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Turbine Powered Technology LLC v. Crowe

United States District Court, W.D. Louisiana, Lafayette Division

February 14, 2018

Turbine Powered Technology LLC
Crowe et al.



         Before 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 granted.


         This 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.

         An 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.

         A 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.

         ATA 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 served.

         TPT filed an Amended Petition on May 23, 2017.[1] 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.

         Proper 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.

         Defendants 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.

         The 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.


         Plaintiff 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.

         Defendants 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.


         1. Diversity Jurisdiction Standard

         Federal 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. ...

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