Transtar Industries, Inc. v. Lewis et al
Filing
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Opinion and Order. For the reasons outlined herein, case is remanded to Cuyahoga County Common Pleas Court. This Court will entertain Plaintiff's Motion for Fees based upon wrongful removal. The Motion shall be filed by 9/10/2015 and any opposition shall be filed by 9/17/2015. Judge Christopher A. Boyko on 9/3/2015. (H,CM)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
TRANSTAR INDUSTRIES, INC.,
Plaintiff,
vs.
ANTHONY LEWIS, et al.,
Defendants.
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CASE NO. 1:15CV1735
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J.:
This matter came before the Court for an Attorney Conference held on September 3,
2015, and upon consideration of Defendants’ Notice of Removal (ECF DKT #1) filed on
August 27, 2015.
I. BACKGROUND
On August 27, 2015, Defendants, Anthony Lewis and Whatever It Takes
Transmission and Parts, Inc. (“WIT”), removed this case from Cuyahoga County Common
Pleas Court on the basis of diversity jurisdiction.
Lewis executed a Non-Competition, Non-Disclosure, Non-Solicitation and
Confidentiality Agreement on December 12, 2011, as a condition of his employment with
Transtar. According to the Agreement, Lewis is prohibited, for a period of twelve (12)
months after termination from employment with Transtar, from accepting employment with a
competitor located within 100 miles of the Transtar branch from which Lewis’s employment
is based, from soliciting Transtar’s customers, from soliciting Transtar’s employees, from
soliciting Transtar’s vendors and from using or disclosing Transtar’s confidential business
information. In his positions as Branch Manager and later as Regional Manager, Lewis
allegedly had access to Transtar’s business plans, pricing models, customer lists, employee
lists, vendor lists and other confidential and proprietary business information that provides
Transtar with a competitive advantage.
On July 7, 2015, Lewis voluntarily resigned from his employment with Transtar and
accepted employment almost immediately with WIT. Transtar alleges that Lewis is the lead
WIT employee in the opening of the new WIT Arizona branch office that will directly
compete with the Transtar branch office he formerly managed.
Transtar’s Complaint, filed in state court on August 11, 2015, is captioned “Complaint
for Injunctive Relief With Jury Demand.” The Complaint quotes Defendant Lewis’s NonCompetition, Non-Disclosure, Non-Solicitation and Confidentiality Agreement, paragraph 2:
“Transtar would suffer irreparable harm from a breach or threatened breach by Employee of
any of the covenants or agreements contained herein and money damages would be an
inadequate remedy for such breach or threatened breach.” Each Count concludes with:
“unless injunctive relief is granted, Defendants’ actions will cause Transtar to suffer
irreparable harm.” Count V is solely a claim for injunctive relief. The Prayer is for injunctive
relief requiring Lewis’s compliance with the Agreement; requiring WIT to cease employing
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Lewis; requiring WIT to return Transtar’s confidential business information; demanding
reasonable attorneys’ fees pursuant to Ohio statutory and common law; demanding costs
incurred in prosecuting this action; and any other appropriate relief that this Court deems just
and equitable.
II. LAW AND ANALYSIS
Removal
28 U.S.C. § 1441 “provides that an action is removable only if it could have initially
been brought in federal court.” Cole v. Great Atlantic & Pacific Tea Co., 728 F.Supp. 1305,
1307 (E.D.Ky. 1990). In other words, a party can remove an action from state to federal court
if federal court would otherwise have had original jurisdiction. 28 U.S.C. § 1441(a). The
burden of establishing federal jurisdiction rests upon the removing party. Alexander v.
Electronic Data Systems Corp., 13 F.3d 940, 949 (6th Cir. 1994). “Concern about
encroaching on a state court’s right to decide cases properly before it, requires this court to
construe removal jurisdiction narrowly.” Cole, 728 F.Supp. at 1307 (citing Shamrock Oil &
Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941)). The court must review the complaint as it
existed at the time the petition for removal was filed, and all doubts must be resolved against
removal. Ahearn v. Charter Township of Bloomfield, 100 F.3d 451, 453 (6th Cir. 1996); Her
Majesty The Queen v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989). “Where there is
doubt as to federal jurisdiction, the doubt should be construed in favor of remanding the case
to the state court where there is no doubt as to its jurisdiction.” Walsh v. American Airlines,
Inc., 264 F.Supp. 514, 515 (E.D.Ky. 1967); see also Breymann v. Pennsylvania, O. & D.
R.R., 38 F.2d 209, 212 (6th Cir. 1930).
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Diversity jurisdiction
In order to establish diversity jurisdiction under 28 U.S.C. § 1332(a)(1), there must be
complete diversity of citizenship between the parties and an amount-in-controversy
exceeding Seventy-Five Thousand Dollars ($75,000). For a federal district court to have
original jurisdiction over a civil action based on diversity of citizenship, the amount in
controversy must exceed $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). The
removing party has the burden of showing by a preponderance of the evidence (“more likely
than not”) that the amount-in-controversy requirement has been met. See Hayes v. Equitable
Energy Res. Co., 266 F.3d 560, 572 (6th Cir. 2001). “To satisfy this burden, this circuit
requires defendants who are faced with an indeterminate state court complaint to make an
independent inquiry as to the extent of the plaintiff’s damages prior to filing the notice of
removal. Bowling v. Ryan, 2005 WL 1875465 (E.D. Ky. July 29, 2005), fn.2 at *3; Cole, 728
F.Supp. at 1309. (Emphasis added).
The diversity analysis, which the Court must undertake, focuses on the facts as they
existed at the time the action was removed. Hayes, 266 F.3d at 573. Defendants maintain
that the Complaint alleges violations of the Ohio Trade Secrets Act, which allows for
recovery for actual loss caused by misappropriation, attorneys’ fees and punitive damages of
three times the actual loss. Defendants point to related litigation between Transtar and WIT
in another courtroom in the U.S. District Court for the Northern District of Ohio. That case
involves alleged unfair competition in the state of Maryland; and Transtar is claiming
monetary damages consisting of lost revenue, lost customers and a drastic reduction in its
price point because WIT is offering prices below theirs for automotive transmission products.
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The Court is not convinced by Defendants’ arguments. Transtar’s Complaint, viewed
at the time of removal, makes no request for compensatory or exemplary damages of any sort.
In fact, the Complaint is carefully drafted to seek only injunctive relief. The Court will not
speculate as to what monetary relief, if any, Transtar hopes to recover and will not
superimpose the damages sought in another case upon this one. Defendants have failed to
show that it is more likely than not that the monetary jurisdictional amount has been satisfied.
III. CONCLUSION
Since removal jurisdiction must be narrowly construed; since any doubt should be
resolved in favor of remand; and since Defendants, Lewis and WIT, have not met their burden
of establishing the requirements of diversity jurisdiction by a preponderance of the evidence;
the above-captioned case is remanded to Cuyahoga County Common Pleas Court. This Court
will entertain Plaintiff’s Motion for Fees based upon wrongful removal. The Motion shall be
filed by September 10, 2015 and any opposition shall be filed by September 17, 2015.
IT IS SO ORDERED.
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
Dated: September 3, 2015
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