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MEMORANDUM IN SUPPORT OF PLAINTIFF’S MOTION TO REMAND AND TO AWARD COSTS AND ATTORNEY’S FEES
ERIC INSELBERG. VS. NEW YORK FOOTBALL GIANTS, INC., : JOHN K. MARA, WILLIAM J. HELLER, : CHRISTINE PROCOPS, EDWARD : WAGNER, JR., JOSEPH SKIBA, : EDWARD SKIBA, ELI MANNING, : BARRY BARONE, PARK CLEANERS, : INC. and JOHN DOES A-Z,
MEMORANDUM IN SUPPORT OF PLAINTIFF’S MOTION TO REMAND AND TO AWARD COSTS AND ATTORNEY’S FEES
ERIC INSELBERG. VS. NEW YORK FOOTBALL GIANTS, INC., : JOHN K. MARA, WILLIAM J. HELLER, : CHRISTINE PROCOPS, EDWARD : WAGNER, JR., JOSEPH SKIBA, : EDWARD SKIBA, ELI MANNING, : BARRY BARONE, PARK CLEANERS, : INC. and JOHN DOES A-Z,
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MEMORANDUM IN SUPPORT OF PLAINTIFF’S MOTION TO REMAND AND TO AWARD COSTS AND ATTORNEY’S FEES
ERIC INSELBERG. VS. NEW YORK FOOTBALL GIANTS, INC., : JOHN K. MARA, WILLIAM J. HELLER, : CHRISTINE PROCOPS, EDWARD : WAGNER, JR., JOSEPH SKIBA, : EDWARD SKIBA, ELI MANNING, : BARRY BARONE, PARK CLEANERS, : INC. and JOHN DOES A-Z,
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Attribution Non-Commercial (BY-NC)
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Descărcați ca PDF, TXT sau citiți online pe Scribd
: ERIC INSELBERG, : : PlaintiII, : : v. : Civ. Action No. 2:14-cv-01317 (WJM) (MF) : NEW YORK FOOTBALL GIANTS, INC., : JOHN K. MARA, WILLIAM J. HELLER, : CHRISTINE PROCOPS, EDWARD : WAGNER, JR., JOSEPH SKIBA, : EDWARD SKIBA, ELI MANNING, : BARRY BARONE, PARK CLEANERS, : INC. and JOHN DOES A-Z, : : DeIendants. : :
MEMORANDUM IN SUPPORT OF PLAINTIFF`S MOTION TO REMAND AND TO AWARD COSTS AND ATTORNEY`S FEES
Brian C. Brook (No. 050442013) Michael S. KasanoII (No. 035751993) CLINTON BROOK & PEED 157 Broad Street, Suite 321 641 Lexington Avenue, 13 th Floor P.O. Box 8175 New York, New York 10022 Red Bank, New Jersey 07701 Tel.: (212) 328-9559 Tel.: (908) 902-5900 Fax: (212) 328-9560 Fax: (732) 741-7528 brianclintonbrook.com mkasanoIIatt.net
Attorneys for Plaintiff Eric Inselberg Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l of 20 PagelD: 2ll ! TABLE OF CONTENTS
TABLE OF AUTHORITIES ........................................................................................................... ii PRELIMINARY STATEMENT ..................................................................................................... 1 PROCEDURAL HISTORY ............................................................................................................... 2 STATEMENT OF FACTS ................................................................................................................. 2 A. BrieI Factual Summary oI the Underlying Case ..................................................................... 2 B. The Causes oI Action Alleged in the Complaint ..................................................................... 3 C. The Allegations Relating to Patents ........................................................................................ 3 D. The Notice oI Removal............................................................................................................ 5 GOVERNING LEGAL PRINCIPLES ............................................................................................... 6 ARGUMENT...................................................................................................................................... 8 I. THIS CASE COULD NOT HAVE BEEN FILED IN FEDERAL COURT BECAUSE NO CLAIM IS ASSERTED PURSUANT TO THE PATENT ACT AND NO SUBSTANTIAL QUESTIONS OF FEDERAL PATENT LAW ARE RAISED ............................................................................................................. 8 A. As Pleaded in the Complaint, PlaintiII Lacks Standing to Invoke the Patent Laws................ 8 B. The State Law Claims in Counts Eight, Nine and Ten Cannot Be Equated with Claims oI Patent InIringement ................................................................................................ 9 1. The causes oI action do not depend on any issues oI patent law ..................................... 10 2. The patent issues in this case are not 'substantial, as deIined by the Supreme Court last term in Gunn v. Minton ............................................................................................. 12 II. PLAINTIFF SHOULD BE AWARDED COSTS AND ATTORNEY`S FEES BECAUSE THE REMOVING DEFENDANTS LACKED AN OBJECTIVELY REASONABLE BASIS FOR FILING THE NOTICE OF REMOVAL .................................................................................................................................... 13 CONCLUSION ................................................................................................................................ 16
Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 2 of 20 PagelD: 2l2 !! TABLE OF AUTHORITIES Cases AsymmetrRx v. Biocare Med., LLC, 582 F.3d 1314 (Fed. Cir. 2009) ................................................ 8 Baer v. Chase, 392 F.3d 609 (3rd Cir. 2004) ................................................................................... 10 Boyer v. SnapOn Tools Corp., 913 F.2d 108 (3d Cir.1990), cert denied, 498 U.S. 1085 (1991) .... 6 Callano v. Oakwood Park Homes Corp., 91 N.J. Super. 105, 219 A.2d 332 (App. Div. 1966) ...... 11 Catepillar Inc. v. Williams, 482 U.S. 386 (1987) ............................................................................... 7 Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (1988) .................................. 8, 9, 10 Dougherty, Clifford & Wadsworth Corp. v. Magna Group, Inc., 2007 WL 2579406 (D.N.J. 2007)................................................................................................................................. 15 Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006) .................................... 7, 12 Flemming v. Ronson Corp., 107 N.J. Super. 311, 258 A.2d 153 (Law Div. 1969).......................... 10 Frederico v. Home Depot, 507 F.3d 188 (3d Cir.2007) ..................................................................... 6 Genelink Biosciences, Inc. v. Colby, 722 F.Supp.2d 592 (D.N.J. 2010) ............................................ 7 Gilson v. Republic of Ireland, 787 F.2d 655 (D.D.C. 1986) .............................................................. 9 Gloucester County Imp. Auth. v. Gallenthin Realty Dev., Inc., 2008 WL 336784 (D.N.J. 2008) ... 15 Grable & Sons Metal Prod., Inc. v. Darue Engg & Mfg., 545 U.S. 308 (2005) ............................... 7 Gunn v. Minton, 133 S.Ct. 1059 (2013) .................................................................................... passim Healy v. Sea Gull Specialty Co., 237 U.S. 479 (1915) ....................................................................... 9 Johnson v. Benjamin Moore & Co., 347 N.J. Super. 71 (App. Div. 2002) ...................................... 10 Kleinerman v. Snitzer, 754 F.Supp. 1 (D.Mass. 1990) ..................................................................... 11 Kokkoken v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994) .............................................. 6 Kopin v. Orange Products, Inc., 297 N.J. Super. 353, 688 A.2d 130 (App. Div. 1997) .................. 11 Mannsfield v. Phenolchemie, Inc., 466 F.Supp.2d 1266 (S.D. Ala. 2006) ......................................... 9 Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) ................................................ 13, 14, 15, 16 Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 3 of 20 PagelD: 2l3 !!! McArdle v. Bronhofft, 980 F.Supp. 68 (D. Me. 1997) ........................................................................ 7 Mints v. ETS, 99 F.3d 1253 (3d Cir. 1996) ................................................................................. 13, 16 Newton v. Tavani, 962 F.Supp. 45 (D.N.J. 1997) ............................................................................. 15 Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304 (Fed. Cir. 2003) ..................................... 8 Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941)............................................................... 6 Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305 (Fed. Cir. 2010) ....... 8 Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 172 N.J. 60, 798 A.2d 238 (2002) ........... 11 Trendx Enterprises, Inc. v. All-Luminum Products, Inc., 856 F.Supp.2d 661 (D.N.J. 2012) ............ 8 Tyco Healthcare Group, LP v. Ethicon Endo-Surgery, Inc., 587 F.3d 1375 (Fed. Cir. 2009)........... 8 VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 641 A.2d 519 (1994) ............................................ 11 Statutes 28 U.S.C. 1338 ............................................................................................................................ 5, 6 28 U.S.C. 1441 ................................................................................................................................ 6 28 U.S.C. 1447 .................................................................................................................... 6, 13, 14 28 U.S.C. 1454 ................................................................................................................................ 5 35 U.S.C. 271 .............................................................................................................................. 3, 5 N.J.S.A. 2C:41-1 ................................................................................................................................. 3 N.J.S.A. 2C:41-4 ................................................................................................................................. 9 Rules Fed. R. Civ. P. 54.............................................................................................................................. 16
Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 4 of 20 PagelD: 2l4
1 PRELIMINARY STATEMENT DeIendants New York Football Giants, Inc., John K. Mara, William J. Heller, and Christine Procops (the 'Removing DeIendants) have improvidently removed this case to Iederal court. The patent-related issues in this case are collateral to PlaintiII Eric Inselberg`s ('PlaintiII or 'Inselberg) claims, all oI which derive Irom New Jersey statutory and common law. None oI the patent-related issues are necessary to any oI the claims, nor are they 'substantial in the relevant sense Ior purposes oI establishing Iederal jurisdiction, as was clearly decided by the Supreme Court last term in Gunn v. Minton, 133 S.Ct. 1059 (2013). The Removing DeIendants have distorted the allegations in PlaintiII`s Complaint in order to create the appearance that it invokes Iederal patent law. Most egregiously, the Removing DeIendants repeatedly assert that PlaintiII has brought a claim oI patent inIringement. To the contrary, the Complaint alleges that the DeIendants` misconduct caused PlaintiII to lose his ownership interest in the patents in question. As a result, PlaintiII does not even have standing to bring a patent inIringement claim. The Removing DeIendants` Iailure to mention this clearly- alleged Iact renders their removal oI this case Irivolous. Considering their omission oI controlling Supreme Court precedent and aIIirmative misstatement oI the nature oI the Complaint, it is evident that the Removing DeIendants lacked any objectively reasonable basis Ior Iiling their Notice oI Removal. Consequently, PlaintiII seeks compensation Ior the costs and attorney`s Iees in connection with this Motion Ior Remand.
Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 5 of 20 PagelD: 2l5
2 PROCEDURAL HISTORY PlaintiII Iiled this action in the Bergen County Superior Court on January 29, 2014. (CertiIication oI Michael S. KasanoII ('KasanoII Cert.) Ex. A). In addition to the Removing DeIendants, the other named DeIendants are: (1) Edward Wagner, Jr.; (2) Joseph Skiba; (3) Edward Skiba; (4) Eli Manning; (5) Barry Barone; and (6) Mr. Barone`s business, Park Cleaners, Inc. (collectively 'the Non-Removing DeIendants). (Ex. A). The Removing DeIendants Iiled their Notice oI Removal on February 27, 2014. (Notice oI Removal, KasanoII Cert. Ex. B). All DeIendants except Ior Barone and Park Cleaners have sought extensions oI time to Iile responsive pleadings to the Complaint. Barone and Park Cleaners are currently in deIault, having Iailed to Iile an Answer or otherwise plead by March 6, 2014. STATEMENT OF FACTS A. Brief Factual Summary of the Underlying Case
This case arises Irom the breakdown oI integrity and institutional control within the New York Football Giants, particularly in connection with a 2010-11 FBI probe into sports memorabilia Iraud. (Ex. A, at 2). When investigators began looking into the Giants` equipment managers and cleaners, individuals within the Giants organization coerced and intimidated witnesses into lying to the FBI. Id. Some oI those witnesses were called upon to testiIy beIore a Iederal Grand Jury, where the lying continued under oath. The perjury and obstruction oI justice successIully covered up the Iact that several Giants employees, including DeIendant Manning, repeatedly engaged in the distribution oI Iraudulent Giants memorabilia. Id. Ultimately, those lies led to the return oI a wrongIul indictment against PlaintiII Eric Inselberg. Id. AIter learning that the Giants` employees had lied to the Grand Jury, the government voluntarily dismissed the indictment in response to pretrial motions Iiled by PlaintiII`s criminal Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 6 of 20 PagelD: 2l6
3 attorneys. Id. UnIortunately Ior PlaintiII, the wrongIul indictment resulted in severe psychological trauma and the destruction oI PlaintiII`s livelihood. Id. This suit has been Iiled to remedy the devastating consequences oI the wrongIul indictment, and to resolve some distinct contractual and quasi-contractual disputes between PlaintiII and the Giants. B. The Causes of Action Alleged in the Complaint
The Complaint alleges sixteen bases Ior recovery under New Jersey law: (1) New Jersey`s Civil Racketeering Statute, N.J.S.A. 2C:41-1 et. seq. ('New Jersey RICO); (2) Tortious InterIerence with Prospective Economic Advantage; (3) Tortious InterIerence with Contractual Relations; (4) Malicious Prosecution; (5) Abuse oI Process; (6) Trade Libel; (7) Intentional InIliction oI Emotional Distress; (8) Unjust Enrichment; (9) Quantum Meruit; (10) UnIair Competition Idea Misappropriation; (11) Breach oI Contract; (12) Civil Conspiracy; (13) Aiding & Abetting; (14) Negligent Supervision; (15) Negligent Retention; and (16) Respondeat Superior. (Ex. A, at 45-62, 164-281.) The only statutory cause oI action is New Jersey RICO. PlaintiII has not pleaded any Iederal causes oI action, including patent inIringement pursuant to the Patent Act, 35 U.S.C. 271(a), nor does PlaintiII seek any relieI Ior patent inIringement or any other Iederal remedies. (Ex. A, at 63). C. The Allegations Relating to Patents In describing how PlaintiII was injured by the wrongIul indictment, the Complaint goes into signiIicant detail concerning the nature oI PlaintiII`s businesses. PlaintiII had two distinct business endeavors Ior which he was involved in obtaining patents to protect his inventions. Only one is at issue here. 1
1 One oI the businesses described in the Complaint is not claimed by the Removing DeIendant to give rise to Iederal jurisdiction. That business involved developing a new Iootball helmet that would diminish brain trauma caused by Irequent collisions. (Ex. A, at 10-11). Two patents were obtained in connection with that helmet. Id. Because DeIendants Ed and Joe Skiba were Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 7 of 20 PagelD: 2l7
4 The relevant business involved development and marketing oI technology and business methods Ior wireless audience interaction at live events, such as Iootball games. (Ex. A, at 12-13, 31-41). PlaintiII amassed a valuable portIolio containing over two dozen wireless-related patents, including twenty-one in the United States, and two in each oI Australia and Canada. (Ex. A, at 12 & Ex. A to the Complaint). Prior to 2010, PlaintiII transIerred ownership oI the patents to Inselberg Interactive, LLC, a company in which PlaintiII held an ownership interest oI between 82.5 and 87.5 at all relevant times. (Ex. A, at 12). As part oI his eIIorts to capitalize on the patents, PlaintiII and his business partners developed a series oI marketing presentations, which were shared with potential customers. The presentation included Inselberg`s novel ideas Ior how to make money Irom interacting with live audience members using the patented inventions. The Complaint reIerred to these ideas as the 'patented wireless marketing concepts. (Ex. A, at 56 233-35). In 2010, PlaintiII pitched these marketing concepts to the Giants as part oI the 'Tapt-In` in-stadium wireless advertising service.. (Ex. A, at 15). The Complaint alleges that 'without providing any Iorm oI compensation to PlaintiII or his company, '|t|he Giants nevertheless proceeded to implement many oI the marketing methods that PlaintiII and Inselberg Interactive had presented to the Giants. Id. As a result oI this conduct, the Complaint Iurther alleges that the Giants are liable Ior engaging in unIair competition by misappropriating PlaintiII`s ideas, and Ior equitable damages based on principles oI unjust enrichment and quantum meruit. (Ex. A, at 54-57 (Counts Eight, Nine, and Ten)).
Inselberg`s collaborators in this endeavor, and Inselberg could not continue to pursue the business without the involvement oI at least one oI them, this business ceased to operate when the Skibas cut oII communication with Inselberg just beIore the indictment. (Ex. A, at 11). Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 8 of 20 PagelD: 2l8
5 As noted above, the Complaint does not allege patent inIringement. In Iact, the Complaint makes clear that PlaintiII lost his ownership interests in the relevant patents, and thereIore lost the right to sue others Ior inIringing them. Ex. A, at 13, 39-41; 41-42, 152-54. The economic harm resulting Irom this lossa direct and proximate result oI the DeIendants` misconduct constitutes a signiIicant component oI the damages sought with respect to Counts One through Six and Twelve through Sixteen oI the Complaint. OI all the damages allegations in the Complaint, the loss oI those patents has the largest number associated with it. (Ex. A, at 42 154 ('Inselberg`s losses with regard to the patents are at least $10 million.and likely signiIicantly more.)). D. The Notice of Removal The Notice oI Removal is based solely on the position that 'PlaintiII has Asserted Claims under the Patent Act, 35 U.S.C. 271(a) (Ex B, at 2), which, iI true, would require removal because such claims within the exclusive jurisdiction oI the Iederal courts (Ex. B, at 2-3 (quoting 28 U.S.C. 1454(a), 1441(a), 1338(a)). Citing 32-41 oI the Complaint, the Removing DeIendants contend that PlaintiII is asserting that the Giants 'inIringe PlaintiII`s rights in and to the Wireless Patents by using such technology without compensating PlaintiII. (Ex. B, at 3 9). The subsequent paragraphs oI the Notice oI Removal attempt to explain why PlaintiII`s state law claims are really claims oI patent inIringement. (See Ex. B, at 3-4, 10-12). With respect to Count Ten (UnIair Competition Misappropriate), the Removing DeIendants say, without elaboration, that '|s|imply put, the allegation in this paragraph that the Giants DeIendants misappropriated PlaintiII`s patented wireless marketing concepts constitutes an allegation oI patent inIringement. (Ex. B, at 12). In the case oI Count Eight (Quasi-Contract Unjust Enrichment), the Removing DeIendants contend that the allegations 'are oI patent inIringement or at the very least raise substantial questions oI Iederal patent law. (Ex. B at 11). Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 9 of 20 PagelD: 2l9
6 Tellingly, despite claiming that the Complaint raises 'substantial questions oI Iederal patent law, the Notice oI Removal never states what any one oI those questions might be. Similarly, the Notice oI Removal omits any discussion oI the elements oI the causes oI action that it believes 'are actually patent inIringement claims under Iederal law. The Notice oI Removal conspicuously avoids mentioning PlaintiII`s allegations regarding his substantial patent-related damages including his loss oI ownership oI the patents in questionthat are available under ten oI the other counts in the Complaint. GOVERNING LEGAL PRINCIPLES A state court action is subject to removal to a Iederal district court only iI the case could otherwise have been commenced in Iederal court. 28 U.S.C. 1441(a). Where subject matter jurisdiction is lacking, however, a party may seek to remand a civil action back to state court. 28 U.S.C. 1447(c). The parties that removed the action (or are otherwise opposing remand) bear the burden oI proving that removal was proper. Frederico v. Home Depot, 507 F.3d 188, 193 (3d Cir.2007); Boyer v. SnapOn Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert denied, 498 U.S. 1085 (1991). The removal statutes are to be strictly construed, with all doubts resolved in Iavor oI remand. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941). 'Federal courts are courts oI limited jurisdiction,` possessing only that power authorized by Constitution and statute.` Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013) (quoting Kokkoken v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994)). 'As relevant here, Congress has authorized the Iederal district courts to exercise original jurisdiction in . . . any civil action arising under any Act oI Congress relating to patents.` Id. (quoting 28 U.S.C. 1338(a)). Cases typically 'aris|e| under Iederal law, including patent law, because Iederal law created the cause oI action asserted. Id. Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l0 of 20 PagelD: 220
7 In addition, there is a 'special and small category oI arising under cases where the cause oI action originates in state law. Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 699 (2006). For Iederal jurisdiction to lie over such state law claims, they must involve a Iederal issue that is: '(1) necessarily raised; (2) actually disputed; (3) substantial; and (4) capable oI resolution in Iederal court without disrupting the Iederal-state balance approved by Congress. Gunn, 133 S.Ct. at 1065 (citing Grable & Sons Metal Prod., Inc. v. Darue Engg & Mfg., 545 U.S. 308, 313-14 (2005)). All Iour elements must be met Ior jurisdiction to be proper. The mere presence oI a Iederal issue does not operate as 'a password opening Iederal courts to any state action embracing a point oI Iederal law. Genelink Biosciences, Inc. v. Colby, 722 F.Supp.2d 592, 595 (D.N.J. 2010). Indeed, the Iact that a case concerns patented inventions or otherwise implicates Iederal patent law does not mean that the case may be removed to Iederal court: 'It is well settled that state courts may adjudicate patent law issues provided that they collaterally arise under a cause oI action over which the state court has subject matter jurisdiction. Id. at 601 n.13. A plaintiII, as the master oI his claim, may avoid Iederal jurisdiction by exclusive reliance upon state law. Id. at 595 (citing Catepillar Inc. v. Williams, 482 U.S. 386, 392 (1987)). See also McArdle v. Bronhofft, 980 F.Supp. 68, 72 (D. Me. 1997) ('The Iact that the allegedly tortious conduct oI DeIendant may also constitute patent inIringement is irrelevant as the party who brings suit is master to decide what law he will rely upon.).
Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page ll of 20 PagelD: 22l
8 ARGUMENT I. THIS CASE COULD NOT HAVE BEEN FILED IN FEDERAL COURT BECAUSE NO CLAIM IS ASSERTED PURSUANT TO THE PATENT ACT AND NO ~SUBSTANTIAL QUESTIONS OF FEDERAL PATENT LAW ARE RAISED Federal subject matter jurisdiction is lacking Ior two independent reasons. First, no claim under the Patent Act can be raised by PlaintiII because he lacks any suIIicient interest to assert such claims. Second, even iI PlaintiII could, hypothetically, assert claims under the Patent Act, he has not done so here, nor do his state law claims necessarily implicate any substantial issues oI Iederal patent law. A. As Pleaded in the Complaint, Plaintiff Lacks Standing to Invoke the Patent Laws
Simply put, PlaintiII makes no claim oI patent inIringement, nor any other claim under the Patent Act. In Iact, he could not do so even iI he wanted to, since he lost his ownership interest in the patents. Patent issues in these case will thus arise only collaterally, iI at all. It is 'well-settled that 'only a patent owner or an exclusive licensee can have constitutional standing to bring an inIringement suit. Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1317 (Fed. Cir. 2010). In order to assert standing, the patent inIringement plaintiII 'must demonstrate that it held enIorceable title at the inception oI the lawsuit. Tyco Healthcare Group, LP v. Ethicon Endo-Surgery, Inc., 587 F.3d 1375, 1378 (Fed. Cir. 2009); Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304, 1309 (Fed. Cir. 2003). See also AsymmetrRx v. Biocare Med., LLC, 582 F.3d 1314, 1318 (Fed. Cir. 2009); Trendx Enterprises, Inc. v. All-Luminum Products, Inc., 856 F.Supp.2d 661, 665 (D.N.J. 2012). 2
2 It is inconceivable that the Removing DeIendants, being represented by sophisticated intellectual property counsel, were unaware oI this rudimentary principle. For instance, in the primary case cited in the Notice oI Removal, Christianson v. Colt Industries Operating Corp., the Supreme Court`s analysis started with reiterating what it 'held long ago: '|I|n order to demonstrate that a case is one arising under` Iederal patent law the plaintiII must set up some right, title or interest under the patent laws, or at least make it appear that some right or privilege will be deIeated by Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l2 of 20 PagelD: 222
9 Here, the Complaint unequivocally states that PlaintiII lost his rights, title, and interest in the patents well beIore the inception oI this lawsuit, as a direct consequence oI DeIendants` misconduct. (Ex. A, page 13, 41; page 41, 152). Indeed, that loss oI value Iorms the largest component oI the damages alleged in the Complaint. Without title or other exclusive rights to the patents, PlaintiII lacks standing to bring a Iederal patent inIringement suit. Accordingly, the Patent Act provides no basis Ior the assertion oI Iederal jurisdiction.
B. The State Law Claims in Counts Eight, Nine and Ten Cannot Be Equated with Claims of Patent Infringement The Notice oI Removal`s assertion that Counts Eight and Ten oI the Complaint 'are claims are patent inIringement is not only impossible as a matter oI Iact, as discussed in the preceding section, but it is also incorrect as a matter oI law. State lawnot the Patent Act created the causes oI action asserted here, and none oI the claims necessarily depend upon resolution oI a substantial question oI Iederal patent law. Christianson, 486 U.S. at 809. A claim arises under the patent laws when the essential Ieatures oI the complaint allege inIringement and seek patent remedies such as an injunction, an account oI proIits, and triple damages. Gilson v. Republic of Ireland, 787 F.2d 655, 657 (D.D.C. 1986)(citing Healy v. Sea Gull Specialty Co., 237 U.S. 479, 481 (1915)). See also Mannsfield v. Phenolchemie, Inc., 466 F.Supp.2d 1266, 1270 (S.D. Ala. 2006). Here, the Complaint does not allege patent inIringement or challenge the patent`s validity or enIorceability, nor does it seek any relieI under the Iederal patent laws. 3 Thus there is no basis Ior the Removing DeIendants` assertion that PlaintiII`s common law causes oI action Ior Misappropriation and Quasi-Contract (Unjust Enrichment)
one construction, or sustained by the opposite construction oI these laws.` 486 U.S. 800, 807- 08 (1988) (emphasis added). 3 While injunctive relieI is sought here, it is only pursuant to New Jersey RICO. (Ex. A, at 63 (citing N.J.S.A. 2C:41-4(a))). Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l3 of 20 PagelD: 223
10 'constitute allegations oI patent inIringement. (Ex. B, at 4-5, 11-13). The Removing DeIendants` back-up positionthat PlaintiII`s common law claims 'at the very least raise substantial questions oI Iederal patent law, id.is similarly meritless. None oI PlaintiII`s causes oI action has any element that necessarily turns on a substantial question oI Iederal patent law, as required to establish Iederal jurisdiction over state law-based claims. Christianson, 486 U.S. at 809. 1. The causes of action do not depend on any issues of patent law Contrary to the summary assertions in the Notice oI Removal, none oI the elements oI the claims asserted in Counts Eight and Ten depends in the slightest on any issue oI patent law substantial or otherwise. The common law cause oI action Ior idea misappropriation derives Irom tort principles and is premised upon the view that 'when a party misappropriates another`s conIidential idea or some other type oI property, the law imposes an obligation on that party to pay the other restitution Ior its improper use. Baer v. Chase, 392 F.3d 609, 627 (3rd Cir. 2004). A plaintiII is entitled to compensation Ior misappropriation oI an idea iI: (1) the idea was novel; (2) it was communicated in conIidence to the deIendant; and (3) it was adopted and made use oI by the deIendant in connection with his own activities. Baer, 392 F.3d at 627 (citing Flemming v. Ronson Corp., 107 N.J. Super. 311, 317, 258 A.2d 153 (Law Div. 1969), affd o.b. 114 N.J Super. 221, 275 A.2d 759 (App. Div. 1971)). 'Misappropriation oI ideas is a separate area oI law Irom . . . patent law.. Johnson v. Benjamin Moore & Co., 347 N.J. Super. 71, 96 (App. Div. 2002). Indeed, the two areas oI law rest on opposite Ioundations: It is the conIidential nature oI a communication that gives rise to a misappropriation claim, while it is the public disclosure oI an idea that Iorms the basis Ior patent protection. Accordingly, it is well-settled that a claim oI misappropriation does Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l4 of 20 PagelD: 224
11 not arise under the patent laws even when the misappropriated idea itselI has been patented. Kleinerman v. Snitzer, 754 F.Supp. 1, 2 (D.Mass. 1990). The same is true Ior PlaintiIIs` claim Ior unjust enrichment. To obtain relieI on a theory oI unjust enrichment, a plaintiII must establish that the 'deIendant received a beneIit and that retention oI that beneIit would be unjust. VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554, 641 A.2d 519 (1994). The legal remedy derives Irom equitable principles. Kopin v. Orange Products, Inc., 297 N.J. Super. 353, 373, 688 A.2d 130 (App. Div. 1997), certif. denied 149 N.J. 409, 694 A.2d 194 (1997). This quasi-contract claim exists when a party conIers beneIit upon another under circumstances dictating that the denial oI compensation would be unjust. Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 172 N.J. 60, 68, 798 A.2d 238 (2002). See also Callano v. Oakwood Park Homes Corp., 91 N.J. Super. 105, 109, 219 A.2d 332 (App. Div. 1966) (explaining that quasi-contractual liability is imposed only where the 'plaintiII expected remuneration Irom the deIendant, or iI the true Iacts were known to plaintiII, he would have expected remuneration Irom deIendant at the time the beneIit was conIerred). 4
Under either a misappropriation or an unjust enrichment theory, PlaintiII`s ability to recover compensation Ior the Giants` use oI his wireless marketing concepts will not be aIIected by any determination regarding the application oI patent law to his inventions. Certainly no such determination is a 'necessary prerequisite to establishing a prima Iacie case.
4 The elements are essentially the same Ior Count Nine Quasi-Contract (Quantum Meruit). Since the Notice oI Removal does not assert that Iederal jurisdiction is based on Count Nine, we do not address it separately here. Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l5 of 20 PagelD: 225
12 2. The patent issues in this case are not ~substantial, as defined by the Supreme Court last term in Gunn v. Minton
The Removing DeIendants` position is Ioreclosed by the recent Supreme Court precedent oI Gunn v. Minton, 133 S.Ct. 1059 (2013). In Gunn, the Supreme Court granted certiorari to determine when a necessary issue oI Iederal patent law is suIIiciently 'substantial such that the state law-based claim could be said to 'arise under Iederal law. The plaintiII had Iiled a legal malpractice action that centered on the alleged mishandling oI a patent inIringement case. Unlike the situation here, the plaintiII`s right to relieI in Gunn undoubtedly depended upon an issue oI Iederal patent law to establish the necessary elements oI the state law malpractice claim. Id. at 1065. Nevertheless, the Supreme Court Iound Iederal jurisdiction wanting. It was not enough to Iind that the Iederal issue was signiIicant to the particular parties in a case, because 'that will always be true when the state claim necessarily raises a disputed Iederal issue.. Id. at 1066 (internal quotation marks omitted). Such an issue is 'not substantial in the relevant sense. Id. Instead, the issue must be important to the Iederal system as a whole. Id. Applying this standard to the legal malpractice case beIore it, the Court observed that such cases 'are by their nature unlikely to have the sort oI signiIicance Ior the Iederal system necessary to establish jurisdiction. Id. at 1065. The case was entirely backward-looking and hypothetical, asking what would have happened iI things had been done diIIerently during prior patent litigation. Id. at 1066-67. The Court saw no valid reason why cases oI that ilk ought to be brought exclusively in Iederal court. See id. at 1067-68. Unlike Iederal issues that have been Iound to be substantial, the state court`s resolution oI hypothetical patent issues would not be 'controlling in numerous other cases or implicate broader Iederal concerns. Id. at 1067 (quoting Empire Healthchoice Assurance, 547 U.S. at 700). Here, any patent issues possibly raised by the Complaint are akin to those in Gunn. The Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l6 of 20 PagelD: 226
13 chieI allegation regarding the wireless patents is that Inselberg lost the ability to derive value Irom the patents aIter he was wrongIully indicted. 5 (Ex. A, page 41, 152). Thus, the case requires ascertaining PlaintiII`s hypothetical earningswhat he would have earned Irom the wireless patents if he had not been indicted. As the Supreme Court squarely held in Gunn, such hypothetical questions are not important to the Iederal system as a whole, and thus 'not substantial in the relevant sense. 133 S.Ct. at 1066. The state court`s resolution oI the patent valuation issues in this case would be limited to the parties and patents in this case, id. at 1068, and would not be controlling in other cases, id. at 1067. Such 'Iact-bound and situation-speciIic eIIects are insuIIicient to establish Iederal 'arising under jurisdiction. Id. II. PLAINTIFF SHOULD BE AWARDED COSTS AND ATTORNEY`S FEES BECAUSE THE REMOVING DEFENDANTS LACKED AN OB1ECTIVELY REASONABLE BASIS FOR FILING THE NOTICE OF REMOVAL When ordering remand, a court may award 'just costs and any actual expenses, including attorney`s Iees, incurred as a result oI the removal. 28 U.S.C. 1447(c). The district court has 'broad discretion in this regard. Mints v. ETS, 99 F.3d 1253 (3d Cir. 1996). Absent unusual circumstances, courts may award attorney`s Iees under 1447(c) only where the removing party lacked an objectively reasonable basis Ior seeking removal. Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). In Martin, the Supreme Court adopted the 'objectively reasonable standard Ior awarding Iees in lieu oI the view held by the Seventh and Ninth Circuits that plaintiIIs were presumptively entitled to Iee awards. Id. at 136. But just because there is no presumption in Iavor oI Iees does
5 The Removing DeIendants have not (yet) contended that Iederal jurisdiction exists based on PlaintiII`s seeking damages Ior his loss oI the patents. Making such an argument would have obviously contradicted their position PlaintiII has asserted currently-held rights pursuant to the Patent Act. Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l7 of 20 PagelD: 227
14 not mean that there is a presumption against Iees. Id. at 138-39 ('|J|ust as there is no basis Ior supposing Congress meant to tilt the exercise oI discretion in favor oI Iee awards under 1447(c) . . . so too there is no basis here Ior a strong bias against Iee awards..) (emphasis in original). In each case, the district court should examine the speciIic Iacts beIore it to ascertain the propriety oI awarding Iees. The Supreme Court recognized that the 'process oI removing a case to Iederal court and then having it remanded back to state court delays resolution oI the case, imposes additional costs upon both parties, and wastes judicial resources. Id. at 140. The assessment oI costs and Iees on remand 'reduces the attactiveness oI removal as a method Ior delaying litigation and imposing costs on the plaintiII. Id. Here, the glaring omission oI clearly-pleaded Iacts Irom the Notice oI Removal makes it readily apparent that the Removing DeIendants lacked any objectively reasonable basis Ior seeking removal. The Complaint could not have been clearer that PlaintiII could not possibly bring an action Ior patent inIringement: 'The death knell came when Inselberg Interactive was Iorced to deIault on the Bisignano Loan and relinquish ownership oI the patents.. (Ex. A, at 41 152 (emphasis added)). 6 Despite this, the Notice oI Removal says, 'PlaintiII has asserted that the |Giants| inIringe Plaintiffs rights in and to the Wireless Partners. (Ex. B, at 3 9) (emphasis added). Considering that the Removing DeIendants` are represented by sophisticated and experienced intellectual property counsel, the aIIirmative distortion oI the Iacts in the Notice oI Removal is unreasonable Irom any perspective, and at the very least constitute 'unusual circumstances warranting an award oI Iees. 7 The wide gap between what the Notice oI Removal
6 See also Ex. A, at 13 41 ('|I|n or about January 2013, Inselberg was Iorced to authorize the transIer oI the Interactive patent portIolio to Bisignano.). 7 The Martin Court noted that 'district courts retain discretion to consider whether unusual circumstances warrant a departure Irom the rule in a given case. 546 U.S. at 141. As an example, the Supreme Court suggested that 'a plaintiII`s . . . Iailure to disclose Iacts necessary to Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l8 of 20 PagelD: 228
15 says the Complaint alleges and what the Complaint actually alleges serves to distinguish this case Irom the typical request Ior Iees made in connection with remanding improvidently removed cases. The justiIication Ior awarding costs and Iees goes beyond just the Removing DeIendants` mangling oI the Iacts; their legal analysis was equally Ilawed. Courts in this Circuit have awarded 'costs, expenses, and attorneys` Iees where the complaint clearly does not state a claim removable to Iederal court or where minimal research would have revealed the impropriety oI removal. Gloucester County Imp. Auth. v. Gallenthin Realty Dev., Inc., 2008 WL 336784 at *8 (D.N.J. 2008) (quoting Newton v. Tavani, 962 F.Supp. 45, 48 (D.N.J. 1997)) (internal citations omitted). In the best case scenario, that is what happened here. Among other legal deIiciencies discussed above, the Notice oI Removal omits mentioning Gunn v. Mintona case very closely on point, issued by the Supreme Court last year. Minimal research by Removing DeIendants` counsel would undoubtedly have led them to such signiIicant authority. The omission oI Gunnlike the Iactual omissionsreIlects the very realistic possibility that removal was subjectively unreasonable, i.e. that the Removing DeIendants did the research but 'simply ignored the law. Dougherty, Clifford & Wadsworth Corp. v. Magna Group, Inc., 2007 WL 2579406 at *4 (D.N.J. 2007). The Court need not delve into the Removing DeIendants` subjective intent, however,
determine jurisdiction may aIIect the decision to award attorney`s Iees. Id. While that is not the precise situation here, the example does oIIer valuable insight, insoIar as it suggests that even an objectively unreasonable removal may not be subject to Iees iI the plaintiII is to blame Ior the deIendants` decision to remove. The situation here is the polar opposite oI that: the PlaintiII made Iull disclosure oI the Iacts, but the Removing DeIendants` cherry-picked among them in order to aIIirmatively misstate that patent inIringement was in play. Whether resorting to such tactics constitutes 'unusual circumstances or evidence that removal was objectively unreasonable, the Iactual deIiciencies and distortions in the Notice oI Removal strongly support an award oI Iees. Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page l9 of 20 PagelD: 229
16 because all that needs to be shown, is that they 'lacked an objectively reasonable basis Ior seeking removal. Martin, 546 U.S. at 141. That standard is met here. CONCLUSION For the Ioregoing reasons, PlaintiII respectIully requests that the Court remand this matter to the Bergen County Superior Court and award PlaintiII reasonable costs and attorney`s Iees, and retain jurisdiction Ior the limited purpose oI adjudicating PlaintiII`s Iee application, to be submitted within 14 days oI remand. See Mints, 99 F.3d at 1257-60 (citing Fed. R. Civ. P. 54(d)(2)(B)). Dated: March 18, 2014
CLINTON BROOK & PEED MICHAEL S. KASANOFF, ESQ.
By: s/ Brian C. Brook s/ Michael S. KasanoII
Attorneys for Plaintiff Eric Inselberg
Case 2:l4-cv-0l3l7-WJM-MF Document 25-l Filed 03/l8/l4 Page 20 of 20 PagelD: 230
CHURCHES UNITED WITH ISRAEL, INC., A Texas nonprofit Corporation; and MICHAEL EVANS, an Individual; and FREE CHAPEL WORSHIP CENTER, INC., a Georgia nonprofit corporation, Defendants. United States District Court for the Northern District of Georgia Gainesville Divion. Civil action file No. 2:20-CV-00156-RWS.