Goughnour v. Hayward Baker, Inc.
MEMORANDUM OPINION AND ORDER DENYING 4 PLAINTIFF'S MOTION TO REMAND. Further, Goughnours motion included a request for attorneys fees accrued in relation to the motion to remand, which is also DENIED. Signed by Senior Judge Frederick P. Stamp, Jron 2/6/2017. (copy to counsel via CM/ECF) (nmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
R. ROBERT GOUGHNOUR,
Civil Action No. 5:16CV191
HAYWARD BAKER, INC.,
MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFF’S MOTION TO REMAND
This is a declaratory judgment and breach of contract case
involving a licensing agreement for the rights to practice a patent
and a pending patent application.
The defendant removed the case
to this Court, citing diversity jurisdiction under 28 U.S.C.
The plaintiff filed a motion to remand, arguing that
the amount in controversy does not exceed $75,000 exclusive of
interest and costs as required by § 1332(a).
For the following
reasons, the plaintiff’s motion is denied.
The plaintiff, Robert Goughnour (“Goughnour”), holds the
rights to United States Patent Number 5,800,090 (“the ‘090 patent”)
The art of both patents covers an earthquake drain
Construction, LLC (“Nilex”), permitting Nilex to practice the
patents in exchange for $150,000 and $0.10 per foot of earthquake
defendant, Hayward Baker, Inc. (“Hayward Baker”), purchased some of
Nilex’s assets and liabilities, including an assignment of the
licensing agreement to Hayward Baker.
Hayward Baker continued to
pay Goughnour under the licensing agreement through April 2016.
Goughnour alleges that Hayward Baker has since refused to make
payments under the licensing agreement.
Hayward Baker argues that
it is no longer obligated to make payments under the agreement
because, it asserts, the ‘090 patent has expired.
a declaration that the licensing agreement requires Hayward Baker
to make payments for the practice of the ‘090 patent through
January 2023 and an order requiring specific performance.
Goughnour originally filed this civil action in the Circuit
Court of Brooke County, West Virginia.
Hayward Baker removed the
case to this Court, citing diversity jurisdiction.
In the notice
of removal, Hayward Baker alleges that Goughnour is a resident of
Wellsburg, West Virginia, and that Hayward Baker is a Delaware
corporation with its principal place of business in Hanover,
Hayward Baker alleges that the amount in controversy
exceeds $75,000 because it has paid Goughnour over $500,000 since
2014 under the licensing agreement, and would pay at least that
much more through the life of the licensing agreement.
A defendant may remove a case from state court to a federal
court with original jurisdiction.
28 U.S.C. § 1441.
U.S.C. § 1332(a), district courts have original jurisdiction where
the dispute is between citizens of different states and the amount
in controversy exceeds $75,000 exclusive of interest and costs.
citizenship of each defendant.”
Hoschar v. Appalachian Power Co.,
739 F.3d 163, 170 (4th Cir. 2014).
time the action is filed.”
Diversity is “assessed at the
Freeport-McMoRan, Inc. v. K N Energy,
Inc., 498 U.S. 426, 428 (1991).
The party seeking removal bears the burden of establishing
See In re Blackwater Security Consulting,
preponderance of the evidence.
Strawn v. AT&T Mobility LLC, 530
F.3d 293, 297-98 (4th Cir. 2008).
Further, this Court must
strictly construe its removal jurisdiction and remand if federal
jurisdiction is doubtful.
Hartley v. CSX Transp., Inc., 187 F.3d
422, 425 (4th Cir. 1999).
Goughnour does not dispute that the parties are diverse.
Rather, he argues that Hayward Baker fails to show that the amount
in controversy exceeds $75,000 exclusive of interest and costs. He
argues that the amount of damages involved is speculative at this
time because there is no indication of how many earthquake drains
Hayward Baker may install in the future. Hayward Baker argues that
if Goughnour prevails it will be obligated to pay him more than
$75,000 per year until January 2023 based upon its expected
continued operations and upon payments made from 2014 through April
In a declaratory judgment action regarding the applicability
of a contract term, the amount in controversy is the value of the
contractual obligation at issue. See Mut. Life Ins. Co. of N.Y. v.
Moyle, 116 F.2d 434, 436 (4th Cir. 1940); Panhandle Farmers Mut.
Ins. Co., Inc. v. Ridge Crest Props., LLC, No. 5:13CV6, 2013 WL
4039948, *3 (N.D. W. Va. Aug. 7, 2013); Darbet, Inc. v. Bituminous
Cas. Corp., 792 F. Supp. 487, 489 (S.D. W. Va. 1992).
dispute is over whether Hayward Baker is obligated to pay Goughnour
for the practice of the ‘090 patent through the term of the
The value of that obligation is the sum of
the payments Hayward Baker would make through the life of the
Hayward Baker points out that in 2014 it paid Goughnour a
total of $224,747 under the agreement.
ECF No. 1-1 at 1.
it paid him a total of $258,477 under the agreement.
the first four months of 2016, it paid him $101,593.
Hayward Baker maintains its current practice of the ‘090 patent and
the Application through the term of the licensing agreement, it
would expect to owe Goughnour at least $200,000 per year—much more
Further, if Hayward Baker reduced its earthquake
operations, from May 2016 through January 2023, it would still
expect to owe Goughnour $84,589.60.
See ECF No. 5 at 5 n.1.
Even if the value of the case is limited to Hayward Baker’s
complaint, December 2, 2016, those payments would likely exceed
$75,000 exclusive of interest and costs.
Hayward Baker asserts
that it paid Goughnour over $200,000 in 2014 and 2015 each, and
paid him $101,593 in the first four months of 2016 alone.
1-1 at 1.
Thus, based on Hayward Baker’s payment history, this
Court finds that those defaulted payments would more than likely
exceed $75,000 exclusive of interest and costs.
Court finds that § 1332(a)’s amount in controversy requirement is
This Court finds subject matter jurisdiction under 28 U.S.C.
Accordingly, Goughnour’s motion to remand (ECF No. 4)
Further, Goughnour’s motion included a request for
attorneys fees accrued in relation to the motion to remand, which
is also DENIED.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
February 6, 2017
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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