Spindletop Films, LLC, et al vs. Cesare Wright

Filing 11

MEMORANDUM OPINION AND ORDER granting 5 MOTION to Remand, denying 7 Amended MOTION to Remand, mooting 1 Motion for Consolidation. This action is Remanded to the 270th Judicial District Court of Harris County, Texas. (Signed by Judge Sim Lake) Parties notified. (aboyd)

I N THE U N I T E D STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

STF # 1 0 0 1 , L . P . a n d
SPINDLETOP FILMS, L.L.C.,

§
§
§
§
§
§
§

Plaintiffs,
v.

C I V I L A C T I O N NO.

H-12-2136

5
5
5

CESARE WRIGHT,
Defendant.

MEMORANDUM OPINION AND ORDER

D e f e n d a n t C e s a r e W r i g h t removed t h i s a c t i o n f r o m t h e 2 7 0 t h
J u d i c i a l D i s t r i c t C o u r t o f H a r r i s C o u n t y , T e x a s , w h e r e i t was f i l e d
u n d e r C a u s e No. 2010-23415.
Spindletop
("STF")

Films,

L. L.C.

(collectively,

Pending b e f o r e t h e c o u r t i s p l a i n t i f f s
("Spindletop")

STF

#1001,

L . P. ' s

Amended M o t i o n

f o r Remand,

Request f o r Attorney Fees and Request f o r S a n c t i o n s

("Motion f o r

Remand")

"Plaintiffs")

and

( D o c k e t E n t r y No.

7).

Also pending b e f o r e t h e c o u r t i s

W r i g h t f s N o t i c e o f Removal a n d M o t i o n f o r C o n s o l i d a t i o n
E n t r y No.

1).

At

i s s u e i s whether Wright's

(Docket

r e m o v a l was p r o p e r

p u r s u a n t t o t h e r e v i v a l e x c e p t i o n f o u n d i n 28 U.S.C.

§

1446.

For

t h e r e a s o n s d i s c u s s e d b e l o w , P l a i n t i f f s f M o t i o n f o r Remand w i l l b e
granted

in

part

and

denied

Consolidation w i l l be denied.

in

part,

and

Wright's

Motion

for

I.

Backqround

Plaintiffs allege that in March

2007 STE agreed

to pay

defendant Wright to direct, produce, and edit a documentary film.'
As part of that agreement Plaintiffs allege that STF provided
certain equipment to Wright for the purpose of producing and
editing the film.2

Plaintiffs further allege that Wright has

refused to complete the film, has refused to return the equipment,
and has refused to provide the film footage to STF.3 As a result,
Plaintiffs allege that STF has been unable to market the film for
distribution.
This lawsuit commenced in state court on April 14, 2 0 1 0 . ~
Plaintiffs amended the petition on October 21, 2010, and again on
October 29, 2010.6

On November 15, 2010, a day before the trial

was to begin in state court, Wright removed the case to this court
based on federal question jurisdiction under 28 U.S.C.
the revival exception found in 28 U.S.C.

§

§

1338 and

1446(b) (2010) (amended

'plaintiff sf
Third
Amended
Petition
("Third Amended
Petition"), Ex. 1 to Notice of Removal and Motion for
Consolidation, Docket Entry No. 1-1, p. 3, ¶ 9. Plaintiffs allege
that Spindletop is a general partner of STF. I ,
d

5 ~ o t i c e Removal and Motion for Consolidation, Docket Entry
of
No. 1, p. 1, ¶ 1.

Dec. 7, 2011) . 7

The court found the revival exception inapplicable

and remanded the action.'
On

June

18, 2012,

The Fifth Circuit dismissed the appeal.g
Plaintiffs

filed their

Third Amended

Petition, the operative pleading in this case, bringing claims
against Wright and Kino Eye Center for Visual Innovation ("Kino Eye
Center") for conversion and violations of the Texas Theft Liability
Act,

and

against

Wright

for

breach

of

contract,

interference with an existing contract, and fraud.''

tortious
Plaintiffs

also seek a declaratory judgment that Plaintiffs are the sole
owners of the film footage and film equipment.''

On July 17, 2012,

Wright again removed the case based on the revival exception found
in 28 U.S.C.

§

1446 (b) (2010) (amended Dec. 7, 2011) .I2

Wright also

moved to consolidate this action with an action previously filed in

*~pindletopFilms, L.L.C. v. Wriqht, No. 4:10-cv-4551, 2011
WL 8199942 (S.D. Tex. July 1, 2011), Ex. A to Brief in Support of
Plaintiffsf Motion for Remand, Request for Attorney Fees and
Request for Sanctions ("Plaintiffs' Brief in Support"), Docket
Entry No. 8.
'see Spindletop Films, L.L.C. v. Wriqht, No. 11-20560, 2012
WL 3568236 (5th Cir. Aug. 20, 2012).
¶¶

'O~hird Amended Petition, Docket Entry No.
13-33.

1-1, pp. 4-8,

"~otice of Removal and Motion for Consolidation, Docket Entry
No. 1.

federal court by Wright against Spindletop.13 Plaintiffs filed an
amended Motion for Remand on August 15, 2012, arguing that subject
matter jurisdiction does not exist and that the revival exception
is inapplicable, rendering the removal untimely.14 Wright filed a
response to the Motion for Remand on August 28, 2012.15 Plaintiffs
filed a reply on September 4, 2012.16
11.

A.

Removal Jurisdiction and the Revival Exception

Applicable Law

Under 28 U.S.C. 5 1441 (a) any state court civil action over
which a federal court would have original jurisdiction may be
removed from state to federal court. See Gasch v. Hartford Acc.
Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007).

&

The removing party

bears the burden of showing that subject matter jurisdiction exists
and that the removal procedure was properly followed.
Prudential Prop.
2002).

&

Manquno v.

Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.

Ambiguities or doubts are to be construed against removal

and in favor of remanding the case to state court.

I.
d

131d. at 11, ¶ 30. The previously filed action was filed under
No. 4:lO-cv-4549.
l4~otion
for Remand, Docket Entry No. 7.
15~efendant's Response in Opposition to Plaintiffs' Motion to
Remand ("Defendant's Response in Opposition") , Docket Entry No. 9.
16plaintiffs' Reply to Defendant's Response in Opposition to
Plaintiffs f Motion to Remand ("Plaintiffs' Reply") , Docket Entry
No. 10.

Section 1446(b) of Title 28, United States Code, governs the
timeliness of removal of a state action to federal court:"
The notice of removal of a civil action or proceeding
shall be filed within thirty 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, or within
thirty days after the service of summons upon the
defendant if such initial pleading has then been filed in
court and is not required to be served on the defendant,
whichever period is shorter.
Consequently a defendant loses the statutory right to remove upon
the expiration of the thirty-day period.18
There is, however, "one narrow judicially-created exception to
the thirty-day rule, known as the revival exception."

Elliott v.

City of Holly Sprinss, 2011 WL 2261331, at *2 (N.D. Miss. June 6,
2011)

(internal quotation marks omitted) .

Under the revival

exception "a lapsed right to remove an initially removable case
within thirty days is restored when the complaint is amended so
substantially

as

to

alter

the

character

constitute essentially a new lawsuit."

of

the

action

and

Johnson v. Heublein, 227

F.3d 236, 241 (5th Cir. 2000); see also Wilson v. Intercollesiate

"~ecause this action was commenced in state court on April 14,
2010, the amendments to the removal statutes enacted in 2011 do not
apply. See Federal Courts Jurisdiction and Venue Clarification Act
of 2011, Pub. L. 112-63, 125 Stat. 758, 5 105. The court applies
§ 1446 as it existed prior to those amendments.
18Assumingr without so finding, that Plaintiffsr case was
removable as first filed, the one-year limitation in the second
paragraph of 28 U.S.C. 5 1446(b) (2010) (amended Dec. 7, 2011) does
not apply to this case.

(Biq Ten) Conference Athletic Assoc., 668 F.2d 962, 965 (7th Cir.
1982) ("The courts

. . .

have read into

[§

1446 (b)1 an exception

for the case where the plaintiff files an amended complaint that so
changes the nature of his action as to constitute 'substantially a
new suit begun that day.'"

(quoting Fletcher v. Hamlet, 6 S. Ct.

426, 427 (1886))).
The Fifth Circuit has twice addressed the revival exception.
In Cliett v. Scott, 233 F.2d 269 (5th Cir. 1956), the plaintiffs
originally filed suit to collect on a money judgment related to
accounts on 700 acres of land.

233 F.2d at 269-70.

Several years

later plaintiffs filed an amended petition asserting for the first
time title to the entire 700-acre tract.

I .at 270. In affirming
d

a denial of remand the Fifth Circuit held that the amended petition
asserting title to the land created "an entirely new and different
suit" through which "defendantsr right to remove revived."
271.

I .at
d

In Heublein, 227 F.3d 236 (5th Cir. 2000), after months of

litigation in state court, the plaintiff and two other defendants
jointly filed a confession of judgment and assignment of claims.
227 F.3d at 239.

The state court realigned the parties and the

newly-aligned co-plaintiffs amended the petition to reassert the
original plaintiff's

claims against the remaining defendants and

assert the new plaintiffs' previously unfiled claims.

I . In
d

affirming a denial of remand the Fifth Circuit held that the
amended pleading revived the defendantsf right to remove because

the

parties

were

realigned,

the

new

allegations

bore

"no

resemblance whatsoever" to those of the original complaint, and the
defendants were confronted with a "suit on a construction contract
involving

exposure

to

substantial

compensatory

and

punitive

damages, instead of only a questionable conversion claim by a
competing creditor with an apparently inferior lien."

I .at 242.
d

In sum, the amended petition began "a virtually new, more complex,
and substantial case."

I . The Heublein court also recognized
d

that the revival exception must be considered in light of the
purposes of the thirty-day limitation on removal and the proper
allocation of decision-making responsibilities between state and
federal courts.

I.
d

Since Heublein, district courts have held that an amendment
does not

revive a

right to

remove when

the

lawsuit

remains

essentially the same as earlier pleaded and the amendment does not
alter the essential character of the action.

See Air Starter

Components, Inc. v. Molina, 442 F. Supp. 2d 374, 382 (S.D. Tex.
2006) (no revival where amended petition reasserted RICO claim and
added allegations that three additional defendants had aided in
alleged conspiracy, but core of suit still related to alleged theft
of trade secrets and conspiracy to defraud plaintiff) ; La. Farm
Bureau Cas. Ins. Co. v. Michelin Tire Corp., 207 F. Supp. 2d 524,
526 (M.D. La. 2002) (no revival where automobile liability insurer
amended complaint to add insured as party plaintiff in subrogation

action against tire manufacturer, but core of lawsuit still arose
from alleged tire explosion and insured's

injuries); Bavch v.

Douslass, 227 F. Supp. 2d 620, 622 (E.D. Tex. 2002) (no revival
where

three

new

defendants

and new

claims

for

fraud, civil

conspiracy, and violations of Uniform Transfers Act were added, but
core of lawsuit still arose from alleged breach of employment
contract); Rodrisuez v. ACandS, Inc., 2001 WL 333101, at *3 (E.D.
La. Apr. 4, 2001) (no revival where new plaintiffs and new claims
for wrongful death were added because original plaintiff died, but
all claims arose out of asbestos exposure and subsequent injury and
death).
Courts have specifically refused to apply the exception even
where the amended claims would require additional evidence.

See

Medrano v. Univ. of Tex.-Pan Am., 2008 WL 2224312, *4 (S.D. Tex.
May 29, 2008)
additional

(

"While the [additional] claim may well require

evidence

and

different

burdens

of

proof,

such

differences are not so substantial as to create a new opportunity
for [the defendant] to remove this action."); Samuels v. All-State
Ins. Co., 2006 WL 449257, at *4 (D. Kan. Feb. 23, 2006) (same).
The revival exception is warranted only in those situations in
which the nature of the suit is substantially transformed by the
amendments.
F.

Supp.

2d

See MG Blds. Materials, Ltd. v. Pavchex, Inc., 841
740,

748

(W.D.N.Y. 2012)

(applying the

revival

exception because "[wlhat began as a lawsuit by two plaintiffs,
alleging that [the defendantfs] failure to make timely and adequate

tax payments on behalf of [the plaintiffs] had caused plaintiffs to
incur some $162,000 in penalties, has morphed into a class action,
potentially

involving

thousands

of

class

members

across

the

country, while the damage claims have grown to a whopping $15
billion, an increase of over nine million percent").
B.

Analysis

Wright argues that the Third Amended Petition revived the
right to remove by adding causes of action for fraud and tortious
interference with contract, which Wright describes as "two wholly
new and distinct claims not previously raised and constituting
entirely new actions. "Ig As to the fraud claim, Plaintiffs allege:
Defendant Wright represented to Plaintiff that he was an
experienced film maker and was capable of filming this
project. Said material representations were false and
Defendant knew that such representations were false or
made recklessly as a positive assertion and without
knowledge of its truth.
The Defendant made such
representations with the intent that the Plaintiffs act
on them, and Plaintiffs did indeed rely upon said
representations. Defendant's fraudulent representations
induced Plaintiffs into the agreement to Plaintiffsf
detriment ."
As to the tortious interference with contract claim, Plaintiffs
allege :
Plaintiffs had valid contracts with [their] investors to
produce and distribute the Film commercially. Defendant
Wright knew of such agreement, and willfully and
intentionally interfered with the contract when Defendant

Ig~otice Removal and Motion for Consolidation, Docket Entry
of
No. 1, p. 11, ¶ 31.
''~hird Amended Petition, Docket Entry No. 1-1, p. 6,
-9-

¶

22.

Wright sent correspondence, in June of 2012, stating that
he would "prefer to include the initial investors in this
process of working to release a viable film[,"] and " [i]f
you are interested in the possibility of working with me
in the future to release a film that may recoup both your
investment and my outstanding expenses, please feel free
to contact me[."] Aside from witness tampering issues,
this interference by said defendant has proximately
caused Plaintiffsf injury, and incurred damages as a
result of such actions.''
Wright relies on these two causes of action to argue that the
amended pleading is sufficient to trigger the revival exception.
support Wright cites Cliett,

and Heublein,

F.3d 236, in which a court applied the revival exception to allow
removal after the expiration of the thirty-day period.
The court concludes that this case does not merit application
of the narrow revival exception because the core of the lawsuit
remains essentially the same and the essential character of the
action has not changed.

Both Heublein and Cliett involved extra-

ordinary facts of the sort not present in this case. First, unlike
in Heublein, the parties in this case have not been realigned in
any way. Notably, Wright does not rely on the addition of Kino Eye
Center as a defendant in the Third Amended Petition to support
revival. In any case, the mere addition of a new party does not by
itself transform the character of the action. See La. Farm Bureau,
207 F. Supp. 2d at 526; Bavch, 227 F. Supp. 2d at 623.
Moreover, the allegations in the Third Amended Petition are
virtually unchanged with the exception of the new defendant and the

211d. 7 and 8,
at

¶

32.

additional causes of action.

The thrust of the facts alleged in

the petition was -- and still is -- that Wright violated an
agreement and now wrongfully refuses to transfer the film footage
and return the equipment to STF.
contrast

to

the

amended petition

This scenario stands in stark
in Heublein

resemblance whatsoever" to the original.

that

bore

"no

Third, the core of the

lawsuit relative to the original petition remains essentially the
same. In both Cliett, where a suit on a money judgment transformed
into a

claim

for

title,

and

Heublein,

where

a

questionable

conversion claim transformed into a claim on a contract accompanied
by an increase in damages, the core of the lawsuit was drastically
altered.

See also Pavchex, 841 F. Supp. 2d at 748 (amendments

transformed suit into class action and increased damages by factor
of nine million).

Wright is not confronted with a drastically

different action or huge increase in potential liability.

Wright

still confronts causes of action for monetary recovery for theft,
conversion, and breach of contract as well as a petition for a
declaratory judgment regarding ownership of the film footage and
equipment.

The causes of action for monetary recoveryz2 for fraud,

which relates to the agreement, and for tortious interference of
contract, which relates to the retention of the film footage, are

*'Wright claims that the new cause of action for fraud alleges
over $100,000 in damages, see Notice of Removal and Motion for
Consolidation, Docket Entry No. 1, p. 13, ¶ 36, but Plaintiffsf
Third Amended Petition does not allege such damages.

not so radically different as to alter the nature of the entire
suit.
Although the amended claims will require additional evidence
and

different

burdens

of

proof,

this

difference

is

not

so

substantial as to afford Wright a new opportunity to remove.
Medrano, 2008 WL 2224312, at *l.

Furthermore, the essentially

unchanged nature of the action as a whole is evidenced by Wright's
own assertion that " [w]
hat confronts the Court are competing claims
in which one party seeks a right to do that which the other party
seeks a right to prevent.

One party seeks to establish its rights

under federal copyright law and the other under state common law."23
Wright thus argues that the parties are still targeting the same
goal -- i.e., establishing ownership of the film footage -- which
shows that Wright has not been confronted with a petition that was
amended so substantially as to alter the character of the action
and constitute essentially a new lawsuit.
The court also concludes that allowing removal of this action
would thwart the purposes behind the thirty-day limitation.

This

has been pending in state court for more than two years and was
docketed for trial at the time of removal. Removal would result in
delay and wastefulness, as it would require a new beginning in this
court after significant proceedings in state court. See Heublein,
227 F.3d at 242.

23~efendants'
Response in Opposition, Docket Entry No. 9, p. 17.
-12-

Wright cites the Heublein directive that courts are to also
consider "the proper allocation of decision-making responsibilities
between state and federal courts" when deciding whether to apply
the revival exception.

See id.

Wright argues that the revival

exception should apply because this is a "case of exclusive, preemptive federal jurisdiction over disputed claims of copyright

owners hi^."^^

But Wright does not argue that the petition for

declaratory judgment -- the part of the petition
ownership of the footage -- triggers revival.

relating to

Wrightfs claim that

the suit should be revived based on the petition for declaratory
judgment has already been adjudicated against him.25 Wright now
argues that the state law causes of action (the only claims that
have been changed) trigger revival.26 The court is not persuaded
that

the

proper

responsibilities

allocation
supports

of

removal

federal
in

this

and
case.

state

court

Therefore,

construing the removal statute against removal and in favor of
remand,

see Manquno,

276 F.3d at 723, the court finds that removal

of this case does not fall within the narrow revival exception of
28 U.S.C. 5 1446(b).

2 4 ~ o t i ofe Removal and Motion for Consolidation, Docket Entry
~
No. 1, p. 14, ¶ 38.
25~ee
Spindletop Films, L.L.C. v. Wriqht, No. 4:lO-cv-4551,
2011 WL 8199942 (S.D. Tex. July 1, 2011), Ex. A to Plaintiffsf
Brief in Support, Docket Entry No. 8.
26~efendant's
Response in Opposition, Docket Entry No. 9, p. 13.

C o s t s , Expenses, and A t t o r n e v ' s Fees

111.

P l a i n t i f f s a l s o s e e k reimbursement o f
a t t o r n e y ' s f e e s u n d e r 28 U.S.C.
R.

Civ.

P.

11.

an

§

objectively

expenses,

and

1 4 4 7 ( c ) a n d s a n c t i o n s u n d e r Fed.

"Absent u n u s u a l c i r c u m s t a n c e s ,

a t t o r n e y ' s f e e s under
lacked

§

costs,

1447 ( c ) o n l y w h e r e

reasonable

basis

c o u r t s may a w a r d

the

for

removing p a r t y

seeking

removal."

M a r t i n v . F r a n k l i n C a p i t a l C o r p . , 1 2 6 S . C t . 704, 7 1 1 ( 2 0 0 5 ) . Even
t h o u g h t h e c o u r t c o n c l u d e s t h a t r e m o v a l was i m p r o p e r , t h e g r o u n d s
on

which

Wright

unreasonable.

removed

the

action

were

not

objectively

The c o u r t w i l l t h e r e f o r e d e n y P l a i n t i f f s '

f o r c o s t s , expenses, and a t t o r n e y ' s f e e s under

§

request

1447 ( c ) .

R u l e 11 p e r m i t s t h e d i s t r i c t c o u r t t o i m p o s e s a n c t i o n s on a
p a r t y o r attorney, o r both,

f o r f i l i n g a p l e a d i n g o r motion t h a t

(1) i s p r e s e n t e d f o r a n i m p r o p e r p u r p o s e ,

w a r r a n t e d by e x i s t i n g law,
fact.
§

or

(2) i s not reasonably

(3) i s n o t reasonably grounded i n

J u s t a s t h e r e m o v a l was n o t o b j e c t i v e l y u n r e a s o n a b l e u n d e r

1 4 4 7 ( c ) , i t was n o t o b j e c t i v e l y u n r e a s o n a b l e u n d e r R u l e 11.

The

court a l s o f i n d s t h a t Wright's

r e m o v a l was n o t p r e s e n t e d f o r a n

improper

w i l l

purpose.

The

court

therefore

deny

Plaintiffs'

r e q u e s t f o r s a n c t i o n s u n d e r R u l e 11.
IV.

Conclusion and O r d e r

The c o u r t c o n c l u d e s t h a t P l a i n t i f f s '
did not

Wright's

T h i r d Amended P e t i t i o n

s u b s t a n t i a l l y a l t e r t h e nature of t h e case a s t o revive
right

to

remove.

Remand
-14-

is

therefore

appropriate.

Furthermore, because the case will be remanded, the court will not
consolidate it with the action Wright previously filed in federal
court.

The court will not award any costs, expenses, attorney's

fees or sanctions because Wright's

grounds for removal were not

objectively unreasonable.
For the reasons stated above, Plaintiffs' Amended Motion for
Remand (Docket Entry No. 7) is GRANTED, and Plaintiffs' Request for
Attorney Fees and Request for Sanctions (Docket Entry No. 7) are
DENIED.

Because the court lacks jurisdiction over the .action,

Wright's Motion for Consolidation (Docket Entry No. 1) is MOOT.
The action is REMANDED to the 270th Judicial District Court of
Harris County, Texas.

The Clerk of Court is directed to promptly

send a copy of this Memorandum Opinion and Order to the District
Clerk of Harris County, Texas.
SIGNED at Houston, Texas, on this 2nd day of November, 2012.

r

SIM LAKE
UNITED STATES DISTRICT JUDGE