HAMMELL et al v. AIR & LIQUID SYSTEMS CORPORATION et al

Filing 166

MEMORANDUM OPINION. Signed by Judge Mary L. Cooper on 8/29/2014. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ARTHUR HAMMELL, et al.,
Plaintiffs,
v.
AIR & LIQUID SYSTEMS
CORPORATION, et al.,
Defendants.

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CIVIL ACTION NO. 14-13 (MLC)
MEMORANDUM OPINION

COOPER, District Judge
Arthur Hammell and Linda Hammell (“the Plaintiffs”) brought this action to
recover damages for personal injuries allegedly caused by exposure to asbestos
(“Asbestos Action”) in New Jersey Superior Court, Middlesex County (“Middlesex
County Superior”). (See dkt. entry no. 1-5, Compl.) The Asbestos Action was removed
to this Court. (See dkt. entry no. 1, Notice of Removal at 1.) The Plaintiffs now move to
remand the Asbestos Action. (See dkt. entry no. 82-2, Pls.’ Br. at 1-2.) For the following
reasons, this Court will deny the Motion insofar as it seeks remand.
BACKGROUND
The Plaintiffs allege Arthur Hammell (“Hammell”) was exposed to asbestos
during various periods between 1950 and “the 1970s.” (See Compl. at 4.) From
approximately April 5, 1962 through September 18, 1964, the Plaintiffs allege that
Hammell was exposed to asbestos while serving as a boilerman in the U.S. Navy on a

ship known as the USS Roan. (Id. at 3.) During this period, Defendant Foster Wheeler
Energy Corporation (“FWE”) manufactured boilers and auxiliary equipment, and
Defendants General Electric Company (“GE”) and CBS Corporation (“CBS”)
(collectively, “Contractor Defendants”) manufactured turbines for Navy ships pursuant to
government contracts. (See dkt. entry no. 103, Defs.’ Br. at 3-6.)
The Plaintiffs brought this Asbestos Action in Middlesex County Superior on
November 15, 2013, asserting personal injury claims against the Contractor Defendants
and many other defendants. (See Compl. at 3-6.) The Plaintiffs assert that the Contractor
Defendants failed to warn Hammell of the hazards of the alleged asbestos-containing
machinery. (Id. at 8-9.) The Plaintiffs also allege that their failure to warn was the actual
and proximate cause of Hammell’s eventual diagnosis of mesothelioma. (Id. at 8.)
The Asbestos Action was removed pursuant to the federal officer removal statute,
28 U.S.C. § (“Section”) 1442(a)(1) (“Federal Officer Removal Statute”). (See Notice of
Removal at 1.) In support of removal, the Contractor Defendants assert that they
manufactured and sold equipment pursuant to Navy contracts sufficient to establish a
government contractor defense (“Government Contractor Defense”) under the Federal
Officer Removal Statute. (Id. at 2.) The Plaintiffs now move to remand the Asbestos
Action to Middlesex County Superior. (See Pls.’ Br. at 1.)
DISCUSSION
I.

LEGAL STANDARD
Pursuant to the Federal Officer Removal Statute the “United States or any agency

thereof or any officer…of the United States or of any agency thereof, [sued] in an official
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or individual capacity, for or relating to any act under color of such office…” may invoke
removal. 28 U.S.C. § 1442(a)(1). The statutory provision should be “broadly construed”
and the removing party bears the burden of proving that subject-matter jurisdiction is
proper under the Federal Officer Removal Statute. Sun Buick v. Saab Cars USA, 26 F.3d
1259, 1262 (3d Cir. 1994); see MacQueen v. Union Carbide, No. 13–831, 2014 WL
108535, at *1 (D. Del. Jan. 9, 2014), adopting, 2013 WL 6571808, at *2 (D. Del. Dec.
13, 2013) (Magistrate Judge Report and Recommendation); Lewis v. Asbestos Corp., No.
10-650, 2012 WL 3240941, at *4 (D.N.J. Aug. 7, 2012).
To establish that removal is proper under the Federal Officer Removal Statute, the
Contractor Defendants must establish: (1) that they are “persons” within the meaning of
the statute; (2) that the Plaintiffs’ claims are based upon the Contractor Defendants’
alleged conduct “acting under” a federal office or officer; (3) a colorable federal defense;
and (4) a causal nexus between the federal direction and the conduct at issue. Mesa v.
California, 489 U.S. 121, 124-26, 129-35 (1989); Feidt v. Owens Corning Fiberglas
Corp., 153 F.3d 124, 127 (3d Cir. 1998). The Court analyzes the requirements and
determines that the Contractor Defendants satisfy each.
A.

Corporate Personhood and the “Acting Under” Requirement

The Federal Officer Removal Statute applies to persons and corporations. See
Hagen v. Benjamin Foster Co., 739 F.Supp.2d 770, 776 n.6 (E.D. Pa. 2010).
Accordingly, Section 1442(a)(1) applies to the Contractor Defendants. Id.; see also
Hicks v. Boeing Co., No. 13-393, 2014 WL 1391104, at *1 (D. Del. Apr. 8, 2014),
adopting, 2014 WL 1051748, at *4 (D. Del. Mar. 17, 2014) (Magistrate Judge’s Report
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and Recommendation stating there “is no dispute that [defendant], as a corporation, is a
‘person’” under the Federal Officer Removal Statute).
A defendant “acts under” a federal office or officer when that defendant’s actions
exceed mere compliance with a federal legal or regulatory scheme. Watson v. Philip
Morris Cos., 551 U.S. 142, 152-53 (2007). In the context of failure to warn claims, a
removing defendant must identify facts sufficient to establish that the government’s
actions transcended “rubber stamping” the defendant’s policies. Tate v. Boeing
Helicopters, 55 F.3d 1150, 1154-57 (6th Cir. 1995); Walkup v. Air & Liquid Sys. Corp.,
No. 12-1635, 2013 WL 5798701, at *1 (D. Del. Oct. 24, 2013), adopting, 2013 WL
5448623, at *7 (D. Del. Sept. 26, 2013) (Magistrate Judge Report and Recommendation).
Rather, a corporate entity “acts under” federal authority by following express federal
directives. Watson, 551 U.S. at 152. In order to establish subject-matter jurisdiction
under the Federal Officer Removal Statute, the removing defendant must demonstrate
that the actions that led to the lawsuit were based on a federal officer’s direct orders or
comprehensive and detailed regulations. See Walkup, 2013 WL 5798701, at *1,
adopting, 2013 WL 5448623, at *2; Lewis, 2012 WL 3240941, at *4-5; Hagen, 739
F.Supp.2d at 784.
The Contractor Defendants assert sufficient evidence to establish they acted
pursuant to express federal directives. The Contractor Defendants’ affidavits, for
example, describe detailed contracts, communications between the federal government
and the corporate entities, and the level of control that the government maintained over
the machinery. (See generally dkt. entry no. 103-8, Lehman Aff. (statements of former
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U.S. Navy Admiral).) Among voluminous evidence, the Contractor Defendants submit
the testimony of retired Navy Captain Lowell regarding Navy participation in reviewing
and approving equipment manuals. (See dkt. entry no. 103-63, Lowell Dep. at 159:18160:12.) Lowell specifically testified that the policies governing boilers and turbines
“weren’t just going to be rubber-stamped” by Navy officials. (Id. at 160:13-18.) This
evidence is sufficient to establish that the Contractor Defendants operated pursuant to
Navy directives. See Hicks, 2014 WL 1391104, at *1, adopting, 2014 WL 1051748, at
*8-9 (“acting under” requirement met because defendants submitted affidavits to
establish that defendants acted pursuant to direct orders and detailed regulations);
Walkup, 2013 WL 5798701, at *1, adopting, 2013 WL 5448623, at *5-7 (affidavits
stating that defendants designed and manufactured equipment pursuant to government
specifications sufficient to satisfy the “acting under” requirement); Bouchard v. CBS
Corp., No. 11-458, 2012 WL 1344388, at *9 (E.D. Pa. Apr. 17, 2012) (recognizing
evidence that defendants acted pursuant to government contracts and in accordance with
government specifications as sufficient to satisfy the “acting under” requirement); Hagen,
739 F.Supp.2d at 784-85 (evidence demonstrating “the Navy was responsible for the lack
of warnings” sufficient to meet the “acting under” requirement). Accordingly, the Court
finds the Contractor Defendants satisfy Section 1442(a)(1)’s “acting under” requirement.
B.

Colorability Requirement

A defendant must assert a colorable defense in order to properly remove an action
to federal court under the Federal Officer Removal Statute. Feidt, 153 F.3d at 127. The
Contractor Defendants here rely upon the Government Contractor Defense to justify
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removal of the Plaintiffs’ failure to warn claims. (See Defs.’ Br. at 10.) This defense
shields government contractors from liability for equipment when: (1) the United States
approved reasonably precise specifications; (2) the equipment conformed with these
specifications; and (3) the supplier warned the United States about the dangers associated
with the equipment that were known to the supplier but not to the United States (“Boyle
Test”). See Boyle v. United Techs. Corp., 487 U.S. 500, 512 (1988). In order to
determine whether the Contractor Defendants assert a colorable defense, the Court
considers each requirement.
1.

Exercise of Discretion

Evidence related to the government’s involvement in designing, manufacturing,
and delivering the Contractor Defendants’ machinery is sufficient to satisfy the first part
of the Boyle Test. See, e.g., Tate, 55 F.3d at 1154-57. The Contractor Defendants cite
evidence regarding Navy specifications, government contracts, government contractors’
technical manuals, and discussions between the Navy and the Contractor Defendants to
establish government involvement. (See, e.g., dkt. entry no. 103-39, Hobson Aff. I at ¶ 1;
dkt. entry no. 103-40, Hobson Aff. II at ¶ 3 (former GE Manager of Navy Customer
Service providing “[t]he U.S. Navy had precise specifications, practices and procedures
that governed the content of any communication affixed to machinery…”); dkt. entry no.
103-7, Schroppe Aff. at ¶¶ 1, 12 (former FWE President providing “[t]he boiler proposal
would be reviewed by the shipyard with the understanding that the proposed design,
prepared specifically for the Navy…conformed to all appropriate specifications….[o]nce
final price negotiations were complete, the contract was awarded to Foster Wheeler”);
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dkt. entry no. at 103-43, Gate Aff. at ¶¶ 1, 15 (former CBS Manager of Design
Verification of the Marine Division providing “the Navy retained ultimate decision
authority over the design of the turbines. If an engineering disagreement arose between
the Navy and the outside design consultant, the Navy controlled the design adopted. All
final design drawings and specifications required express Navy approval and
adoption.”).) This evidence is sufficient to establish that the government exercised
sufficient discretion over the machinery, including determining whether warnings should
have been provided to end users. See Walkup, 2013 WL 5798701, at *1, adopting, 2013
WL 2013 5448623, at *6 (affidavits stating the Navy controlled “the decision of which
warnings should or should not be included” sufficient “to plausibly show that the Navy
was responsible for the product design and lack of warnings”); Hagen, 739 F.Supp.2d at
784 (recognizing affidavits stating that the government precluded defendants from
affixing “any type of warning or caution statement” on the machinery in question as
sufficient evidence of government direction and control); Kirks v. Gen. Elec. Co., 654
F.Supp.2d 220, 224 (D. Del. 2009) (relying upon similar affidavits to determine that
defendant “satisfied its burden to prove that plaintiffs’ failure-to-warn claims [were]
based upon [defendant’s] conduct ‘acting under’ the office of the Navy and its officers”).
2.

Defendants’ Conformity to Navy Specifications

The Boyle Test also requires the Contractor Defendants to establish their
conformity to Navy specifications. Boyle, 487 U.S. at 512. Adherence to government
specifications precluding a government contractor from applying warning labels to
machinery is sufficient to demonstrate conformance. See, e.g., Bouchard, 2012 WL
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1344388, at *10 (“[I]t is clear that the Navy was responsible for the design specifications
of the ship and the finished equipment conformed to those specifications as demonstrated
by the Navy's acceptance of each ship. This satisfies the first two elements of the
government contractor defense.”); Hagen, 739 F.Supp.2d at 784.
According to the Contractor Defendants, comprehensive Navy specifications
governed every aspect of the machinery. (See, e.g., Hobson Aff. I at ¶ 8 (“[s]upervision
and control were exercised through contract documents, design construction drawings,
written specifications and personal oversight of GE’s work by ship engineers and
machinery specialists employed by the U.S. Navy.”).) With respect to the failure to warn
claims, the Contractor Defendants assert that they were not permitted to include any type
of warning or caution statement and that the Navy controlled “the decision of which
warnings should or should not be included.” (See Lehman Aff. at ¶¶ 10, 14.) The
Contractor Defendants assert that military specifications “governed every significant
characteristic of the equipment used on U.S. ships, including the instructions and
warnings.” (Id. at ¶ 10.) Accordingly, the Contractor Defendants satisfy the conformity
requirement under the Boyle Test.
3.

Knowledge Requirement

A removing defendant must demonstrate “[unawareness] of any dangers that the
Navy was unaware of” to satisfy the Boyle Test. Bouchard, 2012 WL 1344388, at *10.
The removing defendant need not demonstrate “the government knew as much or more
than the defendant contractor about the hazards of the project or product” to meet the
knowledge requirement. Beaver Valley Power Co. v. Nat’l Eng’g & Contracting Co.,
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883 F.2d 1210, 1216-19 (3d Cir. 1989). The Contractor Defendants present evidence
sufficient to satisfy the knowledge requirement in this case.
With respect to their knowledge regarding health risks associated with asbestos,
the Contractor Defendants submit conflicting evidence regarding the utilization of
asbestos-containing equipment. (Compare Hobson Aff. I at ¶ 7 (“As manufactured and
shipped to the Navy by GE, turbines did not have any thermal insulation materials
(whether containing asbestos or otherwise) anywhere on them.”) with Gate Aff. at ¶ 11
(“Particularly through the early 1970’s, some of these [Navy] specifications required the
use of asbestos-containing materials…”).) Notwithstanding this conflict, the affidavits
provide sufficient evidence that any asbestos-containing equipment was manufactured
pursuant to Navy directives. (See Gate Aff. at ¶ 11.) Moreover, the Contractor
Defendants submit an affidavit that suggests that the Navy may have had superior
knowledge regarding the health risks associated with asbestos at the time of manufacture.
(See dkt. entry no. 103-49, Forman Aff. I at ¶ 1; dkt. entry no. 103-51, Forman Aff. III at
¶ 56 (Dr. Forman providing “[g]iven the Navy’s state-of-the-art knowledge concerning
asbestos related hazards and its robust safety and health program, it would be
unreasonable to assume that the Navy would have accepted any advice pertaining to
asbestos related safety precautions from a manufacturer of equipment.”).) Based upon
this evidence, the Contractor Defendants satisfy the knowledge requirement under Boyle
and therefore establish a colorable defense to the Plaintiffs’ failure to warn claim. See,
e.g., Bouchard, 2012 WL 1344388, at *10; Hagen, 739 F.Supp.2d at 784; Seigfried v.
Allegheny Ludlum Corp., No. 09-125, 2009 WL 1035001, at *13 (W.D. Pa. Apr. 17,
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2009) (“The affidavits by Admiral Lehman, Betts and Hobson are sufficient to establish
that the Navy had precise specifications….and Plaintiffs’ motion to remand should be
denied.”).
C.

Causal Nexus Requirement

Removal under Section 1442(a)(1) also requires the Contractor Defendants to
establish a causal nexus between the conduct performed under federal direction and the
Plaintiffs’ failure to warn claim. Mesa, 489 U.S. at 131-34. To do so, the Contractor
Defendants must “by direct averment exclude the possibility that [the Contractor
Defendants’ action] was based on acts or conduct…not justified by [the Contractor
Defendants’] federal duty.” Id. at 132. Similar to the colorability requirement, the
Contractor Defendants must demonstrate that they acted at the federal government’s
command to establish the requisite causal nexus. Id. As a practical matter, the causal
nexus requirement is redundant when a “defendant in a government contractor case
makes out a colorable federal defense” because the causal nexus analysis “is essentially
the same as [that associated with] the colorable defense requirement.” Hicks, 2014 WL
1391104, at *1, adopting, 2014 WL 1051748, at *7 n.8 (internal quotations and citation
omitted); MacQueen, 2014 WL 108535, at *1, adopting, 2013 WL 6571808, at *2;
Hagen, 739 F.Supp.2d at 785 (internal quotations and citation omitted).
As described above, the Contractor Defendants establish a colorable federal
defense to the Plaintiffs’ failure to warn claims. The Navy’s supervision and control over
the machinery at issue serves as the predicate for this defense. Seigfried, 2009 WL
1035001, at *10 (finding defendants established a causal nexus because “the affidavits
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specifically refer[red] to…the federal officer who directed [defendant’s] performance”).
Accordingly, the Contractor Defendants establish the necessary causal connection
because the conduct at issue was subject to government oversight.
II.

PLAINTIFFS’ EVIDENCE
The Plaintiffs, in support of a remand of the Asbestos Action, argue that the

Government Contractor Defense does not apply here because the Contractor Defendants’
affidavits lack the factual foundation to support a colorable Government Contractor
Defense. (See Pls.’ Br.) To support this argument, the Plaintiffs characterize the
Contractor Defendants’ evidence as “conclusory” and “speculative”, and cite case law
that granted remand on the grounds that the defendants’ evidence was boilerplate. (Id.)
The Plaintiffs also rely upon contradictory affidavits to challenge the Contractor
Defendants’ evidence. (Id. at 21-22.)
The Plaintiffs’ evidence, however, is unavailing in light of Hagen’s wellestablished pleading standard. Hagen, 739 F.Supp.2d at 783; see also MacQueen, 2014
WL 108535, at *1, adopting, 2013 WL 6571808, at *6 n.12 (following the Hagen
standard, at least in part, because it was established by a Multi-District Litigation court
that had “dealt with thousands of similar cases from across the country”); Walkup, 2013
WL 5798701, at *1, adopting, 2013 WL 5448623, at *4 (“The standard articulated in
Hagen has been adopted by federal district courts in a number of jurisdictions.”); Vedros
v. Northrop Grumman Shipbuilding, No. 11-1198, 2012 WL 3155180, at *5 (E.D. Pa.
Aug. 2, 2012) (following the Hagen standard and holding a “heightened standard of proof
is not appropriate at this stage of the proceedings”). The Hagen court expressly rejected
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the heightened pleading standard, which the Plaintiffs urge this Court to adopt. Hagen,
739 F.Supp.2d at 780-83 (criticizing “those courts that have seemingly required a
heightened showing of a colorable federal defense”).1 Rather, under the broadened
Hagen standard, this Court must simply identify “facts which, viewed in the light most
favorable to [the Contractor Defendants], would establish a complete defense at trial.”
Id. at 783; see also Hicks, 2014 WL 1391104, at *1, adopting, 2014 WL 1051748, at *4;
Vedros, 2012 WL 3155180, at *5. The Court is also mindful that under Hagen, the
Government Contractor Defense is not onerous to satisfy at the removal stage because the
Court is not called upon to “determine credibility, weigh the quantum of evidence or
discredit the source of the defense” at this procedural juncture. Hagen, 739 F.Supp.2d at
780-82; see also Hicks, 2014 WL 1391104, at *1, adopting, 2014 WL 1051748, at *7
(citing Hagen); Walkup, 2013 WL 5798701, at *1, adopting, 2013 WL 2013 5448623, at
*4, *8 (same); In re Asbestos Prod. Liab. Litig., 770 F.Supp.2d 736, 744 n.3 (E.D. Pa.
2011) (same).
The Court must simply analyze “the sufficiency of the facts stated” to determine
whether “the defendant asserting [the defense] identifies facts which, viewed in the light
most favorable to the defendant, would establish a complete defense at trial” at this
procedural stage. Hagen, 739 F.Supp.2d 782-83; see also Walkup, 2013 WL 5798701, at
*1, adopting, 2013 WL 2013 5448623, at *4, *8 (adopting the Hagen standard); Vedros,

Although the Plaintiffs argue that Hagen was “wrongly decided,” the brief cites no authoritative
cases to persuade the Court. (See Pls.’ Br. at 28-29.)
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2012 WL 3155180, at *5-6 (same).2 The Contractor Defendants’ evidence meets this
standard. As previously discussed, the Contractor Defendants’ evidence demonstrates
active and direct Navy involvement and control over the Contractor Defendants’
machinery by regulating the design, manufacture, and delivery. Even though the
Plaintiffs’ evidence contradicts the Contractor Defendants’ affidavits here, it would be
premature for the Court to “determine credibility, weigh the quantum of evidence or
discredit the source of the defense” at this time. Hagen, 739 F.Supp.2d at 782-83; see
also Walkup, 2013 WL 5798701, at *1, adopting, 2013 WL 5448623, at *8 (“Given that
[defendant] has satisfied the removal requirements under Section 1442(a)(1),
consideration of the Plaintiffs’ Evidentiary Objections is not warranted at this early stage
of the proceeding.”).
This Court determines that, viewing the evidence in the light most favorable to the
Contractor Defendants, the evidence shows at this stage that they have satisfied all
necessary requirements for removal under Section 1442(a)(1). See, e.g., Hicks, 2014 WL
1391104, at *1, adopting, 2014 WL 1051748, at *4-8; Walkup, 2013 WL 5798701, at *1,
adopting, 2013 WL 5448623, at *5-9; Asbestos Prod. Liab. Litig., 770 F.Supp.2d 742-44;
Hagen, 739 F.Supp.2d at 782-83. Accordingly, the Plaintiffs’ request to remand will be
denied.

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As a procedural matter, the Hagen court recognized that the evidentiary merits will be tested on
motion for summary judgment or at trial. Hagen, 739 F.Supp.2d at 783 n.13. At the summary
judgment stage in this case, the Contractor Defendants will face the summary judgment standard
and must demonstrate the absence of a genuine issue of material fact and that they are entitled to
the government contractor defense as a matter of law. Willis v. BW IP Int’l, 811 F.Supp.2d
1146, 1153 (E.D. Pa. 2011).
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CONCLUSION
The part of the Plaintiffs’ motion seeking remand of the Asbestos Action to
Middlesex County Superior will be denied. The Court will issue an appropriate order.

s/ Mary L. Cooper
.
MARY L. COOPER
United States District Judge
Dated: August 29, 2014

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