The Seventh Circuit reversed. Regarding the element of whether the companies were acting under federal authority, the court focused on the “special relationship” between the companies and the federal government when the defendant helps the government produce an item it needs. Id. at *3. The court rejected the District Court’s reasoning that mere assistance, in the absence of a legal duty to render such aid, was insufficient to bestow federal jurisdiction, and instead sided with the Second Circuit’s approach that a “voluntary relationship” does not void the application of the removal statute. Id. at *3, n.1. The court held that the government’s detailed specifications regarding the makeup of such materials, the compulsion to provide the product to the government’s specifications, and the continuous federal supervision all revealed the necessary relationship between Atlantic Richfield’s predecessor and the federal government to find that Atlantic Richfield acted under federal authority. Id. at *4.
The court then grappled with the causation issue of whether the alleged polluting conduct related to the federal directives under which the defendants acted. The court considered the 2011 congressional change in the language of the removal statute, which previously required removing defendants to demonstrate that the acts for which they were being sued occurred at least in part because of what they were asked to do by the government. Id. Now, the court noted, the removal statute was broadened to encompass suits for or relating to any act under color of federal office. Id.
The Seventh Circuit expressly joined the Third, Fourth, and Fifth Circuits in adopting a “connected or associated” standard to replace the more rigid “causally connected” requirement that it had previously employed under the federal officer removal analysis. Id. at *4–5. The court noted that the plaintiffs did raise serious questions as to whether the companies’ pollution that allegedly caused the plaintiffs’ injuries flowed from their wartime production for the federal government or from their general manufacturing operations, but it emphasized that those were merits questions that a federal court should decide. Id. at *5. To show the requisite causation for removal, a defendant need now only establish that the act that is the subject of a plaintiff’s attack occurred while defendant was performing official duties. Id. (citing Isaacson v. Dow Chem. Co., 517 F.3d 129, 137–138 (2d Cir. 2008)). The court concluded that the companies’ wartime production was a small yet significant portion of the relevant conduct, and that a federal interest in the matter supported removal. Id. at *6.
The Seventh Circuit also disagreed with the District Court’s apparent conclusion that Atlantic Richfield could not avail itself of the government contractor defense that was developed in Boyle v. United Technologies Corporation, 487 U.S. 500 (1988), because it merely sold standard materials that were available across the general market. Baker, 2020 WL 3287024, at *6. The court found that the defense applies broadly to any product supplied to the government so long as it conformed to the government’s “reasonably precise specifications.” Id. Yet it proceeded cautiously with its analysis, expressing doubt as to whether the government contractor defense would be available to a supplier who merely provided the government with “off the shelf” products that were indistinguishable from products available to general consumers. Id. at *7.
Although the Third, Fourth, Fifth, and Seventh Circuits have now expressly adopted the less stringent “connected or associated” standard of causation for federal officer removal, the Eleventh Circuit has stopped short of expressly adopting this standard, despite having cited with approval the Third Circuit’s decision adopting this standard in a recent decision. See Caver v. Cent. Alabama Elec. Coop., 845 F.3d 1135, 1144 (11th Cir. 2017) (citing In re Commonwealth’s Motion to Appoint Counsel Against or Directed to Def. Ass’n of Phila., 790 F.3d 457, 471 (3d Cir. 2015)). However, the Ninth Circuit in particular has expressed reluctance to expand § 1442(a) considerably, particularly in cases where the defendant has entered into an arms-length transaction with the federal government, the conduct at issue relates to products or services that are widely commercially available (even in highly regulated industries), or where the government relied on the expertise of the contractor as opposed to the government providing detailed specifications and supervision to the contractor. See Cty. of San Mateo v. Chevron Corp., 960 F.3d 586, 600 (9th Cir. 2020); Cabalce v. Thomas E. Blanchard & Assocs., Inc., 797 F.3d 720, 729 (9th Cir. 2015).
Defendants that are seeking a path to federal court, especially suppliers and those holding government contracts, should carefully examine whether the acts at issue in a particular lawsuit could relate to or connect with acts directed by the federal government when seeking removal under § 1442(a), regardless of whether they are being sued because of those acts.