Chavez v. Kincaid

• Citation: 15 F.Supp.2d 1118
• Decision Date: 14 May 1998
• Docket Number: No. Civ. 97-1302 SC/DJS.,Civ. 97-1302 SC/DJS.
• Parties: James T. CHAVEZ, Plaintiff, v. Patricia KINCAID and Santa Fe Kiva Fireplace Manufacturing, Inc., a New Mexico corporation, f/k/a Santa Fe Kiva Fireplace Co., Defendants.
• Court: U.S. District Court — District of New Mexico

15 F.Supp.2d 1118

James T. CHAVEZ, Plaintiff, v. Patricia KINCAID and Santa Fe Kiva Fireplace Manufacturing, Inc., a New Mexico corporation, f/k/a Santa Fe Kiva Fireplace Co., Defendants.

No. Civ. 97-1302 SC/DJS.

United States District Court, D. New Mexico.

May 14, 1998.

Alberto A. León, Alberto A. León, P.C., Albuquerque, NM, Howard R. Thomas, Thomas, Bauman & Dow, P.C., Albuquerque, NM, for Plaintiff.

Kenneth C. Downes, Kenneth C. Downes & Associates, Albuquerque, NM, Ray R. Regan, Law Office of Ray R. Regan, Corrales, NM, for Defendants.

MEMORANDUM OPINION

CAMPOS, Senior District Judge.

THIS MATTER comes before the Court on Plaintiff's Motion to Remand and for Attorney's Fees and Costs, filed November 28, 1997 [Doc. No. 5]. The Court, having read the motions, the memoranda, and the state court records referenced in the memoranda, and being apprised of the applicable law, finds that the Plaintiff's motion is well taken. Upon examination of the record in this case, the Court concludes that the action was improvidently removed to this Court and should be remanded to the state court pursuant to 28 U.S.C. § 1447(c). The Court enters its rulings in accordance with the discussion set forth below.

I. BACKGROUND

Plaintiff filed his Complaint on May 31, 1996, in the Second Judicial District Court of the State of New Mexico. The lawsuit arises out of a business relationship between Plaintiff and Defendants, involving the design, development, and manufacture of at least one fireplace and parts thereof. Plaintiff seeks damages for breach of contract, collection of debt and money due, promissory estoppel, unjust enrichment, fraud/misrepresentation, conversion, and prima facie tort. On October 3, 1997, Defendants filed a Notice of Removal, alleging that this Court has exclusive original jurisdiction pursuant to 28 U.S.C. § 1441(a) (removal) and 28 U.S.C. § 1338(a) (patent law).

II. REMOVAL AND REMAND

A. Legal Standard

The removal statute provides:

[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a).

Federal courts are of limited jurisdiction. See Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). There is a presumption that a case lies outside this limited jurisdiction. See id.; see also Rodriguez v. Union Oil Co. of California, 121 F.Supp. 824, 828 (S.D.Cal.1954). The fight to remove a case that was originally in state court to federal court is purely statutory, not constitutional. See McCurtain County Production Corp. v. Cowett, 482 F.Supp. 809, 812 (E.D.Okla.1978); Abernathy v. Consolidated Cab Co., 169 F.Supp. 831, 833 (D.Kan.1959). Removal statutes are to be construed strictly. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); McCurtain, 482 F.Supp. at 812. Any doubt as to the propriety of removal is to be resolved in favor of remand. See Fajen v. Foundation Reserve Insurance Co., 683 F.2d 331, 333 (10th Cir. 1982); Radio Shack Franchise Department v. Williams, 804 F.Supp. 151, 153 (D.Kan. 1992); see also Lorraine Motors, Inc. v. Aetna Casualty and Surety Co., 166 F.Supp. 319, 323 (E.D.N.Y.1958) (Because "want of federal jurisdiction would make futile the litigation of any of the issues in this court, every doubt should be resolved in favor of remand." (internal quotes omitted) (quoting Rodriguez, 121 F.Supp. at 828)). Defendant, as the party asserting jurisdiction, has the burden of proving all jurisdictional facts and of establishing a right to removal. See Her Majesty the Queen in Right of Province of Ontario v. City of Detroit, 874 F.2d 332, 339 (6th Cir.1989) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97-98, 42 S.Ct. 35, 66 L.Ed. 144 (1921)); P.P. Farmers' Elevator Co. v. Farmers Elevator Mutual Insurance Co., 395 F.2d 546, 548 (7th Cir.1968); see also Kokkonen, 511 U.S. at 377, 114 S.Ct. 1673; Henderson v. Holmes 920 F.Supp. 1184, 1186 (D.Kan.1996).

B. Discussion

Plaintiff contends that this lawsuit should be remanded to state court for three alternative reasons: (1) untimeliness; (2) waiver; and (3) lack of subject matter jurisdiction. The Court agrees that Defendants' removal was untimely and that, even if removal was timely, Defendants, by their acts in state court, waived there removal right. The Court does not reach the jurisdiction question, but leaves that for the state court to decide.¹

1. Timeliness

Timeliness of removal is a matter of statute and of perspective. Under 28 U.S.C. § 1446(b):

The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of the amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable....

28 U.S.C. § 1446(b). The thirty-day time limitation is mandatory and strictly construed. See McCain v. Cahoj, 794 F.Supp. 1061, 1062 (D.Kan.1992). The question of whether, and when, the thirty-day period has run is easily and "objectively" computated once "day one" in known. However, the question of when the thirty-day period begins, i.e., what date is "day one," can be more difficult to answer. To determine at what point in time a defendant should have been able to ascertain the asserted removability of the case, a court must look at the facts of the particular case. See Zatarain v. WDSU-TV, Inc., No. 93-526, 1993 WL 98681 at *2 (E.D.La. March 26, 1993) (unpublished minute entry) ("The facts disclosed must be sufficient to put [the] defendant on notice that the case falls within federal jurisdiction and the removal period runs from the time [the] defendant first acquires such notice.").

Defendants contend that Plaintiff's Complaint, filed May 31, 1996, gave no indication that this lawsuit was removable, and that the removable nature of the lawsuit was not revealed until September 8, 1997, in ¶ 15 of Plaintiff's response [hereinafter Plaintiff's Protective Order Response] to Defendant's state court Motion for Protective Order. Defendants argue that because they filed their Notice of Removal within thirty days of Plaintiff's Protective Order Response such removal was timely under § 1446(b).

In ¶ 15 of Plaintiff's Protective Order Response, Plaintiff stated: "Plaintiff has asserted and continues to assert claims over Defendants' intellectual property rights which arose after the inception of the parties' relationship including, but not limited to, patents, improvements, derivative products, continuations of prior patent registrations, reissued patents or trade secrets." Pl. Resp. Mot. Defs. Mot. Protective Order at ¶ 15.² Defendants allege that a claim for relief for ownership of interests in United States letters patent issued to Defendant Kincaid, or for an interest in any patent issued to Defendant Kincaid or in any as yet unfiled patent application of Defendant Kincaid, is set forth in ¶ 15 of Plaintiff's Protective Order Response. It was not until receipt of ¶ 15, Defendants contend, that they were on notice Plaintiff has an interest in Defendants' patents, and, thus, that this case was removable under 28 U.S.C. § 1338(a).³ Plaintiff disagrees and argues that Defendants were on notice long before September 8, 1997 that his intellectual property claim concerned Defendant Kincaid's patent(s).⁴ Plaintiff points to both pleadings and attorney correspondence to support his prior notice contention.

The basis for Defendants' removal is federal question jurisdiction — that Plaintiff is alleging ownership or co-inventorship rights which arise under the patent laws of the United States. Whether Plaintiff's lawsuit does indeed arise under federal patent law is a question of subject matter jurisdiction into which the Court will not delve. Rather, whether the Plaintiff's Protective Order Response was the first indication that Plaintiff was alleging ownership or co-inventorship interests or claims which concern Defendants' patents or other types of "intellectual property" is the question which this Court must answer. See Golden Apple Management Co., Inc. v. GEAC Computers, Inc., 990 F.Supp. 1364, 1366 (M.D.Ala.1998) ("The issue in this action [is] whether Geac can be charged with knowledge of removability of the action prior to receipt of plaintiff's response to the request for admission.")

The Court realizes hindsight is twenty-twenty. The Court also does not want to encourage the filing of unripe or premature removals, or require defendants to "`guess' as to an action['s] removability." Richstone v. Chubb Colonial Life Insurance, 988 F.Supp. 401, 403 (S.D.N.Y.1997) (internal quotations omitted) (quoting Rowe v. Marder, 750 F.Supp. 718, 721 (W.D.Pa.1990) (citations omitted in Richstone), aff'd, 935 F.2d 1282 (3d Cir.1991)). By September 8, 1997, however, notice in this case was so ripe that its fragance should have been redolent.

One does not need to be a patent lawyer to see that from the beginning Plaintiff's lawsuit involved co-inventorship claims or interests over the product resulting from Plaintiff and Defendants' business relationship. In fact, it is the Defendants who kept defensively asserting Defendant Kincaid's...