Opinion ID: 2827110
Heading Depth: 3
Heading Rank: 2

Heading: Colorable Federal Defenses

Text: Even if VSE presented sufficient evidence of the causal nexus between the plaintiffs’ claims and the actions of a federal officer, VSE’s pursuit of federal officer removal would still falter because it did not demonstrate the requisite colorable federal defense. See Leite, 749 F.3d at 1120 (“To invoke the statute, [VSE] must show that (1) it is a person within the meaning of the statute, (2) a causal nexus exists between plaintiffs’ claims and the actions [VSE] took pursuant to a federal officer’s direction, and (3) it has a colorable federal defense to plaintiffs’ claims.”) (citation and internal quotation marks omitted) (emphasis added).
Relying on Boyle, VSE contends that federal officer removal was proper because it asserted a colorable government contractor defense. In Boyle, the Supreme Court held that military contractors involved in the design of Aviation Administration (FAA), “[t]he FAA contracts included precise specifications” and “Federal officers closely monitored [the defendant’s] work. Specifically, each contract designated a federal officer who directly supervised each remediation. These on-site federal officers . . . were prohibited from modifying or deviating from the FAA’s specifications without first obtaining the signature of the Lead Contractor Officer . . .” 607 F.3d at 1082, 1087 (alteration, footnote reference, and internal quotation marks omitted). In Isaacson, the federal government contracted with several chemical companies to develop Agent Orange. See 517 F.3d at 133. The Second Circuit held that federal officer removal was proper because “the Government knew that Agent Orange contained dioxin, and the Government controlled the method of formulation. The action that Plaintiffs challenge, the production of dioxin, naturally would have occurred during the performance of these government-specified duties. . . .” Id. at 138. 24 CABALCE V. VSE CORP. military equipment should not be held liable for state law claims. The Supreme Court articulated: Liability for design defects in military equipment cannot be imposed, pursuant to state law, when (1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States. . . . Boyle, 487 U.S. at 512. As we have recognized, “[t]his defense protects government contractors from tort liability that arises as a result of the contractor’s compliance with the specifications of a federal government contract.” Getz v. Boeing Co., 654 F.3d 852, 860 (9th Cir. 2011) (citations, alteration, and internal quotation marks omitted). “In the Ninth Circuit, however, [the government contractor defense] is only available to contractors who design and manufacture military equipment.” Snell v. Bell Helicopter Textron, Inc., 107 F.3d 744, 746 n.1 (9th Cir. 1997) (citation omitted). This precedent renders the government contractor defense unavailable to VSE, a nonmilitary contractor.5 5 VSE candidly acknowledges that “[t]his Court has not yet applied the government contractor defense outside of military contracts . . .” Nevertheless, VSE contends that it was entitled to invoke the government contractor defense because it is plausible that the defense may apply outside of the military context. For example, in Integrated Concepts, the district court opined that “the government contractor defense could plausibly be invoked by a contractor hired by a federal civilian agency to CABALCE V. VSE CORP. 25 Even if applicable, VSE did not demonstrate by a preponderance of the evidence a colorable government contractor defense because “[t]he government’s approval of a particular specification must be more than a cursory rubber stamp approving the design.” Getz, 654 F.3d at 861 (citation and internal quotation marks omitted). “Rather, approval must result from a continuous exchange and back and forth dialogue between the contractor and the government.” Id. (citation and internal quotation marks omitted). “When the government engages in a thorough review of the allegedly defective design and takes an active role in testing and implementing that design, [the] first element is met.” Id. (citation omitted). As discussed, VSE failed to proffer any evidence that the government approved “a particular specification” for the fireworks’ destruction after “a continuous exchange and back and forth dialogue between the contractor and the government,” as opposed to “a cursory rubber stamp.” Id.6 design and construct a local infrastructure project.” 2013 WL 6118485 at  (footnote reference omitted). However, our binding precedent has not reached a similar conclusion. See Snell, 107 F.3d at 746 n.1. Indeed, VSE points to no authority permitting the panel to overrule its precedent limiting the government contractor defense to military contractors. See United States v. Hernandez-Estrada, 749 F.3d 1154, 1160 (9th Cir. 2014) (en banc) (emphasizing that “[t]he three judge panel lack[s] the authority to alter circuit law without an intervening Supreme Court or en banc decision that was clearly irreconcilable with our circuit precedent”) (citation omitted). 6 VSE insists that the district court improperly weighed the evidence and made factual determinations in holding that VSE failed to present a colorable government contractor defense. However, we have held in the federal officer removal context that “[b]ecause plaintiffs have raised a factual attack on [the defendant’s] jurisdictional allegations, [the defendant] must support its allegations with competent proof.” Leite, 749 26 CABALCE V. VSE CORP.
Relying on Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18 (1940), VSE asserts that it is entitled to derivative sovereign immunity because VSE performed delegated governmental functions pursuant to its federal contract. In Yearsley, a company that built dikes on the Missouri River pursuant to a federal contract was sued for “using large boats with paddles and pumps to produce artificial erosion [that] washed away a part of petitioners’ land. . . .” Id. at 19. The Supreme Court observed that it was “undisputed that the work which the contractor had done in the river bed was all authorized and directed by the Government of the United States for the purpose of improving the navigation of this navigable river. . . .” Id. at 20 (internal quotation marks omitted). The Supreme Court concluded that the company was not liable because “if the authorized action in this instance does constitute a taking of property for which there must be just compensation under the Fifth Amendment, the Government has impliedly promised to pay that compensation and has afforded a remedy for its recovery by a suit in the Court of Claims. . . .” Id. at 21 (citations omitted). “It follows that as the Government in such a case promises just compensation and provides a complete remedy, action which constitutes the taking of property is within its constitutional power and there is no ground for holding its F.3d at 1122 (citation omitted). The defendant “bears the burden of proving by a preponderance of the evidence that the colorable federal defense and causal nexus requirements for removal jurisdiction have been met.” Id. (citation and footnote reference omitted). Additionally, “if the existence of jurisdiction turns on disputed factual issues, the district court may resolve those factual disputes itself. . . .” Id. at 1121–22 (citations omitted). CABALCE V. VSE CORP. 27 agent liable who is simply acting under the authority thus validly conferred. The action of the agent is the act of the government.” Id. at 21–22 (citation and internal quotation marks omitted). We have held that derivative sovereign immunity, as discussed in Yearsley, is limited to cases in which a contractor “had no discretion in the design process and completely followed government specifications.” In re Hanford Nuclear Reservation Litig., 534 F.3d at 1001 (citation omitted). We clarified that “[n]othing in Yearsley extended immunity to military contractors exercising a discretionary governmental function.” Id. (citation omitted). Even if we applied Yearsley, VSE would not benefit, because the record does not reflect that VSE and Donaldson “had no discretion” in devising the destruction plan for the fireworks. Id. In fact, the record evinces a contrary conclusion. As the district court aptly observed, it was undisputed that Donaldson and VSE designed the destruction plan without government control or supervision.