FOR PUBLICATION



### UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

C O U N T Y O F S A

N M A T E O , individually and on behalf of the People of the State of California,

Plaintiff-Appellee
,

v

.

C H E V RON C O R

P O R A T I ON ; C H E V RON U.S.A. INC.; E X X ON M O B I L C O R

P O R A T I ON ; BP PLC; BP A M E R

I C A , I N C .; R O Y

A L D U T C H S H E L L PLC; S H E L L O I L P RO D U C T S C O MP A

N Y LLC; CITGO P E T RO L E UM C O R P O R A T I ON ; C ON O C O P H I L L I P S ; C ON O C O P H I L L I P S C O MP A N Y ; P H I L L I P S 66 C O MP A

N Y ; P EA B O D Y E N E RG Y C O R P O R A T I ON ; T O T A L E&P USA, I N C

. ; T O T A L S P E C I A L T I E S USA, I N C .; A R C H C O A L I N C

. ; E N I O I L & G A S , I N C .; R I O T I N T O E N E RG

Y A ME R I C A , I N C .; R I O T I

N T O M I N E R A L S , I N C .; R I O T I N T O S E R

V I C E S , I N C

. ; A N A D A R KO P E T RO L E UM C O R P O R A T I ON ; O C C I D E

N T A L P E T RO L E UM C O R

P O R A T I ON ; O C C I D E N T A L C H E M I C A L C O R P O R A T I ON ; R E P S O L E N E RG Y No. 18-15499

D.C. No. 3:17-cv-04929-VCC O U N T Y O F S A

N M A T E O V

. C H E V RO N C O R P

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N O R T H A M E R

I C A C O R

P .; R E P S O L T R A D I N G USA C O R

P

. ; M A R A T H ON O I L C O MP A

N Y ; M A R A T H ON O I L C O R

P O R A T I ON ; M A R A T H ON P E T RO L E UM C O R P

. ; H E S S C O R

P .; D E V O

N E N E RG

Y C O R P .; D E V ON E N E RG

Y P RO D U C T I O

N C O MP A

N Y , LP; E N C A N A C O R P O R A T I ON ; A P A C H E C O R P ., Defendants-Appellants.

C I T Y O F I MP E R

I A L B E A C H , individually and on behalf of the People of the State of California,

Plaintiff-Appellee
,

v

.

C H E V RON C O R

P O R A T I ON ; C H E V RON U.S.A. I N C

. ; E X X ON M O B I L C O R

P O R A T I ON ; BP PLC; BP A M E R

I C A , I N C .; R O Y

A L D U T C H S H E L L PLC; S H E L L O I L P RO D U C T S C O MP A

N Y LLC; CITGO P E T RO L E UM C O R P O R A T I ON ; C ON O C O P H I L L I P S ; C ON O C O P H I L L I P S C O MP A N Y ; P H I L L I P S 66 C O MP A

N Y ; P EA B O D Y E N E RG Y C O R P O R A T I ON ; T O T A L E&P USA, I N C

. ; T O T A L S P E C I A L T I E S USA, INC.; A R C H No. 18-15502

D.C. No. 3:17-cv-04934-VCC O U N T Y O F S A

N M A T E O V

. C H E V RO N C O R P

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C O A L I N C

. ; E N I O I L & G A S , I N C .; R I O T I N T O E N E RG

Y A ME R I C A , I N C .; R I O T I

N T O M I N E R A L S , I N C .; R I O T I N T O S E R

V I C E S , I N C

. ; A N A D A R KO P E T RO L E UM C O R P O R A T I ON ; O C C I D E

N T A L P E T RO L E UM C O R

P O R A T I ON ; O C C I D E N T A L C H E M I C A L C O R P O R A T I ON ; R E P S O L E N E RG Y N O R T H A M E R

I C A C O R

P .; R E P S O L T R A D I N G USA C O R

P

. ; M A R A T H ON O I L C O MP A

N Y ; M A R A T H ON O I L C O R

P O R A T I ON ; M A R A T H ON P E T RO L E UM C O R P

. ; H E S S C O R

P .; D E V O

N E N E RG

Y C O R P .; D E V ON E N E RG

Y P RO D U C T I O

N C O MP A

N Y , LP; E N C A N A C O R P O R A T I ON ; A P A C H E C O R P ., Defendants-Appellants.

C O U N T Y O F M A R

I N , individually and on behalf of the People of the State of California,

Plaintiff-Appellee
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v

.

C H E V RON C O R

P O R A T I ON ; C H E V RON U.S.A. I N C

. ; E X X ON M O B I L C O R

P O R A T I ON ; BP No. 18-15503

D.C. No. 3:17-cv-04935-VCC O U N T Y O F S A

N M A T E O V

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PLC; BP A M E R

I C A , I N C .; R O Y

A L D U T C H S H E L L PLC; S H E L L O I L P RO D U C T S C O MP A

N Y LLC; CITGO P E T RO L E UM C O R P O R A T I ON ; C ON O C O P H I L L I P S ; C ON O C O P H I L L I P S C O MP A N Y ; P H I L L I P S 66 C O MP A

N Y ; P EA B O D Y E N E RG Y C O R P O R A T I ON ; T O T A L E&P USA, I N C

. ; T O T A L S P E C I A L T I E S USA, I N C .; A R C H C O A L I N C

. ; E N I O I L & G A S , I N C .; R I O T I N T O E N E RG

Y A ME R I C A , I N C .; R I O T I

N T O M I N E R A L S , I N C .; R I O T I N T O S E R

V I C E S , I N C

. ; A N A D A R KO P E T RO L E UM C O R P O R A T I ON ; O C C I D E

N T A L P E T RO L E UM C O R

P O R A T I ON ; O C C I D E N T A L C H E M I C A L C O R P O R A T I ON ; R E P S O L E N E RG Y N O R T H A M E R

I C A C O R

P .; R E P S O L T R A D I N G USA C O R

P

. ; M A R A T H ON O I L C O MP A

N Y ; M A R A T H ON O I L C O R

P O R A T I ON ; M A R A T H ON P E T RO L E UM C O R P

. ; H E S S C O R

P .; D E V O

N E N E RG

Y C O R P .; D E V ON E N E RG

Y P RO D U C T I O

N C O MP A

N Y , LP; E N C A N A C O R P O R A T I ON ; A P A C H E C O R P ., Defendants-Appellants.C O U N T Y O F S A

N M A T E O V

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C O U N T Y O F S A

N T A C R U Z , individually and on behalf of The People of the State of California; C I T Y O F S A

N T A C R U Z , a

m unicipal corporation, individually and on behalf of The People of the State of California; C I T Y O F R I C H M ON D , individually and on behalf of The People of the State of California,

Plaintiffs-Appellees
,

v

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C H E V RON C O R

P O R A T I ON ; C H E V RON USA I N C

. ; R O Y A L D U T C H S H E L L PLC; BP PLC; S H E L L O I L P RO D U C T S C O M P A N Y LLC; BP A M E R

I C A , I N C .; E X

X ON M O B I L C O R

P O R A T I ON ; C ON O C O P H I L L I P S ; C ON O C O P H I L L I P S C O MP A N Y ; A N A D A R KO P E T RO L E UM C O R P O R A T I ON ; A P A C H E C O R P O R A T I ON ; D E V ON E N E R G Y C O R P O R A T I ON ; D E V ON E N E R G Y P RO D U C T I O

N C O MP A

N Y , LP; T O T A L E&P USA, I N C .; T O T AL S P E C I A L T I E S USA, I N C .; E N C A N A C O R P O R A T I ON ; CITGO P E T RO L E UM C O R

P O R A T I ON ; H E S S C O R P O R A T I ON ; M A R

A T H O N O I L C O MP A N Y ; M A R A T H ON O I L No. 18-16376

D.C. Nos. 3:18-cv-00450-VC 3:18-cv-00458-VC 3:18-cv-00732-VC

OPINIONC O U N T Y O F S A

N M A T E O V

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C O R P O R A T I ON ; R E P S O L E N E RG Y N O R T H A M E R

I C A C O R

P O R A T I ON ; R E P S O L T R

A D I N G USA C O R P O R A T I ON ; P H I L L I P S 66 C O MP A N Y ; O C C I D E

N T A L P E T RO L E UM C O R

P O R A T I ON ; O C C I D E N T A L C H E M I C A L C O R P O R A T I ON ; E N I O I L & G A S , I N C .; M A R

A T H ON P E T R

O L E UM C O R P O R A T I ON , Defendants-Appellants.

Appeal from

the United States District Court for the Northern District of California Vince Chhabria, District Judge, Presiding

Argued and Subm itted February 5, 2020 Pasadena, California

Filed May 26, 2020

Before: Sandra S. Ikuta, Morgan Christen, and Kenneth K. Lee, Circuit Judges.

Opinion by Judge IkutaC O U N T Y O F S A

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SUMMARY *

Removal/Subject-Matter Jurisdiction/Appellate

Jurisdiction

On appeal from the district court’s order rem anding

com plain t s to the state court from which they had been

rem oved, the panel dism issed the appeal i n part for lack o f jurisdiction and affirm ed in part, holding that defendants did
not carry their burden of establishing the criteria for federalofficer rem oval under 28 U.S.C. § 1442(a)(1).

The C ounty of San Mateo and other cities and counties file d six com

plaints in California state court against m ore than thirty energy com

panie s , alleging nuisance and other

causes of action arising from the role of fossil fuel p roducts in g lobal warm ing. The energy com panies rem oved the cases to f ederal court. The d istrict court granted plaintiffs’ m otions
to rem and, rejecting all eight o f the grounds on which the energy com

panies relied for subject-m atter jurisdiction.

Dism issing in part, the pane l h e ld that under 28 U.S.C. § 1447(d), it h ad jurisd i ction to review the rem oval order only to the extent the o r de r addressed whether rem oval was proper under § 1442(a)(1). The panel concluded that the nonreviewability clause o f § 1447(d) applied because the district
court rem anded based on a lack of subject-m atter jurisdiction. Declinin g t o follow the Seventh Circuit, the panel held that under the “exception clause” o f § 1 4 4 7 (d), authorizing review of rem o va l p u r s uant to 28 U.S.C. §§ 1442 and 1443, it h ad

* This summ ary constitutes no part of the opinion of the court. It h as been prepared by court staff for the convenience of the reader.C O U N T Y O F S A

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jurisdiction to review whether rem oval was p roper under § 1442(a)(1), but the exception clause did not subjec t the district cour t ’s entire rem and order to plenary review. The panel followed Patel v. Del T aco, Inc.
, 446 F.3d 996 (9th Cir. 2006), concluding that Patel was not abrogated ei t he r b y intervening judicial authority or b y Congress’s 2 0 11

am endm ent of § 1447(d) to insert § 1442.

Affirm ing in part, the panel held that the district court did
not err in holding that there was no subject-m atter jurisdiction under the federa l

- officer rem oval statute. The panel concluded that the energy com panies f ailed to establish that they were “acting under” a federal o fficer’s directions based

on three agreem ents wit h the governm ent: C ITGO’s fuel supply agreem ents w ith the Navy Excha nge Service Comm and, a unit agreem ent f or the p etroleum reserves at Elk Hills bet we e n Standard O il Com pany of California and the U.S. Navy, and the energy com panies’ Oil and Gas Leases o f Subm erged Lands Under the Outer Continental Shelf Lands Act.

C OUNSEL

Theodore J. Boutro u s, Jr. (argued), Andrea E. Neum an, W illiam E. Thom son, and Joshua S. Lipshutz, Gibson Dunn & Crutcher LLP, Los Angeles, California; H erbert J. Stern and Joel M. Silverstein
, St er n & Kilcullen LLC, Florham Park, New Jersey; Neal S. Manne, Johnny W. Carter, Erica Harris, and Steven S hepard, Susm an Godfrey LLP, Houston, Texas; f or Defendants-Appellants Chevron Corporation and Chevron U.S.A. Inc.C O U N T Y O F S A

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Jonathan W

. Hughes, Arnold & P orter Kaye Scholer LLP, San F rancisco, California; Matthew T. Heartney and John D

. Lom b ardo, A rnold & Porter Kaye Scholer LLP, Los Angeles, California; Philip H. Curtis and Nancy Milburn, Arnold & Porter Kaye Scholer L L P, N ew York, New Yo r k ; for Defendants-Appellants BP PLC and BP Am erica, Inc.

Sean C

. Gri ms l e y and Jam eson R. Jones, Bartlit Beck LLP, Denver, Co l orado; Megan R

. Nishikawa and Nicholas A

. Miller-Stratton, King & Spalding LLP, San Francisco, Cal i fo r n i a ; Tracie J. Renfroe and Carol M. W ood, King & Spalding LLP, Houston, Texas; for D efendants-Appellants ConocoPhillips and ConocoPhillips Com pany.

M. Randall O ppenheim er and Dawn S estito, O ’Melveny & Myers LLP, Los Angeles, California; Theodore V. W ells, Jr., Daniel J. Toal, and Jaren E. Janghorbani, Paul W eiss Rifkind Wh arton & Garrison LLP, New York, New York; fo r Defendant-Appellant Exxon Mobil Corporation.

Daniel B

. Levin, Munger Tolles & Olson LLP, Los Angeles, Cal ifornia; Jerom e C. Roth and Elizabeth A. Kim
, Munger Tolles & Olso n LLP, S an Francisco, C alifornia; David C. Fr ederick and Brendan J. C rimm ins, Kellogg Hansen Todd Figel & Frederick P.L.L.C., W ashington, D .C.; for Defendants-Appellants Royal Dutch Shell PLC and Shell Oil Products Com

pany LLC.

Bryan M. Killian, Morgan Lewis & Bockius LLP, W ashington, D.C.; Jam es J. Dragna and Yardena R. ZwangW eissm an, Morgan Lewis & Bockius LLP, Los Angeles, Califo rnia; f

or Defendant-Appellant Anadarko P etroleum Corporation.C O U N T Y O F S A

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Thom as F. Koegel, Crowell & Moring LLP, San Francisco, California; Kathleen Taylor Sooy and Tracy A. Rom an, Crowell & Moring LLP, W ashingto n , D.C.; for DefendantAppellant Arch Coal Inc.

Mortim er Hartwell, Vi ns on & Elkins LLP, San Francisco, California; Patrick W

. Mizell and D eborah C. Milner, Vinson & Elkins LLP, Ho uston, T exas; for Defendant-Appellant Apache Corp.

W il l ia m M

. Sloan and Jessica L. Grant, Venable L LP, San Francisco, California; for Defendant-Appellant P e a b ody Energy Corporation.

Mark McKane P.C., Kirkland & E llis LLP, San Francisco, Ca l ifornia; Andrew A. Kassof, P.C., and Brenton Roger s , Kirkland & Ellis LLP, C hicago, Illinois; for DefendantsAp pellants Rio Tinto E nergy A m erica, Inc.; Rio Tint o Minerals, Inc.; and Rio Tinto Services, Inc.

Gregory Evans, McGuireW oods LLP, Los Angeles, California; Steven R. W i lliam s, Joy C. Fuhr, and Brian D

. Schm alzbach, McGuireW oods LLP, Richm o nd, Virginia; for Defendants-Appellants Devon Energy Corp. and Devon Energy Production Com

pany, LP.

Christopher W

. Keegan, K irkland & E llis LLP, San Francisco, California; Andrew R. McGaan, P .C., Kirkland & Ellis LLP, Chicago, Illinois; Anna G

. Rotm an, P.C., Kirkland & Ellis L LP, H ouston, Texas; Bryan D. Ro hm
, Total E&P USA, Inc., Houston, Texas; for Defendants-Appellants Total E&P USA, Inc.; and Total Specialties USA, Inc.C O U N T Y O F S A

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M i chael F. Healy, Shook Hardy & Bacon LLP, Sa n Francisco, California; Michael L. Fo x, Duane Morris LLP, San Francisco, California; for Defendant-Ap pellant E n cana Corporation.

Craig A. Moyer and Peter Duchesneau, Manatt Phelps & Phillips LLP, L os Angeles, California; Stephanie A. Roeser, Manatt Phel p s & Phillips LLP, San Francisco, C alifornia; Nathan P. Eim er, Lisa S. Meyer, Pam ela R. Hanebutt, and Raphael Janove, Eim er Stahl L LP, Chicago, Illinois; for Defendant-Appellant CITGO Petroleum Corporation.

Christopher J. Carr and Jonathan A. Shapi ro, Baker Botts L.L.P., San Francisco, C alifornia; Scott Janoe, B aker Botts L.L.P., Houston, Texas; Evan Young, Baker Bo tt s L.L.P., Austin, Texas; Megan Berge, B aker Botts L.L.P., W ashingt o n , D.C.; f

or Defendants-Appellants H ess Corp., Marathon Oil Com

pany, Marathon Oil Corporation, Repsol Energy N orth Am erica C o rp., and Repsol Trading USA Corp.

Steven M. Bauer and Margaret A. T ough, Latham & W atkins LLP, San Francisco, California; for Defendant-Appellant Phillips 66 Com

pany.

David E. Cranston, Greenberg Glusker Fields C lam a n & Machtinger LLP, Los Angeles, California; fo r DefendantAppellant Eni Oil & Gas, Inc.

Marc A. Fuller an d Matthew R. Stam m el, Vinson & Elkins L.L.P., Dallas, Texas; Stephen C. Lewis a n d R. Morgan Gilhuly, Barg Coffin Lewis & Trapp LLP, San Fr a ncisco, California; for Defendants-Appellants Occidental P etroleum Corporation and Occidental Chem ical Corporation.C O U N T Y O F S A

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Shannon S

. Broom e and Ann Marie M o r t im er, Hunton Andrews Kur t h LLP, San Francisco, California; Shawn Patrick R egan, Hunton Andrews Kurth LLP, New York, New York; for Defendant-Appellant Marathon Petroleum Corp.

Victor M. Sher (argued), Matthew K

. Edling, Katie H. Jones, and Martin D. Quiñ o n e s, Sher Edling L LP, San Francisco, California; Kevin K. Russell, S arah E. Harrington, and Charles H. Davis, Goldstein & Rus s e l l P .C., Bethesda, Maryland; for Plaintiffs-Appellees.

John C. B eiers, Paul A. Okada, David A. Silberm an, Margaret V. Tides, an d Matthew J. Sanders, O ffice of the C ounty Counsel, Redwood City, California; for Plaintiff-Appellee County of San Mateo.

Brian E. Washington, Brian C. Case, and Brandon Halter, Office of the Co unty Counsel, San Rafael, California, for Plaintiff-Appellee County of Marin.

Jennifer Lyon and Steven E. Boehme r , McDougal Love Boehm er Foley Lyon & Canlas, O ffice of the City Attorney, La Mesa, California, for Plaintiff-Appellee City of I mp e rial Beach.

Dana McRae and Jordan Sh e i nbaum
, Office of the C ounty Co unsel, Santa Cruz, California, for Plaintiff-Appell e e County of Santa Cruz.

Anthony P. C o ndotti, C ity Attorney, Santa Cruz, California, for Plaintiff-Appellee City of Santa Cruz.C O U N T Y O F S A

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Bruce Reed G oodm iller and Rachel H. Somm o v i l l a, City Attorney’s Office, R ich m o nd, California, for PlaintiffAppellee City of Richm ond.

Steven P. L eho t sky, Michael B. Schon, and Jonathan D

. Ur i c k, U.S. Cham

ber Litigation Center, W ashington, D.C. ; Peter D. Keisler, C. F rederick Beckner III, Ryan C. Morris, and Tobias S. Loss-Eaton, Sidley A ustin LLP, W ashington, D.C.; for Am icus Curiae Cham ber of Comm erce of the United States of Am erica.

Gerson H

. Sm oger, Sm oger & Associates P

. C., Dallas, Texas; Robert S. Peck, Center f or C onstitutional Litigation P.C., W ashington, D.C.; fo r Am icus Curiae Senator Sheldon W hitehouse.

Scott L. Nelson and Allison M

. Zieve, Public Citizen Litigation Group, W ashington, D.C., fo r Am icus Curiae Public Citizen, Inc.

Jam es R. W illiam s, County C ounsel; Greta S. H ansen, Chief As s istant C ounty Counsel; Laura S

. Trice, Lead D eputy County Counsel; Tony LoPresti, Deputy County Counsel; Office o f the County Counsel, County of Santa Clara
, Sa n José, California; for Am icus Curiae California State Association of Counties.

Ian Fein, N atural Resources Defense C ouncil, San Francisco, California; Peter Huffm an, Natura l Resources Defense Council, W ashington, D.C.; for A m icus Curiae Natural Resources Defense Council.C O U N T Y O F S A

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OPINION

IKUTA, Circuit Judge:

In this appeal, we consid e r a d istrict court’s order

rem anding com

p laints to state court after the defendants h ad

rem oved the com

plaints to federal court on eight se pa r ate grounds. Under 28 U.S.C. § 1447(d), we have jurisdiction to review the rem and order only to the ex t e n t it addresses whether rem oval was proper under § 1442(a)(1), see Patel v. Del T aco, Inc.
, 446 F.3d 996, 9 9 8 ( 9t h Cir. 2006), which auth orizes rem oval by “any person acting under” a federal officer, 28 U.S.C. § 1442(a)(1). W e conclude that the defendants did not carry thei r b ur d en of establishing this criteria for rem oval. B ecause we lack jurisdiction to review other aspects of the rem and order, w e dism iss the rem ainder of the appeal.

I

The County of San Mateo, the County of Marin, and the Ci ty of Im

perial Beach filed three m aterially sim ilar

com plaints in California state court agai n s t m ore than 30 energy com

panies in July 2017. 1 The com plaints allege
t h a t the E nergy Com

panies’ “extraction, refining, and/or form ulation of fossil fuel p roducts; their introduction of fossil fuel products into the stream of c o mm erce; their wrongful
p ro motion o f their fossil fuel products and concealm ent o f known h azards associated wi t h use of those products; and their failure to pursue less hazardous alternatives available to them ; is a substantial factor in causing the increase in global

1 W e refer to the plaintiffs collect i v e l y as the “Counties” and to the defendants collectively as the “Energy Com panies.”C O U N T Y O F S A

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m ean tem peratu re an d co n seq

u en t in crease in global m ean sea surface height.” Based o n t h ese allegations, the com plaints
assert causes of action for public and private nuisance, strict liability for failure t o warn, strict liability for design defect, negligence, negligent failure to warn, and trespass.

The E nergy Com

panies rem o ved the three com p laints to federal court, asserting sev e n bases for subject-m atter jurisdiction, including jurisdiction under the federal-offi cer

r e mo v a l statute, 28 U.S.C. § 1 442(a)(1). T h e three cases were assigned to Judge Vince G. Chhabria.

Shortly thereafter, the County of Santa Cruz, the City o f Santa Cruz, and the City of Richm ond filed m aterially sim ilar

com plaints in California state court. The Energy Com panies

rem oved these cases to f ederal court as we ll, asserting the

sam e seven ba ses for subject-m atter jurisdiction, 2 and they were also assigned to Judge Chhabria. 3

The Counties, in all six ca ses, m oved to rem and to state court based o n a l ack of subject-m atter jurisdiction. In a reasoned o p i nion, the district court rejected all eight of the

2 Marathon Petroleum Corporation raised an eighth groun d f o r

rem oval: that the com

plaints raised issues concerning m aritim e activities, giving rise to adm iralty jurisdiction. S ee 28 U.S.C. § 1333.

3 The city attorneys of Oakland and San Francisco fi le d sim i lar actions in California state court. Those cases were rem oved and assigned
to Judge W illiam H. A lsup, who s ub s e q u ently dism issed the action f o r failure to state a claim and for lack of personal j uri sdiction. See City of Oakl a n d v. BP p.l.c.
, 3 25 F. Supp. 3d 1017 (N.D. Cal. 2018); City of Oakland v. BP p.l.c. , 2018 W L 3609055 (N.D. Cal. July 27, 2 018). In a concurrently f

iled opinion, we resolve th e appeal from those cases. See City of Oakland v. BP p.l.c. , — F.3d — (9th Cir. 2020).C O U N T Y O F S A

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grounds on which the Energy Com p anies r el ied for subjectm atter jurisdiction, but the d istrict co urt stayed its rem and orders to give the Energy Com pa n i e s an o pportunity to appeal. “[W ] e have jurisdiction to d eterm i n e whether we have jurisdiction to hear [a] case.” Atl. Nat’l Tr. LLC v. Mt. Hawley Ins. Co.
, 621 F.3d 931, 933 (9th Cir. 2010) (citation

om itted).

II

Our authority to review an order rem anding a case to state court is lim ited. Under 28 U.S.C. § 1447(d), “[1] [a]n order

r e ma n d i ng a case to the State court from which it wa s

rem oved is not reviewable on appeal or otherwise, [2] except that an o rder rem anding a case to the State court from which it was rem oved pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.” W e consider the Energy C om

panies’ arg um en ts th at w e m ay conduct a plenary review o f the d istrict court’s rem and order under both of these clauses.

A

Although the first clause in § 1447(d) (the “nonreviewability clause”) broadly prohibits review of “[a]n order

rem anding a case to t h e St a t e court from which it was

rem oved,” the Suprem e Court h as in t e rpreted this language narrowly as prohibiting review only i f a r em and order was issued based on a ground enum erated in § 1447(c). 4 Atl. Nat’l

4 Section 1447(c) states, in pertinent part:

A m o tion to rem and the case o n the basis of any defect other than lack of s u b

j e c t m atter jurisdiction m ust beC O U N T Y O F S A

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Tr.
, 621 F .3d at 934 (citing Thermtron Prods., Inc. v. Hermansdorfer
, 423 U .S. 336, 343 (1976)). W hen a district
court bases its rem and order on one of the grounds in § 1447(c)—i.e., the d istrict court “rem ands based o n subject

m atte r jurisdiction [or] nonjurisdictional defects”—as opposed to, f

or exam ple, based on a m erits determ ination or

conce r n s about a heavy docket, id. at 934–35, “review is unavailable no m atter h o w p lain the legal error in ordering the

rem and,” Briscoe v. Be ll
, 432 U.S. 404, 413 n.13 (1977).

“ [R]eview of the District C o urt’s characterization of its

rem and as resting upon lack of subject-m atter jurisdiction, to the e x t ent it is perm issible at all, should be lim ited to

c o nfirm ing that that characterization w as colorable. ” Powerex Corp. v. Reliant Energy S ervs., Inc. , 551 U.S. 224, 234 (2007).

The Energy Com

panies argue th a t the district court’s order rem anded the com

plaints on a ground that cannot be “colorably characterized as subject-m atter jurisdiction.” Id. Specifically, the Energy Com panies contend that the district
court rem anded the com plaints based on a m erits determ ination when it he l d th at “federal com m on law d[id]

n ot govern the [Counties’] claim s” and therefore “d[id] not preclude [the Counties] from asserting

. . . state law claim s.”

W e reject this argu me n t

. T he district court ordered

rem and b ased on its view that the cases were “im properly

m ade w i t h i n 3 0 d ays after the filing o f the notice o f

rem oval under section 1446(a). I f at any tim e before final judgm ent it a ppears t hat the district court lacks subject m atter jurisdiction, the case shall be rem anded.

28 U.S.C. § 1447(c).C O U N T Y O F S A

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rem oved to federal court” because the Energy Com panies failed to show that “the case[s]

. . . fit[] within one of a sm all handful of sm all boxes” providing for subject-m atter jurisdiction. Put sim

p ly, the distr i ct court concluded that it

“ l a ck[ed] subject m atter jurisdiction.” 28 U .S.C. § 1447(c ). Even if the district court erred in reaching this conclusion, “review is unavailable no m atter how p lain the legal error in ordering the r e ma nd.” Kircher v. Putnam Funds T r. , 5 47 U.S. 633, 642 (2006) (citing Briscoe
, 432 U.S. at 4 1 3 n.13). To the extent Po werex requires that we determ ine whether the district court’s conclusion that “federal com m on law [ d]id not govern the [Countie s’] claim s” was “at least arguab l e,” Townsquare Media, Inc. v. Brill
, 652 F.3d 767, 775 (7th Cir. 2011) (citing Atl. Nat’l Tr.
, 621 F.3d at 937–38, 940), we hold that it was, see City of Oakland v. BP p.l.c.
,

— F.3d — (9t h Ci r

. 2 020) (holding that the district court erred in concluding that there was subject-m atter jurisdiction

on the ground that the plaintiffs’ state-la w nuisance claim s were “necessarily governed by federal com m on law”).

B

W e next consider the Energy Com p anies’ argum ent that the second clause of § 1447(d) (the “exception clause”) requires us to conduct p lenary review of the district court’s

rem and order. W e have interpreted the exception clause as giving u s the authority to review the district court’s r e ma nd order only to the extent that the order addresses the statutory sections listed in the clause. See Patel v. Del T aco , I n c

. , 446 F.3d 996, 998 (9th Cir. 2006). In Pate l
, t h e defendants

rem oved a state-court com plaint to federal co urt under § 1443(1), which provid es for rem oval of civil-rights cases. Id. The district court granted the p laintiff’s mo t ion for

rem and on the ground that rem oval was not proper underC O U N T Y O F S A

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e i t h e r § 1441 or § 1443(1). Id. W e h eld that, u n d e r § 1447(d), we lacked jurisdiction “to review the rem and order based on § 1 441” and thus dism issed the defendants’ appeal
to the extent it was based on that section. Id. 5 At t h e sam e tim e, we held that we had jurisdiction “to review the rem and order based on

. . . § 1443(1).” Id. The reasoning in Patel applies directly to our case. Under § 1447(d), as interpreted in Patel
, we h a ve jurisdiction to review the Energy Com panies’ appeal to the extent the rem and order addresses § 1442(a)(1), b ut we lack jurisdiction to review t he ir appeal from the portions of the rem and o rder considering the seven other bases for subject-m atter jurisdiction.

Arguing against t h i s conclusion, the Energy Com panies

c o n tend that when a suit is “rem oved pursuant to sect i o n 1442,” 28 U.S.C. § 1447(d), the district court’s entire rem and order is subje c t to plenary review. The Energy Com panies base this argum ent on a Seventh Circuit case, Lu Junhong v. Boeing Co.
, which concl u ded that because § 1447(d)

auth o rizes ap p ellate review of “an o rder,” it authorizes review of “the order itself,” not just “particular reasons for an order.” 792 F.3d 805, 812 (7th Cir. 2 015). I n r eaching this conclusion, the Seventh Circuit relied on Ya ma ha Motor Corp., U.S.A. v. Calho un , which construed a statute (28 U.S.C. § 1292(b)) giving appellate courts jurisdiction to review interlocutory orders that a d istrict court certifi e s fo r

5 Pa te l considered an earlier version of § 1447(d), which did n ot include § 1442 in the exception clause. See Rem oval Clarification Act o f 2011, Pub. L. No. 112-51, § 2, 125 Stat. 545, 546 (2011).C O U N T Y O F S A

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im m ediate appeal. 516 U .S. 1 99 (1996). 6 Yamaha concluded that § 1292(b) gives an appellate court jurisdiction over “any issue fairly included within the certified order because ‘ i t is the order that is appealable, and not the controlling question identified by the district court.’” Id. at 205 (citation om itted).

The Energy Com

panies urge us to follow Lu Junhong notwithstanding our decision in P atel for two reasons. F irst, they argue that Patel h as been ab r o gated by an act o f Congress. After P atel wa s d ecided, Congress enacted the Rem o val Clarification Act of 2 0 11, which am ended § 1 4 47(d) to a llow for review of rem and orders in cases

rem oved p ursuant to § 1442. See R em oval Clarification A ct of 2011, Pub. L. No. 112-51, § 2, 125 Stat. 545, 546 (2011). According to the Energy Com panies, Congress’s f

ailure t o

am end the re fe r e nce in § 1447(d) to orders “reviewable by appeal,” m eans that Congress intended to adopt Yamaha ’s in terp retiv e ap p ro ach an d th eref o re auth o rized plenary review of rem and orders fo r cases rem oved p ursuant to § 1442. 7 Second, the Energy Com

panies argue that we are not bound by Patel because it was not well reasoned: it did not provide

6 S ection 1292(b) provides that “[w]hen a district judge, in m aking

. . . an order not otherwise appealable” d eterm ines that the order m eets certain crite ria and that “an im

m ediate appeal from the order m ay m aterially advance the ultim ate term ination of the litigation, he shall s o s t a te in writing i n such order,” and “[t]he Court of Appeals

. . . m ay t hereupon, in its discretion, perm it an appeal to be taken from such o rder.” 28 U.S.C. § 1292(b).

7 The E nergy Com

panies do not argue that Yamaha abrogated P atel
, nor could they, given t

hat Yamaha was decided in 1996—a decade before Patel —and t hus is not “intervening h igher authority.” Miller v. Gammie
, 335 F.3d 889, 893 (9th Cir. 2003) (en banc).C O U N T Y O F S A

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any grounds for its conclusion that we lacked jurisdiction to conduct a plenary review of the rem and order.

Both of these argum ents im plicate our doctr i n e o f stare decisis. W e have long held that “one three-judge panel

. . . cannot reconsider or o verrule the decision of a pr ior panel,” Unite d St a t es v. Gay
, 967 F.2d 3 22, 327 (9th Cir. 1992), unless “our prior circuit authority is clearly irreconcilable with the reasoning or theory o f intervening higher authority,” M i ller v. Gammie
, 335 F.3d 889, 893 (9th Cir. 20 0 3 ) ( e n banc).

There is no intervening judicial authority that woul d abrogate Patel

. Neither the Suprem e C ourt nor an en banc panel o f t h is court h as issued a decision after P a tel was decided in 2006 that is clearly irreconcil ab l e with P a tel ’s conclusion that § 1447(d) lim its our review to the g rounds for

rem oval covered by the exception clause. Therefore, we consider o nly the effect o f Congress’s am endme nt o f § 1447(d) in 2011.

Before C ongress’s am endm ent of § 1447(d), every circuit
court that had addressed this issue agreed with our reading o f § 1447(d). 8 A lthough Yamaha was decided in 1996 (ten years before we decid ed Patel ), no circuit court had applied Yamah a to § 1447(d) or discussed its applicability in that

c o ntext. Therefore, w hen Congress am ended § 1447(d) t o

8 See Alabama v. Conley , 245 F.3d 1292, 1293 n.1 (11th Cir. 2001); Davis v. Glanton
, 107 F.3d 1044, 1047 ( 3d Cir. 1 9 9 7 ); Thornton v. Holloway
, 70 F.3d 522
, 524 (8th Cir. 1995); State Farm Mut. Auto. Ins. Co. v. Baasch
, 644 F.2d 94, 9 7 (2d Cir. 1981); D etroit Police Lieutenants & Sergeants Ass’n v. City of Detroit
, 597 F.2d 566, 567 (6th Ci r. 1979); Robertson v. B all
, 534 F.2d 63, 66 & n.5 (5th Cir. 1976); Noel v. McCain
, 538 F.2d 633, 635 (4th Cir. 1976).C O U N T Y O F S A

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insert “1442 or” before “1443,” R em oval Clarification Act o f 2011 § 2, it w as against a backdrop of unanim ous judicial interpretatio n of § 1447(d) as p erm itting review of only the grounds for rem oval identified in the excep t i o n clause. Congress did not g ive any indication that it inte n ded to overrule the then-unanim ous interpretation of § 1447(d) as lim iting judicial review of a rem and order to the g r o unds listed in the exception clause. W e “pres u me t hat Congress acts ‘with awareness of relevant judicial decisions.’” United States v. Alvarez-Hernandez
, 478 F.3d 1 060, 1065 (9th Cir. 200 7) (quoting United S tates v. Male Juvenile
, 280 F.3d 1008, 1016 (9t h Cir. 2002)). And “when ‘judicial interpretations have se t t l ed the m eaning of an existing statutory provision, repetition of the sam e language in a new statute indicates, as a general m atter, the intent to incorporate [the statute’s]

. . . judic i a l interpretations as well.” Id. (quoting Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit
, 547 U.S. 71, 85 (2 0 0 6 ) )

. Accordingly, we conclude that Congress did not abrogate Pa t e l sub silentio but rather “inten[ded] to incorporate” P ate l ’s (and six other circuits’) interpretation o f § 1 447(d). Id. (citation om itted). The Fourth C ircuit has reached the sam e conclusion. See Mayor & City Council of

Baltimore v. BP P.L.C.
, 952 F.3d 4 52, 461 (4th Cir. 2 020) (“[T]he fact that Congress later added § 1442

a s an exception to § 1447(d)’s no-appeal rule for rem and order s d o e s n ot underm ine our holding

. . . that appellate
courts only have jurisdiction to r e v i ew those grounds for

rem oval that are specifically enum erated in § 1447(d).”). W e therefore conclude that C ongress’s am endm ent of § 1447(d) did not abrogate our interpretation in P a tel.

The E nergy Com

panies also argue that we are not bound by Pa t e l b ecause it was not well reasoned and failed to analyze Yamaha or the statutory interpretation argum ent sC O U N T Y O F S A

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discussed in Lu Junhong . W ere we writing on a clean slate,

we m ight conclude t h at Lu Junhong provides a m ore persuasive interpretation of § 1447(d) than P atel

. But see Baltimore
, 952 F.3d at 459–60. Precedents, however, do not

cease to be authoritative m erely because counsel in a later

case advances new argum ents. See United States v. RamosMedina
, 706 F .3d 932, 939 (9th Cir. 2013) (“This p anel is not free to disregard the d e c i s i on of another panel of our court sim ply because we think the argum ents have b een characterized differently or m ore persuasively.”). Therefore,

we rem ain bound by P atel until abrogated by an intervening higher authority.

Applying P atel ’s reading of § 1447(d), we m ay review the district court’s rem and order only to t h e e x tent it addresses § 1442(a)(1). 446 F.3d at 998; accord Baltimore
, 952 F.3d at 461. Accordingly
, we dism iss the Energy Com panies’ appeals for lack of jurisdiction to the extent the Energy Com

panies seek re view of the district court’s ruling

as to other bases for subject-m atter jurisdic t i o n

. See Patel
, 446 F.3d at 1000.

III

W e now turn to the single g round of rem oval that we have jurisdiction to review: the question whether the district court erred in holding that there was no subject-m atter jurisdiction under the fe d e ral-officer rem oval statute, 28 U.S.C. § 1442(a)(1). W e review questions of statutory construction and subject-m atter jurisdiction de novo. Ritchey v. Upjohn Dr u g Co.
, 139 F.3d 1313, 1315 (9th Cir. 1998). The defendant has the burden of proving b y a pre p o n de r ance o f
t he evidence that the requirem ents for rem oval jurisdictio nC O U N T Y O F S A

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have been m et. Leite v. C rane Co.
, 749 F.3d 1117, 1122 (9th Cir. 2014).

As currently drafted, § 1 442(a)(1) p rovides for rem oval of:

A civil action

. . . that is against or directed to

. . . [ t]he United States or any agency thereof

o r a n y officer ( or any person a cting u nder that officer ) of the United States or of any agency th e r eof, in an official or individual capacity, for or relating to any act under color of such office or on account of any right, title

or authority claim ed under any Act o f Congress for the apprehension or punishm ent of crim inals or the collection of the revenue.

28 U.S.C. § 1442(a)(1) (emp hasis added).

I n o rder to invoke § 1442(a)(1), a p rivate person m us t establish: “(a) it is a person within the m eaning o f the statute; (b) there is a causal nexus between its actions, taken p ursuant to a fe d e r al officer’s directions, and [the] plaintiff’s claim s; and (c) it can assert a colorable fed eral defense.” Riggs v. Ai r bu s Helicopters, Inc.
, 939 F.3d 981, 986–87 (9th Cir. 2019) (quoting Fidelitad, Inc. v. Insitu, Inc. , 904 F.3d 1095, 109 9 ( 9 th Cir. 2018)). To d em onstrate a causal nexus, the
p ri v a t e p erson m

ust show: (1) that the person was “acting under” a federal officer in perform ing som e “act un der color of f ederal office,” and (2) tha t such action is causally connected with the plaintiffs’ claim s. See Goncalves ex rel. Goncalves v. R ady Children’s Hosp. San Diego
, 865 F.3d 1237, 1244 (9th Cir. 2017).C O U N T Y O F S A

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The parties focus on the f irst prong: whether the Energy Com panies were “acting under” a federal officer’s d irections. W e b egin by providing som e b ackground. The federal officer

rem oval statute h as existed in som e v ersion s i n ce 1815. Willingham v. Morgan
, 395 U.S. 402, 405 (1969). Although Congress has am ended the statute on a num ber o f occasions,

see Watson v. Philip Morris C os. , 5 51 U.S. 142, 147–49 (2007), m ost recently in 2011, see Rem oval C larification A ct of 2011 § 2
, t h e purpose of the statute has rem ained essentially the sam e: “The statute’s history and th[e] Court’s

cases dem onstrate that its basic p u rp o s e is to protect the Federal Governm ent f

rom the interference with its operations that w ould ensue were a State able, for exam ple, to arrest and bring to trial in a State court for an alleged offense against the law of the State, officers and agents of the Governm ent acting

. . . within the scope of th eir authority.” Watson
, 551 U.S.
at 1 5 0 (cleaned up) (qu ot i ng Willingham
, 3 95 U.S. at 406). Congress thought that allowing a federal officer to rem ove a state action was necessary because “[s]tate-court proceedings

m ay reflect ‘local prej udice’ against unpopular federal laws

or federal officials” and “deprive f ederal officials of a federal forum in which to assert federal im m unity defenses.” Id. (citation o mi tted). Moreover, state-court proceedings m ay have the e ffect of im

p eding or delaying the enforcem ent o f federal law. Id. The federal officer rem oval statute should be “liberally construed” to fulfill its purpose of allowing federal officials and agents who are b eing p rosecuted in state court for acts taken in their federal authority to rem ove the case to federal court. Id. at 147 (citation om itted).

W hen Congress first enact e d § 1442(a)(1), the phrase “officer of the United States” was generally understood as a
t e r m of art that referred to federal officers who “exercis[e d] significant authority.” Int’l Primate Prot. League v. A d m’rsC O U N T Y O F S A

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of Tulane Educ. Fund
, 5 00 U.S. 72, 81 (1991) (quoting Buckley v. Valeo
, 424 U .S. 1, 126 (1976)). In 1948, Congress

am ended the statute to include the language “person[s] acting under” any officer of the U nited States. Act of June 25, 1948, ch. 6 4 6, § 1442, 62 Stat. 869, 938 (codified at 2 8 U. S .C. § 1 442). At the tim e, this change was understo o d a s extending the sect ion to apply to em ployees, as well as officers. Int’l Primate Prot. League
, 500 U.S. at 84 (quoting H.R. Rep. No. 80-308, at A134 (1947)).

The Suprem e Court subsequently interprete d t h e term “person acting under t hat officer” as extending to a “private person” who h as certain types of close relationships w ith the federal g o v e r n me n t. See Watson
, 551 U.S. at 152–53. The Suprem e Court has identified a num ber of fa c t o rs courts should consider in determining w hether a private person is “acting under” a federal o fficer for purposes of § 1442(a)(1). Am ong other things, the C ourt considers whether the person is acting o n behal f of the officer in a m anner akin to an agency relationship. S

e e id. at 151 (private person m ust be authorized t o act “with or f or federal officers”); see also Goncalves
, 86 5 F. 3 d at 1246 (holding that a private person qualified as “acting under ” a fe deral officer when it was “serving as the governm ent’s agent”); Cabalce v. T h omas E. Blanchard & Assocs., Inc.
, 797 F.3d 720, 729 (9th Cir. 2 015) (noting that a com

p any’s inde p e ndent-contractor status supported the conclusion that it was not acting under a federal officer). T he Court also considers wh e t h er the person is subject t o the officer’s close direction, such as acting under the “subjection, guidance, or control” of the offic e r , o r i n a relationship which “is an unusually cl o s e one involving detailed regulation, m onitoring, or supervision.” W atson , 551 U.S. at 151, 153 (citation om itted); see also Le i t e , 749 F.3d at 1120, 1124 (holding that a defense c o n tractorC O U N T Y O F S A

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properly rem oved a case under § 1 442(a)(1) based, in p art, on “the Nav y’ s detailed specifications regulating the warnings that equipm ent m anufacturers were required to provide”). Third, the Court considers w hether the priv a t e person is assisting the federal officer in fulfilling “basic governm ental tasks” that “the Governm ent itself would have had to perform ” if it had not contracted with a private firm

. Watson
, 551 U.S. at 153–54; see also Goncalves
, 865 F.3d at 1246–47 (holding that private person fulfilled a basic governm ental
tas k by pursuing subrogation claim s on behalf o f a governm ent agency). Finally, taking in to acco un t the purpose of § 1442(a)(1), the Court has considered whether the private person’s activity is so closely related to the governm ent’s im plem entation of its fe d e r al duties that the private person faces “a significant risk o f state-court ‘prejudice,’” just as a g ov ernm ent em

ployee would in sim ilar circum stances, a n d

m ay have difficulty in raising an imm unity defense in state court. Watson , 551 U.S. at 152 (citation om itted).

As the Suprem e Court has indicated, and circuit court s have held, a governm ent contractor m ay m eet the criteria for “acting under” an officer under certain circum stances. S ee id.
at 153–54. Watson cited with approval a Fifth Circui t ca s e, Winters v. Diamond S

hamrock Chemical Co.
, which held that

a governm ent contractor could rem ove a state action under § 1442(a) b ecause the contractor was acting on behalf of the governm ent to pr o duce Agent Orange, a carcinogenic herbicide used as part of the w ar strategy in Vietnam
, and was

a cting under the close direction of the federal governm en t which had p rovided “detailed specifications concerning the

m ake-up, packaging, and delivery of Agent Orange,” as well

as “on-going supervision

. . . over the form ulation, packaging, and delivery o f A gent Orange.” 149 F.3d 387, 3 99–400 (5th Cir

. 19 9 8 ). Further, the contractor provided a product thatC O U N T Y O F S A

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was “ u s e d to help conduct a war” and at least arguably

“ p e r form ed a job that, in the absence of a contract wi t h a private firm
, the Governm ent it s elf would have had to perform .” Watson
, 551 U.S. at 153–54; see also Goncalves
, 865 F.3d at 1246–47 (holding that a private con t ra ctor was “acting under” a federal officer when it was s e r v i ng as an agent fo r the governm ent and assisting the governm ent in fulfilling basic duties).

By c o n trast, a p erson is not “acting under” a feder al officer when the person enters into an arm ’s-length business arrangem ent with the federal g overnm ent or supplies it with widely av ailable com m ercial products or services. See Cabalce
, 7 97 F.3d at 727–29; Baltimore
, 952 F.3d at 463–64; cf. Goncalves
, 8 65 F .3d at 1244–47; W i n ters , 149 F.3d
at 398–400. No r d oes a person’s “ compliance with the law (or acquiescence to an order)” am oun t t o “ ‘acting under,’ a federal officer who is giving an order or enforcing the law.” Watson
, 551 U.S. at 152. This is true “even if the regulation is highly detailed and even if the private firm ’s activities are highly supervised and m onitored.” Id. at 153. W e m ay not inte r p r e t § 1 442(a) so as to “expand the scope of the statute considerably, potentially bringing within its scope state-court actions filed against private firm s in m any h i g h ly regulated industries.” Id.

The Energy Com

p anies argue that they m eet th e criteria under § 1 442(a) to rem ove the Counties’ com plaints because they were “persons acti n g under” a federal officer based on three agreem ents with the governm ent. 9 They also argue that

9 W e have held that corporations are “person[s]” under § 1442(a)(1), Goncalves
, 8 65 F .3d at 1 244, so t here is no dispute that t h e Energy Com panies m eet this requirem ent.C O U N T Y O F S A

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there is a causal nexus between their a c t i o n s under those agreem ents and the Counties’ claim s. W e c o nsider each o f these agreem ents in turn.

W e first consider C ITGO’s fuel supply agreem ents with the Navy Exchange Service Com m and (NEXCOM). Under these contracts, CITGO agreed to supply gasoline and diesel fuel to NEXCOM for service stations on approxim ately forty U.S. Navy installations. The governm ent resold the CITGO fuel at NEXCOM faciliti es to individual service m em bers. The En e rgy Com

panies point to three sets o f contractual requirem ents in the fuel supply agreem ents which they claim establish the “subjection, guidan ce or control” necessary to invoke federal jurisdiction, nam ely: (1) “fuel specifications” that required com

pliance w ith specified A m erican Society for Testing and Material Standards and required that NEXCOM have a qualified independent source analyze the products for

com pliance with those specifications; (2) provisions that give the Navy the right to inspect delivery, site, and operations; and (3) branding and advertising requirem ents. 1 0

10 The Energy C o m

panies cite the following sections in the fuel supply agreem ents. F irst, the fuel specification provisions require CITGO to “provide high q

uality g asoline product identical to or the sam e product

as supplied [by] the contractor[’]s comm ercially operated gasoline service station [e.g., regular leaded, r egular unleaded
, and prem ium unleaded].” The “[m ]otor fuel products supplied” by CITGO were required to com ply with the generic standards prom ulgated by the Am erican S o ci e t y f o r Testing a n d M aterials, and the Navy agreed to “have a q ualified in d ep en d ent so ur c e a

n al y ze t h e p r o d u ct s p r o v i d ed [b y CITGO],” including any product that was “suspected of being faulty/infe ri o r. ” Second, the inspection provisions g a v e the Navy t he right to “visually check truck

com p artm ent(s) b efore and after deliveries” of fuel and to conduct “general operational reviews,” which “m ight also include i n s p e ctions o f . . . vehicles.” Third, the branding provisions require CITGO to “supply all necessary equipm ent, including signage, for each f acility,” toC O U N T Y O F S A

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This argum ent fails. T h e provisions on which the Energy Com panies rely “seem typical of a ny com m ercial contract” and are “inci de n t a l to sale and sound in quality assurance.” Baltimore
, 9 52 F.3d at 464. The contracts evince an ar m’ slength business relationship to supply NEXCOM with generally available com m ercial products. See id. Supplying gasoline to the Navy for resale to its em pl o y ees is not an

a c t i v i t y s o c l o s e l y r e l a t e d t o t h e g o v e r n m e n t ’ s im plem e ntation of f

ederal law that the p erson faces “a significant risk of state-court prejudice.” Watso n , 551 U.S.
at 152. Accordingly, we hold t h at CITGO was not “acting under” a federal officer by supplying gasoline and diesel fuel to NEXCOM pursuant to fuel supply contracts.

Second, the Energy Com panies point to the 19 4 4 u nit agreem ent 1 1 for the petro l e u m reserves at Elk Hills between Standard Oil Com

pany of California (Chevron Corporation’s predecessor in interest) and the U.S. Navy. W e have detailed the history of thi s u n i t agreem ent at length in our p rior decisions. See Un i t ed States v. Standard Oil Co. of Cal.
, 545 F.2d 6 24, 626–28 ( 9 t h Cir. 1976). In b rief, Standard

own ed one-fifth and the Navy owned four-fifths o f the

“incorporate the Governm ent logo on at least three . . . provided signage fixtures,” and to supply “[a] standard service station rotating -fi x e d neon

or i ncandescent street corner station id e n t ifi cation sign

. . . f o r each Governm ent fueling station.” And CITGO could subm it “p ro p o sals o n [CITGO] branded products,” but t he governm ent wa s n ot obligated to

m arket “said product under [CITGO’s] brand or trade nam e.”

1 1 “A unit agreem ent was at that t im e and still is a comm o n arrangem ent i n the pe t ro le u m industry where two or m ore owners have interests i n a comm on pool. Under such an arrangem ent, the pool is operated as a unit and the parties share production and costs i n agreedupon proportions.” United States v. Standard O il Co. of California
, 545 F.2d 624, 627 (9th Cir. 1976).C O U N T Y O F S A

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approxim ately 46,000 acres com p risin g t h e Elk H ills

reserves. As is com m on in the oil exploration and p roduction industry, the two landowners entered into a unit agreem ent to

coo r d i nate operations in the oil f ield and production o f the oil. Because the Navy sought to lim it oil production in order
to ensure the availability of o il reserves in the event of a national em ergency, the unit agreem ent required tha t both Standard and the Navy curtail t h eir production and gave the Navy “exclusive control over the explor a tion, prospecting, developm ent, and operation of the Reserve.” To com pensate St a n da r d for reducing production, the unit agreem ent gave Standar d t he r ight to produce a specified am ount of oil per day (a n a verage of 15,000 barrels per day). Both parties could d ispose of the o i l t h e y extracted as they saw fit, and neither had a “preferential right to purchase any portion of the other’s share of [the] production.”

S tandard’s activities under th e un it ag reem en t d id n o t g iv e rise to a relations h i p wh ere Standard w as “acting under” a federal officer f

or purposes of § 1 442. Standard w as not acting on behalf of th e federal governm ent in order to assist the governm ent perfor m a basic governm ent function. Rather, Standard and the governm ent reached a n a gr eem ent that allowed them to coordinate their use of the oil reserve in

a way that woul d benefit both parties: the governm ent

m aintained o il reserv e s for em ergencies, and Standard ensured its ability to produce oil fo r s a l e. W hen Standard extracted o il from the r eserve, Standard was acting i n d ependently, see Cabalce
, 797 F.3d at 728–29, not as th e Navy’s “agent,” Goncalves
, 865 F .3d at 1246; see also H.R. Rep. No. 112-17, pt. 1, at 3 (2011) (“Rem oval is allowed only when the acts of F ederal defendants are essentially o rdered o r dem anded by Federal authority

. . . .”). A nd Sta n d a rd ’s

arm ’s-length business arrangem ent with the Navy does notC O U N T Y O F S A

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inv o lve conduct so closely related to the governm ent’s im plem entation of f

ederal law that the Energy Com panies

wo uld face “a significant risk of state-court ‘prejudice.’” Watson
, 551 U.S. at 152. 1 2

Finally, we consider the Energy Com panies’ lease

a g r eem ents, entitled “Oil and G as Leases of S ubm er g e d Lands Under the Outer C ontinental Shelf Lands Act.” Under these standard-form leases, the governm ent grants the lessee the right to explore and produce oil and gas resources in the subm erged lands o f the outer Contin ental Shelf, and in exchange the lessee agrees to pay t he g overnm ent rents and royalties

. The Energy C om panies argue that the lessee Energy Com

panies were “ a cting under” a federal officer because the leases require that the lessees drill for oil and gas pursuant to governm ent-approved exploration plans and that the lessees sell som e of their production to certain b uyers; specifically, l e s s e es m

ust offer twenty percent of their production to “sm all or independent refiners” and m ust give

12 At o ral argum ent, the Energy Com panies argued for t

he first tim e that Standard was “acting under” a federal officer p u rs u a n t to t he Naval Petroleum Reserves Production Act of 1976, Pub. L. 94-258, § 201, 90 Stat. 303 (1976), which directed the Secretary of the Navy to “produce such reserves [incl u d i n g t he Elk Hill reserve] at the m axim um efficient
rate consistent with sound engineering p ractices for a period not to exceed six years” and to “sell or otherwise dispose of the United States share of

s uc h petroleum produced f rom such reserves.” § 201, 90 Stat. at 3 0 8

. Nothing in the r ecord indicates that the Secretary of the Navy “ordered o r dem anded,” H.R. Rep. No. 112-17, pt. 1, at 3 (2011), reprinted in 2011 U.S.C.C.A.N. 4 20, 422, that Standard produce oil on behalf of t h e Navy,

see also Baltimore
, 952 F .3d at 4 71 (“[W ]e are l eft wanting for p ertinent details about Standard’s role in operating the Elk Hills Re serve and producing oil therefrom on behalf of t he Navy.”). Therefore, the Energy Com panies’ reliance on this Act is m i splaced.C O U N T Y O F S A

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the United Stat e s t h e r ight of first refusal in tim e of war o r “when the President of the United States shall so prescribe.”

This argum ent also fails. The leases do n ot r e q u ire that lessees act on behalf of the federal governm ent , u n d e r its close direction, or to fulfill basic governm ental du t i e s

. Nor

are lessees engaged in an activit y so closely related to the governm ent’s function that the lessee faces “a significant risk of state-court ‘prejudice.’” Id. In fact, the lease requirem ents largely track legal requirem ents, for instance, that the lessee offer 20 percent of the “crude o il, condensate, and natural gas liquids produced on [t he ] le ase

. . . to sm all or independent refiners,” 43 U.S.C. § 1337(b)(7), and that “[i]n tim e of war,

or when the President shall so prescribe, the United St a t es shall have the right of first refusal to purchase at the m arket price all o r any portion of any m ineral produced from the
outer Continental Shelf,” 43 U. S .C. § 1341(b). Mere “com p l[iance] wi t h t h e law, even if the laws are ‘highly detailed, and thus leave [an] entity ‘highly regulated,’” does
not show that the entity is “act i n g under” a federal officer. Goncalves
, 865 F.3d at 1245 (quoting W atson , 551 U.S.
at 151–53). W e agree with the F ourth Circuit that “the willingness to lease federal property or m ineral righ t s to a p rivate entity for the entity’s own com m ercial p urp os e s , wit h o u t m ore” cannot b e “characterized as the type o f assistance that is required” to show that the private en t i ty is “acting under” a federal officer. B a ltimore
, 9 52 F.3d at 465. Accordingly, the leases on w hich the defendants rely do not give rise to the “unusually close” rel ationship where the lessee was “acting under” a f ederal officer. Watson
, 5 5 1 U.S. at 153.

Because we conclude th at th e E n erg y C o m p an ies h ave not carried their burden of proving b y a p reponderan c e of theC O U N T Y O F S A

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evidence that they were “acting under” a federal o fficer, we do not reach the question whether actions pursuant to the fuel supply agreem ent, unit agreem ent, or lease agreem en t had a causal nexus with the Counties’ com plaints, or wh e ther the Energy Com

panies can assert a colorable federal de fe n se. See Fidelitad , 904 F.3d at 1099.

***

W e affirm the d istrict court to the extent it h eld there was

no subject-m atter jurisdiction under 28 U.S.C. § 1442(a)(1), and w e dism is s t h e rem ainder of the appeals for lack o f jurisdiction under § 1447(d).

AFFIRMED IN PART; DISMISSED IN PART

. 1 3

13 The Counties’ Motion for Partial Dism issal (ECF No. 41) is GRANTED

. See Patel
, 446 F.3d at 1 000. Costs s h a ll be taxed against the Energy Com

panies.