Commercial Sav. Bank v. Commercial Federal Bank
| Decision Date | 23 September 1996 |
| Docket Number | No. C 96-3077-MWB.,C 96-3077-MWB. |
| Parties | COMMERCIAL SAVINGS BANK, Plaintiff, v. COMMERCIAL FEDERAL BANK, and Hawkeye Federal Savings Bank, Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
Michael G. Voorhees and Jeffrey D. Harty of Zarley, McKee, Thomte, Voorhees & Sease, in Sioux City, Iowa, Plaintiff Commercial Savings Bank.
Bruce D. Vosburg of Fitzgerald, Schorr, Barmettler & Brennan, P.C., in Omaha, Nebraska, and by local counsel John D. Mayne of Mayne & Mayne, in Sioux City, Iowa, for Defendant Commercial Federal Bank.
TABLE OF CONTENTS
I. INTRODUCTION ......................................................... 676
A. Procedural Background ............................................. 676
B. Factual Background ................................................ 677
II. LEGAL ANALYSIS ....................................................... 678
A. Removal Jurisdiction .............................................. 678
1. The statutory framework ....................................... 678
2. Principles of removal jurisdiction ............................ 679
B. Propriety Of Commercial Federal's Removal ......................... 679
C. Whether Plaintiff's Complaint "Arises Under" Federal Law .......... 681
D. Attorneys' Fees And Costs ......................................... 684
E. Request For TRO ................................................... 684
III. CONCLUSION ........................................................... 684
Plaintiff's Motion to Remand is controlled by the determination of two issues: First, did Plaintiff fraudulently join one Defendant in this case to defeat removal jurisdiction, and second, whether Plaintiff's state court petition "arises under" federal law. If the court determines either issue against Plaintiff, then it must deny the motion to remand.
Plaintiff Commercial Savings Bank ("Commercial Savings") filed its petition in this lawsuit on August 26, 1996, against Defendants Commercial Federal Bank ("Commercial Federal") and Hawkeye Federal Savings Bank ("Hawkeye") in Iowa District Court for Carroll County. Defendants removed plaintiff's petition on September 6, 1996. Commercial Savings is an Iowa state bank. Hawkeye is an Iowa state bank. Commercial Federal is a federal savings bank with its principal place of business in Omaha, Nebraska.
Commercial Savings' four-count petition alleges claims for common-law trademark infringement, injury to its reputation/dilution pursuant to Iowa Code § 548.113, and a declaratory judgment that any use by Defendants, within an eight-county area of central Iowa, of the word "Commercial," either alone or in conjunction with other words or symbols, in connection with a bank or banking products constitutes trademark infringement and unfair competition with Commercial Savings.
Commercial Savings' claims center upon an alleged merger of Commercial Federal with Hawkeye, along with an attendant name change of Hawkeye to Commercial Federal. Commercial Savings asserts that Hawkeye's name change to Commercial Federal will infringe upon Commercial Savings' state common-law trademark "Commercial" and will cause it irreparable harm.
The matter immediately pending before the court is Commercial Savings' Motion to Remand, filed September 12, 1996. Commercial Savings has moved to remand this matter to state court, asserting that because Hawkeye is also a citizen of the State of Iowa, complete diversity does not exist between the parties. Commercial Savings further claims that Commercial Federal is not entitled to removal, because Commercial Savings' causes of action against Defendants do not raise a federal question. Commercial Federal has filed a timely resistance to Commercial Savings' motion, in which it asserts that Commercial Savings fraudulently joined Hawkeye in an attempt to defeat removal jurisdiction. Commercial Federal also contends that it is entitled to removal because Commercial Savings' causes of action do "arise under" federal law.
Commercial Savings has requested a temporary restraining order ("TRO"), which would be in effect until this court determines the motion to remand. On September 16, 1996, the court set both the TRO and the motion to remand for an expedited hearing, and that hearing was held on September 23, 1996, in Sioux City, Iowa. At the hearing, Plaintiff Commercial Savings was represented by counsel Michael G. Voorhees and Jeffrey D. Harty of Zarley, McKee, Thomte, Voorhees & Sease, in Sioux City, Iowa. Defendant Commercial Federal was represented by John D. Mayne of Mayne & Mayne, in Sioux City, Iowa, and Bruce D. Vosburg of Fitzgerald, Schorr, Barmettler & Brennan, P.C., in Omaha, Nebraska.
The reason for the court's urgency in determining Commercial Savings' Motion to Remand flows from the fact that Defendant Hawkeye's shareholder meeting is set to take place on September 26, 1996, to approve a merger between Hawkeye and Commercial Federal. Therefore, in the event the motion is granted, only the entering of a prompt decision on the motion to remand by this court will enable the parties to seek injunctive relief in state court. Therefore, the court is moving with speed, but not with haste, to determine the motion to remand.
The factual background for this case is drawn from the complaint, the affidavits, and the exhibits filed by the parties in support of their respective positions on the remand issue.1
Commercial Savings is an Iowa state bank with its main office in Carroll, Iowa, and branch offices in Lanesborro and Deham, Iowa.2 Since it commenced operation in 1917, Commercial Savings has operated under its chartered name, "Commercial Savings Bank." Commercial Savings currently offers and sells banking products and services to its customers throughout the Iowa counties of Audubon, Calhoun, Carroll, Crawford, Greene, Guthrie, Sac, and Shelby, under its trademark and service mark, "Commercial Savings Bank," and under its service marks, "Commercial Savings" and "Commercial" (collectively "Commercial" or "Commercial Marks"). Commercial Savings' use of the Commercial Marks was exclusive in the eight-county area until February of 1996.
In August of 1995, Defendant Commercial Federal reached an agreement with Conservative Savings Bank, whereby Conservative Savings Bank would merge into Commercial Federal. The application for merger was filed with the United States Office of Thrift Supervision ("OTS") in October of 1995, and approved in December of 1995. The merger was consummated on February 2, 1996. At that time, Conservative Savings Bank was merged into Commercial Federal, and Conservative Savings Bank ceased to exist. When the merger between Commercial Federal and Conservative Savings Bank occurred, Conservative Savings Bank's branch offices, including the one located in Harlan, Iowa, changed their names to Commercial Federal.3 At the time of the name change, Commercial Federal advertised the name change of the Harlan branch in the Harlan Tribune. The Harlan branch of Commercial Federal offers and sells banking products and services to its customers in Audubon, Carroll, Crawford, and Shelby counties in Iowa. Commercial Federal subsequently advertised in Audubon, Carroll, Crawford, and Shelby counties in Iowa.
Since 1949, Commercial Savings has spent over $733,000 advertising under the Commercial Marks in the eight-county area. Commercial Savings has spent over $26,000 this year on advertising under the Commercial Marks. Currently, Commercial Savings has over 7,500 accounts for which it provides services.
Defendant Hawkeye is a federal savings bank with its main office located in Boone, Iowa. Hawkeye also has branch offices in the cities of Carroll, Manning, Lake City, Madrid, and Ogden.4 Hawkeye is currently in the process of merging with Defendant Commercial Federal. At the time Hawkeye merges with Commercial Federal, Hawkeye will cease to exist, and all of Hawkeye's offices will change their names to Commercial Federal. The shareholders meeting of Hawkeye and its parent-holding company will take place on September 26, 1996, for the purpose of approving the merger with Commercial Federal. Having introduced the factual background of the case, the court will commence its analysis of the motion to remand with a review of removal jurisdiction.5
The grounds and procedures for removal of a state court proceeding to federal court and for remand to state court are stated in three statutes, 28 U.S.C. §§ 1441, 1446, and 1447. See, e.g., Liberty Mut. Ins. Co. v. Ward Trucking Corp., 48 F.3d 742, 745 (3d Cir.1995) (). The statute identifying removable actions, 28 U.S.C. § 1441, states in pertinent part:
To continue reading
Request your trial
-
Wright v. Brooke Group Ltd.
...the background necessary to adequately explain the issues at hand to the uninitiated reader); Commercial Savings Bank v. Commercial Federal Bank, 939 F.Supp. 674, 677 (N.D.Iowa 1996) (taking judicial notice of the fact that the cities of Carroll, Dedham, and Lanesborro are all located in Ca......
-
Foslip Pharmaceuticals, Inc. v. Metabolife Intern.
...Co. v. Kroger, 437 U.S. 365, 373-74, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978)). As this court explained in Commercial Sav. Bank v. Commercial Fed. Bank, 939 F.Supp. 674 (N.D.Iowa 1996), a case on which both sides to the Present Action have relied, "Because of the complete diversity requirement,......
-
Wells' Dairy v. American Indus. Refrigeration
...Co. v. Kroger, 437 U.S. 365, 373-74, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978)). As this court explained in Commercial Sav. Bank v. Commercial Fed. Bank, 939 F.Supp. 674 (N.D.Iowa 1996), ... "Because of the complete diversity requirement, a plaintiff may prevent removal simply by joining to the ......
-
Bohnenkamp v. Hog Slat, Inc.
...See Murphy v. Aurora Loan Servs., LLC , 699 F.3d 1027, 1031 (8th Cir. 2012), as corrected (Nov. 28, 2012); Com. Sav. Bank v. Com. Fed. Bank , 939 F. Supp. 674, 680 (N.D. Iowa 1996) ; see also Schur v. L.A. Weight Loss Centers, Inc. , 577 F.3d 752, 763 (7th Cir. 2009) ; In re Briscoe , 448 F......