Court Opinion

ID: 8353233
Source: CourtListenerOpinion
Date Created: 2022-10-18 00:00:20.331354+00
Date Added: 2024-06-11T16:45:52.292673
License: Public Domain

Case: 22-30055    Document: 00516510840        Page: 1   Date Filed: 10/17/2022

          United States Court of Appeals
               for the Fifth Circuit                              United States Court of Appeals
                                                                           Fifth Circuit

                                                                         FILED
                                                                  October 17, 2022
                                No. 22-30055                        Lyle W. Cayce
                                                                         Clerk

   Plaquemines Parish,

                                                         Plaintiff—Appellee,

   State of Louisiana, ex rel. Jeff Landry, Attorney General;
   State of Louisiana, through The Louisiana Department of
   Natural Resources Office of Coastal Management and
   its Secretary, Thomas F. Harris,

                                                      Intervenors—Appellees,

                                    versus

   Chevron USA, Incorporated, as successor in interest to Chevron
   Oil Company and The California Company; Exxon Mobil
   Corporation, as successor in interest to Exxon Corporation and
   Humble Oil and Refining Company; ConocoPhillips
   Company, as successor in interest to General American Oil
   Company of Texas,

                                                    Defendants—Appellants.

                 Appeal from the United States District Court
                    for the Eastern District of Louisiana
                          USDC No. 2:18-CV-5217

   Before Stewart, Elrod, and Graves, Circuit Judges.
Case: 22-30055     Document: 00516510840           Page: 2   Date Filed: 10/17/2022

                                    No. 22-30055

   Per Curiam:*
          This case stems from the federal government’s relationship with the
   oil industry during World War II. The question presented on this appeal is
   whether this case was properly removed to federal court under the federal
   officer removal statute. More specifically, the parties disagree on whether
   defendants Oil Producers were “acting under” federal officers when they
   ramped up wartime oil production such that they can now remove this case
   from state court. 28 U.S.C. § 1442(a)(1). The district court ruled against
   Producers and ordered the case to be remanded to state court. Because we
   find no reversible error by the district court, we AFFIRM.
                                         I.
          Appellee Plaquemines initially brought this case in Louisiana state
   court, alleging violations of the Louisiana’s State and Local Coastal
   Resources Management Act. That Act, which became effective in 1980,
   required parties seeking to use coastal areas (e.g., for natural resource
   extraction) to obtain and comply with “coastal use permit[s].” La. Stat.
   § 49:214.30(A)(1). The Act grandfathered coastal uses that were “legally
   commenced or established prior to the effective date of the coastal use permit
   program.” Id. § 49:214.34(C)(2). Plaquemines alleged that Producers’
   operations, which date back to the 1940s, “were not ‘lawfully commenced or
   established’” before 1980 because, given various alleged “depart[ures] from
   prudent industry practices,” they were not begun “in good faith.” Thus, in
   Plaquemines’s view, Producers’ extant operations were not grandfathered
   in, so they can be held liable under the Act for environmental damages
   resulting from permit violations from 1980 onward. See Par. of Plaquemines
   v. Chevron USA, Inc., 7 F.4th 362 (5th Cir. 2021).

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.

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                                    No. 22-30055

          Producers removed the suit from Louisiana state court to the federal
   district court under § 1442. On their telling, the history of the federal
   government’s oversight, conscription, and vertical integration of the oil
   industry during World War II justified federal jurisdiction because Producers
   “act[ed] under” federal officers in increasing output to help (literally) fuel
   the war effort. 28 U.S.C. § 1442(a)(1). They also noted that they served as
   federal contractors or subcontractors to refineries with government contracts
   during the War. And for that reason, they were contractually “directed” by
   federal officers to perform the actions for which they are now being sued.
          The district court rejected Producers’ theories. It found no federal
   contract or subcontract in the record, and it refused to infer the existence of
   any subcontracts on the basis of Producers’ buyer-supplier relationships with
   government-contracted refineries.           The district court also rejected
   Producers’ argument that, even absent a contract, they had a “special
   relationship” with the federal government and were thus subject to federal-
   officer direction during WWII. Having rejected all of Producers’ “acting
   under” theories, the district court ordered the case to be remanded back to
   state court. 28 U.S.C. § 1442(a)(1). Producers timely appealed. See 28
   U.S.C. § 1447(d) (authorizing appeals of remand orders premised on lack of
   federal-officer jurisdiction).
                                         II.
          “This court reviews de novo an order remanding a case removed under
   the federal officer removal statute.” St. Charles Surgical Hosp., L.L.C. v. La.
   Health Serv. & Indem. Co., 990 F.3d 447, 450 (5th Cir. 2021). “The district
   court’s factual determinations made in the process of determining
   jurisdiction are reviewed for clear error.” U.S. Fire Ins. Co. v. Villegas, 242
   F.3d 279, 283 (5th Cir. 2001).

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                                     No. 22-30055

                                         III.
          The federal officer removal statute provides that “any officer (or any
   person acting under that officer)” may remove to federal court “a civil action
   . . . commenced in a State court” when the claims are “for or relating to any
   act under color of such office.” 28 U.S.C. § 1442(a)(1) (emphasis added).
   Under this statute, “[t]he removing defendant has the burden of showing:
   ‘(1) it has asserted a colorable federal defense, (2) it is a “person” within the
   meaning of the statute, (3) that has acted pursuant to a federal officer’s [or
   agency’s] directions, and (4) the charged conduct is connected or associated
   with an act pursuant to a federal officer’s directions.’” Box v. PetroTel, Inc.,
   33 F.4th 195, 199 (5th Cir. 2022) (quoting Latiolais, 951 F.3d at 296); see also
   Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.
   2002) (“The removing party bears the burden of showing that federal
   jurisdiction exists and that removal was proper.”). The first and second
   prongs are not at issue. The main dispute in this case concerns the third
   prong—whether Producers “acted pursuant to a federal officer’s [or
   agency’s] directions.” Id. Because we hold that Producers fail to satisfy the
   third prong, we need not reach the fourth.
          There is no removal jurisdiction in this case because Producers did not
   “act[] pursuant to a federal officer’s [or agency’s] directions.” PetroTel, 33
   F.4th at 199. The Supreme Court has held that removal jurisdiction under
   § 1442(a)(1) is available “‘only’ if the private parties were ‘authorized to act
   with or for [federal officers or agents] in affirmatively executing duties under
   . . . federal law.’” Watson v. Philip Morris Companies, Inc., 551 U.S. 142, 143
   (quoting City of Greenwood, Miss. v. Peacock, 384 U.S. 808, 824 (1966)). Such
   relationships are often evidenced by governmental contracts, but evidence of
   “any payment, any employer/employee relationship, or any principal/agent
   arrangement” can also indicate the requisite “delegation of legal authority”
   to act “on the Government[’s] behalf.” Watson, 551 U.S. at 156. We hold

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                                     No. 22-30055

   that Producers are not entitled to removal under § 1442 because (1) there is
   insufficient   “evidence     of    any       contract,   any      payment,    any
   employer/employee relationship, or any principal/agent arrangement”
   indicating that the oil companies acted under a federal officer’s or agency’s
   directions; and (2) we find Producers’ alternative theories on this issue
   unpersuasive. Id.
          Producers present two main theories to explain how they “act[ed]
   pursuant to a federal officer’s [or agency’s] directions.” PetroTel, 33 F.4th
   at 199. First, they contend that historical accounts show that they had an
   “unusually close and special relationship” with the federal government
   during the War. Second, they argue that because they were essential
   “suppl[iers]” for refineries that “were contractually obligated to deliver to
   the government,” they were thereby “subcontractors”—and government
   subcontractors have been held to “act[] under” federal officers within the
   meaning of § 1442(a)(1).
                                         A.
          Producers note that they had an “unusually close and special
   relationship with the government,” which supports their contention that
   they were acting under the federal government’s direction. They support
   this assertion mainly through a lengthy historical account showing that there
   was an “unprecedented level of control over oil production” and an
   “unprecedented industry-wide . . . cooperation with the [federal agencies].”
   For example, Producers note that during this time, the federal government
   regulated the use of critical materials like steel and rubber in oil production
   to preserve such materials for the battlefront. See Preference Rating Order
   P-98b, 7 Fed. Reg. 7309 (Sept. 17, 1942). Producers were restricted to only
   one well per 40 acres to conserve steel (although an agency could grant
   spacing exceptions when “necessary and appropriate . . . to promote the war

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                                     No. 22-30055

   effort”). Conservation Order M-68, 67 Fed. Reg. at 6687 (Dec. 24, 1941). On
   Producers’ historical telling, spurred by temporary wartime government
   agencies, the oil industry vertically integrated itself into a well-oiled machine
   and tremendously expanded production, transport, and refinement to meet
   military and domestic wartime needs. These historical events, Producers
   say, evince an “unusually close” and “special relationship” between
   industry and government, oriented towards “assist[ing]” the government in
   “produc[ing] an item that it needs.”
          But merely being subject to federal regulations is not enough to bring
   a private action within § 1442(a)(1). For an entity to be “acting under a
   federal officer or agency,” the action “must involve an effort to assist, or to
   help carry out, the duties or tasks of the federal superior.” Watson, 551 U.S.
   at 151–52. And “the help or assistance necessary to bring a private person
   within the scope of the statute does not include simply complying with the
   law.” Id. at 152. Furthermore, we have held that being “subject to pervasive
   federal regulation alone is not sufficient to confer federal jurisdiction,” even
   when there was “cooperation” between “[the private actor] and the federal
   government.” Glenn v. Tyson Foods, Inc., 40 F.4th 230, 235 (5th Cir. 2022).
   Thus, to the extent that Producers contend that they were “acting under” a
   federal officer because they complied with federal regulations or cooperated
   with federal agencies, we find those arguments unpersuasive. 28 U.S.C.
   § 1442(a)(1).
                                          B.
          Second, Producers argue that because they were obliged, as federal
   subcontractors, to prioritize fulfillment of orders going towards
   governmental “Defense Order[s],” they functionally acted under federal
   officers in delivering oil to the refineries that made war products for the
   government. Priorities Regulation No. 1, 6 Fed. Reg. 6680 (Dec. 4, 1941),

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                                     No. 22-30055

   §944.1(b)(4). Producers first note that they supplied government-contracted
   refineries with crude oil, which were critical raw materials. And because
   Producers supplied a necessary material for the refineries’ government
   contracts, they contend that they were federal subcontractors. As federal
   subcontractors, Producers contended that they “act[ed] under” federal
   officers and may remove to federal court under § 1442.
          The district court observed that there was “no document evidencing
   such a subcontract” on the record and rejected the argument that “supplier
   relationships suffice to create subcontractor relationships.”            Par. of
   Plaquemines v. Riverwood Prod. Co., No. CV 18-5217, 2022 WL 101401, at *8
   (E.D. La. Jan. 11, 2022). And even assuming arguendo that Producers were
   subcontractors, their mere status as subcontractors would not help establish
   that they “act[ed] under” a federal officer’s directions.             28 U.S.C.
   § 1442(a)(1).    In fact, Producers’ own cited authority suggests that
   subcontractors need to indicate how they themselves were “subject to the
   federal government’s guidance and control” to remove under § 1442. Cnty.
   Board v. Express Scripts Pharmacy, Inc., 996 F.3d 243, 253 (4th Cir. 2021); see
   also id. at 251 (noting that the “‘acting under’ relationship requires that there
   at least be some exertion of ‘subjection, guidance, or control’ on the part of
   the federal government’” (quoting Mayor & City Council of Baltimore v. BP
   P.L.C., 952 F.3d 452 (4th Cir. 2020) (in turn quoting Watson, 551 U.S. at
   151.), cert. granted, 141 S. Ct. 222 (2020), and vacated and remanded on other
   grounds, 141 S. Ct. 1532 (2021))).
          Here, Producers have not shown that they were subjected to the
   federal government’s guidance or control as subcontractors. Cf. Express
   Scripts Pharmacy, 996 F.3d at 253 (holding that a subcontractor was entitled
   to removal because “[t]he [governmental] contract not only contemplated
   the use of subcontractors; it also made them directly accountable to the
   federal government”). As the district court noted, the “refineries, who had

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   federal contracts and acted pursuant to those contracts, can likely remove
   [under § 1442], but that does not extend to [parties] not under that
   contractual direction.” Plaquemines, 2022 WL 101401, at *7. Because
   Producers’ arguments fail to convince us otherwise, we reject the contention
   that they “act[ed] pursuant to a federal officer’s directions,” PetroTel, 33
   F.4th at 199, or otherwise “act[ed] under” a federal officer’s directions as
   subcontractors, 28 U.S.C. § 1442(a)(1).
                                 *        *         *
         Accordingly, we AFFIRM the district court’s order granting the
   motion to remand.

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