Mannsfeld v. Evonik Degussa Corp.

• Decision Date: 05 January 2011
• Docket Number: CIVIL ACTION 10-0553-WS-M
• Parties: SVEN PETER MANNSFELD, Plaintiff, v. EVONIK DEGUSSA CORPORATION, et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

SVEN PETER MANNSFELD, Plaintiff,

v.EVONIK DEGUSSA CORPORATION, et al., Defendants.

CIVIL ACTION 10-0553-WS-M

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

Dated: January 5, 2011

ORDER

This removed action comes before the Court on plaintiff's Motion to Remand (doc. 19). The parties having extensively briefed the jurisdictional questions presented therein, the Motion is now ripe for disposition.

I. Relevant Procedural History.

Plaintiff, Sven Peter Mannsfeld, filed a lawsuit in the Circuit Court of Mobile County, Alabama, against his former employer, which may be generically referred to as "Degussa, " concerning rights to a pair of job-related inventions that Mannsfeld claims to have developed in the 1970s and 1980s.¹ Mannsfeld's pleadings name three Degussa entities as defendants, including Evonik Degussa Corporation ("EDC"), an Alabama corporation with its principal place of business in Alabama; Evonik Industries AG ("Evonik Industries"), a German corporation whose principal place of business is in Germany; and Evonik Degussa GmbH ("EDG"), a German company with its principal place of business in Germany. (Amended Complaint, ¶¶ 2-4; Notice of Removal, ¶¶ 29-31.) Mannsfeld, who has resided in Mobile County continuously for more than 35 years, is an Alabama citizen for diversity purposes. (Amended Complaint, ¶ 1.)

The Amended Complaint alleges that "Degussa" (apparently one or more of defendants) and Mannsfeld entered into an employment contract in 1964 pursuant to which "the parties agreed that any inventions made by [plaintiff] during his work relationship, and which arose in the course of Plaintiff's work with Degussa, would be governed by and subject to... 'ArbEG, ' which is a German law governing the ownership of job-related inventions developed by employees." (Amended Complaint, ¶ 5.) Of particular significance to the parties' jurisdictional dispute, Mannsfeld's pleading continues that "'Inventions' within the meaning of ArbEG are those which are eligible for patent or utility model protection, including patentable inventions under German law and/or European law, and U.S. law." (Id., ¶ 7.) The Amended Complaint also purports to set forth the specific ArbEG principles by which an employer's and employee's ownership interests in a job-related invention are defined. (Id., ¶¶ 6, 8-10.)

As to each of the two inventions at issue, the Amended Complaint alleges that Mannsfeld owned and continues to own that invention pursuant to the 1964 agreement and the ArbEG principles that the parties agreed would fix their ownership rights. On that basis, Mannsfeld seeks a declaratory judgment as to each invention "that Plaintiff is the inventor of the aforesaid [invention]; that Plaintiff is the owner of said invention, and has been since it was invented; and that the Defendants are not the owners of said invention." (Amended Complaint, ¶¶ 25-26, 5657.) Building on the fundamental premise that Mannsfeld owns each invention pursuant to ArbEG, the Amended Complaint also asserts nominally state-law causes of action for breach of contract, conversion, unjust enrichment, and breach of fiduciary duty, essentially alleging that defendants have misappropriated, unjustly profited from, and wrongfully claimed ownership of Mannsfeld's inventions. (Id., ¶¶ 27-41, 58-72.) The critical point is that, as postured in the pleadings, all of these claims flow from Mannsfeld's ownership rights in the inventions, as determined by ArbEG principles that he says the parties agreed would govern.

On October 8, 2010, defendants filed a Notice of Removal (doc. 1) removing this entire action to this District Court.² As grounds for removal, defendants invoke both federal questionjurisdiction pursuant to 28 U.S.C. § 1331 and diversity jurisdiction pursuant to 28 U.S.C. § 1332. With respect to the former, defendants contend that federal question jurisdiction lies because federal patent law creates Mannsfeld's causes of action, and/or his right to relief in those causes of action necessarily depends upon resolution of a substantial question of federal patent law. With respect to the latter jurisdictional foothold, defendants assert that diversity jurisdiction is present because the non-diverse defendant, EDC, was fraudulently joined inasmuch as (i) it is not a party to the 1964 agreement, and (ii) the relevant limitations periods have expired. Plaintiff countered by filing a Motion to Remand in which he insists that federal subject-matter jurisdiction is lacking and that this action is due to be returned to Mobile County Circuit Court for appropriate action.

II. Legal Standard for Removal.

It is well settled that "[a] removing defendant bears the burden of proving proper federal jurisdiction." Leonard v. Enterprise Rent A Car, 279 F.3d 967, 972 (11^th Cir. 2002); see also King v. Cessna Aircraft Co., 505 F.3d 1160, 1171 (11^th Cir. 2007) ("Where, as here, the plaintiff asserts diversity jurisdiction, he has the burden to prove that there is diversity."); Friedman v. New York Life Ins. Co., 410 F.3d 1350, 1353 (11^th Cir. 2005) ("[i]n removal cases, the burden is on the party who sought removal to demonstrate that federal jurisdiction exists"). Because removal infringes upon state sovereignty and implicates central concepts of federalism, removal statutes are construed narrowly, with all doubts resolved in favor of remand. See Allen v. Christenberry, 327 F.3d 1290, 1293 (11^th Cir. 2003) ("removal statutes should be construed narrowly, with doubts resolved against removal"); University of South Alabama v. American Tobacco Co., 168 F.3d 405, 411 (11^th Cir. 1999) (explaining that strict construction of removal statutes derives from "significant federalism concerns" raised by removal jurisdiction).³

"In reviewing matters concerning removal and remand, it is axiomatic that ambiguities are generally construed against removal." Jones v. LMR Int'l, Inc., 457 F.3d 1174, 1177 (11^th Cir. 2006) (citation and internal quotation marks omitted). Moreover, it is black-letter law that "[t]he existence of federal jurisdiction is tested at the time of removal." Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1294-95 (11^th Cir. 2008). As such, for purposes of the Motion to Remand, the Court focuses on jurisdictional facts as they appeared when defendants filed the Notice of Removal. See Burns v. Windsor Ins. Co., 31 F.3d 1092, 1097 n.13 (11^th Cir. 1994) ("Jurisdictional facts are assessed on the basis of plaintiff's complaint as of the time of removal.").

III. Federal Question Jurisdiction.

A. Governing Legal Principles.

"[A] defendant may remove on the basis of federal question jurisdiction only where that question appears on the face of the plaintiff's complaint." Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 765 n.20 (11^th Cir. 2010); see also Adventure Outdoors, 552 F.3d at 1295 ("In determining whether jurisdiction exists under 28 U.S.C. § 1331, a court must look to the well-pleaded complaint alone."); Ervast v. Flexible Products Co., 346 F.3d 1007, 1012 (11^th Cir. 2003) (as a general proposition, "unless the face of a plaintiffs complaint states a federal question, a defendant may not remove a case to federal court on this basis"). Nonetheless, even in the absence of a federally created cause of action, "in limited circumstances, federal-question jurisdiction may also be available if a substantial, disputed, question of federal law is a necessary element of a state cause of action." Jaraith v. Dyer, 154 F.3d 1280, 1282 (11^th Cir. 1998); see also Adventure Outdoors, 552 F.3d at 1296 (state-law claims give rise to federal question jurisdiction where they "necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities").

B. Application of 28 U.S.C. § 1338.

1. The Christianson Test.

In removing this action, defendants assert that federal question jurisdiction is presented, notwithstanding the nominally state-law nature of Mannsfeld's claims, pursuant to federal patent law jurisdiction. See 28 U.S.C. § 1338 ("The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents.... Such jurisdiction shallbe exclusive....").⁴ The Supreme Court has held that § 1338 jurisdiction extends to any case "in which a well-pleaded complaint establishes either [1] that federal patent law creates the cause of action or [2] that the plaintiffs right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims." Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 809, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). "In analyzing whether patent law is a necessary element of [plaintiff]'s claims, we are limited to an analysis of [the] well-pleaded complaint, " with any such "arising under" jurisdiction determined "from what necessarily appears in the plaintiff's statement of his own claim." ExcelStor Technology, Inc. v. Papst Licensing GMBH & Co. KG, 541 F.3d 1373, 1376 (Fed. Cir. 2008) (citations omitted). "[A]s long as there is at least one alternative theory supporting the claim that does not rely on patent law, there is no 'arising under' jurisdiction under 28 U.S.C. § 1338." In re DDAVP Direct Purchaser Antitrust Litigation, 585 F.3d 677, 685 (2^nd Cir. 2009) (citation omitted).⁵

2. Whether Federal Patent Law Creates Plaintiff's Causes of Action. In his Motion to Remand, plaintiff asserts that federal patent law does not create his causes of action because the Amended Complaint consists exclusively of state-law claims, with "not one single federal law or patent claim in there." (Doc. 20, at 6.) Defendants dispute this characterization, reasoning that Mannsfeld's declaratory judgment causes of action satisfy the first prong of th...