Heather Isringhausen Gvillo Nov. 19, 2014, 10:33am

NEW YORK (Legal Newsline) – A federal appeals court has granted a lower court jurisdiction over a former Navy sailor’s asbestos lawsuit according to the federal officer removal defense.

Judge Gerard E. Lynch delivered the Nov. 13 opinion in the U.S. Court of Appeals for the Second Circuit reversing the lower court’s judgment. Judges Pierre N. Leval and Christopher F. Droney concurred.

Defendant Crane Co. filed the appeal after the U.S. District Court for the Southern District of New York ordered the asbestos case to be remanded back to state court.

Plaintiff Susan Cuomo filed the failure-to-warn action against Crane Co. and several other defendants in a state court in New York on behalf of her late husband Joseph.

She alleged the decedent was exposed to asbestos while serving in the U.S. Navy from 1974 to 1980. She accuses Crane Co. of causing her husband’s injury by failing to include warning labels on the asbestos-containing valves it supplied for the Navy’s vessels.

Crane Co. removed the suit to the district court under the federal officer removal statute in January 2013.

Then in November 2013, the district court granted Cuomo’s motion to remand, finding that Crane Co. did not provide evidence that the Navy’s specifications either “prohibited” or “dictated” the allowed asbestos warnings on Crane’s products.

The district court further held that Crane Co. failed to identify any significant conflict between the Navy’s safety regulations and New York’s tort liability standards so as to give rise to a colorable federal contractor defense.

On appeal, Crane Co. argued that the district court erred when it required the defendant to produce evidence that the Navy dictated the asbestos warnings as the basis of Crane’s federal contractor defense.

The appeals court agreed, holding that Crane Co. did, in fact, assert a colorable federal contractor defense despite the absence of the evidence the district court takes issue with.

In support of removal, Crane Co. provided several affidavits and numerous documentary exhibits suggesting the Navy provided detailed specifications for the valves that Crane supplied for its vessels, Crane’s valves must have conformed to those specifications if they were accepted by the Navy and the Navy was aware of the health risks associated with asbestos by the 1970s.

“This evidence provides a colorable factual basis for each prong of the federal contractor defense,” the appeals court held.

Additionally, Lynch wrote that the plaintiff’s competing testimony did not undercut Crane Co.’s right to removal. Instead, it raised the same factual dispute regarding the validity of the defense “that should be submitted to the judgment of a federal court.”

Cuomo’s argument that Crane Co. cannot make a colorable bid for the federal contractor defense “exaggerates” the requirements of the defense and the threshold for federal removal, Lynch held.

Cuomo correctly noted that some evidence that the disputed product warnings “resulted from a determination of a government official,” meaning the government dictated what warnings should be provided, the opinion said. However, the appeals court added that “dictating the content of a warning does not necessarily require the government to prescribe its literal terms.”

Because Crane Co. provided evidence that the Navy issued specifications regarding the production and packaging of its valves, which did not mention asbestos warnings, the evidence “easily clears the low threshold for asserting a federal contractor defense for purposes of removal.”

“Whether or not that evidence will ultimately be sufficient to persuade a federal court that these specifications articulated a discretionary safety policy by the Navy effectively ‘limiting’ Crane’s ability to affix additional asbestos warnings, or even to raise a fact issue that will survive a motion for pretrial summary judgment, Crane has certainly provided sufficient evidence to create at this preliminary stage a colorable possibility of satisfying that standard,” Lynch wrote.

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos#@legalnewsline.com

More News