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Flatwire Solutions, LLC v. Sexton

December 29, 2009

FLATWIRE SOLUTIONS, LLC, PLAINTIFF,
v.
ROBERT SEXTON, AN INDIVIDUAL; DECORP AMERICAS, A DELAWARE CORPORATION; SOUTHWIRE COMPANY, A GEORGIA CORPORATION AND DOES 1 THROUGH 50, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER DENYING PLAINTIFF'S MOTION TO REMAND [Motion filed on November 9,2009]

This matter comes before the Court on plaintiff's motion for remand. After reviewing the papers submitted by the parties and considering the arguments therein, the Court is inclined to deny plaintiff's motion to remand the case to state court.

I. BACKGROUND

A. Procedural Background

On August 18, 2009, plaintiff Flatwire Solutions, LLC ("Flatwire")filed suit in Los Angeles County Superior Court against defendants Robert Sexton ("Sexton"), DeCorp Americas ("DeCorp"), and Southwire Company ("Southwire") alleging causes of action for (1) breach of contract; (2) negligent misrepresentation; and (3) intentional misrepresentation.

On October 15, 2009, Sexton removed the instant action based on diversity jurisdiction, pursuant to 28 U.S.C. §§ 1332 and 1441.

On November 9, 2009, Flatwire filed a motion to remand the instant proceeding to state court. On November 16, 2009, Southwire filed an opposition to Flatwire's motion.*fn1 On November 23, 2009, Flatwire filed a reply.

B. Factual Background

This case arises from defendants' alleged breach of a contract to market and sell a patented product called "flatwire." (Compl. ¶ 7.) On October 1, 2004, Flatwire and DeCorp entered into a Distribution Agreement ("agreement"), pursuant to which Flatwire was appointed the exclusive distributor of patented flatwire technology.*fn2 (Compl. ¶ 8.) Under the agreement, Flatwire was the exclusive distributor for a customer base that includes Custom Electronics Design and Installation Association("CEDIA") installers, integrators, and retailers throughout the United States.*fn3 (Compl. ¶ 11.) Also under the agreement, defendants were allegedly obligated to provide marketing, technical, and sales support that "would be crucial to the success of marketing efforts to CEDIA installation professionals." (Compl. ¶ 11.) Flatwire alleges that it suffered damages as a result of defendants' failure to supply flatwire products and "failure to provide any meaningful technical, sales or marketing support" despite its obligations to do so under the agreement. (Compl. ¶ 5.)

II. LEGAL STANDARD

Remand may be ordered either for lack of subject matter jurisdiction or for any defect in removal procedure. See 28 U.S.C. § 1447(c). Courts strictly construe the removal statutes against removal jurisdiction, and jurisdiction must be rejected if there is any doubt as to the right of removal. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking removal bears the burden of establishing federal jurisdiction. See Prize Frize, Inc. v. Matrix, Inc., 167 F.3d 1261, 1265 (9th Cir. 1999). The defendant also has the burden of showing that it has complied with the procedural requirements for removal. Judge William W. Schwarzer, et al., California Practice Guide: Federal Civil Procedure Before Trial § 2:609 (2007).

Under 28 U.S.C. § 1446(b), a defendant must file a notice of removal within 30 days after being served with a complaint alleging a basis for removal. When there are multiple defendants, all defendants named in the complaint who have been properly served in the action must also join in the removal. Hewitt v. City of Stanton, 798 F.2d 1230, 1232 (9th Cir. 1986). This is known as the rule of unanimity. See Chicago, Rock Island & Pac. Railway v. Martin, 178 U.S. 245 (1900); see also Schwarzer,et al., California Practice Guide: Federal Civil Procedure Before Trial 2:905.2 (2007).

Pursuant to 28 U.S.C. ยง 1447(c), a motion to remand based on any defect other than subject matter jurisdiction must be made within 30 days ...


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