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Burford v. Monsanto Co.

United States District Court, E.D. Missouri, Eastern Division

April 10, 2017

KENT N. BURFORD, et al., Plaintiffs,
MONSANTO CO., et al., Defendants.



         This matter is before the Court on Plaintiffs' motion for remand. (ECF No. 13). Defendants Monsanto Company, Solutia, Inc., and Pharmacia LLC (collectively, “Defendants”) oppose the motion. (ECF No. 18). The parties consented to the jurisdiction of the undersigned pursuant to 28 U.S.C. § 636(c). (ECF No. 15).

         I. Factual and Procedural Background

         From 1935 until 1977, Pharmacia (then known as Monsanto) manufactured polychlorinated biphenyls (PCBs)[1] and sold them, under the trade name “Aroclor, ” to a variety of industrial customers. (ECF No. 9, ¶¶ 34, 50). Pharmacia sold the PCBs for use in “closed applications, ” or insulating fluids in high-temperature transformers and capacitators, and “open applications, ” such as inks, paints, pesticides, plasticizers, hydraulic fluids, lubricants, adhesives, heat transfer fluids, and carbonless copy paper. (ECF No. 7 at ¶ 41). In 1971, Pharmacia ceased production of PCBs for use in open-application systems, and in 1977, it ceased all production of PCBs. (ECF No. 9 at ¶¶ 34, 41).

         On March 10, 2016, twenty-eight individual plaintiffs (“Plaintiffs”) filed a petition against Defendants in the Circuit Court of St. Louis County seeking damages under theories of strict product liability and negligence. (ECF No. 7). Plaintiffs alleged that their exposure to PCBs, which were manufactured by Pharmacia and ultimately released into the environment, caused them to develop non-Hodgkin lymphoma, malignant melanoma, and/or breast cancer. (Id. at ¶ 34). Plaintiffs specifically limited their claims to PCBs sold for use in open applications and stated that they “affirmatively disclaim any damages or cause of action for . . . any exposure to PCBs sold by defendants at the direction of any officer of the United States or any of its agencies or entities or any person acting at their direction.” (Id. at ¶ 33).

         Pharmacia, with the consent of Monsanto Co. and Solutia, Inc., removed the action asserting that this Court has jurisdiction under 28 U.S.C. § 1442(a)(1), the federal officer removal statute. (ECF No. 1). In the notice of removal, Pharmacia claimed that it “acted under” color of federal office because it manufactured PCBs: (1) at the express direction and command of the federal government, pursuant to the Defense Production Act; (2) as a direct contractor for various governmental departments and agencies; (3) for federal defense contractors who required them to meet exacting military specifications; and (4) for uses required by federal OSHA regulations. (ECF No. 1 at ¶ 80). Additionally, Pharmacia asserted that Plaintiffs' claims are “for or relating to” Defendant's manufacture and sale of PCBs because the government procured the PCBs and regulated their production. (Id. at ¶ 100). Finally, Pharmacia alleged the following colorable federal defenses: (1) the government contractor defense; (2) express preemption by the Toxic Substances Control Act of 1976 (TSCA); and (3) implied preemption by the EPA's comprehensive regulation of PCBs. (Id. at ¶¶ 88, 96, 98).

         On May 17, 2016, Plaintiffs filed a motion to remand the action to state court on the ground that this case does not satisfy the requirements for federal officer removal. (ECF No. 13). In their memorandum in support of the motion for remand, Plaintiffs argued that Pharmacia satisfied neither the “acting under” nor causal requirements for federal officer jurisdiction because Plaintiffs' cause of action “attacks Monsanto's supply of PCBs used in non-closed applications, which was necessarily prior to the interval in which it says it was required to continue selling them for use in closed applications.” (ECF No. 14 at 5) (emphasis added). In regard to the federal defenses asserted by Pharmacia, Plaintiffs contended that the government contractor defense is not available to Pharmacia because, among other reasons: (1) Pharmacia did not contract directly with the government, but rather with government contractors; and (2) to the extent that Pharmacia presented evidence of government contracts for PCBs, it cannot demonstrate that those PCBs were used in open applications. (Id. at 3-7). Plaintiffs also maintained that the TSCA cannot apply retroactively to bar their claims and, even if it did, the TSCA's savings clause preserved their right to seek damages under common law theories. (Id. at 8-11).

         Defendants filed a response in opposition to remand, arguing that they presented sufficient evidence to satisfy their burden of establishing that they “acted under color of federal office” because they demonstrated that: (1) Pharmacia produced PCBs for direct sale to the federal government; and (2) the federal government exercised control over Pharmacia's production of PCBs for military use. (ECF No. 18 at 4-7). Additionally, Defendants refuted Plaintiffs' assertion that federal subcontractors cannot invoke the federal officer removal statute. (Id. at 9). Finally, Defendants contended that their federal defenses - namely, the government contractor defense and preemption under the TSCA - were “more than colorable.” (Id. at 16-19).

         In their reply memorandum, Plaintiffs maintained that the instant case did not implicate the “basic purpose” of the federal officer removal statute. (ECF No. 22 at 2). Plaintiffs further argued that the evidence presented by Defendants did not demonstrate that Pharmacia was acting under color of federal office because the documents “overwhelmingly concern” PCBs sold either for closed-application uses or to government contractors rather than the government itself. (Id. at 3-4). Plaintiffs contended that, even if the court were to consider the PCBs sold to private companies which used those PCBs in products sold to the government, those sales “constitute only an infinitesimal, de minimis amount of overall sales.” (Id. at 6-7, 10). Plaintiffs emphasized that the government did not require Pharmacia to produce PCBs and, anyway, those covered by OSHA regulations were produced for electrical, and therefore, closed-use purposes. (Id. at 10).

         On June 16, 2016, the Court held a hearing on Plaintiffs' motion for remand. (ECF No. 23). At the opening of the proceedings, the Court noted that Defendants had appealed Judge Fleissig's remand of a similar products liability action to the United States Court of Appeals for the Eighth Circuit. Bailey, et al v. Monsanto al, Case No. 16-2096 (8th Cir., opened May 4, 2016) (appealing Case No. 4:15CV844 AGF, 176 F.Supp.3d 853 (E.D. Mo. 2016)). Plaintiffs' counsel acknowledged that “a plausible way to proceed” would be to stay the instant case pending the Eighth Circuit's decision in Bailey. However, he urged that this case “is even more appropriate for remand” than Bailey because, there, the plaintiffs did not limit their action to PCBs manufactured for open applications.

         On July 18, 2016, the Court entered an order staying the instant matter pending the Eighth Circuit's decision in Bailey. (ECF No. 25). The Court reasoned that the two cases were nearly identical as they involved claims that Pharmacia produced and sold PCBs that caused the plaintiffs to develop cancer, Defendants removed both cases pursuant to the federal officer removal statute, and the plaintiffs filed motions to remand. (Id. at 6-7). The Court also noted that Judge Bodenhausen recently remanded an almost identical case to state court for lack of federal officer jurisdiction in Kelly, et al. v. Monsanto Company, et al., Case No. 4:15CV1825 JMB, 2016 WL 3543050 (E.D.Mo. June 29, 2016).[2]

         Finding that the Eighth Circuit's decision in Bailey would “likely have a significant effect on the ultimate disposition of the instant matter, ” the Court stayed the proceedings pending resolution of that appeal. (Id. at 8). The Court also ordered the parties to file a copy of the Bailey decision within eleven days of its entry. (Id.). On March 27, 2017, Defendants filed a notice of outcome of the Bailey appeal informing the Court that the appeals in both Bailey and Kelly were “settled and dismissed.” (ECF No. 26). As the Bailey appeal is no longer pending, the Court will lift its stay and consider Plaintiffs' motion to remand.

         II. Discussion

         Plaintiffs contend that removal under the federal officer removal statute was improper because: (1) Pharmacia was not a government contractor and was therefore not “acting under” a federal officer for purposes of the federal officer removal statute; (2) there was no causal connection between Pharmacia's actions and official authority; and (3) Defendants did not have a colorable federal defense. (ECF No. 14). Defendants counter that: (1) Pharmacia manufactured PCBs under color of federal office; (2) a causal connection exists because ...

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