Federal judge upholds use of removal statute, orders new complaint in asbestos case

By Heather Isringhausen Gvillo | Apr 16, 2014

EAST ST. LOUIS, Ill. (Legal Newsline) - An Illinois federal judge has found removal of an asbestos case to his court under the federal officer removal statute to be proper.

U.S. District Judge Michael Reagan's order is a grocery list memorandum addressing a number of issues in the case. Most notable, however, is its focus on the claimant's attempt to remand the lawsuit to what has been called by the American Tort Reform Association the epicenter of asbestos litigation - Madison County, Ill.

Plaintiffs Linda and William Hasenberg Jr. originally filed their six-count lawsuit against 35 defendants alleging William Hasenberg was exposed to asbestos through his work with the United States Navy from 1968 to 1972 and in a series of jobs ranging from a crane rental business to auto body repair from 1974 to 1988, as well as on personal automotive repairs from 1973 to 2013.

The lawsuit blames the defendants for Hasenberg's lung cancer development.

Federal Officer Removal

Reagan first addressed defendant Crane Co.'s removal to his court based on the federal officer removal statute. Crane produced parts for the U.S. Navy that were packed in asbestos and used in its ships.

The basic purpose of the federal officer removal statute is to protect the federal government from the interference with its operations "which would ensue if a state were able to try federal officers and agents for alleged offenses committed while acting within the scope of their authority," Reagan wrote.

The claimants filed a response on Feb. 10 asserting that Crane did not satisfy its burden of establishing subject matter jurisdiction, and asked the court to remand the case to Madison County Circuit Court.

However, Reagan stated that there are concerns whether a state court "might reflect 'local prejudice' or hostility against unpopular federal laws or federal officials."

When an "intensely-regulated private contractor" helps produce a needed item for the federal government, the provided assistance to the federal officers "goes beyond simple compliance with the law and helps [the federal] officers fulfill other basic governmental tasks," Reagan wrote.

The U.S. Court of Appeals for the Seventh Circuit has further ruled that a removing defendant must show that "it was a person acting under the United States, its agencies or its officers that has been sued 'for or relating to any act under color of such office and has a colorable federal defense to the plaintiff's claim,'" he continued.

The claimants only agreed that Crane had successfully proved that it was a person under the statute, satisfying the first requirement. However, Reagan stated the court found that Crane met the remaining requirements as well.

According to documents provided to the court, Crane was acting under the direction of the U.S. Navy by designing, manufacturing, supplying or selling its products to the Navy according to precise Navy standards.

The Hasenbergs argued that Crane failed to meet the requirement to prove that a causal connection exists between the conduct complained of and the assertion of official authority, alleging there is no causal nexus between Crane's actions and the plaintiffs' failure-to-warn claims.

Reagan stated the court was unpersuaded by the Hasbenbergs' arguments, because federal officer removal is proper when the plaintiffs' complaint includes both use-of-asbestos and failure-to-warn claims.

Lastly, Reagan wrote that Crane's government contractor defense protects government contractors from state tort liability for products manufactured for the United States Armed Forces under certain circumstances.

Because Crane's evidence proving the Navy provided precise specifications despite knowledge of asbestos hazards and Crane's products followed the guidelines, Crane has a "colorable defense" according to federal law, Reagan states.

Therefore, Reagan found that federal officer removal to the federal court was proper.

Dismissal Motions

After ruling in favor of Crane regarding federal officer removal, Reagan then focused on the several pending dismissal motions.
Reagan granted the Hasenbergs' motion for voluntary dismissal of Counts IV and V against defendant John Crane Inc., but his approved dismissal does not dispose of all claims against John Crane.

Because the plaintiffs previously filed several other motions for voluntary dismissal against various defendants, which has only "muddied the record even further," Reagan ordered the Hasenbergs to file an amended complaint identifying every defendant in each count by May 9.

"This case originated in state court, where it is common to label counts with such titles as 'Willful and Wanton as to Manufacturers/Suppliers of Asbestos Products,'" Reagan explained.

"Although not technically improper, this is quite unhelpful in a case with three dozen defendants, for the record is unclear as to precisely which defendants which counts are directed against, unless one knows who is a manufacturer, who is a supplier and who is both."

Motion to Dismiss for Lack of Personal Jurisdiction

On Jan. 20, Defendant Whittaker, Clark & Daniels, Inc. also filed a motion to dismiss but based their arguments on the plaintiffs' alleged lack of personal jurisdiction.

Reagan wrote that an evidentiary hearing was not held on the issue at the time, leaving the court to question whether the claimants have established personal jurisdiction according to evidence.

Due to the several motions to dismiss and the ordered amended complaint, Reagan rendered WCD's motion moot but continued to address the legal standards governing personal jurisdiction in federal court for future reference.

When applying personal jurisdiction, Reagan ruled that the court should apply federal pleading standards rather than Illinois pleading standards, recognizing that the parties keep citing Illinois cases for concept rather than federal cases.

Reagan wrote that in the federal court, "the judicial approach to considering a question of personal jurisdiction is well-established. 'A complaint need not include facts alleging personal jurisdiction...' However, once the defendant moves to dismiss the complaint under Rule 12 for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating the existence of jurisdiction."

Reagan mooted WCD's motion to dismiss because the court anticipates that if the plaintiffs name WCD as a defendant in their amended complaint, the company will file a fresh motion to dismiss for lack of personal jurisdiction.

While Reagan said it is still premature to address whether personal jurisdiction in regards to a possible motion from WCD is general and could be tried in other states or if it's specific and would certainly be tried in Illinois, he did state that either way the ultimate constitutional query is whether the defendant had certain minimum contacts in order to avoid offending "'traditional notions of fair play and substantial justice.'"

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

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