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What does cigarette maker Philip Morris USA Inc. have in common with a 19th century customs officer who is sued by New England ship owners to prevent him from enforcing an embargo on trade with England during the War of 1812? If you are having trouble answering that question, you are not alone. Lisa Watson, who sued Philip Morris in an Arkansas court alleging that the company’s cigarette advertising violated that state’s unfair trade laws, is puzzled, too. Philip Morris successfully removed her case to federal court by invoking the “federal officer removal statute,” 28 U.S.C. 1442(a)(1), early versions of which were enacted to protect federal law enforcement officials from hostile state court lawsuits that might “paralyze the operations of the [federal] government” in places where federal revenue and customs laws were unpopular. Tennessee v. Davis, 100 U.S. 257, 263 (1880). The company convinced the 8th U.S. Circuit Court of Appeals that it should be allowed to litigate Watson’s state-law claims in federal court on the ground that it was, in the words of the statute, a “person acting under” a federal officer, because its cigarette advertising was closely regulated by the Federal Trade Commission (FTC). The U.S. Supreme Court � which will hear arguments in Watson v. Philip Morris Cos. Inc., No. 05-1284, on April 25 � should reject the 8th Circuit’s expansive reading of this statute. Philip Morris bears no resemblance to the class of persons for whom it was designed, i.e., federal officers and those assisting them to enforce federal law. Also, the text of the statute � which permits removal of suits against “[t]he United States or any agency thereof or any officer (or any person acting under that officer) of the United States or any agency thereof, sued in an official or individual capacity for any act under color of such office” � contemplates claims against federal officers and their agents for official action, not litigation against private actors that merely comply with federal regulation. Finally, the 8th Circuit’s interpretation � elastic enough to allow any business that is heavily regulated by a federal agency to remove its case if it can assert a colorable federal defense � amounts to an unwarranted expansion of federal jurisdiction. To be sure, the 8th Circuit’s decision did not make the leap from 19th century customs officer to modern-day corporation by itself. Over the years, Congress has enacted broader versions of the statute, and the current version applies not just to customs officers, but to all federal officers and “person[s] acting under” them and to federal agencies. In addition, for several years, lower courts have permitted defense contractors that manufacture products to government specifications to remove state tort suits alleging injuries arising from those products on the ground that the contractors were “person[s] acting under” the direction of their military customers. See Winters v. Diamond Shamrock Chemical Co., 149 F.3d 387 (5th Cir. 1998). Drawing on these cases, the 8th Circuit found that the detailed specifications governing defense contractors constituted “the same type of comprehensive, detailed regulation” that Philip Morris faced from the FTC in cigarette advertising. Watson v. Philip Morris Cos. Inc., 420 F.3d 852, 858 (8th Cir. 2005). It cited the agency’s control over the company’s disclosure of ratings, tar and nicotine information to consumers. Not carrying out FTC policies The 8th Circuit missed the key point, though, which is that no matter how intensive the FTC’s regulation of Philip Morris, the company cannot fairly be described as one that assists the agency in carrying out its policies. The FTC is not in the cigarette business, and a state court suit against Philip Morris would not interfere with any of the FTC’s functions. One can quibble with allowing defense contractors to use the statute, too � requiring such contractors to litigate state-law claims in state court would probably not “paralyze the operations of the government.” But at least defense contractors are, when manufacturing war materiel to military specifications, acting as government agents. The same cannot be said for Philip Morris and other regulated entities, which do not, merely by complying with governmental regulation, carry out governmental functions. This distinction, long recognized in 14th Amendment “state action” jurisprudence, seems to have escaped the 8th Circuit. The open-ended removal right created by the 8th Circuit would be available to drug companies, medical equipment makers, nuclear power plants and other private actors that faced “detailed, comprehensive” federal regulation and could assert a colorable pre-emption defense to state tort claims. But pre-emption alone has never previously warranted removal, and state courts have long discharged their duty to preserve the supremacy of federal law. Philip Morris is no federal agent, and the 8th Circuit’s expansion of federal jurisdiction strays beyond what is necessary to protect federal officers and their deputies from interference by state courts. Michael P. Shea is a partner in Day Pitney’s Hartford, Conn., office and serves as chairman of the firm’s appellate practice group.

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