At the beginning of every case filed in state court, a defendant must make a decision, do I litigate in state court or do I remove to federal court? Federal court and state court each have their own advantages and disadvantages, but for the defendant seeking the shelter of federal court one of the first hurdles to overcome after removal is an effort to remand the case to state court. Typically, a defendant who loses the motion to remand is out of luck because orders remanding matters to state court are not appealable to the federal circuit court.
As with every rule, there are exceptions. A defendant is allowed to appeal an order to remand if the cases involves one of two statutes. First, if the defendant's removal is due to their status as a federal officer or agency, then the defendant can similarly appeal a remand order.[2] Second, a defendant who has removed a civil rights case to federal court can appeal the order to remand.[3] The question is, if a defendant removes a case for multiple reasons, including either the federal officer or civil rights provisions, can the appellate court review all of the grounds for removal?
That question came before the Supreme Court in BP. The defendants in BP were sued for their failure to warn about the dangers of their products.[4] The defendants removed pursuant to the federal officer provision because they alleged that their challenged exploration, drilling, and production operations were done at the behest of the federal government.[5] The district court reviewed all of the bases for removing the case in its order remanding the case to the state court.[6] The defendants appealed the remand order to the Fourth Circuit Court of Appeals.[7] The Fourth Circuit read § 1447(d) as only allowing it to review the part of the remand order denying removal under the federal officer provision.[8] The defendant filed a petition for certiorari with the Supreme Court.
Under § 1447(d), "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise."[9]
The Supreme Court, in a 7-1 decision[10], held that the word "order" in § 1447(d) gives the appellate court the right to review every ground for removal when one of the grounds was pursuant to federal officer or civil rights jurisdiction statutes. Further, the Court held that the language of § 1447(d) is clear and any lower court opinions prior to the amendment of § 1447 were simply insufficient to create a consensus contrary to the language of the statute.[11]
The Court further dismissed the City's argument that taking a more expansive view of § 1447(d) will inherently lead to gamesmanship by defendants removing to federal court.[12] Indeed, in her solo dissent, Justice Sotomayor agreed with the City's thinking, writing that she feared the Court's decision "will reward strained theories of removal under § 1442 or § 1443."[13] The Court rejected this concern because the lower courts have the option of imposing sanctions for frivolous filings under Rule 11 and can order the removing party to pay the attorney's fees and expenses for frivolous removals.[14]
Attorneys evaluating whether they should remove a case to federal court will have to include the Court's decision in BP as they weigh the costs and benefits of removal. Even where a party may not be a federal employee, there is room for companies to exercise removal jurisdiction under § 1442. First, a defendant must establish that it is a "person" within the meaning of the statute, who "act[ed] under [a federal] officer[.]"[15] Second, a defendant must demonstrate that it performed the actions "under [the] color of [federal] office[.]"[16] Third, a defendant must show that it raised a colorable federal defense.[17] For instance, in Bennett v. MIS Corp., a company working closely with the FAA to perform mold remediation could remove under § 1442 because of the detailed regulation, monitoring, and supervision involved in the relationship between the private company and the government agency.[18]
Private companies with similarly close ties to government agencies could consider using § 1442 to remove their cases if the conduct in question is closely related to those ties. Not only would a defendant benefit from adding the additional ground for removal, but the mere addition now guarantees that all of a defendant's grounds for removal can be reviewed by the appellate court. Of course, counsel will always need to evaluate the strengths of a removal premised on § 1442 or § 1443 and be wary of the potential for an order to pay the attorney's fees and expenses under § 1447(c). Additionally, counsel will need to be sure their removal satisfies Rule 11. The Court's opinion opens up opportunities for parties removing to federal court, but a frivolous attempt to wedge § 1442 or § 1443 into a removal could result in a significant financial hit by way of attorney's fees, expenses, and fines, on top of the cost of fighting the motion to remand and appealing the order. Regardless, the Supreme Court has added an important arrow to the quiver of a removing party.
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[1] Slip Op., pp. 3-4.
[2] 28 U.S.C. § 1447(d).
[3] Id.
[4] Slip Op., pp. 1-2.
[5] Id. at p. 2.
[6] Id.
[7] Id. at 3.
[8] Id.
[9] 28 U.S.C. § 1447(d).
[10] Justice Samuel Alito did not take part in the decision.
[11] Slip Op., p. 11.
[12] Id. at 13-14.
[13] Sotomayor, J. dissent, p. 7.
[14] Slip Op., pp. 13-14.
[15] 28 U.S.C. § 1442(a)(1); See Bennett v. MIS Corp., 607 F.3d 1076, 1085 (6th Cir. 2010).
[16] 28 U.S.C. § 1442(a)(1); See Bennett, 607 F.3d at 1085.
[17] See Bennett, 607 F.3d at 1085.
[18] Id. at 1088.