(CN) - The 7th Circuit lambasted a federal judge for sending an asbestos case against a defense contractor back to state court, saying the company may deserve immunity.
Henry Ruppel says he developed mesothelioma after being exposed to asbestos for 25 years aboard the U.S.S. Fall River and U.S.S. Enterprise aircraft carriers. Ruppel claims that CBS Corp. and its predecessor, Westinghouse, used asbestos in turbines it supplied to the U.S. Navy, and sued the company and 40 other defendants in Illinois earlier this year.
CBS removed the case to federal court in East St. Louis, Ill., under the federal officer removal statute, which covers the alleged conduct of defendants as government actors.
Trying to remand the case back to state court, Ruppel said that the government contractor defense does not apply to CBS because his complaint accused it only of failure to warn, and the Defense Department does not prevent companies from providing adequate warnings about their products.
Though local rules offer defendants a 30-day response window in such situations, U.S. District Judge G. Patrick Murphy instead adopted much of Ruppel's reasoning and sent the case back to state court after only nine days.
CBS sought a stay so that it could respond the following day, but Murphy sent a certified copy of the order to the state court, denied CBS's motion and stripped himself of jurisdiction to hear the case.
Murphy also ignored CBS when it demanded an alteration of the decision. CBS claimed that the Navy required the use of asbestos, controlled the content of any warnings placed on CBS products and knew the health risks associated with asbestos.
With the Illinois court having already resumed proceedings, CBS appealed to the 7th Circuit.
A three-judge panel there concluded Friday that CBS meets all the criteria for removal to federal court since it acted under federal authority. The company also has a colorable federal defense, according to the ruling.
"Ruppel's primary argument on appeal is his complaint contains only failure-to-warn claims, presumably, because he thinks the government contractor defense is less applicable to these suits," Judge Joel Flaum wrote for the court.
He also noted that Ruppel's complaint "plainly allege[s] liability based on the mere use of asbestos."
"To be sure, the complaint also contains failure-to-warn claims in subparagraphs (e) and (f)," Flaum added. "Ruppel counters that the use-of-asbestos subparagraphs were only 'foundational to the failure to warn claim that was being made; if CBS never used a hazardous material in its manufacture of its products, there would have been no need to warn of same.' However, Ruppel's reading is inconsistent with the introductory 'one or more' clause. Additionally, subparagraph (g), which comes after the two failure-to-warn subparagraphs, asserts liability because CBS 'included asbestos-containing components' in its products - another use-of-asbestos claim."
Finding that the government contractor defense could apply to those claims, the panel said "CBS presents a colorable defense."
In one affidavit, a former CBS manager has testified that its products had to conform to the precise turbine specifications approved by the United States, and that "the Navy explicitly required asbestos, making it impossible to comply with the Navy and state tort law simultaneously," the court summarized.
This colorable defense is further supported by evidence that the Navy has known since 1922 about the dangers associated with asbestos, according to the ruling.
In another affidavit, Dr. Samuel Forman, another CBS expert, "stated that a consultant to high-ranking Naval health officials told the Navy's Bureau of Medicine and Surgery that an insulation supplier (like Westinghouse) had concluded asbestos presented serious health risks, but the Navy did not 'want any change in the specifications as the performance with the present materials [was] entirely satisfactory,'" Flaum wrote.
Noting that CBS has shown that "there is nothing CBS knew about asbestos that the Navy did not," the court decided that "CBS has a colorable defense for the failure-to-warn claims as well."
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