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From Products Liability Law Daily, April 28, 2014

Machinists’ asbestos injury suits properly removed to federal court due to colorable government contractor defense

By John W. Scanlan, J.D.

Two Navy machinists’ asbestos-related claims against a Navy equipment supplier were properly removed to federal court because the supplier had alleged facts sufficient to support a colorable government contractor defense, the U.S. Court of Appeals for the Ninth Circuit held in deciding the machinist’s interlocutory appeals (Leite v. Crane Company, April 25, 2014, Watford, P.).

Background. Douglas Leite and David Thompson worked as machinists in the Pearl Harbor Naval Shipyard in Hawaii. They separately filed state tort law claims against a number of defendants, alleging that the companies failed to warn them of the hazards of asbestos from their products which they sold to the U.S. Navy, resulting in injuries to the workers. One of the defendants, Crane Co., removed both cases to federal court under the federal officer removal statute. Leite and Thompson each moved for remand, asserting that Crane had not provided sufficient factual evidence to support removal. Both district courts denied the motions, and the plaintiffs filed interlocutory appeals. The Ninth Circuit consolidated the two cases for appeal, noting the presence of procedural questions of first impression: whether a defendant must prove necessary facts or simply allege them in order to establish removal jurisdiction; if it must prove them, whether evidentiary challenges to that evidence must be resolved before the court determines whether removal jurisdiction exists; and if the question of removal jurisdiction turns on disputed facts, whether the district court should resolve those issues or leave them for the trier of fact.

Removal jurisdiction. While these issues were novel when applied to removal jurisdiction, the Ninth Circuit observed that they have been resolved in the similar context of a motion to dismiss for lack of subject-matter jurisdiction. A facial attack to a plaintiff’s jurisdictional allegations is brought by introducing evidence from outside the pleadings, requiring the plaintiff to support the allegations with “competent proof;” a plaintiff must prove each of the jurisdictional requirements by a preponderance of the evidence, but a district court may resolve factual disputes if the existence of jurisdiction depends on those disputes. Although a defendant has broader removal rights under the federal officer removal statute than under the general removal statute, the court determined that applying this framework would not unduly burden its rights under the federal officer removal statute.

Federal contractor defense. Crane’s affidavits established that it had a colorable federal defense. Retired Rear Admirals David Sargent and Roger Horne, Jr., stated that the Navy had issued detailed specifications on the content and form of all warnings to be provided by equipment manufacturers on the equipment and in their manuals, the Navy was directly involved in preparing the manuals, manufacturers could not include warnings beyond those required by the Navy, and the Navy specifications did not include manufacturers’ warnings about asbestos. Although the machinists argued that the opinion by the two Rear Admirals that the Navy would have rejected requests from Crane to approve warnings about asbestos was speculative and unreliable, the court found that Crane had made a sufficient showing that the Navy had exercised its discretion and approved warnings without this additional testimony.

Furthermore, Crane’s Vice-President of Environment, Health, and Safety stated that all equipment sold to the Navy by Crane complied with all Navy specifications, including those on warnings, and Sargent stated that the equipment could not have been installed on a Navy vessel unless it was in full compliance with all relevant specifications. Finally, the testimony of Dr. Samuel Forman, who had opined based upon years of research that the Navy always knew at least as much about asbestos hazards as Crane did, established that there was nothing remaining for Crane to warn the Navy about.

This evidence was sufficient to establish that Crane’s government contractor defense was colorable and to prove by a preponderance of the evidence that there was a causal nexus between the machinists’ claims and the actions that Crane undertook at the direction of the Navy. Crane’s failure to warn about asbestos hazards was both the basis for the machinists’ claims and the actions that it performed under the Navy’s direction; therefore, whether it was liable to the machinists was a question for a federal court to decide.

The case number is 12-16864.

Attorneys: L. Richard DeRobertis (Galiher DeRobertis Ono) for Douglas P. Leite. Joseph F. Kotowski III, Esq. (Tom Petrus & Miller LLLC) for Crane Co. Ewing Mason Martin, III, Esq. (Kessner Umebayashi Bain & Matsunaga) for Aurora Pump Co. Gail Miriam Kang (Ayabe, Chong, Nishimoto, Sia & Nakamura) for Bayer Cropscience, Inc., successor-in-interest to Rhone-Poulenc AG Co. AKA Amchem Products, Inc., AKA Benjamin Foster Products Co.

Companies: Crane Co.; Aurora Pump Co.; Bayer Cropscience, Inc., successor-in-interest to Rhone-Poulenc AG Co. AKA Amchem Products, Inc., AKA Benjamin Foster Products Co.

MainStory: TopStory JurisdictionNews DefensesLiabilityNews AsbestosNews AlaskaNews ArizonaNews CaliforniaNews HawaiiNews IdahoNews MontanaNews NevadaNews OregonNews WashingtonNews GuamNews

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