Push Pedal Pull, Inc. v. Kent Casperson, Individually, & 2ND Wind Exercise Equip., Inc.

• Decision Date: 19 September 2013
• Docket Number: No. CIV 13–4057–RAL.,CIV 13–4057–RAL.
• Citation: 971 F.Supp.2d 918
• Parties: PUSH PEDAL PULL, INC., formerly knows as The R.D. Rogers Company, Plaintiff, v. Kent CASPERSON, Individually, and 2nd Wind Exercise Equipment, Inc., Defendants.
• Court: U.S. District Court — District of South Dakota

971 F.Supp.2d 918

PUSH PEDAL PULL, INC., formerly knows as The R.D. Rogers Company, Plaintiff,

v.Kent CASPERSON, Individually, and 2nd Wind Exercise Equipment, Inc., Defendants.

No. CIV 13–4057–RAL.

United States District Court,

D. South Dakota,

Southern Division.

Sept. 19, 2013.

Steven Daniel Sandven, Steven D. Sandven Law Offices, Sioux Falls, SD, Bruce C. Recher, Henson & Efron, P.A., Minneapolis, MN, for Plaintiff.

John Patrick Mullen, Boyce Greenfield Pashby & Welk, LLP, Stephen C. Landon, Alex M. Hagen, Cadwell, Sanford, Deibert & Garry, LLP, Sioux Falls, SD, for Defendants.

OPINION AND ORDER GRANTING MOTION TO REMAND

ROBERTO A. LANGE, District Judge.

I. INTRODUCTION

Plaintiff Push Pedal Pull, Inc. (“Push Pedal Pull”) sued Defendants Kent Casperson (“Casperson”) and 2nd Wind Exercise Equipment, Inc. (“2nd Wind”) (collectively, “Defendants”) through a Complaint dated April 25, 2013, Doc. 1–1, and filed in Circuit Court of Minnehaha County, South Dakota. 2nd Wind filed its Notice of Removal, Doc. 1, with this Court on May 24, 2013. Push Pedal Pull filed a Motion to Remand to State Court, Doc. 6, on June 12, 2013, which Defendants opposed. Docs. 9–10. For the reasons stated below, Plaintiff's Motion to Remand is granted.

II. FACTS

Push Pedal Pull is a South Dakota corporation that sells and services new and used exercise equipment in its retail stores throughout the upper Midwest. Doc. 1–1 at ¶¶ 1, 2. 2nd Wind is a Minnesota Corporationthat sells, trades, services, and refurbishes new and used exercise equipment at the wholesale level and through retail stores in the upper Midwest. Doc. 9 at 1. Casperson is a resident of Hennepin County, Minnesota. Doc. 5 at ¶ 6; Doc. 9 at 1.

Casperson was Director of Service for Push Pedal Pull and in that capacity managed Push Pedal Pull's overall service operations. Doc. 5 at ¶¶ 3, 9; Doc. 1–1 at ¶¶ 10–11. On January 15, 2001, Casperson signed an Agreement Concerning Trade Secrets and Non–Competition (“the Agreement”) with Push Pedal Pull. Doc. 1–1 at 21; Doc. 5 at ¶ 12. Section 2 of the Agreement restricted Casperson for a period of two years from his date of termination of employment with Push Pedal Pull from working for a competing business within 100 miles of any Push Pedal Pull retail store. Doc. 1–1 at 22. The Agreement also had provisions restricting Casperson's use of confidential trade secrets. Doc. 1–1 at 21. Section 4 of the Agreement contained a forum selection clause that provided “[t]he parties agree that this contract is governed by the laws of the State of South Dakota ... and that the state circuit court situated in Minnehaha County, South Dakota, shall be the exclusive jurisdiction of any disputes relating to this Agreement.” Doc. 1–1 at 22.

In March of 2013, Casperson resigned from Push Pedal Pull and began working for 2nd Wind. Doc. 4 at ¶ 10; Doc. 5 at ¶ 23. 2nd Wind knew of the Agreement and assigned Casperson to its Wisconsin office in an attempt to comply with the Agreement's restrictions. Doc. 4 at ¶ 11. Push Pedal Pull alleges that Casperson is working in breach of the Agreement. Doc. 1–1 ¶ 40. Push Pedal Pull also alleges that before his resignation, Casperson accessed and copied various documents containing confidential information and that 2nd Wind encouraged him to do so. Doc. 1–1 at ¶¶ 24–35. Defendants deny these allegations. Doc. 4 at ¶ 9; Doc. 5 at ¶ 1.

In total, Push Pedal Pull alleges eight counts against either Casperson, 2nd Wind, or both: Count One alleges misappropriation of trade secrets in violation of Minnesota and South Dakota state statutes by Casperson and 2nd Wind and seeks injunctive relief and damages in excess of $50,000.00; Count Two alleges breach of fiduciary duty against Casperson and seeks injunctive relief and damages in excess of $50,000.00; Count Three alleges breach of contract against Casperson and seeks injunctive relief and damages in excess of $50,000.00; Count Four alleges unjust enrichment against both Casperson and 2nd Wind and seeks in excess of $50,000.00; Count Five alleges violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq., against Casperson and seeks in excess of $5,000.00; Count Six alleges tortious interference with contract against 2nd Wind and seeks in excess of $50,000.00; Count Seven alleges that 2nd Wind aided and abetted Casperson in breaching his fiduciary duty to Push Pedal Pull and seeks in excess of $50,000.00; Count Eight alleges unfair competition and seeks in excess of $50,000.00. See Doc. 1–1. In the Complaint's prayer for relief, Push Pedal Pull's monetary requests are an “award ... in excess of Fifty Thousand Dollars ($50,000.00) against both Defendants” plus punitive damages and costs. Doc. 1–1 at 20.

Push Pedal Pull's Summons and Complaint venued in Minnehaha County Circuit Court was served on Casperson on April 26, 2013. Doc. 10 at 1; Doc. 7 at 2. 2nd Wind received service of the Summons and Complaint a few days after Casperson on April 29, 2013. Doc. 9 at 2; Doc. 7 at 2. On May 24, 2013, 2nd Wind timely filed its Notice of Removal, Doc. 1, with this Court within thirty days of when 2nd Wind had been served with the Summons and Complaint. The Notice of Removal claimed that this Court has jurisdiction based on diversity jurisdiction and that “[r]emoval is proper under 28 U.S.C. § [ ] 1441 as this is a civil action between citizens of different states and the amount in controversy exceeds $50,000.00,¹ exclusive of interests and costs.” Doc. 1 at ¶ 8. Casperson did not join 2nd Wind's Notice of Removal, 2nd Wind did not attach any additional documents demonstrating Casperson's consent to removal at the time the Notice of Removal was filed, and 2nd Wind's Notice of Removal was silent on Casperson's consent. Doc. 1.

On May 30, 2013, 2nd Wind filed its Answer, Doc. 4. The next day on May 31, 2013, Casperson filed his “Separate Answer, Affirmative Defenses and Jury Demand,” Doc. 5. Casperson's Answer was silent on removal, but contained a jury demand. Doc. 5. In his Answer, Casperson addressed the Complaint's allegation that jurisdiction and venue are proper in South Dakota state court pursuant to the Agreement by stating that Push Pedal Pull's jurisdictional allegations are “legal conclusions for which no response is required, but Casperson admits he is a party to the agreement dated January 15, 2001.” Doc. 5 at ¶ 8.

On June 12, 2013, Push Pedal Pull filed its Motion to Remand to State Court, Doc. 6. On July 2, 2013, Casperson filed a Notice of Consent to Removal, Doc. 8, which stated:

Defendant Kent Casperson, who was the earlier-served defendant of the two defendants in this case, hereby provides his formal written consent to Defendant 2nd Wind Exercise Equipment, Inc.'s removal of this action from South Dakota state court to this Court. Defendant Kent Casperson provides this consent pursuant to 28 U.S.C. § 1446(b)(2)(c) and it is intended to supplement his earlier consent to the removal evidenced by the filing with this Court on May 31, 2013, of his Separate Answer and Jury Demand. Neither Plaintiff nor Defendant 2nd Wind Exercise Equipment, Inc. had invoked the right to trial by jury in this Court before Defendant Kent Casperson did so on May 31, 2013.

Doc. 8. Defendants opposed Plaintiff's Motion to Remand, Docs. 9, 10. ²

III. DISCUSSION

The party seeking removal and opposing a motion to remand bears the burden of establishing federal jurisdiction. In re Bus. Men's Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir.1993) (per curiam). Removal statutes are strictly construed and doubts are resolved in favor of remand. Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 968 (8th Cir.2007).

A. The Rule of Unanimity

Defendants argue that “there is no deadline for Casperson to consent within 30 days from the time the last Defendant [2nd Wind] was served.” Doc. 10 at 4 (internal quotation marks and citations omitted); see also Doc. 9 at 4. Defendants also argue that Casperson's Answer evinces his consent and satisfies the unanimity requirement as does his later-filed Notice of Consent. Doc. 10 at 4; Doc. 9 at 4.

Removal is a statutory right outlined in 28 U.S.C. § 1441 and governed by § 1446. Christiansen v. W. Branch Cmty. Sch. Dist., 674 F.3d 927, 932 (8th Cir.2012). “A defendant or defendants desiring to remove any civil action from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.” 28 U.S.C. § 1446(a). The notice of removal “shall be filed within 30 days” from the time the defendant is served with the complaint. 28 U.S.C. § 1446(b)(1). Section 1446(b)(2)(C) provides that “[i]f defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal.” ³

“[O]rdinarily all defendants must join in a notice of removal or the case will be remanded” pursuant to the rule of unanimity.⁴Marano Enter. of Kansas v. Z–Teca Rest., L.P., 254 F.3d 753, 755 n. 2 (8th Cir.2001); see also Pritchett v. Cottrell, Inc., 512 F.3d 1057, 1062 (8th Cir.2008) (“[T]he failure of one defendant to consent renders the removal defective ....”). The unanimity requirement “serves important interests—it prevents duplicitive litigation and bars one defendant from imposing his forum of choice on co-defendants.” Christiansen, 674 F.3d at 933. While the unanimity requirement should not be applied in “a ‘hypertechnical and unrealistic manner,’ ” its application ought not be so elastic that it is “strip[ped] ... of its utility.” Id. (quoting Bradley v. Maryland Cas. Co.,...