Keeping Tabs on the Ninth Circuit
May 25, 2020 - This Week at the Ninth

This Week at The Ninth: Removal, Choice of Law, and International Comity

This Week at The Ninth:   Removal, Choice of Law, and International Comity

This week, we focus on a set of Ninth Circuit decisions that delve into the procedural doctrines that may prevent state-law claims from being heard in federal court.  In first two decisions, the Ninth Circuit explored nearly every imaginable aspect of removal jurisdiction, cementing at least one acknowledged split with the Seventh Circuit in the process.  In the other, the Court confronted the difficult choice-of-law and international-comity issues that arise when U.S. residents seek to recover for injuries sustained abroad.

In two related decisions, the Court confronted thorny jurisdictional issues stemming from city and county suits against more than thirty energy companies for their alleged contributions to climate change.

Panel:  Judges Ikuta, Christen, and Lee, with Judge Ikuta writing both opinions for a unanimous panel.

Key Highlight:  “Were we writing on a clean slate, we might conclude that [the Seventh Circuit’s decision in] Lu Junhong provides a more persuasive interpretation of § 1447(d) than [the Ninth Circuit’s decision in] Patel. Precedents, however, do not cease to be authoritative merely because counsel in a later case advances new arguments.”

Background:  In City of Oakland, the plaintiffs (San Francisco and Oakland) had initially filed state-law nuisance suits in California Court.  After the defendants removed to federal court, and the district court denied their motion to remand, the plaintiffs amended their complaints to add federal common-law nuisance claims.  The district court then dismissed the complaints for failure to state a claim.

County of San Mateo began in much the same way, with a number of other California cities and counties advancing state-law claims in state court.  When the defendants sought to remove to federal court, however, the district court granted the plaintiffs’ motions to remand.

Result:  In City of Oakland, the Court first held that the district court erred in concluding removal was proper on federal-question grounds.  As the Court explained, the plaintiffs had originally alleged state-law, rather than federal law, claims, so the ordinary requirements of “arising under” federal-question jurisdiction were clearly lacking,.  And no exception to these ordinary requirements was available:  resolving these state-law claims would not require resolution of a substantial question of federal law, and the Clean Air Act does not completely preempt any and all state-law claims falling within its scope.

The Court recognized that the plaintiffs had “cured” any jurisdictional defect by subsequently amending their complaint to add federal claims.  But, the Court held, the plaintiffs had expressly preserved their challenge to the district’s order denying their request for remand.  And the Court rejected the proposition that “considerations of finality, efficiency, and comity” justified disregarding the district court’s initial error, explaining that while violations of the removal statute might be excused on this ground if the case had proceeded all the way to summary judgment, the same considerations “generally will not apply when a district court dismisses a complaint for failure to state a claim under Rule 12(b)(6).”  The Court remanded for the district court to determine whether there might be another viable jurisdictional basis for the defendants’ initial removal to federal court.

In County of San Mateo, the Court emphasized that its authority to review a remand order is limited by 28 U.S.C. § 1447(d)—which precludes, among other things, any review of a remand order that is based on a ground that may be “colorably characterized as subject-matter jurisdiction.”  The Court rejected the defendants’ contention that the district court had made a merits determination exempt from § 1447(d) when the district court concluded that federal-question jurisdiction was absent.

Perhaps more significant, the Court also reject the defendants’ argument that § 1447(d)’s “exception clause”—which allows for review of decisions remanding cases removed under 28 U.S.C. § 1442 (pertaining to federal officers) and § 1443 (pertaining to certain civil rights claims — granted the Court authority to review the district court’s entire remand order simply because the defendants had invoked § 1442 in seeking removal.  Rather, the Court concluded, it had jurisdiction only to review the district court’s specific determination that § 1442 did not authorize removal.  In reaching this holding, the Court refused to follow a contrary decision of the Seventh Circuit, which had held that when § 1447)(d)’s “exceptions” clause applies, it authorizes review of “the order itself,” not just “particular reasons for an order.”  Instead, the Court concluded, it remained bound by Ninth Circuit precedent rejecting this reading of the statute.

Finally, the Court addressed the one question over which it had appellate jurisdiction:  whether § 1442 provided grounds for removal.  As the Court acknowledged, although § 1442 applies to “federal officer[s],” courts have held that term encompasses certain private parties “acting under” government authorities in an “unusually close” relationship.  The Court held, however, that the ordinary commercial contracts the defendants had entered with the government did not give rise to any such unusual relationship.   

The Court rejected contentions that California rather than Japanese law governed claims stemming from the Fukushima disaster and held that principles of international comity required that any such claims be brought in Japan.

Panel:  Judges Tashima, Wardlaw, and Bybee, with Judge Bybee writing the opinion.

Key Highlight:  “We have little difficulty concluding that failure to apply Japanese law in these circumstances would significantly impair Japan’s interests.  Japan’s Compensation Act is directed specifically at accidents at a nuclear facility; California’s products liability rules are general in nature and presumably cover everything from toasters to airplanes.”

Background:  After the massive 2011 earthquake in Japan damaged the Fukushima nuclear power plant, hundreds of U.S. servicemembers helped to provide humanitarian aid.  Alleging they were exposed to radiation, many of those servicemembers then brought suit against both the operator of the Fukushima plant and General Electric, which had manufactured key plant components.  The district court granted both defendants’ motions to dismiss.

Result:  The Ninth Circuit affirmed.  The Court first addressed the claims against GE.  As the parties did not dispute, if applicable, Japanese law would preclude any claims against GE:  a Japanese statute provides that the operator of a nuclear plant is solely responsible for any nuclear damage associated with a reactor.  And, the Ninth Circuit determined, Japanese law applied.  The Court rejected the plaintiffs’ claims that this Japanese statute was categorically inapplicable because it was “procedural” rather than “substantive,” reasoning that the statute does not strip Japanese courts of jurisdiction but rather limits liability for certain injuries.  Applying California choice-of-law principles, the Court then agreed with the district court that Japanese rather than California law applied.  Although both California and Japan had a legitimate interest in the case, Japan’s interest would be “more impaired if its policy were subordinated” to that of California:  Japan had sought to limit liability in order to encourage nuclear power, while California had a more limited interest in its residents recovering for out-of-State injuries.  For many of the same reasons, the Ninth Circuit also concluded that Japanese law governed the plaintiffs’ claims against the plant’s operator.

The Court then turned to the basis for the district court’s dismissal of these claims against the plant operator:  prudential considerations of international comity.  The district court had previously refused to dismiss on this ground, and that refusal was affirmed in a prior appeal.  But this time, the Court held that the district court had not abused its discretion in subsequently reaching the opposite conclusion on remand.  The Ninth Circuit emphasized that only after remand had the district court determined that Japanese law would apply and been able to consider the views of Japan and the U.S. State Department (which were submitted to Ninth Circuit in amicus briefs in the prior appeal).  As the Court explained, “[t]he United States’ measured response pales in comparison to Japan’s unequivocal objection to the exercise of jurisdiction in U.S. courts,” and the district court had not abused its discretion in taking that strong interest into account.