United States District Court, N.D. California
ORDER ON MOTION TO REMAND Re: Dkt. No. 21
JEFFREY S. WHITE, District Judge.
Now before the Court for consideration is the Motion to Remand, filed by Plaintiffs Kevin Halpern ("Halpern") and Celluride Wireless ("Celluride") (collectively "Plaintiffs"). The Court has considered the parties' papers, relevant legal authority, and the record in this case, and it has had the benefit of oral argument/finds the motion suitable for disposition without oral argument, and it VACATES the hearing scheduled for August 14, 2015. See N.D. Civ. L.R. 7-1(b). For the reasons set forth in the remainder of this Order, the Court HEREBY DISMISSES Plaintiffs' claim for conversion, and it REMANDS the remaining claims to the Superior Court for the City and County of San Francisco ("San Francisco Superior Court").
Halpern alleges that he is "the inventor of the P2P transportation industry now known commonly as the ridesharing industry or TNC and, more specifically, " technology now embodied in the "TNC app UBER." (Compl. ¶ 148; see also id. ¶¶ 1-2, 32-42.) Halpern has "transferred his rights to the intellectual property, copyrights and technology he developed" to Celluride. ( Id. ¶ 4.) According to Halpern, as he began to develop the idea of a ride-sharing service, he prepared, inter alia, a business plan, an end-to-end flow process, interface sketches, and other designs. ( Id. ¶¶ 53-55,, 63, 78-80, 105, 117, 131, 149, and Exs. C-D.) Plaintiffs allege that they shared those documents and other information, in confidence, with the Defendants. ( See, e.g., id. ¶¶ 78-80, 90-93, 97-98, 107-108.) Plaintiffs further allege that they "owned possessed and/or were entitled to immediate possession at the time of conversion, certain property assets, and profits associated with Celluride, " which Defendants converted and "represented the property to be theirs without credit or compensation given to Plaintiffs." ( Id. ¶¶ 150, 152.)
Based on these and other allegations, which the Court shall address as necessary, Plaintiffs filed this action in the San Francisco Superior Court and asserted state law claims for misappropriation of trade secrets, conversion, breach of contract, and declaratory relief.
On May 29, 2015, Defendants filed a Notice of Removal, in which they asserted the Court has subject matter jurisdiction on the basis that Plaintiffs' allegations present a federal question. See 28 U.S.C. sections 1331, 1338(a), and 1441(a)
The Court shall address additional facts as necessary in its analysis.
A. Applicable Legal Standards.
"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant... to the district court of the United States for the district and division embracing the place where such action is pending." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 7-8 (1983) (citation omitted); see also 28 U.S.C. § 1441. However, federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). An action originally filed in state court may be removed to federal court only if the district court could have exercised jurisdiction over such action if initially filed there. 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).
The burden of establishing federal jurisdiction for purposes of removal is on the party seeking removal. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). A court must construe the removal statute strictly and reject jurisdiction if there is any doubt regarding whether removal was proper. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996); see also Gaus, 980 F.2d at 566 ("Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.").
"The presence or absence of federal-question jurisdiction is governed by the well-pleaded complaint rule.'" Caterpillar Inc., 482 U.S. at 392. The well-pleaded complaint rule recognizes and empowers the plaintiff as the master of his or her claim. Id. "[H]e or she may avoid federal jurisdiction by exclusive reliance on state law." Id. Under the well-pleaded complaint rule, federal-question jurisdiction arises where the "complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd., 463 U.S. at 27-28.
"It is well settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only true question at issue." Caterpillar, 482 U.S. at 393 (emphasis in original). While a defense of preemption, also known as "ordinary preemption, " is insufficient to demonstrate removal jurisdiction, "complete preemption, " which is a corollary to the well-pleaded complaint rule, would be a sufficient basis for removal. Rains v. Criterion Sys., Inc., 80 F.3d 339, 344 (9th Cir. 1996). Under the complete preemption doctrine, the force of certain federal statutes is considered to be so "extraordinary" that it "converts an ...