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Overhead Door Corporation v. Assa Abloy Entrance Systems Greenville, Inc.

United States District Court, D. South Carolina, Greenville Division

February 13, 2017

OVERHEAD DOOR CORPORATION, Plaintiff,
v.
ASSA ABLOY ENTRANCE SYSTEMS GREENVILLE, INC., f/k/a Overhead Door Company of Greenville, Inc., and ASSA ALBOY ENTRANCE SYSTEMS U.S. INC., Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

          MARY GEIGER LEWIS, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiff filed this case as a breach of contract action. Pending before the Court is Plaintiff's motion to remand this case to the South Carolina Court of Common Pleas for Greenville County. Having carefully considered the motion, the response, the reply, the record, and the applicable law, the Court will grant Plaintiff's motion to remand.

         II. FACTUAL AND PROCEDURAL HISTORY

         The Court draws the relevant facts for purposes of this Order from Plaintiff's Amended Verified Complaint (AVC). Plaintiff is a manufacturer of garage doors, entrance systems, openers, and related equipment. Plaintiff sells, distributes, and services its branded products through a national network of specifically-trained, independently-owned distributors. Defendant Assa Abloy Entrance Systems Greenville, Inc. (AAES Greenville) is a South Carolina corporation with its principal place of business in Greenville, South Carolina. AAES Greenville entered into an agreement with Plaintiff's predecessor in interest in or around 1969 to sell, distribute, and service Plaintiff's products (Distributor's Agreement).

         Sometime prior to July 1, 2016, Defendant ASSA ABLOY Entrance Systems US, Inc. (AAES US), a competitor to Plaintiff, acquired AAES Greenville. AAES Greenville informed Plaintiff of this acquisition by letter dated July 1, 2016. Subsequently, Plaintiff provided written notice to AAES Greenville terminating the Distributor's Agreement. Although the parties ended the Distributor's Agreement, there are provisions in it that bind the parties even after termination, by which Plaintiff advised AAES Greenville to abide.

         On or about August 31, 2016, Plaintiff and AAES Greenville reached an agreement (Email Agreement) providing AAES Greenville would substantially cease certain conduct and abide by the post-termination terms of the Distributor's Agreement. Among other things, the Email Agreement governs the use of Marks and identifiers including, but not limited to, OHD and ODC-initials used by Plaintiff as identifiers-and use of various telephone numbers. Because AAES U.S. acquired AAES Greenville, Plaintiff alleges AAES U.S. is a real party in interest to the Email Agreement and is subject to the Email Agreement.

         Plaintiff avers AAES Greenville has violated the Distributor's Agreement. Plaintiff further asserts AAES Greenville and AAES U.S. (collectively Defendants) have breached the Email Agreement. Among other things, Plaintiff claims Defendants initially removed the websites “www.ohdog.com” and “www.hc-ohd.com, ” only to surreptitiously reactivate these addresses and now use them to take customers directly to AAES US's websites.

         Plaintiff (1) seeks a declaratory judgment the Distributor's Agreement is enforceable and specific performance of the same; (2) alleges AAES Greenville breached the Distributor's Agreement; (3) contends Defendants breached the Email Agreement; and (4) requests injunctive relief as to Defendants.

         Defendants filed a notice of removal on January 3, 2017, alleging this Court possesses federal question jurisdiction over the action under 28 U.S.C. § 1331 because, purportedly, Plaintiff's claims substantially depend on whether certain “Marks” are protected trademarks. Plaintiff filed its motion to remand shortly after removal, to which Defendants filed a response and Plaintiff filed a reply. Additionally, AAES U.S. filed a motion to dismiss all claims against it under Rule 12(b)(6) of the Federal Rules of Civil Procedure, which the parties have fully briefed as well. The Court, having been fully briefed on the relevant issues, is now prepared to discuss the merits of Plaintiff's motion to remand.

         III. STANDARD OF REVIEW

         “[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.” 28 U.S.C. § 1441(a). “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” Id. § 1447(c). “The burden of establishing federal jurisdiction is placed upon the party seeking removal.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). The Court is “obliged to construe removal jurisdiction strictly because of the ‘significant federalism concerns' implicated.” Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (en banc) (quoting Mulcahey, 29 F.3d at 151). “Therefore, ‘[i]f federal jurisdiction is doubtful, a remand [to state court] is necessary.'” Id. (quoting Mulcahey, 29 F.3d at 151). Moreover, any ambiguity is to be construed against the removing party. Her Majesty The Queen In Right of the Province of Ont. v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989).

         When considering a motion to remand, the Court accepts as true all relevant allegations contained in the complaint and construes all factual ambiguities in favor of the plaintiff. Willy v. Coastal Corp., 855 F.2d 1160, 1163-64 (5th Cir. 1988). For a court to have federal question jurisdiction over a case, a right or immunity created by the Constitution or laws of the United States must be an essential element of the plaintiff's claims. See Gully v. First Nat'l Bank, 299 U.S. 109, 112-13 (1936). The “well-pleaded complaint rule” requires the exercise of federal jurisdiction based upon 28 U.S.C. § 1331 when a federal question is presented on the face of the plaintiff's well-pleaded complaint. Harless v. CSX Hotels, Inc., 389 F.3d 444, 450 (4th Cir. 2004) (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004)).

         The plaintiff is the master of the complaint and may avoid federal jurisdiction by exclusively relying upon state law. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). In examining the complaint, the Court “must first discern whether federal or state law creates the cause of action.” Mulcahey, 29 F.3d. at 151. If the claims are created by state law, the Court should generally remand. But, under the substantial federal question doctrine, the Court must determine whether the case falls into the “small class of ‘cases in which a well-pleaded complaint establishes . . . that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law, in that federal law is a necessary ...


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