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Causey's Pharmacy Inc. v. Praeses LLC

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

April 2, 2018

PRAESES, LLC, Defendant

          DRELL JUDGE


          Joseph H.L. Perez-Montes United States Magistrate Judge

         Before the Court is a Motion to Remand (Doc. 10) filed by Plaintiffs Causey's Pharmacy, Inc. (“Causey's”), Steven T. Boyd, and LeAnn Causey Boyd (“the Boyds”) (collectively “Plaintiffs”). Plaintiffs allege no federal question jurisdiction exists and, alternatively, that removal is untimely. (Doc. 10). Defendant Praeses, LLC (“Praeses”) opposes the motion. (Doc. 16). Plaintiffs' Motion to Remand (Doc. 10) should be granted for lack of jurisdiction. Because Praeses demonstrated an objectively reasonable basis for removal, Plaintiffs' Motion for Attorney's Fees and Costs (Doc. 10) should be denied.

         I. Background

         Plaintiffs filed suit in the Tenth Judicial District Court, Natchitoches Parish, Louisiana, against Praeses. (Doc. 1-2). Plaintiffs allege Causey's entered into a Technical Service Agreement (“TSA”) with Praeses on September 13, 2010. (Doc. 1-2). Plaintiffs claim they entered into a First Amendment to the TSA (“First Amendment”) on June 10, 2011. Plaintiffs aver that the purpose of the TSA and First Amendment was to develop, promote, market, and otherwise commercially operate a mobile application (“PocketRx”) which allows users to submit prescription refill requests. (Doc. 1-2). Plaintiffs claim Causey's was paid monetary consideration arising from the TSA and First Amendment. (Doc. 1-2). Causey's states they assigned any right, title, and interest in PocketRx to the Boyds in June 2015. (Doc. 1-2).

         Plaintiffs claim Praeses was granted a Registered Trademark for PocketRx by the United States Patent and Trademark Office (“USPTO”) on October 8, 2013. (Doc. 1-2). Plaintiffs allege Praeses sold PocketRx to a third party, Digital Pharmacy, Inc. (“Digital Pharmacy”), [1] without prior written amendment to the TSA or First Amendment, or any written acknowledgment, waiver, or consent. (Doc. 1-2).

         Plaintiffs aver Praeses tendered an Acknowledgment and Satisfaction of Obligation and Release from Preases (the “Release Agreement”). Plaintiffs state the Release Agreement was tendered for consideration of 9.5% of the purchase price paid by Digital Pharmacy (Doc. 1-2). Plaintiffs allege the TSA and First Agreement were breached. (Doc. 1-2). Plaintiffs seek monetary damages, attorney fees, and judicial interest. (Doc. 1-2).

         Praeses removed, asserting federal question jurisdiction under 28 U.S.C. § 1331, and supplemental jurisdiction under 28 U.S.C. § 1367. (Doc. 1). Praises alleges it received “other paper” from Plaintiffs clarifying the nature of Plaintiffs' claims, which Praises asserts will require application and interpretation of the Copyright Act under 17 U.S.C. § 101, et seq. (Doc. 1). Praises argues Plaintiffs claim an ownership interest in PocketRx, a mobile application developed by Preases. (Doc. 1). Praeses asserts any state law claim related to ownership of PocketRx is preempted by the Copyright Act under 17 U.S.C. § 301. (Doc. 1).

         Plaintiffs filed this Motion to Remand (Doc. 10), asserting this Court has no federal question jurisdiction. Rather, Plaintiffs allege they seek to enforce the provisions of the contract between Causey's and Praeses. (Doc. 10-1). Plaintiffs further allege even assuming federal question jurisdiction exists, removal is untimely. (Doc. 10). Plaintiffs seek attorney's fees and costs for improper removal. (Doc. 10). Defendants oppose remand. (Doc. 16).

         II. Law and Analysis

         A. Federal Question Jurisdiction

         A federal court's jurisdiction is limited to areas authorized by the United States Constitution and acts of Congress. See Scarlott v. Nissan N. Am., Inc., 771 F.3d 883, 887 (5th Cir. 2014). Subject matter jurisdiction must exist at the time of removal to federal court, based on the facts and allegations contained in the complaint. See St. Paul Reinsurance Co. Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998).

         Remand is required “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). The burden of establishing federal jurisdiction is on the party seeking removal. Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988); Scarlott, 771 F.3d at 887 (citing Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013)). Any doubts as to removal must be construed against removal and in favor of remand. See Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000), cert. den., 530 U.S. 1229 (2000) (citing Willy, 855 F.2d at 1164).

         The presence or absence of federal-question jurisdiction is governed by the well-pleaded complaint rule, which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. See Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (1998) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)).

         Yet, the plaintiff may choose to forego the federal claims in order to prevent removal. “The [well-pleaded complaint] rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.” Caterpillar, 482 U.S. at 392. This right, ...

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