Bralich v. Sullivan
ORDER ADOPTING AS MODIFIED THE FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFF'S MOTIONS TO REMAND for 86 Findings and Recommendations. Signed by JUDGE ALAN C. KAY on 10/30/2017. The Court ADOPTS the Findings and Recommendation to Grant Plaintiffs Motions to Remand, as modified by this Order. Plaintiff's Motions for Remand are GRANTED. Accordingly, this action will be remanded to the Circuit Court of the First Circuit, State of Hawaii. (eps, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications served by first class mail on October 31, 2017
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
) Civ. No. 17-00203 ACK-RLP
BARRY A. SULLIVAN, ESQ.; MARK )
PIESNER; CHRIS FRY; JOHN
BATALI; WILLIAM O’GRADY;
PETER MORRELI; CRAIG
WEISSMAN; SAM PULLARA; SCOTT
ZIEGLER; TWITTER; THROWNET A. )
CA-CORP.; THROWNET B. MA)
CORP.; SALESFORCE.COM INC.;
PHILIP BRALICH, PH.D,
ORDER ADOPTING AS MODIFIED THE FINDINGS AND RECOMMENDATION TO
GRANT PLAINTIFF’S MOTIONS TO REMAND
For the reasons set forth below, the Court adopts as
modified the Findings and Recommendation to Grant Plaintiff
Philip Bralich’s Motions to Remand, ECF Nos. 13, 17, issued by
Magistrate Richard L. Puglisi on August 8, 2017.
Background Regarding Plaintiff’s Alleged Claims1
Plaintiff Philip Bralich (“Plaintiff”) is a linguist
who, together with another individual, developed a programmable
theory of syntax between 1991 and 1996.
22-23, ECF No. 1-3 (“TAC”).
Third Am. Compl. ¶¶ 2,
In 1995, Plaintiff founded Ergo
Linguistic Technologies, Inc. (“Ergo”) in order to develop the
theory into a patentable, proprietary computer program.
The patent, No. 5,878,385 A, was granted on March 2,
Id. ¶¶ 25, 66.
The patented software was intended to
provide for structural analysis of sentences generated by speech
or text and to allow for increased accuracy in functions like
database and internet searches.
patent lapsed in 2003.
Id. ¶¶ 27-28.
Payment for the
Id. ¶ 66.
Defendant Barry Sullivan served in various capacities
in Ergo, including as Chief Financial Officer and on the Board
of Directors, as well as investing and raising capital and
functioning as Ergo’s attorney.
Id. ¶ 4.
Around the time Ergo
closed down in 1999-2000, Defendant Sullivan formed a competitor
corporation known as Thrownet.
Id. ¶¶ 45, 80, 84.
in order to bring in additional investors, Defendant Sullivan
This background is taken from the allegations in Plaintiff’s
Third Amended Complaint and is provided for context only. These
background facts are not to be construed as findings of fact
that the parties may rely on in future proceedings.
received access to the Ergo patent source code so it could be
independently evaluated by Defendants John Batali and Chris Fry,
who were also involved with Thrownet.
Id. ¶¶ 46-48.
alleges that Defendant Fry claims to have developed the same
type of software component while at Thrownet “with exactly the
same number of lines of code” as the Ergo software in only two
months, where it took Plaintiff 15 years.
Id. ¶ 48.
alleges that these Defendants used Ergo’s patented technology to
make their own software.
Id. ¶ 50.
Plaintiff also alleges that
Defendant Fry worked with other defendants to obtain a number of
patents that depended on Ergo’s software.
Id. ¶¶ 51, 55-62.
Based on the above, Plaintiff has alleged various
claims, including: patent infringement; legal misconduct and
violations of various ethical rules; breach of non-disclosure
agreements; misappropriation of trade secrets; breach of
fiduciary duty and usurpation of corporate opportunity; fraud;
tortious interference with contract; conversion; defamation; and
conspiracy and RICO violations.
Id. ¶¶ 109-191.
Relevant State Court Proceedings
On July 31, 2015, Plaintiff, proceeding pro se, filed
this action in the Circuit Court for the First Circuit of the
State of Hawaii.
Notice of Removal ¶ 2, ECF No. 1.
initial filing appears to be a compilation of various
See generally ECF No. 53-4.
The first document
appears to be a temporary restraining order issued against
Plaintiff in favor of Defendant Sullivan.
Id. at 5-8.
Plaintiff then attached a letter to the state court seeking to
quash the order and referencing a complaint he had filed with
the Hawaii Bar Association alleging legal misconduct against
Defendant Sullivan, which he attached to the letter.
Id. at 9-
Plaintiff also alleged that “Sullivan violated his non-
disclosure, violated our patent, and stole trade secrets” which
he then described in more detail.
Id. at 12-23.
On January 12, 2016, Defendant Salesforce.com filed a
motion to dismiss or in the alternative for a more definite
statement and noted that the summons with which it was served
did not appear to be valid.
ECF No. 53-5 at 74, 84-85.
motion, Defendant Salesforce.com attempted to parse Plaintiff’s
allegations that the defendants had illegally stolen and used
the Ergo patent, noting he claimed that “Mr. Sullivan and Mr.
Fry have stolen and misappropriated intellectual property
belonging to Ergo and Plaintiff.”
ECF No. 53-5 at 81.
January 26, 2016, Defendant Sullivan filed a position statement
also asserting that attempted service on him was not valid and
moved for dismissal with prejudice as a sanction.
ECF No. 53-7
On February 4, 2016, the state court granted Defendant
Salesforce.com’s motion to dismiss without prejudice and motion
for a more definite statement, and allowed Plaintiff until April
4, 2016 to refile his complaint.
ECF No. 54-5 at 6-13.
court also quashed the attempted service on Defendant Sullivan
and denied his motion for sanctions.
ECF No. 57-3 at 2-6.
Plaintiff filed his First Amended Complaint on March
ECF No. 55-5 (“FAC”).
In the first portion of the
complaint, Plaintiff alleges that the defendants stole his “IT,
IP, investment, and source code” and that in doing so, “they
violated their non-disclosures and [Plaintiff’s] patent.”
Plaintiff alleges this was accomplished by “bur[ying]
[his] patent software in a variety of patents” by Defendant Fry,
who then took the patent to other companies also named as
defendants in the complaint.
Plaintiff also alleged
Defendant Fry “kn[ew] [the] work was patent protected and that
Sullivan had no rights to it.”
Id. at 8.
Plaintiff states that the alleged conduct “is also a violation
of both Hawai’i Federal RICO statutes,” quotes the elements of a
RICO claim, and seeks treble damages for RICO violations.
Plaintiff’s complaint then identifies the Ergo patent,
including the publication number and date, and details the
history of the patent and alleged theft, including that
Plaintiff appears to have filed two copies of this complaint,
one at 7:58 a.m. and one at 7:59 a.m. See ECF Nos. 55-4 at 1
and 55-5 at 4. Although the copies do not appear to differ in
the allegations summarized above, the Court will refer to the
Defendant Fry’s review of prior art in his patents “does not
include the Ergo patent”.
Id. at 15-18, 24-26.
On May 3, 2016, Defendant Sullivan filed a motion to
dismiss for failure to properly serve him with an appropriate
amended complaint and valid summons, and for lack of subject
matter jurisdiction on the basis that federal courts have
exclusive jurisdiction over claims relating to patents.
59-3 at 1-9.
He withdrew that motion on May 11, 2016, and on
May 12, 2016 a return and acknowledgement of service by
Defendant Sullivan was filed.
ECF No. 59-4 at 52-54, 80-81.
Defendant Sullivan then filed a motion for a more definite
statement or in the alternative to strike portions of the First
Amended Complaint on June 2, 2016.
ECF No. 60-4 at 1-15.
that motion, Defendant Sullivan stated that “[o]n May 12, 2016,
a civil process server, on behalf of Bralich, served Sullivan
with Bralich’s [amended complaint] with a valid summons” and
that it “was properly served” on him.
Id. at 5-6.3
Defendant Sullivan contended that the complaint violated other
rules of state civil procedure, as described in the state
court’s order allowing him to amend.
Id. at 6.
In the motion,
Defendant Sullivan also noted Plaintiff’s repeated allegation
that he stole intellectual property from Plaintiff and/or Ergo.
Defendant Sullivan was served with the version of the First
Amended Complaint filed at 7:59 a.m. See ECF No. 64-5 at 15.
Id. at 10.
On August 4, 2016, the state court denied the motion
to strike but granted the motion for a more definite statement.
ECF No. 62-4 at 65-69.
Plaintiff was granted until August 12,
2016 to “file and serve” on all parties a second amended
complaint that complied with state court rules and the court’s
specific directions to include numbered paragraphs and remove
repetitive and irrelevant material.
Id. at 66.
Because Plaintiff failed to file and serve his Second
Amended Complaint by the state court’s deadline, Defendant
Sullivan moved to dismiss on September 2, 2016.
ECF No. 64-5 at
In the motion, Defendant Sullivan noted that on August
12, Plaintiff caused to be served a file-stamped but uncertified
partial copy of the First Amended Complaint, and on August 26
Plaintiff provided an unfiled copy of what purported to be the
Second Amended Complaint and did not include a summons.
On October 31, 2016, the state court denied without
prejudice Defendant Sullivan’s motion to dismiss but quashed the
two attempts to serve him in August.
ECF No. 67-7 at 50-52.
On December 6, 2016, Plaintiff requested leave to file
a third amended complaint.
ECF No. 68-3 at 1-2.
court granted the request on January 31, 2017.
Id. at 104-105.
Plaintiff filed his Third Amended Complaint on March 1, 2017.
TAC, ECF No. 68-4.
Defendant Sullivan was served with this
complaint on April 7, 2017.
ECF No. 68-5 at 12-13.
III. Relevant Federal Court Proceedings
On May 4, 2017, Defendant Sullivan filed a Notice of
Removal based on 28 U.S.C. §§ 1331 and/or 1338, which
respectively provide for federal question jurisdiction and
jurisdiction over actions relating to, inter alia, patents.
Notice of Removal ¶ 1, ECF No. 1.
The Notice asserted that all
defendants who had then been served joined in or consented to
Id. ¶ 7.
The parties then began engaging in
substantial motions practice, including two motions for remand
filed by Plaintiff on May 17, 2017 and May 24, 2017.
On June 7, 2017, this Court administratively withdrew
the various dispositive motions filed, directed that no
additional dispositive motions or further briefing related to
the pending dispositive motions be filed, and referred the two
motions for remand to Magistrate Judge Puglisi.
ECF No. 39.
On June 26, 2017, Defendant Sullivan filed his
opposition to the motions to remand, to which Defendants Nuance
Communications, Salesforce.com Inc., Craig Weissman, Chris Fry,
and Microsoft filed substantive joinders.
ECF Nos. 46-50.
June 27, 2017, Judge Puglisi ordered Defendant Sullivan to file
supplemental briefing regarding cause for extending the removal
period for the patent infringement claim and the timeliness of
removal based on Plaintiff’s RICO allegations.
ECF No. 51.
Defendant Sullivan filed his supplemental opposition on July 5,
ECF No. 83.
ECF No. 84.
Plaintiff filed his reply on July 13, 2017.
On August 8, 2017, Judge Puglisi issued Findings
and Recommendation to Grant Plaintiff’s Motions to Remand.
No. 86 (“F&R”).
In the F&R, Judge Puglisi first determined that the
Third Amended Complaint asserted a claim for RICO violations
under federal law, which provided a basis for removal.
However, Judge Puglisi found that the RICO claims were
ascertainable from the First Amended Complaint, which he
determined was the operative complaint for purposes of removal.
Id. at 10.
As Defendant Sullivan had been served with the First
Amended Complaint on May 12, 2016, the time for removal expired
on June 13, 2016, and thus Defendant Sullivan’s removal was not
Id. at 11.
Judge Puglisi then determined that the
Third Amended Complaint also asserted claims relating to the
Ergo patent, which provided a basis for removal.
Id. at 11-12.
However, the patent claims were also ascertainable from the
First Amended Complaint, which made it the operative complaint
for those claims.
Id. at 13-17.
As such, removal based on
patent jurisdiction was also untimely.
Id. at 17-18.
Judge Puglisi next determined that Defendant Sullivan
had failed to demonstrate good cause for extending the time for
removing this case pursuant to 28 U.S.C. § 1454.
Id. at 18-20.
He also rejected Defendant Sullivan’s argument that removal was
timely based on the counterclaims arising under federal patent
law which Defendant Sullivan filed on May 11, 2017.
Id. at 18
Judge Puglisi then recommended that Plaintiff’s motions be
granted and this action be remanded to state court.
Id. at 21.
On August 21, 2017, Microsoft filed a response
regarding the F&R noticing its intent to remove if this Court
were to remand this case.
ECF No. 87.
On August 22, 2017,
Defendant Sullivan filed objections to the F&R.
ECF No. 88
Plaintiff did not file a response to Microsoft’s
notice of intent to remove or Defendant Sullivan’s objections.
“This Court treats a motion to remand as a dispositive
motion, requiring the issuance of a findings and recommendation
by the magistrate judge.”
PSC Indus. Outsourcing, LP v.
Burlington Ins. Co., Civ. No. 10-00751, ACK-BMK, 2011 WL
1793333, at *3 (D. Haw. May 10, 2011) (citing Keown v. Tudor
Ins. Co., 621 F. Supp. 2d 1025, 1029 (D. Haw. 2008)).
When a party objects to a magistrate judge’s findings
or recommendation, the district court must review de novo those
portions to which the objections are made and “may accept,
reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.”
§ 636(b)(1)(C); see also United States v. Reyna-Tapia, 328 F.3d
1114, 1121 (9th Cir. 2003) (en banc) (“[T]he district court must
review the magistrate judge’s findings and recommendations de
novo if objection is made, but not otherwise.” (emphasis in
Under a de novo standard, a district court reviews
“the matter anew, the same as if it had not been heard before,
and as if no decision previously had been rendered.”
DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006).
district court need not hold a de novo hearing; however, it is
the court’s obligation to arrive at its own independent
conclusion about those portions of the magistrate judge’s
findings or recommendation to which a party objects.
States v. Remsing, 874 F.2d 614, 618 (9th Cir. 1989).
It is within the district court’s discretion to
“receive further evidence, recall witnesses, or recommit the
matter to the magistrate judge with instructions.”
Pursuant to Local Rule 74.2, this Court “may consider the record
developed before the magistrate judge,” but the Court must make
its “own determination on the basis of that record.”
The parties do not object to Judge Puglisi’s
determinations that the Third Amended Complaint asserted federal
RICO and patent-related claims, which provided a basis for
removal, or that those claims were ascertainable in the First
The parties also do not appear to object to
Judge Puglisi’s finding that Defendant Sullivan did not
demonstrate cause for extending the removal deadline.
the parties do not object to Judge Puglisi’s finding that the
filing of Defendant Sullivan’s counterclaims does not render his
removal of the Third Amended Complaint timely.
The Court does
not find clear error regarding these findings and adopts them
for the reasons stated in the F&R.
Defendant Sullivan objects to the F&R on two bases:
first, that Judge Puglisi erred in finding that the operative
complaint for purposes of determining the timeliness of his
removal was the First Amended Complaint as it was not a validly
served complaint; and second, that remanding the case is
contrary to judicial economy in light of Microsoft’s notice of
intent to remove.
See generally Obj.
The Court DISAGREES with
Defendant Sullivan’s Objections and accordingly ADOPTS
Magistrate Judge Puglisi’s Findings and Recommendation as
Defendant Sullivan Incorrectly Asserts that the First
Amended Complaint Was Not a Proper or Validly Served
Under the removal statute, a removing defendant must
file a notice of removal “within 30 days after the receipt by
the defendant, through service or otherwise, of a copy of the
initial pleading setting forth the claim for relief upon which
such action or proceeding is based....”
28 U.S.C. § 1446(b)(1).
“[I]f the case stated by the initial pleading is not removable,
a notice of removal may be filed within thirty days after
receipt by the defendant, through service or otherwise, of a
copy of an amended pleading, motion, order or other paper from
which it may first be ascertained that the case is one which is
or has become removable.”
Id. § 1446(b)(3).
“The removal statute is strictly construed, and any
doubt about the right of removal requires resolution in favor of
Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241,
1244 (9th Cir. 2009); Gaus v. Miles, 980 F.2d 564, 566 (9th Cir.
1992) (“Federal jurisdiction must be rejected if there is any
doubt as to the right of removal in the first instance.”)
‘strong presumption’ against removal jurisdiction means that the
defendant always has the burden of establishing that removal is
Gaus, 980 F.2d at 566.
Defendant Sullivan objects to Judge Puglisi’s finding
that the operative complaint for purposes of removal was the
First Amended Complaint, which was served on Defendant Sullivan
on May 12, 2016.4
Obj. at 4-5.
He appears to argue that because
Defendant Sullivan refers to this complaint throughout his
Objections as “Plaintiff’s 2016 Complaint.” See Obj. at 2.
However, for clarity the Court will refer to the complaint found
to be operative in the F&R for purposes of removal as the First
the state court later quashed attempted service of a subsequent
complaint in August 2016, either the First Amended Complaint
“did not qualify as a complaint under Hawai’i law and procedure”
or it “had not been validly served” and thus the removal
deadlines were not triggered until he was served with the Third
Id. at 9.
The Court disagrees with Defendant Sullivan’s
assertion that the First Amended Complaint “did not qualify, nor
should it have qualified, as a complaint under HRCP Rule 3.”
Id. at 5.
Like its federal counterpart, Hawaii Rule of Civil
Procedure (“HRCP”) 3 merely states that [a] civil action is
commenced by filing a complaint with the court.”
R. Civ. P. 3.
See also Fed.
The Hawaii Supreme Court has indicated that it
will treat documents commencing a civil action as complaints for
purposes of HRCP 3, even if not styled as such.
See Matter of
Lease Cancellation of Smith, 68 Haw. 466, 468, 719 P.2d 397, 399
(Haw. 1986) (treating petition for writ of assistance as
complaint commencing civil action under HRCP 3).
Even if the
complaint is defective, it still may commence an action for
purposes of Rule 3.
See William G. Tadlock Constr. v. U.S.
Dep’t of Defense, 91 F.3d 1335, 1341 (9th Cir. 1996) (finding
that although complaint was defective, the action was commenced
within the statutory period); see also 5A Wright & Miller, Fed.
Prac. & Proc. § 1339 (3d ed.) (“[T]he filing of an unverified
complaint effectively will commence an action under Rule 3”).
The Court notes that Defendant Sullivan does not
appear to have ever made this argument to the state court.
does this Court find merit in it.
Plaintiff’s pleadings, while
apparently defective in form and style,5 were sufficient to
commence his civil action under HRCP 3.
As such, this is not a
reason why the First Amended Complaint should not be treated as
the operative complaint for purposes of removal timing.
The Court also disagrees with Defendant Sullivan’s
position that the First Amended Complaint cannot have
constituted the operative complaint for purposes of removal
because it had not been validly served on him.
See Obj. at 9.
In the first place, Defendant Sullivan has explicitly admitted
on multiple occasions that he was properly served with the First
Amended Complaint and even withdrew his motion to dismiss for
lack of proper service.
See ECF No. 59-3 at 1-9; ECF No. 59-4
To the extent that Defendant Sullivan may be implying that
Plaintiff’s pleadings prior to the Third Amended Complaint did
not qualify as proper complaints because of alleged violations
of HRCP 8-10, governing the form and style of pleading, the
Court disagrees. While remedying these technical deficiencies
may aid in responding to the pleadings, they need not be
addressed prior to removal as long as the basis for removal is
ascertainable. Indeed, like the state court, the federal court
can require that pleadings contain a short and plain statement
of the case in numbered paragraphs. See Fed. R. Civ. P. 8-10;
at 52-54; ECF No. 60-4 at 5-6 (“On May 12, 2016, a civil process
server, on behalf of Bralich, served Sullivan with Bralich’s
[First Amended Complaint] with a valid summons.”); ECF No. 64-5
at 5 (“On May 12, 2016, Bralich effective [sic] service of the
[First Amended Complaint], with a summons, upon Sullivan”).
record also contains a return and acknowledgement of service by
ECF No. 59-4 at 80-81.
However, in his
Objections, Defendant Sullivan has not squarely addressed why,
despite his previous representations to the state court, service
of the First Amended Complaint on him was not valid.
Rather, Defendant Sullivan appears to try to construe
subsequent proceedings and state court orders to undermine and
distract from this fact.
First, Defendant Sullivan argues that
if the First Amended Complaint was not valid, the state court
would not have ordered that subsequent iterations be served in
accordance with HRCP 4.
Obj. at 3.
However, this does not
accurately represent what the state court ordered.
Defendant Sullivan’s motion for a more definite statement, the
state court ordered Plaintiff to “file and serve a Second
Amended Complaint that complies with the Hawaii Rules of Civil
Procedure and Rules of the Circuit Courts of the State of Hawaii
on all parties to this action no later than Friday, August 12,
See ECF No. 62-4 at 66.
Nowhere in that order did the
state court specifically mention HRCP 4.
Similarly, in allowing
Plaintiff leave to file a third amended complaint the state
court did not even set a deadline for service, much less specify
what rule governed service.
ECF No. 68-3 at 105.
Moreover, especially given the facts and circumstances
before the state court, delineating the applicable service rules
does not appear to have been warranted.
At the time of the
state court’s order regarding the Second Amended Complaint,
Defendant Sullivan had admitted being properly served as noted
As such, subsequent service of amended complaints on him
would generally be made pursuant to HRCP 4 rather than HRCP 5.
See Obj. at 8; Brewer v. Ass'n of Apartment Owners of
Southpointe at Waiakoa Condo. Homeowners Ass'n, No. CV. 10-00315
DAE-BMK, 2011 WL 2532757, at *1 n.2 (D. Haw. June 23, 2011)
(finding that Federal Rule of Civil Procedure 4 applied rather
than Rule 5 because there was no evidence the original complaint
had been properly served); see also Emp. Painters' Tr. v. Ethan
Enters., Inc., 480 F.3d 993, 995-96 (9th Cir. 2007) (noting that
under Rule 5, an amended complaint “can often be served in the
same manner as any other pleading if the original complaint is
As HRCP 4 and 5 are identical to their federal counterparts,
federal case law is highly persuasive interpreting the state
rules. Bank of Hawaii v. Shinn, 120 Haw. 1, 26, 200 P.3d 370,
396 (Haw. 2008) (“Where a Hawaii rule of civil procedure is
identical to the federal rule, the interpretation of that rule
(continued . . . )
However, even where a prior complaint has been validly
served, service pursuant to HRCP 4 is still required for
subsequent amended pleadings asserting new or additional claims
See HRCP 5(a).
Here, while certain claims such as
RICO, patent violations, and fraud are apparent in Plaintiff’s
First Amended Complaint, Plaintiff’s pleading renders it
somewhat difficult to ascertain each and every claim he intends
By Plaintiff’s Third Amended Complaint, his claims
include, inter alia, usurpation of corporate opportunity and
tortious interference with contract.
TAC ¶¶ 160-70.
claims might constitute new or additional claims requiring
service under HRCP 4 is at the very least debatable.
these circumstances, the fact that Plaintiff complied with HRCP
4 in serving complaints subsequent to his First Amended
Complaint does not provide a basis for necessarily inferring
that service of prior complaints was invalid.7
In addition, it does not appear that other defendants
had ever been properly served.
See, e.g., ECF No. 57-4 at 4
(Salesforce.com’s motion to dismiss the FAC); ECF No. 56-5 at 3-
( . . . continued)
by the federal courts is highly persuasive.”) (internal
citation, quotation, and alteration omitted).
Moreover, as the service requirements under HRCP 4 are more
stringent than those under HRCP 5, Plaintiff may have complied
with HRCP 4 out of an abundance of caution since such service
would appear to satisfy both rules.
4 (Twitter’s motion to dismiss the FAC); ECF No. 59-4 at 99
(order denying Twitter’s motion to dismiss as no complaint had
yet been served on Twitter).
Thus, irrespective of what service
rule applied to Defendant Sullivan, Plaintiff was still required
to serve other previously unserved defendants pursuant to HRCP
Given the above circumstances, this Court will not construe
the state court’s simple statement that the Second Amended
Complaint had to be filed and served in accordance with
applicable state court rules as implicitly requiring service
pursuant to HRCP 4 or implicitly finding that service of the
First Amended Complaint on Defendant Sullivan was invalid.
Defendant Sullivan also relies on the fact that the
state court quashed two attempts to serve him in August 2016 in
support of his position that the First Amended Complaint was not
Obj. at 4-5, 7.
However, in making this argument,
Defendant Sullivan appears to conflate the First and Second
The record shows that in May 2016 Defendant
Sullivan acknowledged service and explicitly admitted that
Plaintiff had validly served him with the First Amended
Complaint, filed March 3, 2016.
ECF No. 59-4 at 80-81; ECF No.
The Court notes that Defendant Sullivan asserts that service of
“Plaintiff’s 2016 Complaint” was quashed. Obj. at 7. Defendant
Sullivan uses the term “Plaintiff’s 2016 Complaint” to describe
Plaintiff’s First Amended Complaint filed March 3, 2016 and
served on him on May 12, 2016. Id. at 2.
60-4 at 5-6.
This was the complaint Judge Puglisi found to be
operative for purposes of determining removal timing.
at 10, 17.
Defendant Sullivan then moved for a more definite
statement, or in the alternative to strike certain allegations
on June 2, 2016.
ECF No. 60-4 at 1-15.
The state court granted
the motion for a more definite statement and ordered Plaintiff
to file his Second Amended Complaint.
ECF No. 62-4 at 65-69.
Plaintiff then attempted to serve Defendant Sullivan twice in
August 2016, but Defendant Sullivan successfully argued to the
state court that those two service attempts were defective and
should be quashed.
ECF No. 64-5 at 1-10; ECF No. 67-7 at 50-52.
The record thus plainly shows the state court only quashed
attempted service in August 2016 of the Second Amended
Complaint, not the successful service of the First Amended
Complaint on Defendant Sullivan on May 12, 2016.
Moreover, the state court had ample reason to quash
the August 2016 attempts at service of the Second Amended
Complaint that has nothing to do with the First Amended
Plaintiff first apparently attempted to have served
a file-stamped but uncertified partial copy of the First Amended
ECF No. 64-5 at 6.
Though timely, the attempt was
for the wrong document and did not comply with Rule 2(d)(1) of
the Rules of the Circuit Courts of the State of Hawaii (“RCC”),
which requires service of pleadings and other documents to be
made with the certified copy or copy of the summons.
As to the second attempt, Plaintiff caused to be
served an unfiled copy of what purported to be the Second
Amended Complaint, which was left at the reception desk of
Defendant Sullivan’s counsel’s office on August 26, 2016 and did
not include a summons.
ECF No. 64-5 at 7.
As the state court
had ordered service to be completed by August 12, this attempt
was not timely.
This alone would have been reason to quash
Serving an unfiled version also appears
contrary to RCC 2, which requires documents to be presented to
the clerk for filing along with copies to be certified for
See RCC 2(d).
In addition, as the Second Amended
Complaint lists claims against specific individuals and at least
arguably may raise new claims, service may have been required
under HRCP 4.
As no summons was provided, service under HRCP 4
would have been defective.
In light of the foregoing, it cannot
reasonably be inferred that in quashing attempted service of
Plaintiff’s Second Amended Complaint, the state court
This holds true regardless of whether Plaintiff was attempting
service under HRCP 4 or 5, as service under HRCP 5 can also be
quashed even where there is actual notice, if the service is
nevertheless deficient. See Rosiere v. U.S. Sec. & Exch.
Comm'n, No. 2:09CV01975JCMPAL, 2010 WL 419438, at *1 (D. Nev.
Jan. 29, 2010) (granting motion to quash notice of deposition
served under Rule 5 pursuant to unauthorized means).
necessarily implied that service of the First Amended Complaint
on Defendant Sullivan was also invalid.
In sum, neither law nor fact supports Defendant
Sullivan’s position here that if the First Amended Complaint was
valid the state court “would not and could not” have ordered
that subsequent amended complaints be served in accordance with
Obj. at 3.
The state court did not explicitly order
service of subsequent complaints pursuant to HRCP 4, nor did it
do so by necessary implication in generally requiring service in
accordance with applicable Hawaii rules or by quashing defective
attempts at service.
Rather, the record plainly demonstrates
that Defendant Sullivan was validly served with the First
That complaint contained ascertainable RICO
and patent-related claims which provided a basis for removal.
The 30-day period for removing this case thus began on May 12,
2016 when Defendant Sullivan was served with that complaint, and
expired on June 13, 2016.
See 28 U.S.C. § 1446(b).
did not file his notice of removal until May 4, 2017, nearly a
ECF No. 1.
As such, Defendant Sullivan’s removal
is not timely, and as Judge Puglisi found, he has not
established cause for extending the deadline under 28 U.S.C. §
Defendant Sullivan Incorrectly Requests that This Court
Construe His Objections as a Motion for Reconsideration and
Deny the Motion to Remand in Favor of Judicial Economy
Defendant Sullivan requests in the alternative that
his objection be treated as a motion for reconsideration before
Judge Puglisi in light of Defendant Microsoft’s notice of intent
to remove, filed on August 21, 2017.
See Obj. at 4, 11.
Court does not find it appropriate to treat the Objections as a
motion for reconsideration.
It does not appear that the result
would change even if Plaintiff’s motions to remand were
reconsidered since “[c]hallenges to removal jurisdiction require
an inquiry into the circumstances at the time the notice of
removal is filed.”
Spencer v. U.S. Dist. Ct. for N. Dist. of
Cal., 393 F.3d 867, 871 (9th Cir. 2004); see also Rudow v.
Monsanto Co., No. C99-4700 TEH, 2001 WL 228163, at *2 (N.D. Cal.
Mar. 1, 2001) (propriety of removal is determined with respect
The Court notes that in his Objections, Defendant Sullivan
states in passing that he “has shown good cause for extending
the timelines to remove the instant action pursuant to 28 U.S.C.
§ 1454.” Obj. at 10. However, the Court does not find that
this brief mention buried in the middle of the document
constitutes a specific objection warranting de novo review,
especially as Defendant Sullivan does not sufficiently identify
the basis for his disagreement with the F&R, as required by
Local Rule 74.2. Nevertheless, even if it were to review this
issue de novo, the Court would agree with Judge Puglisi’s
analysis and adopt the F&R for the reasons stated therein.
to the parties involved, the causes of action asserted, and the
bases for subject matter jurisdiction at the time of removal).
Here, Defendant Microsoft was not served until after
Defendant Sullivan had already removed this case.
Intent to Remove at 2, ECF No. 87.
As such, whether Defendant
Microsoft has an independent basis for removal is a post-removal
development that should not be taken into account in considering
the propriety of Defendant Sullivan’s removal.
Defendant Microsoft’s apparent consent cure an untimely notice
of removal filed by an earlier-served defendant.
Sols., Inc. v. Pick, No. 2:15-cv-00236-MMD-GWH, 2015 WL 5895902,
at *2 (D. Nev. Oct. 8, 2015) (noting that even if the codefendant was properly served, she consented to an untimely
notice of removal, instead of filing her own notice, and finding
that consent to an untimely notice does not cure the defect).
Since it appears pointless for Judge Puglisi to reconsider the
F&R in light of Defendant Microsoft’s notice of intent to
remove, the Court declines to require him to do so.
Defendant Sullivan also requests that, in light of
Defendant Microsoft’s notice, this Court reject the F&R in favor
of judicial economy.
Obj. at 10-11.
However, it does not
appear procedurally proper at this stage for the Court to
consider judicial economy, nor has Defendant Sullivan pointed to
any authority allowing the Court to do so.
Under 28 U.S.C. §
636(b)(1), a district court reviews de novo those portions of
the findings and recommendation to which a party specifically
objects and may reconsider a matter “where it has been shown
that the magistrate judge’s order is clearly erroneous or
contrary to law.”
Defendant Microsoft’s notice of intent to
remove is not styled as an objection to the F&R, nor does
Defendant Sullivan attempt to construe it as such.
10-11; Notice of Intent to Remove, ECF No. 87.
See Obj. at
Court does not see how this notice could form the basis of an
objection, as the notice had not been filed when Judge Puglisi
issued the F&R.
For the same reason, the F&R cannot be clearly
The Court does not disregard Defendant Sullivan’s
argument that it would be inefficient to remand this case only
to have Defendant Microsoft immediately re-remove it, as it has
asserted it can and will do.
Remove, ECF No. 87.
Obj. at 10-11; Notice of Intent to
However, in light of the fact that under
Ninth Circuit law post-removal developments do not affect the
propriety of removal, such possible inefficiency appears
See Thompson v. Target Corp., CV 12-0010 JGB, 2014
WL 12573412, at *8-9 (C.D. Cal. May 9, 2014) (recognizing that
remand may be pointless in light of intent to re-remove case
based on post-removal developments, but finding removal required
under Ninth Circuit law).
Therefore, as it does not appear procedurally proper
at this stage for the Court to consider Defendant Microsoft’s
notice of intent to remove, and as Defendant Sullivan’s removal
was not timely, as discussed above, the Court accordingly finds
that remand is warranted.
For the foregoing reasons, the Court ADOPTS the
Findings and Recommendation to Grant Plaintiff’s Motions to
Remand, as modified by this Order.
Remand are GRANTED.
Plaintiff’s Motions for
Accordingly, this action will be remanded
to the Circuit Court of the First Circuit, State of Hawaii.
IT IS SO ORDERED.
Honolulu, Hawaii, October 30, 2017.
Alan C. Kay
Sr. United States District Judge
Bralich v. Sullivan, et al., Civ. No. 17-00203 ACK-RLP, Order
Adopting as Modified the Findings and Recommendation to Grant
Plaintiffs’ Motion to Remand.
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