Mirna Rodriguez v. Smith & Wesson Brands, Inc.

• Court: Court of Appeals for the Seventh Circuit
• Decided: April 8, 2024
• Docket: 23-2996
• Status: Published

Opinion

In the United States Court of Appeals For the Seventh Circuit ____________________

Nos. 23-2992, 23-2993, 23-2994, 23-2995, 23-2996, 23-2997, 23- 2998, 23-2999, 23-3000, 23-3001, 23-3002 & 23-3003 KEELY ROBERTS, et al., Plaintiffs-Appellees,

v.

SMITH & WESSON BRANDS, INC.; SMITH & WESSON SALES COMPANY; and SMITH & WESSON, INC., Defendants-Appellants. ____________________

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 22-cv-6186 et al. — Steven C. Seeger, Judge. ____________________

ARGUED APRIL 4, 2024 — DECIDED APRIL 8, 2024 ____________________

Before EASTERBROOK, HAMILTON, and KOLAR, Circuit Judges. EASTERBROOK, Circuit Judge. On July 4, 2022, Robert Eu- gene Crimo III opened fire on a parade in Highland Park, Illi- nois. Perched on a rooftop, Crimo sprayed 83 bullets into the crowd, killing seven people and wounding 48 others. He used a Smith & Wesson M&P15 rifle with three 30-round 2 Nos. 23-2992 et al.

magazines. The M&P15 (for “Military & Police”) is a deriva- tive of Colt’s AR-15 rifle, a cousin to the M16 machine gun. Multiple consolidated suits, filed by some of the victims (or their estates), seek to recover damages under Illinois law from Crimo, his father (Robert Eugene Crimo Jr.), the gun shops where Crimo acquired the rifle, magazines, and ammu- nition, and the rifle’s manufacturer and corporate affiliates. The legal theories advanced against Smith & Wesson rest on state tort law plus the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 to 505/12, and the Illi- nois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 to 510/7. The complaints assert (among other things) that Smith & Wesson should not have offered the M&P15 to civil- ians, because it is a machine gun reserved for police and mil- itary use under 18 U.S.C. §922(b)(4) and 26 U.S.C. §5845(b), and that if the civilian sale of the M&P15 is lawful the manu- facturer still is liable because the weapon was advertised in a way that made it ajractive to irresponsible persons (espe- cially the young) seeking to do maximum damage in mini- mum time. After the mass shooting, the State of Illinois and many mu- nicipalities enacted laws forbidding the sale of AR-15 style ri- fles and large-capacity magazines to civilians and regulating those already in private hands. Addressing a contention that those laws violate the Constitution’s Second Amendment, we held that preliminary injunctive relief is inappropriate. Bevis v. Naperville, 85 F.4th 1175 (7th Cir. 2023). Proceedings on re- mand are ongoing. Those statutes and the Second Amend- ment do not majer to the current litigation. The three Smith & Wesson entities filed notices of removal to federal court, asserting that the victims’ claims arise under Nos. 23-2992 et al. 3

federal law. 28 U.S.C. §1441. The gun shops consented to re- moval. But the two Crimos, though they are the principal as- serted wrongdoers, neither filed their own notices of removal nor consented to Smith & Wesson’s. This led the plaintiffs to move for remand, observing that 28 U.S.C. §1446(b)(2)(A) re- quires the consent of all defendants in order to remove under §1441(a). What’s more, plaintiffs asserted, their suits arose ex- clusively under state law, for it is Illinois law that creates the claim for relief. See American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916). Smith & Wesson offered two responses. First, it insisted that removal rests on its status as an entity “acting under” a federal officer for the purpose of 28 U.S.C. §1442(a)(1), a stat- ute that allows removal whether or not other defendants elect to be in federal court. Second, it contended that removal is au- thorized by §1441(c) rather than §1441(a), and a removal un- der §1441(c) is exempt from the all-defendant-consent re- quirement. See 28 U.S.C. §1441(c)(2). Smith & Wesson recog- nized that federal defenses—whether the contention that the M&P15 is not a machine gun or the defense under the Protec- tion of Lawful Commerce in Arms Act, 15 U.S.C. §§ 7901–03— do not allow removal, but it insisted that a federal issue is em- bedded in the state-law claim and so may be removed under the approach of Grable & Sons Metal Products, Inc. v. Darue En- gineering & Manufacturing, 545 U.S. 308 (2005). The district judge was not persuaded by either line of ar- gument and remanded the cases to state court. 2023 U.S. Dist. LEXIS 170943 (N.D. Ill. Sept. 25, 2023). Normally 28 U.S.C. §1447(d) blocks appellate review of remand orders, but §1447(d) has an exception for cases removed under §1442. If a defendant has invoked §1442, then an appeal presents a 4 Nos. 23-2992 et al.

challenge to the remand order as a whole, permijing appel- late review of theories in addition to §1442. See BP p.l.c. v. Bal- timore, 141 S. Ct. 1532 (2021); Lu Junhong v. Boeing Co., 792 F.3d 805, 811 (7th Cir. 2015). We therefore must consider Smith & Wesson’s arguments under both §1442 and §1441(c), and we do so in that order. (The gun shops have not joined Smith & Wesson’s appeals. We do not discuss them further.) Watson v. Phillip Morris, 551 U.S. 142 (2007); Lu Junhong v. Boeing, supra; and Martin v. Petersen Health Operations, LLC, 37 F.4th 1210 (7th Cir. 2022), all hold that being subject to federal regulation differs from acting under a federal agent for the purpose of 28 U.S.C. §1442(a)(1). Watson stated that “the fact that a federal regulatory agency directs, supervises, and mon- itors a company’s activities in considerable detail” does not satisfy §1442. 551 U.S. at 145. Smith & Wesson is subject to a great deal of federal regulation, but it is hard to see any dif- ference between its situation and that of tobacco producers in Watson or airframe manufacturers in Lu Junhong. Smith & Wesson tells us that the Bureau of Alcohol, To- bacco, and Firearms (ATF) refers to manufacturers as its “partners” and to the system of regulation as a “partnership”, but this snippet of bureaucratese does not change the nature of the relation between regulator and regulated. Congress and ATF set requirements; weapons manufacturers must dance to their tune. Lu Junhong held that a manufacturer that has been allowed to self-certify compliance with federal rules does not become a federal actor or agent; Smith & Wesson lacks any self-certification power and acts wholly as a private entity that must comply with federal (and state) regulation. ATF may lis- ten respectfully to manufacturers’ arguments, as judges listen respectfully to lawyers, but in the end the agency and the Nos. 23-2992 et al. 5

judges make decisions without implying that the manufactur- ers or lawyers “act under” their auspices. Federal regulations are pervasive. Airframe manufactur- ers (Lu Junhong), cigareje producers (Watson), and medical providers (Martin) must comply with innumerable rules and regulations. So must drug producers (regulated by the Food and Drug Administration), chicken farmers (regulated by the Department of Agriculture), auto manufacturers (regulated by several federal agencies), and makers of pesticides (regu- lated by the Environmental Protection Agency). The list is easy to extend. Chicken farmers whose birds lay eggs that contain salmonella, drug producers whose products are inad- equately tested, auto manufacturers whose brake systems fail—these and many more are regularly sued in state court under state law. They may remove under 28 U.S.C. §1332 and §1441 if the parties are of diverse citizenship, but it is incon- ceivable that the existence of federal regulation would allow removal as §1442 is wrijen—whether or not a given agency refers to the objects of regulation as its “partners.” Watson stated that a business might be “acting under” a federal officer if the officer commanded it or contracted with it to produce a particular item in a specified way. 551 U.S. at 153–54. Cf. Boyle v. United Technologies Corp., 487 U.S. 500 (1988). But Smith & Wesson does not contend that ATF di- rected it to make any AR-15 style weapon or compelled it to include in the M&P15 the rapid-fire features that Crimo’s vic- tims call wrongful. Nor does Smith & Wesson contend that ATF directed it to advertise the M&P15 in the way that it did. Those choices were Smith & Wesson’s. That is some distance from “acting under” the ATF. 6 Nos. 23-2992 et al.

This brings us to §1441. Normally federal-question re- moval, including the embedded-federal-issue variety dis- cussed in Grable, proceeds under §1441(a), which allows the removal of all suits over which federal courts have original jurisdiction. Claims arising under federal law support juris- diction, see 28 U.S.C. §1331, so §1441(a) permits their re- moval—if all defendants consent. 28 U.S.C. §1446(b)(2)(A). Smith & Wesson relies on §1441(c), a subsection that deals with multi-claim suits in which some claims arise under fed- eral law and some under state law. Here’s the language: (1) If a civil action includes— (A) a claim arising under the Constitution, laws, or treaties of the United States (within the meaning of section 1331 of this title), and (B) a claim not within the original or supplemental jurisdic- tion of the district court or a claim that has been made nonre- movable by statute, the entire action may be removed if the action would be remova- ble without the inclusion of the claim described in subparagraph (B). (2) Upon removal of an action described in paragraph (1), the dis- trict court shall sever from the action all claims described in para- graph (1)(B) and shall remand the severed claims to the State court from which the action was removed. Only defendants against whom a claim described in paragraph (1)(A) has been asserted are required to join in or consent to the removal under paragraph (1).

As Smith & Wesson sees things, the state suits present at least two “claims”—that the M&P15 is a machine gun and that it was improperly advertised. The first of these arises under fed- eral law as Grable understands §1331, the argument goes, and so may be removed without the Crimos’ consent, even if the advertising claim must be remanded under §1441(c)(2). The Nos. 23-2992 et al. 7

district court rejected this contention because it thought that none of plaintiffs’ theories comes within Grable. We reject it for a more fundamental reason: the state suits do not present multiple claims against Smith & Wesson. Its invocation of §1441(c)(1) depends on a belief that each legal theory is a separate “claim”. That belief is incorrect. As we explained in St. Augustine School v. Underly, 78 F.4th 349, 352 (7th Cir. 2023): We [must honor] the distinction between a legal claim and a the- ory supporting relief (what the common law used to call a cause of action). A claim is the set of operative facts that produce an as- sertable right in court and create an entitlement to a remedy. A theory of relief is the vehicle for pursuing the claim; it may be based on any type of legal source, whether a constitution, statute, precedent, or administrative law. The specific theory dictates what the plaintiff needs to prove to prevail on a claim and what relief may be available. One lawsuit may raise multiple claims, and each claim may be supported by multiple theories.

The core claim in these suits is that Crimo killed and injured multiple persons. Crimo’s father and the other defendants may bear secondary liability for their roles in facilitating his acts. But the complaint does not state separate “claims”—one for selling a machine gun and another for selling the M&P15 using inappropriate messages. Those are instead separate le- gal theories, which may imply separate methods of proof but do not multiply the number of claims. That lawyers often set out each legal theory in a separate “count” of a complaint does not multiply the number of claims. One way to see this is to consider the law of claim preclu- sion (res judicata). For the moment forget about the claim against Crimo. Suppose that one of Crimo’s victims had sued Smith & Wesson on an allegation that the M&P15 is a machine 8 Nos. 23-2992 et al.

gun, lost, and then filed a second suit contending that Smith & Wesson is liable for the way it advertised the M&P15. A court would not entertain the second suit. It would instead rule that the plaintiff must present all legal theories in one suit. See Restatement (Second) of Judgments §19. The court would add something along the lines of: “the claim extin- guished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.” Restatement (Second) of Judgments §24(1). See also Svendsen v. PriQker, 91 F.4th 876 (7th Cir. 2024) (discussing the law of claim splijing in Illinois). The “transaction” at issue in the state suits is the mass shooting at the parade; Smith & Wesson’s role was furnishing an M&P15 to Crimo through the gun shops (with his father’s aid). Whether the legal wrong, if any, lies in the weapon’s de- sign or its promotional campaign does not multiply the num- ber of transactions or allow sequential suits. This means that plaintiffs have only one “claim” against Smith & Wesson. One final observation. Both this court in Lu Junhong and the Supreme Court in BP v. Baltimore recognized that ajempt- ing to remove under §1442 would be ajractive to many de- fendants who sought to sidestep the need for all defendants’ consent or wanted to obtain appellate review of any remand order. The Justices also saw that, when defendants yield to the incentive to misuse §1442 to get around §1447(d) and §1446(b)(2)(A), litigation will be delayed and become need- lessly costly—other things that defendants may hope to achieve. Baltimore asked the Court to curtail those incentives by giving the statute a strained reading. The Justices replied Nos. 23-2992 et al. 9

that sejing policy is for Congress, not the judiciary, but added: Nor is it as if Congress has been blind to the City’s concerns. As the City itself acknowledges, thanks to §1447(c) a district court may order a defendant to pay the plaintiff’s costs and expenses (including a[orney’s fees) if it frivolously removes a case from state court. Additionally, the Federal Rules of Civil Procedure al- low courts to sanction frivolous arguments made in virtually any context. Rules 11(b)–(c). Congress, thus, has already addressed the City’s concerns in other statutes and rules—just not in §1447(d).

141 S. Ct. at 1542–43 (emphasis in original). See also Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005) (fee shifting is appropriate if removal lacked a reasonable basis). The district judge should consider whether Smith & Wesson must reim- burse the plaintiffs’ costs and fees occasioned by the unjusti- fied removal and appeal. The remand decision is affirmed. The case is remanded to the district court to consider acting under 28 U.S.C. §1447(c) and other sources of authority.