Macias v. Kerr-McGee Corp.

No. 92 C 3389 (N.D. Ill. August 19, 1992)

The court holds that a lawsuit by individuals against a chemical company for damages based on injuries resulting from exposure to thorium-containing fill material was properly removed to federal court, because the chemical company brought a third-party complaint against officials of the U.S. Environmental Protection Agency (EPA) and the U.S. Nuclear Regulatory Commission (NRC), which allegedly prevented the company from storing the materials at its West Chicago, Illinois, facility. The court first holds that the fact that the plaintiffs' [23 ELR 20227] complaint raises no federal issues does not bar removal of the case to federal court, because the right of removal under 28 U.S.C. § 1442 is not driven by the plaintiffs' complaint. Consistent with the policy aims of § 1442, courts have allowed third-party federal defendants to remove on the basis of a federal defense to the third-party complaint. The court also rejects the plaintiffs' argument that it should remand the case to state court because EPA and the NRC are the real parties in interest. Relying on U.S. Supreme Court precedent, the court holds that nominal involvement of federal officials may confer jurisdiction that would otherwise be lacking. Addressing the plaintiffs' argument that the present case involves the adjudication of abstract rights and does not satisfy the requirements of § 1442, the court holds that a significant federal interest is present in this case, because at issue is the authority of the federal officials and their agencies to decide the proper remedial action to be taken regarding the contaminated materials. Finally, the court holds that the case should not be remanded, even though the state did not have jurisdiction over the third-party complaint. In 1986, with the enactment of 28 U.S.C. § 1441(e), Congress eliminated the derivative nature of removal jurisdiction with respect to all cases commenced on or after June 19, 1986. While Congress did not explicitly extend § 1441(e) to federal official removal under § 1442, the courts have interpreted it as a broad elimination of a judge-made doctrine, which applies to § 1442 as well.

[Related decisions are published at 20 ELR 21339 and 21369.]

Counsel for Plaintiffs
Robert Osmundsen, Steven Lemon
Jeff Diver Group
45 S. Park Blvd., Ste. 270, Glen Ellyn IL 60137
(708) 790-0001

Counsel for Defendants-Counterdefendants
Peter Nickels
Covington & Burling
1201 Pennsylvania Ave. NW, Washington DC 20044
(202) 662-6000

Nordberg, J.

Nordberg, J.:

Memorandum Opinion and Order

Plaintiffs filed suit against Kerr-McGee Corporation seeking damages for personal injuries sustained as a result of exposure to thorium-containing materials on public land in West Chicago as well as on residential real estate where such materials were used as fill. Plaintiffs also seek damages for the devaluation of their property resulting from the contamination. Kerr-McGee subsequently filed a third-party complaint against the Environmental Protection Agency (EPA), William K. Reilly, individually and in his capacity as Administrator of the EPA, the Nuclear Regulatory Commission (NRC) and Ivan Selin, individually and in his capacity as Chairman of the NRC, and against various Illinois agencies and the directors of them. In its third-party complaint (styled a counterclaim under Illinois practice rules, see Ill. Rev. Stat. ch. 110, P 2-608), Kerr-McGee seeks a declaratory judgment stating that it may conduct physical removal of thorium-contaminated materials from certain sites and storage at another. At present, Kerr-McGee is prohibited from acting with regard to its West Chicago sites while the EPA undertakes a remedial investigation and feasibility study. On May 21, 1992, Reilly and Selin, the two individual federal defendants, filed a notice of removal to this Court, pursuant to 28 U.S.C. § 1442. The plaintiffs responded with a motion to remand to state court, which is presently before the Court.

Analysis

At issue in the Kerr-McGee third-party complaint is its alleged inability to remove or store certain thorium-contaminated materials. The Illinois Department of Nuclear Safety, pursuant to the transfer of regulatory authority from the NRC, has allegedly denied Kerr-McGee the ability to store the materials at their facility in West Chicago.

Section 1442(a)(1) permits the defendant in a civil suit filed in state court to remove the action to a federal district court if the defendant is "[a]ny officer of the United States or any agency thereof, or person acting under him, [in a suit challenging] any act under color of such office. . . ." See Int'l Primate Protection League v. Administrators of Tulane Educational Fund, 111 S. Ct. 1700, 1703 (1991). The notice of removal provides, in part, that Reilly and Selin "are officers of United States agencies . . . who were sued in the counterclaim for acts taken under color of their officers"; it further provides that they have federal defenses to the third-party complaint, based on the provisions of the Comprehensive Environmental Response, Compensation, and Recovery Act ("CERCLA"), 42 U.S.C. §§ 9601, et seq., and the Atomic Energy Act, 42 U.S.C. §§ 2011, et seq.

The plaintiffs argue in their motion to remand that their straight-forward complaint raises no federal issues, is unrelated to the third-party complaint filed by Kerr-McGee, and will be needlessly delayed by the involvement of the federal third-party defendants in this action. Moreover, they argue that federal officer removal under § 1442 is proper only if the claims made against the officer threaten to subject him to personal liability or civil penalties. The plaintiffs argue that the real federal parties in interest in the third-party complaint are the EPA and the NRC. Relying on Home Savings & Loan Ass'n v. Samuel T. Isaac & Assoc., 496 F. Supp. 831 (N.D. Ill. 1980), the plaintiffs argue that simply naming the individual federal defendants, Reilly and Selin, does not confer federal jurisdiction; at bottom, the plaintiffs claim, the third-party complaint does not have as its basis the "act" of any individual federal defendant.

As an initial matter, the right of removal under § 1442 is not driven by the plaintiffs' complaint. Instead, "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." Mesa v. California, 109 S. Ct. 959, 968 (1989). In fact, the removal statute trumps the well-pleaded complaint rule, which would otherwise preclude removal even when predicated on a federal defense. Id. Therefore, the plaintiffs' protests that their complaint has not explicitly generated any federal issues is irrelevant. What is relevant is whether removal jurisdiction may be premised on the fact that the federal defenses arise in response to the third-party complaint.

The Seventh Circuit has not addressed the issue except in the context of the narrower fight of removal under § 1441. In Thomas v. Shelton, 740 F.2d 478 (7th Cir. 1984), the Seventh Circuit held that third-party defendants could not remove under 1441(c). The broad purpose of § 1442, counsels a different result, however. The rationale for granting a right of removal to federal officers acting under color of office is the protection of the exercise of legitimate federal authority against interference by individual states through their courts. Wright, Miller & Cooper, Federal Practice and Procedure § 3727 at p. 445 (1985). Consistent with the policy aims of § 1442, the courts have allowed third-party federal defendants to remove on the basis of a federal defense to the third-party complaint. See, e.g., Nolan v. Boeing Co., 919 F.2d 1058, 1066 (5th Cir. 1990), cert. denied, 111 S. Ct. 1587 (1991); Edwards v. McMahon, 834 F.2d 796, 798 (9th Cir. 1987); Johnson v. Showers, 747 F.2d 1228 (8th Cir. 1984); Kozera v. Spirito, 723 F.2d 1003 (1st Cir. 1983); City of New Brunswick v. Borough of Milltown, 686 F.2d 120, 125 [12 ELR 20803] (3d Cir. 1982). This Court, therefore, will not preclude removal on the grounds that the federal defense is raised in response to the third-party complaint.

Nor is the plaintiffs' argument that the agencies — and not Reilly and Selin — are the real parties in interest compelling. In Primate Protection League, the Supreme Court held that § 1442(a)(1) allows removal only by federal officers and not by federal agencies. In so holding, the Court rejected the argument that denying removal power to the agencies would lead to absurd results because it would allow removal power to turn on the "technicality" of who was named in the complaint. 111 S. Ct. at 1708. The Court reasoned that Congress could rationally have intended a federal court, rather than a potentially hostile state court to hammer out the complexities of federal immunity of individual officers. Id. at 1708-09. Thus, contrary to the plaintiff's argument, the nominal involvement of federal officials can serve to confer jurisdiction that would otherwise be lacking, notwithstanding plaintiff's citation to Western Securities Co. v. Derwinski, 937 F.2d 1276, 1279 (7th Cir. 1991). While the Derwinski court is correct that an official capacity suit is in effect a suit against the government, it was Congress' determination in enacting § 1442(a)(1) that while state courts could be trusted to apply the law of sovereign immunity in cases in which a federal agency was the defendant, the same could not be said when the defendant was a federal official. Primate Protection League, 111 S. Ct. at 1708.

Nonetheless, the plaintiffs contend that, because the claims made against Reilly and Selin do not threaten to subject them to [23 ELR 20228] personal liability or civil penalties, § 1442removal jurisdiction does not exist. The plaintiffs concede that an action for declaratory relief against federal officials could vest removal power under § 1442 in the defendants. They claim, however, that the present case involves the adjudication of abstract rights and does not satisfy the requirements of § 1442.

The plaintiffs place particular reliance on Home Savings & Loan, in which the district court reversed its earlier decision that § 1442 removal by the Secretary of the Department of Housing and Urban Development (HUD) was appropriate and remanded to state court. In that case, the court emphasized that no recovery was being sought from either HUD or the Secretary, but explained that joinder of the federal defendants was necessary under Illinois law so that HUD could be instructed to make payments to the appropriate parties in accordance with the reformation of certain participation agreements being sought by the plaintiffs. The court deemed this an insufficient interest in the action to confer federal jurisdiction under § 1442.¹

By contrast, in this case, Kerr-McGee seeks a declaration that the third-party defendants, including Reilly and Selin, have prevented Kerr-McGee from removing thorium-contaminated materials from plaintiffs' property, and that the federal officials and other counterdefendants must allow Kerr-McGee to carry out its removal program. A declaration on this issue will affect more than a resolution of passive abstract rights. See National Audubon Society v. Dep't of Water & Power, 496 F. Supp. 499, 505 (E.D. Cal. 1980). At issue is the authority of the federal officials and their agencies to decide the proper remedial action to be taken regarding the contaminated materials. A significant federal interest is clearly present in this case.

The plaintiffs also suggest that, because the state court did not have jurisdiction over the third-party complaint, under the doctrine of derivative jurisdiction, this case must be remanded. In 1986, however, with the enactment of 28 U.S.C. § 1441(e), Congress eliminated the derivative nature of removal jurisdiction with respect to all cases commenced on or after June 19, 1986. Section 1441(e) provides, as follows:

The court to which such civil action is removed is not precluded from heating and determining any claim in such civil action because the State court from which such civil action is removed did not have jurisdiction over that claim.

While Congress did not explicitly extend § 1441(e) to federal official removal under § 1442, the courts have interpreted it as a broad elimination of a judge-made doctrine, which applies to § 1442 as well. In North Dakota v. Fredericks, 940 F.2d 333 (8th Cir. 1991), the Eighth Circuit explained the rationale for what it deemed was "Congress's general attitude towards the now-discredited theory of derivative jurisdiction":

[S]uppose someone sued you in a state court claiming infringement of a patent. Realizing that such matters are inherently federal, you file a petition for removal. The federal court, however, refuses to entertain the case. Federal district courts have original and exclusive jurisdiction of patent-infringement cases. The state court therefore had no jurisdiction at all, and the federal court on removal, as a sort of off-shoot of the state court, can have none, either. The result is that a federal court refuses to entertain a case over which only it has jurisdiction. Presumably, the plaintiff then refiles in the federal court, or you, as defendant, file suit for declaratory judgment in that court, so in the end the federal court will decide the dispute.

Id. at 336. This inefficiency was not limited to removal under § 1441, accordingly courts have assumed that in enacting § 1441(e), Congress was eliminating altogether derivative jurisdiction from the removal analysis. Id. at 338; see also Federal Nat'l Mortgage Ass'n v. LeCrone, 868 F.2d 190, 192 n.4 (6th Cir. 1989), cert. denied, 493 U.S. 938 (1989); Guidry v. Durkin, 834 F.2d 1465, 1468 n.4 (9th Cir. 1987).²

Accordingly, the Court denies the plaintiffs' motion to remand.³ Should it become appropriate at a later date, the plaintiffs may renew their motion at that time.

1. The government notes that Home Savings & Loan, was decided before the Supreme Court reaffirmed the principal that § 1442 removal must be premised on a federal defense, in Mesa. No mention of a federal defense is made in Home Savings & Loan, so it may be that if before the court today, the case would be remanded on the grounds that the Secretary did not raise a federal defense.

2. The plaintiffs also attempt to incorporate into the present motion to remand certain statutory arguments upon which the federal defendants have premised their motion to dismiss. The Court has expressly stated to the parties that it will address the motion to dismiss separately.

3. Kerr-McGee, in its response to the plaintiffs' motion, also challenges the timeliness of the motion. Because the Court has addressed the substantive challenges to the removal of this action and found removal under § 1442 to be proper, it need not address Kerr-McGee's waiver arguments.