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OMNI PHASE RESEARCH LABORATORIES, INC v. EUGENE RZYSKI

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


November 29, 2010

OMNI PHASE RESEARCH LABORATORIES, INC., PLAINTIFF,
v.
EUGENE RZYSKI, DEFENDANT.

The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND [Docket No. 3]

This matter comes before the Court on Plaintiff's motion to remand this case to San Diego Superior Court. Defendant Eugene Rzyski filed an opposition to the motion, and Plaintiff filed a reply. After a thorough review of the issues, the Court grants Plaintiff's motion.

I.

BACKGROUND Plaintiff Omni Phase Research Laboratories, Inc. filed the present case against Defendant Eugene Rzyski in San Diego Superior Court on May 29, 2009. The Complaint alleges claims for breach of settlement agreement, breach of confidentiality and non-disclosure agreement, trade libel and intentional interference with prospective economic advantage. Defendant filed an Answer to the Complaint on August 11, 2009.

The case was scheduled to begin trial on October 15, 2010, but on August 4, 2010, Defendant removed the case to this Court based on claims in a proposed cross-complaint presented to the state court on August 3, 2010. (See Notice of Removal ¶ 2.) Notably, the cross-complaint was never filed, but instead was "Received." (See Notice of Removal, Ex. 1.)

On August 18, 2010, Plaintiff's counsel sent a letter to Defendant's counsel setting out the arguments raised in the present motion to remand, and asking Defendant to stipulate to remand the case. Defendant's counsel did not respond. Plaintiff thereafter filed the present motion.

II.

DISCUSSION Plaintiff moves to remand this case to state court on the ground that the removal was improper. Specifically, Plaintiff argues that removal cannot be based on claims in a cross-complaint. Defendant does not address this argument, but instead argues that the removal was based on the claims in the Complaint.

It is well-settled that counterclaims do not provide a basis for removal. Takeda v. Northwestern National Life Ins. Co., 765 F.2d 815, 822 (9th Cir. 1985); Chase Manhattan Mortgage Corp. v. Smith, 507 F.3d 910, 914-15 (6th Cir. 2007); Metro Ford Truck Sales, Inc. v. Ford Motor Co., 145 F.3d 320, 326-27 (5th Cir. 1998). Since Defendant's removal of this case was based on claims in his proposed cross-complaint, the removal was improper.

Defendant now retreats from his Notice of Removal, and asserts that he removed this case based on the claims in the Complaint. However, Defendant did not assert this argument in his Notice of Removal, and thus the Court declines to consider it here.*fn1

III.

CONCLUSION For these reasons, the Court grants Plaintiff's motion to remand. The Court also finds that Defendant "lacked an objectively reasonable basis for seeking removal[,]" Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005), and therefore awards Plaintiff attorneys fees in the amount of $2,765.00.*fn2


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