United States District Court, W.D. Louisiana, Lafayette Division
REPORT AND RECOMMENDATION
B. WHITEHURST UNITED STATES MAGISTRATE JUDGE.
the undersigned, by referral from the district judge is
Plaintiff, Turbine Powered Technology LLC's
(“TPT”), Motion To Remand [Rec. Doc. 18], an
Opposition Memorandum filed by Defendants David Crowe
(“Crowe”), Kenneth Braccio
(“Braccio”), Arizona Turbine Technology, LLC
(“AZTT, LLC”), Arizona Turbine Technology, Inc.
(“AZTT, Inc.”), Advanced Turbine Services, LLC
(“ATS”), Turbine Integrated Power Systems, LLC
(“TIPS”), and Daniel Foley (“Foley”)
[Rec. Doc. 45], and a Reply thereto filed by TPT. Based on
the foregoing, the undersigned recommends that the motion be
action was originally initiated by TPT on November 7, 2016,
in the 16thJudicial District Court for the Parish
of St. Mary, State of Louisiana, Docket No. 130379-F. The
Petition set forth multiple causes of action under Louisiana
law including breach of contract, breach of fiduciary duty,
tortious interference with a business relationship and
violations of the Louisiana Uniform Trade Secrets and Unfair
Trade Practices Acts. No claims are alleged under federal
statutes or law. The named defendants were Crowe, Braccio,
Kent Ellsworth (“Ellsworth”), AZTT, LLC, AZTT,
Inc.)all residents of Arizona, ATS and TIPS)residents of
Connecticut, and Daniel “Danny” Foley
(“Foley”) and George Jackson
(“Jackson))residents of Louisiana.
Application for Temporary Restraining Order
(“TRO”) and for Preliminary Injunction was filed
with the Original Petition on that date. R. 1-3;
18-4. The state court executed the TRO against all of
the defendants stating that it would be in effect until 9:00
a.m. on January 3, 2017, at which time a hearing would be
conducted on the Application for Preliminary Injunction.
R. 1-5; 18-5. Long Arm Service was obtained upon
Braccio, Ellsworth and AZTT, LLC on December 13, 2016. R.
18-6. Long Arm Service was obtained on AZTT, Inc., ATS
and TIPS on December 29, 2016. R. 18-7.
Preliminary Injunction hearing took place in the State court
on January 3, 2017, which resulted in finding Long Arm
Service was proper and granting the Preliminary Injunction
against Braccio, Ellsworth, AZTT, LLC, AZTT, Inc., ATS, and
TIPS. R. 1-6; 18-8. Also, at that time a Preliminary
Default was entered against those same defendants for not
appearing in State court and a hearing was scheduled to
confirm the Default Judgment at 9:00 a.m. on March 6,
2017. R. 18-10. Long Arm Service was obtained on
Crowe on January 13, 2017. R. 11.
represents that several attempts were made to serve Foley to
no avail. Since service had been requested on Foley, the
delays had not yet run under Louisiana Code of Civil
Procedure Art. 1201. Because, however, the deadline for
requesting service on Jackson was approaching and his
whereabouts were not determined, he was dismissed without
prejudice. R. 18-12. Defendants Crowe, Braccio,
AZTT, LLC, AZTT, Inc., ATS and TIPS all filed exceptions to
the Petition just prior to the scheduled hearing to confirm
the default. On April 24, 2017, Foley filed Declinatory,
Dilatory and Peremptory Exceptions against plaintiff's
Petition even though he claimed he had not been properly
filed an Amended Petition on May 23, 2017. At that time,
neither defendant Foley nor defendant Jackson had been
served. Both Foley and Jackson were named in the caption of
the Amended Petition, but only Foley was named in the list of
defendants under paragraph 2. The Amended Petition stated
specific allegations against both Foley and Jackson in the
body of the pleading and the Prayer asked for relief against
both defendants. R. 1-2, pp. 1, 11, 21, 38.
service of the Amended Petition was ultimately obtained on
Foley on June 1, 2017. R.18-14. Jackson was served
with the Original and Amended Petitions on June 11, 2017.
R. 18-15. Thus, all of the defendants were served
prior to removal on June 22, 2017. Only Ellsworth and Jackson
had not yet made a personal appearance prior to removal. A
default judgment was obtained against Ellsworth, R.
18-16, and Jackson is also now in default.
filed multiple motions while the case was pending in State
court which were to be heard on June 15, 2017: (1)
Declinatory Exception of Lack of Personal Jurisdiction and
(2) Dilatory Exception of Prematurity filed by Crowe,
Braccio, AZTT, LLC, AZTT, Inc. and ATS; (3) Declinatory
Exceptions of Insufficiency of Citation and Service of
Process, (4) Dilatory Exceptions of Vagueness or Ambiguity,
Improper Cumulation of Actions and Improper Joinder of
Actions and (5) Peremptory Exception of No Cause of Action
all filed by Foley; (6) Motion to Dissolve Preliminary
Injunction and for Damages and (7) Motion to Bifurcate and
Continue the Hearing on Damages filed on behalf of Crowe,
Braccio, AZTT, Inc., ATS and Foley. TPT filed a Rule to Show
Cause why defendants should not be held in Contempt and
Motion for Inventory of Assets related to alleged violations
of the preliminary injunction. R. 18-17.
State court judge held a hearing with oral argument,
including documentary and testimonial evidence on the
Exceptions of Lack of Personal Jurisdiction, Prematurity,
Insufficiency of Citation and Service, Exception of Ambiguity
or Vagueness, Exception of No Cause of Action, Motion to
Bifurcate and Motion to Dissolve Preliminary Injunction. The
State court judge denied the Exceptions of Lack of Personal
Jurisdiction and Prematurity and sustained the Dilatory
Exception of Vagueness or Ambiguity, but allowed additional
time for TPT to amend its Petition to cure the ambiguity and
state with further specificity its causes of action. The
judge took defendants' motion to dissolve the preliminary
injunction “under advisement, ” indicating a
ruling would issue within 30 days (July 15, 2017). Foley was
not dismissed from the case. Defendants removed this case
from the 16th Judicial District Court seven days
later on June 22, 2017, before the deadline for plaintiff to
amend the petition and before the State court's ruling on
the motion to dissolve the preliminary injunction.
CONTENTIONS OF THE PARTIES
TPT contends that this case should be remanded because this
Court does not have subject matter jurisdiction as parties
are not diverse in citizenship and no questions of federal
law pertain to the case. TPT also contends that the Notice of
Removal was not timely.
argue that this case arises under patent law and, therefore,
the Court has federal question jurisdiction. Alternatively,
they argue that diversity jurisdiction exists. Finally, they
argue that the notice of removal was timely filed. The Court
will initially address whether or not diversity jurisdiction
existed at the time this action was removed, and then address
the issue of federal question jurisdiction.
LAW AND ANALYSIS A. DIVERSITY JURISDICTION
Diversity Jurisdiction Standard
district courts are courts of limited jurisdiction,
possessing only the power authorized by the Constitution and
by statute.See, e.g., Griffin v. Lee, 621
F.3d 380, 388 (5th Cir. 2010); Howery v.
Allstate Ins., Co., 243 F.3d 912, 916 (5th
Cir. 2001). Accordingly, federal courts have subject matter
jurisdiction only over civil actions presenting a federal
question, 28 U.S.C. § 1331, and those in which the
amount in controversy exceeds $75, 000 exclusive of interest
and costs and the parties are citizens of different states,
28 U.S.C. § 1332. For that reason, a suit is presumed to
lie outside a federal court's jurisdiction until the
party invoking federal-court jurisdiction establishes
otherwise.Howery at 916. Because “the effect
of removal is to deprive the state court of an action
properly before it, removal raises significant federalism
concerns.”Carpenter v. Wichita Falls Indep. Sch.
Dist., 44 F.3d 362, 365 (5th Cir. 1995). The
removal statute is therefore to be strictly construed, and
any doubt about the propriety of removal must be resolved in
favor of remand and against federal-court jurisdiction.
Id. at 366; Acuna v. Brown & Root Inc.,
200 F.3d 335, 339 (5th Cir. 2000). The party
invoking subject matter jurisdiction in federal court has the
burden of establishing the court's jurisdiction by a
preponderance of the evidence. Howery at 919. ...