Mechanical Rubber & Supply v. American Saw & Mfg.

• Decision Date: 14 November 1990
• Docket Number: No. 89-1120.,89-1120.
• Citation: 810 F. Supp. 986
• Court: U.S. District Court — Central District of Illinois
• Parties: MECHANICAL RUBBER & SUPPLY COMPANY, Plaintiff, v. AMERICAN SAW AND MANUFACTURING COMPANY, and Hagerty Brothers Company, Defendants.

810 F. Supp. 986

MECHANICAL RUBBER & SUPPLY COMPANY, Plaintiff, v. AMERICAN SAW AND MANUFACTURING COMPANY, and Hagerty Brothers Company, Defendants.

No. 89-1120.

United States District Court, C.D. Illinois.

November 14, 1990.

COPYRIGHT MATERIAL OMITTED

Phillip B. Lenzini, Kavanagh Scully Sudow White & Frederick PC, Peoria, IL, for plaintiff.

Ronald L. Hamm, Hamm & Hanna, Peoria, IL, Michael T. Reid, George W. Keeley, Halfpenny Hahn Roche & Marchese, Chicago, IL, Franklin L. Renner, Littler Renner Howard & Wombach, Peoria, IL, for defendants.

ORDER

MIHM, Chief Judge.

Before the Court are Motions by the Defendant American Saw to dismiss the Amended Complaint (# 19 and # 36) and Motions by the Plaintiff Mechanical Rubber to Reconsider (# 44) and For Summary Judgment on American Saw's Counterclaim (# 26). The Court grants American Saw's Motions to Dismiss. The Court grants Mechanical Rubber's Motion to Reconsider in part and denies it in part. And, the Court denies Mechanical Rubber's Motion for Summary Judgment.

BACKGROUND

Count I of the Amended Complaint alleges antitrust violations against American Saw under federal and state law. See, 15 U.S.C. § 14 and Ill.Rev.Stat. ch. 38, ¶ 60-3(4). Count II of the Amended Complaint alleges that American Saw wrongfully terminated Mechanical Rubber as a franchisee under the Illinois Franchise Disclosure Act of 1987. See Ill.Rev.Stat., ch. 121½, ¶¶ 1701 et seq. Count III of the Amended Complaint alleges that American Saw breached a distributorship contract with Mechanical Rubber. Counts IV and V are no longer pending because Hagerty Brothers Company, which was once a Defendant, is no longer a party to this action. This Court found in an order entered September 26, 1990 that there is no independent basis for jurisdiction over Hagerty Brothers who was a pendent party. Count VI of the Amended Complaint alleges that American Saw engaged in a scheme and conspiracy to defraud it. Count VII of the Amended Complaint alleges that American Saw engaged in a conspiracy to injure Mechanical Rubber in its business.

American Saw has filed an answer to the Amended Complaint and several counterclaims against Mechanical Rubber. Count I of the counterclaim is brought under the Lanham Trademark Act. See, 15 U.S.C. § 1125(a). Counts II and III are brought under the Illinois Uniform Deceptive Trade Practices Act and the Consumer Fraud and Deceptive Business Practices Act respectively.

I. Mechanical Rubber's Motion to Reconsider

On September 26, 1990, this Court entered an order denying Mechanical Rubber's Motion to Remand and dismissed all the claims against the Defendant, Hagerty Brothers Company (hereinafter "Hagerty Brothers") for lack of subject matter jurisdiction. 747 F.Supp. 1292. Mechanical Rubber asserts that the Motion to Remand should have been granted because the removal to federal court was not carried out properly. Mechanical Rubber notes that removal is a purely statutory right which limits the state's judicial powers and consequently its requirements are to be strictly construed. Shamrock Oil and Gas Corporation v. Sheets, 313 U.S. 100, 108-109, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941).

The statutory provision for removal is given in 28 U.S.C. § 1446. Mechanical Rubber contends that these provisions have been interpreted to require that all Defendants properly joined and served in the state court action must file a petition for removal (now a notice of removal) or join in another defendant's petition for removal within 30 days of service of that defendant. Mechanical Rubber maintains that, if this requirement is not met, then the entire cause must be remanded to the state court from which it was removed. See, Cohen v. Hoard, 696 F.Supp. 564, 565-566 (D.Kan. 1988); Mason v. International Business Machines, Inc., 543 F.Supp. 444, 445-446 (M.D.N.C.1982); Cornwall v. Robinson, 654 F.2d 685, 686-687 (10th Cir.1981); Tri-Cities Newspapers, Inc. v. Tri-Cities Printing Pressmen and Assistants Local 349, 427 F.2d 325, 326-327 (5th Cir.1970).

In the present case, the two Defendants, American Saw and Hagerty Brothers, were properly joined and served in the state action. However, Mechanical Rubber asserts that only American Saw filed a Notice of Removal and that Hagerty Brothers did not file such a notice or petition or join in the Defendant American Saw's notice. Further, Mechanical Rubber maintains that the only pleading that Hagerty Brothers filed in federal court within 30 days of service was an entry of appearance, filed two days after American Saw's Notice of Removal. Thus, Mechanical Rubber contends that the removal was fatally defective and that Plaintiff's Petition to Remand should have been granted.

In response, American Saw asserts that, contrary to Mechanical Rubber's representations in its Motion, Hagerty Brothers did indeed join the Notice of Removal. The last sentence of ¶ 4 in the Notice of Removal states: "Hagerty Brothers joins in removal of this action." While the general rule, with certain exceptions, is that removal is proper only if all defendants named in the action join in the petition for removal, American Saw contends that it is not necessary for all Defendants to actually sign the Petition. As one court stated:

However, this court does not believe that it is necessary for all defendants actually to sign the petition. Requiring all defendants to sign would be a senseless formalism. As long as all defendants consent to removal within 30 days after service upon them of the complaint, (footnote omitted), the requirement that all defendants "join" in the petition is satisfied. See, Crompton v. Park Ward Motors, Inc., 477 F.Supp. 699, 701 (E.D.Pa. 1979) ("all defendants must join in or consent to removal" within 30 day period); Sicinski v. Reliance Funding Corp., 461 F.Supp. 649, 652 (S.D.N.Y. 1978) (removal valid despite failure of all defendants to sign petition where petition stated that all consented and non-signing defendants submitted affidavit of consent after 30 day period had expired); Crawford v. Fargo Mfg. Co., 341 F.Supp. 762, 763 (M.D.Fla.1972) (recognizing that all defendants must join in petition but not requiring all to sign); Stangard Dickerson Corp. v. United Electrical, Radio and Machine Workers of America, 33 F.Supp. 449, 451 (D.N.J. 1940) (removal valid although only one defendant signed, remaining defendants filed separate paper consenting to petition).

Colin K. v. Schmidt, 528 F.Supp. 355, 358 (D.R.I.1981) (there the court was advised orally that co-defendants had no objection to the removal petition, and it was held sufficient).

This Court also believes that it is sufficient that American Saw stated that Hagerty Brothers joined in the removal of the action. However, as Hagerty Brothers did not sign the Petition, this Court believes that American Saw should be required to obtain an affidavit from Hagerty Brothers stating that it joined in the Petition for Removal at that time. This requirement is consistent with the requirements given by the court in Sicinski, 461 F.Supp. at 652.

Mechanical Rubber next asserts that if this Court finds that removal was proper and that remand was properly denied, then page 16 of the Court's order of September 26, 1990 should be modified to remand to state court all claims against Hagerty Brothers, rather than to dismiss said claims. Hagerty Brothers has not responded to this contention, and American Saw takes no position on this issue.

This Court believes that Mechanical Rubber is correct in contending that the Court's order of September 26, 1990 should be modified to remand to state court all claims against Hagerty Brothers, rather than to dismiss the claims. Several courts, in similar situations, have held that the proper response, for those defendants as to whom there was no subject matter jurisdiction, was to remand the claims to the state court rather than to dismiss. See Maine Association of Interdependent Neighborhoods v. Commissioner, Maine Department of Human Services, 876 F.2d 1051, 1053-1054 (1st Cir.1989); Charles D. Bonanno Linen Service, Inc. v. McCarthy, 708 F.2d 1, 11 (1st Cir.1983), cert. denied, 464 U.S. 936, 104 S.Ct. 346, 78 L.Ed.2d 312; Williams v. City of Atlanta, 794 F.2d 624, 628-629 (11th Cir.1986); Birkinshaw v. Armstrong World Industries, Inc., 715 F.Supp. 126, 127 (E.D.Pa.1989). In addition, 28 U.S.C. § 1447(c) which governs the procedure after removal generally states:

If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. (Emphasis added).

Therefore, the claims against Hagerty should be remanded to state court rather than dismissed, and the order of September 26, 1990 is thereby amended.

II. American Saw's Motions to Dismiss

Defendant American Saw contends that Counts II, III, VI, and VII fail to state a claim upon which relief can be granted.

A. American Saw's Motion to Dismiss Count II

Count II alleges a cause of action under the Illinois Franchise Disclosure Act of 1987, Ill.Rev.Stat. ch. 121½, ¶¶ 1701 et seq. for the wrongful termination of a franchise.

American Saw first asserts that Count II must be dismissed because it fails to allege facts sufficient to establish that the Plaintiff is a franchisee within the meaning of the Franchise Act. Section 3 of the Act defines the criteria necessary to establish a franchise. It provides:

Franchise means a contract or agreement, either express or implied, whether oral or written, between two or more persons by which:

(a) a franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services, under a marketing plan or system prescribed or suggested in substantial part by a franchisor; and

(b) the operation of the franchisee's business pursuant to such plan or system is substantially associated with the franchisor's trademark, service mark, trade name, logo type, advertising, or other

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