Burford v. Monsanto Company et al

Filing 27

MEMORANDUM AND ORDER. (See Full Order.) The Court concludes that Defendants failed to meet their burden of showing that removal of this proper. Accordingly, IT IS HEREBY ORDERED that Plaintiffs' motion for remand (ECF No. 13 ) is GRANTED. Signed by Magistrate Judge Patricia L. Cohen on 4/10/2017. (Certified copy of Memorandum and Order and docket sheet sent to St. Louis County Circuit Court this date.) (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
KENT N. BURFORD, et al.,

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Plaintiffs,
vs.
MONSANTO CO., et al.,
Defendants.

Case no. 4:16CV536

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiffs’ motion for remand.

(ECF No. 13).

Defendants Monsanto Company, Solutia, Inc., and Pharmacia LLC (collectively, “Defendants”)
oppose the motion. (ECF No. 18). The parties consented to the jurisdiction of the undersigned
pursuant to 28 U.S.C. § 636(c). (ECF No. 15).
I.

Factual and Procedural Background
From 1935 until 1977, Pharmacia (then known as Monsanto) manufactured

polychlorinated biphenyls (PCBs)1 and sold them, under the trade name “Aroclor,” to a variety
of industrial customers. (ECF No. 9, ¶¶ 34, 50). Pharmacia sold the PCBs for use in “closed
applications,” or insulating fluids in high-temperature transformers and capacitators, and “open
applications,” such as inks, paints, pesticides, plasticizers, hydraulic fluids, lubricants, adhesives,
heat transfer fluids, and carbonless copy paper.

(ECF No. 7 at ¶ 41).

In 1971, Pharmacia

ceased production of PCBs for use in open-application systems, and in 1977, it ceased all
production of PCBs. (ECF No. 9 at ¶¶ 34, 41).
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PCBs are a class of man-made organic compounds that are nonflammable and conduct heat
without conducting electricity, and have been used in many different products, including
electrical equipment, to prevent fires and explosions. Kelly, et al. v. Monsanto Company, et al.,
Case No. 4:15CV1825 JMB, 2016 WL 3543050 at *1 n.2 (E.D.Mo. June 29, 2016)
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On March 10, 2016, twenty-eight individual plaintiffs (“Plaintiffs”) filed a petition
against Defendants in the Circuit Court of St. Louis County seeking damages under theories of
strict product liability and negligence. (ECF No. 7). Plaintiffs alleged that their exposure to
PCBs, which were manufactured by Pharmacia and ultimately released into the environment,
caused them to develop non-Hodgkin lymphoma, malignant melanoma, and/or breast cancer.
(Id. at ¶ 34). Plaintiffs specifically limited their claims to PCBs sold for use in open applications
and stated that they “affirmatively disclaim any damages or cause of action for . . . any exposure
to PCBs sold by defendants at the direction of any officer of the United States or any of its
agencies or entities or any person acting at their direction.” (Id. at ¶ 33).
Pharmacia, with the consent of Monsanto Co. and Solutia, Inc., removed the action
asserting that this Court has jurisdiction under 28 U.S.C. § 1442(a)(1), the federal officer
removal statute. (ECF No. 1). In the notice of removal, Pharmacia claimed that it “acted under”
color of federal office because it manufactured PCBs: (1) at the express direction and command
of the federal government, pursuant to the Defense Production Act; (2) as a direct contractor for
various governmental departments and agencies; (3) for federal defense contractors who required
them to meet exacting military specifications; and (4) for uses required by federal OSHA
regulations. (ECF No. 1 at ¶ 80). Additionally, Pharmacia asserted that Plaintiffs’ claims are
“for or relating to” Defendant’s manufacture and sale of PCBs because the government procured
the PCBs and regulated their production.
following colorable federal defenses:

(Id. at ¶ 100).

Finally, Pharmacia alleged the

(1) the government contractor defense; (2) express

preemption by the Toxic Substances Control Act of 1976 (TSCA); and (3) implied preemption
by the EPA’s comprehensive regulation of PCBs. (Id. at ¶¶ 88, 96, 98).

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On May 17, 2016, Plaintiffs filed a motion to remand the action to state court on the
ground that this case does not satisfy the requirements for federal officer removal. (ECF No.
13). In their memorandum in support of the motion for remand, Plaintiffs argued that Pharmacia
satisfied neither the “acting under” nor causal requirements for federal officer jurisdiction
because Plaintiffs’ cause of action “attacks Monsanto’s supply of PCBs used in non-closed
applications, which was necessarily prior to the interval in which it says it was required to
continue selling them for use in closed applications.” (ECF No. 14 at 5) (emphasis added). In
regard to the federal defenses asserted by Pharmacia, Plaintiffs contended that the government
contractor defense is not available to Pharmacia because, among other reasons: (1) Pharmacia
did not contract directly with the government, but rather with government contractors; and (2) to
the extent that Pharmacia presented evidence of government contracts for PCBs, it cannot
demonstrate that those PCBs were used in open applications. (Id. at 3-7). Plaintiffs also
maintained that the TSCA cannot apply retroactively to bar their claims and, even if it did, the
TSCA’s savings clause preserved their right to seek damages under common law theories. (Id. at
8-11).
Defendants filed a response in opposition to remand, arguing that they presented
sufficient evidence to satisfy their burden of establishing that they “acted under color of federal
office” because they demonstrated that: (1) Pharmacia produced PCBs for direct sale to the
federal government; and (2) the federal government exercised control over Pharmacia’s
production of PCBs for military use. (ECF No. 18 at 4-7). Additionally, Defendants refuted
Plaintiffs’ assertion that federal subcontractors cannot invoke the federal officer removal statute.
(Id. at 9). Finally, Defendants contended that their federal defenses – namely, the government

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contractor defense and preemption under the TSCA – were “more than colorable.” (Id. at 1619).
In their reply memorandum, Plaintiffs maintained that the instant case did not implicate
the “basic purpose” of the federal officer removal statute. (ECF No. 22 at 2). Plaintiffs further
argued that the evidence presented by Defendants did not demonstrate that Pharmacia was acting
under color of federal office because the documents “overwhelmingly concern” PCBs sold either
for closed-application uses or to government contractors rather than the government itself. (Id. at
3-4). Plaintiffs contended that, even if the court were to consider the PCBs sold to private
companies which used those PCBs in products sold to the government, those sales “constitute
only an infinitesimal, de minimis amount of overall sales.”

(Id. at 6-7, 10).

Plaintiffs

emphasized that the government did not require Pharmacia to produce PCBs and, anyway, those
covered by OSHA regulations were produced for electrical, and therefore, closed-use purposes.
(Id. at 10).
On June 16, 2016, the Court held a hearing on Plaintiffs’ motion for remand. (ECF No.
23). At the opening of the proceedings, the Court noted that Defendants had appealed Judge
Fleissig’s remand of a similar products liability action to the United States Court of Appeals for
the Eighth Circuit. Bailey, et al v. Monsanto Co.et al, Case No. 16-2096 (8th Cir., opened May
4, 2016) (appealing Case No. 4:15CV844 AGF, 176 F. Supp.3d 853 (E.D. Mo. 2016)).
Plaintiffs’ counsel acknowledged that “a plausible way to proceed” would be to stay the instant
case pending the Eighth Circuit’s decision in Bailey. However, he urged that this case “is even
more appropriate for remand” than Bailey because, there, the plaintiffs did not limit their action
to PCBs manufactured for open applications.

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On July 18, 2016, the Court entered an order staying the instant matter pending the
Eighth Circuit’s decision in Bailey. (ECF No. 25). The Court reasoned that the two cases were
nearly identical as they involved claims that Pharmacia produced and sold PCBs that caused the
plaintiffs to develop cancer, Defendants removed both cases pursuant to the federal officer
removal statute, and the plaintiffs filed motions to remand. (Id. at 6-7). The Court also noted
that Judge Bodenhausen recently remanded an almost identical case to state court for lack of
federal officer jurisdiction in Kelly, et al. v. Monsanto Company, et al., Case No. 4:15CV1825
JMB, 2016 WL 3543050 (E.D.Mo. June 29, 2016).2
Finding that the Eighth Circuit’s decision in Bailey would “likely have a significant
effect on the ultimate disposition of the instant matter,” the Court stayed the proceedings pending
resolution of that appeal. (Id. at 8).

The Court also ordered the parties to file a copy of the

Bailey decision within eleven days of its entry. (Id.). On March 27, 2017, Defendants filed a
notice of outcome of the Bailey appeal informing the Court that the appeals in both Bailey and
Kelly were “settled and dismissed.” (ECF No. 26). As the Bailey appeal is no longer pending,
the Court will lift its stay and consider Plaintiffs’ motion to remand.
II.

Discussion
Plaintiffs contend that removal under the federal officer removal statute was improper

because: (1) Pharmacia was not a government contractor and was therefore not “acting under” a
federal officer for purposes of the federal officer removal statute; (2) there was no causal
connection between Pharmacia’s actions and official authority; and (3) Defendants did not have
a colorable federal defense.

(ECF No. 14).

Defendants counter that:

(1) Pharmacia

manufactured PCBs under color of federal office; (2) a causal connection exists because
2

Defendants filed a notice appealing the remand on July 25, 2016. Kelly, et al. v. Monsanto Co.,
et al., Case No. 16-2096.
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Plaintiffs claims are “for or relating to” acts under federal office; and (3) Pharmacia asserted
three colorable federal defenses. (ECF No. 18).
The federal officer removal statute permits a defendant to remove to federal court a state
court action brought against the
United States or any agency thereof or 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 or on
account of any right, title or authority claimed under any Act of Congress for
the apprehension or punishment of criminals or the collection of the revenue.
28 U.S.C. § 1442(a)(1). See also Watson v. Philip Morris Cos., 551 U.S. 142, 145 (2007). A
defendant seeking federal officer removal must demonstrate that: (1) the defendant is a “person”
within the meaning of the statute;3 (2) the defendant “acted under” the direction of a federal
officer; (3) there was a causal connection between the defendant’s actions and the official
authority; and (4) the defendant “has a colorable federal defense to the plaintiff’s claims.” Jacks
v. Meridian Resource Co., LLC, 701 F.3d 1224, 1230 (8th Cir. 2012).
The purpose of the federal officer removal statute is “to avert various forms of state court
prejudice against federal officers or those private persons acting as an assistant to a federal
official in helping that official carry out federal law.” Id. at 1231. While courts are to construe
broadly Section 1442(a)(1) so that the statute’s purpose is not “frustrated by a narrow, grudging
interpretation,” Arizona v. Manypenny, 451 U.S. 232, 242 (1981) (quotation omitted), the
Supreme Court has established that “not all relationships between private entities or individuals
and the federal government suffice to effect removal under the federal officer removal statute.”
Jacks, 701 F.3d at 1231 (citing Watson, 551 U.S. at 153).

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The parties do not dispute that Defendants are persons for purposes of the federal officer
removal statute.
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A. “Acting under” a federal officer
In support of their motion to remand, Plaintiffs argue that Pharmacia was not a
government contractor and therefore was not “acting under” a federal officer within the meaning
of Section 1442(a)(1). (ECF No. 14 at 2). More specifically, Plaintiffs assert that the invoices
Defendants submitted with their notice of removal do not satisfy the “acting under” requirement
because: (1) many of the invoices are for other companies’ products; and (2) there is no
evidence that the invoices relate to PCBs purchased for open applications. Plaintiffs further
contend that their “claims do not arise out of anything done by [D]efendants at the direction of a
federal officer[.]”4 (Id.).
In response, Defendants contend that Pharmacia acted under color of law when it
produced PCBs for direct sale to the federal government. (ECF No. 18). Defendants counter
Plaintiffs’ assertion that many of the invoices submitted by Pharmacia were “irrelevant,” arguing
that: (1) Pharmacia produced all of the products referenced in the invoices, even those whose
trade names were owned by other companies; and (2) “all sales of PCBs to the federal
government – whether for open or closed applications are relevant, because Plaintiffs cannot
determine whether they were exposed to PCBs used in open or closed applications.” (Id. at 5).
“The words ‘acting under’ are broad, and . . . the statute must be ‘liberally construed,’”
but the term is not “limitless.” Watson, 551 U.S. at 142 (citations omitted). See also Jacks, 701
Additionally, Plaintiffs argue that, even if Pharmacia was “acting under” a government agency,
Plaintiffs’ claims do not arise from such actions because, in their complaint, they disclaimed
“any claim arising from an act or omission . . . of any officer of the U.S. or any agency or person
acting under him occurring under color of such office.” (ECF No. 15 at 5-6) (quoting ECF No. 7
at ¶ 33). However, the Eighth Circuit has held that a defendant may remove under Section
1442(a)(1) even where a plaintiff has “expressly pleaded” that his claims “cover[] only conduct
by the individual defendants that in fact was outside the scope of their federal employ.” Brown
v. Armstrong, 949 F.2d 1007, 1010 (8th Cir. 1991) (emphasis in original). See also Jefferson
County, Ala. v. Acker, 527 U.S. 423, 431 (1999) (“[S]uits against federal officers may be
removed despite the nonfederal cast of the complaint[.]”).
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F.3d at 1230. “[T]he fact that a federal regulatory agency directs, supervises, and monitors a
company’s activities in considerable detail . . . does not bring[] that company within the scope
of” the statute “and thereby permit[] removal.” Id. at 145. Rather, “a private person’s ‘acting
under’ must involve an effort to assist, or to help carry out, the duties or tasks of the federal
superior.” Id. at 152 (emphasis in original). “Government contractors fall within the terms of
the federal officer removal statute, at least when the relationship between the contractor and the
Government is an unusually close one involving detailed regulation, monitoring, or supervision.”
Jacks, 701 F.3d at 1231 (quoting Watson, 551 U.S. at 153).
In Bailey and Kelly, the district court considered whether Defendants satisfied the “acting
under” requirement for federal officer removal in claims arising from Pharmacia’s production of
PCBs. In both cases, the court found that Defendants met the “acting under” requirement for
federal officer removal only as to the PCBs that Pharmacia sold directly to the government or to
others at the government’s direction. Bailey, 176 F. Supp.3d at 870; Kelly, 2016 WL at *9. The
court explained: “Although the government required the use of PCBs in certain products during
the relevant time period, and provided financial assistance to [Pharmacia] to manufacture them in
the early 1940s, Defendants sold the PCBs, by and large, to government contractors and not to
the government itself.” Bailey, 176 F. Supp.3d at 870; Kelly, 2016 WL at *9.
Here, as in Bailey and Kelley, Defendants presented evidence of direct sales of PCBs to
government agencies between the years 1966 and 1971.5 However, Defendants demonstrated

5

Pharmacia submitted with its notice of removal fifty-three invoices evidencing sales of PCBcontaining products to government agencies between 1966 and 1971. (ECF No. 1-24). The
parties dispute the significance of the invoices. Specifically, Plaintiffs assert that Pharmacia was
not responsible for the manufacture of Inerteen, a Westinghouse produce, or Pyranol, a General
Electric product, which together account for nineteen of the fifty-three invoices. (ECF Nos. 124, 13-4). Plaintiffs further alleged that Pydraul, a product sold pursuant to eight of the invoices
“was sold in both PCB-containing and non-PCB-containing formulations.” (Id. at 4). Finally,
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neither that the government supervised or controlled the manufacturing process, nor that
Pharmacia produced the PCBs to the government’s detailed specifications, nor that the
government compelled Pharmacia to produce PCBs under threat of criminal sanction.

Cf.

Isaacson v. Dow Chem. Co., 517 F.3d 129, 137-38 (2d Cir. 2008) (manufacturers of Agent
Orange were entitled to federal officer removal in negligence and products liability cases
because the companies directly contracted with the government for the production of Agent
Orange and produced the chemical to the government’s detailed specifications); Winters v.
Diamond Shamrock Chem. Co., 149 F.3d 387, 398-99 (5th Cir. 1998) (same). The Court
therefore concludes that Defendants failed to establish that they were “acting under” a federal
officer. See, e.g., Bailey, 176 F. Supp.3d at 870; Kelly, 2016 WL at *9.
B. Causal connection between Pharmacia’s actions and official authority
In regard to the causal connection requirement for federal officer removal, Plaintiffs
argue that their claims “simply have nothing to do with anything [Defendants] say [Pharmacia]
did at the behest of the Government.” (ECF No. 14 at 4). More specifically, Plaintiffs assert that
“the federal government did not require [Pharmacia] to do anything with regard[] to PCBs” and,
to the extent the government allegedly required Plaintiff to continue selling PCBs for use in
closed electricity between the years 1971 and 1977, those PCBs were used in closed applications.
In response, Defendants contend that they satisfied the causal connection requirement because
Plaintiffs’ claims relate to acts Defendants performed under color of federal office. (ECF No. 18
at 12-14).
To satisfy the statute’s causal connection requirement, a defendant must show that the
plaintiff’s cause of action is “for or relating to any act under color of such [federal] office[.]” 28
Plaintiffs emphasize that Defendants do “not attempt to show, which if any, of the invoices relate
to the claims at issue here – that is, PCB sales for open uses.” (Id.).
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U.S.C. 1442(a)(1). In other words, a defendant “must show a nexus, a ‘causal connection
between the charged conduct and asserted official authority.’” Jefferson County, Ala. v. Acker,
527 U.S. 423, 432 (1999) (quoting Willingham v. Morgan, 395 U.S. 402, 409 (1969)). As
applied to non-governmental corporate defendants, “such entities must demonstrate that the acts
for which they are being sued . . . occurred because of what they were asked to do by the
Government.” Isaacson, 517 F.3d at 137 (emphasis in original).
In Bailey, the plaintiffs argued that, where “the vast, overwhelming majority of
[Pharmacia’s] products were sold to private companies,” a “vanishingly small number of PCB
sales [] made to government purchasers” did not make the case removable on federal officer
grounds.6 Bailey, 176 F.Supp.3d at 863. More specifically, the evidence demonstrated that,
“over the years, 1.2 billion pounds of PCBs were sold,” but Defendants “provided evidence that
only 47,000 pounds of PCBs were sold to the government[.]” Id. The court found the plaintiffs’
argument persuasive and concluded that Defendants failed to meet the causal connection
requirement for federal officer removal. Id. at 870.
In Kelly, as in this case, Plaintiffs limited their claims to PCBs sold for use in open
applications and Defendants submitted additional invoices reflecting sales of PCBs to
government agencies. Kelly, 2016 WL at *1, 5. In Kelly, the court calculated that the invoices
showed that Pharmacia sold 5,538 pounds of PCBs to federal government agencies for use in
open applications. Id. at *9. The court explained that, according to the record, “a total of 1.2
billion pounds of PCBs were sold” to the government but only “5,538 pounds of PCBs were sold
for open applications,” meaning that “government sales for open applications would account for
less than one one-thousandth of one percent of overall sales of PCBs.” Id.
6

Plaintiffs characterized this argument as a de minimis argument and acknowledged that “due to
the unique theory of liability in this case, they did not have case law supporting their position.”
Bailey, 176 F.Supp.3d at 863.
10

The Kelly court opined that the outcome would not change if the Court were to accept
Defendants’ claim “that this case[] involves six time the amount of PCBs [as the Bailey case], in
other words 282,000 pounds, this would mean approximately .024 percent of all of [Pharmacia’s]
PCB sales were made to the government.” Id. at *9 n.15. The court held that, even accepting
Defendants’ calculations, “the amount of sales of PCBs manufactured by [Pharmacia] for open
uses pursuant to contracts with the government and sold to federal contractors at the direction of
the government relative to the amount of PCBs allegedly persisting in the environment and food
chain is too small to satisfy the requirement that there be a causal connection between the
conduct that was taken under federal authority and Plaintiffs’ claims.” Id. at *9. See also
Bailey, 176 F. Supp.3d at 870.
Defendants urge the Court to reject the de minimis theory applied in Bailey and Kelly and
find that Defendants satisfied the causal connection requirement for federal officer removal.
(ECF No. 18 at 14). Defendants also argue that the Court should consider all fifty-three of the
invoices evidencing sales of PCBs to government agencies and not exclude the PCBs Pharmacia
sold as a subcontractor. (Id.). Even if the Court assumed that all of the sales represented by
Defendants’ invoices involved Pharmacia’s PCBs and that all of those PCBs were used in open
applications, the percentage of PCBs produced “because of what they were asked to do by the
Government” is too small to satisfy the causal connection requirement. 7 Isaacson, 517 F.3d at
137. The Court therefore holds that Defendants did not establish the requisite causal connection.
III.

Conclusion
The Court concludes that Defendants failed to meet their burden of showing that removal

of this proper. Accordingly,
7

Because Defendants satisfied neither the “acting under” nor causal connection requirements for
federal officer removal, the Court need not consider whether Defendants asserted a colorable
federal defense to Plaintiffs’ claims. See, e.g., Bailey, 176 F.Supp.3d at 870.
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IT IS HEREBY ORDERED that Plaintiffs’ motion for remand (ECF No. 13) is
GRANTED.

PATRICIA L. COHEN
UNITED STATES MAGISTRATE JUDGE
Dated this 10th day of April, 2017

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