Opinion
No. 03-CIV-2556 (WJM).
February 13, 2004
Williams Cuker Berezofsky, Esther Berezofsky, Esq., Cherry Hill, New Jersey, and Trujillo, Rodriguez Richards, LLC, Lisa Rodriguez, Esq., Haddonfield, New Jersey, (Attorneys for Plaintiffs).
Law Offices of Dechert, LLP, Ezra D. Rosenberg, Esq., Princeton Pike Corporate Center, Princeton, New Jersey, and O'Melveny Meyers, LLP, Martin Glenn, Esq., New York, NY, (Attorneys for Defendant).
OPINION
This matter comes before the Court on Defendant, Philip Morris USA, Inc.'s ("PM") Objections to Magistrate Roanld J. Hedges' October 31, 2003 Report and Recommendation, which grants Plaintiffs, Sidney Stern, Theresa Stern, and Nick Commisso, on behalf of themselves and others similarly situated, ("Plaintiffs") motion to remand the above-captioned matter to the New Jersey Superior Court, Middlesex County.
For the reasons detailed herein, this Court hereby adopts Magistrate Judge Hedges' October 31, 2003 Report and Recommendation, and orders that the above-entitled action be expeditiously remanded to New Jersey Superior Court, Middlesex County, from where it was removed.
BACKGROUND
This putative class action was brought on behalf of purchasers of Marlboro Lights cigarettes manufactured by PM, and was filed in Middlesex County Superior Court on April 3, 2003. (See Def. Notice of Removal, at Ex. A). On May 27, 2003, PM filed a timely Notice of Removal to this Court pursuant to 18 U.S.C. § 1442(a)(1). (Id.) Shortly thereafter, on August 7, 2003, Plaintiffs moved to remand the action back to Middlesex County Superior Court. (See Pl. Motion to Remand)
On or around October 31, 2003, Magistrate Judge Hedges recommended that Plaintiff's remand motion be granted, and relevantly concluded that PM's removal was not appropriate under the "federal officer" removal statute, which is codified at 28 U.S.C. § 1442(a). (Mag. Hedges' RR, at pp. 3-6).
On November 20, 2003, PM filed the herein Objections to Magistrate Hedges' RR, asserting that the Magistrate's proposed findings of fact and legal conclusions were erroneous, and that this matter should remain in federal court pursuant to § 1442(a). (Def. Br., at p. 3). This Court now turns to the merits of PM's application.
ANALYSIS
Pursuant to Fed.R.Civ.P. 53 (e)-(f), this Court shall accept Magistrate Judge Hedges' reported findings of fact, unless they are clearly erroneous. See Levin v. Garfinkle, 540 F. Supp. 1228, 1236 (E.D. Pa. 1982) (citing Bennerson v. Joseph, 583 F.2d 633 (3d Cir. 1978)). However, this Court will review, de novo, Magistrate Hedges' conclusions of law, as they do not bind this Court; they are recommendations which the Court may consider. See In re Mifflin Chemical Corp., 123 F.2d 311 (3d Cir. 1941), cert. denied, 315 U.S. 815 (1942).
To establish removal jurisdiction under § 1442(a), PM must establish four elements, namely that: (1) it is a "person" within the meaning of the statute; (2) the plaintiff's claims are based upon the defendant's conduct "acting under" a federal officer; (3) it raises a colorable federal defense; and (4) there is a causal nexus between the claims and the conduct performed under color of a federal office. Feidt v. Owens Corning Fiberglas Corp., 153 F.3d 124, 127 (3d Cir. 1998). See Mesa v. California, 489 U.S. 121, 129 (1989).
As Magistrate Hedges found that PM was a "person" within meaning of § 1442(a), PM attacks the Magistrate's legal and factual findings as to Feidt elements (2), (3), and (4). (Def. Br., at p. 3). As a preliminary matter, this Court agrees with Magistrate Judge Hedges that PM is a person as contemplated under the statute. Accord Crackau v. Lucent Technologies, 2003 WL 21665135 (D.N.J 2003). I. Plaintiffs' Claims Are Not Based on PM's Conduct "Acting Under" a Federal Officer.
PM first contends that Magistrate Hedges erred when he found that PM did not act under the direction of the Federal Trade Commission ("FTC"), because the FTC never promulgated a formalized rule requiring use of the Cambridge Filter Method. (Id., at p. 4). Second, PM attacks Magistrate Hedges' finding that PM was free to adopt its own testing method, and lists a battery of FTC reports and/or rulings, and deposition evidence by FTC Deputy Director Peeler, in support of its claim that the FTC specified and mandated the Cambridge Filter testing methodology, and actually conducted said testing for twenty years. (Id., at pp. 6-9).
The FTC utilized the Cambridge Filter Method, or the "FTC Method" as termed by PM, which evaluated tar and nicotine levels in cigarettes by employing a machine to smoke the cigarettes.
This Court finds nothing in the record to suggest that the FTCmandated PM to follow the Cambridge Filter Method. In fact, Magistrate Hedges accurately states that the Cambridge Filter Method was adopted by the FTC simply to "provide smokers seeking to switch to lower tar cigarettes with a single standardized measurement with which to choose among existing brands." (Id., at p. 1, 5, citing 62 Fed. Reg., at 48, 158).
Indeed, PM cannot dispute that the FTC did not legally require PM to employ the Cambridge Filter Method. "Because the FTC has not adopted its system of testing pursuant to a Trade Regulation Rule under section 18 of the FTC Act, 15 U.S.C. § 57a (1982), one cannot say that the FTC system constitutes the only acceptable one available for measuring milligrams of tar per cigarette."FTC v. Brown Williamson, 778 F.2d 35, 44 (D.C. Cir. 1985).
As Magistrate Hedges crucially noted, in Brown Williamson, the D.C. Circuit also stated that B W could devise a new testing system (subject to FTC audits of any advertising deceptiveness, inadequacy, or format), advertise its results, and "provide information about competing brands prominently enough and in sufficient quantity to allow consumers to make informed decisions without confusing figures from disparate testing systems." Id., at 45. Most importantly, the Brown Williamson decision noted: "The Commission may, of course, address the problem by promulgating a Trade Regulation Rule under Section 18 of the Act." Id.
PM's argument that they were informally directed to follow the Cambridge Filter Method is also unsubstantiated. Mere participation in a heavily regulated industry will not afford PM a federal forum, and PM provides no satisfactory rebuttal to well-reasoned legal authority supporting this opinion. Instead, PM saddles this Court with documentation of FTC's tar and nicotine program in attempt to demonstrate that use of the Cambridge Filter Method was implicitly required. Indeed, Magistrate Hedges' reliance on Tremblay v. Philip Morris, and PM's obvious failure to address said case is indicative of the merits of the herein application. 231 F. Supp.2d 411 (D.N.H. 2002).
For purposes of further clarity, this Court also followsTremblay's reasoning on this issue. In that case, PM argued for removal on the exact grounds that their compliance with the Cambridge Filter Method implicated § 1442(a) removal. Chief Judge Barbadoro rejected PM's argument, stating in relevant part:
Philip Morris argues that it was merely attempting to comply with the FTC's policies regarding the testing and labeling of light cigarettes when it engaged in the conduct for which it has been sued. Thus, it argues that it has satisfied § 1442(a)(1)'s second requirement. Because this argument is based on both a misunderstanding of FTC's activities in this area and a mischaracterization of the plaintiffs' complaint, I find its assertion unpersuasive . . . [T]he FTC's regulatory treatment of light cigarettes demonstrates that the FTC endorsed the use of the Cambridge Filter Method in order to "provide smokers seeking to switch to lower tar cigarettes with a single, standardized measurement with which to choose among the existing brands," not to direct and control the design or production of low tar cigarettes. As for the disclosure of tar and nicotine levels, the FTC's participation in obtaining Philip Morris's agreement to disclose tar and nicotine levels for its products produced by the Cambridge Filter Method does not transform its design, manufacture, or sales practices into actions conducted under the direction of a federal officer or agency.Id., at 417. (Internal citations omitted).
This Court also finds no merit to PM's assertions that it used the Cambridge Filter Method results as the basis for its "light" and "low tar" descriptors pursuant to FTC policy, and therefore was acting under the direction of the FTC. This Court adopts Magistrate Judge Hedges' reasoning that Plaintiffs' Complaint does not attack the Cambridge Filter Method, or any FTC policy, procedure or regulation. Instead, Plaintiffs clearly and concisely allege that Philip Morris engages in a course of conduct aimed at manipulating the FTC's policies by exploiting loopholes in the Cambridge Filter Method. For example, Plaintiffs' contend that PM "[m]anipulat[ed] the design and content of Marlboro Lights cigarettes in order to maximize nicotine delivery, while falsely and/or deceptively claiming lowered tar and nicotine", "[e]mployed techniques that purportedly reduce machine-measured levels of tar and nicotine, while actually increasing the harmful biological effects", and "[i]ntentionally exploiting the standardized test tar and nicotine yields to cultivate the false perception among smokers that they are reducing their risk for smoke related diseases by switching to Marlboro Lights from regular cigarettes." (Compl., at ¶¶ 20(d), (e)(g)(h)).
In short, as stated in Tremblay, "this is not a case where plaintiffs seek to challenge federal policy or official action in a state court forum. Rather, the plaintiffs challenge the conduct of a private corporation, acting without direction from a federal officer or agency. Allowing this action to be litigated in state court will not interfere with the course of the FTC's duties nor its policies regarding the regulation of the cigarette industry." Tremblay, 231 F. Supp.2d, at 419.
II. There is No Causal Nexus Between Plaintiffs' Claims and the Conduct Performed Under Color of Federal Office.
Magistrate Judge Hedges properly concluded that there is no causal nexus between Plaintiffs' allegations and PM's use of the Cambridge Filter Method. Plaintiffs are not simply alleging that the Cambridge Filter Method itself was inherently fraudulent, or that PM committed a fraud upon the FTC. As explained above, the FTC did not direct PM to, as alleged by Plaintiffs, research the shortcomings of the Cambridge Filter Method, design a cigarette which took advantage of those shortcomings, and publicize and advertise those biased test results. (Magistrate Hedges RR, at p. 6). Although PM does not approve of Magistrate Hedges' "erroneous assumption" that PM could not have been acting at the direction of a federal officer if it was engaging in misconduct, this Court precisely adopts the Magistrate's ruling. (Def. Reply Br., at p. 5).
III. PM Has Not Raised a Colorable Federal Defense.
Lastly, this Court adopts Magistrate Judge Hedges' ruling that PM's preemption defense does not have jurisdictional significance for purposes of determining the propriety of its remand motion. "Rather, a `federal defense' for purposes of the federal officer removal statute, is a defense based on the defendant's contention that he was acting under federal direction at the time of the conduct of which the plaintiff complains." Guckin v. Nagle, 259 F. Supp.2d 406, 418 (E.D. Pa 2003).
PM argues that Guckin was wrongly decided by the Eastern District of Pennsylvania, and that its reasoning is "entirely divorced" from the language of the § 1442(a), its legislative history, and the Feidt case. (Def. Reply Br., at p. 6). However, PM merely argues against Guckin by referring to case law outside of this Circuit, and this Court, like Magistrate Judge Hedges, sees no reason to depart from Guckin's well reasoned opinion that a party does not have a colorable claim to a federal defense if the Court determines that they never acted under the direction of a federal officer. Guckin, 259 F. Supp.2d, at 418. Accordingly, this Court's above ruling that PM was not acting under the direction of the FTC, necessitates a finding that PM also has no colorable claim to a federal defense.
CONCLUSION
For the reasons detailed above, this Court adopts Magistrate Judge Hedges' October 31, 2003 Report and Recommendation, and GRANTS Plaintiff's Motion to Remand the above-entitled action to the New Jersey Superior Court, Middlesex County, from where it was removed.