This post was written by MGKF summer associate Ella Souder

In March 2023, the State of New Jersey sued Dow Chemical Company (“Dow”) in state court alleging that Dow was responsible for contamination caused by the chemical 1,4-dioxane which was used as an inhibitor in cleaning agents which Dow had sold decades earlier to, among others, the United States Government and military (the “Government”).  Dow removed the case to United States District Court for the District of New Jersey under the federal-officer removal statute, claiming that in producing this chemical it was “acting under” the auspices of the Government.  The District Court remanded the matter back to state court and on June 11, 2025 the Third Circuit affirmed the remand, holding that simply providing a product to the Government, even if the product complied with government specifications, was insufficient to implicate the federal-officer removal statute. See New Jersey v. Dow Chemical Co., 2025 WL 1646963 (3^rd Cir. 2025).

Beginning in 1951, Dow designed and sold 1,4-dioxane inhibited 1,1,1-trichlorethane (“TCA”) products for use as specialty vapor degreasing agents. In 1966, Dow began selling a formulation of its degreasing product that was compliant with newly-enacted California regulations.  A year later, the Government began working with Dow and other industry members to revise and amend product specifications for the vapor degreasing agents it would purchase, eventually issuing specifications that were met by Dow’s existing California product.  Thereafter, Dow began selling the California product on a nationwide basis to both the public and to the Government.

In the 1980s it was determined that 1,4-dioxane was a possible carcinogen and in 2013 the EPA classified it as "likely to be carcinogenic to humans through all routes of exposure."  In 2023, the State of New Jersey filed suit against Dow and others seeking to recover damages as a result of 1,4-dioxane's impact on the environment.

To succeed in removing under the federal-officer removal statute, Dow needed to meet four requirements: (1) Dow must be considered a “person”; (2) New Jersey’s claims against Dow must center on its conduct when “acting under’ the government; (3) New Jersey claims against Dow must be “for, or relating to” an act under color of federal office and (4) Dow must raise a colorable federal defense. The Third Circuit’s analysis began and ended with the “acting under” requirement, determining that Dow’s connection to the Government was not strong enough, despite Dow’s contentions that it was producing a product for government use under federal specifications.

After a review of Supreme Court and Circuit precedent, the court explained that federal-officer removal is permitted only when a private party assists or carries out the Government’s duties or tasks under a contract, or the government directs, guides or controls the private party, a standard laid out by the United States Supreme Court in Watson v Philip Morris Cos., 551 U.S. 142 (2007). However, a purely regulatory relationship or receipt of economic benefits from complying with government regulations are insufficient to establish federal officer removal. The Government purchased Dow’s vapor degreasing agent but did not direct or closely supervise the production, nor was Dow assisting or helping the Government carry out federal duties or tasks. Further, Dow had produced the product in various formulations for more than a decade before the government issued the product specifications. With no indica of close federal ties, the product sales are insufficient to prove federal-officer removal, and the case was remanded to state court.

This decision makes clear that defendants seeking to remove to federal court using the federal-officer removal statute must be acting under the control of the federal government and not simply complying with the law.

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