Background
Michigan’s Department of Environment, Great Lakes, and Energy sued the Gerald R. Ford International Airport Authority in state court in September 2023, asserting two claims under Michigan’s Natural Resources and Environmental Protection Act for alleged per- and polyfluoroalkyl substances (PFAS) contamination caused by the airport’s use of aqueous film-forming foam (AFFF) in firefighting and equipment testing. The state alleged PFAS had been detected in groundwater and nearby drinking-water wells, and that the airport violated its water-pollution-control permit.
The airport authority initially removed the case to federal court under the federal-officer removal statute (28 U.S.C. § 1442(a)(1)), arguing that FAA requirements made its actions federal in nature. The district court remanded, and the Sixth Circuit affirmed. After remand to state court, the airport authority filed third-party claims against AFFF manufacturers seeking contribution and indemnification. The manufacturers then removed the case based on their own claimed status as federal contractors acting under military specifications.
The district court granted the state’s motion to sever its direct claims against the airport authority from the manufacturers’ third-party liability claims, declined supplemental jurisdiction over the state’s claims, and remanded them to state court. The airport authority appealed, challenging the severance, the jurisdictional decline, and renewing its federal-officer removal theory.
The Court’s Holding
The Sixth Circuit affirmed all three aspects of the district court’s order. On severance, the court held the district court did not abuse its discretion in splitting the claims despite factual overlap regarding PFAS source and movement. The state’s direct enforcement claims required only proof that the airport authority caused or permitted the contamination and violated state law. By contrast, the manufacturers’ liability required proof of arranger status, manufacturer knowledge, product design, warnings, and concealment—issues “wholly irrelevant” to the state’s claims. Judicial economy and considerations of prejudice favored remand because the state’s claims would likely proceed faster outside the AFFF multidistrict litigation where manufacturers’ claims belonged.
On supplemental jurisdiction, the court held § 1367(c) permitted the district court to decline jurisdiction even assuming some factual overlap. After severance, only federal-law issues related to the third-party defendants remained, while the state’s claims arose purely under Michigan environmental law. The court found exceptional circumstances in the unusual procedural posture—the state’s claims had already been remanded once after the airport authority’s failed federal-officer removal, and they returned to federal court only through the third-party defendants’ removal. Remanding to state court was thus appropriate.
The court invoked law-of-the-case doctrine to bar the airport authority’s renewed federal-officer removal argument. The prior appeal had already rejected the identical “acting under” theory regarding the FAA relationship, finding it regulatory rather than supervisory and that federal grant conditions did not establish supervisory control. No intervening authority, materially changed facts, or clear error warranted revisiting that holding, despite the changed procedural posture.
Key Takeaways
- District courts have broad discretion under Rule 21 to sever joined claims, and factual overlap alone does not prevent severance when the claims require substantially different proof or legal inquiries.
- After severance, supplemental jurisdiction may be declined even over state-law claims that arguably form part of the same constitutional case or controversy, when state-law issues predominate or exceptional circumstances exist.
- Law-of-the-case doctrine constrains relitigation of jurisdictional issues in later stages of proceedings, even when those issues arise in a new procedural posture, absent intervening controlling authority or clear error.
- The federal-officer removal statute requires an “acting under” a federal officer relationship; regulatory supervision and federal grant compliance conditions do not suffice to establish such a relationship for removal purposes.
Why It Matters
This decision reinforces the availability of severance in complex environmental and product-liability litigation where defendants face overlapping claims from both direct users and third-party suppliers. State attorneys general pursuing direct enforcement against facility operators need not worry that joining of manufacturer indemnification claims will indefinitely entangle state environmental claims in federal court or multidistrict litigation. The opinion clarifies that judges may privilege state-court adjudication of state-law enforcement claims even where related federal product-liability claims proceed in federal MDL.
The decision also sets boundaries on federal-officer removal in the environmental context. Airports and other regulated entities operating under FAA requirements and accepting federal grant funding cannot bootstrap removal merely by citing compliance obligations or grant assurances; the FAA relationship must involve supervisory control of the challenged conduct, not mere regulatory oversight. The law-of-the-case holding bars repeated federal-officer arguments across successive appeals, promoting finality and preventing litigants from re-litigating jurisdictional theories when circumstances change only procedurally rather than substantively.