U.S. Agrees: Tobacco Companies Aren't Federal Officers

by Deepak Gupta

Several months ago, I posted an overview of consumer cases with a reasonable chance of being granted for review by the U.S. Supreme Court.  Among them was Watson v. Philip Morris, a truly remarkable case in which the Eighth Circuit held that a tobacco company was entitled to remove a case to federal court under the federal officer removal statute--a statute designed to protect federal officers and employees.   The Justices will take up the matter at their private conference this Friday.

Watson may be one of those relatively rare cases in which a federal appellate court's decision on an important and recurring issue is so outrageously wrong that the Court concludes it can't be allowed to stand, regardless of how long the issue has percolated in the courts below.  The court's reasoning--that Philip Morris was heavily regulated by the Federal Trade Commission such that it was effectively "acting under" federal officials when it promoted and sold its "light cigarettes"--is simply indefensible.  Indeed, the absurdity of the decision is heightened when you consider that the federal government actually sued Philip Morris for the very same conduct that the Eighth Circuit concluded was carried out "under" federal direction.

Last May, the Supreme Court invited the Solicitor General to present the views of the United States. That's usually a very strong sign that the Court is interested in a case.  And in Watson, it was particularly welcome news becuase it was hard to see how the government could defend the decision.  Well, the SG's recently-filed amicus brief takes the view that the Eighth Circuit's decision was not only wrong, but fell "substantially wide of the mark."  The SG nevertheless recommends denying cert because a sufficient split of authority hasn't developed.

Although circuit splits are often regarded as the sine qua non of Supreme Court review, the SG's ultimate recommendation doesn't make too much sense in a case like this.  The identical issue is already pending in the Seventh Circuit.   Either the Seventh Circuit will disagree, thus creating a circuit split, or it will agree, signaling that the Eighth Circuit's novel regulated-industry-removal doctrine has begun to spread like a virus.  Either way, the issue would cry out for review.   

Plus, what's the stopping point of the Eighth Circuit's reasoning?  Can lawsuits against automakers for manufacturing unsafe cars be removed to federal court on the basis of regulation by the National Highway Transportation Safety Administration?   What about suits about drugs, or consumer products, or pesticides--or virtually anything made by a federally-regulated industry, for that matter?  Most of those industries are much more heavily regulated than Philip Morris.

We should find out what happens this Friday or, at the latest, on Monday morning.   We'll keep you posted.  (Disclosure:  Public Citizen filed this amicus brief in support of the petitioners.)