Sweet Pickle, Inc. et al v. QFA Royalties LLC et al

Filing 17

ORDER Sua Sponte REMANDING CASE to the District Court for the City and County of Denver, Colorado, by Judge William J. Martinez on 2/12/2013. (ervsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 13-cv-0255-WJM-KLM
SWEET PICKLE, INC., and
TIMOTHY WAISS,
Plaintiffs,
v.
QFA ROYALTIES, LLC,
QUIZNO’S FRANCHISING II LLC,
QCE FINANCE LLC, f/k/a QCE PARENT LLC,
QUIZNO’S MASTER LLC,
QIP HOLDER LLC,
TQSC II LLC f/k/a TQSC LLC,
QCE HOLDING LLC,
QZ FINANCE LLC,
QCE INCENTIVE LLC,
QCE LLC,
QUIZNOS FINANCE LLC,
QAFT, INC.,
AMERICAN FOOD DISTRIBUTORS LLC,
SOURCE ONE DISTRIBUTION LLC f/k/a/ NATIONAL RESTAURANT SUPPLY
DISTRIBUTION LLC,
S&S EQUIPMENT COMPANY LLC,
BA-BING! LLC f/k/a SOURCE ONE SYSTEMS LLC,
CHAIN MANAGEMENT SYSTEMS LLC,
KINETIC SOURCING SOLUTIONS LLC f/k/a U.S. FULFILLMENT LLC,
CONTINENTAL LENDING GROUP LLC,
CLG LEASING LLC,
CERVANTES HOLDING COMPANY, THE,
CERVANTES CAPITAL LLC,
CERVANTES MASTER LLC,
RICHARD E. SCHADEN,
RICHARD F. SCHADEN, and
PATRICK E. MEYERS,
Defendants.

ORDER SUA SPONTE REMANDING CASE

This matter is before the Court sua sponte on Defendants’ Notice of Removal
(the “Notice”). (ECF No. 1.) In every case and at every stage of the proceeding, a
federal court must satisfy itself as to its own jurisdiction, even if doing so requires sua
sponte action. See Citizens Concerned for Separation of Church & State v. City & Cty.
of Denver, 628 F.2d 1289, 1297, 1301 (10th Cir. 1980). Absent an assurance that
jurisdiction exists, a court may not proceed in a case. See Cunningham v. BHP
Petroleum Great Britain PLC, 427 F.3d 1238, 1245 (10th Cir. 2005).
The Notice states that this Court has jurisdiction over this action pursuant to 28
U.S.C. § 1331. (ECF No. 1 at 2.) Defendants acknowledge that “Plaintiffs’ Complaint
does not explicitly assert a federal cause of action”, but allege that the Court has
jurisdiction “because Plaintiffs’ state law claims raise substantial federal questions.”
(Id.) Specifically, Defendants contend that all of Plaintiffs’ state law claims are based
on a Uniform Offering Circular which is required by federal law. (Id. at 3-4.)
Defendants allege that “[a]ny challenge to the quality of Quiznos’ pre-sale disclosures,
complaints regarding the UFOC or FDD, and claims that Quiznos failed to disclose
material information implicates federal law.” (Id. at 5.)
In cases that are nearly identical to this action, at least two judges in this District
have explicitly rejected Defendants’ arguments and found that this Federal Court lacks
subject matter jurisdiction over these franchisee/frachisor disputes. Given the thorough
analysis provided by United States District Judges Marcia S. Krieger and Philip A.

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Brimmer, the Court finds it unnecessary to write a lengthy opinion about why it lacks
jurisdiction over this action. Rather, the Court explicitly adopts the reasoning set forth
by Judge Marcia S. Krieger in Viadeli, Inc., et al. v. QFA Royalties LLC, et al, Case No.
13-cv-264-MSK and Judge Philip A. Brimmer in Ranjer Foods LC v. QFA Royalties
LLC, et al., Case No. 13-cv-256-PAB, 2013 WL 489160 (D. Colo. Feb. 8, 2013).
The party invoking federal jurisdiction—here, the Defendants—bears the burden
of proving that such jurisdiction exists. Montoya v. Chao, 296 F.3d 952, 955 (10th Cir.
2002). For the reasons set forth in Viadeli and Ranjer, the Court finds that Defendants
have failed to meet their burden and that this case must be remanded. See
Cunningham, 427 F.3d at 1245 (court must remand where jurisdiction not established).
Accordingly, the Court ORDERS that the above-captioned action is REMANDED
to the District Court for the City and County of Denver, Colorado.
Dated this 12th day of February, 2013.
BY THE COURT:

William J. Martínez
United States District Judge

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