L'Garde, Inc. v. Raytheon Space & Airborne Systems
805 F. Supp. 2d 932
C.D. Cal.2011Background
- L'Garde filed a complaint in California Superior Court against Raytheon for breach of contract and fraud.
- Raytheon removed the action to federal court asserting diversity and federal-question jurisdiction.
- The court granted judicial notice to CA Secretary of State records regarding Raytheon entities.
- Plaintiff argued for remand based on a forum-selection clause, lack of complete diversity, and absence of federal-question jurisdiction.
- The court denied remand and denied the motion to dismiss plaintiff's fraud claim, ruling on jurisdiction and pleading standards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a forum-selection clause mandates remand | L'Garde argues the clause requires California forum and removal invalid. | Raytheon contends clause is permissive and does not waive removal. | Permissive clause; removal not waived; remand denied on this basis. |
| Whether complete diversity exists between the parties | L'Garde asserts lack of complete diversity. | Raytheon asserts diversity via Raytheon Company’s incorporation and nerve center. | Complete diversity exists; Raytheon SAS's citizenship tracked to Raytheon Company with Massachusetts nerve center. |
| Whether federal question jurisdiction applies | California law should govern; no federal question. | FAR clauses and federal interests may require federal common law. | Federal-question jurisdiction not shown; California law applies; no removal jurisdiction on this basis. |
| Whether the complaint satisfies Rule 9(b) heightened pleading for fraud | Fraud allegations meet Rule 9(b) specificity and scienter can be pled generally. | Claim lacks the required particularity. | Fraud claim pled with particularity; Rule 9(b) satisfied; dismissal denied. |
Key Cases Cited
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir.1992) (reversal of removal where jurisdiction questionable)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (Supreme Court 1972) (forum-selection clauses and removal limits)
- Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75 (9th Cir.1987) (forum-selection clause meaningfully restricting forum)
- Breitman v. May Co. Calif., 37 F.3d 562 (9th Cir.1994) (distinction between incorporated subsidiary and unincorporated division for purposes of diversity)
- New SD, Inc. v. Rockwell Int'l Corp., 79 F.3d 953 (9th Cir.1996) (uniform federal law for national-security-related subcontract disputes)
- Northrop Corp. v. AIL Systems, Inc., 959 F.2d 1424 (7th Cir.1992) (teaming agreements and federal-interest considerations)
- American Pipe & Steel Corp. v. Firestone Tire & Rubber Co., 292 F.2d 640 (7th Cir.1961) (standard for federal common law inquiry in removal context)
- Erie R. Co. v. Tompkins, 304 U.S. 64 (Supreme Court 1938) (necessity of applying state law absent federal-question jurisdiction)
- Boyle v. United Technologies Corp., 487 U.S. 500 (Supreme Court 1988) (federal-common-law displacement requires a significant federal-interest conflict)
- North Cal. Power Agency v. AltaRock Energy, Inc., 2011 WL 2415748 (N.D. Cal. 2011) (nerve-center evidence considerations for headquarters location)