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IN RE METHYL TERTIARY BUTYL ETHER

October 19, 2004.

IN RE: METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION. This document relates to: State of New Hampshire
v.
Amerada Hess Corp., et al., No. 04 Civ. 4976 (SAS). The People of the State of California, et al. v. Atlantic Richfield Co., et al., No. 04 Civ. 4972 (SAS).



The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge

OPINION AND ORDER

I. INTRODUCTION

This multi-district litigation consists of dozens of cases, in which plaintiffs seek relief for contamination or threatened contamination of groundwater from defendants' use of the gasoline additive methyl tertiary butyl ether ("MTBE").*fn1 Plaintiffs include states, cities, municipalities, private water providers, and other entities. Although the cases were filed in various state courts, defendants removed the actions to federal court, asserting four grounds of subject matter jurisdiction: (1) federal agent jurisdiction; (2) substantial federal question; (3) complete preemption; and (4) bankruptcy jurisdiction.*fn2

  Certain plaintiffs moved to remand I denied the motions, holding that this Court has federal agent jurisdiction over some, and bankruptcy jurisdiction over all, of the MTBE cases pending before it.*fn3 I found that defendants had sufficiently averred facts supporting removal; specifically, they alleged that they added MTBE to gasoline at the direction of the EPA, a federal agency, to comply with the requirements of the Reformulated Gasoline ("RFG") Program and the Oxygenated Fuels Program.*fn4 This allegation sufficed to establish jurisdiction based on defendants having acted as federal agents. I further found defendants' allegations sufficient to establish federal agent jurisdiction with respect to certain non-covered areas because the federal government expected to turn some non-covered locations into RFG areas as a practical matter when it promulgated the RFG Program.*fn5 Finally, I held that the Court has bankruptcy jurisdiction because plaintiffs have alleged some actions by defendants that pre-date Texaco's (one of the defendants) plan of reorganization, and questions concerning when claims arose and whether they were discharged involve the enforcement and construction of Texaco's discharge injunction.*fn6

  Notwithstanding the Court's federal question jurisdiction, plaintiffs State of New Hampshire ("New Hampshire") and The People of the State of California ("California") (collectively "State Plaintiffs") move to remand based on state sovereign immunity. I now consider whether principles of sovereign immunity are violated when a state plaintiff voluntarily prosecutes a claim and its case is removed from state to federal court without its consent.

  II. LEGAL STANDARD

  Section 1447(c) of Title 28 provides that a case removed from state court shall be remanded "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." When a party files a motion to remand challenging the removal of an action from state court, "the burden falls squarely upon the removing party to establish its right to a federal forum by `competent proof.'"*fn7 "Out of respect for the independence of state courts, and in order to control the federal docket, `federal courts construe the removal statute narrowly, resolving any doubts against removability.'"*fn8 If the removing party cannot establish its right to removal by "competent proof," the removal was improper, and the district court must remand the case to the court in which it was filed.*fn9

  III. DISCUSSION

  State Plaintiffs argue that the Eleventh Amendment of the United States Constitution protects states from being involuntarily subjected to federal jurisdiction.*fn10 They argue that respecting their right to pursue these actions in state court is consistent with the preeminent purpose" of state sovereign immunity, i.e., the dignitary interest of States, and the Supreme Court's expansive interpretation of the Eleventh Amendment.*fn11 New Hampshire asserts that the federal officer removal statute cannot trump sovereign immunity.*fn12 California contends that in Hans v. Louisiana,*fn13 the Supreme Court established a presumption against proceedings or suits that were "anomalous or unheard of" at the time the Constitution was adopted; since removing States to federal court without their consent was anomalous and unheard of, defendants cannot establish their right to a federal forum, and the case must be remanded.*fn14 In addition, State Plaintiffs assert that cases upholding removal over the objections of sovereigns improperly rely on two inapposite Supreme Court opinions; improperly limit their analyses to the literal text of the Eleventh Amendment; and fail to discuss and apply the Hans presumption.*fn15

  Defendants counter that sovereign immunity does not bar removal where the removal is based on section 1442 of Title 28 because Congress created the federal officer removal statute in order to protect the supremacy of federal law and the sovereignty of the federal government against intrusion by the States. They argue that the Eleventh Amendment and sovereign immunity doctrines do not bar removal, but only prohibit lawsuits against the States, i.e., the immunity only applies when a State is the defendant. Moreover, they contend that the Hans presumption does not bar removal because nothing in Hans or any other case insulates non-consenting States from court process. Finally, defendants assert that California cannot raise the defense of sovereign immunity because the lawsuit is brought by the Sacramento District Attorney, who does not represent the State of California.*fn16

  A. Sovereign Immunity The Eleventh Amendment provides: "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."*fn17 Discussions of state sovereign immunity often begin and end here because the text of the Amendment seems clear. On its face, the Eleventh Amendment only prohibits suits against non-consenting States in federal court; it does not bar removal of cases in which the State is the plaintiff.

  However, the Supreme Court has explained:

  The phrase ["Eleventh Amendment immunity"] is a convenient shorthand but something of a misnomer, for the sovereign immunity of the States neither derives from, nor is limited by, the terms of the Eleventh Amendment. Rather, as the Constitution's structure, its history, and the authoritative interpretations by this Court make clear, the State's immunity from suit is a fundamental aspect of the sovereignty which the States enjoyed before the ratification of the Constitution, and which they retain today. ...


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