Bierman v. Toshiba Corporation et al

Filing 30

ORDER by Judge Hamilton finding as moot 7 Motion to Dismiss; granting 17 Motion to Remand (pjhlc1, COURT STAFF) (Filed on 1/29/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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BRUCE BIERMAN,
Plaintiff,

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v.

ORDER GRANTING MOTION
TO REMAND

TOSHIBA CORPORATION,

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For the Northern District of California

United States District Court

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No. C 12-5375 PJH

Defendant(s).
_______________________________/

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Before the court is plaintiff’s motion to remand the above-entitled action to the

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Superior Court of California, County of Marin. Having read the parties’ papers and carefully

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considered their arguments and the relevant legal authority, the court hereby GRANTS the

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motion.

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Plaintiff Bruce Bierman (“Bierman”) argues that this case should be remanded for

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lack of subject matter jurisdiction. There is a “strong presumption” against removal

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jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The burden of

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establishing federal jurisdiction for purposes of removal is on the party seeking removal.

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Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004). Doubts as to removability

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are resolved in favor of remanding the case to state court. Matheson v. Progressive

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Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

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Bierman originally filed the complaint in Marin County Superior Court in July 2010,

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against defendants Toshiba Corporation (“Toshiba Corp.”) and Toshiba America

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Information Systems (“TAIS”). TAIS removed the case to this court in September 2010 as

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case No. C-10-4203 MMC, asserting that the complaint “arises under federal copyright

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laws.” In the notice of removal, TAIS alleged that it had been served with the summons

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and complaint on August 20, 2010, and that “[n]o other defendant has been served with the

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[s]ummons and [c]omplaint.”

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On October 4, 2010, the court, Judge Chesney presiding, issued an order to show

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cause re remand, directing TAIS to show cause why the case should not be remanded, on

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the basis that Bierman had alleged no federal claims (including copyright claims) and had

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asserted state law causes of action only. In its response, TAIS argued that removal was

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warranted under the complete preemption doctrine, because three of Bierman’s state law

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claims were preempted by the Copyright Act. On November 12, 2012, the court issued an

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order remanding the case to the Marin County Superior Court.
In the remand order, the court found that the sixth cause of action for breach of a

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For the Northern District of California

United States District Court

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licensing agreement was not preempted by the Copyright Act, but did find that the seventh

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cause of action for unjust enrichment/restitution was preempted to the extent that it was

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based on the theory that TAIS made misrepresentations to obtain the Bookmark software

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from Bierman and then used his (copyrighted) software. The court noted, however, that

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Bierman had disclaimed any reliance on such a theory, and had indicated that he intended

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to base his unjust enrichment/restitution claim solely on the theories that TAIS had

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breached the terms of two written agreements, and that TAIS had misappropriated

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Bierman’s “trade secrets.” The court also noted that the eighth cause of action for an

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accounting was withdrawn to the extent it was preempted.

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Thus, because Bierman had withdrawn any claims that might be preempted by the

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Copyright Act, the court dismissed with prejudice those portions of the seventh and eighth

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causes of action that were preempted, and found that the remaining state law claims

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should be remanded to state court.

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On November 19, 2010, TAIS filed a motion pursuant to Federal Rule of Civil

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Procedure 59(e) to alter or amend the judgment, asserting that because Bierman had filed

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another suit in this court against International Business Machines (“IBM”), involving the

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same intellectual property, the remand order should be vacated and the case against IBM

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should be ordered related to the case that had just been ordered remanded. The court
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denied the motion. TAIS appealed the remand order and the order on the Rule 59(e)

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motion, and on May 12, 2012, the Ninth Circuit issued an order affirming both orders.

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On August 16, 2012, TAIS filed a motion for summary judgment in Marin County

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Superior Court. The motion was set for hearing on October 31, 2012. Plaintiff filed his

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opposition on October 17, 2012, and Toshiba Corp. filed a notice of removal the following

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day.

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In its notice of removal, Toshiba Corp. alleged that it had been served with the state

the notice of removal (even though it acknowledged that the claims against TAIS had

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previously been remanded). Toshiba Corp. alleged further that removal was proper

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For the Northern District of California

court summons and complaint on September 19, 2012; and also alleged that TAIS joined in

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United States District Court

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because the complaint arises under the Copyright Act.

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Bierman asserts that removal was improper. In his motion, Bierman contends that

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nothing in this case has changed since it was remanded previously, and that he has always

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maintained that he is not asserting federal claims against either Toshiba entity. Thus, he

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asserts that there is no federal question jurisdiction.

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In opposition, defendants argue that it is not true that the court previously dismissed

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all federal claims from the entire lawsuit. Their reasoning is that because at the time of the

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dismissal, Bierman had not served process on Toshiba Corp. – but only on TAIS – neither

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Bierman nor the court addressed Bierman’s claims directly as to Toshiba Corp., and the

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withdrawal of federal claims and the order of dismissal applied to TAIS only.

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Defendants claim that after the case was remanded, Toshiba Corp. attempted to

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eliminate the need for removal by asking Bierman to confirm that he was not pursuing any

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federal causes of action against Toshiba Corp., and that any federal claims in the complaint

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would be considered to be withdrawn, consistent with Judge Chesney’s order of 12, 2010.

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However, according to Toshiba Corp., Bierman would not clearly agree that he was

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asserting no federal claims.

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Defendants assert that it is only now that Bierman is willing to provide that
representation, and that the court should dismiss the seventh and eighth causes of action
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with prejudice against Toshiba Corp, consistent with the court’s prior dismissal of those

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claims against TAIS. In addition, however, defendants argue that because (in their view)

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this court had subject matter jurisdiction at the time that Toshiba Corp. removed the case

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(based on their assertion that Bierman failed to unequivocally confirm that there were no

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federal claims), the court should now exercise supplemental jurisdiction over the remaining

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state law causes of action in light of the pendency of the other three cases, which Toshiba

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thinks should be related to this one based on “[t]he efforts that this [c]ourt has already

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undertaken in the various Bierman and Intellisoft cases . . . ,” and also based on the fact

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that if the case is remanded, the parties will be engaging in duplicative discovery and both
this court and the state court will be addressing similar issues of procedural and

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For the Northern District of California

United States District Court

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substantive law.

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Defendants also argue, essentially, that there would be no benefit to remanding the

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case, because the state court case has only begun – while it was originally filed in July

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2010, removed in September 2010, and remanded in November 2010, the appeal before

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the Ninth Circuit essentially resulted in a stay of the case until 2012. The parties did not

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begin discovery until late summer of 2012, and the state court has not addressed the

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substance of the claims or set any case schedule. While TAIS did file a motion for

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summary judgment in state court, briefing was not completed prior to Toshiba’s removal of

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the case.

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Finally, defendants argue that the Ninth Circuit’s affirmance of the order remanding

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the case to state court does not preclude or undermine the assertion of supplemental

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jurisdiction now, as the issue before the Ninth Circuit was whether the district court was

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within its discretion to remand the case in November 2010, and to deny TAIS’ motion for

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reconsideration in December 2010. Defendants contend that because of the events that

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have transpired since then (granting of summary judgment for IBM in Bierman v. IBM, filing

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of appeal in that case, filing of additional cases by Bierman and Intellisoft, and orders

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staying those cases pending the Ninth Circuit’s ruling), it makes more sense for this court to

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exercise supplemental jurisdiction over this case.
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In reply, Bierman disputes defendants’ assertion that he did not withdraw the

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seventh and eighth causes of action as to both defendants when the case was previously

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pending in this court. He points to his response to TAIS’ response to the order to show

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cause, in which he stated that his claim for unjust enrichment was “not premised on

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copyright or any right equivalent to copyright,” but on the assertion that TAIS “unjustly

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received benefits at the expense of [p]laintiff” through TAIS’ wrongful conduct, “including,

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but not limited to, [the] misappropriation of [p]laintiff’s Bookmark products and Bookmark

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technology, breach of the NDA, and breach of the Licensing Agreement.”

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Beirman claims that because the complaint specifies that TAIS and Toshiba Corp.
will be collectively referred to as “Toshiba,” it is clear that plaintiff’s statements in his

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For the Northern District of California

United States District Court

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response to TAIS’ response to the OSC must be interpreted as a disclaimer of any federal

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claim in the case – against either TAIS or Toshiba Corp.

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Bierman also asserts that the court’s order referring to “Toshiba” must be interpreted

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as a reference to both TAIS and Toshiba Corp., and that because the court stated that

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Bierman had withdrawn the seventh cause of action “to the extent it is preempted,” it is also

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clear that the preempted portion of the seventh cause of action was totally withdrawn, as to

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both defendants. In addition, he asserts, because a federal court can decline to exercise

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supplemental jurisdiction over state law claims only when it has dismissed all claims over

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which it has jurisdiction, the court could not have previously remanded the case if any

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federal claim remained in the case.

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The court finds that the motion must be GRANTED. It is clear that Bierman

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withdrew any federal copyright claims while the case was pending before Judge Chesney

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(before Toshiba Corp. was served). Based on that prior withdrawal, and Bierman’s present

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assertion that he does not intend to pursue federal copyright claims against either TAIS or

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Toshiba Corp., and to the extent that anything remained of the preempted portions of the

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seventh and eighth causes of action after Judge Chesney remanded the case, the court

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dismisses those portions of the seventh and eighth causes of action, and finds that the

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state law claims must be remanded.
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Accordingly, this case is hereby REMANDED to the Marin County Superior Court.

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Because the court finds that defendants have not met their burden of establishing removal

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jurisdiction, and that remand is thus warranted, the court need not address the motion to

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dismiss. The February 6, 2013 hearing date is VACATED.

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IT IS SO ORDERED.

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Dated: January 29, 2013
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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For the Northern District of California

United States District Court

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