538 F.3d 334 (5th Cir. 2008), 07-20321, Singh v. Duane Morris LLP

Docket Nº:07-20321.
Citation:538 F.3d 334, 87 U.S.P.Q.2d 1532
Party Name:Robin SINGH, Doing Business as Testmasters, Plaintiff-Appellant, v. DUANE MORRIS LLP; Richard T. Redano, Defendants-Appellees.
Case Date:July 30, 2008
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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538 F.3d 334 (5th Cir. 2008)

87 U.S.P.Q.2d 1532

Robin SINGH, Doing Business as Testmasters, Plaintiff-Appellant,

v.

DUANE MORRIS LLP; Richard T. Redano, Defendants-Appellees.

No. 07-20321.

United States Court of Appeals, Fifth Circuit.

July 30, 2008

Page 335

[Copyrighted Material Omitted]

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          Daniel J. Sheehan, Jr. (argued), John McGrath Phalen, Jr., Daniel Sheehan & Associates, Dallas, TX, for Singh.

         George M. Kryder, III (argued), Gabriela Angelina Gallegos, Vinson & Elkins, Dallas, TX, for Defendants-Appellees.

         Appeal from the United States District Court for the Southern District of Texas.

         Before REAVLEY, SMITH and DENNIS, Circuit Judges.

         JERRY E. SMITH, Circuit Judge:

         Robin Singh sued Duane Morris LLP and attorney Richard Redano (jointly “Redano" ) for malpractice allegedly committed during Redano's representation of Singh in a federal trademark lawsuit. Because the federal courts lack subject matter jurisdiction over this malpractice action, we vacate the judgment and render a judgment of dismissal.

         I.

          This case arises out of a dispute between two test-prep companies over use of the name “Testmasters." Singh, who owned a California-based test-prep company, and Test Masters Educational Services, Inc. (“TES" ), a Texas-based company, sued in federal court, asserting various trademark claims against each other. Redano represented Singh. After a five-day trial, a jury found that Singh's mark was descriptive and that he had established secondary meaning in the “Testmasters" mark. The jury also found that TES had infringed Singh's mark but was not liable, because it had been an innocent prior user. Both parties appealed, and we reversed, holding that Singh had presented “little or no evidence regarding secondary meaning."

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Test Masters Educ. Servs., Inc. v. Singh, 46 Fed.Appx. 227, 2002 WL 1940083, *4 (5th Cir.2002) (per curiam) (unpublished).1

         Singh filed this malpractice suit against Redano in Texas state court, claiming that Redano had mistakenly failed at trial to introduce available evidence that would have successfully established secondary meaning. Redano removed to federal court, basing federal jurisdiction on the contention that the outcome of the malpractice case depended on resolving questions of federal trademark law.

         The district court, Judge Vanessa Gilmore presiding, denied Singh's motion to remand, concluding that it had subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1338(a) and the All Writs Act, 28 U.S.C. § 1651. The court granted in part Redano's motion for summary judgment and dismissed Singh's malpractice claims. The court held that collateral estoppel bars Singh's malpractice claims and that Singh's claims are precluded by his failure to file a Federal Rule of Civil Procedure 60(b) motion with additional secondary meaning evidence after the trademark trial had been concluded.

         II.

          We review de novo the district court's assumption of subject matter jurisdiction. Local 1351 Int'l Longshoremens Ass'n v. Sea-Land Serv., Inc., 214 F.3d 566, 569 (5th Cir.2000). Pursuant to 28 U.S.C. §§ 1331 and 1338(a), federal courts have subject matter jurisdiction over civil actions “arising under" federal law and specifically over actions “arising under any Act of Congress relating to ... trademarks." We must decide whether a state-law malpractice claim “arises under" federal law merely because the alleged malpractice occurred in a prior federal trademark suit. We conclude that such claim does not arise under federal law and does not confer subject matter jurisdiction under § 1331 or 1338(a).

         Singh sued Redano in state court on a state-law cause of action. Having removed the case to federal court, Redano contends that federal jurisdiction is proper because resolving the malpractice claim necessarily requires resolving a federal question-to-wit, whether Singh could have established secondary meaning in his trademark.

          Under Texas law, “[w]hen a legal malpractice claim arises from earlier litigation, the plaintiff ... bears the burden to prove he would have prevailed on the underlying cause of action." Williams v. Briscoe, 137 S.W.3d 120, 124 (Tex.App.-Houston [1st Dist.] 2004, no writ). That rule, which is necessary to satisfy the causation element of a malpractice claim, has been dubbed the “suit within a suit" requirement: “[T]he plaintiff must establish that the underlying suit would have been won ‘but for’ the attorney's breach of duty ...." Ballesteros v. Jones, 985 S.W.2d 485, 489 (Tex.App.-San Antonio 1998, pet. denied). Hence, Singh must prove there was sufficient evidence of secondary meaning such that he could have established secondary meaning in his prior federal trademark suit.

          A federal question exists “only [in] those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question

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of federal law." 2 Redano seizes on the necessary-resolution language of Franchise Tax Board, observing that the “suit within a suit" requirement of Singh's Texas malpractice claim necessarily raises a federal question. But the Supreme Court has subsequently warned that Franchise Tax Board's necessary-resolution language should be read as part of a carefully nuanced standard rather than a broad and simplistic rule.

          The fact that a substantial federal question is necessary to the resolution of a state-law claim is not sufficient to permit federal jurisdiction: “Franchise Tax Board... did not purport to disturb the long-settled understanding that the mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction." Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 813, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986). Likewise, “the presence of a disputed federal issue ... [is] never necessarily dispositive." Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005). Instead, “[f]ar from creating some kind of automatic test, Franchise Tax Board thus candidly recognized the need for careful judgments about the exercise of federal judicial power in an area of uncertain jurisdiction."...

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