Marcus v. Air & Liquid Systems Corporation

Background

Michael and Victoria Marcus brought a seven-count lawsuit in Alameda County Superior Court against more than 20 defendants. The complaint alleges that asbestos exposure during Michael Marcus’s service in the United States Navy caused his terminal mesothelioma and permanent injuries. The claims include state-law theories that the defendants designed asbestos-containing products and failed to warn about asbestos hazards. Victoria Marcus also asserts a claim based on the effects of Michael’s injuries on her.

Greene, Tweed & Co. removed the case to federal court under the federal-officer removal statute, 28 U.S.C. § 1442(a)(1). Air & Liquid Systems Corporation and Foster Wheeler Energy Corporation joined the removal. Greene Tweed argued that, when it supplied asbestos-containing gasket and packing material to the government, it followed detailed military contracts, designs, testing requirements, and labeling specifications. The plaintiffs moved to remand the case to state court and requested attorney’s fees.

Legal standard

The federal-officer removal statute permits a civil lawsuit against a person acting under a United States officer to be removed to federal court when the lawsuit relates to acts performed under that authority. The removing defendants had to show that they were covered persons, that a federal officer directed the relevant conduct, and that they had a “colorable” federal defense—meaning a legally supportable defense, without yet proving that they would ultimately prevail.

Because the plaintiffs made a factual challenge to the removal allegations, the defendants had to support them with competent evidence and prove the required elements by a preponderance of the evidence. The court also noted that federal-officer removal rights are interpreted broadly in favor of removal.

Court’s analysis

The parties did not dispute that the removing defendants qualified as covered persons. The court found that the defendants had shown that the Navy exercised direct and detailed control over their work. The evidence described Navy specifications, qualified-products lists, design approvals, testing, inspections, and Navy control over changes to specifications for equipment and materials used on Navy ships. The court therefore found that the defendants acted at the direction of a federal officer.

For the design-defect claims, the court found a colorable government-contractor defense. The defense required evidence that the government approved reasonably precise specifications, that the supplied products complied with those specifications, and that the suppliers warned the government about known dangers that the government did not know about. The court found evidence supporting all three requirements, including detailed Navy specifications for asbestos-containing materials, Navy testing and qualification of products, and evidence that the Navy knew about asbestos hazards.

For the failure-to-warn claims, the defense required evidence that the Navy approved the warnings, that the defendants provided the warnings the Navy required, and that the defendants warned the Navy about asbestos hazards known to them but not to the Navy. The court found evidence that the Navy controlled the form and content of warnings, did not require additional asbestos warnings, and knew at least as much about asbestos hazards as the equipment manufacturers. The court stated that the defendants did not have to prove at this stage that the defense would succeed on the merits; they only had to show that it was legally supportable.

Fees and disposition

The court denied the plaintiffs’ request for attorney’s fees because it denied remand and found that the defendants had an objectively reasonable basis for removing the case. The court DENIED the plaintiffs’ motion for remand. It also set a telephonic case management conference for October 17, 2023, and directed the parties to submit a joint case management statement by October 10, 2023.