ORDER RE: MOTION TO REMAND, MOTIONS TO DISMISS, MOTION TO STRIKE, MOTIONS FOR SANCTIONS, AND MOTION REGARDING MEDIATION
I. Factual and Procedural Background
Plaintiffs Reverge Anselmo and Seven Hills Land and Cattle Company initiated this action in state court on October 6, 2008, against defendants Shasta County, the Board of Supervisors of the County of Shasta, and Shasta County officials Russ Mull, Leslie Morgan, Les Baugh, and Glen Hawes. In their Third Amended Complaint ("TAC"), plaintiffs allege claims against Shasta County and its employees under 42 U.S.C. § 1983. Plaintiffs' claims arise from defendants' alleged wrongful interference with plaintiffs' use of their land. Plaintiffs allege that county officials engaged in a variety of wrongful conduct that interfered with plaintiffs' use of their property, such as issuing wrongful notices of grading violations, filing false reports with various officials and agencies, requiring an unnecessary environmental impact study, interfering with plaintiffs' development of their winery, and wrongfully denying plaintiffs' application for a Williamson Act contract. (Third Am. Compl. ("TAC") ¶¶ 23, 27, 30, 40, 44-58) (Docket No. 1, Ex. B).)
Plaintiffs further allege that as part of the county officials' campaign against them, Andrew Jensen, an employee of the California Regional Water Quality Control Board, attempted to intimidate Anselmo by soliciting governmental agencies including the United States Army Corps of Engineers ("Army Corps") to "obtain assertions of violations of other laws" in order to "create a 'piling on' condition" that deprived plaintiffs of their right to use their property. (Id. ¶ 28.) Plaintiffs and Jensen reached a settlement, and plaintiffs dismissed their claims against him with prejudice on June 25, 2009. (Docket No. 68-2.)
While the case was still pending in state court, Shasta County initiated cross-claims against plaintiffs and third-party claims against Jensen and three employees of the Army Corps. The Attorney General certified the case under the Westfall Act, 28 U.S.C. § 2697, and thus the United States removed the action to federal court pursuant to 28 U.S.C. § 1442(a) and § 2679(d)(2) on May 25, 2012. The court denied Shasta County's motion to challenge the Attorney's General certification without prejudice. (Docket No. 31.)
Currently before the court are (1) plaintiffs' motion to remand the case to state court; (2) plaintiffs' motion for sanctions against Shasta County pursuant to Federal Rule of Civil Procedure 11; (3) plaintiffs' motion to dismiss Shasta County's cross-claims for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) and for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6); (4) Jensen's motion to dismiss Shasta County's third-party claims pursuant to Rule 12(b)(6); (5) Jensen's motion to strike Shasta County's third-party claims pursuant to Rule 12(f); and (6) Shasta County's motion for an order precluding plaintiffs from further violations of a mediation confidentiality agreement and for monetary sanctions.
The United States removed this action from state court pursuant to 28 U.S.C. § 1442(a) and § 2679(d)(2) after Shasta County filed third-party claims against three employees of the Army Corps. In removing the action, the Attorney General certified under the Westfall Act, § 2697(d)(2), that the Army Corps employees were acting within the scope and course of their employment at the time of the alleged conduct, and the United States was substituted as the defendant in place of the Army Corps employees. Shasta County challenged the Attorney General's certification, and the court denied the challenge without prejudice to it being raised based on new discovery or allegations. (Docket No. 31.) In a separate Order, the court granted the United States' Rule 12(b)(6) motion to dismiss Shasta County's claims against it because the § 1983 claims under which Shasta County sought contribution could not be brought against the United States. (Docket No 33.) After Shasta County failed to file an amended third-party complaint against the United States within the time provided, the court dismissed Shasta County's third-party claims against the United States with prejudice.*fn1 (Docket No. 58.)
Because the sole basis for removal was the claims against the Army Corps employees to which the United States was substituted as the defendant and the claims against the United States have been dismissed with prejudice, plaintiffs now seek to remand the action to state court pursuant to § 1447(c).
Section 2679(d)(2) of the Westfall Act provides that the certification of the Attorney General pursuant to that subsection "shall conclusively establish scope of office or employment for purposes of removal." 28 U.S.C. § 2679(d)(2). The Supreme Court has interpreted this provision to mean that, once the Attorney General certifies scope of employment under § 2679(d)(2) and triggers removal of the case to federal court, "§ 2679(d)(2) renders the federal court exclusively competent and categorically precludes a remand to the state court." Osborn v. Haley, 549 U.S. 225, 243 (2007).
In Osborn, the United States removed a case to federal court after the Attorney General certified that the federal employee defendant was acting within the scope of his employment. After removal, the plaintiff successfully challenged the Westfall Act certification and the court denied the United States' motion to be substituted as the defendant and remanded the case to state court. The Supreme Court held that § 1447(c) did not bar review of the district court's order remanding the case and held that § 2697(d)(2) precluded the district court from remanding the case.
Given the fact that the remand in Osborn occurred after the district court rejected the Attorney General's certification, the Court's analysis at times appears limited to precluding remand under similar circumstances: "Congress gave district courts no authority to return cases to state courts on the ground that the Attorney General's certification was unwarranted"; "[w]ere it open to a district court to remand a removed action on the ground that the Attorney General's certification was erroneous, the final instruction in § 2679(d)(2) would be weightless." Id. at 241-42 (emphasis added).
In contrast to this potentially limiting language, other statements in the opinion unconditionally limit a court's ability to remand a case removed pursuant to § 2679(d)(2):
[W]hen the Attorney General certifies scope of employment, triggering removal of the case to a federal forum[,] . . . § 2679(d)(2) renders the federal court exclusively competent and categorically precludes a remand to the state court. . . . Our decision . . . leaves the district court without authority to send a certified case back to the state court. . . . [T]he Westfall Act's command that a district court retain jurisdiction over a case removed pursuant to § 2679(d)(2) does not run afoul of Article III.
When the Attorney General's certification is not challenged and the claims against the United States are subsequently dismissed, district courts have reached different conclusions as to whether Osborn's ban on remand applies. In Kebaish v. Inova Health Care Services, 731 F. Supp. 2d 483 (E.D. Va. 2010), the plaintiff voluntarily dismissed its claims against the United States after it had been substituted as the defendant under the Westfall Act and the case had been removed from state court. The court reasoned that the factual differences between the case before it and Osborn were not material because "Osborn holds that § 2679(d)(2) provides a conclusive basis for federal subject matter jurisdiction in all cases, regardless of whether certification is ultimately upheld." Kebaish, 731 F. Supp. 2d at 487; accord Boggs-Wilkerson v. Anderson, Civ. No. 2:10-518, 2011 WL 6934598, at *2 (E.D. Va. Nov. 17, 2011).
On the other hand, a district court reached the opposite result in Salazar v. PCC Community Wellness Center, Civ. No. 08-1764, 2010 WL 391383 (N.D. Ill. Jan. 29, 2010). In that case, the plaintiff similarly dismissed the claims against the United States after the case had been removed from state court and the United States had been substituted as the defendant under the Westfall Act. The court emphasized the limiting language in Osborn that "district courts have no authority to return cases to state courts based on the district [']court's disagreement with the Attorney General's scope-of-employment determination.'" Salazar, 2010 WL 391383, at *3 (quoting Osborn, 549 U.S. at 227).
Limiting Osborn to cases in which the Westfall Act certification is rejected is consistent with the language of § 2679(d)(2) and some of the Court's statements in Osborn. Nonetheless, remanding this case based on the difference between it and Osborn, would be difficult, if not impossible, to reconcile with the Court's unconditional and sweeping pronouncement that ...