U.S. at 125-26. More
recently, the Supreme Court explained that the “basic” reason for allowing federal officer
removal, is because “State-court proceedings may reflect local prejudice against
unpopular federal laws or federal officials [and] States may deprive federal officials of a
12

The Court grants Plaintiffs’ unopposed motion (Doc. No. 80) to supplement the
record concerning removal on the basis of diversity jurisdiction with the deposition of
Robert G. Kaley taken in the context of Town of Lexington. Kaley, a designated
representative of Defendants herein and in Town of Lexington, testified that it was his
understanding that New Monsanto and Solutia “assumed” liabilities from Old Monsanto.
The Court agrees with Defendants (and with the court in Town of Lexington) that this
evidence is not relevant, as Kaley is not an attorney qualified to offer legal opinions, and
further because his testimony does not answer the question of whether New Monsanto
and Solutia assumed direct liability or indemnification responsibility.
29

federal forum in which to assert federal immunity defenses.” Watson v. Philip Morris
Cos., 551 U.S. 142, 150 (2007) (citations omitted). The words “or relating to” were
added to the statute by Congress in 2011. This addition was “intended to broaden the
universe of acts that enable Federal officers to remove to Federal court.” In re
Commonwealth’s Motion to Appoint Counsel Against or Directed to Def. Ass’n of
Philadelphia, 790 F.3d 457, 467 (3d Cir. 2015) (citing legislative history).
To come within the purview of § 1442(a)(1), Defendants must show that (1) they
are “persons,” within the meaning of the statute, (2) they acted under the direction of a
federal officer, (3) there was a causal connection between their actions taken under
federal direction and Plaintiffs’ claims, and (4) they have a colorable federal defense to
Plaintiffs’ claims. Jacks, 701 F.3d at 1230; Ruppel v. CBS Corp., 701 F. 3d 1176, 118081 (2012). As with diversity jurisdiction, the removing party bears the burden of proving
the grounds supporting federal officer removal. See, e.g., Ruppel, at 1180.
It is undisputed that Defendants are persons within the meaning of the statute.
With respect to the “acting under” requirement, the Supreme Court explained as follows
in Watson: “Section 1442(a)(1)’s words ‘acting under’ are broad, and the statute must be
liberally construed. But broad language is not limitless. And a liberal construction
nonetheless can find limits in a text’s language, context, history, and purposes.” Watson,
551 U.S. at 147. In that case the Court rejected a cigarette manufacturer’s argument that
it acted under the federal government because it was subjected to heavy regulation. Id. at
152. Drawing on its previous federal officer removal cases, the Court held that “‘acting
under’ must involve an effort to assist, or to help carry out, the federal superior’s duties
30

or tasks.” Id. “Cases in which the Supreme Court has approved removal involve
defendants working hand-in-hand with the federal government to achieve a task that
furthers an end of the federal government.” Ruppel, 701 F.3d at 181. “‘Acting under’”
covers situations . . . where the federal government uses a private corporation to achieve
an end it would have otherwise used its own agents to complete.” Id.
The Court concludes that here, in light of the supplemental evidence submitted by
Defendants, a somewhat close question is presented as to what extent Defendants have
met the “acting under” requirement for federal officer removal. Upon review of the
record before it, the Court concludes that this requirement is met only with respect to the
PCBs that Old Monsanto sold directly to the government, or to others at the direction of
the government. Although the government required the use of PCBs in certain products
during the relevant time period, and provided financial assistance to Old Monsanto to
manufacture them in the early 1940s, Defendants sold the PCBs, by and large, to
government contractors and not to the government itself. Defendants have not
maintained that the manufacturing process itself was in any way supervised or controlled
by the government. Cf. Anderson v. Hackett, 646 F. Supp. 2d 1041, 1054 (S.D. Ill. 2009)
(concluding that the Monsanto defendants in that case – Pharmacia, Solutia, Pfizer, and
New Monsanto – were not entitled to federal officer removal of claims challenging their
production and disposal of PCBs based on their argument that the government directed
them to produce PCBs, as the evidence failed to show such direction).
This is in contrast to, for example, Agent Orange cases, in which courts have
routinely held that the manufacturers of Agent Orange were entitled to federal officer
31

removal in cases asserting negligence and products liability claims, because the
companies directly contracted with the government for the production of Agent Orange
and the chemical was produced to the detailed specifications of the government. See,
e.g., Isaacson v. Dow Chem. Co., 517 F.3d 129, 137-38 (2nd Cir. 2008); Winters v.
Diamond Shamrock Chem. Co., 149 F.3d 387, 398-99 (5th Cir. 1998).
The Court also concludes that Defendants have failed to meet the causal
connection requirement for federal officer removal. The Court finds Plaintiffs’ de
minimis argument persuasive in the context of the rather novel theory of liability raised in
this case. Plaintiffs’ theory of liability is premised on their exposure to PCBs that over
decades accumulated and persisted in the environment and food chain. Although the
“calculus” is changed by the supplemental evidence, the record before the Court still
shows that the amount of PCBs manufactured by Old Monsanto pursuant to direct
contracts with the government, together with the amounts sold to federal contractors at
the direction of the government, and even together with the amounts manufactured to
meet the needs of defense contractors during the years of the Second World War, relative
to the total amount of PCBs allegedly persisting in the environment and food chain, is
simply too small to satisfy the requirement that there be a causal connection between the
conduct that was taken under federal authority and Plaintiffs’ claims. This dictates
against finding federal officer removal.
The Court need not decide whether Defendants’ asserted preemption defenses
constitute colorable federal defenses in this case.

32

CONCLUSION
The Court concludes that Defendants have failed to meet their burden of showing
that removal of this action was proper.
Accordingly,
IT IS HEREBY ORDERED that the parties’ motions for leave to supplement the
record are GRANTED. (Doc. Nos. 75 & 80)
IT IS FURTHER ORDERED that Plaintiffs’ motion to remand this case to state
court due to lack of diversity jurisdiction is GRANTED. (Doc. No. 24.)
IT IS FURTHER ORDERED that Plaintiffs’ motion to remand this case to state
court due to lack of federal officer jurisdiction is GRANTED. (Doc. No. 39.)
IT IS FURTHER ORDERED that the Clerk of Court shall take all necessary
steps to remand this case to the state court in which it was filed.

________________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRCIT JUDGE
Dated this 31st day of March, 2016

33