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Fidelitad, Inc. v. Insitu, Inc.

United States Court of Appeals, Ninth Circuit

September 25, 2018

Fidelitad, Inc., a Washington corporation, Plaintiff-Counter-Defendant-Appellant,
v.
Insitu, Inc., a Washington corporation, Defendant-Counter-Claimant-Appellee.

          Argued and Submitted May 15, 2018 Seattle, Washington

          Appeal from the United States District Court for the Eastern District of Washington D.C. No. 2:13-cv-03128-TOR Thomas O. Rice, Chief Judge, Presiding

          Shelby R. Frost Lemmel (argued) and Kenneth W. Masters, Masters Law Group P.L.L.C., Bainbridge Island, Washington; Mark G. Jackson, Jackson Rosenfield LLP, Seattle, Washington; for Plaintiff-Counter-Defendant-Appellant.

          Eric B. Wolff (argued) and Steve Y. Koh, Perkins Coie LLP, Seattle, Washington, for Defendant-Counter-Claimant-Appellee.

          Before: Marsha S. Berzon, Stephanie Dawn Thacker, [*] and Andrew D. Hurwitz, Circuit Judges.

         SUMMARY[**]

         Jurisdiction

         Reversing the district court's judgment in favor of the defendant on state law claims, the panel held that the district court erred in denying the plaintiff's motion to remand the case to the state court from which it had been removed.

         The defendant designed and manufactured drones that it sold to military and civilian customers. The plaintiff, a value-added reseller of defendant's drones in Latin America, alleged that the defendant improperly delayed shipment of its orders, wrongfully terminated a purported distributorship agreement, and then moved into the Latin American market, appropriating the plaintiff's prior groundwork.

         The defendant removed the action based on 28 U.S.C. § 1442(a)(1), which allows removal of a civil action against a federal officer or any person acting under that officer. The panel held that the plaintiff's remand motion should have been granted because the defendant was not acting "pursuant to a federal officer's directions" in undertaking the actions that were the subject of the plaintiff's complaint. No federal officer directed the defendant to delay the plaintiff's orders or cease doing business with the plaintiff. The panel held that complying with the International Traffic in Arms Regulations, governing the sale of military goods to foreign governments, did not bring the defendant within the scope of the federal officer removal statute. The defendant also was not entitled to removal as a federal contractor.

         The panel reversed the district court's judgment and remanded with instructions to remand the action to state court.

          OPINION

          HURWITZ, CIRCUIT JUDGE.

         Insitu, Inc. designs and manufactures unmanned aerial systems-commonly known as "drones"-that it sells to military and civilian customers. Fidelitad, Inc. is a value-added reseller of Insitu's drones in Latin America. In this action, Fidelitad claims that Insitu improperly delayed shipment of its orders, wrongfully terminated a purported distributorship agreement, and then moved into the Latin American market, appropriating Fidelitad's prior groundwork.

         Fidelitad filed its original complaint in Washington state court. Insitu removed the action to the United States District Court for the Eastern District of Washington, invoking 28 U.S.C. § 1442(a)(1), which allows removal of civil actions against "any officer (or any person acting under that officer) of the United States." The district court denied Fidelitad's motion to remand and later granted summary judgment to Insitu. We hold that the ...


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