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United States District Court, S.D. New York

November 3, 2004.

IN RE: METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION. This document relates to: Orange County Water District
Unocal Corp., et al., No. 04 Civ. 4968 (SAS). City of Riverside v. Atlantic Richfield Co., et al., No. 04 Civ. 4969 (SAS). Quincy Community Services District v. Atlantic Richfield Co., et al., No. 04 Civ. 4970 (SAS). City of Roseville v. Atlantic Richfield Co., et al., No. 04 Civ. 4971 (SAS). The People of the State of California, et al. v. Atlantic Richfield Co., et al., No. 04 Civ. 4972 (SAS). City of Fresno v. Chevron USA, Inc., et al., No. 04 Civ. 4973 (SAS). California-American Water Co. v. Atlantic Richfield Co., et al., No. 04 Civ. 4974 (SAS). Silver, et al. v. Alon USA Energy, Inc., et al., No. 04 Civ. 4975 (SAS).

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



In this consolidated multi-district litigation, plaintiffs allege that defendants have caused the contamination or threatened contamination of groundwater through their use of the gasoline additive methyl tertiary butyl ether ("MTBE"). Although MTBE is supposed to reduce air pollution by making fuel cleaner burning, plaintiffs assert that it pollutes the water supply whenever gasoline is released into the environment.*fn1 Defendants removed the actions from various state courts, asserting four grounds of subject matter jurisdiction: (1) federal agent jurisdiction; (2) substantial federal question; (3) complete preemption; and (4) bankruptcy jurisdiction. In a series of jurisdictional challenges, I held that this Court has federal agent jurisdiction over some, and bankruptcy jurisdiction over all, of the MTBE cases pending before it.*fn2 With respect to the former, I found that preemption constitutes a colorable federal defense, which is a prerequisite for federal agent jurisdiction.*fn3 At the time I considered the issue, the California plaintiffs were not yet before this Court.

  After these cases were transferred to me, plaintiffs moved to remand based on the argument that defendants had not properly alleged a colorable "federal" defense.*fn4 Specifically, they argue that preemption defenses are not "federal" for purposes of the federal officer removal statute, and that only immunity defenses can be asserted. I now consider whether preemption is a sufficient "federal" defense for removal under section 1442(a) of Title 28, the federal officer removal statute.


  A. Removal and Remand

  Section 1447(c) of Title 28 provides: "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." When a party challenges the removal of the action from state court, the burden falls on the removing party "to establish its right to a federal forum by `competent proof.'"*fn5 "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.'"*fn6 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.*fn7

  In the absence of diversity jurisdiction, a case is generally not removable if the complaint does not affirmatively allege a federal claim.*fn8 District courts have federal question jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States."*fn9 A case "arises under" federal law when federal law provides for the cause of action,*fn10 or where the vindication of a right turns on some construction of federal law.*fn11

  "To determine whether a claim arises under federal law, we examine the `well-pleaded' allegations of the complaint and ignore potential defenses."*fn12 The presence of a federal defense does not raise a federal question, even if the "defense is anticipated in the plaintiff's complaint, and even if . . . the federal defense is the only question truly at issue."*fn13

  Two exceptions to the well-pleaded complaint rule permit removal of state law actions. First, a case arises under federal law, and is thus removable, when a federal statute wholly displaces the state law cause of action through complete preemption.*fn14 Second, a state law case may be removed where Congress specifically gives federal courts jurisdiction over a particular subject matter.*fn15

  B. Federal Agent Jurisdiction

  The federal officer removal statute is a jurisdictional enactment that overcomes the well-pleaded complaint rule.*fn16 Thus, persons acting under color of any federal officer or agency may remove a case to federal court despite the absence of a federal cause of action.*fn17 Although section 1442(a) permits removal where a federal claim has not been stated, the action must nevertheless raise an issue of federal law because the statute does not independently support Article III "arising under" jurisdiction. "Rather, it is the raising of a federal question in the officer's removal petition that constitutes the federal law under which the action against the federal officer arises for Art. III purposes."*fn18

  Therefore, to remove a case under section 1442(a), a party must sufficiently allege that (1) it acted under the direction of a federal officer or agency; (2) it has a colorable federal defense; and (3) there is a causal nexus between the federal direction and the conduct at issue.*fn19 The second requirement is broadly construed; a defense need only be colorable, not clearly sustainable.*fn20 Some courts have also said that the removing party must be a "person" within the meaning of the statute.*fn21 However, it is no longer generally disputed that corporations constitute "persons."*fn22


  In support of their motion, plaintiffs argue that preemption is not a removable federal defense: a federal defense for purposes of section 1442(a) is one that is "based on" a defendant's contention that he was acting under federal direction at the time of the conduct of which the plaintiff complains.*fn23 Plaintiffs also assert that preemption defenses should be decided in state court pursuant to section 1441,*fn24 absent some other, independent basis for federal jurisdiction. State courts regularly determine federal preemption defenses, which are not normally removable.*fn25

  Section 1442(a) provides:

A civil action or criminal prosecution commenced in a State court against any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending: [] 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, sued in an official or individual capacity for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress. . . .*fn26
  Although the statute is silent, the Supreme Court has made clear that removal under section 1442(a) must be predicated on the averment of a colorable federal defense. In Mesa v. California,*fn27 two U.S. postal workers were separately charged in state criminal proceedings with traffic violations arising out of unrelated accidents while they were operating their mail trucks. Petitioners removed their cases to federal court based on the fact that they were federal employees, and the charges arose from accidents occurring while they were on duty and acting within the scope of their employment. The district court accepted the petition. However, the court of appeals issued a writ of mandamus, ordering the district court to remand the cases because petitioners had not raised a claim of immunity or other federal defense. In affirming the decision, the Supreme Court examined section 1442(a) and its statutory forebears, and concluded that removing parties had always been required to assert a colorable defense based on federal law.*fn28 Furthermore, the Court explained that section 1442(a) is a jurisdictional statute that defeats the well-pleaded complaint rule but does not independently confer federal question jurisdiction. Rather, it is the averment of a federal defense that supplies the substantive Article III "arising under" jurisdiction.*fn29 Because the purpose of the defense is to supply subject matter jurisdiction, any federal defense will suffice. The Court set out the standard as "colorable federal defense."*fn30 It did not — and has not — limited which federal defenses can be raised.*fn31 Instead, the Supreme Court has advised that the policy underlying removal by federal officers "should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1)."*fn32 In Willingham v. Morgan,*fn33 the Supreme Court held that the "color of office" test for removal under the federal officer removal statute was broader, not narrower, than the test for official immunity. In so holding, the Court reasoned that "[f]ederal jurisdiction rest[ed] on a federal interest in the matter, the very basic interest in the enforcement of federal law through federal officials."*fn34 The right to removal is absolute when a state court action is for any act done under color of office because the federal government


"can act only through its officers and agents, and they must act within the States. If, when thus acting, and within the scope of their authority, those officers can be arrested and brought to trial in a State court, for an alleged offense against the law of the State, yet warranted by the Federal authority they possess . . . the operations of the general government may at any time be arrested at the will of one of its members."*fn35
The right of removal therefore protects federal officers as a means of ensuring the supremacy of federal law.*fn36

  It cannot really be argued that preemption is not "federal" because the defense would not exist in the absence of federal law. Instead, plaintiffs urge this Court to read "federal" to mean "immunity." However, nothing in the statute itself or the case law supports such a narrow and grudging interpretation of the federal defense requirement. It is true that the Supreme Court has spoken of the importance of having the immunity defense considered in federal court, as a basis for removal.*fn37 This is not surprising given that immunity often arises in cases where the removing party is a government employee.*fn38 In that situation, the asserted federal defense arises out of the official's employment duties. However, when the party is an entity that has acted under the direction of a federal officer, it is logical to recognize other federal defenses because the situation may not fit the historical model. Accordingly, courts have recognized removable defenses other than immunity — for instance, the government contractor defense,*fn39 self-defense,*fn40 federal regulations under CERCLA,*fn41 and preemption.*fn42

  I, too, conclude that preemption is a colorable federal defense for purposes of the federal officer removal statute. This holding comports with the policy underlying section 1442(a). Here, the federal government has a significant interest in curtailing air pollution through the enforcement of the Clean Air Act ("CAA"). Defendants assert two preemption defenses: express preemption and conflict preemption. First, defendants contend that state law claims seeking to penalize defendants for using MTBE interfere with federal controls on fuel and fuel additives as set forth in the CAA.*fn43 Second, they argue that it would have been impossible for them to adhere to federal law and to state controls banning MTBE because MTBE was the only approved oxygenate available in quantities necessary to meet the CAA's requirements.*fn44 If defendants' assertions are true, plaintiffs' state law claims would present an obstacle to the enforcement of federal law. Thus, it is appropriate to permit defendants to remove these actions to federal court.

  One could argue that the federal government has an interest every time a federal defense is asserted. Nonetheless, not all federal defenses are removable. Removal under section 1442(a) is only permitted when the removing party is a federal officer or acting under the direction of a federal officer, and the suit is based upon acts done under color of such authority.*fn45 When these two factors are present, Congress has chosen to allow removal of any federal defense.

  Plaintiffs contend that section 1441 evinces a congressional determination that preemption defenses should be tried in state court.*fn46 Although state courts regularly examine preemption issues, that does not mean preemption defenses lie exclusively in the province of state courts. Sections 1442 and 1441 are not mutually exclusive. State courts may consider any federal defense, including immunity, if the case is not removed to federal court. Therefore, plaintiffs' argument that preemption defenses can only be tried in state court pursuant to section 1441 fails. IV. CONCLUSION

  For the reasons set forth above, plaintiffs' motion to remand is denied. Preemption constitutes a colorable federal defense for purposes of the federal officer removal statute. As noted in the Court's prior opinions, defendants have averred facts sufficient to support removal. The Clerk of the Court is directed to close this motion.


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