Navy Contractor Successfully Removes Case under Federal Officer Removal Statute

Navy Contractor Successfully Removes Case under Federal Officer Removal Statute

By: Marie Olga Luis

Zeringue v. Crane Co., No. 16-30058, 2017 U.S. App. LEXIS 1077 (5th Cir. Jan. 20, 2017).Zeringue v. Crane Co., 846 F.3d 785, 794 (5th Cir. 2017).The Fifth Circuit reversed an Eastern District of Louisiana Court’s decision that narrowly interpreted a removal statute in favor of the plaintiff (“Zeringue”) in an asbestos liability case against the defendant (“Crane”), along with twenty-one others. In the suit, Zeringue claims that he was exposed to asbestos during his employment in the Navy, however Zeringue failed to provide evidence of which of the twenty-one companies exposed him to asbestos, how he was exposed, or when the exposure occurred. Zeringue claims that, at some point, thirteen of the twenty-one defendants had a hand in his eventual exposure to asbestos. Crane was a government contractor that, among other things, manufactured and provided valves to the Navy. After Crane removed the case to federal court under the “federal-officer removal statute,” the district court remanded the case to state court. Crane consequently appealed the district court’s decision, maintaining that removal to federal court was proper. The Fifth Circuit reviewed the motion to remand de novo.In order for the “federal officer removal statute” to be applicable Crane needed to show sufficient proof: “(1) that it is a person within the meaning of the statute, (2) that it has ‘a colorable federal defense,’ (3) that it ‘acted pursuant to a federal officer's directions,’ and (4) ‘that a causal nexus exists between [its] actions under color of federal office and the plaintiff's claims.’”First, both individuals and corporations may fall under the scope of “persons” within the statute, therefore Crane was a “person” under the meaning of the statute. Crane was also successful in providing a “colorable federal defense” by invoking the “government contractor defense,” pursuant to 28 U.S.C. § 2680(a). For a defense to be “colorable,” it cannot be insubstantial or frivolous.  The “government contractor defense” allows for corporations to be extended the immunity granted to the federal government “for the performance of discretionary actions” when the contractor abides by design specifications provided by the federal government and provides a warning as to the product’s dangers. The Fifth Circuit noted that for removal to federal court to be proper, Crane was only required to show sufficient (not definitive) evidence that it was the Navy’s discretionary actions (not Crane’s) that resulted in Zeringue’s asbestos exposure. This same standard applied to whether Crane was required to warn the Navy about the dangers of asbestos if the Navy had pre-existing knowledge of its dangers.Through affidavits and sample military specifications, Crane was able to provide sufficient evidence that the Navy “accepted” and “used” the product, as well as that it had pre-existing knowledge of the dangers of asbestos.  Thus, the Fifth Circuit found Crane was successful in establishing a colorable defense by providing sufficient evidence the Navy exercised its discretion in determining whether the valves complied with the Navy’s specifications before installing the equipment in the Navy vessels.Additionally, Crane acted “pursuant to a federal officer’s directions.” Crane could harbor itself under the statute because it manufactured the valves according to the Navy’s specifications and, had Crane not provided the valves, the Navy would have had to build the parts on their own. This equated to Crane acting “pursuant to a federal officer’s directions,” despite a lack of direct or substantial supervision by a Naval officer.Lastly, Crane established a “casual nexus between its actions under color of [the Navy] and [Zeringue’s] claim.” Zeringue argued Crane failed to establish a nexus because Crane was not under the Navy’s direct federal supervision. However, the Fifth Circuit found Crane did establish a nexus because it “did not depart from the course of [its] duty” to the point where Crane’s acts would become “personal.” Crane’s only connection to Zeringue derived from its relationship with the Navy as a government contractor. Moreover, Zeringue’s claims directly related to Crane’s “improper” use of asbestos in the valves that it provided to the Navy as part of that agreement.  In short, Crane’s actions fell within the scope of the Navy’s authority.