Bennett v. MIS CORP.

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 10a0161p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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TERESA BENNETT, RICHARD BENNETT, LEWIS X
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BIRD, PAULA BIRD, BERNARD CAMPAU II,
TAMMY CAMPAU, RANALD CARLSON, -
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No. 08-2567
MICHELLE CARLSON, ELIZABETH DALE,
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KIMBERLY EBERHART, PATRICK EBERHART,

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AMELIA HAEFNER, ROBERT HAEFNER,
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ANGELA MORAN, ROB MORAN, JILL
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PAKLEDINAZ, ADAM PAKLEDINAZ, KLINT
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SIMMEL, TRACY SIMMEL, VINCENT SUGENT,

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JAMIE SUGENT, RICHARD WHEATLEY, JOHN
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EBY, COOKIE EBY, TRACY GILLIAN, KYLE
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GILLIAN, RICHARD HERBERT, MARSHAL
HERBERT, GARY KLAWENDER, STEPHANIE -
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KLAWENDER, RONALD PYTLAK, NANCY
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PYTLAK, RICHARD RODRIGUEZ, DANIEL
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RUEHL, MARY RUEHL, DAVID PARKER, and
BARBARA PARKER, -
Plaintiffs-Appellants, -
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v.
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MIS CORPORATION, COACH’S CATASTROPHIC -
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CLEANING & RESTORATION SERVICES, INC.,
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TE/OC, INC., CLAYTON ENVIRONMENTAL
CONSULTANTS, BUREAU VERITAS NORTH -
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AMERICAN, INC., JACOBS FACILITIES, INC.,

Defendants-Appellees. -
and SAFE TECHNOLOGY, INC.,
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Appeal from the United States District Court
for the Eastern District of Michigan at Ann Arbor.
No. 07-14005—John Corbett O’Meara, District Judge.
Argued: August 4, 2009
Decided and Filed: June 4, 2010
Before: SILER, MOORE, and GRIFFIN, Circuit Judges.

1
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 2

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COUNSEL
ARGUED: Gene S. Davis, FISHER DAVIS PLC, Grosse Pointe, Michigan, for Appellants.
Brian H. Phinney, FOLEY, BARON & METZGER, PLLC, Livonia, Michigan, Donald J.
Parthum, Jr., PROVIZER & PHILLIPS, PC, Bingham Farms, Michigan, Richard B. Poling,
Jr., POLING, McGAW & POLING, P.C., Troy, Michigan, Deborah A. Hebert, COLLINS,
EINHORN, FARRELL & ULANOFF, P.C., Southfield, Michigan, Ralph C. Chapa, Jr.,
KAUFMAN, PAYTON & CHAPA, Farmington Hills, Michigan, Evan A. Burkholder,
LeCLAIR RYAN, Dearborn, Michigan, for Appellees. ON BRIEF: Gene S. Davis,
FISHER DAVIS PLC, Grosse Pointe, Michigan, for Appellants. Brian H. Phinney, FOLEY,
BARON & METZGER, PLLC, Livonia, Michigan, Randall E. Phillips, PROVIZER &
PHILLIPS, PC, Bingham Farms, Michigan, Richard B. Poling, Jr., POLING, McGAW &
POLING, P.C., Troy, Michigan, Deborah A. Hebert, COLLINS, EINHORN, FARRELL &
ULANOFF, P.C., Southfield, Michigan, Ralph C. Chapa, Jr., Lawrence C. Atorthy,
KAUFMAN, PAYTON & CHAPA, Farmington Hills, Michigan, Evan A. Burkholder,
LeCLAIR RYAN, Dearborn, Michigan, for Appellees.
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OPINION
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GRIFFIN, Circuit Judge. Plaintiffs are air traffic controllers who allege personal
injuries based on their exposure to toxic mold at the Detroit Metropolitan Wayne County
Airport (DTW). They claim that several mold remediation firms hired by the Federal
Aviation Administration (FAA) negligently performed their contracts and exacerbated the
building’s existing mold contamination. Plaintiffs appeal the district court’s order
dismissing their complaint for failure to state a claim under Rule 12(b)(6) of the Federal
Rules of Civil Procedure. Because we conclude that all defendants but one were properly
dismissed, we affirm the district court’s judgment in part and reverse in part.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 3

I.

A.

Plaintiffs are FAA employees who work as air traffic controllers in DTW’s air traffic
1
control tower (“tower”). In September 2004, the FAA discovered mold in the tower’s
storage areas and hired MoldQuest International, L.L.C. (“MoldQuest”) to investigate.
MoldQuest’s testing revealed “significant levels” of mold contamination, including the
presence of Stachybotrys, commonly referred to as toxic mold. MoldQuest’s report
stated that “the presence of Stachybotrys indicated the affected wall materials had been
saturated for an extended period of time.”

The FAA hired a private mold remediation firm, defendant MIS Corporation, Inc.
(“MIS”), to treat and remove the mold in the tower’s fourth and ninth floors.2 Plaintiffs
allege that MIS’s remediation, which took place in January 2005, was “disastrous[,]”
causing toxic mold to spread throughout the tower.3

The FAA hired defendant TE/OC, Inc. (“TE/OC”), an environmental consulting
firm, to evaluate the scope of the cross-contamination and to recommend mitigation
strategies. TE/OC recommended that the FAA retain another mold remediation firm to
spray the tower’s fourth and ninth floors and its elevator shaft with “approved
microbiologic biocide.” The FAA thereafter hired Coach’s Catastrophic Cleaning &
Restoration Services, Inc. (“Coach”) to perform a second remediation.

On January 22, 2005, defendant Coach sprayed the tower’s fourth and ninth
floors and elevator shaft using “an unmarked container[.]” “Within hours of the
spraying, eight air traffic controllers became ill and sought immediate medical
treatment[,]” resulting in a five-hour tower-wide employee evacuation. According to

1
Plaintiffs also include the air traffic controllers’ spouses. The FAA is not a party.
2
Mold remediation refers to the removal, cleaning, sanitizing, demolition, or other treatment,
including preventive activities, of mold or mold-contaminated matter.
3
Plaintiffs allege that MIS “failed to follow industry guidelines,” “left visible debris on the floors
and in the elevator[,]” “failed to seal off the [work] area[,]” and, in general, did not “perform[] [the] [tasks]
[] required by the [FAA’s] Statement of Work.”
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 4

plaintiffs, Coach’s spray contained “1 Octanol, Undecone, 1-Dodecane, Dodecane, and
Tridecane[,]” which can cause “numerous health hazards[,] including . . . lung damage,
drowsiness, dizziness, [] pulmonary edema, asphyxiation, . . . vomiting, [] and [] death.”

Despite two professional mold remediations, the contamination persisted. The
National Air Traffic Controllers Association (plaintiffs’ union) hired Wonder Makers
Environmental, Inc. (“Wonder Makers”) to evaluate the tower’s contamination. Wonder
Makers detected various strains of mold on the fourth, ninth, and tenth floors, and toxic
mold in “air and dust samples” collected “throughout the building.”

The FAA again contracted with MIS to perform a third remediation. They also
hired Safe Technology, Inc. (“Safe”) to recommend an effective mold remediation plan
and to provide air-quality testing. In addition, the FAA retained a Certified Industrial
Hygienist (“CIH”) from Clayton Environmental Consultants (“Clayton”) to assist MIS
with its remediation efforts.

MIS performed the third mold remediation in May 2005, executing the FAA’s
specifications according to the consulting reports the FAA received from Clayton and
Safe. Plaintiffs assert that Safe’s report was flawed because it failed to address several
cross-contamination issues. After the third remediation, plaintiffs reported “an increase
in the [] severity of [their mold-exposure] symptoms.”

In June 2005, the FAA hired defendant Jacobs Facilities, Inc. (“Jacobs”) to
conduct a site survey and to prepare an assessment report. Jacobs’s investigation
revealed that the tower’s elevator shaft “act[ed] as a piston [that] forc[ed] [contaminated
mold-spore] air into each level of the building[.]” The report characterized the tower’s
overall contamination as “minor,” but nonetheless recommended a thorough cleaning of
the tower’s elevator shaft with a “bleach/water solution.”

In May 2006, the FAA hired MIS to perform a fourth remediation, focusing on
the tower’s elevator shaft. At the direction of the FAA, MIS executed many of Jacobs’s
recommendations regarding the treatment of mold and other contaminated materials
located in the shaft.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 5

Wonder Makers returned in December 2006 to conduct additional testing. Its
sampling indicated that the May 2006 remediation failed to “remov[e] all fungal
materials.” Wonder Makers recommended to the FAA an invasive sampling of the
elevator’s interior liner to determine if mold spores were present beneath the liner. The
FAA ultimately rejected Wonder Makers’s recommendation.

In light of plaintiffs’ “contin[uing] complaints of health problems,” the FAA
hired Applied Environmental, Inc.4 and Safe to investigate whether their multiple
remediations had eradicated the mold. In June 2007, Safe recommended that no further
mold testing or remediation was required. The FAA adopted Safe’s assessment and did
not hire MIS to perform a fifth remediation. According to plaintiffs, however, Safe was
hired to simply rubber stamp the FAA’s decision to cease its mold remediation efforts.

B.

On September 6, 2007, plaintiffs filed a complaint in the Circuit Court of Wayne
County, Michigan, claiming that TE/OC, Safe, Jacobs, and Bureau Veritas North
American, Inc., Clayton’s successor by merger, were negligent in their consultation and
evaluation of the tower’s mold contamination and that MIS and Coach negligently
executed their mold remediation contracts with the FAA.5 Plaintiffs sought
compensatory and punitive damages in excess of $25,000 resulting from their exposure
“to indoor air contamination and ineffective [mold] remediation.”

MIS removed plaintiffs’ complaint to the United States District Court for the
Eastern District of Michigan pursuant to 28 U.S.C. § 1442(a)(1), the federal officer
removal statute, asserting that it was acting under the color of federal office by virtue of

4
We granted plaintiffs’ motion to dismiss Applied Environmental, Inc. as a party to this appeal
on March 4, 2009.
5
Plaintiffs’ complaint also alleged that MIS, TE/OC, Clayton, and Safe engaged in intentional,
reckless, and outrageous conduct, but plaintiffs failed to address the district court’s dismissal of this claim
and have therefore forfeited it on appeal. “Issues adverted to in a perfunctory manner, unaccompanied by
some effort at developed argumentation, are deemed waived.” El-Moussa v. Holder, 569 F.3d 250, 257
(6th Cir. 2009) (internal citation and quotation marks omitted).
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 6

its multiple contracts with the FAA.6 MIS argued that it was immune from liability
under the government contractor defense because the FAA had closely regulated,
monitored, and supervised each mold remediation. Plaintiffs moved to remand the case,
which the district court denied after conducting a jurisdictional hearing.

Relying upon Fultz v. Union-Commerce Associates, 683 N.W.2d 587 (Mich.
2004), and its progeny, defendants moved to dismiss the complaint on the grounds that
Michigan law does not recognize third-party tort actions for alleged negligent breaches
of contract. Plaintiffs contested the dismissal and moved the district court for leave to
file an amended complaint.

After extensive briefing, the district court granted defendants’ motions to dismiss
and denied plaintiffs’ motion to amend their complaint on futility grounds. Specifically,
the district court ruled that the operative complaint and proposed amended complaint
failed to allege that defendants owed plaintiffs a duty that was “separate and distinct”
from defendants’ contractual obligations to the FAA. See Fultz, 683 N.W.2d at 589.

Plaintiffs timely appeal.

II.

Plaintiffs first claim that the district court lacked subject matter jurisdiction based
upon the purported inapplicability of the government contractor defense. We disagree.
The district court’s subject matter jurisdiction was not dependant upon the success of the
government contractor defense; rather, MIS needed only to assert a “colorable” federal
defense at the time of removal. Mesa v. California, 489 U.S. 121, 129 (1989).7

The federal officer removal statute permits a defendant to remove to federal court
a state-court action brought against the

6
All co-defendants consented to removal.
7
“[S]ection 1442(a)(1) authorizes removal of the entire case even if only one of the controversies
it raises involves a federal officer or agency[.]” 14C Arthur R. Miller, Edward H. Cooper, Vikram David
Amar, Federal Practice & Procedure § 3726 (4th ed. 2009).
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 7

United States or any agency thereof or any officer (or any person acting
under that officer) of the United States or of any agency thereof, sued in
an official or individual capacity for any act under color of such office or
on account of any right, title or authority claimed under any Act of
Congress for the apprehension or punishment of criminals or the
collection of the revenue.

28 U.S.C. § 1442(a)(1).

In Willingham v. Morgan, 395 U.S. 402 (1969), the United States Supreme Court
explained the broad scope of the federal officer removal statute:

The federal officer removal statute is not ‘narrow’ or ‘limited.’ At the
very least, it is broad enough to cover all cases where federal officers can
raise a colorable defense arising out of their duty to enforce federal law.
One of the primary purposes of the removal statute – as its history clearly
demonstrates – was to have such defenses litigated in the federal courts.
The position of the court below would have the anomalous result of
allowing removal only when the officers had a clearly sustainable
defense. The suit would be removed only to be dismissed. Congress
certainly meant more than this when it chose the words ‘under color of
office.’ In fact, one of the most important reasons for removal is to have
the validity of the defense of official immunity tried in a federal court.
The officer need not win his case before he can have it removed. In
cases like this one, Congress has decided that federal officers, and indeed
the Federal Government itself, require the protection of a federal forum.
This policy should not be frustrated by a narrow, grudging interpretation
of [§] 1442(a)(1).

Id. at 406-07 (emphasis added) (citation omitted).

Because MIS is not itself a federal officer, it must satisfy a three-pronged test to
entitle it to removal under § 1442(a)(1). First, MIS must establish that it is a “person”
within the meaning of the statute who “act[ed] under [a federal] officer[.]” 28 U.S.C.
§ 1442(a)(1). Second, MIS must demonstrate that it performed the actions for which it
is being sued “under color of [federal] office[.]” Id. Third, MIS must show that it raised
a colorable federal defense. See Jefferson County v. Acker, 527 U.S. 423, 431 (1999);
Lay v. Burley Stabilization Corp., 312 F. App’x 752, 759 (6th Cir. 2009) (unpublished)
(Moore, J. concurring); Isaacson v. Dow Chem. Co., 517 F.3d 129, 138 (2d Cir. 2008).
We address each of these requirements in turn.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 8

A.

The parties do not dispute that MIS is a person under the statute. Nevertheless,
we conclude that the term “person” includes MIS because the “context [of § 1442 (a)(1)
does not] indicate[] otherwise.”8 1 U.S.C. § 1. The plain language of § 1442 does not
exclude corporations. In addition, § 1442.s text covers “non-natural entities, such as the
United States and its agencies, which suggests that interpreting ‘person’ to include
corporations is consistent with the statutory scheme.” Isaacson, 517 F.3d at 135; see
also Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387, 398 (5th Cir. 1998)
(same); Good v. Armstrong World Indus., Inc., 914 F. Supp. 1125, 1127-28 (E.D. Pa.
1996) (same); Pack v. AC & S, Inc., 838 F. Supp. 1099, 1102-03 (D. Md. 1993) (same);
Fung v. Abex Corp., 816 F. Supp. 569, 572 (N.D. Cal. 1992) (same).9

The statute permits removal only if MIS was “acting under” an FAA officer. 28
U.S.C. § 1442(a)(1); see Lay, 312 F. App’x at 759. In Watson v. Phillip Morris
Companies, Inc., 551 U.S. 142 (2007), the Supreme Court held that the Federal Trade
Commission’s heavy regulation and supervision of a cigarette-manufacturing firm’s
product-testing did not, standing alone, satisfy the statute’s “acting under” requirement:

The relevant relationship is that of a private person “acting under” a
federal “officer” or “agency.” 28 U.S.C. § 1442(a)(1) (emphasis added).
In this context, the word “under” must refer to what has been described
as a relationship that involves “acting in a certain capacity, considered in
relation to one holding a superior position or office.” 18 Oxford English
Dictionary 948 (2d ed.1989). That relationship typically involves
“subjection, guidance, or control.” Webster’s New International
Dictionary 2765 (2d ed.1953). See also Funk & Wagnalls New Standard
Dictionary of the English Language 2604 (1942) (defining “under” as
meaning “[s]ubordinate or subservient to,” “[s]ubject to guidance,

8
Specifically, 1 U.S.C. § 1 provides: “In determining the meaning of any Act of Congress,
unless the context indicates otherwise . . . . the words ‘person’ and ‘whoever’ include corporations,
companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals[.]”
9
In Watson v. Phillip Morris Cos., 551 U.S. 142 (2007), the defendant, a cigarette manufacturer,
removed a product liability lawsuit under § 1442(a)(1) arguing that it was a “person” who acted under the
color of federal office based upon the Federal Trade Commission’s detailed regulation of its cigarette
testing. Id. at 151. The Supreme Court’s rejection of Phillip Morris’s argument was not based upon its
status as a corporation. This outcome suggests, at least implicitly, that a corporate entity falls within
§ 1442(a)(1)’s definition of a “person.” Id.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 9

tutorship, or direction of”); 18 Oxford English Dictionary, supra, at 949
(“[s]ubject to the instruction, direction, or guidance of”). In addition,
precedent and statutory purpose make clear that the private person’s
“acting under” must involve an effort to assist, or to help carry out, the
duties or tasks of the federal superior. See, e.g., Davis v. South Carolina,
supra, at 600, 2 S. Ct. 636; see also supra, at 2305 - 2307.
In our view, the help or assistance necessary to bring a private person
within the scope of the statute does not include simply complying with
the law. We recognize that sometimes an English speaker might say that
one who complies with the law “helps” or “assists” governmental law
enforcement. Taxpayers who fill out complex federal tax forms, airline
passengers who obey federal regulations prohibiting smoking, for that
matter well-behaved federal prisoners, all “help” or “assist” federal law
enforcement authorities in some sense of those words. But that is not the
sense of “help” or “assist” that can bring a private action within the scope
of this statute. That is in part a matter of language. One would usually
describe the behavior of the taxpayers, airline passengers, and prisoners
we have described as compliance with the law (or acquiescence to an
order), not as “acting under” a federal official who is giving an order or
enforcing the law.

Id. at 151-52 (emphasis in original).

In rejecting Phillip Morris’s argument, the Court distinguished the facts of its
case from those of other lower federal court cases that have held that “Government
contractors fall within the terms of the federal officer removal statute, at least when the
relationship between the contractor and the Government is an unusually close one
involving detailed regulation, monitoring, or supervision.” Id. at 153 (citing Winters,
149 F.3d at 387). The Court explained that when analyzing whether a private firm is
“help[ing]” or “assist[ing]” a federal officer, such that its assistance satisfies the “acting
under” requirement:

The answer . . . lies in the fact that the private contractor in such cases
is helping the Government to produce an item that it needs. The
assistance that private contractors provide federal officers goes beyond
simple compliance with the law and helps officers fulfill other basic
governmental tasks. In the context of Winters for example, Dow
Chemical fulfilled the terms of a contractual agreement by providing the
Government with a product that it used to help conduct a war. Moreover,
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 10

at least arguably, Dow performed a job that, in the absence of a contract
with a private firm, the Government itself would have had to perform.

Watson, 551 U.S. at 153-54.10

In its removal motion, MIS claimed that “its work was performed at the direction
of, and in accordance with, [] detailed mold abatement specifications established by the
FAA” and that “[t]he FAA provided detailed [instructions] . . . pertaining to the
materials that MIS was required to use and the manner in which MIS was to perform the
[mold] remedial activities.” In support of its removal, MIS attached its FAA contracts.11

The FAA contracts included precise specifications. For example, during the
January 2005 remediation, the FAA mandated that MIS follow explicit parameters for
site containment and waste disposal:

The Contractor must establish a work area perimeter around the area
containing the visible mold on the DTW-ATCT fourth and ninth floors.
The area where mold is present is to be isolated utilizing a minimum of
6-mil plastic sheeting. Negative pressure is to be supplied to the
enclosure with the use of negative air scrubber machines equipped with
HEPA (high-efficiency particulate air) filtration.
***
The mold contaminated drywall and mold spore-containing waste is to
be double bagged in labeled 6-mil polyethylene bags. Each bag shall be
adequately sealed. The exterior bag is to be HEPA vacuumed in the
equipment room of the Decon chamber prior to exiting to work area.
Finally, the bags are transported to and then disposed of in a landfill
approved for the disposal of mold and mold-spore containing waste by
the State of Michigan.

10
The Court noted that private contracting was not an issue in Watson. Id. at 154.
11
When a district court’s subject matter jurisdiction is in question, it is empowered to review
extra-complaint evidence and resolve factual disputes. Rogers v. Stratton Indus. Inc., 798 F.2d 913,
915-16 (6th Cir. 1986). “When facts presented to the district court give rise to a factual controversy, the
district court must [] weigh the conflicting evidence to arrive at the factual predicate that subject matter
jurisdiction exists or does not exist. In reviewing these [] motions, a trial court has wide discretion to allow
affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts.” Ohio
Nat’l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990); see Ogle v. Church of God, 153 F.
App’x 371, 375 (6th Cir. 2005) (unpublished) (same).
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 11

Federal officers closely monitored MIS’s work. Specifically, each contract
designated a federal officer who“direct[ly]” supervised each remediation.12 These on-
site federal officers (hereinafter “FAA contracting officers”) were prohibited from
modifying or deviating from the FAA’s specifications without first obtaining the
“signature of the [Lead] Contractor Officer,” Judy Ryckman, also an FAA officer.
Furthermore, FAA contracting officers had the authority to “require” MIS to “dismiss
from work those [MIS] employees which [they] deem[ed] incompetent, insubordinate,
unsuitable, or otherwise objectionable.” The FAA also controlled the working hours of
MIS employees, who were “escorted by FAA personnel at all times[,]” and were
prohibited from entering the work site without prior FAA approval.

Unlike the cigarette manufacturer in Watson, MIS’s assistance went beyond
“simple compliance with the law.” Id. at 153. MIS helped FAA officers carry out their
task of ridding a federal employee occupied building of an allegedly hazardous
contaminant – “a job that, in the absence of a contract with [MIS] [or another private
mold remediation firm] the [FAA] itself would have had to perform.” Id. at 154. Under
these facts, we conclude that the contractual “relationship between [MIS] and [the FAA]
[was] an unusually close one[,] involving detailed regulation, monitoring, [and]
supervision.” Id. at 153 (citing Winters, 149 F.3d at 387). For these reasons, we
conclude that MIS has satisfied § 1442(a)(1)’s “acting under” requirement. See Watson,
551 U.S. at 148.

B.

Next, MIS must show that it performed the actions for which it is being sued
“under color of [federal] office.” Acker, 527 U.S. at 431 (internal citation and quotation
marks omitted). “To satisfy th[is] [] requirement, [MIS] must show a nexus, a ‘causal
connection’ between the charged conduct and [the] asserted official authority.” Id.
(quoting Willingham, 395 U.S. at 409). In other words, the removing party must show
that it is being sued because of the acts it performed at the direction of the federal officer.

12
The FAA appointed on-site contracting officers from the Environmental Protection Agency and
the Department of Transportation, which operates the FAA.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 12

See Watson, 551 U.S. at 148; City of Cookeville v. Upper Cumberland Elec. Membership
Corp., 484 F.3d 380, 391 (6th Cir. 2007); Lay, 312 F. App’x at 759. The Supreme Court
has indicated that “[t]he hurdle erected by this requirement is quite low.” Isaacson, 517
F.3d at 137 (citing Maryland v. Soper, 270 U.S. 9, 33 (1926) ( “[i]t is enough that [the
federal officer’s] acts or [] presence at the place in performance of his official duty
constitute[s] the basis” for the lawsuit.).

Here, MIS’s mold remediation work, which was performed at the direction of
FAA officers under contract, was also the alleged cause of plaintiffs’ personal injuries.
This establishes the nexus required by § 1442(a)(1). See Willingham, 395 U.S. at 409.
Furthermore, even if plaintiffs were able to demonstrate that the alleged cross-
contamination occurred because of an act not contemplated by MIS’s contracts with the
FAA, it is sufficient for our purposes that MIS’s execution of the FAA contracts gave
rise to the alleged cross-contamination. See Isaacson, 517 F.3d at 138. “Indeed,
whether the challenged act was outside the scope of [MIS’s] official duties, or whether
it was specifically directed by the [FAA], is one for the federal – not state – courts to
answer.” Id. (citing Willingham, 395 U.S. at 409); see also 14C Arthur R. Miller,
Edward H. Cooper, Vikram David Amar, Federal Practice & Procedure § 3726 (4th ed.
2009).

C.

Finally, MIS must show that it raised a colorable federal defense. Acker, 527
U.S. at 431; Mesa, 489 U.S. at 129. In its removal motion, MIS asserted that it was
immune from liability under the government contractor defense as articulated in Boyle
v. United Technologies Corp., 487 U.S. 500 (1988). In Boyle, the Supreme Court held
that the “uniquely federal interest[ ]” of “getting the Government’s work done” requires
that, under certain circumstances, a private contractor must be protected from tort
liability associated with its performance of a government procurement contract. Id. at
504-05 (internal quotation marks omitted). The Boyle Court thereafter articulated a
three-pronged test announcing that
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 13

“[l]iability for design defects in military equipment cannot be imposed,
pursuant to state law, when: (1) the United States approved reasonably
precise specifications; (2) the equipment conformed to those
specifications; and (3) the supplier warned the United States about the
dangers in the use of the equipment that were known to the supplier but
not to the United States.”

Id. at 512. Post-Boyle, this affirmative defense – the product of federal common law –
became known as the government contractor defense. Id. at 504.

Plaintiffs assert that the government contractor defense was not a colorable
defense because MIS’s contracts with the FAA were non-military performance contracts.
The availability of the government contractor defense based upon the performance of a
non-military service contract presents an issue of first impression in our circuit.
However, we have stated that a colorable federal defense need only be plausible, Upper
Cumberland Elec. Membership Corp., 484 F.3d at 391; Lay, 312 F. App’x at 759, and
that a district court is not required to determine its validity at the time of removal. Upper
Cumberland Elec. Membership Corp., 484 F.3d at 391 (citing with approval Magnin v.
Teledyne Cont’l Motors, 91 F.3d 1424, 1427 (11th Cir. 1996) (“[A colorable federal
defense] need only be plausible; its ultimate validity is not to be determined at the time
of removal.”). For example, in Acker, the Supreme Court concluded that the defendant
had presented a colorable federal defense of inter-governmental tax immunity even
though the Court ultimately rejected that defense. 527 U.S. at 431.

Thus, we must determine whether our lack of precedent regarding the availability
of the Boyle defense to non-military service contractors defeats the plausibility of the
defense. In this regard, “[we] routinely look[] to our sister circuits for guidance when
we encounter a legal question that we have not previously passed upon.” United States
v. Washington, 584 F.3d 693, 698 (6th Cir. 2009) (citation and internal quotation marks
omitted). As MIS argued in its removal brief, the application of the government
contractor defense has found support in the non-military context, as well as in the
performance contract context. See Hudgens v. Bell Helicopters/Textron, 328 F.3d 1329,
1333-34 (11th Cir. 2003) (defense applicable where private service contractor defending
a negligent maintenance-contract lawsuit); Carley v. Wheeled Coach, 991 F.2d 1117,
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 14

1123 (3d Cir. 1993) (defense available to non-military contractors). But see In re
Hawaii Federal Asbestos Cases, 960 F.2d 806, 810-12 (9th Cir. 1992) (limiting
applicability of government contractor defense to military procurement contracts). In
Hudgens, the Eleventh Circuit stated that “[a]lthough Boyle referred specifically to
procurement contracts, the analysis it requires is not designed to promote all-or-nothing
rules regarding different classes of contract. Rather, the question is whether subjecting
a contractor to liability under state tort law would create a significant conflict with a
unique federal interest.” 328 F.3d at 1334 (citing Glassco v. Miller Equip. Co., 966 F.2d
641, 642 (11th Cir. 1992)).

The plausibility of the government contractor defense involving non-military
performance contracts has also been accepted by many federal district courts. See
Guillory v. Ree’s Contract Servs., Inc., 872 F. Supp. 344, 346 (S.D. Miss. 1994) (holding
that federal contractor defense is a colorable federal defense in the non-military
performance contract context under 28 U.S.C. § 1442(a)(1)); see also Richland-
Lexington Airport Dist. v. Atlas Props., Inc., 854 F. Supp. 400, 421 (D.S.C. 1994)
(“[T]here is simply no reason why a nonmilitary contractor should be barred from
enjoying this extension of immunity simply because he does not contract with the armed
forces.”); Lamb v. Martin Marietta Energy Sys., Inc., 835 F. Supp. 959, 966 (W.D. Ky.
1993) (“[T]he Supreme Court’s rationale for applying the government contractor defense
in Boyle is equally applicable in non-military as well as military settings.”) (footnote
omitted).

Indeed, when the Boyle Court articulated its basis for the government contractor
defense, it explained that:

In Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), we
rejected an attempt by a landowner to hold a construction contractor
liable under state law for the erosion of 95 acres [of land] caused by the
contractor’s work in constructing dikes for the Government. We said that
“if [the] authority to carry out the project was validly conferred, that is,
if what was done was within the constitutional power of Congress, there
is no liability on the part of the contractor for executing its will.” Id., at
20-21. The federal interest justifying this holding surely exists as much
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 15

in procurement contracts as in performance contracts; we see no basis
for a distinction.

Boyle, 487 U.S. at 506 (emphasis added) (second alteration in original). Thus, it is at
least plausible that the government contractor defense could apply outside the military
procurement contract context because the Supreme Court noted that the origins of the
defense, at least in part, were based upon a case that immunized a private contractor
from liability arising out of its performance of a public works project. See Yearsley, 309
U.S. at 19; Carley, 991 F.2d at 1123. “[T]he [Boyle] court concluded that the rationale
of the defense is the extension of sovereign immunity, and that in circumstances where
the government would not be liable, private actors acting pursuant to government
directives should not be liable either.” Carley, 991 F.2d at 1123.

Under § 1442(a)(1), MIS was not required to prove the success of the defense.
See Mesa, 489 U.S. at 133; Magnin, 91 F.3d at 1427 (holding that “defense need only
be plausible; its ultimate validity is not to be determined at the time of removal”);
Jamison v. Wiley, 14 F.3d 222, 238 (4th Cir. 1994) (concluding that “defendant need not
prove that he will actually prevail on his federal immunity defense in order to obtain
removal”); Winters, 149 F.3d at 400-01 (same).

The reason for § 1442(a)(1)’s threshold, colorability requirement is simple:

[T]he Supreme Court has noted that one of the most important functions
of this right of removal is to allow a federal court to determine the
validity of an asserted official immunity defense. Removal pursuant to
§ 1442(a)(1) is thus meant to ensure a federal forum in any case where
a federal official is entitled to raise a defense arising out of his official
duties. Furthermore, this right is not to be frustrated by a grudgingly
narrow interpretation of the removal statute.

Winters, 149 F.3d at 397-98 (emphasis added) (citation and internal quotation marks
omitted); see Mesa, 489 U.S. at 133 (“In fact, one of the most important reasons for
removal is to have the validity of the defense of official immunity tried in a federal
court.”) (quoting Willingham, 395 U.S. at 407) (internal quotation marks omitted); see
also Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 72, 85 (1991)
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 16

(expressly acknowledging the difficulty in applying a federal immunity defense: “[T]he
question of [] immunity of federal officers” is “complicated[,]” to wit, “[d]etermining
whether a federal officer ha[s] acted ultra vires [is] fraught with difficulty and subject
to considerable manipulation.”).

Consequently, because this aspect of plaintiffs’ appeal challenges only the basis
for MIS’s removal under § 1442(a)(1), our focus is not on whether MIS would have
succeeded at trial on the Boyle defense, but only on whether, for removal purposes, MIS
raised a colorable claim to it. In this regard, we have stated previously that “where [a]
federal defense [raises] an issue of first impression in this court and [it] ha[s] previously
found success in other circuits, one would be hard pressed to say that the defense was
not colorable.” Upper Cumberland Elec. Membership Corp., 484 F.3d at 391.

For these reasons, we hold that MIS’s § 1442(a)(1) removal was proper and that
the district court therefore possessed subject matter jurisdiction over plaintiffs’ claims.13

III.

Plaintiffs also assert that the district court erred in dismissing their complaint for
failure to state a claim under Fed. R. Civ. P. 12(b)(6) and improperly denied their motion
for leave to amend their complaint on grounds of futility. We review these rulings de
novo. First Am. Title Co. v. Devaugh, 480 F.3d 438, 443 (6th Cir. 2007); Yuhasz v.
Brush Wellman, Inc., 341 F.3d 559, 569 (6th Cir. 2003). It is well-established that
defendants bear the burden of proving that plaintiffs’ claims fail as a matter of law.
Devaugh, 480 F.3d at 443. We must also accept all well-pleaded factual allegations as
true and construe the complaint in the light most favorable to plaintiffs. Id. We need
not, however, accept unwarranted factual inferences. See Bell Atlantic Corp. v.

13
“That the federal court ultimately rejects the federal defense that supported removal under
§ 1442(a)(1) does not mean that it thereby loses subject matter jurisdiction over the removed action; ‘the
jurisdiction of the federal courts over a properly removed action will not be defeated by later developments
in the suit.’” Jamison, 14 F.3d at 239 (quoting 14C Arthur R. Miller, Edward H. Cooper, Vikram David
Amar, Federal Practice & Procedure § 3739 (4th ed. 2009). In addition, “when removal of a state court
action is available because the defendant is a federal officer, the substantive law to be applied is unaffected
by the removal. If state law was applicable before the removal, it will apply after the removal.” Id. at
§ 3727 (citing Arizona v. Manypenny, 451 U.S. 232, 239 (1981)). Here, the parties agree that Michigan
law applies to plaintiffs’ claims.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 17

Twombly, 550 U.S. 544, 570 (2007). In addition, to survive a motion to dismiss,
plaintiffs must aver “enough facts to state a claim to relief that is plausible on its face.”
Id.

A.

Because the district court’s rulings are based upon a legal rule that appears
unique to Michigan tort law, we discuss the Fultz case in detail. There, the Michigan
Supreme Court held that a third party could not sue a party to a contract for its negligent
performance of that contract unless the plaintiff alleges that the defendant “owed a duty
to [him] that [was] separate and distinct from the defendant’s contractual obligations.”
683 N.W.2d at 592.

The plaintiff in Fultz slipped and fell while walking though a snow and
ice-covered parking lot. 683 N.W.2d at 589. The defendant, Creative Maintenance
Limited (“CML”), had previously contracted with the parking lot owner to provide snow
removal services. Id. At the time of plaintiff’s fall, CML had neither salted nor plowed
the parking lot in approximately fourteen hours. Id. The plaintiff sued the parking lot
owner and CML. A jury awarded the plaintiff compensatory damages after finding that
CML was negligent in its performance of the contract and that its negligence was the
proximate cause of plaintiff’s injuries. Id. The Michigan Court of Appeals affirmed.

The Michigan Supreme Court reversed, holding that, as a matter of law, CML
“owed no contractual or common-law duty to plaintiff to plow or salt the parking lot.”
Id. at 590. The Fultz court provided the following explanation:

We believe the “slippery distinction” between misfeasance and
nonfeasance of a duty undertaken obscures the proper initial inquiry:
Whether a particular defendant owes any duty at all to a particular
plaintiff.
This Court and the Court of Appeals have defined a tort action stemming
from misfeasance of a contractual obligation as the “violation of a legal
duty separate and distinct from the contractual obligation.”
We believe that the “separate and distinct” definition of misfeasance
offers better guidance in determining whether a negligence action based
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 18

on a contract and brought by a third party to that contract may lie because
it focuses on the threshold question of duty in a negligence claim. As
there can be no breach of a nonexistent duty, the former
misfeasance/nonfeasance inquiry in a negligence case is defective
because it improperly focuses on whether a duty was breached instead of
whether a duty exists at all.
Accordingly, the lower courts should analyze tort actions based on a
contract and brought by a plaintiff who is not a party to that contract by
using a “separate and distinct” mode of analysis. Specifically, the
threshold question is whether the defendant owed a duty to the plaintiff
that is separate and distinct from the defendant’s contractual obligations.
If no independent duty exists, no tort action based on a contract will lie.

Fultz, 683 N.W.2d at 592 (citations and footnote omitted). The Michigan Supreme
Court decided the Fultz case in 2004. Since then, the Fultz holding often functions to
bar a third-party plaintiff from suing a contractor for its negligent performance.

The best illustration of the rule’s scope is set forth in Banaszak v. Northwest
Airlines, Inc., No. 263305, 2006 WL 473848, at *1 (Mich. Ct. App. Feb. 28, 2006)
(unpublished).14 There, the Michigan Court of Appeals reversed a trial court’s grant of
summary disposition in favor of an elevator contractor that was sued for negligence
arising out of its installation of a moving walkway at the DTW. Id. The plaintiff in
Banaszak fell into a four-foot deep “wellway” that defendant Otis Elevator Company had
inadequately covered with plywood.15 Id. at *3. According to Otis’s contract with
Northwest Airlines, Otis was required to secure open wellways with aluminum covers.
Id. at *3-5. On appeal, the plaintiff argued that Fultz did not bar her recovery against
Otis because it had created a “new hazard,” i.e., the use of plywood instead of aluminum
to cover the wellway, which created a duty that was separate and distinct from Otis’s
contractual obligations to Northwest. Id. at *5. The Michigan Court of Appeals agreed:

14
Pursuant to Michigan Court Rule 7.215(C)(1): “An unpublished opinion [of the Michigan
Court of Appeals] is not precedentially binding under the rule of stare decisis.” See People v. Green, 680
N.W.2d 477, 484 n.5 (Mich. Ct. App. 2004).
15
A wellway is an opening at the end of the moving walkway that contains the mechanical
elements. Banaszak v. Northwest Airlines, Inc., 722 N.W.2d 433, 434 (Mich. 2006).
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 19

Whether others removed structural plywood covers, or whether others
placed the deficient plywood are factual matters to be determined at trial.
Whether the action presents one of failure of policing by others, the
general contractor, or the owner as a theory of defense is also subject to
proof at trial. Otis Elevator’s performance, and choices of performance,
are negligence issues and not duty issues. And these, like the theories
concerning proximate causation are questions of fact for the jury.
Because Otis Elevator owed a separate and distinct duty from that
required under its contract with Northwest Airlines, the trial court erred
in granting summary disposition in favor of Otis Elevator and dismissing
plaintiff’s claim. We reverse and remand for further proceedings
consistent with this opinion.

Banaszak, 2006 WL 473848, at *5 (citation omitted).

In a one-paragraph order, the Michigan Supreme Court reversed the appellate
court’s decision and reinstated the trial court’s order granting Otis’s motion for
summary judgment:

On order of the Court, the application for leave to appeal the February
28, 2006 judgment of the Court of Appeals is considered and, pursuant
to MCR 7.302(G)(1), in lieu of granting leave to appeal, we REVERSE
the judgment of the Court of Appeals and REINSTATE the order of the
Wayne Circuit Court granting summary disposition to defendant Otis
Elevator Company. Otis entered into a contract to install moving
walkways in a new airport terminal. As part of that contract, Otis was
required to provide a cover over the “wellway,” an opening at the end of
the moving walkway that contains the mechanical elements. The purpose
of the cover was to protect persons using that area. The plaintiff was
injured when she stepped on an inadequate piece of plywood covering
the “wellway.” This hazard was the subject of the Otis contract. As a
result, Otis owed no duty to plaintiff that was “separate and distinct”
from its duties under the contract. Fultz v. Union-Commerce Associates,
470 Mich. 460, 683 N.W.2d 587 (2004).

Banaszak v. Northwest Airlines, Inc., 722 N.W.2d 433, 434 (Mich. 2006) (emphasis
added).

Plaintiffs argue that the Michigan Supreme Court’s order in Banaszak is not
controlling due to its brevity and because orders of the Michigan Supreme Court are not
precedentially binding. We disagree. “Because the Supreme Court’s order can be []
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 20

understood, it is binding precedent.” Evans & Luptak, PLC v. Lizza, 650 N.W.2d 364,
370 (Mich. Ct. App. 2002); see Brooks v. Engine Power Components, Inc., 613 N.W.2d
733, 735 (2000), overruled on other grounds, Kurtz v. Faygo Beverages, Inc., 644 N.W.
2d 710, 714 (Mich. 2002); People v. Phillips, 575 N.W.2d 784, 789 n.11 (Mich. Ct. App.
1997) (citing People v. Crall, 510 N.W.2d 182, 183 n.8 (Mich. 1993)); Carrington v.
Cadillac Asphalt, LLC, No. 289075, 2010 WL 446096, at *1 (Mich. Ct. App. Feb. 9,
2010) (unpublished per curium opinion) (Michigan courts are bound by Banaszak order).

Under the Michigan Supreme Court’s holding in Banaszak, Michigan and federal
district courts sitting in diversity have concluded that there is no independent duty under
Fultz when a plaintiff alleges a hazard that is the subject of the defendant’s contractual
obligations. See Mierzejewski v. Torre & Bruglio, Inc., 729 N.W.2d 225 (Mich. 2007)
(no new hazard despite hazardously displaced snow because snow removal subject of
parties’ contract); Thacker v. Encompass Ins., No. 265405, 2006 WL 1451554, at *5
(Mich Ct. App. May 25, 2006) (unpublished per curium opinion) (no new hazard despite
cross-contamination caused by negligent mold remediation because mold removal
subject of parties’ contract); Crespo v. Henkel Corp., No. 1:06-CV-325, 2007 WL
2284257, at *3 (W.D. Mich. Aug. 7, 2007) (no new hazard because alleged toxins
released by metal working fluids was subject of parties’ contract), aff’d, 339 F. App’x
514 (6th Cir. 2009) (per curium); Irrer v. Milacron, Inc., No. 04-72898, 2007 WL
677902, at *1 (E.D. Mich. Mar. 6, 2007) (no new hazard where metal working fluid
toxins permeated plant injuring employees because metal working fluid maintenance
subject of parties’ contract).

In short, under Michigan law, when an obligor contracts with an obligee to
perform services, the obligor does not necessarily assume the obligee’s legal duties.
Using the Fultz case as an example, when CML contracted to remove snow and ice by
salting and sanding the owner’s lot, it did not assume the owner’s duty to provide a
reasonably safe premises. Thus, by implication, the injured plaintiff’s negligence action
would lie against the premises owner and not the contractor. In turn, the premises owner
may seek indemnification or contribution from the contractor.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 21

In this regard, most jurisdictions deem a negligent action by a contractor to be
a voluntary assumption of a duty to foreseeable plaintiffs. See Briere v. Lathrop Co.,
258 N.E.2d 597, 602 (Ohio 1970) (holding general contractor liable for painter’s injury
where employee of general contractor assisted subcontractor’s employee in moving
scaffold, thereby proximately causing painter’s fall from scaffold); Trail-Likoy v. Saint
Joseph Healthcare, Inc., No. 2005-CA-000658-MR, 2006 WL 2193496, at *2-3 (Ky. Ct.
App. 2006) (expressly recognizing viable cause of action for negligence against
hospital’s cleaning contractor who placed rumpled mat in hospital vestibule, although
noting that plaintiff’s injury, a severed thumb, was not the foreseeable consequence of
any negligence by cleaner because injury was caused when plaintiff placed thumb in
hinge of automatic door while attempting to straighten rumpled mat with foot); Burks
v. Kroger Co., No. M2008-02664-COA-R3-CV, 2009 WL 4059145, *6-9 (Tenn. Ct.
App. Nov. 23, 2009) (reversing trial court’s grant of summary judgment to roofing
contractors because there existed a genuine issue of material fact concerning whether
roofing contractors’ negligent repair of grocery store’s leaking roof proximately caused
plaintiff’s injuries).

Thus, except in Michigan, the nonfeasance/misfeasance dichotomy is recognized
because a contractor who fails to act assumes no duty to third persons by his inaction,
while a contractor who negligently acts, assumes, under the law, a duty to foreseeable
persons who may be injured by the contractor’s conduct. Id.; see Morgan v. Scott, 291
S.W.3d 622, 632 (Ky. 2009); Biscan v. Brown, 160 S.W.3d 462, 483 (Tenn. 2005);
Wissel v. Ohio High School Athletic Ass’n, 605 N.E.2d 458, 465 (Ohio Ct. App. 1992);
see also Dan B. Dobbs, et al., Prosser and Keeton on Torts, § 56, Acts and Omissions,
373-85 (5th ed., 10th reprint, 2004). As then Chief Judge Benjamin Cardozo of New
York’s Court of Appeals explained, “[t]he query always is whether the putative
wrongdoer has advanced to such a point as to have launched a force or instrument of
harm, or has stopped where inaction is at most a refusal to become an instrument for
good.” H.R. Moch Co. v. Rensselaer Water Co., 159 N.E. 896, 898 (N.Y. 1928).
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 22

However, this well-accepted principle of tort law is no longer the law in
Michigan. See Fultz, 683 N.W.2d at 592. But see Davis v. Venture One Constr., Inc.,
568 F.3d 570, 574-76 (6th Cir. 2009) (discussing the Fultz case and holding that under
Michigan law “[c]ontractual duties do not limit separately existing common law tort
duties”). Since we decided Davis, however, the Michigan Court of Appeals has held
that, while “eloquent[],” the Davis decision is not consistent with Fultz, Mierzejewski,
Banaszak, or its progeny. Carrington, 2010 WL 446096, at *1 (“[O]ur Supreme Court
has made clear that [the distinction recognized in Davis] [is] not allowed under the
majority’s interpretation of Fultz when determining what constitutes a ‘separate and
distinct’ duty.”).

It is a well-established rule in this Circuit that a panel of this court may not
overrule a prior published opinion of our court absent en banc review or an intervening
and binding change in the state of the law. See Salmi v. Sec’y of Health & Human
Servs., 774 F.2d 685, 689 (6th Cir. 1985); Rutherford v. Columbia Gas, 575 F.3d 616,
619 (6th Cir. 2009). A caveat to this rule was first explored in Blaine Construction
Corp. v. Insurance Company of North America, 171 F.3d 343, 350 (6th Cir. 1999), a
diversity case applying Tennessee law. In Blaine, the panel declined to reconsider a
dispositive Sixth Circuit case interpreting state law on the theory that it was bound by
a prior panel decision. The panel further indicated, however, that it would have been
empowered to revisit the prior case had there been “an indication by the Tennessee
courts that they would have decided [the previous Sixth Circuit case] differently.” Id.
at 350; see also Rutherford, 575 F.3d at 619. In Hampton v. United States, 191 F.3d 695,
701 (6th Cir. 1999), a panel of this court interpreted Blaine as standing for the
proposition that a “panel may reconsider [a previous panel decision interpreting state law
when] the [state] courts have expressly indicated . . . that they disagree with [the
previous panel decision] and would have decided it differently.”

Here, the Michigan Court of Appeals in its Carrington decision “expressly
indicate[s],” Hampton, 191 F.3d at 701, that Davis is incorrect in light of Mierzejewski
and Banaszak. See Carrington, 2010 WL 446096, at *1 n.1. The fact that Carrington
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 23

is a Michigan Court of Appeals opinion, as opposed to a Michigan Supreme Court
decision, is not dispositive because “[w]e will accept the holding of a state intermediate
appellate court with respect to state law unless we determine the highest court of the
state would decide otherwise.” United States v. Philp, 460 F.3d 729, 732 (6th Cir.
2006); see also Hampton, 191 F.3d at 702 (indicating that the Circuit “should presume
the Michigan Supreme Court would agree [with the Michigan Court of Appeals] unless
it[’]s clear the Michigan Supreme Court would likely disagree”).

We acknowledge that Carrington is an unpublished decision. Pursuant to
Michigan Court Rule 7.215(C)(1), “[a]n unpublished opinion is not precedentially
binding under the rule of stare decisis,” and, as a result, we are not necessarily bound by
Carrington’s holding. See Am. Fidelity & Cas. Co. v. Indem. Ins. Co. of N. Am., 308
F.2d 697, 700 (6th Cir. 1962) (“[I]t would be incongruous indeed to hold the federal
court bound by a decision which would not be binding on any state court.”). However,
despite the fact that Carrington is not precedentially binding, it remains our overarching
duty to ensure that we correctly apply Michigan law. After doing so, we conclude that
it would be improper for us to disregard Carrington’s analysis of Davis and adhere to
Davis merely because Carrington is unpublished. Carrington provides persuasive
evidence that the Michigan courts would have decided Davis differently, and we should
accord Carrington deference notwithstanding the fact that it is not technically binding.
Cf. Bailey v. V & O Press Co., 770 F.2d 601, 604 (6th Cir. 1985) (noting that in
determining state law the panel is entitled to look to the “relevant dicta in related [state]
cases” (emphasis added)).

In light of the Michigan Supreme Court’s decisions in Mierzejewski and
Banaszak, we conclude that it is very unlikely that the Michigan Supreme Court would
disagree with Carrington’s pronouncement that the Davis panel’s reasoning runs
contrary to Michigan law. Because Carrington provides us with a clear indication that
Davis would have been decided differently in the Michigan courts, there is sufficient
evidence to allow this panel to disregard our decision in Davis. See Hampton, 191 F.3d
at 701; cf. Rutherford, 575 F.3d at 619.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 24

B.

In the present case, defendants fall into two performance categories: consultation
or removal. According to plaintiffs’ complaint, defendants TE/OC, Safe, Jacobs, and
Bureau Veritas provided professional consultation services to the FAA by producing
reports that recommended mold remediation strategies. Defendants MIS and Coach, on
the other hand, performed the actual mold remediation work at the direction of the FAA.
The Fultz case applies to plaintiffs’ negligence claims because they were not parties to
defendants’ contracts and they do not assert that they were third-party beneficiaries.
Thus, the salient inquiry is whether plaintiffs’ complaint avers that any defendant created
a “new hazard” that gave rise to a duty that was “separate and distinct” from its
contractual obligations to the FAA. See Fultz, 683 N.W.2d at 587.

Plaintiffs rely heavily on Conant v. State Farm & Cas. Co., No. 260524, 2006
WL 1411216, at *1 (Mich. Ct. App. May 23, 2006) (unpublished per curium opinion),
for the proposition that a mold remediation contractor can be held liable to a third party
if its negligent work-site containment procedures cause the spread of dangerous mold.
Id. In Conant, plaintiffs’ homeowner insurer instructed a mold removal contractor to cut
holes in plaintiffs’ bedroom wall to discover the source of their claimed water damage.
Id. Despite evidence of mold in the wall’s interior, the contractor did not seal off his
work area. Id. The plaintiffs claimed that by cutting the holes, the contractor dislodged
dormant mold spores that, until then, had been contained, and upon disruption, had
become hazardously airborne. Id. The jury returned a verdict for the plaintiffs, finding
the insurer and mold contractor negligent. The Michigan Court of Appeals affirmed.
Id. However, contrary to plaintiffs’ position, Conant is inapposite because the mold
removal contractor was not a party to the plaintiffs’ appeal – thus, the Michigan Court
of Appeals was not resolving a Fultz rule question. In addition, the plaintiffs in Conant
were not a third party with regard to their homeowner insurer.

Instead, as defendants argue, Thacker v. Encompass Ins. Co., No. 265405, 2006
WL 1451554 (Mich App. Ct. May 25, 2006) (unpublished per curium opinion) is more
persuasive. There, a plaintiff claimed, inter alia, that Soil & Materials Engineers, Inc.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 25

(“SME”), a mold remediation company hired by her homeowner insurer to remove
existing mold contamination “failed to remedy and/or worsened the dangerous [mold]
conditions[,]” which caused her personal injuries. Id. at *1 (quotation marks omitted).
It was uncontested on appeal that the plaintiff was a third party to the mold remediation
contract:

Finally, plaintiff argues that genuine issues of material fact exist
regarding whether SME and Colby breached their common-law duties,
as described in Restatement Torts, 2d, § 324A, to perform their
contractual undertakings with ordinary care. We disagree. Plaintiff’s
claims against SME were dismissed by the trial court on the ground that,
contrary to the Fultz holding, plaintiff failed to establish that SME owed
a duty to her that was separate and distinct from its contractual
obligations. On appeal, plaintiff has failed to distinguish the Fultz
holding or establish SME’s independent duty. Accordingly, we conclude
that her claims against SME were properly dismissed.

Id. at *5. We find the Thacker case instructive regarding what constitutes a “new
hazard” under Michigan law with respect to a mold remediation contract.

1.

We hold that pursuant to Thacker, Banaszak, and Mierzejewski, the Fultz rule of
law forecloses plaintiffs’ claims against the consulting defendants, TE/OC, Safe, Jacobs,
and Bureau Veritas. Specifically, the FAA hired TE/OC to conduct air quality testing,
to provide a mold remediation strategy, and to assess the extent of the tower’s existing
contamination. The FAA hired Safe to produce indoor air quality reports,
mold-sampling recommendations, and mold removal strategies. The FAA’s contract
with Jacobs involved its consultation regarding the mold contamination in the tower’s
elevator shaft and its preparation of a moisture assessment report. The FAA hired
Clayton/Bureau Veritas to address the contamination in the tower’s elevator shaft and
to retain a CIH.

Plaintiffs’ claims against each of these defendants simply allege that they
negligently performed their FAA contracts. In essence, their failure to perform did not
create a “new hazard”; they merely left alone an existing mold hazard, or allowed
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 26

contemplated mold hazards to manifest themselves. See Banaszak, 722 N.W.2d at 434
(no duty to plaintiff when she stepped on an inadequate piece of plywood covering a
wellway because proper wellway covering subject of contract); Mierzejewski, 729
N.W.2d at 225 (no new hazard despite hazardously displaced snow because snow
removal subject of contract); Thacker, 2006 WL 1451554, at *5 (no new hazard because
mold remediation was subject of contract); Crespo, 2009 WL 2018001, at *3 (no new
hazard because metal working fluid maintenance subject of contract); and Irrer, 2007
WL 677902, at *1 (no new hazard where metal working fluid toxins permeated plant
because metal working fluid maintenance was subject of contract). Accordingly, we
conclude that the district court did not err in ruling that plaintiffs’ complaint failed to
assert a duty that was “separate and distinct” from TE/OC’s, Safe’s, Jacobs’s, and
Bureau Veritas’s contractual obligations under their FAA contracts. Put another way,
under Fultz, these defendants did not assume the FAA’s duty to provide a reasonably
safe working environment when the FAA hired them to provide consulting services.

2.

Next, we must analyze whether plaintiffs’ complaint avers that MIS or Coach
created a new hazard that gave rise to a duty that was separate and distinct from their
contracted-for duties. Plaintiffs argue that MIS’s negligent work-site containment and
mold disposal procedures created a new hazard, namely, severe cross-contamination.16
However, pursuant to Fultz, Banaszak, Mierzejewski, and Thacker, MIS’s failure to
properly contain its work area and dispose of contaminated mold debris did not give rise
to a concomitant duty to plaintiffs because mold containment and disposal procedures
were the subject of its FAA contracts. See also Crespo, 2009 WL 2018001, at *3; Irrer,
2007 WL 677902, at *1. Moreover, cross-contamination was a contemplated hazard in
its FAA contracts. Thus, any cross-contamination that resulted from MIS’s negligent
performance did not constitute a new hazard as that concept is understood and applied
under Michigan law.

16
As previously discussed, the FAA’s statement of work provided specific instructions regarding
site containment and waste disposal.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 27

The FAA’s contract with Coach presents a more difficult question. According
to the operative complaint, the FAA directed Coach to spray the fourth and ninth floors
and elevator shaft with an “approved microbiologic biocide.” (Emphasis added.) Coach
argues that it did not create a new hazard under Fultz because “the FAA had full
knowledge of what [biocide it would use] and where it was going to be applied.”

However, plaintiffs’ complaint avers that Coach used “an unmarked container”
to spray “1 Octanol, Undecone, 1-Dodecane, Dodecane, and Tridecane,” allegedly
dangerous chemicals, which can cause “numerous health hazards, including . . . lung
damage, drowsiness, dizziness, pulmonary edema, asphyxiation, . . . vomiting, and []
death.” When Coach sprayed the “unmarked” substance, it caused a five-hour tower-
wide employee evacuation and sent several plaintiffs to the hospital. The hazard of
exposure to toxic biocide was not the subject of the FAA’s contract with Coach. Thus,
plaintiffs’ claim against Coach is distinguishable from Crespo because the alleged
hazard is not an exposure to toxic mold, but an exposure to toxic biocide. See generally,
Katzman v. Orion Constr. Co., No. 268006, 2006 WL 2382429, at *3-4 (Mich. Ct. App.
Aug. 17, 2006) (unpublished per curium opinion) (ruling that contractor owed plaintiff
a duty that was separate and distinct from its snow removal duties because it left behind
an unusually large piece of rock salt that was concealed under two inches of snow,
causing plaintiff to trip and injure herself. Court ruled that rock salt hazard was a new
hazard because alleged hazard did not involve a pre-existing snow hazard, but the
introduction of a latent and unusual piece of rock salt).

Viewing the facts in the light most favorable to plaintiffs and drawing all
reasonable inferences in their favor, the toxic biocide sprayed by Coach was not an
“approved microbiologic biocide” and, thus, was not the subject of its contract with the
FAA. (emphasis added); see Banaszak, 722 N.W.2d at 434; Devaugh, 480 F.3d at 443.
Moreover, exposure to toxic biocide was not a contemplated hazard in Coach’s contract
with the FAA.

For these reasons, we hold that Coach’s use of this allegedly unapproved biocide
gave rise to a duty under Michigan law to foreseeable persons, such as these plaintiffs,
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 28

that was “separate and distinct” from its contract with the FAA. Therefore, we conclude
that under the Fultz rule of law, the district court erred by dismissing Coach from this
action. See Reed v. Shurlow, Nos. 288201-02, 2009 WL 4827827, at *4 (Mich. Ct. App.
Dec. 15, 2009) (acknowledging that post-Fultz, “the law [continues to] provide, in
certain circumstances, for third party liability arising from negligent performance of
contractual duties”).

3.

Plaintiffs also argue that a “special relationship” existed between plaintiffs and
defendants under Michigan law that created a duty that was separate and distinct from
defendants’ contractual duties. Specifically, plaintiffs argue that defendants’ expertise
in the area of mold remediation created a duty owed to plaintiffs as occupants of the
DTW building.

Negligence law typically does not impose an affirmative duty to act for the
protection of another; however, Michigan law recognizes a number of special
relationships that impose such affirmative duties. Stiver v. Parker, 975 F.2d 261, 270-71
(6th Cir. 1992). Some “special relationships recognized [in] Michigan [] are . . .
innkeeper to guest, employer to employees, psychiatrist to patient, doctor to patient
outside medical malpractice liability[.]” Id. (citation omitted); see also Dawe v. Dr.
Reuven Bar-Levav & Assocs., P.C., 780 N.W.2d 272, 275 n.3 (Mich. 2010) (noting that
Michigan “has determined that a ‘special relationship’ exists in a variety of situations,”
and “has classified the common carrier-passenger, innkeeper-guest, landlord-tenant,
employer-employee, and doctor-patient relationships as special relationships”).

“The duty owed in a special relationship is often based on a two party
relationship under which one delivers a service and the other pays for the service[.]” Id.
at 271 n.17. “In analyzing special relationships and deciding whether one person has a
duty to aid or protect another, courts also look to whether the defendant created any
hazard which did not already exist, or increased existing hazards by either taking or not
taking certain steps.” Id. (citation and internal quotation marks omitted). As the
Michigan Supreme Court recently reiterated, “[t]he rationale behind imposing a duty to
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 29

protect in these special relationships is based on control.” Dawe, 780 N.W.2d at 275
(internal quotation marks omitted). In each instance where the Michigan courts have
recognized a special relationship “one person entrusts himself to the control and
protection of another, with a consequent loss of control to protect himself.” Id. (internal
quotation marks omitted). “The duty to protect is imposed upon the person in control
because he is best able to provide a place of safety.” Id. (internal quotation marks
omitted). Thus, under Michigan law, “a special relationship would exist if the
plaintiff[s] had entrusted [them]sel[ves] to the protection and control of [the]
defendant[s] . . . and, in so doing, lost the ability to protect [them]sel[ves].” Murdock
v. Higgins, 559 N.W.2d 639, 643 (Mich. 1997).

The Michigan courts have not yet addressed the precise question before us:
whether a special relationship exists between a mold remediation contractor and the
occupants of the structure that they were hired to remediate. In facing “an issue that has
not yet been resolved by the Michigan courts, we must attempt to predict what the
Michigan Supreme Court would do if confronted with the same question.” Mazur v.
Young, 507 F.3d 1013, 1016 (6th Cir. 2007) (internal quotation marks and alteration
omitted). We believe that Michigan would not recognize the existence of the “special
relationship” that plaintiffs propose. First, the relationship between plaintiffs and
defendants is based solely on defendants’ contracts with a third party, the FAA. Cf.
Dawe, 780 N.W.2d at 275 n.3 (noting that special relationships include “common
carrier-passenger, innkeeper-guest, landlord-tenant, employer-employee, and
doctor-patient relationships”). Second, plaintiffs do not claim that they somehow
“entrusted” themselves to the “protection and control” of defendants such that they “lost
the ability to protect” themselves. Murdock, 559 N.W.2d at 643. Arguably, plaintiffs
entrusted themselves to the care of their employer, the FAA, and the owner of the
building, but there is no averment that there was a “trust relationship” between
defendants and plaintiffs. Id. Moreover, to hold that a “special relationship” exists in
the present case would essentially render the Michigan Supreme Court’s holding in Fultz
a nullity. As the district court stated, defendants’ duty to provide professional mold
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 30

remediation services was part-in-parcel to its contractual obligations to the FAA and,
therefore, does not create a separate and distinct duty to plaintiffs under Fultz.

IV.

Finally, plaintiffs assert that the district court erred when it denied their motion
for leave to file an amended complaint with respect to their proposed common law fraud
claim.17 We disagree.

We ordinarily review a district court’s denial of a motion to amend a pleading for
abuse of discretion. Perkins v. Am. Elec. Power Fuel Supply, Inc., 246 F.3d 593, 604
(6th Cir. 2001). However, when “the district court denies the motion to amend on
grounds that the amendment would be futile, we review denial of the motion de novo.”
Parry v. Mohawk Motors of Mich., Inc., 236 F.3d 299, 306 (6th Cir. 2000).

Pursuant to Federal Rule of Civil Procedure 9(b), “a party must state with
particularity the circumstances constituting fraud or mistake.” Id. We interpret “Rule
9(b) as requiring plaintiffs to allege the time, place, and content of the alleged
misrepresentation on which he or she relied; the fraudulent scheme; the fraudulent intent
of the defendants; and the injury resulting from the fraud.” Yuhasz, 341 F.3d at 563
(citation and internal quotation marks omitted). Plaintiffs filed their proposed amended
complaint ten months after their case was removed to federal district court, and thus they
were required to comply with Rule 9(b).

Under Michigan law, common-law fraud requires proof that:

(1) the defendant made a material representation; (2) the representation
was false; (3) when the defendant made the representation, the defendant
knew that it was false, or made it recklessly, without knowledge of its
truth as a positive assertion; (4) the defendant made the representation

17
Plaintiffs’ amended complaint also asserts claims for professional negligence, intentional,
reckless, and outrageous conduct, tortious interference with a contractual relationship, conspiracy to
interfere with a contractual or business relationship, and negligent misrepresentation. However, because
plaintiffs’ initial appellate brief addressed only the district court’s dismissal of their fraud claim, we need
only address its decision with respect to this ruling. “[A]n appellant abandons all issues not raised and
argued in its initial brief on appeal.” United States v. Johnson, 440 F.3d 832, 845-46 (6th Cir. 2006).
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 31

with the intention that the plaintiff would act upon it; (5) the plaintiff
acted in reliance upon it; and (6) the plaintiff suffered damage.

Cummins v. Robinson Twp., 770 N.W.2d 421, 435 (Mich. Ct. App. 2009). Further, an
action for fraud must be predicated upon a false statement relating to a past or existing
fact; promises regarding the future are contractual and do not support a claim for fraud.
See Hi-Way Motor Co. v. Int’l Harvester Co., 247 N.W.2d 813, 815 (Mich. 1976). In
addition, establishing a claim of fraudulent misrepresentation requires the plaintiff’s
reasonable reliance upon the false representation. Cummins, 770 N.W.2d at 435.

Plaintiffs aver that in late January to mid-March 2005, Tillotson, Safe, and
Andrew Crause, a project manager for Clayton, made material misrepresentations to the
FAA in their reports.18 They allege that Tillotson, Safe, and Crause made these material
misrepresentations in their effort to “bias[] the opinions of the FAA, Department of the
Attorney General, Michigan OSHA, NIOSH, and an arbitrator in another legal
proceeding instituted by some Plaintiffs-Controllers.” Plaintiffs claim that they “relied
upon said misrepresentations by continuing to work at the DTW []” to their detriment,
which caused “health problems and economic loss.”

Defendants argue that plaintiffs’ proposed fraud claim fails as a matter of law
because they did not allege that Tillotson, Safe, and Crause made the misrepresentations
“with the intent or knowledge that . . . [it would be] repeated to [plaintiffs] for the
purpose of deceiving [them].” Nernberg v. Pearce, 35 F.3d 247, 251 (6th Cir. 1994).
Under Michigan law, a plaintiff must allege that the defendant’s misrepresentation was
made with the intent or knowledge that it would be communicated to the plaintiff with
the intent to deceive him or her. Id.

The amended complaint does not aver that Tillotson, Safe, or Crause made the
alleged misrepresentations in the FAA reports with the intent or knowledge that it would
be communicated to plaintiffs with the intent to deceive them. In fact, plaintiffs simply
allege that defendants made the misrepresentations “to bias[] the opinions of the FAA.”

18
Defendant Jacobs is mentioned only once in the amended complaint, and plaintiffs do not aver
any specific wrongdoing on its part.
No. 08-2567 Bennett, et al. v. MIS Corp., et al. Page 32

Rule 9(b) requires particularity because “the nature of the evidence in cases involving
allegations of fraud is often circumstantial, [and] claims of fraud can be fabricated
easily.” Disner v. Westinghouse Elec. Corp., 726 F.2d 1106, 1110 (6th Cir. 1984).
Thus, fraud claims pose a higher risk that an error will be made in determining whether
a defendant has committed it. Id.

Under Nernberg, we conclude that the district court properly dismissed plaintiffs’
proposed fraud claim as futile under Rule 9(b). 35 F.3d at 251.

V.

For these reasons, we affirm the district court’s judgment with respect to
defendants MIS, TE/OC, Safe, Jacobs, and Bureau Veritas, but reverse and remand for
further proceedings consistent with this opinion with respect to defendant Coach.