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MGA Entertainment, Inc. v. Zuru, LLC

United States District Court, C.D. California

October 21, 2019

MGA ENTERTAINMENT, INC.
v.
ZURU, LLC ET AL.

          Present: The Honorable ANDREW J. GUILFORD.

          CIVIL MINUTES - GENERAL

         [IN CHAMBERS] ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

         Plaintiff MGA Entertainment, Inc. sued Defendant Zuru, LLC in Los Angeles Superior Court asserting state law claims for trademark infringement, trade dress infringement, and violations of California's Unfair Competition Law ("UCL"). (Compl., Dkt. No. 1-1.) Defendant removed to this Court, claiming jurisdiction was proper under 28 U.S.C. § 1441(a). (Notice of Removal, Dkt. No. 1 at 2.) Now, Plaintiff moves to remand flits case back to state court, arguing that this Court lacks jurisdiction over its state law claims. (See Mot., Dkt. No. 23-1.)

         The Court GRANTS Plaintiffs motion to remand. The Court REMANDS this case to Los Angeles Superior Court. All other pending matters are VACATED.

         1. BRIEF BACKGROUND

         The following facts are taken mosdy from Plaintiff's complaint. The Court's purpose here is only to provide some background about the case.

         Both Plaintiff and Defendant are toy companies. (See Compl. at ¶¶ 5, 7.) One of Plaintiff's most popular toys is called L.O.L. Surprise! (Id. at ¶ 12.) Plaintiff pardy attributes the success of L.O.L Surprise! To its "distinctive design: an opaquely wrapped spherical container, which, when opened, reveals 'surprise' individual toys inside." (Mot. at 3 (citing Compl. at ¶ 13).) Accordingly, Plaintiff registered the L.O.L. Surprise! Trade dress with the California Secretary of State. (Compl. at¶ 18.)

         Plaintiff alleges that Defendant has attempted to piggyback on the success of L.O.L Surprise! by creating a knock-off version of the toy that Defendant calls 5 Surprise. (Mot. at 4 (citing Compl. at ¶ 33); see also Compl. at ¶ 30.) Plaintiff claims that the design of 5 Surprise is strikingly similar to L.O.L. Surprise. (Compl. at ¶¶ 29-32) Consequently, Plaintiff asserts that consumers are regularly duped into buying a 5 Surprise toy thinking they are actually purchasing a L.O.L. Surprise! toy. (Id. at ¶¶ 33-35.)

         Thus, to protect the L.O.L. Surprise! trade dress against consumer confusion, Plaintiff filed this lawsuit against Defendant in Los Angeles Superior Court asserting state law claims for trademark infringement, trade dress infringement, and violations of the UCL. (Compl. at ¶¶ 40-49, 50-54, 55-59.) Despite the lack of any federal claim in this case, Defendant removed to this Court, claiming Plaintiffs claims nonetheless arise under federal law. (See Notice of Removal at 2-3.)

         2. LEGAL STANDARD

         The Court can decide only those cases it has subject matter jurisdiction over. Indeed, "[f]ederal courts are courts of limited jurisdiction," and they possess "only that power authorized by Constitution and statute." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The Constitution provides, in Article III, § 2, that "[t]he judicial Power [of the United States] shall extend ... to all Cases . . . arising under this Constitution, die Laws of die United States . . . [or] between Citizens of different States." And Congress has authorized district courts to exercise jurisdiction over "all civil actions arising under die Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331.

         Principles of federalism and judicial economy require courts to "scrupulously confine their [removal] jurisdiction to the precise limits which [Congress] has defined." See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941). In that vein, "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in die first instance." Padilla v. AT&T Corp., 697 F.Supp.2d 1156, 1158 (CD. Cal. 2009) (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). As this Court has often stated, "[n]othing is to be more jealously guarded by a court than its jurisdiction." See United States v. Ceja-Prado, 333 F.3d 1046, 1051 (9th Cir. 2003) (internal quotations omitted).

         3. ANALYSIS

         This case doesn't involve diversity jurisdiction. So for federal jurisdiction to be proper, Defendant, as the removing party, must show this matter "aris[es] under the Constitution, laws, or treaties of the United States," and thus presents a federal question. 28 U.S.C. § 1331. Here, because Plaintiff pleads only state law claims, a federal question only exists it one of Plaintiffs claims "turn[s] on substantial questions of federal law." Grable & Sons Metal Prods., Inc. v. Dame Engineering &Mfg.,545 U.S. 308, 308 (2005). For this to be true, the state law claim must "necessarily raise a stated federal issue, actually disputed and substantial, which ...


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